National Oilwell Varco Announces Fourth Quarter and Full Year 2015 Earnings
Revenues for the fourth quarter of 2015 were
Revenues reported for the full year 2015 were
This ‘lower-for-longer' market decline will provide the foundation for an eventual recovery, as oil depletion marches onward and demand continues to grow. We nevertheless recognize that the timing of the recovery remains uncertain and that we face additional headwinds in the year ahead. I am grateful for the hard work and dedication of our NOV employees and am confident in their ability to navigate the tough road ahead. We remain resolute in our focus on reducing costs, improving execution, doing more with less and, ultimately, emerging from the depths of this cycle well positioned for the upturn.”
Segment results (excluding other items):
Rig Systems Segment
Rig Systems generated revenues of
Backlog for capital equipment orders for Rig Systems at
Rig Aftermarket Segment
Rig Aftermarket generated revenues of
Wellbore Technologies Segment
Wellbore Technologies generated revenues of
Completion & Production Solutions Segment
Completion & Production Solutions generated revenues of
Backlog for capital equipment orders for Completion & Production
Solutions 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
NATIONAL OILWELL VARCO, INC. | ||||||||||
CONSOLIDATED BALANCE SHEETS |
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(In millions, except share data) | ||||||||||
December 31, | December 31, | |||||||||
2015 | 2014 | |||||||||
(Unaudited) | ||||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 2,080 | $ | 3,536 | ||||||
Receivables, net | 2,926 | 4,416 | ||||||||
Inventories, net | 4,678 | 5,281 | ||||||||
Costs in excess of billings | 1,250 | 1,878 | ||||||||
Deferred income taxes | 376 | 447 | ||||||||
Prepaid and other current assets | 491 | 604 | ||||||||
Total current assets | 11,801 | 16,162 | ||||||||
Property, plant and equipment, net | 3,124 | 3,362 | ||||||||
Deferred income taxes | 488 | 503 | ||||||||
Goodwill | 6,980 | 8,539 | ||||||||
Intangibles, net | 3,849 | 4,444 | ||||||||
Investment in unconsolidated affiliates | 327 | 362 | ||||||||
Other assets | 156 | 190 | ||||||||
$ | 26,725 | $ | 33,562 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 623 | $ | 1,189 | ||||||
Accrued liabilities | 2,284 | 3,518 | ||||||||
Billings in excess of costs | 785 | 1,775 | ||||||||
Current portion of long-term debt and short-term borrowings | 2 | 152 | ||||||||
Accrued income taxes | 264 | 431 | ||||||||
Deferred income taxes | 291 | 309 | ||||||||
Total current liabilities | 4,249 | 7,374 | ||||||||
Long-term debt | 3,928 | 3,014 | ||||||||
Deferred income taxes | 1,805 | 1,972 | ||||||||
Other liabilities | 283 | 430 | ||||||||
Total liabilities | 10,265 | 12,790 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders’ equity: | ||||||||||
Common stock – par value $.01; 1 billion shares authorized; 375,764,794 and 418,977,608 shares issued and outstanding at December 31, 2015 and December 31, 2014 |
4 | 4 | ||||||||
Additional paid-in capital | 6,230 | 8,341 | ||||||||
Accumulated other comprehensive loss | (1,553 | ) | (834 | ) | ||||||
Retained earnings | 11,702 | 13,181 | ||||||||
Total Company stockholders’ equity | 16,383 | 20,692 | ||||||||
Noncontrolling interests | 77 | 80 | ||||||||
Total stockholders’ equity | 16,460 | 20,772 | ||||||||
$ | 26,725 | $ | 33,562 | |||||||
NATIONAL OILWELL VARCO, INC. | |||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | |||||||||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||||||||
Three Months Ended | Years Ended | ||||||||||||||||||||||||
December 31, |
September 30, |
December 31, | |||||||||||||||||||||||
