Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 29, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | DNOW | |
Security Exchange Name | NYSE | |
Entity Registrant Name | NOW INC. | |
Entity Central Index Key | 0001599617 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 109,308,266 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-36325 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-4191184 | |
Entity Address, Address Line One | 7402 North Eldridge Parkway | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77041 | |
City Area Code | 281 | |
Local Phone Number | 823-4700 | |
Title of 12(b) Security | Common Stock, par value $0.01 | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 202 | $ 183 |
Receivables, net | 366 | 370 |
Inventories, net | 434 | 465 |
Assets held-for-sale | 34 | |
Prepaid and other current assets | 18 | 15 |
Total current assets | 1,020 | 1,067 |
Property, plant and equipment, net | 112 | 120 |
Deferred income taxes | 2 | 2 |
Goodwill | 245 | |
Intangibles, net | 90 | |
Other assets | 62 | 67 |
Total assets | 1,196 | 1,591 |
Current liabilities: | ||
Accounts payable | 258 | 255 |
Accrued liabilities | 119 | 127 |
Liabilities held-for-sale | 6 | |
Other current liabilities | 8 | 8 |
Total current liabilities | 385 | 396 |
Long-term operating lease liabilities | 31 | 34 |
Deferred income taxes | 4 | |
Other long-term liabilities | 12 | 13 |
Total liabilities | 428 | 447 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock - par value $0.01; 20 million shares authorized; no shares issued and outstanding | ||
Common stock - par value $0.01; 330 million shares authorized; 109,308,266 and 109,207,678 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 1 | 1 |
Additional paid-in capital | 2,046 | 2,046 |
Accumulated deficit | (1,112) | (775) |
Accumulated other comprehensive loss | (167) | (128) |
Total stockholders' equity | 768 | 1,144 |
Total liabilities and stockholders' equity | $ 1,196 | $ 1,591 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 330,000,000 | 330,000,000 |
Common stock, shares issued | 109,308,266 | 109,207,678 |
Common stock, shares outstanding | 109,308,266 | 109,207,678 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 604 | $ 785 |
Operating expenses: | ||
Cost of products | 487 | 627 |
Warehousing, selling and administrative | 130 | 135 |
Impairment charges | 320 | |
Operating profit (loss) | (333) | 23 |
Other expense | (4) | |
Income (loss) before income taxes | (333) | 19 |
Income tax provision (benefit) | (2) | 1 |
Net income (loss) | $ (331) | $ 18 |
Earnings (loss) per share: | ||
Basic earnings (loss) per common share | $ (3.03) | $ 0.17 |
Diluted earnings (loss) per common share | $ (3.03) | $ 0.16 |
Weighted-average common shares outstanding, basic | 109,251,892 | 108,556,369 |
Weighted-average common shares outstanding, diluted | 109,251,892 | 109,060,795 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income (loss) | $ (331) | $ 18 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (39) | 10 |
Comprehensive income (loss) | $ (370) | $ 28 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (331) | $ 18 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 10 | 10 |
Provision for doubtful accounts | 4 | (3) |
Provision for inventory | 9 | 4 |
Impairment charges | 320 | |
Other, net | 3 | 12 |
Change in operating assets and liabilities, net of effects of acquisitions and divestitures: | ||
Receivables | (12) | (26) |
Inventories | 13 | (34) |
Prepaid and other current assets | (7) | |
Accounts payable, accrued liabilities and other, net | (3) | (1) |
Net cash provided by (used in) operating activities | 6 | (20) |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (3) | |
Net proceeds from sale of business | 25 | |
Net cash provided by (used in) investing activities | 22 | |
Cash flows from financing activities: | ||
Borrowings under the revolving credit facility | 106 | |
Repayments under the revolving credit facility | (114) | |
Other, net | (2) | (2) |
Net cash provided by (used in) financing activities | (2) | (10) |
Effect of exchange rates on cash and cash equivalents | (7) | 1 |
Net change in cash and cash equivalents | 19 | (29) |
Cash and cash equivalents, beginning of period | 183 | 116 |
Cash and cash equivalents, end of period | $ 202 | $ 87 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings (Deficit) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Beginning balance at Dec. 31, 2018 | $ 1,214 | $ 2,034 | $ (678) | $ (143) | |
Beginning balance, shares at Dec. 31, 2018 | 1 | ||||
Net income (loss) | 18 | 18 | |||
Stock-based compensation | 4 | 4 | |||
Exercise of stock options | 1 | 1 | |||
Shares withheld for taxes | (2) | (2) | |||
Other comprehensive income (loss) | 10 | 10 | |||
Ending balance at Mar. 31, 2019 | 1,245 | 2,037 | (660) | (133) | |
Ending balance, shares at Mar. 31, 2019 | 1 | ||||
Beginning balance at Dec. 31, 2019 | 1,144 | 2,046 | (775) | (128) | |
Beginning balance, shares at Dec. 31, 2019 | 1 | ||||
Cumulative effect of accounting change at Dec. 31, 2019 | (6) | (6) | |||
Net income (loss) | (331) | (331) | |||
Other comprehensive income (loss) | (39) | (39) | |||
Ending balance at Mar. 31, 2020 | $ 768 | $ 2,046 | $ (1,112) | $ (167) | |
Ending balance, shares at Mar. 31, 2020 | 1 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Nature of Operations NOW Inc. (“NOW” or the “Company”) is a holding company headquartered in Houston, Texas that was incorporated in Delaware on November 22, 2013. NOW operates primarily under the DistributionNOW and DNOW brands. NOW is a global distributor of energy products as well as products for industrial applications through its locations in the U.S., Canada and internationally which are geographically positioned to serve the energy and industrial markets in approximately 80 countries. NOW’s energy product offerings are used in the oil and gas industry including upstream drilling and completion, exploration and production, midstream infrastructure development and downstream petroleum refining – as well as in other industries, such as chemical processing and power generation. The industrial distribution portion of NOW’s business targets a diverse range of facilities across numerous industries and end markets. NOW also provides supply chain management to drilling contractors, E&P operators, midstream operators and downstream energy companies. NOW’s supplier network consists of thousands of vendors in approximately 40 countries. Basis of Presentation All significant intercompany transactions and accounts have been eliminated. The unaudited consolidated financial information included in this report has been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of SEC Regulation S-X. The principles for interim financial information do not require the inclusion of all the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the financial statements included in the Company’s most recent Annual Report on Form 10-K. In the opinion of the Company’s management, the consolidated financial statements include all adjustments, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. The results of operations for the three months ended March 31, 2020 are not Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported and contingent amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassification Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported results of operations. