Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 25, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | DNOW | |
Entity Registrant Name | NOW INC. | |
Entity Central Index Key | 1,599,617 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 107,667,793 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 102 | $ 106 |
Receivables, net | 412 | 354 |
Inventories, net | 491 | 483 |
Prepaid and other current assets | 20 | 16 |
Total current assets | 1,025 | 959 |
Property, plant and equipment, net | 136 | 143 |
Deferred income taxes | 2 | 1 |
Goodwill | 316 | 311 |
Intangibles, net | 180 | 184 |
Other assets | 4 | 5 |
Total assets | 1,663 | 1,603 |
Current liabilities: | ||
Accounts payable | 305 | 246 |
Accrued liabilities | 94 | 100 |
Other current liabilities | 1 | |
Total current liabilities | 399 | 347 |
Long-term debt | 82 | 65 |
Deferred income taxes | 6 | 7 |
Other long-term liabilities | 1 | 1 |
Total liabilities | 488 | 420 |
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; 107,667,793 and 107,474,904 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 1 | 1 |
Additional paid-in capital | 2,007 | 2,002 |
Accumulated deficit | (701) | (678) |
Accumulated other comprehensive loss | (132) | (142) |
Total stockholders' equity | 1,175 | 1,183 |
Total liabilities and stockholders' equity | $ 1,663 | $ 1,603 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
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 | 107,667,793 | 107,474,904 |
Common stock, shares outstanding | 107,667,793 | 107,474,904 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Revenue | $ 631 | $ 548 |
Operating expenses: | ||
Cost of products | 517 | 461 |
Warehousing, selling and administrative | 135 | 152 |
Operating loss | (21) | (65) |
Other expense | (2) | (2) |
Loss before income taxes | (23) | (67) |
Income tax benefit | (4) | |
Net loss | $ (23) | $ (63) |
Loss per share: | ||
Basic loss per common share | $ (0.21) | $ (0.59) |
Diluted loss per common share | $ (0.21) | $ (0.59) |
Weighted-average common shares outstanding, basic | 107,550,846 | 107,272,937 |
Weighted-average common shares outstanding, diluted | 107,550,846 | 107,272,937 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (23) | $ (63) |
Other comprehensive income: | ||
Foreign currency translation adjustments | 10 | 23 |
Comprehensive loss | $ (13) | $ (40) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (23) | $ (63) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 13 | 12 |
Deferred income taxes | (2) | (2) |
Stock-based compensation | 6 | 6 |
Provision for doubtful accounts | (1) | 7 |
Provision for inventory | 5 | 13 |
Change in operating assets and liabilities, net of acquisitions: | ||
Receivables | (53) | 72 |
Inventories | (11) | 55 |
Prepaid and other current assets | (4) | 1 |
Accounts payable and accrued liabilities | 52 | (7) |
Income taxes receivable, net | (1) | (3) |
Other assets / liabilities, net | (2) | (2) |
Net cash provided by (used in) operating activities | (21) | 89 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (1) | (1) |
Business acquisitions, net of cash acquired | (3) | |
Other, net | 2 | 1 |
Net cash provided by (used in) investing activities | (2) | |
Cash flows from financing activities: | ||
Borrowing under the revolving credit facility | 59 | 10 |
Repayments under the revolving credit facility | (42) | (63) |
Other | (1) | (4) |
Net cash provided by (used in) financing activities | 16 | (57) |
Effect of exchange rates on cash and cash equivalents | 3 | 9 |
Net change in cash and cash equivalents | (4) | 41 |
Cash and cash equivalents, beginning of period | 106 | 90 |
Cash and cash equivalents, end of period | $ 102 | $ 131 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [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 80 countries. NOW’s energy product offerings are used in the oil and gas 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 other 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. Basis of Presentation All significant intercompany transactions and accounts have been eliminated. The unaudited consolidated financial information included in this report has been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of SEC Regulation S-X. The principles for interim financial information do not require the inclusion of all the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the financial statements included in the Company’s most recent Annual Report on Form 10-K. In the opinion of the Company’s management, the consolidated financial statements include all adjustments, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the full year. 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. Reclassification Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported operating loss, loss before income taxes or net loss. 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. Cash equivalents include only those investments having a maturity date of three months or less at the time of purchase. See Note 11 “Derivative Financial Instruments” for the fair value of derivative financial instruments. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers Revenue Recognition Narrow-Scope Improvements and Practical Expedients In February 2016, the FASB issued ASU 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Recently Adopted Accounting Standards In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU 2016-16, Intra-Entity Asset Transfers of Assets Other than Inventory to recognize the income tax consequences of intra-entity transfers of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for annual and interim periods in fiscal years beginning after December 15, 2017 with early adoption permitted in the first interim period of fiscal year 2017. Upon adoption, any deferred charge established upon the intra-company transfer would be recorded as a cumulative-effect adjustment to retained earnings. The Company early adopted this standard in the first quarter of fiscal year 2017 and reversed a deferred charge of $1 million previously recorded in prepaid and other current assets in the accompanying consolidated balance sheets. However, due to the Company’s full valuation allowance in the U.S., the deferred charge recorded as a cumulative-effect adjustment to accumulated deficit netted to zero. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 3 Months Ended |
Mar. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment, net | 2. Property, Plant and Equipment, net Property, plant and equipment consist of (in millions): Estimated Useful Lives March 31, 2017 December 31, 2016 Information technology assets 1-7 Years $ 47 $ 47 Operating equipment 2-15 Years 93 93 Buildings and land (1) 5-35 Years 95 95 Construction in progress 2 1 Total property, plant and equipment 237 236 Less: accumulated depreciation (101 ) (93 ) Property, plant and equipment, net $ 136 $ 143 (1) . |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | 3. Accrued Liabilities Accrued liabilities consist of (in millions): March 31, 2017 December 31, 2016 Compensation and other related expenses $ 30 $ 25 Customer credits and prepayments 20 27 Taxes (non-income) 13 17 Other 31 31 Total $ 94 $ 100 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 4. Debt On January 20, 2016, the Company entered into an amendment (the “Amendment”) to its credit facility dated as of April 18, 2014 (the “Credit Agreement”). The Amendment, among other things, (i) suspends, until the Company elects otherwise, the Credit Agreement’s minimum interest coverage ratio effective as of December 30, 2015, (ii) adds a minimum asset coverage ratio (as defined in the Credit Agreement), which requires that the ratio of the value of the Company’s eligible assets (value of qualified cash, eligible inventory and eligible accounts receivable) to the amount of its outstanding obligations under the Credit Agreement is no less than 1.50 to 1.00, (iii) reduces the maximum capitalization ratio (as defined in the Credit Agreement) from 50% to 45%, (iv) increases the applicable interest margin on current borrowings by 75 basis points and the current commitment fee by 5 basis points and (v) reduces sub-facilities for standby letters of credit and swingline loans to $40 million and $25 million, respectively. In connection with the Amendment, the Company also entered into a Security Agreement dated as of January 20, 2016 (the “Security Agreement”) pursuant to which it granted the lenders under the Credit Agreement customary security interests in substantially all of the Company’s U.S. assets and in approximately 65% of the equity interests of the Company’s first-tier foreign subsidiaries. As of March 31, 2017, the Company had borrowed $82 million against its senior secured revolving credit facility, and had $467 million in availability (as defined in the Credit Agreement) resulting in the excess availability (as defined in the Credit Agreement) of 85%, subject to certain restrictions. Borrowings that result in the excess availability dropping below 25% are conditioned upon compliance with or waiver of a minimum fixed charge ratio (as defined in the Credit Agreement). The Company was not obligated to pay back the borrowing against the senior secured revolving credit facility until the expiration date of April 18, 2019, as such the outstanding borrowing is classified as long term. As of March 31, 2017, the Company was in compliance with all financial covenants in the credit facility. Total commitments under the amended credit facility remain at $750 million and the amended credit facility continues to include the $250 million accordion feature, subject to certain conditions. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 5. Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) are as follows (in millions) Foreign Currency Translation Adjustments Balance at December 31, 2016 $ (142 ) Other comprehensive income 10 Balance at March 31, 2017 $ (132 ) 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, foreign currency translation adjustments resulting from the process of translating the entities’ financial statements into the reporting currency are reported in other comprehensive income (loss) in accordance with ASC Topic 830 “ Foreign Currency Matters |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Business Segments | 6. Business Segments Operating results by reportable segment are as follows (in millions) Three Months Ended March 31, 2017 2016 Revenue: United States $ 439 $ 357 Canada 96 63 International 96 128 Total revenue $ 631 $ 548 Operating profit (loss): United States $ (26 ) $ (59 ) Canada 3 (6 ) International 2 — Total operating loss $ (21 ) $ (65 ) Operating profit (loss) % of revenue: United States (5.9 %) (16.5 %) Canada 3.1 % (9.5 %) International 2.1 % — Total operating loss % (3.3 %) (11.9 %) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes 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 connection with the Separation, the Company and NOV entered into a Tax Matters Agreement, dated as of May 29, 2014 (the “Tax Matters Agreement”). 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 has prepared and filed the consolidated federal income tax return, and any other tax returns that include both NOV and the Company for all the liability periods ended on or prior to May 30, 2014. The income tax provision (benefit) for periods prior to the Separation has been computed as if NOW were a stand-alone company. 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. The effective tax rate for the three months ended March 31, 2017 was 1.8%, compared to 5.2% for the same period in 2016. Compared to the U.S. statutory rate, the effective tax rate was impacted by recurring items, such as lower tax rates on income earned in foreign jurisdictions that is permanently reinvested, offset by nondeductible expenses, state income taxes and the change in valuation allowance recorded against deferred tax assets. Due to the continuing uncertainty in our industry and thus our outlook, the Company continues to utilize the method of recording income taxes on a year-to-date effective tax rate for the three months ended March 31, 2017. The Company will evaluate its use of this method each quarter until such time as a return to the annualized estimated effective tax rate method is deemed appropriate. To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts have been classified as a component of income tax provision (benefit) in the financial statements consistent with the Company’s policy. 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. 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 2012 and outside the U.S. for the tax years ending after 2010. The Company is indemnified for any income tax exposures related to the periods prior to the Separation under the Tax Matters Agreement with NOV. |
Loss Per Share ("EPS")
Loss Per Share ("EPS") | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Loss Per Share ("EPS") | 8. Loss Per Share (“EPS”) For the three months ended March 31, 2017 and 2016, 7,762,312 and 6,951,056, respectively, Basic and diluted loss per share follows (in millions, except share data) Three Months Ended March 31, 2017 2016 Numerator for basic and diluted net loss per share attributable to the Company's stockholders: Net loss attributable to the Company's stockholders $ (23 ) $ (63 ) Denominator for basic loss per share attributable to the Company's stockholders: Weighted average common shares outstanding 107,550,846 107,272,937 Effect of dilutive securities: Dilutive effect of stock-based compensation — — Denominator for diluted loss per share attributable to the Company's stockholders 107,550,846 107,272,937 Loss per share attributable to the Company's stockholders: Basic $ (0.21 ) $ (0.59 ) Diluted $ (0.21 ) $ (0.59 ) ASC Topic 260, “Earnings Per Share” 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 losses are not allocated to nonvested shares in periods that the Company determines that those shares are not obligated to participate in losses. |
Stock-based Compensation and Ou
Stock-based Compensation and Outstanding Awards | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation and Outstanding Awards | 9. Stock-based Compensation and Outstanding Awards In connection with the Separation, the Company and NOV entered into the Employee Matters Agreement which 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 provided the adjustment mechanisms applied as a result of the Spin-Off to convert outstanding NOV equity awards held by Company employees to Company awards. The Company has a stock-based compensation plan known as the NOW Inc. Long-Term Incentive Plan (the “Plan”). Under the Plan, the Company’s employees are eligible to be granted stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and performance stock awards (“PSAs”). For the three months ended March 31, 2017, the Company granted 915,037 stock options with a weighted average fair value of $7.07 per share and 146,723 shares of RSAs and RSUs with a weighted average fair value of $20.64 per share. In addition, the Company granted PSAs to senior management employees with potential payouts varying from zero to 169,346 shares. These options vest over a three-year period from the grant date on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. The RSAs and RSUs vest on the third anniversary of the date of grant. The PSAs can be earned based on performance against