National Oilwell Varco 2012 Annual Report Download - page 91

Index to Financial Statements
The Company leases certain facilities and equipment under operating leases that expire at various dates through 2066. These leases generally contain renewal options and
require the lessee to pay maintenance, insurance, taxes and other operating expenses in addition to the minimum annual rentals. Rental expense related to operating leases
approximated $256 million, $215 million, and $199 million in 2011, 2010 and 2009, respectively.
Future minimum lease commitments under noncancellable operating leases with initial or remaining terms of one year or more at December 31, 2011 are payable as follows
(in millions):
2012 $ 150
2013 110
2014 88
2015 69
2016 58
Thereafter 242
Total future lease commitments $ 717
13. Common Stock
National Oilwell Varco has authorized 1 billion shares of $.01 par value common stock. The Company also has authorized 10 million shares of $.01 par value preferred stock,
none of which is issued or outstanding.
Cash dividends aggregated $191 million and $172 million for the years ended December 31, 2011 and 2010, 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.
Stock Options
Under the terms of National Oilwell Varcos Long-Term Incentive Plan, as amended, 25.5 million shares of common stock are authorized for the grant of options to officers,
key employees, non-employee directors and other persons. Options granted under our stock option plan generally vest over a three-year period starting one year from the date
of grant and expire ten years from the date of grant. The purchase price of options granted may not be less than the closing market price of National Oilwell Varco common
stock on the date of grant. At December 31, 2011, approximately 6 million shares were available for future grants.
We also have inactive stock option plans that were acquired in connection with the acquisitions of Varco International, Inc. in 2005 and Grant Prideco in 2008. We converted
the outstanding stock options under these plans to options to acquire our common stock and no further options are being issued under these plans. Stock option information
summarized below includes amounts for the National Oilwell Varco Long-Term Incentive Plan and stock plans of acquired companies. Options outstanding at December 31,
2011 under the stock option plans have exercise prices between $8.38 and $79.80 per share, and expire at various dates from January 30, 2012 to May 20, 2021.
The following summarizes options activity:
Years Ended December 31,
2011 2010 2009
Number
of
Shares
Average
Exercise
Price
Number
of
Shares
Average
Exercise
Price
Number
of
Shares
Average
Exercise
Price
Shares under option at beginning of year 11,039,544 $ 38.01 10,255,982 $ 34.19 7,547,822 $ 37.24
Granted 2,277,946 79.68 3,485,283 44.03 3,234,400 26.03
Cancelled (241,174) 40.20 (232,488) 40.53 (156,356) 29.79
Exercised (2,594,566) 36.84 (2,469,233) 30.35 (369,884) 40.86
Shares under option at end of year 10,481,750 $ 47.20 11,039,544 $ 38.01 10,255,982 $ 34.19
Exercisable at end of year 5,073,965 $ 38.47 5,067,186 $ 36.31 5,308,465 $ 33.14
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