National Oilwell Varco Reports Second Quarter 2016 Results
Revenues for the second quarter of 2016 were
“Our second quarter results reflect further declines, as global oilfield
spending again fell sharply following the crude oil price bottom we saw
in February,” stated
Importantly, our team also continues to invest in our future, leveraging
our global resources and installed base of equipment to expand our
considerable technology portfolio.
Rig Systems
Rig Systems generated revenues of
Backlog for capital equipment orders for Rig Systems at
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 continues to develop and introduce technology that improves the performance and reliability of its industry-leading subsea blowout preventers (BOPs). NOV’s new RCX Low Shock SPM valves dramatically reduce the hydraulic shock in the BOP system for improved reliability of stack components, in addition to being designed for longer life and reduced potential for incorrect assembly. Additionally, our RIGSENTRY™ BOP monitoring service, introduced last quarter, identified potential failure of subsea regulators before it occurred on four separate occasions, allowing our drilling contractor customers to address these issues during planned out of service intervals and maximize up time.
NOV’s eVolve™ optimization and closed loop drilling automation services
continue to gain traction in the marketplace, signing an additional
contract for downhole drilling automation with a large independent E&P
customer in the
NOV’s recently acquired completion tools business won a significant
five-year contract for completions work in the
NOV’s recently introduced Horizontal Gun Barrel separators offer a new direction for saltwater disposal, replacing outdated and inefficient vertical gun barrels and tanks frequently used for Saltwater Disposal (SWD) facilities. This new process lowers power consumption, improves worker safety, and reduces environmental hazards. The horizontal Gun Barrel recovers more oil at higher quality, so our customers can sell pipeline quality oil rather than accepting a discounted price for typical SWD oil that requires further treatment.
NOV reached a definitive agreement to acquire the subsea production
product portfolio from Kongsberg Oil & Gas Technologies AS, a subsidiary
of
NOV completed the acquisition of Geological Rentals and Services (GRS), a provider of gas detection equipment and geological software. The company’s GEOgas Analyzer™ is the first patented Fourier Transform Infrared Spectrometer analyzer specifically designed for wellsite gas sampling. The DDS Geological Services group, which delivers remote geosteering and logging services, can use the gas analyzer to provide real-time gas ratio analysis for formation hydrocarbons identification that helps maximize contact with the desired pay zone and minimize wellsite personnel.
NOV completed the acquisition of
NOV began supplying proprietary composite corrosion-resistant products
at its newly inaugurated Resin Infusion Composite Engineering facility
in
Other Corporate Items
As of
Second 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) |
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Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | March 31, | June 30, | ||||||||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | ||||||||||||||||
Revenue: | ||||||||||||||||||||
Rig Systems | $ | 564 | $ | 1,930 | $ | 926 | $ | 1,490 | $ | 4,453 | ||||||||||
