National Oilwell Varco 2003 Annual Report Download - page 28

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27
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
National-Oilwell, Inc.
We have audited the accompanying consolidated balance sheets of National-Oilwell, Inc. as of
December 31, 2003 and 2002, and the related consolidated statements of operations, stockholders’ equity,
and cash flows for each of the three years in the period ended December 31, 2003. Our audits also
included the financial statement schedule listed in the index at Item 15 (a). These financial statements and
schedule are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United
States. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
consolidated financial position of National-Oilwell, Inc. at December 31, 2003 and 2002, and the
consolidated results of its operations and its cash flows for each of the three years in the period ended
December 31, 2003, in conformity with accounting principles generally accepted in the United States.
Also, in our opinion, the related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects the information set forth
therein.
As discussed in Note 1 to the consolidated financial statements, in 2002 the Company changed its
method of accounting for goodwill and other intangible assets.
/s/ ERNST & YOUNG LLP
Houston, Texas
February 12, 2004