(Mark One) | ||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the Quarterly Period Ended | ||
OR | ||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |
Delaware | 76-0451843 |
(State or Other Jurisdiction of | (I.R.S. Employer |
Incorporation or Organization) | Identification No.) |
1333 West Loop South, Suite 1700, Houston, Texas | 77027 |
(Address of Principal Executive Offices) | (Zip Code) |
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
Three Months Ended March 31, | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
2015 | 2014 | (unaudited) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
REVENUES | $ | 2,273 | $ | 2,329 | $ | 2,208 | $ | 2,678 | $ | 6,703 | $ | 7,577 | |||||||||||
COSTS AND EXPENSES: | |||||||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown separately below) | 1,608 | 1,690 | 1,530 | 1,915 | 4,723 | 5,456 | |||||||||||||||||
Selling and administrative expenses | 286 | 318 | 256 | 320 | 821 | 970 | |||||||||||||||||
Depreciation and amortization | 89 | 85 | 86 | 83 | 264 | 256 | |||||||||||||||||
Interest, net | 38 | 32 | 34 | 36 | 105 | 98 | |||||||||||||||||
Asset impairment charges (see Note 3) | 553 | 40 | |||||||||||||||||||||
Other costs (see Note 3) | 24 | 9 | |||||||||||||||||||||
Asset charges (see Note 4) | 18 | — | 581 | 44 | |||||||||||||||||||
Other costs (gains), net (see Note 4) | 26 | 19 | 77 | 18 | |||||||||||||||||||
Total costs and expenses | 2,598 | 2,174 | 1,950 | 2,373 | 6,571 | 6,842 | |||||||||||||||||
Income (loss) from continuing operations before income taxes | (325 | ) | 155 | ||||||||||||||||||||
Income from continuing operations before income taxes | 258 | 305 | 132 | 735 | |||||||||||||||||||
Income tax provision | (53 | ) | (45 | ) | (44 | ) | (70 | ) | (144 | ) | (179 | ) | |||||||||||
Income (loss) from continuing operations | (378 | ) | 110 | 214 | 235 | (12 | ) | 556 | |||||||||||||||
Income from discontinued operations, net of income taxes | 429 | 5 | |||||||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | (1 | ) | 3 | 431 | 31 | ||||||||||||||||||
Net income | 51 | 115 | 213 | 238 | 419 | 587 | |||||||||||||||||
Less: Net income attributable to noncontrolling interests | 2 | 4 | 26 | 13 | 43 | 29 | |||||||||||||||||
Net income attributable to Cameron stockholders | $ | 49 | $ | 111 | $ | 187 | $ | 225 | $ | 376 | $ | 558 | |||||||||||
Amounts attributable to Cameron stockholders: | |||||||||||||||||||||||
Income (loss) from continuing operations | $ | (380 | ) | $ | 106 | $ | 188 | $ | 222 | $ | (55 | ) | $ | 527 | |||||||||
Income from discontinued operations | 429 | 5 | |||||||||||||||||||||
Income (loss) from discontinued operations | (1 | ) | 3 | 431 | 31 | ||||||||||||||||||
Net income attributable to Cameron stockholders | $ | 49 | $ | 111 | $ | 187 | $ | 225 | $ | 376 | $ | 558 | |||||||||||
Earnings (loss) per common share attributable to Cameron stockholders: | |||||||||||||||||||||||
Basic - | |||||||||||||||||||||||
Continuing operations | $ | (1.97 | ) | $ | 0.49 | $ | 0.99 | $ | 1.11 | $ | (0.29 | ) | $ | 2.55 | |||||||||
Discontinued operations | 2.22 | 0.02 | (0.01 | ) | 0.01 | 2.25 | 0.15 | ||||||||||||||||
Basic earnings per share | $ | 0.25 | $ | 0.51 | $ | 0.98 | $ | 1.12 | $ | 1.96 | $ | 2.70 | |||||||||||
Diluted - | |||||||||||||||||||||||
Continuing operations | $ | (1.97 | ) | $ | 0.49 | $ | 0.98 | $ | 1.10 | $ | (0.29 | ) | 2.53 | ||||||||||
Discontinued operations | 2.22 | 0.02 | (0.01 | ) | 0.01 | 2.25 | 0.15 | ||||||||||||||||
Diluted earnings per share | $ | 0.25 | $ | 0.51 | $ | 0.97 | $ | 1.11 | $ | 1.96 | $ | 2.68 | |||||||||||
Shares used in computing earnings per common share: | |||||||||||||||||||||||
Basic | 193 | 215 | 191 | 201 | 192 | 207 | |||||||||||||||||
Diluted | 193 | 216 | 192 | 203 | 192 | 208 | |||||||||||||||||
Comprehensive income (loss) | $ | (239 | ) | $ | 141 | $ | (8 | ) | $ | 29 | $ | 14 | $ | 389 | |||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | (63 | ) | 19 | ||||||||||||||||||||
Comprehensive income (loss) attributable to Cameron stockholders | $ | (176 | ) | $ | 122 | ||||||||||||||||||
Less: Comprehensive loss attributable to noncontrolling interests | (41 | ) | (40 | ) | (55 | ) | (17 | ) | |||||||||||||||
Comprehensive income attributable to Cameron stockholders | $ | 33 | $ | 69 | $ | 69 | $ | 406 |
March 31, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
ASSETS | |||||||||||||||
Cash and cash equivalents | $ | 1,322 | $ | 1,513 | $ | 1,627 | $ | 1,513 | |||||||
Short-term investments | 424 | 113 | 321 | 113 | |||||||||||
Receivables, net | 2,178 | 2,389 | 2,088 | 2,389 | |||||||||||
Inventories, net | 2,930 | 2,929 | 2,659 | 2,929 | |||||||||||
Other current assets | 397 | 391 | 481 | 391 | |||||||||||
Assets of discontinued operations | – | 217 | — | 217 | |||||||||||
Total current assets | 7,251 | 7,552 | 7,176 | 7,552 | |||||||||||
Plant and equipment, net | 1,830 | 1,964 | 1,733 | 1,964 | |||||||||||
Goodwill | 1,858 | 2,461 | 1,796 | 2,461 | |||||||||||
Intangibles, net | 679 | 728 | 613 | 728 | |||||||||||
Other assets | 187 | 187 | 291 | 187 | |||||||||||
TOTAL ASSETS | $ | 11,805 | $ | 12,892 | $ | 11,609 | $ | 12,892 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||
Short-term debt | $ | 31 | $ | 263 | $ | 38 | $ | 263 | |||||||
Accounts payable and accrued liabilities | 3,194 | 3,748 | 2,786 | 3,748 | |||||||||||
Accrued income taxes | 393 | 168 | 342 | 168 | |||||||||||
Liabilities of discontinued operations | – | 90 | — | 90 | |||||||||||
Total current liabilities | 3,618 | 4,269 | 3,166 | 4,269 | |||||||||||
Long-term debt | 2,813 | 2,819 | 2,794 | 2,819 | |||||||||||
Deferred income taxes | 179 | 193 | 227 | 193 | |||||||||||
Other long-term liabilities | 166 | 167 | 162 | 167 | |||||||||||
Total liabilities | 6,776 | 7,448 | 6,349 | 7,448 | |||||||||||
Stockholders' Equity: | |||||||||||||||
Common stock, par value $.01 per share, 400,000,000 shares authorized, 263,111,472 shares issued at March 31, 2015 and December 31, 2014 | 3 | 3 | |||||||||||||
Stockholders’ Equity: | |||||||||||||||
Common stock, par value $.01 per share, 400,000,000 shares authorized, 263,111,472 shares issued at September 30, 2015 and December 31, 2014 | 3 | 3 | |||||||||||||
Capital in excess of par value | 3,234 | 3,255 | 3,253 | 3,255 | |||||||||||
Retained earnings | 5,680 | 5,631 | 6,007 | 5,631 | |||||||||||
Accumulated other elements of comprehensive income (loss) | (765 | ) | (540 | ) | (847 | ) | (540 | ) | |||||||
Less: Treasury stock, 71,543,192 shares at March 31, 2015 (68,139,027 shares at December 31, 2014) | (3,949 | ) | (3,794 | ) | |||||||||||
Total Cameron stockholders' equity | 4,203 | 4,555 | |||||||||||||
Less: Treasury stock, 72,298,711 shares at September 30, 2015 (68,139,027 shares at December 31, 2014) | (3,987 | ) | (3,794 | ) | |||||||||||
Total Cameron stockholders’ equity | 4,429 | 4,555 | |||||||||||||
Noncontrolling interests | 826 | 889 | 831 | 889 | |||||||||||
