Weatherford Announces Fourth-Quarter and Full-Year 2020 Results

17 Feb 2021
- Revenues of $842 million in the fourth quarter increased 4% sequentially, from 15% growth in North America and 2% internationally
- Fourth-quarter operating loss of $107 million and adjusted EBITDA [1][2] of $98 million
- Cash provided by operating activities of $22 million in the fourth quarter and unlevered free cash flow [1] of $95 million
- Full-year revenues of $3.7 billion declined 29% year-on-year, from declines of 22% internationally and 45% in North America
- Full-year operating loss of $1.5 billion and adjusted EBITDA [1][2] of $459 million
- Full-year cash provided by operating activities of $210 million and free cash flow [1] of $78 million
- Total cash remained essentially unchanged from the prior quarter, ending at $1.3 billion [3]

HOUSTON, Feb. 17, 2021 /PRNewswire/ -- Weatherford International plc (OTC Pink: WFTLF) ("Weatherford" or the "Company") announced today its results for the fourth quarter and full-year 2020.

Revenues for the fourth quarter of 2020 were $842 million, compared to revenue of $985 million and $261 million in the Predecessor and Successor periods of the fourth quarter of 2019, respectively. Reported operating loss was $107 million in the fourth quarter of 2020, compared to an operating loss of $316 million and operating income of $1 million in the Predecessor and Successor periods of the fourth quarter of 2019, respectively. The Company's fourth-quarter 2020 net loss was $200 million, compared to net income of $5.3 billion and a net loss of $26 million in the Predecessor and Successor periods of the fourth quarter of 2019, respectively. Fourth-quarter 2020 cash flows provided by operations were $22 million, compared to cash flows used in operations of $68 million and cash flows provided by operations of $61 million in the Predecessor and Successor periods of the fourth quarter of 2019, respectively. Capital expenditures were $54 million in the fourth quarter of 2020, compared to $73 million and $20 million in the Predecessor and Successor periods of the fourth quarter of 2019, respectively.

Revenues for full-year 2020 were $3.7 billion, compared to revenue of $5.0 billion and $261 million in the Predecessor and Successor periods in 2019, respectively. Reported full-year operating loss was $1.5 billion in 2020, compared to a $1.2 billion loss and income of $1 million in the Predecessor and Successor periods in 2019, respectively. The Company's full-year 2020 net loss was $1.9 billion, compared to net income of $3.7 billion and a net loss of $26 million in the Predecessor and Successor periods in 2019, respectively. Full-year 2020 cash flows provided by operations were $210 million, compared to cash flows used in operations of $747 million and provided by operations of $61 million in the Predecessor and Successor periods in 2019, respectively. Capital expenditures for full-year 2020 were $154 million, compared to $250 million and $20 million in the Predecessor and Successor periods in 2019, respectively.

On a non-GAAP basis:

  • Fourth-quarter 2020
    • Adjusted EBITDA [1][2] of $98 million declined 6% sequentially and 37% versus the combined fourth quarter of 2019, reflecting year-on-year decrementals of 14% [4]. Excluding the one-time gain on sale of operational assets from the third quarter of 2020, adjusted EBITDA increased by 7% sequentially
    • Unlevered free cash flow [1] of $95 million improved $167 million versus the combined fourth quarter of 2019
  • Full-year 2020
    • Adjusted EBITDA [1][2] of $459 million decreased 22% versus the combined full-year 2019, reflecting year-on-year decrementals of 9% [4]; associated margins improved by 112 basis points year-on-year to 12%
    • Free cash flow [1] of $78 million improved $950 million from the combined full-year 2019

Girish Saligram, President and Chief Executive Officer, commented, "The past year was extremely challenging for our industry, and I'm pleased with the Company's performance in a tough environment. Our focus on leveraging our portfolio, expanding margins and enhancing liquidity continued to build through the fourth quarter, resulting in strong operational performance. Fourth-quarter 2020 revenues increased by 4% sequentially, comprised of growth of 15% in North America and 2% internationally. We achieved another quarter of double-digit adjusted EBITDA margins, and full-year 2020 adjusted EBITDA decrementals were limited to 9% year-on-year. Our results are a testament to our employees' commitment to performance and I am extremely grateful for their resilience, creativity and dedication to our customers and the Company.

"I have outlined our multi-year objective of delivering sustainable profitability and free cash flow, and in 2020 we built a strong foundation to enable the achievement of this goal. We leveraged our broad product and service portfolio, driving full-year revenue growth in strategic international markets, including a number of countries in the Middle East, despite significant reductions in activity and customer spending. We acted decisively, implementing actions that exceeded our annualized cost savings targets of over $800 million. We generated $78 million of positive free cash flow in 2020, an improvement of $950 million year-on-year, through improved operating performance, disciplined capital allocation and expenditures, and reduced working capital. In conjunction with the refinancing transactions, these actions strengthened the Company's liquidity position, with Weatherford ending the year with $1.3 billion of total cash, which provides flexibility to operate through this environment.