2015 | 2014 | 2015 | 2015 | 2014 | |||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Rig Systems | $ | 1,015 | $ | 2,561 | $ | 1,496 | $ | 6,964 | $ | 9,848 | |||||||||||||||
Rig Aftermarket | 569 | 850 | 570 | 2,515 | 3,222 | ||||||||||||||||||||
Wellbore Technologies | 757 | 1,529 | 834 | 3,718 | 5,722 | ||||||||||||||||||||
Completion & Production Solutions | 746 | 1,325 | 798 | 3,365 | 4,645 | ||||||||||||||||||||
Eliminations | (365 | ) | (556 | ) | (392 | ) | (1,805 | ) | (1,997 | ) | |||||||||||||||
Total revenue | 2,722 | 5,709 | 3,306 | 14,757 | 21,440 | ||||||||||||||||||||
Gross profit | 520 | 1,546 | 700 | 3,270 | 5,816 | ||||||||||||||||||||
Gross profit % | 19.1 | % | 27.1 | % | 21.2 | % | 22.2 | % | 27.1 | % | |||||||||||||||
Selling, general, and administrative | 379 | 528 | 354 | 1,636 | 2,047 | ||||||||||||||||||||
Other items | 1,773 | 163 | 112 | 2,024 | 214 | ||||||||||||||||||||
Operating profit (loss) | (1,632 | ) | 855 | 234 | (390 | ) | 3,555 | ||||||||||||||||||
Interest and financial costs | (27 | ) | (26 | ) | (24 | ) | (103 | ) | (105 | ) | |||||||||||||||
Interest income | 5 | 5 | 2 | 14 | 18 | ||||||||||||||||||||
Equity income in unconsolidated affiliates | (3 | ) | 16 | - | 13 | 58 | |||||||||||||||||||
Other income (expense), net | (17 | ) | (20 | ) | (20 | ) | (123 | ) | (32 | ) | |||||||||||||||
Income (loss) before income taxes | (1,674 | ) | 830 | 192 | (589 | ) | 3,494 | ||||||||||||||||||
Provision for income taxes | (152 | ) | 233 | 36 | 178 | 1,039 | |||||||||||||||||||
Income (loss) from continuing operations | (1,522 | ) | 597 | 156 | (767 | ) | 2,455 | ||||||||||||||||||
Income from discontinued operations | - | - | - | - | 52 | ||||||||||||||||||||
Net income (loss) | (1,522 | ) | 597 | 156 | (767 | ) | 2,507 | ||||||||||||||||||
Net income attributable to noncontrolling interests | 1 | 2 | 1 | 2 | 5 | ||||||||||||||||||||
Net income (loss) attributable to Company | $ | (1,523 | ) | $ | 595 | $ | 155 | $ | (769 | ) | $ | 2,502 | |||||||||||||
Per share data: | |||||||||||||||||||||||||
Basic: | |||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (4.06 | ) | $ | 1.39 | $ | 0.41 | $ | (1.99 | ) | $ | 5.73 | |||||||||||||
Income from discontinued operations | $ | - | $ | - | $ | - | $ | - | $ | 0.12 | |||||||||||||||
Net income (loss) attributable to Company | $ | (4.06 | ) | $ | 1.39 | $ | 0.41 | $ | (1.99 | ) | $ | 5.85 | |||||||||||||
Diluted: | |||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (4.06 | ) | $ | 1.39 | $ | 0.41 | $ | (1.99 | ) | $ | 5.70 | |||||||||||||
Income from discontinued operations | $ | - | $ | - | $ | - | $ | - | $ | 0.12 | |||||||||||||||
Net income (loss) attributable to Company | $ | (4.06 | ) | $ | 1.39 | $ | 0.41 | $ | (1.99 | ) | $ | 5.82 | |||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||||
Basic | 375 | 427 | 380 | 387 | 428 | ||||||||||||||||||||
Diluted | 375 | 428 | 381 | 387 | 430 | ||||||||||||||||||||
NATIONAL OILWELL VARCO, INC. | |||||||||||||||||||||||||
OPERATING PROFIT – AS ADJUSTED SUPPLEMENTAL SCHEDULE (Unaudited) | |||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||
Three Months Ended | Years Ended | ||||||||||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||||||||||
2015 | 2014 | 2015 | 2015 | 2014 | |||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Rig Systems | $ | 1,015 | $ | 2,561 | $ | 1,496 | $ | 6,964 | $ | 9,848 | |||||||||||||||
Rig Aftermarket | 569 | 850 | 570 | 2,515 | 3,222 | ||||||||||||||||||||
Wellbore Technologies | 757 | 1,529 | 834 | 3,718 | 5,722 | ||||||||||||||||||||
Completion & Production Solutions | 746 | 1,325 | 798 | 3,365 | 4,645 | ||||||||||||||||||||
Eliminations | (365 | ) | (556 | ) | (392 | ) | (1,805 | ) | (1,997 | ) | |||||||||||||||
Total revenue | $ | 2,722 | $ | 5,709 | $ | 3,306 | $ | 14,757 | $ | $ | 21,440 | ||||||||||||||
