Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 17, 2015 | Jun. 30, 2014 |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | DNOW | ||
Entity Registrant Name | NOW INC. | ||
Entity Central Index Key | 1599617 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 107,067,457 | ||
Entity Public Float | $3.80 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $195 | $101 |
Receivables, net | 851 | 661 |
Inventories, net | 949 | 850 |
Deferred income taxes | 22 | 21 |
Prepaid and other current assets | 30 | 29 |
Total current assets | 2,047 | 1,662 |
Property, plant and equipment, net | 124 | 102 |
Deferred income taxes | 2 | 15 |
Goodwill | 346 | 333 |
Intangibles, net | 73 | 68 |
Other assets | 4 | 3 |
Total assets | 2,596 | 2,183 |
Current liabilities: | ||
Accounts payable | 490 | 264 |
Accrued liabilities | 125 | 99 |
Accrued income taxes | 5 | |
Total current liabilities | 620 | 363 |
Deferred income taxes | 10 | 16 |
Other long-term liabilities | 2 | |
Total liabilities | 630 | 381 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock - par value $0.01; 20 million shares authorized; no shares issued and outstanding | ||
Common stock - par value $0.01; 330 million shares authorized; 107,067,457 shares issued and outstanding | 1 | |
Additional paid-in capital | 1,952 | |
National Oilwell Varco, Inc. ("NOV") net investment | 1,802 | |
Retained earnings | 58 | |
Accumulated other comprehensive income (loss) | -45 | |
Total stockholders' equity | 1,966 | 1,802 |
Total liabilities and stockholders' equity | $2,596 | $2,183 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 330,000,000 | 330,000,000 |
Common stock, shares issued | 107,067,457 | 107,067,457 |
Common stock, shares outstanding | 107,067,457 | 107,067,457 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||||||||||
Revenue | $1,006 | $1,070 | $952 | $1,077 | $1,041 | $1,113 | $1,070 | $1,072 | $4,105 | $4,296 | $3,414 |
Operating expenses: | |||||||||||
Cost of products | 801 | 857 | 759 | 869 | 844 | 907 | 874 | 874 | 3,286 | 3,499 | 2,803 |
Operating and warehousing costs | 110 | 108 | 105 | 102 | 104 | 104 | 103 | 101 | 425 | 412 | 315 |
Selling, general and administrative | 69 | 55 | 45 | 44 | 43 | 39 | 40 | 39 | 213 | 161 | 128 |
Operating profit | 26 | 50 | 43 | 62 | 50 | 63 | 53 | 58 | 181 | 224 | 168 |
Other income (expense) | -2 | -1 | -2 | -4 | 2 | 2 | -3 | -2 | -3 | ||
Income before income taxes | 24 | 49 | 43 | 62 | 48 | 59 | 55 | 60 | 178 | 222 | 165 |
Provision for income taxes | 8 | 17 | 16 | 21 | 14 | 20 | 22 | 19 | 62 | 75 | 57 |
Net income | $16 | $32 | $27 | $41 | $34 | $39 | $33 | $41 | $116 | $147 | $108 |
Earnings per share: | |||||||||||
Basic earnings per common share | $0.15 | $0.30 | $0.25 | $0.38 | $0.32 | $0.37 | $0.31 | $0.37 | $1.07 | $1.37 | $1.01 |
Diluted earnings per common share | $0.14 | $0.30 | $0.25 | $0.38 | $0.32 | $0.36 | $0.31 | $0.37 | $1.06 | $1.37 | $1 |
Weighted-average common shares outstanding, basic | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,058,843 | 107,053,031 | 107,053,031 |
Weighted-average common shares outstanding, diluted | 108,000,000 | 108,000,000 | 108,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,556,144 | 107,468,868 | 107,468,868 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income | $116 | $147 | $108 |
Other comprehensive income (loss): | |||
Currency translation adjustments | -45 | -18 | 9 |
Comprehensive income | $71 | $129 | $117 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | $116 | $147 | $108 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 21 | 17 | 12 |
Deferred income taxes | 7 | 3 | -7 |
Stock-based compensation | 18 | 6 | 6 |
Gain on disposal of property, plant and equipment | -6 | ||
Other, net | 18 | 12 | 7 |
Change in operating assets and liabilities: | |||
Receivables | -200 | 23 | -25 |
Inventories | -116 | 158 | -87 |
Prepaid and other current assets | -1 | -11 | -3 |
Accounts payable and accrued liabilities | 261 | -9 | -59 |
Accrued income taxes | -6 | -6 | -1 |
Other assets / liabilities, net | -4 | -23 | 37 |
Net cash provided by (used in) operating activities | 108 | 317 | -12 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | -39 | -55 | -14 |
Business acquisitions, net of cash acquired | -36 | -1,113 | |
Other, net | 8 | 1 | |
Net cash used in investing activities | -67 | -54 | -1,127 |
Cash flows from financing activities: | |||
Net contributions from (distributions to) NOV | 67 | -298 | 1,185 |
Other | -1 | -1 | |
Net cash provided by (used in) financing activities | 66 | -299 | 1,184 |
Effect of exchange rates on cash and cash equivalents | -13 | -1 | 2 |
Net change in cash and cash equivalents | 94 | -37 | 47 |
Cash and cash equivalents, beginning of period | 101 | 138 | 91 |
Cash and cash equivalents, end of period | 195 | 101 | 138 |
Cash payments during the period for: | |||
Income taxes paid | 65 | 73 | 65 |
Non-cash investing and financing activities: | |||
Contributed property, plant and equipment | 4 | ||
Accrued purchases of property, plant and equipment | $1 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Retained Earnings [Member] | NOV Net Investment [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
In Millions, except Share data | |||||
Beginning balance at Dec. 31, 2011 | $669 | $660 | $9 | ||
Net income | 108 | 108 | |||
Contributions/transfers from (distributions to) NOV | 1,185 | 1,185 | |||
Other comprehensive income (loss) | 9 | 9 | |||
Ending balance at Dec. 31, 2012 | 1,971 | 1,953 | 18 | ||
Net income | 147 | 147 | |||
Contributions/transfers from (distributions to) NOV | -298 | -298 | |||
Other comprehensive income (loss) | -18 | -18 | |||
Ending balance at Dec. 31, 2013 | 1,802 | 1,802 | |||
Net income | 116 | 58 | 58 | ||
Contributions/transfers from (distributions to) NOV | 75 | 75 | |||
Stock-based compensation | 18 | 13 | 5 | ||
Reclassification of NOV net investment to additional paid-in capital | 1,940 | -1,940 | |||
Issuance of common stock at Separation, value | -1 | ||||
Issuance of common stock at the Separation, par value | 1 | ||||
Other comprehensive income (loss) | -45 | -45 | |||
Issuance of common stock at Separation, share | 107,053,000 | ||||
Issuance of common stock for exercise of options | 14,000 | ||||
Ending balance, Common stock value at Dec. 31, 2014 | 1 | 1 | |||
Ending balance at Dec. 31, 2014 | $1,966 | $1,952 | $58 | ($45) | |
Ending balance, shares at Dec. 31, 2014 | 107,067,000 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Accounting Policies [Abstract] | ||||
Organization and Basis of Presentation | 1. Organization and Basis of Presentation | |||
Nature of Operations | ||||
NOW Inc. (“NOW” or the “Company”) is a holding company headquartered in Houston, Texas that was incorporated in Delaware on November 22, 2013. NOW operates primarily under the DistributionNOW and Wilson Export brands. NOW is a global distributor of energy products as well as products for industrial applications through its locations in the U.S., Canada and internationally which are geographically positioned to serve the energy and industrial markets in over 100 countries. NOW’s energy product offerings are used in the energy industry including upstream drilling and completion, exploration and production, midstream infrastructure development and downstream petroleum refining – as well as in other industries, such as chemical processing, power generation and industrial manufacturing operations. The industrial distribution portion of NOW’s business targets a diverse range of manufacturing and facilities across numerous industries and end markets. NOW also provides supply chain management to drilling contractors, E&P operators, midstream operators, downstream energy and industrial manufacturing companies. NOW’s supplier network consists of thousands of vendors in approximately 40 countries. | ||||
The Separation | ||||
On May 1, 2014, the National Oilwell Varco, Inc. (“NOV”) Board of Directors approved the Spin-Off (the “Spin-Off” or “Separation”) of its distribution business into an independent, publicly traded company named NOW Inc. In accordance with a separation and distribution agreement, the two companies were separated by NOV distributing to its stockholders 107,053,031 shares of common stock of the Company after the market closed on May 30, 2014. Each NOV stockholder received one share of NOW common stock for every four shares of NOV common stock held at the close of business on the record date of May 22, 2014 and not sold prior to close of business on May 30, 2014. Fractional shares of NOW common stock were not distributed and any fractional shares of NOW common stock otherwise issuable to a NOV stockholder were sold in the open market on such stockholder’s behalf, and such stockholder received a cash payment with respect to that fractional share. In conjunction with the Spin-Off, NOV received an opinion from its legal counsel to the effect that, based on certain facts, assumptions, representations and undertakings, for U.S. federal income tax purposes, the distribution of NOW common stock and certain related transactions generally was not taxable to NOV or U.S. holders of NOV common stock, except in respect to cash received in lieu of fractional shares, which generally will be taxable to such holders as a capital gain. Following the Spin-Off, NOW became an independent, publicly traded company as NOV had no ownership interest in NOW. Each company has separate public ownership, boards of directors and management. A Registration Statement on Form 10, as amended, relating to the Spin-Off was filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) and was declared effective on May 13, 2014. On June 2, 2014, NOW stock began trading the “regular-way” on the New York Stock Exchange under the ticker symbol “DNOW”. | ||||
Basis of Presentation | ||||
All financial information presented before the Spin-Off represents the combined results of operations, financial position and cash flows for the Company and all financial information presented after the Spin-Off represents the consolidated results of operations, financial position and cash flows for the Company. Accordingly: | ||||
• | The Company’s consolidated statement of income for the year ended December 31, 2014 consists of the consolidated results of NOW for the period from May 31 through December 31 and the combined results of NOW for the period from January 1, 2014 through May 30, 2014. | |||
• | The Company’s consolidated balance sheet as of December 31, 2014 is presented on a consolidated basis, whereas the Company’s consolidated balance sheet as of December 31, 2013 was prepared on a combined basis. | |||
• | The Company’s consolidated statement of cash flows for the year ended December 31, 2014 consist of the consolidated results of NOW for the period from May 31 through December 31 and the combined results of NOW for the period from January 1, 2014 through May 30, 2014. | |||
The Company’s historical financial statements prior to May 31, 2014 were derived from the consolidated financial statements and accounting records of NOV and include assets, liabilities, revenues and expenses directly attributable to the Company’s operations. The assets and liabilities in the consolidated financial statements have been reflected on a historical cost basis, as immediately prior to the separation all of the assets and liabilities presented were wholly owned by NOV and were transferred within NOV. For the periods prior to the Spin-Off, the consolidated financial statements include expense allocations for certain functions provided by NOV as well as other NOV employees not solely dedicated to NOW, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, shared services, employee benefits and incentives and stock-based compensation. These expenses were allocated to NOW on the basis of direct usage when identifiable, with the remainder allocated on the basis of operating profit, headcount or other measures. | ||||
Actual costs that would have been incurred if NOW had been a stand-alone public company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. The Company’s historical financial statements prior to May 31, 2014 do not reflect the debt or interest costs it might have incurred if it had been a stand-alone entity. In addition, the Company expects to incur other costs, not reflected in its historical financial statements prior to May 31, 2014, as a result of being a separate publicly traded company. As a result, the Company’s historical financial statements prior to May 31, 2014 do not necessarily reflect what its financial position or results of operations would have been if it had been operated as a stand-alone public entity during the periods covered prior to May 31, 2014, and may not be indicative of the Company’s future results of operations and financial position. | ||||
The consolidated financial statements include certain assets and liabilities that have historically been held by NOV but which are specifically identifiable or otherwise allocable to the Company. The cash and cash equivalents held by NOV are not specifically identifiable to NOW and therefore were not allocated to it for any of the periods presented prior to the Spin-Off. Cash and equivalents in the Company’s consolidated balance sheets primarily represent cash held locally by entities included in its consolidated financial statements. Transfers of cash prior to the Spin-Off to and from NOV’s cash management system are reflected as a component of NOV net investment on the consolidated balance sheets. | ||||
Prior to the Spin-Off, all significant intercompany transactions between NOW and NOV were considered to be effectively settled for cash at the time the transaction was recorded. The total net effect of the settlement of these intercompany transactions is reflected in the consolidated statements of cash flow as a financing activity and in the consolidated balance sheet as NOV net investment. | ||||
Recently Issued Accounting Standards | ||||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-08 Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which is an update for Accounting Standards Codification Topic No. 205 “Presentation of Financial Statements” and Topic No. 360 “Property, Plant and Equipment’. This update changes the requirements of reporting discontinued operations. Under the amended guidance, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The amendments in this update are effective for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years, with early adoption permitted. The adoption of this update concerns presentation and disclosure only as it relates to the Company’s consolidated financial statements. The Company is currently assessing the impact of ASU No. 2014-08 on its financial position and results of operations. No material changes are expected upon adoption of this ASU. | ||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606. ASU 2014-09 affects any entity using GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The ASU provides two transition methods: | ||||
(i) retrospectively to each prior reporting period presented (ii) retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. The Company is currently assessing the impact of ASU No. 2014-09 on its financial position and results of operations. | ||||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies |
Cash and Cash Equivalents | |
Cash and Cash Equivalents consist of all highly liquid investments with maturities of three months or less at the date of purchase. | |
Fair Value of Financial Instruments | |
The carrying amounts of cash and cash equivalents, receivables and payables approximated fair value because of the relatively short maturity of these instruments. See Note 12 for the fair value of derivative financial instruments. | |
Inventories | |
Inventories consist of oilfield and industrial finished goods. Inventories are stated at the lower of cost or market and using average cost methods. Allowances for excess and obsolete inventories are determined based on the Company’s historical usage of inventory on-hand as well as its future expectations. | |
Property, Plant and Equipment | |
Property, plant and equipment are stated at cost. Expenditures for major improvements that extend the lives of property and equipment are capitalized while minor replacements, maintenance and repairs are charged to expense as incurred. Disposals are removed at cost less accumulated depreciation with any resulting gain or loss reflected in the results of operations for the respective period. Depreciation is provided using the straight-line method over the estimated useful lives of individual items. | |
Long-Lived Assets, Including Goodwill and Other Acquired Intangible Assets | |
The Company evaluates the recoverability of property, plant and equipment and amortizable intangible assets, at the asset level, for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. The Company has not recorded any such impairment charge during the years presented. | |
