Date of Report (Date of earliest event reported): | October 22, 2015 |
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 October 22, 2015 – Cameron Third 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 October 22, 2015 – Cameron Third Quarter Earnings. |
• | $1.18 fully diluted earnings per share excluding discontinued operations and other costs |
• | Strong execution and margin performance in Subsea and Drilling Segments |
• | Systemic cost reduction program continues to enhance margins |
• | Subsea - the segment generated significant increases in operating income and operating income margin relative to the year-ago quarter, driven primarily by strong execution which generated project cost reductions during the quarter. |
• | Surface - ongoing weakness in demand and pricing in North America contributed to a decline in operating income and operating income margin as compared to the year-ago quarter. |
• | Drilling - strong execution enabled accelerated delivery of backlog, which contributed to an increase in operating income margin relative to the year-ago quarter. Margin improvement was also supported by cost reduction activities. |
• | Valves & Measurement - lower volumes and pricing pressures contributed to a decline in operating income and operating income margin, relative to the year-ago quarter, partially offset by cost reduction. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
REVENUES | $ | 2,208 | $ | 2,678 | $ | 6,703 | $ | 7,577 | ||||||||
COSTS AND EXPENSES: | ||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown separately below) | 1,530 | 1,915 | 4,723 | 5,456 | ||||||||||||
Selling and administrative expenses | 256 | 320 | 821 | 970 | ||||||||||||
Depreciation and amortization | 86 | 83 | 264 | 256 | ||||||||||||
Interest, net | 34 | 36 | 105 | 98 | ||||||||||||
Other costs (gains), net (see Note 4) | 44 | 19 | 658 | 62 | ||||||||||||
Total costs and expenses | 1,950 | 2,373 | 6,571 | 6,842 | ||||||||||||
Income from continuing operations before income taxes | 258 | 305 | 132 | 735 | ||||||||||||
Income tax provision | (44 | ) | (70 | ) | (144 | ) | (179 | ) | ||||||||
Income (loss) from continuing operations | 214 | 235 | (12 | ) | 556 | |||||||||||
Income (loss) from discontinued operations, net of income taxes | (1 | ) | 3 | 431 | 31 | |||||||||||
Net income | 213 | 238 | 419 | 587 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 26 | 13 | 43 | 29 | ||||||||||||
Net income attributable to Cameron stockholders | $ | 187 | $ | 225 | $ | 376 | $ | 558 | ||||||||
Amounts attributable to Cameron stockholders: | ||||||||||||||||
Income (loss) from continuing operations | $ | 188 | $ | 222 | $ | (55 | ) | $ | 527 | |||||||
Income (loss) from discontinued operations | (1 | ) | 3 | 431 | 31 | |||||||||||
Net income attributable to Cameron stockholders | $ | 187 | $ | 225 | $ | 376 | $ | 558 | ||||||||
Earnings (loss) per common share attributable to Cameron stockholders: | ||||||||||||||||
Basic - | ||||||||||||||||
Continuing operations | $ | 0.99 | $ | 1.11 | $ | (0.29 | ) | $ | 2.55 | |||||||
Discontinued operations | (0.01 | ) | .01 | 2.25 | .15 | |||||||||||
Basic earnings per share | $ | 0.98 | $ | 1.12 | $ | 1.96 | $ | 2.70 | ||||||||
Diluted - | ||||||||||||||||
Continuing operations | $ | 0.98 | $ | 1.10 | $ | (0.29 | ) | $ | 2.53 | |||||||
Discontinued operations | (0.01 | ) | .01 | 2.25 | .15 | |||||||||||
Diluted earnings per share | $ | 0.97 | $ | 1.11 | $ | 1.96 | $ | 2.68 | ||||||||
Shares used in computing earnings per common share: | ||||||||||||||||
Basic | 191 | 201 | 192 | 207 | ||||||||||||
Diluted | 192 | 203 | 192 | 208 |
September 30, 2015 | December 31, 2014 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 1,627 | $ | 1,513 | ||||
Short-term investments | 321 | 113 | ||||||
