Weatherford International Ltd.

EANS-Adhoc: Weatherford Reports First Quarter Results


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  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.
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3-month report

24.04.2012

Earnings rise approximately 20% to $0.25 in Q1 versus $0.21 in Q4, before items

GENEVA, April 24, 2012 -- Weatherford International Ltd. (NYSE and SIX: WFT)
today reported first quarter 2012 net income of $190 million, or $0.25 per
diluted share, excluding an after tax loss of $67 million. On a GAAP basis, our
net income for the first quarter of 2012 was $123 million, or $0.16 per diluted
share. The excluded after tax loss is comprised of the following items:


    
    - Severance charges of $25 million, primarily related to executive officers;
    - $2 million of costs incurred in connection with on-going investigations
      by the U.S. government;
    - $40 million of discrete tax items primarily related to changes in
      estimates and uncertain tax positions that are not directly related to
      current year operating results

end of ad-hoc-announcement

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(Logo: http://photos.prnewswire.com/prnh/19990308/WEATHERFORDLOGO)

First quarter 2012 diluted earnings per share reflect an increase of $0.18 over
the first quarter of 2011 diluted earnings per share of $0.07, before charges.
Sequentially, the company's first quarter diluted earnings per share, before
charges, were $0.04 higher than the fourth quarter of 2011.

First quarter revenues were $3,599 million, or 26 percent higher than the same
period last year, and down three percent sequentially. North America revenues
increased 29 percent compared to the first quarter of 2011 while international
revenues were up 23 percent over the same period.

Segment operating income of $554 million improved 57 percent year-over-year but
was down nine percent sequentially. Segment operating income margins of 15%
improved three percent over the same period last year and declined one percent
sequentially. Segment margin performance improved relative to the same period in
the prior year primarily due to improved operating performance and in part due
to less severe weather conditions in our Middle East/North Africa/Asia region
and the charge taken in the prior-year period for the Colombia net equity tax
enacted in the first quarter of 2011.

Corporate general and administrative expense increased $7 million sequentially
to an all time high of $64 million, primarily attributable to additional
professional service fees incurred in the first quarter.

Subject to the risks regarding forward-looking statements highlighted by the
company in this press release and its public filings, the company expects
diluted earnings per share before excluded items of approximately $0.24 to $0.26
in the second quarter of 2012. With regard to the entirety of 2012, the company
maintains a positive but measured outlook for its North American business and
expects modest revenue and operating income growth compared to 2011.
Internationally, the company anticipates continued growth and expanding margins
in its Latin America region, underpinned by improvements in Brazil, Colombia,
Mexico and Venezuela. Eastern Hemisphere is also expected to improve in 2012,
with upticks in Europe and Russia, as well as continued recovery in the Middle
East / North Africa / Asia Pacific region with positive contributions in the
second half of 2012 from the completion of unfavorable contracts and new
contracts with better terms and pricing. For 2012, we currently estimate an
effective tax rate of approximately 35 percent, although the actual rate may
vary.

North America
Revenue increased three percent sequentially and 29 percent compared to the
first quarter of 2011. Artificial Lift, Wireline and Completions posted strong
revenue growth sequentially and were partially offset by a decline in
Stimulation, Drilling Tools and Fishing which were negatively impacted by the
natural gas market. Operating income of $359 million declined by $23 million
sequentially due to a 200 basis point decline in operating margins to 21%,
driven primarily by the Stimulation, Drilling Tools and Fishing product lines in
the U.S.

Middle East/North Africa/Asia
Revenue decreased $70 million sequentially, or 10 percent, with declines in
Completions and Wireline as well as expected seasonality in China. Despite the
decline in revenue, operating income improved $14 million or 39 percent
sequentially.

Europe/SSA/FSU
Revenue declined $40 million, or seven percent, sequentially as the normal
winter seasonality in the North Sea and Russia negatively impacted the first
quarter. Operating income declined $21 million sequentially due to the lower
level of activity and a 280 basis point decline in operating margins.

Latin America
Revenue decreased eight percent, or $57 million, on a sequential basis and
increased 64 percent, or $261 million, compared to the first quarter of 2011.
Operating income fell $25 million sequentially on the decline in revenue due to
budgetary seasonality of  operators in the region.