Rig Aftermarket | 364 | 657 | 391 | 755 | 1,376 | |||||||||||||||
Wellbore Technologies | 511 | 956 | 631 | 1,142 | 2,127 | |||||||||||||||
Completion & Production Solutions | 538 | 873 | 558 | 1,096 | 1,821 | |||||||||||||||
Eliminations | (253 | ) | (507 | ) | (317 | ) | (570 | ) | (1,048 | ) | ||||||||||
Total revenue | 1,724 | 3,909 | 2,189 | 3,913 | 8,729 | |||||||||||||||
Gross profit | 139 | 872 | 300 | 439 | 2,050 | |||||||||||||||
Gross profit % | 8.1 | % | 22.3 | % | 13.7 | % | 11.2 | % | 23.5 | % | ||||||||||
Selling, general, and administrative | 292 | 417 | 348 | 640 | 903 | |||||||||||||||
Other items | 117 | 17 | 141 | 258 | 139 | |||||||||||||||
Operating profit (loss) | (270 | ) | 438 | (189 | ) | (459 | ) | 1,008 | ||||||||||||
Interest and financial costs | (30 | ) | (26 | ) | (25 | ) | (55 | ) | (52 | ) | ||||||||||
Interest income | 3 | 2 | 5 | 8 | 7 | |||||||||||||||
Equity income (loss) in unconsolidated affiliates | (7 | ) | 7 | (6 | ) | (13 | ) | 16 | ||||||||||||
Other income (expense), net | (34 | ) | (30 | ) | (21 | ) | (55 | ) | (86 | ) | ||||||||||
Income (loss) before income taxes | (338 | ) | 391 | (236 | ) | (574 | ) | 893 | ||||||||||||
Provision for income taxes | (121 | ) | 105 | (118 | ) | (239 | ) | 294 | ||||||||||||
Net income (loss) | (217 | ) | 286 | (118 | ) | (335 | ) | 599 | ||||||||||||
Net income (loss) attributable to noncontrolling interests | - | (3 | ) | 1 | 1 | - | ||||||||||||||
Net income (loss) attributable to Company | $ | (217 | ) | $ | 289 | $ | (119 | ) | $ | (336 | ) | $ | 599 | |||||||
Per share data: | ||||||||||||||||||||
Basic | $ | (0.58 | ) | $ | 0.75 | $ | (0.32 | ) | $ | (0.90 | ) | $ | 1.51 | |||||||
Diluted | $ | (0.58 | ) | $ | 0.74 | $ | (0.32 | ) | $ | (0.90 | ) | $ | 1.51 | |||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 375 | 387 | 375 | 375 | 397 | |||||||||||||||
Diluted | 375 | 388 | 375 | 375 | 398 | |||||||||||||||
NATIONAL OILWELL VARCO, INC. CONSOLIDATED BALANCE SHEETS (In millions) |
||||||
June 30, | December 31, | |||||
2016 | 2015 | |||||
(Unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 1,661 | $ | 2,080 | ||
Receivables, net | 2,044 | 2,926 | ||||
Inventories, net | 4,287 | 4,678 | ||||
Costs in excess of billings | 790 | 1,250 | ||||
Other current assets | 422 | 491 | ||||
Total current assets | 9,204 | 11,425 | ||||
Property, plant and equipment, net | 3,277 | 3,124 | ||||
Goodwill and intangibles, net | 10,695 | 10,829 | ||||
Other assets | 608 | 592 | ||||
Total assets | $ | 23,784 | $ | 25,970 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 434 | $ | 623 | ||
Accrued liabilities | 1,774 | 2,284 | ||||
Billings in excess of costs | 653 | 785 | ||||
Current portion of long-term debt and short-term borrowings | 12 | 2 | ||||
Accrued income taxes | 74 | 264 | ||||
Total current liabilities | 2,947 | 3,958 | ||||
Long-term debt | 3,268 | 3,907 | ||||
Other liabilities | 1,383 | 1,645 | ||||
Total liabilities | 7,598 | 9,510 | ||||
Total stockholders’ equity | 16,186 | 16,460 | ||||
Total liabilities and stockholders’ equity | $ | 23,784 | $ | 25,970 | ||
NATIONAL OILWELL VARCO, INC. OPERATING PROFIT – AS ADJUSTED SUPPLEMENTAL SCHEDULE (Unaudited) (In millions) |
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Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | March 31, | June 30, | ||||||||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | ||||||||||||||||
Revenue: | ||||||||||||||||||||
