Led by growth in the Eastern Hemisphere and Canada
HOUSTON, Jan. 30 /PRNewswire-FirstCall/ -- Weatherford International Ltd. (NYSE: WFT) today reported 2003 fourth quarter revenues of $723.9 million and net income of $48.8 million, or $0.36 per diluted share. In the fourth quarter of 2002, revenues and net income were $581.9 million and $31.5 million ($0.25 per diluted share), respectively.
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Revenues and operating income in the fourth quarter of 2003 improved $142.0 million and $24.0 million, or 24 percent and 42 percent, respectively, compared to the fourth quarter of 2002. The revenue increase reflects improvements in nearly all geographic regions. International revenues increased 19 percent, well above the 5 percent improvement in international rig count. North American revenues increased $82.5 million, or 30 percent as Canada posted record earnings for the quarter.
For the full year 2003, revenues were $2.6 billion and net income before charges was $167.2 million ($1.27 per diluted share). After-tax charges for the period included $23.8 million, or $0.17 per diluted share, related to debt redemption, severance and an equity investment's debt restructuring. Reported net income for the year 2003 was $1.09 per diluted share. In 2002, full year revenues were $2.3 billion and net income was $150.2 million ($1.20 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. The reported net loss for the year 2002 was $0.05 per diluted share.
The company has adopted Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, to expense the fair value of employee stock-based compensation, which is the "preferred" method of accounting. The company selected the prospective method of adoption for recording stock-based compensation expenses. Under this method, the fair value of stock-based compensation granted in 2003 is recognized as an expense over the vesting period. Because this transition method is effective January 1, 2003, the previously reported 2003 quarterly results have been restated to reflect the impact of adopting SFAS No. 123 and are included for reference. Under the prospective method, financial results for periods prior to 2003 are not restated. The new accounting policy does not impact the cash flows of the company nor the underlying economics of the company's business model.
Drilling Services
Revenues in the fourth quarter of 2003 were $402.5 million, 15 percent above the prior year's fourth quarter and 5 percent higher than the preceding quarter. Operating income of $64.0 million, including the impact of research and development expenditures, was 47 percent higher than the prior year and essentially flat with the third quarter. Sequentially, Drilling Services' fourth quarter performance reflects strong growth in the Middle East and CIS and higher activity levels in Canada, offset by a seasonal decline in the North Sea.
Production Systems
Revenues in the fourth quarter of 2003 of $321.4 million were 38 percent above the fourth quarter of 2002 and 16 percent above the preceding quarter. The current quarter's operating income of $23.1 million, including research and development expenditures, increased 30 percent as compared to the prior year's fourth quarter and was 35 percent higher than the preceding quarter. Sequentially, revenues from international markets grew by 14 percent, with all regions improving, except Latin America, which remained flat. Operating income margins improved sequentially primarily due to lower costs, offset in part by a shift in product mix.
Conference Call
The company will host a conference call with financial analysts to discuss the fourth quarter and 2003 year-end results on January 30, 2004 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 Twelve Months
Ended December 31, Ended December 31,
2003 2002 2003 2002
Net Revenues:
Drilling Services $402,525 $349,028 $1,493,604 $1,374,867
Production Systems 321,362 232,857 1,097,804 954,063
723,887 581,885 2,591,408 2,328,930
Operating Income (Loss):
Drilling Services 74,712 53,222 280,574 260,511
Production Systems 32,664 32,515 118,498 136,749
Research and Development (20,249) (24,439) (82,453) (79,586)
Equity in Earnings 4,444 5,663 14,947 24,303
Corporate Expenses (10,754) (10,140) (42,202) (44,097)
Non-recurring Expenses -- -- (7,710) (232,493)
80,817 56,821 281,654 65,387
Other Income (Expense):
Other, Net 1,443 9,703 7,759 6,812
Interest Expense, Net (15,877) (21,481) (74,822) (82,882)
Debt Redemption Expense -- -- (20,911) --
Income (Loss) Before Income
Taxes 66,383 45,043 193,680 (10,683)
(Provision) Benefit for Income
Taxes (17,546) (13,502) (50,328) 4,653
Net Income (Loss) $48,837 $31,541 $143,352 $(6,030)
Earnings (Loss) Per Share:
Basic $0.37 $0.26 $1.13 $(0.05)
Diluted $0.36 $0.25 $1.09 $(0.05)
Weighted Average Shares
Outstanding:
Basic 131,845 120,843 126,524 120,058
Diluted 145,444 125,822 131,761 120,058
Weatherford International Ltd.
