Stock Analysis on Net
Stock Analysis on Net

National Oilwell Varco Inc. (NYSE:NOV)

This company has been moved to the archive! The financial data has not been updated since August 3, 2016.

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

National Oilwell Varco Inc., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Customer relationships 4,016 4,094 4,093 3,522 3,044
Trademarks 880 871 893 877 716
Indefinite-lived trade names 384 536 643 643 643
Other 1,040 1,058 1,175 1,087 751
Identified intangibles, gross 6,320 6,559 6,804 6,129 5,154
Accumulated amortization (2,471) (2,115) (1,749) (1,386) (1,081)
Identified intangibles, net book value 3,849 4,444 5,055 4,743 4,073
Goodwill 6,980 8,539 9,049 7,172 6,151
Intangible assets 10,829 12,983 14,104 11,915 10,224

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Item Description The company
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. National Oilwell Varco Inc. goodwill decreased from 2013 to 2014 and from 2014 to 2015.
Intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. National Oilwell Varco Inc. intangible assets decreased from 2013 to 2014 and from 2014 to 2015.

Adjustments to Financial Statements: Removal of Goodwill

National Oilwell Varco Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Adjustment to Total Assets
Total assets (as reported) 26,725 33,562 34,812 31,484 25,515
Less: Goodwill 6,980 8,539 9,049 7,172 6,151
Total assets (adjusted) 19,745 25,023 25,763 24,312 19,364
Adjustment to Total Company Stockholders’ Equity
Total Company stockholders’ equity (as reported) 16,383 20,692 22,230 20,239 17,619
Less: Goodwill 6,980 8,539 9,049 7,172 6,151
Total Company stockholders’ equity (adjusted) 9,403 12,153 13,181 13,067 11,468
Adjustment to Net Income (loss) Attributable To Company
Net income (loss) attributable to Company (as reported) (769) 2,502 2,327 2,491 1,994
Add: Goodwill impairment 1,485 — — — —
Net income (loss) attributable to Company (adjusted) 716 2,502 2,327 2,491 1,994

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

National Oilwell Varco Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

National Oilwell Varco Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Net Profit Margin
Reported net profit margin -5.21% 11.67% 10.18% 12.43% 13.60%
Adjusted net profit margin 4.85% 11.67% 10.18% 12.43% 13.60%
Total Asset Turnover
Reported total asset turnover 0.55 0.64 0.66 0.64 0.57
Adjusted total asset turnover 0.75 0.86 0.89 0.82 0.76
Financial Leverage
Reported financial leverage 1.63 1.62 1.57 1.56 1.45
Adjusted financial leverage 2.10 2.06 1.95 1.86 1.69
Return on Equity (ROE)
Reported ROE -4.69% 12.09% 10.47% 12.31% 11.32%
Adjusted ROE 7.61% 20.59% 17.65% 19.06% 17.39%
Return on Assets (ROA)
Reported ROA -2.88% 7.45% 6.68% 7.91% 7.82%
Adjusted ROA 3.63% 10.00% 9.03% 10.25% 10.30%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. National Oilwell Varco Inc. adjusted net profit margin ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. National Oilwell Varco Inc. adjusted total asset turnover ratio deteriorated from 2013 to 2014 and from 2014 to 2015.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 National Oilwell Varco Inc. adjusted financial leverage ratio increased from 2013 to 2014 and from 2014 to 2015.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. National Oilwell Varco Inc. adjusted ROE improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. National Oilwell Varco Inc. adjusted ROA improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.

National Oilwell Varco Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Company (769) 2,502 2,327 2,491 1,994
Revenue 14,757 21,440 22,869 20,041 14,658
Profitability Ratio
Net profit margin1 -5.21% 11.67% 10.18% 12.43% 13.60%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Company 716 2,502 2,327 2,491 1,994
Revenue 14,757 21,440 22,869 20,041 14,658
Profitability Ratio
Adjusted net profit margin2 4.85% 11.67% 10.18% 12.43% 13.60%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 Net profit margin = 100 × Net income (loss) attributable to Company ÷ Revenue
= 100 × -769 ÷ 14,757 = -5.21%

2 Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to Company ÷ Revenue
= 100 × 716 ÷ 14,757 = 4.85%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. National Oilwell Varco Inc. adjusted net profit margin ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Revenue 14,757 21,440 22,869 20,041 14,658
Total assets 26,725 33,562 34,812 31,484 25,515
Activity Ratio
Total asset turnover1 0.55 0.64 0.66 0.64 0.57
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue 14,757 21,440 22,869 20,041 14,658
Adjusted total assets 19,745 25,023 25,763 24,312 19,364
Activity Ratio
Adjusted total asset turnover2 0.75 0.86 0.89 0.82 0.76

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 14,757 ÷ 26,725 = 0.55

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 14,757 ÷ 19,745 = 0.75

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. National Oilwell Varco Inc. adjusted total asset turnover ratio deteriorated from 2013 to 2014 and from 2014 to 2015.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Total assets 26,725 33,562 34,812 31,484 25,515
Total Company stockholders’ equity 16,383 20,692 22,230 20,239 17,619
Solvency Ratio
Financial leverage1 1.63 1.62 1.57 1.56 1.45
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 19,745 25,023 25,763 24,312 19,364
Adjusted total Company stockholders’ equity 9,403 12,153 13,181 13,067 11,468
Solvency Ratio
Adjusted financial leverage2 2.10 2.06 1.95 1.86 1.69

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 Financial leverage = Total assets ÷ Total Company stockholders’ equity
= 26,725 ÷ 16,383 = 1.63

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Company stockholders’ equity
= 19,745 ÷ 9,403 = 2.10

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 National Oilwell Varco Inc. adjusted financial leverage ratio increased from 2013 to 2014 and from 2014 to 2015.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Company (769) 2,502 2,327 2,491 1,994
Total Company stockholders’ equity 16,383 20,692 22,230 20,239 17,619
Profitability Ratio
ROE1 -4.69% 12.09% 10.47% 12.31% 11.32%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Company 716 2,502 2,327 2,491 1,994
Adjusted total Company stockholders’ equity 9,403 12,153 13,181 13,067 11,468
Profitability Ratio
Adjusted ROE2 7.61% 20.59% 17.65% 19.06% 17.39%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 ROE = 100 × Net income (loss) attributable to Company ÷ Total Company stockholders’ equity
= 100 × -769 ÷ 16,383 = -4.69%

2 Adjusted ROE = 100 × Adjusted net income (loss) attributable to Company ÷ Adjusted total Company stockholders’ equity
= 100 × 716 ÷ 9,403 = 7.61%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. National Oilwell Varco Inc. adjusted ROE improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Company (769) 2,502 2,327 2,491 1,994
Total assets 26,725 33,562 34,812 31,484 25,515
Profitability Ratio
ROA1 -2.88% 7.45% 6.68% 7.91% 7.82%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Company 716 2,502 2,327 2,491 1,994
Adjusted total assets 19,745 25,023 25,763 24,312 19,364
Profitability Ratio
Adjusted ROA2 3.63% 10.00% 9.03% 10.25% 10.30%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 ROA = 100 × Net income (loss) attributable to Company ÷ Total assets
= 100 × -769 ÷ 26,725 = -2.88%

2 Adjusted ROA = 100 × Adjusted net income (loss) attributable to Company ÷ Adjusted total assets
= 100 × 716 ÷ 19,745 = 3.63%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. National Oilwell Varco Inc. adjusted ROA improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.