Liquidity and Net Debt
Net debt for the quarter increased $317 million primarily as a result of an
increase in working capital of $155 million and capital expenditures of
approximately $483 million, net of lost-in-hole offset by positive contributions
from operations.

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. The non-GAAP financial measures
we may present from time to  time include: 1) operating income or income from
continuing operations excluding certain charges or amounts, 2) the provision for
income taxes excluding discrete items and 3) the resulting non-GAAP net income
and per share amounts. Weatherford has added and expects to include the
provision for income taxes excluding discrete items as a non-GAAP measure going
forward. We believe it will provide users of this financial information
additional meaningful comparison between current operating results and operating
results in prior periods as well as greater transparency of income taxes.

Conference Call
The company will host a conference call with financial analysts to discuss the
2012 first quarter results on April 24, 2012 at 8:30 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 60,000
people worldwide.



    Contacts: John H. Briscoe                     +1.713.836.4610
              Chief Financial Officer

              Karen David-Green                   +1.713.836.7430
              Vice President - Investor Relations



Forward-Looking Statements
This press release contains, and the conference call announced in this release
may include, forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. This includes statements related to
future levels of earnings, revenue, expenses, margins, capital expenditures,
changes in working capital, cash flows, tax expense, effective tax rates and net
income, as well as the prospects for the oilfield service business generally and
our business in particular. Forward-looking statements also include any
statements about the resolution of our ongoing remediation of our material
weakness in internal control over financial reporting for income taxes. It is
inherently difficult to make projections or other forward-looking statements in
a cyclical industry and given the current macroeconomic uncertainty. Such
statements are based upon the current beliefs of Weatherford's management, and
are subject to significant risks, assumptions and uncertainties. These include
the Company's inability to design or improve internal controls to address
identified issues; the impact upon operations of legal compliance matters or
internal controls review, improvement and remediation, including the detection
of wrongdoing, improper activities or circumvention of internal controls;
difficulties in controlling expenses, including costs of legal compliance
matters or internal controls review, improvement and remediation; impact of
changes in management or staff levels, the effect of global political, economic
and market conditions on the Company's projected results; the possibility that
the Company may be unable to recognize expected revenues from current and future
contracts; the effect of currency fluctuations on the Company's business; the
Company's ability to manage its workforce to control costs; the cost and
availability of raw materials, the Company's ability to manage its supply chain
and business processes; the Company's ability to commercialize new technology;
whether the Company can realize expected benefits from its redomestication of
its former Bermuda parent company; the Company's ability to realize expected
benefits from its acquisitions and dispositions; the effect of a downturn in its
industry on the Company's carrying value of its goodwill; the effect of weather
conditions on the Company's operations; the impact of oil and natural gas prices
and worldwide economic conditions on drilling activity; the effect of turmoil in
the credit markets on the Company's ability to manage risk with interest rate
and foreign exchange swaps; the outcome of pending government investigations,
including the Securities and Exchange Commission's investigation of the
circumstances surrounding the Company's material weakness in its internal
control over financial reporting of income taxes; the outcome of ongoing
litigation, including shareholder litigation related to the Company's material
weakness in its internal control over financial reporting of income taxes and
its restatement of historical financial statements; the future level of crude
oil and natural gas prices; demand for our products and services; levels of
pricing for our products and services; utilization rates of our equipment; the
effectiveness of our supply chain; weather-related disruptions and other
operational and non-operational risks that are detailed in our most recent Form
10-K and other filings with the U.S. Securities and Exchange Commission. Should
one or more of these risks or uncertainties materialize, or underlying
assumptions prove incorrect, actual results may vary materially from those
indicated in our forward-looking statements. We undertake no obligation to
correct or update any forward-looking statement, whether as a result of new
information, future events, or otherwise, except to the extent required under
federal securities laws.




