National Oilwell Varco 2015 Annual Report Download - page 44

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Table of Contents
approximately $2.2 billion of revenue out of backlog in 2016 and approximately $3.9 billion of revenue out of backlog in 2017 and thereafter. At
December 31, 2015, approximately 90% of the capital equipment backlog was for offshore products and approximately 93% of the capital equipment
backlog was destined for international markets.
Rig Aftermarket
Revenue from Rig Aftermarket for the year ended December 31, 2015 was $2,515 million, a decrease of $707 million (21.9%) compared to the year ended
December 31, 2014. The decrease was due to lower global drilling activity which has caused customers to use existing inventories and components from idle
and unused rigs to repair better utilized rigs rather than purchase new.
Operating profit from Rig Aftermarket was $605 million for the year ended December 31, 2015, a decrease of $277 million (31.4%) compared to 2014.
Operating profit percentage decreased to 24.1%, from 27.4% in 2014. Operating profit percentage decreased primarily due to lower volumes and pricing
pressure.
Included in operating profit are certain restructuring and other items related to costs associated with a Voluntary Early Retirement Plan established by the
Company during the first quarter of 2015 and costs related to severance and facility closures. Restructuring and other items included in operating profit for
Rig Aftermarket were $12 million for the year ended December 31, 2015 and nil for the year ended December 31, 2014.
Wellbore Technologies
Revenue from Wellbore Technologies for the year ended December 31, 2015 was $3,718 million, a decrease of $2,004 million (35.0%) compared to the year
ended December 31, 2014. The decrease was due to lower drilling activity.
Operating loss from Wellbore Technologies was $1,613 million for the year ended December 31, 2015 compared to operating profit of $937 million for 2014,
a decrease of $2,550 million (272.1%). Operating profit percentage decreased to negative 43.4% from 16.4% in 2014. Operating profit decreased mainly due
to a $1,658 million impairment charge incurred on the carrying value of goodwill in the segment’s Drilling & Intervention and Drill Pipe business units as
well as a certain indefinite-lived trade name associated with this segment in the fourth quarter of 2015, as well as the overall decrease in drilling activity.
Included in operating profit are certain restructuring and other items related to costs associated with a Voluntary Early Retirement Plan established by the
Company during the first quarter of 2015 and costs related to severance and facility closures. Restructuring and other items included in operating profit for
Wellbore Technologies were $117 million for the year ended December 31, 2015 and $6 million for the year ended December 31, 2014.
Completion & Production Solutions
Revenue from Completion & Production Solutions for the year ended December 31, 2015 was $3,365 million, a decrease of $1,280 million
(27.6%) compared to the year ended December 31, 2014. The decrease was due lower market activity.
Operating profit from Completion & Production Solutions was $161 million for the year ended December 31, 2015 compared to $690 million for 2014, a
decrease of $529 million (76.7%). Operating profit percentage decreased to 4.8% from 14.9% in 2014. This decrease was due to the overall decrease in market
activity as well as $24 million in impairment charges incurred on intangible assets.
Included in operating profit are certain restructuring and other items related to costs associated with a Voluntary Early Retirement Plan established by the
Company during the first quarter of 2015; costs related to severance and
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