Market Overview

Cameron Announces Results For Fourth Quarter Of 2015

Share:

- $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

HOUSTON, Jan. 28, 2016 /PRNewswire/ -- Cameron (NYSE: CAM) today reported fully diluted earnings per share, excluding discontinued operations and other costs, of $1.08 for the fourth quarter of 2015, compared to $1.34 for the same period of 2014.

Other costs in the fourth quarter of 2015 amounted to $115 million on a pretax basis, or $0.43 per share, primarily related to asset charges and severance, as detailed in an accompanying table.

On a GAAP basis, the Company's fully diluted earnings per share for the fourth quarter of 2015 were $0.65, as compared to $1.28 for the same period of 2014.

For the full year 2015, the Company reported fully-diluted earnings per share, excluding discontinued operations and other costs, of $4.00, compared to $4.14 for 2014.  On a GAAP basis, the Company's 2015 fully diluted earnings per share were $2.60, as compared to $3.96 for 2014.

Commenting on the Company's performance in the fourth quarter of 2015, President and Chief Executive Officer Scott Rowe, said, "Cameron once again delivered very strong operating results in the face of a continued downturn in the energy markets.  The Company's performance was driven by accelerated progress in the transformation of our cost structure and strong execution.  In particular, the company's Subsea segment reported an operating income margin of 23.1%, more than double that of the fourth quarter of 2014."

Segment Performance

  • 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.

Outlook

Rowe said, "Although declines in energy prices will have a negative impact on our business in 2016, we remain focused on the factors that will drive our fundamental long-term performance:  execution, customer relationships, cost reduction and technology."

Cash Flow from Operations

The Company generated cash from operations of $497 million during the fourth quarter and $708 million for the full-year 2015.  The Company ended the quarter with cash, cash equivalents and short-term investments totaling $2.4 billion.

Agreement to be Acquired by Schlumberger Limited

On August 26, 2015, Schlumberger Limited (NYSE: SLB) and Cameron jointly announced a definitive merger agreement in which the companies will combine in a stock and cash transaction. The agreement was unanimously approved by the boards of directors of both companies and, on December 17, Cameron stockholders overwhelmingly voted to adopt the merger agreement.  The transaction remains subject to regulatory approvals and customary closing conditions, and is expected to close in the first quarter of 2016.

Cameron is a leading provider of flow equipment products, systems and services to worldwide oil and gas industries.

Forward-Looking Statements

In addition to the historical data contained herein, this document includes forward-looking statements regarding the Company's long-term performance and expectations regarding the closing of merger transaction and, if accomplished, the timing thereof, made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and subject to risk factors that are discussed in Cameron's most recent filings on Form 10-Q and 10-K, filed with the SEC, as well as other filings with the SEC available at the SEC's Internet site (http://www.sec.gov). Actual results may differ materially from those expected, estimated or projected and a closing of the merger transaction may not occur or the timing thereof could be different from that currently expected. Forward-looking statements speak only as of the date they are made, and Cameron undertakes no obligation to publicly update or revise any of them in light of new information, future events or otherwise.

 


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,



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


 


Cameron

Consolidated Condensed Balance Sheets

($ millions)








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


 


Cameron

Unaudited Consolidated Condensed Statements of Cash Flows

($ millions)








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)



33


   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


 

Cameron

Unaudited Supplemental Segment Financial Data

($ millions)








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


 

Cameron

Reconciliation of GAAP to Non-GAAP Financial Information

($ millions, except per share amounts)




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


(1) Based on 193 million diluted shares

 



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


(1) Based on 198 million diluted shares

 

Cameron

Reconciliation of GAAP to Non-GAAP Financial Information

($ millions, except per share amounts)






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


(1) Based on 193 million diluted shares

 



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


(1) Based on 205 million diluted shares

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/cameron-announces-results-for-fourth-quarter-of-2015-300211184.html

SOURCE Cameron

View Comments and Join the Discussion!