Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 31, 2013 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'NOV | ' |
Entity Registrant Name | 'NATIONAL OILWELL VARCO INC | ' |
Entity Central Index Key | '0001021860 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 428,100,188 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $2,741 | $3,319 |
Receivables, net | 4,801 | 4,320 |
Inventories, net | 6,078 | 5,891 |
Costs in excess of billings | 1,640 | 1,225 |
Deferred income taxes | 370 | 349 |
Prepaid and other current assets | 625 | 574 |
Total current assets | 16,255 | 15,678 |
Property, plant and equipment, net | 3,333 | 2,945 |
Deferred income taxes | 372 | 413 |
Goodwill | 9,036 | 7,172 |
Intangibles, net | 5,180 | 4,743 |
Investment in unconsolidated affiliates | 373 | 393 |
Other assets | 124 | 140 |
Total assets | 34,673 | 31,484 |
Current liabilities: | ' | ' |
Accounts payable | 1,312 | 1,200 |
Accrued liabilities | 2,857 | 2,571 |
Billings in excess of costs | 1,553 | 1,189 |
Current portion of long-term debt and short-term borrowings | ' | 1 |
Accrued income taxes | 260 | 355 |
Deferred income taxes | 335 | 333 |
Total current liabilities | 6,317 | 5,649 |
Long-term debt | 3,749 | 3,148 |
Deferred income taxes | 2,443 | 1,997 |
Other liabilities | 439 | 334 |
Total liabilities | 12,948 | 11,128 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock-par value $.01; 1 billion shares authorized; 427,719,063 and 426,928,322 shares issued and outstanding at September 30, 2013 and December 31, 2012 | 4 | 4 |
Additional paid-in capital | 8,846 | 8,743 |
Accumulated other comprehensive income | 1 | 107 |
Retained earnings | 12,776 | 11,385 |
Total Company stockholders' equity | 21,627 | 20,239 |
Noncontrolling interests | 98 | 117 |
Total stockholders' equity | 21,725 | 20,356 |
Total liabilities and stockholders' equity | $34,673 | $31,484 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement Of Financial Position [Abstract] | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 427,719,063 | 426,928,322 |
Common stock, shares outstanding | 427,719,063 | 426,928,322 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Statement [Abstract] | ' | ' | ' | ' |
Revenue | $5,789 | $5,319 | $16,697 | $14,356 |
Cost of revenue | 4,327 | 3,948 | 12,705 | 10,411 |
Gross profit | 1,462 | 1,371 | 3,992 | 3,945 |
Selling, general and administrative | 516 | 473 | 1,526 | 1,291 |
Operating profit | 946 | 898 | 2,466 | 2,654 |
Interest and financial costs | -26 | -11 | -84 | -28 |
Interest income | 2 | 2 | 8 | 8 |
Equity income in unconsolidated affiliates | 13 | 7 | 47 | 43 |
Other income (expense), net | -16 | -22 | -24 | -43 |
Income before income taxes | 919 | 874 | 2,413 | 2,634 |
Provision for income taxes | 283 | 265 | 746 | 819 |
Net income | 636 | 609 | 1,667 | 1,815 |
Net income (loss) attributable to noncontrolling interests | ' | -3 | -2 | -8 |
Net income attributable to Company | $636 | $612 | $1,669 | $1,823 |
Net income attributable to Company per share: | ' | ' | ' | ' |
Basic | $1.49 | $1.44 | $3.92 | $4.29 |
Diluted | $1.49 | $1.43 | $3.90 | $4.28 |
Cash dividends per share | $0.26 | $0.12 | $0.65 | $0.36 |
Weighted average shares outstanding: | ' | ' | ' | ' |
Basic | 426 | 425 | 426 | 425 |
Diluted | 428 | 427 | 428 | 426 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement Of Income And Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | $636 | $609 | $1,667 | $1,815 |
Currency translation adjustments | 154 | 84 | -84 | 28 |
Changes in derivative financial instruments, net of tax | 48 | 64 | -22 | 74 |
Comprehensive income | 838 | 757 | 1,561 | 1,917 |
Comprehensive loss attributable to noncontrolling interest | ' | -3 | -2 | -8 |
Comprehensive income attributable to Company | $838 | $760 | $1,563 | $1,925 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net income | $1,667 | $1,815 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 555 | 462 |
Deferred income taxes | -91 | 40 |
Equity income in unconsolidated affiliates | -47 | -43 |
Dividend from unconsolidated affiliate | 66 | 61 |
Other, net | 93 | 76 |
Change in operating assets and liabilities, net of acquisitions: | ' | ' |
Receivables | -389 | -251 |
Inventories | -47 | -1,152 |
Costs in excess of billings | -415 | -472 |
Prepaid and other current assets | -18 | -254 |
Accounts payable | 46 | 165 |
Billings in excess of costs | 364 | 173 |
Income taxes payable | -93 | -569 |
Other assets/liabilities, net | 188 | -231 |
Net cash provided by (used in) operating activities | 1,879 | -180 |
Cash flows from investing activities: | ' | ' |
Purchases of property, plant and equipment | -484 | -382 |
Business acquisitions, net of cash acquired | -2,397 | -2,305 |
Other | 69 | 24 |
Net cash used in investing activities | -2,812 | -2,663 |
Cash flows from financing activities: | ' | ' |
Borrowings against lines of credit and other debt | 2,357 | 1,019 |
Repayments on debt | -1,758 | -3 |
Cash dividends paid | -278 | -153 |
Proceeds from stock options exercised | 25 | 111 |
Other | 17 | 31 |
Net cash provided by financing activities | 363 | 1,005 |
Effect of exchange rates on cash | -8 | 5 |
Decrease in cash and cash equivalents | -578 | -1,833 |
Cash and cash equivalents, beginning of period | 3,319 | 3,535 |
Cash and cash equivalents, end of period | 2,741 | 1,702 |
Cash payments during the period for: | ' | ' |
Interest | 64 | 21 |
Income taxes | $886 | $1,320 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended | |
Sep. 30, 2013 | ||
Accounting Policies [Abstract] | ' | |
Basis of Presentation | ' | |
1 | Basis of Presentation | |
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) 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. Actual results could differ from those estimates. | ||
The accompanying unaudited consolidated financial statements of National Oilwell Varco, Inc. (the “Company”) present information in accordance with GAAP in the United States for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X. They do not include all information or footnotes required by GAAP in the United States for complete consolidated financial statements and should be read in conjunction with our 2012 Annual Report on Form 10-K. | ||
In our opinion, the consolidated financial statements include all adjustments, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year. | ||
Fair Value of Financial Instruments | ||
The carrying amounts of 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. See Note 7 for the fair value of long-term debt and Note 10 for the fair value of derivative financial instruments. |
Inventories_net
Inventories, net | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories, net | ' | ||||||||
2 | Inventories, net | ||||||||
Inventories consist of (in millions): | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Raw materials and supplies | $ | 1,191 | $ | 1,268 | |||||
Work in process | 1,057 | 905 | |||||||
Finished goods and purchased products | 3,830 | 3,718 | |||||||
Total | $ | 6,078 | $ | 5,891 | |||||
Accrued_Liabilities
Accrued Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Payables And Accruals [Abstract] | ' | ||||||||
Accrued Liabilities | ' | ||||||||
3 | Accrued Liabilities | ||||||||
Accrued liabilities consist of (in millions): | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Customer prepayments and billings | $ | 786 | $ | 699 | |||||
Accrued vendor costs | 648 | 444 | |||||||
Compensation | 424 | 511 | |||||||
Warranty | 222 | 194 | |||||||
Taxes (non income) | 136 | 150 | |||||||
Insurance | 128 | 108 | |||||||
Fair value of derivatives | 16 | 18 | |||||||
Interest | 31 | 14 | |||||||
Other | 466 | 433 | |||||||
Total | $ | 2,857 | $ | 2,571 | |||||
Service and Product Warranties | |||||||||
The Company provides certain service and product warranties. 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 Accounting Standards Codification (“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, 2012 | $ | 194 | |||||||
Net provisions for warranties issued during the year | 75 | ||||||||
Amounts incurred | (53 | ) | |||||||
Currency translation adjustments and other | 6 | ||||||||
Balance at September 30, 2013 | $ | 222 | |||||||
Costs_and_Estimated_Earnings_o
Costs and Estimated Earnings on Uncompleted Contracts | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Text Block [Abstract] | ' | ||||||||
Costs and Estimated Earnings on Uncompleted Contracts | ' | ||||||||
4 | Costs and Estimated Earnings on Uncompleted Contracts | ||||||||
Costs and estimated earnings on uncompleted contracts consist of (in millions): | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Costs incurred on uncompleted contracts | $ | 7,515 | $ | 5,731 | |||||
Estimated earnings | 3,537 | 3,160 | |||||||
11,052 | 8,891 | ||||||||
Less: Billings to date | 10,965 | 8,855 | |||||||
$ | 87 | $ | 36 | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ | 1,640 | $ | 1,225 | |||||
Billings in excess of costs and estimated earnings on uncompleted contracts | (1,553 | ) | (1,189 | ) | |||||
$ | 87 | $ | 36 | ||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||||||||||||||||||||||
5 | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||
The components of accumulated other comprehensive income (loss) are as follows (in millions): | |||||||||||||||||||||||||||||||||
Derivative | Defined | ||||||||||||||||||||||||||||||||
Currency | Financial | Benefit | |||||||||||||||||||||||||||||||
Translation | Instruments, | Plans, | |||||||||||||||||||||||||||||||
Adjustments | Net of Tax | Net of Tax | Total | ||||||||||||||||||||||||||||||
Balance at December 31, 2012 | $ | 132 | $ | 42 | $ | (67 | ) | $ | 107 | ||||||||||||||||||||||||
Accumulated other comprehensive income (loss) before reclassifications | (59 | ) | (22 | ) | — | (81 | ) | ||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (25 | ) | — | — | (25 | ) | |||||||||||||||||||||||||||
Balance at September 30, 2013 | $ | 48 | $ | 20 | $ | (67 | ) | $ | 1 | ||||||||||||||||||||||||
The components of amounts reclassified from accumulated other comprehensive income (loss) are as follows (in millions): | |||||||||||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||
Currency | Derivative | Defined | Total | Currency | Derivative | Defined | Total | ||||||||||||||||||||||||||
Translation | Financial | Benefit | Translation | Financial | Benefit | ||||||||||||||||||||||||||||
Adjustments | Instruments | Plans | Adjustments | Instruments | Plans | ||||||||||||||||||||||||||||
Revenue | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) | $ | — | $ | 3 | $ | — | $ | 3 | |||||||||||||||
Cost of revenue | — | 7 | — | 7 | — | 11 | — | 11 | |||||||||||||||||||||||||
Other income (expense), net | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Tax effect | — | (2 | ) | — | (2 | ) | — | (4 | ) | — | (4 | ) | |||||||||||||||||||||
$ | — | $ | 2 | $ | — | $ | 2 | $ | — | $ | 10 | $ | — | $ | 10 | ||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||
Currency | Derivative | Defined | Total | Currency | Derivative | Defined | Total | ||||||||||||||||||||||||||
Translation | Financial | Benefit | Translation | Financial | Benefit | ||||||||||||||||||||||||||||
