26 Percent Increase Over Prior Year
HOUSTON, July 21 /PRNewswire-FirstCall/ -- Weatherford International Ltd. (NYSE: WFT) today reported second quarter 2008 income from continuing operations of $300 million, or $0.43 per diluted share, excluding an after tax gain from non-recurring items of $0.09. Second quarter diluted earnings per share from continuing operations reflect an improvement of 26 percent over the second quarter of 2007 diluted earnings per share from continuing operations of $0.34, before non-recurring items. The non-recurring items in the second quarter of 2008 results include a gain on the restructuring of a Qatar operation into a JV, partially offset by investigation and exit costs incurred in connection with the company's withdrawal from sanctioned countries.
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Second quarter revenues were $2,229 million, or 23 percent higher than the same period last year, against a backdrop of a seven percent increase in rig count activity. This is the highest level of quarterly revenue in the company's history.
Sequentially, the company's second quarter diluted earnings per share from continuing operations, before non-recurring items, were $0.07 lower than the first quarter 2008 diluted earnings per share from continuing operations of $0.50, before non-recurring items, due to the seasonal decline in Canadian activity, which was only partially offset by improvements in other geographic markets.
In the first six months of 2008, revenues were $4.4 billion and income from continuing operations before charges was $650.7 million, or $0.93 per diluted share. In 2007, the company reported revenues for the first six months of $3.7 billion and income from continuing operations before charges of $521.5 million, or $0.75 per diluted share.
North America
Revenues for the quarter were $1,012 million. This is a 15 percent increase over the same quarter in the prior year, as compared to a seven percent rig count increase. Sequentially, revenues decreased seven percent, as compared to an 11 percent decline in rig count, driven by a 68 percent decline in Canadian rig count. In Canada, all product lines decreased. In the United States, strong revenue growth was experienced in our drilling services, wireline, and artificial lift product lines.
Operating income of $224 million was 17 percent higher than the same quarter in the prior year and 23 percent lower sequentially due entirely to the seasonal decline in Canadian activity, which was only partially offset by improvements in the United States.
Middle East/North Africa/Asia
Second quarter revenues of $556 million were 28 percent higher than the second quarter of 2007 and seven percent higher than the prior quarter. Algeria, Kuwait, and Libya as well as Australia, China and Indonesia were standout performers. By product line, wireline, integrated drilling, well construction and completion all experienced significant increases.
The current quarter's operating income of $131 million improved 35 percent as compared to the same quarter in the prior year and increased eight percent as compared to the prior quarter.
Europe/West Africa/CIS
Second quarter revenues of $390 million were 34 percent higher than the second quarter of 2007 and 12 percent higher than the prior quarter. Norway, U.K. and Russia all saw strong improvements on a sequential basis. All product lines grew, with the most substantial growth experienced in our drilling services, artificial lift and well construction product lines.
The current quarter's operating income of $99 million improved 42 percent as compared to the same quarter in the prior year and six percent sequentially.
Latin America
Second quarter revenues of $271 million were 31 percent higher than the second quarter of 2007 and 15 percent higher than the prior quarter. On a sequential basis, Mexico, Brazil and Venezuela were the top performing countries. Region-wide revenue grew in all product lines.
The current quarter's operating income of $58 million improved 28 percent as compared to the same quarter in the prior year and was four percent lower when compared to the first quarter of 2008 due to mobilization costs incurred with respect to new projects in Mexico.
Discontinued Operations
The company has disposed 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 June 30, 2008, the gain per diluted share from discontinued operations was $0.01.
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 2008 second quarter results on July 21, 2008 at 8:00 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.
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 42,000 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 thousands, except per share amounts)
Three Months Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Net Revenues:
North America $1,012,244 $883,364 $2,102,606 $1,889,997
Middle East/North
Africa/Asia 556,251 435,338 1,078,135 830,090
Europe/West Africa/CIS 389,563 290,639 737,192 535,597
Latin America 271,192 206,604 507,209 412,546
2,229,250 1,815,945 4,425,142 3,668,230
Operating Income(Expense):
North America 224,252 192,268 515,905 492,478
Middle East/North
Africa/Asia 130,650 96,998 251,324 180,471
Europe/West Africa/CIS 99,016 69,790 192,229 125,025
Latin America 58,355 45,742 118,853 94,331
Research and Development (44,430) (40,700) (87,069) (81,214)
Corporate Expenses (35,275) (23,525) (68,907) (50,620)
Exit and Restructuring 64,356 (13,132) (9,877) (17,316)
496,924 327,441 912,458 743,155
Other Income(Expense):
Interest Expense, Net (62,399) (35,293) (115,202) (69,064)
Other, Net (5,282) (5,934) (4,783) (8,306)
Income from Continuing
Operations
Before Income Taxes and
Minority Interest 429,243 286,214 792,473 665,785
Provision for Income Taxes:
Provision for Operations (57,875) (59,845) (138,806) (152,743)
Tax Charges and Benefit
From Exit and
Restructuring - (45,426) 7,306 (43,906)
(57,875) (105,271) (131,500) (196,649)
Income from Continuing
Operations Before Minority
Interest 371,368 180,943 660,973 469,136
Minority Interest, Net of
Taxes (7,324) (4,463) (12,860) (8,837)
Income from Continuing
Operations $364,044 $176,480 $648,113 $460,299
Gain (Loss) from
Discontinued Operation,
Net of Taxes 6,940 (11,170) (12,928) (13,417)
Net Income $370,984 $165,310 $635,185 $446,882
Basic Earnings Per Share:
Income from Continuing
Operations $0.53 $0.26 $0.95 $0.68
Gain (Loss) from
Discontinued Operation 0.01 (0.02) (0.02) (0.02)
Net Income $0.54 $0.24 $0.93 $0.66
Diluted Earnings Per Share:
Income from Continuing
Operations $0.52 $0.25 $0.93 $0.66
Gain (Loss) from
Discontinued Operation 0.01 (0.01) (0.02) (0.02)
Net Income $0.53 $0.24 $0.91 $0.64
Weighted Average Shares
Outstanding:
Basic 681,870 676,662 681,030 677,340
Diluted 701,927 695,634 699,507 694,124
Weatherford International Ltd.
