Weatherford International Ltd.
EANS-Adhoc: Weatherford Reports Fourth Quarter and 2013 Annual 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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Annual Reports/quarterly report
26.02.2014
-- Remediates Material Weakness for Income Tax Accounting; Reduces Net Debt by
$687 million and generates positive free cash flow of $298 million in the fourth
quarter
GENEVA, Feb. 26, 2014 -- Weatherford International Ltd. (NYSE/Euronext
Paris/SIX: WFT) reported net income of $53 million ($0.07 diluted earnings per
share on a non-GAAP basis), before charges, on revenues of $3.74 billion for
the fourth quarter of 2013. For the year ended December 31, 2013, Weatherford
reported full-year net income, before charges, of $463 million ($0.60 diluted
earnings per share on a non-GAAP basis) on revenues of $15.26 billion.
(Logo: http://photos.prnewswire.com/prnh/19990308/WEATHERFORDLOGO )
Fourth Quarter 2013 Highlights
-- Successful remediation of the long standing material weakness in income
tax accounting;
-- Reduction in net debt by $687 million;
-- Positive free cash flow generation of $298 million (sequential
improvement of $337 million), driven primarily by a reduction in working
capital; and
-- Completion of the sale of our equity investment in Borets for $400
million and collection of cash proceeds of $359 million in the fourth
quarter.
end of ad-hoc-announcement
================================================================================
Bernard J. Duroc-Danner, Chairman, President and Chief Executive Officer
commented, "While the fourth quarter results were disappointing, Weatherford is
now actively engaged in transforming itself into a lean, deleveraged and
focused organization going into 2014. Over the last few years, we have been
consumed with remediating the material weakness in our tax accounting and
managing several governmental investigations. Now that we have both of these
distractions behind us, we can focus fully on the future. We have defined three
initiatives that will transform Weatherford.
-- We will divest our non-core businesses. In the second half of 2013, we
identified several non-core businesses that Weatherford had accumulated
over the years that are not part of our future growth strategy. These
included four businesses: pipeline and specialty services, testing and
production services, drilling fluids and wellheads. We have focused
teams working on each of the four divestitures and we expect to complete
the cash sale of each business by the end of 2014. In addition to these
four businesses, the IPO or spin-off of our land drilling rig business
is expected to take place in Q4 2014 or Q1 2015. The cash proceeds from
these transactions will be used to pay down debt. Finally, we expect to
complete our legacy loss contracts in Iraq during 2014 and exit the
early production facility ("EPF") business for good.
-- We will reduce our cost base of our remaining core businesses, which
includes our recently announced plan to reduce our worldwide employee
headcount by 7,000 during the first half of this year with targeted
annualized cost savings of $500 million. We have made significant
progress on this front with 6,192 positions already identified for
termination starting the end of the first quarter with estimated
annualized cost savings of $466 million. There are other areas of cost
reductions which will come from shutting down marginal business presence
in certain markets that are uneconomic and drain cash. This effort is
not expected to result in Weatherford's exit from any country as a whole
and is not anticipated to materially reduce our infrastructure
footprint.
-- The third element of our transformation is linked to the first two.
Once we divest the non-core businesses and reduce our remaining cost
base, the entire management team will refocus on growing the core
businesses retained by Weatherford and doing so at attractive cash
incremental returns. The core includes well construction, formation
evaluation, completion, stimulation and artificial lift. These
businesses have good margins and did so even in 2013. The overall 2013
operating income margin (before R&D and corporate expenses) was 11.2%.
The operating income margin for our core businesses was 16.3% compared
to a negative operating income margin of (6.9)% for the non-core
businesses. Excluding the impact of the U.S. pressure pumping business,
the core businesses generated an operating income margin of 18.9% in
2013. These businesses have good capital intensity and capital return
characteristics and we believe in their future. The U.S. pressure
pumping business is being re-engineered and repaired and, with emerging
market conditions, we should be able to improve our performance in this
business in 2014.
