Weatherford International Ltd.
EANS-Adhoc: Weatherford International Ltd.
Weatherford Reports First Quarter
Results
-------------------------------------------------------------------------------- ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide distribution. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------------
quarterly report
21.04.2011
- $0.10 per diluted share, before severance, exit and other adjustments
GENEVA, Switzerland, April 21, 2011 -- Weatherford International Ltd. (NYSE / SIX: WFT) today reported first quarter 2011 income of $78 million, or $0.10 per diluted share, excluding an after-tax loss of $18 million. On a GAAP basis, our net income for the first quarter of 2011 was $59 million, or $0.08 per diluted share. The excluded after-tax loss is comprised of the following items:
- $9 million after-tax charge incurred in connection with the termination of a corporate consulting contract;
- $8 million in after-tax severance; and
- $1 million for investigation costs.
(Logo: http://photos.prnewswire.com/prnh/19990308/WEATHERFORDLOGO)
First quarter diluted earnings per share reflect an increase of $0.07over the first quarter of 2010 diluted earnings per share of $0.03, before charges. Sequentially, the company's first quarter diluted earnings per share, before charges, were $0.06 lower than the fourth quarter of 2010.
First quarter revenues were $2,856 million, or 23 percent higher than the same period last year, and down two percent sequentially. North America revenues increased 53 percent compared to the first quarter of 2010 while international revenues were up four percent over the same period.
Segment operating income of $353 million improved 38 percent year-over-year but was down 17 percent sequentially. Margin performance was held back primarily due to political turmoil in the Middle East and North Africa, unfavorable weather conditions and an equity tax enacted in Colombia.
The company expects earnings per share before excluded items of approximately $0.15 to $0.17 in the second quarter of 2011.
North America
Revenue increased eight percent sequentially and 53 percent compared to
the first quarter of 2010. Canadian activity was strong while colder wintertemperatures subdued progress in the United States. Operating income of $284 million improved $22 million sequentially, and margins increased 20 basis points to 20.9 percent.
Middle East/North Africa/Asia Revenue decreased $109 million sequentially, or 16 percent, as political disruptions in the Middle East and North Africa and challenging weather events in Australia and China took a heavy toll, accounting for approximately two-thirds of the drop. Operating income declined $38 million sequentially, on decrementals of 35 percent.
Europe/West Africa/FSU Revenue declined $18 million, or three percent, sequentially but was up 12 percent compared to the first quarter of 2010. The winter effect in the North Sea, Russia and Caspian were primarily responsible for the decline. Operating income declined $27 million sequentially. Contributing to the severe decrementals were increased employee-related costs, as well as higher fuel and transportation costs in Russia.
Latin America
Revenue decreased eight percent, or $36 million, on a sequential basis
and declined four percent, or $17 million, compared to the first quarter of2010. Mexico and Venezuela led the declines. Operating income fell $32 million sequentially. Approximately $16 million of the decline was due to the charge for the Colombia equity tax. Adjusting for this effect, decrementals were approximately 44 percent.
Net Debt Net debt for the quarter increased $547 million primarily as a result of an increase in working capital of $365 million. The increase in working capital was largely driven by North America and Latin America.
Reclassifications and Non-GAAP Non-GAAP performance measures and corresponding reconciliations to GAAP financial measures have been provided for meaningful comparisons between current results and results in prior operating periods.
Conference Call The company will host a conference call with financial analysts to discuss the 2011 first quarter results on April 21, 2011 at 8:00 a.m. (CDT). The company invites investors to listen to a play back of the conference call and to access the call transcript at the company's website, http://www.weatherford.com in the "investor relations" section.
Weatherford is a Swiss-based, multi-national oilfield service company. It is one of the largest global providers of innovative mechanical solutions, technology and services for the drilling and production sectors of the oil and gas industry. Weatherford operates in over 100 countries and employs over 55,000 people worldwide.
Contacts: Andrew P. Becnel +41-22-816-1502
Chief Financial Officer
Karen David-Green +1-713-693-2530
Vice President - Investor Relations
This press release contains forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995 concerning, among other things, Weatherford's prospects for its operations which are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in Weatherford International Ltd.'s reports and registration statements filed with the SEC, include the impact of oil and natural gas prices and worldwide economic conditions on drilling activity, the outcome of pending government investigations, the demand for and pricing of Weatherford's products and services, domestic and international economic and regulatory conditions and changes in tax and other laws affecting our business, results of our tax planning efforts, effects of extreme weather conditions and global political instability. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary materially from those currently anticipated.
