GENEVA, Switzerland,
April 24, 2014 /PRNewswire/ -- Weatherford International
Ltd. (NYSE/Euronext Paris/SIX: WFT) reported net income before
charges of $99 million, ($0.13 diluted earnings per share on a non-GAAP
basis) on revenues of $3.60 billion
for the first quarter of 2014.
First Quarter 2014 Highlights
- Operating income margins improved 115 basis points sequentially
with international margins improving 278 basis points over the
fourth quarter;
- Executed our plan to reduce the cost base of our core business.
To date, we have identified over 6,600 positions for elimination,
and during the first quarter we completed approximately 56% of our
planned reduction in workforce with an estimated pre-tax annualized
savings of $263 million for the
positions already eliminated;
- Started the process of closing 20 underperforming operating
locations in various countries, and identified an additional 30
operating locations to begin closing during the second quarter;
and
- Entered into an agreement to sell our pipeline and specialty
services business for a total consideration of $250 million, including $241 million in cash and $9 million in retained working capital.
Bernard J. Duroc-Danner,
Chairman, President and Chief Executive Officer commented, "We have
amassed an outstanding industrial core, supported by the quality of
our management and employees. For 2014, we have established
reasonable objectives grounded on careful assessment and steadfast
focus on three clear actions: Core, Cost and Cash. Weatherford has
implemented measures needed to leverage and further develop our
industrial core, placing us on a long-term financially rewarding
path. Weatherford's industrial might will again reemerge to
the greater benefit of our customers, employees and all our
stakeholders. Our direction is as simple as it is committed
by all. The whole organization understands this, and we are
focused on three principal themes:
- Core: Despite the adverse impacts of extreme weather related
activity reductions, mainly across the U.S. and Russia and our self-imposed capital discipline
driven activity reductions in Venezuela, our core business operating income
margins were 15.1% for the quarter, re-emphasizing the overall
strong attributes of our core businesses. This compared with 15.2%
for the fourth quarter of 2013. Sequentially, our product sales
businesses (Artificial Lift and Completions) declined slightly from
the fourth quarter after the normal year-end surge in sales.
Pressure pumping revenue improved measurably as more fleets were
contracted in the U.S., reflecting our internal consolidation
efforts and improving customer demand. Well Construction and
Formation Evaluation were affected in part by the adverse weather
conditions. We see strong growth in our core businesses in the
balance of the year.
- Cost: We have made significant progress on our headcount
reduction plan in the first quarter with the remaining to be
substantially completed in the second quarter. The cost savings
will materially help results starting from the second quarter. In
addition, the process of identifying and exiting underperforming
operating locations has begun in earnest. While these restructuring
actions will involve one-time severance and restructuring costs,
the end result will be a leaner and fitter company, better equipped
to deliver higher margins with top line growth.
- Cash: While our net debt increased in the first quarter, we
fully expect to deliver positive free cash flow from operations of
$500 million this year, and reduce
net debt to $7 billion by year end.
The first quarter performance included one-time payments including
$253 million to settle our U.S.
government investigations, severance associated with our headcount
reduction program and cash consumed by our Zubair EPF project in
Iraq, coupled with a seasonal
slowdown in customer collections. Going forward, the severance and
restructuring cash payments should substantially end by mid-year,
and the Zubair EPF project cash flow will improve with customer
reimbursements. Our divestiture efforts are already bearing fruit
this year. In the first quarter, we announced the signing of an
agreement to sell the first of our non-core businesses, pipeline
and specialty services, for $250
million, which we expect to close after customary regulatory
approvals. The process of divesting our testing and production
services business is well under way and buyer interest is strong
while the other non-core business divestitures are on schedule. In
summary, Weatherford is moving steadfastly along the plan we
outlined at the beginning of the year, and we are confident of
executing our plan successfully."
First Quarter 2014 Results
Revenue for the first quarter of 2014 was $3.60 billion compared with $3.74 billion in the fourth quarter of 2013 and
$3.84 billion in the first quarter of
2013. Net loss for the first quarter of 2014 was $41 million, or $0.05 loss per diluted share. After-tax charges
for the first quarter of $140 million
included:
- $71 million, net of tax,
primarily associated with severance and exit costs related to our
workforce reduction and the shutdown of loss making businesses in
certain markets;
- $47 million, net of tax,
associated with our legacy lump sum contracts in Iraq; and
- $22 million of professional fees
and other costs, net of tax, largely associated with our
divestiture program, year-end income tax material weakness
remediation and our previously announced redomiciliation
activities.