established metrics over a three-year performance period. The PSAs are divided into three equal, independent parts that are subject to three separate performance metrics: (i) one-third of the PSAs have a Total Shareholder Return (TSR) metric, (ii) one-third of the PSAs have an EBITDA metric, and (iii) one-third of the PSAs have a Working Capital (WC) metric. Performance against the TSR metric is determined by comparing the performance of the Company’s TSR with the TSR performance of designated peer companies for the three-year performance period. Performance against the EBITDA metric is determined by comparing the performance of the Company’s actual EBITDA average for each of the three-years of the performance period against the EBITDA metrics set by the Company’s Compensation Committee of the Board of Directors. Performance against the WC metric is determined by comparing the performance of the Company’s actual WC average for each of the three-years of the performance period against the WC metrics set by the Company’s Compensation Committee of the Board of Directors. Stock-based compensation expense totaled $6 million for the three months ended March 31, 2017 and 2016. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies In connection with the Spin-Off, the Company and NOV entered into a Separation and Distribution Agreement which 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 Company is involved in various claims, regulatory agency audits and pending or threatened legal actions involving a variety of matters. 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. 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 does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible, but not probable. Estimating reasonably possible losses also requires the analysis of multiple possible outcomes that often depend on judgments about potential actions by third parties. NOW’s management currently estimates a range of loss for reasonably possible losses for which an estimate can be made is between zero and $15 million in the international segment primarily attributable to accounts receivable with one customer. The Company has accrued its best estimate for The Company maintains credit arrangements with several banks providing for short-term borrowing capacity, overdraft protection and other bonding requirements. As of March 31, 2017, these credit ar rangements totaled approximately $46 million, of which the Company was contingently liable for approximately $11 million of outstanding standby letters of credit, including bid and performance related bonds and surety bonds. The Company does not believe |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 11. 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. The Company has entered into certain financial derivative instruments to manage this risk. The derivative financial instruments the Company has entered into are forward exchange contracts which have terms of less than one year to economically hedge foreign currency exchange rate risk on recognized non-functional currency monetary accounts. The purpose of the Company’s foreign currency economic hedging activities is to economically hedge the Company’s risk from changes in the fair value of non-functional currency denominated monetary accounts. 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 and the gain or loss on the derivative instrument is recorded in earnings. The Company has determined that the fair value of its derivative financial instruments are computed 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. The table below provides data about the fair value of the derivative instruments that are recorded in the consolidated balance sheets ( in millions March 31, 2017 December 31, 2016 Assets Liabilities Assets Liabilities Derivatives not designated as hedging instruments: Foreign exchange forward contracts (1) $ 1 $ — $ 1 $ — (1) Included in other current liabilities and other current assets in the consolidated balance sheets. The total notional amount of the forward foreign exchange contracts was approximately $26 million and $76 million at March 31, 2017 and December 31, 2016, respectively. The table below provides the gains recognized in other income in the accompanying consolidated statements of operations related to the Company’s derivative instruments ( in millions Three Months Ended March 31, 2017 2016 Derivatives not designated as hedging instruments: Foreign exchange forward contracts $ 1 $ 6 As of March 31, 2017, 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. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | 1 2. Acquisitions On June 1, 2016, the Company acquired Power Service, Inc., Industrial Tool & Repair, Inc. and Power Transportation LLC (collectively, “Power Service”) for a purchase price consideration of $179 million. Power Service is known as a premier one-stop shop for modularized well hook-ups. This acquisition primarily expands NOW’s market in the western United States. The Company has included the financial results of the acquisition in its consolidated financial statements from the date of the acquisition. The Company completed its preliminary valuations of this acquisition as of the acquisition date and recognized goodwill of $119 million and intangible assets of $45 million which is subject to change. If additional information is obtained about these assets and liabilities within the measurement period (not to exceed one year from the date of acquisition), the Company will refine its estimate of fair value to allocate the purchase price more accurately; any such revisions are not expected to be significant. During the three months ended March 31, 2017, the Company recognized measurement period adjustments based on information that was received subsequent to the acquisition date that related to conditions that existed as of the acquisition date. The effect of these adjustments resulted in a $1 million increase to the purchase price, current asset and current liabilities, and a $1 million decrease to property, plant and equipment. The net impact of these adjustments was a $2 million increase to goodwill. Following is the purchase price allocation detail ( in millions As of March 31, 2017 Net purchase price $ 179 Fair value of net assets acquired: Current assets other than cash 26 Property, plant and equipment 11 Trade names (estimated useful lives of 20 years) 20 Customer relationships (estimated useful lives of 10 years) 25 Current liabilities (21 ) Deferred tax liabilities (1 ) Total fair value of net assets acquired 60 Goodwill (1) $ 119 (1) The amount of goodwill represents the excess of its purchase price over the fair value of net assets acquired. Goodwill includes the expected benefits that the Company believes will result from combining its operations with those of businesses acquired. The amount of goodwill recognized that is expected to be deductible for income tax purposes is $116 million. The Purchase Agreement with Power Service contains non-compete agreements with certain employees. The Company identified these agreements as a separate transaction and recognized a non-compete intangible asset of $7 million with a two-year life. Amortization expense for these agreements recognized for the quarter ended March 31, 2017 was approximately $1 million. The Company has not presented supplemental pro forma information because the acquired operations did not materially impact the Company’s consolidated operating results. |
Organization and Basis of Pre19
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
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 80 countries. NOW’s energy product offerings are used in the oil and gas 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 other 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. |
Basis of Presentation | Basis of Presentation All significant intercompany transactions and accounts have been eliminated. The unaudited consolidated financial information included in this report has been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of SEC Regulation S-X. The principles for interim financial information do not require the inclusion of all the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the financial statements included in the Company’s most recent Annual Report on Form 10-K. In the opinion of the Company’s management, the consolidated financial statements include all adjustments, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the full year. |
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. |
Reclassification | Reclassification Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported operating loss, loss before income taxes or net loss. |
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. Cash equivalents include only those investments having a maturity date of three months or less at the time of purchase. See Note 11 “Derivative Financial Instruments” for the fair value of derivative financial instruments. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers Revenue Recognition Narrow-Scope Improvements and Practical Expedients In February 2016, the FASB issued ASU 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU 2016-16, Intra-Entity Asset Transfers of Assets Other than Inventory to recognize the income tax consequences of intra-entity transfers of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for annual and interim periods in fiscal years beginning after December 15, 2017 with early adoption permitted in the first interim period of fiscal year 2017. Upon adoption, any deferred charge established upon the intra-company transfer would be recorded as a cumulative-effect adjustment to retained earnings. The Company early adopted this standard in the first quarter of fiscal year 2017 and reversed a deferred charge of $1 million previously recorded in prepaid and other current assets in the accompanying consolidated balance sheets. However, due to the Company’s full valuation allowance in the U.S., the deferred charge recorded as a cumulative-effect adjustment to accumulated deficit netted to zero. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment |
Property, Plant and Equipment20