Receivables, net | 2,088 | 2,389 | ||||||
Inventories, net | 2,659 | 2,929 | ||||||
Other current assets | 481 | 391 | ||||||
Assets of discontinued operations | — | 217 | ||||||
Total current assets | 7,176 | 7,552 | ||||||
Plant and equipment, net | 1,733 | 1,964 | ||||||
Goodwill | 1,796 | 2,461 | ||||||
Intangibles, net | 613 | 728 | ||||||
Other assets | 291 | 187 | ||||||
TOTAL ASSETS | $ | 11,609 | $ | 12,892 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Short-term debt | $ | 38 | $ | 263 | ||||
Accounts payable and accrued liabilities | 2,786 | 3,748 | ||||||
Accrued income taxes | 342 | 168 | ||||||
Liabilities of discontinued operations | — | 90 | ||||||
Total current liabilities | 3,166 | 4,269 | ||||||
Long-term debt | 2,794 | 2,819 | ||||||
Deferred income taxes | 227 | 193 | ||||||
Other long-term liabilities | 162 | 167 | ||||||
Total liabilities | 6,349 | 7,448 | ||||||
Stockholders’ Equity: | ||||||||
Common stock, par value $.01 per share, 400,000,000 shares authorized, 263,111,472 shares issued at September 30, 2015 and December 31, 2014 | 3 | 3 | ||||||
Capital in excess of par value | 3,253 | 3,255 | ||||||
Retained earnings | 6,007 | 5,631 | ||||||
Accumulated other elements of comprehensive income (loss) | (847 | ) | (540 | ) | ||||
Less: Treasury stock, 72,298,711 shares at September 30, 2015 (68,139,027 shares at December 31, 2014) | (3,987 | ) | (3,794 | ) | ||||
Total Cameron stockholders’ equity | 4,429 | 4,555 | ||||||
Noncontrolling interests | 831 | 889 | ||||||
Total equity | 5,260 | 5,444 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 11,609 | $ | 12,892 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 213 | $ | 238 | $ | 419 | $ | 587 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Asset impairment and other charges | 18 | — | 581 | 44 | ||||||||||||
Pre-tax gain on sale of Compression businesses | — | — | (681 | ) | (95 | ) | ||||||||||
Depreciation | 74 | 74 | 226 | 217 | ||||||||||||
Amortization | 12 | 11 | 38 | 49 | ||||||||||||
Non-cash stock compensation expense | 13 | 13 | 35 | 43 | ||||||||||||
Gain from remeasurement of prior interest in equity method investment | — | — | — | (8 | ) | |||||||||||
Deferred income taxes and tax benefit of employee stock compensation plan transactions | (53 | ) | (74 | ) | (68 | ) | (57 | ) | ||||||||
Changes in assets and liabilities, net of translation, and non-cash items: | ||||||||||||||||
Receivables | (6 | ) | (69 | ) | 245 | 42 | ||||||||||
Inventories | 176 | (55 | ) | 106 | (283 | ) | ||||||||||
Accounts payable and accrued liabilities | (115 | ) | 152 | (869 | ) | (291 | ) | |||||||||
Other assets and liabilities, net | 38 | (74 | ) | 173 | 7 | |||||||||||
Net cash provided by operating activities | 376 | 216 | 211 | 255 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Proceeds received from sale of Compression businesses, net | — | — | 832 | 547 | ||||||||||||
Proceeds from sales and maturities of short-term investments | 274 | 18 | 674 | 41 | ||||||||||||
Purchases of short-term investments | (159 | ) | (78 | ) | (883 | ) | (115 | ) | ||||||||
Capital expenditures | (60 | ) | (80 | ) | (190 | ) | (259 | ) | ||||||||
Other dispositions (acquisitions), net | — | 10 | — | (7 | ) | |||||||||||
Proceeds from sales of plant and equipment | 2 | 1 | 11 | 11 | ||||||||||||
Net cash provided by (used for) investing activities | 57 | (129 | ) | 444 | 218 | |||||||||||
Cash flows from financing activities: | ||||||||||||||||
Issuance of senior notes | — | — | — | 500 | ||||||||||||
Debt issuance costs | — | — | — | (4 | ) | |||||||||||
Early retirement of senior notes | — | (253 | ) | — | (253 | ) | ||||||||||
Short-term loan borrowings (repayments), net | (7 | ) | 94 | (220 | ) | 104 | ||||||||||
Purchase of treasury stock | (45 | ) | (351 | ) | (240 | ) | (1,556 | ) | ||||||||
