Document and Entity Information (USD $) In Billions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Feb. 17, 2011	Jun. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	NATIONAL OILWELL VARCO INC
Entity Central Index Key	0001021860
Document Type	10-K
Document Period End Date	Dec. 31, 2010
Amendment Flag	false
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 13.9
Entity Common Stock, Shares Outstanding		421,070,856

Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Current assets:
Cash and cash equivalents	$ 3,333	$ 2,622
Receivables, net	2,425	2,187
Inventories, net	3,388	3,490
Costs in excess of billings	815	740
Deferred income taxes	316	290
Prepaid and other current assets	258	269
Total current assets	10,535	9,598
Property, plant and equipment, net	1,840	1,836
Deferred income taxes	341	92
Goodwill	5,790	5,489
Intangibles, net	4,103	4,052
Investment in unconsolidated affiliate	386	393
Other assets	55	72
Total assets	23,050	21,532
Current liabilities:
Accounts payable	628	584
Accrued liabilities	2,105	2,267
Billings in excess of costs	511	1,090
Current portion of long-term debt and short-term borrowings	373	7
Accrued income taxes	468	226
Deferred income taxes	451	340
Total current liabilities	4,536	4,514
Long-term debt	514	876
Deferred income taxes	1,885	1,751
Other liabilities	253	163
Total liabilities	7,188	7,304
Commitments and contingencies
Stockholders' equity:
Common stock - par value $.01; 421,141,751 and 418,451,731 shares issued and outstanding at December 31, 2010 and December 31, 2009	4	4
Additional paid-in capital	8,353	8,214
Accumulated other comprehensive income	91	90
Retained earnings	7,300	5,805
Total Company stockholders' equity	15,748	14,113
Noncontrolling interests	114	115
Total stockholders' equity	15,862	14,228
Total liabilities and stockholders' equity	$ 23,050	$ 21,532

Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2010	Dec. 31, 2009
Stockholders' equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	421,141,751	418,451,731
Common stock, shares outstanding	421,141,751	418,451,731

Consolidated Statements of Income (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Revenue
Sales	$ 9,956	$ 10,812	$ 11,162
Services	2,200	1,900	2,269
Total	12,156	12,712	13,431
Cost of revenue
Cost of sales	6,598	7,297	7,784
Cost of services	1,726	1,631	1,575
Total	8,324	8,928	9,359
Gross profit	3,832	3,784	4,072
Selling, general and administrative	1,385	1,322	1,154
Intangible asset impairment		147
Operating profit	2,447	2,315	2,918
Interest and financial costs	(50)	(53)	(67)
Interest income	13	9	45
Equity income in unconsolidated affiliate	36	47	42
Other income (expense), net	(49)	(110)	23
Income before income taxes	2,397	2,208	2,961
Provision for income taxes	738	735	993
Net income	1,659	1,473	1,968
Net income (loss) attributable to noncontrolling interests	(8)	4	16
Net income attributable to Company	$ 1,667	$ 1,469	$ 1,952
Net income attributable to Company per share:
Basic	$ 3.99	$ 3.53	$ 4.91
Diluted	$ 3.98	$ 3.52	$ 4.90
Cash dividends per share	$ 0.41	$ 1.10
Weighted average shares outstanding:
Basic	417	416	397
Diluted	419	417	399

Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Cash flows from operating activities:
Net income	$ 1,659	$ 1,473	$ 1,968
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	507	490	402
Deferred income taxes	(165)	(174)	(33)
Stock-based compensation	66	68	67
Excess tax benefit from the exercise of stock options	(10)	(1)	(37)
Equity income in unconsolidated affiliate	(36)	(47)	(42)
Dividend from unconsolidated affiliate	17	86
Intangible asset impairment		147
Other	135	75	115
Change in operating assets and liabilities, net of acquisitions:
Receivables	(189)	1,033	(626)
Inventories	39	468	(643)
Costs in excess of billings	(4)	(122)	25
Prepaid and other current assets	15	23	230
Accounts payable	40	(361)	95
Billings in excess of costs	(620)	(1,071)	765
Other assets/liabilities, net	88	8	8
Net cash provided by operating activities	1,542	2,095	2,294
Cash flows from investing activities:
Purchases of property, plant and equipment	(232)	(250)	(379)
Business acquisitions, net of cash acquired	(556)	(573)	(3,008)
Business divestitures, net of cash disposed			801
Sale of equity interest, net		251
Dividend from unconsolidated affiliate	16	8	113
Other, net	29	12
Net cash used in investing activities	(743)	(552)	(2,473)
Cash flows from financing activities:
Borrowings against lines of credit and other debt	3	7	2,731
Payments against lines of credit and other debt	(16)	(47)	(2,920)
Dividends paid	(172)	(460)
Excess tax benefits from exercise of stock options	10	1	37
Proceeds from stock options exercised	73	8	78
Net cash used in financing activities	(102)	(491)	(74)
Effect of exchange rates on cash	14	27	(46)
Increase (decrease) in cash and cash equivalents	711	1,079	(299)
Cash and cash equivalents, beginning of period	2,622	1,543	1,842
Cash and cash equivalents, end of period	3,333	2,622	1,543
Cash payments during the period for:
Interest	56	56	76
Income taxes	$ 551	$ 929	$ 1,261

Consolidated Statements of Stockholders' Equity and Comprehensive Income (USD $) In Millions, unless otherwise specified	Total	Common Stock	Additional Paid in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total Company Stockholders' Equity	Noncontrolling Interests
Beginning Balance at Dec. 31, 2007	$ 6,724	$ 3	$ 3,617	$ 195	$ 2,846	$ 6,661	$ 63
Beginning Balance, Shares at Dec. 31, 2007		356
Net income	1,968				1,952	1,952	16
Other comprehensive income:
Currency translation adjustments	(176)			(176)		(176)
Derivative financial instruments	(160)			(160)		(160)
Change in defined benefit plans	(20)			(20)		(20)
Comprehensive income	1,612					1,596
Adoption of FAS158, net of tax	(2)				(2)	(2)
Stock issued in acquisition	4,191	1	4,190			4,191
Stock issued in acquisition, Shares		57
Acquired noncontrolling interests	25						25
Dividends to noncontrolling interests	(8)						(8)
Stock-based compensation	67		67			67
Common stock issued	78		78			78
Common stock issued, Shares		4
Excess tax benefit of options exercised	37		37			37
Ending Balance at Dec. 31, 2008	12,724	4	7,989	(161)	4,796	12,628	96
Ending Balance, Shares at Dec. 31, 2008		417
Net income	1,473				1,469	1,469	4
Other comprehensive income:
Currency translation adjustments	100			100		100
Derivative financial instruments	160			160		160
Change in defined benefit plans	(9)			(9)		(9)
Comprehensive income	1,724					1,720
Cash dividends per common share	(460)				(460)	(460)
Dividends to noncontrolling interests	(13)						(13)
Noncontrolling interest contribution	28						28
Gain on sale of equity interest, net of tax	148		148			148
Stock-based compensation	68		68			68
Common stock issued	8		8			8
Common stock issued, Shares		1
Excess tax benefit of options exercised	1		1			1
Ending Balance at Dec. 31, 2009	14,228	4	8,214	90	5,805	14,113	115
Ending Balance, Shares at Dec. 31, 2009		418
Net income	1,659				1,667	1,667	(8)
Other comprehensive income:
Currency translation adjustments	13			13		13
Derivative financial instruments	(13)			(13)		(13)
Change in defined benefit plans	1			1		1
Comprehensive income	1,660					1,668
Cash dividends per common share	(172)				(172)	(172)
Dividends to noncontrolling interests	(2)						(2)
Noncontrolling interest contribution	9						9
Stock-based compensation	66		66			66
Common stock issued	73		73			73
Common stock issued, Shares		3
Withholding taxes	(10)		(10)			(10)
Excess tax benefit of options exercised	10		10			10
Ending Balance at Dec. 31, 2010	$ 15,862	$ 4	$ 8,353	$ 91	$ 7,300	$ 15,748	$ 114
Ending Balance, Shares at Dec. 31, 2010		421

Organization and Basis of Presentation	12 Months Ended
Organization and Basis of Presentation	Dec. 31, 2010
Organization and Basis of Presentation [Abstract]
Organization and Basis of Presentation	1. Organization and Basis of Presentation Nature of Business We design, construct, manufacture and sell comprehensive systems, components, and products used in oil and gas drilling and production, provide oilfield services and supplies, and distribute products and provide supply chain integration services to the upstream oil and gas industry. Our revenues and operating results are directly related to the level of worldwide oil and gas drilling and production activities and the profitability and cash flow of oil and gas companies, drilling contractors and oilfield service companies, which in turn are affected by current and anticipated prices of oil and gas. Oil and gas prices have been and are likely to continue to be volatile. Basis of Consolidation The accompanying Consolidated Financial Statements include the accounts of National Oilwell Varco, Inc. and its majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Investments that are not wholly-owned, but where we exercise control, are fully consolidated with the equity held by minority owners and their portion of net income (loss) reflected as noncontrolling interests in the accompanying consolidated financial statements. Investments in unconsolidated affiliates, over which we exercise significant influence, but not control, are accounted for by the equity method. We reclassified $340 million of deferred tax liabilities from noncurrent to current on the 2009 balance sheet in order to conform with the 2010 presentation.

