National Oilwell Varco Reports Fourth Quarter and Full Year 2016 Results
Revenues for the fourth quarter of 2016 were
Revenues for the full year 2016 were
“We are very encouraged by our results, as our fourth quarter
consolidated revenues increased for the first time since the downturn
began in late 2014,” commented
“For the first time in many years, the Company’s total revenues from
land markets exceeded its total revenue from offshore, driven by sharply
rising demand in
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's eVolve™ automation and optimization services was awarded a project
in the
NOV acquired a symmetric propagation wave resistivity logging while drilling (LWD) technology, which is being integrated into the Company’s directional drilling bottom hole assembly (BHA) platform. In addition to the new LWD technology, the platform will include advanced TolteqTM MWD tools, VectorTM Rotary Steerable System and Reed HycalogTM Drill Bits. NOV plans to provide customers with a complete suite of drilling and measurement tools that improve well placement and allow for more precise geosteering in horizontal drilling applications. Real-time broadband communication of the data captured from the advanced BHA will be enabled through IntelliServ wired drill pipe, and the system will be optimally configured to leverage the full capabilities of NOV’s NOVOS process automation drilling control system.
NOV ReedHycalog introduced its Reflektor™ 3D polished cutters, an impact and thermal resistant shaped cutter technology for harsh rock drilling. The cutting-edge geometry significantly improves drilling efficiency in medium to high strength formations. Customers using the new cutters on NOV’s Tektonic™ drill bits have averaged 20% improvements in rate of penetration.
NOV Grant PridecoTM introduced DeltaTM, its fourth-generation drill pipe connection. Delta delivers enhanced mechanical performance and improved total-cost-of-ownership relative to Grant Prideco’s XT® connection. The connection is easier to run in the field and provides wider field inspection tolerances to reduce repair frequencies, making it an ideal solution for horizontal land applications. Since its release, NOV has sold multiple strings of drill pipe with Delta connections for use in U.S. shale plays.
NOV booked an order from an independent U.S. service provider for 75,000 HHP of hydraulic fracture stimulation pumps and associated support equipment. The order is expected to be delivered over the first half of 2017.
NOV completed the acquisition of
NOV Tuboscope’s Zap-Lok™ coating was approved for gas flow line
applications by the technology board of the national oil company in
NOV's MPowerD™ rotating control drive (RCD) qualified for a five-year
managed pressure drilling (MPD) operation in the
NOV and Maersk Drilling entered a five-year partnership to improve maintenance cost predictability for NOV drilling equipment on seven of the driller's offshore floating rigs. Under the agreement, the driller is moving away from calendar-based maintenance to condition-based maintenance. Enabled by NOV’s remote connectivity services, continuous data collection and analysis, Maersk and NOV can carry out the right level of maintenance, at the right time, without interfering with drilling schedules.
In December, NOV set a field record for the most footage drilled in a
24-hour period with a single drill bit in the
NOV Grant Prideco released the industry’s first-ever welded 7-5/8” drill
pipe for use in offshore completion and intervention applications. The