The Company reviews goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. The two-step goodwill impairment test is performed to review goodwill for impairment. The first step, identifying a potential impairment, compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the second step would need to be performed; otherwise, no further step is required. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying amount of the goodwill. Any excess of the goodwill carrying amount over the applied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. | |
In addition to the recoverability assessment, the Company routinely reviews the remaining estimated useful lives of property, plant and equipment and amortizable intangible assets. If the Company reduces the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. | |
Foreign Currency | |
The functional currency for most of the Company’s foreign operations is the local currency. The cumulative effects of translating the balance sheet accounts from the functional currency into the U.S. dollar at current exchange rates are included in accumulated other comprehensive income (loss). Revenues and expenses are translated at average exchange rates in effect during the period. Certain foreign operations use the U.S. dollar as the functional currency. Accordingly, financial statements of these foreign subsidiaries are remeasured to U.S. dollars for consolidation purposes using current rates of exchange for monetary assets and liabilities and historical rates of exchange for nonmonetary assets and related elements of expense. Revenue and expense elements are remeasured at rates that approximate the rates in effect on the transaction dates. For all operations, gains or losses from remeasuring foreign currency transactions into the functional currency are included in other income. Net foreign currency transaction losses were $2 million, $2 million and $3 million for the years ending December 31, 2014, 2013 and 2012, respectively, and are included in other income (expense) in the accompanying consolidated statements of income. | |
Revenue Recognition | |
The Company sells products through store fronts, on-site and eCommerce. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Generally, across every channel, these conditions are met when the product is shipped or picked up by the customer. Revenues are presented net of return allowances and include freight charges billed to customers. Sales tax collected from customers is excluded from revenue in the accompanying consolidated statements of income. | |
Cost of Products | |
Cost of products includes the cost of inventory sold and related items, such as vendor consideration, inventory allowances and shipping and handling and inbound and outbound freight. | |
Operating and Warehousing Costs | |
Operating and Warehousing Costs include branch location and distribution center expenses (including compensation, benefits and rent). | |
Vendor Consideration | |
The Company receives funds from vendors in the normal course of business, principally as a result of purchase volumes. Generally, these vendor funds do not represent the reimbursement of specific, incremental and identifiable costs incurred by the Company to sell the vendor’s product. Therefore, the Company treats these funds as a reduction of inventory when purchased and once these goods are sold to third parties the associated amount is credited to cost of sales. The Company develops accrual rates for vendor consideration based on the provisions of the arrangements in place, historical trends, purchases and future expectations. Due to the complexity and diversity of the individual vendor agreements, the Company performs analyses and reviews historical trends throughout the year and confirms actual amounts with select vendors to ensure the amounts earned are appropriately recorded. Amounts accrued throughout the year could be impacted if actual purchase volumes differ from projected annual purchase volumes, especially in the case of programs that provide for increased funding when graduated purchase volumes are met. | |
Income Taxes | |
The liability method is used to account for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized. | |
Concentration of Credit Risk | |
The Company grants credit to its customers, which operate primarily in the energy industry. Concentrations of credit risk are limited because the Company has a large number of geographically diverse customers, thus spreading trade credit risk. The Company controls credit risk through credit evaluations, credit limits and monitoring procedures. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral, but may require letters of credit for certain international sales. Credit losses are provided for in the financial statements. Allowances for doubtful accounts are determined based on a continuous process of assessing the Company’s portfolio on an individual customer basis taking into account current market conditions and trends. This process consists of a thorough review of historical collection experience, current aging status of the customer accounts, and financial condition of the Company’s customers. Based on a review of these factors, the Company will establish or adjust allowances for specific customers. No single customer represents more than 10% of the Company’s revenue. The Company’s top 20 customers in aggregate represent approximately one-third of the Company’s revenue. | |
Stock-Based Compensation | |
Compensation expense for the Company’s stock-based compensation plans is measured using the fair value method required by ASC Topic 718 “Compensation—Stock Compensation” (“ASC Topic 718”). Under this guidance the fair value of stock option grants and restricted stock is amortized to expense using the straight-line method over the shorter of the vesting period or the remaining employee service period. The Company provides compensation benefits to employees and non-employee directors under share-based payment arrangements. | |
Environmental Liabilities | |
When environmental assessments or remediations are probable and the costs can be reasonably estimated, remediation liabilities are recorded on an undiscounted basis and are adjusted as further information develops or circumstances change. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported and contingent amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Contingencies | |
The Company accrues for costs relating to litigation claims and other contingent matters, when such liabilities become probable and reasonably estimable. Such estimates may be based on advice from third parties or on management’s judgment, as appropriate. Revisions to contingent liabilities are reflected in income in the period in which different facts or information become known or circumstances change that affect the Company’s previous judgments with respect to the likelihood or amount of loss. Amounts paid upon the ultimate resolution of contingent liabilities may be materially different from previous estimates and could require adjustments to the estimated reserves to be recognized in the period such new information becomes known. | |
In circumstances where the most likely outcome of a contingency can be reasonably estimated, the Company accrues a liability for that amount. Where the most likely outcome cannot be estimated, a range of potential losses is established and if no one amount in that range is more likely than others, the low end of the range is accrued. |
Receivables_net
Receivables, net | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Receivables [Abstract] | |||||||||||||
Receivables, net | 3. Receivables, net | ||||||||||||
Receivables are recorded and carried at the original invoiced amount less an allowance for doubtful accounts. | |||||||||||||
Allowance for Doubtful Accounts | |||||||||||||
The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance. Activity in the allowance for doubtful accounts was as follows (in millions): | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Allowance for doubful accounts | |||||||||||||
Beginning balance | $ | 22 | $ | 15 | $ | 6 | |||||||
Net charge-offs | (7 | ) | (2 | ) | (5 | ) | |||||||
Provision | 4 | 9 | 14 | ||||||||||
Ending balance | $ | 19 | $ | 22 | $ | 15 | |||||||
Inventories_net
Inventories, net | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||
Inventories, net | 4. Inventories, net | ||||||||||||
Inventories consist of (in millions): | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Finished goods | $ | 988 | $ | 881 | $ | 1,047 | |||||||
Less: inventory reserves | (39 | ) | (31 | ) | (32 | ) | |||||||
Total | $ | 949 | $ | 850 | $ | 1,015 | |||||||
Inventory reserves: | |||||||||||||
Beginning balance | $ | 31 | $ | 32 | $ | 22 | |||||||
Charged to costs and expenses | 8 | 5 | 16 | ||||||||||
Write-offs | — | (6 | ) | (6 | ) | ||||||||
Ending balance | $ | 39 | $ | 31 | $ | 32 | |||||||
Property_Plant_and_Equipment
Property, Plant and Equipment | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||
Property, Plant and Equipment | 5. Property, Plant and Equipment | ||||||||||||
Property, plant and equipment consist of (in millions): | |||||||||||||
Estimated | December 31, | ||||||||||||
Useful Lives | 2014 | 2013 | |||||||||||
Information technology assets | 2-7 Years | $ | 49 | $ | 27 | ||||||||
Operating equipment | 3-15 Years | 51 | 57 | ||||||||||
Buildings and land (indefinite life) | 5-35 Years | 73 | 60 | ||||||||||
Construction in progress | 2 | 19 | |||||||||||
Total property, plant and equipment | 175 | 163 | |||||||||||
Less: accumulated depreciation | (51 | ) | (61 | ) | |||||||||
Property, plant and equipment, net | $ | 124 | $ | 102 | |||||||||
Depreciation expense was $16 million, $11 million and $8 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Accrued_Liabilities
Accrued Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Accrued Liabilities | 6. Accrued Liabilities | ||||||||
Accrued liabilities consist of (in millions): | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Compensation and other related expenses | $ | 39 | $ | 24 | |||||
Customer prepayments | 24 | 18 | |||||||
Taxes (non income) | 24 | 25 | |||||||
Other | 38 | 32 | |||||||
Total | $ | 125 | $ | 99 | |||||
Goodwill_and_Intangibles
Goodwill and Intangibles | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||
Goodwill and Intangibles | 7. Goodwill and Intangibles | ||||||||||||||||
The Company performed its annual impairment analysis for its goodwill during the fourth quarter of 2014 resulting in no impairment. The valuation techniques used in the annual test were consistent with those used during previous testing. The inputs used in the annual test were updated for current market conditions and forecasts. | |||||||||||||||||
Goodwill is identified by segment as follows (in millions): | |||||||||||||||||
United States | Canada | International | Total | ||||||||||||||
Balance at December 31, 2012 | $ | 204 | $ | 117 | $ | 22 | $ | 343 | |||||||||
Currency translation adjustments and other | (2 | ) | (8 | ) | — | (10 | ) | ||||||||||
Balance at December 31, 2013 | 202 | 109 | 22 | 333 | |||||||||||||
Additions | 20 | — | — | 20 | |||||||||||||
Currency translation adjustments and other | — | (8 | ) | 1 | (7 | ) | |||||||||||
Balance at December 31, 2014 | $ | 222 | $ | 101 | $ | 23 | $ | 346 | |||||||||
Identified intangible assets with determinable lives consist primarily of customer relationships, tradenames, trademarks and patents, and non-compete agreements acquired in acquisitions, and are being amortized on a straight-line basis over the estimated useful lives of 2-30 years. Amortization expense of identified intangibles is expected to be approximately $5 million in each of the next five years. | |||||||||||||||||
The net book values of identified intangible assets are identified by segment as follows (in millions): | |||||||||||||||||
United States | Canada | International | Total | ||||||||||||||
Balance at December 31, 2012 | $ | 53 | $ | 3 | $ | 18 | $ | 74 | |||||||||
Amortization | (3 | ) | (1 | ) | (2 | ) | (6 | ) | |||||||||
Balance at December 31, 2013 | 50 | 2 | 16 | 68 | |||||||||||||
Additions | 10 | — | — | 10 | |||||||||||||
Amortization | (3 | ) | (1 | ) | (1 | ) | (5 | ) | |||||||||
Balance at December 31, 2014 | $ | 57 | $ | 1 | $ | 15 | $ | 73 | |||||||||
Identified intangible assets by major classification consist of the following (in millions): | |||||||||||||||||
Accumulated | Net Book | ||||||||||||||||
Gross | Amortization | Value | |||||||||||||||
December 31, 2012: | |||||||||||||||||
Tradenames, trademarks and patents | $ | 63 | $ | (3 | ) | $ | 60 | ||||||||||
Customer relationships | 13 | (2 | ) | 11 | |||||||||||||
Other (covenant not to compete) | 4 | (1 | ) | 3 | |||||||||||||
Total identified intangibles | $ | 80 | $ | (6 | ) | $ | 74 | ||||||||||
December 31, 2013: | |||||||||||||||||
Tradenames, trademarks and patents | $ | 63 | $ | (6 | ) | $ | 57 | ||||||||||
Customer relationships | 13 | (3 | ) | 10 | |||||||||||||
Other (covenant not to compete) | 4 | (3 | ) | 1 | |||||||||||||
Total identified intangibles | $ | 80 | $ | (12 | ) | $ | 68 | ||||||||||
December 31, 2014: | |||||||||||||||||
Tradenames, trademarks and patents | $ | 61 | $ | (9 | ) | $ | 52 | ||||||||||
Customer relationships | 24 | (4 | ) | 20 | |||||||||||||
Other (covenant not to compete) | 5 | (4 | ) | 1 | |||||||||||||
Total identified intangibles | $ | 90 | $ | (17 | ) | $ | 73 | ||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | 8. Income Taxes | ||||||||||||
In connection with the Separation, the Company and NOV entered into a Tax Matters Agreement, dated as of May 29, 2014 (the “Tax Matters Agreement”), which governs the Company’s and NOV’s respective rights, responsibilities and obligations. The Tax Matters Agreement sets forth the Company and NOV’s rights and obligations related to the allocation of federal, state, local and foreign taxes for periods before and after the Spin-Off, as well as taxes attributable to the Spin-Off, and related matters such as the filing of tax returns and the conduct of IRS and other audits. Pursuant to the Tax Matters Agreement, NOV will prepare and file the consolidated federal income tax return, and any other tax returns that include both NOV and the Company for all taxable periods ending on or prior to May 30, 2014. NOV will indemnify and hold harmless the Company for any income tax liability for periods before the Separation date. The Company will prepare and file all tax returns that include solely the Company for all taxable periods ending after that date. Settlements of tax payments between NOV and the Company were generally treated as contributions from or distributions to NOV in periods prior to the Separation date. Following the Spin-Off, the Company maintains the amount legally due to the tax authorities and maintains a due to/from NOV, Inc. for taxes related to periods prior to the Spin-Off that NOV is responsible for. After NOV files the tax returns for 2014, we anticipate there will be a settlement under the Tax Matters Agreement related to income taxes for the period of 2014 prior to the Spin-Off. | |||||||||||||
The domestic and foreign components of income before income taxes were as follows (in millions): | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
United States | $ | 101 | $ | 161 | $ | 115 | |||||||
Foreign | 77 | 61 | 50 | ||||||||||
$ | 178 | $ | 222 | $ | 165 | ||||||||
The provision for income taxes for 2014, 2013, and 2012 consisted of the following: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
U.S. Federal: | |||||||||||||
Current | $ | 38 | $ | 48 | $ | 46 | |||||||
Deferred | 3 | 6 | (4 | ) | |||||||||
41 | 54 | 42 | |||||||||||
U.S. State: | |||||||||||||
Current | 4 | 4 | 4 | ||||||||||
Deferred | — | — | 1 | ||||||||||
4 | 4 | 5 | |||||||||||
Foreign | |||||||||||||
Current | 18 | 20 | 14 | ||||||||||
Deferred | (1 | ) | (3 | ) | (4 | ) | |||||||
17 | 17 | 10 | |||||||||||
Total current income tax provision | $ | 62 | $ | 75 | $ | 57 | |||||||
The reconciliation between the Company’s effective tax rate on income from continuing operations and the statutory tax rate is as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income tax expense (benefit) at federal statutory rate | $ | 62 | $ | 78 | $ | 58 | |||||||
Foreign income tax rate differential | (6 | ) | (5 | ) | (5 | ) | |||||||
State income tax, net of federal benefit | 3 | 3 | 2 | ||||||||||
Nondeductible expenses | 2 | 2 | 1 | ||||||||||
Foreign dividends, net of foreign tax credits | — | (1 | ) | 1 | |||||||||
Change in contingency reserve and other | 1 | (2 | ) | — | |||||||||
Income tax expense (benefit) | $ | 62 | $ | 75 | $ | 57 | |||||||
Significant components of the Company’s deferred tax assets and liabilities were as follows (in millions): | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Deferred tax assets: | |||||||||||||
Allowances and operating liabilities | $ | 2 | $ | 12 | $ | 10 | |||||||
Net operating loss carryforwards | 1 | 1 | — | ||||||||||
Book over tax depreciation | — | 2 | 1 | ||||||||||
Trade credit | 4 | 1 | — | ||||||||||
Bad debt reserve | 3 | 2 | 1 | ||||||||||
