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Press release from PR Newswire

Cameron Fourth Quarter Earnings $0.77 Per Share, Excluding Charges

Thursday, February 02, 2012

Cameron Fourth Quarter Earnings $0.77 Per Share, Excluding Charges08:10 EST Thursday, February 02, 2012-- Quarter's earnings per share total $0.40, including charges -- Quarter's orders total $1.9 billion, year-end backlog nearly $6 billion -- 2011 orders total $7.8 billion, $2.0 billion more than 2010HOUSTON, Feb. 2, 2012 /PRNewswire/ -- Cameron (NYSE: CAM) reported net income of $99.9 million, or $0.40 per diluted share, for the quarter ended December 31, 2011, compared with net income in the prior year's fourth quarter of $164.6 million, or $0.66 per diluted share. The fourth quarter 2011 results include after-tax charges of $90.5 million, or $0.37 per share, primarily related to the Deepwater Horizon matter.  The fourth quarter 2010 results included after-tax charges of $6.2 million, or $0.03 per share, primarily related to costs associated with Deepwater Horizon and the continued integration of the NATCO Group Inc. Excluding the above items, the Company's earnings per diluted share were $0.77 for the fourth quarter of 2011, compared with $0.69 for the fourth quarter of 2010.Revenues up 12 percent for quarter, 13 percent for year; both represent new highsRevenues for the fourth quarter of 2011 were a record $2.03 billion, up more than 12 percent from the prior year, and revenues for the year were $6.96 billion, up more than 13 percent from 2010's $6.13 billion, also a new record. Excluding charges, earnings per diluted share for 2011 were $2.67, compared to $2.42 for 2010. Including charges, earnings per diluted share were $2.09 for 2011 and $2.27 for 2010.  Cameron Chairman, President and Chief Executive Officer Jack B. Moore commented that each segment saw record revenues in 2011 reflecting the investments Cameron has made in each of its businesses over the last three years.Record orders; backlog nearly $6.0 billion at year-endOrders booked in the fourth quarter of 2011 totaled $1.91 billion, up from $1.71 billion a year ago. Year-over-year orders were higher in all three of the Company's operating segments.  Full-year orders totaled $7.83 billion, up 35 percent from 2010, and represented the highest order year in the Company's history. Moore noted that record annual orders in Drilling and Surface Systems drove the year-over-year improvement in Drilling & Production Systems (DPS), while each of Valves & Measurement's (V&M) businesses saw record annual orders. Moore said, "The Process & Compression (PCS) segment saw record orders in the fourth quarter, as well as on an annual level," and added, "We continue to be pleased with the balance in our business lines and the opportunities that our diverse product offerings provide." Cash flow to improve, capital spending to increase in 2012Cameron's cash flow from operations totaled $329 million in the fourth quarter.  Moore said, "Cameron invested over $600 million in working capital in 2011 to help support the record sales and orders we experienced in 2011, but we expect this build to moderate significantly in 2012.""We spent $388 million in capital expenditures during the year," Moore said, "with an emphasis on enhancing our aftermarket reach and capability and meeting demands in unconventional drilling."  Moore added that he expects Cameron's capital spending to increase to approximately $500 million during 2012, saying, "We see a mix of needs and opportunities for our businesses during the year that could push our capital expenditures to a new record. The majority will be targeted at expanding our infrastructure in Brazil, growing our aftermarket support bases for Drilling in the North Sea and Far East and adding to Cameron's global fleet of equipment and services in the unconventional shale markets."2012 earnings expected to reach $3.20 to $3.30 per shareMoore said Cameron currently expects its 2012 earnings to be in the range of $3.20 to $3.30 per diluted share, excluding charges, and first quarter 2012 earnings, excluding charges, are expected to be approximately $0.50 to $0.55 per diluted share.Cameron (NYSE: CAM) is a leading provider of flow equipment products, systems and services to worldwide oil, gas and process industries.Website: www.c-a-m.comIn addition to the historical data contained herein, this document includes forward-looking statements regarding future order levels, working capital needs, revenues and earnings of the Company (including first quarter and full year 2012 earnings per share estimates), as well as expectations regarding facility expansion, the Company's ability to control raw material, overhead and operating costs, capital spending and cash flow, made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The Company's actual results may differ materially from those described in forward-looking statements.  