GENEVA, Oct 19, 2009 /PRNewswire-FirstCall via COMTEX/ -- Weatherford International Ltd. (NYSE: WFT) today reported third quarter 2009 income from continuing operations of $93 million, or $0.13 per diluted share, excluding an after tax loss of $0.02 for investigation and exit costs incurred in connection with the company's withdrawal from sanctioned countries and severance costs principally associated with restructuring activities. Third quarter diluted earnings per share from continuing operations reflect a decrease of 76 percent over the third quarter of 2008 diluted earnings per share from continuing operations of $0.55, before severance and investigation costs. Results for the third quarter include a tax benefit of approximately $0.05 resulting from the lowering of the company's estimate of its effective tax rate, as well as a negative $0.02 impact from higher losses on foreign currency remeasurement and the settlement of a legal dispute. In addition, third quarter results include a gain of $27 million recorded pursuant to Statement of Financial Accounting Standards No. 141(R), Business Combinations, in connection with the revaluation of contingent consideration associated with an acquisition. This financial item was mostly offset by other adjustments going both ways.
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Third quarter revenues were $2,150 million, or 15 percent lower than the same period last year, against a backdrop of a 39 percent decrease in global rig count. North America was primarily responsible for the decline, with revenues decreasing 47 percent against a 52 percent decline in rig count. International revenues were up 12 percent against an 11 percent decrease in international rig count.
Sequentially, the company's third quarter diluted earnings per share from continuing operations, before severance and investigation costs, were $0.03 higher than the second quarter of 2009 diluted earnings per share from continuing operations of $0.10, before severance and investigation costs.
North America
Revenues for the quarter were $620 million, which is a 47 percent decrease over the same quarter in the prior year, as compared to a 52 percent rig count decrease. Sequentially, revenues were up nine percent as compared to a 13 percent rig count increase.
Operating income was $33 million, which is down $280 million compared to the same quarter in the prior year and up $34 million sequentially. The sequential increase was mainly attributable to the seasonal recovery in Canada.
Middle East/North Africa/Asia
Third quarter revenues of $600 million were six percent lower than the third quarter of 2008 and one percent higher than the prior quarter. On a sequential basis, strong performances were posted in Saudi Arabia, Qatar, China and Australia.
The current quarter's operating income of $102 million decreased 30 percent as compared to the same quarter in the prior year and decreased 17 percent as compared to the prior quarter due to the combined impact of delayed project start ups and product deliveries, as well as lower pricing.
Latin America
Third quarter revenues of $525 million were 67 percent higher than the third quarter of 2008 and 13 percent higher than the prior quarter despite weather issues and reduced gas activity in Mexico. On average, we operated 45 strings in Mexico, up from an average of 33 strings last quarter. Those rigs that were unaffected by weather ran more efficiently than the prior quarter. Fourteen of our strings operate in the central and northern part of the Chicontepec field which suffered from flooding during the current quarter.
The current quarter's operating income of $54 million declined 22 percent as compared to the same quarter in the prior year. Sequentially, operating income declined 37 percent due to pricing declines as well as the negative impact of fixed costs incurred on rigs made idle during the flooding in Mexico.
Europe/West Africa/FSU
Third quarter revenues of $404 million were one percent lower than the third quarter of 2008 and 11 percent higher than the prior quarter. The sequential increase was driven primarily by our acquisition of TNK-BP's oilfield service business during the third quarter. This increase was offset by declines in activity in Europe.
The current quarter's operating income of $72 million declined 30 percent as compared to the same quarter in the prior year and increased 15 percent sequentially.
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 third quarter results on October 19, 2009 at 7:30 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 52,000 people worldwide.