    
                          Weatherford International Ltd.
                 Consolidated Condensed Statements of Operations
                                   (Unaudited)
                     (In Millions, Except Per Share Amounts)


                                     Three Months
                                    Ended March 31,
                                    2012       2011
Net Revenues:
    North America                $ 1,754    $ 1,360
    Middle East/North
    Africa/Asia                      605        576
    Europe/SSA/FSU                   569        510
    Latin America                    671        410
                                   3,599      2,856

Operating Income (Expense):
    North America                    359        283
    Middle East/North
    Africa/Asia                       48         10
    Europe/SSA/FSU                    60         40
    Latin America                     87         21
    Research and
    Development                     (62)       (60)
    Corporate Expenses              (64)       (56)
    Severance, Exit and
    Other Adjustments               (32)       (21)
                                     396        217



Other Income (Expense):

    Interest Expense, Net          (112)      (113)
    Other, Net                      (17)       (19)

Income Before Income Taxes           267         85

Benefit (Provision) for Income
Taxes:
    Provision for Operations        (99)       (54)
    Benefit from Severance, Exit
    and Other Adjustments              2          2
    Benefit (Provision) for
    Discrete Items                  (40)          6
                                   (137)       (46)

Net Income                           130         39
Net Income Attributable 
to Noncontrolling Interest           (7)        (2)
Net Income Attributable 
to Weatherford                     $ 123       $ 37


Earnings Per Share Attributable 
to Weatherford:

    Basic                         $ 0.16     $ 0.05
    Diluted                       $ 0.16     $ 0.05

Weighted Average Shares 
Outstanding:
    Basic                            760        748
    Diluted                          766        758



    
                            Weatherford International Ltd.
                      Selected Income Statement Information
                                  (Unaudited)
                                 (In Millions)
         
                                  Three Months Ended
              3/31/2012    12/31/2011    9/30/2011    6/30/2011    3/31/2011
Net Revenues:

 North America  $ 1,754       $ 1,699      $ 1,620      $ 1,344      $ 1,360
 Middle East/
 North Africa/

 Asia               605           675          573          617          576
 Europe/SSA/FSU     569           609          588          593          510
 Latin America      671           727          591          498          410
                $ 3,599       $ 3,710      $ 3,372      $ 3,052      $ 2,856


                                  Three Months Ended
              3/31/2012    12/31/2011    9/30/2011    6/30/2011    3/31/2011
Operating Income
(Expense):
 North America    $ 359         $ 382        $ 353        $ 244        $ 283
 Middle East/
 North Africa/
 Asia                48            35           18           34           10
 Europe/SSA/FSU      60            81           86           89           40
 Latin America       87           112           70           50           21
 Research and
 Development       (62)          (64)         (59)         (62)         (60)
 Corporate
 Expenses          (64)          (57)         (42)         (43)         (56)
 Libya Reserve        -          (67)            -            -            -
 Severance, Exit
 and Other 
 Adjustments       (32)          (26)          (8)         (19)         (21)
                  $ 396         $ 396        $ 418        $ 293        $ 217


                                  Three Months Ended
              3/31/2012    12/31/2011    9/30/2011    6/30/2011    3/31/2011
Product Line
Revenues:
 Formation
 Evaluation 
 and Well 

 Construction
 (1)            $ 2,045       $ 2,075      $ 1,879      $ 1,689      $ 1,714
 Completion 
 and

 Production(2)    1,554         1,635        1,493        1,363        1,142
                $ 3,599       $ 3,710      $ 3,372      $ 3,052      $ 2,856


                                  Three Months Ended
              3/31/2012    12/31/2011    9/30/2011    6/30/2011    3/31/2011
Depreciation 
and 

Amortization:
 North America     $ 95          $ 91         $ 91         $ 88         $ 88
 Middle East/
 North Africa/

 Asia                83            82           81           83           82
 Europe/SSA/FSU      63            59           59           58           56
 Latin America       55            52           51           49           46
 Research and
 Development          2             2            2            2            2
 Corporate            3             3            2            3            3
                  $ 301         $ 289        $ 286        $ 283        $ 277

    
    (1) Formation Evaluation and Well Construction includes Drilling Services,
        Well Construction, Integrated Drilling, Wireline and Evaluation
        Services, Drilling Tools and Re-entry and Fishing
    (2) Completion and Production includes Artificial Lift Systems,
        Stimulation and Chemicals, Completion Systems and Pipeline and
        Specialty Services

