National Oilwell Varco Reports Fourth Quarter and Full Year 2019 Results
Revenues for the full year 2019 were
“Our team executed well in a challenging market during 2019, successfully driving cost savings and efficiencies in working capital throughout our organization,” commented
“The fourth quarter saw continued improvements in international and offshore markets, partially offset by another sequential decline in spending by our customers in
“NOV remains focused on creating value for our shareholders by supporting our customers across all phases of oil and gas operations with products and services that enhance their returns, improve safety, and extend the life of equipment. Our technology, global footprint, portfolio of products and services, and large installed base make NOV a partner of choice across the global oilfield.”
Wellbore Technologies
Wellbore Technologies generated revenues of
Completion & Production Solutions
Completion & Production Solutions generated revenues of
New orders booked during the quarter were
Rig Technologies
Rig Technologies generated revenues of
New orders booked during the quarter totaled
Other Corporate Items
Further declines in U.S. drilling activity levels and ongoing cost-cutting efforts led the Company to recognize
As of
Significant Achievements
NOV sold the first PowerBlade™ Hybrid system to a key drilling contractor on the Norwegian Continental Shelf. The hybrid solution consists of technology that enables the operator to reduce its carbon footprint during drilling operations by utilizing a special flywheel technology coupled to a battery system. This technology will aid customers in the pursuit of their goals to achieve zero emissions during drilling operations, reduce rig maintenance, and improve rig efficiency.
NOV deployed the first high pressure frac hoses in a pilot launch with leading North American completion service providers. By introducing flexibility into the rig-up of frac operations, reducing the number of potential leak points in the pressure line, and significantly extending operational life, NOV’s frac hoses have the potential to significantly reduce the total cost of ownership of flow connections for completion service companies.
NOV’s Vector™ rotary steerable technologies achieved a significant milestone when a customer deployed a VectorEXAKT tool to drill a precise vertical section in southern
NOV’s industry-leading M/D Totco eVolve™ Optimization Services saw rapid growth during the fourth quarter and completed a record high for wired drill pipe optimization jobs in the
NOV successfully delivered a package of Figure 2002, 20,000-psi high-pressure flowline equipment to an operator in northwestern
NOV secured an order for a monoethylene glycol (MEG) for use in an LNG development in
NOV delivered the first order for actuated chokes out of its recently-opened factory in
NOV launched its Fuego series of Tektonic™ drill bits in
Fourth Quarter Earnings Conference Call
NOV will hold a conference call to discuss its fourth quarter 2019 results on
About NOV
Visit www.nov.com for more information.
Cautionary Statement for the Purpose of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995
