National Oilwell Varco Announces Third Quarter 2014 Earnings
The third quarter 2014 fully diluted earnings per share includes
Revenues for the third quarter of 2014 were
Ending backlog for the third quarter of 2014 was
Rig Systems
Third quarter revenues for the Rig Systems segment were
Backlog for capital equipment orders for the Company’s Rig Systems
segment at
Rig Aftermarket
Third quarter revenues for the Rig Aftermarket segment were
Wellbore Technologies
Revenues for the third quarter of the Wellbore Technologies segment were
Completion & Production Solutions
The Completion & Production Solutions segment generated revenues of
Backlog for capital equipment orders for the Company’s Completion &
Production Solutions segment at
The Company has scheduled a conference call for
Statements made in this press release that are forward-looking in nature
are intended to be "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934 and may involve risks
and uncertainties. These statements may differ materially from actual
future events or results. Readers are referred to documents filed by
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NATIONAL OILWELL VARCO, INC. CONSOLIDATED BALANCE SHEETS (In millions, except share data) |
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September 30, | December 31, | |||||||
2014 | 2013 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,091 | $ | 3,436 | ||||
Receivables, net | 4,482 | 4,896 | ||||||
Inventories, net | 5,464 | 5,603 | ||||||
Costs in excess of billings | 1,615 | 1,539 | ||||||
Deferred income taxes | 399 | 373 | ||||||
Prepaid and other current assets | 619 | 576 | ||||||
Total current assets | 16,670 | 16,423 | ||||||
Property, plant and equipment, net | 3,377 | 3,408 | ||||||
Deferred income taxes | 433 | 372 | ||||||
Goodwill | 8,614 | 9,049 | ||||||
Intangibles, net | 4,695 | 5,055 | ||||||
Investment in unconsolidated affiliates | 356 | 390 | ||||||
Other assets | 125 | 115 | ||||||
$ | 34,270 | $ | 34,812 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,259 | $ | 1,275 | ||||
Accrued liabilities | 3,310 | 2,763 | ||||||
Billings in excess of costs | 1,809 | 1,771 | ||||||
Current portion of long-term debt and short-term borrowings | 151 | 1 | ||||||
Accrued income taxes | 267 | 556 | ||||||
Deferred income taxes | 405 | 312 | ||||||
Total current liabilities | 7,201 | 6,678 | ||||||
Long-term debt | 2,995 | 3,149 | ||||||
Deferred income taxes | 2,088 | 2,292 | ||||||
Other liabilities | 367 | 363 | ||||||
Total liabilities | 12,651 | 12,482 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock – par value $.01; 1 billion shares authorized; 430,569,502 and 428,433,703 | ||||||||
shares issued and outstanding at September 30, 2014 and December 31, 2013 | 4 | 4 | ||||||
Additional paid-in capital | 9,099 | 8,907 | ||||||
Accumulated other comprehensive loss | (362 | ) | (4 | ) | ||||
Retained earnings | 12,782 | 13,323 | ||||||
Total Company stockholders’ equity | 21,523 | 22,230 | ||||||
Noncontrolling interests | 96 | 100 | ||||||
Total stockholders’ equity | 21,619 | 22,330 | ||||||
$ | 34,270 | $ | 34,812 |
NATIONAL OILWELL VARCO, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In millions, except per share data) |
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Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | June 30, | September 30, | ||||||||||||||||||
2014 | 2013 | 2014 | 2014 | 2013 | ||||||||||||||||
Revenue: | ||||||||||||||||||||
Rig Systems | $ | 2,659 | $ | 2,061 | $ | 2,372 | $ | 7,287 | $ | 6,053 | ||||||||||
Rig Aftermarket | 837 | 712 | 785 | 2,372 | 1,933 | |||||||||||||||
Wellbore Technologies | 1,469 | 1,293 | 1,446 | 4,193 | 3,738 | |||||||||||||||
Completion & Production Solutions | 1,191 | 1,095 | 1,127 | 3,320 | 3,154 | |||||||||||||||
