AMSTERDAM, Jan. 29, 2014
/PRNewswire/ -- In the fourth quarter of 2013, Core
Laboratories N.V. (NYSE: "CLB US" and NYSE Euronext: "CLB NA") was
added to the Philadelphia Oil Service Sector Index, better known as
the OSX, and posted the most profitable quarter in Company
history. The record results were driven primarily by the
introduction of new technology and related services, especially by
the Company's Production Enhancement operations. This marked
the fifth consecutive quarter in which Core has posted all-time
quarterly records for earnings per diluted share ("EPS"), net
income, and revenue. The Company's fourth quarter 2013 EPS
increased 22% year-over-year to $1.43, the largest percentage increase in six
quarters, excluding items referenced in the non-GAAP
reconciliations. Fourth quarter 2013 net income increased 18%
from the year-earlier period to $64,936,000, ex-items, while operating income,
ex-items, increased 17% to $88,480,000. Revenue for the fourth quarter
of 2013 increased 9% to $276,279,000
from the fourth quarter of 2012. Year-over-year quarterly
operating margins increased more than 220 basis points to a fourth
quarter record 32%, while quarterly year-over-year incremental
margins reached 58%, ex-items.
(Logo: http://photos.prnewswire.com/prnh/20100712/DA33898LOGO)
Fourth quarter 2013 free cash flow ("FCF"), defined as cash from
operations less capital expenditures, reached $79,061,000. During the quarter, Core
converted almost 29 cents of every
revenue dollar into FCF, one of the highest rates among all major
oilfield service companies. Core returned over $85,462,000 to its shareholders during the
quarter via dividends of approximately $14,517,000 and share repurchases totaling
approximately $70,945,000. The
Company repurchased 376,912 shares in the quarter, lowering Core's
outstanding diluted share count to 45,351,000, a new 16-year low.
The Company's Shareholder Capital Return Program has returned over
$1.66 billion to its shareholders via
diluted share count reductions and special and quarterly dividends
over the past 11-year period.
The Company's improved year-over-year and sequential quarterly
results reflect Core's long-held growth strategy of adding new
high-margin technologies and services. Rather than relying on
increasingly volatile and downward trending exploration efforts,
the Company's multi-decade-long focus on existing fields and fields
under development has led to five consecutive all-time record
quarters and 16 consecutive quarters of year-over-year revenue and
EPS increases, during which time operating margins improved over
400 basis points. Going into 2014, Core's focus will remain
on deepwater developments, especially in the "Golden Triangle"
areas of the Gulf of Mexico,
West Africa, and Brazil; unconventional tight-oil plays
primarily in North America, with
emerging plays in Russia,
North Africa, and Australia; and enhanced oil recovery projects
in the North Sea, Middle East, and
Asia Pacific. In South America, Core exited Venezuela in 2013 and plans to minimize all
in-country operations in Argentina
in 2014 because of governmental controls that preclude companies
such as Core from earning accretive returns.
Comparing full-year 2013 results with those of 2012, ex-items,
Core's EPS increased 18% to $5.32,
while net income was up 14% to $244,857,000. Revenue increased 9% to
$1,073,508,000, and operating margins
reached 31%, up 120 basis points, establishing annual historic
highs for both revenue and operating margins. Incremental
operating margins for 2013 were 44%, which is at the high end of
earlier full-year 2013 guidance. FCF established another annual
record at $262,721,000, increasing
28% over full-year 2012 totals. In 2013, as has been true for
eight of the last twelve years, Core's FCF exceeded net income.
As reported in previous quarters, the Board of Supervisory
Directors ("Board") of Core Laboratories N.V. has established an
internal performance metric of achieving a return on invested
capital ("ROIC") in the top decile of the service companies listed
as Core's peers by Bloomberg Financial ("Comp Group"). Based
on Bloomberg's calculations for the latest comparable data
available, Core's ROIC was the highest in its oilfield services
Comp Group. Moreover, the Company had the highest ROIC to
Weighted Average Cost of Capital ("WACC") ratio in its Comp
Group.
Segment Highlights
Core Laboratories reports results under three operating
segments: Reservoir Description, Production Enhancement, and
Reservoir Management. All operating results exclude foreign
currency translations and non-operational items from the third and
fourth quarters of 2013.