7-5/8” intervention string with MaxIt™ connections was used by a major
operator in a Deepwater Gulf of
Other Corporate Items
As of
Fourth Quarter and Full Year 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 | Years Ended | ||||||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | |||||||||||||||||
Revenue: | |||||||||||||||||||||
Rig Systems | $ | 426 | $ | 1,015 | $ | 470 | $ | 2,386 | $ | 6,964 | |||||||||||
Rig Aftermarket | 339 | 569 | 322 | 1,416 | 2,515 | ||||||||||||||||
Wellbore Technologies | 531 | 757 | 526 | 2,199 | 3,718 | ||||||||||||||||
Completion & Production Solutions | 602 | 746 | 543 | 2,241 | 3,365 | ||||||||||||||||
Eliminations | (206 | ) | (365 | ) | (215 | ) | (991 | ) | (1,805 | ) | |||||||||||
Total revenue | 1,692 | 2,722 | 1,646 | 7,251 | 14,757 | ||||||||||||||||
Gross profit (loss) (1) | (459 | ) | 388 | 79 | (101 | ) | 3,063 | ||||||||||||||
Gross profit (loss) % | -27.1 | % | 14.3 | % | 4.8 | % | -1.4 | % | 20.8 | % | |||||||||||
Selling, general, and administrative | 307 | 386 | 293 | 1,338 | 1,764 | ||||||||||||||||
Goodwill and intangible asset impairment | - | 1,634 | 972 | 972 | 1,689 | ||||||||||||||||
Operating loss | (766 | ) | (1,632 | ) | (1,186 | ) | (2,411 | ) | (390 | ) | |||||||||||
Interest and financial costs | (25 | ) | (27 | ) | (25 | ) | (105 | ) | (103 | ) | |||||||||||
Interest income | 4 | 5 | 3 | 15 | 14 | ||||||||||||||||
Equity income (loss) in unconsolidated affiliates | (2 | ) | (3 | ) | (6 | ) | (21 | ) | 13 | ||||||||||||
Other income (expense), net | (16 | ) | (17 | ) | (30 | ) | (101 | ) | (123 | ) | |||||||||||
Loss before income taxes | (805 | ) | (1,674 | ) | (1,244 | ) | (2,623 | ) | (589 | ) | |||||||||||
Provision for income taxes | (88 | ) | (152 | ) | 120 | (207 | ) | 178 | |||||||||||||
Net loss | (717 | ) | (1,522 | ) | (1,364 | ) | (2,416 | ) | (767 | ) | |||||||||||
Net income (loss) attributable to noncontrolling interests | (3 | ) | 1 | (2 | ) | (4 | ) | 2 | |||||||||||||
Net loss attributable to Company | $ | (714 | ) | $ | (1,523 | ) | $ | (1,362 | ) | $ | (2,412 | ) | $ | (769 | ) | ||||||
Per share data: | |||||||||||||||||||||
Basic | $ | (1.90 | ) | $ | (4.06 | ) | $ | (3.62 | ) | $ | (6.41 | ) | $ | (1.99 | ) | ||||||
Diluted | $ | (1.90 | ) | $ | (4.06 | ) | $ | (3.62 | ) | $ | (6.41 | ) | $ | (1.99 | ) | ||||||
Weighted average shares outstanding: | |||||||||||||||||||||
Basic | 376 | 375 | 376 | 376 | 387 | ||||||||||||||||
Diluted | 376 | 375 | 376 | 376 | 387 |
(1) | Gross profit excluding other items was $235 million and $859 million for the three months and year ended December 31, 2016, respectively. Gross profit excluding other items was $520 million and $3,270 million for the three months and year ended December 31, 2015, respectively. Gross profit excluding other items was $185 million for the three months ended September 30, 2016. See GAAP to Non-GAAP reconciliation on page 10. |
NATIONAL OILWELL VARCO, INC. CONSOLIDATED BALANCE SHEETS (In millions) |
||||||
December 31, | December 31, | |||||
2016 | 2015 | |||||
(Unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 1,408 | $ | 2,080 | ||
Receivables, net | 2,083 | 2,926 | ||||
Inventories, net | 3,325 | 4,678 | ||||
Costs in excess of billings | 665 | 1,250 | ||||
Other current assets | 395 | 491 | ||||
Total current assets | 7,876 | 11,425 | ||||
Property, plant and equipment, net | 3,150 | 3,124 | ||||
Goodwill and intangibles, net | 9,597 | 10,829 | ||||
Other assets | 517 | 592 | ||||
Total assets | $ | 21,140 | $ | 25,970 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 414 | $ | 623 | ||