- Definition

Description containing the entire organization, consolidation and basis of presentation of financial statements disclosure. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References+ Details

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2010

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Fair Value of Financial Instruments

The carrying amounts of financial instruments including cash and cash equivalents, receivables, and payables approximated fair value because of the relatively short maturity of these instruments. Cash equivalents include only those investments having a maturity date of three months or less at the time of purchase. The carrying values of other financial instruments approximate their respective fair values.

Derivative Financial Instruments

ASC Topic 815, “Derivatives and Hedging” (“ASC Topic 815”) requires companies to recognize all of its derivative instruments as either assets or liabilities in the Consolidated Balance Sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are foreign currency exchange rate risk and interest rate risk. Forward contracts against various foreign currencies are entered into to manage the foreign currency exchange rate risk on forecasted revenue and expenses denominated in currencies other than the functional currency of the operating unit (cash flow hedge).Other forward exchange contracts against various foreign currencies are entered into to manage the foreign currency exchange rate risk associated with certain firm commitments denominated in currencies other than the functional currency of the operating unit (fair value hedge).In addition, the Company will enter into non-designated forward contracts against various foreign currencies to manage the foreign currency exchange rate risk on recognized nonfunctional currency monetary accounts (non-designated hedge).Interest rate swaps are entered into to manage interest rate risk associated with the Company’s fixed and floating-rate borrowings.

The Company records all derivative financial instruments at their fair value in its Consolidated Balance Sheet. Except for certain non-designated hedges discussed below, all derivative financial instruments that the Company holds are designated as either cash flow or fair value hedges and are highly effective in offsetting movements in the underlying risks. Such arrangements typically have terms between two and 24 months, but may have longer terms depending on the underlying cash flows being hedged, typically related to the projects in our backlog. The Company may also use interest rate contracts to mitigate its exposure to changes in interest rates on anticipated long-term debt issuances.

At December 31, 2010, the Company has determined that its financial assets of $47 million and liabilities of $23 million (primarily currency related derivatives) are level 2 in the fair value hierarchy. At December 31, 2010, the net fair value of the Company’s foreign currency forward contracts totaled an asset of $24 million.

As of December 31, 2010, the Company did not have any interest rate swaps and its financial instruments do not contain any credit-risk-related or other contingent features that could cause accelerated payments when the Company’s financial instruments are in net liability positions. We do not use derivative financial instruments for trading or speculative purposes.

Cash Flow Hedging Strategy

For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is subject to a particular currency risk),the effective portion of the gain or loss on the derivative instrument is reported as a component of Other Comprehensive Income and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings (e.g., in “revenues” when the hedged transactions are cash flows associated with forecasted revenues).The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any (i.e. the ineffective portion), or hedge components excluded from the assessment of effectiveness, are recognized in the Consolidated Statements of Income during the current period.

To protect against the volatility of forecasted foreign currency cash flows resulting from forecasted sales and expenses, the Company has instituted a cash flow hedging program. The Company hedges portions of its forecasted revenues and expenses denominated in nonfunctional currencies with forward contracts. When the U.S. dollar strengthens against the foreign currencies, the decrease in present value of future foreign currency revenue and costs is offset by gains in the fair value of the forward contracts designated as hedges. Conversely, when the U.S. dollar weakens, the increase in the present value of future foreign currency cash flows is offset by losses in the fair value of the forward contracts.

As of December 31, 2010, the Company had the following outstanding foreign currency forward contracts that were entered into to hedge nonfunctional currency cash flows from forecasted revenues and costs (in millions):


	Currency Denomination
	December 31,
Foreign Currency	2010		2009
British Pound Sterling	£	4	£		39
Danish Krone	DKK	31	DKK	180
Euro	€	122	€	199
Norwegian Krone	NOK	4,983	NOK	6,097
U.S. Dollar	$	247	$		224
Korean Won	KRW	—	KRW	2,317

Fair Value Hedging Strategy

For derivative instruments that are designated and qualify as a fair value hedge (i.e., hedging the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is subject to a particular risk), the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in the same line item associated with the hedged item in current earnings (e.g., in “revenue” when the hedged item is a contracted sale).

The Company enters into forward exchange contracts to hedge certain firm commitments of revenue and costs that are denominated in currencies other than the functional currency of the operating unit. The purpose of the Company’s foreign currency hedging activities is to protect the Company from risk that the eventual U.S. dollar-equivalent cash flows from the sale of products to customers will be adversely affected by changes in the exchange rates.

As of December 31, 2010, the Company had the following outstanding foreign currency forward contracts that were entered into to hedge nonfunctional currency fair values of firm commitments of revenues and costs (in millions):


	Currency Denomination
	December 31,
Foreign Currency	2010		2009
U.S. Dollar	$	1	$	52

Non-designated Hedging Strategy

For derivative instruments that are non-designated, the gain or loss on the derivative instrument is recognized in the same line item associated with the hedged item in current earnings.

The Company enters into forward exchange contracts to hedge certain nonfunctional currency monetary accounts. The purpose of the Company’s foreign currency hedging activities is to protect the Company from risk that the eventual U.S. dollar-equivalent cash flows from the nonfunctional currency monetary accounts will be adversely affected by changes in the exchange rates.

As of December 31, 2010, the Company had the following outstanding foreign currency forward contracts that hedge the fair value of nonfunctional currency monetary accounts (in millions):


	Currency Denomination
	December 31,
Foreign Currency	2010		2009
British Pound Sterling	£	8	£	10
Danish Krone	DKK	115	DKK	77
Euro	€	97	€	106
Norwegian Krone	NOK	1,442	NOK	3,096
Swedish Krone	SEK	—	SEK	5
U.S. Dollar	$	328	$	501
Russian Ruble	RUB	780	RUB	2,812

As of December 31, 2010 and 2009, the Company has the following respective fair values of its derivative instruments and their balance sheet classifications (in millions):


	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
	Balance Sheet	December 31,				Balance Sheet	December 31,
	Location	2010		2009		Location	2010		2009
Derivatives designated as hedging instruments under ASC Topic 815

Foreign exchange contracts	Prepaid and other current assets	$	28	$	56	Accrued liabilities	$	12	$	39
Foreign exchange contracts	Other Assets		12		17	Other Liabilities		1		7


Total derivatives designated as hedging instruments under ASC Topic 815		$	40	$	73		$	13	$	46


Derivatives not designated as hedging instruments under ASC Topic 815

Foreign exchange contracts	Prepaid and other current assets	$	7	$	30	Accrued liabilities	$	10	$	8
Foreign exchange contracts	Other Assets		—		1	Other Liabilities		—		1


Total derivatives not designated as hedging instruments under ASC Topic 815		$	7	$	31		$	10	$	9


Total derivatives		$	47	$	104		$	23	$	55

The Effect of Derivative Instruments on the Consolidated Statement of Income
($ in millions)

Location of Gain (Loss)

Recognized in Income on

Amount of Gain (Loss)

Location of Gain (Loss)

Derivative (Ineffective

Recognized in Income on

Reclassified from

Amount of Gain (Loss)

Portion and Amount

Derivative (Ineffective

Derivatives in ASC Topic 815

Amount of Gain (Loss)