Rig Systems | $ | 564 | $ | 1,930 | $ | 926 | $ | 1,490 | $ | 4,453 | ||||||||||
Rig Aftermarket | 364 | 657 | 391 | 755 | 1,376 | |||||||||||||||
Wellbore Technologies | 511 | 956 | 631 | 1,142 | 2,127 | |||||||||||||||
Completion & Production Solutions | 538 | 873 | 558 | 1,096 | 1,821 | |||||||||||||||
Eliminations | (253 | ) | (507 | ) | (317 | ) | (570 | ) | (1,048 | ) | ||||||||||
Total revenue | $ | 1,724 | $ | 3,909 | $ | 2,189 | $ | 3,913 | $ | 8,729 | ||||||||||
Operating profit (loss): | ||||||||||||||||||||
Rig Systems | $ | 7 | $ | 421 | $ | 67 | $ | 74 | $ | 898 | ||||||||||
Rig Aftermarket | 62 | 153 | 69 | 131 | 357 | |||||||||||||||
Wellbore Technologies | (146 | ) | 48 | (91 | ) | (237 | ) | 143 | ||||||||||||
Completion & Production Solutions | (33 | ) | 85 | (38 | ) | (71 | ) | 173 | ||||||||||||
Eliminations and corporate costs | (160 | ) | (269 | ) | (196 | ) | (356 | ) | (563 | ) | ||||||||||
Total operating profit (loss) | $ | (270 | ) | $ | 438 | $ | (189 | ) | $ | (459 | ) | $ | 1,008 | |||||||
Other items: | ||||||||||||||||||||
Rig Systems | $ | 23 | $ | 3 | $ | 52 | $ | 75 | $ | 43 | ||||||||||
Rig Aftermarket | 5 | 2 | 8 | 13 | 10 | |||||||||||||||
Wellbore Technologies | 50 | 9 | 38 | 88 | 54 | |||||||||||||||
Completion & Production Solutions | 38 | 3 | 34 | 72 | 32 | |||||||||||||||
Eliminations and corporate costs | 1 | - | 9 | 10 | - | |||||||||||||||
Total other items | $ | 117 | $ | 17 | $ | 141 | $ | 258 | $ | 139 | ||||||||||
Operating profit (loss) excluding other items: | ||||||||||||||||||||
Rig Systems | $ | 30 | $ | 424 | $ | 119 | $ | 149 | $ | 941 | ||||||||||
Rig Aftermarket | 67 | 155 | 77 | 144 | 367 | |||||||||||||||
Wellbore Technologies | (96 | ) | 57 | (53 | ) | (149 | ) | 197 | ||||||||||||
Completion & Production Solutions | 5 | 88 | (4 | ) | 1 | 205 | ||||||||||||||
Eliminations and corporate costs | (159 | ) | (269 | ) | (187 | ) | (346 | ) | (563 | ) | ||||||||||
Total operating profit (loss) excluding other items | $ | (153 | ) | $ | 455 | $ | (48 | ) | $ | (201 | ) | $ | 1,147 | |||||||
NATIONAL OILWELL VARCO, INC. AS ADJUSTED BEFORE DEPRECIATION & AMORTIZATION SUPPLEMENTAL SCHEDULE (Unaudited) (In millions) |
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Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | March 31, | June 30, | ||||||||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | ||||||||||||||||
Operating profit (loss) excluding other items: | ||||||||||||||||||||
Rig Systems | $ | 30 | $ | 424 | $ | 119 | $ | 149 | $ | 941 | ||||||||||
Rig Aftermarket | 67 | 155 | 77 | 144 | 367 | |||||||||||||||
Wellbore Technologies | (96 | ) | 57 | (53 | ) | (149 | ) | 197 | ||||||||||||
Completion & Production Solutions | 5 | 88 | (4 | ) | 1 | 205 | ||||||||||||||
Eliminations and corporate costs | (159 | ) | (269 | ) | (187 | ) | (346 | ) | (563 | ) | ||||||||||
Total operating profit (loss) excluding other items | $ | (153 | ) | $ | 455 | $ | (48 | ) | $ | (201 | ) | $ | 1,147 | |||||||
Depreciation & amortization: | ||||||||||||||||||||
Rig Systems | $ | 19 | $ | 21 | $ | 18 | $ | 37 | $ | 42 | ||||||||||
Rig Aftermarket | 6 | 6 | 5 | 11 | 11 | |||||||||||||||
Wellbore Technologies | 97 | 100 | 96 | 193 | 205 | |||||||||||||||
Completion & Production Solutions | 52 | 60 | 52 | 104 | 116 | |||||||||||||||
Eliminations and corporate costs | 4 | 3 | 4 | 8 | 6 | |||||||||||||||
Total depreciation & amortization | $ | 178 | $ | 190 | $ | 175 | $ | 353 | $ | 380 | ||||||||||