Reservoir Description
Reservoir Description operations, which focus primarily on
worldwide crude-oil developments, reported an all-time quarterly
high revenue of $136,251,000 for the
fourth quarter of 2013, up 6% from year-ago levels even though the
international rig count was up just 4% from the year-earlier fourth
quarter period. Operating income was $38,245,000, yielding operating margins of 28%,
up 60 basis points over third quarter 2013 levels.
Reservoir Description's record revenue quarter was due to an
increasing number of reservoir-fluids-related projects around the
globe. Clients are now more focused on the phase behavior and
pressure-volume-temperature ("PVT") relationships of the three
reservoir fluids -- natural gases, crude oil, and water.
Understanding these relationships is mission-critical for
maximizing daily production totals, and more importantly, for
maximizing ultimate hydrocarbon recovery rates.
For operations in the deepwater and ultra-deepwater Gulf of Mexico ("GOM"), Core has developed
proprietary cutting-edge processes and equipment that allows some
reservoir fluid parameters to be accurately measured at pressures
to 30,000 pounds per square inch ("PSI") and temperatures to 390º
Fahrenheit. Core continues to innovate, and additional
ultra-high pressure and temperature capabilities will be introduced
throughout 2014.
These abovementioned capabilities are necessary for projects in
the Lower Tertiary trend in the ultra-deepwater GOM, where water
depths can reach 10,000 feet and reservoirs can be at depths to
35,000 feet. Several Lower Tertiary discoveries have been
reported by operators to be significantly under-saturated in
natural gases, thereby posing immense technical challenges to the
industry. Core is providing data sets from 10 ultra-deepwater
projects to super major and major independent oil companies -- data
sets that hold the key to increased crude-oil recoveries that could
be worth billions of dollars to these operating companies.
Core is currently engaged in a large PVT study tied directly to
a miscible-gas enhanced oil recovery project in the pre-salt
sequences in the Santos Basin offshore deepwater Brazil.
Operators have reported that many offshore deepwater Brazilian
pre-salt reservoirs contain crude oil that is under-saturated with
natural gas, leading to lower than optimal hydrocarbon recovery
rates. In this project, Core is determining what specific
miscible-gas combination could increase total hydrocarbon recovery
rates. The potential incremental production could yield over
one billion dollars more in FCF for
the operator, which is a major independent oil company.
In the deepwater west of the Shetland Islands, Core is
conducting a two-year reservoir fluids characterization study to
provide greater certainty of overall reservoir hydrocarbon volumes
and the specific distribution of different fluid characteristics
across the entire field. These comprehensive data sets will
be used to design field-wide production systems.
In Russia, Core has developed a
thermal imaging ("T•VISIONTM") technology that expedites
the efficiency of loading crude oil into tank cars for
transport. First, the crude is fractionated and distilled to
determine its quality and value. T•VISION thermal imaging is
then used to accurately measure the quantity of crude loaded into
each car. T•VISION technology can also be used for Bakken,
Eagle Ford, and Permian Basin tank car shipments since rail
transport is now used to move approximately one million barrels of
oil per day through North
America.
The Company has developed a computer-based dashboard
("liveQTM") display using HTML5 technology that, when
coupled with T•VISION technology, can be accessed by customers via
laptop or mobile devices. The liveQ service allows storage
terminal operators to receive real-time crude-oil-characterization
data sets for valuation of product and blending mixtures. The
real-time data updates enable more efficient and profitable
management of crude oil and products, while optimizing delivery
operations to pipelines, tankers, and rail cars.
In the Middle East, Core is
working in a giant oilfield that produces a lean gas condensate
containing high levels of hydrogen sulfide, a corrosive and
dangerous gas. This independent oil company came to Core for
its expertise in overcoming the difficulties of working with lean
condensates that contain high levels of sour gas. Samples are
being collected extensively throughout the field so that each
sample can be characterized to determine its individual level of
hydrogen sulfide. The data will be used to model the
reservoir and design appropriate surface facilities to handle the
high levels of dangerous gas.
In Asia-Pacific, Core has
worked numerous reservoir-fluids-related projects from the Browse,
Carnarvon, and Bonaparte basins located offshore northwest
Australia. Several of these projects involved
characterization of lean gas condensate hydrocarbon streams that
will be converted to liquefied natural gas ("LNG") for
export. The data sets will be used to optimize LNG facilities
that have an investment base of over $50
billion.