Weatherford International Ltd.
Consolidated Condensed Statements of Income
(Unaudited)
(In Thousands, Except Per Share Amounts)
Three Months
Ended March 31,
---------------
2011 2010
---- ----
Net Revenues:
North America $1,360,472 $888,579
Middle East/North Africa/Asia 575,526 562,056
Europe/West Africa/FSU 510,423 453,759
Latin America 409,765 426,673
2,856,186 2,331,067
--------- ---------
Operating Income (Expense):
North America 283,697 108,432
Middle East/North Africa/Asia 10,804 75,714
Europe/West Africa/FSU 37,504 46,298
Latin America 21,091 26,074
Research and Development (64,547) (48,857)
Corporate Expenses (55,829) (45,058)
Revaluation of Contingent Consideration - (11,010)
Severance, Exit and Other Adjustments (20,832) (44,032)
------- -------
211,888 107,561
Other Income (Expense):
Interest Expense, Net (112,506) (95,339)
Devaluation of Venezuelan Bolivar - (63,859)
Other, Net (18,566) (9,218)
------- ------
Income (Loss) Before Income Taxes 80,816 (60,855)
Benefit (Provision) for Income Taxes:
Provision for Operations (21,798) (29,883)
Benefit from Devaluation of Venezuelan
Bolivar - 23,973
Benefit from Severance, Exit and Other
Adjustments 2,521 2,443
----- -----
(19,277) (3,467)
Net Income (Loss) 61,539 (64,322)
Net Income Attributable to Noncontrolling
Interest (2,338) (4,035)
------ ------
Net Income (Loss) Attributable to Weatherford $59,201 $(68,357)
======= ========
Earnings (Loss) Per Share Attributable to
Weatherford:
Basic $0.08 $(0.09)
Diluted $0.08 $(0.09)
Weighted Average Shares Outstanding:
Basic 747,468 737,865
Diluted 757,617 737,865
Weatherford International Ltd.
Selected Income Statement Information
(Unaudited)
(In Thousands)
Three Months Ended
------------------
3/31/2011 12/31/2010 9/30/2010
--------- ---------- ---------
Net Revenues:
North America $1,360,472 $1,263,643 $1,096,963
Middle East/North Africa/Asia 575,526 684,630 601,215
Europe/West Africa/FSU 510,423 528,380 496,113
Latin America 409,765 446,162 335,461
$2,856,186 $2,922,815 $2,529,752
========== ========== ==========
Operating Income (Expense):
North America $283,697 $261,145 $199,029
Middle East/North Africa/Asia 10,804 49,222 65,718
Europe/West Africa/FSU 37,504 64,398 63,236
Latin America 21,091 52,960 40,914
Research and Development (64,547) (57,637) (54,457)
Corporate Expenses (55,829) (43,283) (41,907)
Revaluation of Contingent
Consideration 15,349 90,011
Severance, Exit and Other
Adjustments (20,832) (48,775) (87,120)
$211,888 $293,379 $275,424
======== ======== ========
Three Months Ended
------------------
6/30/2010 3/31/2010
--------- ---------
Net Revenues:
North America $917,696 $888,579
Middle East/North Africa/Asia 602,602 562,056
Europe/West Africa/FSU 506,177 453,759
Latin America 410,688 426,673
$2,437,163 $2,331,067
========== ==========
Operating Income (Expense):
North America $127,001 $108,432
Middle East/North Africa/Asia 73,993 75,714
Europe/West Africa/FSU 67,366 46,298
Latin America 41,991 26,074
Research and Development (53,530) (48,857)
Corporate Expenses (42,670) (45,058)
Revaluation of Contingent
Consideration (81,753) (11,010)
Severance, Exit and Other
Adjustments (27,309) (44,032)
$105,089 $107,561
======== ========
Supplemental Information
(Unaudited)
(In Thousands)
Three Months Ended
------------------
3/31/2011 12/31/2010 9/30/2010
--------- ---------- ---------
Depreciation and Amortization:
North America $87,793 $83,996 $81,843
Middle East/North Africa/Asia 81,380 81,596 75,968
Europe/West Africa/FSU 56,594 53,408 56,960
Latin America 46,388 47,377 46,527
Research and Development 1,964 2,398 2,420
Corporate 2,936 3,075 3,491
$277,055 $271,850 $267,209
======== ======== ========
Three Months Ended
------------------
6/30/2010 3/31/2010
--------- ---------
Depreciation and Amortization:
North America $81,040 $80,660
Middle East/North Africa/Asia 75,139 72,290
Europe/West Africa/FSU 52,371 49,271
Latin America 44,753 42,479
Research and Development 2,324 2,224
Corporate 2,943 2,781
$258,570 $249,705
======== ========
We report our financial results in accordance with generally accepted
accounting principles (GAAP). However, Weatherford's management
believes that certain non-GAAP performance measures and ratios may
provide users of this financial information additional meaningful
comparisons between current results and results in prior operating
periods. One such non-GAAP financial measure we may present from
time to time is operating income or income from continuing
operations excluding certain charges or amounts. This adjusted
income amount is not a measure of financial performance under GAAP.
