2016 Q4 Form 10-K Financial Statement

#000153470117000051 Filed on February 17, 2017

View on sec.gov

Income Statement

Concept 2016 Q4 2015 Q4 2015 Q3
Revenue $23.40B $21.89B $25.79B
YoY Change 6.87% -37.38% -36.19%
Cost Of Revenue $21.69B $19.31B $22.09B
YoY Change 12.29% -39.84% -40.9%
Gross Profit $1.888B $2.580B $3.699B
YoY Change -26.82% -9.85% 21.92%
Gross Profit Margin 8.07% 11.78% 14.34%
Selling, General & Admin $473.0M $447.0M $437.0M
YoY Change 5.82% -9.15% 8.98%
% of Gross Profit 25.05% 17.33% 11.81%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $305.0M $281.0M $270.0M
YoY Change 8.54% 2.93% 8.43%
% of Gross Profit 16.15% 10.89% 7.3%
Operating Expenses $1.981B $1.807B $437.0M
YoY Change 9.63% -6.61% 8.98%
Operating Profit -$93.00M $773.0M $3.262B
YoY Change -112.03% -16.61% 23.89%
Interest Expense $145.0M $54.00M $511.0M
YoY Change 168.52% -83.98% 16.67%
% of Operating Profit 6.99% 15.67%
Other Income/Expense, Net $10.00M $9.000M $20.00M
YoY Change 11.11% -85.25% 81.82%
Pretax Income $62.00M $832.0M $2.359B
YoY Change -92.55% -38.87% 36.6%
Income Tax -$132.0M $166.0M $767.0M
% Of Pretax Income -212.9% 19.95% 32.51%
Net Earnings $163.0M $650.0M $1.578B
YoY Change -74.92% -43.33% 33.73%
Net Earnings / Revenue 0.7% 2.97% 6.12%
Basic Earnings Per Share $0.31 $1.21 $2.92
Diluted Earnings Per Share $0.31 $1.20 $2.90
COMMON SHARES
Basic Shares Outstanding 540.4M shares
Diluted Shares Outstanding 544.7M shares

Balance Sheet

Concept 2016 Q4 2015 Q4 2015 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $2.711B $3.074B $4.822B
YoY Change -11.81% -40.96% 55.15%
Cash & Equivalents $2.711B $3.074B $4.822B
Short-Term Investments
Other Short-Term Assets $422.0M $532.0M $641.0M
YoY Change -20.68% -36.13% -0.93%
Inventory $3.150B $3.477B $4.388B
Prepaid Expenses
Receivables $6.397B $5.173B $5.198B
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $12.68B $12.26B $15.05B
YoY Change 3.46% -26.58% -17.29%
LONG-TERM ASSETS
Property, Plant & Equipment $20.86B $19.72B $19.26B
YoY Change 5.75% 13.69% 13.6%
Goodwill $3.270B $3.275B $3.275B
YoY Change -0.15% 0.03% 0.0%
Intangibles $888.0M $906.0M $879.0M
YoY Change -1.99% 0.67% 7.33%
Long-Term Investments $13.10B $11.98B $10.60B
YoY Change 9.39% 19.35% 3.56%
Other Assets $426.0M $279.0M $354.0M
YoY Change 52.69% -4.12% 103.45%
Total Long-Term Assets $38.97B $36.32B $34.37B
YoY Change 7.29% 13.51% 9.25%
TOTAL ASSETS
Total Short-Term Assets $12.68B $12.26B $15.05B
Total Long-Term Assets $38.97B $36.32B $34.37B
Total Assets $51.65B $48.58B $49.42B
YoY Change 6.33% -0.23% -0.47%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $6.395B $5.155B $6.151B
YoY Change 24.05% -31.16% -40.75%
Accrued Expenses $1.086B $1.832B $1.970B
YoY Change -40.72% -16.27% -12.99%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $1.000B $44.00M $43.00M
YoY Change 2172.73% -94.77% 22.86%
Total Short-Term Liabilities $9.463B $7.531B $8.875B
YoY Change 25.65% -32.12% -35.54%
LONG-TERM LIABILITIES
Long-Term Debt $9.588B $8.843B $8.908B
YoY Change 8.42% 13.47% 44.19%
Other Long-Term Liabilities $2.134B $2.227B $2.199B
YoY Change -4.18% -2.2% 17.16%
Total Long-Term Liabilities $11.72B $11.07B $11.11B
YoY Change 5.89% 9.93% 37.89%
TOTAL LIABILITIES
Total Short-Term Liabilities $9.463B $7.531B $8.875B
Total Long-Term Liabilities $11.72B $11.07B $11.11B
Total Liabilities $27.93B $24.64B $25.38B
YoY Change 13.33% -7.55% -7.55%
SHAREHOLDERS EQUITY
Retained Earnings $12.61B $12.35B $12.00B
YoY Change 2.11% 32.65% 42.2%
Common Stock $19.57B $19.15B $19.12B
YoY Change 2.16% 0.55% 0.46%
Preferred Stock
YoY Change
Treasury Stock (at cost) $8.788B $7.746B $7.340B
YoY Change 13.45% 24.25% 28.73%
Treasury Stock Shares 122.8M shares 109.9M shares 105.2M shares
Shareholders Equity $22.39B $23.10B $23.19B
YoY Change
Total Liabilities & Shareholders Equity $51.65B $48.58B $49.42B
YoY Change 6.33% -0.23% -0.47%