Accrued liabilities | 1,568 | 2,284 | ||||
Billings in excess of costs | 440 | 785 | ||||
Current portion of long-term debt and short-term borrowings | 506 | 2 | ||||
Accrued income taxes | 119 | 264 | ||||
Total current liabilities | 3,047 | 3,958 | ||||
Long-term debt | 2,708 | 3,907 | ||||
Other liabilities | 1,382 | 1,645 | ||||
Total liabilities | 7,137 | 9,510 | ||||
Total stockholders’ equity | 14,003 | 16,460 | ||||
Total liabilities and stockholders’ equity | $ | 21,140 | $ | 25,970 |
NATIONAL OILWELL VARCO, INC. OPERATING PROFIT (LOSS) – GAAP to Non-GAAP RECONCILIATION (Unaudited) (In millions) |
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Three Months Ended | Years Ended | ||||||||||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | |||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Rig Systems | $ | 426 | $ | 1,015 | $ | 470 | $ | 2,386 | $ | 6,964 | |||||||||||||||
Rig Aftermarket | 339 | 569 | 322 | 1,416 | 2,515 | ||||||||||||||||||||
Wellbore Technologies | 531 | 757 | 526 | 2,199 | 3,718 | ||||||||||||||||||||
Completion & Production Solutions | 602 | 746 | 543 | 2,241 | 3,365 | ||||||||||||||||||||
Eliminations | (206 | ) | (365 | ) | (215 | ) | (991 | ) | (1,805 | ) | |||||||||||||||
Total revenue | $ | 1,692 | $ | 2,722 | $ | 1,646 | $ | 7,251 | $ | 14,757 | |||||||||||||||
Operating profit (loss): | |||||||||||||||||||||||||
Rig Systems | $ | (81 | ) | $ | 146 | $ | (962 | ) | $ | (969 | ) | $ | 1,322 | ||||||||||||
Rig Aftermarket | 26 | 138 | 72 | 229 | 652 | ||||||||||||||||||||
Wellbore Technologies | (439 | ) | (1,714 | ) | (94 | ) | (770 | ) | (1,573 | ) | |||||||||||||||
Completion & Production Solutions | (134 | ) | 4 | (61 | ) | (266 | ) | 187 | |||||||||||||||||
Eliminations and corporate costs | (138 | ) | (206 | ) | (141 | ) | (635 | ) | (978 | ) | |||||||||||||||
Total operating profit (loss) | $ | (766 | ) | $ | (1,632 | ) | $ | (1,186 | ) | $ | (2,411 | ) | $ | (390 | ) | ||||||||||
Other items: | |||||||||||||||||||||||||
Rig Systems | $ | 121 | $ | 47 | $ | 994 | $ | 1,190 | $ | 112 | |||||||||||||||
Rig Aftermarket | 49 | 1 | 3 | 65 | 12 | ||||||||||||||||||||
Wellbore Technologies | 364 | 1,692 | 24 | 476 | 1,775 | ||||||||||||||||||||
Completion & Production Solutions | 151 | 33 | 51 | 274 | 125 | ||||||||||||||||||||
Eliminations and corporate costs | 9 | - | 6 | 25 | - | ||||||||||||||||||||
Total other items | $ | 694 | $ | 1,773 | $ | 1,078 | $ | 2,030 | $ | 2,024 | |||||||||||||||
Operating profit (loss) excluding other items: | |||||||||||||||||||||||||
Rig Systems | $ | 40 | $ | 193 | $ | 32 | $ | 221 | $ | 1,434 | |||||||||||||||
Rig Aftermarket | 75 | 139 | 75 | 294 | 664 | ||||||||||||||||||||
Wellbore Technologies | (75 | ) | (22 | ) | (70 | ) | (294 | ) | 202 | ||||||||||||||||
Completion & Production Solutions | 17 | 37 | (10 | ) | 8 | 312 | |||||||||||||||||||
Eliminations and corporate costs | (129 | ) | (206 | ) | (135 | ) | (610 | ) | (978 | ) | |||||||||||||||
Total operating profit (loss) excluding other items | $ | (72 | ) | $ | 141 | $ | (108 | ) | $ | (381 | ) | $ | 1,634 |
NATIONAL OILWELL VARCO, INC. AS ADJUSTED BEFORE DEPRECIATION & AMORTIZATION SUPPLEMENTAL SCHEDULE (Unaudited) (In millions) |
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Three Months Ended | Years Ended | ||||||||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | |||||||||||||||||||
Operating profit (loss) excluding other items: | |||||||||||||||||||||||
Rig Systems | $ | 40 | $ | 193 | $ | 32 | $ | 221 | $ | 1,434 | |||||||||||||
