UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
July 28, 2016
Date of Report (Date of earliest event reported)
NATIONAL OILWELL VARCO, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-12317 | 76-0475815 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File Number) | Identification No.) | ||
| 7909 Parkwood Circle Dr. Houston, Texas |
77036 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: 713-346-7500
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
On July 28, 2016, National Oilwell Varco, Inc. issued a press release announcing earnings for the quarter ended June 30, 2016 and conference call in connection therewith. A copy of the release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
The information contained in this Current Report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibit is provided as part of the information furnished under Item 2.02 of this Current Report on Form 8-K:
| 99.1 | National Oilwell Varco, Inc. press release dated July 28, 2016 announcing the earnings results for the quarter ended June 30, 2016. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: July 28, 2016 | NATIONAL OILWELL VARCO, INC. | |||||
| /s/ Brigitte M. Hunt | ||||||
| Brigitte M. Hunt Vice President | ||||||
Index to Exhibits
| 99.1 | National Oilwell Varco, Inc. press release dated July 28, 2016 announcing the earnings results for the quarter ended June 30, 2016. |
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Exhibit 99.1
| NEWS |
Contact: Loren Singletary | |
| (713) 346-7807 |
FOR IMMEDIATE RELEASE
NATIONAL OILWELL VARCO REPORTS SECOND QUARTER 2016 RESULTS
HOUSTON, TX, July 28, 2016 — National Oilwell Varco, Inc. (NYSE: NOV) today reported a second quarter 2016 net loss of $217 million, or $0.58 per share. Excluding other items, net loss for the quarter was $114 million, or $0.30 per share. Other items included $143 million in pre-tax charges ($103 million net of tax) primarily associated with severance, facility closure costs, and write-off of certain fixed assets.
Revenues for the second quarter of 2016 were $1.72 billion, a decrease of 21 percent compared to the first quarter of 2016 and a decrease of 56 percent from the second quarter of 2015. Operating loss for the second quarter was $270 million, 15.7 percent of sales. Excluding other items, operating loss was $153 million, or 8.9 percent of sales. Adjusted EBITDA (operating profit excluding other items before depreciation and amortization) for the second quarter was $25 million, or 1.5 percent of sales. Decremental Adjusted EBITDA leverage (the change in Adjusted EBITDA as a percent of the change in revenue) from the first quarter of 2016 to the second quarter of 2016 was 22 percent.
“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 Clay Williams, Chairman, President and CEO. “We are responding by aggressively reducing costs and restructuring our operations to match this market reality. I am grateful for our experienced team, which continues to focus relentlessly on costs and efficiencies.
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. National Oilwell Varco has a long history of delivering innovative solutions and crisp execution to the oil and gas industry. We will continue to help drive our industry to better economic returns and a brighter future.”
Rig Systems
Rig Systems generated revenues of $564 million in the second quarter of 2016, a decrease of 39 percent from the first quarter of 2016 and a decrease of 71 percent from the second quarter of 2015. Operating profit was $7 million, or 1.2 percent of sales. Adjusted EBITDA was $49 million, or 8.7 percent of sales, down 64 percent sequentially and down 89 percent from the prior year.
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Backlog for capital equipment orders for Rig Systems at June 30, 2016 was $2.94 billion. New orders during the quarter were $66 million, representing a book-to-bill of 15 percent when compared to the $441 million shipped out of backlog.
Rig Aftermarket
Rig Aftermarket generated revenues of $364 million, down 7 percent from the first quarter of 2016 and down 45 percent from the second quarter of 2015. Operating profit was $62 million, or 17.0 percent of sales. Adjusted EBITDA was $73 million, or 20.1 percent of sales, down 11 percent sequentially and down 55 percent from the prior year.
Wellbore Technologies
Wellbore Technologies generated revenues of $511 million, down 19 percent from the first quarter of 2016 and down 47 percent from the second quarter of 2015. The segment reported an operating loss of $146 million, or 28.6 percent of sales. Adjusted EBITDA was $1 million, or 0.2 percent of sales, down 98 percent sequentially and down 99 percent from the prior year.
Completion and Production Solutions
Completion and Production Solutions generated revenues of $538 million, down 4 percent from the first quarter of 2016 and down 38 percent from the second quarter of 2015. The segment reported an operating loss of $33 million, or 6.1 percent of sales. Adjusted EBITDA was $57 million, or 10.6 percent of sales, an increase of 19 percent sequentially and a decrease of 61 percent from the prior year.