Core has been approached by numerous clients in Kurdistan, including a major oil company, a
major independent, and multiple independent companies, to establish
a full-scale core analysis and reservoir fluids laboratory in the
region. The anticipated client work programs have been
reviewed, and the new facility, to be located in Erbil, meets
Core's ROIC threshold. Therefore, investment is expected to be
initiated in 2014. The facility will have capabilities to
analyze conventional reservoirs, as well as unconventional
tight-oil reservoirs, via routine and advanced rock properties
testing. The reservoir fluids lab will have full capabilities
to characterize fluid phase behaviors and
pressure-volume-temperature relationships. Many of the
region's recent oil discoveries are reported to be under-saturated
in natural gas, so Core's clients will apply combinations of rock
and fluids data sets, measured at in-situ reservoir temperatures
and pressures, to increase hydrocarbon recovery rates and optimize
ultimate recovery.
Production Enhancement
Production Enhancement operations, largely focused on North
American deepwater and unconventional tight-oil developments, but
expanding internationally, posted its most profitable quarter ever
despite an essentially flat North
America rig count. The record results were underpinned
by the continued successful introduction of Core's new
FLOWPROFILERTM service and its new systems for
optimizing completions and stimulations of horizontal wells.
Production Enhancement fourth quarter 2013 revenue increased 8%
year-over-year to $115,274,000, while
operating income surged 25% to $41,514,000. Year-over-year operating
margins increased 490 basis points to a quarterly record of
36%.
The Company has enjoyed rapidly increased demand for its
FLOWPROFILER service, a proprietary oil-based tracer technology,
which is a further development of Core's patented
SPECTRACHEM® technology and has been in use for more
than four years, that quantifies the hydrocarbon production from
discrete segments in multi-stage horizontal well completions and
stimulations in unconventional tight-oil plays. FLOWPROFILER
technology and the analytical methodology for identifying the
oil-soluble tracers are the protected intellectual property of
Core.
FLOWPROFILER technology employs a unique oil-soluble tracer, or
combination of unique oil-soluble tracers, introduced into isolated
stages via the stimulating proppant stream. The tracers are
absorbed by the crude oil associated with each stage. When
the well is flowed, crude oil samples are collected and analyzed by
gas chromatography-mass spectrometry to identify and quantify flow
from each stage. Stages not flowing optimally can be
identified, precipitating remedial efforts and providing valuable
insights for future wells.
Because this powerful technology can help maximize initial flow
and estimated ultimate recovery ("EUR") rates for virtually all
unconventional tight-oil plays, Core has been recommending closer
well spacings, longer laterals with more and shorter stages, and
pumping proppant to "screen-out" for all stages. While these
applications can increase well costs by as much as 20%, the
additional expenses are clearly offset by the potential for a 40%
to 60% increase in the EUR of hydrocarbons in certain tight-oil
plays.
Core's Production Enhancement operations continue to introduce
breakthrough perforating technology. The Company believes
that its revolutionary completion technologies should change the
methodology of perforating and stimulating horizontal wells in
unconventional tight-oil reservoirs and conventional reservoirs
worldwide. Just as horizontal wells are currently used to increase
production, reserves, and ultimate hydrocarbon recovery rates in
the shallow waters in the GOM, Core's horizontal well technologies
can be successfully used in severely damaged reservoirs in southern
Iraq, under-saturated reservoirs
in northern Iraq, and conventional
reservoirs throughout the Middle
East and other international petroleum provinces.
Core's multi-year effort to develop game-changing technology is
directly tied to the expected increase in horizontal well
developments worldwide over the next decade.