Total equity | 5,029 | 5,444 | 5,260 | 5,444 | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 11,805 | $ | 12,892 | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 11,609 | $ | 12,892 |
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
(unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 51 | $ | 115 | ||||
Adjustments to reconcile net income to net cash used for operating activities: | ||||||||
Asset impairment charges | 553 | 40 | ||||||
Pre-tax gain on sale of Centrifugal Compression business | (680 | ) | – | |||||
Depreciation | 75 | 68 | ||||||
Amortization | 14 | 19 | ||||||
Non-cash stock compensation expense | 10 | 14 | ||||||
Deferred income taxes and tax benefit of stock compensation plan transactions | (2 | ) | (16 | ) | ||||
Changes in assets and liabilities, net of translation and non-cash items: | ||||||||
Receivables | 147 | (60 | ) | |||||
Inventories | (105 | ) | (175 | ) | ||||
Accounts payable and accrued liabilities | (471 | ) | (213 | ) | ||||
Other assets and liabilities, net | 215 | 34 | ||||||
Net cash used for operating activities | (193 | ) | (174 | ) | ||||
Cash flows from investing activities: | ||||||||
Pre-tax net proceeds received from sale of Centrifugal Compression business | 831 | – | ||||||
Proceeds from sales and maturities of short-term investments | 122 | 5 | ||||||
Purchases of short-term investments | (433 | ) | (5 | ) | ||||
Capital expenditures | (89 | ) | (105 | ) | ||||
Proceeds from sales of plant and equipment | 6 | 6 | ||||||
Net cash provided by (used for) investing activities | 437 | (99 | ) | |||||
Cash flows from financing activities: | ||||||||
Short-term loan borrowings (repayments), net | (201 | ) | 330 | |||||
Purchase of treasury stock | (182 | ) | (902 | ) | ||||
Proceeds from stock option exercises, net of tax payments from stock compensation plan transactions | (8 | ) | 9 | |||||
Excess tax benefits from stock compensation plan transactions | 1 | 2 | ||||||
Principal payments on capital leases | (6 | ) | (3 | ) | ||||
Net cash used for financing activities | (396 | ) | (564 | ) | ||||
Effect of translation on cash | (39 | ) | (4 | ) | ||||
Decrease in cash and cash equivalents | (191 | ) | (841 | ) | ||||
Cash and cash equivalents, beginning of period | 1,513 | 1,813 | ||||||
Cash and cash equivalents, end of period | $ | 1,322 | $ | 972 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(unaudited) | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 213 | $ | 238 | $ | 419 | $ | 587 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Asset impairment and other charges | 18 | — | 581 | 44 | |||||||||||
Loss on disposal of non-core assets | 6 | — | 6 | — | |||||||||||
Pre-tax gain on sale of Compression businesses | — | — | (681 | ) | (95 | ) | |||||||||
Depreciation | 74 | 74 | 226 | 217 | |||||||||||
Amortization | 12 | 11 | 38 | 49 | |||||||||||
Non-cash stock compensation expense | 13 | 13 | 35 | 43 | |||||||||||
Gain from remeasurement of prior interest in equity method investment | — | — | — | (8 | ) | ||||||||||
Deferred income taxes and tax benefit of employee stock compensation plan transactions | (53 | ) | (74 | ) | (68 | ) | (57 | ) | |||||||
Changes in assets and liabilities, net of translation, and non-cash items: | |||||||||||||||
Receivables | (6 | ) | (69 | ) | 245 | 42 | |||||||||
Inventories | 176 | (55 | ) | 106 | (283 | ) | |||||||||
Accounts payable and accrued liabilities | (115 | ) | 152 | (869 | ) | (291 | ) | ||||||||
Other assets and liabilities, net | 38 | (74 | ) | 173 | 7 | ||||||||||
Net cash provided by operating activities | 376 | 216 | 211 | 255 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Proceeds received from sale of Compression businesses, net | — | — | 832 | 547 | |||||||||||
Proceeds from sales and maturities of short-term investments | 274 | 18 | 674 | 41 | |||||||||||
Purchases of short-term investments | (159 | ) | (78 | ) | (883 | ) | (115 | ) | |||||||
Capital expenditures | (60 | ) | (80 | ) | (190 | ) | (259 | ) | |||||||
Other dispositions (acquisitions), net | — | 10 | — | (7 | ) | ||||||||||
Proceeds from sales of plant and equipment | 2 | 1 | 11 | 11 | |||||||||||
Net cash provided by (used for) investing activities | 57 | (129 | ) | 444 | 218 | ||||||||||
Cash flows from financing activities: | |||||||||||||||
Issuance of senior notes | — | — | — | 500 | |||||||||||
Debt issuance costs | — | — | — | (4 | ) | ||||||||||
Early retirement of senior notes | — | (253 | ) | — | (253 | ) | |||||||||
Short-term loan borrowings (repayments), net | (7 | ) | 94 | (220 | ) | 104 | |||||||||
Purchase of treasury stock | (45 | ) | (351 | ) | (240 | ) | (1,556 | ) | |||||||
Contributions from (distributions to) noncontrolling interest owners, net | (21 | ) | (40 | ) | (3 | ) | (40 | ) | |||||||
Proceeds from stock option exercises, net of tax payments from stock compensation plan transactions | 10 | 14 | 5 | 39 | |||||||||||
Excess tax benefits from employee stock compensation plan transactions | — | 1 | 1 | 6 | |||||||||||
Principal payments on capital leases | (6 | ) | (6 | ) | (15 | ) | (15 | ) | |||||||
Net cash used for financing activities | (69 | ) | (541 | ) | (472 | ) | (1,219 | ) | |||||||
Effect of translation on cash | (32 | ) | (13 | ) | (69 | ) | (9 | ) | |||||||
Increase (decrease) in cash and cash equivalents | 332 | (467 | ) | 114 | (755 | ) | |||||||||
Cash and cash equivalents, beginning of period | 1,295 | 1,525 | 1,513 | 1,813 | |||||||||||
Cash and cash equivalents, end of period | $ | 1,627 | $ | 1,058 | $ | 1,627 | $ | 1,058 |
Cameron Stockholders | Cameron Stockholders | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Elements of Comprehensive Income (Loss) | Treasury Stock | Noncontrolling Interests | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Elements of Comprehensive Income (Loss) | Treasury Stock | Noncontrolling Interests | |||||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2014 | $ | 3 | $ | 3,255 | $ | 5,631 | $ | (540 | ) | $ | (3,794 | ) | $ | 889 | $ | 3 | $ | 3,255 | $ | 5,631 | $ | (540 | ) | $ | (3,794 | ) | $ | 889 | ||||||||||||||
Net income | – | – | 49 | – | – | 2 | — | — | 376 | — | — | 43 | ||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | – | – | – | (225 | ) | – | (65 | ) | — | — | — | (307 | ) | — | (98 | ) | ||||||||||||||||||||||||||
Non-cash stock compensation expense | – | 10 | – | – | – | – | — | 35 | — | — | — | — | ||||||||||||||||||||||||||||||
Purchase of treasury stock | – | – | – | – | (179 | ) | – | — | — | — | — | (236 | ) | — | ||||||||||||||||||||||||||||
Treasury stock issued under stock compensation plans | – | (31 | ) | – | – | 24 | – | — | (38 | ) | — | — | 43 | — | ||||||||||||||||||||||||||||
Tax benefit of stock compensation plan transactions | – | – | – | – | – | – | — | 1 | — | — | — | — | ||||||||||||||||||||||||||||||
Balance at March 31, 2015 | $ | 3 | $ | 3,234 | $ | 5,680 | $ | (765 | ) | $ | (3,949 | ) | $ | 826 | ||||||||||||||||||||||||||||
Contributions from noncontrolling interest owners | — | — | — | — | — | 18 | ||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest owners | — | — | — | — | — | (21 | ) | |||||||||||||||||||||||||||||||||||