In summary, Weatherford is committed to transforming itself in 2014 to emerge as
a leaner, more efficient and stronger company, with high margin core product
lines, strategically positioned and focused on growing them. We are also
committed to deleveraging the company through a combination of proceeds from
divestitures and internally generated cash flow as quickly and as much as we
can. Our medium-term objective is a 25% debt to capitalization ratio.
My entire management team and I are determined to make the above happen. Our
direction is clear. Execution is our single minded focus."
Fourth Quarter 2013 Results
Revenue for the fourth quarter of 2013 was $3.74 billion compared with $3.82
billion in the third quarter of 2013 and $4.06 billion in the fourth quarter of
2012.
Net income for the fourth quarter of 2013, before charges, was $53 million
compared to $177 million in the third quarter of 2013 and $8 million in the
fourth quarter of 2012.
The sequential decline in earnings was driven by:
-- Extreme weather conditions in North America, Russia and the North Sea,
adversely affecting activity;
-- Operational disruptions in the Middle East;
-- Capital discipline driven activity reductions in Latin America; and
-- A higher than normal tax rate of 45%, which included certain items that
are expected to benefit future tax charges.
Reported net income on a GAAP basis for the fourth quarter of 2013 was a net
loss of $271 million, or ($0.35) per diluted share. After-tax charges for the
fourth quarter of $324 million included:
-- $171 million, net of tax, associated with our legacy lump sum contracts
in Iraq;
-- $96 million, net of tax, for charges related to the exchange of some of
our Venezuela accounts receivable for bonds that were subsequently
monetized and other accounts receivable write-offs;
-- $57 million, net of tax, in severance, exit and other charges.
Regional Highlights
- North America
North America revenues for the fourth quarter were $1.57 billion, down 2%
sequentially and down 7% from the same quarter in the prior year. North America
revenue decreased sequentially due to lower activity in the U.S. markets from
severe weather disruptions impacting most of our service product lines. Product
sales from the Artificial Lift and Completion product lines improved
sequentially. Fourth quarter operating income was flat sequentially at $216
million (13.7% margin) despite the decline in revenues, and down $10 million,
or 4%, from the same quarter in the prior year.
- Middle East/North Africa/Asia Pacific
Fourth quarter revenues of $821 million were up $2 million sequentially, and
down $30 million, or 4%, from the same quarter in the prior year. The current
quarter's operating income of $50 million (6.1% margin) decreased $19 million,
or 28%, sequentially and decreased 14% from the same quarter in the prior year.
Short-term operational disruptions in the Middle East during the fourth quarter
impacted our sequential operating income, primarily in the Land Rig Drilling
and Well Construction product lines.
- Europe/Sub-Sahara Africa/Russia
Fourth quarter revenues of $688 million were flat sequentially and 3% higher
than the same quarter in the prior year. The sequential revenues were impacted
by seasonal disruptions in Russia and the North Sea, which were offset by
improvements in other parts of Europe and Sub-Sahara Africa. The current
quarter's operating income of $47 million (6.8% margin) decreased $56 million,
or 54%, sequentially and declined 20% when compared to the same quarter in the
prior year. Impacting the fourth quarter operating income is a reduction in the
equity earnings of our investment in Borets that was sold early in the fourth
quarter.
- Latin America
Fourth quarter revenues of $657 million were down $56 million, or 8%,
sequentially, and down $199 million, or 23%, compared to the same quarter in
the prior year. The decline in revenue in the fourth quarter was largely
related to capital discipline driven reductions in certain markets. The fourth
quarter's operating income of $62 million (9.4% margin) was down $53 million,
or 46%, lower sequentially and $63 million, or 50%, lower than the same quarter
in the prior year. These deteriorations are consistent with the decline in
revenues and driven mainly by our decision to reduce activity in certain markets
and refocus on cash-driven growth opportunities elsewhere in the region. This
decision resulted in lower activity for the Formation Evaluation, Stimulation
and Artificial Lift product lines.