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, receivables and payables approximated fair value because of the relatively short maturity of these instruments. Cash equivalents include only those investments having a maturity date of three months or less at the time of purchase. See Note 14 Recently Issued Accounting Standards In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Entities that elect the relief are required to disclose the nature of the optional expedients and exceptions that are adopted and the reasons for the adoptions. The guidance is effective upon issuance and the expedients and exceptions may be applied prospectively through December 31, 2022. The Company is currently assessing the impact of ASU 2020-04 on its consolidated financial statements. 8 Recently Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. On January 1, 2020, the Company adopted ASC Topic 326 using the modified retrospective basis and began to recognize allowance for doubtful accounts (“AFDA”) based on the estimated lifetime expected credit loss related to trade receivables. The adoption of ASC Topic 326 resulted in a cumulative-effect adjustment of $6 million (net of income taxes) to its opening accumulated deficit and AFDA in the consolidated balance sheets. See Note 3 “Receivables, net” for additional information. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820), which modified the disclosure requirements on fair value measurements. On January 1, 2020, the Company adopted this standard and expanded its fair value disclosures to address the quantitative and qualitative requirements of this standard. See Note 4 “Asset Impairment” for fair value disclosures relating to the impairment of goodwill and other long-lived assets. In August 2018, The FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (Topic 350-40), which aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement service contract with the capitalization requirements of costs to develop or obtain internal-use software licenses. On January 1, 2020, the Company adopted this standard using the prospective transition approach, with no material impact in its consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 2. Revenue The Company’s primary source of revenue is the sale of energy products and an extensive selection of products for industrial applications based upon purchase orders or contracts with customers. The majority of revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferred to the customer when the product is shipped, delivered or picked up by the customer. The Company does not grant extended payment terms. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to government authorities. Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods and are recorded in cost of products. The amount of revenue recognized reflects the consideration to which the Company expects to receive in exchange for products sold. Revenue is recorded at the transaction price net of estimates of variable consideration, which may include product returns, trade discounts and allowances. The Company accrues for variable consideration using the expected value method. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. See Note 9 “Business Segments” for disaggregation of revenue by reporting segments. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which work has not been performed on contracts with an original expected duration of more than one year. The Company’s contracts are predominantly short-term in nature with a contract term of one year or less. For those contracts, the Company has utilized the practical expedient in ASC Topic 606 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations when the performance obligation is part of a contract that has an original expected duration of one year or less. Receivables Receivables are recorded when the Company has an unconditional right to consideration. Contract Assets and Liabilities Contract assets primarily consist of retainage amounts held as a form of security by customers until the Company satisfies its remaining performance obli gations. As of March 31, 2020 and December 31, 2019, contract assets were $3 million for both periods, and were included in receivables, net in the consolidated balance were not material 9 Contract liabilities primarily consist of deferred revenues recorded when customer payments are received or due in advance of satisfying performance obligations, including amounts which are refundable, and other accrued customer liabilities. Revenue recognition is deferred to a future period until the Company completes its obligations contractually agreed with customers. The decrease in contract liabilities for the three months ended March 31, 2020 was primarily related to revenue of approximately $8 million that was deferred at December 31, 2019, partially offset by net customer deposits and credits of approximately $6 million. |
Receivables, net
Receivables, net | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Receivables, net | 3. Receivables, net The Company is exposed to credit losses relating to sales to its customers. Receivables are recorded and carried at the original invoiced amount less the allowance for doubtful accounts. With the adoption of ASU 2016-13 on January 1, 2020, the estimated AFDA reflects the Company’s immediate recognition of current expected credit losses by incorporating the historical loss experience, as well as current and future market conditions that are reasonably available. Judgements in the estimate of AFDA include global economic and business conditions, oil and gas industry and market conditions, customer’s financial conditions and account receivables past due. Activity in the allowance for doubtful accounts are as follows (in millions) March 31, 2020 Allowance for doubtful accounts Beginning balance $ 16 Cumulative effect of accounting change 6 Additions charged to expenses 4 Ending balance $ 26 |
Asset Impairment
Asset Impairment | 3 Months Ended |
Mar. 31, 2020 | |
Asset Impairment Charges [Abstract] | |