Adjustments | Instruments | Plans | Adjustments | Instruments | Plans | ||||||||||||||||||||||||||||
Revenue | $ | — | $ | (7 | ) | $ | — | $ | (7 | ) | $ | — | $ | 9 | $ | — | $ | 9 | |||||||||||||||
Cost of revenue | — | 8 | — | 8 | — | 22 | — | 22 | |||||||||||||||||||||||||
Other income (expense), net | (25 | ) | — | — | (25 | ) | — | — | — | — | |||||||||||||||||||||||
Tax effect | — | (1 | ) | — | (1 | ) | — | (9 | ) | — | (9 | ) | |||||||||||||||||||||
$ | (25 | ) | $ | — | $ | — | $ | (25 | ) | $ | — | $ | 22 | $ | — | $ | 22 | ||||||||||||||||
The Company’s reporting currency is the U.S. dollar. A majority of the Company’s international entities in which there is a substantial investment have the local currency as their functional currency. As a result, currency translation adjustments resulting from the process of translating the entities’ financial statements into the reporting currency are reported in other comprehensive income or loss in accordance with ASC Topic 830 “Foreign Currency Matters” (“ASC Topic 830”). For the three months ended September 30, 2013 a majority of these local currencies strengthened against the U.S. dollar. This resulted in net other comprehensive income of $154 million upon the translation from local currencies to the U.S. dollar. However, for the nine months ended September 30, 2013 a majority of these local currencies weakened against the U.S. dollar resulting in a net other comprehensive loss of $59 million upon the translation from local currencies to the U.S. dollar. Due to the sale of a foreign subsidiary during the second quarter of 2013, $25 million of currency translation gains were reclassified from accumulated other comprehensive income (loss) into other income (expense), net in the Consolidated Statements of Income. For the three and nine months ended September 30, 2012, a majority of these local currencies strengthened against the U.S. dollar which resulted in other comprehensive income of $84 million and $28 million, respectively. | |||||||||||||||||||||||||||||||||
The effect of changes in the fair values of derivatives designated as cash flow hedges are accumulated in other comprehensive income (loss), net of tax, until the underlying transactions to which they are designed to hedge are realized. The movement in other comprehensive income (loss) from period to period will be the result of the combination of changes in fair value for open derivatives and the outflow of other comprehensive income (loss) related to cumulative changes in the fair value of derivatives that have settled in the current or prior periods. The accumulated effect was other comprehensive income of $48 million (net of tax of $17 million) and other comprehensive loss of $22 million (net of tax of $10 million) for the three and nine months ended September 30, 2013, respectively. The accumulated effect was other comprehensive income of $64 million (net of tax of $23 million) and $74 million (net of tax of $27 million) for the three and nine months ended September 30, 2012, respectively. | |||||||||||||||||||||||||||||||||
Business_Segments
Business Segments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Business Segments | ' | ||||||||||||||||
6 | Business Segments | ||||||||||||||||
Operating results by segment are as follows (in millions): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenue: | |||||||||||||||||
Rig Technology | $ | 2,945 | $ | 2,547 | $ | 8,406 | $ | 7,211 | |||||||||
Petroleum Services & Supplies | 1,809 | 1,717 | 5,259 | 5,197 | |||||||||||||
Distribution & Transmission | 1,342 | 1,315 | 3,864 | 2,659 | |||||||||||||
Eliminations | (307 | ) | (260 | ) | (832 | ) | (711 | ) | |||||||||
Total Revenue | $ | 5,789 | $ | 5,319 | $ | 16,697 | $ | 14,356 | |||||||||
Operating Profit: | |||||||||||||||||
Rig Technology | $ | 706 | $ | 598 | $ | 1,830 | $ | 1,699 | |||||||||
Petroleum Services & Supplies | 321 | 383 | 849 | 1,161 | |||||||||||||
Distribution & Transmission | 74 | 42 | 195 | 131 | |||||||||||||
Unallocated expenses and eliminations | (155 | ) | (125 | ) | (408 | ) | (337 | ) | |||||||||
Total Operating Profit | $ | 946 | $ | 898 | $ | 2,466 | $ | 2,654 | |||||||||
Operating Profit %: | |||||||||||||||||
Rig Technology | 24 | % | 23.5 | % | 21.8 | % | 23.6 | % | |||||||||
Petroleum Services & Supplies | 17.7 | % | 22.3 | % | 16.1 | % | 22.3 | % | |||||||||
Distribution & Transmission | 5.5 | % | 3.2 | % | 5 | % | 4.9 | % | |||||||||
Total Operating Profit % | 16.3 | % | 16.9 | % | 14.8 | % | 18.5 | % | |||||||||
Included in Rig Technology revenue and operating profit for the three and nine months ended September 30, 2013, are $102 million in net gains resulting from a legal settlement. | |||||||||||||||||
Included in operating profit are certain other costs related to acquisitions. These certain other costs include administration costs and the amortization of backlog and inventory that was stepped up to fair value during purchase accounting. Other costs by segment are as follows (in millions): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Other costs: | |||||||||||||||||
Rig Technology | $ | 2 | $ | 12 | $ | 22 | $ | 33 | |||||||||
Petroleum Services & Supplies | 3 | — | 90 | 3 | |||||||||||||
Distribution & Transmission | 4 | 36 | 19 | 44 | |||||||||||||
Total other costs | $ | 9 | $ | 48 | $ | 131 | $ | 80 | |||||||||
The Company had revenues of 9% and 10% of total revenue from one of its customers for each of the three and nine months ended September 30, 2013 and 2012, respectively. This customer, Samsung Heavy Industries, is a shipyard acting as a general contractor for its customers, who are drillship owners and drilling contractors. This shipyard’s customers have specified that the Company’s drilling equipment be installed on their drillships and have required the shipyard to issue contracts to the Company. | |||||||||||||||||
Debt
Debt | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt | ' | ||||||||
7 | Debt | ||||||||
Debt consists of (in millions): | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Senior Notes, interest at 6.125% payable semiannually, principal due on August 15, 2015 | $ | 151 | $ | 151 | |||||
Senior Notes, interest at 1.35% payable semiannually, principal due on December 1, 2017 | 500 | 500 | |||||||
Senior Notes, interest at 2.6% payable semiannually, principal due on December 1, 2022 | 1,395 | 1,395 | |||||||
Senior Notes, interest at 3.95% payable semiannually, principal due on December 1, 2042 | 1,096 | 1,096 | |||||||
Commercial Paper | 600 | — | |||||||
Other | 7 | 7 | |||||||
Total debt | 3,749 | 3,149 | |||||||
Less current portion | — | 1 | |||||||
Long-term debt | $ | 3,749 | $ | 3,148 | |||||
The Company has a $3.5 billion, five-year unsecured revolving credit facility which expires September 28, 2018, following a one year extension executed in September 2013. In August 2013, the Company initiated a commercial paper program. Borrowings under the commercial paper program are classified as long-term as the program is supported by the $3.5 billion, five-year revolving credit facility. At September 30, 2013, there were $600 million in commercial paper borrowings, and there were $802 million in outstanding letters of credit issued under the credit facility, resulting in $2,098 million of funds available under this revolving credit facility. Interest under this multicurrency facility is based upon LIBOR, NIBOR or EURIBOR plus 0.875% subject to a ratings-based grid, or the prime rate. The credit facility contains a financial covenant regarding maximum debt to capitalization and the Company was in compliance at September 30, 2013. | |||||||||
The Company also had $3,194 million of additional outstanding letters of credit at September 30, 2013, primarily in Norway, that are under various bilateral committed letter of credit facilities. Other letters of credit are issued as bid bonds and performance bonds. | |||||||||
The fair value of the Company’s Senior Notes are estimated using Level 2 inputs in the fair value hierarchy and is based on quoted prices for those or similar instruments. At September 30, 2013 and December 31, 2012, the fair value of the Company’s unsecured Senior Notes approximated $2,932 million and $3,190 million, respectively. At September 30, 2013 and December 31, 2012, the carrying value of the Company’s unsecured Senior Notes was $3,142 million. The carrying value of the Company’s variable rate borrowings approximates fair value. |
Tax
Tax | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Tax | ' | ||||||||||||||||
8 | Tax | ||||||||||||||||
The effective tax rate for each of the three and nine months ended September 30, 2013 was 30.8% and 30.9%, respectively, compared to 30.3% and 31.1% for the same periods in 2012. Compared to the U.S. statutory rate, the effective tax rate was positively impacted in all periods by the effect of lower tax rates on income earned in foreign jurisdictions, the tax rate change on timing differences and the deduction in the U.S. for manufacturing activities. The effective tax rate for 2013 was negatively impacted by the change in valuation allowance and foreign exchange gains for tax reporting in Norway, while 2012 was positively impacted by foreign exchange losses for tax reporting in Norway. | |||||||||||||||||
The difference between the effective tax rate reflected in the provision for income taxes and the U.S. federal statutory rate of 35% was as follows (in millions): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Federal income tax at U.S. federal statutory rate | $ | 322 | $ | 306 | $ | 845 | $ | 922 | |||||||||
Foreign income tax rate differential | (50 | ) | (29 | ) | (172 | ) | (109 | ) | |||||||||
State income tax, net of federal benefit | 5 | 7 | 17 | 24 | |||||||||||||
Nondeductible expenses | 4 | — | 20 | 23 | |||||||||||||
Tax benefit of manufacturing deduction | (4 | ) | (12 | ) | (20 | ) | (30 | ) | |||||||||
Foreign dividends, net of foreign tax credits | 12 | 2 | 24 | 22 | |||||||||||||
Tax impact of foreign exchange | (12 | ) | (15 | ) | 27 | (33 | ) | ||||||||||
Tax rate change on temporary differences | (16 | ) | — | (16 | ) | — | |||||||||||
Change in valuation allowance | 32 | 2 | 40 | 4 | |||||||||||||
Other | (10 | ) | 4 | (19 | ) | (4 | ) | ||||||||||
Provision for income taxes | $ | 283 | $ | 265 | $ | 746 | $ | 819 | |||||||||
The balance of unrecognized tax benefits at September 30, 2013 was $128 million, $55 million of which if ultimately realized, would be recorded as income tax benefit. The Company recognized no material changes in the balance of unrecognized tax benefits for the three and nine months ended September 30, 2013. | |||||||||||||||||
The Company does not anticipate that its total unrecognized tax benefits will significantly change due to the settlement of audits or the expiration of statutes of limitation within 12 months of this reporting date. | |||||||||||||||||