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 the actual future events or results. Readers are referred to documents filed by
Certain prior period amounts have been reclassified in this press release to be consistent with current period presentation.
NATIONAL OILWELL VARCO, INC. CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) (In millions, except per share data) |
||||||||||||||||||||
|
|
Three Months Ended |
|
|
Years Ended |
|
||||||||||||||
|
|
December 31, |
|
|
September 30, |
|
|
December 31, |
|
|||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
764 |
|
|
$ |
884 |
|
|
$ |
793 |
|
|
$ |
3,214 |
|
|
$ |
3,235 |
|
Completion & Production Solutions |
|
|
799 |
|
|
|
788 |
|
|
|
728 |
|
|
|
2,771 |
|
|
|
2,931 |
|
Rig Technologies |
|
|
759 |
|
|
|
804 |
|
|
|
649 |
|
|
|
2,682 |
|
|
|
2,575 |
|
Eliminations |
|
|
(41 |
) |
|
|
(78 |
) |
|
|
(44 |
) |
|
|
(188 |
) |
|
|
(288 |
) |
Total revenue |
|
|
2,281 |
|
|
|
2,398 |
|
|
|
2,126 |
|
|
|
8,479 |
|
|
|
8,453 |
|
Gross profit |
|
|
376 |
|
|
|
409 |
|
|
|
151 |
|
|
|
845 |
|
|
|
1,444 |
|
Gross profit % |
|
|
16.5 |
% |
|
|
17.1 |
% |
|
|
7.1 |
% |
|
|
10.0 |
% |
|
|
17.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative |
|
|
289 |
|
|
|
322 |
|
|
|
293 |
|
|
|
1,303 |
|
|
|
1,233 |
|
Long-lived asset impairment |
|
|
436 |
|
|
|
— |
|
|
|
12 |
|
|
|
5,821 |
|
|
|
— |
|
Operating profit (loss) |
|
|
(349 |
) |
|
|
87 |
|
|
|
(154 |
) |
|
|
(6,279 |
) |
|
|
211 |
|
Interest and financial costs |
|
|
(25 |
) |
|
|
(22 |
) |
|
|
(25 |
) |
|
|
(100 |
) |
|
|
(93 |
) |
Interest income |
|
|
4 |
|
|
|
7 |
|
|
|
4 |
|
|
|
20 |
|
|
|
25 |
|
Equity loss in unconsolidated affiliates |
|
|
(7 |
) |
|
|
(2 |
) |
|
|
(4 |
) |
|
|
(13 |
) |
|
|
(3 |
) |
Other income (expense), net |
|
|
(54 |
) |
|
|
(29 |
) |
|
|
(10 |
) |
|
|
(90 |
) |
|
|
(99 |
) |
Income (loss) before income taxes |
|
|
(431 |
) |
|
|
41 |
|
|
|
(189 |
) |
|
|
(6,462 |
) |
|
|
41 |
|
Provision (benefit) for income taxes |
|
|
(46 |
) |
|
|
26 |
|
|
|
60 |
|
|
|
(369 |
) |
|
|
63 |
|
Net income (loss) |
|
|
(385 |
) |
|
|
15 |
|
|
|
(249 |
) |
|
|
(6,093 |
) |
|
|
(22 |
) |
Net (income) loss attributable to noncontrolling interests |
|
|
— |
|
|
|
3 |
|
|
|
(5 |
) |
|
|
2 |
|
|
|
9 |
|
Net income (loss) attributable to Company |
|
$ |
(385 |
) |
|
$ |
12 |
|
|
$ |
(244 |
) |
|
$ |
(6,095 |
) |
|
$ |
(31 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(1.01 |
) |
|
$ |
0.03 |
|
|
$ |
(0.64 |
) |
|
$ |
(15.96 |
) |
|
$ |
(0.08 |
) |
Diluted |
|
$ |
(1.01 |
) |
|
$ |
0.03 |
|
|
$ |
(0.64 |
) |
|
$ |
(15.96 |
) |
|
$ |
(0.08 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
382 |
|
|
|
379 |
|
|
|
382 |
|
|
|
382 |
|
|
|
378 |
|
Diluted |
|
|
382 |
|
|
|
383 |
|
|
|
382 |
|
|
|
382 |
|
|
|
378 |
|
NATIONAL OILWELL VARCO, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In millions) |
||||||||
|
|
December 31, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,171 |
|
|
$ |
1,427 |
|
Receivables, net |
|
|
1,855 |
|
|
|
2,101 |
|
Inventories, net |
|
|
2,197 |
|
|
|
2,986 |
|
Contract assets |
|
|
643 |
|
|
|
565 |
|
Other current assets |
|
|
247 |
|
|
|
200 |
|
Total current assets |
|
|
6,113 |
|
|
|
