HOUSTON, Jan. 25 /PRNewswire-FirstCall/ -- Weatherford International Ltd. (NYSE: WFT) today reported fourth quarter 2007 income from continuing operations of $345 million, or $0.99 per diluted share, before non-recurring items. Fourth quarter diluted earnings per share from continuing operations reflect an improvement of 30 percent over the fourth quarter of 2006 diluted earnings per share from continuing operations of $0.76, before non-recurring items. The non-recurring item in the fourth quarter of 2007 results includes investigation and exit costs incurred in connection with the company's exit from sanctioned countries.
Fourth quarter revenues were $2,192 million, or 21 percent higher than the same period last year, against a backdrop of a two percent increase in rig count activity. This is the highest level of quarterly revenues in the company's history.
Sequentially, the company's fourth quarter diluted earnings per share from continuing operations were $0.13 higher than the third quarter 2007 diluted earnings per share from continuing operations of $0.86, before non-recurring items.
For the twelve months ended December 31, 2007, revenues were $7.8 billion and income from continuing operations before non-recurring items was $1,164 million, or $3.35 per diluted share. In 2006, the company reported revenues of $6.6 billion and income from continuing operations before non- recurring items of $900 million, or $2.54 per diluted share.
North America
Revenues for the quarter were $1,054 million. This is a 10 percent increase over the same quarter in the prior year, as compared to a one percent rig count decline. Growth in the U.S. rig count was more than offset by a 19 percent drop in the Canadian rig count. Sequentially, revenues increased six percent, as compared to a one percent increase in rig count. In Canada, artificial lift, well construction and wireline increased on a year over year and sequential basis. In the U.S., artificial lift, well construction, drilling services and completion performed well.
Operating income of $256 million was seven percent lower than the same quarter in the prior year and three percent lower sequentially.
Latin America
Fourth quarter revenues of $256 million were 21 percent higher than the fourth quarter of 2006 and 20 percent higher than the prior quarter. This region's performance reflected strong sequential growth in all of its product lines.
The current quarter's operating income of $63 million improved 37 percent as compared to the same quarter in the prior year and was 40 percent higher when compared to the third quarter of 2007.
Europe/West Africa/CIS
Fourth quarter revenues of $344 million were 50 percent higher than the fourth quarter of 2006 and 12 percent higher than the prior quarter. This region improved across most product lines with the strongest growth in the artificial lift, wireline and drilling services product lines.
The current quarter's operating income of $91 million improved 92 percent as compared to the same quarter in the prior year and 17 percent sequentially.
Middle East/North Africa/Asia
Fourth quarter revenues of $538 million were 31 percent higher than the fourth quarter of 2006 and 18 percent higher than the prior quarter. This region's performance reflected improvements in most product lines with exceptional performance from wireline, completion and drilling services.
The current quarter's operating income of $132 million improved 35 percent as compared to the same quarter in the prior year and 27 percent as compared to the prior quarter.
Discontinued Operations
The company is disposing of its non-core oil and gas development and production business. The results of operations of this business for the current and prior periods are reflected as discontinued operations, net of taxes. For the three months ended December 31, 2007, the loss per diluted share from discontinued operations was $0.02.
Reclassifications and Non-GAAP
Non-GAAP performance measures and corresponding reconciliations to GAAP financial measures have been provided for meaningful comparisons between current results and results in prior operating periods.
Conference Call
The company will host a conference call with financial analysts to discuss the 2007 fourth quarter results on January 25, 2008 at 8:00 a.m. (CST). 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.
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 38,000 people worldwide.
Contact: Andrew P. Becnel (713) 693-4136
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 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 outcome of pending government investigations, 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 materially from those currently anticipated.
Weatherford International Ltd.