The Company is subject to taxation in the U.S., various states and foreign jurisdictions. The Company has significant operations in the United States, Canada, the United Kingdom, the Netherlands and Norway. Tax years that remain subject to examination by major tax jurisdiction vary by legal entity, but are generally open in the U.S. for tax years after 2007 and outside the U.S. for tax years after 2006. | |||||||||||||||||
To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts have been classified as a component of income tax expense in the financial statements. | |||||||||||||||||
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | |
Sep. 30, 2013 | ||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | |
Stock-Based Compensation | ' | |
9 | Stock-Based Compensation | |
The Company has a stock-based compensation plan known as the National Oilwell Varco, Inc. Long-Term Incentive Plan (the “Plan”). The Plan provides for the granting of stock options, performance-based share awards, restricted stock, phantom shares, stock payments and stock appreciation rights. The number of shares authorized under the Plan was increased during the second quarter of 2013 and is 39.5 million. At September 30, 2013, 14,443,427 shares remain available for future grants under the Plan, all of which are available for grants of stock options, performance-based share awards, restricted stock awards, phantom shares, stock payments and stock appreciation rights. During the first quarter of 2013, the Company concluded that the performance conditions relating to the performance-based restricted stock awards granted on February 16, 2010 were not met. As a result, the Company reversed $8 million in previously recognized stock-based compensation expense related to performance-based restricted stock awards that did not vest. Total stock based compensation for all stock-based compensation arrangements under the Plan was $25 million and $67 million for the three and nine months ended September 30, 2013, respectively, and $23 million and $57 million for the three and nine months ended September 30, 2012, respectively. The total income tax benefit recognized in the Consolidated Statements of Income for all stock-based compensation arrangements under the Plan was $8 million and $21 million for the three and nine months ended September 30, 2013, respectively, and $6 million and $17 million for the three and nine months ended September 30, 2012, respectively. | ||
During the nine months ended September 30, 2013, the Company granted 2,819,806 stock options with a fair value of $24.10 per share, 540,194 shares of restricted stock and restricted stock units with a fair value of $69.33 per share and 16,702 shares of restricted stock with a fair value of $69.17 per share. In addition, the Company granted performance share awards to senior management employees with potential payouts varying from zero to 368,860 shares. The stock options were granted February 15, 2013 with an exercise price of $69.33. These options generally vest over a three-year period from the grant date. The restricted stock and restricted stock units were granted February 15, 2013 and vest on the third anniversary of the date of grant, except for a special grant of 16,352 restricted stock units which vest on the second anniversary of the date of grant (subject to the satisfaction of a performance condition). On May 22, 2013, the 16,702 restricted stock awards, with a fair value of $69.17 per share, 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 share awards were granted on March 22, 2013 and can be earned based on performance against established goals over a three-year performance period. The performance share awards are divided into two equal, independent parts that are subject to two separate performance metrics: 50% with a TSR (total shareholder return) goal (the “TSR Award”) and 50% with an internal ROC (return on capital) goal (the “ROC Award”). | ||
Performance against the TSR goal is determined by comparing the performance of the Company’s TSR with the TSR performance of the members of the OSX index for the three year performance period. Performance against the ROC goal is determined by comparing the performance of the Company’s actual ROC performance average for each of the three years of the performance period against the ROC goal set by the Company’s Compensation Committee. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 9 Months Ended | ||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | ' | ||||||||||||||||||||||||||||||||||
10 | Derivative Financial Instruments | ||||||||||||||||||||||||||||||||||
ASC Topic 815, “Derivatives and Hedging” (“ASC Topic 815”) requires a company 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 risk managed by using derivative instruments is foreign currency exchange rate risk. Forward contracts against various foreign currencies are entered into to manage the foreign currency exchange rate risk on forecasted revenues and expenses denominated in currencies other than the functional currency of the operating unit (cash flow 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). | |||||||||||||||||||||||||||||||||||
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 cash flow 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 September 30, 2013, the Company has determined that the fair value of its derivative financial instruments representing assets of $63 million and liabilities of $26 million (primarily currency related derivatives) are determined using level 2 inputs (inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability) in the fair value hierarchy as the fair value is based on publicly available foreign exchange and interest rates at each financial reporting date. At September 30, 2013, the net fair value of the Company’s foreign currency forward contracts totaled a net asset of $37 million. | |||||||||||||||||||||||||||||||||||
At September 30, 2013, 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 | |||||||||||||||||||||||||||||||||||
To protect against the volatility associated with foreign currency cash flows resulting from forecasted revenues 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 revenues and expenses 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. | |||||||||||||||||||||||||||||||||||
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, is recognized in the Consolidated Statements of Income during the current period. | |||||||||||||||||||||||||||||||||||
The Company had the following outstanding foreign currency forward contracts that were entered into to hedge nonfunctional currency cash flows from forecasted revenues and expenses (in millions): | |||||||||||||||||||||||||||||||||||
Currency Denomination | |||||||||||||||||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||||||||||||
Foreign Currency | 2013 | 2012 | |||||||||||||||||||||||||||||||||
Norwegian Krone | NOK | 9,631 | NOK | 6,281 | |||||||||||||||||||||||||||||||
U.S. Dollar | $ | 426 | $ | 331 | |||||||||||||||||||||||||||||||
Euro | € | 376 | € | 389 | |||||||||||||||||||||||||||||||
Danish Krone | DKK | 222 | DKK | 134 | |||||||||||||||||||||||||||||||
British Pound Sterling | £ | 26 | £ | 6 | |||||||||||||||||||||||||||||||
Singapore Dollar | SGD | 15 | SGD | 14 | |||||||||||||||||||||||||||||||
Non-designated Hedging Strategy | |||||||||||||||||||||||||||||||||||
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. | |||||||||||||||||||||||||||||||||||
For derivative instruments that are non-designated, the gain or loss on the derivative instrument subject to the hedged risk (i.e., nonfunctional currency monetary accounts) is recognized in other income (expense), net in current earnings. | |||||||||||||||||||||||||||||||||||
The Company had the following outstanding foreign currency forward contracts that hedge the fair value of nonfunctional currency monetary accounts (in millions): | |||||||||||||||||||||||||||||||||||
Currency Denomination | |||||||||||||||||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||||||||||||
Foreign Currency | 2013 | 2012 | |||||||||||||||||||||||||||||||||
Norwegian Krone | NOK | 2,121 | NOK | 1,684 | |||||||||||||||||||||||||||||||
Russian Ruble | RUB | 1,779 | RUB | 1,467 | |||||||||||||||||||||||||||||||
U.S. Dollar | $ | 532 | $ | 967 | |||||||||||||||||||||||||||||||
Danish Krone | DKK | 261 | DKK | 177 | |||||||||||||||||||||||||||||||
Euro | € | 214 | € | 225 | |||||||||||||||||||||||||||||||
Brazilian Real | BRL | 56 | BRL | 135 | |||||||||||||||||||||||||||||||
British Pound Sterling | £ | 23 | £ | 9 | |||||||||||||||||||||||||||||||
Singapore Dollar | SGD | 16 | SGD | 24 | |||||||||||||||||||||||||||||||
Swedish Krone | SEK | 2 | SEK | 5 | |||||||||||||||||||||||||||||||
Canadian Dollar | CAD | 2 | CAD | 2 | |||||||||||||||||||||||||||||||
The Company has the following gross fair values of its derivative instruments and their balance sheet classifications (in millions): | |||||||||||||||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||
Balance Sheet | September 30, | December 31, | Balance Sheet | September 30, | December 31, | ||||||||||||||||||||||||||||||
Location | 2013 | 2012 | Location | 2013 | 2012 | ||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments under ASC Topic 815 | |||||||||||||||||||||||||||||||||||
Foreign exchange contracts | Prepaid and other current assets | $ | 36 | $ | 57 | Accrued liabilities | $ | 8 | $ | 5 | |||||||||||||||||||||||||
Foreign exchange contracts | Other Assets | 12 | 24 | Other Liabilities | 10 | 1 | |||||||||||||||||||||||||||||
Total derivatives designated as hedging instruments under ASC Topic 815 | $ | 48 | $ | 81 | $ | 18 | $ | 6 | |||||||||||||||||||||||||||
Derivatives not designated as hedging instruments under ASC Topic 815 | |||||||||||||||||||||||||||||||||||
Foreign exchange contracts | Prepaid and other current assets | $ | 15 | $ | 24 | Accrued liabilities | $ | 8 | $ | 13 | |||||||||||||||||||||||||
Total derivatives not designated as hedging instruments under ASC Topic 815 | $ | 15 | $ | 24 | $ | 8 | $ | 13 | |||||||||||||||||||||||||||
Total derivatives | $ | 63 | $ | 105 | $ | 26 | $ | 19 | |||||||||||||||||||||||||||
The Effect of Derivative Instruments on the Consolidated Statements 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) | ||||||||||||||||||||||||||||||
Nine Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | |||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||
Revenue | 7 | (9 | ) | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | (32 | ) | 69 | Cost of revenue | (8 | ) | (22 | ) | Other income (expense), net | 6 | 5 | ||||||||||||||||||||||||
Total | (32 | ) | 69 | (1 | ) | (31 | ) | 6 | 5 | ||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||||
Foreign exchange contracts | Other income (expense), net | 13 | 8 | ||||||||||||||||||||||||||||||||
Total | 13 | 8 | |||||||||||||||||||||||||||||||||
(a) | The Company expects $(26) million of the accumulated other comprehensive income (loss) to be reclassified into earnings within the next twelve months offset by gains (losses) from the underlying transactions resulting in no impact to earnings or cash flow. | ||||||||||||||||||||||||||||||||||