7,279 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
2,354 |
|
|
|
2,797 |
|
Lease right-of-use assets |
|
|
674 |
|
|
|
— |
|
Goodwill and intangibles, net |
|
|
3,659 |
|
|
|
9,284 |
|
Other assets |
|
|
349 |
|
|
|
436 |
|
Total assets |
|
$ |
13,149 |
|
|
$ |
19,796 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
715 |
|
|
$ |
722 |
|
Accrued liabilities |
|
|
949 |
|
|
|
1,088 |
|
Contract liabilities |
|
|
427 |
|
|
|
458 |
|
Current portion of lease liabilities |
|
|
114 |
|
|
|
7 |
|
Accrued income taxes |
|
|
42 |
|
|
|
66 |
|
Total current liabilities |
|
|
2,247 |
|
|
|
2,341 |
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
1,989 |
|
|
|
2,482 |
|
Lease liabilities |
|
|
674 |
|
|
|
222 |
|
Other liabilities |
|
|
393 |
|
|
|
862 |
|
Total liabilities |
|
|
5,303 |
|
|
|
5,907 |
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
7,846 |
|
|
|
13,889 |
|
Total liabilities and stockholders’ equity |
|
$ |
13,149 |
|
|
$ |
19,796 |
|
The Company adopted ASC 842, Leases, effective
NATIONAL OILWELL VARCO, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In millions) |
||||||||
|
|
Years Ended |
|
|||||
|
|
December 31, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Cash flows from operating activities: |
|
|
|
|||||
Net loss |
|
$ |
(6,093 |
) |
|
$ |
(22 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
533 |
|
|
|
690 |
|
Working capital and other operating items, net |
|
|
6,274 |
|
|
|
(147 |
) |
Net cash provided by operating activities |
|
|
714 |
|
|
|
521 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(233 |
) |
|
|
(244 |
) |
Business acquisitions, net of cash acquired |
|
|
(180 |
) |
|
|
(280 |
) |
Other |
|
|
98 |
|
|
|
67 |
|
Net cash used in investing activities |
|
|
(315 |
) |
|
|
(457 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Borrowings against lines of credit and other debt |
|
|
511 |
|
|
|
— |
|
Payments against lines of credit and other debt |
|
|
(1,000 |
) |
|
|
— |
|
Cash dividends paid |
|
|
(77 |
) |
|
|
(76 |
) |
Other |
|
|
(81 |
) |
|
|
46 |
|
Net cash used in financing activities |
|
|
(647 |
) |
|
|
(30 |
) |
Effect of exchange rates on cash |
|
|
(8 |
) |
|
|
(44 |
) |
Decrease in cash and cash equivalents |
|
|
(256 |
) |
|
|
(10 |
) |
Cash and cash equivalents, beginning of period |
|
|
1,427 |
|
|
|
1,437 |
|
Cash and cash equivalents, end of period |
|
$ |
1,171 |
|
|
$ |
1,427 |
|
NATIONAL OILWELL VARCO, INC. RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME (LOSS) (Unaudited) (In millions) |
||||||||||||||||||||
The Company discloses Adjusted EBITDA (defined as Operating Profit excluding Depreciation, Amortization and, when applicable, Other Items) in its periodic earnings press releases and other public disclosures to provide investors additional information about the results of ongoing operations. The Company uses Adjusted EBITDA internally to evaluate and manage the business. Adjusted EBITDA is not intended to replace GAAP financial measures, such as Net Income. Other items include goodwill, intangible and long-lived asset impairment charges, inventory charges, severance, and other restructuring costs. |
||||||||||||||||||||
|
|
Three Months Ended |
|
|
