UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 5, 2014
NATIONAL OILWELL VARCO, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-12317 | 76-0475815 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 7909 Parkwood Circle Dr. Houston, Texas |
77036 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 713-346-7500
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.01 Completion of Acquisition or Disposition of Assets
On May 30, 2014, National Oilwell Varco, Inc. (“NOV” or the “Company”) completed the previously announced spin-off of its distribution business into an independent public company named NOW Inc., which trades on the New York Stock Exchange under the symbol “DNOW”. After the close of the New York Stock Exchange on May 30, 2014, the stockholders of record as of May 22, 2014 (the “Record Date”) received one share of NOW Inc. common stock for every four shares of NOV common shares as of the Record Date. No fractional shares of NOW Inc. common stock were distributed. Instead, the transfer agent aggregated any fractional shares into whole shares, sold those whole shares in the open market at prevailing rates and distributed the net cash proceeds, after deducting any taxes required to be withheld and any amount equal to all brokerage charges and commissions, pro rata to each holder who would otherwise have been entitled to receive fractional shares in the distribution.
Item 9.01 Financial Statements and Exhibits
(b) Pro Forma Financial Information
The unaudited pro forma consolidated financial statements of National Oilwell Varco, Inc. have been derived from our historical consolidated financial statements and are being presented to give the effect to the separation of NOW Inc. into an independent, publicly traded company. The unaudited pro forma consolidated balance sheet of National Oilwell Varco, Inc., as of March 31, 2014, and the unaudited pro forma consolidated income statements of National Oilwell Varco, Inc., for the three months ended March 31, 2014 and March 31, 2013, and for the years ended December 31, 2013, 2012 and 2011, and the related notes thereto are furnished as Exhibit 99.1 to this Current Report on Form 8-K.
| (d) | Exhibits |
The following exhibit is provided as part of the information furnished under Items 2.01 and 9.01 of this Current Report on Form 8-K:
| 99.1 | Unaudited pro forma consolidated financial statements | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: June 5, 2014 | NATIONAL OILWELL VARCO, INC. | |||||
| /s/ Brigitte Hunt | ||||||
| Brigitte Hunt | ||||||
| Vice President | ||||||
Index to Exhibits
| 99.1 | Financial Schedules | |
Exhibit 99.1
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated financial statements of National Oilwell Varco, Inc. have been derived from our historical consolidated financial statements and are being presented to give effect to the separation of NOW Inc. into an independent, publicly traded company. Effective with the filing of the National Oilwell Varco, Inc.’s Form 10-Q for the period ending June 30, 2014, NOW Inc. will be reported as a discontinued operation of National Oilwell Varco, Inc. The unaudited pro forma consolidated balance sheet has been prepared as though the separation of NOW Inc. occurred on March 31, 2014. The unaudited pro forma consolidated income statements have been prepared as though the separation of NOW Inc. occurred on January 1, 2011. Pro forma adjustments represent intercompany revenue and intercompany cost of revenue that were previously eliminated, but will be considered third party sales after the separation. Such transactions will continue after the separation. The following unaudited pro forma consolidated financial statements should be read in conjunction with our historical financial statements and accompanying notes.
The unaudited pro forma consolidated financial statements are for illustrative purposes only, and do not reflect what our financial position and results of operations would have been had the separation occurred on the dates indicated and are not necessarily indicative of our future financial position and future results of operations.