Core has also developed KODIAK Enhanced Perforating
SystemsTM ("KODIAK") energetic technology, which
combines the Company's HERO® High Efficiency Reservoir
Optimization perforating charges, now API-certified as the
industry's deepest penetrating perforating charges, with
proprietary accelerator propellant pellets to boost the
effectiveness of the perforating/stimulating event. The
detonation of the perforating charge initiates a complex,
sequentially oxidizing reaction of the solid rocket fuel pellets,
thereby generating a high-pressure pulse of gases. This pulse
initiates and propagates fractures ("mini-fracs") into the
unconventional reservoir sequence, allowing for cleaner perforation
tunnels, improvement of stimulant/proppant injection, and increased
hydrocarbon production. Moreover, the propellant-activated
mini-frac can potentially reduce the frac breakdown pressure of the
reservoir. Lowering the formation frac breakdown pressure
should, in turn, reduce the amount of compressive horsepower needed
at the surface, thereby lowering frac stimulation costs.
The Company believes that its completion technologies create the
potential to substantially increase reservoir performance, while
reducing completion and stimulation costs in unconventional
tight-oil developments and conventional reservoirs worldwide.
Reservoir Management
Reservoir Management operations posted fourth quarter 2013
revenue of $24,754,000 and operating
income of $7,972,000, increases of
30% and 48%, respectively, over 2012 fourth quarter totals.
Both revenue and operating income were all-time records for any
fourth quarter.
Reservoir Management continues to have a high level of activity
in its Permian Basin Projects focused on both the Delaware Basin and Midland Basin. Four
more companies have joined the project, bringing the total to
61. The project is concentrating on improving reservoir
characterization, fracture stimulation, production practices, and
production performance of the liquids-rich reservoirs such as the
Wolfcamp, Cline, Bone Spring and other intervals. Reservoir
Management also completed a large proprietary project for a
potentially new unconventional play in North America.
Internationally, Reservoir Management has continued to focus on
offshore and deepwater reservoir studies along the Atlantic margins
and East Africa. Recently completed petroleum system projects
include Pre-Salt Carbonates, Post-Salt West Africa Reservoirs,
Namibia-South Africa, and Uganda. Several new
multi-client projects were initiated and include Mozambique
Reservoirs and Central West Africa
(Senegal and Guinea Bissau).
Reservoir Management has also increased the licensing of its
proprietary reservoir properties database RAPIDTM and
associated "Cloud" technology. One major and two large
independent oil and natural gas companies adopted the technology
for their corporate software in the fourth quarter. This
software and associated analytics allows the companies to access
and analyze reservoir data across their systems worldwide.
CLB added to OSX
On 26 November 2013, Core
Laboratories was added to the Philadelphia Oil Service Sector Index
("OSX"), which is composed of fifteen of the leading oilfield
service companies, including Schlumberger, Halliburton, Baker
Hughes, National Oilwell Varco, Oceaneering, Tidewater, and Oil
States International, among others. The Index is designed to
track the performance of a representative group of companies
involved in the oilfield services sector.
When Core was added to the Index, the OSX was at 278.84 and the
CLB share price was $185.37.
The OSX was established on 31 December
1996 with a base of 75.00, on which day the CLB share price
was $3.93. The Index is
price-weighted, therefore CLB has the greatest weighting of the
fifteen companies, representing about a 20% weighting of the entire
OSX. Since inception, the OSX has increased almost four-fold,
while CLB shares are up over 45-fold. For all of 2013, Core
was the best performing stock in the OSX, up 75% for the year.
Free Cash Flow, Share Repurchases, Dividends, Capital
Returned To Shareholders
During the fourth quarter of 2013, Core Laboratories generated
$87,489,000 of cash from operating
activities and had capital expenditures of $8,428,000, yielding over $79,061,000 in FCF. This is the highest
level of quarterly FCF ever generated in Company history, as Core
converted almost 29 cents of every
revenue dollar into FCF.
For the full year of 2013, Core converted over 24 cents of every revenue dollar into FCF, the
highest conversion rate of all major oilfield service
companies. Moreover, Core's revenue-to-FCF conversion rate of
over 24% is significantly greater than most of the recent operating
income margins of the largest oilfield service companies.
Core's 2013 FCF exceeds 2013 net income and reached an annual
record of $262,721,000, up 28%
year-over-year.
The FCF in the fourth quarter 2013, along with borrowings from
the Company's revolving credit facility, was used to pay
$14,517,000 in cash dividends and to
repurchase 376,912 shares. Core's outstanding diluted share
count of 45,351,000 shares stands at a 16-plus year low. For all of
2013, Core returned over $285,858,000
to shareholders in the form of dividends totaling approximately
$58,642,000 and share repurchases
totaling approximately $227,216,000. In all, Core has reduced its
diluted share count by over 38,000,000 shares and has returned over
$1.66 billion to its shareholders via
diluted share count reductions, special dividends, and quarterly
dividends since implementing its Shareholder Capital Return Program
over 11 years ago.