Asset Impairment | 4. Asset Impairment The Company tests goodwill for impairment at least annually or more frequently whenever events or circumstances occur indicating that it might be impaired. During the first quarter of 2020, the Company’s market capitalization declined significantly driven by current macroeconomic and geopolitical conditions including the collapse of oil prices caused by both surplus production and supply as well as the decrease in demand caused by the COVID-19 pandemic. In addition, the uncertainty related to oil demand continues to have a significant impact on the investment and operating plans of our primary customers. Based on these events, the Company concluded that it was more likely than not that the fair values of certain of its reporting units were less than their carrying values. Therefore, the Company performed an interim goodwill impairment test. Goodwill was evaluated for impairment at the reporting unit level. The Company has five reporting units: U.S. Energy, U.S. Supply Chain, U.S. Process Solutions, Canada and International. The Company determined the fair values of three reporting units with goodwill were below their carrying values, resulting in a $230 million goodwill impairment which was included in impairment charges in the consolidated statements of operations for the three months ended on March 31, 2020. No tax benefit was reported as the goodwill impairment was either nondeductible for tax purposes or was subject to a valuation allowance. Goodwill by reportable segment is shown as follows (in millions) United States Canada International Total Balance at December 31, 2019 (1) $ 125 $ 67 $ 53 $ 245 Impairment (125 ) (60 ) (45 ) (230 ) Foreign currency translation adjustments — (7 ) (8 ) (15 ) Balance at March 31, 2020 $ — $ — $ — $ — (1) In the United States, Canada and International segments, 393 The Company evaluates the recoverability of long-lived assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. During the first quarter of 2020, the results of the Company's test for impairment of goodwill and the other negative market indicators described above were a triggering event that indicated that its long-lived assets were possibly impaired. 10 The Company identified its reporting units as individual asset groups and measured long-lived assets recoverability by a comparison of the carrying amount and the undiscounted cash flows of the reporting unit. The results indicated that long-lived assets associated with three reporting units were not recoverable. Further, t he estimated fair value of these assets was determined to be below their carrying value. As a result, for the three months ended March 31, 2020, the Company recognized $ 90 million of impairments of long-lived assets which were included in impairment charges in the consolidated statements of operations. Remaining long-lived assets consisted primarily of $ million in property, plant and equipment, net and $ 49 million in operating right-of-use assets. The Company recognized a $ 4 million tax benefit related to the long-lived asset impairments. The impairment of long-lived assets is shown as follows (in millions) United States International Total Intangibles, net $ (62 ) $ (22 ) $ (84 ) Property, plant and equipment, net — (4 ) (4 ) Operating right-of-use assets (1 ) (1 ) (2 ) Total impairment $ (63 ) $ (27 ) $ (90 ) The Company determined the fair value of both long-lived assets and goodwill primarily using the discounted cash flow method and in the case of goodwill, a multiples-based market approach for comparable companies when applicable. Given the current volatile market environment, the Company utilized third-party valuation advisors to assist us with these valuations. These analyses included significant judgment, including management’s short-term and long-term forecast of operating performance, discount rates based on the weighted average cost of capital, revenue growth rates, profitability margins, capital expenditures, the timing of future cash flows based on an eventual recovery of the oil and gas industry, and in the case of long-lived assets, the remaining useful life and service potential of the asset, all of which were classified as level 3 inputs under the fair value hierarchy. These impairment assessments incorporate inherent uncertainties, including projected commodity pricing, supply and demand for the Company’s products and future market conditions, which are difficult to predict in volatile economic environments. As of March 31, 2020, the discount rates utilized to value the reporting units were in a range from 11.5% to 12.8%. |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment, net | 5. Property, Plant and Equipment, net Property, plant and equipment consist of (in millions): Estimated Useful Lives March 31, 2020 December 31, 2019 Information technology assets 1-7 Years $ 46 $ 46 Operating equipment (1) 2-15 Years 109 109 Buildings and land (2) 5-35 Years 92 100 Construction in progress 11 10 Total property, plant and equipment 258 265 Less: accumulated depreciation (146 ) (145 ) Property, plant and equipment, net $ 112 $ 120 (1) Includes finance lease right-of-use assets. (2) Land has an indefinite life . |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | 6. Accrued Liabilities Accrued liabilities consist of (in millions): March 31, 2020 December 31, 2019 Compensation and other related expenses $ 32 $ 31 Contract liabilities 32 34 Taxes (non-income) 8 12 Current portion of operating lease liabilities 19 21 Other 28 29 Total $ 119 $ 127 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt On April 30, 2018, the Company replaced its existing senior secured revolving credit facility and entered into a senior secured revolving credit facility (the “Credit Facility”) with a syndicate of lenders with Wells Fargo Bank, National Association serving as the administrative agent. The five-year 1.00 Borrowings under the Credit Facility will bear an interest rate at the Company’s option, at (i) the base rate plus an applicable margin based on the Company’s fixed charge coverage ratio (and if applicable, the Company’s leverage ratio); or (ii) the greater of LIBOR for the applicable interest period and zero, plus an applicable margin based on the Company’s fixed charge coverage ratio (and if applicable, the Company’s leverage ratio). The Credit Facility includes a commitment fee on the unused portion of commitments that ranges from 25 to 37.5 basis points. Commitment fees incurred during the period were included in other expense in the consolidated statements of operations. Availability under the Credit Facility is determined by a borrowing base comprised of eligible receivables and eligible inventory in the U.S and Canada. As of March 31, 2020, the Company had no borrowings against the Credit Facility and approximately $392 million in availability (as defined in the Credit Facility) resulting in the excess availability (as defined in the Credit Facility) of 98%, subject to certain limitations. The Company is not obligated to pay back borrowings against the Credit Facility until the expiration The Company issued $7 million in letters of credit under the Credit Facility primarily for casualty insurance expiring in July 2020. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 8. Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) are as follows (in millions) Foreign Currency Translation Adjustments Balance at December 31, 2019 $ (128 ) Other comprehensive income (loss) (39 ) Balance at March 31, 2020 $ (167 ) The Company’s reporting currency is the U.S. dollar. A majority of the Company’s international entities in which there is a substantial investment have the local currency as their functional currency. As a result, foreign currency translation adjustments resulting from the process of translating the entities’ financial statements into the reporting currency are reported in other comprehensive income or loss in accordance with ASC Topic 830, “Foreign Currency Matters.” For the three months ended March 31, 2020, several local currencies weakened against the U.S. dollar, contributing to the other comprehensive loss. |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Business Segments | 9. Business Segments Operating results by reportable segment are as follows (in millions) Three Months Ended March 31, 2020 2019 Revenue: United States $ 441 $ 600 Canada 78 86 International 85 99 Total revenue $ 604 $ 785 Operating profit (loss): United States $ (204 ) $ 19 Canada (58 ) 2 International (71 ) 2 Total operating profit (loss) $ (333 ) $ 23 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The effective tax rate for the three months ended March 31, 2020 was 0.6% compared to 6.5% for the same period in 2019. Compared to the U.S. statutory rate, the effective tax rate was impacted by recurring items, such as differing tax rates on income earned in certain foreign jurisdictions, nondeductible expenses, state income taxes and the change in valuation allowance recorded against deferred tax assets. Due to the continuing uncertainty in the Company’s industry, the Company continues to utilize the method of recording income taxes on a year-to-date effective tax rate for the three months ended March 31, 2020. The Company will evaluate its use of this method each quarter until such time as a return to the annualized estimated effective tax rate method is deemed appropriate. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act contains several tax law changes for corporations, including modifications for net operating loss carrybacks, the refundability of prior-year minimum tax liability, limitations on business interest and limitations on charitable contribution deductions. These benefits did not impact the Company’s tax provision for the three months ended March 31, 2020. The Company is subject to taxation in the United States, various states and foreign jurisdictions. The Company has significant operations in the United States and Canada and to a lesser extent in various other international jurisdictions. Tax years that remain subject to examination by major tax jurisdictions vary by legal entity but are generally open in the U.S. for the tax years ending after 2015 and outside the U.S. for the tax years ending after 2013. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | 11. Earnings (Loss) Per Share For the three months ended March 31, 2020 and 2019, 6 million and 3 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to the Company recognizing a net loss for the period or due to their antidilutive effect. Basic and diluted earnings (loss) per share follows (in millions, except share data) Three Months Ended March 31, 2020 2019 Numerator: Net income (loss) attributable to the Company $ (331 ) $ 18 Less: net income attributable to participating securities — — Net income (loss) attributable to the Company's stockholders $ (331 ) $ 18 Denominator: Weighted average basic common shares outstanding 109,251,892 108,556,369 Effect of dilutive securities — 504,426 Weighted average diluted common shares outstanding 109,251,892 109,060,795 Earnings (loss) per share attributable to the Company's stockholders: Basic $ (3.03 ) $ 0.17 Diluted $ (3.03 ) $ 0.16 13 Under ASC Topic 260, “Earnings Per Share ” , t he two-class method requires a portion of net income attributable to the Company to be allocated to participating securities, which are unvested awards of share-based payments with non-forfeitable rights to receive dividends or dividend equivalents, if declared. Net losses are not allocated to nonvested shares in periods that the Company determines that those shares are not obligated to participate in losses. For the periods that the Company recognized net income, net income attributable to the Company allocated to these participating securities was excluded from net income attributable to the Company’s stockholders in the numerator of the earnings per share computation. Net income attributable to the Company allocated to these participating securities was less than $ 1 million for the three months ended March 31, 2019 . |
Stock-based Compensation and Ou
Stock-based Compensation and Outstanding Awards | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation and Outstanding Awards | 12. Stock-based Compensation and Outstanding Awards The Company has a stock-based compensation plan known as the NOW Inc. Long-Term Incentive Plan (the “Plan”). Under the Plan, the Company’s employees are eligible to be granted stock options, restricted stock awards (“RSAs”), restricted stock units and phantom shares (“RSUs”), and performance stock awards (“PSAs”). For the three ended March 31 three-year RSUs vest on anniversary a three-year into three independent parts that are subject to separate performance : (i) one- of the PSAs have a Total Shareholder Return (“TSR”) metric, (ii) one-quarter one-quarter Performance against the TSR metric is determined by comparing the performance of the Company’s TSR with the TSR performance of designated peer companies for the three-year performance period. Performance against the EBITDA metric is determined by comparing the performance of the Company’s actual EBITDA average for each of the three-years of the performance period against the EBITDA metrics set by the Company’s Compensation Committee of the Board of Directors. Performance against the ROCE metric is determined by comparing the performance of the Company’s actual ROCE average for each of the three-years Stock-based compensation expense recognized for the three months ended March 31, 2020 and 2019 , |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies The Company is involved in various claims, regulatory agency audits and pending or threatened legal actions involving a variety of matters . The Company has also assessed the potential for additional losses above the amounts accrued as well as potential losses for matters that are not probable but are reasonably possible. The total potential loss on these matters cannot be determined; however, in the Company’s opinion, any ultimate liability, to the extent not otherwise recorded or accrued for, will not materially affect the Company’s financial position, cash flow or results of operations. These estimated liabilities are based on the Company’s assessment of the nature of these matters, their progress toward resolution, the advice of legal counsel and outside experts as well as management’s intention and experience. The Company’s business is affected both directly and indirectly by governmental laws and regulations relating to the oilfield service industry in general, as well as by environmental and safety regulations that specifically apply to the Company’s business. Although the Company has not incurred material costs in connection with its compliance with such laws, there can be no assurance that other developments, such as new environmental laws, regulations and enforcement policies hereunder may not result in additional, presently unquantifiable costs or liabilities to the Company. The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible but not probable. Estimating reasonably possible losses also requires the analysis of multiple possible outcomes that often depend on judgments about potential actions by third parties. The Company expects to record a charge relating to severance during the second quarter of 2020. However, at this time the amount cannot be reasonably estimated. Additionally, as market conditions evolve and the Company develops its strategy to deal with such conditions, it may result in charges in future periods relating to, among other things, inventory and other assets. 