Contacts: Andrew P. Becnel +41.22.816.1502
Chief Financial Officer
Nicholas W. Gee +41.22.816.1510
Group Vice President- Marketing & Planning
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 Nine Months
Ended September 30, Ended September 30,
-------------------- --------------------
2009 2008 2009 2008
---- ---- ---- ----
Net Revenues:
North America $620,496 $1,179,605 $2,029,264 $3,282,211
Middle East/
North Africa/
Asia 600,110 637,872 1,774,964 1,716,007
Europe/West
Africa/FSU 404,390 408,993 1,138,201 1,146,185
Latin America 524,883 314,326 1,458,423 821,535
------- ------- --------- -------
2,149,879 2,540,796 6,400,852 6,965,938
--------- --------- --------- ---------
Operating Income (Expense):
North America 33,259 312,887 155,586 828,792
Middle East/
North Africa/
Asia 101,943 146,450 359,522 397,774
Europe/West
Africa/FSU 71,836 102,385 209,393 294,614
Latin America 54,343 69,521 232,319 188,374
Research and
Development (49,300) (52,026) (144,434) (139,095)
Corporate
Expenses (44,272) (30,750) (124,705) (99,657)
Exit and
Restructuring (17,887) (13,727) (73,669) (23,604)
------- ------- ------- -------
149,922 534,740 614,012 1,447,198
Other Income (Expense):
Interest
Expense, Net (90,285) (60,521) (274,846) (175,723)
Other, Net (11,046) (8,243) (28,456) (13,026)
------- ------ ------- -------
Income from Continuing Operations
Before Income
Taxes 48,591 465,976 310,710 1,258,449
Benefit (Provision) for Income Taxes:
Benefit (Provision)
for Operations 31,766 (82,990) (12,867) (221,796)
Benefit From Exit
and Restructuring 2,603 - 9,332 7,306
----- --- ----- -----
34,369 (82,990) (3,535) (214,490)
Income from
Continuing
Operations, Net of
Taxes 82,960 382,986 307,175 1,043,959
Gain (Loss) from
Discontinued
Operation, Net of
Taxes - - - (12,928)
--- --- --- -------
Net Income 82,960 382,986 307,175 1,031,031
Net Income
Attributable to
Noncontrolling
Interest (5,586) (12,386) (23,018) (25,246)
------ ------- ------- -------
Net Income
Attributable to
Weatherford $77,374 $370,600 $284,157 $1,005,785
======= ======== ======== ==========
Basic Earnings Per Share Attributable to Weatherford:
Income from
Continuing
Operations $0.11 $0.54 $0.40 $1.49
Gain (Loss) from
Discontinued
Operation - - - (0.01)
--- --- --- -----
Net Income $0.11 $0.54 $0.40 $1.48
===== ===== ===== =====
Diluted Earnings Per Share Attributable to Weatherford:
Income from
Continuing
Operations $0.11 $0.53 $0.40 $1.46
Gain (Loss) from
Discontinued
Operation - - - (0.02)
--- --- --- -----
Net Income $0.11 $0.53 $0.40 $1.44
===== ===== ===== =====
Amounts Attributable to Weatherford Common Shareholders:
Income from
Continuing
Operations, Net of
Taxes $77,374 $370,600 $284,157 $1,018,713
Gain (Loss) from
Discontinued
Operation, Net of
Taxes - - - (12,928)
--- --- --- -------
Net Income $77,374 $370,600 $284,157 $1,005,785
======= ======== ======== ==========
Weighted Average Shares Outstanding:
Basic 724,114 682,532 707,621 681,531
Diluted 735,109 701,284 715,719 700,099
Weatherford International Ltd.