Inventory reserve | 9 | 11 | 12 | ||||||||||
Stock options | 12 | 5 | 4 | ||||||||||
Other | 3 | 2 | 1 | ||||||||||
Total deferred tax assets | 34 | 36 | 29 | ||||||||||
Deferred tax liabilities: | |||||||||||||
Tax over book depreciation | (2 | ) | (2 | ) | — | ||||||||
Intangible assets | (18 | ) | (14 | ) | (9 | ) | |||||||
Total deferred tax liabilities | (20 | ) | (16 | ) | (9 | ) | |||||||
Net deferred tax asset | $ | 14 | $ | 20 | $ | 20 | |||||||
Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance, the Company looked to the future reversal of existing taxable temporary differences, taxable income in carryback years, the feasibility of tax planning strategies and estimated future taxable income and determined a valuation allowance is not needed. The need for a valuation allowance can be affected by changes to tax laws, changes to statutory tax rates and changes to future taxable income estimates. | |||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions): | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Unrecognized tax benefit—January 1 | $ | — | $ | 2 | $ | 2 | |||||||
Gross increases—tax positions in prior period | — | — | — | ||||||||||
Gross decreases—tax positions in prior period | — | — | — | ||||||||||
Gross increases—tax positions in current period | — | — | — | ||||||||||
Settlement | — | — | — | ||||||||||
Lapse of statute of limitations | — | (2 | ) | — | |||||||||
Unrecognized tax benefit—December 31 | $ | — | $ | — | $ | 2 | |||||||
The Company does not anticipate that the total unrecognized tax benefits will significantly change due to the settlement of audits or the expiration of statutes of limitation within 12 months of this reporting date. | |||||||||||||
To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts are classified as a component of income tax expense in the financial statements consistent with the Company’s policy. During the year ended December 31, 2014, the Company did not record any income tax expense for interest and penalties related to uncertain tax positions. At December 31, 2014, the Company has not accrued any interest and penalties relating to unrecognized tax benefits. | |||||||||||||
The Company is subject to taxation in the United States, various states and foreign jurisdictions. The Company has significant operations in the United States and Canada and to a lesser extent in various other international jurisdictions including the United Kingdom, Indonesia, and Norway. Tax years that remain subject to examination by major tax jurisdictions vary by legal entity, but are generally open in the U.S. for the tax years ending after 2009 and outside the U.S. for the tax years ending after 2006. The Company is indemnified for any income tax expense exposures related to periods prior to the Separation. | |||||||||||||
In the United States, the Company has no net operating loss carryforwards as of December 31, 2014 and December 31, 2013. | |||||||||||||
Outside the United States, the Company has $4 million and $1 million of net operating loss carryforwards as of December 31, 2014 and December 31, 2013. The majority of net operating loss carryforwards will expire between 2023 and 2024 | |||||||||||||
Also in the United States, the Company has $0 and $3 million of excess foreign tax credits as of December 31, 2014 and December 31, 2013. | |||||||||||||
In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. As of December 31, 2014, the amount of unremitted earnings was approximately $187 million. The Company has not, nor do they anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with domestic debt service requirements. These earnings are considered to be permanently reinvested and no provision for U.S. federal and state income taxes has been made. Distribution of these earnings in the form of dividends or otherwise could result in U.S. federal taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable in various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is not practical; however, unrecognized foreign tax credit carryforwards would be available to reduce some portion of the U.S. liability. | |||||||||||||
Because of the number of tax jurisdictions in which the Company operates, its effective tax rate can fluctuate as operations and the local country tax rates fluctuate. The Company is also subject to audits by federal, state and foreign jurisdictions which may result in proposed assessments. The Company’s future tax provision will reflect any favorable or unfavorable adjustments to its estimated tax liabilities when resolved. The Company is unable to predict the outcome of these matters. However, the Company believes that none of these matters will have a material adverse effect on the results of operations or financial condition of the Company. |
Credit_Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
Credit Facility | 9. Credit Facility |
On April 18, 2014, the Company entered into a five-year senior unsecured revolving credit facility with a syndicate of lenders, including Wells Fargo Bank, National Association, as administrative agent. The credit facility became available to the Company on June 2, 2014 as a result of the satisfaction of customary conditions, including the consummation of the Separation. The credit facility is for an aggregate principal amount of up to $750 million with sub-facilities for standby letters of credit and swingline loans, each with a sublimit of $150 million and $50 million, respectively. The Company has the right, subject to certain conditions, to increase the aggregate principal amount of commitments under the credit facility by $250 million. Borrowings under the credit facility will bear interest at a base rate (as defined in the credit agreement) plus an applicable interest margin based on the Company’s capitalization ratio. The base rate is calculated as the highest of (a) the Federal Funds Rate, as published by the Federal Reserve Bank of New York, plus 1/2 of 1%, (b) the prime commercial lending rate of the administrative agent, as established from time to time at its principal U.S. office, and (c) the Daily One-Month LIBOR (as defined in the credit agreement) plus 1%. The Company also has the option for borrowings under the credit facility to bear interest based on LIBOR (as defined in the credit agreement). The credit facility is unsecured and guaranteed by the Company’s domestic subsidiaries. The credit agreement also provides for customary fees, including administrative agent fees, commitment fees, fees in respect of letters of credit and other fees. The annual commitment fee ranges from 25 to 35 basis points of the unused portion of the credit facility. The line of credit expires in April 2019, unless extended. | |
The credit facility contains usual and customary affirmative and negative covenants for credit facilities of this type including financial covenants consisting of (a) a maximum capitalization ratio (as defined in the credit agreement) of 50% and (b) a minimum interest coverage ratio (as defined in the credit agreement) of no less than 3:1. As of December 31, 2014, the Company was in compliance with all covenants. | |
As of December 31, 2014, the Company had no borrowings against its revolving credit facility and a $2 million letter of credit was issued under its revolving credit facility. The letter of credit was issued in conjunction with casualty insurance expiring May 30, 2015. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies | 10. Commitments and Contingencies | ||||
The Company is involved in various claims, regulatory agency audits and pending or threatened legal actions involving a variety of matters. At December 31, 2014, the Company recorded an immaterial amount for contingent liabilities representing all contingencies believed to be probable. The Company has also assessed the potential for additional losses above the amounts accrued as well as potential losses for matters that are not probable but are reasonably possible. The total potential loss on these matters cannot be determined; however, in the Company’s opinion, any ultimate liability, to the extent not otherwise recorded or accrued for, will not materially affect the Company’s financial position, cash flow or results of operations. | |||||
To the extent a resolution is not negotiated as anticipated, the Company cannot predict the timing or effect that any resulting government actions may have on the Company’s financial position, cash flow or results of operations. These estimated liabilities are based on the Company’s assessment of the nature of these matters, their progress toward resolution, the advice of legal counsel and outside experts as well as management’s intention and experience. | |||||
The Company’s business is affected both directly and indirectly by governmental laws and regulations relating to the oilfield service industry in general, as well as by environmental and safety regulations that specifically apply to the Company’s business. Although the Company has not incurred material costs in connection with its compliance with such laws, there can be no assurance that other developments, such as new environmental laws, regulations and enforcement policies hereunder may not result in additional, presently unquantifiable, costs or liabilities to the Company. | |||||
The Company leases certain facilities and equipment under operating leases that expire at various dates through 2024. 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 $61 million, $70 million and $50 million in 2014, 2013 and 2012, respectively. | |||||
Future minimum lease commitments under noncancellable operating leases with initial or remaining terms of one year or more at December 31, 2014, are payable as follows (in millions): | |||||
2015 | $ | 39 | |||
2016 | 27 | ||||
2017 | 18 | ||||
2018 | 12 | ||||
2019 | 7 | ||||
Thereafter | 22 | ||||
Total future lease commitments | $ | 125 | |||
Related_Party_Transactions_and
Related Party Transactions and Net Parent Company Investment | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Related Party Transactions [Abstract] | |||||||||||||
Related Party Transactions and Net Parent Company Investment | 11. Related Party Transactions and Net Parent Company Investment | ||||||||||||
Related Party Transactions | |||||||||||||
In connection with the Spin-Off, the Company and NOV entered into a Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, and Transition Service Agreement each dated May 29, 2014. | |||||||||||||
The Separation and Distribution Agreement contains the key provisions related to the separation from NOV and the distribution of the Company’s common stock to NOV shareholders. The Separation and Distribution Agreement separated the assets related to the Company’s business from NOV, along with liabilities related to such assets, which now reside with the Company. In general, the Company agrees to indemnify NOV from liabilities arising from the Company’s business and assets, and NOV agrees to indemnify the Company from liabilities arising from NOV’s business and assets (that remained with NOV), except as otherwise provided in such agreement. | |||||||||||||
The Tax Matters Agreement (See Note 8) governs the respective rights, responsibilities and obligations of each party with respect to taxes and tax benefits, the filing of tax returns, the control of audits, restrictions to preserve the tax-free status of the Spin-Off and other tax matters. | |||||||||||||
The Employee Matters Agreement governs the Company and NOV’s compensation and employee benefit obligations with respect to current and former employees of each company, and generally allocates liabilities and responsibilities relating to employee compensation and benefit plans and programs. Such agreement also provides the adjustment mechanisms to be applied as a result of the Spin-Off to convert outstanding NOV equity awards held by Company employees to Company awards. | |||||||||||||
The Transition Service Agreement provides for transitional services in the areas of information technology, tax, accounting, finance and employee benefits and are initially short-term in nature. The charges under these transition service agreements will be at cost-based rates. For the period from May 31 through September 30, 2014, the net amount of less than $1 million incurred by the Company under this agreement was recognized in selling, general and administrative in the consolidated statements of income. No amounts were reflected in the consolidated statements of income prior to May 31, 2014, as the Transition Service Agreement was not effective prior to the Spin-Off. | |||||||||||||
Allocation of General Corporate Expenses | |||||||||||||
For the periods prior to the Spin-Off, the consolidated financial statements include expense allocations for certain functions provided by NOV as well as other NOV employees not solely dedicated to NOW, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, shared services, employee benefits and incentives, and stock-based compensation. These expenses were allocated to NOW on the basis of direct usage when identifiable, with the remainder allocated on the basis of operating profit, headcount or other measures. During 2014, 2013 and 2012, NOW Inc. was allocated $6 million, $9 million and $7 million, respectively, of general corporate expenses incurred by NOV which is included within selling, general and administrative expenses in the consolidated statements of income. Allocations from NOV discontinued as of May 30, 2014. | |||||||||||||
NOV Net Investment | |||||||||||||
Prior to the Spin-Off, net contributions from NOV invested equity were included within NOV net investment on the consolidated balance sheets and statements of cash flows. The components of the change in NOV net investment are as follows (in millions): | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net contribution from (distributions to) NOV per the consolidated statements of stockholders’ equity | $ | 138 | $ | (151 | ) | $ | 1,293 | ||||||
Non-cash adjustments: | |||||||||||||
Stock-based compensation | (5 | ) | — | ||||||||||
Net transfer of assets and liabilities from NOV | (8 | ) | — | ||||||||||
Less: Net income attributable to NOV net investment prior to the Spin-Off | (58 | ) | (147 | ) | (108 | ) | |||||||
Net contributions from (distributions to) NOV per the consolidated statements of cash flows | $ | 67 | $ | (298 | ) | $ | 1,185 | ||||||
As a result of the separation and distribution, certain adjustments were made to true-up the differences between the book basis and the tax basis of certain assets and liabilities, the loss of certain tax credits that were no longer eligible for use, and liabilities assumed by NOV, which resulted in a net $5 million adjustment to current and deferred tax balances with an offsetting reduction to APIC. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 12. Derivative Financial Instruments |
The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed by using derivative instruments is foreign currency exchange rate risk. Forward contracts against foreign currencies may be entered into to manage (i) foreign currency exchange rate risk on forecasted revenues and expenses denominated in currencies other than the functional currency of the operating unit, (ii) foreign currency exchange rate risk on recognized nonfunctional currency monetary accounts, or (iii) foreign-currency exchange rate risk on unrecognized firm commitments. | |
The Company records all derivative financial instruments at their fair value in its consolidated balance sheets. None of the derivative financial instruments that the Company holds are designated as either a fair value hedge or cash flow hedge. For derivative instruments that are non-designated, the gain or loss on the derivative instrument subject to the economically-hedged risk (i.e. unrecognized firm commitments) is recognized in other income in current earnings. | |
The Company has entered into forward exchange contracts which have terms of less than a year to economically hedge foreign currency exchange rate risk on recognized nonfunctional currency monetary accounts denominated in pounds sterling and foreign-currency exchange rate risk on unrecognized firm commitments denominated in U.S. Dollars. The purpose of the Company’s foreign currency economic hedging activities are to economically-hedge the Company’s risk from (i) forecasted cash flows associated with nonfunctional currency monetary accounts and (ii) changes in the fair value of a non-functional currency denominated unrecognized firm commitment attributable to changes in the rates between the non-functional currency and the functional currency. | |
The Company has determined that the fair value of its derivative financial instruments are determined using level 2 inputs (inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability) in the fair value hierarchy as the fair value is based on publicly available foreign exchange rates at each financial reporting date. At December 31, 2014, the net fair value of the Company’s foreign currency forward contracts totaled a net asset of less than $1 million and is included in prepaid and other current assets in the consolidated balance sheets. | |