Property, Plant and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Property, plant and equipment consist of (in millions): Estimated Useful Lives March 31, 2017 December 31, 2016 Information technology assets 1-7 Years $ 47 $ 47 Operating equipment 2-15 Years 93 93 Buildings and land (1) 5-35 Years 95 95 Construction in progress 2 1 Total property, plant and equipment 237 236 Less: accumulated depreciation (101 ) (93 ) Property, plant and equipment, net $ 136 $ 143 (1) . |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Payables And Accruals [Abstract] | |
Summary of Accrued Liabilities | Accrued liabilities consist of (in millions): March 31, 2017 December 31, 2016 Compensation and other related expenses $ 30 $ 25 Customer credits and prepayments 20 27 Taxes (non-income) 13 17 Other 31 31 Total $ 94 $ 100 |
Accumulated Other Comprehensi22
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) are as follows (in millions) Foreign Currency Translation Adjustments Balance at December 31, 2016 $ (142 ) Other comprehensive income 10 Balance at March 31, 2017 $ (132 ) |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of Operating Results by Reportable Segment | Operating results by reportable segment are as follows (in millions) Three Months Ended March 31, 2017 2016 Revenue: United States $ 439 $ 357 Canada 96 63 International 96 128 Total revenue $ 631 $ 548 Operating profit (loss): United States $ (26 ) $ (59 ) Canada 3 (6 ) International 2 — Total operating loss $ (21 ) $ (65 ) Operating profit (loss) % of revenue: United States (5.9 %) (16.5 %) Canada 3.1 % (9.5 %) International 2.1 % — Total operating loss % (3.3 %) (11.9 %) |
Loss Per Share ("EPS") (Tables)
Loss Per Share ("EPS") (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Loss Per Share | Basic and diluted loss per share follows (in millions, except share data) Three Months Ended March 31, 2017 2016 Numerator for basic and diluted net loss per share attributable to the Company's stockholders: Net loss attributable to the Company's stockholders $ (23 ) $ (63 ) Denominator for basic loss per share attributable to the Company's stockholders: Weighted average common shares outstanding 107,550,846 107,272,937 Effect of dilutive securities: Dilutive effect of stock-based compensation — — Denominator for diluted loss per share attributable to the Company's stockholders 107,550,846 107,272,937 Loss per share attributable to the Company's stockholders: Basic $ (0.21 ) $ (0.59 ) Diluted $ (0.21 ) $ (0.59 ) |
Derivative Financial Instrume25
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Instruments | The table below provides data about the fair value of the derivative instruments that are recorded in the consolidated balance sheets ( in millions March 31, 2017 December 31, 2016 Assets Liabilities Assets Liabilities Derivatives not designated as hedging instruments: Foreign exchange forward contracts (1) $ 1 $ — $ 1 $ — (1) Included in other current liabilities and other current assets in the consolidated balance sheets. The total notional amount of the forward foreign exchange contracts was approximately $26 million and $76 million at March 31, 2017 and December 31, 2016, respectively. |
Schedule of Gains Recognized | The table below provides the gains recognized in other income in the accompanying consolidated statements of operations related to the Company’s derivative instruments ( in millions Three Months Ended March 31, 2017 2016 Derivatives not designated as hedging instruments: Foreign exchange forward contracts $ 1 $ 6 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocation | Following is the purchase price allocation detail ( in millions As of March 31, 2017 Net purchase price $ 179 Fair value of net assets acquired: Current assets other than cash 26 Property, plant and equipment 11 Trade names (estimated useful lives of 20 years) 20 Customer relationships (estimated useful lives of 10 years) 25 Current liabilities (21 ) Deferred tax liabilities (1 ) Total fair value of net assets acquired 60 Goodwill (1) $ 119 (1) The amount of goodwill represents the excess of its purchase price over the fair value of net assets acquired. Goodwill includes the expected benefits that the Company believes will result from combining its operations with those of businesses acquired. The amount of goodwill recognized that is expected to be deductible for income tax purposes is $116 million. |
Organization and Basis of Pre27
Organization and Basis of Presentation - Additional Information (Detail) | Nov. 22, 2013GeographicMarketVendorCountry | Mar. 31, 2017USD ($) |
Basis Of Presentation And Organization [Line Items] | ||
Number of geographical area covered | GeographicMarket | 80 | |
Number of vendors | Vendor | 1,000 | |
Number of countries distribution occur through vendors | Country | 40 | |
ASU 2016-16 [Member] | ||
Basis Of Presentation And Organization [Line Items] | ||
Upon adoption of deferred charge cumulative-effect adjustment to accumulated deficit netted | $ 0 | |
Prepaid and Other Current Assets [Member] | ASU 2016-16 [Member] | ||
Basis Of Presentation And Organization [Line Items] | ||
Reversal of deferred charge | $ 1,000,000 |
Property, Plant and Equipment28
Property, Plant and Equipment, net - Summary of Property, Plant and Equipment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 237 | $ 236 |
Less: accumulated depreciation | (101) | (93) |
Property, plant and equipment, net | 136 | 143 |
Information Technology Assets [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 47 | 47 |
Operating Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 93 | 93 |
Buildings and Land [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 95 | 95 |
Construction in progress [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2 | $ 1 |
Minimum [Member] | Information Technology Assets [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 1 year | |
Minimum [Member] | Operating Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 2 years | |
Minimum [Member] | Buildings [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 5 years | |
Maximum [Member] | Information Technology Assets [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 7 years | |
Maximum [Member] | Operating Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 15 years | |
Maximum [Member] | Buildings [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 35 years |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Payables And Accruals [Abstract] | ||
Compensation and other related expenses | $ 30 | $ 25 |
Customer credits and prepayments | 20 | 27 |
Taxes (non-income) | 13 | 17 |
Other | 31 | 31 |
Total | $ 94 | $ 100 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Jan. 20, 2016 | Mar. 31, 2017 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Agreement date | Apr. 18, 2014 | ||
Minimum asset coverage ratio | 150.00% | ||
Maximum capitalization ratio | 45.00% | 50.00% | |
Base rate | 0.75% | ||
Percentage increase in commitment fee | 0.05% | ||
Percentage of equity in customary security interest | 65.00% | ||
Senior secured revolving credit facility commitment | $ 750,000,000 | ||
Line of Credit Facility, Expiration Date | Apr. 18, 2019 | ||
Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit covenant trigger percentage | 25.00% | ||
Standby Letters of Credit | |||
Debt Instrument [Line Items] | |||
Line of credit facility borrowings | $ 40,000,000 | ||
Swing Line Loan | |||
Debt Instrument [Line Items] | |||
Line of credit facility borrowings | $ 25,000,000 | ||
Senior Secured Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility borrowings | $ 82,000,000 | ||
Line of Credit Facility, Available Borrowing Capacity | $ 467,000,000 | ||
Line Of credit Unused Capacity Percentage | 85.00% | ||
Accordion Debt [member] | |||
Debt Instrument [Line Items] | |||
Senior secured revolving credit facility commitment | $ 250,000,000 |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Income (Loss) - Summary of Components of Accumulated Other Comprehensive Income (Loss) (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Accumulated other comprehensive income (loss), Beginning balance | $ (142) |
Accumulated other comprehensive income (loss), Ending balance | (132) |
Accumulated Other Comprehensive Income (Loss) [Member] | |
Accumulated other comprehensive income (loss), Beginning balance | (142) |
Other comprehensive income | 10 |
Accumulated other comprehensive income (loss), Ending balance | $ (132) |
Business Segments - Summary of
Business Segments - Summary of Operating Results by Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||
Total revenue | $ 631 | $ 548 |
Operating profit (loss): | ||
Total operating loss | $ (21) | $ (65) |
Operating profit (loss) % of revenue: | ||
Total operating loss % | (3.30%) | (11.90%) |
United States [Member] | ||
Revenue: | ||
Total revenue | $ 439 | $ 357 |
Operating profit (loss): | ||
Total operating loss | $ (26) | $ (59) |
Operating profit (loss) % of revenue: | ||
Total operating loss % | (5.90%) | (16.50%) |
Canada [Member] | ||
Revenue: | ||
Total revenue | $ 96 | $ 63 |
Operating profit (loss): | ||
Total operating loss | $ 3 | $ (6) |
Operating profit (loss) % of revenue: | ||
Total operating loss % | 3.10% | (9.50%) |
International [Member] | ||
Revenue: | ||
Total revenue | $ 96 | $ 128 |
Operating profit (loss): | ||
Total operating loss | $ 2 | |
Operating profit (loss) % of revenue: | ||
Total operating loss % | 2.10% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 1.80% | 5.20% |
Loss Per Share ("EPS") - Additi
Loss Per Share ("EPS") - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Antidilutive Securities excluded from Computation of Earnings Per Share | 7,762,312 | 6,951,056 |
Loss Per Share ("EPS") - Comput
Loss Per Share ("EPS") - Computation of Basic and Diluted Loss Per Share (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator for basic and diluted net loss per share attributable to the Company's stockholders: | ||
Net loss attributable to the Company's stockholders | $ (23) | $ (63) |
Denominator for basic loss per share attributable to the Company's stockholders: | ||
Weighted-average common shares outstanding, basic | 107,550,846 | 107,272,937 |
Effect of dilutive securities: | ||
Denominator for diluted loss per share attributable to the Company's stockholders | 107,550,846 | 107,272,937 |
Basic loss per common share | $ (0.21) | $ (0.59) |