On 8 October 2013, the Company's
Board announced a quarterly cash dividend of $0.32 per share of common stock that was paid on
20 November 2013 to shareholders of
record on 18 October 2013. Dutch withholding tax was deducted
from the dividend at the rate of 15%.
On 13 January 2014, the Board
announced a quarterly cash dividend of $0.50 per share of common stock payable in the
first quarter of 2014. This amount represents a 56.25%
increase over the quarterly dividends of $0.32 per share that were paid in 2013, and if
paid each quarter of 2014, it would equal a payout of $2.00 per share of common stock. The first
quarter cash dividend will be payable on 21
February 2014 to shareholders of record on 24 January
2014. Dutch withholding tax will be deducted from the
dividend at a rate of 15%.
Return On Invested Capital
As reported in previous quarters, the Company's Board has
established an internal performance metric of achieving an ROIC in
the top decile of the oilfield service companies listed as Core's
peers by Bloomberg Financial. The Company and its Board
believe that ROIC is a leading performance metric used by
shareholders to determine the relative investment value of publicly
traded companies. Further, the Company and its Board believe
shareholders will benefit if Core consistently performs in the
highest ROIC decile among its Bloomberg peers. According to
the latest financial information from Bloomberg, Core Laboratories'
ROIC was the highest of any of the oilfield service companies
listed in its Comp Group. Several of the peer companies
failed to post ROIC that exceeded their WACC, thereby eroding
capital and shareholder value. Core's ratio of ROIC to WACC
is the highest of any company in the Comp Group.
Comp Group companies listed by Bloomberg include Halliburton,
Schlumberger, Carbo Ceramics, FMC Technologies, Baker Hughes,
Cameron International, Oceaneering, National Oilwell Varco, and Oil
States International, among others. Core will update its ROIC
compared with the oilfield services sector for the fourth quarter
2013 in its first quarter 2014 earnings release.
First Quarter 2014 Earnings Guidance, 2014 Outlook
Core Lab anticipates that first quarter 2014 North American
activity levels will ramp up slightly from fourth quarter 2013
levels, while international activity will continue to experience
moderate increases. Therefore, Core expects first quarter
2014 revenue to range between $280,000,000
and $286,000,000. Using the midpoint of revenue
guidance and applying year-over-year quarterly incremental margins
of 40% to 45%, first quarter 2014 EPS guidance would range from
$1.43 to $1.45. FCF for the
quarter is expected to be approximately $70,000,000, or greater, once again exceeding net
income for the period. This operational guidance excludes any
foreign currency translations or any shares that may be repurchased
in the first quarter, other than those previously disclosed.
A 24.0% effective tax rate is assumed for the first
quarter.
This first quarter guidance reflects Core's expected ability to
continue to grow year-over-year revenues above the increase in
worldwide activity levels. This is evident in fourth quarter
2013 results, wherein all three of the Company's operating segments
increased year-over-year quarterly revenue totals, with Reservoir
Description and Production Enhancement operations posting all-time
high quarterly revenue totals.
The Company's outlook for 2014 remains positive as Core projects
increases in worldwide activity should support revenue growth of up
to 10% and EPS growth of up to 17%. Assuming continued
support from robust crude-oil prices, Core believes that it will
have expanding opportunities in increasingly more established
fields, newer field development projects as well as unconventional
tight-oil plays. Moreover, Core believes that the emerging
dynamic of oil companies returning more capital back to
shareholders via increased dividends and share buybacks will weigh
negatively on future exploration budgets. This will create
further volatility in downward-trending exploration activity
levels. Core now receives less than 15% of its revenue from
exploration activities, down from over 80% two decades ago.