Accumulated OCI into

Reclassified from

Excluded from

Portion and Amount

Cash Flow Hedging

Recognized in OCI on

Income

Accumulated OCI into

Effectiveness

Excluded from

Relationships

Derivative (Effective Portion) (a)

(Effective Portion)

Income (Effective Portion)

Testing)

Effectiveness Testing) (b)

Years Ended

December 31,

2010

2009

2010

2009

2010

2009

Revenue

Foreign exchange contracts

(25

)

164

Cost of revenue

(22

)

(42

)

Other income (expense), net

(24

)

Total

(25

)

164

(12

)

(16

)

(24

)

Derivatives in ASC Topic 815

Location of Gain (Loss)

Amount of Gain (Loss)

ASC Topic 815

Location of Gain (Loss)

Recognized in Income on

Fair Value

Recognized in Income

Recognized in Income on

Fair Value Hedge

Recognized in Income on

Related Hedged

Hedging Relationships

on Derivative

Derivative

Relationships

Related Hedged Item

Items

Years Ended

December 31,

2010

2009

2010

2009

Foreign exchange contracts

Revenue

)

Firm commitments

Revenue

)

Foreign exchange contracts

Cost of revenue

—

(13

)

Firm commitments

Cost of revenue

—

Total

)

Derivatives Not Designated as

Location of Gain (Loss)

Amount of Gain (Loss)

Hedging Instruments under

Recognized in Income

Recognized in Income on

ASC Topic 815

on Derivative

Derivative

Years Ended

December 31,

2010

2009

Foreign exchange contracts

Other income (expense), net

Total


(a)		The Company expects that $(14) million of the Accumulated Other Comprehensive Income (Loss) will be reclassified into earnings within the next twelve months with an offset by gains from the underlying transactions resulting in no impact to earnings or cash flow.

(b)		The amount of gain (loss) recognized in income represents $9 million and $(24) million related to the ineffective portion of the hedging relationships for the years ended December 31, 2010 and 2009, respectively, and $12 million and $4 million related to the amount excluded from the assessment of the hedge effectiveness for the years ended December 31, 2010 and 2009, respectively.

Inventories

Inventories consist of raw materials, work-in-process and oilfield and industrial finished products, manufactured equipment and spare parts. Inventories are stated at the lower of cost or market using the first-in, first-out or average cost methods. Allowances for excess and obsolete inventories are determined based on our historical usage of inventory on-hand as well as our future expectations related to our installed base and the development of new products. The allowance, which totaled $270 million and $206 million at December 31, 2010 and 2009, respectively, is the amount necessary to reduce the cost of the inventory to its estimated realizable value.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Expenditures for major improvements that extend the lives of property and equipment are capitalized while minor replacements, maintenance and repairs are charged to operations as incurred. Disposals are removed at cost less accumulated depreciation with any resulting gain or loss reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of individual items. Depreciation expense was $262 million, $249 million and $222 million for the years ended December 31, 2010, 2009 and 2008, respectively. The estimated useful lives of the major classes of property, plant and equipment are included in Note 6 to the consolidated financial statements.

Long-lived Assets

We record impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets are impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. The carrying value of assets used in operations that is not recoverable is reduced to fair value if lower than carrying value. In determining the fair market value of the assets, we consider market trends and recent transactions involving sales of similar assets, or when not available, discounted cash flow analysis. There have been no impairments of long-lived assets for the years ended December 31, 2010, 2009 and 2008.

Intangible Assets

The Company has approximately $5.8 billion of goodwill and $4.1 billion of identified intangible assets as of December 31, 2010. Generally accepted accounting principles require the Company to test goodwill and other indefinite-lived intangible assets for impairment at least annually or more frequently whenever events or circumstances occur indicating that such assets might be impaired.

Goodwill is identified by segment as follows (in millions):


			Petroleum
	Rig		Services &		Distribution
	Technology		Supplies		Services		Total
Balance at December 31, 2008	$	1,458	$	3,705	$	62	$	5,225

Goodwill acquired during period		97		143		—		240
Translation and other adjustments		12		7		5		24


Balance at December 31, 2009		1,567		3,855		67		5,489

Goodwill acquired during period		287		2		9		298
Translation adjustments		—		2		1		3


Balance at December 31, 2010	$	1,854	$	3,859	$	77	$	5,790

Identified intangible assets with determinable lives consist primarily of customer relationships, trademarks, trade names, patents, and technical drawings acquired in acquisitions, and are being amortized on a straight-line basis over the estimated useful lives of 2-30 years. Amortization expense of identified intangibles is expected to be approximately $260 million in each of the next five years. Included in intangible assets are approximately $643 million of indefinite-lived trade names.

The net book value of identified intangible assets are identified by segment as follows (in millions):


				Petroleum
	Rig			Services &			Distribution
	Technology			Supplies			Services			Total
Balance at December 31, 2008	$	361		$	3,933		$	6		$	4,300

Additions to intangible assets		86			37			—			123
Asset impairment		—			(147	)		—			(147	)
Amortization		(36	)		(204	)		(1	)		(241	)
Translation		5			11			1			17


Balance at December 31, 2009		416			3,630			6			4,052

Additions to intangible assets		291			8			—			299
Amortization		(38	)		(206	)		(1	)		(245	)
Translation		(3	)		—			—			(3	)


Balance at December 31, 2010	$	666		$	3,432		$	5		$	4,103

Identified intangible assets by major classification consist of the following (in millions):


			Accumulated			Net Book
	Gross		Amortization			Value
December 31, 2009:

Customer relationships	$	2,819	$	(366	)	$	2,453
Trademarks		619		(73	)		546
Indefinite-lived trade names		643		—			643
Other		531		(121	)		410


Total identified intangibles	$	4,612	$	(560	)	$	4,052


December 31, 2010:

Customer relationships	$	2,933	$	(536	)	$	2,397
Trademarks		677		(95	)		582
Indefinite-lived trade names		643		—			643
Other		655		(174	)		481


Total identified intangibles	$	4,908	$	(805	)	$	4,103

2009 Asset Impairment

During the second quarter of 2009, the worldwide average rig count was 2,009 rigs, down 41% from the fourth quarter 2008 average of 3,395 and down 25% from the first quarter 2009 average of 2,681. The second quarter 2009 average rig count represented the lowest quarterly average in the past six years. In addition, the Company’s updated forecast was behind the Company’s previous forecast completed at the beginning of 2009. While operating profit for the first quarter of 2009 was in line with the Company’s first quarter 2009 operating profit forecast, the Company’s consolidated operating profit for the second quarter of 2009 was below its second quarter 2009 forecast. As a result of the substantial decline in the worldwide rig count, and the decline in actual/forecasted results compared to the original 2009 forecast, the Company concluded that events or circumstances had occurred indicating that goodwill and other indefinite-lived intangible assets might be impaired as described in ASC Topic 350, “Intangibles — Goodwill and Other” (“ASC Topic 350”).

Therefore, the Company performed its interim impairment test of goodwill for its reporting units and its indefinite-lived intangible assets at the end of the second quarter of 2009. Projections for the remainder of 2009 also reflected declines compared to the original 2009 annual forecast. The Company updated its 2009 operating forecast, long-term forecast, and discounted cash flows based on this information.

The goodwill impairment analysis that the Company performed during the second quarter of 2009 did not result in goodwill impairment as of June 30, 2009. However, based on the Company’s indefinite-lived intangible asset impairment analysis performed during the second quarter of 2009, the Company incurred an impairment charge of $147 million in the Petroleum Services & Supplies segment related to a partial impairment of the Company’s Grant Prideco trade name. The impairment charge was primarily the result of the substantial decline in worldwide rig counts through June 2009, declines in forecasts in rig activity for the remainder of 2009, 2010, and 2011 compared to rig count forecast at the beginning of 2009, and a decline in the revenue forecast for the drill pipe business unit for the remainder of 2009, 2010, and 2011.

The Company performed its annual impairment analysis for its goodwill and indefinite-lived assets during the fourth quarter of 2009 and 2010 each resulting in no further impairment. The valuation techniques used in the annual test were consistent with those used during previous testing. The inputs used in the annual test were updated for current market conditions and forecasts.

