Name: National Oilwell Varco Inc. (NYSE:NOV) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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National Oilwell Varco Inc., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Sales	11,707)	17,173)	19,137)	16,641)	11,842)
Services	3,050)	4,267)	3,732)	3,400)	2,816)
Revenue	14,757)	21,440)	22,869)	20,041)	14,658)
Cost of sales	(9,362)	(12,407)	(14,370)	(11,886)	(8,037)
Cost of services	(2,332)	(3,224)	(3,010)	(2,816)	(2,124)
Cost of revenue	(11,694)	(15,631)	(17,380)	(14,702)	(10,161)
Gross profit	3,063)	5,809)	5,489)	5,339)	4,497)
Selling, general and administrative	(1,764)	(2,092)	(2,066)	(1,782)	(1,560)
Goodwill and intangible asset impairment	(1,689)	(104)	—)	—)	—)
Operating profit (loss)	(390)	3,613)	3,423)	3,557)	2,937)
Interest and financial costs	(103)	(105)	(111)	(49)	(40)
Interest income	14)	18)	12)	10)	18)
Equity income in unconsolidated affiliates	13)	58)	63)	58)	46)
Other income (expense), net	(123)	(90)	(41)	(71)	(39)
Income (loss) from continuing operations before income taxes	(589)	3,494)	3,346)	3,505)	2,922)
Provision for income taxes	(178)	(1,039)	(1,018)	(1,022)	(937)
Income (loss) from continuing operations	(767)	2,455)	2,328)	2,483)	1,985)
Income from discontinued operations	—)	52)	—)	—)	—)
Net income (loss)	(767)	2,507)	2,328)	2,483)	1,985)
Net (income) loss attributable to noncontrolling interests	(2)	(5)	(1)	8)	9)
Net income (loss) attributable to Company	(769)	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).

The financial performance from 2011 through 2015 is characterized by a period of significant growth followed by a sharp contraction in both revenue and profitability. Revenue experienced a strong upward trajectory, peaking in 2013 at 22,869 million US dollars before entering a precipitous decline that culminated in 2015, where revenue fell to 14,757 million US dollars, effectively returning to 2011 levels.

Revenue and Gross Profit Trends: Total revenue grew by approximately 55% between 2011 and 2013, driven by increases in both sales and services. Gross profit followed a similar trajectory, rising from 4,497 million US dollars in 2011 to a peak of 5,809 million US dollars in 2014. However, 2015 marked a severe reversal, with gross profit dropping to 3,063 million US dollars, a decrease of nearly 47% from the previous year.
Operating Profitability and Impairments: Operating profit remained relatively stable and positive between 2011 and 2014, ranging from 2,937 million to 3,613 million US dollars. A critical shift occurred in 2015, where the operating profit transitioned to an operating loss of 390 million US dollars. This downturn was heavily influenced by a substantial increase in goodwill and intangible asset impairments, which rose from 104 million US dollars in 2014 to 1,689 million US dollars in 2015.
Net Income Analysis: The company maintained consistent profitability from 2011 to 2014, with net income attributable to the company peaking at 2,502 million US dollars in 2014. In 2015, the company recorded a net loss attributable to the company of 769 million US dollars. This loss is primarily attributable to the combination of declining revenues and the aforementioned massive impairment charges.
Expense and Financial Cost Management: Selling, general and administrative expenses increased steadily from 2011 to 2014, peaking at 2,092 million US dollars before moderating slightly to 1,764 million US dollars in 2015. Interest and financial costs showed a gradual increase from 40 million US dollars in 2011 to a plateau of approximately 103-111 million US dollars between 2013 and 2015, indicating a stable but higher debt-servicing cost environment compared to the start of the period.

Overall, the data indicates a volatile cycle. The period of expansion from 2011 to 2013 was followed by a period of stagnation in 2014 and a severe financial correction in 2015, where non-cash impairment charges played a dominant role in eroding the bottom line.

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