HOUSTON, Feb 07, 2005 /PRNewswire-FirstCall via COMTEX/ -- Weatherford International Ltd. (NYSE: WFT) today reported 2004 fourth quarter revenues of $882.6 million and income from continuing operations of $132.9 million, or $0.90 per diluted share. Fourth quarter results include a gain of $52.4 million, or $0.35 per diluted share, relating to the sale of four million shares of Universal Compression Holdings, Inc.'s common stock. Excluding the gain, fourth quarter results were $0.55 per diluted share from continuing operations, a 53 percent improvement over fourth quarter 2003 diluted earnings per share of $0.36.
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Revenues and operating income in the fourth quarter of 2004 improved $172.2 million and $43.7 million, or 24 percent and 54 percent, above the fourth quarter of 2003, respectively. The revenue increase reflects improvements in all geographic regions. Eastern Hemisphere revenues increased 12 percent, well above the 6 percent improvement in Eastern Hemisphere rig count. North American revenues increased $122.0 million, or 34 percent, as both Canada and the United States posted record activity levels.
Sequentially, fourth quarter revenues and operating income improved $88.3 million and $14.1 million, respectively. Canada, Middle East/North Africa, and the United States were the primary contributors to the growth. Europe/West Africa revenues remained relatively flat despite the seasonal decline in the North Sea.
For the full year 2004, revenues were $3.1 billion and income from continuing operations was $337.3 million ($2.35 per diluted share). The 2004 results include $77.6 million of gains ($0.52 per diluted share) on the sale of seven million shares of Universal's common stock. In 2003, annual revenues were $2.6 billion, and income from continuing operations before charges was $171.0 million ($1.29 per diluted share). After-tax charges for 2003 included $23.8 million, or $0.17 per diluted share, related to debt redemption, severance and an equity investment's debt restructuring.
Drilling Services
Revenues in the fourth quarter of 2004 were $494.4 million, 23 percent above the prior year's fourth quarter and 10 percent higher than the preceding quarter. Operating income of $108.7 million was 45 percent higher than the prior year and 11 percent higher than the third quarter. Sequentially, Drilling Services' fourth quarter performance reflects strong growth in the Middle East and higher activity levels in Canada, offset in part by a seasonal decline in the North Sea.
The drilling methods product line posted the strongest growth for the year with a 24 percent improvement over 2003. Drilling tools, intervention services and well construction improved 20, 19, and 15 percent, respectively.
Production Systems
Revenues of $388.2 million in the fourth quarter of 2004 were 26 percent above the fourth quarter of 2003 and 13 percent above the preceding quarter. Operating income of $51.1 million was 54 percent higher than the prior year's fourth quarter and 16 percent higher than the preceding quarter. Sequentially, North American revenues increased $34.0 million, led by a 22 percent growth in Canada. International markets grew by 8 percent, led by strong growth in the Middle East. On a product line basis, production optimization improved 39 percent, artificial lift systems improved 31 percent and completions systems improved 18 percent over 2003 levels.
Research and Development
The Company's Research and Development expenditures were $23.8 million in the fourth quarter. Expenditures increased $3.4 million sequentially primarily due to prototype expenses. These expenses are a result of the commitment to raise the technology content of products and services.
Corporate Expenses
Corporate expenses increased sequentially and as compared to the same period last year due to corporate governance compliance. These expenses are primarily associated with the company's Sarbanes-Oxley 404 project.
Other Income (Expense)
The Company sold four million shares of Universal's common stock during the fourth quarter of 2004 and seven million shares year to date. Net proceeds for the fourth quarter and the full year 2004 were $141.8 million and $231.8 million and resulted in gains of $52.4 million and $77.6 million, respectively. There were no tax effects associated with the dispositions.
Other, Net was an expense of $2.6 million, primarily due to currency losses posted in the fourth quarter.
Conference Call
The company will host a conference call with financial analysts to discuss the fourth quarter 2004 results on February 7, at 9:00 a.m. (CDT). The company invites investors to listen to a play back of the conference call at the company's website, http://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 that 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 18,000 people worldwide.