(b) | The amount of gain (loss) recognized in income represents nil and $(1) million related to the ineffective portion of the hedging relationships for the nine months ended September 30, 2013 and 2012, respectively, and $6 million and $6 million related to the amount excluded from the assessment of the hedge effectiveness for the nine months ended September 30, 2013 and 2012, respectively. |
Net_Income_Attributable_to_Com
Net Income Attributable to Company Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Net Income Attributable to Company Per Share | ' | ||||||||||||||||
11 | 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): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Numerator: | |||||||||||||||||
Net income attributable to Company | $ | 636 | $ | 612 | $ | 1,669 | $ | 1,823 | |||||||||
Denominator: | |||||||||||||||||
Basic—weighted average common shares outstanding | 426 | 425 | 426 | 425 | |||||||||||||
Dilutive effect of employee stock options and other unvested stock awards | 2 | 2 | 2 | 1 | |||||||||||||
Diluted outstanding shares | 428 | 427 | 428 | 426 | |||||||||||||
Net income attributable to Company per share: | |||||||||||||||||
Basic | $ | 1.49 | $ | 1.44 | $ | 3.92 | $ | 4.29 | |||||||||
Diluted | $ | 1.49 | $ | 1.43 | $ | 3.9 | $ | 4.28 | |||||||||
Cash dividends per share | $ | 0.26 | $ | 0.12 | $ | 0.65 | $ | 0.36 | |||||||||
ASC Topic 260, “Earnings Per Share” (“ASC Topic 260”) requires companies with unvested participating securities to utilize a two-class method for the computation of Net income attributable to Company per share. The two-class method requires a portion of net income attributable to Company to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, if declared. Net income attributable to Company allocated to these participating securities was immaterial for the three and nine months ended September 30, 2013 and 2012 and therefore not excluded from net income attributable to Company per share calculation. | |||||||||||||||||
In addition, the Company had stock options outstanding that were anti-dilutive totaling 7 million shares for each of the three and nine months ended September 30, 2013, and 4 million and 5 million shares for the three and nine months ended September 30, 2012, respectively. |
Cash_Dividends
Cash Dividends | 9 Months Ended | |
Sep. 30, 2013 | ||
Text Block [Abstract] | ' | |
Cash Dividends | ' | |
12 | Cash Dividends | |
On August 14, 2013, the Company’s Board of Directors approved a cash dividend of $0.26 per share. The cash dividend was paid on September 27, 2013, to each stockholder of record on September 13, 2013. Cash dividends aggregated $111 million and $278 million for the three and nine months ended September 30, 2013 and $51 million and $153 million for the three and nine months ended September 30, 2012, respectively. 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. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | |
Sep. 30, 2013 | ||
Commitments And Contingencies Disclosure [Abstract] | ' | |
Commitments and Contingencies | ' | |
13 | Commitments and Contingencies | |
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 U.S. Department of Justice (“DOJ”), the Department of Commerce Bureau of Industry and Security (“BIS”), the United States Department of Treasury, Office of Foreign Assets Control (“OFAC”), 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, we cannot predict the timing or effect that any resulting government actions may have on our financial position or results of operations. | ||
In 2011, the Company acquired Ameron International Corporation (“Ameron”). On or about November 21, 2008, OFAC sent a Requirement to Furnish Information to Ameron. Ameron retained counsel and conducted an internal investigation. In 2009, Ameron, through its counsel, responded to OFAC. On or about January 21, 2011, OFAC issued an administrative subpoena to Ameron. OFAC and Ameron entered into Tolling Agreements. All of the conduct under review occurred before acquisition of Ameron by the Company. During the three months ended September 30, 2013, the Company settled such matter with OFAC by paying an administrative fine in an amount that was not material to the Company. | ||
On February 20, 2013, the Company acquired Robbins & Myers, Inc. (“R&M”). R&M was subject to an ongoing investigation by the DOJ and the BIS regarding potential export controls violations arising from certain shipments by R&M’s Belgian subsidiary to one customer in Iran, Sudan and Syria in 2005 and 2006. R&M has cooperated with the investigation and is currently negotiating a joint settlement with the DOJ and BIS. We currently anticipate that any administrative fine or criminal 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, we cannot predict the timing or effect that any resulting government actions may have on our financial position or results of operations. | ||
In addition, we are involved in various other claims, regulatory agency audits and pending or threatened legal actions involving a variety of matters. As of September 30, 2013, the Company recorded an immaterial amount for contingent liabilities representing all contingencies believed to be probable. The Company has also assessed the potential for additional losses above the amounts accrued as well as potential losses for matters that are not probable but are reasonably possible. The total potential loss on these matters cannot be determined; however, in our opinion, any ultimate liability, to the extent not otherwise provided for and except for the specific cases referred to above, will not materially affect our financial position, cash flow or results of operations. As it relates to the specific cases referred to above 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. These estimated liabilities are based on the Company’s assessment of the nature of these matters, their progress toward resolution, the advice of legal counsel and outside experts as well as management’s intention and experience. | ||
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. | ||
Acquisition
Acquisition | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Business Combinations [Abstract] | ' | ||||
Acquisition | ' | ||||
14 | Acquisition | ||||
On February 20, 2013, the Company completed its previously announced acquisition of all of the shares of Robbins & Myers, Inc., a U.S.-based designer and manufacturer of products and systems for the oil and gas industry. Under the merger agreement for this transaction, R&M shareholders received $60.00 in cash for each common share for an aggregate purchase price of $2,378 million, net of cash acquired. | |||||
The Company has included the financial results of R&M in its consolidated financial statements as of the date of acquisition with components of the R&M operations included in the Company’s Rig Technology, Petroleum Services & Supplies and Distribution & Transmission segments. The Company believes the acquisition of R&M will advance its strategic goal of providing a broader selection of products and services to its customers. | |||||
The following table displays the total preliminary purchase price allocation for the R&M acquisition. The R&M purchase price allocation remains preliminary until the valuation is complete. The table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition. (in millions): | |||||
Current assets, net of cash acquired | $ | 428 | |||
Property, plant and equipment | 246 | ||||
Intangible assets | 916 | ||||
Goodwill | 1,554 | ||||
Other assets | 47 | ||||
Total assets acquired | 3,191 | ||||
Current liabilities | 188 | ||||
Deferred taxes | 505 | ||||
Other liabilities | 120 | ||||
Total liabilities | 813 | ||||
Cash consideration, net of cash acquired | $ | 2,378 | |||
The Company has preliminarily allocated $916 million to identifiable intangible assets (19 year weighted-average life). The intangible assets are expected to be amortizable and are comprised of: $635 million of customer relationships (18 year weighted-average life), $170 million of patents (20 year weighted-average life), $86 million of trademarks (20 year weighted-average life), and $25 million of other intangible assets (15 year weighted-average life). The amount allocated to goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Goodwill resulting from the R&M acquisition is not expected to be deductible for tax purposes. Pro forma information is not included because the results of the acquired operations would not have materially impacted the Company’s consolidated operating results. |
Recently_Issued_Accounting_Sta
Recently Issued Accounting Standards | 9 Months Ended | |
Sep. 30, 2013 | ||
Text Block [Abstract] | ' | |
Recently Issued Accounting Standards | ' | |
15 | Recently Issued Accounting Standards | |
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2013-02, “Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income” (ASU No. 2013-02), which is an update for Accounting Standards Codification Topic No. 220 “Comprehensive Income”. The update improves the reporting of reclassifications out of accumulated other comprehensive income. The guidance was effective for the Company’s interim and annual reporting periods beginning January 1, 2013, and applied prospectively. There was no significant impact to the Company’s Consolidated Financial Statements from the adopted provisions of ASU No. 2013-02. | ||
In March 2013, the FASB issued Accounting Standards Update No. 2013-05, “Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force).” (ASU No. 2013-05), which amends Accounting Standards Codification Topic No. 830, “Foreign Currency Matters,” and Accounting Standards Codification Topic No. 810, “Consolidation,” to address diversity in practice related to the release of cumulative translation adjustments (“CTA”) into earnings upon the occurrence of certain derecognition events. ASU No. 2013-05 precludes the release of CTA for derecognition events that occur within a foreign entity, unless such events represent a complete or substantially complete liquidation of the foreign entity; however, derecognition events related to investments in a foreign entity result in the release of all CTA related to the derecognized foreign entity, even when a noncontrolling financial interest is retained. ASU No. 2013-05 also amends Accounting Standards Codification Topic No. 805, “Business Combinations,” for transactions that result in a company obtaining control of a business in a step acquisition by increasing an investment in a foreign entity from one accounted for under the equity method to one accounted for as a consolidated investment. ASU No. 2013-05 is effective for fiscal years beginning after December 15, 2013, and applied prospectively. Early adoption is permitted as of the beginning of the entity’s fiscal year. The Company is currently assessing the impact ASU No. 2013-05 will have on its financial statements, but does not expect a significant impact from adoption of the pronouncement. |
Proposed_Spinoff
Proposed Spin-off | 9 Months Ended | |
Sep. 30, 2013 | ||
Text Block [Abstract] | ' | |
Proposed Spin-off | ' | |
16 | Proposed Spin-off | |
