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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Amendment No. 1
 FORM 10-Q/A
 (Mark one)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934FOR THE QUARTER ENDED MARCH 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission file number 1-12317
 NATIONAL OILWELL VARCO, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    76-0475815(State or other jurisdiction 
of incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 10000 Richmond Avenue
Houston, Texas
77042-4200
 (Address of principal executive offices)
 (713) 346-7500
 (Registrants telephone number, including area code)
  þ o
  þ o o
 o þ




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TABLE OF CONTENTS
 Amendment No. 1 OverviewPART IItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsPART IIItem 6. ExhibitsSIGNATURESEXHIBIT INDEXCertification Pursuant to Rule 13a-14(a)/15d-14(a)Certification Pursuant to Rule 13a-14(a)/15d-14(a)




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Amendment No. 1 Overview
  
    
    To provide a reconciliation of certain non-GAAP measures to the most directly comparable
GAAP financial measures, which discussion is contained in the supplemental disclosure that
provides a comparison of operating results for certain periods as though the Varco
acquisition had occurred at the beginning of those periods;
    
    To replace the term pro forma with the term adjusted in certain places throughout
the Managements Discussion and Analysis section; and
    
    To incorporate certain exhibits in our exhibit list.
  2




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Introduction
  Rig Technology
  Petroleum Services & Supplies
  Distribution Services
  Executive Summary
   3




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Oil & Gas Equipment and Services Market
       4




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Segment Performance
    5




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Outlook
   6




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Operating Environment Overview
  %
    
    
    %1Q06 vs.
    
    
    1Q06 vs.1Q06*
    
    
    1Q05*
    
    
    4Q05*
    
    
    1Q05
    
    
    4Q05Active Drilling Rigs:U.S.
    
    
    1,520
    
    
    
    1,279
    
    
    
    1,479
    
    
    
    18.8
    %
    
    
    2.8
    %Canada
    
    
    665
    
    
    
    521
    
    
    
    572
    
    
    
    27.6
    %
    
    
    16.3
    %International
    
    
    893
    
    
    
    876
    
    
    
    929
    
    
    
    1.9
    %
    
    
    (3.9
    %)Worldwide
    
    
    3,078
    
    
    
    2,676
    
    
    
    2,980
    
    
    
    15.0
    %
    
    
    3.3
    %Active Workover Rigs:U.S.
    
    
    1,527
    
    
    
    1,261
    
    
    
    1,457
    
    
    
    21.1
    %
    
    
    4.8
    %Canada
    
    
    707
    
    
    
    769
    
    
    
    777
    
    
    
    (8.1
    %)
    
    
    (9.0
    %)North America
    
    
    2,234
    
    
    
    2,030
    
    
    
    2,234
    
    
    
    10.0
    %
    
    
    West Texas Intermediate
Crude Prices (per barrel)
    
    $
    63.18
    
    
    $
    49.88
    
    
    $
    60.42
    
    
    
    26.7
    %
    
    
    4.6
    %Natural Gas Prices ($/mmbtu)
    
    $
    7.71
    
    
    $
    6.42
    
    
    $
    12.25
    
    
    
    20.1
    %
    
    
    (37.1
    %)
 
 *
    
    Averages for the quarters indicated. See sources below.  
  7




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Results of Operations
  Three Months Ended March 31,2006
    
    
    2005Revenue:Rig Technology
    
    $
    715.3
    
    
    $
    424.4Petroleum Services & Supplies
    
    
    541.0
    
    
    
    209.1Distribution Services
    
    
    326.5
    
    
    
    235.9Elimination
    
    
    (71.0
    )
    
    
    (54.5
    )Total Revenue
    
    $
    1,511.8
    
    
    $
    814.9Operating Profit:Rig Technology
    
    $
    100.8
    
    
    $
    44.9Petroleum Services & Supplies
    
    
    118.3
    
    
    
    35.2Distribution Services
    
    
    20.8
    
    
    
    7.6Unallocated expenses and eliminations
    
    
    (27.4
    )
    
    
    (10.9
    )Integration costs and stock-based
compensation
    
    
    (14.7
    )
    
    
    (10.9
    )Total operating profit
    
    $
    197.8
    
    
    $
    65.9Operating profit %:Rig Technology
    
    
    14.1
    %
    
    
    10.6
    %Petroleum Services & Supplies
    
    
    21.9
    %
    
    
    16.8
    %Distribution Services
    
    
    6.4
    %
    
    
    3.2
    %Total Operating Profit %
    
    
    13.1
    %
    
    
    8.1
    %
 Rig Technology
   Petroleum Services & Supplies
  9




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Distribution Services
   Unallocated expenses and eliminations
  Interest expense
  Provision for income taxes
  Liquidity and Capital Resources
   10




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Critical Accounting Policies and Estimates
  Revenue Recognition
  11




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Revenue Recognition under Long-term Construction Contracts
  Allowance for Doubtful Accounts
  Inventory Reserves
  Impairment of Long-Lived Assets (Including Goodwill)
   12




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Income Taxes
   Pensions and Other Postretirement Benefits
  13