Foreign Currency

The functional currency for most of our foreign operations is the local currency. The cumulative effects of translating the balance sheet accounts from the functional currency into the U.S. dollar at current exchange rates are included in accumulated other comprehensive income (loss). Revenues and expenses are translated at average exchange rates in effect during the period. Certain other foreign operations, including our operations in Norway, use the U.S. dollar as the functional currency. Accordingly, financial statements of these foreign subsidiaries are remeasured to U.S. dollars for consolidation purposes using current rates of exchange for monetary assets and liabilities and historical rates of exchange for nonmonetary assets and related elements of expense. Revenue and expense elements are remeasured at rates that approximate the rates in effect on the transaction dates. For all operations, gains or losses from remeasuring foreign currency transactions into the functional currency are included in income. Net foreign currency transaction gains (losses) were ($30) million, ($79) million and $50 million for the years ending December 31, 2010, 2009 and 2008, respectively, and are included in other income (expense) in the accompanying statement of operations.

During the first quarter of 2010, the Venezuelan government officially devalued the Venezuelan bolivar against the U.S. dollar. As a result the Company converted its Venezuela ledgers to U.S. dollar functional currency, devalued monetary assets resulting in a $27 million charge, and wrote-down certain accounts receivable in view of deteriorating business conditions in Venezuela, resulting in an additional $11 million charge. The Company’s net investment in Venezuela was $28 million at December 31, 2010.

Revenue Recognition

The Company’s products and services are sold based upon purchase orders or contracts with the customer that include fixed or determinable prices and that do not generally include right of return or other similar provisions or other significant post delivery obligations. Except for certain construction contracts and drill pipe sales described below, the Company records revenue at the time its manufacturing process is complete, the customer has been provided with all proper inspection and other required documentation, title and risk of loss has passed to the customer, collectability is reasonably assured and the product has been delivered. Customer advances or deposits are deferred and recognized as revenue when the Company has completed all of its performance obligations related to the sale. The Company also recognizes revenue as services are performed. The amounts billed for shipping and handling cost are included in revenue and related costs are included in cost of sales.

Revenue Recognition under Long-term Construction Contracts

The Company uses the percentage-of-completion method to account for certain long-term construction contracts in the Rig Technology segment. These long-term construction contracts include the following characteristics:

	•		the contracts include custom designs for customer specific applications;

	•		the structural design is unique and requires significant engineering efforts; and

	•		construction projects often have progress payments.

This method requires the Company to make estimates regarding the total costs of the project, progress against the project schedule and the estimated completion date, all of which impact the amount of revenue and gross margin the Company recognizes in each reporting period. The Company prepares detailed cost estimates at the beginning of each project. Significant projects and their related costs and profit margins are updated and reviewed at least quarterly by senior management. Factors that may affect future project costs and margins include shipyard access, weather, production efficiencies, availability and costs of labor, materials and subcomponents and other factors. These factors can impact the accuracy of the Company’s estimates and materially impact the Company’s current and future reported earnings.

The asset, “Costs in excess of billings,” represents revenues recognized in excess of amounts billed. The liability, “Billings in excess of costs,” represents billings in excess of revenues recognized.

Drill Pipe Sales

For drill pipe sales, if requested in writing by the customer, delivery may be satisfied through delivery to the Company’s customer storage location or to a third-party storage facility. For sales transactions where title and risk of loss have transferred to the customer but the supporting documentation does not meet the criteria for revenue recognition prior to the products being in the physical possession of the customer, the recognition of the revenues and related inventory costs from these transactions are deferred until the customer takes physical possession.

Service and Product Warranties

The Company provides service and warranty policies on certain of its products. The Company accrues liabilities under service and warranty policies based upon specific claims and a review of historical warranty and service claim experience in accordance with ASC Topic 450 “Contingencies” (“ASC Topic 450”). Adjustments are made to accruals as claim data and historical experience change. In addition, the Company incurs discretionary costs to service its products in connection with product performance issues and accrues for them when they are encountered. The Company monitors the actual cost of performing these discretionary services and adjusts the accrual based on the most current information available.

The changes in the carrying amount of service and product warranties are as follows (in millions):


Balance at December 31, 2008	$	114


Net provisions for warranties issued during the year		144
Amounts incurred		(62	)
Foreign currency translation		21


Balance at December 31, 2009	$	217


Net provisions for warranties issued during the year		52
Amounts incurred		(45	)
Foreign currency translation and other		(9	)


Balance at December 31, 2010	$	215

Income Taxes

The liability method is used to account for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized.

Concentration of Credit Risk

We grant credit to our customers, which operate primarily in the oil and gas industry. Concentrations of credit risk are limited because we have a large number of geographically diverse customers, thus spreading trade credit risk. We control credit risk through credit evaluations, credit limits and monitoring procedures. We perform periodic credit evaluations of our customers’ financial condition and generally do not require collateral, but may require letters of credit for certain international sales. Credit losses are provided for in the financial statements. Allowances for doubtful accounts are determined based on a continuous process of assessing the Company’s portfolio on an individual customer basis taking into account current market conditions and trends. This process consists of a thorough review of historical collection experience, current aging status of the customer accounts, and financial condition of the Company’s customers. Based on a review of these factors, the Company will establish or adjust allowances for specific customers. Accounts receivable are net of allowances for doubtful accounts of approximately $107 million and $95 million at December 31, 2010 and 2009, respectively.

Stock-Based Compensation

Compensation expense for the Company’s stock-based compensation plans is measured using the fair value method required by ASC Topic 718 “Compensation — Stock Compensation” (“ASC Topic 718”).Under this guidance the fair value of stock option grants and restricted stock is amortized to expense using the straight-line method over the shorter of the vesting period or the remaining employee service period.

The Company provides compensation benefits to employees and non-employee directors under share-based payment arrangements, including various employee stock option plans.

Total compensation cost that has been charged against income for all share-based compensation arrangements was $66 million, $68 million and $61 million for 2010, 2009 and 2008, respectively. The total income tax benefit recognized in the income statement for all share-based compensation arrangements was $20 million, $21 million and $19 million for 2010, 2009 and 2008, respectively.

Environmental Liabilities

When environmental assessments or remediations are probable and the costs can be reasonably estimated, remediation liabilities are recorded on an undiscounted basis and are adjusted as further information develops or circumstances change.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported and contingent amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Such estimates include but are not limited to, estimated losses on accounts receivable, estimated costs and related margins of projects accounted for under percentage-of-completion, estimated realizable value on excess and obsolete inventory, contingencies, estimated liabilities for litigation exposures and liquidated damages, estimated warranty costs, estimates related to pension accounting, estimates related to the fair value of reporting units for purposes of assessing goodwill and other indefinite-lived intangible assets for impairment and estimates related to deferred tax assets and liabilities, including valuation allowances on deferred tax assets. Actual results could differ from those estimates.

Contingencies

The Company accrues for costs relating to litigation claims and other contingent matters, including liquidated damage liabilities, when such liabilities become probable and reasonably estimable. Such estimates may be based on advice from third parties or on management’s judgment, as appropriate. Revisions to contingent liabilities are reflected in income in the period in which different facts or information become known or circumstances change that affect the Company’s previous judgments with respect to the likelihood or amount of loss. Amounts paid upon the ultimate resolution of contingent liabilities may be materially different from previous estimates and could require adjustments to the estimated reserves to be recognized in the period such new information becomes known.

In circumstances where the most likely outcome of a contingency can be reasonably estimated, we accrue a liability for that amount. Where the most likely outcome cannot be estimated, a range of potential losses is established and if no one amount in that range is more likely than others, the low end of the range is accrued.

Net Income Attributable to Company Per Share

The following table sets forth the computation of weighted average basic and diluted shares outstanding (in millions, except per share data):


	Years Ended December 31,
	2010		2009		2008
Numerator:
Net income attributable to Company	$	1,667	$	1,469	$	1,952

Denominator:
Basic—weighted average common shares outstanding		417		416		397
Dilutive effect of employee stock options and other unvested stock awards		2		1		2

Diluted outstanding shares		419		417		399


Basic earnings attributable to Company per share	$	3.99	$	3.53	$	4.91

Diluted earnings attributable to Company per share	$	3.98	$	3.52	$	4.90

Cash dividends per share	$	0.41	$	1.10	$	—

In addition, we had stock options outstanding that were anti-dilutive totaling 7.7 million, 4.0 million, and 0.4 million at December 31, 2010, 2009 and 2008, respectively.

