HOUSTON, Oct 30, 2003 /PRNewswire-FirstCall via COMTEX/ -- Weatherford International Ltd. (NYSE: WFT) today reported 2003 third quarter revenues of $660.5 million and net income of $47.6 million, or $0.35 per diluted share, before charges related to the redemption of the Company's $402.5 million 5% convertible preferred debentures. After-tax charges of $13.6 million, or $0.10 per share, reduced the Company's net income for the quarter to $34.0 million, or $0.25 per diluted share. In the third quarter of 2002, revenues and net income were $584.9 million and $34.6 million ($0.28 per diluted share), respectively, excluding non-recurring items related to its write-down of an equity investment, severance costs and facility closures.
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In the first nine months of 2003, revenues were $1.9 billion and net income, excluding charges, was $120.3 million, or $0.92 per diluted share. After-tax charges for the period included $23.8 million, or $0.18 per diluted share related to debt redemption, severance and its equity investment's debt restructuring. In 2002, reported revenues for the first nine months were $1.7 billion and net income was $118.6 million, or $0.94 per diluted share, before a $156.2 million after-tax charge related to the write-down of an equity investment, severance costs and facility closures.
Third quarter revenues and operating income, before charges, increased 7 percent and 18 percent above the second quarter of 2003, respectively. The sequential revenue increase reflects improvements in nearly all geographic regions. International revenues had gains of 8 percent, well above the 2 percent increase in rig count. Europe/CIS and the Middle East regions experienced the most significant improvements with sequential increases of 13 percent and 18 percent, respectively. North American revenues increased 6 percent sequentially as the 13 percent seasonal revenue increase in Canada was augmented marginally by a 2 percent increase in U.S. revenues.
Drilling Services
Revenues of $383.4 million in the third quarter increased 6 percent compared to the second quarter of 2003. All regions, except Asia, had sequential revenue improvements. Latin America and Europe/CIS increased 20 percent and 10 percent, respectively. The fastest growing business segments were drilling techniques, followed by intervention services.
Operating income of $76.2 million was 16 percent higher sequentially over the second quarter of 2003. Incremental operating margins were a very strong 49%.
Production Systems
Third quarter revenues of $277.1 million were 8 percent higher on a sequential basis. Strong performances in Canada and the Middle East led this division's increase in revenues. From a business segment standpoint, artificial lift and production optimization showed the strongest sequential improvement.
A sequential operating profit decline of 4 percent reflected the negative impact of product mix and pricing pressure in U.S. markets, particularly in completion products. Any benefits related to the cost reduction initiatives were offset by incremental costs incurred to finalize the divisional realignment. Both this division and the Company as a whole will begin realizing the benefit of these initiatives in the fourth quarter of 2003.
Other
The Company's research and development expenditures were $20.0 million, or 10 percent below the prior quarter due to the non-linear nature of project expenses.
Other income was $3.3 million, primarily related to gains on sales of assets. This compares with other income of $5.6 million in the prior quarter.
Conference Call
The Company will host a conference call with financial analysts to discuss the third quarter and year-to-date 2003 results on October 30, 2003, at 9:00 a.m. (CST). The Company invites investors to listen to a play back of the conference call at the Company's website, www.weatherford.com in the "investor relations" section. Further, the "investor relations/financial information" section of the Company's website includes a disclosure and reconciliation of non-GAAP financial measures that are used in this release and may be used periodically by management when discussing the Company's financial results with investors and analysts.
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 17,000 people worldwide.
Contact: Lisa W. Rodriguez (713) 693-4746
Chief Financial Officer
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 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 Nine Months
Ended September 30, Ended September 30,
2003 2002 2003 2002
Net Revenues:
Drilling Services $383,359 $347,536 $1,091,079 $1,025,839
Production Systems 277,121 237,394 776,442 721,206
660,480 584,930 1,867,521 1,747,045
Operating Income (Loss):
Drilling Services 76,181 66,267 206,170 207,289
Production Systems 27,149 28,488 86,218 104,234
Research and Development (19,993) (19,624) (62,112) (55,147)
Equity in Earnings 5,639 5,445 10,503 18,640
Corporate Expenses (10,071) (9,871) (29,565) (33,957)
Non-recurring Expenses -- (232,493) (7,710) (232,493)
78,905 (161,788) 203,504 8,566
Other Income (Expense):
Other, Net 3,285 (917) 6,316 (2,891)
Interest Expense, Net (17,205) (20,404) (58,945) (61,401)
Debt Redemption Expense (20,911) -- (20,911) --
Income (Loss) Before Income
Taxes 44,074 (183,109) 129,964 (55,726)
Provision for Income Taxes (17,351) (14,815) (40,812) (58,127)
Benefit for Income Taxes,
Related to
Debt Redemption Expense 7,319 -- 7,319 --
Benefit for Income Taxes,
Related to
the Non-recurring Expense -- 76,282 -- 76,282
Net Income (Loss) $34,042 $(121,642) $96,471 $(37,571)
Earnings (Loss) Per Share:
Basic $0.26 $(1.01) $0.77 $(0.31)
Diluted $0.25 $(1.01) $0.74 $(0.31)
Weighted Average Shares
Outstanding:
Basic 131,596 120,193 124,751 119,796
Diluted 136,542 120,193 130,274 119,796
Weatherford International Ltd.