Supplemental Information
(In 000's)
Three Months Twelve Months
Ended December 31, Ended December 31,
2003 2002 2003 2002
Geographic Revenues:
Eastern Hemisphere $296,846 $254,912 $1,047,123 $1,029,088
United States 222,791 188,252 855,321 774,345
Canada 132,017 84,093 442,562 320,851
Latin America 72,233 54,628 246,402 204,646
$723,887 $581,885 $2,591,408 $2,328,930
Depreciation and Amortization:
Drilling Services $42,803 $43,307 $171,837 $166,320
Production Systems 16,147 11,546 53,684 42,398
Research and Development 681 863 4,639 3,276
Other 385 884 2,519 2,924
$60,016 $56,600 $232,679 $214,918
Research and Development:
Drilling Services $10,708 $9,680 $41,945 $33,461
Production Systems 9,541 14,759 40,508 46,125
$20,249 $24,439 $82,453 $79,586
Weatherford International Ltd.
Consolidated Condensed Statements of Operations
Restated for the Impact of the Change in
Accounting for Stock-Based Compensation
(In 000's, Except Per Share Amounts)
For the Three Months Ended
March 31, June 30, Sept. 30,
2003 2003 2003
Net Revenues:
Drilling Services $345,676 $362,044 $383,359
Production Systems 243,662 255,659 277,121
589,338 617,703 660,480
Operating Income (Loss):
Drilling Services 64,275 65,543 76,044
Production Systems 30,635 28,239 26,960
Research and Development (20,018) (22,153) (20,033)
Equity in Earnings 4,562 302 5,639
Corporate Expenses (9,826) (9,694) (11,928)
Non-recurring Expenses -- (7,710) --
69,628 54,527 76,682
Other Income (Expense):
Other, Net (2,571) 5,602 3,285
Interest Expense, Net (20,808) (20,932) (17,205)
Debt Redemption Expense -- -- (20,911)
Income Before Income Taxes 46,249 39,197 41,851
Provision for Income Taxes (12,719) (10,624) (16,758)
Benefit for Income Taxes, Related to
the Debt Redemption Expense -- -- 7,319
Net Income $33,530 $28,573 $32,412
Earnings Per Share:
Basic $0.28 $0.24 $0.25
Diluted $0.27 $0.22 $0.24
Weighted Average Shares Outstanding:
Basic 121,185 121,471 131,596
Diluted 126,523 127,409 136,465
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 years ended December 31, 2003 and 2002 and for the three months ended September 30, 2003. 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 year ended December 31, 2003
Items Non-GAAP
impacting Adjusted
GAAP the period* Earnings
Income before Income Taxes $193,680 $33,271 $226,951
Provision for Income Taxes (50,328) (9,472) (59,800)
Net Income $143,352 $23,799 $167,151
Diluted Earnings Per Share $1.09 $1.27
Diluted Weighted Average Shares
Outstanding 131,761 140,858
* 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 year ended December 31, 2002
Items Non-GAAP
impacting Adjusted
GAAP the period* Earnings
Income (Loss) before Income Taxes $(10,683) $232,493 $221,810
Provision for Income Taxes 4,653 (76,282) (71,629)
Net Income (Loss) $(6,030) $156,211 $150,181
Diluted Earnings (Loss) Per Share $(0.05) $1.20
Diluted Weighted Average Shares
Outstanding 120,058 125,583
* Relates to charges from the non-cash write down of our investment in
Universal Compression Holdings, Inc. and severance and facility
closures.
For the three months ended
September 30, 2003
(restated for the impact for the
change in accounting for stock-based
compensation)
Items Non-GAAP
impacting Adjusted
GAAP the period* Earnings
Income before Income Taxes $41,851 $20,911 $62,762
Provision for Income Taxes (9,439) (7,319) (16,758)
Net Income $32,412 $13,592 $46,004
Diluted Earnings Per Share $0.24 $0.34
Diluted Weighted Average Shares
Outstanding 136,465 145,562
* Relates to charges from the call premium and write-off of unamortized
debt issuance costs from the early extinguishment of debentures.
SOURCE Weatherford International Ltd.