Liquidity and Free Cash Flow
Free cash flow improved by $337 million sequentially, driven by improvements in
working capital as accounts receivable and inventory balances declined during
the fourth quarter. Capital expenditures, net of lost-in-hole, increased 3%
sequentially and declined 29% compared to the same quarter in the prior year.
Inventory levels were down for the third consecutive quarter and contracted 6%
sequentially. Days sales in inventory decreased to 80 days from 83 days in the
prior quarter and was down seven days compared to the same quarter in the prior
year. Days sales outstanding decreased seven days sequentially and compared to
the same quarter in the prior year as all regions saw improvements in
collections during the fourth quarter. Overall, working capital days were down
14 days for the year.
Income Tax Material Weakness Remediation
During 2013, we completed the remediation of our material weakness in financial
reporting for income taxes and concluded that our internal controls are
effective. We will continue to focus on maintaining the system of internal
controls that was developed and implemented over the last three years and make
enhancements as necessary.
Outlook
In 2014, we remain focused on achieving a step change in profitability by:
-- Focusing the organization on growing our core businesses;
-- Making our cost base more efficient;
-- Divesting our non-core businesses and reducing our net debt.
We have completed the initial phase of our cost reduction initiatives and have
identified 6,192 positions for our reduction in workforce, with expected
annualized cost savings of $466 million. This reduction remains on track to be
completed during the first half of 2014. Our strategic business reviews of
operations that do not have critical mass, are currently unprofitable and are a
drain on our cash flow are well underway. We expect to begin eliminating select
operations identified during these reviews in the second quarter of 2014. We
expect these actions will bring additional costs savings, both in the form of
headcount reductions and other savings. These additional headcount reductions
will enable us to deliver fully on the 7,000 reduction target and approach the
$500 million annualized cost savings targeted previously.
In 2014, we expect revenue growth in North America, Europe/Sub Sahara
Africa/Russia and Middle East/North Africa/Asia Pacific regions while Latin
America is expected to decline year over year. Overall margins will improve
with lower costs and the growth in our more profitable core businesses. Based
on our current activity profile, and inclusive of the already identified and
expected benefits from the cost reduction actions outlined above, we reiterate
our most recent guidance and expect 2014 earnings per share (non-GAAP) to range
between $1.10 and $1.20. Our effective tax rate is forecasted to be between 25%
and 35% and will depend on the geographical mix of earnings going forward.
Capital expenditure for 2014 is targeted at 8% of revenue. The continued focus
on reducing working capital coupled with improved earnings is expected to
generate positive free cash flow of approximately $500 million for the year.
Given these targets and the divestiture program, we expect net debt to approach
$7 billion by the end of the year.
Retirement of Board Member
The Company announces the retirement of former Secretary of the United States
Department of the Treasury, Nicholas F. Brady, from its Board of Directors. Mr.
Brady's decision is due to his numerous commitments which encumber his ability
to be present at overseas Board meetings.
Mr. Brady has been a Director since 2004. He joined the Board of Directors
during a time when the Company was in full development and established a large
international presence. Later, Mr. Brady further helped lead the Company
through its most challenging years. His adept leadership and considerable
experience have contributed fundamentally in guiding the Company on its
transformational path.
The entire Company and its Board of Directors sincerely thank Mr. Brady for his
dedicated and distinguished tenure at Weatherford. He has been a trusted
colleague and adviser whose input and sound direction were invaluable.
Non-GAAP Performance Measures
Unless explicitly stated to the contrary, all performance measures used
throughout this document are non-GAAP. Corresponding reconciliations to GAAP
financial measures have been provided in the following pages to offer
meaningful comparisons between current results and results in prior periods.