Balance at September 30, 2015 | $ | 3 | $ | 3,253 | $ | 6,007 | $ | (847 | ) | $ | (3,987 | ) | $ | 831 |
Three Months Ended March 31, | ||||||||
(dollars in millions) | 2015 | 2014 | ||||||
Results of Operations: | ||||||||
Revenues | $ | – | $ | 150 | ||||
Cost of sales (excluding depreciation and amortization) | – | (110 | ) | |||||
All other costs | (5 | ) | (33 | ) | ||||
Gain from sale of Centrifugal Compression business | 680 | – | ||||||
Income before income taxes | 675 | 7 | ||||||
Income tax provision | (246 | ) | (2 | ) | ||||
Income from discontinued operations, net of income taxes | $ | 429 | $ | 5 | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
(dollars in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||
Revenues | $ | — | $ | 64 | $ | — | $ | 348 | ||||
Cost of sales (excluding depreciation and amortization) | — | (43 | ) | — | (246 | ) | ||||||
All other (costs) gains | (1 | ) | (17 | ) | (2 | ) | (75 | ) | ||||
Gain on sale of Compression businesses, before tax | — | — | 681 | 95 | ||||||||
Income before income taxes | (1 | ) | 4 | 679 | 122 | |||||||
Income tax provision | — | (1 | ) | (248 | ) | (91 | ) | |||||
Income from discontinued operations, net of income taxes | $ | (1 | ) | $ | 3 | $ | 431 | $ | 31 |
(dollars in millions) | Sale of Centrifugal Compression | Sale of Reciprocating Compression | ||||
Sales price | $ | 850 | $ | 550 | ||
Net assets sold | (160 | ) | (442 | ) | ||
Transaction and other costs associated with the sale | (9 | ) | (13 | ) | ||
Pre-tax gain | 681 | 95 | ||||
Tax provision | (248 | ) | (85 | ) | ||
Gain on sale | $ | 433 | $ | 10 |
Sales price | $ | 850 | ||
Net assets sold, including estimated post-closing working capital adjustments | (160 | ) | ||
Transaction and other costs associated with the sale | (10 | ) | ||
Pre-tax gain | 680 | |||
Tax provision | (248 | ) | ||
Gain on sale | $ | 432 |
Three Months Ended March 31, | ||||||||
(dollars in millions) | 2015 | 2014 | ||||||
Asset impairment charges - | ||||||||
Goodwill impairment | $ | 517 | $ | 40 | ||||
Other long-lived asset impairments | 36 | – | ||||||
Total asset impairment charges | $ | 553 | $ | 40 | ||||
Other costs (credits) - | ||||||||
Mark-to-market impact on currency derivatives not designated as accounting hedges | $ | 12 | $ | – | ||||
Gain from Venezuela currency devaluation | (4 | ) | – | |||||
Acquisition and other integration costs | – | 2 | ||||||
Employee severance, restructuring and other costs | 16 | 7 | ||||||
Total other costs, net | $ | 24 | $ | 9 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
(dollars in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||
Asset charges - | ||||||||||||
Goodwill impairment | $ | — | $ | — | $ | 517 | $ | 40 | ||||
Other long-lived asset impairments | 18 | — | 54 | 4 | ||||||||
Accelerated depreciation on underutilized assets | — | — | 10 | — | ||||||||
Total | $ | 18 | $ | — | $ | 581 | $ | 44 | ||||
Other costs (gains) - | ||||||||||||
Loss on disposal of non-core assets | 6 | 10 | 6 | 10 | ||||||||
Facility closures and severance | 10 | 2 | 43 | 10 | ||||||||
Merger costs | 6 | — | 6 | — | ||||||||
Mark-to-market impact on currency derivatives not designated as accounting hedges | — | 4 | 11 | 4 | ||||||||
Net loss from currency devaluations | 2 | — | 7 | — | ||||||||
Gain from remeasurement of prior interest in equity method investment | — | — | — | (8 | ) | |||||||
All other costs, net | 2 | 3 | 4 | 2 | ||||||||
Total | 26 | 19 | 77 | 18 | ||||||||
Total asset charges and other costs (gains), net | $ | 44 | $ | 19 | $ | 658 | $ | 62 |
(dollars in millions) | March 31, 2015 | December 31, 2014 | ||||||
Trade receivables | $ | 1,430 | $ | 1,678 | ||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 615 | 621 | ||||||
Other receivables | 172 | 122 | ||||||
Allowance for doubtful accounts | (39 | ) | (32 | ) | ||||
Total receivables, net | $ | 2,178 | $ | 2,389 |
(dollars in millions) | September 30, 2015 | December 31, 2014 | ||||
Trade receivables | $ | 1,267 | $ | 1,678 | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | 739 | 621 | ||||
Other receivables | 136 | 122 | ||||
Allowance for doubtful accounts | (54 | ) | (32 | ) | ||
Total receivables | $ | 2,088 | $ | 2,389 |
(dollars in millions) | March 31, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||
Raw materials | $ | 155 | $ | 159 | $ | 125 | $ | 159 | ||||||
Work-in-process | 759 | 827 | 688 | 827 | ||||||||||
Finished goods, including parts and subassemblies | 2,237 | 2,150 | 2,022 | 2,150 | ||||||||||
Other | 23 | 24 | 23 | 24 | ||||||||||
Gross inventories | 3,174 | 3,160 | ||||||||||||
Total gross inventories | 2,858 | 3,160 | ||||||||||||
Excess of current standard costs over LIFO costs | (82 | ) | (86 | ) | (70 | ) | (86 | ) | ||||||
Allowances | (162 | ) | (145 | ) | (129 | ) | (145 | ) | ||||||
Total inventories, net | $ | 2,930 | $ | 2,929 | ||||||||||
Total net inventories | $ | 2,659 | $ | 2,929 |
(dollars in millions) | March 31, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||
Plant and equipment, at cost | $ | 3,460 | $ | 3,580 | $ | 3,478 | $ | 3,580 | ||||||
Accumulated depreciation | (1,630 | ) | (1,616 | ) | (1,745 | ) | (1,616 | ) | ||||||
Total plant and equipment, net | $ | 1,830 | $ | 1,964 | ||||||||||
Total plant and equipment | $ | 1,733 | $ | 1,964 |
Balance at December 31, 2014 | $ | 2,461 | ||
Impairment of goodwill (See Note 3) | (517 | ) | ||
Adjustments to the purchase price allocation for prior year acquisitions | (5 | ) | ||
Translation effect of currency changes | (81 | ) | ||
Balance at March 31, 2015 | $ | 1,858 |
Balance at December 31, 2014 | $ | 2,461 | |
Impairment of goodwill (Note 4) | (517 | ) | |
Goodwill associated with assets held for sale | (14 | ) | |
Adjustments to the purchase price allocation for prior year acquisitions | (12 | ) | |
Translation effect of currency changes and other | (122 | ) | |
Balance at September 30, 2015 | $ | 1,796 |
(dollars in millions) | March 31, 2015 | December 31, 2014 | September 30, 2015 | December 31, 2014 | ||||||||||
Trade accounts payable and accruals | $ | 677 | $ | 1,084 | $ | 521 | $ | 1,084 | ||||||
Advances from customers | 1,429 | 1,576 | 1,165 | 1,576 | ||||||||||
Other accruals | 1,088 | 1,088 | 1,100 | 1,088 | ||||||||||
Total accounts payable and accrued liabilities | $ | 3,194 | $ | 3,748 | $ | 2,786 | $ | 3,748 |
(dollars in millions) | March 31, 2015 | December 31, 2014 | ||||||
Commercial paper (0.49% weighted average rate at December 31, 2014) | $ | – | $ | 201 | ||||
Senior notes: | ||||||||
1.15% notes due December 15, 2016 | 250 | 250 | ||||||
1.4% notes due June 15, 2017 | 250 | 250 | ||||||
6.375% notes due July 15, 2018 | 450 | 450 | ||||||
4.5% notes due June 1, 2021 | 250 | 250 | ||||||
3.6% notes due April 30, 2022 | 250 | 250 | ||||||
4.0% notes due December 15, 2023 | 250 | 250 | ||||||
3.7% notes due June 15, 2024 | 250 | 250 | ||||||