On September 24, 2013, the Company announced that its Board of Directors authorized Company management to move forward with exploration of a plan to spin-off the Company’s distribution business from the remainder of the Company, creating two stand-alone, publicly traded corporations. The Company believes that the separation of the distribution business can be accomplished via a tax-efficient spin-off to Company shareholders. | ||
The spin-off is expected to be completed in the first half of 2014 and is subject to market conditions, customary regulatory approvals, the execution of separation and intercompany agreements and final board approval. The separation of the distribution business from the rest of the Company does not require shareholder approval. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Payables And Accruals [Abstract] | ' | ||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The carrying amounts of 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. See Note 7 for the fair value of long-term debt and Note 10 for the fair value of derivative financial instruments. | |||||||||||||||||
Service and Product Warranties | ' | ||||||||||||||||
Service and Product Warranties | |||||||||||||||||
The Company provides certain service and product warranties. 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 Accounting Standards Codification (“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, 2012 | $ | 194 | |||||||||||||||
Net provisions for warranties issued during the year | 75 | ||||||||||||||||
Amounts incurred | (53 | ) | |||||||||||||||
Currency translation adjustments and other | 6 | ||||||||||||||||
Balance at September 30, 2013 | $ | 222 | |||||||||||||||
Derivatives and Hedging | ' | ||||||||||||||||
ASC Topic 815, “Derivatives and Hedging” (“ASC Topic 815”) requires a company 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 risk managed by using derivative instruments is foreign currency exchange rate risk. Forward contracts against various foreign currencies are entered into to manage the foreign currency exchange rate risk on forecasted revenues and expenses denominated in currencies other than the functional currency of the operating unit (cash flow 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). | |||||||||||||||||
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 cash flow 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 September 30, 2013, the Company has determined that the fair value of its derivative financial instruments representing assets of $63 million and liabilities of $26 million (primarily currency related derivatives) are determined using level 2 inputs (inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability) in the fair value hierarchy as the fair value is based on publicly available foreign exchange and interest rates at each financial reporting date. At September 30, 2013, the net fair value of the Company’s foreign currency forward contracts totaled a net asset of $37 million. | |||||||||||||||||
At September 30, 2013, 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 | |||||||||||||||||
To protect against the volatility associated with foreign currency cash flows resulting from forecasted revenues 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 revenues and expenses 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. | |||||||||||||||||
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, is recognized in the Consolidated Statements of Income during the current period. | |||||||||||||||||
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): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Numerator: | |||||||||||||||||
Net income attributable to Company | $ | 636 | $ | 612 | $ | 1,669 | $ | 1,823 | |||||||||
Denominator: | |||||||||||||||||
Basic—weighted average common shares outstanding | 426 | 425 | 426 | 425 | |||||||||||||
Dilutive effect of employee stock options and other unvested stock awards | 2 | 2 | 2 | 1 | |||||||||||||
Diluted outstanding shares | 428 | 427 | 428 | 426 | |||||||||||||
Net income attributable to Company per share: | |||||||||||||||||
Basic | $ | 1.49 | $ | 1.44 | $ | 3.92 | $ | 4.29 | |||||||||
Diluted | $ | 1.49 | $ | 1.43 | $ | 3.9 | $ | 4.28 | |||||||||
Cash dividends per share | $ | 0.26 | $ | 0.12 | $ | 0.65 | $ | 0.36 | |||||||||
Recently Issued Accounting Standards | ' | ||||||||||||||||
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2013-02, “Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income” (ASU No. 2013-02), which is an update for Accounting Standards Codification Topic No. 220 “Comprehensive Income”. The update improves the reporting of reclassifications out of accumulated other comprehensive income. The guidance was effective for the Company’s interim and annual reporting periods beginning January 1, 2013, and applied prospectively. There was no significant impact to the Company’s Consolidated Financial Statements from the adopted provisions of ASU No. 2013-02. | |||||||||||||||||
In March 2013, the FASB issued Accounting Standards Update No. 2013-05, “Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force).” (ASU No. 2013-05), which amends Accounting Standards Codification Topic No. 830, “Foreign Currency Matters,” and Accounting Standards Codification Topic No. 810, “Consolidation,” to address diversity in practice related to the release of cumulative translation adjustments (“CTA”) into earnings upon the occurrence of certain derecognition events. ASU No. 2013-05 precludes the release of CTA for derecognition events that occur within a foreign entity, unless such events represent a complete or substantially complete liquidation of the foreign entity; however, derecognition events related to investments in a foreign entity result in the release of all CTA related to the derecognized foreign entity, even when a noncontrolling financial interest is retained. ASU No. 2013-05 also amends Accounting Standards Codification Topic No. 805, “Business Combinations,” for transactions that result in a company obtaining control of a business in a step acquisition by increasing an investment in a foreign entity from one accounted for under the equity method to one accounted for as a consolidated investment. ASU No. 2013-05 is effective for fiscal years beginning after December 15, 2013, and applied prospectively. Early adoption is permitted as of the beginning of the entity’s fiscal year. The Company is currently assessing the impact ASU No. 2013-05 will have on its financial statements, but does not expect a significant impact from adoption of the pronouncement. |
Inventories_net_Tables
Inventories, net (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
Inventories consist of (in millions): | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Raw materials and supplies | $ | 1,191 | $ | 1,268 | |||||
Work in process | 1,057 | 905 | |||||||
Finished goods and purchased products | 3,830 | 3,718 | |||||||
Total | $ | 6,078 | $ | 5,891 | |||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Payables And Accruals [Abstract] | ' | ||||||||
Accrued Liabilities | ' | ||||||||
Accrued liabilities consist of (in millions): | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Customer prepayments and billings | $ | 786 | $ | 699 | |||||
Accrued vendor costs | 648 | 444 | |||||||
Compensation | 424 | 511 | |||||||
Warranty | 222 | 194 | |||||||
Taxes (non income) | 136 | 150 | |||||||
Insurance | 128 | 108 | |||||||
Fair value of derivatives | 16 | 18 | |||||||
Interest | 31 | 14 | |||||||
Other | 466 | 433 | |||||||
Total | $ | 2,857 | $ | 2,571 | |||||
Changes in Carrying Amount of Service and Product Warranties | ' | ||||||||
The changes in the carrying amount of service and product warranties are as follows (in millions): | |||||||||
Balance at December 31, 2012 | $ | 194 | |||||||
Net provisions for warranties issued during the year | 75 | ||||||||
Amounts incurred | (53 | ) | |||||||
Currency translation adjustments and other | 6 | ||||||||
Balance at September 30, 2013 | $ | 222 | |||||||
Costs_and_Estimated_Earnings_o1
Costs and Estimated Earnings on Uncompleted Contracts (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Text Block [Abstract] | ' | ||||||||
Costs and Estimated Earnings on Uncompleted Contracts | ' | ||||||||
Costs and estimated earnings on uncompleted contracts consist of (in millions): | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Costs incurred on uncompleted contracts | $ | 7,515 | $ | 5,731 | |||||
Estimated earnings | 3,537 | 3,160 | |||||||
11,052 | 8,891 | ||||||||
Less: Billings to date | 10,965 | 8,855 | |||||||
$ | 87 | $ | 36 | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ | 1,640 | $ | 1,225 | |||||
Billings in excess of costs and estimated earnings on uncompleted contracts | (1,553 | ) | (1,189 | ) | |||||
$ | 87 | $ | 36 | ||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||||||||||||||||||||||
The components of accumulated other comprehensive income (loss) are as follows (in millions): | |||||||||||||||||||||||||||||||||
Derivative | Defined | ||||||||||||||||||||||||||||||||
Currency | Financial | Benefit | |||||||||||||||||||||||||||||||
Translation | Instruments, | Plans, | |||||||||||||||||||||||||||||||
Adjustments | Net of Tax | Net of Tax | Total | ||||||||||||||||||||||||||||||
Balance at December 31, 2012 | $ | 132 | $ | 42 | $ | (67 | ) | $ | 107 | ||||||||||||||||||||||||
Accumulated other comprehensive income (loss) before reclassifications | (59 | ) | (22 | ) | — | (81 | ) | ||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (25 | ) | — | — | (25 | ) | |||||||||||||||||||||||||||
Balance at September 30, 2013 | $ | 48 | $ | 20 | $ | (67 | ) | $ | 1 | ||||||||||||||||||||||||
Components of Amounts Reclassified from Accumulated Other Comprehensive Income Loss | ' | ||||||||||||||||||||||||||||||||
The components of amounts reclassified from accumulated other comprehensive income (loss) are as follows (in millions): | |||||||||||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||
Currency | Derivative | Defined | Total | Currency | Derivative | Defined | Total | ||||||||||||||||||||||||||
Translation | Financial | Benefit | Translation | Financial | Benefit | ||||||||||||||||||||||||||||
Adjustments | Instruments | Plans | Adjustments | Instruments | Plans | ||||||||||||||||||||||||||||
Revenue | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) | $ | — | $ | 3 | $ | — | $ | 3 | |||||||||||||||
Cost of revenue | — | 7 | — | 7 | — | 11 | — | 11 | |||||||||||||||||||||||||
Other income (expense), net | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Tax effect | — | (2 | ) | — | (2 | ) | — | (4 | ) | — | (4 | ) | |||||||||||||||||||||
$ | — | $ | 2 | $ | — | $ | 2 | $ | — | $ | 10 | $ | — | $ | 10 | ||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||
Currency | Derivative | Defined | Total | Currency | Derivative | Defined | Total | ||||||||||||||||||||||||||
Translation | Financial | Benefit | Translation | Financial | Benefit | ||||||||||||||||||||||||||||
Adjustments | Instruments | Plans | Adjustments | Instruments | Plans | ||||||||||||||||||||||||||||
Revenue | $ | — | $ | (7 | ) | $ | — | $ | (7 | ) | $ | — | $ | 9 | $ | — | $ | 9 | |||||||||||||||