Accordingly, it should not be considered as a substitute for
operating income, net income or other income data prepared in
accordance with GAAP. See the table below for supplemental
financial data and corresponding reconciliations to GAAP financial
measures for the three months ended March 31, 2011, December 31,
2010, and March 31, 2010. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, the Company's
reported results prepared in accordance with GAAP.
Weatherford International Ltd.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In Thousands, Except Per Share Amounts)
Three Months Ended
------------------
March 31, December 31,
2011 2010
---- ----
Operating Income:
GAAP Operating Income $211,888 $293,379
Severance, Exit and Other
Adjustments 20,832 48,775
Revaluation of Contingent
Consideration - (15,349)
--- -------
Non-GAAP Operating Income $232,720 $326,805
======== ========
Income (Loss) Before Income
Taxes:
GAAP Income (Loss) Before
Income Taxes $80,816 $117,162
Severance, Exit and Other
Adjustments 20,832 48,775
Revaluation of Contingent
Consideration - (15,349)
Devaluation of Venezuelan
Bolivar - -
Bond Tender Premium - 43,242
--- ------
Non-GAAP Income (Loss)
Before Income Taxes $101,648 $193,830
======== ========
Benefit (Provision) for
Income Taxes:
GAAP Benefit (Provision) for
Income Taxes $(19,277) $(200,337)
Legal Entity Reorganization
Charges - 157,699
Devaluation of Venezuelan
Bolivar - -
Bond Tender, Severance, Exit
and Other Adjustments (2,521) (24,301)
------ -------
Non-GAAP Benefit (Provision)
for Income Taxes $(21,798) $(66,939)
======== ========
Net Income (Loss)
Attributable to Weatherford:
GAAP Net Income (Loss) $59,201 $(86,331)
Total Charges, net of tax 18,311 (a) 210,066 (b)
------ -------
Non-GAAP Net Income $77,512 $123,735
======= ========
Diluted Earnings (Loss) Per
Share Attributable to
Weatherford:
GAAP Diluted Earnings (Loss)
per Share $0.08 $(0.12)
Total Charges, net of tax 0.02 (a) 0.28 (b)
---- ----
Non-GAAP Diluted Earnings
per Share $0.10 $0.16
===== =====
Three Months Ended
------------------
March 31,
2010
----
Operating Income:
GAAP Operating Income $107,561
Severance, Exit and Other Adjustments 44,032
Revaluation of Contingent Consideration 11,010
------
Non-GAAP Operating Income $162,603
========
Income (Loss) Before Income Taxes:
GAAP Income (Loss) Before Income Taxes $(60,855)
Severance, Exit and Other Adjustments 44,032
Revaluation of Contingent Consideration 11,010
Devaluation of Venezuelan Bolivar 63,859
Bond Tender Premium -
---
Non-GAAP Income (Loss) Before Income
Taxes $58,046
=======
Benefit (Provision) for Income Taxes:
GAAP Benefit (Provision) for Income Taxes $(3,467)
Legal Entity Reorganization Charges -
Devaluation of Venezuelan Bolivar (23,973)
Bond Tender, Severance, Exit and Other
Adjustments (2,443)
------
Non-GAAP Benefit (Provision) for Income
Taxes $(29,883)
========
Net Income (Loss) Attributable to
Weatherford:
GAAP Net Income (Loss) $(68,357)
Total Charges, net of tax 92,485 (c)
------
Non-GAAP Net Income $24,128
=======
Diluted Earnings (Loss) Per Share
Attributable to Weatherford:
GAAP Diluted Earnings (Loss) per Share $(0.09)
Total Charges, net of tax 0.12 (c)
----
Non-GAAP Diluted Earnings per Share $0.03
=====
Note (a): This amount is comprised of a $9 million charge
associated with terminating a corporate consulting contract and $8
million for severance costs. We also incurred investigation costs
in connection with on-going investigations by the U.S. government.