Adjusted EBITDA (Operating profit excluding other | ||||||||||||||||||||
items before depreciation & amortization) (Note 1): | ||||||||||||||||||||
Rig Systems | $ | 49 | $ | 445 | $ | 137 | $ | 186 | $ | 983 | ||||||||||
Rig Aftermarket | 73 | 161 | 82 | 155 | 378 | |||||||||||||||
Wellbore Technologies | 1 | 157 | 43 | 44 | 402 | |||||||||||||||
Completion & Production Solutions | 57 | 148 | 48 | 105 | 321 | |||||||||||||||
Eliminations and corporate costs | (155 | ) | (266 | ) | (183 | ) | (338 | ) | (557 | ) | ||||||||||
Total Adjusted EBITDA | $ | 25 | $ | 645 | $ | 127 | $ | 152 | $ | 1,527 | ||||||||||
Adjusted EBITDA % (Note 1): | ||||||||||||||||||||
Rig Systems | 8.7 | % | 23.1 | % | 14.8 | % | 12.5 | % | 22.1 | % | ||||||||||
Rig Aftermarket | 20.1 | % | 24.5 | % | 21.0 | % | 20.5 | % | 27.5 | % | ||||||||||
Wellbore Technologies | 0.2 | % | 16.4 | % | 6.8 | % | 3.9 | % | 18.9 | % | ||||||||||
Completion & Production Solutions | 10.6 | % | 17.0 | % | 8.6 | % | 9.6 | % | 17.6 | % | ||||||||||
Total Adjusted EBITDA % | 1.5 | % | 16.5 | % | 5.8 | % | 3.9 | % | 17.5 | % | ||||||||||
Total Adjusted EBITDA: | $ | 25 | $ | 645 | $ | 127 | $ | 152 | $ | 1,527 | ||||||||||
Other items in operating profit | (117 | ) | (17 | ) | (141 | ) | (258 | ) | (139 | ) | ||||||||||
Interest income | 3 | 2 | 5 | 8 | 7 | |||||||||||||||
Equity income (loss) in unconsolidated affiliates | (7 | ) | 7 | (6 | ) | (13 | ) | 16 | ||||||||||||
Other income (expense), net | (34 | ) | (30 | ) | (21 | ) | (55 | ) | (86 | ) | ||||||||||
Net (income) loss attributable to noncontrolling interest | - | 3 | (1 | ) | (1 | ) | - | |||||||||||||
EBITDA (Note 1) | $ | (130 | ) | $ | 610 | $ | (37 | ) | $ | (167 | ) | $ | 1,325 | |||||||
Reconciliation of EBITDA (Note 1): | ||||||||||||||||||||
GAAP net income (loss) attributable to Company | $ | (217 | ) | $ | 289 | $ | (119 | ) | $ | (336 | ) | $ | 599 | |||||||
Provision for income taxes | (121 | ) | 105 | (118 | ) | (239 | ) | 294 | ||||||||||||
Interest expense | 30 | 26 | 25 | 55 | 52 | |||||||||||||||
Depreciation & amortization | 178 | 190 | 175 | 353 | 380 | |||||||||||||||
EBITDA | (130 | ) | 610 | (37 | ) | (167 | ) | 1,325 | ||||||||||||
Other items in operating profit | 117 | 17 | 141 | 258 | 139 | |||||||||||||||
Other items in other income (expense), net | 26 | - | 6 | 32 | 9 | |||||||||||||||
EBITDA excluding other items (Note 1) | $ | 13 | $ | 627 | $ | 110 | $ | 123 | $ | 1,473 | ||||||||||
NATIONAL OILWELL VARCO, INC. OPERATING (NON-GAAP) DILUTED EARNINGS PER SHARE RECONCILIATION (Unaudited) |
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Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | March 31, | June 30, | ||||||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | ||||||||||||||
Net income (loss) attributable to Company | $ | (0.58 | ) | $ | 0.74 | $ | (0.32 | ) | $ | (0.90 | ) | $ | 1.51 | |||||
Other items | 0.23 | 0.03 | 0.25 | 0.48 | 0.22 | |||||||||||||
Fixed asset write-down | 0.05 | - | 0.01 | 0.06 | - | |||||||||||||
Argentina/Venezuela asset write-down | - | - | - | - | 0.02 | |||||||||||||
Tax items | - | - | - | - | 0.17 | |||||||||||||
Operating (non-GAAP) (Note 1) | $ | (0.30 | ) | $ | 0.77 | $ | (0.06 | ) | $ | (0.36 | ) | $ | 1.92 | |||||
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.
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/20160728005525/en/
Source:
National Oilwell Varco, Inc.
Loren Singletary, 713-346-7807
Loren.Singletary@nov.com