Morningstar Names Merrill A. (Pete) Miller Jr. of National Oilwell Varco as its 2012 CEO of the Year

Thu Jan 3, 2013 2:03pm EST

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CHICAGO,  Jan. 3, 2013  /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a
leading provider of independent investment research, today named  Merrill A.
(Pete) Miller Jr., CEO of  Houston-based National Oilwell Varco, as its 2012 CEO
of the Year. Morningstar annually recognizes a chief executive who exhibits
exemplary corporate stewardship, demonstrates independent thinking, creates
lasting value for shareholders, and has put his or her stamp on an industry.  

The two other nominees for Morningstar's 2012 CEO of the Year award were  George
Paz  of Express Scripts and  J. Michael Pearson  of Valeant Pharmaceuticals
International.  

"This year's nominees have been instrumental in transforming their companies
from small players or those with few competitive advantages to leaders in their
industries," said  Paul Larson, chief equities strategist and editor of 
Morningstar StockInvestor. "We selected Miller, who has served as CEO of
National Oilwell Varco since 2001, as our winner this year for the rare
combination of excellence he's demonstrated across all three facets of a chief
executive's job-strategic insights, capital allocation, and execution.  

"Miller has successfully mitigated the inherent risks of doing business in the
oil and gas equipment and services industry. For instance, he executed an
acquisition-heavy strategy, which can carry the threat of operational miscues,
without a hitch. Despite the pace of acquisitions, Miller has prioritized
shareholder-friendly actions by paying a special dividend in 2009, cutting his
own salary in light of the difficult economic environment in 2008, and openly
sharing his thoughts with analysts about where he thinks the market is going and
how National Oilwell Varco is positioned to compete."  

In the last 18 months, continuing a long-running streak of deals, National
Oilwell Varco under Miller has completed or has pending nearly  $6 billion  in
acquisitions. In another move that reflects substantial value creation for
shareholders, the company also raised  $3 billion  in senior notes in the midst
of an extremely favorable corporate credit environment.  

With Miller at the helm, National Oilwell Varco has reshaped the oilfield
equipment industry and is positioned to maintain its influence:

* After an impressive string of deals mostly led by Miller over the last 15
years, National Oilwell Varco has become a critical player in the industry, with
such leading technology and services that many drillers are electing to
standardize around its equipment.  
* Miller successfully predicted several major industry shifts-the aging of
global rig fleets, the onset of shorter lifecycles for equipment necessary to
exploit North American oil and gas reservoirs, and the need for floating
production storage and offshore (FPSO) units used for offshore markets-and
invested billions of dollars in capital to situate National Oilwell Varco
favorably ahead of them.     
* The company's footing uniquely positions it to become one of the leading
suppliers for FPSO and related subsea efforts, a development likely to unfold
over the next decade, replicating its earlier success with offshore drilling in
terms of market penetration and approach to equipment standardization.

"National Oilwell Varco is one of the very few companies in Morningstar's
coverage universe with a Wide 'Economic Moat' Rating, a Positive Economic Moat
Trend, and an Exemplary Stewardship Rating," Larson added. "We don't award moat
ratings based on operational effectiveness or skilled management, but we do
acknowledge that they can strengthen a firm's moat. Miller's actions, along with
those of his management team, have indeed steeled National Oilwell Varco's
competitive position by changing the way offshore rigs are built to the
company's benefit, solidifying its low-cost position in the industry as drillers
standardized around its products to take advantage of improved rig economics.
Meanwhile, National Oilwell Varco reaped the benefits of powerful switching
costs through the integration of its equipment into a single operating system." 


Morningstar's Economic Moat rating is a proprietary measure of a company's
sustainable competitive advantages, and Morningstar assigns each company a
rating of Wide, Narrow, or None. A company can obtain an economic moat through
five primary sources: Efficient Scale (a limited market where there is little
incentive for new entrants), Network Effect (a situation where incremental
customers add value for existing customers), Cost Advantage (allowing a company
a greater profit margin and/or the ability to steal market share), Intangible
Assets (e.g. patents or strong brands), and Switching Costs (making it costly in
time and/or money for customers to switch providers). Morningstar also evaluates
a company's "moat trend," which indicates whether the economic moat of its
underlying businesses is strengthening or weakening.

Morningstar introduced its CEO of the Year award in  January 2000. Winners are
chosen by senior members of Morningstar's equity analyst team based on their
in-depth independent research.  

For Morningstar's commentary about Miller, go to: 
http://www.morningstar.com/goto/ceo2012.   

For the complete list of past winners, go to: 
http://corporate.morningstar.com/CEOhalloffame.



About Morningstar, Inc.  

Morningstar, Inc. is a leading provider of independent investment research in 
North America,  Europe,  Australia, and  Asia. The company offers an extensive
line of products and services for individuals, financial advisors, and
institutions. Morningstar provides data on more than 385,000 investment
offerings, including stocks, mutual funds, and similar vehicles, along with
real-time global market data on more than 8 million equities, indexes, futures,
options, commodities, and precious metals, in addition to foreign exchange and
Treasury markets. Morningstar also offers investment management services through
its registered investment advisor subsidiaries and has more than  $195 billion 
in assets under advisement and management as of  Sept. 30, 2012. The company has
operations in 27 countries.

©2013 Morningstar, Inc. All Rights Reserved.

MORN-C

Media Contact:

Carling Spelhaug, 312-696-6150 or  carling.spelhaug@morningstar.com

 


 

SOURCE  Morningstar, Inc.
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