Cashflow Statement

Concept 2016 Q4 2015 Q4 2015 Q3
OPERATING ACTIVITIES
Net Income $163.0M $650.0M $1.578B
YoY Change -74.92% -43.33% 33.73%
Depreciation, Depletion And Amortization $305.0M $281.0M $270.0M
YoY Change 8.54% 2.93% 8.43%
Cash From Operating Activities $667.0M $1.497B $1.437B
YoY Change -55.44% 71.67% 234.97%
INVESTING ACTIVITIES
Capital Expenditures -$813.0M -$2.478B -$992.0M
YoY Change -67.19% 120.07% -34.48%
Acquisitions
YoY Change
Other Investing Activities -$182.0M -$44.00M $28.00M
YoY Change 313.64% -106.69% -78.95%
Cash From Investing Activities -$995.0M -$2.522B -$964.0M
YoY Change -60.55% 438.89% -30.2%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 703.0M -717.0M -699.0M
YoY Change -198.05% -143.48% -10.15%
NET CHANGE
Cash From Operating Activities 667.0M 1.497B 1.437B
Cash From Investing Activities -995.0M -2.522B -964.0M
Cash From Financing Activities 703.0M -717.0M -699.0M
Net Change In Cash 375.0M -1.742B -226.0M
YoY Change -121.53% -184.85% -86.94%
FREE CASH FLOW
Cash From Operating Activities $667.0M $1.497B $1.437B
Capital Expenditures -$813.0M -$2.478B -$992.0M
Free Cash Flow $1.480B $3.975B $2.429B
YoY Change -62.77% 98.95% 25.01%