Rig Aftermarket | 75 | 139 | 75 | 294 | 664 | ||||||||||||||||||
Wellbore Technologies | (75 | ) | (22 | ) | (70 | ) | (294 | ) | 202 | ||||||||||||||
Completion & Production Solutions | 17 | 37 | (10 | ) | 8 | 312 | |||||||||||||||||
Eliminations and corporate costs | (129 | ) | (206 | ) | (135 | ) | (610 | ) | (978 | ) | |||||||||||||
Total operating profit (loss) excluding other items | $ | (72 | ) | $ | 141 | $ | (108 | ) | $ | (381 | ) | $ | 1,634 | ||||||||||
Depreciation & amortization: | |||||||||||||||||||||||
Rig Systems | $ | 17 | $ | 21 | $ | 18 | $ | 72 | $ | 84 | |||||||||||||
Rig Aftermarket | 5 | 6 | 6 | 22 | 23 | ||||||||||||||||||
Wellbore Technologies | 95 | 99 | 96 | 384 | 403 | ||||||||||||||||||
Completion & Production Solutions | 52 | 52 | 53 | 209 | 223 | ||||||||||||||||||
Eliminations and corporate costs | 5 | 5 | 3 | 16 | 14 | ||||||||||||||||||
Total depreciation & amortization | $ | 174 | $ | 183 | $ | 176 | $ | 703 | $ | 747 | |||||||||||||
Adjusted EBITDA (Operating profit excluding other | |||||||||||||||||||||||
items before depreciation & amortization) (Note 1): | |||||||||||||||||||||||
Rig Systems | $ | 57 | $ | 214 | $ | 50 | $ | 293 | $ | 1,518 | |||||||||||||
Rig Aftermarket | 80 | 145 | 81 | 316 | 687 | ||||||||||||||||||
Wellbore Technologies | 20 | 77 | 26 | 90 | 605 | ||||||||||||||||||
Completion & Production Solutions | 69 | 89 | 43 | 217 | 535 | ||||||||||||||||||
Eliminations and corporate costs | (124 | ) | (201 | ) | (132 | ) | (594 | ) | (964 | ) | |||||||||||||
Total Adjusted EBITDA | $ | 102 | $ | 324 | $ | 68 | $ | 322 | $ | 2,381 | |||||||||||||
Adjusted EBITDA % (Note 1): | |||||||||||||||||||||||
Rig Systems | 13.4 | % | 21.1 | % | 10.6 | % | 12.3 | % | 21.8 | % | |||||||||||||
Rig Aftermarket | 23.6 | % | 25.5 | % | 25.2 | % | 22.3 | % | 27.3 | % | |||||||||||||
Wellbore Technologies | 3.8 | % | 10.2 | % | 4.9 | % | 4.1 | % | 16.3 | % | |||||||||||||
Completion & Production Solutions | 11.5 | % | 11.9 | % | 7.9 | % | 9.7 | % | 15.9 | % | |||||||||||||
Total Adjusted EBITDA % | 6.0 | % | 11.9 | % | 4.1 | % | 4.4 | % | 16.1 | % | |||||||||||||
Total Adjusted EBITDA: | $ | 102 | $ | 324 | $ | 68 | $ | 322 | $ | 2,381 | |||||||||||||
Other items in operating profit | (694 | ) | (1,773 | ) | (1,078 | ) | (2,030 | ) | (2,024 | ) | |||||||||||||
Interest income | 4 | 5 | 3 | 15 | 14 | ||||||||||||||||||
Equity income (loss) in unconsolidated affiliates | (2 | ) | (3 | ) | (6 | ) | (21 | ) | 13 | ||||||||||||||
Other income (expense), net | (16 | ) | (17 | ) | (30 | ) | (101 | ) | (123 | ) | |||||||||||||
Net (income) loss attributable to noncontrolling interest | 3 | (1 | ) | 2 | 4 | (2 | ) | ||||||||||||||||
EBITDA (Note 1) | $ | (603 | ) | $ | (1,465 | ) | $ | (1,041 | ) | $ | (1,811 | ) | $ | 259 | |||||||||
Reconciliation of EBITDA (Note 1): | |||||||||||||||||||||||
GAAP net income (loss) attributable to Company | $ | (714 | ) | $ | (1,523 | ) | $ | (1,362 | ) | $ | (2,412 | ) | $ | (769 | ) | ||||||||
Provision for income taxes | (88 | ) | (152 | ) | 120 | (207 | ) | 178 | |||||||||||||||
Interest expense | 25 | 27 | 25 | 105 | 103 | ||||||||||||||||||
Depreciation & amortization | 174 | 183 | 176 | 703 | 747 | ||||||||||||||||||
EBITDA | (603 | ) | (1,465 | ) | (1,041 | ) | (1,811 | ) | 259 | ||||||||||||||
Other items in operating profit | 694 | 1,773 | 1,078 | 2,030 | 2,024 | ||||||||||||||||||
Other items in other income (expense), net | 12 | 7 | 10 | 54 | 16 | ||||||||||||||||||
EBITDA excluding other items (Note 1) | $ | 103 | $ | 315 | $ | 47 | $ | 273 | $ | 2,299 |