"While commodity prices and industry activity have generally improved from earlier this year and we are optimistic that the market is in the early stages of a broader recovery, particularly as we look ahead to the second half of 2021, there is continued uncertainty around the timing and magnitude of a recovery, primarily due to the COVID-19 pandemic and its impact on economic activity.

"To continue our journey towards achieving sustainable profitability and positive free cash flow, we have built our 2021 cost plan assuming activity levels remain flat versus 2020 exit levels. We have also identified several focus areas to continue driving improvements. To further our margin expansion, we will continue to improve our profitability in North America, simplify our organization, and we are implementing initiatives to improve the variable cost profile of our operations. To drive our cash flow performance, we will capitalize on our margin improvements, remain disciplined when evaluating and allocating capital expenditures, and we will implement new processes to catalyze further working capital efficiencies. The achievement of these focus areas is not predicated on a recovery in market activity and we look forward to sharing updates on our progress throughout the year."

Note: Upon completing its financial restructuring in late 2019, the Company adopted fresh-start accounting resulting in Weatherford becoming a new entity for accounting and financial reporting purposes. As required by GAAP, results up to and including December 13, 2019 are presented separately as the predecessor period (the "Predecessor" period) and results from December 14, 2019 and onwards are presented as the successor period (the "Successor" period). The results from these Predecessor and Successor periods are not comparable. Nevertheless, for discussion purposes herein, the Company combined the results of the Predecessor and Successor periods as we believe the 18 days of the Successor period in 2019 is not a significant period of time impacting the 2019 combined results and that this provides the most meaningful basis to analyze our results.

Notes:

[1] Adjusted EBITDA excludes, among other items, impairments of long-lived assets and goodwill as well as write-offs of property plant and equipment, right-of-use assets, and inventory. Free cash flow is calculated as cash flows provided by (used in) operating activities, less capital expenditures plus proceeds from the disposition of assets. Unlevered free cash flow is calculated as free cash flow plus cash paid for interest. Adjusted EBITDA, free cash flow and unlevered free cash flow are non-GAAP measures. Each measure is defined and reconciled to the most directly comparable GAAP measure in the tables below.

[2] In the first quarter of 2020 the Company began reporting adjusted EBITDA excluding stock-based compensation expense. Additional detail for the current and historical periods is provided in the tables below.

[3] Includes cash and cash equivalents and restricted cash.

[4] Decrementals calculated as the change in adjusted EBITDA between two periods divided by the corresponding change in revenue.

Leveraging Our Portfolio 

  • Weatherford was awarded a contract from a major operator in Asia to deploy the TR1PTM single-trip completion system for two deepwater wells. TR1P is the industry's first digitally-enabled single-trip deepwater completion system. Our equipment will be used exclusively to install the upper and lower sand face completion. The award is recognition of the value that TR1P is delivering to customers, including through reductions in rig time, personnel on board, improved logistics, and eliminating the need for intervention services.
  • Weatherford was awarded two five-year contract extensions from a National Oil Company in the Middle East for Liner Hangers and Tubular Running Services, including the Company's VeroTM automated connection integrity solution. The extensions enable Weatherford to continue to deliver on its consistent service quality and safety metrics, having gone nearly 20 years without a lost-time incident resulting from its liner hanger operations in this country, and to continue deploying technology to improve efficiencies.
  • A major integrated energy operator awarded the Company a multi-year contract to provide annular Safety Valve solutions in the Caspian Sea. Apart from delivering unmatched performance, our offering utilizes unique technology that enables installations to be completed faster and safer than traditional operations.
  • In the Middle East, an operator utilized multiple applications of Weatherford's Managed Pressure Drilling (MPD) solution to drill the longest-ever offshore well section in the region (6,700 ft). The operation used pressurized mud cap drilling as well as constant bottom hole pressure applications to drill the section, install and cement a liner. The use of these managed pressure methods enabled the well to be delivered days ahead of schedule, saving the customer millions of dollars in rig time.
  • Weatherford provided an integrated solution to an IOC in Argentina in the Vaca Muerta formation to complete a well in the region's fastest recorded time. The Company combined its Revolution® rotary steerable system, MPD, and Vero solutions, enabling the customer to drill the well's production section in under seven days or approximately 60% off the original plan. Moreover, the Vero solution delivered the customer's fastest-ever casing running in this field.
  • The Company recorded several production-related achievements in the United States. In the Bakken, Weatherford deployed its Rotaflex® 1160 long-stroke pumping unit for the first time, bridging the gap between ESP and traditional forms of lift, thus eliminating the need for the commonly used secondary ESP and saving the customer significant OPEX costs. The Company also received an award to install its ForeSite® Flow multiphase flowmeter package on an operator's wells in the Permian Basin. Additionally, Weatherford received approval from regulatory agencies in North Dakota and Texas to use ForeSite Flow as an allocation measurement tool, replacing the cost and footprint of a traditional test separator package and allowing for continuous flow measurement on each well.
  • Weatherford received multiple safety awards during the quarter in the Middle East, Latin America, and Russia, including two CEO HSE awards from National Oil Companies in the Middle East in recognition of the Company's outstanding HSE performance.