Eliminations | (569 | ) | (400 | ) | (475 | ) | (1,441 | ) | (1,061 | ) | ||||||||||
Total revenue | 5,587 | 4,761 | 5,255 | 15,731 | 13,817 | |||||||||||||||
Gross profit | 1,524 | 1,253 | 1,456 | 4,270 | 3,669 | |||||||||||||||
Gross profit % | 27.3 | % | 26.3 | % | 27.7 | % | 27.1 | % | 26.6 | % | ||||||||||
Selling, general, and administrative | 535 | 462 | 511 | 1,519 | 1,351 | |||||||||||||||
Other items | 1 | (92 | ) | 32 | 51 | 37 | ||||||||||||||
Operating profit | 988 | 883 | 913 | 2,700 | 2,281 | |||||||||||||||
Interest and financial costs | (26 | ) | (26 | ) | (27 | ) | (79 | ) | (84 | ) | ||||||||||
Interest income | 4 | 2 | 5 | 13 | 8 | |||||||||||||||
Equity income in unconsolidated affiliates | 9 | 13 | 23 | 42 | 47 | |||||||||||||||
Other income (expense), net | 9 | (11 | ) | (21 | ) | (12 | ) | (15 | ) | |||||||||||
Income before income taxes | 984 | 861 | 893 | 2,664 | 2,237 | |||||||||||||||
Provision for income taxes | 283 | 263 | 284 | 806 | 686 | |||||||||||||||
Income from continuing operations | 701 | 598 | 609 | 1,858 | 1,551 | |||||||||||||||
Income from discontinued operations | - | 38 | 11 | 52 | 116 | |||||||||||||||
Net income | 701 | 636 | 620 | 1,910 | 1,667 | |||||||||||||||
Net income (loss) attributable to noncontrolling interests | 2 | - | 1 | 3 | (2 | ) | ||||||||||||||
Net income attributable to Company | $ | 699 | $ | 636 | $ | 619 | $ | 1,907 | $ | 1,669 | ||||||||||
Per share data: | ||||||||||||||||||||
Basic: | ||||||||||||||||||||
Income from continuing operations | $ | 1.63 | $ | 1.40 | $ | 1.42 | $ | 4.34 | $ | 3.64 | ||||||||||
Income from discontinued operations | $ | - | $ | 0.09 | $ | 0.03 | $ | 0.12 | $ | 0.28 | ||||||||||
Net income attributable to Company | $ | 1.63 | $ | 1.49 | $ | 1.45 | $ | 4.46 | $ | 3.92 | ||||||||||
Diluted: | ||||||||||||||||||||
Income from continuing operations | $ | 1.62 | $ | 1.40 | $ | 1.42 | $ | 4.31 | $ | 3.62 | ||||||||||
Income from discontinued operations | $ | - | $ | 0.09 | $ | 0.02 | $ | 0.12 | $ | 0.28 | ||||||||||
Net income attributable to Company | $ | 1.62 | $ | 1.49 | $ | 1.44 | $ | 4.43 | $ | 3.90 | ||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 429 | 426 | 428 | 428 | 426 | |||||||||||||||
Diluted | 431 | 428 | 430 | 430 | 428 |
NATIONAL OILWELL VARCO, INC. OPERATING PROFIT – AS ADJUSTED SUPPLEMENTAL SCHEDULE (Unaudited) (In millions) |
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Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | June 30, | September 30, | ||||||||||||||||||
2014 | 2013 | 2014 | 2014 | 2013 | ||||||||||||||||
Revenue: | ||||||||||||||||||||
Rig Systems | $ | 2,659 | $ | 2,061 | $ | 2,372 | $ | 7,287 | $ | 6,053 | ||||||||||
Rig Aftermarket | 837 | 712 | 785 | 2,372 | 1,933 | |||||||||||||||
Wellbore Technologies | 1,469 | 1,293 | 1,446 | 4,193 | 3,738 | |||||||||||||||
Completion & Production Solutions | 1,191 | 1,095 | 1,127 | 3,320 | 3,154 | |||||||||||||||
Eliminations | (569 | ) | (400 | ) | (475 | ) | (1,441 | ) | (1,061 | ) | ||||||||||
Total revenue | $ | 5,587 | $ | 4,761 | $ | 5,255 | $ | 15,731 | $ | 13,817 | ||||||||||
Operating profit: | ||||||||||||||||||||
Rig Systems | $ | 533 | $ | 392 | $ | 501 | $ | 1,485 | $ | 1,157 | ||||||||||
Rig Aftermarket | 229 | 202 | 217 | 637 | 533 | |||||||||||||||
Wellbore Technologies | 278 | 206 | 269 | 771 | 609 | |||||||||||||||
Completion & Production Solutions | 184 | 176 | 158 | 485 | 511 | |||||||||||||||
Unallocated expenses and eliminations | (235 | ) | (185 | ) | (200 | ) | (627 | ) | (492 | ) | ||||||||||
Total operating profit (before other items) |
$ | 989 | $ | 791 | $ | 945 | $ | 2,751 | $ | 2,318 | ||||||||||
Operating profit %: | ||||||||||||||||||||