Supplemental Information
(In 000's)
Three Months Nine Months
Ended September 30, Ended September 30,
2003 2002 2003 2002
Geographic Revenues:
Eastern Hemisphere $266,685 $259,194 $750,277 $774,176
United States 219,222 195,969 632,530 586,093
Canada 107,265 79,964 310,545 236,758
Latin America 67,308 49,803 174,169 150,018
$660,480 $584,930 $1,867,521 $1,747,045
Depreciation and
Amortization:
Drilling Services $43,266 $42,609 $129,034 $123,013
Production Systems 13,507 10,716 37,537 30,852
Research and Development 1,291 881 3,958 2,413
Other 487 772 2,134 2,040
$58,551 $54,978 $172,663 $158,318
Research and Development:
Drilling Services $10,225 $8,753 $31,165 $23,781
Production Systems 9,768 10,871 30,947 31,366
$19,993 $19,624 $62,112 $55,147
The Company reports its financial results in accordance with generally
accepted accounting principles (GAAP). However, management believes
that certain non-GAAP performance measures and ratios may provide
users of this financial information additional meaningful comparisons
between current results and results in prior operating periods. See
the table below for supplemental financial data and corresponding
reconciliations to GAAP financial measures for the three and nine
months ended September 30, 2003 and 2002. Non-GAAP financial measures
should be viewed in addition to, and not as an alternative for, the
Company's reported results prepared in accordance with GAAP.
Weatherford International Ltd.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except per share data)
For the three months ended September 30, 2003
Items Non-GAAP
impacting Adjusted
GAAP the period* Earnings
Income before Income Taxes $44,074 $20,911 $64,985
Provision for Income Taxes (10,032) (7,319) (17,351)
Net Income $34,042 $13,592 $47,634
Diluted Earnings Per Share $0.25 $0.35
Diluted Weighted Average Shares
Outstanding 136,542 145,639
* Relates to charges from the call premium and write-off of
unamortized debt issuance costs from the early extinguishment of
debentures.
For the three months ended September 30, 2002
GAAP Items Non-GAAP
impacting Adjusted
the period* Earnings
Income (Loss ) before Income Taxes $(183,109) $232,493 $49,384
(Provision) Benefit for Income Taxes 61,467 (76,282) (14,815)
Net Income (Loss) $(121,642) $156,211 $34,569
Diluted Earnings (Loss) Per Share $(1.01) $0.28
Diluted Weighted Average Shares
Outstanding 120,193 125,138
* Relates to charges from the non-cash write down of our investment in
Universal Compression Holdings, Inc. and severance and facility
closures.
Weatherford International Ltd.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except per share data)
For the nine months ended September 30, 2003
GAAP Items Non-GAAP
impacting Adjusted
the period* Earnings
Income before Income Taxes $129,964 $33,271 $163,235
Provision for Income Taxes (33,493) (9,472) (42,965)
Net Income $96,471 $23,799 $120,270
Diluted Earnings Per Share $0.74 $0.92
Diluted Weighted Average Shares
Outstanding 130,274 133,227
* Primarily relates to charges from the call premium and write-off of
unamortized debt issuance costs from the early extinguishment of
debentures, severance and our equity investment's, Universal
Compression Holdings, Inc., debt restructuring charges.
For the nine months ended September 30, 2002
GAAP Items Non-GAAP
impacting Adjusted
the period* Earnings
Income (Loss) before Income Taxes $(55,726) $232,493 $176,767
(Provision) Benefit for Income Taxes 18,155 (76,282) (58,127)
Net Income (Loss) $(37,571) $156,211 $118,640
Diluted Earnings (Loss) Per Share $(0.31) $0.94
Diluted Weighted Average Shares
Outstanding 119,796 131,568
* Relates to charges from the non-cash write down of our investment in
Universal Compression Holdings, Inc. and severance and facility
closures.
SOURCE Weatherford International Ltd.
Lisa W. Rodriguez, Chief Financial Officer of Weatherford