Expanding Our Margins

Full-year 2020 adjusted EBITDA margins improved by 112 basis points year-on-year, despite a 29% reduction in revenue. The corresponding EBITDA decrementals were limited to 9%, primarily due to the Company's meaningful cost reduction actions.

Fourth-quarter 2020 adjusted EBITDA margins declined 129 basis points sequentially, largely due to the non-repeat of a $12 million gain on the sale of operational assets during the third quarter. Excluding the impact of that transaction, adjusted EBITDA margins increased 20 basis points sequentially.

Enhancing Our Liquidity

The Company maintained its disciplined focus on cash flow during the quarter and ended the year with ample liquidity. Unlevered free cash flow of $95 million in the fourth quarter of 2020 improved by over $165 million versus the prior year, despite a 37% reduction in adjusted EBITDA. Full-year 2020 free cash flow of $78 million and unlevered free cash flow of $310 million, improved by over $900 million year-on-year due to the Company's efforts to control costs and reduce net working capital and capital expenditures, as well as the non-repeat of cash outflows in 2019 associated with the Company's financial restructuring. Total cash of approximately $1.3 billion as of December 31, 2020 was essentially unchanged from the prior quarter and liquidity improved by approximately $270 million year-on-year as the net benefit from the refinancing transactions was bolstered by positive free cash flow.

Results by Operating Segment

Western Hemisphere

   

Successor

   

Predecessor

 

Q4 2019

       
           

Period From

   

Period From

 

Non-GAAP

       
   

Quarter Ended

 

12/14/19 to

   

10/01/19 to

 

Combined

 

Variance

($ in Millions)

 

12/31/20

 

9/30/20

 

12/31/19

   

12/13/19

 

Results

 

Seq.

 

YoY

Revenues:

                             

North America

 

$

201

   

$

175

   

$

68

     

$

289

   

$

357

   

15

%

 

(44)

%

Latin America

 

171

   

141

   

53

     

211

   

264

   

21

%

 

(35)

%

Total Revenues

 

$

372

   

$

316

   

$

121

     

$

500

   

$

621

   

18

%

 

(40)

%

                               

Adjusted Segment EBITDA

 

$

41

   

29

   

$

10

     

$

54

   

$

64

   

41

%

 

(36)

%

% Margin

 

11

%

 

9

%

 

8

%

   

11

%

 

10

%

 

180

 bps

 

70

 bps

                                             

Fourth-quarter 2020 Western Hemisphere revenues of $372 million increased 18% sequentially and decreased 40% year-on-year.

In North America, fourth-quarter 2020 revenues of $201 million increased by 15% sequentially primarily due to increased Completion and Production sales in the United States and Canada and seasonal activity increases in Canada.

Fourth-quarter 2020 revenues of $171 million in Latin America increased 21% sequentially, driven by increased activity and year-end product sales in Argentina and Colombia, partially offset by lower activity in Mexico largely due to weather-related project delays.

Fourth-quarter 2020 adjusted segment EBITDA of $41 million increased $12 million sequentially and associated margins of 11% improved by 180 basis points versus the third quarter of 2020. The growth in adjusted segment EBITDA was primarily driven by increased activity and product sales in Latin America.

Eastern Hemisphere

   

Successor

   

Predecessor

 

Q4 2019

       
           

Period From

   

Period From

 

Non-GAAP

       
   

Quarter Ended

 

12/14/19 to

   

10/01/19 to

 

Combined

 

Variance

($ in Millions)

 

12/31/20

 

9/30/20

 

12/31/19

   

12/13/19

 

Results

 

Seq.

 

YoY

Revenues:

                             

Middle East, North Africa & Asia

 

$

289

   

$

319

   

$

88

     

$

298

   

$

386

   

(9)

%

 

(25)

%

Europe, SSA & Russia

 

181

   

172

   

52

     

187

   

239

   

5

%

 

(24)

%

Total Revenues

 

$

470

   

$

491

   

$

140

     

$

485

   

$

625

   

(4)

%

 

(25)

%

                               

Adjusted Segment EBITDA

 

$

87

   

104

   

$

30

     

$

84

   

$

114

   

(16)

%

 

(24)

%

% Margin

 

19

%

 

21

%

 

21

%

   

17

%

 

18

%

 

(270)

 bps

 

30

bps

                                             

Fourth-quarter 2020 Eastern Hemisphere revenues of $470 million declined 4% sequentially and 25% year-on-year.

In the Middle East, North Africa, and Asia, fourth-quarter 2020 revenues of $289 million declined 9% sequentially, primarily due to reduced drilling activity across the Middle East, the non-repeat of Completion and Production sales in Saudi Arabia from the third quarter of 2020 and projects reaching the end of their work scope in Asia.

Fourth-quarter 2020 revenues in Europe, Sub Saharan Africa and Russia of $181 million increased 5% sequentially, primarily due to increased Completion and Production sales in the North Sea and the Mediterranean, which was partially offset by seasonally lower drilling activity in Russia.