Selected Income Statement Information
(Unaudited)
(In 000's)
Three Months
Ended
-----
9/30/2009 6/30/2009 3/31/2009 12/31/2008 9/30/2008
--------- --------- --------- ---------- ---------
Net Revenues:
North
America $620,496 $571,415 $837,353 $1,177,936 $1,179,605
Middle East/
North Africa/
Asia 600,110 592,908 581,946 675,513 637,872
Europe/West
Africa/FSU 404,390 364,968 368,843 393,005 408,993
Latin America 524,883 465,541 467,999 388,172 314,326
------- ------- ------- ------- -------
$2,149,879 $1,994,832 $2,256,141 $2,634,626 $2,540,796
========== ========== ========== ========== ==========
Operating Income
(Expense):
North
America $33,259 $(709) $123,036 $296,407 $312,887
Middle East/
North Africa/
Asia 101,943 123,553 134,026 163,238 146,450
Europe/West
Africa/FSU 71,836 62,614 74,943 88,158 102,385
Latin America 54,343 85,759 92,217 88,720 69,521
Research and
Development (49,300) (46,113) (49,021) (53,564) (52,026)
Corporate
Expenses (44,272) (40,834) (39,599) (35,355) (30,750)
Exit and
Restructuring (17,887) (30,905) (24,877) (16,253) (13,727)
------- ------- ------- ------- -------
$149,922 $153,365 $310,725 $531,351 $534,740
======== ======== ======== ======== ========
Supplemental Information
(Unaudited)
(In 000's)
Three Months
Ended
-----
9/30/2009 6/30/2009 3/31/2009 12/31/2008 9/30/2008
--------- --------- --------- ---------- ---------
Depreciation and
Amortization:
North America $79,737 $77,253 $75,098 $80,555 $79,619
Middle East/
North Africa/
Asia 65,771 60,921 57,634 55,587 49,138
Europe/West
Africa/FSU 44,864 35,190 34,678 33,825 31,911
Latin America 43,403 35,971 30,442 30,331 23,561
Research and
Development 1,940 2,017 1,933 1,931 1,902
Corporate 2,194 2,341 1,609 1,449 1,000
----- ----- ----- ----- -----
$237,909 $213,693 $201,394 $203,678 $187,131
======== ======== ======== ======== ========
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, 2009, June 30, 2009, and September 30,
2008 and for the nine months ended September 30, 2009 and September 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 Nine Months Ended
------------------ -----------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Operating
Income:
GAAP
Operating
Income $149,922 $153,365 $534,740 $614,012 $1,447,198
Exit and
Restructuring 17,887(a) 30,905(b) 13,727(c) 73,669(d) 23,604(e)
------ ------ ------ ------ ------
Non-GAAP
Operating
Income $167,809 $184,270 $548,467 $687,681 $1,470,802
======== ======== ======== ======== ==========
Benefit
(Provision)
For
Income
Taxes:
GAAP Benefit
(Provision)
For
Income
Taxes $34,369 $(5,441) $(82,990) $(3,535) $(214,490)
Tax
Impact
of Exit
and
Restructuring (2,603)(a) (3,388)(b) -(c) (9,332)(d) (7,306)(e)
------ ------ ------ ------ ------
Non-GAAP Benefit
(Provision) for
Income Taxes $31,766 $(8,829) $(82,990) $(12,867) $(221,796)
======= ======= ======== ======== =========
Income from
Continuing
Operations
Attributable
to Weatherford:
GAAP Income
from Continuing
Operations $77,374 $41,981 $370,600 $284,157 $1,018,713
Total Exit and
Restructuring,
net of
tax 15,284(a) 27,517(b) 13,727(c) 64,337(d) 16,298(e)
------ ------ ------ ------ ------
Non-GAAP
Income from
Continuing
Operations $92,658 $69,498 $384,327 $348,494 $1,035,011
======= ======= ======== ======== ==========
Diluted Earnings
Per Share
From
Continuing
Operations
Attributable
to Weatherford:
GAAP Diluted
Earnings per
Share From $0.11 $0.06 $0.53 $0.40 $1.46
Continuing
Operations
Total Exit and
Restructuring,
net of
tax 0.02(a) 0.04(b) 0.02(c) 0.09(d) 0.02(e)
---- ---- ---- ---- ----
Non-GAAP Diluted
Earnings per Share
From Continuing
Operations $0.13 $0.10 $0.55 $0.49 $1.48
===== ===== ===== ===== =====
Note (a): This amount represents investigation costs incurred in connection with on-going investigations by the U.S. government. Also included are severance charges and facility closure costs 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 and costs related to the Company's withdrawal from sanctioned countries. Also included are severance charges associated with the Company's reorganization activities.
Note (c): 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 (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 and facility closure costs associated with the Company's reorganization activities.
Note (e): 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, partially offset by a gain on the restructuring of a Qatar operation into a JV.
SOURCE Weatherford International Ltd.
http://www.weatherford.com