At December 31, 2014, the Company’s financial instruments do not contain any credit-risk-related or other contingent features that could cause accelerated payments when the Company’s financial instruments are in net liability positions. The Company does not use derivative financial instruments for trading or speculative purposes. | |
The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed by using derivative instruments is foreign currency exchange rate risk. Forward contracts against various foreign currencies are entered into to manage the foreign currency exchange rate risk on forecasted revenues and expenses denominated in currencies other than the functional currency of the operating unit (cash flow hedge). Other forward exchange contracts against various foreign currencies are entered into to manage the foreign currency exchange rate risk associated with certain firm commitments denominated in currencies other than the functional currency of the operating unit (fair value hedge). In addition, the Company will enter into non-designated forward contracts against various foreign currencies to manage the foreign currency exchange rate risk on recognized nonfunctional currency monetary accounts (non-designated hedge). | |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Equity [Abstract] | |||||
Accumulated Other Comprehensive Income (Loss) | 13. Accumulated Other Comprehensive Income (Loss) | ||||
The components of accumulated other comprehensive income (loss) are as follows (in millions): | |||||
Currency | |||||
Translation | |||||
Adjustments | |||||
Balance at December 31, 2013 | $ | — | |||
Accumulated other comprehensive income (loss) before reclassifications | (45 | ) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | — | ||||
Balance at December 31, 2014 | $ | (45 | ) | ||
The Company’s reporting currency is the U.S. dollar. A majority of the Company’s international entities in which there is a substantial investment have the local currency as their functional currency. As a result, currency translation adjustments resulting from the process of translating the entities’ financial statements into the reporting currency are reported in Other Comprehensive Income or Loss in accordance with ASC Topic 830 “Foreign Currency Matters” (“ASC Topic 830”). |
Business_Segments
Business Segments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Business Segments | 14. Business Segments | ||||||||||||||||
The Company has four principal operating segments, which are the (1) United States Energy branches, (2) United States Supply Chain locations, (3) Canada and (4) International. These operating segments were determined based primarily on the geographical markets and secondarily on the distribution channel of the products and services offered. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company’s chief executive officer has been identified as the chief operating decision maker. The Company’s chief operating decision maker directs the allocation of resources to operating segments based on various metrics of each respective operating segment. The allocation of resources across the operating segments is dependent upon, among other factors, the operating segment’s historical operating margins; the operating segment’s historical or future expected return on capital; outlook within a specific oilfield market; opportunities to grow profitability through new technology, new products or new customer accounts; confidence in management; competitive landscape and intensity; etc. | |||||||||||||||||
The Company has determined that there are three reportable segments: (1) United States, (2) Canada and (3) International. The United States Energy branches and United States Supply Chain locations operating segments were not separately reported as they exhibit similar long term economic characteristics, the nature of the products offered and services offered are similar, purchase many identical products from outside vendors, have similar customers, sell products directly to end-users and operate in similar regulatory environments. | |||||||||||||||||
United States | |||||||||||||||||
The Company has more than 200 locations in the U.S., which are geographically positioned to best serve the upstream, midstream and downstream energy and industrial markets. | |||||||||||||||||
Canada | |||||||||||||||||
The Company has a network of over 70 locations in the Canadian oilfield, predominantly in the oil rich provinces of Alberta and Saskatchewan in Western Canada. The Company’s Canadian segment primarily serves the energy exploration, production and drilling business. | |||||||||||||||||
International | |||||||||||||||||
The Company operates in over 20 countries and serves the needs of its international customers from more than 30 locations outside of the U.S. and Canada, all of which are strategically located in major oil and gas development areas. The Company’s International segment primarily serves the energy exploration, production and drilling business. | |||||||||||||||||
The following table presents financial information for each of the Company’s reportable segments as of and for the year ended December 31 (in millions): | |||||||||||||||||
United States | Canada | International | Total | ||||||||||||||
2014 | |||||||||||||||||
Revenue | $ | 2,793 | $ | 669 | $ | 643 | $ | 4,105 | |||||||||
Operating profit | 89 | 47 | 45 | 181 | |||||||||||||
Depreciation and amortization | 16 | 3 | 2 | 21 | |||||||||||||
Long-lived assets: | |||||||||||||||||
Property, plant and equipment, net | 101 | 20 | 3 | 124 | |||||||||||||
Goodwill | 222 | 101 | 23 | 346 | |||||||||||||
Intangibles, net | 58 | 1 | 14 | 73 | |||||||||||||
Total assets | 1,735 | 500 | 361 | 2,596 | |||||||||||||
2013 | |||||||||||||||||
Revenue | $ | 2,863 | $ | 773 | $ | 660 | $ | 4,296 | |||||||||
Operating profit | 134 | 47 | 43 | 224 | |||||||||||||
Depreciation and amortization | 11 | 3 | 3 | 17 | |||||||||||||
Long-lived assets: | |||||||||||||||||
Property, plant and equipment, net | 86 | 13 | 3 | 102 | |||||||||||||
Goodwill | 202 | 109 | 22 | 333 | |||||||||||||
Intangibles, net | 50 | 2 | 16 | 68 | |||||||||||||
Total assets | 1,582 | 411 | 190 | 2,183 | |||||||||||||
2012 | |||||||||||||||||
Revenue | $ | 2,257 | $ | 591 | $ | 566 | $ | 3,414 | |||||||||
Operating profit | 94 | 37 | 37 | 168 | |||||||||||||
Depreciation and amortization | 7 | 2 | 3 | 12 | |||||||||||||
Long-lived assets: | |||||||||||||||||
Property, plant and equipment, net | 40 | 16 | 5 | 61 | |||||||||||||
Goodwill | 204 | 117 | 22 | 343 | |||||||||||||
Intangibles, net | 53 | 3 | 18 | 74 | |||||||||||||
Total assets | 1,603 | 549 | 221 | 2,373 | |||||||||||||
The following table presents a comparison of the approximate sales mix in the principal product categories (in millions): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Product Category | |||||||||||||||||
Drilling and production | $ | 991 | $ | 987 | $ | 860 | |||||||||||
Pipe | 723 | 845 | 621 | ||||||||||||||
Valves | 801 | 839 | 569 | ||||||||||||||
Fittings and flanges | 667 | 664 | 522 | ||||||||||||||
Mill tool, MRO, safety and other | 923 | 961 | 842 | ||||||||||||||
Total | $ | 4,105 | $ | 4,296 | $ | 3,414 | |||||||||||
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Earnings Per Share | 15. Earnings Per Share | ||||||||||||
In conjunction with the Spin-Off, NOV distributed to its stockholders all 107,053,031 shares of common stock of NOW Inc. after the market closed on May 30, 2014. Each NOV stockholder received one share of NOW common stock for every four shares of NOV common stock held at the close of business on the record date of May 22, 2014 and not sold prior to close of business May 30, 2014. On June 2, 2014, NOW Inc. stock began trading the “regular-way” on the New York Stock Exchange under the symbol “DNOW”. | |||||||||||||
Basic earnings per share is based on net income attributable to the Company’s earnings and is calculated based upon the daily weighted-average number of common shares outstanding during the periods presented. Also, this calculation includes fully vested stock and unit awards that have not yet been issued as common stock. Diluted EPS includes the above, plus unvested stock, unit or option awards granted and vested unexercised stock options, but only to the extent these instruments dilute earnings per share. | |||||||||||||
For comparative purposes, and to provide a more meaningful calculation of weighted-average shares outstanding, the Company has assumed the 107,053,031 shares of common stock of NOW Inc. that was distributed on May 30, 2014 to be outstanding as of the beginning of each period prior to the Spin-Off presented in the calculation of weighted-average shares. In addition, the Company has assumed the dilutive securities outstanding at May 30, 2014, were also outstanding for each of the periods prior to the Spin-Off presented. | |||||||||||||
For the year ended December 31, 2014, 2,552,292 stock options, RSAs and RSUs were excluded from the computation of diluted earnings per share due to their antidilutive effect. | |||||||||||||
Year Ended December 31, | |||||||||||||
(In millions, except share data) | 2014 | 2013 | 2012 | ||||||||||
Numerator for basic and diluted net income per share attributable to the Company’s stockholders: | |||||||||||||
Net income attributable to the Company | $ | 116 | $ | 147 | $ | 108 | |||||||
Less: net income attributable to nonvested shares | (1 | ) | — | — | |||||||||
Net income attributable to the Company’s stockholders | $ | 115 | $ | 147 | $ | 108 | |||||||
Denominator for basic net income per share attribtable to the Company’s stockholders: | |||||||||||||
Weighted average common shares outstanding | 107,058,843 | 107,053,031 | 107,053,031 | ||||||||||
Effect of dilutive securities: Dilutive effect of stock based compensation | 497,301 | 415,837 | 415,837 | ||||||||||
Denominator for diluted net income per share attributable to the Company’s stockholders: | 107,556,144 | 107,468,868 | 107,468,868 | ||||||||||
Earnings per share attributable to the Company’s stockholders: | |||||||||||||
Basic | $ | 1.07 | $ | 1.37 | $ | 1.01 | |||||||
Diluted | $ | 1.06 | $ | 1.36 | $ | 1 | |||||||
ASC Topic 260, “Earnings Per Share” (“ASC Topic 260”) requires companies with unvested participating securities to utilize a two-class method for the computation of net income attributable to the Company per share. The two-class method requires a portion of net income attributable to the Company to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, if declared. Net income attributable to the Company allocated to these participating securities was approximately $1 million, $0 million, and $0 million for the years ended December 31, 2014, 2013 and 2012, respectively, and therefore excluded from net income attributable to the Company per share calculation. |
Stockbased_Compensation_and_Ou
Stock-based Compensation and Outstanding Awards | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock-based Compensation and Outstanding Awards | 16. Stock-based Compensation and Outstanding Awards | ||||||||||||
Prior to the Spin-Off, the Company participated in NOV’s stock-based compensation plan known as the National Oilwell Varco, Inc. Long-Term Incentive Plan (the “NOV Plan”) and the Company’s employees were issued NOV equity awards. Under the NOV Plan, the Company’s employees were granted stock options, restricted stock units (RSUs), performance share awards (PSAs) and/or restricted stock awards (RSAs). | |||||||||||||
In connection with the Spin-Off, the Company established the NOW Inc. Long-Term Incentive Plan (the “Plan”). The Plan was adopted by the Company’s board of directors and approved by NOV, as the Company’s sole stockholder, on May 1, 2014. Under the terms of the Plan, 16 million shares of Company common stock were authorized for grant under the Plan. In connection with the Spin-Off, stock-based compensation awards granted under the NOV Plan and held by Company employees as of May 30, 2014, were adjusted or substituted as follows. These adjustments were intended to preserve the intrinsic value of the awards on May 30, 2014. | |||||||||||||
• | Stock option awards held by Company employees were replaced with substitute awards to purchase NOW common stock. | ||||||||||||
• | Unvested RSAs and RSUs under the NOV plan were replaced with adjusted, substitute awards for NOW RSAs or RSUs, as applicable. | ||||||||||||
• | PSAs received were replaced entirely with substitute NOW RSAs. | ||||||||||||
Stock based compensation expense recognized in the years ended December 31, 2014, 2013 and 2012 totaled $18 million, $6 million and $6 million, respectively. Adjustment and substitution of the awards did not result in additional compensation expense. | |||||||||||||
A summary of stock option activity under the Plan as of December 31, 2014, and changes from May 30, 2014 through December 31, 2014 are presented below: | |||||||||||||
Options | Shares | Weighted-Average | Aggregate | ||||||||||
Exercise Price | Intrinsic Value | ||||||||||||
(in millions) | |||||||||||||
Outstanding as of May 30, 2014 | 3,599,654 | $ | 30.85 | ||||||||||
Granted | — | — | |||||||||||
Forfeited | (39,855 | ) | 31.36 | ||||||||||
Exercised or settled | (14,280 | ) | 27.49 | ||||||||||
Expired or canceled | |||||||||||||
Outstanding as of December 31, 2014 | 3,545,519 | $ | 30.86 | $ | 2 | ||||||||
Exercisable at December 31, 2014 | 1,589,126 | $ | 30.61 | $ | 2 | ||||||||
All stock option awards presented in this table are for NOW stock only. | |||||||||||||
The weighted-average remaining contractual terms of outstanding options and exercisable options at December 31, 2014, were 7.6 years and 6.4 years, respectively. The total intrinsic value of options exercised for the period from May 30, 2014 through December 31, 2014 was less than $1 million. | |||||||||||||
A summary of the status of the Company’s nonvested shares as of December 31, 2014, and changes for the period from May 30, 2014 through December 31, 2014 are presented below: | |||||||||||||
RSAs / RSUs | Shares | Weighted-Average | |||||||||||
Grant-Date Fair | |||||||||||||
Value | |||||||||||||
Nonvested as of May 30, 2014 | 1,034,055 | $ | 31.94 | ||||||||||
Granted | 1,422,708 | 29.02 | |||||||||||
Vested | — | — | |||||||||||
Forfeited | (9,825 | ) | 31.59 | ||||||||||
Expired or canceled | — | — | |||||||||||
Nonvested as of December 31, 2014 | 2,446,938 | $ | 30.24 | ||||||||||
All RSUs and RSAs presented in this table are for NOW stock only. | |||||||||||||
Awards granted in connection with the adjustment and substitution of awards originally issued under the NOV Plan were deducted from the number of NOW shares of common stock available for grant under the Plan. As of December 31, 2014, unrecognized compensation cost related to stock option awards was $12 million, which is expected to be recognized over a weighted average period of 1.8 years. Unrecognized compensation cost related to RSU and RSA awards was $57 million, which is expected to be recognized over a weighted average period of 4.6 years. | |||||||||||||
The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise activity. The use of the Black-Scholes options-pricing model requires the use of extensive actual employee exercise activity data and the use of a number of complex assumptions including expected volatility, risk-free interest rate, expected dividends and expected term. | |||||||||||||
Though NOW Inc. did not grant any new options in 2014 after the Spin-Off, the following table provides the significant assumptions used to calculate the grant date fair market values of options granted prior to the Spin-Off over the years shown below, as calculated using the Black-Scholes options-pricing model. | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Valuation Assumptions: | |||||||||||||
Expected volatility | 50 | % | 50.1 | % | 51.7 | % | |||||||
Risk-free interest rate | 0.9 | % | 0.9 | % | 0.9 | % | |||||||
Expected dividends | $ | 0.75 | $ | 0.75 | $ | 0.57 | |||||||
Expected term (in years) | 3.4 | 3.4 | 3.2 | ||||||||||
Expected volatility was based on NOV’s actual volatility for traded options for the past 10 years prior to grant date. The risk-free interest rate assumption was based on observed interest rates appropriate for the term of the employee stock options. The expected dividend assumption was based on NOV’s history and expectation of dividend payouts. The estimated expected term was based on NOV’s actual employee exercise activity for the past ten years. As stock-based compensation expense recognized in the consolidated statements of income for 2014 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. ASC Topic 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on historical experience. |
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Quarterly Financial Data (Unaudited) | 17. Quarterly Financial Data (Unaudited) | ||||||||||||||||
Summarized quarterly results, were as follows (in millions, except per share data): | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||