Fourth-quarter 2020 adjusted segment EBITDA of $87 million decreased $17 million sequentially, and associated margins of 19% declined 270 basis points versus the third quarter of 2020. The sequential decline in adjusted segment EBITDA was driven primarily by the non-repeat of a $12 million one-time gain on operational asset sales and, to a lesser extent, lower activity and product sales in the Middle East and Asia. Excluding the impact of the one-time gain on operational asset sales, fourth quarter 2020 adjusted segment EBITDA margins declined by 20 basis points.

Restructuring Charges

Weatherford recorded restructuring and other charges of $89 million during the quarter, primarily related to the Company's facility consolidations and headcount reductions.

About Weatherford 

Weatherford is a leading wellbore and production solutions company. Operating in more than 75 countries, the Company answers the challenges of the energy industry with its global talent network of approximately 17,200 team members and approximately 390 operating locations, including manufacturing, research and development, service, and training facilities. Visit https://www.weatherford.com/ for more information or connect on LinkedIn, Facebook, Twitter, Instagram, or YouTube.

Conference Call Details

Weatherford will host a conference call on Thursday, February 18, 2021, to discuss the results for the fourth quarter and full year ending December 31, 2020. The conference call will begin at 9:00 a.m. Eastern Time (8:00 a.m. Central Time).

Listeners are encouraged to download the accompanying presentation slides which will be available in the investor relations section of the Company's website.

Listeners can participate in the conference call via a live webcast at https://www.weatherford.com/en/investor-relations/investor-news-and-events/events/ or by dialing +1 877-328-5344 (within the U.S.) or +1 412-902-6762 (outside of the U.S.) and asking for the Weatherford conference call. Listeners should log in or dial in approximately 10 minutes prior to the start of the call.

A telephonic replay of the conference call will be available until March 4, 2021, at 5:00 p.m. Eastern Time. To access the replay, please dial +1 877-344-7529 (within the U.S.) or +1 412-317-0088 (outside of the U.S.) and reference conference number 10150677.

Contacts

For Investors:
Sebastian Pellizzer
Senior Director, Investor Relations
+1 713-836-7777
investor.relations@weatherford.com 

For Media:
Kelley Hughes
Director, Global Communications
+1 713-836-4193
kelley.hughes@weatherford.com 

Forward-Looking Statements

This news release contains forward-looking statements concerning, among other things, the Company's quarterly and full-year net debt, forecasts or expectations regarding business outlook, cost savings plans, and capital expenditures, and are also generally identified by the words "believe," "project," "expect," "anticipate," "estimate," "outlook," "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 cautioned that forward-looking statements are only predictions and may differ materially from actual future events or results, including the price and price volatility of oil and natural gas; the extent or duration of business interruptions, demand for oil and gas and depressed commodity prices associated with COVID-19 pandemic; general global economic repercussions related to COVID-19 pandemic; the macroeconomic outlook for the oil and gas industry; and operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees, remote work arrangements, performance of contracts and supply chain disruptions; our ability to generate cash flow from operations to fund our operations; and the realization of additional cost savings and operational efficiencies. Forward-looking statements are also affected by the risk factors described in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and those set forth from time-to-time in the Company's other filings with the Securities and Exchange Commission. 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 plc

Quarterly Condensed Consolidated Statements of Operations (Unaudited)

($ in Millions, Except Per Share Amounts)

                       
   

Successor

   

Predecessor

 

Q4 2019

           

Period From

   

Period From

 

Non-GAAP

   

Quarter Ended

 

12/14/19 to

   

10/1/19 to

 

Combined

   

12/31/20

 

09/30/20

 

12/31/19

   

12/13/19

 

Results

Revenues:

                     

Western Hemisphere

 

$

372

   

$

316

   

$

121

     

$

500

   

$

621

 

Eastern Hemisphere

 

470

   

491

   

140

     

485

   

625

 

 Total Revenues

 

842

   

807

   

261

     

985

   

1,246

 

Operating Income (Loss):

                     

Western Hemisphere

 

14

   

(2)

   

(4)

     

19

   

15

 

Eastern Hemisphere

 

(1)

   

5

   

10

     

30

   

40

 

  Segment Operating Income

 

13

   

3

   

6

     

49

   

55

 

Corporate

 

(31)

   

(28)

   

(5)

     

(23)

   

(28)

 

Impairments and Other Charges [1]

 

3

   

(16)

   

     

(254)

   

(254)

 

Restructuring Charges

 

(92)

   

(31)

   

     

(96)

   

(96)

 

Gain on Sale of Operational Assets

 

   

12

   

     

   

 

Gain on Sale of Business

 

   

   

     

8

   

8

 

  Total Operating Income (Loss)

 

(107)

   

(60)

   

1

     

(316)

   

(315)

 

Other Income (Expense):

                     

Interest Expense, Net

 

(70)

   

(79)

   

(12)

     

(21)

   

(33)

 

Reorganization Items

 

   

   

(4)

     

5,692

   

5,688

 

Other Expense, Net

 

3

   

(20)

   

     

(8)

   

(8)

 

  Net Income (Loss) Before Income Taxes

 

(174)

   

(159)

   

(15)

     

5,347

   

5,332

 

Income Tax Provision

 