7.0% notes due July 15, 2038 | 300 | 300 | ||||||
5.95% notes due June 1, 2041 | 250 | 250 | ||||||
5.125% notes due December 15, 2043 | 250 | 250 | ||||||
Unamortized original issue discount | (7 | ) | (7 | ) | ||||
Other debt | 33 | 67 | ||||||
Obligations under capital leases | 68 | 71 | ||||||
Total debt | 2,844 | 3,082 | ||||||
Less: current maturities | (31 | ) | (263 | ) | ||||
Long-term maturities | $ | 2,813 | $ | 2,819 |
(dollars in millions) | September 30, 2015 | December 31, 2014 | ||||
Commercial paper (0.49% weighted average rate at December 31, 2014) | $ | — | $ | 201 | ||
Senior notes: | ||||||
1.15% notes due December 15, 2016 | 250 | 250 | ||||
1.40% notes due June 15, 2017 | 250 | 250 | ||||
6.375% notes due July 15, 2018 | 450 | 450 | ||||
4.5% notes due June 1, 2021 | 250 | 250 | ||||
3.6% notes due April 30, 2022 | 250 | 250 | ||||
4.0% notes due December 15, 2023 | 250 | 250 | ||||
3.7% notes due June 15, 2024 | 250 | 250 | ||||
7.0% notes due July 15, 2038 | 300 | 300 | ||||
5.95% notes due June 1, 2041 | 250 | 250 | ||||
5.125% notes due December 15, 2043 | 250 | 250 | ||||
Unamortized original issue discount | (7 | ) | (7 | ) | ||
Other debt | 27 | 67 | ||||
Obligations under capital leases | 62 | 71 | ||||
2,832 | 3,082 | |||||
Current maturities | (38 | ) | (263 | ) | ||
Long-term maturities | $ | 2,794 | $ | 2,819 |
Three Months Ended March 31, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||
(dollars in millions) | Tax Provision | Tax Rate | Tax Provision | Tax Rate | Tax Provision | Tax Rate | Tax Provision | Tax Rate | ||||||||||||||||||
Provision (benefit) based on international income (loss) distribution | $ | (75 | ) | 23.0 | % | $ | 37 | 23.9 | % | $ | 27 | 20.5 | % | $ | 167 | 22.7 | % | |||||||||
Adjustments to income tax provision (benefit): | ||||||||||||||||||||||||||
Asset impairments with no tax benefit | 127 | (39.2 | ) | 10 | 6.4 | |||||||||||||||||||||
Adjustments to income tax provision: | ||||||||||||||||||||||||||
Impairments with no tax benefit | 113 | 86.0 | 9 | 1.3 | ||||||||||||||||||||||
Asset impairments | (5 | ) | (3.8 | ) | — | — | ||||||||||||||||||||
Finalization of prior year returns | – | – | (3 | ) | (1.9 | ) | — | — | 4 | 0.5 | ||||||||||||||||
Changes in valuation allowances | 8 | 6.3 | 3 | 0.4 | ||||||||||||||||||||||
Accrual adjustments and other | 1 | (0.1 | ) | 1 | 0.6 | 1 | 0.1 | (4 | ) | (0.5 | ) | |||||||||||||||
Tax provision | $ | 53 | (16.3 | )% | $ | 45 | 29.0 | % | $ | 144 | 109.1 | % | $ | 179 | 24.4 | % |
Three Months Ended March 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
(dollars in millions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||
Revenues: | ||||||||||||||||||||
Subsea | $ | 631 | $ | 681 | $ | 758 | $ | 779 | $ | 2,047 | $ | 2,195 | ||||||||
Surface | 543 | 538 | 446 | 600 | 1,499 | 1,751 | ||||||||||||||
Drilling | 726 | 667 | 673 | 800 | 2,118 | 2,233 | ||||||||||||||
V&M | 428 | 500 | 376 | 558 | 1,185 | 1,597 | ||||||||||||||
Elimination of intersegment revenues | (55 | ) | (57 | ) | (45 | ) | (59 | ) | (146 | ) | (199 | ) | ||||||||
Total revenues | $ | 2,273 | $ | 2,329 | $ | 2,208 | $ | 2,678 | $ | 6,703 | $ | 7,577 | ||||||||
Segment Income before Interest and Income Taxes: | ||||||||||||||||||||
Segment income before interest and income taxes: | ||||||||||||||||||||
Subsea | $ | 57 | $ | 29 | $ | 120 | $ | 44 | $ | 244 | $ | 119 | ||||||||
Surface | 92 | 91 | 49 | 105 | 210 | 304 | ||||||||||||||
Drilling | 135 | 67 | 146 | 159 | 400 | 323 | ||||||||||||||
V&M | 45 | 98 | 58 | 104 | 147 | 312 | ||||||||||||||
Elimination of intersegment earnings | (16 | ) | (12 | ) | (9 | ) | (17 | ) | (32 | ) | (53 | ) | ||||||||
Segment income before interest and income taxes | 313 | 273 | 364 | 395 | 969 | 1,005 | ||||||||||||||
Corporate Items: | ||||||||||||||||||||
Corporate expense | (23 | ) | (37 | ) | ||||||||||||||||
Corporate items: | ||||||||||||||||||||
Corporate expenses | (28 | ) | (35 | ) | (74 | ) | (110 | ) | ||||||||||||
Interest, net | (38 | ) | (32 | ) | (34 | ) | (36 | ) | (105 | ) | (98 | ) | ||||||||
Asset impairment charges | (553 | ) | (40 | ) | ||||||||||||||||
Other costs | (24 | ) | (9 | ) | ||||||||||||||||
Consolidated income (loss) from continuing operations before income taxes | $ | (325 | ) | $ | 155 | |||||||||||||||
Other (costs) gains, net (see Note 4) | (44 | ) | (19 | ) | (658 | ) | (62 | ) | ||||||||||||
Income from continuing operations before income taxes | $ | 258 | $ | 305 | $ | 132 | $ | 735 |
Three Months Ended March 31, | ||||||||
(dollars and shares in millions, except per share amounts) | 2015 | 2014 | ||||||
Net income (loss) from continuing operations | $ | (378 | ) | $ | 110 | |||
Less: Net income attributable to noncontrolling interests | 2 | 4 | ||||||
Net income (loss) from continuing operations attributable to Cameron | (380 | ) | 106 | |||||
Income from discontinued operations, net of taxes | 429 | 5 | ||||||
Net income attributable to Cameron stockholders | $ | 49 | $ | 111 | ||||
Average shares outstanding (basic) | 193 | 215 | ||||||
Common stock equivalents | – | 1 | ||||||
Diluted shares | 193 | 216 | ||||||
Basic earnings (loss) per share attributable to Cameron stockholders: | ||||||||
Continuing operations | $ | (1.97 | ) | $ | 0.49 | |||
Discontinued operations | 2.22 | 0.02 | ||||||
Basic earnings per share | $ | 0.25 | $ | 0.51 | ||||
Diluted earnings (loss) per share attributable to Cameron stockholders: | ||||||||
Continuing operations | $ | (1.97 | ) | $ | 0.49 | |||
Discontinued operations | 2.22 | 0.02 | ||||||
Diluted earnings per share | $ | 0.25 | $ | 0.51 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
(dollars and shares in millions, except per share amounts) | 2015 | 2014 | 2015 | 2014 | ||||||||
Net income (loss) from continuing operations | $ | 214 | $ | 235 | $ | (12 | ) | $ | 556 | |||
Less: Net income attributable to noncontrolling interests | 26 | 13 | 43 | 29 | ||||||||
Net income (loss) from continuing operations attributable to Cameron | 188 | 222 | (55 | ) | 527 | |||||||
Income (loss) from discontinued operations, net of taxes | (1 | ) | 3 | 431 | 31 | |||||||
Net income attributable to Cameron | $ | 187 | $ | 225 | $ | 376 | $ | 558 | ||||
Average shares outstanding (basic) | 191 | 201 | 192 | 207 | ||||||||
Common stock equivalents | 1 | 2 | — | 1 | ||||||||
Diluted shares | 192 | 203 | 192 | 208 | ||||||||
Basic earnings (loss) per share: | ||||||||||||
Continuing operations | 0.99 | 1.11 | (0.29 | ) | 2.55 | |||||||
Discontinued operations | (0.01 | ) | 0.01 | 2.25 | 0.15 | |||||||
Basic earnings per share | 0.98 | 1.12 | 1.96 | 2.70 | ||||||||
Diluted earnings (loss) per share: | ||||||||||||
Continuing operations | 0.98 | 1.10 | (0.29 | ) | 2.53 | |||||||
Discontinued operations | (0.01 | ) | 0.01 | 2.25 | 0.15 | |||||||
Diluted earnings per share | 0.97 | 1.11 | 1.96 | 2.68 |
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Treasury shares at beginning of period | 68,139,027 | 41,683,164 | ||||||
