Analysis of Debt
Total Debt (Carrying Amount)
National Oilwell Varco Inc., balance sheet: debt
US$ in millions
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).
Total debt experienced a significant expansion over the five-year period, characterized by a substantial increase in leverage starting in 2012 and further growth by the end of 2015.
- Total Debt Trajectory
- The carrying amount of total debt rose from 510 million US$ in 2011 to 3,149 million US$ in 2012, representing a sharp increase in total liabilities. Following this surge, debt levels remained relatively stable through 2013 and 2014, before climbing further to reach 3,930 million US$ by December 31, 2015.
- Long-Term Debt Analysis
- The growth in total debt is primarily driven by long-term debt, excluding the current portion. This figure increased from 159 million US$ in 2011 to 3,148 million US$ in 2012, remaining near that level through 2014 before increasing to 3,928 million US$ in 2015. This indicates a heavy reliance on long-term financing to support capital requirements.
- Current Portion and Short-Term Borrowings
- The current portion of long-term debt and short-term borrowings exhibits high volatility relative to its size but remains a small fraction of the total debt profile. After a high of 351 million US$ in 2011, this figure dropped to near-zero levels in 2012 and 2013, spiked to 152 million US$ in 2014, and returned to 2 million US$ in 2015. This pattern suggests periodic settlements of maturing debt or fluctuations in short-term credit utilization.
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Total Debt (Fair Value)
| Dec 31, 2015 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Senior Notes | 2,551) |
| Commercial paper | 893) |
| Other | 45) |
| Total debt (fair value) | 3,489) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.89 |
Based on: 10-K (reporting date: 2015-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt: 2.89%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 1.35% | 500) | 7) | |
| 2.60% | 1,396) | 36) | |
| 3.95% | 1,096) | 43) | |
| Total | 2,992) | 86) | |
| 2.89% | |||
Based on: 10-K (reporting date: 2015-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 86 ÷ 2,992 = 2.89%