(21)

   

(8)

   

(9)

     

(59)

   

(68)

 

  Net Income (Loss)

 

(195)

   

(167)

   

(24)

     

5,288

   

5,264

 

Net Income Attributable to Noncontrolling Interests

 

5

   

7

   

2

     

9

   

11

 

Net Income (Loss) Attributable to Weatherford

 

$

(200)

   

$

(174)

   

$

(26)

     

$

5,279

   

$

5,253

 
                       

Basic and Diluted Loss Per Share

 

$

(2.87)

   

$

(2.48)

   

$

(0.37)

     

$

5.26

   

n/a

 

Basic and Diluted Weighted Average Shares Outstanding

 

70

   

70

   

70

     

1,004

   

n/a

 
   

[1]

See Quarterly Selected Statements of Operations Information Table for details of the impairments and other charges by quarter.

     
     
     

Weatherford International plc

Full Year Condensed Consolidated Statements of Operations (Unaudited)

($ in Millions, Except Per Share Amounts)

                 
 

Successor

   

Predecessor

 

2019

 

Year

 

Period From

   

Period From

 

Non-GAAP

 

Ended

 

12/14/19 to

   

1/1/19 to

 

Combined

 

12/31/20

 

12/31/19

   

12/13/19

 

Results

Revenues:

               

Western Hemisphere

$

1,586

   

$

121

     

$

2,620

   

$

2,741

 

Eastern Hemisphere

2,099

   

140

     

2,334

   

2,474

 

 Total Revenues

3,685

   

261

     

4,954

   

5,215

 

Operating Income (Loss):

               

Western Hemisphere

18

   

(4)

     

54

   

50

 

Eastern Hemisphere

37

   

10

     

134

   

144

 

  Segment Operating Income

55

   

6

     

188

   

194

 

Corporate

(111)

   

(5)

     

(118)

   

(123)

 

Impairments and Other Charges [1]

(1,236)

   

     

(1,104)

   

(1,104)

 

Restructuring Charges

(206)

   

     

(189)

   

(189)

 

Prepetition Charges

   

     

(86)

   

(86)

 

Gain on Sale of Operational Assets

12

   

     

15

   

15

 

Gain on Sale of Business

   

     

112

   

112

 

  Total Operating Income (Loss)

(1,486)

   

1

     

(1,182)

   

(1,181)

 

Other Income (Expense):

               

Interest Expense, Net

(266)

   

(12)

     

(362)

   

(374)

 

Reorganization Items

(9)

   

(4)

     

5,389

   

5,385

 

Other Expense, Net

(53)

   

     

(26)

   

(26)

 

  Net Income (Loss) Before Income Taxes

(1,814)

   

(15)

     

3,819

   

3,804

 

Income Tax Provision

(85)

   

(9)

     

(135)

   

(144)

 

  Net Income (Loss)

(1,899)

   

(24)

     

3,684

   

3,660

 

Net Income Attributable to Noncontrolling Interests

22

   

2

     

23

   

25

 

Net Income (Loss) Attributable to Weatherford

$

(1,921)

   

$

(26)

     

$

3,661

   

$

3,635

 
                 

Basic and Diluted Loss Per Share

$

(27.44)

   

$

(0.37)

     

$

3.65

   

n/a

 

Basic and Diluted Weighted Average Shares Outstanding

70

   

70

     

1,004

   

n/a

 
   

[1]

See Full Year Selected Statements of Operations Information Table for details of the impairments and other charges by quarter.

 
 
 

Weatherford International plc

Selected Balance Sheet Data (Unaudited)

($ in Millions)

       
 

12/31/2020

 

12/31/2019

Assets:

     

Cash and Cash Equivalents

$

1,118

   

$

618

 

Restricted Cash

167

   

182

 

Accounts Receivable, Net

826

   

1,241

 

Inventories, Net

717

   

972

 
       

Property, Plant and Equipment, Net

1,236

   

2,122

 

Goodwill

   

239

 

Intangibles, Net

810

   

1,114

 
       

Liabilities:

     

Accounts Payable

325

   

585

 

Short-term Borrowings and Current Portion of Long-term Debt

13

   

13

 

Long-term Debt

2,601

   

2,151

 
       

Shareholders' Equity:

     

Total Shareholders' Equity

937

   

2,916

 
       

Components of Net Debt [1]:

     

Short-term Borrowings and Current Portion of Long-term Debt

13

   

13

 

Long-term Debt

2,601

   

2,151

 

Less: Cash and Cash Equivalents

1,118

   

618

 

Less: Restricted Cash

167

   

182

 

Net Debt [1]

$

1,329

   

$

1,364

 
   

[1]

Net debt is a non-GAAP measure calculated as total short- and long-term debt less cash and cash equivalents and restricted cash.