Such statements are based on current expectations of the Company's performance and are subject to a variety of factors, some of which are not under the control of the Company, which can affect the Company's results of operations, liquidity or financial condition.  Such factors may include overall demand for, and pricing of, the Company's products; the size and timing of orders; the Company's ability to successfully execute deliveries, particularly with respect to the large subsea and drilling systems projects it has been awarded; the possibility of cancellation of orders in backlog; the Company's ability to convert backlog into revenues on a timely and profitable basis; the impact of acquisitions the Company has made or may make; changes in the price of (and demand for) oil and gas in both domestic and international markets; raw material costs and availability; political and social issues affecting the countries in which the Company does business, including the ability of companies to obtain drilling permits following the lifting of a temporary moratorium imposed by the United States government on drilling activities in deepwater areas of the Gulf of Mexico; fluctuations in currency markets worldwide; and variations in global economic activity.  In particular, current and projected oil and gas prices historically have generally directly affected customers' spending levels and their related purchases of the Company's products and services.  Additionally, changes in oil and gas price expectations may impact the Company's financial results due to changes in cost structure, staffing or spending levels.Because the information herein is based solely on data currently available, it is subject to change as a result of changes in conditions over which the Company has no control or influence, and should not therefore be viewed as assurance regarding the Company's future performance.  Additionally, the Company is not obligated to make public indication of such changes unless required under applicable disclosure rules and regulations.CameronUnaudited Consolidated Condensed Results of Operations($ and shares in millions except per share data)Three MonthsEnded December 31,Twelve MonthsEnded December 31,2011201020112010Revenues:Drilling & Production Systems                    $  1,216.0$  1,118.2$  4,061.5$  3,718.3Valves & Measurement                         462.2336.21,663.01,273.3Process & Compression Systems                 352.5353.91,234.51,143.2Total revenues                           2,030.71,808.36,959.06,134.8Costs and Expenses:Cost of sales (exclusive of depreciation and amortization shown separately below)1,430.51,264.94,838.44,212.4Selling and administrative expenses               277.7250.41,001.5862.3Depreciation and amortization                    61.247.9206.6201.6Interest, net                                  21.221.784.078.0Other costs                                  114.28.1177.447.2Total costs and expenses                   1,904.81,593.06,307.95,401.5Income before income taxes                       125.9215.3651.1733.3Income tax provision                             (26.0)(50.7)(129.2)(170.4)Net income                                     $  99.9$  164.6$  521.9$  562.9Earnings per common share: Basic                                       $  0.41$  0.68$  2.13$  2.32Diluted                                      $  0.40$  0.66$  2.09$  2.27Shares used in computing earnings per common share: Basic                                       245.3243.1245.0243.1Diluted                                      247.4249.0249.2247.5EBITDA:Drilling & Production Systems                     $  246.0$  227.0$  797.0$  759.7Valves & Measurement                           92.361.0334.4230.4Process & Compression Systems                   38.045.9153.9186.8Corporate and other(1)                           (168.0)(49.0)(343.6)(164.0)Total                                       $  208.3$  284.9$  941.7$  1,012.9(1) Corporate EBITDA amounts include $114.2 and $8.1 million of other costs for the three-month periods ended December 31, 2011 and 2010 respectively; and $177.4 and $47.2 million for the years ended December 31, 2011 and 2010, respectively.CameronConsolidated Condensed Balance Sheets($ millions)December 31,2011December 31,2010(unaudited)Assets:Cash and cash equivalents                                        $  898.9$  1,832.5Short-term investments                                           423.5?Receivables, net                                                 