Note (b): This amount is comprised of a $34 million premium paid on
tendering a portion of our senior notes, severance costs, a $21
million reserve taken against accounts receivable balances in
Venezuela due to the country's economic prognosis and a $15 million
gain on the settlement of contingent consideration included as part
of our acquisition of the Oilfield Services Division ("OFS") of
TNK-BP. We also incurred investigation costs in connection with
on-going investigations by the U.S. government. In addition, we
incurred a tax charge of $158 million primarily as a result of a
tax reorganization initiative completed during the fourth quarter
of 2010.
Note (c): This amount is primarily comprised of a $38 million
charge, net of tax, related to our supplemental executive
retirement plan that was frozen on March 31, 2010 and a $40 million
charge, net of tax, related to the devaluation of the Venezuelan
Bolivar. In addition, we incurred a charge of $11 million for the
revaluation of contingent consideration included as part of our OFS
acquisition. We also incurred investigation costs in connection
with on-going investigations by the U.S. government and severance
charges and facility closure costs.
Weatherford International Ltd.
Consolidated Condensed Balance Sheet
(Unaudited)
(In Thousands)
March December
1, 31,
2011 2010
---- ----
Current Assets:
Cash and Cash Equivalents $249,317 $415,772
Accounts Receivable, Net 2,923,062 2,629,403
Inventories 2,759,569 2,590,008
Other Current Assets 963,919 856,884
6,895,867 6,492,067
Long-Term Assets:
Property, Plant and Equipment, Net 7,117,261 6,939,754
Goodwill 4,260,025 4,185,477
Other Intangibles, Net 735,494 730,429
Equity Investments 551,686 539,580
Other Assets 261,588 244,347
12,926,054 12,639,587
- ---
Total Assets $19,821,921 $19,131,654
=========== ===========
Current Liabilities:
Short-term Borrowings and Current Portion of
Long-term Debt $619,490 $235,392
Accounts Payable 1,433,259 1,335,020
Other Current Liabilities 939,560 1,012,567
2,992,309 2,582,979
Long-term Liabilities:
Long-term Debt 6,526,464 6,529,998
Other Liabilities 590,765 553,830
7,117,229 7,083,828
Total Liabilities 10,109,538 9,666,807
-
Shareholders' Equity:
Weatherford Shareholders' Equity 9,650,984 9,400,931
Noncontrolling Interest 61,399 63,916
Total Shareholders' Equity 9,712,383 9,464,847
Total Liabilities and Shareholders' Equity $19,821,921 $19,131,654
=========== ===========
Weatherford International Ltd.
Net Debt
(Unaudited)
(In Thousands)
Change in Net Debt for the Three
Months Ended March 31, 2011:
Net Debt at December 31, 2010 $(6,349,618)
Operating Income 211,888
Depreciation and Amortization 277,055
Severance, Exit and Other Adjustments 20,832
Capital Expenditures (355,650)
Increase in Working Capital (299,723)
Income Taxes Paid (65,532)
Interest Paid (175,925)
Acquisitions and Divestitures of
Assets and Businesses, Net (19,389)
Foreign Currency Contract Settlements (54,128)
Other (86,447)
-------
Net Debt at March 31, 2011 $(6,896,637)
===========
March 31, December 31,
Components of Net Debt 2011 2010
---- ----
Cash $249,317 $415,772
Short-term Borrowings and Current
Portion of Long-Term Debt (619,490) (235,392)
Long-term Debt (6,526,464) (6,529,998)
---------- ----------
Net Debt $(6,896,637) $(6,349,618)
=========== ===========
"Net Debt" is debt less cash. Management believes that Net Debt
provides useful information regarding the level of
Weatherford indebtedness by reflecting cash that could be used to
repay debt.
Working capital is defined as accounts receivable plus inventory less
accounts payable.
SOURCE Weatherford International Ltd.end of announcement euro adhoc --------------------------------------------------------------------------------
Contact:
Contacts: Andrew P. Becnel +41-22-816-1502
Chief Financial Officer
Karen David-Green +1-713-693-2530
Vice President - Investor Relations
Branche: Oil & Gas - Upstream activities
ISIN: CH0038838394
WKN: A0RF77
Börsen: Euronext Paris / stock market
New York / stock market
SIX Swiss Exchange / Main Standard