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Recently Issued Accounting Standards
  Forward-Looking Statements
  Supplemental Adjusted Comparison of Operating Results
   January 1, 2005to March 10, 2005GAAP Results
    
    
    Varco Results
    
    
    
    
    
    
    AdjustedAs
Reported
    
    

Historical
    
    

Adjustments
    
    

ResultsThree Months ended March 31,
2006:Revenue:Rig Technology
    
    $
    715.3
    
    
    $
    
    
    
    $
    
    
    
    $
    715.3Petroleum Services & Supplies
    
    
    541.0
    
    
    
    
    
    
    
    
    
    
    
    541.0Distribution Services
    
    
    326.5
    
    
    
    
    
    
    
    
    
    
    
    326.5Eliminations
    
    
    (71.0
    )
    
    
    
    
    
    
    
    
    
    
    (71.0
    )Total Revenue
    
    $
    1,511.8
    
    
    $
    
    
    
    $
    
    
    
    $
    1,511.8
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January 1, 2005to March 10, 2005GAAP Results
    
    
    Varco Results
    
    
    
    
    
    
    AdjustedAs
Reported
    
    

Historical
    
    

Adjustments
    
    

ResultsOperating Profit:Rig Technology
    
    $
    100.8
    
    
    $
    
    
    
    $
    
    
    
    $
    100.8Petroleum Services & Supplies
    
    
    118.3
    
    
    
    
    
    
    
    
    
    
    
    118.3Distribution Services
    
    
    20.8
    
    
    
    
    
    
    
    
    
    
    
    20.8Unallocated expenses and eliminations
    
    
    (27.4
    )
    
    
    
    
    
    
    
    
    
    
    (27.4
    )Integration costs and stock-based
compensation
    
    
    (14.7
    )
    
    
    
    
    
    
    14.7
    (1)
    
    
    Total Operating Profit
    
    $
    197.8
    
    
    $
    
    
    
    $
    14.7
    
    
    $
    212.5
 January 1, 2005toMarch 10, 2005GAAP Results
    
    
    Varco Results
    
    
    
    
    
    
    AdjustedAs Reported
    
    
    Historical
    
    
    Adjustments
    
    
    ResultsThree months ended March 31,
2005:Revenue:Rig Technology
    
    $
    424.4
    
    
    $
    118.9
    
    
    $
    
    
    
    $
    543.3Petroleum Services & Supplies
    
    
    209.1
    
    
    
    192.9
    
    
    
    
    
    
    
    402.0Distribution Services
    
    
    235.9
    
    
    
    
    
    
    
    
    
    
    
    235.9Eliminations
    
    
    (54.5
    )
    
    
    
    
    
    
    (3.9
    )(2)
    
    
    (58.4
    )Total Revenue
    
    $
    814.9
    
    
    $
    311.8
    
    
    $
    (3.9
    )
    
    $
    1,122.8Operating Profit:Rig Technology
    
    $
    44.9
    
    
    $
    16.4
    
    
    $
    
    
    
    $
    61.3Petroleum Services & Supplies
    
    
    35.2
    
    
    
    28.4
    
    
    
    
    
    
    
    63.6Distribution Services
    
    
    7.6
    
    
    
    
    
    
    
    
    
    
    
    7.6Unallocated expenses and eliminations
    
    
    (10.9
    )
    
    
    (7.5
    )
    
    
    (3.6
    )(3)
    
    
    (22.0
    )Integration costs and stock-based
compensation
    
    
    (10.9
    )
    
    
    
    
    
    
    10.9
    (4)
    
    
    Total Operating Profit
    
    $
    65.9
    
    
    $
    37.3
    
    
    $
    7.3
    
    
    $
    110.5
 
 (1)
    
    The $14.7 million is comprised of $7.9 million of integration costs directly related to the Varco acquisition and $6.8 million of
stock-based compensation.(2)
    
    The $3.9 million is 2005 pre-merger sales between National Oilwell and Varco.(3)
    
    The $3.6 million is comprised of $1.7 million of 2005 pre-merger cost-of-sales between
National Oilwell and Varco and $1.9 million of estimated depreciation/amortization step-up
related to the Varco acquisition.(4)
    
    The $10.9 million is comprised of $9.8 million of integration costs and $1.1 million of
stock-based compensation, both directly related to the Varco acquisition.   15




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PART II    OTHER INFORMATION
 
 Item 6. Exhibits
  
 SIGNATURE
   /s/ Clay C. WilliamsClay C. WilliamsSenior Vice President and Chief Financial Officer(Duly Authorized Officer, Principal Financial andAccounting Officer)
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INDEX TO EXHIBITS
  3.1
    
    Amended and Restated Certificate of Incorporation of National
Oilwell, Inc. (incorporated by reference to exhibit 3.1 to our
Quarterly Report on Form 10-Q filed on August 11, 2000).3.2
    
    Amended and Restated By-laws of National Oilwell Varco, Inc.
(incorporated by reference to exhibit 3.2 to our Current Report on Form 8-K filed on November 18, 2005).31.1
    
    Certification pursuant to
Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended.31.2
    
    Certification pursuant to
Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended.
 18