Revenue | $ | 1,077 | $ | 952 | $ | 1,070 | $ | 1,006 | |||||||||
Operating expenses | |||||||||||||||||
Cost of products | 869 | 759 | 857 | 801 | |||||||||||||
Operating and warehousing costs | 102 | 105 | 108 | 110 | |||||||||||||
Selling, general and administrative | 44 | 45 | 55 | 69 | |||||||||||||
Operating profit | 62 | 43 | 50 | 26 | |||||||||||||
Other income | — | — | (1 | ) | (2 | ) | |||||||||||
Income before income taxes | 62 | 43 | 49 | 24 | |||||||||||||
Provision for income taxes | 21 | 16 | 17 | 8 | |||||||||||||
Net income | $ | 41 | $ | 27 | $ | 32 | $ | 16 | |||||||||
Earnings per share | |||||||||||||||||
Basic earnings per common share | $ | 0.38 | $ | 0.25 | $ | 0.3 | $ | 0.15 | |||||||||
Diluted earnings per common share | $ | 0.38 | $ | 0.25 | $ | 0.3 | $ | 0.14 | |||||||||
Weighted-average common shares outstanding, basic | 107 | 107 | 107 | 107 | |||||||||||||
Weighted-average common shares outstanding, diluted | 107 | 108 | 108 | 108 | |||||||||||||
Year ended December 31, 2013 | |||||||||||||||||
Revenue | $ | 1,072 | $ | 1,070 | $ | 1,113 | $ | 1,041 | |||||||||
Operating expenses | |||||||||||||||||
Cost of products | 874 | 874 | 907 | 844 | |||||||||||||
Operating and warehousing costs | 101 | 103 | 104 | 104 | |||||||||||||
Selling, general and administrative | 39 | 40 | 39 | 43 | |||||||||||||
Operating profit | 58 | 53 | 63 | 50 | |||||||||||||
Other income | 2 | 2 | (4 | ) | (2 | ) | |||||||||||
Income before income taxes | 60 | 55 | 59 | 48 | |||||||||||||
Provision for income taxes | 19 | 22 | 20 | 14 | |||||||||||||
Net income | $ | 41 | $ | 33 | $ | 39 | $ | 34 | |||||||||
Earnings per share | |||||||||||||||||
Basic earnings per common share | $ | 0.37 | $ | 0.31 | $ | 0.37 | $ | 0.32 | |||||||||
Diluted earnings per common share | $ | 0.37 | $ | 0.31 | $ | 0.36 | $ | 0.32 | |||||||||
Weighted-average common shares outstanding, basic | 107 | 107 | 107 | 107 | |||||||||||||
Weighted-average common shares outstanding, diluted | 107 | 107 | 107 | 107 | |||||||||||||
Employee_Bargaining_Agreements
Employee Bargaining Agreements and Benefit Plans | 12 Months Ended |
Dec. 31, 2014 | |
Postemployment Benefits [Abstract] | |
Employee Bargaining Agreements and Benefit Plans | 18. Employee Bargaining Agreements and Benefit Plans |
Collective bargaining agreements | |
At December 31, 2014 the company had more than 5,000 employees in total, of which approximately 500 were temporary employees. Less than one percent of the Company’s employees in the U.S. are subject to collective bargaining agreements. Some of the Company’s employees in various foreign locations are subject to collective bargaining agreements. | |
Benefit plans | |
The Company has benefit plans covering substantially all of its employees. Defined-contribution benefit plans cover most of the U.S. and Canadian employees, and benefits are based on years of service, a percentage of current earnings and matching of employee contributions. For the years ended December 31, 2014, 2013 and 2012, expenses for defined-contribution plans were $13 million, $14 million, and $6 million, respectively, and all funding is current. The Company sponsors one defined benefit plan in the UK which is frozen. This plan as of December 31, 2014 has a projected benefit obligation of $4 million and plan assets of $5 million. The net asset is presented within other assets on the consolidated balance sheets. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2014 | |
Business Combinations [Abstract] | |
Acquisitions | 19. Acquisitions |
In 2014, the Company completed three acquisitions for an aggregate purchase price consideration of approximately $36 million. These acquisitions expand NOW’s market in the United States. The Company completed its preliminarily valuations as of the acquisition date of the acquired net assets and recognized goodwill of $20 million and intangible assets of $10 million. The purchase price consideration is subject to customary post-closing working capital adjustments that could ultimately affect the amount of purchase price consideration and goodwill recognized. We have not presented supplementary pro forma financial information for 2013 because these acquisitions were immaterial to the results of the Company. |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Policies) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Accounting Policies [Abstract] | ||||
Nature of Operations | Nature of Operations | |||
NOW Inc. (“NOW” or the “Company”) is a holding company headquartered in Houston, Texas that was incorporated in Delaware on November 22, 2013. NOW operates primarily under the DistributionNOW and Wilson Export brands. NOW is a global distributor of energy products as well as products for industrial applications through its locations in the U.S., Canada and internationally which are geographically positioned to serve the energy and industrial markets in over 100 countries. NOW’s energy product offerings are used in the energy industry including upstream drilling and completion, exploration and production, midstream infrastructure development and downstream petroleum refining – as well as in other industries, such as chemical processing, power generation and industrial manufacturing operations. The industrial distribution portion of NOW’s business targets a diverse range of manufacturing and facilities across numerous industries and end markets. NOW also provides supply chain management to drilling contractors, E&P operators, midstream operators, downstream energy and industrial manufacturing companies. NOW’s supplier network consists of thousands of vendors in approximately 40 countries. | ||||
The Separation | The Separation | |||
On May 1, 2014, the National Oilwell Varco, Inc. (“NOV”) Board of Directors approved the Spin-Off (the “Spin-Off” or “Separation”) of its distribution business into an independent, publicly traded company named NOW Inc. In accordance with a separation and distribution agreement, the two companies were separated by NOV distributing to its stockholders 107,053,031 shares of common stock of the Company after the market closed on May 30, 2014. Each NOV stockholder received one share of NOW common stock for every four shares of NOV common stock held at the close of business on the record date of May 22, 2014 and not sold prior to close of business on May 30, 2014. Fractional shares of NOW common stock were not distributed and any fractional shares of NOW common stock otherwise issuable to a NOV stockholder were sold in the open market on such stockholder’s behalf, and such stockholder received a cash payment with respect to that fractional share. In conjunction with the separation, NOV received an opinion from its legal counsel to the effect that, based on certain facts, assumptions, representations and undertakings, for U.S. federal income tax purposes, the distribution of NOW common stock and certain related transactions generally was not taxable to NOV or U.S. holders of NOV common stock, except in respect to cash received in lieu of fractional shares, which generally will be taxable to such holders as a capital gain. Following the separation, NOW became an independent, publicly traded company as NOV had no ownership interest in NOW. Each company has separate public ownership, boards of directors and management. A Registration Statement on Form 10, as amended, relating to the Spin-Off was filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) and was declared effective on May 13, 2014. On June 2, 2014, NOW stock began trading the “regular-way” on the New York Stock Exchange under the symbol “DNOW”. | ||||
Basis of Presentation | Basis of Presentation | |||
All financial information presented before the Spin-Off represents the combined results of operations, financial position and cash flows for the Company and all financial information presented after the Spin-Off represents the consolidated results of operations, financial position and cash flows for the Company. Accordingly: | ||||
• | The Company’s consolidated statement of income for the year ended December 31, 2014 consists of the consolidated results of NOW for the period from May 31 through December 31 and the combined results of NOW for the period from January 1, 2014 through May 30, 2014. | |||
• | The Company’s consolidated balance sheet as of December 31, 2014 is presented on a consolidated basis, whereas the Company’s consolidated balance sheet as of December 31, 2013 was prepared on a combined basis. | |||
• | The Company’s consolidated statement of cash flows for the year ended December 31, 2014 consist of the consolidated results of NOW for the period from May 31 through December 31 and the combined results of NOW for the period from January 1, 2014 through May 30, 2014. | |||
The Company’s historical financial statements prior to May 31, 2014 were derived from the consolidated financial statements and accounting records of NOV and include assets, liabilities, revenues and expenses directly attributable to the Company’s operations. The assets and liabilities in the consolidated financial statements have been reflected on a historical cost basis, as immediately prior to the separation all of the assets and liabilities presented were wholly owned by NOV and were transferred within NOV. For the periods prior to the Separation, the consolidated financial statements include expense allocations for certain functions provided by NOV as well as other NOV employees not solely dedicated to NOW, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, shared services, employee benefits and incentives and stock-based compensation. These expenses were allocated to NOW on the basis of direct usage when identifiable, with the remainder allocated on the basis of operating profit, headcount or other measures. | ||||
Actual costs that would have been incurred if NOW had been a stand-alone public company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. The Company’s historical financial statements prior to May 31, 2014 do not reflect the debt or interest costs it might have incurred if it had been a stand-alone entity. In addition, the Company expects to incur other costs, not reflected in its historical financial statements prior to May 31, 2014, as a result of being a separate publicly traded company. As a result, the Company’s historical financial statements prior to May 31, 2014 do not necessarily reflect what its financial position or results of operations would have been if it had been operated as a stand-alone public entity during the periods covered prior to May 31, 2014, and may not be indicative of the Company’s future results of operations and financial position. | ||||
The consolidated financial statements include certain assets and liabilities that have historically been held by NOV but which are specifically identifiable or otherwise allocable to the Company. The cash and cash equivalents held by NOV are not specifically identifiable to NOW and therefore were not allocated to it for any of the periods presented prior to the Separation. Cash and equivalents in the Company’s consolidated balance sheets primarily represent cash held locally by entities included in its consolidated financial statements. Transfers of cash prior to the Separation to and from NOV’s cash management system are reflected as a component of NOV net investment on the consolidated balance sheets. | ||||
Prior to the Separation, all significant intercompany transactions between NOW and NOV were considered to be effectively settled for cash at the time the transaction was recorded. The total net effect of the settlement of these intercompany transactions is reflected in the consolidated statements of cash flow as a financing activity and in the consolidated balance sheet as NOV net investment. | ||||
Recently Issued Accounting Standards | Recently Issued Accounting Standards | |||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-08 Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which is an update for Accounting Standards Codification Topic No. 205 “Presentation of Financial Statements” and Topic No. 360 “Property, Plant and Equipment’. This update changes the requirements of reporting discontinued operations. Under the amended guidance, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The amendments in this update are effective for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years, with early adoption permitted. The adoption of this update concerns presentation and disclosure only as it relates to the Company’s consolidated financial statements. The Company is currently assessing the impact of ASU No. 2014-08 on its financial position and results of operations. No material changes are expected upon adoption of this ASU. | ||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606. ASU 2014-09 affects any entity using GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The ASU provides two transition methods: (i) retrospectively to each prior reporting period presented (ii) retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. The Company is currently assessing the impact of ASU No. 2014-09 on its financial position and results of operations. | ||||
Cash and Cash Equivalents | Cash and Cash Equivalents | |||
Cash and Cash Equivalents consist of all highly liquid investments with maturities of three months or less at the date of purchase. | ||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |||
The carrying amounts of cash and cash equivalents, receivables and payables approximated fair value because of the relatively short maturity of these instruments. See Note 12 for the fair value of derivative financial instruments. | ||||
Inventories | Inventories | |||
Inventories consist of oilfield and industrial finished goods. Inventories are stated at the lower of cost or market and using average cost methods. Allowances for excess and obsolete inventories are determined based on the Company’s historical usage of inventory on-hand as well as its future expectations. | ||||
Property, Plant and Equipment | Property, Plant and Equipment | |||
Property, plant and equipment are stated at cost. Expenditures for major improvements that extend the lives of property and equipment are capitalized while minor replacements, maintenance and repairs are charged to expense as incurred. Disposals are removed at cost less accumulated depreciation with any resulting gain or loss reflected in the results of operations for the respective period. Depreciation is provided using the straight-line method over the estimated useful lives of individual items. | ||||
Long-Lived Assets, Including Goodwill and Other Acquired Intangible Assets | Long-Lived Assets, Including Goodwill and Other Acquired Intangible Assets | |||
The Company evaluates the recoverability of property, plant and equipment and amortizable intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. The Company has not recorded any such impairment charge during the years presented. | ||||
The Company reviews goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. The two-step goodwill impairment test is performed to review goodwill for impairment. The first step, identifying a potential impairment, compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the second step would need to be performed; otherwise, no further step is required. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying amount of the goodwill. Any excess of the goodwill carrying amount over the applied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. | ||||
In addition to the recoverability assessment, the Company routinely reviews the remaining estimated useful lives of property, plant and equipment and amortizable intangible assets. If the Company reduces the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. | ||||
Foreign Currency | Foreign Currency | |||
The functional currency for most of the Company’s foreign operations is the local currency. The cumulative effects of translating the balance sheet accounts from the functional currency into the U.S. dollar at current exchange rates are included in accumulated other comprehensive income (loss). Revenues and expenses are translated at average exchange rates in effect during the period. Certain foreign operations use the U.S. dollar as the functional currency. Accordingly, financial statements of these foreign subsidiaries are remeasured to U.S. dollars for consolidation purposes using current rates of exchange for monetary assets and liabilities and historical rates of exchange for nonmonetary assets and related elements of expense. Revenue and expense elements are remeasured at rates that approximate the rates in effect on the transaction dates. For all operations, gains or losses from remeasuring foreign currency transactions into the functional currency are included in other income. Net foreign currency transaction losses were $2 million, $2 million and $3 million for the years ending December 31, 2014, 2013 and 2012, respectively, and are included in other income (expense) in the accompanying consolidated statements of income. | ||||
