National Oilwell Varco Reports First Quarter 2016 Results
Revenues for the first quarter of 2016 were
“Oil prices and oilfield activity continued to plummet during the first
quarter of 2016, causing our customers to cut spending to bare minimum
levels,” stated
Segment Results (excluding other items)
To provide a clearer measurement of segment performance, the Company
will no longer allocate certain corporate overhead costs to its segments
and is now capturing those costs in “Eliminations and corporate costs”.
Prior periods are shown on a comparable basis. For the quarters ended
Rig Systems
Rig Systems generated revenues of
In light of the recently announced vote by the shareholders of
Rig Aftermarket
Rig Aftermarket generated revenues of
Wellbore Technologies
Wellbore Technologies generated revenues of
Completion and Production Solutions
Completion and Production Solutions generated revenues of
Backlog for capital equipment orders for Completion and Production
Solutions at
Significant Events and Achievements
NOV achieved several key wins related to its eVolve™ optimization and
closed loop drilling automation services, notably the completion of an
18-month project in the
NOV introduced the RIGSENTRY™ remote monitoring service, the first end-to-end predictive solution that can foresee certain operational failures in subsea blowout preventer (BOP) components up to 14 days in advance. With its ability to identify the specific point of failure and alert customers earlier than a human operator or other traditional detection techniques, RIGSENTRY™ will result in more efficient maintenance practices and reduced unplanned downtime.
NOV completed the acquisition of
NOV completed the acquisition of TracID AS, which offers Radio Frequency Identification (RFID) tags for downhole applications and associated asset management software. The tags are capable of withstanding harsh downhole conditions for extended periods of time and have been installed in over 40,000 drillstring components to date. The technology, when combined with NOV's existing premium tubular and services offerings, will enhance lifecycle and asset management for drillstring owners.
NOV recently provided a turnkey composites package for an offshore
platform in the
Following the recent introduction of NOV’s large pipe product line, the Company built and delivered an industry-first 7-5/8" drill pipe riser string for use by a major international oil company during the quarter. The pipe can be used either as a completion landing string within the marine riser or as an intervention riser string in open water. Rugged and capable of deploying quickly, these strings offer a cost-effective means for offshore completion, intervention and plug and abandonment activities requiring big bores.
During the first quarter of 2016, NOV delivered its 2,000th model TDS-11SA top drive, further contributing to NOV’s industry leading installed base. The TDS-11SA’s performance and reliability has made it the best-selling top drive in the world.
Other Corporate Items
During the first quarter of 2016, NOV generated
As of
First Quarter Earnings Conference Call
NOV will hold a conference call on
About
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
| NATIONAL OILWELL VARCO, INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) | ||||||||||||
| (In millions, except per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, |
December 31, |
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| 2016 | 2015 | 2015 | ||||||||||
| Revenue: | ||||||||||||
| Rig Systems | $ | 926 | $ | 2,523 | $ | 1,015 | ||||||
| Rig Aftermarket | 391 | 719 | 569 | |||||||||
| Wellbore Technologies | 631 | 1,171 | 757 | |||||||||
| Completion & Production Solutions | 558 | 948 | 746 | |||||||||
| Eliminations | (317 | ) | (541 | ) | (365 | ) | ||||||
| Total revenue | 2,189 | 4,820 | 2,722 | |||||||||
| Gross profit | 300 | 1,178 | 520 | |||||||||
| Gross profit % | 13.7 | % | 24.4 | % | 19.1 | % | ||||||
| Selling, general, and administrative | 348 | 486 | 379 | |||||||||
| Other items | 141 | 122 | 1,773 | |||||||||
| Operating profit (loss) | (189 | ) | 570 | (1,632 | ) | |||||||
| Interest and financial costs | (25 | ) | (26 | ) | (27 | ) | ||||||
| Interest income | 5 | 5 | 5 | |||||||||
| Equity income (loss) in unconsolidated affiliates | (6 | ) | 9 | (3 | ) | |||||||
| Other income (expense), net | (21 | ) | (56 | ) | (17 | ) | ||||||
| Income (loss) before income taxes | (236 | ) | 502 | (1,674 | ) | |||||||