Backlog for capital equipment orders for Completion and Production Solutions at June 30, 2016 was $947 million, down 5 percent from the first quarter of 2016, and down 20 percent from the end of the second quarter of 2015. Revenues out of backlog during the quarter were $333 million. New orders were $269 million, achieving a book-to-bill of 81 percent, and the effect of foreign currency adjustments was $17 million.
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 Permian Basin.
NOV’s recently acquired completion tools business won a significant five-year contract for completions work in the Norwegian North Sea from a large independent E&P. The company’s advanced sliding sleeve technology enables horizontal multi-stage production in one of the most demanding offshore environments.
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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 Kongsberg Gruppen ASA (OSE: KOG). The acquired technology fits broadly into two categories: tie-in and structures and process and controls, and will be highly complementary to NOV’s existing solutions in Subsea Umbilicals, Risers, and Flowlines (SURF) and subsea infrastructure.
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 DJ Oilfield Services Co., Ltd., which offers OCTG inspection and tubular maintenance services in Thailand and the Gulf of Thailand. The acquisition further solidifies NOV’s presence in Southeast Asia, and combined with NOV’s existing premium tubular and services offering provides a platform to enhance lifecycle and asset management for operators and service companies.
NOV began supplying proprietary composite corrosion-resistant products at its newly inaugurated Resin Infusion Composite Engineering facility in Plymouth, UK, expanding its offering beyond jointed and spoolable fiberglass pipe and into non-tubular composite corrosion resistance with potential applications in floating production vessels and subsea structures.
Other Corporate Items
As of June 30, 2016, the Company had $1.66 billion in cash and cash equivalents and total debt of $3.28 billion, a decrease of $99 million from March 31, 2016. NOV had $4.39 billion available on its revolving credit facility as of June 30, 2016. The unsecured facility, which matures in September of 2018, is subject to one primary covenant which is a maximum debt-to-capitalization ratio of 60 percent. As of June 30, 2016, NOV had a debt-to-capitalization ratio of 16.8% percent.
Second Quarter Earnings Conference Call
NOV will hold a conference call on Thursday, July 28, 2016 at 8:00 a.m. (Central Time) to discuss results for the second quarter of 2016. Participants may join the conference call by dialing (844) 464-3148 within North America or (574) 990-9849 outside of North America five to
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ten minutes prior to the scheduled start time and by asking for the “National Oilwell Varco Conference Call.” The call will be broadcast simultaneously at www.nov.com/investors on a listen-only basis. A replay will be available on the website for 30 days.
About National Oilwell Varco
National Oilwell Varco (NYSE: NOV) is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production operations and in the provision of oilfield services to the upstream oil and gas industry.
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 with the Securities and Exchange Commission, including the Annual Report on Form 10-K, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.
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NATIONAL OILWELL VARCO, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited)
(In millions, except per share data)
| Three Months Ended | Six Months Ended June 30, |
|||||||||||||||||||
| June 30, | March 31, 2016 |
|||||||||||||||||||
| 2016 | 2015 | 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 | ) | ||||||||||
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|
|||||||||||
| 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 | |||||||||||||||
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|||||||||||
| 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 | ) | ||||||||||
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|||||||||||
| Income (loss) before income taxes |
(338 | ) | 391 | (236 | ) | (574 | ) | 893 | ||||||||||||
| Provision for income taxes |
(121 | ) | 105 | (118 | ) | (239 | ) | 294 | ||||||||||||
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|
|
|
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|
|
|
|||||||||||
| Net income (loss) |
(217 | ) | 286 | (118 | ) | (335 | ) | 599 | ||||||||||||
| Net income (loss) attributable to noncontrolling interests |
— | (3 | ) | 1 | 1 | — | ||||||||||||||
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|
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|
|||||||||||
| Net income (loss) attributable to Company |
$ | (217 | ) | $ | 289 | $ | (119 | ) | $ | (336 | ) | $ | 599 | |||||||
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|||||||||||
| Per share data: |
||||||||||||||||||||
| Basic |
$ | (0.58 | ) | $ | 0.75 | $ | (0.32 | ) | $ | (0.90 | ) | $ | 1.51 | |||||||
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|||||||||||
| Diluted |
$ | (0.58 | ) | $ | 0.74 | $ | (0.32 | ) | $ | (0.90 | ) | $ | 1.51 | |||||||
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|||||||||||
| Weighted average shares outstanding: |
||||||||||||||||||||
| Basic |
375 | 387 | 375 | 375 | 397 | |||||||||||||||
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| Diluted |
375 | 388 | 375 | 375 | 398 | |||||||||||||||
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NATIONAL OILWELL VARCO, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)
| June 30, 2016 |
December 31, 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 | ||||||
|
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|
|
|||||
| 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 | ||||||
|
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|
|
|||||
| Total assets |
$ | 23,784 | $ | 25,970 | ||||
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| 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 | ||||||
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|
|||||
| Total current liabilities |
2,947 | 3,958 | ||||||
| Long-term debt |
3,268 | 3,907 | ||||||
| Other liabilities |
1,383 | 1,645 | ||||||
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|||||
| Total liabilities |
7,598 | 9,510 | ||||||
| Total stockholders’ equity |
16,186 | 16,460 | ||||||
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|||||
| Total liabilities and stockholders’ equity |
$ | 23,784 | $ | 25,970 | ||||
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NATIONAL OILWELL VARCO, INC.