14 The Company maintains credit arrangements with several banks providing for short-term borrowing capacity, overdraft protection and other bonding requirements. As of March 3 1 , 20 20 , t he Company was contingently liable for approximately $ million of outstanding standby letters of credit and surety bonds. The Company does not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 14. Derivative Financial Instruments The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed by using derivative instruments is foreign currency exchange rate risk. The Company has entered into certain financial derivative instruments to manage this risk. The derivative financial instruments the Company has entered into are forward exchange contracts which have terms of less than one year to economically hedge foreign currency exchange rate risk on recognized non-functional currency monetary accounts. The purpose of the Company’s foreign currency economic hedging activities is to economically hedge the Company’s risk from changes in the fair value of non-functional currency denominated monetary accounts. The Company records all derivative financial instruments at their fair value in its consolidated balance sheets. None of the derivative financial instruments that the Company holds are designated as either a fair value hedge or cash flow hedge and the gain or loss on the derivative instrument is recorded in earnings. The Company has determined that the fair value of its derivative financial instruments are computed using level 2 inputs (inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability) in the fair value hierarchy as the fair value is based on publicly available foreign exchange rates at each financial reporting date. As of March 31, 2020 and December 31, 2019, the fair value of the Company’s foreign currency forward contracts totaled an asset of less than $1 $1 For the three months ended March 31, 2020 and 2019, the Company recorded a loss of less than $1 million in both periods related to changes in fair value. All gains and losses are included in other expense in the consolidated statements of operations. The notional principal associated with those contracts was $10 million and $15 million as of March 31, 2020 and December 31, 2019, respectively. As of March 31, 2020, the Company’s financial instruments do not |
Business Divestiture
Business Divestiture | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Business Divestiture | 15. Business Divestiture On January 31, 2020, the Company completed the sale of its previously held-for-sale business which was primarily in the United States segment selling cutting tools to the aerospace and automotive markets. Subject to customary post-closing working capital and other transaction price adjustments as defined in the transaction agreement, the sale resulted in a loss of less than $1 million for the three months ended on March 31, 2020 and was included in impairment charges in the consolidated statements of operations. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations NOW Inc. (“NOW” or the “Company”) is a holding company headquartered in Houston, Texas that was incorporated in Delaware on November 22, 2013. NOW operates primarily under the DistributionNOW and DNOW brands. NOW is a global distributor of energy products as well as products for industrial applications through its locations in the U.S., Canada and internationally which are geographically positioned to serve the energy and industrial markets in approximately 80 countries. NOW’s energy product offerings are used in the oil and gas industry including upstream drilling and completion, exploration and production, midstream infrastructure development and downstream petroleum refining – as well as in other industries, such as chemical processing and power generation. The industrial distribution portion of NOW’s business targets a diverse range of facilities across numerous industries and end markets. NOW also provides supply chain management to drilling contractors, E&P operators, midstream operators and downstream energy companies. NOW’s supplier network consists of thousands of vendors in approximately 40 countries. |
Basis of Presentation | Basis of Presentation All significant intercompany transactions and accounts have been eliminated. The unaudited consolidated financial information included in this report has been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of SEC Regulation S-X. The principles for interim financial information do not require the inclusion of all the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the financial statements included in the Company’s most recent Annual Report on Form 10-K. In the opinion of the Company’s management, the consolidated financial statements include all adjustments, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. The results of operations for the three months ended March 31, 2020 are not |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported and contingent amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Reclassification | Reclassification Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported results of operations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, receivables and payables approximated fair value because of the relatively short maturity of these instruments. Cash equivalents include only those investments having a maturity date of three months or less at the time of purchase. See Note 14 |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Entities that elect the relief are required to disclose the nature of the optional expedients and exceptions that are adopted and the reasons for the adoptions. The guidance is effective upon issuance and the expedients and exceptions may be applied prospectively through December 31, 2022. The Company is currently assessing the impact of ASU 2020-04 on its consolidated financial statements. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. On January 1, 2020, the Company adopted ASC Topic 326 using the modified retrospective basis and began to recognize allowance for doubtful accounts (“AFDA”) based on the estimated lifetime expected credit loss related to trade receivables. The adoption of ASC Topic 326 resulted in a cumulative-effect adjustment of $6 million (net of income taxes) to its opening accumulated deficit and AFDA in the consolidated balance sheets. See Note 3 “Receivables, net” for additional information. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820), which modified the disclosure requirements on fair value measurements. On January 1, 2020, the Company adopted this standard and expanded its fair value disclosures to address the quantitative and qualitative requirements of this standard. See Note 4 “Asset Impairment” for fair value disclosures relating to the impairment of goodwill and other long-lived assets. In August 2018, The FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (Topic 350-40), which aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement service contract with the capitalization requirements of costs to develop or obtain internal-use software licenses. On January 1, 2020, the Company adopted this standard using the prospective transition approach, with no material impact in its consolidated financial statements. |