About Weatherford
Weatherford is a Swiss-based, multinational oilfield service company. It is one
of the largest global providers of technology and services for the oil and gas
industry. Weatherford operates in over 100 countries, and employs over 67,000
people worldwide. For more information, visit www.weatherford.com
Conference Call
The Company will host a conference call with financial analysts to discuss the
quarterly results on February 26, 2014, at 8:30 a.m. eastern standard time
(EST), 7:30 a.m. central standard time (CST). Weatherford invites investors to
listen to the call live via the Company's website, www.weatherford.com in the
Investor Relations section. A recording of the conference call and transcript
of the call will be available in that section of the website shortly after the
call ends.
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. These forward-looking statements
include, among other things, the Company's non-GAAP earnings per share and the
size, timing and benefits of the reduction in workforce, and are also generally
identified by the words "believe," "project," "expect," "anticipate,"
"estimate," "budget," "intend," "strategy," "plan," "guidance," "may,"
"should," "could," "will," "would," "will be," "will continue," "will likely
result," and similar expressions, although not all forward-looking statements
contain these identifying words. Such statements are based upon the current
beliefs of Weatherford's management, and are subject to significant risks,
assumptions and uncertainties. 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. Readers are also cautioned that forward- looking statements are only
predictions and may differ materially from actual future events or results due
to the Company's ability to implement workforce reductions in various
geographies; possible changes in the size and components of the expected costs
and charges associated with the workforce reduction; and risks associated with
the Company's ability to achieve the benefits of the planned workforce
reduction. Forward- looking statements also are affected by the risk factors
described in the company's Annual Report on Form 10-K for the year ended
December 31, 2013, and those set forth from time-to-time in other filings with
the Securities and Exchange Commission ("SEC"). 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)
(Stated in Millions, Except Per Share Amounts)
Three Months Ended Year Ended
12/31/2013 12/31/2012 12/31/2013 12/31/2012
---------- ---------- ---------- ----------
Net Revenues:
North America $1,572 $1,682 $6,390 $6,824
Middle East/
North Africa/
Asia 821 851 3,344 2,795
Europe/
SSA/
Russia 688 669 2,693 2,519
Latin America 657 856 2,836 3,077
3,738 4,058 15,263 15,215
----- ----- ------ ------
Operating Income
(Expense):
North America 216 226 822 1,107
Middle East/
North Africa/
Asia 50 58 230 171
Europe/
SSA/
Russia 47 59 298 315
Latin America 62 125 365 395
Research and
Development (63) (63) (266) (257)
Corporate
Expenses (58) (49) (200) (196)
Goodwill and
Equity
Investment
Impairment - - - (793)
U.S.
Government
Investigation
Loss - - (153) (100)
Other Items (304) (111) (573) (344)
(50) 245 523 298
Other Income
(Expense):
Interest
Expense, Net (128) (126) (516) (486)
Devaluation
of Venezuelan
Bolivar - - (100) -
Other, Net (16) (30) (77) (100)
Net Income (Loss)
Before Income
Taxes (194) 89 (170) (288)
Provision for
Income Taxes (70) (203) (144) (462)
Net Loss (264) (114) (314) (750)
Net Income
Attributable
to Noncontrolling
Interests (7) (8) (31) (28)
Net Loss
Attributable
to Weatherford $(271) $(122) $(345) $(778)
===== ===== ===== =====
Income (Loss)
Per Share
Attributable
to Weatherford:
Basic $(0.35) $(0.16) $(0.45) $(1.02)
Diluted $(0.35) $(0.16) $(0.45) $(1.02)
Weighted Average
Shares
Outstanding:
Basic 774 768 772 765
Diluted 774 768 772 765
Weatherford International Ltd.