Years Ended |
|
||||||||||||||
|
|
December 31, |
|
|
September 30, |
|
|
December 31, |
|
|||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|||||
Operating profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
(317 |
) |
|
$ |
41 |
|
|
$ |
42 |
|
|
$ |
(3,551 |
) |
|
$ |
131 |
|
Completion & Production Solutions |
|
|
57 |
|
|
|
64 |
|
|
|
(24 |
) |
|
|
(1,934 |
) |
|
|
166 |
|
Rig Technologies |
|
|
(23 |
) |
|
|
75 |
|
|
|
(110 |
) |
|
|
(524 |
) |
|
|
213 |
|
Eliminations and corporate costs |
|
|
(66 |
) |
|
|
(93 |
) |
|
|
(62 |
) |
|
|
(270 |
) |
|
|
(299 |
) |
Total operating profit (loss) |
|
$ |
(349 |
) |
|
$ |
87 |
|
|
$ |
(154 |
) |
|
$ |
(6,279 |
) |
|
$ |
211 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
410 |
|
|
$ |
24 |
|
|
$ |
41 |
|
|
$ |
3,794 |
|
|
$ |
21 |
|
Completion & Production Solutions |
|
|
13 |
|
|
|
(3 |
) |
|
|
79 |
|
|
|
2,042 |
|
|
|
— |
|
Rig Technologies |
|
|
114 |
|
|
|
— |
|
|
|
194 |
|
|
|
784 |
|
|
|
6 |
|
Corporate |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11 |
|
|
|
(18 |
) |
Total other items |
|
$ |
537 |
|
|
$ |
21 |
|
|
$ |
314 |
|
|
$ |
6,631 |
|
|
$ |
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
50 |
|
|
$ |
90 |
|
|
$ |
50 |
|
|
$ |
284 |
|
|
$ |
374 |
|
Completion & Production Solutions |
|
|
26 |
|
|
|
51 |
|
|
|
27 |
|
|
|
150 |
|
|
|
212 |
|
Rig Technologies |
|
|
21 |
|
|
|
27 |
|
|
|
21 |
|
|
|
87 |
|
|
|
90 |
|
Corporate |
|
|
3 |
|
|
|
3 |
|
|
|
4 |
|
|
|
12 |
|
|
|
14 |
|
Total depreciation & amortization |
|
$ |
100 |
|
|
$ |
171 |
|
|
$ |
102 |
|
|
$ |
533 |
|
|
$ |
690 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
143 |
|
|
$ |
155 |
|
|
$ |
133 |
|
|
$ |
527 |
|
|
$ |
526 |
|
Completion & Production Solutions |
|
|
96 |
|
|
|
112 |
|
|
|
82 |
|
|
|
258 |
|
|
|
378 |
|
Rig Technologies |
|
|
112 |
|
|
|
102 |
|
|
|
105 |
|
|
|
347 |
|
|
|
309 |
|
Eliminations and corporate costs |
|
|
(63 |
) |
|
|
(90 |
) |
|
|
(58 |
) |
|
|
(247 |
) |
|
|
(303 |
) |
Total Adjusted EBITDA |
|
$ |
288 |
|
|
$ |
279 |
|
|
$ |
262 |
|
|
$ |
885 |
|
|
$ |
910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) attributable to Company |
|
$ |
(385 |
) |
|
$ |
12 |
|
|
$ |
(244 |
) |
|
$ |
(6,095 |
) |
|
$ |
(31 |
) |
Noncontrolling interests |
|
|
— |
|
|
|
3 |
|
|
|
(5 |
) |
|
|
2 |
|
|
|
9 |
|
Provision (benefit) for income taxes |
|
|
(46 |
) |
|
|
26 |
|
|
|
60 |
|
|
|
(369 |
) |
|
|
63 |
|
Interest expense |
|
|
25 |
|
|
|
22 |
|
|
|
25 |
|
|
|
100 |
|
|
|
93 |
|
Interest income |
|
|
(4 |
) |
|
|
(7 |
) |
|
|
(4 |
) |
|
|
(20 |
) |
|
|
(25 |
) |
Equity loss in unconsolidated affiliate |
|
|
7 |
|
|
|
2 |
|
|
|
4 |
|
|
|
13 |
|
|
|
3 |
|
Other (income) expense, net |
|
|
54 |
|
|
|
29 |
|
|
|
10 |
|
|
|
90 |
|
|
|
99 |
|
Depreciation and amortization |
|
|
100 |
|
|
|
171 |
|
|
|
102 |
|
|
|
533 |
|
|
|
690 |
|
Other items |
|
|
537 |
|
|
|
21 |
|
|
|
314 |
|
|
|
6,631 |
|
|
|
9 |
|
Total Adjusted EBITDA |
|
$ |
288 |
|
|
$ |
279 |
|
|
$ |
262 |
|
|
$ |
885 |
|
|
$ |
910 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200206006006/en/
Source:
Blake McCarthy
Vice President, Corporate Development and Investor Relations
(713) 815-3535
Blake.McCarthy@nov.com