Purchases of treasury shares | 3,946,534 | 15,157,103 | ||||||
Net change in treasury shares owned by participants in nonqualified deferred compensation plans | (133 | ) | 39,762 | |||||
Treasury shares issued in satisfaction of stock option exercises and vesting of restricted stock units | (542,236 | ) | (770,393 | ) | ||||
Treasury shares at end of period | 71,543,192 | 56,109,636 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
Treasury shares at beginning of period | 71,671,246 | 60,027,350 | 68,139,027 | 41,683,164 | ||||||||
Purchases of treasury shares | 905,100 | 4,915,044 | 5,130,334 | 24,588,815 | ||||||||
Net change in treasury shares owned by participants in nonqualified deferred compensation plans | (1,920 | ) | (1,440 | ) | (2,652 | ) | 36,708 | |||||
Treasury shares issued in satisfaction of stock option exercises and vesting of restricted stock units | (275,715 | ) | (132,881 | ) | (967,998 | ) | (1,500,614 | ) | ||||
Treasury shares at end of period | 72,298,711 | 64,808,073 | 72,298,711 | 64,808,073 | ||||||||
Average cost per share | $ | 49.48 | $ | 71.43 | $ | 46.11 | $ | 63.38 |
Three Months Ended March 31, 2015 | ||||||||||||||||||||
(dollars in millions) | Accumulated Foreign Currency Translation Gain (Loss) | Prior Service Credits and Net Actuarial Losses | Accumulated Gain (Loss) on Cash Flow Hedge Derivatives | Total | Three Months Ended March 31, 2014 | |||||||||||||||
Balance at beginning of year | $ | (428 | ) | $ | (78 | ) | $ | (34 | ) | $ | (540 | ) | $ | (80 | ) | |||||
Other comprehensive income (loss) before reclassifications: | ||||||||||||||||||||
Pre-tax | (197 | ) | – | (58 | ) | (255 | ) | 16 | ||||||||||||
Tax effect | – | – | 16 | 16 | (3 | ) | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income to: | ||||||||||||||||||||
Revenues | – | – | 11 | 11 | (3 | ) | ||||||||||||||
Cost of sales | – | – | 8 | 8 | – | |||||||||||||||
Selling and administrative expense | – | – | – | – | – | |||||||||||||||
Tax effect | – | – | (5 | ) | (5 | ) | 1 | |||||||||||||
Net current period other comprehensive income | (197 | ) | – | (28 | ) | (225 | ) | 11 | ||||||||||||
Balance at end of period | $ | (625 | ) | $ | (78 | ) | $ | (62 | ) | $ | (765 | ) | $ | (69 | ) |
Three Months Ended September 30, 2015 | |||||||||||||||
(dollars in millions) | Accumulated Foreign Currency Translation Gain (Loss) | Prior Service Credits and Net Actuarial Losses | Accumulated Gain (Loss) on Cash Flow Hedge Derivatives | Total | Three Months Ended September 30, 2014 | ||||||||||
Balance at beginning of period | $ | (575 | ) | $ | (78 | ) | $ | (40 | ) | $ | (693 | ) | $ | (76 | ) |
Other comprehensive income (loss) before reclassifications: | |||||||||||||||
Pre-tax | (155 | ) | — | (18 | ) | (173 | ) | (167 | ) | ||||||
Tax effect | — | — | 8 | 8 | 12 | ||||||||||
Amounts reclassified from accumulated other comprehensive income to: | |||||||||||||||
Revenues | — | — | 9 | 9 | (2 | ) | |||||||||
Cost of sales | — | — | 8 | 8 | 1 | ||||||||||
Tax effect | — | — | (6 | ) | (6 | ) | — | ||||||||
Net current period other comprehensive income (loss) | (155 | ) | — | 1 | (154 | ) | (156 | ) | |||||||
Balance at end of period | $ | (730 | ) | $ | (78 | ) | $ | (39 | ) | $ | (847 | ) | $ | (232 | ) |
Nine Months Ended September 30, 2015 | |||||||||||||||
(dollars in millions) | Accumulated Foreign Currency Translation Gain (Loss) | Prior Service Credits and Net Actuarial Losses | Accumulated Gain (Loss) on Cash Flow Hedge Derivatives | Total | Nine Months Ended September 30, 2014 | ||||||||||
Balance at beginning of period | $ | (428 | ) | $ | (78 | ) | $ | (34 | ) | $ | (540 | ) | $ | (80 | ) |
Other comprehensive income (loss) before reclassifications: | |||||||||||||||
Pre-tax | (302 | ) | — | (61 | ) | (363 | ) | (157 | ) | ||||||
Tax effect | — | — | 12 | 12 | 10 | ||||||||||
Amounts reclassified from accumulated other comprehensive income to: | |||||||||||||||
Revenues | — | — | 38 | 38 | (7 | ) | |||||||||
Cost of sales | — | — | 25 | 25 | (1 | ) | |||||||||
Tax effect | — | — | (19 | ) | (19 | ) | 3 | ||||||||
Net current period other comprehensive income (loss) | (302 | ) | — | (5 | ) | (307 | ) | (152 | ) | ||||||
Balance at end of period | $ | (730 | ) | $ | (78 | ) | $ | (39 | ) | $ | (847 | ) | $ | (232 | ) |
Fair Value Based on Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Based on Significant Other Observable Inputs (Level 2) | Total | ||||||||||||||||||||||
(dollars in millions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||||||
Cash | $ | 534 | $ | 616 | $ | – | $ | – | $ | 534 | $ | 616 | ||||||||||||
Money market funds | 665 | 842 | – | – | 665 | 842 | ||||||||||||||||||
Commercial paper | – | – | 55 | 13 | 55 | 13 | ||||||||||||||||||
U.S. Treasury securities | 7 | 5 | – | – | 7 | 5 | ||||||||||||||||||
U.S. corporate obligations | 23 | 4 | – | – | 23 | 4 | ||||||||||||||||||
Non-U.S. bank and other obligations | 25 | 33 | – | – | 25 | 33 | ||||||||||||||||||
U.S. non-governmental agency asset-backed securities | – | – | 13 | – | 13 | – | ||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||
Commercial paper | – | – | 115 | 11 | 115 | 11 | ||||||||||||||||||
U.S. Treasury securities | 76 | 51 | – | – | 76 | 51 | ||||||||||||||||||
U.S. corporate obligations | 188 | 51 | – | – | 188 | 51 | ||||||||||||||||||
U.S. non-governmental agency asset-backed securities | – | – | 45 | – | 45 | – | ||||||||||||||||||
Non-qualified plan assets: | ||||||||||||||||||||||||
Money market funds | – | 1 | – | – | – | 1 | ||||||||||||||||||
Domestic bond funds | 3 | 3 | – | – | 3 | 3 | ||||||||||||||||||
Domestic equity funds | 6 | 5 | – | – | 6 | 5 | ||||||||||||||||||
International equity funds | 3 | 3 | – | – | 3 | 3 | ||||||||||||||||||
Blended equity funds | 5 | 5 | – | – | 5 | 5 | ||||||||||||||||||
Common stock | 2 | 2 | – | – | 2 | 2 | ||||||||||||||||||
Derivatives, net asset (liability): | ||||||||||||||||||||||||
Foreign currency contracts | – | – | (119 | ) | (99 | ) | (119 | ) | (99 | ) | ||||||||||||||
$ | 1,537 | $ | 1,621 | $ | 109 | $ | (75 | ) | $ | 1,646 | $ | 1,546 |
Fair Value Based on Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Based on Significant Other Observable Inputs (Level 2) | Total | ||||||||||||||||
(dollars in millions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Cash and cash equivalents: | ||||||||||||||||||
Cash | $ | 703 | $ | 616 | $ | — | $ | — | $ | 703 | $ | 616 | ||||||
Money market funds | 827 | 842 | — | — | 827 | 842 | ||||||||||||
Commercial paper | — | — | 48 | 13 | 48 | 13 | ||||||||||||
U.S. Treasury securities | — | 5 | — | — | — | 5 | ||||||||||||
U.S. corporate obligations | 10 | 4 | — | — | 10 | 4 | ||||||||||||
Non-U.S. bank and other obligations | 39 | 33 | — | — | 39 | 33 | ||||||||||||
Short-term investments: | ||||||||||||||||||
Commercial paper | — | — | 96 | 11 | 96 | 11 | ||||||||||||
U.S. Treasury securities | 32 | 51 | — | — | 32 | 51 | ||||||||||||
U.S. corporate obligations | 140 | 51 | — | — | 140 | 51 | ||||||||||||
