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.

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 data over the five-year period illustrates a fluctuating performance in various key areas. In terms of sales, the figures rose significantly from 11,842 million US dollars in 2011 to a peak of 19,137 million US dollars in 2013, followed by a decline to 11,707 million US dollars in 2015. Service revenues displayed a similar pattern with growth until 2014 and a subsequent decline in 2015.

Total revenue followed the same trajectory, increasing steadily to 22,869 million US dollars in 2013, then decreasing to 14,757 million US dollars by the end of 2015. Correspondingly, the cost of sales and cost of services increased until 2013-2014 and then decreased, consistent with the overall revenue trend.

Gross profit showed initial growth from 4,497 million US dollars in 2011, peaking at 5,809 million US dollars in 2014, before sharply declining to 3,063 million US dollars in 2015. This decrease is notable, indicating pressure on profitability during the latter period.

Operating expenses under selling, general, and administrative categories steadily increased from 1,560 million US dollars in 2011, reaching 2,092 million US dollars in 2014, but then declined to 1,764 million US dollars in 2015. An item regarding goodwill and intangible asset impairment appears only in the last two years, with a significant impairment charge of 1,689 million US dollars recorded in 2015, which likely impacted overall operating profit.

Operating profit mirrored the pattern of gross profit, increasing between 2011 and 2014, with values around the 3,400-3,600 million US dollars range, but declining sharply to a loss of 390 million US dollars in 2015, reflecting the challenges faced that year.

Financial costs and interest income remained relatively small with minor fluctuations, and equity income showed a notable decline in 2015. Other income and expenses net declined consistently over the years, contributing to overall reduced profitability.

Income before income taxes maintained steady growth until 2014, then suffered a significant loss before taxes of 589 million US dollars in 2015. Provision for income taxes decreased substantially in 2015 to 178 million US dollars, in line with reduced taxable income.

Income from continuing operations peaked in 2012 at 2,483 million US dollars, then declined, turning negative at -767 million US dollars in 2015. Net income attributable to the company followed a similar trend, with strong profits from 2011 to 2014, but a marked loss in 2015, reflecting the overall downturn in financial performance during the last reported year.

Summary of Key Trends:: Sales and revenue increased significantly between 2011 and 2013 but decreased sharply thereafter.; Costs rose alongside revenue initially, but both declined after 2013, with profitability margins compressed in 2015.; Gross and operating profits demonstrated strong growth until 2014 followed by a severe decline in 2015, including an operating loss influenced by impairment charges.; Financial expenses remained relatively stable, but equity income decreased noticeably by 2015.; Net income showed positive growth through 2014, then reversed to a net loss in 2015, indicating significant financial challenges in the final year of data reported.

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National Oilwell Varco Inc. (NYSE:NOV)

Income Statement