Cost of revenue | — | 8 | — | 8 | — | 22 | — | 22 | |||||||||||||||||||||||||
Other income (expense), net | (25 | ) | — | — | (25 | ) | — | — | — | — | |||||||||||||||||||||||
Tax effect | — | (1 | ) | — | (1 | ) | — | (9 | ) | — | (9 | ) | |||||||||||||||||||||
$ | (25 | ) | $ | — | $ | — | $ | (25 | ) | $ | — | $ | 22 | $ | — | $ | 22 | ||||||||||||||||
Business_Segments_Tables
Business Segments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Operating Results by Segment | ' | ||||||||||||||||
Operating results by segment are as follows (in millions): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenue: | |||||||||||||||||
Rig Technology | $ | 2,945 | $ | 2,547 | $ | 8,406 | $ | 7,211 | |||||||||
Petroleum Services & Supplies | 1,809 | 1,717 | 5,259 | 5,197 | |||||||||||||
Distribution & Transmission | 1,342 | 1,315 | 3,864 | 2,659 | |||||||||||||
Eliminations | (307 | ) | (260 | ) | (832 | ) | (711 | ) | |||||||||
Total Revenue | $ | 5,789 | $ | 5,319 | $ | 16,697 | $ | 14,356 | |||||||||
Operating Profit: | |||||||||||||||||
Rig Technology | $ | 706 | $ | 598 | $ | 1,830 | $ | 1,699 | |||||||||
Petroleum Services & Supplies | 321 | 383 | 849 | 1,161 | |||||||||||||
Distribution & Transmission | 74 | 42 | 195 | 131 | |||||||||||||
Unallocated expenses and eliminations | (155 | ) | (125 | ) | (408 | ) | (337 | ) | |||||||||
Total Operating Profit | $ | 946 | $ | 898 | $ | 2,466 | $ | 2,654 | |||||||||
Operating Profit %: | |||||||||||||||||
Rig Technology | 24 | % | 23.5 | % | 21.8 | % | 23.6 | % | |||||||||
Petroleum Services & Supplies | 17.7 | % | 22.3 | % | 16.1 | % | 22.3 | % | |||||||||
Distribution & Transmission | 5.5 | % | 3.2 | % | 5 | % | 4.9 | % | |||||||||
Total Operating Profit % | 16.3 | % | 16.9 | % | 14.8 | % | 18.5 | % | |||||||||
Other Costs by Segment | ' | ||||||||||||||||
Other costs by segment are as follows (in millions): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Other costs: | |||||||||||||||||
Rig Technology | $ | 2 | $ | 12 | $ | 22 | $ | 33 | |||||||||
Petroleum Services & Supplies | 3 | — | 90 | 3 | |||||||||||||
Distribution & Transmission | 4 | 36 | 19 | 44 | |||||||||||||
Total other costs | $ | 9 | $ | 48 | $ | 131 | $ | 80 | |||||||||
Debt_Tables
Debt (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt | ' | ||||||||
Debt consists of (in millions): | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Senior Notes, interest at 6.125% payable semiannually, principal due on August 15, 2015 | $ | 151 | $ | 151 | |||||
Senior Notes, interest at 1.35% payable semiannually, principal due on December 1, 2017 | 500 | 500 | |||||||
Senior Notes, interest at 2.6% payable semiannually, principal due on December 1, 2022 | 1,395 | 1,395 | |||||||
Senior Notes, interest at 3.95% payable semiannually, principal due on December 1, 2042 | 1,096 | 1,096 | |||||||
Commercial Paper | 600 | — | |||||||
Other | 7 | 7 | |||||||
Total debt | 3,749 | 3,149 | |||||||
Less current portion | — | 1 | |||||||
Long-term debt | $ | 3,749 | $ | 3,148 | |||||
Tax_Tables
Tax (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Difference Between Effective Tax Rate | ' | ||||||||||||||||
The difference between the effective tax rate reflected in the provision for income taxes and the U.S. federal statutory rate of 35% was as follows (in millions): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Federal income tax at U.S. federal statutory rate | $ | 322 | $ | 306 | $ | 845 | $ | 922 | |||||||||
Foreign income tax rate differential | (50 | ) | (29 | ) | (172 | ) | (109 | ) | |||||||||
State income tax, net of federal benefit | 5 | 7 | 17 | 24 | |||||||||||||
Nondeductible expenses | 4 | — | 20 | 23 | |||||||||||||
Tax benefit of manufacturing deduction | (4 | ) | (12 | ) | (20 | ) | (30 | ) | |||||||||
Foreign dividends, net of foreign tax credits | 12 | 2 | 24 | 22 | |||||||||||||
Tax impact of foreign exchange | (12 | ) | (15 | ) | 27 | (33 | ) | ||||||||||
Tax rate change on temporary differences | (16 | ) | — | (16 | ) | — | |||||||||||
Change in valuation allowance | 32 | 2 | 40 | 4 | |||||||||||||
Other | (10 | ) | 4 | (19 | ) | (4 | ) | ||||||||||
Provision for income taxes | $ | 283 | $ | 265 | $ | 746 | $ | 819 | |||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||||
Outstanding Foreign Currency Forward Contracts | ' | ||||||||||||||||||||||||||||||||||
The Company had the following outstanding foreign currency forward contracts that were entered into to hedge nonfunctional currency cash flows from forecasted revenues and expenses (in millions): | |||||||||||||||||||||||||||||||||||
Currency Denomination | |||||||||||||||||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||||||||||||
Foreign Currency | 2013 | 2012 | |||||||||||||||||||||||||||||||||
Norwegian Krone | NOK | 9,631 | NOK | 6,281 | |||||||||||||||||||||||||||||||
U.S. Dollar | $ | 426 | $ | 331 | |||||||||||||||||||||||||||||||
Euro | € | 376 | € | 389 | |||||||||||||||||||||||||||||||
Danish Krone | DKK | 222 | DKK | 134 | |||||||||||||||||||||||||||||||
British Pound Sterling | £ | 26 | £ | 6 | |||||||||||||||||||||||||||||||
Singapore Dollar | SGD | 15 | SGD | 14 | |||||||||||||||||||||||||||||||
The Company had the following outstanding foreign currency forward contracts that hedge the fair value of nonfunctional currency monetary accounts (in millions): | |||||||||||||||||||||||||||||||||||
Currency Denomination | |||||||||||||||||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||||||||||||
Foreign Currency | 2013 | 2012 | |||||||||||||||||||||||||||||||||
Norwegian Krone | NOK | 2,121 | NOK | 1,684 | |||||||||||||||||||||||||||||||
Russian Ruble | RUB | 1,779 | RUB | 1,467 | |||||||||||||||||||||||||||||||
U.S. Dollar | $ | 532 | $ | 967 | |||||||||||||||||||||||||||||||
Danish Krone | DKK | 261 | DKK | 177 | |||||||||||||||||||||||||||||||
Euro | € | 214 | € | 225 | |||||||||||||||||||||||||||||||
Brazilian Real | BRL | 56 | BRL | 135 | |||||||||||||||||||||||||||||||
British Pound Sterling | £ | 23 | £ | 9 | |||||||||||||||||||||||||||||||
Singapore Dollar | SGD | 16 | SGD | 24 | |||||||||||||||||||||||||||||||
Swedish Krone | SEK | 2 | SEK | 5 | |||||||||||||||||||||||||||||||
Canadian Dollar | CAD | 2 | CAD | 2 | |||||||||||||||||||||||||||||||
Derivative Instruments and their Balance Sheet Classifications | ' | ||||||||||||||||||||||||||||||||||
The Company has the following gross fair values of its derivative instruments and their balance sheet classifications (in millions): | |||||||||||||||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||
Balance Sheet | September 30, | December 31, | Balance Sheet | September 30, | December 31, | ||||||||||||||||||||||||||||||
Location | 2013 | 2012 | Location | 2013 | 2012 | ||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments under ASC Topic 815 | |||||||||||||||||||||||||||||||||||
Foreign exchange contracts | Prepaid and other current assets | $ | 36 | $ | 57 | Accrued liabilities | $ | 8 | $ | 5 | |||||||||||||||||||||||||
Foreign exchange contracts | Other Assets | 12 | 24 | Other Liabilities | 10 | 1 | |||||||||||||||||||||||||||||
Total derivatives designated as hedging instruments under ASC Topic 815 | $ | 48 | $ | 81 | $ | 18 | $ | 6 | |||||||||||||||||||||||||||
Derivatives not designated as hedging instruments under ASC Topic 815 | |||||||||||||||||||||||||||||||||||
Foreign exchange contracts | Prepaid and other current assets | $ | 15 | $ | 24 | Accrued liabilities | $ | 8 | $ | 13 | |||||||||||||||||||||||||
Total derivatives not designated as hedging instruments under ASC Topic 815 | $ | 15 | $ | 24 | $ | 8 | $ | 13 | |||||||||||||||||||||||||||
Total derivatives | $ | 63 | $ | 105 | $ | 26 | $ | 19 | |||||||||||||||||||||||||||
Effect of Derivative Instruments on Consolidated Statements of Income | ' | ||||||||||||||||||||||||||||||||||
The Effect of Derivative Instruments on the Consolidated Statements 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) | ||||||||||||||||||||||||||||||
Nine Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | |||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||
Revenue | 7 | (9 | ) | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | (32 | ) | 69 | Cost of revenue | (8 | ) | (22 | ) | Other income (expense), net | 6 | 5 | ||||||||||||||||||||||||
Total | (32 | ) | 69 | (1 | ) | (31 | ) | 6 | 5 | ||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||||
Foreign exchange contracts | Other income (expense), net | 13 | 8 | ||||||||||||||||||||||||||||||||
Total | 13 | 8 | |||||||||||||||||||||||||||||||||
(a) | The Company expects $(26) million of the accumulated other comprehensive income (loss) to be reclassified into earnings within the next twelve months offset by gains (losses) from the underlying transactions resulting in no impact to earnings or cash flow. | ||||||||||||||||||||||||||||||||||
(b) | The amount of gain (loss) recognized in income represents nil and $(1) million related to the ineffective portion of the hedging relationships for the nine months ended September 30, 2013 and 2012, respectively, and $6 million and $6 million related to the amount excluded from the assessment of the hedge effectiveness for the nine months ended September 30, 2013 and 2012, respectively. |
Net_Income_Attributable_to_Com1
Net Income Attributable to Company Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Computation of Weighted Average Basic and Diluted Shares Outstanding | ' | ||||||||||||||||
The following table sets forth the computation of weighted average basic and diluted shares outstanding (in millions, except per share data): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Numerator: | |||||||||||||||||
Net income attributable to Company | $ | 636 | $ | 612 | $ | 1,669 | $ | 1,823 | |||||||||
Denominator: | |||||||||||||||||
Basic—weighted average common shares outstanding | 426 | 425 | 426 | 425 | |||||||||||||
Dilutive effect of employee stock options and other unvested stock awards | 2 | 2 | 2 | 1 | |||||||||||||
Diluted outstanding shares | 428 | 427 | 428 | 426 | |||||||||||||
Net income attributable to Company per share: | |||||||||||||||||
Basic | $ | 1.49 | $ | 1.44 | $ | 3.92 | $ | 4.29 | |||||||||
Diluted | $ | 1.49 | $ | 1.43 | $ | 3.9 | $ | 4.28 | |||||||||
Cash dividends per share | $ | 0.26 | $ | 0.12 | $ | 0.65 | $ | 0.36 | |||||||||
Acquisition_Tables
Acquisition (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Business Combinations [Abstract] | ' | ||||
Estimated Fair Values of Assets Acquired and Liabilities Assumed | ' | ||||
The table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition. (in millions): | |||||
Current assets, net of cash acquired | $ | 428 | |||
Property, plant and equipment | 246 | ||||
Intangible assets | 916 | ||||
Goodwill | 1,554 | ||||
Other assets | 47 | ||||
Total assets acquired | 3,191 | ||||
Current liabilities | 188 | ||||
Deferred taxes | 505 | ||||
Other liabilities | 120 | ||||
Total liabilities | 813 | ||||
Cash consideration, net of cash acquired | $ | 2,378 | |||
Inventories_net_Inventories_De
Inventories, net - Inventories (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Raw materials and supplies | $1,191 | $1,268 |