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CY2015 us-gaap Cash Provided By Used In Financing Activities Discontinued Operations
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2.92
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0.014
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0.013
CY2016 us-gaap Effective Income Tax Rate Reconciliation Deductions Qualified Production Activities
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0.000
CY2014 us-gaap Effective Income Tax Rate Reconciliation Disposition Of Assets
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0.003
CY2015 us-gaap Effective Income Tax Rate Reconciliation Disposition Of Assets
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18.95
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18.84
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16.94
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CY2016 us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
DescriptionOfNewAccountingPronouncementsNotYetAdopted
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;font-weight:bold;">New Accounting Standards</font><font style="font-family:inherit;font-size:10.5pt;font-weight:bold;"> </font></div><div style="line-height:120%;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;">In January 2017, the FASB issued ASU 2017-04, &#8220;Intangibles&#8212;Goodwill and Other&#8212;Simplifying the Test for Goodwill Impairment,&#8221; which eliminates Step 2 from the goodwill impairment test. Under the revised test, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit&#8217;s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Public business entities should apply the guidance in ASU No. 2017-04 for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the provisions of ASU No. 2017-04.</font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;">In January 2017, the FASB issued ASU No. 2017-01, &#8220;Business Combinations: Clarifying the Definition of a Business,&#8221; which clarifies the definition of a business with the objective of adding guidance to assist in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The amendment provides a screen for determining when a transaction involves an acquisition of a business. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the transaction does not involve the acquisition of a business. If the screen is not met, then the amendment requires that to be considered a business, the operation must include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The guidance may reduce the number of transactions accounted for as business acquisitions. Public business entities should apply the guidance in ASU No. 2017-01 to annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted. The amendments should be applied prospectively, and no disclosures are required at the effective date. We are currently evaluating the provisions of ASU No. 2017-01.</font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;">In November 2016, the FASB issued ASU No. 2016-18, &#8220;Statement of Cash Flows (Topic 230): Restricted Cash,&#8221; which clarifies the classification and presentation of changes in restricted cash. The amendment requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. Public business entities should apply the guidance in ASU No. 2016-18 on a retrospective basis for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted. We do not expect the adoption of this ASU to have a material impact on our financial statements. </font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;">In August 2016, the FASB issued ASU No. 2016-15, &#8220;Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,&#8221; which clarifies the treatment of several cash flow categories. In addition, ASU No. 2016-15 clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. Public business entities should apply the guidance in ASU No. 2016-15 on a retrospective basis for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted. We are currently evaluating the provisions of ASU No. 2016-15 and assessing the impact on our financial statements. </font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;">In June 2016, the FASB issued ASU No. 2016-13, &#8220;Financial Instruments&#8212;Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.&#8221; The new standard amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. Public business entities should apply the guidance in ASU No. 2016-13 for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption will be permitted for annual periods beginning after December 15, 2018. We are currently evaluating the provisions of ASU No. 2016-13 and assessing the impact on our financial statements.</font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;">In March 2016, the FASB issued ASU No. 2016-09, &#8220;Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,&#8221; which simplifies several aspects of the accounting for share-based payment award transactions including accounting for income taxes and classification of excess tax benefits on the statement of cash flows, forfeitures and minimum statutory tax withholding requirements. Public business entities should apply the guidance in ASU No. 2016-09 for annual periods beginning after December 15, 2016, including interim periods within those annual periods. Early adoption is permitted. We are currently evaluating the provisions of ASU No. 2016-09 and assessing the impact on our financial statements.</font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;">In February 2016, the FASB issued ASU No. 2016-02, &#8220;Leases (Topic 842).&#8221; In the new standard, the FASB modified its determination of whether a contract is a lease rather than whether a lease is a capital or operating lease under the previous accounting principles generally accepted in the United States (GAAP). A contract represents a lease if a transfer of control occurs over an identified property, plant and equipment for a period of time in exchange for consideration. Control over the use of the identified asset includes the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct its use. The FASB continued to maintain two classifications of leases </font><font style="font-family:inherit;font-size:10pt;">&#8212;</font><font style="font-family:inherit;font-size:10.5pt;"> financing and operating </font><font style="font-family:inherit;font-size:10pt;">&#8212;</font><font style="font-family:inherit;font-size:10.5pt;"> which are substantially similar to capital and operating leases in the previous lease guidance. Under the new standard, recognition of assets and liabilities arising from operating leases will require recognition on the balance sheet. The effect of all leases in the statement of comprehensive income and the statement of cash flows will be largely unchanged. Lessor accounting will also be largely unchanged. Additional disclosures will be required for financing and operating leases for both lessors and lessees. Public business entities should apply the guidance in ASU No. 2016-02 for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted. We are currently evaluating the provisions of ASU No. 2016-02 and assessing its impact on our financial statements.