Accumulated Other Comprehensive Income (Loss) | The Company’s reporting currency is the U.S. dollar. A majority of the Company’s international entities in which there is a substantial investment have the local currency as their functional currency. As a result, foreign currency translation adjustments resulting from the process of translating the entities’ financial statements into the reporting currency are reported in other comprehensive income or loss in accordance with ASC Topic 830, “Foreign Currency Matters.” For the three months ended March 31, 2020, several local currencies weakened against the U.S. dollar, contributing to the other comprehensive loss. |
Revenue Recognition | The Company’s primary source of revenue is the sale of energy products and an extensive selection of products for industrial applications based upon purchase orders or contracts with customers. The majority of revenue is recognized at a point in time once the Company has determined that the customer has obtained control over the product. Control is typically deemed to have been transferred to the customer when the product is shipped, delivered or picked up by the customer. The Company does not grant extended payment terms. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to government authorities. Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods and are recorded in cost of products. The amount of revenue recognized reflects the consideration to which the Company expects to receive in exchange for products sold. Revenue is recorded at the transaction price net of estimates of variable consideration, which may include product returns, trade discounts and allowances. The Company accrues for variable consideration using the expected value method. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. See Note 9 “Business Segments” for disaggregation of revenue by reporting segments. The Company believes this disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. |
Remaining Performance Obligations | Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which work has not been performed on contracts with an original expected duration of more than one year. The Company’s contracts are predominantly short-term in nature with a contract term of one year or less. For those contracts, the Company has utilized the practical expedient in ASC Topic 606 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations when the performance obligation is part of a contract that has an original expected duration of one year or less. |
Receivables | Receivables Receivables are recorded when the Company has an unconditional right to consideration. |
Contract Assets and Liabilities | Contract Assets and Liabilities Contract assets primarily consist of retainage amounts held as a form of security by customers until the Company satisfies its remaining performance obli gations. As of March 31, 2020 and December 31, 2019, contract assets were $3 million for both periods, and were included in receivables, net in the consolidated balance were not material 9 Contract liabilities primarily consist of deferred revenues recorded when customer payments are received or due in advance of satisfying performance obligations, including amounts which are refundable, and other accrued customer liabilities. Revenue recognition is deferred to a future period until the Company completes its obligations contractually agreed with customers. The decrease in contract liabilities for the three months ended March 31, 2020 was primarily related to revenue of approximately $8 million that was deferred at December 31, 2019, partially offset by net customer deposits and credits of approximately $6 million. |
Receivables, net (Tables)
Receivables, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Rollforward of Allowance for Doubtful Accounts | Activity in the allowance for doubtful accounts are as follows (in millions) March 31, 2020 Allowance for doubtful accounts Beginning balance $ 16 Cumulative effect of accounting change 6 Additions charged to expenses 4 Ending balance $ 26 |
Asset Impairment (Tables)
Asset Impairment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Asset Impairment Charges [Abstract] | |
Summary of Goodwill by Reportable Segment | Goodwill by reportable segment is shown as follows (in millions) United States Canada International Total Balance at December 31, 2019 (1) $ 125 $ 67 $ 53 $ 245 Impairment (125 ) (60 ) (45 ) (230 ) Foreign currency translation adjustments — (7 ) (8 ) (15 ) Balance at March 31, 2020 $ — $ — $ — $ — (1) In the United States, Canada and International segments, 393 |
Summary of Impairment of Long-lived Assets | The impairment of long-lived assets is shown as follows (in millions) United States International Total Intangibles, net $ (62 ) $ (22 ) $ (84 ) Property, plant and equipment, net — (4 ) (4 ) Operating right-of-use assets (1 ) (1 ) (2 ) Total impairment $ (63 ) $ (27 ) $ (90 ) |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Property, plant and equipment consist of (in millions): Estimated Useful Lives March 31, 2020 December 31, 2019 Information technology assets 1-7 Years $ 46 $ 46 Operating equipment (1) 2-15 Years 109 109 Buildings and land (2) 5-35 Years 92 100 Construction in progress 11 10 Total property, plant and equipment 258 265 Less: accumulated depreciation (146 ) (145 ) Property, plant and equipment, net $ 112 $ 120 (1) Includes finance lease right-of-use assets. (2) Land has an indefinite life . |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Payables And Accruals [Abstract] | |
