OREANDA-NEWS. February 12, 2016. Cameron (NYSE: CAM) today reported fully diluted earnings per share, excluding discontinued operations and other costs, of \\$1.08 for the fourth quarter of 2015, compared to \\$1.34 for the same period of 2014.

Other costs in the fourth quarter of 2015 amounted to \\$115 million on a pretax basis, or \\$0.43 per share, primarily related to asset charges and severance, as detailed in an accompanying table.

On a GAAP basis, the Company's fully diluted earnings per share for the fourth quarter of 2015 were \\$0.65, as compared to \\$1.28 for the same period of 2014.

For the full year 2015, the Company reported fully-diluted earnings per share, excluding discontinued operations and other costs, of \\$4.00, compared to \\$4.14 for 2014.  On a GAAP basis, the Company's 2015 fully diluted earnings per share were \\$2.60, as compared to \\$3.96 for 2014.

Commenting on the Company's performance in the fourth quarter of 2015, President and Chief Executive Officer Scott Rowe, said, "Cameron once again delivered very strong operating results in the face of a continued downturn in the energy markets.  The Company's performance was driven by accelerated progress in the transformation of our cost structure and strong execution.  In particular, the company's Subsea segment reported an operating income margin of 23.1%, more than double that of the fourth quarter of 2014."

Segment Performance

  • Subsea - Relative to the fourth quarter of 2014, the segment reported an 85% increase in operating income despite lower revenues, driven in particular by strong execution on several late-stage projects as well as a greater mix of services-related work.  Segment orders increased 27% versus the fourth quarter of 2014 and more than doubled as compared to the third quarter of 2015.  Orders for the year totaled \\$2.23 billion versus \\$2.36 billion in 2014.
  • Surface -  Revenues, operating income and margin all improved relative to the third quarter of  2015 but were lower than the fourth quarter of 2014 due in large part to the weakness in North American markets.
  • Drilling - Operating income margin increased to 21.7% in the fourth quarter of 2015 as compared to 18.5% in the fourth quarter of 2014 due to continued strong execution.  Revenues and operating income declined, reflecting lower project-related backlog as well as a reduction in service activity.
  • Valves & Measurement - Revenues, operating income and margin all declined relative to the fourth quarter of 2014, reflecting lower volumes and pricing pressures, particularly in the North American distribution market.

Outlook

Rowe said, "Although declines in energy prices will have a negative impact on our business in 2016, we remain focused on the factors that will drive our fundamental long-term performance:  execution, customer relationships, cost reduction and technology."

Cash Flow from Operations

The Company generated cash from operations of \\$497 million during the fourth quarter and \\$708 million for the full-year 2015.  The Company ended the quarter with cash, cash equivalents and short-term investments totaling \\$2.4 billion.

Agreement to be Acquired by Schlumberger Limited

On August 26, 2015, Schlumberger Limited (NYSE: SLB) and Cameron jointly announced a definitive merger agreement in which the companies will combine in a stock and cash transaction. The agreement was unanimously approved by the boards of directors of both companies and, on December 17, Cameron stockholders overwhelmingly voted to adopt the merger agreement.  The transaction remains subject to regulatory approvals and customary closing conditions, and is expected to close in the first quarter of 2016.

Cameron is a leading provider of flow equipment products, systems and services to worldwide oil and gas industries.

Forward-Looking Statements

In addition to the historical data contained herein, this document includes forward-looking statements regarding the Company's long-term performance and expectations regarding the closing of merger transaction and, if accomplished, the timing thereof, made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and subject to risk factors that are discussed in Cameron's most recent filings on Form 10-Q and 10-K, filed with the SEC, as well as other filings with the SEC available at the SEC's Internet site (http://www.sec.gov). Actual results may differ materially from those expected, estimated or projected and a closing of the merger transaction may not occur or the timing thereof could be different from that currently expected. Forward-looking statements speak only as of the date they are made, and Cameron undertakes no obligation to publicly update or revise any of them in light of new information, future events or otherwise.

Cameron

Unaudited Consolidated Condensed Results of Operations

(\\$ and shares in millions except per share data)





Three months ended December 31,

Twelve months ended December 31,

2015

2014

2015

2014

REVENUES

\\$

2,079

\\$

2,804

\\$

8,782

\\$

10,381

COSTS AND EXPENSES:







Cost of sales (exclusive of depreciation and amortization shown separately below)

1,403

2,009

6,126

7,464

Selling and administrative expenses

261

316

1,082

1,287

Depreciation and amortization

78

92

342

348

Interest, net

33

31

138

129

Other costs, net

115

11

773

73

Total costs and expenses

1,890

2,459

8,461

9,301

Income from continuing operations before income taxes

189

345

321

1,080

Income tax provision

(40)