Recently Issued Accounting Standards

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about Fair Value Measurements” (“ASU No. 2010-06”) as an update to Accounting Standards Codification Topic 820, “Fair Value Measurements and Disclosures” (“ASC Topic 820”). ASU No. 2010-06 requires additional disclosures about transfers between Levels 1 and 2 of the fair value hierarchy and disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements. ASU No. 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the rollforward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company adopted the required provisions of ASU No. 2010-06 in the first quarter of 2010. There was no significant impact to the Company’s Consolidated Financial Statements from the adopted provisions of ASU No. 2010-06.

Grant Prideco Merger

12 Months Ended

Dec. 31, 2010

Mergers and Other Acquisitions [Abstract]

Grand Prideco Merger

3. Grant Prideco Merger

Pursuant to the Agreement and Plan of Merger with Grant Prideco, Inc. (“Grant Prideco”) (the “Merger”), a Delaware Corporation, effective December 16, 2007 (the “Agreement Date”), the Company issued .4498 shares of National Oilwell Varco, Inc. common stock and $23.20 in cash (the “Exchange Ratio”) for each Grant Prideco common share outstanding on April 21, 2008 (the “Merger Date”) totaling approximately 57 million shares and $2.9 billion in cash. The Company has included the financial results of Grant Prideco in its Consolidated Financial Statements beginning on the Merger Date, the date Grant Prideco common shares were exchanged for National Oilwell Varco common shares and cash. The Grant Prideco operations are included in the Petroleum Services & Supplies segment.

Prior to its acquisition, Grant Prideco was a world leader in drill stem technology development and drill pipe manufacturing, sales and service and a global leader in drill bit and specialty tools, manufacturing, sales and service. The Company believes the Merger with Grant Prideco advanced its strategic goal of providing more products and services to its customers and that Grant Prideco’s product range added new growth opportunities to the Company and benefited its customers’ needs worldwide.

The Merger was accounted for as a purchase business combination. Assets acquired and liabilities assumed were recorded at their fair values as of April 21, 2008. The fair value of shares issued was determined using an average price of $72.74, which represents the average closing price of the Company’s common stock for a five-day period beginning two available trading days before the public announcement of the transaction. The total purchase price was $7,199 million, including Grant Prideco stock options assumed and acquisition related transaction costs and is comprised of (in millions):


Shares issued totaled approximately 57 million shares at $72.74 per share	$	4,135
Cash paid at $23.20 per share		2,932
Grant Prideco stock options assumed		56
Merger related transaction costs		76

Total purchase price	$	7,199

For all Grant Prideco stock options and restricted stock granted prior to 2008, vesting was accelerated under the terms of the stock option and restricted stock agreements; therefore, there was no modification of the awards as defined under SFAS 123(R). For stock options and restricted stock granted by Grant Prideco in 2008, 320,500 Grant Prideco stock options and 388,000 shares of restricted stock were replaced with 250,402 National Oilwell Varco stock options and 303,212 shares of National Oilwell Varco restricted stock, respectively. For the 2008 Grant Prideco grants, vesting was not accelerated in connection with the Merger, under the terms of the stock option and restricted stock agreements, except for certain recipients of the 2008 Grant Prideco restricted stock grant.

Merger related costs of $76 million include severance and other external costs directly related to the Merger.

Transaction costs of $11 million for the year ending December 31, 2008 were comprised of $6 million for accelerated vesting of stock-based compensation, $4 million for bridge loan fees and $1 million of other costs and are included in selling, general and administrative expense in the Consolidated Statements of Income.

Purchase Price Allocation

Under the purchase method of accounting, the total purchase price was allocated to Grant Prideco’s net tangible and identifiable intangible assets based on their fair values as of April 21, 2008. The excess of the purchase price over the net tangible and identifiable intangible assets was recorded as goodwill. The following table, set forth below, displays the total purchase price allocated to Grant Prideco’s net tangible and identifiable intangible assets based on their fair values as of April 21, 2008 (in millions):


Cash and cash equivalents	$	171
Receivables		420
Assets held for sale, net		784
Inventories		611
Prepaid and other current assets		210
Property, plant and equipment		392
Goodwill		2,775
Intangibles		3,696
Investment in unconsolidated affiliate		512
Other assets		98
Accounts payable and accrued liabilities		(316	)
Accrued income taxes		(627	)
Long-term debt		(176	)
Deferred income taxes		(1,305	)
Minority interest		(25	)
Other liabilities		(21	)

Total purchase price	$	7,199

Under purchase accounting, a fair value step up adjustment of $89 million was made to inventory and was charged to “Cost of sales” as the applicable inventory sold. Cost of sales included $89 million of these inventory charges for the year ended December 31, 2008.

Additionally, the Company identified other intangible assets associated with tradenames, patents, and customer relationships, and the fair values assigned were $1.2 billion, $0.3 billion, and $2.2 billion, respectively. The initial range of useful lives associated with trade names, patents, and customer relationships were 40 years to an indefinite life, 5 to 15 years and 16 to 17 years, respectively. Of the $1.2 billion associated with trade names, $0.8 billion was initially identified as having an indefinite life.

Disposition of Certain Grant Prideco Businesses

Prior to the Merger, Grant Prideco had entered into a definitive Purchase and Sale Agreement with Vallourec S.A. and Vallourec & Mannesman Holdings, Inc. (collectively referred to as “Vallourec”) to sell four of its tubular businesses for approximately $800 million in cash, subject to final working capital adjustments and standard closing conditions (including regulatory approval). The transaction closed May 16, 2008. The amount included in “Assets held for sale, net” included in the preliminary purchase price allocation above, relates to this disposition. Additionally, $256 million is included above in “Accrued income taxes” for taxes related to the disposition.

Unaudited Pro Forma Financial Information

The unaudited financial information in the table below summarizes the combined results of operations of National Oilwell Varco and Grant Prideco, on a pro forma basis, as though the companies had been combined as of the beginning of 2008. The pro forma financial information is presented for informational purposes only and may not be indicative of the results of operations that would have been achieved if the merger had taken place at the beginning of 2008. The pro forma financial information for the year ended December 31, 2008 includes the business combination accounting effect on historical Grant Prideco revenues, adjustments to depreciation on acquired property, amortization charges from acquired intangible assets, financing costs on new debt in connection with the merger and related tax effects for the year ended December 31, 2008 (in millions, except per share data):


Total revenues	$	14,035

Net income attributable to Company	$	2,080

Basic net income attributable to Company per share	$	5.02

Diluted net income attributable to Company per share	$	4.99

Other Acquisitions and Investments

12 Months Ended

Dec. 31, 2010

Other Acquisitions and Investments [Abstract]

Other Acquisitions and Investments

4. Other Acquisitions and Investments

2010

The Company completed 12 acquisitions for an aggregate purchase price of $556 million, net of cash acquired. These acquisitions included:

	•		The shares of Advanced Production and Loading PLC, a Norway-based designer and manufacturer of turret mooring systems and other products for Floating Production, Storage and Offloading vessels (“FPSOs”) and other offshore vessels and terminals for a purchase price of approximately $500 million.

	•		The business and assets of Ambar Lone Star Fluids Services, LLP, a U.S.-based Drilling and Completions Fluids company.

The preliminary allocation of the purchase price of each acquisition was based upon preliminary valuations. The Company’s estimates and assumptions are subject to change upon the receipt, and management’s review, of the final valuations. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition of the 2010 acquisitions (in millions):


Current assets, net of cash acquired	$	136
Cost in excess of billings		71
Property, plant and equipment		38
Intangible assets		299
Goodwill		298
Other assets		8


Total assets acquired		850


Current liabilities		142
Billings in excess of cost		41
Other liabilities		111


Total liabilities		294


Cash consideration, net of cash acquired	$	556

The Company allocated $299 million to intangible assets (18 year weighted-average life), comprised of: $116 million of customer relationships (15 year weighted-average life), $59 million of trademarks (30 year weighted-average life), and $124 million of other intangible assets (15 year weighted-average life).

