Date of Report (Date of earliest event reported): | January 28, 2016 |
Delaware ___________________ (State or other jurisdiction of incorporation) | 1-13884 _________________ (Commission File Number) | 76-0451843 ___________________ (I.R.S. Employer Identification No.) |
1333 West Loop South, Suite 1700, Houston, Texas ________________________________________ | 77027 _______________ |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant's telephone number, including area code: | (713) 513-3300 |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit Number | Exhibit Title or Description |
Exhibit 99.1 | Press Release of Cameron International Corporation, dated January 28, 2016 – Cameron Fourth Quarter Earnings. |
CAMERON INTERNATIONAL CORPORATION | |
By: /s/ Charles M. Sledge | |
Charles M. Sledge | |
Senior Vice President and Chief Financial Officer |
Exhibit Number | Exhibit Title or Description |
Press Release of Cameron International Corporation, dated January 28, 2016 – Cameron Third Quarter Earnings. |
• | $1.08 fully diluted earnings per share excluding discontinued operations and other costs |
• | 17.8% segment operating income as a percent of revenue, driven by Subsea and Drilling segments |
• | Cash provided by operations reaches nearly $500 million |
• | Subsea - Relative to the fourth quarter of 2014, the segment reported an 85% increase in operating income despite lower revenues, driven in particular by strong execution on several late-stage projects as well as a greater mix of services-related work. Segment orders increased 27% versus the fourth quarter of 2014 and more than doubled as compared to the third quarter of 2015. Orders for the year totaled $2.23 billion versus $2.36 billion in 2014. |
• | Surface - Revenues, operating income and margin all improved relative to the third quarter of 2015 but were lower than the fourth quarter of 2014 due in large part to the weakness in North American markets. |
• | Drilling - Operating income margin increased to 21.7% in the fourth quarter of 2015 as compared to 18.5% in the fourth quarter of 2014 due to continued strong execution. Revenues and operating income declined, reflecting lower project-related backlog as well as a reduction in service activity. |
• | Valves & Measurement - Revenues, operating income and margin all declined relative to the fourth quarter of 2014, reflecting lower volumes and pricing pressures, particularly in the North American distribution market. |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
REVENUES | $ | 2,079 | $ | 2,804 | $ | 8,782 | $ | 10,381 | ||||||||
COSTS AND EXPENSES: | ||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown separately below) | 1,403 | 2,009 | 6,126 | 7,464 | ||||||||||||
Selling and administrative expenses | 261 | 316 | 1,082 | 1,287 | ||||||||||||
Depreciation and amortization | 78 | 92 | 342 | 348 | ||||||||||||
Interest, net | 33 | 31 | 138 | 129 | ||||||||||||
Other costs, net | 115 | 11 | 773 | 73 | ||||||||||||
Total costs and expenses | 1,890 | 2,459 | 8,461 | 9,301 | ||||||||||||
Income from continuing operations before income taxes | 189 | 345 | 321 | 1,080 | ||||||||||||
Income tax provision | (40 | ) | (79 | ) | (184 | ) | (258 | ) | ||||||||
Income from continuing operations | 149 | 266 | 137 | 822 | ||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | (4 | ) | 431 | 26 | |||||||||||
Net income | 149 | 262 | 568 | 848 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 24 | 8 | 67 | 37 | ||||||||||||
Net income attributable to Cameron stockholders | $ | 125 | $ | 254 | $ | 501 | $ | 811 | ||||||||
Amounts attributable to Cameron stockholders: | ||||||||||||||||
Income from continuing operations | $ | 125 | $ | 258 | $ | 70 | $ | 785 | ||||||||
Income (loss) from discontinued operations | — | (4 | ) | 431 | 26 | |||||||||||
Net income attributable to Cameron stockholders | $ | 125 | $ | 254 | $ | 501 | $ | 811 | ||||||||
Earnings (loss) per common share attributable to Cameron stockholders: | ||||||||||||||||
Basic - | ||||||||||||||||
Continuing operations | $ | 0.65 | $ | 1.32 | $ | 0.36 | $ | 3.85 | ||||||||
Discontinued operations | — | (.02 | ) | 2.25 | .13 | |||||||||||
Basic earnings per share | $ | 0.65 | $ | 1.30 | $ | 2.61 | $ | 3.98 | ||||||||
Diluted - | ||||||||||||||||
Continuing operations | $ | 0.65 | $ | 1.30 | $ | 0.36 | $ | 3.83 | ||||||||