Revenue Recognition | Revenue Recognition | |||
The Company sells products through store fronts, on-site and eCommerce. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Generally, across every channel, these conditions are met when the product is shipped or picked up by the customer. Revenues are presented net of return allowances and include freight charges billed to customers. Sales tax collected from customers is excluded from revenue in the accompanying consolidated statements of income. | ||||
Cost of Products | Cost of Products | |||
Cost of products includes the cost of inventory sold and related items, such as vendor consideration, inventory allowances and shipping and handling and inbound and outbound freight. | ||||
Operating and Warehousing Costs | Operating and Warehousing Costs | |||
Operating and Warehousing Costs include branch location and distribution center expenses (including compensation, benefits and rent). | ||||
Vendor Consideration | Vendor Consideration | |||
The Company receives funds from vendors in the normal course of business, principally as a result of purchase volumes. Generally, these vendor funds do not represent the reimbursement of specific, incremental and identifiable costs incurred by the Company to sell the vendor’s product. Therefore, the Company treats these funds as a reduction of inventory when purchased and once these goods are sold to third parties the associated amount is credited to cost of sales. The Company develops accrual rates for vendor consideration based on the provisions of the arrangements in place, historical trends, purchases and future expectations. Due to the complexity and diversity of the individual vendor agreements, the Company performs analyses and reviews historical trends throughout the year and confirms actual amounts with select vendors to ensure the amounts earned are appropriately recorded. Amounts accrued throughout the year could be impacted if actual purchase volumes differ from projected annual purchase volumes, especially in the case of programs that provide for increased funding when graduated purchase volumes are met. | ||||
Income Taxes | Income Taxes | |||
The liability method is used to account for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized. | ||||
Concentration of Credit Risk | Concentration of Credit Risk | |||
The Company grants credit to its customers, which operate primarily in the energy industry. Concentrations of credit risk are limited because the Company has a large number of geographically diverse customers, thus spreading trade credit risk. The Company controls credit risk through credit evaluations, credit limits and monitoring procedures. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral, but may require letters of credit for certain international sales. Credit losses are provided for in the financial statements. Allowances for doubtful accounts are determined based on a continuous process of assessing the Company’s portfolio on an individual customer basis taking into account current market conditions and trends. This process consists of a thorough review of historical collection experience, current aging status of the customer accounts, and financial condition of the Company’s customers. Based on a review of these factors, the Company will establish or adjust allowances for specific customers. No single customer represents more than 10% of the Company’s revenue. The Company’s top 20 customers in aggregate represent approximately one-third of the Company’s revenue. | ||||
Stock-Based Compensation | Stock-Based Compensation | |||
Compensation expense for the Company’s stock-based compensation plans is measured using the fair value method required by ASC Topic 718 “Compensation—Stock Compensation” (“ASC Topic 718”). Under this guidance the fair value of stock option grants and restricted stock is amortized to expense using the straight-line method over the shorter of the vesting period or the remaining employee service period. The Company provides compensation benefits to employees and non-employee directors under share-based payment arrangements. | ||||
Environmental Liabilities | Environmental Liabilities | |||
When environmental assessments or remediations are probable and the costs can be reasonably estimated, remediation liabilities are recorded on an undiscounted basis and are adjusted as further information develops or circumstances change. | ||||
Use of Estimates | Use of Estimates | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported and contingent amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||
Contingencies | Contingencies | |||
The Company accrues for costs relating to litigation claims and other contingent matters, when such liabilities become probable and reasonably estimable. Such estimates may be based on advice from third parties or on management’s judgment, as appropriate. Revisions to contingent liabilities are reflected in income in the period in which different facts or information become known or circumstances change that affect the Company’s previous judgments with respect to the likelihood or amount of loss. Amounts paid upon the ultimate resolution of contingent liabilities may be materially different from previous estimates and could require adjustments to the estimated reserves to be recognized in the period such new information becomes known. | ||||
In circumstances where the most likely outcome of a contingency can be reasonably estimated, the Company accrues a liability for that amount. Where the most likely outcome cannot be estimated, a range of potential losses is established and if no one amount in that range is more likely than others, the low end of the range is accrued. | ||||
Accumulated Other Comprehensive Income (Loss) | The Company’s reporting currency is the U.S. dollar. A majority of the Company’s international entities in which there is a substantial investment have the local currency as their functional currency. As a result, currency translation adjustments resulting from the process of translating the entities’ financial statements into the reporting currency are reported in Other Comprehensive Income or Loss in accordance with ASC Topic 830 “Foreign Currency Matters” (“ASC Topic 830”). | |||
Earnings Per Share | ASC Topic 260, “Earnings Per Share” (“ASC Topic 260”) requires companies with unvested participating securities to utilize a two-class method for the computation of net income attributable to the Company per share. The two-class method requires a portion of net income attributable to the Company to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, if declared. Net income attributable to the Company allocated to these participating securities was approximately $1 million, $0 million, and $0 million for the years ended December 31, 2014, 2013 and 2012, respectively, and therefore excluded from net income attributable to the Company per share calculation. |
Receivables_net_Tables
Receivables, net (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Receivables [Abstract] | |||||||||||||
Rollforward of Allowance for Doubtful Accounts | Activity in the allowance for doubtful accounts was as follows (in millions): | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Allowance for doubful accounts | |||||||||||||
Beginning balance | $ | 22 | $ | 15 | $ | 6 | |||||||
Net charge-offs | (7 | ) | (2 | ) | (5 | ) | |||||||
Provision | 4 | 9 | 14 | ||||||||||
Ending balance | $ | 19 | $ | 22 | $ | 15 | |||||||
Inventories_net_Tables
Inventories, net (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||
Summary of Inventories | Inventories consist of (in millions): | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Finished goods | $ | 988 | $ | 881 | $ | 1,047 | |||||||
Less: inventory reserves | (39 | ) | (31 | ) | (32 | ) | |||||||
Total | $ | 949 | $ | 850 | $ | 1,015 | |||||||
Inventory reserves: | |||||||||||||
Beginning balance | $ | 31 | $ | 32 | $ | 22 | |||||||
Charged to costs and expenses | 8 | 5 | 16 | ||||||||||
Write-offs | — | (6 | ) | (6 | ) | ||||||||
Ending balance | $ | 39 | $ | 31 | $ | 32 | |||||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||
Summary of Property, Plant and Equipment | Property, plant and equipment consist of (in millions): | ||||||||||||
Estimated | December 31, | ||||||||||||
Useful Lives | 2014 | 2013 | |||||||||||
Information technology assets | 2-7 Years | $ | 49 | $ | 27 | ||||||||
Operating equipment | 3-15 Years | 51 | 57 | ||||||||||
Buildings and land (indefinite life) | 5-35 Years | 73 | 60 | ||||||||||
Construction in progress | 2 | 19 | |||||||||||
Total property, plant and equipment | 175 | 163 | |||||||||||
Less: accumulated depreciation | (51 | ) | (61 | ) | |||||||||
Property, plant and equipment, net | $ | 124 | $ | 102 | |||||||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Summary of Accrued Liabilities | Accrued liabilities consist of (in millions): | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Compensation and other related expenses | $ | 39 | $ | 24 | |||||
Customer prepayments | 24 | 18 | |||||||
Taxes (non income) | 24 | 25 | |||||||
Other | 38 | 32 | |||||||
Total | $ | 125 | $ | 99 | |||||
Goodwill_and_Intangibles_Table
Goodwill and Intangibles (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||
Summary of Goodwill Identified by Segment | Goodwill is identified by segment as follows (in millions): | ||||||||||||||||
United States | Canada | International | Total | ||||||||||||||
Balance at December 31, 2012 | $ | 204 | $ | 117 | $ | 22 | $ | 343 | |||||||||
Currency translation adjustments and other | (2 | ) | (8 | ) | — | (10 | ) | ||||||||||
Balance at December 31, 2013 | 202 | 109 | 22 | 333 | |||||||||||||
Additions | 20 | — | — | 20 | |||||||||||||
Currency translation adjustments and other | — | (8 | ) | 1 | (7 | ) | |||||||||||
Balance at December 31, 2014 | $ | 222 | $ | 101 | $ | 23 | $ | 346 | |||||||||
Net Book Values of Identified Intangible Assets by Segment and Major Classification | The net book values of identified intangible assets are identified by segment as follows (in millions): | ||||||||||||||||
United States | Canada | International | Total | ||||||||||||||
Balance at December 31, 2012 | $ | 53 | $ | 3 | $ | 18 | $ | 74 | |||||||||
Amortization | (3 | ) | (1 | ) | (2 | ) | (6 | ) | |||||||||
Balance at December 31, 2013 | 50 | 2 | 16 | 68 | |||||||||||||
Additions | 10 | — | — | 10 | |||||||||||||
Amortization | (3 | ) | (1 | ) | (1 | ) | (5 | ) | |||||||||
Balance at December 31, 2014 | $ | 57 | $ | 1 | $ | 15 | $ | 73 | |||||||||
Identified intangible assets by major classification consist of the following (in millions): | |||||||||||||||||
Accumulated | Net Book | ||||||||||||||||
Gross | Amortization | Value | |||||||||||||||
December 31, 2012: | |||||||||||||||||
Tradenames, trademarks and patents | $ | 63 | $ | (3 | ) | $ | 60 | ||||||||||
Customer relationships | 13 | (2 | ) | 11 | |||||||||||||
Other (covenant not to compete) | 4 | (1 | ) | 3 | |||||||||||||
Total identified intangibles | $ | 80 | $ | (6 | ) | $ | 74 | ||||||||||
December 31, 2013: | |||||||||||||||||
Tradenames, trademarks and patents | $ | 63 | $ | (6 | ) | $ | 57 | ||||||||||
Customer relationships | 13 | (3 | ) | 10 | |||||||||||||
Other (covenant not to compete) | 4 | (3 | ) | 1 | |||||||||||||
Total identified intangibles | $ | 80 | $ | (12 | ) | $ | 68 | ||||||||||
December 31, 2014: | |||||||||||||||||
Tradenames, trademarks and patents | $ | 61 | $ | (9 | ) | $ | 52 | ||||||||||
Customer relationships | 24 | (4 | ) | 20 | |||||||||||||
Other (covenant not to compete) | 5 | (4 | ) | 1 | |||||||||||||
Total identified intangibles | $ | 90 | $ | (17 | ) | $ | 73 | ||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Domestic and Foreign Components of Income Before Income Taxes | The domestic and foreign components of income before income taxes were as follows (in millions): | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
United States | $ | 101 | $ | 161 | $ | 115 | |||||||
Foreign | 77 | 61 | 50 | ||||||||||
$ | 178 | $ | 222 | $ | 165 | ||||||||
Components of the Provision for Income Taxes | The provision for income taxes for 2014, 2013, and 2012 consisted of the following: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
U.S. Federal: | |||||||||||||
Current | $ | 38 | $ | 48 | $ | 46 | |||||||
Deferred | 3 | 6 | (4 | ) | |||||||||
41 | 54 | 42 | |||||||||||
U.S. State: | |||||||||||||
Current | 4 | 4 | 4 | ||||||||||
Deferred | — | — | 1 | ||||||||||
4 | 4 | 5 | |||||||||||
Foreign | |||||||||||||
Current | 18 | 20 | 14 | ||||||||||
Deferred | (1 | ) | (3 | ) | (4 | ) | |||||||
17 | 17 | 10 | |||||||||||
Total current income tax provision | $ | 62 | $ | 75 | $ | 57 | |||||||
Reconciliation Between Effective Tax Rate | The reconciliation between the Company’s effective tax rate on income from continuing operations and the statutory tax rate is as follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income tax expense (benefit) at federal statutory rate | $ | 62 | $ | 78 | $ | 58 | |||||||
Foreign income tax rate differential | (6 | ) | (5 | ) | (5 | ) | |||||||
State income tax, net of federal benefit | 3 | 3 | 2 | ||||||||||
Nondeductible expenses | 4 | 2 | 1 | ||||||||||
Foreign dividends, net of foreign tax credits | — | (1 | ) | 1 | |||||||||
Change in contingency reserve and other | (1 | ) | (2 | ) | — | ||||||||
Income tax expense (benefit) | $ | 62 | $ | 75 | $ | 57 | |||||||
Significant Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities were as follows (in millions): | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Deferred tax assets: | |||||||||||||
Allowances and operating liabilities | $ | 2 | $ | 12 | $ | 10 | |||||||
Net operating loss carryforwards | 1 | 1 | — | ||||||||||
Book over tax depreciation | — | 2 | 1 | ||||||||||
Trade credit | 4 | 1 | — | ||||||||||
Bad debt reserve | 3 | 2 | 1 | ||||||||||
Inventory reserve | 9 | 11 | 12 | ||||||||||
Stock options | 12 | 5 | 4 | ||||||||||
Other | 3 | 2 | 1 | ||||||||||
Total deferred tax assets | 34 | 36 | 29 | ||||||||||
Deferred tax liabilities: | |||||||||||||
Tax over book depreciation | (2 | ) | (2 | ) | — | ||||||||
Intangible assets | (18 | ) | (14 | ) | (9 | ) | |||||||
Total deferred tax liabilities | (20 | ) | (16 | ) | (9 | ) | |||||||
Net deferred tax asset | $ | 14 | $ | 20 | $ | 20 | |||||||
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions): | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Unrecognized tax benefit—January 1 | $ | — | $ | 2 | $ | 2 | |||||||
Gross increases—tax positions in prior period | — | — | — | ||||||||||
Gross decreases—tax positions in prior period | — | — | — | ||||||||||
Gross increases—tax positions in current period | — | — | — | ||||||||||
Settlement | — | — | — | ||||||||||
Lapse of statute of limitations | — | (2 | ) | — | |||||||||
Unrecognized tax benefit—December 31 | $ | — | $ | — | $ | 2 | |||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Future Minimum Lease Commitments Under Noncancellable Operating Leases | Future minimum lease commitments under noncancellable operating leases with initial or remaining terms of one year or more at December 31, 2014, are payable as follows (in millions): | ||||
2015 | $ | 39 | |||
2016 | 27 | ||||
2017 | 18 | ||||
2018 | 12 | ||||
2019 | 7 | ||||
Thereafter | 22 | ||||
Total future lease commitments | $ | 125 | |||
Related_Party_Transactions_and1
Related Party Transactions and Net Parent Company Investment (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Related Party Transactions [Abstract] | |||||||||||||
Schedule of Components of Changes in NOV Net Investment | The components of the change in NOV net investment are as follows (in millions): | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net contribution from (distributions to) NOV per the consolidated statements of stockholders’ equity | $ | 138 | $ | (151 | ) | $ | 1,293 | ||||||
Non-cash adjustments: | |||||||||||||
Stock-based compensation | (5 | ) | — | ||||||||||
Net transfer of assets and liabilities from NOV | (8 | ) | — | ||||||||||
Less: Net income attributable to NOV net investment prior to the Spin-Off | (58 | ) | (147 | ) | (108 | ) | |||||||
Net contributions from (distributions to) NOV per the consolidated statements of cash flows | $ | 67 | $ | (298 | ) | $ | 1,185 | ||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Equity [Abstract] | |||||
Components of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) are as follows (in millions): | ||||
Currency | |||||
Translation | |||||
Adjustments | |||||
Balance at December 31, 2013 | $ | — | |||
Accumulated other comprehensive income (loss) before reclassifications | (45 | ) | |||
Amounts reclassified from accumulated other comprehensive income (loss) | — | ||||
Balance at December 31, 2014 | $ | (45 | ) | ||
Business_Segments_Tables
Business Segments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Summary of Financial Information of Company's Reportable Segments | The following table presents financial information for each of the Company’s reportable segments as of and for the year ended December 31 (in millions): | ||||||||||||||||