Selected Statements of Operations Information
(Unaudited)
(Stated In Millions)
Three Months Ended
------------------
12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012
---------- --------- --------- --------- ----------
Net Revenues:
North America $1,572 $1,597 $1,529 $1,692 $1,682
Middle East/
North
Africa/ Asia 821 819 919 785 851
Europe/SSA/
Russia 688 691 681 633 669
Latin America 657 713 739 727 856
--- --- --- --- ---
$3,738 $3,820 $3,868 $3,837 $4,058
====== ====== ====== ====== ======
Three Months Ended
------------------
12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012
---------- --------- --------- --------- ----------
Operating
Income
(Expense):
North America $216 $215 $167 $224 $226
Middle East/
North
Africa/Asia 50 69 66 45 58
Europe/SSA/
Russia 47 103 83 65 59
Latin America 62 115 90 98 125
Research and
Development (63) (65) (71) (67) (63)
Corporate
Expenses (58) (45) (49) (48) (49)
U.S.
Government
Investigation
Loss - - (153) - -
Other Items (304) (153) (78) (38) (111)
---- ---- --- --- ----
$(50) $239 $55 $279 $245
==== ==== === ==== ====
Three Months Ended
------------------
12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012
---------- --------- --------- --------- ----------
Product Line
Revenues:
Formation
Evaluation
and Well
Construction
(1) $2,307 $2,330 $2,361 $2,273 $2,348
Completion
and
Production (2) 1,431 1,490 1,507 1,564 1,710
$3,738 $3,820 $3,868 $3,837 $4,058
====== ====== ====== ====== ======
Three Months Ended
------------------
12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012
---------- --------- --------- --------- ----------
Depreciation
and
Amortization:
North America $106 $108 $102 $108 $108
Middle East/
North
Africa/Asia 104 101 98 93 94
Europe/SSA/
Russia 78 69 68 71 71
Latin America 69 71 68 68 63
Research and
Development
and
Corporate 6 3 5 6 7
--- --- --- --- ---
$363 $352 $341 $346 $343
==== ==== ==== ==== ====
1) Formation Evaluation and Well Construction includes Controlled-Pressure
Drilling and Testing, Drilling Services, Tubular Running services,
Drilling Tools, Integrated Drilling, Wireline Services, Re-entry and
Fishing, Cementing, Liner Systems, Integrated Laboratory Services and
Surface Logging.
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 U.S. 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 of
prior periods. The non-GAAP amounts shown below should not be considered
as substitutes for operating income, provision for income taxes, net income
or other data prepared and reported in accordance with GAAP, but should be
viewed in addition to the Company's reported results prepared in accordance
with GAAP.
Weatherford International Ltd.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(Stated In Millions, Except Per Share Amounts)
Three Months Ended
------------------
12/31/2013 9/30/2013 12/31/2012
---------- --------- ----------
Operating Income:
GAAP Operating
Income $(50) $239 $245
Goodwill and
Equity
Investment
Impairment - - -
Legacy
Contracts (a) 168 107 30
U.S. Government
Investigation
Loss - - -
Accounts
Receivable
Reserves and
Write-offs 98 - -
Severance 30 20 5
Tax Remediation
and
Restatement
Expenses 2 8 50
Investigation
Related
Expenses 5 8 10
Other
Adjustments 1 10 16
Non-GAAP
Operating Income $254 $392 $356
==== ==== ====
Income Before Income
Taxes:
