National Oilwell Varco Reports Fourth Quarter and Full Year 2017 Results
Revenues for the full year 2017 were
“Solid execution and success in our efforts to reposition the Company
resulted in a
“Our diverse global franchise that leverages capabilities across business lines is focused on developing improvements in drilling automation, multi-stage completions, predictive analytics and condition-based maintenance, and deepwater project economics. Advances on these and other initiatives have us well positioned to capitalize on improving industry fundamentals in 2018 and beyond.”
Wellbore Technologies
Wellbore Technologies generated revenues of
Completion & Production Solutions
Completion & Production Solutions generated revenues of
Backlog for capital equipment orders for Completion & Production
Solutions at
Rig Technologies
Rig Technologies generated revenues of
Backlog for capital equipment orders for Rig Systems at
Significant Events and Achievements
NOV introduced and booked several orders for its new DSGD-425 drawworks for land applications. The new drawworks simultaneously addresses the market need for greater lifting and hoisting capabilities while reducing footprint and weight compared to traditional units. The low-inertia design and optimized gear ratios enable faster tripping times and enhanced responsiveness, maximizing the benefits from autodrillers and NOVOS™ process automation.
NOV’s optimization and automation solutions continued to gain traction
in
NOV sold two strings, a total of 50,000 feet, of IntelliServ™ wired drill pipe to a major North American land drilling contractor. This marks the first sale of IntelliServ pipe to a land drilling contractor and reflects the growing demand from leading operators for the benefits of high-speed wired drill-pipe telemetry and associated optimization and automation services.
NOV signed its first contract for the Seabox™ subsea water treatment
system. The contract was signed with a major operator who will deploy
the system at an offshore installation in the third quarter of 2018 for
an extended test during the 2018/2019 winter season. The Seabox system
eliminates the need for expensive, bulky topside equipment by enabling
water treatment to be done directly at the seabed and water to be pumped
straight into the injection well. This will allow the operator to
optimize waterflooding and improve oil recovery. Two successful pilot
projects, backed by the
NOV advanced its leadership position in shaped cutter technologies,
introducing five new innovative geometries for implementation in wide
ranges of vertical and directional applications and varying rock
strengths. The new ION™ 4D cutter geometry combines point loading to
fracture with a ploughing effect to enhance a bit’s ability to shear
through formations. An operator drilling in the
NOV was awarded a significant contract for the supply of several major
topside packages for an FPSO redeployment in
NOV acquired Remacut, a provider of offshore construction solutions, in
early
NOV’s Tuboscope and Rig Technologies businesses collaborated to complete
the first comprehensive offshore riser inspection in the Gulf of
NOV continued to expand its drilling fluids business and gain market
share in
NOV ran its symmetric propagation wave resistivity (SPR)
logging-while-drilling tool for the first time in conjunction with the
Tolteq™ iSeries measurement-while-drilling (MWD) tool. The Company
developed an interface between the SPR tool and MWD tool that enables
real-time data transmission, allowing NOV’s customers to offer
directional drilling and logging services in markets where resistivity
measurements are typically acquired while drilling, including the
NOV successfully delivered an APL submerged SAL™ system with yoke
(SSY™), the first of its kind, to a major LNG shipping Company. The SSY,
which is designed to permanently moor ships and floating structures that
are producing and storing hydrocarbons in shallow waters, allows the
vessel to passively weathervane and incorporates pipework, valves,
swivel, and a flexible riser to enable natural gas import to the vessel
for liquefaction. The FPSO was hooked up on time as the world’s first
converted FLNG unit, operating offshore
NOV secured two long-term contracts for condition-based maintenance (CBM) programs with major offshore drilling companies; one for BOPs and one for risers. The CBM programs deliver a commercially favorable total-cost-of-ownership reduction for the customers versus their historical spending on maintenance and repairs, transitioning the customers’ maintenance scheduling from their current calendar-based regime to cost-optimized, condition-based maintenance planning. These CBM agreements increase NOV’s scope of maintenance and provide a consistent revenue stream while allowing the Company to increase the customers’ in-service time, decrease inspection costs, and help ensure components are only replaced when necessary.
