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Derivative Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2014
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  

Foreign Currency

      March 31,  
2014		      December 31,
2013		  

Norwegian Krone

    NOK 10,172       NOK 10,503   

Euro

    € 500       € 406   

U.S. Dollar

    $ 443       $ 357   

Danish Krone

    DKK 266       DKK 278   

British Pound Sterling

    £ 52       £ 23   

Singapore Dollar

    SGD 36       SGD 17   

Canadian Dollar

    CAD 16       CAD 16   

The Company had the following outstanding foreign currency forward contracts that hedge the fair value of nonfunctional currency monetary accounts (in millions):

 

     Currency Denomination  

Foreign Currency

      March 31,  
2014		      December 31,
2013		  

Norwegian Krone

    NOK 3,866       NOK 3,257   

Russian Ruble

    RUB 1,786       RUB 2,149   

U.S. Dollar

    $ 801       $ 715   

Danish Krone

    DKK 383       DKK 177   

Euro

    € 381       € 310   

Singapore Dollar

    SGD 15       SGD 3   

British Pound Sterling

    £ 26       £ 14   

Swedish Krone

    SEK 11       SEK 4   

Canadian Dollar

    CAD 5       CAD 3   
Derivative Instruments and their Balance Sheet Classifications

The Company has the following gross fair values of its derivative instruments and their balance sheet classifications:

NATIONAL OILWELL VARCO, INC.

Fair Values of Derivative Instruments

(In millions)

 

   

Asset Derivatives

     Liability Derivatives  
        Fair Value         Fair Value  
    Balance Sheet   March 31,     December 31,     Balance Sheet   March 31,     December 31,  
   

Location

   2014     2013     Location   2014     2013  

Derivatives designated as hedging instruments under ASC Topic 815

            

Foreign exchange contracts

   Prepaid and other current assets   $ 33      $ 35      Accrued liabilities   $ 8      $ 18   

Foreign exchange contracts

   Other Assets     13        5      Other Liabilities     3        9   
   

 

 

    

 

 

      

 

 

    

 

 

  

Total derivatives designated as hedging instruments under ASC Topic 815

     $ 46      $ 40        $ 11      $ 27   
   

 

 

    

 

 

      

 

 

    

 

 

  

Derivatives not designated as hedging instruments under ASC Topic 815

            

Foreign exchange contracts

   Prepaid and other current assets   $ 21      $ 19      Accrued liabilities   $ 13      $ 13   

Foreign exchange contracts

   Other Assets     1        —        Other Liabilities     —          —     
   

 

 

    

 

 

      

 

 

    

 

 

  

Total derivatives not designated as hedging instruments under ASC Topic 815

     $ 22      $ 19        $ 13      $ 13   
   

 

 

    

 

 

      

 

 

    

 

 

  

Total derivatives

     $ 68      $ 59        $ 24      $ 40   
   

 

 

    

 

 

      

 

 

    

 

 

  
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)  
    Three Months Ended
March 31,		         Three Months Ended
March 31,		         Three Months Ended
March 31,		  
    2014     2013         2014     2013         2014     2013  
      Revenue     13        2         

Foreign exchange contracts

     35        (61 )    Cost of revenue     (3 )      3      Other income (expense), net     13        3   
 

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

  

Total

     35        (61 )        10        5          13        3   
 

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

  

 

(a) The Company expects that $(19) million of the Accumulated Other Comprehensive Income (Loss) will be reclassified into earnings within the next twelve months with an offset by gains from the underlying transactions resulting in no impact to earnings or cash flow.
(b) The amount of gain (loss) recognized in income represents nil related to the ineffective portion of the hedging relationships for each of the three months ended March 31, 2014 and 2013, respectively, and $13 million and $3 million related to the amount excluded from the assessment of the hedge effectiveness for the three months ended March 31, 2014 and 2013, respectively.