We report our financial results in accordance with generally accepted accounting
principles (GAAP). However, Weatherford's management believes that certain
non-GAAP financial measures and ratios (as defined under the SEC's Regulation G)
may provide users of this financial information additional meaningful
comparisons between current results and results in prior periods. The non-GAAP
financial measures we may present from time to time include: 1) operating income
or income from continuing operations excluding certain charges or amounts, 2)
the provision for income taxes excluding discrete items and 3) the resulting
non-GAAP net income and per share amounts. These adjusted amounts are not
measures of financial performance under GAAP. Accordingly, these amounts should
not be considered as a substitute for operating income, provision for income
taxes, net income or other data prepared and reported 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,
2012, December 31, 2011, and March 31, 2011. Non-GAAP financial measures should
be viewed in addition to, and not as an alternative to, the Company's reported
results prepared in accordance with GAAP.


    
              Reconciliation of GAAP to Non-GAAP Financial Measures
                                   (Unaudited)
                     (In Millions, Except Per Share Amounts)

                                            Three Months Ended
                                    March 31, December 31, March 31,
                                       2012        2011       2011
Operating Income:
      GAAP Operating Income            $ 396        $ 397     $ 217
                 Libya Reserve             -           67         -
                 Severance, Exit
                 and Other
                 Adjustments              32           26        21
      Non-GAAP Operating Income        $ 428        $ 490     $ 238


Income (Loss) Before Income
Taxes:

      GAAP Income (Loss) Before
      Income Taxes                     $ 267        $ 245      $ 85
                 Libya Reserve             -           67         -
                 Severance, Exit
                 and Other
                 Adjustments              29           31        21
      Non-GAAP Income (Loss)
      Before Income Taxes              $ 296        $ 343     $ 106


Benefit (Provision) for Income
Taxes:

      GAAP Benefit (Provision) for                              
      Income Taxes                    $ (137)      $ (221)   $ (46)
                 Legal Entity
                 Reorganization
                 Charges                   -           22         -
                 Severance, Exit
                 and Other
                 Adjustments             (2)          (7)       (2)
                 Discrete Items (1)       40           28       (6)
      Non-GAAP Benefit (Provision)         
      for Income Taxes                $ (99)      $ (178)    $ (54)


Net Income (Loss) Attributable to
Weatherford:

      GAAP Net Income (Loss)           $ 123         $ 18      $ 37
                 Total Charges, net
                 of tax                   67 (a)      141 (b)    13 (c)
      Non-GAAP Net Income              $ 190        $ 159      $ 50


Diluted Earnings (Loss) Per Share
Attributable to Weatherford:

      GAAP Diluted Earnings (Loss)                              
      per Share                       $ 0.16       $ 0.02    $ 0.05
                 Total Charges, net
                 of tax                 0.09         0.19      0.02
      Non-GAAP Diluted Earnings                                  
      per Share                       $ 0.25       $ 0.21    $ 0.07

Effective Tax Rate (2)                 51.3%        90.2%     54.1%
Annual Effective Tax Rate (3)          33.4%        51.9%     50.9%


    
    Note (a): Non-GAAP adjustments, after tax, are comprised of (i) severance,
    exit and other charges of $25 million, primarily related to executive
    officer severance, (ii) $2 million of costs incurred in connection with
    on-going investigations by the U.S. government and (iii) $40 million of
    discrete tax items primarily related to uncertain tax positions and return
    to accrual adjustments.

    Note (b): Non-GAAP adjustments, after tax, are comprised of (i) a $67
    million charge primarily to reserve accounts receivable, inventory and
    machinery and equipment in Libya (ii) $4 million in legal and professional
    costs incurred in conjunction with our tax planning and reorganization
    activities, as well as $23 million in withholding taxes related to these
    transactions (iii) $5 million of costs incurred in connection with
    on-going investigations by the U.S. government, (iv) severance, exit and
    other charges of $14 million and (v) a $28 million provision for discrete
    tax items primarily related to valuation allowances on deferred tax
    assets.

    Note (c): This after tax amount is comprised of (i) a $9 million charge
    associated with terminating a corporate consulting contract, (ii) $8
    million for severance costs, (iii) investigation costs in connection with
    on-going investigations by the U.S. government and (iv) a $6 million
    benefit for discrete tax items.