1,757.31,056.1Inventories, net                                                 2,399.91,779.3Other                                                         349.0265.0 Total current assets                                            5,828.64,932.9Plant and equipment, net                                           1,500.11,247.8Goodwill 1,615.31,475.8Other assets                                                   473.8348.6   Total Assets                                              $  9,417.8$  8,005.1Liabilities and Stockholders' Equity:Current portion of long-term debt                                    $  10.6$  519.9Accounts payable and accrued liabilities                             2,725.82,016.0Accrued income taxes                                                 ?38.0 Total current liabilities                                           2,736.42,573.9Long-term debt                                                  1,574.2772.9Deferred income taxes                                           184.595.7Other long-term liabilities                                           215.3170.2  Total liabilities                                               4,710.43,612.7Commitments and contingencies                                     ??Stockholders' equity:Common stock, par value $.01 per share, 400,000,000 shares authorized, 263,111,472 shares issued at December 31, 2011 and 2010??.2.62.6Preferred stock, par value $.01 per share, 10,000,000 shares authorized, no shares issued or outstanding??Capital in excess of par value                                    2,072.42,259.3Retained earnings                                             3,370.22,848.3Accumulated other elements of comprehensive income (loss)           (90.8)(27.1)Less:  Treasury stock at cost, 17,579,397 shares at December 31, 2011 and 19,197,642 shares at December 31, 2010(647.0)(690.7)      Total stockholders' equity                                       4,707.44,392.4         Total Liabilities and Stockholders' Equity                          $  9,417.8$  8,005.1CameronUnaudited Consolidated Condensed Statements Of Cash Flows($ millions)Three MonthsEnded December 31,Twelve MonthsEnded December 31,2011201020112010Cash flows from operating activities:Net income                                     $  99.9$  164.6$  521.9$  562.9Adjustments to reconcile net income to net cash provided by operating activities:Depreciation                                 45.234.8160.2142.6Amortization                                 16.013.146.459.0Non-cash stock compensation expense           10.09.336.734.5Deferred income taxes and tax benefit of employee stock compensation plan transactions(34.6)(13.7)(22.0)(19.1)Changes in assets and liabilities, net of translation, acquisitions and non-cash items:Receivables                                 (100.7)(34.4)(461.1)(81.4)Inventories                                 34.387.2(397.1)(3.8)Accounts payable and accrued liabilities          177.7107.1202.4(291.7)Other assets and liabilities, net                  81.2(13.2)121.1(108.8)Net cash provided by operating activities     329.0354.8208.5294.2Cash flows from investing activities:Increase in short-term investments, net               (422.8)?(422.8)?Capital expenditures                              (159.6)(85.7)(388.1)(200.7)Acquisitions, net of cash acquired                   (378.8)?(421.3)(40.9)Proceeds from sale of plant and equipment            2.03.519.612.4Net cash used for investing activities         (959.2)(82.2)(1,212.6)(229.2)Cash flows from financing activities:Short-term loan borrowings (repayments), net         (4.0)(1.8)45.7(8.4)Issuance of senior debt                           ??747.8?Debt issuance costs                              ??(4.7)?Redemption of convertible debentures                ??(705.7)?Sale (purchase) of equity call options, net             ??(12.2)?Purchase of treasury stock                         (2.4)?(2.4)(124.0)Proceeds from stock option exercises, net of tax payments from stock compensation plan transactions1.545.921.536.3Excess tax benefits from employee stock compensation plan transactions3.710.19.016.4Principal payments on capital leases                 (2.2)(1.7)(8.2)(6.6)Net cash provided by (used for) financing activities(3.4)52.590.8(86.3)Effect of translation on cash                         (4.0)(4.4)(20.3)(7.2)Increase (decrease) in cash and cash equivalents        (637.6)320.7(933.6)(28.5)Cash and cash equivalents, beginning of period          1,536.51,511.81,832.51,861.0Cash and cash equivalents, end of period               $  898.9$  1,832.5$  898.9$  1,832.5CameronOrders and Backlog($ millions)OrdersThree MonthsEnded December 31,Twelve MonthsEnded December 31,2011201020112010Drilling & Production Systems              $  933.4$  