HOUSTON, Oct. 20 /PRNewswire-FirstCall/ -- Weatherford International Ltd. (NYSE: WFT) today reported third quarter 2008 income from continuing operations of $384 million, or $0.55 per diluted share, excluding an after tax loss from non-recurring items of $0.02. Third quarter diluted earnings per share from continuing operations reflect an improvement of 28 percent over the third quarter of 2007 diluted earnings per share from continuing operations of $0.43, before non-recurring items. The non-recurring items in the third quarter of 2008 results include investigation and exit costs incurred in connection with the company's withdrawal from sanctioned countries.
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Third quarter revenues were $2,541 million, or 29 percent higher than the same period last year, against a backdrop of an 11 percent increase in rig count activity. This is the highest level of quarterly revenue in the company's history.
Sequentially, the company's third quarter diluted earnings per share from continuing operations, before non-recurring items, were $0.12 higher than the second quarter 2008 diluted earnings per share from continuing operations of $0.43, before non-recurring items.
In the first nine months of 2008, revenues were $7.0 billion and income from continuing operations before non-recurring items was $1,035 million, or $1.48 per diluted share. In 2007, the company reported revenues for the first nine months of $5.6 billion and income from continuing operations before non-recurring items of $819 million, or $1.18 per diluted share.
North America
Revenues for the quarter were $1,180 million. This is a 19 percent increase over the same quarter in the prior year, as compared to a 13 percent rig count increase. Sequentially, revenues increased 17 percent. All product lines grew, other than well construction which experienced significant downtime due to hurricanes.
Operating income of $313 million was 18 percent higher than the same quarter in the prior year and 40 percent higher sequentially due to the seasonal recovery in Canadian activity offset by the impact of hurricanes.
Middle East/North Africa/Asia
Third quarter revenues of $638 million were 40 percent higher than the third quarter of 2007 and 15 percent higher than the prior quarter. Algeria, Libya, Saudi Arabia, India, China and Malaysia were standout performers. By product line, artificial lift, drilling services, integrated drilling, drilling tools and wireline all experienced significant increases.
The current quarter's operating income of $146 million improved 41 percent as compared to the same quarter in the prior year and increased 12 percent as compared to the prior quarter.
Europe/West Africa/CIS
Third quarter revenues of $409 million were 33 percent higher than the third quarter of 2007 and five percent higher than the prior quarter. Central Europe, Russia and Kazakhstan saw strong improvements on a sequential basis. Substantial growth was experienced in our drilling services, wireline and stimulation and chemicals product lines.
The current quarter's operating income of $102 million improved 31 percent as compared to the same quarter in the prior year and three percent sequentially.
Latin America
Third quarter revenues of $314 million were 47 percent higher than the third quarter of 2007 and 16 percent higher than the prior quarter. On a sequential basis, Argentina, Brazil, Mexico and Venezuela were the top performing countries. Revenue grew across all product lines, with drilling services, completion and integrated drilling standing out as the top performers.
The current quarter's operating income of $70 million improved 53 percent as compared to the same quarter in the prior year and was 19 percent higher when compared to the second quarter of 2008.
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 third quarter results on October 20, 2008 at 9:30 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 46,700 people worldwide.
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.
Contact: Andrew P. Becnel (713) 693-4136
Chief Financial Officer
Weatherford International Ltd.
Consolidated Condensed Statements of Income
(Unaudited)
(In 000's, Except Per Share Amounts)
Three Months Nine Months
Ended September 30, Ended September 30,
2008 2007 2008 2007
Net Revenues:
North America $1,179,605 $993,828 $3,282,211 $2,883,825
Middle East/North
Africa/Asia 637,872 455,932 1,716,007 1,286,022
Europe/West Africa/CIS 408,993 308,587 1,146,185 844,184
Latin America 314,326 213,644 821,535 626,190
2,540,796 1,971,991 6,965,938 5,640,221
Operating Income (Expense):
North America 312,887 264,183 828,792 756,661
Middle East/North
Africa/Asia 146,450 103,839 397,774 284,310
Europe/West Africa/CIS 102,385 77,886 294,614 202,911
Latin America 69,521 45,453 188,374 139,784
Research and Development (52,026) (43,199) (139,095) (124,413)
Corporate Expenses (30,750) (24,945) (99,657) (75,565)
Exit and Restructuring (13,727) (3,628) (23,604) (20,944)
534,740 419,589 1,447,198 1,162,744
Other Income (Expense):
Interest Expense, Net (60,521) (50,194) (175,723) (119,258)
Other, Net (8,243) 1,282 (13,026) (7,024)
Income from Continuing
Operations Before Income
Taxes and Minority Interest 465,976 370,677 1,258,449 1,036,462
Provision for Income Taxes:
Provision for Operations (82,990) (71,075) (221,796) (223,818)
Tax Charges and Benefit
From Exit and
Restructuring - 646 7,306 (43,260)
(82,990) (70,429) (214,490) (267,078)
Income from Continuing
Operations Before Minority
Interest 382,986 300,248 1,043,959 769,384
Minority Interest, Net of
Taxes (12,386) (5,324) (25,246) (14,161)
Income from Continuing
Operations $370,600 $294,924 $1,018,713 $755,223
Loss from Discontinued
Operation, Net of Taxes - (2,211) (12,928) (15,628)
Net Income $370,600 $292,713 $1,005,785 $739,595
Basic Earnings Per Share:
Income from Continuing
Operations $0.54 $0.44 $1.49 $1.12
Loss from Discontinued
Operation - (0.01) (0.01) (0.03)
Net Income $0.54 $0.43 $1.48 $1.09
Diluted Earnings Per Share:
Income from Continuing
Operations $0.53 $0.42 $1.46 $1.09
Loss from Discontinued
Operation - - (0.02) (0.03)
Net Income $0.53 $0.42 $1.44 $1.06
Weighted Average Shares
Outstanding:
Basic 682,532 676,352 681,531 677,012
Diluted 701,284 696,496 700,099 694,916
Weatherford International Ltd.