    Note (1): Discrete Items are income tax provisions (benefits) related
    primarily to our changes in estimates as we file tax returns, settle
    disputes with tax authorities or became aware of other events and include
    changes in (a) deferred taxes, (b) valuation allowance on deferred taxes,
    (c) uncertain tax positions and (d) other tax liabilities. Management
    believes that excluding these items from the GAAP provision for income
    taxes provides a non-GAAP measure of tax that provides additional
    meaningful information about the income tax related to current and prior
    period operating results and management expectations of income taxes for
    the current year.

    Note (2): Effective Tax Rate is GAAP provision for income taxes divided by
    GAAP income before income taxes.

    Note (3): Annual Effective Tax Rate is the Non-GAAP provision for income
    taxes divided by Non-GAAP income before income taxes.

    
                          Weatherford International Ltd.
                       Consolidated Condensed Balance Sheet
                                   (Unaudited)
                                  (In Millions)

                                                      March 31, December 31,
                                                          2012       2011
Current Assets:
                         Cash and Cash
                         Equivalents                     $ 339       $ 371
                         Accounts Receivable, Net        3,358       3,235
                         Inventories                     3,303       3,158
                         Other Current Assets            1,053         935
                                                         8,053       7,699
Long-Term Assets:
                         Property, Plant and
                         Equipment, Net                  7,585       7,283
                         Goodwill                        4,445       4,422
                         Other Intangibles, Net            706         711
                         Equity Investments                634         616
                         Other Assets                      450         454
                                                        13,820      13,486
                                                          
      Total Assets                                    $ 21,873    $ 21,185
Current Liabilities:
                         Short-term Borrowings
                         and Current Portion of              
                         Long-term Debt                $ 1,902     $ 1,320
                         Accounts Payable                1,679       1,567
                         Other Current
                         Liabilities                     1,251       1,326
                                                         4,832       4,213
Long-term Liabilities:
                         Long-term Debt                  5,989       6,286
                         Other Liabilities               1,119       1,133
                                                         7,108       7,419
      Total Liabilities                                 11,940      11,632
Shareholders' Equity:
                         Weatherford
                         Shareholders' Equity            9,912       9,532
                         Noncontrolling Interests           21          21
      Total Shareholders' Equity                         9,933       9,553
                                                                 
      Total Liabilities and Shareholders' Equity      $ 21,873    $ 21,185


                          Weatherford International Ltd.
                                     Net Debt
                                   (Unaudited)
                                  (In Millions)


Change in Net Debt for the Three Months
Ended March 31, 2012:

   Net Debt at December 31, 2011                 $ (7,235)
                   Operating Income                    396
                   Depreciation and
                   Amortization                        301
                   Severance, Exit and Other
                   Adjustments                          32
                   Capital Expenditures              (514)
                   Increase in Working
                   Capital                           (180)
                   Income Taxes Paid                  (98)
                   Interest Paid                     (180)
                   Acquisitions and
                   Divestitures of Assets and
                   Businesses, Net                    (12)
                   Foreign Currency Contract
                   Settlements                        (28)
                   Other                              (34)
   Net Debt at March 31, 2012                    $ (7,552)

                                                   March 31,     December 31,
Components of Net Debt                             2012           2011
                   Cash                              $ 339           $ 371
                   Short-term Borrowings and
                   Current Portion of
                   Long-Term Debt                  (1,902)         (1,320)
                   Long-term Debt                  (5,989)         (6,286)
                   Net Debt                      $ (7,552)       $ (7,235)




    "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.


Further inquiry note:
Contacts: John H. Briscoe, Chief Financial Officer, +1.713.836.4610; Karen
David-Green, Vice President - Investor Relations, +1.713.836.7430

end of announcement                               euro adhoc 
--------------------------------------------------------------------------------


issuer:      Weatherford International Ltd.
             Rue Jean-Francois Bartholoni 4-6
             CH-1204 Geneva
phone:       +41.22.816.1500
FAX:         +41.22.816.1599
mail:     karen.david-green@weatherford.com
WWW:      http://www.weatherford.com
sector:      Oil & Gas - Upstream activities
ISIN:        CH0038838394
indexes:     
stockmarkets: Main Standard: SIX Swiss Exchange, stock market: New York, Euronext
             Paris 
language:   English
 

 

 



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