U.S. non-governmental agency asset-backed securities | — | — | 53 | — | 53 | — | ||||||||||||
Non-qualified plan assets: | ||||||||||||||||||
Money market funds | — | 1 | — | — | — | 1 | ||||||||||||
Domestic bond funds | 3 | 3 | — | — | 3 | 3 | ||||||||||||
Domestic equity funds | 5 | 5 | — | — | 5 | 5 | ||||||||||||
International equity funds | 3 | 3 | — | — | 3 | 3 | ||||||||||||
Blended equity funds | 5 | 5 | — | — | 5 | 5 | ||||||||||||
Common stock | 2 | 2 | — | — | 2 | 2 | ||||||||||||
Derivatives, net asset (liability): | ||||||||||||||||||
Foreign currency contracts | — | — | (58 | ) | (99 | ) | (58 | ) | (99 | ) | ||||||||
Total | $ | 1,769 | $ | 1,621 | $ | 139 | $ | (75 | ) | $ | 1,908 | $ | 1,546 |
Notional Amount - Buy | Notional Amount - Sell | |||||||||||||||||||||||||||
(amounts in millions) | 2015 | 2016 | 2017 | Total | 2015 | 2016 | Total | |||||||||||||||||||||
Foreign exchange forward contracts - | ||||||||||||||||||||||||||||
Notional currency in: | ||||||||||||||||||||||||||||
Euro | 236 | 14 | – | 250 | (51 | ) | – | (51 | ) | |||||||||||||||||||
Malaysian ringgit | 319 | 51 | – | 370 | (47 | ) | – | (47 | ) | |||||||||||||||||||
Norwegian krone | 580 | 184 | 4 | 768 | (63 | ) | (54 | ) | (117 | ) | ||||||||||||||||||
Pound Sterling | 150 | 9 | – | 159 | (28 | ) | (1 | ) | (29 | ) | ||||||||||||||||||
U.S. dollar | 61 | – | – | 61 | (481 | ) | (137 | ) | (618 | ) | ||||||||||||||||||
Foreign exchange option contracts - | ||||||||||||||||||||||||||||
Notional currency in: | ||||||||||||||||||||||||||||
U.S. dollar | 13 | – | – | 13 | – | – | – |
Notional Amount - Buy | Notional Amount - Sell | |||||||||||||||||
(amounts in millions) | 2015 | 2016 | 2017 | Total | 2015 | 2016 | 2017 | 2018 | Total | |||||||||
Foreign exchange forward contracts - | ||||||||||||||||||
Notional currency in: | ||||||||||||||||||
Euro | 65 | 69 | 37 | 171 | (23 | ) | (10 | ) | — | — | (33 | ) | ||||||
Malaysian ringgit | 143 | 76 | — | 219 | (16 | ) | — | — | — | (16 | ) | |||||||
Norwegian krone | 187 | 598 | 32 | 817 | (51 | ) | (74 | ) | (4 | ) | — | (129 | ) | |||||
Pound Sterling | 94 | 22 | 2 | 118 | (5 | ) | (1 | ) | — | — | (6 | ) | ||||||
U.S. dollar | 16 | 44 | 4 | 64 | (282 | ) | (327 | ) | (101 | ) | (1 | ) | (711 | ) |
March 31, 2015 | December 31, 2014 | |||||||||||||||
(dollars in millions) | Assets | Liabilities | Assets | Liabilities | ||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||
Current | $ | 12 | $ | 104 | $ | 8 | $ | 83 | ||||||||
Non-current | 1 | 13 | 1 | 12 | ||||||||||||
Derivatives designated as hedges | 13 | 117 | 9 | 95 | ||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||
Current | – | 15 | 1 | 14 | ||||||||||||
Non-current | – | – | – | – | ||||||||||||
Derivatives not designated as hedges | – | 15 | 1 | 14 | ||||||||||||
Total derivatives | $ | 13 | $ | 132 | $ | 10 | $ | 109 |
September 30, 2015 | December 31, 2014 | |||||||||||
(dollars in millions) | Assets | Liabilities | Assets | Liabilities | ||||||||
Derivatives designated as hedging instruments: | ||||||||||||
Current | $ | 10 | $ | 62 | $ | 8 | $ | 83 | ||||
Non-current | 4 | 4 | 1 | 12 | ||||||||
Total derivatives designated as hedging instruments | 14 | 66 | 9 | 95 | ||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Current | — | 6 | 1 | 14 | ||||||||
Non-current | — | — | — | — | ||||||||
Total derivatives not designated as hedging instruments | — | 6 | 1 | 14 | ||||||||
Total derivatives | $ | 14 | $ | 72 | $ | 10 | $ | 109 |
Three Months Ended March 31, | ||||||||
(dollars in millions) | 2015 | 2014 | ||||||
Derivatives designated as hedging instruments - | ||||||||
Cost of sales | $ | (3 | ) | $ | 1 | |||
Derivatives not designated as hedging instruments - | ||||||||
Cost of sales | (19 | ) | 2 | |||||
Other costs | (12 | ) | – | |||||
$ | (34 | ) | $ | 3 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
(dollars in millions) | 2015 | 2014 | 2015 | 2014 | ||||||||
Derivatives designated as hedging instruments - | ||||||||||||
Cost of sales | $ | 1 | $ | 4 | $ | — | $ | 3 | ||||
Derivatives not designated as hedging instruments - | ||||||||||||
Cost of sales | 11 | 6 | 20 | 4 | ||||||||
Other costs | — | 4 | 11 | 4 | ||||||||
Total pre-tax loss | $ | 12 | $ | 14 | $ | 31 | $ | 11 |
estimate the amount of variable consideration to include in the transaction price, and allocate the transaction price to each separate performance obligation. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended March 31, | Increase (Decrease) | |||||||||||||||
2015 | 2014 | Amount | % | |||||||||||||
Drilling activity (average number of working rigs during period)(1): | ||||||||||||||||
United States | 1,380 | 1,780 | (400 | ) | (22.5 | )% | ||||||||||
Canada | 309 | 526 | (217 | ) | (41.3 | )% | ||||||||||
Rest of world | 1,261 | 1,337 | (76 | ) | (5.7 | )% | ||||||||||
Global average rig count | 2,950 | 3,643 | (693 | ) | (19.0 | )% | ||||||||||
Commodity prices (average of daily U.S. dollar prices per unit during period)(2): | ||||||||||||||||
West Texas Intermediate (WTI) Cushing, OK crude spot price (per barrel) | $ | 48.49 | $ | 98.65 | $ | (50.16 | ) | (50.8 | )% | |||||||
Brent crude oil spot price (per barrel) | $ | 59.87 | $ | 105.54 | $ | (45.67 | ) | (43.3 | )% | |||||||
Henry Hub natural gas spot price (per MMBtu) | $ | 2.87 | $ | 5.16 | $ | (2.29 | ) | (44.4 | )% | |||||||
Twelve-month futures strip price (U.S. dollar amount at period end)(2): | ||||||||||||||||
West Texas Intermediate (WTI) Cushing, OK crude oil contract (per barrel) | $ | 53.30 | $ | 96.71 | $ | (43.41 | ) | (44.9 | )% | |||||||
Brent crude oil contract (per barrel) | $ | 55.11 | $ | 107.76 | $ | (52.65 | ) | (48.9 | )% | |||||||
Henry Hub Natural Gas contract (per MMBtu) | $ | 2.91 | $ | 4.46 | $ | (1.55 | ) | (34.8 | )% | |||||||
Contracted drillships and semi-submersibles by location at period-end(3): | ||||||||||||||||
U.S. Gulf of Mexico | 48 | 45 | 3 | 6.7 | % | |||||||||||
Central and South America | 66 | 72 | (6 | ) | (8.3 | )% | ||||||||||
Northwestern Europe | 42 | 46 | (4 | ) | (8.7 | )% | ||||||||||
West Africa | 36 | 44 | (8 | ) | (18.2 | )% | ||||||||||
Far East, Southeast Asia and Australia | 33 | 38 | (5 | ) | (13.2 | )% | ||||||||||
Indian Ocean | 14 | 16 | (2 | ) | (12.5 | )% | ||||||||||
Other | 25 | 20 | 5 | 25.0 | % | |||||||||||
Total | 264 | 281 | (17 | ) | (6.0 | )% |
Three Months Ended September 30, | Increase (Decrease) | |||||||||||||
2015 | 2014 | Amount | % | |||||||||||
Drilling activity (average number of working rigs during period)(1): | ||||||||||||||
United States | 866 | 1,903 | (1,037 | ) | (54.5 | )% | ||||||||
Canada | 191 | 385 | (194 | ) | (50.4 | )% | ||||||||
Rest of world | 1,132 | 1,348 | (216 | ) | (16.0 | )% | ||||||||
Global average rig count | 2,189 | 3,636 | (1,447 | ) | (39.8 | )% | ||||||||
Commodity prices (average of daily U.S. dollar prices per unit during period)(2): | ||||||||||||||
West Texas Intermediate (WTI) Cushing, OK crude spot price (per barrel) | $ | 46.48 | $ | 97.60 | $ | (51.12 | ) | (52.4 | )% | |||||