Selected Income Statement Information
(Unaudited)
(In 000's)
Three Months Ended
9/30/2008 6/30/2008 3/31/2008 12/31/2007 9/30/2007
Net Revenues:
North America $1,179,605 $1,012,244 $1,090,362 $1,053,631 $993,828
Middle East/
North Africa/
Asia 637,872 556,251 521,884 537,747 455,932
Europe/West
Africa/CIS 408,993 389,563 347,629 344,335 308,587
Latin America 314,326 271,192 236,017 256,128 213,644
$2,540,796 $2,229,250 $2,195,892 $2,191,841 $1,971,991
Operating Income (Expense):
North
America $312,887 $224,252 $291,653 $256,427 $264,183
Middle East/
North Africa/
Asia 146,450 130,650 120,674 131,953 103,839
Europe/West
Africa/CIS 102,385 99,016 93,213 90,935 77,886
Latin America 69,521 58,355 60,498 63,427 45,453
Research and
Development (52,026) (44,430) (42,639) (44,904) (43,199)
Corporate
Expenses (30,750) (35,275) (33,632) (26,403) (24,945)
Exit and
Restructuring (13,727) 64,356 (74,233) (9,843) (3,628)
$534,740 $496,924 $415,534 $461,592 $419,589
Supplemental Information
(Unaudited)
(In 000's)
Three Months Ended
9/30/2008 6/30/2008 3/31/2008 12/31/2007 9/30/2007
Depreciation and Amortization:
North America $79,619 $75,093 $74,787 $74,452 $74,047
Middle East/
North Africa/
Asia 49,138 45,982 45,736 44,220 40,983
Europe/West
Africa/CIS 31,911 27,600 26,621 24,671 22,926
Latin America 23,561 20,368 19,682 21,352 18,880
Research and
Development 1,902 1,867 1,694 1,671 1,678
Corporate 1,000 800 768 825 463
$187,131 $171,710 $169,288 $167,191 $158,977
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, 2008, June 30, 2008, and September 30, 2007 and for the nine months ended September 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 data)
Three Months Ended Nine Months Ended
September June September September September
30, 2008 30, 2008 30, 2007 30, 2008 30, 2007
Operating Income:
GAAP Operating
Income $534,740 $496,924 $419,589 $1,447,198 $1,162,744
Exit and
Restructuring 13,727(a) (64,356)(b) 3,628(c) 23,604(d) 20,944(e)
Non-GAAP
Operating
Income $548,467 $432,568 $423,217 $1,470,802 $1,183,688
Provision for Income Taxes:
GAAP Provision
for Income
Taxes $(82,990) $(57,875) $(70,429) $(214,490) $(267,078)
Tax impact of
Exit and
Restructuring - - (646)(c) (7,306)(d) (6,740)(e)
Other Charges - - - - 50,000(e)
Non-GAAP
Provision for
Income
Taxes $(82,990) $(57,875) $(71,075) $(221,796) $(223,818)
Income from Continuing Operations:
GAAP Income
from Continuing
Operations $370,600 $364,044 $294,924 $1,018,713 $755,223
Total Exit and
Restructuring and
Other Charges,
net of tax 13,727(a) (64,356)(b) 2,982(c) 16,298(d) 64,204(e)
Non-GAAP Income
from Continuing
Operations $384,327 $299,688 $297,906 $1,035,011 $819,427
Diluted Earnings Per Share From Continuing Operations:
GAAP Diluted
Earnings per
Share From
Continuing
Operations $0.53 $0.52 $0.42 $1.46 $1.09
Total Exit and
Restructuring and
Other Charges,
net of tax 0.02(a) (0.09)(b) 0.01(c) 0.02(d) 0.09(e)
Non-GAAP Diluted
Earnings per Share
From Continuing
Operations $0.55 $0.43 $0.43 $1.48 $1.18
Note (a): This amount represents investigation costs incurred in
connection with on-going investigations by the U.S. government
and costs related to the Company's withdrawal from sanctioned
countries.
Note (b): 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 (c): This amount represents investigation costs incurred in
connection with on-going investigations by the U.S. government.
Note (d): 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 (e): This amount represents severance charges incurred in connection
with the Company's restructuring activities and investigation
costs incurred in connection with on-going investigations by the
U.S. government. 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.