Consistent with its historical efforts to expand revenue beyond
its clients' spending levels, the Company plans to enter fields
where it currently does not have operations and to offer new
technologies and additional services in 2014. These new
technologies and services, such as the FLOWPROFILER and the KODIAK
technologies featured in this release, will be focused on
increasing the daily production and ultimate hydrocarbon recovery
rates from liquids-related unconventional and conventional
reservoir developments worldwide. Therefore, Core believes
its business model goal of achieving a revenue growth rate of 200
to 400 basis points above the increase in the worldwide activity
level remains intact, with incremental margins, between 40% and
45%, positively impacting operating margins.
Based on the anticipated increases in worldwide activity levels,
Core believes that full-year 2014 revenue will range between
approximately $1,160,000,000 and
$1,181,000,000, with full-year EPS ranging from
approximately $6.00, applying 40%
full year-over-year incremental margins to the lower projected
revenue level, to approximately $6.25, applying 45% full year-over-year
incremental margins to the higher projected revenue level.
Operating income margins are expected to expand to 32%, increasing
approximately 100 basis points over 2013 levels.
Core expects FCF totals to exceed $300,000,000 in 2014, with the Company's
client-directed capex program to be slightly greater than in 2013
and to be more than offset by continued improvements in working
capital efficiencies. The Company, once again, has
significantly increased its quarterly dividend in 2014, while
continuing its Share Repurchase Program, thereby expanding its
Shareholder Capital Return Program.
The Company has scheduled a conference call to discuss Core's
fourth quarter 2013 earnings announcement. The call will
begin at 7:30 a.m. CST/2:30 p.m. CET on Thursday, 30 January 2014. To listen to the call, please go
to Core's website at www.corelab.com.
Core Laboratories N.V. (www.corelab.com) is a leading provider
of proprietary and patented reservoir description, production
enhancement, and reservoir management services used to optimize
petroleum reservoir performance. The Company has over 70
offices in more than 50 countries and is located in every major
oil-producing province in the world.
This release includes forward-looking statements regarding the
future revenue, profitability, business strategies and developments
of the Company made in reliance upon the safe harbor provisions of
Federal securities law. The Company's outlook is subject to
various important cautionary factors, including risks and
uncertainties related to the oil and natural gas industry, business
conditions, international markets, international political climates
and other factors as more fully described in the Company's 2012
Form 10-K filed on 19 February 2013,
and in other securities filings. These important factors could
cause the Company's actual results to differ materially from those
described in these 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. Because the information herein is based
solely on data currently available, and because it is subject to
change as a result of changes in conditions over which the Company
has no control or influence, such forward-looking statements should
not be viewed as assurance regarding the Company's future
performance. The Company undertakes no obligation to publicly
update any forward looking statement to reflect events or
circumstances that may arise after the date of this press release,
except as required by law.
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(amounts in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
31 December
2013
|
|
31 December
2012
|
|
31 December
2013
|
|
31 December
2012
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
$
|
276,279
|
|
|
$
|
254,455
|
|
|
$
|
1,073,508
|
|
|
$
|
981,080
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
Costs of services and
sales
|
|
168,393
|
|
|
160,958
|
|
|
662,968
|
|
|
621,819
|
|
|
General and
administrative expenses
|
|
13,660
|
|
|
12,302
|
|
|
51,988
|
|
|
43,185
|
|
|
Depreciation and
amortization
|
|
6,729
|
|
|
5,498
|
|
|
25,471
|
|
|
22,917
|
|
|
Other (income)
expense, net
|
|
(420)
|
|
|
(171)
|
|
|
(338)
|
|
|
(4,121)
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
87,917
|
|
|
75,868
|
|
|
333,419
|
|
|
297,280
|
|
Interest
expense
|
|
2,483
|
|
|
2,292
|
|
|
9,317
|
|
|
8,820
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAX EXPENSE
|
|
85,434
|
|
|
73,576
|
|
|
324,102
|
|
|
288,460
|
|
INCOME TAX
EXPENSE
|
|
20,718
|
|
|
18,394
|
|
|
80,908
|
|
|
71,848
|
|
NET INCOME
|
|
64,716
|
|
|
55,182
|
|
|
243,194
|
|
|
216,612
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO NON-CONTROLLING
INTEREST
|
|
(8)
|
|
|
381
|
|
|
383
|
|
|
541
|
|
NET INCOME
ATTRIBUTABLE TO CORE LABORATORIES N.V.