 
 
 

Weatherford International plc

Selected Cash Flows Information (Unaudited)

($ in Millions)

                     
 

Successor

   

Predecessor

 

2019

 

Successor

 

Year

 

Period From

   

Period From

 

Non-GAAP

 

Three Months

 

Ended

 

12/14/19 to

   

01/01/2019 to

 

Combined

 

Ended

 

12/31/2020

 

12/31/2019

   

12/13/2019

 

Results

 

12/31/2020

Cash Flows From Operating Activities:

                   

Net Income (Loss)

$

(1,899)

   

$

(24)

     

$

3,684

   

$

3,660

   

$

(195)

 

Adjustments to Reconcile Net Income (Loss) to Net Cash Provided By (Used In) Operating Activities:

                   

Depreciation and Amortization

503

   

34

     

447

   

481

   

116

 

Gain on Settlement of Liabilities Subject to Compromise

   

     

(4,297)

   

(4,297)

   

 

Reorganization Items

   

     

(1,161)

   

(1,161)

   

 

Impairments and Other Adjustments

1,318

   

     

1,013

   

1,013

   

75

 

Working Capital [a]

192

   

(25)

     

(422)

   

(447)

   

86

 

Other Operating Activities

96

   

76

     

(11)

   

65

   

(60)

 

  Net Cash Provided By (Used In) Operating Activities

210

   

61

     

(747)

   

(686)

   

22

 
                     

Cash Flows From Investing Activities:

                   

Capital Expenditures for Property, Plant and Equipment

(154)

   

(20)

     

(250)

   

(270)

   

(54)

 

Proceeds from Disposition of Assets

22

   

     

84

   

84

   

9

 

Proceeds from Disposition of Businesses and Investments

11

   

7

     

328

   

335

   

10

 

Other Investing Activities

46

   

(1)

     

(13)

   

(14)

   

25

 

  Net Cash Provided by (Used in) Investing Activities

(75)

   

(14)

     

149

   

135

   

(10)

 
                     

Cash Flows From Financing Activities:

                   

Borrowings of Long-term Debt

453

   

     

1,600

   

1,600

   

(4)

 

Repayments of Long-term Debt

(9)

   

(1)

     

(318)

   

(319)

   

(2)

 

Borrowings (Repayments) of Short-term Debt, Net

(27)

   

(1)

     

(347)

   

(348)

   

(5)

 

Debtor in Possession Financing Fees and Payments on Backstop Agreement

   

     

(137)

   

(137)

   

 

Other Financing Activities

(69)

   

     

(49)

   

(49)

   

(17)

 

  Net Cash Provided by (Used In) Financing Activities

$

348

   

$

(2)

     

$

749

   

$

747

   

$

(28)

 
   

[a]

Working capital is defined as the cash changes in accounts receivable plus inventory less accounts payable.

 
 
 

Weatherford International plc

Quarterly Selected Statements of Operations Information (Unaudited)

($ in Millions)

                     
 

Successor

   

Predecessor

 

Q4 2019

         

Period From

   

Period From

 

Non-GAAP

 

Quarter Ended

 

12/14/19 to

   

10/01/19 to

 

Combined

 

12/31/20

 

9/30/20

 

12/31/19

   

12/13/19

 

Results

Revenues

                   

Western Hemisphere

$

372

   

$

316

   

$

121

     

$

500

   

$

621

 

Eastern Hemisphere

470

   

491

   

140

     

485

   

625

 

Total Revenues

$

842

   

$

807

   

$

261

     

$

985

   

$

1,246

 
                     

Adjusted EBITDA[1]

                   

Western Hemisphere

$

41

   

$

29

   

$

10

     

$

54

   

$

64

 

Eastern Hemisphere

87

   

104

   

30

     

84

   

114

 

  Adjusted Segment EBITDA

128

   

133

   

40

     

138

   

178

 

Corporate

(30)

   

(29)

   

(5)

     

(18)

   

(23)

 

Total Adjusted EBITDA

$

98

   

$

104

   

$

35

     

$

120

   

$

155

 
                     

Operating Income (Loss)

                   

Western Hemisphere

$

14

   

$

(2)

   

$

(4)

     

19

   

$

15

 

Eastern Hemisphere

(1)

   

5

   

10

     

30

   

40

 

  Segment Operating Income

13

   

3

   

6

     

49

   

55

 

Corporate

(31)

   

(28)

   

(5)

     

(23)

   

(28)

 

Long-lived Asset Impairments

4

   

   

     

   

 

Other Charges

(1)

   

(16)

   

     

(254)

   

(254)

 

Restructuring Charges

(92)

   

(31)

   

     

(96)

   

(96)

 

Gain on Sale of Operational Assets

   

12

   

     

   

 

Gain on Sale of Business

   

   

     

8

   

8

 

Total Operating Income (Loss)

$

(107)

   

$

(60)

   

$

1

     

$

(316)

   

$

(315)

 
                     

Depreciation and Amortization

                   

Western Hemisphere

$

27

   

31

   

$

14

     

$

34

   

$

48

 

Eastern Hemisphere

88

   

87

   

20

     

54

   

74

 

Corporate

1

   

(1)

   

     

2

   

2

 

Total Depreciation and Amortization

$

116

   

117

   

$

34

     

$

90

   

$

124

 
   

[1]

In the first quarter of 2020 the Company began reporting adjusted EBITDA excluding the burden of share-based compensation and historical periods have been restated to reflect this methodology. We had an immaterial amount of share-based compensation during 2020 and $4 million and $24 million for the three and twelve months Predecessor Period ended December 31, 2019, respectively. A portion of share-based compensation related to a reorganization adjustment for the acceleration of share-based compensation is recorded in Other Charges above. Total share-based compensation for 2019 was $46 million. For certain of the periods presented, the Eastern Hemisphere Adjusted Segment EBITDA includes the Gain on Sale of Operational Assets.