NATIONAL OILWELL VARCO, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
March 31, 2014
(In millions)
| Separation | Pro Forma | |||||||||||||||
| Historical | of NOW Inc. | Adjustments | Pro Forma | |||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: |
||||||||||||||||
| Cash and cash equivalents |
$ | 3,688 | $ | (175 | ) | $ | — | $ | 3,513 | |||||||
| Receivables, net |
5,310 | (754 | ) | — | 4,556 | |||||||||||
| Inventories, net |
5,659 | (839 | ) | — | 4,820 | |||||||||||
| Costs in excess of billings |
1,520 | — | — | 1,520 | ||||||||||||
| Deferred income taxes |
325 | (29 | ) | — | 296 | |||||||||||
| Prepaid and other current assets |
709 | (29 | ) | — | 680 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total current assets |
17,211 | (1,826 | ) | — | 15,385 | |||||||||||
| Property, plant and equipment, net |
3,437 | (104 | ) | — | 3,333 | |||||||||||
| Deferred income taxes |
479 | (15 | ) | — | 464 | |||||||||||
| Goodwill |
8,875 | (330 | ) | — | 8,545 | |||||||||||
| Intangibles, net |
4,953 | (67 | ) | — | 4,886 | |||||||||||
| Investment in unconsolidated affiliates |
402 | — | — | 402 | ||||||||||||
| Other assets |
123 | (1 | ) | — | 122 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total assets |
$ | 35,480 | $ | (2,343 | ) | $ | — | $ | 33,137 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
| Current liabilities: |
||||||||||||||||
| Accounts payable |
$ | 1,391 | $ | (313 | ) | $ | — | $ | 1,078 | |||||||
| Accrued liabilities |
2,717 | (100 | ) | — | 2,617 | |||||||||||
| Billings in excess of costs |
2,079 | — | — | 2,079 | ||||||||||||
| Accrued income taxes |
484 | (7 | ) | — | 477 | |||||||||||
| Deferred income taxes |
427 | — | — | 427 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total current liabilities |
7,098 | (420 | ) | — | 6,678 | |||||||||||
| Long-term debt |
3,149 | — | — | 3,149 | ||||||||||||
| Deferred income taxes |
2,088 | (17 | ) | — | 2,071 | |||||||||||
| Other liabilities |
353 | (2 | ) | — | 351 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities |
12,688 | (439 | ) | — | 12,249 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Commitments and contingencies |
||||||||||||||||
| Stockholders’ equity: |
||||||||||||||||
| Common stock—par value $.01; 1 billion shares authorized; 428,852,227 shares issued and outstanding at March 31, 2014 |
4 | — | — | 4 | ||||||||||||
| Additional paid-in capital |
8,933 | — | — | 8,933 | ||||||||||||
| Accumulated other comprehensive income (loss) |
(41 | ) | 17 | — | (24 | ) | ||||||||||
| Retained earnings |
13,801 | (1,921 | ) | — | 11,880 | |||||||||||
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|
|
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|
|||||||||
| Total Company stockholders’ equity |
22,697 | (1,904 | ) | — | 20,793 | |||||||||||
| Noncontrolling interests |
95 | — | — | 95 | ||||||||||||
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|
|
|
|
|
|
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|
|||||||||
| Total stockholders’ equity |
22,792 | (1,904 | ) | — | 20,888 | |||||||||||
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|
|
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|
|||||||||
| Total liabilities and stockholders’ equity |
$ | 35,480 | $ | (2,343 | ) | $ | — | $ | 33,137 | |||||||
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|||||||||
NATIONAL OILWELL VARCO, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Three Months Ended March 31, 2014
(In millions, except per share data)
| Separation | Pro Forma | |||||||||||||||
| Historical | of NOW Inc. | Adjustments | Pro Forma | |||||||||||||
| Revenue |
$ | 5,777 | $ | (1,077 | ) | 189 | (a) | $ | 4,889 | |||||||
| Cost of revenue |
4,381 | (971 | ) | 189 | (a) | 3,599 | ||||||||||
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|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
1,396 | (106 | ) | — | 1,290 | |||||||||||
| Selling, general and administrative |
535 | (44 | ) | — | 491 | |||||||||||
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|
|
|
|
|
|
|
|
|||||||||
| Operating profit |
861 | (62 | ) | — | 799 | |||||||||||
| Interest and financial costs |
(26 | ) | — | — | (26 | ) | ||||||||||
| Interest income |
4 | — | — | 4 | ||||||||||||
| Equity income in unconsolidated affiliates |
10 | — | — | 10 | ||||||||||||
| Other income (expense), net |
— | — | — | — | ||||||||||||
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|
|||||||||
| Income before income taxes |
849 | (62 | ) | — | 787 | |||||||||||
| Provision for income taxes |
260 | (21 | ) | — | 239 | |||||||||||
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|
|
|
|
|
|
|||||||||
| Net income |
589 | (41 | ) | — | 548 | |||||||||||
| Net income (loss) attributable to noncontrolling interests |
— | — | — | — | ||||||||||||
|
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|||||||||
| Net income attributable to Company |