|
|
$
|
64,724
|
|
|
$
|
54,801
|
|
|
$
|
242,811
|
|
|
$
|
216,071
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share:
|
$
|
1.42
|
|
|
$
|
1.17
|
|
|
$
|
5.28
|
|
|
$
|
4.54
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
DILUTED COMMON SHARES OUTSTANDING
|
45,517
|
|
|
46,857
|
|
|
45,994
|
|
|
47,553
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Reservoir
Description
|
$
|
136,251
|
|
|
$
|
128,805
|
|
|
$
|
522,251
|
|
|
$
|
495,529
|
|
Production
Enhancement
|
115,274
|
|
|
106,641
|
|
|
452,415
|
|
|
403,792
|
|
Reservoir
Management
|
24,754
|
|
|
19,009
|
|
|
98,842
|
|
|
81,759
|
|
|
Total
|
$
|
276,279
|
|
|
$
|
254,455
|
|
|
$
|
1,073,508
|
|
|
$
|
981,080
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
Reservoir
Description
|
$
|
38,631
|
|
|
$
|
37,231
|
|
|
$
|
146,338
|
|
|
$
|
144,502
|
|
Production
Enhancement
|
40,954
|
|
|
33,168
|
|
|
154,715
|
|
|
128,602
|
|
Reservoir
Management
|
7,718
|
|
|
5,371
|
|
|
31,555
|
|
|
26,428
|
|
Corporate and
other
|
614
|
|
|
98
|
|
|
811
|
|
|
(2,252)
|
|
|
Total
|
$
|
87,917
|
|
|
$
|
75,868
|
|
|
$
|
333,419
|
|
|
$
|
297,280
|
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
(amounts in
thousands)
|
|
ASSETS:
|
31 December
2013
|
|
31 December
2012
|
|
|
(Unaudited)
|
|
|
Cash and Cash
Equivalents
|
$
|
25,088
|
|
|
$
|
19,226
|
|
Accounts Receivable,
net
|
201,322
|
|
|
184,774
|
|
Inventory
|
46,821
|
|
|
49,265
|
|
Other Current
Assets
|
30,637
|
|
|
43,642
|
|
|
Total Current
Assets
|
303,868
|
|
|
296,907
|
|
|
|
|
|
|
Property, Plant and
Equipment, net
|
138,824
|
|
|
125,418
|
|
Intangibles, Goodwill
and Other Long Term Assets, net
|
218,318
|
|
|
214,191
|
|
|
Total
Assets
|
$
|
661,010
|
|
|
$
|
636,516
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
$
|
50,821
|
|
|
$
|
55,168
|
|
Other Current
Liabilities
|
84,954
|
|
|
85,342
|
|
|
Total Current
Liabilities
|
135,775
|
|
|
140,510
|
|
|
|
|
|
|
Long-Term Debt &
Lease Obligations
|
$
|
267,002
|
|
|
$
|
234,033
|
|
Other Long-Term
Liabilities
|
88,844
|
|
|
74,060
|
|
|
|
|
|
|
Total
Equity
|
169,389
|
|
|
187,913
|
|
|
Total Liabilities and
Equity
|
$
|
661,010
|
|
|
$
|
636,516
|
|
|
|
|
|
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOW
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
31 December
2013
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
$
|
298,137
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
(43,198)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
(249,077)
|
|
|
|
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
5,862
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
19,226
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
$
|
25,088
|
|
|
|
|
|
Non-GAAP Information
Management believes that the exclusion of certain income and
expenses enables it to evaluate more effectively the Company's
operations period-over-period and to identify operating trends that
could otherwise be masked by the excluded Items. For this
reason, we used certain non-GAAP measures that exclude these Items;
and we feel that this presentation provides the public a clearer
comparison with the numbers reported in prior periods.