 
 
 

Weatherford International plc

Full Year Selected Statements of Operations Information (Unaudited)

($ in Millions)

                 
 

Successor

   

Predecessor

 

2019

 

Year

 

Period From

   

Period From

 

Non-GAAP

 

Ended

 

12/14/19 to

   

01/01/19 to

 

Combined

 

12/31/20

 

12/31/19

   

12/13/19

 

Results

Revenues

               

Western Hemisphere

$

1,586

   

$

121

     

$

2,620

   

$

2,741

 

Eastern Hemisphere

2,099

   

140

     

2,334

   

2,474

 

  Total Revenues

$

3,685

   

$

261

     

$

4,954

   

$

5,215

 
                 

Adjusted EBITDA[1]

               

Western Hemisphere

$

152

   

$

10

     

$

229

   

$

239

 

Eastern Hemisphere

418

   

30

     

421

   

451

 

  Adjusted Segment EBITDA

570

   

40

     

650

   

690

 

Corporate

(111)

   

(5)

     

(94)

   

(99)

 

  Total Adjusted EBITDA

459

   

35

     

556

   

$

591

 
                 

Operating Income (Loss)

               

Western Hemisphere

$

18

   

$

(4)

     

$

54

   

$

50

 

Eastern Hemisphere

37

   

10

     

134

   

144

 

  Segment Operating Income

55

   

6

     

188

   

194

 

Corporate

(111)

   

(5)

     

(118)

   

(123)

 

Goodwill Impairment

(239)

   

     

(730)

   

(730)

 

Long-lived Asset Impairments

(814)

   

     

(20)

   

(20)

 

Restructuring Charges

(206)

   

     

(189)

   

(189)

 

Other Charges

(183)

   

     

(354)

   

(354)

 

Prepetition Charges

   

     

(86)

   

(86)

 

Gain on Sale of Operational Assets

12

   

     

15

   

15

 

Gain on Sale of Business

   

     

112

   

112

 

  Total Operating Income (Loss)

$

(1,486)

   

$

1

     

$

(1,182)

   

$

(1,181)

 
                 

Depreciation and Amortization

               

Western Hemisphere

$

134

   

$

14

     

$

171

   

$

185

 

Eastern Hemisphere

369

   

20

     

269

   

289

 

Corporate

   

     

7

   

7

 

  Total Depreciation and Amortization

$

503

   

$

34

     

$

447

   

$

481

 
   

[1]

In the first quarter of 2020 the Company began reporting adjusted EBITDA excluding the burden of share-based compensation and historical periods have been restated to reflect this methodology. We had an immaterial amount of share-based compensation during 2020 and $4 million and $24 million for the three and twelve months Predecessor Period ended December 31, 2019, respectively. A portion of share-based compensation related to a reorganization adjustment for the acceleration of share-based compensation is recorded in Other Charges above. Total share-based compensation for 2019 was $46 million. For certain of the periods presented, the Eastern Hemisphere Adjusted Segment EBITDA includes the Gain on Sale of Operational Assets.

 
 
 

Weatherford International plc

($ in Millions)

Quarterly Selected Statements of Operations Information (Unaudited) - Product Line Revenues

                     
 

Successor

   

Predecessor

 

Q4 2019

         

Period From

   

Period From

 

Non-GAAP

 

Quarter Ended

 

12/14/19 to

   

10/01/19 to

 

Combined

Product Line Revenues

12/31/20

 

9/30/20

 

12/31/19

   

12/13/19

 

Results

Product Line Revenue by Hemisphere:

                   

  Completion and Production

$

227

   

$

170

   

$

69

     

$

261

   

$

330

 

  Drilling, Evaluation and Intervention

145

   

146

   

52

     

239

   

291

 

Western Hemisphere

372

   

316

   

121

     

500

   

621

 
                     

  Completion and Production

237

   

241

   

67

     

205

   

272

 

  Drilling, Evaluation and Intervention

233

   

250

   

73

     

280

   

353

 

Eastern Hemisphere

470

   

491

   

140

     

485

   

625

 
                     

Total Completion and Production

464

   

411

   

136

     

466

   

602

 

Total Drilling, Evaluation and Intervention

378

   

396

   

125

     

519

   

644

 

Total Product Line Revenues

$

842

   

$

807

   

$

261

     

$

985

   

$

1,246

 
 
 
 

Full Year Selected Statements of Operations Information (Unaudited) - Product Line Revenues

                 
 

Successor

   

Predecessor

 

2019

 

Year

 

Period From

   

Period From

 

Non-GAAP

 

Ended

 

12/14/19 to

   

