GENEVA, July 20, 2009 /PRNewswire-FirstCall via COMTEX/ -- Weatherford International Ltd. (NYSE: WFT) today reported second quarter 2009 income from continuing operations of $69 million, or $0.10 per diluted share, excluding an after tax loss of $0.04 for investigation and exit costs incurred in connection with the company's withdrawal from sanctioned countries and severance costs principally associated with restructuring activities. Second quarter diluted earnings per share from continuing operations reflect a decrease of 77 percent over the second quarter of 2008 diluted earnings per share from continuing operations of $0.43, before non-recurring items, mainly due to a combination of record low seasonal activity in Canada and greater than anticipated pricing declines in both the United States and Canada.
Second quarter revenues were $1,995 million, or 11 percent lower than the same period last year, against a backdrop of a 35 percent decrease in global rig count. North America was responsible for the decline with revenues decreasing 44 percent against a 50 percent decline in rig count. International revenues were up 17 percent against a nine percent decrease in international rig count.
Sequentially, the company's second quarter diluted earnings per share from continuing operations, before non-recurring items, were $0.17 lower than the first quarter of 2009 diluted earnings per share from continuing operations of $0.27, before non-recurring items. This decline was principally due to the continued curtailment of North American activity during the second quarter of 2009.
North America
Revenues for the quarter were $571 million, which is a 44 percent decrease over the same quarter in the prior year, as compared to a 50 percent rig count decrease. Sequentially, revenues were down 32 percent as compared to a 39 percent rig count decrease. Canadian rig activity registered its lowest levels in the last 10 years, as average rig count for the quarter was 89 rigs. This is 10 percent lower than the 1999 trough of 101 rigs.
Operating income was a loss of $1 million, which is down $225 million compared to the same quarter in the prior year and down $124 million sequentially, as margins were negatively impacted by pricing and activity. Aggressive cost cutting measures and apparent share gains only partially offset the impact of price deterioration and lower activity levels.
Middle East/North Africa/Asia
Second quarter revenues of $593 million were seven percent higher than the second quarter of 2008 and two percent higher than the prior quarter. Strong performances in Saudi Arabia, Kuwait, Yemen, Oman, India, Pakistan and China were partially offset by weakness in Egypt and Libya.
The current quarter's operating income of $124 million decreased five percent as compared to the same quarter in the prior year and decreased eight percent as compared to the prior quarter due to lower pricing.
Europe/West Africa/FSU
Second quarter revenues of $365 million were six percent lower than the second quarter of 2008 and one percent lower than the prior quarter. Central Europe declined significantly, while Russian activity lingered near the trough activity levels seen during the prior quarter.
The current quarter's operating income of $63 million declined 37 percent as compared to the same quarter in the prior year and 16 percent sequentially due to sales mix and lower pricing.
Latin America
Second quarter revenues of $466 million were 72 percent higher than the second quarter of 2008 and flat compared to the prior quarter. Mexico was the top performer on a sequential basis, while significant declines in Venezuela, Argentina and Colombia served as an offset.
The current quarter's operating income of $86 million improved 47 percent as compared to the same quarter in the prior year and was seven percent lower when compared to the first quarter of 2009.
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 2009 second quarter results on July 20, 2009 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 a Swiss-based, multi-national oilfield service company. It 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 over 47,000 people worldwide.
Contacts:
Andrew P. Becnel - +41.22.816.15.02
Chief Financial Officer
Nicholas W. Gee - +44.1224.762945
Vice President - Investor Relations
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 Six Months
Ended June 30, Ended June 30,
---------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Net Revenues:
North America $571,415 $1,012,244 $1,408,768 $2,102,606
Middle East/North
Africa/Asia 592,908 556,251 1,174,854 1,078,135
Europe/West Africa/
CIS 364,968 389,563 733,811 737,192
Latin America 465,541 271,192 933,540 507,209
------- ------- ------- -------
1,994,832 2,229,250 4,250,973 4,425,142
--------- --------- --------- ---------
Operating Income (Expense):
North America (709) 224,252 122,327 515,905
Middle East/North
Africa/Asia 123,553 130,650 257,579 251,324
Europe/West Africa/
CIS 62,614 99,016 137,557 192,229
Latin America 85,759 58,355 177,976 118,853
Research and
Development (46,113) (44,430) (95,134) (87,069)
Corporate Expenses (40,834) (35,275) (80,433) (68,907)
Exit and
Restructuring (30,905) 64,356 (55,782) (9,877)
------- ------ ------- ------
153,365 496,924 464,090 912,458
Other Income (Expense):
Interest Expense, Net (93,498) (62,399) (184,561) (115,202)
Other, Net (3,871) (5,282) (17,410) (4,783)
------ ------ ------- ------
Income from Continuing Operations
Before Income Taxes 55,996 429,243 262,119 792,473
Provision for Income Taxes:
Provision for Operations (8,829) (57,875) (44,633) (138,806)
Benefit From Exit and
Restructuring 3,388 - 6,729 7,306
----- ----- ----- -----
(5,441) (57,875) (37,904) (131,500)
Income from Continuing
Operations, Net
of Taxes 50,555 371,368 224,215 660,973
Gain (Loss) from
Discontinued
Operation, Net of Taxes - 6,940 - (12,928)
------ ----- ------- -------
Net Income 50,555 378,308 224,215 648,045
Net Income Attributable to
Noncontrolling Interest (8,574) (7,324) (17,432) (12,860)
------ ------ ------- -------
Net Income Attributable to
Weatherford $41,981 $370,984 $206,783 $635,185
======= ======== ======== ========
Basic Earnings Per Share
Attributable to Weatherford:
Income from Continuing
Operations $0.06 $0.53 $0.30 $0.95
Gain (Loss) from
Discontinued
Operation - 0.01 - $(0.02)
----- ---- ----- ------
Net Income $0.06 $0.54 $0.30 $0.93
===== ===== ===== =====
Diluted Earnings Per Share
Attributable to Weatherford:
Income from Continuing
Operations $0.06 $0.52 $0.29 $0.93
Gain (Loss) from
Discontinued
Operation - 0.01 - (0.02)
----- ---- ----- -----
Net Income $0.06 $0.53 $0.29 $0.91
===== ===== ===== =====
Amounts Attributable to
Weatherford
Common Shareholders:
Income from Continuing
Operations, Net of Taxes $41,981 $364,044 $206,783 $648,113
Gain (Loss) from
Discontinued
Operation, Net of Taxes - 6,940 - (12,928)
----- ----- ----- -------
Net Income $41,981 $370,984 $206,783 $635,185
======= ======== ======== ========
Weighted Average Shares
Outstanding:
Basic 700,424 681,870 699,375 681,030
Diluted 709,412 701,927 706,024 699,507
Weatherford International Ltd.