OPERATING PROFIT – AS ADJUSTED SUPPLEMENTAL SCHEDULE (Unaudited)
(In millions)
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | March 31, 2016 |
June 30, | ||||||||||||||||||
| 2016 | 2015 | 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 | ) | ||||||||||
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|
|||||||||||
| Total revenue |
$ | 1,724 | $ | 3,909 | $ | 2,189 | $ | 3,913 | $ | 8,729 | ||||||||||
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| 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 | ) | ||||||||||
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|||||||||||
| Total operating profit (loss) |
$ | (270 | ) | $ | 438 | $ | (189 | ) | $ | (459 | ) | $ | 1,008 | |||||||
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|||||||||||
| 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 | — | |||||||||||||||
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|||||||||||
| Total other items |
$ | 117 | $ | 17 | $ | 141 | $ | 258 | $ | 139 | ||||||||||
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|||||||||||
| 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 | ) | ||||||||||
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|||||||||||
| Total operating profit (loss) excluding other items |
$ | (153 | ) | $ | 455 | $ | (48 | ) | $ | (201 | ) | $ | 1,147 | |||||||
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NATIONAL OILWELL VARCO, INC.
AS ADJUSTED BEFORE DEPRECIATION & AMORTIZATION SUPPLEMENTAL SCHEDULE (Unaudited)
(In millions)
| 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 | ) | ||||||||||
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|
|
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|||||||||||
| Total operating profit (loss) excluding other items |
$ | (153 | ) | $ | 455 | $ | (48 | ) | $ | (201 | ) | $ | 1,147 | |||||||
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| 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 | |||||||||||||||
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|
|
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|
|||||||||||
| Total depreciation & amortization |
$ | 178 | $ | 190 | $ | 175 | $ | 353 | $ | 380 | ||||||||||
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| 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 | ) | ||||||||||
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|
|
|
|
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|
|
|||||||||||
| Total Adjusted EBITDA |
$ | 25 | $ | 645 | $ | 127 | $ | 152 | $ | 1,527 | ||||||||||
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| 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 | ) | — | |||||||||||||
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|||||||||||
| EBITDA (Note 1) |
$ | (130 | ) | $ | 610 | $ | (37 | ) | $ | (167 | ) | $ | 1,325 | |||||||
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| 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 | |||||||||||||||
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| 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 | |||||||||||||||
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| EBITDA excluding other items (Note 1) | $ | 13 | $ | 627 | $ | 110 | $ | 123 | $ | 1,473 | ||||||||||
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NATIONAL OILWELL VARCO, INC.
OPERATING (NON-GAAP) DILUTED EARNINGS PER SHARE RECONCILIATION (Unaudited)
| Three Months Ended | Six Months Ended June 30, |
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| June 30, | March 31, 2016 |
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| 2016 | 2015 | 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 | |||||||||||||||
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| Operating (non-GAAP) (Note 1) |
$ | (0.30 | ) | $ | 0.77 | $ | (0.06 | ) | $ | (0.36 | ) | $ | 1.92 | |||||||
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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.
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.
| CONTACT: |
National Oilwell Varco, Inc. | |||
| Loren Singletary (713) 346-7807 | ||||
| Loren.Singletary@nov.com |
- 9 -