2009

The Company completed nine acquisitions for an aggregate purchase price of $573 million, net of cash acquired. These acquisitions included:

	•		The shares of ASEP Group Holding B.V., a Netherlands-based manufacturer of well service equipment.

	•		The shares of ANS (1001) Ltd. (“Anson”), a U.K.-based manufacturer of pumps and fluid expendibles.

	•		The business and assets of Spirit Drilling Fluids Ltd., a U.S.-based company that provides drilling fluids and related well-site services to exploration and production companies.

	•		The business and assets of Spirit Minerals L.P., a U.S.-based company that mines, processes and distributes barite to the oil and gas drilling fluid industry.

	•		The shares of South Seas Inspection (S) Pte. Ltd., a Singapore-based inspection, repair and maintenance provider to the oil and gas industry.

	•		The shares of Hochang Machinery Industries Co., Ltd., a South Korean-based manufacturing and fabrication business.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition of the 2009 acquisitions (in millions):


Current assets, net of cash acquired	$	404
Property, plant and equipment		149
Intangible assets		115
Goodwill		198
Other assets		5


Total assets acquired		871


Current liabilities		242
Long-term debt		48
Other liabilities		8


Total liabilities		298


Cash consideration, net of cash acquired	$	573

The Company allocated $115 million to intangible assets (11 year weighted-average life), comprised of: $60 million of customer relationships (9 year weighted-average life), $46 million of trademarks (18 year weighted-average life), and $9 million of other intangible assets (7 year weighted-average life).

In September 2009, the Company sold 45% of certain of its IntelliServ operations and created the IntelliServ Joint Venture (“IntelliServ”). IntelliServ provides drilling technology that enables downhole drilling conditions to be measured, evaluated and monitored.

2008

In addition to the Grant Prideco Merger, the Company completed nine acquisitions for an aggregate purchase price of $171 million net of cash acquired. These acquisitions included:

	•		Welch Power Source, L.L.C., a Louisiana-based manufacturer of power generation equipment.

	•		CKS, a France-based solids control company.

	•		Mid-South Machine, Inc., a Louisiana-based machine shop.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition of the 2008 acquisitions (in millions):


Current assets, net of cash acquired	$	33
Property, plant and equipment		61
Intangible assets		38
Goodwill		76


Total assets acquired		208


Current liabilities		11
Long-term debt		26


Total liabilities		37


Cash consideration, net of cash acquired	$	171

The Company allocated $38 million to intangible assets (9 year weighted-average life), comprised of: $30 million of customer relationships (15 year weighted-average life), $1 million of trademarks (16 year weighted-average life), and $7 million of other intangible assets (4 year weighted-average life).

Each of the acquisitions were accounted for using the purchase method of accounting and, accordingly, the results of operations of each business are included in the consolidated results of operations from the date of acquisition. Excluding the Grant Prideco merger, a summary of the acquisitions follows (in millions):


	Years Ended December 31,
	2010			2009			2008
Fair value of assets acquired, net of cash acquired	$	850		$	871		$	208
Cash paid, net of cash acquired		(556	)		(573	)		(171	)

Liabilities assumed, debt issued and minority interest	$	294		$	298		$	37


Excess purchase price over fair value of net assets acquired	$	298		$	198		$	76

Inventories, net

12 Months Ended

Dec. 31, 2010

Inventories net [Abstract]

Inventories, net

5. Inventories, net

Inventories consist of (in millions):


	December 31,
	2010		2009
Raw materials and supplies	$	661	$	704
Work in process		953		1,307
Finished goods and purchased products		1,774		1,479

Total	$	3,388	$	3,490

Property, Plant and Equipment

12 Months Ended

Dec. 31, 2010

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

6. Property, Plant and Equipment

Property, plant and equipment consist of (in millions):


	Estimated	December 31,
	Useful Lives	2010			2009
Land and buildings	5-35 Years	$	736		$	678
Operating equipment	3-15 Years		1,539			1,429
Rental equipment	3-12 Years		628			594

			2,903			2,701
Less: Accumulated Depreciation			(1,063	)		(865	)

		$	1,840		$	1,836

Long-Term Debt

12 Months Ended

Dec. 31, 2010

Long-term Debt [Abstract]

Long-Term Debt

9. Long-Term Debt

Debt consists of (in millions):


	December 31,
	2010		2009
Senior Notes, interest at 6.5% payable semiannually, principal due on March 15, 2011	$	150	$	150

Senior Notes, interest at 7.25% payable semiannually, principal due on May 1, 2011		201		205

Senior Notes, interest at 5.65% payable semiannually, principal due on November 15, 2012		200		200

Senior Notes, interest at 5.5% payable semiannually, principal due on November 19, 2012		151		151

Senior Notes, interest at 6.125% payable semiannually, principal due on August 15, 2015		151		151

Other		34		26

Total debt		887		883
Less current portion		373		7

Long-term debt	$	514	$	876

Principal payments of debt for years subsequent to 2010 are as follows (in millions):


2011	$	373
2012		355
2013		5
2014		2
2015		151
Thereafter		1

	$	887

Revolving Credit Facilities

On April 21, 2008, the Company replaced its existing $500 million unsecured revolving credit facility with an aggregate of $3 billion of unsecured credit facilities and borrowed $2 billion to finance the cash portion of the Grant Prideco acquisition. These facilities consisted of a $2 billion, five-year revolving credit facility and a $1 billion, 364-day revolving credit facility which was terminated early in February 2009. At December 31, 2010, there were no borrowings against the remaining credit facility, and there were $477 million in outstanding letters of credit issued under this facility, resulting in $1,523 million of funds available under this revolving credit facility. Interest under this multicurrency facility is based upon LIBOR, NIBOR or EURIBOR plus 0.26% subject to a ratings-based grid, or the prime rate.

The Company also had $1,366 million of additional outstanding letters of credit at December 31, 2010, primarily in Norway, that are essentially under various bilateral committed letter of credit facilities. Other letters of credit are issued as bid bonds and performance bonds. The Senior Notes contain reporting covenants and the credit facility contains a financial covenant regarding maximum debt to capitalization. The Company was in compliance with all covenants at December 31, 2010.

Employee Benefit Plans

12 Months Ended

Dec. 31, 2010

Employee Benefit Plans [Abstract]

Employee Benefit Plans

10. Employee Benefit Plans

We have benefit plans covering substantially all of our employees. Defined-contribution benefit plans cover most of the U.S. and Canadian employees, and benefits are based on years of service, a percentage of current earnings and matching of employee contributions. Employees in our Norwegian operations can elect to participate in a defined-contribution plan in lieu of a local defined benefit plan. For the years ended December 31, 2010, 2009 and 2008, expenses for defined-contribution plans were $41 million, $39 million, and $37 million, respectively, and all funding is current.

Certain retired or terminated employees of predecessor or acquired companies participate in a defined benefit plan in the United States. None of the participants in this plan are eligible to accrue benefits. In addition, approximately 677 U.S. retirees and spouses participate in defined benefit health care plans of predecessor or acquired companies that provide postretirement medical and life insurance benefits. Active employees are ineligible to participate in any of these defined benefit plans. Our subsidiaries in the United Kingdom and Norway also have defined benefit pension plans covering virtually all of their employees.

Net periodic benefit cost for our defined benefit plans aggregated $10 million, $12 million and $7 million for the years ended December 31, 2010, 2009 and 2008, respectively.