United States | Canada | International | Total | ||||||||||||||
2014 | |||||||||||||||||
Revenue | $ | 2,793 | $ | 669 | $ | 643 | $ | 4,105 | |||||||||
Operating profit | 89 | 47 | 45 | 181 | |||||||||||||
Depreciation and amortization | 16 | 3 | 2 | 21 | |||||||||||||
Long-lived assets: | |||||||||||||||||
Property, plant and equipment, net | 101 | 20 | 3 | 124 | |||||||||||||
Goodwill | 222 | 101 | 23 | 346 | |||||||||||||
Intangibles, net | 58 | 1 | 14 | 73 | |||||||||||||
Total assets | 1,735 | 500 | 361 | 2,596 | |||||||||||||
2013 | |||||||||||||||||
Revenue | $ | 2,863 | $ | 773 | $ | 660 | $ | 4,296 | |||||||||
Operating profit | 134 | 47 | 43 | 224 | |||||||||||||
Depreciation and amortization | 11 | 3 | 3 | 17 | |||||||||||||
Long-lived assets: | |||||||||||||||||
Property, plant and equipment, net | 86 | 13 | 3 | 102 | |||||||||||||
Goodwill | 202 | 109 | 22 | 333 | |||||||||||||
Intangibles, net | 50 | 2 | 16 | 68 | |||||||||||||
Total assets | 1,582 | 411 | 190 | 2,183 | |||||||||||||
2012 | |||||||||||||||||
Revenue | $ | 2,257 | $ | 591 | $ | 566 | $ | 3,414 | |||||||||
Operating profit | 94 | 37 | 37 | 168 | |||||||||||||
Depreciation and amortization | 7 | 2 | 3 | 12 | |||||||||||||
Long-lived assets: | |||||||||||||||||
Property, plant and equipment, net | 40 | 16 | 5 | 61 | |||||||||||||
Goodwill | 204 | 117 | 22 | 343 | |||||||||||||
Intangibles, net | 53 | 3 | 18 | 74 | |||||||||||||
Total assets | 1,603 | 549 | 221 | 2,373 | |||||||||||||
Schedule of Comparison of Approximate Sales Mix in Principal Product Categories | The following table presents a comparison of the approximate sales mix in the principal product categories (in millions): | ||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Product Category | |||||||||||||||||
Drilling and production | $ | 991 | $ | 987 | $ | 860 | |||||||||||
Pipe | 723 | 845 | 621 | ||||||||||||||
Valves | 801 | 839 | 569 | ||||||||||||||
Fittings and flanges | 667 | 664 | 522 | ||||||||||||||
Mill tool, MRO, safety and other | 923 | 961 | 842 | ||||||||||||||
Total | $ | 4,105 | $ | 4,296 | $ | 3,414 | |||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Computation of Basic and Diluted Earnings Per Share | For the year ended December 31, 2014, 2,552,292 stock options, RSAs and RSUs were excluded from the computation of diluted earnings per share due to their antidilutive effect. | ||||||||||||
Year Ended December 31, | |||||||||||||
(In millions, except share data) | 2014 | 2013 | 2012 | ||||||||||
Numerator for basic and diluted net income per share attributable to the Company’s stockholders: | |||||||||||||
Net income attributable to the Company | $ | 116 | $ | 147 | $ | 108 | |||||||
Less: net income attributable to nonvested shares | (1 | ) | — | — | |||||||||
Net income attributable to the Company’s stockholders | $ | 115 | $ | 147 | $ | 108 | |||||||
Denominator for basic net income per share attribtable to the Company’s stockholders: | |||||||||||||
Weighted average common shares outstanding | 107,058,843 | 107,053,031 | 107,053,031 | ||||||||||
Effect of dilutive securities: Dilutive effect of stock based compensation | 497,301 | 415,837 | 415,837 | ||||||||||
Denominator for diluted net income per share attributable to the Company’s stockholders: | 107,556,144 | 107,468,868 | 107,468,868 | ||||||||||
Earnings per share attributable to the Company’s stockholders: | |||||||||||||
Basic | $ | 1.07 | $ | 1.37 | $ | 1.01 | |||||||
Diluted | $ | 1.06 | $ | 1.36 | $ | 1 | |||||||
Stockbased_Compensation_and_Ou1
Stock-based Compensation and Outstanding Awards (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Summary of Stock Option Activity | A summary of stock option activity under the Plan as of December 31, 2014, and changes from May 30, 2014 through December 31, 2014 are presented below: | ||||||||||||
Options | Shares | Weighted-Average | Aggregate | ||||||||||
Exercise Price | Intrinsic Value | ||||||||||||
(in millions) | |||||||||||||
Outstanding as of May 30, 2014 | 3,599,654 | $ | 30.85 | ||||||||||
Granted | — | — | |||||||||||
Forfeited | (39,855 | ) | 31.36 | ||||||||||
Exercised or settled | (14,280 | ) | 27.49 | ||||||||||
Expired or canceled | |||||||||||||
Outstanding as of December 31, 2014 | 3,545,519 | $ | 30.86 | $ | 2 | ||||||||
Exercisable at December 31, 2014 | 1,589,126 | $ | 30.61 | $ | 2 | ||||||||
Summary of Status of the Nonvested Shares | A summary of the status of the Company’s nonvested shares as of December 31, 2014, and changes for the period from May 30, 2014 through December 31, 2014 are presented below: | ||||||||||||
RSAs / RSUs | Shares | Weighted-Average | |||||||||||
Grant-Date Fair | |||||||||||||
Value | |||||||||||||
Nonvested as of May 30, 2014 | 1,034,055 | $ | 31.94 | ||||||||||
Granted | 1,422,708 | 29.02 | |||||||||||
Vested | — | — | |||||||||||
Forfeited | (9,825 | ) | 31.59 | ||||||||||
Expired or canceled | — | — | |||||||||||
Nonvested as of December 31, 2014 | 2,446,938 | $ | 30.24 | ||||||||||
Significant Assumptions Used to Calculate the Grant Date Fair Market Values of Options Granted | Though NOW Inc. did not grant any new options in 2014 after the Spin-Off, the following table provides the significant assumptions used to calculate the grant date fair market values of options granted prior to the Spin-Off over the years shown below, as calculated using the Black-Scholes options-pricing model. | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Valuation Assumptions: | |||||||||||||
Expected volatility | 50 | % | 50.1 | % | 51.7 | % | |||||||
Risk-free interest rate | 0.9 | % | 0.9 | % | 0.9 | % | |||||||
Expected dividends | $ | 0.75 | $ | 0.75 | $ | 0.57 | |||||||
Expected term (in years) | 3.4 | 3.4 | 3.2 |
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Summarized Quarterly Result | Summarized quarterly results, were as follows (in millions, except per share data): | ||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||
Revenue | $ | 1,077 | $ | 952 | $ | 1,070 | $ | 1,006 | |||||||||
Operating expenses | |||||||||||||||||
Cost of products | 869 | 759 | 857 | 801 | |||||||||||||
Operating and warehousing costs | 102 | 105 | 108 | 110 | |||||||||||||
Selling, general and administrative | 44 | 45 | 55 | 69 | |||||||||||||
Operating profit | 62 | 43 | 50 | 26 | |||||||||||||
Other income | — | — | (1 | ) | (2 | ) | |||||||||||
Income before income taxes | 62 | 43 | 49 | 24 | |||||||||||||
Provision for income taxes | 21 | 16 | 17 | 8 | |||||||||||||
Net income | $ | 41 | $ | 27 | $ | 32 | $ | 16 | |||||||||
Earnings per share | |||||||||||||||||
Basic earnings per common share | $ | 0.38 | $ | 0.25 | $ | 0.3 | $ | 0.15 | |||||||||
Diluted earnings per common share | $ | 0.38 | $ | 0.25 | $ | 0.3 | $ | 0.14 | |||||||||
Weighted-average common shares outstanding, basic | 107 | 107 | 107 | 107 | |||||||||||||
Weighted-average common shares outstanding, diluted | 107 | 108 | 108 | 108 | |||||||||||||
Year ended December 31, 2013 | |||||||||||||||||
Revenue | $ | 1,072 | $ | 1,070 | $ | 1,113 | $ | 1,041 | |||||||||
Operating expenses | |||||||||||||||||
Cost of products | 874 | 874 | 907 | 844 | |||||||||||||
Operating and warehousing costs | 101 | 103 | 104 | 104 | |||||||||||||
Selling, general and administrative | 39 | 40 | 39 | 43 | |||||||||||||
Operating profit | 58 | 53 | 63 | 50 | |||||||||||||
Other income | 2 | 2 | (4 | ) | (2 | ) | |||||||||||
Income before income taxes | 60 | 55 | 59 | 48 | |||||||||||||
Provision for income taxes | 19 | 22 | 20 | 14 | |||||||||||||
Net income | $ | 41 | $ | 33 | $ | 39 | $ | 34 | |||||||||
Earnings per share | |||||||||||||||||
Basic earnings per common share | $ | 0.37 | $ | 0.31 | $ | 0.37 | $ | 0.32 | |||||||||
Diluted earnings per common share | $ | 0.37 | $ | 0.31 | $ | 0.36 | $ | 0.32 | |||||||||
Weighted-average common shares outstanding, basic | 107 | 107 | 107 | 107 | |||||||||||||
Weighted-average common shares outstanding, diluted | 107 | 107 | 107 | 107 | |||||||||||||
Organization_and_Basis_of_Pres2
Organization and Basis of Presentation - Additional Information (Detail) | 0 Months Ended | 12 Months Ended | ||
Nov. 22, 2013 | 30-May-14 | Dec. 31, 2014 | Dec. 31, 2013 | |
Country | ||||
Vendor | ||||
GeographicMarket | ||||
Basis Of Presentation And Organization [Line Items] | ||||
Number of geographical area covered | 100 | |||
Number of vendors | 1,000 | |||
Number of countries distribution occur through vendors | 40 | |||
Common stock, shares outstanding | 107,053,031 | 107,067,457 | 107,067,457 | |
Separation [Member] | ||||
Basis Of Presentation And Organization [Line Items] | ||||
Spin-off description | In accordance with a separation and distribution agreement, the two companies were separated by NOV distributing to its stockholders 107,053,031 shares of common stock of the Company after the market closed on May 30, 2014. Each NOV stockholder received one share of NOW common stock for every four shares of NOV common stock held at the close of business on the record date of May 22, 2014 and not sold prior to close of business on May 30, 2014. | |||
Common stock, shares outstanding | 107,053,031 | 107,053,031 | ||
Ratio of common stock sharing | 4 | 4 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Customer | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Foreign currency transaction losses | $2 | $2 | $3 |
Percentage revenue contribution | 20 | ||
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Percentage of revenue | 10.00% | ||
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Major Customers [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Percentage of revenue | 33.00% |
Receivables_Net_Rollforward_of
Receivables, Net - Rollforward of Allowance for Doubtful Accounts (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for doubtful accounts | |||
Beginning balance | $22 | $15 | $6 |
Net charge-offs | -7 | -2 | -5 |
Provision | 4 | 9 | 14 |
Ending balance | $19 | $22 | $15 |
Inventories_Net_Summary_of_Inv
Inventories, Net - Summary of Inventories (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Inventory Disclosure [Abstract] | |||
Finished goods | $988 | $881 | $1,047 |
Less: inventory reserves | -39 | -31 | -32 |
Total | 949 | 850 | 1,015 |
Inventory reserves: | |||
Inventory reserves, Beginning balance | 31 | 32 | 22 |
Inventory reserves, Charged to costs and expenses | 8 | 5 | 16 |
Inventory reserves, Write-offs | -6 | -6 | |
Inventory reserves, Ending balance | $39 | $31 | $32 |
Property_Plant_and_Equipment_S
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, Gross | 175 | $163 | |
Less: accumulated depreciation | -51 | -61 | |
Net property, plant and equipment | 124 | 102 | 61 |
Information Technology Assets [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, Gross | 49 | 27 | |
Information Technology Assets [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment estimated useful lives | 2 years | ||
Information Technology Assets [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment estimated useful lives | 7 years | ||
Operating Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, Gross | 51 | 57 | |
Operating Equipment [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment estimated useful lives | 3 years | ||
Operating Equipment [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment estimated useful lives | 15 years | ||
Buildings and Land (Indefinite Life) [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, Gross | 73 | 60 | |
Buildings and Land (Indefinite Life) [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment estimated useful lives | 5 years | ||
Buildings and Land (Indefinite Life) [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment estimated useful lives | 35 years | ||
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, Gross | 2 | $19 |
Property_Plant_and_Equipment_A
Property, Plant and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property Plant and Equipment Useful Life and Values [Abstract] | |||
Depreciation expense | $16 | $11 | $8 |
Accrued_Liabilities_Summary_of
Accrued Liabilities - Summary of Accrued Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Compensation and other related expenses | $39 | $24 |
Customer prepayments | 24 | 18 |
Taxes (non income) | 24 | 25 |
Other | 38 | 32 |
Total | $125 | $99 |
Goodwill_and_Intangibles_Addit
Goodwill and Intangibles - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill impairment loss | $0 | |
2014 | 5,000,000 | 5,000,000 |
2015 | 5,000,000 | 5,000,000 |
2016 | 5,000,000 | 5,000,000 |
2017 | 5,000,000 | 5,000,000 |
2018 | $5,000,000 | $5,000,000 |
Amortization period | 5 years | |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives of identified intangible assets | 2 years | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives of identified intangible assets | 30 years |
Goodwill_and_Intangibles_Summa
Goodwill and Intangibles - Summary of Goodwill Identified by Segment (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Line Items] | |||
Goodwill,Beginning balance | $333 | $343 | |
Additions | 20 | ||
Currency translation adjustments and other | 7 | -10 | |
Goodwill,Ending balance | 346 | 333 | |
United States [Member] | |||
Goodwill [Line Items] | |||
Goodwill,Beginning balance | 202 | 204 | |
Additions | 20 | ||
Currency translation adjustments and other | -2 | ||
Goodwill,Ending balance | 222 | 202 | |
Canada (Member) | |||
Goodwill [Line Items] | |||
Goodwill,Beginning balance | 109 | 117 | |
Currency translation adjustments and other | -8 | -8 | |
Goodwill,Ending balance | 101 | 109 | |
International [Member] | |||
Goodwill [Line Items] | |||
Goodwill,Beginning balance | 22 | 22 | |
Currency translation adjustments and other | 1 | ||
Goodwill,Ending balance | $23 | $22 |
Goodwill_and_Intangibles_Net_B
Goodwill and Intangibles - Net Book Values of Identified Intangible Assets by Segment and Major Classification (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets,Beginning balance | $68 | $74 | |
Additions | 10 | ||
Gross | 90 | 80 | 80 |
Accumulated Amortization | -5 | -6 | -6 |
Finite lived intangible assets,Ending balance | 73 | 74 | |
Net Book Value | 73 | 74 | |
United States [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets,Beginning balance | 50 | 53 | |
Additions | 10 | ||
Accumulated Amortization | -3 | -3 | |
Finite lived intangible assets,Ending balance | 57 | 53 | |
Net Book Value | 57 | 53 | |
Canada (Member) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets,Beginning balance | 2 | 3 | |
Accumulated Amortization | -1 | -1 | |
Finite lived intangible assets,Ending balance | 1 | 2 | 3 |
Net Book Value | 1 | 2 | 3 |
International [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets,Beginning balance | 16 | 18 | |
Accumulated Amortization | -1 | -2 | |
Finite lived intangible assets,Ending balance | 15 | 16 | 18 |
Net Book Value | 15 | 16 | 18 |
Tradenames, Trademarks and Patents [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets,Beginning balance | 57 | 60 | |
Gross | 61 | 63 | 63 |
Accumulated Amortization | -9 | -6 | -3 |
Finite lived intangible assets,Ending balance | 52 | 57 | 60 |
Net Book Value | 52 | 57 | 60 |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets,Beginning balance | 10 | 11 | |
Gross | 24 | 13 | 13 |
Accumulated Amortization | -4 | -3 | -2 |
Finite lived intangible assets,Ending balance | 20 | 10 | 11 |
Net Book Value | 20 | 10 | 11 |
Other (Covenant Not to Compete) [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets,Beginning balance | 1 | 3 | |
Gross | 5 | 4 | 4 |
Accumulated Amortization | -4 | -3 | -1 |
Finite lived intangible assets,Ending balance | 1 | 1 | 3 |
Net Book Value | $1 | $1 | $3 |
Income_Taxes_Domestic_and_Fore
Income Taxes - Domestic and Foreign Components of Income Before Income Taxes (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||||||||||
United States | $101 | $161 | $115 | ||||||||
Foreign | 77 | 61 | 50 | ||||||||
Income before income taxes | $24 | $49 | $43 | $62 | $48 | $59 | $55 | $60 | $178 | $222 | $165 |
Income_Taxes_Components_of_the
Income Taxes - Components of the Provision for Income Taxes (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
U.S. Federal: | |||||||||||
Current | $38 | $48 | $46 | ||||||||
Deferred | 3 | 6 | -4 | ||||||||
U.S. Federal, Total | 41 | 54 | 42 | ||||||||
U.S. State: | |||||||||||
Current | 4 | 4 | 4 | ||||||||
Deferred | 1 | ||||||||||
U.S. State, Total | 4 | 4 | 5 | ||||||||
Foreign | |||||||||||
Current | 18 | 20 | 14 | ||||||||
Deferred | -1 | -3 | -4 | ||||||||
Foreign, Total | 17 | 17 | 10 | ||||||||
Income tax expense (benefit) | $8 | $17 | $16 | $21 | $14 | $20 | $22 | $19 | $62 | $75 | $57 |
Income_Taxes_Difference_Betwee
Income Taxes - Difference Between Effective Tax Rate (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||||||||||
Income tax expense (benefit) at federal statutory rate | $62 | $78 | $58 | ||||||||
Foreign income tax rate differential | -6 | -5 | -5 | ||||||||
State income tax, net of federal benefit | 3 | 3 | 2 | ||||||||