GAAP Income
(Loss) Before
Income Taxes $(194) $80 $89
Operating
Income
Adjustments 304 153 111
Devaluation of
Venezuelan
Bolivar - - -
Other
Adjustments - - -
Non-GAAP
Income Before
Income Taxes $110 $233 $200
==== ==== ====
Provision for
Income Taxes:
GAAP Provision
for Income Taxes $(70) $(49) $(203)
Non-GAAP
Provision for
Income Taxes (50) (47) (184)
Net Income
Attributable
to Weatherford:
GAAP Net Income
(Loss) $(271) $22 $(122)
Goodwill and
Equity
Investment
Impairment - - -
Legacy
Contracts (a) 171 113 64
U.S. Government
Investigation
Loss - - -
Devaluation of
Venezuelan
Bolivar 33 - -
Accounts
Receivable
Reserves and
Write-offs 96 - -
Severance 25 17 4
Tax Remediation
and Restatement
Expenses (2) 7 43
Investigation
Related
Expenses 2 10 7
Other Adjustments (1) 8 12
Total Charges,
net of tax 324 155 130
Non-GAAP Net Income $53 $177 $8
=== ==== ===
Diluted
Earnings Per Share
Attributable to
Weatherford:
GAAP Diluted
Earnings
(Loss) per Share $(0.35) $0.03 $(0.16)
Total Charges,
net of tax 0.42 0.20 0.17
Non-GAAP
Diluted Earnings
per Share $0.07 $0.23 $0.01
===== ===== =====
GAAP Effective
Tax Rate (b) (36)% 61% 228%
Annual
Effective Tax
Rate (c) 45% 20% 92%
Year Ended
----------
12/31/2013 12/31/2012
---------- ----------
Operating Income:
GAAP Operating
Income $523 $298
Goodwill and
Equity
Investment
Impairment - 793
Legacy
Contracts (a) 299 137
U.S. Government
Investigation
Loss 153 100
Accounts
Receivable
Reserves and
Write-offs 98 -
Severance 94 45
Tax Remediation
and
Restatement
Expenses 37 103
Investigation
Related
Expenses 30 13
Other
Adjustments 15 46
Non-GAAP
Operating
Income $1,249 $1,535
====== ======
Income Before
Income Taxes:
GAAP Income
(Loss) Before
Income Taxes $(170) $(288)
Operating
Income
Adjustments 726 1,237
Devaluation of
Venezuelan
Bolivar 100 -
Other
Adjustments - (3)
Non-GAAP
Income Before
Income Taxes $656 $946
==== ====
Provision for
Income Taxes:
GAAP Provision
for Income
Taxes $(144) $(462)
Non-GAAP
Provision for
Income Taxes (162) (471)
Net Income
Attributable to
Weatherford:
GAAP Net Income
(Loss) $(345) $(778)
Goodwill and
Equity
Investment
Impairment - 792
Legacy
Contracts (a) 323 171
U.S. Government
Investigation
Loss 153 99
Devaluation of
Venezuelan
Bolivar 94 -
Accounts
Receivable
Reserves and
Write-offs 96 -
Severance 73 39
Tax Remediation
and
Restatement
Expenses 28 87
Investigation
Related
Expenses 23 9
Other
Adjustments 18 28
Total Charges,
net of tax 808 1,225
Non-GAAP Net Income $463 $447
==== ====
Diluted
Earnings Per Share
Attributable to
Weatherford:
GAAP Diluted
Earnings
(Loss) per Share $(0.45) $(1.02)
Total Charges,
net of tax 1.05 1.60
Non-GAAP
Diluted
Earnings per Share $0.60 $0.58
===== =====
GAAP Effective
Tax Rate (b) (85)% (160)%
Annual
Effective Tax
Rate (c) 25% 50%
Note (a): The revenues associated with the legacy lump sum contracts in\
Iraq were $52 million, $80 million and $178 million for the three
months ended 12/31/2013, 9/30/2013 and 12/31/2012 and $512
million and $360 million for the years ended 12/31/2013 and 2012,
respectively.
Note (b): GAAP Effective Tax Rate is GAAP provision for income taxes
divided by GAAP income before income taxes.
Note (c): Annual Effective Tax Rate is the Non-GAAP provision for income
taxes divided by Non GAAP income before income taxes.
Weatherford International Ltd.