Work in process | 1,057 | 905 |
Finished goods and purchased products | 3,830 | 3,718 |
Total | $6,078 | $5,891 |
Accrued_Liabilities_Accrued_Li
Accrued Liabilities - Accrued Liabilities (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Payables And Accruals [Abstract] | ' | ' |
Customer prepayments and billings | $786 | $699 |
Accrued vendor costs | 648 | 444 |
Compensation | 424 | 511 |
Warranty | 222 | 194 |
Taxes (non income) | 136 | 150 |
Insurance | 128 | 108 |
Fair value of derivatives | 16 | 18 |
Interest | 31 | 14 |
Other | 466 | 433 |
Total | $2,857 | $2,571 |
Accrued_Liabilities_Changes_in
Accrued Liabilities - Changes in Carrying Amount of Service and Product Warranties (Detail) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Product Warranties Disclosures [Abstract] | ' |
Beginning Balance | $194 |
Net provisions for warranties issued during the year | 75 |
Amounts incurred | -53 |
Currency translation adjustments and other | 6 |
Ending Balance | $222 |
Costs_and_Estimated_Earnings_o2
Costs and Estimated Earnings on Uncompleted Contracts - Costs and Estimated Earnings on Uncompleted Contracts (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Contractors [Abstract] | ' | ' |
Costs incurred on uncompleted contracts | $7,515 | $5,731 |
Estimated earnings | 3,537 | 3,160 |
Costs and estimated earnings on uncompleted contracts, Gross | 11,052 | 8,891 |
Less: Billings to date | 10,965 | 8,855 |
Total net estimate billing on uncompleted contracts | 87 | 36 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 1,640 | 1,225 |
Billings in excess of costs and estimated earnings on uncompleted contracts | -1,553 | -1,189 |
Total net estimate billing on uncompleted contracts | $87 | $36 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Accumulated other comprehensive income (loss), Beginning balance | $107 |
Accumulated other comprehensive income (loss) before reclassifications | -81 |
Amounts reclassified from accumulated other comprehensive income (loss) | -25 |
Accumulated other comprehensive income (loss), Ending balance | 1 |
Currency Translation Adjustments [Member] | ' |
Accumulated other comprehensive income (loss), Beginning balance | 132 |
Accumulated other comprehensive income (loss) before reclassifications | -59 |
Amounts reclassified from accumulated other comprehensive income (loss) | -25 |
Accumulated other comprehensive income (loss), Ending balance | 48 |
Derivative Financial Instruments, Net of Tax [Member] | ' |
Accumulated other comprehensive income (loss), Beginning balance | 42 |
Accumulated other comprehensive income (loss) before reclassifications | -22 |
Amounts reclassified from accumulated other comprehensive income (loss) | ' |
Accumulated other comprehensive income (loss), Ending balance | 20 |
Defined Benefit Plans, Net of Tax [Member] | ' |
Accumulated other comprehensive income (loss), Beginning balance | -67 |
Accumulated other comprehensive income (loss) before reclassifications | ' |
Amounts reclassified from accumulated other comprehensive income (loss) | ' |
Accumulated other comprehensive income (loss), Ending balance | ($67) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income (Loss) - Components Of Amounts Reclassified From Accumulated Other Comprehensive Income Loss (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' |
Currency Translation Adjustments | ' | ' | ($25) | ' |
Derivative Financial Instruments | 2 | 10 | ' | 22 |
Defined Benefit Plans | ' | ' | ' | ' |
Total | 2 | 10 | -25 | 22 |
Revenue [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' |
Currency Translation Adjustments | ' | ' | ' | ' |
Derivative Financial Instruments | -3 | 3 | -7 | 9 |
Defined Benefit Plans | ' | ' | ' | ' |
Total | -3 | 3 | -7 | 9 |
Cost of Revenue [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' |
Currency Translation Adjustments | ' | ' | ' | ' |
Derivative Financial Instruments | 7 | 11 | 8 | 22 |
Defined Benefit Plans | ' | ' | ' | ' |
Total | 7 | 11 | 8 | 22 |
Other income (expense), net [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' |
Currency Translation Adjustments | ' | ' | -25 | ' |
Derivative Financial Instruments | ' | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' | ' |
Total | ' | ' | -25 | ' |
Tax Effects [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' |
Currency Translation Adjustments | ' | ' | ' | ' |
Derivative Financial Instruments | -2 | -4 | -1 | -9 |
Defined Benefit Plans | ' | ' | ' | ' |
Total | ($2) | ($4) | ($1) | ($9) |
Accumulated_Other_Comprehensiv4
Accumulated Other Comprehensive Income (Loss) - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement Of Income And Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net increase to other comprehensive income or loss upon the translation | $154 | $84 | ($84) | $28 |
Currency translation gains reclassified from accumulated other comprehensive income (loss) | 25 | ' | ' | ' |
Changes in derivative financial instruments, net of tax | 48 | 64 | -22 | 74 |
Changes in derivative financial instruments, tax | $17 | $23 | $10 | $27 |
Business_Segments_Operating_Re
Business Segments - Operating Results by Segment (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | $5,789 | $5,319 | $16,697 | $14,356 |
Total Operating Profit | 946 | 898 | 2,466 | 2,654 |
Percentage as of operating profit to revenue | 16.30% | 16.90% | 14.80% | 18.50% |
Operating Segments [Member] | Rig Technology [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 2,945 | 2,547 | 8,406 | 7,211 |
Total Operating Profit | 706 | 598 | 1,830 | 1,699 |
Percentage as of operating profit to revenue | 24.00% | 23.50% | 21.80% | 23.60% |
Operating Segments [Member] | Petroleum Services & Supplies [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 1,809 | 1,717 | 5,259 | 5,197 |
Total Operating Profit | 321 | 383 | 849 | 1,161 |
Percentage as of operating profit to revenue | 17.70% | 22.30% | 16.10% | 22.30% |
Operating Segments [Member] | Distribution & Transmission [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 1,342 | 1,315 | 3,864 | 2,659 |
Total Operating Profit | 74 | 42 | 195 | 131 |
Percentage as of operating profit to revenue | 5.50% | 3.20% | 5.00% | 4.90% |
Unallocated/Eliminations [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | -307 | -260 | -832 | -711 |
Total Operating Profit | ($155) | ($125) | ($408) | ($337) |
Business_Segments_Additional_I
Business Segments - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting [Abstract] | ' | ' | ' | ' |
Gains from Legal Settlement, Net | $102 | ' | $102 | ' |
Revenue from shipyard customer | 9.00% | 9.00% | 10.00% | 10.00% |
Business_Segments_Other_Cost_b
Business Segments - Other Cost by Segment (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total other costs | $9 | $48 | $131 | $80 |
Operating Segments [Member] | Rig Technology [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total other costs | 2 | 12 | 22 | 33 |
Operating Segments [Member] | Petroleum Services & Supplies [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total other costs | 3 | ' | 90 | 3 |
Operating Segments [Member] | Distribution & Transmission [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total other costs | $4 | $36 | $19 | $44 |
Debt_Debt_Detail
Debt - Debt (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Commercial Paper | $600 | ' |
Other | 7 | 7 |
Total debt | 3,749 | 3,149 |
Less current portion | ' | 1 |
Long-term debt | 3,749 | 3,148 |
Senior Notes, interest at 6.125% payable semiannually, principal due on August 15, 2015 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior Notes | 151 | 151 |
Senior Notes, interest at 1.35% payable semiannually, principal due on December 1, 2017 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior Notes | 500 | 500 |
Senior Notes, interest at 2.6% payable semiannually, principal due on December 1, 2022 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior Notes | 1,395 | 1,395 |
Senior Notes, interest at 3.95% payable semiannually, principal due on December 1, 2042 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior Notes | $1,096 | $1,096 |
Debt_Debt_Parenthetical_Detail
Debt - Debt (Parenthetical) (Detail) | Sep. 30, 2013 |
Senior Notes, interest at 6.125% payable semiannually, principal due on August 15, 2015 [Member] | ' |
Debt Instrument [Line Items] | ' |
Senior notes interest rate | 6.13% |
Senior Notes, interest at 1.35% payable semiannually, principal due on December 1, 2017 [Member] | ' |
Debt Instrument [Line Items] | ' |
Senior notes interest rate | 1.35% |
Senior Notes, interest at 2.6% payable semiannually, principal due on December 1, 2022 [Member] | ' |
Debt Instrument [Line Items] | ' |
Senior notes interest rate | 2.60% |
Senior Notes, interest at 3.95% payable semiannually, principal due on December 1, 2042 [Member] | ' |
Debt Instrument [Line Items] | ' |
Senior notes interest rate | 3.95% |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Debt Instrument [Line Items] | ' | ' |
Borrowings under Commercial Paper | $600,000,000 | ' |
Borrowings against credit facility | 802,000,000 | ' |
Funds available under revolving credit facility | 2,098,000,000 | ' |
Variable rate | 0.88% | ' |
Interest rate under multi currency facility | 'LIBOR, NIBOR or EURIBOR plus 0.875% | ' |
Variable rate basis | 'LIBOR, NIBOR or EURIBOR plus | ' |
Outstanding letters of credit under various bilateral committed letter of credit facilities | 3,194,000,000 | ' |
Fair Value of Unsecured Senior Note | 2,932,000,000 | 3,190,000,000 |
Carrying Value of Unsecured Senior Notes | 3,749,000,000 | 3,149,000,000 |
Five-year unsecured revolving credit facility [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Unsecured revolving credit facility | 3,500,000,000 | ' |
Borrowings under Commercial Paper | 600,000,000 | ' |
Unsecured Senior Notes [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Carrying Value of Unsecured Senior Notes | $3,142,000,000 | $3,142,000,000 |
Unsecured Revolving Credit Facility [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Revolving credit facility, Period | '5 years | ' |
Revolving credit facility [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Revolving credit facility, Period | '5 years | ' |
Tax_Additional_Information_Det
Tax - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Reconciliation Of Statutory Federal Tax Rate [Line Items] | ' | ' | ' | ' |
Effective tax rate | 30.80% | 30.30% | 30.90% | 31.10% |
U.S. federal statutory rate | ' | ' | 35.00% | ' |
Unrecognized tax benefit | $128 | ' | $128 | ' |
Realized [Member] | ' | ' | ' | ' |
Reconciliation Of Statutory Federal Tax Rate [Line Items] | ' | ' | ' | ' |
Unrecognized tax benefit | $55 | ' | $55 | ' |
Tax_Difference_Between_Effecti
Tax - Difference Between Effective Tax Rate (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Federal income tax at U.S. federal statutory rate | $322 | $306 | $845 | $922 |
Foreign income tax rate differential | -50 | -29 | -172 | -109 |
State income tax, net of federal benefit | 5 | 7 | 17 | 24 |
Nondeductible expenses | 4 | ' | 20 | 23 |