Consolidated Condensed Statements of Income
(Unaudited)
(In 000's, Except Per Share Amounts)
Three Months Twelve Months
Ended December 31, Ended December 31,
2007 2006 2007 2006
Net Revenues:
North America $1,053,631 $956,436 $3,937,456 $3,672,630
Latin America 256,128 211,512 882,318 726,197
Europe/West Africa/CIS 344,335 229,757 1,188,519 827,343
Middle East/North
Africa/Asia 537,747 409,883 1,823,769 1,352,758
2,191,841 1,807,588 7,832,062 6,578,928
Operating Income
(Expense):
North America 256,427 274,476 1,013,088 1,040,647
Latin America 63,427 46,413 203,211 133,027
Europe/West Africa/CIS 90,935 47,270 293,846 171,798
Middle East/North
Africa/Asia 131,953 98,086 416,263 279,953
Research and Development (44,904) (37,384) (169,317) (149,429)
Corporate Expenses (26,403) (26,625) (101,968) (95,106)
Exit and Restructuring
Charges (9,843) (23,433) (30,787) (26,203)
461,592 378,803 1,624,336 1,354,687
Other Income (Expense):
Other, Net (1,545) (2,801) (8,569) (13,218)
Interest Expense, Net (52,023) (32,494) (171,281) (102,560)
Income from Continuing
Operations Before Income
Taxes and Minority
Interest 408,024 343,508 1,444,486 1,238,909
Provision for Income Taxes:
Provision for Operations (67,434) (96,758) (291,252) (354,156)
Tax Charges and Benefit
From Exit and Restructuring
Charges 1,752 31,713 (41,508) 32,683
(65,682) (65,045) (332,760) (321,473)
Income from Continuing
Operations Before
Minority Interest 342,342 278,463 1,111,726 917,436
Minority Interest, Net of
Taxes (5,590) (3,518) (19,751) (11,330)
Income from Continuing
Operations $336,752 $274,945 $1,091,975 $906,106
Loss from Discontinued
Operation, Net of Taxes (5,741) (2,943) (21,369) (9,737)
Net Income $331,011 $272,002 $1,070,606 $896,369
Basic Earnings Per Share:
Income from Continuing
Operations $0.99 $0.81 $3.23 $2.62
Loss from Discontinued
Operation (0.01) (0.01) (0.07) (0.03)
Net Income $0.98 $0.80 $3.16 $2.59
Diluted Earnings Per Share:
Income from Continuing
Operations $0.97 $0.79 $3.14 $2.55
Loss from Discontinued
Operation (0.02) (0.01) (0.06) (0.02)
Net Income $0.95 $0.78 $3.08 $2.53
Weighted Average Shares
Outstanding:
Basic 338,547 340,747 338,516 346,123
Diluted 348,659 348,617 347,758 354,832
Weatherford International Ltd.
Selected Income Statement Information
(Unaudited)
(In 000's)
Three Months
Ended
12/31/2007 9/30/2007 6/30/2007 3/31/2007 12/31/2006
Net Revenues:
North America $1,053,631 $993,828 $883,364 $1,006,633 $956,436
Latin America 256,128 213,644 206,604 205,942 211,512
Europe/West
Africa/CIS 344,335 308,587 290,639 244,958 229,757
Middle East/
North Africa/
Asia 537,747 455,932 435,338 394,752 409,883
$2,191,841 $1,971,991 $1,815,945 $1,852,285 $1,807,588
Operating Income
(Expense):
North America $256,427 $264,183 $192,268 $300,210 274,476
Latin America 63,427 45,453 45,742 48,589 46,413
Europe/West
Africa/CIS 90,935 77,886 69,790 55,235 47,270
Middle East/
North Africa/
Asia 131,953 103,839 96,998 83,473 98,086
Research and
Development (44,904) (43,199) (40,700) (40,514) (37,384)
Corporate
Expenses (26,403) (24,945) (23,525) (27,095) (26,625)
Exit and
Restructuring
Charges (9,843) (3,628) (13,132) (4,184) (23,433)
$461,592 $419,589 $327,441 $415,714 $378,803
Supplemental Information
(Unaudited)
(In 000's)
Three Months
Ended
12/31/2007 9/30/2007 6/30/2007 3/31/2007 12/31/2006
Depreciation and
Amortization:
North America $74,452 $74,047 $66,959 $61,764 $58,475
Latin America 21,352 18,880 17,118 16,739 17,307
Europe/West
Africa/CIS 24,671 22,926 20,936 18,235 17,259
Middle East/
North Africa/
Asia 44,220 40,983 36,951 36,167 32,549
Research and
Development 1,671 1,678 1,669 1,620 1,819
Corporate 825 463 909 990 1,576
$167,191 $158,977 $144,542 $135,515 $128,985