$ | 589 | $ | (41 | ) | $ | — | $ | 548 | |||||||
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|||||||||
| Net income attributable to Company per share: |
||||||||||||||||
| Basic |
$ | 1.38 | $ | — | $ | — | $ | 1.28 | ||||||||
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|||||||||
| Diluted |
$ | 1.37 | $ | — | $ | — | $ | 1.28 | ||||||||
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|||||||||
| Cash dividends per share |
$ | 0.26 | $ | — | $ | — | $ | 0.26 | ||||||||
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|||||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
428 | — | — | 428 | ||||||||||||
|
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|
|||||||||
| Diluted |
429 | — | — | 429 | ||||||||||||
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|||||||||
NATIONAL OILWELL VARCO, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Three Months Ended March 31, 2013
(In millions, except per share data)
| Separation | Pro Forma | |||||||||||||||
| Historical | of NOW Inc. | Adjustments | Pro Forma | |||||||||||||
| Revenue |
$ | 5,307 | $ | (1,072 | ) | $ | 141 | (a) | $ | 4,376 | ||||||
| Cost of revenue |
4,043 | (975 | ) | 141 | (a) | 3,209 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
1,264 | (97 | ) | — | 1,167 | |||||||||||
| Selling, general and administrative |
513 | (39 | ) | — | 474 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating profit |
751 | (58 | ) | — | 693 | |||||||||||
| Interest and financial costs |
(28 | ) | — | — | (28 | ) | ||||||||||
| Interest income |
3 | — | — | 3 | ||||||||||||
| Equity income in unconsolidated affiliates |
19 | — | — | 19 | ||||||||||||
| Other income (expense), net |
(21 | ) | (2 | ) | — | (23 | ) | |||||||||
|
|
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|
|
|
|
|
|
|||||||||
| Income before income taxes |
724 | (60 | ) | — | 664 | |||||||||||
| Provision for income taxes |
224 | (19 | ) | — | 205 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
500 | (41 | ) | — | 459 | |||||||||||
| Net loss attributable to noncontrolling interests |
(2 | ) | — | — | (2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income attributable to Company |
$ | 502 | $ | (41 | ) | $ | — | $ | 461 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income attributable to Company per share: |
||||||||||||||||
| Basic |
$ | 1.18 | $ | — | $ | — | $ | 1.08 | ||||||||
|
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|
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|
|||||||||
| Diluted |
$ | 1.17 | $ | — | $ | — | $ | 1.08 | ||||||||
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|
|||||||||
| Cash dividends per share |
$ | 0.13 | $ | — | $ | — | $ | 0.13 | ||||||||
|
|
|
|
|
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|
|
|||||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
426 | — | — | 426 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
428 | — | — | 428 | ||||||||||||
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|
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|
|
|
|
|
|
|||||||||
NATIONAL OILWELL VARCO, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 2013
(In millions, except per share data)
| Separation | Pro Forma | 8-K | ||||||||||||||
| Historical | of NOW Inc. | Adjustments | Pro Forma | |||||||||||||
| Revenue |
$ | 22,869 | $ | (4,296 | ) | $ | 648 | (a) | $ | 19,221 | ||||||
| Cost of revenue |
17,380 | (3,911 | ) | 648 | (a) | 14,117 | ||||||||||
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|
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|
|||||||||
| Gross profit |
5,489 | (385 | ) | — | 5,104 | |||||||||||
| Selling, general and administrative |
2,066 | (161 | ) | — | 1,905 | |||||||||||
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|
|||||||||
| Operating profit |
3,423 | (224 | ) | — | 3,199 | |||||||||||
| Interest and financial costs |
(111 | ) | — | — | (111 | ) | ||||||||||
| Interest income |
12 | — | — | 12 | ||||||||||||
| Equity income in unconsolidated affiliates |
63 | — | — | 63 | ||||||||||||
| Other income (expense), net |
(41 | ) | 2 | — | (39 | ) | ||||||||||
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|||||||||
| Income before income taxes |
3,346 | (222 | ) | — | 3,124 | |||||||||||
| Provision for income taxes |
1,018 | (75 | ) | — | 943 | |||||||||||
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|
|||||||||
| Net income |
2,328 | (147 | ) | — | 2,181 | |||||||||||
| Net income attributable to noncontrolling interests |
1 | — | — | 1 | ||||||||||||
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|||||||||
| Net income attributable to Company |
$ | 2,327 | $ | (147 | ) | $ | — | $ | 2,180 | |||||||
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|||||||||
| Net income attributable to Company per share: |
||||||||||||||||
| Basic |
$ | 5.46 | $ | — | $ | — | $ | 5.12 | ||||||||
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|||||||||