932.6$  4,343.4$  2,967.2Valves & Measurement                   538.2442.22,000.71,579.2Process & Compression Systems           443.2335.81,483.51,244.1Total                               $  1,914.8$  1,710.6$  7,827.6$  5,790.5BacklogDecember 31,2011December 31,2010Drilling & Production Systems                            $  3,811.1$  3,195.9Valves & Measurement                                 1,144.9833.8Process & Compression Systems                         1,013.1787.4Total                                             $  5,969.1$  4,817.1CameronReconciliation of GAAP to Non-GAAP Financial Information($ millions)Three Months Ended December 31, 2011Drilling &ProductionSystemsValves &MeasurementProcess &CompressionSystemsCorporateTotalIncome (loss) before income taxes$  211.3$  81.9$  27.4$  (194.7)$  125.9Depreciation & amortization 34.710.410.65.561.2Interest, net                    ?      ?      ?21.221.2EBITDA                 $  246.0$  92.3$  38.0$  (168.0)$  208.3Three Months Ended December 31, 2010Drilling &ProductionSystemsValves &MeasurementProcess &CompressionSystemsCorporateTotalIncome (loss) before income taxes$  202.9$  50.6$  35.5$  (73.7)$  215.3Depreciation & amortization 24.110.410.43.047.9Interest, net                    ?      ?      ?21.721.7EBITDA                 $  227.0$  61.0$  45.9$  (49.0)$  284.9CameronReconciliation of GAAP to Non-GAAP Financial Information($ millions)Twelve Months Ended December 31, 2011Drilling &ProductionSystemsValves &MeasurementProcess &CompressionSystemsCorporateTotalIncome (loss) before income taxes$  685.6$  294.1$  116.0$  (444.6)$  651.1Depreciation & amortization 111.440.337.917.0206.6Interest, net                    ?      ?      ?84.084.0EBITDA                 $  797.0$  334.4$  153.9$  (343.6)$  941.7Twelve Months Ended December 31, 2010Drilling &ProductionSystemsValves &MeasurementProcess &CompressionSystemsCorporateTotalIncome (loss) before income taxes$  666.7$  188.0$  131.9$  (253.3)$  733.3Depreciation & amortization 93.042.454.911.3201.6Interest, net                    ?      ?      ?78.078.0EBITDA                 $  759.7$  230.4$  186.8$  (164.0)$  1,012.9CameronReconciliation of GAAP to Non-GAAP Financial Information($ millions, except per share amounts)Three Months Ended December 31, 2011After Tax(1)Diluted EPS(2)Net income, as reported                                         $  99.9$  0.40Adjustments:Costs associated with the Deepwater Horizon matter               85.40.35Mark-to-market impact on currency derivatives(3)                   2.30.01Severance, acquisition and other restructuring costs                2.80.01    Net income excluding charges                                $         190.4$          0.77(1) Individual adjustments assume a 20.7% effective tax rate(2) Based on 247.4 million diluted shares(3) These derivatives have not been designated as accounting hedgesThree Months Ended December 31, 2010After Tax(1)Diluted EPS(2)Net income, as reported                                         $  164.6$  0.66Adjustments:Costs associated with the Deepwater Horizon matter               4.40.02Severance, acquisition and other restructuring costs                1.80.01    Net income excluding charges                              $         170.8$          0.69(1) Individual adjustments assume a 23.5% effective tax rate(2) Based on 249.0 million diluted sharesYear Ended December 31, 2011After Tax(1)Diluted EPS(2)Net income, as reported                                         $  521.9$  2.09Adjustments: Costs associated with the Deepwater Horizon matter               114.80.47 Mark-to-market impact on currency derivatives(3)                   7.50.03 Costs associated with retiring the 2.5% convertible debentures       11.60.05Severance, acquisition and other restructuring costs                8.30.03    Net income excluding charges                                $     664.1$        2.67(1) Individual adjustments assume a 19.8% effective tax rate(2) Based on 249.2 million diluted shares(3) These derivatives have not been designated as accounting hedgesYear Ended December 31, 2010After Tax(1)Diluted EPS(2)Net income, as reported                                         $  562.9$  2.27Adjustments:NATCO acquisition integration costs                             16.90.07Costs associated with the Deepwater Horizon matter               9.60.04Severance, acquisition and other restructuring costs                9.80.04    Net income excluding charges                              $          599.2$         2.42(1) Individual adjustments assume a 23.2% effective tax rate(2) Based on 247.5 million diluted sharesSOURCE CameronFor further information: Jeff Altamari, Vice President, Investor Relations, +1-713-513-3344