Other Corporate Items
As of
Fourth Quarter and Full Year Earnings Conference Call
NOV will hold a conference call to discuss its fourth quarter and full
year 2017 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
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, | |||||||||||||||||||||||
2017 | 2016 | 2017 | 2017 | 2016 | |||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Wellbore Technologies | $ | 715 | $ | 531 | $ | 693 | $ | 2,577 | $ | 2,199 | |||||||||||||||
Completion & Production Solutions | 690 | 602 | 682 | 2,672 | 2,241 | ||||||||||||||||||||
Rig Technologies | 614 | 613 | 510 | 2,252 | 3,110 | ||||||||||||||||||||
Eliminations | (50 | ) | (54 | ) | (50 | ) | (197 | ) | (299 | ) | |||||||||||||||
Total revenue | 1,969 | 1,692 | 1,835 | 7,304 | 7,251 | ||||||||||||||||||||
Gross profit (loss) | 167 | (459 | ) | 285 | 892 | (101 | ) | ||||||||||||||||||
Gross profit (loss) % |
8.5% |
|
(27.1% |
) |
15.5% |
|
12.2% |
|
(1.4% |
) |
|||||||||||||||
Selling, general, and administrative | 278 | 307 | 292 | 1,169 | 1,338 | ||||||||||||||||||||
Goodwill impairment | - | - | - | - | 972 | ||||||||||||||||||||
Operating loss | (111 | ) | (766 | ) | (7 | ) | (277 | ) | (2,411 | ) | |||||||||||||||
Interest and financial costs | (25 | ) | (25 | ) | (26 | ) | (102 | ) | (105 | ) | |||||||||||||||
Interest income | 6 | 4 | 11 | 25 | 15 | ||||||||||||||||||||
Equity loss in unconsolidated affiliates | (1 | ) | (2 | ) | (2 | ) | (5 | ) | (21 | ) | |||||||||||||||
Other income (expense), net | (14 | ) | (16 | ) | (6 | ) | (33 | ) | (101 | ) | |||||||||||||||
Loss before income taxes | (145 | ) | (805 | ) | (30 | ) | (392 | ) | (2,623 | ) | |||||||||||||||
Provision for income taxes | (130 | ) | (88 | ) | (3 | ) | (156 | ) | (207 | ) | |||||||||||||||
Net loss | (15 | ) | (717 | ) | (27 | ) | (236 | ) | (2,416 | ) | |||||||||||||||
Net income (loss) attributable | |||||||||||||||||||||||||
to noncontrolling interests | (1 | ) | (3 | ) | (1 | ) | 1 | (4 | ) | ||||||||||||||||
Net loss attributable to Company | $ | (14 | ) | $ | (714 | ) | $ | (26 | ) | $ | (237 | ) |
$ |
(2,412 |
) |
||||||||||
Per share data: | |||||||||||||||||||||||||
Basic | $ | (0.04 | ) | $ | (1.90 | ) | $ | (0.07 | ) | $ | (0.63 | ) | $ | (6.41 | ) | ||||||||||
Diluted | $ | (0.04 | ) | $ | (1.90 | ) | $ | (0.07 | ) | $ | (0.63 | ) | $ | (6.41 | ) | ||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||||
Basic | 377 | 376 | 377 | 377 | 376 | ||||||||||||||||||||
Diluted | 377 | 376 | 377 | 377 | 376 |
NATIONAL OILWELL VARCO, INC. CONSOLIDATED BALANCE SHEETS (In millions) |
|||||||||
December 31, | December 31, | ||||||||
2017 | 2016 | ||||||||
(Unaudited) | |||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 1,437 | $ | 1,408 | |||||
Receivables, net | 2,015 | 2,083 | |||||||
Inventories, net | 3,003 | 3,325 | |||||||
Costs in excess of billings | 495 | 665 | |||||||
Other current assets | 267 | 395 | |||||||
Total current assets | 7,217 | 7,876 | |||||||
Property, plant and equipment, net | 3,002 | 3,150 | |||||||
Goodwill and intangibles, net | 9,528 | 9,597 | |||||||
Other assets | 459 | 517 | |||||||
Total assets | $ | 20,206 | $ | 21,140 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 510 | $ | 414 | |||||
Accrued liabilities | 1,478 | 1,568 | |||||||
Billings in excess of costs | 279 | 440 | |||||||
Current portion of long-term debt | |||||||||
and short term borrowings | 6 | 506 | |||||||
Accrued income taxes | 81 | 119 | |||||||
Total current liabilities | 2,354 | 3,047 | |||||||
Long-term debt | 2,706 | 2,708 | |||||||
Other liabilities | 986 | 1,382 | |||||||
Total liabilities | 6,046 | 7,137 | |||||||
Total stockholders’ equity | 14,160 | 14,003 | |||||||