Summary of Accrued Liabilities | Accrued liabilities consist of (in millions): March 31, 2020 December 31, 2019 Compensation and other related expenses $ 32 $ 31 Contract liabilities 32 34 Taxes (non-income) 8 12 Current portion of operating lease liabilities 19 21 Other 28 29 Total $ 119 $ 127 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) are as follows (in millions) Foreign Currency Translation Adjustments Balance at December 31, 2019 $ (128 ) Other comprehensive income (loss) (39 ) Balance at March 31, 2020 $ (167 ) |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of Operating Results by Reportable Segment | Operating results by reportable segment are as follows (in millions) Three Months Ended March 31, 2020 2019 Revenue: United States $ 441 $ 600 Canada 78 86 International 85 99 Total revenue $ 604 $ 785 Operating profit (loss): United States $ (204 ) $ 19 Canada (58 ) 2 International (71 ) 2 Total operating profit (loss) $ (333 ) $ 23 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings (Loss) Per Share | Basic and diluted earnings (loss) per share follows (in millions, except share data) Three Months Ended March 31, 2020 2019 Numerator: Net income (loss) attributable to the Company $ (331 ) $ 18 Less: net income attributable to participating securities — — Net income (loss) attributable to the Company's stockholders $ (331 ) $ 18 Denominator: Weighted average basic common shares outstanding 109,251,892 108,556,369 Effect of dilutive securities — 504,426 Weighted average diluted common shares outstanding 109,251,892 109,060,795 Earnings (loss) per share attributable to the Company's stockholders: Basic $ (3.03 ) $ 0.17 Diluted $ (3.03 ) $ 0.16 |
Organization and Basis of Pre_3
Organization and Basis of Presentation - Additional Information (Detail) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020USD ($)GeographicMarketCountry | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | |
Basis Of Presentation And Organization [Line Items] | |||
Number of geographical area covered | GeographicMarket | 80 | ||
Number of countries distribution occur through vendors | Country | 40 | ||
Accumulated deficit | $ (1,112) | $ (775) | |
ASC Topic 326 [Member] | |||
Basis Of Presentation And Organization [Line Items] | |||
Accumulated deficit | $ 6 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Deferred revenue | $ 8 | |
Decrease in contract liabilities for net customer deposits and credits | $ 6 | |
Receivables, Net [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Contract assets | $ 3 | $ 3 |
Maximum [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Amortization period of revenue recognized | 1 year |
Receivables, net - Rollforward
Receivables, net - Rollforward of Allowance for Doubtful Accounts (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Allowance For Doubtful Accounts Receivable Rollforward | |||
Beginning balance | $ 16 | ||
Cumulative effect of accounting change | $ (6) | ||
Provision for doubtful accounts | 4 | $ (3) | |
Ending balance | 26 | ||
ASU 2016-13 [Member] | |||
Allowance For Doubtful Accounts Receivable Rollforward | |||
Cumulative effect of accounting change | $ 6 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net - Summary of Property, Plant and Equipment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 258 | $ 265 |
Less: accumulated depreciation | (146) | (145) |
Property, plant and equipment, net | 112 | 120 |
Information Technology Assets [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 46 | 46 |
Operating Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 109 | 109 |
Buildings and Land [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 92 | 100 |
Construction in Progress [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 11 | $ 10 |
Minimum [Member] | Information Technology Assets [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 1 year | |
Minimum [Member] | Operating Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 2 years | |
Minimum [Member] | Buildings [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 5 years | |
Maximum [Member] | Information Technology Assets [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 7 years | |
Maximum [Member] | Operating Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 15 years | |
Maximum [Member] | Buildings [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment estimated useful lives | 35 years |
Property, Plant and Equipment_4
Property, Plant and Equipment, net - Summary of Property, Plant and Equipment (Parenthetical) (Detail) | 3 Months Ended |
Mar. 31, 2020 | |
Land [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated Useful Lives | indefinite life |
Asset Impairment - Additional I
Asset Impairment - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2020USD ($)ReportingUnit | |
Impaired Assets To Be Disposed Of By Method Other Than Sale [Line Items] | |
Number of reporting units | ReportingUnit | 5 |
Goodwill impairment loss | $ 230,000,000 |
Goodwill impairment tax benefit | 0 |
Impairments of long-lived assets other than goodwill | 90,000,000 |
Remaining long lived assets impairment of property plant and equipment | 112,000,000 |
Remaining long lived assets impairment of operating lease right of use assets | 49,000,000 |
Tax benefit related to long-lived assets impairments | $ 4,000,000 |
Measurement Input Discount Rate [Member] | Minimum [Member] | |
Impaired Assets To Be Disposed Of By Method Other Than Sale [Line Items] | |
Reporting unit measurement input | 11.50% |
Measurement Input Discount Rate [Member] | Maximum [Member] | |
Impaired Assets To Be Disposed Of By Method Other Than Sale [Line Items] | |
Reporting unit measurement input | 12.80% |
Asset Impairment - Summary of G
Asset Impairment - Summary of Goodwill by Reportable Segment (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Line Items] | |
Goodwill, Beginning balance | $ 245 |
Impairment | (230) |
Foreign currency translation adjustments | (15) |
United States [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning balance | 125 |
Impairment | (125) |
Canada [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning balance | 67 |
Impairment | (60) |
Foreign currency translation adjustments | (7) |
International [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning balance | 53 |
Impairment | (45) |
Foreign currency translation adjustments | $ (8) |
Asset Impairment - Summary of_2
Asset Impairment - Summary of Goodwill by Reportable Segment (Parenthetical) (Detail) $ in Millions | Mar. 31, 2020USD ($) |
United States [Member] | |
Goodwill [Line Items] | |
Goodwill, accumulated impairment | $ 393 |
Canada [Member] | |
Goodwill [Line Items] | |
Goodwill, accumulated impairment | 27 |
International [Member] | |
Goodwill [Line Items] | |
Goodwill, accumulated impairment | $ 54 |
Asset Impairment - Summary of I
Asset Impairment - Summary of Impairment of Long-lived Assets (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Impairment of Long-Lived Assets (Other than Goodwill) [Line Items] | |
Intangibles, net | $ (84) |
Property, plant and equipment, net | (4) |
Operating right-of-use assets | (2) |
Total impairment | (90) |
United States [Member] | |
Impairment of Long-Lived Assets (Other than Goodwill) [Line Items] | |
Intangibles, net | (62) |
Operating right-of-use assets | (1) |
Total impairment | (63) |
International [Member] | |
Impairment of Long-Lived Assets (Other than Goodwill) [Line Items] | |
Intangibles, net | (22) |
Property, plant and equipment, net | (4) |
Operating right-of-use assets | (1) |
Total impairment | $ (27) |
Accrued Liabilities - Summary o