Operating profit (loss): | |||||||||||||||||||||||||
Rig Systems | $ | 160 | $ | 511 | $ | 275 | $ | 1,318 | $ | 1,996 | |||||||||||||||
Rig Aftermarket | 127 | 245 | 146 | 617 | 882 | ||||||||||||||||||||
Wellbore Technologies | (31 | ) | 276 | 22 | 162 | 1,047 | |||||||||||||||||||
Completion & Production Solutions | 34 | 215 | 63 | 286 | 700 | ||||||||||||||||||||
Unallocated expenses and eliminations | (149 |
) |
(229 | ) | (160 | ) | (749 | ) | (856 | ) | |||||||||||||||
Total operating profit (before other items) |
$ | 141 | $ | 1,018 | $ | 346 | $ | 1,634 | $ | 3,769 | |||||||||||||||
Operating profit (loss) %: | |||||||||||||||||||||||||
Rig Systems | 15.8 | % | 20.0 | % | 18.4 | % | 18.9 | % | 20.3 | % | |||||||||||||||
Rig Aftermarket | 22.3 | % | 28.8 | % | 25.6 | % | 24.5 | % | 27.4 | % | |||||||||||||||
Wellbore Technologies | (4.1 | %) | 18.1 | % | 2.6 | % | 4.4 | % | 18.3 | % | |||||||||||||||
Completion & Production Solutions | 4.6 | % | 16.2 | % | 7.9 | % | 8.5 | % | 15.1 | % | |||||||||||||||
Total operating profit % (before other items) | 5.2 | % | 17.8 | % | 10.5 | % | 11.1 | % | 17.6 | % | |||||||||||||||
NATIONAL OILWELL VARCO, INC. | |||||||||||||||||||||||||
AS ADJUSTED BEFORE DEPRECIATION & AMORTIZATION SUPPLEMENTAL SCHEDULE (Unaudited) | |||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||
Three Months Ended | Years Ended | ||||||||||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||||||||||
2015 | 2014 | 2015 | 2015 | 2014 | |||||||||||||||||||||
Operating profit (loss) excluding other items: | |||||||||||||||||||||||||
Rig Systems | $ | 160 | $ | 511 | $ | 275 | $ | 1,318 | $ | 1,996 | |||||||||||||||
Rig Aftermarket | 127 | 245 | 146 | 617 | 882 | ||||||||||||||||||||
Wellbore Technologies | (31 | ) | 276 | 22 | 162 | 1,047 | |||||||||||||||||||
Completion & Production Solutions | 34 | 215 | 63 | 286 | 700 | ||||||||||||||||||||
Eliminations | (149 | ) | (229 | ) | (160 | ) | (749 | ) | (856 | ) | |||||||||||||||
Total operating profit (before other items) | $ | 141 | $ | 1,018 | $ | 346 | $ | 1,634 | $ | 3,769 | |||||||||||||||
Depreciation & amortization: | |||||||||||||||||||||||||
Rig Systems | $ | 24 | $ | 23 | $ | 25 | $ | 96 | $ | 88 | |||||||||||||||
Rig Aftermarket | 8 | 7 | 8 | 30 | 27 | ||||||||||||||||||||
Wellbore Technologies | 99 | 111 | 97 | 400 | 439 | ||||||||||||||||||||
Completion & Production Solutions | 52 | 58 | 54 | 221 | 224 | ||||||||||||||||||||
Eliminations | - | - | - | - | - | ||||||||||||||||||||
Total depreciation & amortization | $ | 183 | $ | 199 | $ | 184 | $ | 747 | $ | 778 | |||||||||||||||
Operating profit as adjusted before depreciation & amortization: | |||||||||||||||||||||||||
Rig Systems | $ | 184 | $ | 534 | $ | 300 | $ | 1, 414 | $ | 2,084 | |||||||||||||||
Rig Aftermarket | 135 | 252 | 154 | 647 | 909 | ||||||||||||||||||||
Wellbore Technologies | 68 | 387 | 119 | 562 | 1,486 | ||||||||||||||||||||
Completion & Production Solutions | 86 | 273 | 117 | 507 | 924 | ||||||||||||||||||||
Eliminations | (149 | ) | (229 | ) | (160 | ) | (749 | ) | (856 | ) | |||||||||||||||
Total operating profit as adjusted before depreciation & amortization | $ | 324 | $ | 1,217 | $ | 530 | $ | 2,381 | $ | 4,547 | |||||||||||||||
Operating profit % as adjusted before depreciation & amortization (Note 1): | |||||||||||||||||||||||||
Rig Systems | 18.1 | % | 20.9 | % | 20.1 | % | 20.3 | % | 21.2 | % | |||||||||||||||
Rig Aftermarket | 23.7 | % | 29.6 | % | 27.0 | % | 25.7 | % | 28.2 | % | |||||||||||||||
Wellbore Technologies | 9.0 | % | 25.3 | % | 14.3 | % | 15.1 | % | 26.0 | % | |||||||||||||||
Completion & Production Solutions | 11.5 | % | 20.6 | % | 14.7 | % | 15.1 | % | 19.9 | % | |||||||||||||||