Total liabilities and stockholders’ equity | $ | 20,206 | $ | 21,140 |
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 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 in 2017 consisted primarily of restructure charges for inventory write-downs, facility closures and severance payments. Other items in 2016 consisted primarily of goodwill impairment expense and restructure charges for inventory write-downs, facility closures and severance payments. |
Three Months Ended | Years Ended | |||||||||||||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||||||||||||
2017 | 2016 | 2017 | 2017 | 2016 | ||||||||||||||||||||||
Operating profit (loss): | ||||||||||||||||||||||||||
Wellbore Technologies | $ | (21 | ) | $ | (439 | ) | $ | - | $ | (102 | ) | $ | (770 | ) | ||||||||||||
Completion & Production Solutions | 19 | (134 | ) | 44 | 98 | (266 | ) | |||||||||||||||||||
Rig Technologies | (51 | ) | (121 | ) | 18 | (14 | ) |
(1,033 |
) | |||||||||||||||||
Eliminations and corporate costs | (58 | ) | (72 | ) | (69 | ) | (259 | ) | (342 | ) | ||||||||||||||||
Total operating profit (loss) | $ | (111 | ) | $ | (766 | ) | $ | (7 | ) | $ | (277 | ) | $ | (2,411 | ) | |||||||||||
Other items: | ||||||||||||||||||||||||||
Wellbore Technologies | $ | 32 | $ | 364 | $ | - | $ | 28 | $ | 476 | ||||||||||||||||
Completion & Production Solutions | 1 | 151 | - | 33 | 274 | |||||||||||||||||||||
Rig Technologies | 100 | 170 | - | 129 | 1,255 | |||||||||||||||||||||
Eliminations and corporate costs | - | 9 | - | - | 25 | |||||||||||||||||||||
Total other items | $ | 133 | $ | 694 | $ | - | $ | 190 | $ | 2,030 | ||||||||||||||||
Depreciation & amortization: | ||||||||||||||||||||||||||
Wellbore Technologies | $ | 96 | $ | 95 | $ | 94 | $ | 379 | $ | 384 | ||||||||||||||||
Completion & Production Solutions | 54 | 52 | 53 | 215 | 209 | |||||||||||||||||||||
Rig Technologies | 21 | 22 | 22 | 88 | 94 | |||||||||||||||||||||
Eliminations and corporate costs | 4 | 5 | 5 | 16 | 16 | |||||||||||||||||||||
Total depreciation & amortization | $ | 175 | $ | 174 | $ | 174 | $ | 698 | $ | 703 | ||||||||||||||||
Adjusted EBITDA: | ||||||||||||||||||||||||||
Wellbore Technologies | $ | 107 | $ | 20 | $ | 94 | $ | 305 | $ | 90 | ||||||||||||||||
Completion & Production Solutions | 74 | 69 | 97 | 346 | 217 | |||||||||||||||||||||
Rig Technologies | 70 | 71 | 40 | 203 | 316 | |||||||||||||||||||||
Eliminations and corporate costs | (54 | ) | (58 | ) | (64 | ) | (243 | ) | (301 | ) | ||||||||||||||||
Total Adjusted EBITDA | $ | 197 | $ | 102 | $ | 167 | $ | 611 | $ | 322 | ||||||||||||||||
Reconciliation of Adjusted EBITDA: | ||||||||||||||||||||||||||
GAAP net loss attributable to Company | $ | (14 | ) | $ | (714 | ) | $ | (26 | ) | $ | (237 | ) |
$ |
(2,412 |
) |
|||||||||||
Noncontrolling interest | (1 | ) | (3 | ) | (1 | ) | 1 | (4 | ) | |||||||||||||||||
Provision for income taxes | (130 | ) | (88 | ) | (3 | ) | (156 | ) | (207 | ) | ||||||||||||||||
Interest expense | 25 | 25 | 26 | 102 | 105 | |||||||||||||||||||||
Interest income | (6 | ) | (4 | ) | (11 | ) | (25 | ) | (15 | ) | ||||||||||||||||
Equity loss in unconsolidated affiliates | 1 | 2 | 2 | 5 | 21 | |||||||||||||||||||||
Other (income) expense, net | 14 | 16 | 6 | 33 | 101 | |||||||||||||||||||||
Depreciation & amortization | 175 | 174 | 174 | 698 | 703 | |||||||||||||||||||||
Other items | 133 | 694 | - | 190 | 2,030 | |||||||||||||||||||||
Total Adjusted EBITDA | $ | 197 | $ | 102 | $ | 167 | $ | 611 | $ | 322 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180205006061/en/
Source:
National Oilwell Varco, Inc.
Loren Singletary, (713) 346-7807
Loren.Singletary@nov.com