Accrued Liabilities - Summary of Accrued Liabilities (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Payables And Accruals [Abstract] | ||
Compensation and other related expenses | $ 32 | $ 31 |
Contract liabilities | 32 | 34 |
Taxes (non-income) | 8 | 12 |
Current portion of operating lease liabilities | 19 | 21 |
Other | 28 | 29 |
Total | $ 119 | $ 127 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Apr. 30, 2018 | Mar. 31, 2020 |
Debt Instrument [Line Items] | ||
Term of loan | 5 years | |
Agreement date | Apr. 30, 2018 | |
Senior secured revolving credit facility commitment | $ 750,000,000 | |
Sub-facility for letter of credit | $ 60,000,000 | |
Percentage of swing line sub facility | 10.00% | |
Increase in aggregate principal amount | $ 250,000,000 | |
Description of line of credit | The Company will be required to maintain a fixed charge coverage ratio of at least 1.00:1.00 as of the end of each fiscal quarter if excess availability under the Credit Facility falls below the greater of 12.5% of the borrowing base or $60 million. | |
Minimum amount of credit facility required to maintain coverage ratio percentage | 12.50% | |
Minimum amount of credit facility required to maintain coverage ratio | $ 60,000,000 | |
Fixed charge coverage ratio | 100.00% | |
Senior Secured Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit facility borrowings | $ 0 | |
Line of Credit Facility, Available Borrowing Capacity | $ 392,000,000 | |
Line Of credit Unused Capacity Percentage | 98.00% | |
Letters of credit | $ 7,000,000 | |
Casualty insurance, expiration month and year | 2020-07 | |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Unused portion of commitment fee range | 0.25% | |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Unused portion of commitment fee range | 0.375% | |
Canadian Subsidiaries [Member] | ||
Debt Instrument [Line Items] | ||
Senior secured revolving credit facility commitment | $ 100,000,000 | |
UK Subsidiaries [Member] | ||
Debt Instrument [Line Items] | ||
Senior secured revolving credit facility commitment | $ 40,000,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated other comprehensive income (loss), Beginning balance | $ (128) | |
Other comprehensive income (loss) | (39) | $ 10 |
Accumulated other comprehensive income (loss), Ending balance | (167) | |
Accumulated Other Comprehensive Income (Loss) [Member] | ||
Accumulated other comprehensive income (loss), Beginning balance | (128) | |
Other comprehensive income (loss) | (39) | $ 10 |
Accumulated other comprehensive income (loss), Ending balance | $ (167) |
Business Segments - Summary of
Business Segments - Summary of Operating Results by Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue: | ||
Total revenue | $ 604 | $ 785 |
Operating profit (loss): | ||
Total operating profit (loss) | (333) | 23 |
United States [Member] | ||
Revenue: | ||
Total revenue | 441 | 600 |
Operating profit (loss): | ||
Total operating profit (loss) | (204) | 19 |
Canada [Member] | ||
Revenue: | ||
Total revenue | 78 | 86 |
Operating profit (loss): | ||
Total operating profit (loss) | (58) | 2 |
International [Member] | ||
Revenue: | ||
Total revenue | 85 | 99 |
Operating profit (loss): | ||
Total operating profit (loss) | $ (71) | $ 2 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 0.60% | 6.50% |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Line Items] | ||
Antidilutive Securities excluded from Computation of Earnings Per Share | 6 | 3 |
Maximum [Member] | ||
Earnings Per Share [Line Items] | ||
Net income attributable to participating securities | $ 1 |
Earnings (Loss) Per Share - Com
Earnings (Loss) Per Share - Computation of Basic and Diluted Earnings (Loss) Per Share (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net income (loss) attributable to the Company | $ (331) | $ 18 |
Net income (loss) attributable to the Company's stockholders | $ (331) | $ 18 |
Denominator: | ||
Weighted average basic common shares outstanding | 109,251,892 | 108,556,369 |
Effect of dilutive securities | 504,426 | |
Weighted average diluted common shares outstanding | 109,251,892 | 109,060,795 |
Basic | $ (3.03) | $ 0.17 |
Diluted | $ (3.03) | $ 0.16 |
Stock-based Compensation and _2
Stock-based Compensation and Outstanding Awards - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock option granted | 697,317 | |
Weighted-average grant-date fair value of options granted | $ 3.59 | |
Maximum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 1 | $ 4 |
Restricted Stock and Restricted Stock Units [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based awards, shares granted | 262,445 | |
Weighted average grant date fair value, Granted | $ 9.53 | |
Performance-base restricted stock [Member] | Minimum [Member] | Senior Management Employees [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based awards, shares granted | 0 | |
Performance-base restricted stock [Member] | Maximum [Member] | Senior Management Employees [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based awards, shares granted | 343,302 | |
Stock Options [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based awards, vested, number of years | 3 years | |
TSR metric [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Performance based restricted stock awards granted in percent | 50.00% | |
Performance based restricted stock awards goals over performance period | 3 years | |
EBITDA metric [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Performance based restricted stock awards granted in percent | 25.00% | |
Performance based restricted stock awards goals over performance period | 3 years | |
Return on Capital Employed (ROCE) metric [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Performance based restricted stock awards granted in percent | 25.00% | |
Performance based restricted stock awards goals over performance period | 3 years |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Mar. 31, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Contingent liability | $ 10 |
Derivative Financial Instrume_2
Derivative Financial Instruments - Additional Information (Detail) - Derivatives Not Designated as Hedging Instrument [Member] - Fair Value, Inputs, Level 2 [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Derivatives Fair Value [Line Items] | |||
Foreign currency forward contracts, notional amount | $ 10 | $ 15 | |
Other Expense [Member] | Maximum [Member] | |||
Derivatives Fair Value [Line Items] | |||
Foreign currency forward contracts, gain (loss) related to changes in fair value | (1) | $ (1) | |
Prepaid and Other Current Assets [Member] | Maximum [Member] | |||
Derivatives Fair Value [Line Items] | |||
Foreign currency forward contracts, assets | 1 | 1 | |
Other Current Liabilities [Member] | Maximum [Member] | |||
Derivatives Fair Value [Line Items] | |||
Foreign currency forward contracts, liability | $ 1 | $ 1 |
Business Divestiture - Addition
Business Divestiture - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Impairment charges [Member] | Maximum [Member] | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |
Loss on sale of business | $ (1) |