Total operating profit % as adjusted before depreciation & amortization | 11.9 | % | 21.3 | % | 16.0 | % | 16.1 | % | 21.2 | % | |||||||||||||||
Total operating profit as adjusted before depreciation & amortization: | $ | 324 | $ | 1,217 | $ | 530 | $ | 2,381 | $ | 4,547 | |||||||||||||||
Nonrecurring items | (1,773 | ) | (163 | ) | (112 | ) | (2,024 | ) | (214 | ) | |||||||||||||||
Interest income | 5 | 5 | 2 | 14 | 18 | ||||||||||||||||||||
Equity income in unconsolidated affiliates | (3 | ) | 16 | - | 13 | 58 | |||||||||||||||||||
Other income (expense), net | (17 | ) | (20 | ) | (20 | ) | (123 | ) | (32 | ) | |||||||||||||||
Net income attributable to noncontrolling interest | (1 | ) | (2 | ) | (1 | ) | (2 | ) | (5 | ) | |||||||||||||||
EBITDA | $ | (1,465 | ) | $ | 1,053 | $ | 399 | $ | 259 | $ | 4,372 | ||||||||||||||
Reconciliation of EBITDA: | |||||||||||||||||||||||||
GAAP net income (loss) attributable to Company | $ | (1,523 | ) | $ | 595 | $ | 155 | $ | (769 | ) | $ | 2,502 | |||||||||||||
Income from discontinued operations | - | - | - | - | (52 | ) | |||||||||||||||||||
Provision for income taxes | (152 | ) | 233 | 36 | 178 | 1,039 | |||||||||||||||||||
Interest expense | 27 | 26 | 24 | 103 | 105 | ||||||||||||||||||||
Depreciation and amortization | 183 | 199 | 184 | 747 | 778 | ||||||||||||||||||||
EBITDA | (1,465 | ) | 1,053 | 399 | 259 | 4,372 | |||||||||||||||||||
Nonrecurring items | 1,773 | 163 | 112 | 2,024 | 214 | ||||||||||||||||||||
EBITDA excluding nonrecurring items | $ | 308 | $ | 1,216 | $ | 511 | $ | 2,283 | $ | 4,586 | |||||||||||||||
NATIONAL OILWELL VARCO, INC. | |||||||||||||||||||||||
OPERATING (NON-GAAP) DILUTED EARNINGS PER SHARE RECONCILIATION (Unaudited) | |||||||||||||||||||||||
Three Months Ended |
Years Ended |
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December 31, |
September 30, |
December 31, |
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2015 |
2014 |
2015 |
2015 |
2014 |
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Net income (loss) attributable to Company |
$ | (4.06 | ) | $ | 1.39 | $ | 0.41 | $ | (1.99 | ) | $ | 5.82 | |||||||||||
Income from discontinued operations | - | - | - | - | (0.12 | ) | |||||||||||||||||
Income (loss) from continuing operations | (4.06 | ) | 1.39 | 0.41 | (1.99 | ) | 5.70 | ||||||||||||||||
Other items and non-recurring charges: | |||||||||||||||||||||||
Goodwill and other intangible asset write-down | 4.21 | - | 0.10 | 4.18 | - | ||||||||||||||||||
Restructuring and other items | 0.25 | 0.30 | 0.10 | 0.57 | 0.37 | ||||||||||||||||||
Argentina/Venezuela asset write-down | 0.01 | - | - | 0.04 | - | ||||||||||||||||||
Tax items | (0.18 | ) | - | - | - | - | |||||||||||||||||
Operating (non-GAAP) (Note 1) | 0.23 | 1.69 | 0.61 | 2.80 | 6.07 | ||||||||||||||||||
Amortization of purchased intangible assets | 0.17 | 0.15 | 0.16 | 0.63 | 0.57 | ||||||||||||||||||
Operating (non-GAAP) excluding amortization of purchased intangible assets (Note 1) | $ | 0.40 | $ | 1.84 | $ | 0.77 | $ | 3.43 | $ | 6.64 | |||||||||||||
Note 1: In an effort to provide investors with additional information regarding our results as determined by GAAP, we disclose, as appropriate, various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. The primary non-GAAP financial measures we focus on, when applicable, 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, (vii) EBITDA excluding other items, (viii) Operating (non-GAAP) per fully diluted share and (ix) Operating (non-GAAP) excluding amortization of purchased intangible assets per fully diluted share. Each of these financial measures excludes the impact of certain 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160203005453/en/
Source:
National Oilwell Varco, Inc.
Jose Bayardo, 713-375-3700
Jose.Bayardo@nov.com