NATIONAL OILWELL VARCO, INC. GAAP to Non-GAAP (Adjusted) RECONCILIATION (Unaudited) (In millions, except per share data) |
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Three Months Ended | Years Ended | |||||||||||||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | ||||||||||||||||||||||
GAAP net income (loss) attributable to Company | $ | (714 | ) | $ | (1,523 | ) | $ | (1,362 | ) | $ | (2,412 | ) | $ | (769 | ) | |||||||||||
Other Items: | ||||||||||||||||||||||||||
Inventory charges, facility closures, severance and other | 694 | 139 | 106 | 1,058 | 335 | |||||||||||||||||||||
Goodwill and other intangbile asset write-downs | - | 1,634 | 972 | 972 | 1,689 | |||||||||||||||||||||
Fixed asset write-down | 12 | - | 10 | 54 | - | |||||||||||||||||||||
Argentina/Venezuela asset write-down | - | 7 | - | - | 16 | |||||||||||||||||||||
GAAP net income (loss) less pre-tax other items | (8 | ) | 257 | (274 | ) | (328 | ) | 1,271 | ||||||||||||||||||
Tax impact on other items | (224 | ) | (104 | ) | (67 | ) | (380 | ) | (189 | ) | ||||||||||||||||
Tax items | 175 | (68 | ) | 213 | 388 | 1 | ||||||||||||||||||||
Adjusted net income (loss) attributable to Company (Note 1) | (57 | ) | 85 | (128 | ) | (320 | ) | 1,083 | ||||||||||||||||||
Noncontrolling interest | (3 | ) | 1 | (2 | ) | (4 | ) | 2 | ||||||||||||||||||
Adjusted net income (loss) (Note 1) | $ | (60 | ) | $ | 86 | $ | (130 | ) | $ | (324 | ) | $ | 1,085 | |||||||||||||
Three Months Ended | Years Ended | |||||||||||||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | ||||||||||||||||||||||
GAAP net income (loss) attributable to Company per share | $ | (1.90 | ) | $ | (4.06 | ) | $ | (3.62 | ) | $ | (6.41 | ) | $ | (1.99 | ) | |||||||||||
Other items: | ||||||||||||||||||||||||||
Inventory charges, facility closures, severance and other | 1.26 | 0.25 | 0.18 | 1.93 | 0.57 | |||||||||||||||||||||
Goodwill and other intangbile asset write-downs | - | 4.21 | 2.51 | 2.51 | 4.18 | |||||||||||||||||||||
Fixed asset write-down | 0.02 | - | 0.02 | 0.10 | - | |||||||||||||||||||||
Argentina/Venezuela asset write-down | - | 0.01 | - | - | 0.04 | |||||||||||||||||||||
Tax items | 0.47 | (0.18 | ) | 0.57 | 1.03 | - | ||||||||||||||||||||
Adjusted operating earnings per share (Note 1) | $ | (0.15 | ) | $ | 0.23 | $ | (0.34 | ) | $ | (0.84 | ) | $ | 2.80 | |||||||||||||
Three Months Ended | Years Ended | |||||||||||||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | ||||||||||||||||||||||
GAAP gross profit | $ | (459 | ) | $ | 388 | $ | 79 | $ | (101 | ) | $ | 3,063 | ||||||||||||||
Other items included in gross profit | 694 | 132 | 106 | 960 | 207 | |||||||||||||||||||||
Adjusted gross profit (Note 1) | $ | 235 | $ | 520 | $ | 185 | $ | 859 | $ | 3,270 | ||||||||||||||||
GAAP selling, general, and administrative | $ | 307 | $ | 386 | $ | 293 | $ | 1,338 | $ | 1,764 | ||||||||||||||||
Other items included in selling, general, and administrative | - | (7 | ) | - | (98 | ) | (128 | ) | ||||||||||||||||||
Adjusted selling, general, and administrative (Note 1) | $ | 307 | $ | 379 | $ | 293 | $ | 1,240 | $ | 1,636 | ||||||||||||||||
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, (viii) Adjusted net income (loss), (ix) Adjusted operating earnings per fully diluted share, (x) Adjusted gross profit, and (xi) Adjusted selling, general, and administrative. 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/20170206006214/en/
Source:
National Oilwell Varco, Inc.
Loren Singletary, (713) 346-7807
Loren.Singletary@nov.com