Rig Systems | 20.0 | % | 19.0 | % | 21.1 | % | 20.4 | % | 19.1 | % | ||||||||||
Rig Aftermarket | 27.4 | % | 28.4 | % | 27.6 | % | 26.9 | % | 27.6 | % | ||||||||||
Wellbore Technologies | 18.9 | % | 15.9 | % | 18.6 | % | 18.4 | % | 16.3 | % | ||||||||||
Completion & Production Solutions | 15.4 | % | 16.1 | % | 14.0 | % | 14.6 | % | 16.2 | % | ||||||||||
Total operating profit % (before other items) | 17.7 | % | 16.6 | % | 18.0 | % | 17.5 | % | 16.8 | % |
NATIONAL OILWELL VARCO, INC. |
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AS ADJUSTED BEFORE DEPRECIATION & AMORTIZATION SUPPLEMENTAL SCHEDULE (Unaudited) |
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(In millions) |
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Three Months Ended |
Nine Months Ended |
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September 30, | June 30, |
September 30, |
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2014 | 2013 | 2014 | 2014 | 2013 | |||||||||||||||||||||||||||
Operating profit excluding other items (Note 1): | |||||||||||||||||||||||||||||||
Rig Systems | $ | 533 | $ | 392 | $ | 501 | $ | 1,485 | $ | 1,157 | |||||||||||||||||||||
Rig Aftermarket | 229 | 202 | 217 | 637 | 533 | ||||||||||||||||||||||||||
Wellbore Technologies | 278 | 206 | 269 | 771 | 609 | ||||||||||||||||||||||||||
Completion & Production Solutions | 184 | 176 | 158 | 485 | 511 | ||||||||||||||||||||||||||
Unallocated expenses and eliminations | (235 | ) | (185 | ) | (200 | ) | (627 | ) | (492 | ) | |||||||||||||||||||||
Total operating profit excluding other items | $ | 989 | $ | 791 | $ | 945 | $ | 2,751 | $ | 2,318 | |||||||||||||||||||||
Depreciation & amortization: | |||||||||||||||||||||||||||||||
Rig Systems | $ | 21 | $ | 19 | $ | 22 | $ | 65 | $ | 57 | |||||||||||||||||||||
Rig Aftermarket | 7 | 6 | 7 | 20 | 18 | ||||||||||||||||||||||||||
Wellbore Technologies | 112 | 111 | 108 | 328 | 313 | ||||||||||||||||||||||||||
Completion & Production Solutions | 58 | 51 | 53 | 166 | 155 | ||||||||||||||||||||||||||
Unallocated expenses and eliminations | - | - | - | - | - | ||||||||||||||||||||||||||
Total depreciation & amortization | $ | 198 | $ | 187 | $ | 190 | $ | 579 | $ | 543 | |||||||||||||||||||||
Operating profit as adjusted before depreciation & | |||||||||||||||||||||||||||||||
amortization (Note 1): | |||||||||||||||||||||||||||||||
Rig Systems | $ | 554 | $ | 411 | $ | 523 | $ | 1,550 | $ | 1,214 | |||||||||||||||||||||
Rig Aftermarket | 236 | 208 | 224 | 657 | 551 | ||||||||||||||||||||||||||
Wellbore Technologies | 390 | 317 | 377 | 1,099 | 922 | ||||||||||||||||||||||||||
Completion & Production Solutions | 242 | 227 | 211 | 651 | 666 | ||||||||||||||||||||||||||
Unallocated expenses and eliminations | (235 | ) | (185 | ) | (200 | ) | (627 | ) | (492 | ) | |||||||||||||||||||||
Total operating profit as adjusted before depreciation & | |||||||||||||||||||||||||||||||
amortization | $ | 1,187 | $ | 978 | $ | 1,135 | $ | 3,330 | $ | 2,861 | |||||||||||||||||||||
Operating profit % as adjusted before depreciation & | |||||||||||||||||||||||||||||||
amortization (Note 1): | |||||||||||||||||||||||||||||||
Rig Systems | 20.8 | % | 19.9 | % | 22.0 | % | 21.3 | % | 20.1 | % | |||||||||||||||||||||
Rig Aftermarket | 28.2 | % | 29.2 | % | 28.5 | % | 27.7 | % | 28.5 | % | |||||||||||||||||||||
Wellbore Technologies | 26.5 | % | 24.5 | % | 26.1 | % | 26.2 | % | 24.7 | % | |||||||||||||||||||||
Completion & Production Solutions | 20.3 | % | 20.7 | % | 18.7 | % | 19.6 | % | 21.1 | % | |||||||||||||||||||||
Total operating profit % as adjusted before depreciation | |||||||||||||||||||||||||||||||
& amortization | 21.2 | % | 20.5 | % | 21.6 | % | 21.2 | % | 20.7 | % | |||||||||||||||||||||