Net income on a non-GAAP basis for the first quarter of 2014 was
$99 million compared to $53 million in the fourth quarter of 2013 and
$117 million in the first quarter of
2013.
Sequential operating income growth was driven by:
- Latin America, due to the
completion of lower margin project work in Mexico, and a continued focus on higher margin
activity in Argentina and
Brazil;
- Europe/Sub-Sahara
Africa/Russia as increases in
activity in the North Sea and Caspian along with new work in Sub-Sahara
Africa more than offset a larger-than-normal seasonal decline in
Russia;
- Middle East/North Africa/Asia
Pacific where improvements, primarily in the Gulf Countries,
offset the seasonal decline in China and Australia; and
- Partially offsetting these improvements was unusually harsh
winter weather in the U.S. that negatively impacted our activity
levels.
Regional Highlights
First quarter revenues of $1.61
billion were up $38 million or
2% sequentially, and down $82
million, or 5%, from the same quarter in the prior year.
First quarter operating income of $201
million (12.5% margin) declined 7% sequentially and 10% from
the same quarter in the prior year. The sequential revenue
improvement reflects stronger seasonal activity in Canada more than offsetting severe weather
related weakness in the U.S. On a product service line basis,
the revenue improvements came mainly from Stimulation, Formation
Evaluation and Completions. The sequential operating
income deterioration stems mainly from the weather related activity
shortfalls in the U.S. which were partially mitigated by an
improvement in the operating income margins in Canada.
- Middle East/North Africa/Asia
Pacific
First quarter revenues of $781
million were down $40 million
or 5% sequentially, and down $4
million, or 1%, from the same quarter in the prior year.
First quarter operating income of $54
million (6.9% margin) increased 8% sequentially and
increased 20% from the same quarter in the prior year. The
sequential revenue decline is typical of seasonal effects in
China and Australia, and the recovery of operating
income is attributable to the re-start of certain operations in the
Middle East after some disruptions
temporarily halted activity during the fourth quarter, which
primarily impacted our Land Rig Drilling product line.
- Europe/Sub-Sahara
Africa/Russia
First quarter revenues of $664
million were down $24 million
or 3% sequentially, and up $31
million, or 5%, higher than the same quarter in the prior
year. First quarter operating income of $54
million (8.1% margin) increased $7
million, or 15%, sequentially and declined 17% when compared
to the same quarter in the prior year. The sequential revenues and
operating income margins were affected by activity stoppages with
the severe winter conditions in Russia, which were partly offset by
improvements in Europe and
Sub-Sahara Africa.
First quarter revenues of $541
million were down $116 million
or 18% sequentially, and down $186
million, or 26%, from the same quarter in the prior year.
First quarter operating income of $93
million (17.2% margin) was up $31
million, or 50% sequentially, and down $5 million, or 5%, compared to the same quarter
in the prior year. The decline in revenue in the first
quarter was largely related to the completion of project work in
Mexico, and the continued impact
of our capital discipline driven activity reductions in
Venezuela. The sequential margin
growth is due to the completion of lower margin project work in
Mexico and a continued focus on
higher margin activity in Argentina and Brazil.
Net Debt
Net debt increased by $673
million, reflecting mainly the payment of $253 million to settle our U.S. government
investigations, capital expenditures of $286
million (net of lost-in-hole) and the seasonal impact on
working capital balances.
Outlook
In 2014, we remain focused on achieving a step change in
profitability by:
- Focusing the organization on growing our core businesses;
- Making our cost base more efficient; and
- Divesting our non-core businesses and reducing our net
debt.
We have completed the initial phase of our cost reduction
initiatives, and have identified over 6,600 positions for our
reduction in workforce, with expected annualized pre-tax cost
savings of approximately $450
million. This reduction remains on track to be substantially
completed during the first half of 2014. Our strategic business
reviews of operations that do not have critical mass, are currently
unprofitable and are a drain on our cash flow are well underway. We
have already started eliminating select operating locations
identified during these reviews and will continue to do so during
the next two quarters. We expect these actions will bring
additional costs savings, both in the form of headcount reductions
and other savings. These additional headcount reductions will
enable us to fully deliver on the 7,000 reduction target and
achieve our $500 million targeted
annualized pre-tax cost savings.