Discontinued operations | — | (.02 | ) | 2.24 | .13 | |||||||||||
Diluted earnings per share | $ | 0.65 | $ | 1.28 | $ | 2.60 | $ | 3.96 | ||||||||
Shares used in computing earnings per common share: | ||||||||||||||||
Basic | 192 | 196 | 192 | 204 | ||||||||||||
Diluted | 193 | 198 | 193 | 205 |
December 31, 2015 | December 31, 2014 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 1,775 | $ | 1,513 | ||||
Short-term investments | 584 | 113 | ||||||
Receivables, net | 1,964 | 2,389 | ||||||
Inventories, net | 2,360 | 2,929 | ||||||
Other current assets | 333 | 391 | ||||||
Assets held for sale | 102 | 217 | ||||||
Total current assets | 7,118 | 7,552 | ||||||
Plant and equipment, net | 1,717 | 1,964 | ||||||
Goodwill | 1,764 | 2,461 | ||||||
Intangibles, net | 582 | 728 | ||||||
Other assets | 319 | 187 | ||||||
Total assets | $ | 11,500 | $ | 12,892 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Short-term debt | $ | 284 | $ | 263 | ||||
Accounts payable and accrued liabilities | 2,793 | 3,748 | ||||||
Accrued income taxes | 127 | 168 | ||||||
Liabilities held for sale | 2 | 90 | ||||||
Total current liabilities | 3,206 | 4,269 | ||||||
Long-term debt | 2,542 | 2,819 | ||||||
Deferred income taxes | 212 | 193 | ||||||
Other long-term liabilities | 150 | 167 | ||||||
Total liabilities | 6,110 | 7,448 | ||||||
Stockholders’ equity: | ||||||||
Common stock, par value $.01 per share, 400,000,000 shares authorized, 263,111,472 shares issued at December 31, 2015 and 2014 | 3 | 3 | ||||||
Capital in excess of par value | 3,265 | 3,255 | ||||||
Retained earnings | 6,132 | 5,631 | ||||||
Accumulated other elements of comprehensive income (loss) | (877 | ) | (540 | ) | ||||
Less: Treasury stock at cost, 71,931,558 shares at December 31, 2015 and 68,139,027 shares at December 31, 2014 | (3,969 | ) | (3,794 | ) | ||||
Total Cameron stockholders’ equity | 4,554 | 4,555 | ||||||
Noncontrolling interests | 836 | 889 | ||||||
Total equity | 5,390 | 5,444 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 11,500 | $ | 12,892 |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 149 | $ | 262 | $ | 568 | $ | 848 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Asset impairment and other charges | 68 | — | 654 | 44 | ||||||||||||
Pre-tax gain on sale of compression businesses | — | — | (681 | ) | (95 | ) | ||||||||||
Depreciation | 67 | 78 | 293 | 296 | ||||||||||||
Amortization | 11 | 15 | 49 | 64 | ||||||||||||
Non-cash stock compensation expense | 14 | 11 | 49 | 54 | ||||||||||||
Gain from remeasurement of prior interest in equity method investment | — | — | — | (8 | ) | |||||||||||
Deferred income taxes and tax benefit of stock compensation plan transactions | 17 | (8 | ) | (50 | ) | (48 | ) | |||||||||
Changes in assets and liabilities, net of translation, and non-cash items: | ||||||||||||||||
Receivables | 145 | 124 | 390 | 166 | ||||||||||||
Inventories | 256 | 139 | 362 | (144 | ) | |||||||||||
Accounts payable and accrued liabilities | (43 | ) | 274 | (913 | ) | (17 | ) | |||||||||
Other assets and liabilities, net | (187 | ) | 43 | (13 | ) | 23 | ||||||||||
Net cash provided by operating activities | 497 | 938 | 708 | 1,193 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Proceeds from sales and maturities of short-term investments | 249 | 24 | 923 | 65 | ||||||||||||
Purchases of short-term investments | (512 | ) | (22 | ) | (1,394 | ) | (137 | ) | ||||||||
Capital expenditures | (95 | ) | (126 | ) | (285 | ) | (385 | ) | ||||||||
Net proceeds received from sale of compression businesses, net | — | — | 831 | 547 | ||||||||||||
Other dispositions (acquisitions), net | — | — | — | (7 | ) | |||||||||||
Proceeds from sales of plant and equipment | 3 | 2 | 14 | 13 | ||||||||||||
Net cash provided by (used for) investing activities | (355 | ) | (122 | ) | 89 | 96 | ||||||||||
Cash flows from financing activities: | ||||||||||||||||
Issuance of senior debt | — | — | — | 500 | ||||||||||||
Debt issuance costs | — | — | — | (4 | ) | |||||||||||
Early retirement of senior notes | — | — | — | (253 | ) | |||||||||||
Short-term loan borrowings (repayments), net | (2 | ) | (138 | ) | (222 | ) | (34 | ) | ||||||||
Purchase of treasury stock | — | (191 | ) | (240 | ) | (1,747 | ) | |||||||||
Contributions from (distributions to) noncontrolling interest owners | — | (2 | ) | (3 | ) | (42 | ) | |||||||||
Proceeds from stock option exercises, net of tax payments from stock compensation plan transactions | 15 | 1 | 20 | 40 | ||||||||||||
Excess tax benefits from stock compensation plan transactions | 1 | — | 2 | 6 | ||||||||||||
Principal payments on capital leases | (3 | ) | (5 | ) | (18 | ) | (20 | ) | ||||||||
Net cash used for financing activities | 11 | (335 | ) | (461 | ) | (1,554 | ) | |||||||||
Effect of translation on cash | (5 | ) | (26 | ) | (74 | ) | (35 | ) | ||||||||
Increase (decrease) in cash and cash equivalents | 148 | 455 | 262 | (300 | ) | |||||||||||
Cash and cash equivalents, beginning of year | 1,627 | 1,053 | 1,513 | 1,813 | ||||||||||||
Cash and cash equivalents, end of year | $ | 1,775 | $ | 1,513 | $ | 1,775 | $ | 1,513 |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenues: | ||||||||||||||||
Subsea | $ | 706 | $ | 872 | $ | 2,753 | $ | 3,067 | ||||||||
Surface | 458 | 660 | 1,957 | 2,411 | ||||||||||||
Drilling | 590 | 816 | 2,708 | 3,049 | ||||||||||||
Valves and Measurement (V&M) | 363 | 528 | 1,548 | 2,125 | ||||||||||||
Elimination of intersegment revenues | (38 | ) | (72 | ) | (184 | ) | (271 | ) | ||||||||
Consolidated revenues | $ | 2,079 | $ | 2,804 | $ | 8,782 | $ | 10,381 | ||||||||
Segment operating income before interest and income taxes: | ||||||||||||||||
Subsea | $ | 163 | $ | 88 | $ | 407 | $ | 207 | ||||||||
Surface | 54 | 123 | 264 | 427 | ||||||||||||
Drilling | 128 | 151 | 528 | 474 | ||||||||||||
V&M | 30 | 81 | 177 | 393 | ||||||||||||
Elimination of intersegment earnings | (4 | ) | (21 | ) | (36 | ) | (74 | ) | ||||||||
Segment operating income before interest and income taxes | 371 | 422 | 1,340 | 1,427 | ||||||||||||
Corporate items: | ||||||||||||||||
Corporate expenses | (34 | ) | (35 | ) | (108 | ) | (145 | ) | ||||||||
Interest, net | (33 | ) | (31 | ) | (138 | ) | (129 | ) | ||||||||
Other costs, net | (115 | ) | (11 | ) | (773 | ) | (73 | ) | ||||||||
Consolidated income from continuing operations before income taxes | $ | 189 | $ | 345 | $ | 321 | $ | 1,080 | ||||||||
Orders: | ||||||||||||||||
Subsea | $ | 656 | $ | 518 | $ | 2,228 | $ | 2,356 | ||||||||
Surface | 396 | 560 | 1,770 | 2,480 | ||||||||||||
Drilling | 169 | 419 | 1,107 | 2,449 | ||||||||||||
V&M | 315 | 509 | 1,418 | 2,091 | ||||||||||||
Consolidated orders | $ | 1,536 | $ | 2,006 | $ | 6,523 | $ | 9,376 |
December 31, | December 31, | |||||||
Backlog (at end of period): | 2015 | 2014 | ||||||
Subsea | $ | 3,421 | $ | 4,263 | ||||
Surface | 884 | 1,025 | ||||||
Drilling | 1,611 | 3,327 | ||||||
V&M | 701 | 921 | ||||||
Consolidated backlog | $ | 6,617 | $ | 9,536 |
Three Months Ended December 31, 2015 | ||||||||
After Tax | Diluted EPS(1) | |||||||
Net income attributable to Cameron from continuing operations | $ | 125 | $ | 0.65 | ||||
Adjustments: | ||||||||
Asset charges & loss on disposal of assets | 50 | |||||||
Facility closures & severance | 32 | |||||||
All other | 1 | |||||||
Net income attributable to Cameron, excluding charges | $ | 208 | $ | 1.08 |
Three Months Ended December 31, 2014 | ||||||||
After Tax | Diluted EPS(1) | |||||||
Net income attributable to Cameron from continuing operations | $ | 258 | $ | 1.30 | ||||
Adjustments: | ||||||||
Asset charges & loss on disposal of assets | 1 | |||||||
Facilities closures and severance | 3 | |||||||
All other | 4 | |||||||
Net income attributable to Cameron, excluding charges | $ | 266 | $ | 1.34 |
Twelve months ended December 31, 2015 | ||||||||
After Tax | Diluted EPS(1) | |||||||
Net income attributable to Cameron from continuing operations | $ | 70 | $ | 0.36 | ||||
Adjustments: | ||||||||
Asset charges and loss on disposal of assets | 616 | |||||||
Facility closures and severance | 63 | |||||||
All other | 23 | |||||||
Net income attributable to Cameron, excluding charges | $ | 772 | $ | 4.00 |
Twelve months ended December 31, 2014 | ||||||||
After Tax | Diluted EPS(1) | |||||||
Net income attributable to Cameron from continuing operations | $ | 785 | $ | 3.83 | ||||
Adjustments: | ||||||||
Asset charges and loss on disposal of assets | 52 | |||||||
Facility closures, severance, and restructuring | 10 | |||||||
All other | 2 | |||||||
Net income attributable to Cameron, excluding charges | $ | 849 | $ | 4.14 |