Reconciliation of
Operating Income
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
31 December
2013
|
|
31 December
2013
|
|
31 December
2012
|
|
|
|
|
|
|
|
|
Operating
income
|
$
|
87,917
|
|
|
$
|
333,419
|
|
|
$
|
297,280
|
|
|
Foreign exchange
losses
|
1,299
|
|
|
4,339
|
|
|
—
|
|
|
Legal entity
realignment
|
—
|
|
|
—
|
|
|
1,860
|
|
|
NYSE Euronext
listing-related costs
|
—
|
|
|
—
|
|
|
923
|
|
|
Gain from insurance
settlement
|
(736)
|
|
|
(1,611)
|
|
|
(4,490)
|
|
|
Operating income
excluding specific items
|
$
|
88,480
|
|
|
$
|
336,147
|
|
|
$
|
295,573
|
|
|
|
|
|
|
Three Months Ended
31 December 2013
|
|
|
Reservoir
Description
|
|
Production
Enhancement
|
|
Reservoir
Management
|
|
|
|
|
|
|
|
|
Operating
income
|
$
|
38,631
|
|
|
$
|
40,954
|
|
|
$
|
7,718
|
|
|
Gain from insurance
settlement
|
(736)
|
|
|
—
|
|
|
—
|
|
|
Foreign exchange
losses
|
350
|
|
|
560
|
|
|
254
|
|
|
Operating income
excluding specific items
|
$
|
38,245
|
|
|
$
|
41,514
|
|
|
$
|
7,972
|
|
|
Reconciliation of
Net Income
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
31 December
2013
|
|
31 December
2013
|
|
31 December
2012
|
|
|
|
|
|
|
|
|
Net income
|
$
|
64,724
|
|
|
$
|
242,811
|
|
|
$
|
216,071
|
|
|
Foreign exchange
losses (net of tax)
|
984
|
|
|
3,254
|
|
|
—
|
|
|
Legal entity
realignment (net of tax)
|
—
|
|
|
—
|
|
|
1,397
|
|
|
NYSE Euronext
listing-related costs
|
—
|
|
|
—
|
|
|
693
|
|
|
Gain from insurance
settlement (net of tax)
|
(558)
|
|
|
(1,208)
|
|
|
(3,372)
|
|
|
Impact of lower
effective tax rate
|
(214)
|
|
|
—
|
|
|
—
|
|
|
Net income excluding
specific items
|
$
|
64,936
|
|
|
$
|
244,857
|
|
|
$
|
214,789
|
|
|
Reconciliation of
Earnings Per Diluted Share
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
31 December
2013
|
|
31 December
2013
|
|
31 December
2012
|
|
|
|
|
|
|
|
|
Earnings per diluted
share
|
$
|
1.42
|
|
|
$
|
5.28
|
|
|
$
|
4.54
|
|
|
Foreign exchange
losses (net of tax)
|
0.02
|
|
|
0.07
|
|
|
—
|
|
|
Legal entity
realignment (net of tax)
|
—
|
|
|
—
|
|
|
0.03
|
|
|
NYSE Euronext
listing-related costs
|
—
|
|
|
—
|
|
|
0.02
|
|
|
Gain from insurance
settlement (net of tax)
|
(0.01)
|
|
|
(0.03)
|
|
|
(0.07)
|
|
|
Impact of lower
effective tax rate
|
—
|
|
|
—
|
|
|
—
|
|
|
Earnings per diluted
share excluding specific items
|
$
|
1.43
|
|
|
$
|
5.32
|
|
|
$
|
4.52
|
|
|
Free Cash Flow
Core uses the non-GAAP measure of free cash flow to evaluate its
cash flows and results of operations. Free cash flow is an
important measurement because it represents the cash from
operations, in excess of capital expenditures, available to operate
the business and fund non-discretionary obligations. Free cash flow
is not a measure of operating performance under GAAP, and should
not be considered in isolation nor construed as an alternative
consideration to operating income, net income, earnings per share,
or cash flows from operating, investing, or financing activities,
each as determined in accordance with GAAP. You should also not
consider free cash flow as a measure of liquidity. Moreover, since
free cash flow is not a measure determined in accordance with GAAP
and thus is susceptible to varying interpretations and
calculations, free cash flow as presented may not be comparable to
similarly titled measures presented by other companies.
Computation of
Free Cash Flow
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
|
Three
Months
|
|
Twelve
Months
|
|
|
Ended
|
|
Ended
|
|
|
31 December
2013
|
|
31 December
2013
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
87,489
|
|
|
$
|
298,137
|
|
Less: capital
expenditures
|
|
(8,428)
|
|
|
(35,416)
|
|
Free cash
flow
|
|
$
|
79,061
|
|
|
$
|
262,721
|
|
SOURCE Core Laboratories N.V.