The change in benefit obligation, plan assets and the funded status of the defined benefit pension plans in the United States, United Kingdom, and Norway and defined postretirement plans in the United States, using a measurement date of December 31, 2010 and December 31, 2009, is as follows (in millions):


	Pension benefits						Postretirement benefits
At year end	2010			2009			2010			2009
Benefit obligation at beginning of year	$	262		$	214		$	39		$	20
Service cost		5			5			—			—
Interest cost		14			14			2			2
Actuarial loss (gain)		10			19			(3	)		1
Benefits paid		(12	)		(10	)		(5	)		(2	)
Participants contributions		1			1			—			—
Exchange rate loss (gain)		(7	)		19			—			18
Other		(1	)		—			—			—

Benefit obligation at end of year	$	272		$	262		$	33		$	39


Accumulated benefit obligation at end of year	$	254		$	244


Fair value of plan assets at beginning of year	$	193		$	153		$	—		$	—
Actual return		18			21			—			—
Benefits paid		(12	)		(10	)		(5	)		(2	)
Company contributions		8			12			5			2
Participants contributions		1			1			—			—
Exchange rate (loss) gain		(4	)		16			—			—
Other		(1	)		—			—			—

Fair value of plan assets at end of year	$	203		$	193		$	—		$	—


Funded status	$	(69	)	$	(69	)	$	(33	)	$	(39	)

Defined Benefit Pension Plans

Assumed long-term rates of return on plan assets, discount rates and rates of compensation increases vary for the different plans according to the local economic conditions. The assumption rates used for benefit obligations are as follows:


	Years Ended December 31,
	2010			2009
Discount rate:
United States plan		4.95%			5.26%
International plans		5.25% - 5.50	%		5.25% - 5.75	%

Salary increase:
United States plan		N/A			N/A
International plans		2.50% - 4.33	%		2.50% - 4.25	%

The assumption rates used for net periodic benefit costs are as follows:


	Years Ended December 31,
	2010			2009			2008
Discount rate:
United States plan		5.26%			6.23%			6.34%
International plans		5.25% - 5.75	%		5.75% - 6.50	%		5.50% - 5.75	%

Salary increase:
United States plan		N/A			N/A			N/A
International plans		2.50% - 4.25	%		2.50% - 4.50	%		2.50% - 4.50	%

Expected return on assets:
United States plan		7.50%			7.75%			7.75%
International plans		6.00% - 6.85	%		6.00% - 6.85	%		5.50% - 6.86	%

In determining the overall expected long-term rate of return for plan assets, the Company takes into consideration the historical experience as well as future expectations of the asset mix involved. As different investments yield different returns, each asset category is reviewed individually and then weighted for significance in relation to the total portfolio.

The majority of our plans have projected benefit obligations in excess of plan assets.

The Company expects to pay future benefit amounts on its defined benefit plans ranging from $16 million to $17 million for each of the next five years and aggregate payments of $163 million.

Plan Assets

The Company and its investment advisers collaboratively reviewed market opportunities using historic and statistical data, as well as the actuarial valuation reports for the plans, to ensure that the levels of acceptable return and risk are well-defined and monitored. Currently, the Company’s management believes that there are no significant concentrations of risk associated with plan assets. Our pension investment strategy worldwide prohibits a direct investment in our own stock.

The following table sets forth by level, within the fair value hierarchy, the Plan’s assets carried at fair value (in millions):


	Fair Value Measurements
	Total		Level 1		Level 2		Level 3
December 31, 2009:

Equity securities	$	70	$	—	$	70	$	—
Bonds		53		—		53		—
Mutual funds		36		16		20		—
Other (insurance contracts)		32		—		—		32

		191		16		143		32
Cash		2		—		2		—


Total Fair Value Measurments	$	193	$	16	$	145	$	32


December 31, 2010:

Equity securities	$	66	$	—	$	66	$	—
Bonds		58		—		58		—
Mutual funds		19		19		—		—
Other (insurance contracts)		54		—		22		32

		197		19		146		32
Cash		6		—		6		—


Total Fair Value Measurments	$	203	$	19	$	152	$	32

The following table sets forth a summary of changes in the fair value of the Plan’s Level 3 assets (in millions):


	Level 3
	Plan
	Assets

Balance at January 1, 2009	$	24


Actual return on plan assets still held at reporting date		2
Purchases, sales and settlements		1
Currency impact		5


Balance at December 31, 2009	$	32


Actual return on plan assets still held at reporting date		1
Currency impact		(1	)


Balance at December 31, 2010	$	32

- Definition

Description containing the entire pension and other postretirement benefits disclosure as a single block of text.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 158

-Paragraph 7, 21, 22

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5, 6, 7, 8

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 8

-Subparagraph m

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 106

-Paragraph 518

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 87

-Paragraph 264

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph b

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph a

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph h

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph q

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name FASB Staff Position (FSP)

-Number FAS106-2

-Paragraph 20, 21, 22

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Emerging Issues Task Force (EITF)

-Number 03-2

-Paragraph 8

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Accounting Principles Board Opinion (APB)

-Number 30

-Paragraph 26

Reference 13: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Implementation Guide (Q and A)

-Number FAS88

-Paragraph 63

+ Details

Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2010

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income (Loss)

11. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) are as follows (in millions):


				Cumulative
	Defined			Currency			Derivative
	Benefit			Translation			Financial
	Plans			Adjustment			Instruments			Total
Balance at December 31, 2007	$	(20	)	$	196		$	19		$	195


Current period activity		(30	)		(265	)		(241	)		(536	)
Tax effect		10			89			81			180


Balance at December 31, 2008	$	(40	)	$	20		$	(141	)	$	(161	)


Current period activity		(14	)		150			223			359
Tax effect		5			(50	)		(63	)		(108	)


Balance at December 31, 2009	$	(49	)	$	120		$	19		$	90


Current period activity		1			19			(17	)		3
Tax effect		—			(6	)		4			(2	)


Balance at December 31, 2010	$	(48	)	$	133		$	6		$	91

- Definition

This label may include the following: 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income. Components of comprehensive income include: (1) foreign currency translation adjustments; (2) gains and losses on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity; (3) gains and losses on intercompany foreign currency transactions that are of a long-term-investment nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements; (4) change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value; (5) unrealized holding gains and losses on available-for-sale securities and that resulting from transfers of debt securities from the held-to-maturity category to the available-for-sale category; (6) a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost; and (7) the net gain or loss and net prior service cost or credit for pension plans and other postretirement benefit plans.

+ References+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2010

Commitment and Contigencies [Abstract]

Future minimum lease commitments under noncancellable operating leases with initial or remaining terms of one year or more

12. Commitments and Contingencies

We are involved in various claims, regulatory agency audits and pending or threatened legal actions involving a variety of matters. The total liability on these matters at December 31, 2010 cannot be determined; however, in our opinion, any ultimate liability, to the extent not otherwise provided for, will not materially affect our financial position, cash flow or results of operations.

Our business is affected both directly and indirectly by governmental laws and regulations relating to the oilfield service industry in general, as well as by environmental and safety regulations that specifically apply to our business. Although we have not incurred material costs in connection with our compliance with such laws, there can be no assurance that other developments, such as new environmental laws, regulations and enforcement policies hereunder may not result in additional, presently unquantifiable, costs or liabilities to us.

We have received federal grand jury subpoenas and subsequent inquiries from governmental agencies requesting records related to our compliance with export trade laws and regulations. We have cooperated fully with agents from the Department of Justice, the Bureau of Industry and Security, the Office of Foreign Assets Control, and U.S. Immigration and Customs Enforcement in responding to the inquiries. We have also cooperated with an informal inquiry from the Securities and Exchange Commission in connection with the inquiries previously made by the aforementioned federal agencies. We have conducted our own internal review of this matter. At the conclusion of our internal review in the fourth quarter of 2009, we identified possible areas of concern and discussed these areas of concern with the relevant agencies. We are currently negotiating a potential resolution with the agencies involved related to these matters. We currently anticipate that any administrative fine or penalty agreed to as part of a resolution would be within established accruals, and would not have a material effect on our financial position or results of operations. To the extent a resolution is not negotiated as anticipated, we cannot predict the timing or effect that any resulting government actions may have on our financial position, cash flow or results of operations.

The Company leases certain facilities and equipment under operating leases that expire at various dates through 2066. These leases generally contain renewal options and require the lessee to pay maintenance, insurance, taxes and other operating expenses in addition to the minimum annual rentals. Rental expense related to operating leases approximated $215 million, $199 million, and $184 million in 2010, 2009 and 2008, respectively.

Future minimum lease commitments under noncancellable operating leases with initial or remaining terms of one year or more at December 31, 2010 are payable as follows (in millions):


2011	$	130
2012		94
2013		72
2014		56
2015		49
Thereafter		238

Total future lease commitments	$	639

Common Stock

12 Months Ended

Dec. 31, 2010

Common Stock [Abstract]

Common Stock

13. Common Stock

National Oilwell Varco has authorized 500 million shares of $.01 par value common stock. We also have authorized 10 million shares of $.01 par value preferred stock, none of which is issued or outstanding.