Selected Income Statement Information
(Unaudited)
(In thousands)
Three Months
Ended
06/30/2008 03/31/2008 12/31/2007 09/30/2007 06/30/2007
Net Revenues:
North America $1,012,244 $1,090,362 $1,053,631 $993,828 $883,364
Middle East/
North Africa/
Asia 556,251 521,884 537,747 455,932 435,338
Europe/West
Africa/CIS 389,563 347,629 344,335 308,587 290,639
Latin America 271,192 236,017 256,128 213,644 206,604
$2,229,250 $2,195,892 $2,191,841 $1,971,991 $1,815,945
Operating Income
(Expense):
North America $224,252 $291,653 $256,427 $264,183 $192,268
Middle East/
North Africa/Asia 130,650 120,674 131,953 103,839 96,998
Europe/West
Africa/CIS 99,016 93,213 90,935 77,886 69,790
Latin America 58,355 60,498 63,427 45,453 45,742
Research and
Development (44,430) (42,639) (44,904) (43,199) (40,700)
Corporate Expenses (35,275) (33,632) (26,403) (24,945) (23,525)
Exit and
Restructuring 64,356 (74,233) (9,843) (3,628) (13,132)
$496,924 $415,534 $461,592 $419,589 $327,441
Supplemental Information
(Unaudited)
(In thousands)
Three Months
Ended
06/30/2008 03/31/2008 12/31/2007 09/30/2007 06/30/2007
Depreciation and
Amortization:
North America $75,093 $74,787 $74,452 $74,047 $66,959
Middle East/North
Africa/Asia 45,982 45,736 44,220 40,983 36,951
Europe/West
Africa/CIS 27,600 26,621 24,671 22,926 20,936
Latin America 20,368 19,682 21,352 18,880 17,118
Research and
Development 1,867 1,694 1,671 1,678 1,669
Corporate 800 768 825 463 909
$171,710 $169,288 $167,191 $158,977 $144,542
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 June 30, 2008, March 31, 2008 and June 30, 2007 and for the six months ended June 30, 2008 and 2007. 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 amounts)
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2008 2008 2007 2008 2007
Operating Income:
GAAP Operating
Income $496,924 $415,534 $327,441 $912,458 $743,155
Exit and
Restructuring (64,356)(a) 74,233(b) 13,132(c) 9,877 17,316(d)
Non-GAAP
Operating
Income $432,568 $489,767 $340,573 $922,335 $760,471
Provision for
Income Taxes:
GAAP Provision
for Income
Taxes $(57,875) $(73,625) $(105,271) $(131,500) $(196,649)
Tax impact of
Exit and
Restructuring - (7,306)(b) (4,574)(c) (7,306) (6,094)(d)
Other charges - - 50,000 (c) - 50,000(d)
Non-GAAP
Provision
for Income
Taxes $(57,875) $(80,931) $(59,845) $(138,806) $(152,743)
Income from
Continuing
Operations:
GAAP Income from
Continuing
Operations $364,044 $284,069 $176,480 $648,113 $460,299
Total Exit and
Restructuring
and other
charges, net
of tax (64,356)(a) 66,927(b) 58,558(c) 2,571 61,222(d)
Non-GAAP Income
from Continuing
Operations $299,688 $350,996 $235,038 $650,684 $521,521
Diluted Earnings
Per Share From
Continuing
Operations:
GAAP Diluted
Earnings per
Share From
Continuing
Operations $0.52 $0.41 $0.25 $0.93 $0.66
Total Exit and
Restructuring
and other
charges, net
of tax (0.09)(a) 0.09(b) 0.09(c) 0.00 0.09(d)
Non-GAAP Diluted
Earnings per Share
From Continuing
Operations $0.43 $0.50 $0.34 $0.93 $0.75
Note (a): This amount represents a gain on the restructuring of a Qatar
operation into a JV, partially offset by investigation and exit costs
incurred in connection with the Company's withdrawal from sanctioned
countries.
Note (b): This amount represents investigation and exit costs incurred
in connection with the Company's withdrawal from sanctioned countries.
Also included are severance charges associated with the Company's
reorganization activities.
Note (c): This amount represents severance charges associated with the
Company's reorganization activities. On an after tax basis, these
charges approximated $9 million during the three months ended June 30,
2007. In addition, the Company incurred a tax charge of $50 million
for withholding taxes required to be paid on a distribution made by the
Company to one of its foreign subsidiaries.
Note (d): This amount represents severance charges associated with the
Company's reorganization activities. On an after tax basis, these
charges approximated $11 million during the six months ended June 30,
2007. In addition, the Company incurred a tax charge of $50 million
for withholding taxes required to be paid on a distribution made by the
Company to one of its foreign subsidiaries.
SOURCE Weatherford International Ltd.
-0- 07/21/2008
/CONTACT: Andrew P. Becnel, Chief Financial Officer of Weatherford
International Ltd., +1-713-693-4136/
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/Web site: http://www.weatherford.com /
(WFT)
CO: Weatherford International Ltd.
ST: Texas
IN: OIL MAC
SU: ERN CCA
LB-SP
-- CLM903 --
6129 07/21/2008 07:00 EDT http://www.prnewswire.com