(79)

(184)

(258)

Income from continuing operations

149

266

137

822

Income (loss) from discontinued operations, net of income taxes

—

(4)

431

26

Net income

149

262

568

848

Less: Net income attributable to noncontrolling interests

24

8

67

37

Net income attributable to Cameron stockholders

\\$

125

\\$

254

\\$

501

\\$

811

Amounts attributable to Cameron stockholders:







Income from continuing operations

\\$

125

\\$

258

\\$

70

\\$

785

Income (loss) from discontinued operations

—

(4)

431

26

   Net income attributable to Cameron stockholders

\\$

125

\\$

254

\\$

501

\\$

811

Earnings (loss) per common share attributable to Cameron stockholders:







Basic -







Continuing operations

\\$

0.65

\\$

1.32

\\$

0.36

\\$

3.85

Discontinued operations

—

(.02)

2.25

.13

Basic earnings per share

\\$

0.65

\\$

1.30

\\$

2.61

\\$

3.98

Diluted -







Continuing operations

\\$

0.65

\\$

1.30

\\$

0.36

\\$

3.83

Discontinued operations

—

(.02)

2.24

.13

Diluted earnings per share

\\$

0.65

\\$

1.28

\\$

2.60

\\$

3.96

Shares used in computing earnings per common share:







Basic

192

196

192

204

Diluted

193

198

193

205

Cameron

Consolidated Condensed Balance Sheets

(\\$ millions)





December 31, 2015

December 31, 2014

(unaudited)

ASSETS



Cash and cash equivalents

\\$

1,775

\\$

1,513

Short-term investments

584

113

Receivables, net

1,964

2,389

Inventories, net

2,360

2,929

Other current assets

333

391

Assets held for sale

102

217

Total current assets

7,118

7,552

Plant and equipment, net

1,717

1,964

Goodwill

1,764

2,461

Intangibles, net

582

728

Other assets

319

187

Total assets

\\$

11,500

\\$

12,892

LIABILITIES AND STOCKHOLDERS' EQUITY



Short-term debt

\\$

284

\\$

263

Accounts payable and accrued liabilities

2,793

3,748

Accrued income taxes

127

168

Liabilities held for sale

2

90

Total current liabilities

3,206

4,269

Long-term debt

2,542

2,819

Deferred income taxes

212

193

Other long-term liabilities

150

167

Total liabilities

6,110

7,448

Stockholders' equity:



Common stock, par value \\$.01 per share, 400,000,000 shares authorized, 263,111,472 shares issued at December 31, 2015 and 2014

3

3

Capital in excess of par value

3,265

3,255

Retained earnings

6,132

5,631

Accumulated other elements of comprehensive income (loss)

(877)

(540)

Less: Treasury stock at cost, 71,931,558 shares at December 31, 2015 and 68,139,027 shares at December 31, 2014

(3,969)

(3,794)

   Total Cameron stockholders' equity

4,554

4,555

Noncontrolling interests

836

889

   Total equity

5,390

5,444

   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

\\$

11,500

\\$

12,892

Cameron

Unaudited Consolidated Condensed Statements of Cash Flows

(\\$ millions)





Three months ended December 31,

Twelve months ended December 31,

2015

2014

2015

2014

Cash flows from operating activities:







Net income

\\$

149

\\$

262

\\$

568

\\$

848

Adjustments to reconcile net income to net cash provided by operating activities:







   Asset impairment and other charges

68

—

654

44

   Pre-tax gain on sale of compression businesses

—

—

(681)

(95)

   Depreciation

67

78

293

296

   Amortization

11

15

49

64

   Non-cash stock compensation expense

14

11

49

54

   Gain from remeasurement of prior interest in equity method investment

—

—

—

(8)

   Deferred income taxes and tax benefit of stock compensation plan transactions

17

(8)

(50)

(48)

Changes in assets and liabilities, net of translation, and non-cash items:







   Receivables

145

124

390

166

   Inventories

256

139

362

(144)

   Accounts payable and accrued liabilities

(43)

274

(913)

(17)

   Other assets and liabilities, net

(187)

43

(13)

33

   Net cash provided by operating activities

497

938

708

1,193

Cash flows from investing activities:







Proceeds from sales and maturities of short-term investments

249

24

923

65

Purchases of short-term investments

(512)

(22)

(1,394)

(137)

Capital expenditures

(95)

(126)

(285)

(385)

Net proceeds received from sale of compression businesses, net

—

—

831

547

Other dispositions (acquisitions), net

—

—

—

(7)

Proceeds from sales of plant and equipment

3

2

14

13

Net cash provided by (used for) investing activities

(355)

(122)