In 2014, we expect revenue growth in North America, Europe/Sub-Sahara Africa/Russia and Middle
East/North
Africa/Asia Pacific
regions, while Latin America is
expected to decline year-over-year. Overall margins will improve
with lower costs and the growth in our more profitable core
businesses. Based on our current and projected activity profile,
and inclusive of the already identified and expected benefits from
the cost reduction actions outlined above, we re-affirm our most
recent guidance, and expect 2014 earnings per share (non-GAAP) to
range between $1.10 and $1.20. Our
effective tax rate is forecasted to be between 25% and 30% and will
depend on the geographical mix of earnings going forward. Capital
expenditures are estimated at $1.3
billion for 2014 and include core and non-core product lines
until the divestitures are complete. The continued focus on
reducing working capital coupled with improved earnings is expected
to generate positive free cash flow from operations of
approximately $500 million for the
year. Given these targets and the divestiture program, we expect
net debt to reduce to $7 billion by
the end of the year.
Non-GAAP Performance Measures
Unless explicitly stated to the contrary, all performance
measures used throughout this document are non-GAAP. Corresponding
reconciliations to GAAP financial measures have been provided in
the following pages to offer meaningful comparisons between current
results and results in prior periods.
About Weatherford
Weatherford is a Swiss-based, multinational oilfield service
company. It is one of the largest global providers of technology
and services for the oil and gas industry. Weatherford operates in
over 100 countries, and employs over 64,000 people worldwide. For
more information, visit www.weatherford.com
Conference Call
The Company will host a conference call with financial analysts
to discuss the quarterly results on April 25, 2014, at
8:30 a.m. eastern daylight time
(EDT), 7:30 a.m. central daylight
time (CDT). Weatherford invites investors to listen to the
call live via the Company's website, www.weatherford.com in the
Investor Relations section. A recording of the conference call and
transcript of the call will be available in that section of the
website shortly after the call ends.
Contacts:
|
|
Krishna
Shivram
|
|
+1.713.836.4610
|
|
|
Executive Vice
President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
Karen
David-Green
|
|
+1.713.836.7430
|
|
|
Vice President -
Investor Relations
|
|
|
Forward-Looking Statements
This press release contains, and the conference call announced
in this release may include, forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include, among other things, the
Company's annual non-GAAP earnings per share, effective tax rate,
free cash flow, net debt, capital expenditures and the size, timing
and benefits of the reduction in workforce, and are also generally
identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "budget," "intend," "strategy," "plan,"
"guidance," "may," "should," "could," "will," "would," "will be,"
"will continue," "will likely result," and similar expressions,
although not all forward-looking statements contain these
identifying words. Such statements are based upon the current
beliefs of Weatherford's management, and are subject to significant
risks, assumptions and uncertainties. Should one or more of these
risks or uncertainties materialize, or underlying assumptions prove
incorrect, actual results may vary materially from those indicated
in our forward-looking statements. Readers are also cautioned that
forward-looking statements are only predictions and may differ
materially from actual future events or results due to the
Company's ability to implement workforce reductions in various
geographies; possible changes in the size and components of the
expected costs and charges associated with the workforce reduction;
and risks associated with the Company's ability to achieve the
benefits of the planned workforce reduction. Forward-looking
statements also are affected by the risk factors described in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2013, and those set
forth from time-to-time in other filings with the Securities and
Exchange Commission ("SEC"). We undertake no obligation to correct
or update any forward-looking statement, whether as a result of new
information, future events, or otherwise, except to the extent
required under federal securities laws.