Selected Income Statement Information
(Unaudited)
(In 000's)
Three Months Ended
------------------
6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
--------- --------- ---------- --------- ---------
Net Revenues:
North
America $571,415 $837,353 $1,177,936 $1,179,605 $1,012,244
Middle
East/
North
Africa/
Asia 592,908 581,946 675,513 637,872 556,251
Europe/
West
Africa/
CIS 364,968 368,843 393,005 408,993 389,563
Latin
America 465,541 467,999 388,172 314,326 271,192
------- ------- ------- ------- -------
$1,994,832 $2,256,141 $2,634,626 $2,540,796 $2,229,250
========== ========== ========== ========== ==========
Operating
Income
(Expense):
North
America $(709) $123,036 $296,407 $312,887 $224,252
Middle
East/
North
Africa/
Asia 123,553 134,026 163,238 146,450 130,650
Europe/West
Africa/CIS 62,614 74,943 88,158 102,385 99,016
Latin
America 85,759 92,217 88,720 69,521 58,355
Research
and
Development (46,113) (49,021) (53,564) (52,026) (44,430)
Corporate
Expenses (40,834) (39,599) (35,355) (30,750) (35,275)
Exit and
Restructuring (30,905) (24,877) (16,253) (13,727) 64,356
------- ------- ------- ------- ------
$153,365 $310,725 $531,351 $534,740 $496,924
======== ======== ======== ======== ========
Supplemental Information
(Unaudited)
(In 000's)
Three Months Ended
------------------
6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
--------- --------- ---------- --------- ---------
Depreciation and
Amortization:
North America $77,253 $75,098 $80,555 $79,619 $75,093
Middle East/
North Africa/
Asia 60,921 57,634 55,587 49,138 45,982
Europe/West
Africa/CIS 35,190 34,678 33,825 31,911 27,600
Latin America 35,971 30,442 30,331 23,561 20,368
Research and
Development 2,017 1,933 1,931 1,902 1,867
Corporate 2,341 1,609 1,449 1,000 800
----- ----- ----- ----- ---
$213,693 $201,394 $203,678 $187,131 $171,710
======== ======== ======== ======== ========
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, 2009, March 31, 2009, and June 30, 2008 and
for the six months ended June 30, 2009 and June 30, 2008. 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 Six Months Ended
------------------ ----------------
June 30, March 31, June 30, June 30, June 30,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Operating
Income:
GAAP
Operating
Income $153,365 $310,725 $496,924 $464,090 $912,458
Exit and
Restructuring 30,905(a) 24,877(b) (64,356)(c) 55,782 9,877(d)
------ ------ ------- ------ -----
Non-GAAP
Operating
Income $184,270 $335,602 $432,568 $519,872 $922,335
======== ======== ======== ======== ========
Provision for
Income Taxes:
GAAP
Provision
for Income
Taxes $(5,441) $(32,463) $(57,875) $(37,904) $(131,500)
Tax impact of
Exit and
Restructuring (3,388)(a) (3,341)(b) -(c) (6,729) (7,306)(d)
------ ------ --- ------ ------
Non-GAAP
Provision
for Income
Taxes $(8,829) $(35,804) $(57,875) $(44,633) $(138,806)
======= ======== ======== ======== =========
Income from
Continuing
Operations
Attributable to
Weatherford:
GAAP Income
from
Continuing
Operations $41,981 $164,802 $364,044 $206,783 $648,113
Total Exit and
Restructuring,
net of tax 27,517(a) 21,536(b) (64,356)(c) 49,053 2,571(d)
------ ------ ------- ------ -----
Non-GAAP
Income from
Continuing
Operations $69,498 $186,338 $299,688 $255,836 $650,684
======= ======== ======== ======== ========
Diluted Earnings
Per Share From
Continuing
Operations
Attributable to
Weatherford:
GAAP Diluted
Earnings per
Share From $0.06 $0.23 $0.52 $0.29 $0.93
Continuing
Operations
Total Exit and
Restructuring,
net of tax 0.04(a) 0.04(b) (0.09)(c) 0.07 0.00(d)
---- ---- ----- ---- ----
Non-GAAP
Diluted
Earnings
per Share
From
Continuing
Operations $0.10 $0.27 $0.43 $0.36 $0.93
===== ===== ===== ===== =====
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. Also included are severance charges associated with
the Company's reorganization activities.
Note (b): This amount represents investigation costs incurred in
connection with on-going investigations by the U.S. government. Also
included are severance charges associated with the Company's
reorganization activities.
Note (c): 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 (d): 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. Also
included are severance charges associated with the Company's
reorganization activities. These charges were partially offset by a gain
on the restructuring of a Qatar operation into a JV.
SOURCE Weatherford International Ltd.
http://www.weatherford.com