89

96

Cash flows from financing activities:







Issuance of senior debt

—

—

—

500

Debt issuance costs

—

—

—

(4)

Early retirement of senior notes

—

—

—

(253)

Short-term loan borrowings (repayments), net

(2)

(138)

(222)

(34)

Purchase of treasury stock

—

(191)

(240)

(1,747)

Contributions from (distributions to) noncontrolling interest owners

—

(2)

(3)

(42)

Proceeds from stock option exercises, net of tax payments from stock compensation plan transactions

15

1

20

40

Excess tax benefits from stock compensation plan transactions

1

—

2

6

Principal payments on capital leases

(3)

(5)

(18)

(20)

Net cash used for financing activities

11

(335)

(461)

(1,554)

Effect of translation on cash

(5)

(26)

(74)

(35)

Increase (decrease) in cash and cash equivalents

148

455

262

(300)

Cash and cash equivalents, beginning of year

1,627

1,053

1,513

1,813

Cash and cash equivalents, end of year

\\$

1,775

\\$

1,513

\\$

1,775

\\$

1,513

Cameron

Unaudited Supplemental Segment Financial Data

(\\$ millions)





Three months ended December 31,

Twelve months ended December 31,

2015

2014

2015

2014

Revenues:







Subsea

\\$

706

\\$

872

\\$

2,753

\\$

3,067

Surface

458

660

1,957

2,411

Drilling

590

816

2,708

3,049

Valves and Measurement (V&M)

363

528

1,548

2,125

Elimination of intersegment revenues

(38)

(72)

(184)

(271)

   Consolidated revenues

\\$

2,079

\\$

2,804

\\$

8,782

\\$

10,381

Segment operating income before interest and income taxes:







Subsea

\\$

163

\\$

88

\\$

407

\\$

207

Surface

54

123

264

427

Drilling

128

151

528

474

V&M

30

81

177

393

Elimination of intersegment earnings

(4)

(21)

(36)

(74)

   Segment operating income before interest and income taxes

371

422

1,340

1,427

Corporate items:







Corporate expenses

(34)

(35)

(108)

(145)

Interest, net

(33)

(31)

(138)

(129)

Other costs, net

(115)

(11)

(773)

(73)

    Consolidated income from continuing operations before income taxes

\\$

189

\\$

345

\\$

321

\\$

1,080

Orders:







Subsea

\\$

656

\\$

518

\\$

2,228

\\$

2,356

Surface

396

560

1,770

2,480

Drilling

169

419

1,107

2,449

V&M

315

509

1,418

2,091

   Consolidated orders

\\$

1,536

\\$

2,006

\\$

6,523

\\$

9,376


December 31,

December 31,

Backlog (at end of period):

2015

2014

Subsea

\\$

3,421

\\$

4,263

Surface

884

1,025

Drilling

1,611

3,327

V&M

701

921

   Consolidated backlog

\\$

6,617

\\$

9,536

Cameron

Reconciliation of GAAP to Non-GAAP Financial Information

(\\$ millions, except per share amounts)

Three Months Ended December 31, 2015

After Tax

Diluted EPS(1)

Net income attributable to Cameron from continuing operations

\\$

125

\\$

0.65

Adjustments:



Asset charges & loss on disposal of assets

50


Facility closures & severance

32


All other

1


   Net income attributable to Cameron, excluding charges

\\$

208

\\$

1.08

(1) Based on 193 million diluted shares

Three Months Ended December 31, 2014

After Tax

Diluted EPS(1)

Net income attributable to Cameron from continuing operations

\\$

258

\\$

1.30

Adjustments:



Asset charges & loss on disposal of assets

1


Facilities closures and severance

3


All other

4


   Net income attributable to Cameron, excluding charges

\\$

266

\\$

1.34

(1) Based on 198 million diluted shares

Cameron

Reconciliation of GAAP to Non-GAAP Financial Information

(\\$ millions, except per share amounts)



Twelve months ended December 31, 2015

After Tax

Diluted EPS(1)

Net income attributable to Cameron from continuing operations

\\$

70

\\$

0.36

Adjustments:



Asset charges and loss on disposal of assets

616


Facility closures and severance

63


All other

23


   Net income attributable to Cameron, excluding charges

\\$

772

\\$

4.00

(1) Based on 193 million diluted shares

Twelve months ended December 31, 2014

After Tax

Diluted EPS(1)

Net income attributable to Cameron from continuing operations

\\$

785

\\$

3.83

Adjustments:



Asset charges and loss on disposal of assets

52


Facility closures, severance, and restructuring

10


All other

2


   Net income attributable to Cameron, excluding charges

\\$

849

\\$

4.14

(1) Based on 205 million diluted shares