We report our financial results in accordance with generally accepted accounting principles (GAAP). However, Weatherford's 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. One such non-GAAP financial measure we may present from time to time is operating income or income from continuing operations excluding certain charges or amounts. This adjusted income amount is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for operating income, net income or other income data prepared in accordance with GAAP. See the table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months ended September 30, 2007 and the three months and years ended December 31, 2007 and 2006. 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)
Three Months Ended Year Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
Operating Income:
GAAP Operating
Income $461,592 $419,589 $378,803 $1,624,336 $1,354,687
Exit and
restructuring
charges 9,843(a) 3,628(b) 23,433(c) 30,787(d) 26,203(e)
Non-GAAP
Operating
Income $471,435 $423,217 $402,236 $1,655,123 $1,380,890
Provision for
Income Taxes:
GAAP
Provision
for Income
Taxes $(65,682) $(70,429) $(65,045) $(332,760) $(321,473)
Tax impact
of charges (1,752)(a) (646)(b) (5,315)(c) (8,492)(d) (6,285)(e)
Other
(benefits)
charges - - (26,398)(c) 50,000(d) (26,398)(e)
Non-GAAP
Provision
for Income
Taxes $(67,434) $(71,075) $(96,758) $(291,252) $(354,156)
Income from
Continuing
Operations:
GAAP Income
from
Continuing
Operations $336,752 $294,924 $274,945 $1,091,975 $906,106
Total
charges,
net of tax 8,091(a) 2,982(b) (8,280)(c) 72,295(d) (6,480)(e)
Non-GAAP
Income from
Continuing
Operations $344,843 $297,906 $266,665 $1,164,270 $899,626
Diluted Earnings
Per Share From
Continuing
Operations:
GAAP Diluted
Earnings per
Share From $0.97 $0.85 $0.79 $3.14 $2.55
Continuing
Operations
Total charges,
net of tax 0.02(a) 0.01(b) (0.03)(c) 0.21(d) (0.01)(e)
Non-GAAP
Diluted
Earnings
per Share
From
Continuing
Operations $0.99 $0.86 $0.76 $3.35 $2.54
Note (a): This amount represents investigation and exit costs incurred in
connection with on-going investigations by the U.S. government. On an
after tax basis, these charges approximated $8.1 million during the three
months ended December 31, 2007.
Note (b): This amount represents investigation and exit costs incurred in
connection with on-going investigations by the U.S. government. On an
after tax basis, these charges approximated $2.9 million during the three
months ended September 30, 2007.
Note (c): This amount represents severance charges associated with the
Company's restructuring activities. On an after tax basis, these charges
approximated $18.1 million during the three months ended December 31,
2006. In addition, the Company realized a tax benefit of $26.4 million
related to the favorable settlement of certain foreign tax exposures.
Note (d): This amount represents investigation and exit costs incurred in
connection with on-going investigations by the U.S. government. On an
after-tax basis, these charges approximated $11.0 million during the year
ended December 31, 2007. In addition, the Company incurred severance
charges associated with its restructuring activities during the first half
of 2007. On an after tax basis, these charges approximated $11.2 million
for the year ended December 31, 2007. The Company also incurred a tax
charge of $50.0 million for withholding taxes required to be paid on a
distribution made by the Company to one of its foreign subsidiaries.
Note (e): This amount represents severance charges associated with the
Company's restructuring activities. On an after tax basis, these charges
approximated $19.9 million during the year ended December 31, 2006. In
addition, the Company realized a tax benefit of $26.4 million related to
the favorable settlement of certain foreign tax exposures.
SOURCE Weatherford International Ltd.
CONTACT: Andrew P. Becnel, Chief Financial Officer of Weatherford
International Ltd., +1-713-693-4136/
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(WFT)