National Oilwell Varco 2015 Annual Report Download - page 96

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Table of Contents
and their customers become engaged in disputes or litigation related to any such suspensions, delays or cancellations, we may also become involved, either
directly or indirectly, in such disputes or litigation, as we enforce the terms of our contracts with our shipyard customers. Even though the contracts with our
shipyard customers for the supply of drilling equipment packages do not provide for cancellation for convenience, in light of the decline in oil prices and the
deterioration in the energy markets, we are starting to experience suspensions, delays and attempted cancellations with greater frequency. While we manage
equipment deliveries and collection of payment to achieve milestone payments that mitigate our financial risk, such delays, suspensions, attempted
cancellations, breaches of contract or other similar circumstances, could adversely affect our operating results and could reduce our backlog.
The Company leases certain facilities and equipment under operating leases that expire at various dates through 2066. These leases generally contain
renewal options and require the lessee to pay maintenance, insurance, taxes and other operating expenses in addition to the minimum annual rentals. Rental
expense related to operating leases approximated $327 million, $390 million, and $336 million in 2015, 2014 and 2013, respectively.
Future minimum lease commitments under noncancellable operating leases with initial or remaining terms of one year or more at December 31, 2015, are
payable as follows (in millions):
2016 $202
2017 120
2018 91
2019 71
2020 69
Thereafter 369
Total future lease commitments $922

National Oilwell Varco has authorized 1 billion shares of $0.01 par value common stock. The Company also has authorized 10 million shares of $0.01 par
value preferred stock, none of which is issued or outstanding.
Cash dividends aggregated $710 million and $703 million for the years ended December 31, 2015 and 2014, respectively. The declaration and payment of
future dividends is at the discretion of the Company’s Board of Directors and will be dependent upon the Company’s results of operations, financial
condition, capital requirements and other factors deemed relevant by the Company’s Board of Directors.
During the third quarter of 2015 the Company completed its $3 billion share repurchase program. As shares were repurchased, they were constructively
retired and returned to an unissued state. During the years ended December 31, 2015 and 2014, the Company repurchased 44.0 million and 11.6 million
shares, respectively, under the program for an average price of $50.53 and $66.97 per share, respectively, for an aggregate amount of $2,221 million and $779
million, respectively.
Total compensation cost that has been charged against income for all share-based compensation arrangements was $109 million, $101 million and $92
million for 2015, 2014 and 2013, respectively. The total income tax benefit recognized in the consolidated statement of income for all share-based
compensation arrangements was $28 million, $35 million and $28 million for 2015, 2014 and 2013, respectively.
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