Weatherford
International Ltd.
|
Consolidated
Condensed Statements of Operations
|
(Unaudited)
|
(Stated in Millions,
Except Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
3/31/2014
|
|
3/31/2013
|
Net
Revenues:
|
|
|
|
|
|
|
North
America
|
|
$
|
1,610
|
|
|
$
|
1,692
|
|
Middle
East/North Africa/Asia
|
|
781
|
|
|
785
|
|
Europe/SSA/Russia
|
|
664
|
|
|
633
|
|
Latin
America
|
|
541
|
|
|
727
|
|
Total Net Revenues
|
|
3,596
|
|
|
3,837
|
|
|
|
|
|
|
|
|
Operating Income
(Expense):
|
|
|
|
|
|
|
North
America
|
|
201
|
|
|
224
|
|
Middle
East/North Africa/Asia
|
|
54
|
|
|
45
|
|
Europe/SSA/Russia
|
|
54
|
|
|
65
|
|
Latin
America
|
|
93
|
|
|
98
|
|
Research and
Development
|
|
(69)
|
|
|
(67)
|
|
Corporate
Expenses
|
|
(47)
|
|
|
(48)
|
|
Restructuring
Charges
|
|
(70)
|
|
|
—
|
|
Other
Items
|
|
(86)
|
|
|
(38)
|
|
Total Operating Income
|
|
130
|
|
|
279
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
Interest
Expense, Net
|
|
(126)
|
|
|
(131)
|
|
Devaluation of
Venezuelan Bolivar
|
|
—
|
|
|
(100)
|
|
Other,
Net
|
|
(9)
|
|
|
(13)
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Before Income Taxes
|
|
(5)
|
|
|
35
|
|
|
|
|
|
|
|
|
Provision for Income
Taxes
|
|
(27)
|
|
|
(5)
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
|
(32)
|
|
|
30
|
|
Net Income
Attributable to Noncontrolling Interests
|
|
(9)
|
|
|
(8)
|
|
Net Income (Loss)
Attributable to Weatherford
|
|
$
|
(41)
|
|
|
$
|
22
|
|
|
|
|
|
|
|
|
Income (Loss) Per
Share Attributable to Weatherford:
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.05)
|
|
|
$
|
0.03
|
|
Diluted
|
|
$
|
(0.05)
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
|
|
Basic
|
|
776
|
|
|
769
|
|
Diluted
|
|
776
|
|
|
773
|
|
Weatherford
International Ltd.
|
Selected
Statements of Operations Information
|
(Unaudited)
|
(Stated In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
3/31/2014
|
|
12/31/2013
|
|
9/30/2013
|
|
6/30/2013
|
|
3/31/2013
|
Net
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
1,610
|
|
|
$
|
1,572
|
|
|
$
|
1,597
|
|
|
$
|
1,529
|
|
|
$
|
1,692
|
|
Middle East/North
Africa/Asia
|
781
|
|
|
821
|
|
|
819
|
|
|
919
|
|
|
785
|
|
Europe/SSA/Russia
|
664
|
|
|
688
|
|
|
691
|
|
|
681
|
|
|
633
|
|
Latin
America
|
541
|
|
|
657
|
|
|
713
|
|
|
739
|
|
|
727
|
|
Total Net Revenues
|
$
|
3,596
|
|
|
$
|
3,738
|
|
|
$
|
3,820
|
|
|
$
|
3,868
|
|
|
$
|
3,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
3/31/2014
|
|
12/31/2013
|
|
9/30/2013
|
|
6/30/2013
|
|
3/31/2013
|
Operating Income
(Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
201
|
|
|
$
|
216
|
|
|
$
|
215
|
|
|
$
|
167
|
|
|
$
|
224
|
|
Middle East/North
Africa/Asia
|
54
|
|
|
50
|
|
|
69
|
|
|
66
|
|
|
45
|
|
Europe/SSA/Russia
|
54
|
|
|
47
|
|
|
103
|
|
|
83
|
|
|
65
|
|
Latin
America
|
93
|
|
|
62
|
|
|
115
|
|
|
90
|
|
|
98
|
|
Research and
Development
|
(69)
|
|
|
(63)
|
|
|
(65)
|
|
|
(71)
|
|
|
(67)
|
|
Corporate
Expenses
|
(47)
|
|
|
(58)
|
|
|
(45)
|
|
|
(49)
|
|
|
(48)
|
|
Restructuring
Charges
|
(70)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
U.S. Government
Investigation Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(153)
|
|
|
—
|
|
Other
Items
|
(86)
|
|
|
(304)
|
|
|
(153)
|
|
|
(78)
|
|
|
(38)
|
|
Total Operating Income (Expense)
|
$
|
130
|
|
|
$
|
(50)
|
|
|
$
|
239
|
|
|
$
|
55
|
|
|
$
|
279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