</font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;">In January 2016, the FASB issued ASU No. 2016-01, &#8220;Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,&#8221; to meet its objective of providing more decision-useful information about financial instruments. The majority of this ASU&#8217;s provisions amend only the presentation or disclosures of financial instruments; however, one provision will also affect net income. Equity investments carried under the cost method or lower of cost or fair value method of accounting, in accordance with current GAAP, will have to be carried at fair value upon adoption of ASU No. 2016-01, with changes in fair value recorded in net income. For equity investments that do not have readily determinable fair values, a company may elect to carry such investments at cost less impairments, if any, adjusted up or down for price changes in similar financial instruments issued by the investee, when and if observed. Public business entities should apply the guidance in ASU No. 2016-01 for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption prohibited. We are currently evaluating the provisions of ASU No. 2016-01. Our initial review indicates that ASU No. 2016-01 will have a limited impact on our financial statements.</font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;">In May 2014, the FASB issued ASU No. 2014-09, &#8220;Revenue from Contracts with Customers (Topic 606).&#8221; The new standard converged guidance on recognizing revenues in contracts with customers under GAAP and International Financial Reporting Standards. This ASU is intended to improve comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets and expand disclosure requirements. In August 2015, the FASB issued ASU No. 2015-14, &#8220;Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.&#8221; The amendment in this ASU defers the effective date of ASU No. 2014-09 for all entities for one year. Public business entities should apply the guidance in ASU No. 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier adoption is permitted only as of annual reporting periods beginning after December 31, 2016, including interim reporting periods within that reporting period. Retrospective or modified retrospective application of the accounting standard is required. ASU No. 2014-09 was further amended in March 2016 by the provisions of ASU No. 2016-08, &#8220;Principal versus Agent Considerations (Reporting Revenue Gross versus Net),&#8221; in April 2016 by the provisions of ASU No. 2016-10, &#8220;Identifying Performance Obligations and Licensing,&#8221; in May 2016 by the provisions of ASU No. 2016-12, &#8220;Narrow-Scope Improvements and Practical Expedients,&#8221; and in December 2016 by the provisions of ASU No. 2016-20, &#8220;Technical Corrections to Topic 606, Revenue from Contracts with Customers.&#8221; As part of our assessment work-to-date, we have formed an implementation work team, completed training on the new ASU&#8217;s revenue recognition model and are continuing our contract review and documentation. Our expectation is to adopt the standard on January 1, 2018, using the modified retrospective application. In addition, we expect to present revenue net of sales-based taxes collected from our customers resulting in no impact to earnings. Sales-based taxes include excise taxes on petroleum product sales as noted on our consolidated statement of income. Our evaluation of the new ASU is ongoing, which includes understanding the impact of adoption on earnings from equity method investments.</font></div></div>
CY2016 us-gaap Property Plant And Equipment Impairment
PropertyPlantAndEquipmentImpairment
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;font-weight:bold;">Impairment of Properties, Plants and Equipment</font><font style="font-family:inherit;font-size:10.5pt;">&#8212;Properties, plants and equipment (PP&amp;E) used in operations are assessed for impairment whenever changes in facts and circumstances indicate a possible significant deterioration in the future cash flows expected to be generated by an asset group. If indicators of potential impairment exist, an undiscounted cash flow test is performed. If the sum of the undiscounted pre-tax cash flows is less than the carrying value of the asset group, including applicable liabilities, the carrying value of the PP&amp;E included in the asset group is written down to estimated fair value through additional amortization or depreciation provisions and reported in the &#8220;Impairments&#8221; line of our consolidated statement of income in the period in which the determination of the impairment is made. Individual assets are grouped for impairment purposes at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets (for example, at a refinery complex level). Because there usually is a lack of quoted market prices for long-lived assets, the fair value of impaired assets is typically determined using </font><font style="font-family:inherit;font-size:10.5pt;">one</font><font style="font-family:inherit;font-size:10.5pt;"> or more of the following methods: the present values of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants; a market multiple of earnings for similar assets; or historical market transactions of similar assets, adjusted using principal market participant assumptions when necessary. Long-lived assets held for sale are accounted for at the lower of amortized cost or fair value, less cost to sell, with fair value determined using a binding negotiated price, if available, or present value of expected future cash flows as previously described.</font></div><div style="line-height:120%;padding-left:48px;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-left:48px;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;">The expected future cash flows used for impairment reviews and related fair value calculations are based on estimated future volumes, prices, costs, margins and capital project decisions, considering all available evidence at the date of review.</font></div></div>
CY2016 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10.5pt;"><font style="font-family:inherit;font-size:10.5pt;font-weight:bold;">Use of Estimates</font><font style="font-family:inherit;font-size:10.5pt;">&#8212;The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. Actual results could differ from these estimates.</font></div></div>

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