| Diluted |
$ | 5.44 | $ | — | $ | — | $ | 5.09 | ||||||||
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|||||||||
| Cash dividends per share |
$ | 0.91 | $ | — | $ | — | $ | 0.91 | ||||||||
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|||||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
426 | — | — | 426 | ||||||||||||
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|||||||||
| Diluted |
428 | — | — | 428 | ||||||||||||
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|||||||||
NATIONAL OILWELL VARCO, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 2012
(In millions, except per share data)
| Separation | Pro Forma | |||||||||||||||
| Historical | of NOW Inc. | Adjustments | Pro Forma | |||||||||||||
| Revenue |
$ | 20,041 | $ | (3,414 | ) | $ | 567 | (a) | $ | 17,194 | ||||||
| Cost of revenue |
14,702 | (3,118 | ) | 567 | (a) | 12,151 | ||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Gross profit |
5,339 | (296 | ) | — | 5,043 | |||||||||||
| Selling, general and administrative |
1,782 | (128 | ) | — | 1,654 | |||||||||||
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|
|||||||||
| Operating profit |
3,557 | (168 | ) | — | 3,389 | |||||||||||
| Interest and financial costs |
(49 | ) | — | — | (49 | ) | ||||||||||
| Interest income |
10 | — | — | 10 | ||||||||||||
| Equity income in unconsolidated affiliates |
58 | — | — | 58 | ||||||||||||
| Other income (expense), net |
(71 | ) | 3 | — | (68 | ) | ||||||||||
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|
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|
|||||||||
| Income before income taxes |
3,505 | (165 | ) | — | 3,340 | |||||||||||
| Provision for income taxes |
1,022 | (57 | ) | — | 965 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
2,483 | (108 | ) | — | 2,375 | |||||||||||
| Net loss attributable to noncontrolling interests |
(8 | ) | — | — | (8 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income attributable to Company |
$ | 2,491 | $ | (108 | ) | $ | — | $ | 2,383 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income attributable to Company per share: |
||||||||||||||||
| Basic |
$ | 5.86 | $ | — | $ | — | $ | 5.61 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
$ | 5.83 | $ | — | $ | — | $ | 5.58 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Cash dividends per share |
$ | 0.49 | $ | — | $ | — | $ | 0.49 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
425 | — | — | 425 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
427 | — | — | 427 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
NATIONAL OILWELL VARCO, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 2011
(In millions, except per share data)
| Separation | Pro Forma | |||||||||||||||
| Historical | of NOW Inc. | Adjustments | Pro Forma | |||||||||||||
| Revenue |
$ | 14,658 | $ | (1,641 | ) | $ | 458 | (a) | $ | 13,475 | ||||||
| Cost of revenue |
10,161 | (1,440 | ) | 458 | (a) | 9,179 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
4,497 | (201 | ) | — | 4,296 | |||||||||||
| Selling, general and administrative |
1,560 | (73 | ) | — | 1,487 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating profit |
2,937 | (128 | ) | — | 2,809 | |||||||||||
| Interest and financial costs |
(40 | ) | — | — | (40 | ) | ||||||||||
| Interest income |
18 | — | — | 18 | ||||||||||||
| Equity income in unconsolidated affiliates |
46 | — | — | 46 | ||||||||||||
| Other income (expense), net |
(39 | ) | — | — | (39 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income taxes |
2,922 | (128 | ) | — | 2,794 | |||||||||||
| Provision for income taxes |
937 | (43 | ) | — | 894 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
1,985 | (85 | ) | — | 1,900 | |||||||||||
| Net loss attributable to noncontrolling interests |
(9 | ) | — | — | (9 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income attributable to Company |
$ | 1,994 | $ | (85 | ) | $ | — | $ | 1,909 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income attributable to Company per share: |
||||||||||||||||
| Basic |
$ | 4.73 | $ | — | $ | — | $ | 4.52 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
$ | 4.70 | $ | — | $ | — | $ | 4.50 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Cash dividends per share |
$ | 0.45 | $ | — | $ | — | $ | 0.45 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
422 | — | — | 422 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
424 | — | — | 424 | ||||||||||||
|
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|
|
|
|
|
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NATIONAL OILWELL VARCO, INC.
NOTES UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
| (a) | Pro forma adjustments represent intercompany revenue and intercompany cost of revenue that were previously eliminated, but will be considered third party sales after the separation. Such transactions will continue after the separation. |