Name: National Oilwell Varco Inc. (NYSE:NOV) | Liabilities and Stockholders’ Equity
Creator: Stock Analysis on Net

Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

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National Oilwell Varco Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in millions

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Accounts payable	623)	1,189)	1,275)	1,200)	901)
Accrued vendor costs	449)	815)	531)	444)	280)
Customer prepayments and billings	426)	703)	673)	699)	686)
Fair value of derivatives	261)	297)	31)	18)	83)
Warranty	244)	272)	228)	194)	211)
Compensation	241)	662)	516)	511)	468)
Taxes, non income	175)	211)	188)	150)	119)
Insurance	113)	126)	131)	108)	103)
Accrued commissions	73)	97)	97)	77)	—)
Interest	8)	11)	11)	14)	7)
Other	294)	324)	357)	356)	419)
Accrued liabilities	2,284)	3,518)	2,763)	2,571)	2,376)
Billings in excess of costs	785)	1,775)	1,771)	1,189)	865)
Current portion of long-term debt and short-term borrowings	2)	152)	1)	1)	351)
Accrued income taxes	264)	431)	556)	355)	709)
Deferred income taxes	291)	309)	312)	333)	214)
Current liabilities	4,249)	7,374)	6,678)	5,649)	5,416)
Long-term debt, excluding current portion	3,928)	3,014)	3,149)	3,148)	159)
Deferred income taxes	1,805)	1,972)	2,292)	1,997)	1,852)
Other liabilities	283)	430)	363)	334)	360)
Noncurrent liabilities	6,016)	5,416)	5,804)	5,479)	2,371)
Total liabilities	10,265)	12,790)	12,482)	11,128)	7,787)
Common stock, par value $.01	4)	4)	4)	4)	4)
Additional paid-in capital	8,005)	8,341)	8,907)	8,743)	8,535)
Accumulated other comprehensive income (loss)	(1,553)	(834)	(4)	107)	(23)
Retained earnings	9,927)	13,181)	13,323)	11,385)	9,103)
Total Company stockholders’ equity	16,383)	20,692)	22,230)	20,239)	17,619)
Noncontrolling interests	77)	80)	100)	117)	109)
Total stockholders’ equity	16,460)	20,772)	22,330)	20,356)	17,728)
Total liabilities and stockholders’ equity	26,725)	33,562)	34,812)	31,484)	25,515)

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 trajectory between 2011 and 2015 is characterized by a significant expansion of long-term leverage and a subsequent contraction in total stockholders' equity, indicating a shift in the company's capital structure and overall financial position.

Liability Trends and Debt Obligations: Total liabilities grew from 7,787 million in 2011 to a peak of 12,790 million in 2014, before moderating to 10,265 million in 2015. A pivotal change occurred in 2012, where long-term debt, excluding the current portion, escalated from 159 million to 3,148 million. This long-term debt remained high throughout the period, reaching 3,928 million by 2015, which suggests a strategic pivot toward long-term borrowed capital to fund operations or acquisitions.
Current Liability Dynamics: Current liabilities exhibited a steady increase from 2011 (5,416 million) through 2014 (7,374 million), followed by a sharp decline to 4,249 million in 2015. This volatility is particularly evident in billings in excess of costs, which rose from 865 million in 2011 to 1,775 million in 2014 before dropping precipitously to 785 million in 2015. Additionally, accrued liabilities peaked in 2014 at 3,518 million before falling to 2,284 million in 2015, mirroring the general contraction of short-term obligations in the final year.
Stockholders' Equity and Retained Earnings: Total stockholders' equity followed a convex trend, rising from 17,728 million in 2011 to a peak of 22,330 million in 2013, then declining to 16,460 million by 2015. This erosion was primarily driven by a decrease in retained earnings, which fell from 13,323 million in 2013 to 9,927 million in 2015. The decline was further exacerbated by accumulated other comprehensive income, which transitioned from a positive 107 million in 2012 to a substantial deficit of 1,553 million by 2015.
Overall Capitalization and Solvency: The total balance sheet size peaked in 2013 at 34,812 million before contracting to 26,725 million by 2015. The simultaneous increase in long-term debt and the decrease in total equity from 2013 to 2015 indicates an increase in financial leverage and a weakening of the equity cushion. The substantial reduction in current liabilities in 2015, contrasted with the increase in long-term debt, suggests a reallocation of obligations from short-term to long-term profiles.

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