Nondeductible expenses | 4 | 2 | 1 | ||||||||
Foreign dividends, net of foreign tax credits | -1 | 1 | |||||||||
Change in contingency reserve and other | -1 | -2 | |||||||||
Income tax expense (benefit) | $8 | $17 | $16 | $21 | $14 | $20 | $22 | $19 | $62 | $75 | $57 |
Income_Taxes_Significant_Compo
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | |||
Deferred tax assets: | |||
Allowances and operating liabilities | $2 | $12 | $10 |
Net operating loss carryforwards | 1 | 1 | |
Book over tax depreciation | 2 | 1 | |
Trade credit | 4 | 1 | |
Bad debt reserve | 3 | 2 | 1 |
Inventory reserve | 9 | 11 | 12 |
Stock options | 12 | 5 | 4 |
Other | 3 | 2 | 1 |
Total deferred tax assets | 34 | 36 | 29 |
Deferred tax liabilities: | |||
Tax over book depreciation | -2 | -2 | |
Intangible assets | -18 | -14 | -9 |
Total deferred tax liabilities | -20 | -16 | -9 |
Net deferred tax asset | $14 | $20 | $20 |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefit beginning balance | $2 | $2 | |
Gross increases - tax positions in prior period | 0 | 0 | 0 |
Gross decreases - tax positions in prior period | 0 | 0 | 0 |
Gross increases - tax positions in current period | 0 | 0 | 0 |
Settlement | 0 | 0 | 0 |
Lapse of statute of limitations | -2 | ||
Unrecognized tax benefit ending balance | $2 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule Of Income Tax [Line Items] | |||
Unrecognized tax benefits, income tax penalties and interest expense | $0 | ||
Unrecognized tax benefits, income tax penalties and interest accrued | 0 | ||
Unremitted earnings | 187,000,000 | ||
Provision for U.S federal income tax | 38,000,000 | 48,000,000 | 46,000,000 |
Provision for state income tax | 4,000,000 | 4,000,000 | 4,000,000 |
Foreign Subsidiaries [Member] | |||
Schedule Of Income Tax [Line Items] | |||
Provision for U.S federal income tax | 0 | ||
Provision for state income tax | 0 | ||
United States [Member] | |||
Schedule Of Income Tax [Line Items] | |||
Net operating loss carryforwards | 0 | 0 | |
Outside United States [Member] | |||
Schedule Of Income Tax [Line Items] | |||
Net operating loss carryforwards | 4,000,000 | 1,000,000 | |
Minimum [Member] | |||
Schedule Of Income Tax [Line Items] | |||
Foreign tax credits | $0 | $3,000,000 | |
Operating loss carryforwards expiration year | 2023 | ||
Maximum [Member] | |||
Schedule Of Income Tax [Line Items] | |||
Operating loss carryforwards expiration year | 2024 |
Credit_Facility_Additional_Inf
Credit Facility - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Sep. 30, 2014 | |
Debt Instrument [Line Items] | ||
Term of loan | 5 years | |
Agreement date | 18-Apr-14 | |
Aggregate loan amount | $750,000,000 | |
Sub-facility for letter of credit | 150,000,000 | |
Sub-facility for swing line loans | 50,000,000 | |
Increase in aggregate principal amount | 250,000,000 | |
Maximum capitalization ratio | 50.00% | |
Minimum interest coverage ratio | 3.00% | |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Annual commitment fee range | 0.25% | |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Annual commitment fee range | 0.35% | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility borrowings | 0 | |
Letter of credit outstanding amount | $2,000,000 | |
Letter of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility expiration date | 30-May-15 | |
Federal Funds Rate [Member] | ||
Debt Instrument [Line Items] | ||
Base rate | 0.50% | |
London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Base rate | 1.00% |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments and Contingencies Disclosure [Abstract] | |||
Rental expense | $61 | $70 | $50 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Future Minimum Lease Commitments Under Noncancellable Operating Leases (Detail) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
2015 | $39 |
2016 | 27 |
2017 | 18 |
2018 | 12 |
2019 | 7 |
Thereafter | 22 |
Total future lease commitments | $125 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | 4 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 |
Schedule of Other Related Party Transactions [Line Items] | ||||
Selling general and administration expenses | $6 | $9 | $7 | |
Adjustments to current and deferred tax balances | 5 | |||
Maximum [Member] | ||||
Schedule of Other Related Party Transactions [Line Items] | ||||
Other operating expenses | $1 |
Related_Party_Transactions_Sch
Related Party Transactions - Schedule of Components of Changes in NOV Net Investment (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Transaction [Abstract] | |||
Net contribution from (distributions to) NOV per the consolidated statements of stockholders' equity | $138 | ($151) | $1,293 |
Non-cash adjustments: | |||
Stock-based compensation | -5 | ||
Net transfer of assets and liabilities from NOV | -8 | ||
Less: Net income attributable to NOV net investment prior to the Spin-off | -58 | -147 | -108 |
Net contributions from (distributions to) NOV per the consolidated statements of cash flows | $67 | ($298) | $1,185 |
Derivative_Financial_Instrumen1
Derivative Financial Instruments - Additional Information (Detail) (Forward Contracts [Member], Maximum [Member], USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Forward Contracts [Member] | Maximum [Member] | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Foreign currency forward contracts | $1 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) - Summary of Components of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Statement of Comprehensive Income [Abstract] | |
Accumulated other comprehensive income (loss), Beginning balance | |
Accumulated other comprehensive income (loss) before reclassifications | -45 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 |
Accumulated other comprehensive income (loss), Ending balance | ($45) |
Business_Segments_Additional_I
Business Segments - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Segments | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 3 |
Number of operating segments | 4 |
Minimum [Member] | United States [Member] | |
Segment Reporting Information [Line Items] | |
Number of locations | 200 |
Minimum [Member] | Canada (Member) | |
Segment Reporting Information [Line Items] | |
Number of locations | 70 |
Minimum [Member] | International [Member] | |
Segment Reporting Information [Line Items] | |
Number of locations | 30 |
Number of countries | 20 |
Business_Segments_Summary_of_F
Business Segments - Summary of Financial Information of Company's Reportable Segments (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $1,006 | $1,070 | $952 | $1,077 | $1,041 | $1,113 | $1,070 | $1,072 | $4,105 | $4,296 | $3,414 |
Operating profit | 26 | 50 | 43 | 62 | 50 | 63 | 53 | 58 | 181 | 224 | 168 |
Depreciation and amortization | 21 | 17 | 12 | ||||||||
Long-lived assets | |||||||||||
Property, plant and equipment, net | 124 | 102 | 124 | 102 | 61 | ||||||
Goodwill | 346 | 333 | 346 | 333 | 343 | ||||||
Intangibles, net | 73 | 68 | 73 | 68 | 74 | ||||||
Total assets | 2,596 | 2,183 | 2,596 | 2,183 | 2,373 | ||||||
United States [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 2,793 | 2,863 | 2,257 | ||||||||
Operating profit | 89 | 134 | 94 | ||||||||
Depreciation and amortization | 16 | 11 | 7 | ||||||||
Long-lived assets | |||||||||||
Property, plant and equipment, net | 101 | 86 | 101 | 86 | 40 | ||||||
Goodwill | 222 | 202 | 222 | 202 | 204 | ||||||
Intangibles, net | 58 | 50 | 58 | 50 | 53 | ||||||
Total assets | 1,735 | 1,582 | 1,735 | 1,582 | 1,603 | ||||||
Canada (Member) | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 669 | 773 | 591 | ||||||||
Operating profit | 47 | 47 | 37 | ||||||||
Depreciation and amortization | 3 | 3 | 2 | ||||||||
Long-lived assets | |||||||||||
Property, plant and equipment, net | 20 | 13 | 20 | 13 | 16 | ||||||
Goodwill | 101 | 109 | 101 | 109 | 117 | ||||||
Intangibles, net | 1 | 2 | 1 | 2 | 3 | ||||||
Total assets | 500 | 411 | 500 | 411 | 549 | ||||||
International [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 643 | 660 | 566 | ||||||||
Operating profit | 45 | 43 | 37 | ||||||||
Depreciation and amortization | 2 | 3 | 3 | ||||||||
Long-lived assets | |||||||||||
Property, plant and equipment, net | 3 | 3 | 3 | 3 | 5 | ||||||
Goodwill | 23 | 22 | 23 | 22 | 22 | ||||||
Intangibles, net | 14 | 16 | 14 | 16 | 18 | ||||||
Total assets | $361 | $190 | $361 | $190 | $221 |
Business_Segments_Schedule_of_
Business Segments - Schedule of Comparison of Approximate Sales Mix in Principal Product Categories (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Total Revenues | |||||||||||
Total Revenues | $1,006 | $1,070 | $952 | $1,077 | $1,041 | $1,113 | $1,070 | $1,072 | $4,105 | $4,296 | $3,414 |
Drilling and Production [Member] | |||||||||||
Total Revenues | |||||||||||
Total Revenues | 991 | 987 | 860 | ||||||||
Pipe [Member] | |||||||||||
Total Revenues | |||||||||||
Total Revenues | 723 | 845 | 621 | ||||||||
Valves [Member] | |||||||||||
Total Revenues | |||||||||||
Total Revenues | 801 | 839 | 569 | ||||||||
Fittings and Flanges [Member] | |||||||||||
Total Revenues | |||||||||||
Total Revenues | 667 | 664 | 522 | ||||||||
Mill Tool, MRO, Safety and Other [Member] | |||||||||||
Total Revenues | |||||||||||
Total Revenues | $923 | $961 | $842 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 30-May-14 |
Earnings Per Share [Line Items] | ||||
Common stock, shares outstanding | 107,067,457 | 107,067,457 | 107,053,031 | |
Net income attributable to participating securities | $1 | $0 | $0 | |
Restricted Stock Awards (RSAs) [Member] | ||||
Earnings Per Share [Line Items] | ||||
Antidilutive Securities excluded from Computation of Earnings Per Share | 2,552,292 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Earnings Per Share [Line Items] | ||||
Antidilutive Securities excluded from Computation of Earnings Per Share | 2,552,292 | |||
Separation [Member] | ||||
Earnings Per Share [Line Items] | ||||
Common stock, shares outstanding | 107,053,031 | 107,053,031 | ||
Spin-Off of shares | 4 | 4 |
Earnings_Per_Share_Computation
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator for basic and diluted net income per share attributable to the Company's stockholders: | |||||||||||
Net income attributable to the Company | $16 | $32 | $27 | $41 | $34 | $39 | $33 | $41 | $116 | $147 | $108 |
Less: net income attributable to nonvested shares | -1 | ||||||||||
Net income attributable to the Company's stockholders | $115 | $147 | $108 | ||||||||
Denominator for basic net income per share attributable to the Company's stockholders: | |||||||||||
Weighted average common shares outstanding | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,058,843 | 107,053,031 | 107,053,031 |
Effect of dilutive securities: | |||||||||||
Dilutive effect of stock based compensation | 497,301 | 415,837 | 415,837 | ||||||||
Denominator for diluted net income per share attributable to the Company's stockholders: | 108,000,000 | 108,000,000 | 108,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,556,144 | 107,468,868 | 107,468,868 |
Basic | $0.15 | $0.30 | $0.25 | $0.38 | $0.32 | $0.37 | $0.31 | $0.37 | $1.07 | $1.37 | $1.01 |
Diluted | $0.14 | $0.30 | $0.25 | $0.38 | $0.32 | $0.36 | $0.31 | $0.37 | $1.06 | $1.37 | $1 |
Stockbased_Compensation_and_Ou2
Stock-based Compensation and Outstanding Awards - Additional Information (Detail) (USD $) | 7 Months Ended | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Company common stock were authorized for grant | 16,000,000 | 16,000,000 | ||
Stock-based compensation | $18 | $6 | $6 | |
Aggregate intrinsic value, Exercised or settled | 1 | |||
Restricted Stock and Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | 57 | 57 | ||
Expected to be recognized over a weighted average period | 4 years 7 months 6 days | |||
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average remaining contractual term, options vested | 7 years 7 months 6 days | |||
Weighted-average remaining contractual term, options exercisable | 6 years 4 months 24 days | |||
Unrecognized compensation costs | $12 | $12 | ||
Expected to be recognized over a weighted average period | 1 year 9 months 18 days |
Stockbased_Compensation_and_Ou3
Stock-based Compensation and Outstanding Awards - Summary of Stock Option Activity (Detail) (USD $) | 7 Months Ended |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Options, Outstanding, Beginning balance | 3,599,654 |
Options, Granted | 0 |
Options, Forfeited | -39,855 |
Options, Exercised or settled | -14,280 |
Options, Expired or canceled | 0 |
Options, Outstanding, Ending balance | 3,545,519 |
Options, Exercisable at December 31, 2014 | 1,589,126 |
Weighted average exercise price, Outstanding, Beginning balance | $30.85 |
Weighted average exercise price, Granted | $0 |
Weighted average exercise price, Forfeited | $31.36 |
Weighted average exercise price, Exercised or settled | $27.49 |
Weighted average exercise price, Expired or canceled | $0 |
Weighted average exercise price, Outstanding, Ending balance | $30.86 |
Weighted average exercise price, Exercisable at December 31, 2014 | $30.61 |
Aggregate intrinsic value, Outstanding, Ending balance | $2 |
Aggregate intrinsic value, Exercisable at December 31, 2014 | $2 |
Stockbased_Compensation_and_Ou4
Stock-based Compensation and Outstanding Awards - Summary of Status of the Nonvested Shares (Detail) (Restricted Stock and Restricted Stock Units [Member], USD $) | 7 Months Ended |
Dec. 31, 2014 | |
Restricted Stock and Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested shares, beginning balance | 1,034,055 |
Shares, Granted | 1,422,708 |
Shares, Vested | 0 |
Shares, Forfeited | -9,825 |
Shares , Expired or canceled | 0 |
Nonvested shares, ending balance | 2,446,938 |
Weighted average grant date fair value, Nonvested beginning balance | $31.94 |
Weighted average grant date fair value, Granted | $29.02 |
Weighted average grant date fair value, Vested | $0 |
Weighted average grant date fair value, Forfeited | $31.59 |
Weighted average grant date fair value, Expired or canceled | $30.24 |
Weighted average grant date fair value, Nonvested ending balance | $30.24 |
Stockbased_Compensation_and_Ou5
Stock-based Compensation and Outstanding Awards - Significant Assumptions Used to Calculate the Grant Date Fair Market Values of Options Granted (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Valuation Assumptions: | |||
Expected volatility | 50.00% | 50.10% | 51.70% |
Risk-free interest rate | 0.90% | 0.90% | 0.90% |
Expected dividends | $0.75 | $0.75 | $0.57 |
Expected term (in years) | 3 years 4 months 24 days | 3 years 4 months 24 days | 3 years 2 months 12 days |
Quarterly_Financial_Data_Summa
Quarterly Financial Data - Summarized Quarterly Result (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $1,006 | $1,070 | $952 | $1,077 | $1,041 | $1,113 | $1,070 | $1,072 | $4,105 | $4,296 | $3,414 |
Operating expenses | |||||||||||
Cost of products | 801 | 857 | 759 | 869 | 844 | 907 | 874 | 874 | 3,286 | 3,499 | 2,803 |
Operating and warehousing costs | 110 | 108 | 105 | 102 | 104 | 104 | 103 | 101 | 425 | 412 | 315 |
Selling, general and administrative | 69 | 55 | 45 | 44 | 43 | 39 | 40 | 39 | 213 | 161 | 128 |
Operating profit | 26 | 50 | 43 | 62 | 50 | 63 | 53 | 58 | 181 | 224 | 168 |
Other income | -2 | -1 | -2 | -4 | 2 | 2 | -3 | -2 | -3 | ||
Income before income taxes | 24 | 49 | 43 | 62 | 48 | 59 | 55 | 60 | 178 | 222 | 165 |
Provision for income taxes | 8 | 17 | 16 | 21 | 14 | 20 | 22 | 19 | 62 | 75 | 57 |
Net income | $16 | $32 | $27 | $41 | $34 | $39 | $33 | $41 | $116 | $147 | $108 |
Earnings per share | |||||||||||
Basic earnings per common share | $0.15 | $0.30 | $0.25 | $0.38 | $0.32 | $0.37 | $0.31 | $0.37 | $1.07 | $1.37 | $1.01 |
Diluted earnings per common share | $0.14 | $0.30 | $0.25 | $0.38 | $0.32 | $0.36 | $0.31 | $0.37 | $1.06 | $1.37 | $1 |
Weighted-average common shares outstanding, basic | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,058,843 | 107,053,031 | 107,053,031 |
Weighted-average common shares outstanding, diluted | 108,000,000 | 108,000,000 | 108,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,000,000 | 107,556,144 | 107,468,868 | 107,468,868 |
Employee_Bargaining_Agreements1
Employee Bargaining Agreements and Benefit Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Employees | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expenses for defined contribution plan | $13 | $14 | $6 |
Number of temporary employees | 500 | ||
Projected benefit obligation | 4 | ||
Defined benefit plan fair value of plan assets | $5 | ||
UK [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of defined benefit plan | 1 | ||
Minimum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total number of employee | 5,000 | ||
Maximum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of employees collective bargaining agreement | 1.00% |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Acquisition | |
Business Combinations [Abstract] | |
Number of acquisitions completed | 3 |
Aggregate purchase price | $36 |
Net assets acquired and recognized goodwill | 20 |
Intangible assets | $10 |