On November 17, 2010, the Company’s Board of Directors approved a cash dividend of $0.11 per share. The cash dividend was paid on December 17, 2010 to each stockholder of record on December 3, 2010. Cash dividends aggregated $46 million and $172 million for the three and twelve months ended December 31, 2010, respectively, and $460 million for both the three and twelve months ended December 31, 2009. The declaration and payment of future dividends is at the discretion of the Company’s Board of Directors and will be dependent upon the Company’s results of operations, financial condition, capital requirements and other factors deemed relevant by the Company’s Board of Directors.

Stock Options

Under the terms of National Oilwell Varco’s Long-Term Incentive Plan, as amended, 25.5 million shares of common stock are authorized for the grant of options to officers, key employees, non-employee directors and other persons. Options granted under our stock option plan generally vest over a three-year period starting one year from the date of grant and expire ten years from the date of grant. The purchase price of options granted may not be less than the closing market price of National Oilwell Varco common stock on the date of grant. At December 31, 2010, approximately 8 million shares were available for future grants.

We also have inactive stock option plans that were acquired in connection with the acquisitions of Varco International, Inc. in 2005 and Grant Prideco in 2008. We converted the outstanding stock options under these plans to options to acquire our common stock and no further options are being issued under these plans. Stock option information summarized below includes amounts for the National Oilwell Varco Long-Term Incentive Plan and stock plans of acquired companies. Options outstanding at December 31, 2010 under the stock option plans have exercise prices between $8.33 and $73.98 per share, and expire at various dates from January 31, 2011 to May 13, 2020.

The following summarizes options activity:


	Years Ended December 31,
	2010					2009					2008
	Number			Average		Number			Average		Number			Average
	of			Exercise		of			Exercise		of			Exercise
	Shares			Price		Shares			Price		Shares			Price
Shares under option at beginning of year		10,255,982		$	34.19		7,547,822		$	37.24		7,903,832		$	29.12
Granted		3,485,283			44.03		3,234,400			26.03		2,993,000			48.59
Cancelled		(232,488	)		40.53		(156,356	)		29.79		(218,560	)		30.90
Exercised		(2,469,233	)		30.35		(369,884	)		40.86		(3,130,450	)		27.08


Shares under option at end of year		11,039,544		$	38.01		10,255,982		$	34.19		7,547,822		$	37.24


Exercisable at end of year		5,067,186		$	36.31		5,308,465		$	33.14		3,110,462		$	26.17

The following summarizes information about stock options outstanding as of December 31, 2010:


	Weighted-Avg		Options Outstanding				Options Exercisable
	Remaining				Weighted-Avg				Weighted-Avg
Range of Exercise Price	Contractual Life		Shares		Exercise Price		Shares		Exercise Price
8.33 -15.00		2.79		416,027	$	11.42		395,639	$	11.42
15.92 - 33.29		7.25		3,214,610		24.68		1,174,403		22.45
33.57 - 73.98		7.53		7,408,907		45.29		3,497,144		43.89


Total		7.27		11,039,544	$	38.01		5,067,186	$	36.31

The weighted-average fair value of options granted during 2010, 2009 and 2008 was approximately $16.73, $11.89 and $22.16 (excluding options assumed in the Grant Prideco merger) per share, respectively, as determined using the Black-Scholes option-pricing model. The total intrinsic value of options exercised during 2010 and 2009 was $60 million and $6 million, respectively.

The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise activity. The use of the Black Scholes model requires the use of extensive actual employee exercise activity data and the use of a number of complex assumptions including expected volatility, risk-free interest rate, expected dividends and expected term.


	Years Ended December 31,
	2010			2009			2008
Valuation Assumptions:
Expected volatility		55.0	%		63.5	%		41.8	%
Risk-free interest rate		2.3	%		1.8	%		2.9	%
Expected dividends	$	0.4		$	—		$	—
Expected term (in years)		3.2			3.4			3.6

We used the actual volatility for traded options for the past 10 years prior to option date as the expected volatility assumption required in the Black Scholes model.

The risk-free interest rate assumption is based upon observed interest rates appropriate for the term of our employee stock options. The dividend yield assumption is based on the history and expectation of dividend payouts. The estimated expected term is based on actual employee exercise activity for the past ten years.

As stock-based compensation expense recognized in the Consolidated Statement of Income in 2010 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. ASC Topic 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on historical experience.

The following summary presents information regarding outstanding options as of December 31, 2010 and changes during 2010 with regard to options under all stock option plans:


						Weighted
				Weighted-		Remaining
				Average		Contractual
				Exercise		Term		Aggregate
	Shares			Price		(years)		Intrinsic Value
Outstanding at December 31, 2009		10,255,982		$	34.19
Granted		3,485,283		$	44.03
Exercised		(2,469,233	)	$	30.35
Cancelled		(232,488	)	$	40.53


Outstanding at December 31, 2010		11,039,544		$	38.01		7.27	$	312,423,777


Vested or expected to vest		10,669,951		$	38.01		7.27	$	304,394,486


Exercisable at December 31, 2010		5,067,186		$	36.31		5.69	$	152,742,256

As of December 31, 2010, total unrecognized compensation cost related to nonvested stock options was $47 million. This cost is expected to be recognized over a weighted-average period of two years. The total fair value of stock options vested in 2010, 2009 and 2008 was approximately $78 million, $40 million and $43 million, respectively. Cash received from option exercises for 2010, 2009 and 2008 was $73 million, $8 million and $78 million, respectively. The actual tax benefit realized for the tax deductions from option exercises totaled $16 million, $2 million and $46 million for 2010, 2009 and 2008, respectively. Cash used to settle equity instruments granted under all share-based payment arrangements for 2010, 2009 and 2008 was not material for any period.

Restricted Shares

The Company issues restricted stock awards (“RSA”) with no exercise price to officers and key employees in addition to stock options. Out of the total number of restricted stock awards granted, 543,035 were granted on February 16, 2010 and 1,440 were granted on May 12, 2010 and vest on the third anniversary of the date of grant. In addition, on May 12, 2010, 14,056 restricted stock awards were granted to the non-employee members of the Board of Directors. These restricted stock awards vest in equal thirds over three years on the anniversary of the grant date. The performance-based restricted stock awards of 171,400 were granted on February 16, 2010. The performance-based restricted stock awards granted will be 100% vested 36 months from the date of grant, subject to the performance condition of the Company’s average operating income growth, measured on a percentage basis, from January 1, 2010 through December 31, 2012 exceeding the median operating income level growth of a designated peer group over the same period. The estimated forfeiture rate of RSA’s is factored into the share-based compensation expense the Company recognizes.

The following summary presents information regarding outstanding restricted shares as of December 31, 2010, 2009 and 2008 and changes during 2010 and 2009:


				Weighted-Average
				Grant Date
Restricted Shares	Units			Fair Value
Nonvested at December 31, 2007		1,061,002		$	36.56
Granted		755,535		$	64.33
Vested		(307,905	)	$	68.12
Forfeited		(48,136	)	$	42.32


Nonvested at December 31, 2008		1,460,496		$	47.34
Granted		762,692		$	26.02
Vested		(7,322	)	$	36.05
Forfeited		(34,622	)	$	41.52


Nonvested at December 31, 2009		2,181,244		$	40.51

Granted		558,531		$	43.99
Vested		(921,454	)	$	43.28
Forfeited		(52,484	)	$	35.11


Nonvested at December 31, 2010		1,765,837		$	42.15

The weighted-average grant day fair value of RSA’s granted during the years ended 2010, 2009 and 2008 was $43.99, $26.02 and $64.16 (excluding RSA’s assumed in the Grant Prideco merger) per share, respectively. There were 921,454; 7,322 and 307,905 RSA’s that vested during 2010, 2009 and 2008, respectively. As of December 31, 2010, there was $22 million of unrecognized compensation cost related to nonvested RSA’s, which is expected to be recognized over a weighted-average period of two years.

- Definition

Disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References+ Details

Consolidated Statements of Stockholders' Equity and Comprehensive Income (Parenthetical) (USD $)	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Cash dividends, per common share	$ 0.11	$ 1.10
Retained Earnings
Cash dividends, per common share	$ 0.41	$ 1.10
Total Company Stockholders' Equity
Cash dividends, per common share	$ 0.41	$ 1.10