Brent crude oil spot price (per barrel) | $ | 54.57 | $ | 104.30 | $ | (49.73 | ) | (47.7 | )% | |||||
Henry Hub natural gas spot price (per MMBtu) | $ | 2.75 | $ | 3.93 | $ | (1.18 | ) | (30.0 | )% | |||||
Twelve-month futures strip price (U.S. dollar amount at period end)(2): | ||||||||||||||
West Texas Intermediate (WTI) Cushing, OK crude oil contract (per barrel) | $ | 47.83 | $ | 88.68 | $ | (40.85 | ) | (46.1 | )% | |||||
Brent crude oil contract (per barrel) | $ | 48.37 | $ | 94.67 | $ | (46.30 | ) | (48.9 | )% | |||||
Henry Hub natural gas contract (per MMBtu) | $ | 2.75 | $ | 4.01 | $ | (1.26 | ) | (31.4 | )% | |||||
Contracted drillships and semi-submersibles by location at period-end(3): | ||||||||||||||
U.S. Gulf of Mexico | 46 | 48 | (2 | ) | (4.2 | )% | ||||||||
Central and South America | 55 | 66 | (11 | ) | (16.7 | )% | ||||||||
Northwestern Europe | 38 | 44 | (6 | ) | (13.6 | )% | ||||||||
West Africa | 32 | 46 | (14 | ) | (30.4 | )% | ||||||||
Far East, Southeast Asia and Australia | 28 | 39 | (11 | ) | (28.2 | )% | ||||||||
Indian Ocean | 7 | 16 | (9 | ) | (56.3 | )% | ||||||||
Other | 20 | 24 | (4 | ) | (16.7 | )% | ||||||||
Total | 226 | 283 | (57 | ) | (14.7 | )% |
(1) | Based on average monthly rig count data from Baker Hughes |
(2) | Source: Bloomberg |
(3) | Source: IHS Energy – IHS Petrodata World Rig Forecast |
Three Months Ended March 31, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
(dollars in millions) | Tax Provision | Tax Rate | Tax Provision | Tax Rate | ||||||||||||
Provision (benefit) based on international income (loss) distribution | $ | (75 | ) | 23.0 | % | $ | 37 | 23.9 | % | |||||||
Adjustments to income tax provision (benefit): | ||||||||||||||||
Asset impairments with no tax benefit | 127 | (39.2 | ) | 10 | 6.4 | |||||||||||
Finalization of prior year returns | – | – | (3 | ) | (1.9 | ) | ||||||||||
Accrual adjustments and other | 1 | (0.1 | ) | 1 | 0.6 | |||||||||||
Tax provision | $ | 53 | (16.3 | )% | $ | 45 | 29.0 | % |
Three Months Ended September 30, | ||||||||||
2015 | 2014 | |||||||||
(dollars in millions) | Tax Provision | Tax Rate | Tax Provision | Tax Rate | ||||||
Provision (benefit) based on international income (loss) distribution | $ | 43 | 16.7 | % | $ | 66 | 21.6 | % | ||
Adjustments to income tax provision: | ||||||||||
Asset impairments | (5 | ) | (2.0 | ) | — | — | ||||
Finalization of prior year returns | (2 | ) | (0.9 | ) | 4 | 1.3 | ||||
Changes in valuation allowances | 8 | 2.9 | 3 | 1.0 | ||||||
Accrual adjustments and other | — | 0.2 | (3 | ) | (0.9 | ) | ||||
Tax provision | $ | 44 | 16.9 | % | $ | 70 | 23.0 | % |
Three Months Ended March 31, | Increase (Decrease) | Three Months Ended September 30, | Increase (Decrease) | ||||||||||||||||||||||||
(dollars in millions) | 2015 | 2014 | $ | % | 2015 | 2014 | $ | % | |||||||||||||||||||
Revenues | $ | 631 | $ | 681 | $ | (50 | ) | (7.3 | )% | $ | 758 | $ | 779 | $ | (21 | ) | (2.7 | )% | |||||||||
Segment operating income before interest and income taxes | $ | 57 | $ | 29 | $ | 28 | 96.6 | % | $ | 120 | $ | 44 | $ | 76 | 172.7 | % | |||||||||||
Segment operating income before interest and income taxes as a percent of revenues | 9.0 | % | 4.3 | % | N/A | 4.7 pts. | 15.8 | % | 5.6 | % | N/A | 10.2 pts. | |||||||||||||||
Orders | $ | 560 | $ | 430 | $ | 130 | 30.2 | % | $ | 270 | $ | 813 | $ | (543 | ) | (66.8 | )% | ||||||||||
Backlog (at period-end) | $ | 4,101 | $ | 4,805 | $ | (704 | ) | (14.7 | )% | $ | 3,454 | $ | 4,703 | $ | (1,249 | ) | (26.6 | )% |
Three Months Ended March 31, | Increase (Decrease) | Three Months Ended September 30, | Increase (Decrease) | ||||||||||||||||||||||||
(dollars in millions) | 2015 | 2014 | $ | % | 2015 | 2014 | $ | % | |||||||||||||||||||
Revenues | $ | 543 | $ | 538 | $ | 5 | 0.9 | % | 446 | 600 | $ | (154 | ) | (25.7 | )% | ||||||||||||
Segment operating income before interest and income taxes | $ | 92 | $ | 91 | $ | 1 | 1.1 | % | 49 | 105 | $ | (56 | ) | (53.3 | )% | ||||||||||||
Segment operating income before interest and income taxes as a percent of revenues | 16.9 | % | 16.9 | % | N/A | 0.0 pts. | 11.0 | % | 17.5 | % | N/A | (6.5) pts. | |||||||||||||||
Orders | $ | 450 | $ | 635 | $ | (185 | ) | (29.1 | )% | $ | 453 | $ | 665 | $ | (212 | ) | (31.9 | )% | |||||||||
Backlog (at period-end) | $ | 1,009 | $ | 1,063 | $ | (54 | ) | (5.1 | )% | $ | 942 | $ | 1,202 | $ | (260 | ) | (21.6 | )% |
Three Months Ended September 30, | Increase (Decrease) | ||||||||||
(dollars in millions) | 2015 | 2014 | $ | % | |||||||
Revenues | $ | 673 | $ | 800 | $ | (127 | ) | (15.9 | )% | ||
Segment operating income before interest and income taxes | $ | 146 | $ | 159 | $ | (13 | ) | (8.2 | )% | ||
Segment operating income before interest and income taxes as a percent of revenues | 21.7 | % | 19.9 | % | N/A | 1.8 pts. | |||||
Orders | $ | 344 | $ | 574 | $ | (230 | ) | (40.1 | )% | ||
Backlog (at period-end) | $ | 2,074 | $ | 3,725 | $ | (1,651 | ) | (44.3 | )% |
Three Months Ended September 30, | Increase (Decrease) | ||||||||||
(dollars in millions) | 2015 | 2014 | $ | % | |||||||
Revenues | $ | 376 | $ | 558 | $ | (182 | ) | (32.6 | )% | ||
Segment operating income before interest and income taxes | $ | 58 | $ | 104 | $ | (46 | ) | (44.2 | )% | ||
Segment operating income before interest and income taxes as a percent of revenues | 15.4 | % | 18.6 | % | N/A | (3.2) pts. | |||||
Orders | $ | 346 | $ | 529 | $ | (183 | ) | (34.6 | )% | ||
Backlog (at period-end) | $ | 763 | $ | 954 | $ | (191 | ) | (20.0 | )% |
Nine Months Ended September 30, | Decrease | ||||||||||||||
2015 | 2014 | Amount | % | ||||||||||||
Drilling activity (average number of working rigs during period)(1): | |||||||||||||||
United States | 1,052 | 1,845 | (793 | ) | (43.0 | )% | |||||||||
Canada | 200 | 371 | (171 | ) | (46.1 | )% | |||||||||
Rest of world | 1,187 | 1,344 | (157 | ) | (11.7 | )% | |||||||||
Global average rig count | 2,439 | 3,560 | (1,121 | ) | (31.5 | )% | |||||||||
Commodity prices (average of daily U.S. dollar prices per unit during period)(2): | |||||||||||||||
West Texas Intermediate (WTI) Cushing, OK crude spot price (per barrel) | $ | 50.94 | $ | 99.77 | $ | (48.83 | ) | (48.9 | )% | ||||||
Brent crude oil spot price (per barrel) | $ | 60.19 | $ | 105.59 | $ | (45.40 | ) | (43.0 | )% | ||||||
Henry Hub natural gas spot price (per MMBtu) | $ | 2.77 | $ | 4.55 | $ | (1.78 | ) | (39.1 | )% |
(1) | Based on average monthly rig count data from Baker Hughes |
(2) | Source: Bloomberg |
Nine Months Ended September 30, | ||||||||||
2015 | 2014 | |||||||||
(dollars in millions) | Tax Provision | Tax Rate | Tax Provision | Tax Rate | ||||||
Provision (benefit) based on international income (loss) distribution | $ | 27 | 20.5 | % | $ | 167 | 22.7 | % | ||
Adjustments to income tax provision: | ||||||||||
Impairments with no tax benefit | 113 | 86.0 | 9 | 1.3 | ||||||
Asset impairments | (5 | ) | (3.8 | ) | — | — | ||||
Finalization of prior year returns | — | — | 4 | 0.5 | ||||||