| Provision for income taxes | (118 | ) | 189 | (152 | ) | |||||||
| Net income (loss) | (118 | ) | 313 | (1,522 | ) | |||||||
| Net income attributable to noncontrolling interests | 1 | 3 | 1 | |||||||||
| Net income (loss) attributable to Company | $ | (119 | ) | $ | 310 | $ | (1,523 | ) | ||||
| Per share data: | ||||||||||||
| Basic | $ | (0.32 | ) | $ | 0.76 | $ | (4.06 | ) | ||||
| Diluted | $ | (0.32 | ) | $ | 0.76 | $ | (4.06 | ) | ||||
| Weighted average shares outstanding: | ||||||||||||
| Basic | 375 | 407 | 375 | |||||||||
| Diluted | 375 | 409 | 375 | |||||||||
| NATIONAL OILWELL VARCO, INC. | ||||||||||||
| EBITDA & OPERATING PROFIT – AS ADJUSTED SUPPLEMENTAL SCHEDULE (Unaudited) | ||||||||||||
| (In millions) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | December 31, | |||||||||||
| 2016 | 2015 | 2015 | ||||||||||
| Revenue: | ||||||||||||
| Rig Systems | $ | 926 | $ | 2,523 | $ | 1,015 | ||||||
| Rig Aftermarket | 391 | 719 | 569 | |||||||||
| Wellbore Technologies | 631 | 1,171 | 757 | |||||||||
| Completion & Production Solutions | 558 | 948 | 746 | |||||||||
| Eliminations | (317 | ) | (541 | ) | (365 | ) | ||||||
| Total revenue | $ | 2,189 | $ | 4,820 | $ | 2,722 | ||||||
| Adjusted EBITDA: | ||||||||||||
| Rig Systems | $ | 137 | $ | 538 | $ | 214 | ||||||
| Rig Aftermarket | 82 | 217 | 145 | |||||||||
| Wellbore Technologies | 43 | 245 | 77 | |||||||||
| Completion & Production Solutions | 48 | 173 | 89 | |||||||||
| Eliminations and corporate costs (A) | (183 | ) | (291 | ) | (201 | ) | ||||||
|
Total Adjusted EBITDA |
$ | 127 | $ | 882 | $ | 324 | ||||||
| Operating profit (loss) excluding other items: | ||||||||||||
| Rig Systems | $ | 119 | $ | 517 | $ | 193 | ||||||
| Rig Aftermarket | 77 | 212 | 139 | |||||||||
| Wellbore Technologies | (53 | ) | 140 | (22 | ) | |||||||
| Completion & Production Solutions | (4 | ) | 117 | 37 | ||||||||
| Eliminations and corporate costs (A) | (187 | ) | (294 | ) | (206 | ) | ||||||
|
Total operating profit (loss) excluding other items |
$ | (48 | ) | $ | 692 | $ | 141 | |||||
|
(A) – The Company no longer allocates certain corporate overhead costs to its operating segments. Prior periods are shown on a comparable basis. |
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| NATIONAL OILWELL VARCO, INC. | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| (In millions) | ||||||
| March 31, | December 31, | |||||
| 2016 | 2015 | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 1,759 | $ | 2,080 | ||
| Receivables, net | 2,212 | 2,926 | ||||
| Inventories, net | 4,534 | 4,678 | ||||
| Costs in excess of billings | 1,040 | 1,250 | ||||
| Other current assets (B) | 503 | 491 | ||||
| Total current assets | 10,048 | 11,425 | ||||
| Property, plant and equipment, net | 3,303 | 3,124 | ||||
| Goodwill and intangibles, net | 10,803 | 10,829 | ||||
| Other assets (B) (C) | 1,415 | 1,326 | ||||
| Total assets | $ | 25,569 | $ | 26,704 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 467 | $ | 623 | ||
| Accrued liabilities | 2,058 | 2,284 | ||||
| Billings in excess of costs | 704 | 785 | ||||
| Current portion of long-term debt and short-term borrowings | 7 | 2 | ||||
| Accrued income taxes | 199 | 264 | ||||
| Total current liabilities | 3,435 | 3,958 | ||||
| Long-term debt (C) | 3,372 | 3,907 | ||||
| Other liabilities (B) | 2,329 | 2,379 | ||||
| Total liabilities | 9,136 | 10,244 | ||||
| Total stockholders’ equity | 16,433 | 16,460 | ||||
| Total liabilities and stockholders’ equity | $ | 25,569 | $ | 26,704 | ||
|
(B) – For the quarter ended March 31, 2016, NOV adopted FASB Accounting Standards Update No. 2015-17, Income Taxes – Balance Sheet Classification of Deferred Taxes, which requires classification of deferred tax asset and liabilities as non-current where previously they had been split between current and non-current. Prior periods are shown on a comparable basis. |
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(C) – For the quarter ended March 31, 2016, NOV adopted FASB Accounting Standards Update No. 2015-03, Interest – Imputation of Interest – Simplifying the Presentation of Debt Issuance Costs, which requires classification of debt issuance costs as a reduction of debt where previously they had been classified as an asset. Prior periods are shown on a comparable basis. |
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| NATIONAL OILWELL VARCO, INC. | ||||||||||||