Contact: Lisa W. Rodriguez (713) 693-4746
Chief Financial Officer
Andrew P. Becnel (713) 693-4136
Vice President - Finance
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 Income
(In 000's, Except Per Share Amounts)
Three Months Twelve Months
Ended December 31, Ended December 31,
2004 2003 2004 2003
(Restated) (Restated)
Net Revenues:
Drilling Services $494,396 $402,525 $1,773,295 $1,493,604
Production Systems 388,209 307,890 1,358,479 1,068,430
882,605 710,415 3,131,774 2,562,034
Operating Income (Expense):
Drilling Services 108,660 74,712 370,208 280,574
Production Systems 51,063 33,119 162,575 122,571
Research and Development (23,833) (20,138) (83,552) (81,963)
Equity in Earnings 5,848 4,444 22,405 14,947
Non-recurring Expense - - - (7,710)
Corporate Expenses (16,652) (10,754) (55,889) (42,202)
125,086 81,383 415,747 286,217
Other Income (Expense):
Gain on Sale of Universal
Common Stock 52,362 - 77,642 -
Other, Net (2,593) 1,464 (4,121) 7,810
Interest Expense, Net (13,928) (15,795) (59,716) (74,538)
Debt Redemption Expense - - - (20,911)
Income from Continuing
Operations Before Income
Taxes 160,927 67,052 429,552 198,578
Provision for Income Taxes (27,998) (17,680) (92,253) (51,335)
Income from Continuing
Operations 132,929 49,372 337,299 147,243
Income (Loss) from
Discontinued Operations, Net
of Taxes 626 (535) (7,153) (3,891)
Net Income $133,555 $48,837 $330,146 $143,352
Basic Earnings Per Share:
Income from Continuing
Operations $0.97 $0.37 $2.52 $1.16
Income (Loss) from
Discontinued Operations 0.01 (0.00) (0.06) (0.03)
Net Income $0.98 $0.37 $2.46 $1.13
Diluted Earnings Per Share:
Income from Continuing
Operations $0.90 $0.36 $2.35 $1.12
Income (Loss) from
Discontinued Operations 0.00 (0.00) (0.05) (0.03)
Net Income $0.90 $0.36 $2.30 $1.09
Weighted Average Shares
Outstanding:
Basic 136,435 131,845 134,000 126,524
Diluted 151,520 145,444 148,684 131,761
Weatherford International Ltd.
Supplemental Information
(In 000's)
Three Months Twelve Months
Ended December 31, Ended December 31,
2004 2003 2004 2003
(Restated) (Restated)
Geographic Revenues:
Eastern Hemisphere $317,650 $283,374 $1,160,827 $1,017,749
United States 321,405 222,791 1,140,974 855,321
Canada 155,380 132,017 528,581 442,562
Latin America 88,170 72,233 301,392 246,402
$882,605 $710,415 $3,131,774 $2,562,034
Depreciation and Amortization:
Drilling Services $47,537 $42,803 $182,669 $171,837
Production Systems 17,795 16,059 66,140 53,422
Research and Development 1,151 681 4,606 4,639
Other 613 385 2,469 2,519
$67,096 $59,928 $255,884 $232,417
Research and Development:
Drilling Services $11,519 $10,708 $41,090 $41,945
Production Systems 12,314 9,430 42,462 40,018
$23,833 $20,138 $83,552 $81,963
Selected Balance Sheet Information
(In 000's)
December 31, December 31,
2004 2003
(Restated)
Cash $317,439 $56,082
Accounts Receivable, Net 739,223 556,306
Inventories 679,607 616,748
Accounts Payable 279,763 234,599
Short-Term Borrowings and Long-Term
Debt 1,426,667 1,586,953
Shareholders' Equity 3,299,016 2,708,068
Accounts Receivable Securitization
(Off Balance Sheet) - 75,000
SOURCE Weatherford International Ltd.
Lisa W. Rodriguez, Chief Financial Officer, +1-713-693-4746, or Andrew P. Becnel, Vice President - Finance, +1-713-693-4136, both of Weatherford International Ltd.
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