National Oilwell Varco 2015 Annual Report Download - page 51

Download and view the complete annual report

Please find page 51 of the 2015 National Oilwell Varco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 123

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123

Table of Contents
Operating Activities
2015 vs 2014. Net cash provided by continuing operating activities was $1,332 million in 2015 compared to net cash provided by continuing operating
activities of $3,080 million in 2014. Before changes in operating assets and liabilities, net of acquisitions, cash was provided by continuing operations
primarily through loss from continuing operations of $74 million plus non-cash charges of $505 million, plus $34 million in a dividend received from Voest-
Alpine Tubulars, an unconsolidated affiliate, less $13 million in equity income.
Net changes in operating assets and liabilities, net of acquisitions, used $466 million of cash in 2015 compared to $794 million used in the same period in
2014. The decrease in cash used in 2015 compared to the same period in 2014 was the result of a decline in accounts receivable and inventory; partially
offset by a decline in accounts payable and decreased orders in the Rig Systems segment which is reflected in customer financing, where revenue recognized
outpaced prepayments and milestone invoicing on major projects.
2014 vs 2013. Net cash provided by continuing operating activities was $2,525 million in 2014 compared to net cash provided by continuing operating
activities of $3,080 million in 2013. Before changes in operating assets and liabilities, net of acquisitions, cash was provided by operations primarily through
net income from continuing operations of $2,455 million plus non-cash charges of $484 million and a $73 million dividend received from Voest-Alpine
Tubulars, an unconsolidated affiliate, less $58 million in equity income. Net changes in operating assets and liabilities, net of acquisitions, used $794
million in 2014 compared to $350 million provided in 2013. Due to an increase in market activity during 2014 compared to 2013, revenue and backlog
increased which is reflected in increased accounts receivable as well as a buildup in inventory. Increased market activity during 2014 also resulted in higher
taxes paid, and an increase in both costs in excess of billings and billings in excess of costs with costs incurred on major rig projects outpacing customer
progress and milestone invoicing.
Investing Activities
2015 vs 2014. Net cash used in continuing investing activities was $514 million in 2014 compared to net cash used in continuing investing activities of
$1,092 million in 2014. Net cash used in continuing investing activities was primarily the result of capital expenditures and acquisition activity both of
which decreased in 2015 compared to 2014. The Company used $453 million during 2015 for capital expenditures compared to $699 million in 2014 and
$86 million for acquisitions during 2015, compared to $291 million in 2014.
2014 vs 2013. Net cash used in continuing investing activities was $1,092 million in 2014 compared to net cash used in continuing investing activities of
$2,910 million in 2013. Net cash used in continuing investing activities continued to be the result of acquisition activity as well as capital expenditures. The
Company used approximately $291 million for acquisitions in 2014, a significant decrease compared to approximately $2.4 billion for the purpose of
acquiring Robbins & Myers during 2013. Capital expenditures however increased to $699 million during 2014 compared to $614 million during 2013. In
addition, the Company’s cash and cash equivalents decreased $253 million as a result of the spin-off of its distribution business on May 30, 2014.
Financing Activities
2015 vs 2014. Net cash used in continuing financing activities was $2,163 million in 2015 compared to $1,343 million in 2014. This increase was primarily
the result of $2,221 million used to repurchase and retire 44.0 million of the Company’s common shares outstanding during 2015. In order to fund a large
portion of the share repurchases, the Company entered into net commercial paper borrowings of $893 million during 2015. The Company repaid $151
million of Senior Notes in the third quarter of 2015. In addition, the Company increased its dividend to $710 million during 2015 compared to $703 million
in 2014.
2014 vs 2013. Net cash used in continuing financing activities was $1,343 million in 2014 compared to $304 million in 2013. The increase was primarily
due to increased dividend payments and the implementation of a share repurchase program. The change was partially offset by increased proceeds from stock
options exercised to $108 million during 2014, from $58 million during 2013.
50