National Oilwell Varco 2015 Annual Report Download - page 38

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Table of Contents
 

The Company is a leading worldwide provider of highly engineered drilling and well-servicing equipment, products and services to the exploration and
production segments of the oil and gas industry. With operations in approximately 835 locations across six continents, we design, manufacture and service a
comprehensive line of drilling and well servicing equipment; sell and rent drilling motors, specialized downhole tools, and rig instrumentation; perform
inspection and internal coating of oilfield tubular products; provide drill cuttings separation, management and disposal systems and services; and provide
expendables and spare parts used in conjunction with our large installed base of equipment. We also manufacture coiled tubing and high pressure fiberglass
and composite tubing, and sell and rent advanced in-line inspection equipment to makers of oil country tubular goods. We have a long tradition of
pioneering innovations which improve the cost-effectiveness, efficiency, safety, and environmental impact of oil and gas operations.
Our revenue and operating results are directly related to the level of worldwide oil and gas drilling and production activities and the profitability and cash
flow of oil and gas companies and drilling contractors, which in turn are affected by current and anticipated prices of oil and gas. Oil and gas prices have been
and are likely to continue to be volatile. See Item 1A. “Risk Factors”. We conduct our operations through four business segments: Rig Systems, Rig
Aftermarket, Wellbore Technologies and Completion & Production Solutions. See Item 1. “Business”, for a discussion of each of these business segments.
Unless indicated otherwise, results of operations are presented in accordance with accounting principles generally accepted in the United States (“GAAP”). In
an effort to provide investors with additional information regarding our results of operations, certain non-GAAP financial measures, including operating
profit excluding other items, operating profit percentage excluding other items, diluted earnings per share excluding other items and operating (non-GAAP)
earnings, are provided. See Non-GAAP Financial Measures and Reconciliations in Results of Operations for an explanation of our use of non-GAAP financial
measures and reconciliations to their corresponding measures calculated in accordance with GAAP.

Our results are dependent on, among other things, the level of worldwide oil and gas drilling, well remediation activity, the price of crude oil and natural gas,
capital spending by exploration and production companies and drilling contractors, and worldwide oil and gas inventory levels. Key industry indicators for
the past three years include the following:

U.S. 977 1,862 1,761 (47.5%) (44.5%)
Canada 194 380 354 (48.9%) (45.2%)
International 1,167 1,337 1,296 (12.7%) (10.0%)
Worldwide 2,338 3,579 3,411 (34.7%) (31.5%)
 $48.71 $93.26 $97.91 (47.8%) (50.3%)
 $ 2.61 $ 4.38 $ 3.72 (40.4%) (29.8%)
* Averages for the years indicated. See sources below.
37