Changes in valuation allowances | 8 | 6.3 | 3 | 0.4 | ||||||
Accrual adjustments and other | 1 | 0.1 | (4 | ) | (0.5 | ) | ||||
Tax provision | $ | 144 | 109.1 | % | $ | 179 | 24.4 | % |
Nine Months Ended September 30, | Increase (Decrease) | ||||||||||
(dollars in millions) | 2015 | 2014 | $ | % | |||||||
Revenues | $ | 2,047 | $ | 2,195 | $ | (148 | ) | (6.7 | )% | ||
Segment operating income before interest and income taxes | $ | 244 | $ | 119 | $ | 125 | 105.0 | % | |||
Segment operating income before interest and income taxes as a percent of revenues | 11.9 | % | 5.4 | % | N/A | 6.5 pts. | |||||
Orders | $ | 1,572 | $ | 1,838 | $ | (266 | ) | (14.5 | )% |
Nine Months Ended September 30, | Increase (Decrease) | ||||||||||
(dollars in millions) | 2015 | 2014 | $ | % | |||||||
Revenues | $ | 1,499 | $ | 1,751 | $ | (252 | ) | (14.4 | )% | ||
Segment operating income before interest and income taxes | $ | 210 | $ | 304 | $ | (94 | ) | (30.9 | )% | ||
Segment operating income before interest and income taxes as a percent of revenues | 14.0 | % | 17.4 | % | N/A | (3.4) pts. | |||||
Orders | $ | 1,374 | $ | 1,920 | $ | (546 | ) | (28.4 | )% |
Three Months Ended March 31, | Increase (Decrease) | |||||||||||||||
(dollars in millions) | 2015 | 2014 | $ | % | ||||||||||||
Revenues | $ | 726 | $ | 667 | $ | 59 | 8.8 | % | ||||||||
Segment operating income before interest and income taxes | $ | 135 | $ | 67 | $ | 68 | 101.5 | % | ||||||||
Segment operating income before interest and income taxes as a percent of revenues | 18.6 | % | 10.0 | % | N/A | 8.6 pts. | ||||||||||
Orders | $ | 267 | $ | 817 | $ | (550 | ) | (67.3 | )% | |||||||
Backlog (at period-end) | $ | 2,864 | $ | 4,050 | $ | (1,186 | ) | (29.3 | )% |
Nine Months Ended September 30, | Increase (Decrease) | ||||||||||
(dollars in millions) | 2015 | 2014 | $ | % | |||||||
Revenues | $ | 2,118 | $ | 2,233 | $ | (115 | ) | (5.2 | )% | ||
Segment operating income before interest and income taxes | 400 | 323 | $ | 77 | 23.8 | % | |||||
Segment operating income before interest and income taxes as a percent of revenues | 18.9 | % | 14.5 | % | N/A | 4.4 pts. | |||||
Orders | $ | 938 | $ | 2,030 | $ | (1,092 | ) | (53.8 | )% |
Three Months Ended March 31, | Decrease | Nine Months Ended September 30, | Increase (Decrease) | ||||||||||||||||||||||||
(dollars in millions) | 2015 | 2014 | $ | % | 2015 | 2014 | $ | % | |||||||||||||||||||
Revenues | $ | 428 | $ | 500 | $ | (72 | ) | (14.4 | )% | 1,185 | 1,597 | $ | (412 | ) | (25.8 | )% | |||||||||||
Segment operating income before interest and income taxes | $ | 45 | $ | 98 | $ | (53 | ) | (54.1 | )% | $ | 147 | $ | 312 | $ | (165 | ) | (52.9 | )% | |||||||||
Segment operating income before interest and income taxes as a percent of revenues | 10.5 | % | 19.6 | % | N/A | (9.1) pts. | 12.4 | % | 19.5 | % | N/A | (7.1) pts. | |||||||||||||||
Orders | $ | 388 | $ | 536 | $ | (148 | ) | (27.6 | )% | $ | 1,103 | $ | 1,582 | $ | (479 | ) | (30.3 | )% | |||||||||
Backlog (at period-end) | $ | 810 | $ | 1,057 | $ | (247 | ) | (23.4 | )% |
the effects of civil unrest and, in some cases, military action on the Company’s business operations, customers and employees, such as that recently occurring in several countries in the Middle East, in Ukraine and in Venezuela; exchange controls or other similar measures which result in restrictions on repatriation of capital and/or income, such as those involving the currencies of, and the Company’s operations in, Angola and Nigeria; and reductions in the number or capacity of qualified personnel. |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Notional Amount - Buy | Notional Amount - Sell | |||||||||||||||||
(amounts in millions) | 2015 | 2016 | 2017 | Total | 2015 | 2016 | 2017 | 2018 | Total | |||||||||
Foreign exchange forward contracts - | ||||||||||||||||||
Notional currency in: | ||||||||||||||||||
Euro | 65 | 69 | 37 | 171 | (23 | ) | (10 | ) | — | — | (33 | ) | ||||||
Malaysian ringgit | 143 | 76 | — | 219 | (16 | ) | — | — | — | (16 | ) | |||||||
Norwegian krone | 187 | 598 | 32 | 817 | (51 | ) | (74 | ) | (4 | ) | — | (129 | ) | |||||
Pound Sterling | 94 | 22 | 2 | 118 | (5 | ) | (1 | ) | — | — | (6 | ) | ||||||
U.S. dollar | 16 | 44 | 4 | 64 | (282 | ) | (327 | ) | (101 | ) | (1 | ) | (711 | ) |
Notional Amount - Buy | Notional Amount - Sell | |||||||||||||||||||||||||||
(amounts in millions) | 2015 | 2016 | 2017 | Total | 2015 | 2016 | Total | |||||||||||||||||||||
Foreign exchange forward contracts - | ||||||||||||||||||||||||||||
Notional currency in: | ||||||||||||||||||||||||||||
Euro | 236 | 14 | – | 250 | (51 | ) | – | (51 | ) | |||||||||||||||||||
Malaysian ringgit | 319 | 51 | – | 370 | (47 | ) | – | (47 | ) | |||||||||||||||||||
Norwegian krone | 580 | 184 | 4 | 768 | (63 | ) | (54 | ) | (117 | ) | ||||||||||||||||||
Pound Sterling | 150 | 9 | – | 159 | (28 | ) | (1 | ) | (29 | ) | ||||||||||||||||||
U.S. dollar | 61 | – | – | 61 | (481 | ) | (137 | ) | (618 | ) | ||||||||||||||||||
Foreign exchange option contracts - | ||||||||||||||||||||||||||||
Notional currency in: | ||||||||||||||||||||||||||||
U.S. dollar | 13 | – | – | 13 | – | – | – |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total number of shares purchased during the period | Average price paid per share | Cumulative number of shares purchased as part of repurchase program | Maximum number of shares that may yet be purchased under repurchase program(1) | ||||||||||||
1/1/15 – 1/31/15 | 1,230,663 | $ | 44.55 | 56,618,578 | 9,415,237 | |||||||||||
2/1/15 – 2/28/15 | 1,451,000 | $ | 46.86 | 58,069,578 | 7,510,988 | |||||||||||
3/1/15 – 3/31/15 | 1,264,871 | $ | 44.28 | 59,334,449 | 6,595,850 | |||||||||||
Total | 3,946,534 | $ | 45.31 | 59,334,449 | 6,595,850 |
Period | Total number of shares purchased during the period | Average price paid per share | Cumulative number of shares purchased as part of repurchase program | Maximum number of shares that may yet be purchased under repurchase program(1) | |||||
7/1/15 – 7/30/15 | 803,700 | $ | 49.51 | 60,416,849 | 4,853,308 | ||||
8/1/15 – 8/31/15 | 101,400 | $ | 49.31 | 60,518,249 | 3,676,599 | ||||
9/1/15 – 9/30/15 | — | $ | — | 60,518,249 | 3,912,232 | ||||
Total | 905,100 | $ | 49.48 | 60,518,249 | 3,912,232 |
(1) | Based upon month-end stock price. At September 30, 2015, the closing stock price was $61.32 per share. |
Item 3. | Defaults Upon Senior Securities |
Item 5. | Other Information |
(a) | Information Not Previously Reported in a Report on Form 8-K |
(b) | Material Changes to the Procedures by Which Security Holders May Recommend Board Nominees. |
Item 6. | Exhibits |
Date: | CAMERON INTERNATIONAL CORPORATION | |
(Registrant) | ||
By: | /s/ | |
Charles M. Sledge | ||
Charles M. Sledge | ||
Senior Vice President and Chief Financial Officer and authorized to sign on behalf of the Registrant |
Exhibit Number | Description | |
31.1 | Certification | |
31.2 | Certification | |
32.1 | Certification of the CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |