EX-99.1 2 ex99_1.htm EXHIBIT 99.1
Exhibit 99.1

2015-xx
  
 
Contact: Scott Lamb
 
Vice President, Investor Relations
 
(713) 513-3344

CAMERON ANNOUNCES RESULTS FOR FOURTH QUARTER AND FULL YEAR OF 2014

· Record-level of quarterly earnings per share and cash from operations
· Record-level annual earnings per share and cash from operations
· Continued improvement in consolidated operating income margin

HOUSTON, January 29, 2015 -- Cameron (NYSE: CAM) today reported a record-level of fully diluted quarterly earnings per share from continuing operations, excluding other costs, of  $1.34 for the fourth quarter of 2014, compared to $0.90 for the same period of 2013.  Cash generated by operations was $938 million in the fourth quarter of 2014, a 49% increase from the same period of 2013.

The other cost items for the fourth quarter of 2014 amounted to $0.04 per fully diluted share, due primarily to the net impact of litigation expense and restructuring costs partially offset by one-time credits; the other cost items for the fourth quarter of 2013 amounted to $0.05 per fully diluted share, related primarily to integration and restructuring costs.  On a GAAP basis, the Company’s fully diluted earnings per share from continuing operations were $1.30 for the fourth quarter of 2014, as compared to $0.85 for the fourth quarter of 2013.

For the full year 2014, the Company reported fully diluted earnings per share from continuing operations, excluding other costs, of  $4.14, compared to $2.89 for 2013.  On a GAAP basis, the Company’s 2014 fully diluted earnings per share from continuing operations were $3.83 as compared to $2.60 for 2013.

Commenting on the Company’s performance in the fourth quarter of 2014 relative to the year-ago period, Chairman and Chief Executive Officer Jack B. Moore, said, “Cameron’s financial results were due largely to the strong performance of our Drilling and Surface segments  combined with an 11% decline in consolidated SG&A expense.  In particular, the Drilling segment  reported an 89% increase in operating income and an almost 700-basis point improvement in operating income  margin relative to the year-ago quarter, while our Surface segment reported a 23% increase in operating income.  On a consolidated basis, these factors contributed to a segment operating income margin of 15.0% for Cameron, which is above the year-ago quarter and demonstrates the success of our multi-year margin improvement program.  Additionally, the increase in cash from operations reflects, in part, our sharp focus on reducing working capital.”
 
Orders and Backlog
New orders and backlog for the fourth quarter of 2014 declined sequentially and as compared to  the year-ago period, reflecting reduced activity levels across the industry in response to the recent declines in commodity prices.  “Even so,” said Moore, “we continued to book significant new agreements during the quarter, most notably the multi-year contract with ExxonMobil Canada Properties for topside wellhead equipment and production trees for the Hebron project, a 52-well development located offshore Newfoundland – as well as OneSubsea’s execution of definitive agreements for the subsea well-intervention alliance with Schlumberger and Helix.”

Record Cash Flow from Operations and Disciplined Capital Program
Cameron's cash flow from operations totaled $938 million for the quarter and $1.2 billion for the full year 2014.

Cameron’s capital expenditures totaled $126 million in the fourth quarter and $385 million for the full year 2014.  The Company expects full-year 2015 capital expenditures to be moderately below the 2014 level.

Share Repurchase Activity Continued
The Company continued to repurchase its shares, investing approximately $191 million to acquire 3.4 million shares during the quarter of 2014. Fully diluted shares outstanding at the end of the fourth quarter were approximately 195 million.  As of the end of the fourth quarter of 2014, $476 million remained under the Company’s existing share purchase authorization.

2015 Outlook
“Our backlog provides us with good visibility into a portion of Cameron’s 2015 business,” said Moore.  “However, the surprising speed of the cyclical downturn has created significant uncertainty regarding the anticipated spending levels of our customers, especially in relation to our shorter-cycle businesses, which account for a meaningful portion of our revenues and operating profit.”

Moore added, “Given our backlog, our strong balance sheet and the Company’s impressive operational performance in the fourth quarter of 2014, Cameron is well positioned to deal with the challenges posed in 2015 while we stay committed to advancing cost-efficient solutions for our customers, execution and service excellence and the aggressive management of our cost structure.”

Cameron (NYSE: CAM) is a leading provider of flow equipment products, systems and services to worldwide oil, gas and process industries.

###

Website: www.c-a-m.com

In addition to the historical data contained herein, this document includes forward-looking statements regarding anticipated revenues, operating income and earnings of the Company for 2015, as well as expectations regarding improved execution, cost reduction and expected capital spending, made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
 
2

The Company’s actual results may differ materially from those described in forward-looking statements.  Such statements are based on current expectations of the Company’s performance and are subject to a variety of factors, some of which are not under the control of the Company, which can affect the Company’s results of operations, liquidity or financial condition.  Such factors may include overall demand for, and pricing of, the Company’s products, particularly as affected by North American activity; the size and timing of orders; the Company’s ability to successfully execute the large subsea and drilling systems projects it has been awarded; the possibility of cancellations of orders; the Company’s ability to convert backlog into revenues on a timely and profitable basis; the impact of acquisitions the Company has made or may make; changes in the price of (and demand for) oil and gas in both domestic and international markets; raw material costs and availability; political and social issues affecting the countries in which the Company does business; fluctuations in currency markets worldwide; and variations in global economic activity.  In particular, current and projected oil and gas prices historically have generally directly affected customers’ spending levels and their related purchases of the Company’s products and services.  Additionally, changes in oil and gas price expectations may impact the Company’s financial results due to changes it may make in its cost structure, staffing or spending levels.

Because the information herein is based solely on data currently available, it is subject to change as a result of changes in conditions over which the Company has no control or influence, and should not therefore be viewed as assurance regarding the Company’s future performance.  Additionally, the Company is not obligated to make public indication of such changes unless required under applicable disclosure rules and regulations.

3
Cameron
Unaudited Consolidated Condensed Results of Operations
($ and shares in millions except per share data)

   
Three Months Ended
December 31,
    
Twelve Months Ended
December 31,
  
   
2014
    
2013
    
2014
    
2013
  
                 
Revenues
   $ 
2,804
     $ 
2,731
     $ 
10,381
     $ 
9,138
  
                                 
Costs and Expenses:
                                
Cost of sales (exclusive of depreciation and amortization shown separately below)
    
2,009
      
1,973
      
7,464
      
6,518
  
Selling and administrative expenses
    
316
      
355
      
1,287
      
1,275
  
Depreciation and amortization
    
92
      
86
      
348
      
298
  
Interest, net
    
31
      
26
      
129
      
100
  
Other costs
    
11
      
11
      
73
      
92
  
Total costs and expenses
    
2,459
      
2,451
      
9,301
      
8,283
  
                                 
Income from continuing operations before income taxes
    
345
      
280
      
1,080
      
855
  
Income tax provision
    
(79
)
    
(59
)
    
(258
)
    
(196
)
Income from continuing operations
    
266
      
221
      
822
      
659
  
Income (loss) from discontinued operations, net of income taxes
    
(4
)
    
22
      
26
      
65
  
Net income
    
262
      
243
      
848
      
724
  
Net income attributable to noncontrolling interests
    
8
      
22
      
37
      
25
  
Net income attributable to Cameron stockholders
  
$
254
    
$
221
    
$
811
    
$
699
  
                                 
Amounts attributable to Cameron stockholders:
                                
Income from continuing operations
  
$
258
    
$
199
    
$
785
    
$
634
  
Income (loss) from discontinued operations
    
(4
)
    
22
      
26
      
65
  
Net income attributable to Cameron stockholders
  
$
254
    
$
221
    
$
811
    
$
699
  
Earnings per common share attributable to Cameron stockholders:
                                
Basic-
                                
Continuing operations
  
$
1.32
    
$
0.86
    
$
3.85
    
$
2.62
  
Discontinued operations
    
(0.02
)
    
.10
      
.13
      
.27
  
Basic earnings per share
  
$
1.30
    
$
0.96
    
$
3.98
    
$
2.89
  
                                 
Diluted-
                                
Continuing operations
  
$
1.30
    
$
0.85
    
$
3.83
    
$
2.60
  
Discontinued operations
    
(0.02
)
    
.09
      
.13
      
.27
  
Diluted earnings per share
  
$
1.28
    
$
0.94
    
$
3.96
    
$
2.87
  
Shares used in computing earnings per common share:
                                
Basic
    
196
      
231
      
204
      
242
  
Diluted
    
198
      
233
      
205
      
244
  
 
4
Cameron
Consolidated Condensed Balance Sheets
($ millions)

   
December 31,
2014
    
December 31,
2013
  
   
(unaudited)
      
Assets:
        
Cash and cash equivalents
  
$
1,513
    
$
1,813
  
Short-term investments
    
113
      
41
  
Receivables, net
    
2,389
      
2,719
  
Inventories, net
    
2,929
      
3,133
  
Other current assets
    
391
      
463
  
Assets from discontinued operations
    
217
      
-
  
Total current assets
    
7,552
      
8,169
  
                 
Plant and equipment, net
    
1,964
      
2,037
  
Goodwill
    
2,461
      
2,925
  
Intangibles, net
    
728
      
904
  
Other assets
    
187
      
214
  
Total Assets
  
$
12,892
    
$
14,249
  
                 
Liabilities and Stockholders’ Equity:
                
Short-term debt
  
$
263
    
$
297
  
Accounts payable and accrued liabilities
    
3,748
      
3,883
  
Accrued income taxes
    
168
      
80
  
Liabilities from discontinued operations
    
90
      
-
  
Total current liabilities
    
4,269
      
4,260
  
                 
Long-term debt
    
2,819
      
2,563
  
Deferred income taxes
    
193
      
277
  
Other long-term liabilities
    
167
      
233
  
Total liabilities
    
7,448
      
7,333
  
                 
Stockholders’ Equity:
                
Common stock, par value $.01 per share, 400,000,000  shares authorized,  263,111,472 shares issued at December 31, 2014 and 2013
    
3
      
3
  
Capital in excess of par value
    
3,255
      
3,207
  
Retained earnings
    
5,631
      
4,820
  
Accumulated other elements of comprehensive income (loss)
    
(540
)
    
(80
)
Less:  Treasury stock, 68,139,027 shares at December 31, 2014 (41,683,164 shares at December 31, 2013)
    
(3,794
)
    
(2,098
)
Total Cameron stockholders’ equity
    
4,555
      
5,852
  
Noncontrolling interests
    
889
      
1,064
  
 
Total equity
    
5,444
      
6,916
  
                 
Total Liabilities and Stockholders’ Equity
  
$
12,892
    
$
14,249
  
 
5
Cameron
Unaudited Consolidated Condensed Statements of Cash Flows
($ millions)

   
Three Months Ended
December 31,
    
Twelve Months Ended
December 31,
  
   
2014
    
2013
    
2014
    
2013
  
                 
Cash flows from operating activities:
                
Net income
  
$
262
    
$
243
    
$
848
    
$
724
  
Adjustments to reconcile net income to net cash provided by operating activities:
                                
Gain on sale of Reciprocating Compression business
    
–
      
–
      
(95
)
    
–
  
Depreciation
    
78
      
69
      
296
      
246
  
Amortization
    
15
      
22
      
64
      
69
  
Non-cash stock compensation expense
    
11
      
13
      
54
      
54
  
Gain from remeasurement of prior interest in equity method investment
    
–
      
–
      
(8
)
    
–
  
Deferred income taxes and tax benefit of employee stock compensation plan transactions
    
(8
)
    
(19
)
    
(48
)
    
11
  
Changes in assets and liabilities, net of translation, and non-cash items:
                                
Receivables
    
124
      
(237
)
    
166
      
(470
)
Inventories
    
139
      
82
      
(144
)
    
(367
)
Accounts payable and accrued liabilities
    
274
      
337
      
(17
)
    
556
  
Other assets and liabilities, net
    
43
      
121
      
77
      
15
  
Net cash provided by operating activities
    
938
      
631
      
1,193
      
838
  
Cash flows from investing activities:
                                
Proceeds from sales and maturities of short-term investments
    
24
      
671
      
65
      
1,559
  
Purchases of short-term investments
    
(22
)
    
(214
)
    
(137
)
    
(1,082
)
Capital expenditures
    
(126
)
    
(214
)
    
(385
)
    
(520
)
Proceeds received from sale of Reciprocating Compression business, net
    
–
      
–
      
547
      
–
  
Other dispositions (acquisitions), net
    
–
      
–
      
(7
)
    
(11
)
Proceeds received and cash acquired from formation of OneSubsea
    
–
      
(80
)
    
–
      
523
  
Proceeds from sales of plant and equipment
    
2
      
6
      
13
      
13
  
Net cash provided by (used for) investing activities
    
(122
)
    
169
      
96
      
482
  
Cash flows from financing activities:
                                
Issuance of senior notes
    
–
      
747
      
500
      
747
  
Debt issuance costs
    
–
      
(6
)
    
(4
)
    
(6
)
Early retirement of senior notes
    
–
      
–
      
(253
)
    
–
  
Short-term loan borrowings (repayments), net
    
(138
)
    
6
      
(34
)
    
46
  
Purchase of treasury stock
    
(191
)
    
(974
)
    
(1,747
)
    
(1,531
)
Contributions from noncontrolling interest owners
    
–
      
–
      
–
      
62
  
Distribution to noncontrolling interest owners
    
(2
)
    
–
      
(42
)
    
–
  
Purchases of noncontrolling ownership interests
    
–
      
–
      
–
      
(7
)
Proceeds from stock option exercises, net of tax payments from stock compensation plan transactions
    
1
      
1
      
40
      
31
  
Excess tax benefits from employee stock compensation plan transactions
    
–
      
1
      
6
      
9
  
Principal payments on capital leases
    
(5
)
    
(5
)
    
(20
)
    
(18
)
Net cash used for financing activities
    
(335
)
    
(230
)
    
(1,554
)
    
(667
)
Effect of translation on cash
    
(26
)
    
(14
)
    
(35
)
    
(26
)
Increase (decrease) in cash and cash equivalents
    
455
      
556
      
(300
)
    
627
  
Cash and cash equivalents, beginning of period
    
1,058
      
1,257
      
1,813
      
1,186
  
Cash and cash equivalents, end of period
  
$
1,513
    
$
1,813
    
$
1,513
    
$
1,813
  
6
Cameron
Unaudited Supplemental Segment Financial Data
 ($ millions)

   
Three Months Ended
December 31,
    
Twelve Months Ended
December 31,
  
   
2014
    
2013
    
2014
    
2013
  
                 
Revenues:
                
Subsea
  
$
872
    
$
1,030
    
$
3,067
    
$
2,813
  
Surface
    
660
      
557
      
2,411
      
2,077
  
Drilling
    
816
      
680
      
3,049
      
2,327
  
Valves and Measurement (V&M)
    
528
      
530
      
2,125
      
2,105
  
Elimination of intersegment revenues
    
(72
)
    
(66
)
    
(271
)
    
(184
)
Consolidated revenues
  
$
2,804
    
$
2,731
    
$
10,381
    
$
9,138
  
                                 
Segment operating income before interest and income taxes:
                                
Subsea
  
$
88
    
$
93
    
$
207
    
$
152
  
Surface
    
123
      
100
      
427
      
367
  
Drilling
    
151
      
80
      
474
      
311
  
Valves and Measurement (V&M)
    
81
      
105
      
393
      
414
  
Elimination of intersegment earnings
    
(21
)
    
(11
)
    
(74
)
    
(35
)
Segment operating income before interest and income taxes
  
 
422
    
 
367
    
 
1,427
    
 
1,209
  
                                 
Corporate Items:
                                
Corporate Expense
  
 
(35
)
  
 
(50
)
  
 
(145
)
  
 
(162
)
Interest, net
    
(31
)
    
(26
)
  
 
(129
)
  
 
(100
)
Other costs
    
(11
)
    
(11
)
    
(73
)
    
(92
)
Consolidated income from continuing operations before noncontrolling interest and income taxes
  
$
345
    
$
280
    
$
1,080
    
$
855
  
                                 
Orders:
                                
Subsea
  
$
517
    
$
1,184
    
$
2,356
    
$
4,405
  
Surface
    
561
      
580
      
2,480
      
2,372
  
Drilling
    
419
      
832
      
2,449
      
2,803
  
Valves and Measurement (V&M)
    
509
      
526
      
2,091
      
2,086
  
Consolidated orders
  
$
2,006
    
$
3,122
    
$
9,376
    
$
11,666
  
                                 
Backlog (at period end):
                                
Subsea
                  
$
4,263
    
$
4,958
  
Surface
                    
1,025
      
963
  
Drilling
                    
3,327
      
4,141
  
Valves and Measurement (V&M)
                    
921
      
1,017
  
Consolidated backlog
                  
$
9,536
    
$
11,079
  

7
Cameron
Reconciliation of GAAP to Non-GAAP Financial Information
($ millions, except per share amounts)

   
Three Months Ended
December 31, 2014
  
   
After Tax(1)
    
Diluted EPS(2)
  
Income from continuing operations
  
$
266
      
Less:  Net income attributable to noncontrolling interests
    
8
      
Net income attributable to Cameron from continuing operations
    
258
    
$
1.30
  
Adjustments:
                
Litigation costs
    
8
          
International pension curtailment gains, net
    
(6
)
        
Mark-to-market impact on currency derivatives not designated as accounting hedges
    
2
          
Severance, restructuring and other costs
    
4
          
Net income attributable to Cameron, excluding charges
  
$
266
    
$
1.34
  

(1) Individual adjustment assumes a 23% effective tax rate
(2) Based on 198 million diluted shares
 
   
Three Months Ended
December 31, 2013
  
   
After Tax (1)
    
Diluted EPS (2)
  
         
Income from continuing operations
  
$
221
      
Less:  Net income attributable to noncontrolling interests
    
22
      
Net income attributable to Cameron from continuing operations
    
199
    
$
0.85
  
Adjustments:
                
Acquisition and OneSubsea formation and integration costs
    
3
          
Severance, restructuring and other costs
    
7
           
Net income attributable to Cameron, excluding charges
  
$
209
    
$
0.90
  

(1) Individual adjustments assume a 23% effective tax rate
(2) Based on 233 million diluted shares
 
8
Cameron
Reconciliation of GAAP to Non-GAAP Financial Information
($ millions, except per share amounts)
 
   
Year Ended
December 31, 2014
  
   
After Tax(1)
    
Diluted EPS(3)
  
Income from continuing operations
  
$
822
      
Less:  Net income attributable to noncontrolling interests
    
37
      
Net income attributable to Cameron from continuing operations
    
785
    
$
3.83
  
Adjustments:
                
Litigation costs
    
8
          
International pension curtailment gains, net
    
(6
)
        
Impairment of goodwill (2)
    
40
          
Loss on disposal of non-core assets
    
7
          
Impairment of identifiable intangible asset
    
3
          
Gain on remeasurement of prior interest in equity method investment
    
(6
)
        
Mark-to-market impact on currency derivatives not designated as accounting hedges
    
6
          
Severance, restructuring and other costs
    
12
          
Net income attributable to Cameron, excluding charges
  
$
849
    
$
4.14
  

(1) Individual adjustment assumes a 24% effective tax rate
(2) Adjustment is non-deductible for tax purposes
(3)  Based on 205 million diluted shares

   
Year Ended
December 31, 2013
  
   
After Tax(1)
    
Diluted EPS(2)
  
Income from continuing operations
  
$
659
      
Less:  Net income attributable to noncontrolling interests
    
25
      
Net income attributable to Cameron from continuing operations
    
634
    
$
2.60
  
Adjustments:
                
OneSubsea formation and integration costs
    
39
          
Currency devaluation
    
7
          
Severance, restructuring and other costs
    
24
          
Net income attributable to Cameron, excluding charges
  
$
704
    
$
2.89
  

(1) Individual adjustment assumes a 24% effective tax rate
(2)  Based on 244 million diluted shares
 
 
9