Contributions from (distributions to) noncontrolling interest owners, net | (21 | ) | (40 | ) | (3 | ) | (40 | ) | ||||||||
Proceeds from stock option exercises, net of tax payments from stock compensation plan transactions | 10 | 14 | 5 | 39 | ||||||||||||
Excess tax benefits from employee stock compensation plan transactions | — | 1 | 1 | 6 | ||||||||||||
Principal payments on capital leases | (6 | ) | (6 | ) | (15 | ) | (15 | ) | ||||||||
Net cash used for financing activities | (69 | ) | (541 | ) | (472 | ) | (1,219 | ) | ||||||||
Effect of translation on cash | (32 | ) | (13 | ) | (69 | ) | (9 | ) | ||||||||
Increase (decrease) in cash and cash equivalents | 332 | (467 | ) | 114 | (755 | ) | ||||||||||
Cash and cash equivalents, beginning of period | $ | 1,295 | $ | 1,525 | $ | 1,513 | $ | 1,813 | ||||||||
Cash and cash equivalents, end of period | $ | 1,627 | $ | 1,058 | $ | 1,627 | $ | 1,058 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenues: | ||||||||||||||||
Subsea | $ | 758 | $ | 779 | $ | 2,047 | $ | 2,195 | ||||||||
Surface | 446 | 600 | 1,499 | 1,751 | ||||||||||||
Drilling | 673 | 800 | 2,118 | 2,233 | ||||||||||||
Valves and Measurement (V&M) | 376 | 558 | 1,185 | 1,597 | ||||||||||||
Elimination of intersegment revenues | (45 | ) | (59 | ) | (146 | ) | (199 | ) | ||||||||
Consolidated revenues | $ | 2,208 | $ | 2,678 | $ | 6,703 | $ | 7,577 | ||||||||
Segment operating income before interest and income taxes: | ||||||||||||||||
Subsea | $ | 120 | $ | 44 | $ | 244 | $ | 119 | ||||||||
Surface | 49 | 105 | 210 | 304 | ||||||||||||
Drilling | 146 | 159 | 400 | 323 | ||||||||||||
V&M | 58 | 104 | 147 | 312 | ||||||||||||
Elimination of intersegment earnings | (9 | ) | (17 | ) | (32 | ) | (53 | ) | ||||||||
Segment operating income before interest and income taxes | 364 | 395 | 969 | 1,005 | ||||||||||||
Corporate Items: | ||||||||||||||||
Corporate expenses | (28 | ) | (35 | ) | (74 | ) | (110 | ) | ||||||||
Interest, net | (34 | ) | (36 | ) | (105 | ) | (98 | ) | ||||||||
Other (costs) gains, net | (44 | ) | (19 | ) | (658 | ) | (62 | ) | ||||||||
Consolidated income (loss) from continuing operations before income taxes | $ | 258 | $ | 305 | 132 | $ | (270 | ) | ||||||||
Orders: | ||||||||||||||||
Subsea | $ | 270 | $ | 813 | $ | 1,572 | $ | 1,838 | ||||||||
Surface | 453 | 665 | 1,374 | 1,920 | ||||||||||||
Drilling | 344 | 574 | 938 | 2,030 | ||||||||||||
V&M | 346 | 529 | 1,103 | 1,582 | ||||||||||||
Consolidated orders | $ | 1,413 | $ | 2,581 | $ | 4,987 | $ | 7,370 |
September 30, | December 31, | September 30, | ||||||||||
Backlog (at end of period): | 2015 | 2014 | 2014 | |||||||||
Subsea | $ | 3,454 | $ | 4,263 | $ | 4,703 | ||||||
Surface | 942 | 1,025 | 1,202 | |||||||||
Drilling | 2,074 | 3,327 | 3,725 | |||||||||
V&M | 763 | 921 | 954 | |||||||||
Consolidated backlog | $ | 7,233 | $ | 9,536 | $ | 10,584 |
Three Months Ended September 30, 2015 | ||||||||
After Tax | Diluted EPS(1) | |||||||
Net income attributable to Cameron from continuing operations | $ | 188 | $ | 0.98 | ||||
Adjustments: | ||||||||
Asset charges & loss on disposal of assets | 20 | |||||||
Facility closures & severance | 9 | |||||||
Merger costs & all other | 9 | |||||||
Net income attributable to Cameron, excluding charges | $ | 226 | $ | 1.18 |
Three Months Ended September 30, 2014 | ||||||||
After Tax | Diluted EPS(2) | |||||||
Net income attributable to Cameron from continuing operations | $ | 222 | $ | 1.10 | ||||
Adjustments: | ||||||||
Loss on disposal of assets | 8 | |||||||
Mark-to-market impact on currency derivatives not designated as accounting hedges | 3 | |||||||
Severance, restructuring and other costs | 4 | |||||||
Net income attributable to Cameron, excluding charges | $ | 237 | $ | 1.17 |