Due to significant drilling activity declines in the US and certain international markets, including Venezuela, Kazakhstan and the UK sector of the North Sea, Weatherford's fourth quarter financial performance declined from the prior year fourth quarter levels. Fourth quarter activity levels versus the prior 2001 period fell approximately 15 percent in the US, 40 percent in Venezuela and more than 10 percent in the UK. Over the same time frame, Weatherford's revenues declined 6 percent. Profit margins also declined due to higher spending for research and development.
For the full year 2002, revenues were $2.3 billion and net income excluding the non-recurring charge was $150.2 million ($1.20 per diluted share). In 2001, full year revenues were $2.3 billion and net income was $214.7 million ($1.76 per diluted share). Net income for the 2001 year excluding goodwill amortization net of taxes would have been $251.5 million ($2.04 per diluted share).
Drilling & Intervention Services
Revenues in the fourth quarter of 2002 were $327.3 million, 8 percent below the prior year's fourth quarter and 2 percent higher than the preceding quarter. EBITDA (operating income adding back depreciation and amortization and non-recurring charges) of $92.7 million was 22 percent below the comparable quarter of 2001 and 7 percent below the preceding quarter. Sequentially, Drilling & Intervention Services' fourth quarter performance reflected the continuing sluggish drilling environment in the United States, the demobilization of the Tengiz project in Kazakhstan, slower activity in the UK sector of the North Sea, and a strike-led decline in Venezuelan activity.
Completion Systems
Fourth quarter 2002 revenues of $81.1 million were 21 percent lower than the same quarter last year and 8 percent lower sequentially. EBITDA of $15.1 million was 34 percent below the prior year's fourth quarter and 17 percent below the preceding quarter. Sequentially, Completion Systems' performance was affected by geographic trends similar to those for Drilling & Intervention Services.
Artificial Lift Systems
Revenues in the fourth quarter of 2002 of $173.5 million were 6 percent higher than the fourth quarter of 2001 and 2 percent below the preceding quarter. EBITDA of $32.8 million was higher than the prior year and 9 percent above the preceding quarter. In spite of the negative effect of the Venezuelan volume decline, record levels of production optimization sales fueled margin growth for this division.
Research & Development
The Company's research and development (R&D) expenses were at a record level of $24.4 million in the fourth quarter of 2002 due in part to one-time costs for prototype development and testing. R&D represents a critical investment in new technologies. These technologies experienced a number of milestones in the fourth quarter of 2002 including the installation of the 150th Expandable Sand Screen (ESS(TM)) in China, the first installation of a permanent fiber optic seismic array in a well in France and the continuing successful commercialization of underbalanced drilling and drilling with casing (DwC) systems.
Weatherford 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 approximately 15,000 people worldwide.
Contact: Don Galletly (713) 693-4148
Lisa Rodriguez (713) 693-4746
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 concerning, among other things,
Weatherford's prospects for its operations and the successful integration of the
plan of restructuring, all of which are subject to certain risks, uncertainties
and assumptions. These risks and uncertainties, which are more fully described
in Weatherford International Ltd.'s and Weatherford International, Inc.'s
reports and registration statements filed with the SEC, include the impact of
oil and natural gas prices and worldwide economic conditions on drilling
activity, the demand for and pricing of Weatherford's products and services,
domestic and international economic and regulatory conditions and changes in tax
and other laws affecting our business. Should one or more of these risks or
uncertainties materialize, or should the assumptions prove incorrect, actual
results may vary in material aspects from those currently anticipated.
Weatherford International Ltd.
Consolidated Condensed Statements of Operations
(In 000's, Except Per Share Amounts)
Three Months Twelve Months
Ended December 31, Ended December 31,
2002 2001 2002 2001
Net Revenues:
Drilling and Intervention
Services $327,273 $353,943 $1,269,883 $1,340,140
Completion Systems 81,113 102,878 366,564 350,685
Artificial Lift Systems 173,499 164,115 692,483 610,951
Compression Services --- --- --- 26,939
581,885 620,936 2,328,930 2,328,715
Operating Income (Loss):
Drilling and Intervention
Services 53,245 82,425 247,616 344,413
Completion Systems 5,635 14,695 49,007 48,207
Artificial Lift Systems 26,857 24,923 100,637 86,283
Compression Services --- --- --- (511)
Research and Development (24,439) (15,638) (79,586) (50,777)
Equity in Earnings 5,663 6,820 24,303 21,528
Corporate Expenses (10,140) (10,019) (44,097) (39,669)
Non-recurring Charge --- --- (232,493) ---
56,821 103,206 65,387 409,474
Other Income (Expense):
Other, Net 7,991 368 9,377 (1,016)
Currency Gain/(Loss) 1,712 753 (2,565) 151
Interest Expense, Net (21,481) (19,482) (82,882) (71,389)
Income (Loss) Before Income
Taxes 45,043 84,845 (10,683) 337,220
Provision for Income Taxes (13,502) (30,321) (71,629) (122,569)
Benefit for Income Taxes,
Related to the Non-recurring
Charge --- --- 76,282 ---
Net Income (Loss) $31,541 $54,524 $(6,030) $214,651
Earnings (Loss) Per Share:
Basic $0.26 $0.47 $(0.05) $1.88
Diluted (A) $0.25 $0.44 $(0.05) $1.76
Weighted Average Shares
Outstanding:
Basic 120,843 116,793 120,058 114,018
Diluted 125,822 137,540 120,058 133,255
(A) Diluted earnings per share for the three and twelve months ended
December 31, 2001 excluding goodwill amortization, net of taxes, was
$0.51 and $2.04, respectively.
Weatherford International Ltd.
Supplemental Information
(In 000's)
Three Months Twelve Months
Ended December 31, Ended December 31,
2002 2001 2002 2001
Geographic Revenues:
Eastern Hemisphere $254,912 $255,758 $1,029,088 $797,236
United States 188,252 231,575 774,345 949,342
Canada 84,093 76,345 320,851 333,417
Latin America 54,628 57,258 204,646 248,720
$581,885 $620,936 $2,328,930 $2,328,715
Depreciation and Amortization:
Drilling and Intervention
Services $39,448 $37,022 $153,371 $136,760
Completion Systems 9,434 8,112 32,290 29,845
Artificial Lift Systems 5,971 7,738 23,057 28,646
Compression Services --- --- --- 4,184
Research and Development 863 615 3,276 2,102
Other 884 1,797 2,924 6,592
$56,600 $55,284 $214,918 $208,129
Research and Development:
Drilling and Intervention
Services $7,578 $7,136 $26,590 $24,321
Completion Systems 14,401 7,376 44,984 22,327
Artificial Lift Systems 2,460 1,126 8,012 4,043
Compression Services --- --- --- 86
$24,439 $15,638 $79,586 $50,777
SOURCE Weatherford International Ltd.
CONTACT: Don Galletly, +1-713-693-4148, or Lisa Rodriguez, +1-713-693-4746, both of Weatherford International Ltd.