National Oilwell Varco Inc., balance sheet: property, plant and equipment

US$ in millions

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Land and buildings	1,582)	1,528)	1,494)	1,348)	1,069)
Operating equipment	3,055)	3,060)	2,960)	2,463)	1,955)
Rental equipment	639)	817)	758)	712)	636)
Property, plant and equipment, gross	5,276)	5,405)	5,212)	4,523)	3,660)
Accumulated depreciation	(2,152)	(2,043)	(1,804)	(1,578)	(1,215)
Property, plant and equipment, net	3,124)	3,362)	3,408)	2,945)	2,445)

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Item	Description	The company
Property, plant and equipment, gross	Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.	National Oilwell Varco Inc. property, plant and equipment, gross increased from 2013 to 2014 but then slightly decreased from 2014 to 2015 not reaching 2013 level.
Property, plant and equipment, net	Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.	National Oilwell Varco Inc. property, plant and equipment, net decreased from 2013 to 2014 and from 2014 to 2015.

National Oilwell Varco Inc., asset age ratios

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Average age ratio	40.79%	37.80%	34.61%	34.89%	33.20%
Estimated total useful life (years)	13	13	13	14	13
Estimated age, time elapsed since purchase (years)	6	5	5	5	4
Estimated remaining life (years)	8	8	9	9	9

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Asset age ratio	Description	The company
Average age ratio	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company fixed asset base is old or new. Newer assets are likely to be more efficient.	National Oilwell Varco Inc. average age ratio of depreciable property, plant and equipment deteriorated from 2013 to 2014 and from 2014 to 2015.
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company depreciation policy and can be used for comparisons with competitors.	National Oilwell Varco Inc. estimated total useful life of depreciable property, plant and equipment decreased from 2013 to 2014 but then increased from 2014 to 2015 exceeding 2013 level.
Estimated time elapsed since purchase	The approximate age in years of a company fixed assets. Useful for comparison purposes.	National Oilwell Varco Inc. estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2013 to 2014 and from 2014 to 2015.
Estimated remaining life		National Oilwell Varco Inc. estimated remaining life of depreciable property, plant and equipment decreased from 2013 to 2014 and from 2014 to 2015.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Selected Financial Data (US$ in millions)
Accumulated depreciation	2,152)	2,043)	1,804)	1,578)	1,215)
Property, plant and equipment, gross	5,276)	5,405)	5,212)	4,523)	3,660)
Asset Age Ratio
Average age¹	40.79%	37.80%	34.61%	34.89%	33.20%

2015 Calculations

¹ Average age = 100 × Accumulated depreciation ÷ Property, plant and equipment, gross
= 100 × 2,152 ÷ 5,276 = 40.79%

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Asset age ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company fixed asset base is old or new. Newer assets are likely to be more efficient.	National Oilwell Varco Inc. average age ratio of depreciable property, plant and equipment deteriorated from 2013 to 2014 and from 2014 to 2015.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Selected Financial Data (US$ in millions)
Property, plant and equipment, gross	5,276)	5,405)	5,212)	4,523)	3,660)
Depreciation expense	391)	413)	392)	323)	279)
Asset Age Ratio (Years)
Estimated total useful life¹	13	13	13	14	13

2015 Calculations

¹ Estimated total useful life = Property, plant and equipment, gross ÷ Depreciation expense
= 5,276 ÷ 391 = 13

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Asset age ratio	Description	The company
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company depreciation policy and can be used for comparisons with competitors.	National Oilwell Varco Inc. estimated total useful life of depreciable property, plant and equipment decreased from 2013 to 2014 but then increased from 2014 to 2015 exceeding 2013 level.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Selected Financial Data (US$ in millions)
Accumulated depreciation	2,152)	2,043)	1,804)	1,578)	1,215)
Depreciation expense	391)	413)	392)	323)	279)
Asset Age Ratio (Years)
Time elapsed since purchase¹	6	5	5	5	4

2015 Calculations

¹ Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 2,152 ÷ 391 = 6

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Asset age ratio	Description	The company
Estimated time elapsed since purchase	The approximate age in years of a company fixed assets. Useful for comparison purposes.	National Oilwell Varco Inc. estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2013 to 2014 and from 2014 to 2015.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Selected Financial Data (US$ in millions)
Property, plant and equipment, net	3,124)	3,362)	3,408)	2,945)	2,445)
Depreciation expense	391)	413)	392)	323)	279)
Asset Age Ratio (Years)
Estimated remaining life¹	8	8	9	9	9

2015 Calculations

¹ Estimated remaining life = Property, plant and equipment, net ÷ Depreciation expense
= 3,124 ÷ 391 = 8

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Asset age ratio	Description	The company
Estimated remaining life		National Oilwell Varco Inc. estimated remaining life of depreciable property, plant and equipment decreased from 2013 to 2014 and from 2014 to 2015.

National Oilwell Varco Inc. (NYSE:NOV)

Analysis of Property, Plant and Equipment