Selected Balance Sheet Data
(Unaudited)
(Stated In Millions)
12/31/2013 9/30/2013 6/30/2013
---------- --------- ---------
Assets:
Cash and Cash
Equivalents $435 $316 $295
Accounts
Receivable, Net 3,594 4,004 3,837
Inventories, Net 3,371 3,580 3,637
Property, Plant and
Equipment, Net 8,368 8,397 8,333
Goodwill and
Intangibles, Net 4,335 4,421 4,402
Equity Investments 296 686 671
Liabilities:
Accounts Payable 2,091 2,117 2,144
Short-term
Borrowings and
Current Portion of
Long-term Debt 1,666 2,230 2,148
Long-term Debt 7,061 7,065 7,087
3/31/2013 12/31/2012
--------- ----------
Assets:
Cash and Cash
Equivalents $286 $300
Accounts
Receivable, Net 3,850 3,885
Inventories, Net 3,744 3,675
Property, Plant and
Equipment, Net 8,299 8,299
Goodwill and
Intangibles, Net 4,485 4,637
Equity Investments 660 646
Liabilities:
Accounts Payable 2,191 2,108
Short-term
Borrowings and
Current Portion of
Long-term Debt 1,896 1,585
Long-term Debt 7,032 7,049
Weatherford International Ltd.
Net Debt
(Unaudited)
(Stated In Millions)
Change in Net Debt for
the Three Months Ended
12/31/2013:
Net Debt at 9/30/2013 $(8,979)
Operating Income (50)
Depreciation and
Amortization 363
Capital Expenditures (364)
Decrease in Working
Capital 401
Income Taxes Paid (106)
Interest Paid (83)
Acquisitions and
Divestitures of Assets
and Businesses, Net 413
Net Change in Billing
in Excess/Costs in
Excess 11
Other 102
Net Debt at 12/31/2013 $(8,292)
=======
Change in Net Debt for
the Year Ended
12/31/2013:
Net Debt at 12/31/2012 $(8,334)
Operating Income 523
Depreciation and
Amortization 1,402
Capital Expenditures (1,575)
Decrease in Working
Capital 186
Income Taxes Paid (442)
Interest Paid (525)
Acquisitions and
Divestitures of Assets
and Businesses, Net 480
Net Change in Billing
in Excess/Costs in
Excess (179)
Other 172
---
Net Debt at 12/31/2013 $(8,292)
=======
Components of Net Debt 12/31/2013 9/30/2013 12/31/2012
---------- --------- ----------
Cash $435 $316 $300
Short-term Borrowings
and Current Portion of
Long-term Debt (1,666) (2,230) (1,585)
Long-term Debt (7,061) (7,065) (7,049)
------ ------ ------
Net Debt $(8,292) $(8,979) $(8,334)
======= ======= =======
"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.
We report our financial results in accordance with U.S. 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 of
prior periods. The non-GAAP amounts shown below should not be considered
as substitutes for cash flow information prepared and reported in
accordance with GAAP, but should be viewed in addition to the Company's
reported cash flow statements prepared in accordance with GAAP.
Weatherford International Ltd.
Selected Cash Flow Data
(Unaudited)
(Stated In Millions)
Three Months Ended
------------------
12/31/2013 9/30/2013 12/31/2012
---------- --------- ----------
Net Cash
Provided by
Operating
Activities $662 $326 $705
Less:
Capital
Expenditures for
Property,
Plant and
equipment (364) (365) (507)
Free Cash Flow $298 $(39) $198
==== ==== ====
Year Ended
----------
12/31/2013 12/31/2012
---------- ----------
Net Cash
Provided by
Operating
Activities $1,229 $1,221
Less:
Capital
Expenditures for
Property,
Plant and
equipment (1,575) (2,177)
Free Cash Flow $(346) $(956)
===== =====
Free cash flow is defined as net cash provided by or used in operating
activities less capital expenditures. Free cash flow is an important
indicator of how much cash is generated or used by our normal business
operations, including capital expenditures. Management uses free cash flow
as a measure of progress on its capital efficiency and cash flow
initiatives.
SOURCE Weatherford International Ltd.
Further inquiry note:
Contacts: Krishna Shivram, Executive Vice President and 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