Total operating profit as adjusted before depreciation | |||||||||||||||||||||||||||||||
& amortization: | $ | 1,187 | $ | 978 | $ | 1,135 | $ | 3,330 | $ | 2,861 | |||||||||||||||||||||
Other items | (1 | ) | 92 | (32 | ) | (51 | ) | (37 | ) | ||||||||||||||||||||||
Interest income | 4 | 2 | 5 | 13 | 8 | ||||||||||||||||||||||||||
Equity income in unconsolidated affiliates | 9 | 13 | 23 | 42 | 47 | ||||||||||||||||||||||||||
Other income (expense), net | 9 | (11 | ) | (21 | ) | (12 | ) | (15 | ) | ||||||||||||||||||||||
Net income (loss) attributable to noncontrolling | |||||||||||||||||||||||||||||||
interest | (2 | ) | - | (1 | ) | (3 | ) | 2 | |||||||||||||||||||||||
EBITDA (Note 1) | $ | 1,206 | $ | 1,074 | $ | 1,109 | $ | 3,319 | $ | 2,866 | |||||||||||||||||||||
Reconciliation of EBITDA (Note 1): | |||||||||||||||||||||||||||||||
GAAP net income attributable to Company | $ | 699 | $ | 636 | $ | 619 | $ | 1,907 | $ | 1,669 | |||||||||||||||||||||
Income from discontinued operations | - | (38 | ) | (11 | ) | (52 | ) | (116 | ) | ||||||||||||||||||||||
Provision for income taxes | 283 | 263 | 284 | 806 | 686 | ||||||||||||||||||||||||||
Interest expense | 26 | 26 | 27 | 79 | 84 | ||||||||||||||||||||||||||
Depreciation and amortization | 198 | 187 | 190 | 579 | 543 | ||||||||||||||||||||||||||
EBITDA | 1,206 | 1,074 | 1,109 | 3,319 | 2,866 | ||||||||||||||||||||||||||
Other items | 1 | (92 | ) | 32 | 51 | 37 | |||||||||||||||||||||||||
EBITDA excluding other items (Note 1) | $ | 1,207 | $ | 982 | $ | 1,141 | $ | 3,370 | $ | 2,903 | |||||||||||||||||||||
NATIONAL OILWELL VARCO, INC. |
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OPERATING (NON-GAAP) DILUTED EARNINGS PER SHARE RECONCILIATION (Unaudited) |
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Three Months Ended |
Nine Months Ended |
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September 30, |
June 30, |
September 30, |
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2014 |
2013 |
2014 |
2014 |
2013 |
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Net income attributable to Company |
$ | 1.62 | $ | 1.49 | $ | 1.44 | $ | 4.43 | $ | 3.90 | |||||||||
Income from discontinued operations | - | (0.09 | ) | (0.02 | ) | (0.12 | ) | (0.28 | ) | ||||||||||
Income from continuing operations | 1.62 | 1.40 | 1.42 | 4.31 | 3.62 | ||||||||||||||
Other items | - | (0.16 | ) | 0.05 | 0.07 | 0.05 | |||||||||||||
Amortization of intangible assets | 0.14 | 0.14 | 0.14 | 0.43 | 0.42 | ||||||||||||||
Operating (non-GAAP) | $ | 1.76 | $ | 1.38 | $ | 1.61 | $ | 4.81 | $ | 4.09 | |||||||||
Note 1: In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. The primary non-GAAP financial measures we focus on are: (i) revenue excluding other items, (ii) operating profit excluding other items, (iii) operating profit percentage excluding other items, (iv) operating profit excluding other items before depreciation & amortization, (v) operating profit percentage excluding other items before depreciation & amortization (vi) EBITDA and (vii) Operating (non-GAAP) per fully diluted share. Each of these financial measures excludes the impact of certain other items and therefore has not been calculated in accordance with GAAP. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is included here within.
We use these non-GAAP financial measures internally to evaluate and manage the Company’s operations because we believe it provides useful supplemental information regarding the Company’s on-going economic performance. We have chosen to provide this information to investors to enable them to perform more meaningful comparisons of operating results and as a means to emphasize the results of on-going operations.
Source:
National Oilwell Varco, Inc.
Jeremy Thigpen, (713) 346-7301
Jeremy.Thigpen@nov.com