Tax benefit of manufacturing deduction | -4 | -12 | -20 | -30 |
Foreign dividends, net of foreign tax credits | 12 | 2 | 24 | 22 |
Tax impact of foreign exchange | -12 | -15 | 27 | -33 |
Tax rate change on temporary differences | -16 | ' | -16 | ' |
Change in valuation allowance | 32 | 2 | 40 | 4 |
Other | -10 | 4 | -19 | -4 |
Provision for income taxes | $283 | $265 | $746 | $819 |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Earlier authorized shares under stock based compensation | ' | ' | 39,500,000 | ' |
Remaining shares available for future grants under the Plan | 14,443,427 | ' | 14,443,427 | ' |
Total stock-based compensation compensation arrangements under the Plan | $25 | $23 | $67 | $57 |
Total income tax benefit stock-based compensation arrangements under the Plan | 8 | 6 | 21 | 17 |
Period of option vested over grant date | ' | ' | 'Restricted stock awards vest in equal thirds over three years on the anniversary of the grant date | ' |
Description of performance goal | ' | ' | 'Performance against the ROC goal is determined by comparing the performance of the Company's actual ROC performance average for each of the three years of the performance period against the ROC goal set by the Company's Compensation Committee. | ' |
Stock options [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Stock option granted | ' | ' | 2,819,806 | ' |
Stock option granted fair value | ' | ' | $24.10 | ' |
Restricted stock and restricted stock units [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Restricted stock granted | ' | ' | 540,194 | ' |
Restricted stock granted fair value | ' | ' | $69.33 | ' |
Performance-base restricted stock [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total stock-based compensation compensation arrangements under the Plan | ' | ' | $8 | ' |
Performance-base restricted stock [Member] | Minimum [Member] | Senior Management Employees [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Restricted stock granted | ' | ' | 0 | ' |
Performance-base restricted stock [Member] | Maximum [Member] | Senior Management Employees [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Restricted stock granted | ' | ' | 368,860 | ' |
Restricted stock awards [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Restricted stock granted | ' | ' | 16,702 | ' |
Restricted stock granted fair value | ' | ' | $69.17 | ' |
Period of option vested over grant date | ' | ' | 'restricted stock and restricted stock units were granted February 15, 2013 and vest on the third anniversary of the date of grant, except for a special grant of 16,352 restricted stock units which vest on the second anniversary of the date of grant (subject to the satisfaction of a performance condition). On May 22, 2013, 16,702 the restricted stock awards, with a fair value of $69.17, were granted to the non-employee members of the board of directors. These options generally vest over a three-year period from the grant date. | ' |
Performance based restricted stock awards vested, number of years | ' | ' | '3 years | ' |
Restricted stock awards [Member] | Stock options [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Stock option granted, exercise price | ' | ' | $69.33 | ' |
Restricted stock awards [Member] | TSR Award [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Performance based restricted stock awards granted in percent | ' | ' | 50.00% | ' |
Restricted stock awards [Member] | ROC Award [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Performance based restricted stock awards granted in percent | ' | ' | 50.00% | ' |
Derivative_Financial_Instrumen2
Derivative Financial Instruments - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
In Millions, unless otherwise specified | Fair Value, Inputs, Level 2 [Member] | Minimum [Member] | Maximum [Member] | ||
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' | ' |
Maximum Derivative Financial Instrument's Term (Months) | ' | ' | ' | '2 months | '24 months |
Derivative Assets | $63 | $105 | $63 | ' | ' |
Derivative Liabilities | 26 | 19 | 26 | ' | ' |
Fair value of the Company's foreign currency forward contracts | $37 | ' | ' | ' | ' |
Derivative_Financial_Instrumen3
Derivative Financial Instruments - Outstanding Foreign Currency Forward Contracts (Detail) (Forward Contracts [Member]) | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 |
In Millions, unless otherwise specified | USD ($) | BRL | CAD | DKK | EUR (€) | GBP (£) | NOK | RUB | SEK | SGD | USD ($) | BRL | CAD | DKK | EUR (€) | GBP (£) | NOK | RUB | SEK | SGD |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency, Cash flow hedging | $426 | ' | ' | 222 | € 376 | £ 26 | 9,631 | ' | ' | 15 | $331 | ' | ' | 134 | € 389 | £ 6 | 6,281 | ' | ' | 14 |
Foreign currency, Non-designated hedging | $532 | 56 | 2 | 261 | € 214 | £ 23 | 2,121 | 1,779 | 2 | 16 | $967 | 135 | 2 | 177 | € 225 | £ 9 | 1,684 | 1,467 | 5 | 24 |
Derivative_Financial_Instrumen4
Derivative Financial Instruments - Derivative Instruments and their Balance Sheet Classifications (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liabilities | $26 | $19 |
Derivative Assets | 63 | 105 |
Designated as Hedging Instruments [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liabilities | 18 | 6 |
Derivative Assets | 48 | 81 |
Not Designated As Hedging Instrument [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liabilities | 8 | 13 |
Derivative Assets | 15 | 24 |
Foreign exchange contracts [Member] | Prepaid and other current assets [Member] | Designated as Hedging Instruments [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Assets | 36 | 57 |
Foreign exchange contracts [Member] | Prepaid and other current assets [Member] | Not Designated As Hedging Instrument [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Assets | 15 | 24 |
Foreign exchange contracts [Member] | Other Assets [Member] | Designated as Hedging Instruments [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Assets | 12 | 24 |
Foreign exchange contracts [Member] | Accrued liabilities [Member] | Designated as Hedging Instruments [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liabilities | 8 | 5 |
Foreign exchange contracts [Member] | Accrued liabilities [Member] | Not Designated As Hedging Instrument [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liabilities | 8 | 13 |
Foreign exchange contracts [Member] | Other Liabilities [Member] | Designated as Hedging Instruments [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liabilities | $10 | $1 |
Derivative_Financial_Instrumen5
Derivative Financial Instruments - Effect of Derivative Instruments on Consolidated Statements of Income (Detail) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | $6 | $6 |
Cash Flow Hedging [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | -32 | 69 |
Not Designated As Hedging Instrument [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | 13 | 8 |
Foreign exchange contracts [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | -1 | -31 |
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 6 | 5 |
Foreign exchange contracts [Member] | Cash Flow Hedging [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | -32 | 69 |
Foreign exchange contracts [Member] | Other income (expense), net [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 6 | 5 |
Foreign exchange contracts [Member] | Other income (expense), net [Member] | Not Designated As Hedging Instrument [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | 13 | 8 |
Foreign exchange contracts [Member] | Revenue [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | 7 | -9 |
Foreign exchange contracts [Member] | Cost of revenue [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | ($8) | ($22) |
Derivative_Financial_Instrumen6
Derivative Financial Instruments - Effect of Derivative Instruments on Consolidated Statements of Income (Parenthetical) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Accumulated other comprehensive income (loss), reclassified | ($2) | ($10) | ' | ($22) |
Amount of gain (loss) recognized in income on derivative (ineffective portion) | ' | ' | ' | -1 |
Amount of gain (loss) recognized in income on derivative (amount excluded from hedge effectiveness) | ' | ' | 6 | 6 |
Scenario, Forecast [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Accumulated other comprehensive income (loss), reclassified | ' | ' | ($26) | ' |
Net_Income_Attributable_to_Com2
Net Income Attributable to Company Per Share - Computation of Weighted Average Basic and Diluted Shares Outstanding (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Numerator: | ' | ' | ' | ' |
Net income attributable to Company | $636 | $612 | $1,669 | $1,823 |
Denominator: | ' | ' | ' | ' |
Basic-weighted average common shares outstanding | 426 | 425 | 426 | 425 |
Dilutive effect of employee stock options and other unvested stock awards | 2 | 2 | 2 | 1 |
Diluted outstanding shares | 428 | 427 | 428 | 426 |
Net income attributable to Company per share: | ' | ' | ' | ' |
Basic | $1.49 | $1.44 | $3.92 | $4.29 |
Diluted | $1.49 | $1.43 | $3.90 | $4.28 |
Cash dividends per share | $0.26 | $0.12 | $0.65 | $0.36 |
Net_Income_Attributable_to_Com3
Net Income Attributable to Company Per Share - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Anti-dilutive stock options outstanding | 7 | 4 | 7 | 5 |
Cash_Dividends_Additional_Info
Cash Dividends - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Aug. 14, 2013 |
Statement Of Partners Capital [Abstract] | ' | ' | ' | ' | ' |
Dividends Payable, Amount Per Share | ' | ' | ' | ' | $0.26 |
Aggregated Cash Dividends Paid | $111 | $51 | $278 | $153 | ' |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 9 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Aggregate purchase price of acquisitions | $2,397 | $2,305 |
All Other Acquisitions [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Share holder received in cash per share | $60 | ' |
Aggregate purchase price of acquisitions | 2,378 | ' |
Intangible assets | 916 | ' |
Weighted average life | '19 years | ' |
Customer Relationships [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets | 635 | ' |
Weighted average life | '18 years | ' |
Patents [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets | 170 | ' |
Weighted average life | '20 years | ' |
Trademarks [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets | 86 | ' |
Weighted average life | '20 years | ' |
Other Intangible Assets [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets | $25 | ' |
Weighted average life | '15 years | ' |
Acquisitions_Estimated_Fair_Va
Acquisitions - Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Business Acquisition [Line Items] | ' | ' |
Goodwill | $9,036 | $7,172 |
All Other Acquisitions [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Current assets, net of cash acquired | 428 | ' |
Property, plant and equipment | 246 | ' |
Intangible assets | 916 | ' |
Goodwill | 1,554 | ' |
Other assets | 47 | ' |
Total assets acquired | 3,191 | ' |
Current liabilities | 188 | ' |
Deferred taxes | 505 | ' |
Other liabilities | 120 | ' |
Total liabilities | 813 | ' |
Cash consideration, net of cash acquired | $2,378 | ' |