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

News provided by

Cameron

Jan 29, 2015, 07:30 ET

HOUSTON, Jan. 29, 2015 /PRNewswire/ -- 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 approximately 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. 

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.

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










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

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 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

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

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

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

SOURCE Cameron

Related Links

http://www.c-a-m.com

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