Diluted loss per common share | $ (0.21) | $ (0.59) |
Stock-based Compensation and 36
Stock-based Compensation and Outstanding Awards - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock option granted | 915,037 | |
Stock option granted, weighted average fair value | $ 7.07 | |
Stock-based compensation expense | $ 6 | $ 6 |
Restricted Stock and Restricted Stock Units [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based awards, shares granted | 146,723 | |
Stock based awards, shares granted, weighted average fair value | $ 20.64 | |
Performance-base restricted stock [Member] | Minimum [Member] | Senior Management Employees [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based awards, shares granted | 0 | |
Performance-base restricted stock [Member] | Maximum [Member] | Senior Management Employees [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based awards, shares granted | 169,346 | |
Stock Options [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based awards, vested, number of years | 3 years | |
TSR metric [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Performance based restricted stock awards granted in percent | 33.33% | |
Performance based restricted stock awards goals over performance period | 3 years | |
EBITDA metric [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Performance based restricted stock awards granted in percent | 33.33% | |
Performance based restricted stock awards goals over performance period | 3 years | |
Working Capital (WC) metric [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Performance based restricted stock awards granted in percent | 33.33% | |
Performance based restricted stock awards goals over performance period | 3 years |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Mar. 31, 2017USD ($) |
Loss Contingencies [Line Items] | |
Credit arrangements | $ 46,000,000 |
Contingent liability | 11,000,000 |
Minimum [Member] | |
Loss Contingencies [Line Items] | |
Range of reasonably possible losses | 0 |
Maximum [Member] | |
Loss Contingencies [Line Items] | |
Range of reasonably possible losses | $ 15,000,000 |
Derivative Financial Instrume38
Derivative Financial Instruments - Schedule of Fair Value of Derivative Instruments (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Derivatives Not Designated as Hedging Instrument [Member] | ||
Derivatives Fair Value [Line Items] | ||
Foreign exchange forward contracts, Assets | $ 1 | $ 1 |
Derivative Financial Instrume39
Derivative Financial Instruments - Schedule of Fair Value of Derivative Instruments (Parenthetical) (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Forward Contracts [Member] | ||
Derivatives Fair Value [Line Items] | ||
Notional amount of forward foreign exchange contracts | $ 26 | $ 76 |
Derivative Financial Instrume40
Derivative Financial Instruments - Schedule of Gains Recognized (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Derivatives Not Designated as Hedging Instrument [Member] | ||
Derivative Instruments Gain Loss [Line Items] | ||
Foreign exchange forward contracts | $ 1 | $ 6 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Millions | Jun. 01, 2016 | Mar. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 316 | $ 311 | |
Power Service [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price consideration | $ 179 | 179 | |
Goodwill | 119 | ||
Intangible assets | 45 | ||
Business combination adjustments, increase in purchase price | 1 | ||
Business combination adjustments, increase in current assets | 1 | ||
Business combination adjustments, increase in current liabilities | 1 | ||
Business combination adjustments, decrease in property, plant and equipment | (1) | ||
Net impact of business combination adjustments, increase in goodwill | 2 | ||
Power Service [Member] | Non-Compete [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 7 | ||
Intangible assets amortization period | 2 years | ||
Amortization of Intangible Assets | $ 1 |
Acquisitions - Summary of Purch
Acquisitions - Summary of Purchase Price Allocation (Detail) - Power Service [Member] - USD ($) $ in Millions | Jun. 01, 2016 | Mar. 31, 2017 |
Business Acquisition [Line Items] | ||
Net purchase price | $ 179 | $ 179 |
Fair value of net assets acquired: | ||
Current assets other than cash | 26 | |
Property, plant and equipment | 11 | |
Intangible assets | 45 | |
Current liabilities | (21) | |
Deferred tax liabilities | (1) | |
Total fair value of net assets acquired | 60 | |
Goodwill | 119 | |
Trade Names [Member] | ||
Fair value of net assets acquired: | ||
Intangible assets | 20 | |
Customer Relationships [Member] | ||
Fair value of net assets acquired: | ||
Intangible assets | $ 25 |
Acquisitions - Summary of Pur43
Acquisitions - Summary of Purchase Price Allocation (Parenthetical) (Detail) - Power Service [Member] $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Business Acquisition [Line Items] | |
Goodwill | $ 116 |
Trade Names [Member] | |
Business Acquisition [Line Items] | |
Estimated useful lives | 20 years |
Customer Relationships [Member] | |
Business Acquisition [Line Items] | |
Estimated useful lives | 10 years |