1/1/19 to

 

Combined

Product Line Revenues

12/31/20

 

12/31/19

   

12/13/19

 

Results

Product Line Revenue by Hemisphere:

               

  Completion and Production

$

859

   

$

69

     

$

1,357

   

$

1,426

 

  Drilling, Evaluation and Intervention

727

   

52

     

1,263

   

1,315

 

Western Hemisphere

1,586

   

121

     

2,620

   

2,741

 
                 

  Completion and Production

1,020

   

67

     

975

   

1,042

 

  Drilling, Evaluation and Intervention

1,079

   

73

     

1,359

   

1,432

 

Eastern Hemisphere

2,099

   

140

     

2,334

   

2,474

 
                 

Total Completion and Production

1,879

   

136

     

2,332

   

2,468

 

Total Drilling, Evaluation and Intervention

1,806

   

125

     

2,622

   

2,747

 

Total Product Line Revenues

$

3,685

   

$

261

     

$

4,954

   

$

5,215

 

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 and Item 10(e) of Regulation S-K) may provide users of this financial information additional meaningful comparisons between current results and results of prior periods and comparisons with peer companies. The non-GAAP amounts shown in the following tables 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 plc

Quarterly Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)

($ in Millions, Except Per Share Amounts)

                     
 

Successor

   

Predecessor

 

Q4 2019

         

Period From

   

Period From

 

Non-GAAP

 

Quarter Ended

 

12/14/19 to

   

10/1/19 to

 

Combined

 

12/31/20

 

9/30/20

 

12/31/19

   

12/13/19

 

Results

Operating Income (Loss):

                   

GAAP Operating Income (Loss)

$

(107)

   

$

(60)

   

$

1

     

$

(316)

   

$

(315)

 

Impairments and Other Charges

(3)

   

16

   

     

254

   

254

 

Restructuring Charges

92

   

31

   

     

96

   

96

 

Gain on Sale of Operational Assets

   

(12)

   

     

   

 

Gain on Sale of Business

   

   

     

(8)

   

(8)

 

  Operating Non-GAAP Adjustments

89

   

35

   

     

342

   

342

 

Non-GAAP Adjusted Operating Income (Loss)

$

(18)

   

$

(25)

   

$

1

     

$

26

   

$

27

 
                     

Income (Loss) Before Income Taxes:

                   

GAAP Income (Loss) Before Income Taxes

$

(174)

   

$

(159)

   

$

(15)

     

$

5,347

   

$

5,332

 

Operating Non-GAAP Adjustments

89

   

35

   

     

342

   

342

 

Reorganization Items

   

   

4

     

(5,692)

   

(5,688)

 

Non-GAAP Adjustments Before Taxes

89

   

35

   

4

     

(5,350)

   

(5,346)

 

Non-GAAP Loss Before Income Taxes

$

(85)

   

$

(124)

   

$

(11)

     

$

(3)

   

$

(14)

 
                     

Benefit (Provision) for Income Taxes:

                   

GAAP Provision for Income Taxes

$

(21)

   

$

(8)

   

$

(9)

     

$

(59)

   

$

(68)

 

Tax Effect on Non-GAAP Adjustments

(3)

   

(3)

   

     

24

   

24

 

Non-GAAP Benefit (Provision) for Income Taxes

$

(24)

   

$

(11)

   

$

(9)

     

$

(35)

   

$

(44)

 
                     

Net Income (Loss) Attributable to Weatherford:

                   

GAAP Net Income (Loss)

$

(200)

   

$

(174)

   

$

(26)

     

$

5,279

   

$

5,253

 

Non-GAAP Adjustments, net of tax

86

   

32

   

4

     

(5,326)

   

(5,322)

 

Non-GAAP Net Loss

$

(114)

   

$

(142)

   

$

(22)

     

$

(47)

   

$

(69)

 
                     

Diluted Loss Per Share Attributable to Weatherford:

                   

GAAP Diluted Loss per Share

$

(2.87)

   

$

(2.48)

   

$

(0.37)

     

$

5.26

   

n/a

 

Non-GAAP Adjustments, net of tax

1.24

   

0.45

   

0.06

     

(5.31)

   

n/a

 

Non-GAAP Diluted Loss per Share

$

(1.63)

   

$

(2.03)

   

$

(0.31)

     

$

(0.05)

   

n/a

 
 
 
 

Weatherford International plc

Full Year Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)

($ in Millions, Except Per Share Amounts)

                 
 

Successor

   

Predecessor

 

2019

 

Year

 

Period From

   

Period From

 

Non-GAAP

 

Ended

 

12/14/19 to

   

01/01/19 to

 

Combined

 

12/31/20

 

12/31/19

   

12/13/19

 

Results

Operating Income (Loss):

               

GAAP Operating Income (Loss)

$

(1,486)

   

$

1

     

$

(1,182)

   

$

(1,181)

 

Impairments and Other Charges

1,236

   

     

1,104

   

1,104

 

Restructuring Charges

206

   

     

189

   

189

 

Prepetition Charges

   

     

86

   

86

 

Gain on Sale of Operational Assets

(12)