| AS ADJUSTED BEFORE DEPRECIATION & AMORTIZATION SUPPLEMENTAL SCHEDULE (Unaudited) | ||||||||||||
| (In millions) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | December 31, | |||||||||||
| 2016 | 2015 | 2015 | ||||||||||
| Operating profit (loss) excluding other items: | ||||||||||||
| Rig Systems | $ | 119 | $ | 517 | $ | 193 | ||||||
| Rig Aftermarket | 77 | 212 | 139 | |||||||||
| Wellbore Technologies | (53 | ) | 140 | (22 | ) | |||||||
| Completion & Production Solutions | (4 | ) | 117 | 37 | ||||||||
| Eliminations and corporate costs | (187 | ) | (294 | ) | (206 | ) | ||||||
| Total operating profit (loss) excluding other items | $ | (48 | ) | $ | 692 | $ | 141 | |||||
| Depreciation & amortization: | ||||||||||||
| Rig Systems | $ | 18 | $ | 21 | $ | 21 | ||||||
| Rig Aftermarket | 5 | 5 | 6 | |||||||||
| Wellbore Technologies | 96 | 105 | 99 | |||||||||
| Completion & Production Solutions | 52 | 56 | 52 | |||||||||
| Eliminations and corporate costs | 4 | 3 | 5 | |||||||||
| Total depreciation & amortization | $ | 175 | $ | 190 | $ | 183 | ||||||
| Adjusted EBITDA (Operating profit excluding other items before depreciation & amortization) (Note 1): | ||||||||||||
| Rig Systems | $ | 137 | $ | 538 | $ | 214 | ||||||
| Rig Aftermarket | 82 | 217 | 145 | |||||||||
| Wellbore Technologies | 43 | 245 | 77 | |||||||||
| Completion & Production Solutions | 48 | 173 | 89 | |||||||||
| Eliminations and corporate costs | (183 | ) | (291 | ) | (201 | ) | ||||||
| Total Adjusted EBITDA | $ | 127 | $ | 882 | $ | 324 | ||||||
| Adjusted EBITDA % (Note 1): | ||||||||||||
| Rig Systems | 14.8 | % | 21.3 | % | 21.1 | % | ||||||
| Rig Aftermarket | 21.0 | % | 30.2 | % | 25.5 | % | ||||||
| Wellbore Technologies | 6.8 | % | 20.9 | % | 10.2 | % | ||||||
| Completion & Production Solutions | 8.6 | % | 18.2 | % | 11.9 | % | ||||||
| Total Adjusted EBITDA % | 5.8 | % | 18.3 | % | 11.9 | % | ||||||
| Total Adjusted EBITDA | $ | 127 | $ | 882 | $ | 324 | ||||||
| Other items | (141 | ) | (122 | ) | (1,773 | ) | ||||||
| Interest income | 5 | 5 | 5 | |||||||||
| Equity income (loss) in unconsolidated affiliates | (6 | ) | 9 | (3 | ) | |||||||
| Other income (expense), net | (21 | ) | (56 | ) | (17 | ) | ||||||
| Net loss attributable to noncontrolling interest | (1 | ) | (3 | ) | (1 | ) | ||||||
| EBITDA (Note 1) | $ | (37 | ) | $ | 715 | $ | (1,465 | ) | ||||
| Reconciliation of EBITDA (Note 1): | ||||||||||||
| GAAP net income (loss) attributable to Company | $ | (119 | ) | $ | 310 | $ | (1,523 | ) | ||||
| Provision for income taxes | (118 | ) | 189 | (152 | ) | |||||||
| Interest expense | 25 | 26 | 27 | |||||||||
| Depreciation & amortization | 175 | 190 | 183 | |||||||||
| EBITDA | (37 | ) | 715 | (1,465 | ) | |||||||
| Other items in operating profit | 141 | 122 | 1,773 | |||||||||
| Other items in other income (expense), net | 6 | 9 | 7 | |||||||||
| EBITDA excluding other items (Note 1) | $ | 110 | $ | 846 | $ | 315 | ||||||
| NATIONAL OILWELL VARCO, INC. | |||||||||||
| OPERATING (NON-GAAP) DILUTED EARNINGS PER SHARE RECONCILIATION (Unaudited) | |||||||||||
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Three Months Ended |
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March 31, |
December 31, |
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2016 |
2015 |
2015 |
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Net income (loss) attributable to Company |
$ | (0.32 | ) | $ | 0.76 | $ | (4.06 | ) | |||
| Restructuring and other items | 0.26 | 0.19 | 0.25 | ||||||||
| Goodwill and other intangible asset write-down | - | - | 4.21 | ||||||||
| Argentina/Venezuela asset write-down | - | 0.02 | 0.01 | ||||||||
| Tax items | - | 0.17 | (0.18 | ) | |||||||
| Operating (non-GAAP) (Note 1) | $ | (0.06 | ) | $ | 1.14 | $ | 0.23 | ||||
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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) Adjusted EBITDA (operating profit excluding other items before depreciation & amortization), (v) Adjusted EBITDA percentage, (vi) EBITDA (vii) EBITDA excluding other items and (viii) 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.
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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. |
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View source version on businesswire.com: http://www.businesswire.com/news/home/20160428005619/en/
Source:
National Oilwell Varco, Inc.
Loren Singletary, 713-346-7807
Loren.Singletary@nov.com