3/31/2014
|
|
12/31/2013
|
|
9/30/2013
|
|
6/30/2013
|
|
3/31/2013
|
Product Service
Line Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Formation Evaluation
and Well Construction (a)
|
2,164
|
|
|
2,307
|
|
|
2,330
|
|
|
2,361
|
|
|
2,273
|
|
Completion and
Production (b)
|
1,432
|
|
|
1,431
|
|
|
1,490
|
|
|
1,507
|
|
|
1,564
|
|
Total Product Service Line Revenues
|
$
|
3,596
|
|
|
$
|
3,738
|
|
|
$
|
3,820
|
|
|
$
|
3,868
|
|
|
$
|
3,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
3/31/2014
|
|
12/31/2013
|
|
9/30/2013
|
|
6/30/2013
|
|
3/31/2013
|
Depreciation and
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
107
|
|
|
$
|
106
|
|
|
$
|
108
|
|
|
$
|
102
|
|
|
$
|
108
|
|
Middle East/North
Africa/Asia
|
102
|
|
|
104
|
|
|
101
|
|
|
98
|
|
|
93
|
|
Europe/SSA/Russia
|
72
|
|
|
78
|
|
|
69
|
|
|
68
|
|
|
71
|
|
Latin
America
|
64
|
|
|
69
|
|
|
71
|
|
|
68
|
|
|
68
|
|
Research and
Development and Corporate
|
6
|
|
|
6
|
|
|
3
|
|
|
5
|
|
|
6
|
|
Total Depreciation and Amortization
|
$
|
351
|
|
|
$
|
363
|
|
|
$
|
352
|
|
|
$
|
341
|
|
|
$
|
346
|
|
|
|
(a)
|
Formation Evaluation
and Well Construction includes Controlled Pressure Drilling and
Testing, Drilling Services, Tubular Running Services, Drilling
Tools, Integrated Drilling, Wireline Services, Re-entry and
Fishing, Cementing, Liner Systems, Integrated Laboratory Services
and Surface Logging.
|
(b)
|
Completion and
Production includes Artificial Lift Systems, Stimulation and
Chemicals, Completion Systems and Pipeline and Specialty
Services.
|
|
|
We report our
financial results in accordance with U.S. generally accepted
accounting principles (GAAP). However, Weatherford's
management believes that certain non-GAAP financial measures and
ratios (as defined under the SEC's Regulation G) may provide users
of this financial information, additional meaningful comparisons
between current results and results of prior periods. The
non-GAAP amounts shown below should not be considered as
substitutes for operating income, provision for income taxes, net
income or other data prepared and reported in accordance with GAAP,
but should be viewed in addition to the Company's reported results
prepared in accordance with GAAP.
|
Weatherford
International Ltd.
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
(Unaudited)
|
(Stated In Millions,
Except Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
3/31/2014
|
|
12/31/2013
|
|
3/31/2013
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Income
|
|
$
|
130
|
|
|
$
|
(50)
|
|
|
$
|
279
|
|
Restructuring, Exited Businesses and Severance Cost (a)
|
|
84
|
|
|
30
|
|
|
8
|
|
Legacy Contracts (b)
|
|
46
|
|
|
168
|
|
|
3
|
|
Accounts Receivable Reserves and Write-offs
|
|
—
|
|
|
98
|
|
|
—
|
|
Tax Remediation and Restatement Expenses
|
|
5
|
|
|
2
|
|
|
21
|
|
Investigation Related Expenses
|
|
—
|
|
|
5
|
|
|
5
|
|
Professional Fees and Other (c)
|
|
21
|
|
|
1
|
|
|
1
|
|
Total
Non-GAAP Adjustments
|
|
156
|
|
|
304
|
|
|
38
|
|
Non-GAAP
Operating Income
|
|
$
|
286
|
|
|
$
|
254
|
|
|
$
|
317
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss)
Before Income Taxes:
|
|
|
|
|
|
|
|
|
|
GAAP Income
(Loss) Before Income Taxes
|
|
$
|
(5)
|
|
|
$
|
(194)
|
|
|
$
|
35
|
|
Operating Income Adjustments
|
|
156
|
|
|
304
|
|
|
38
|
|
Devaluation of Venezuelan Bolivar
|
|
—
|
|
|
—
|
|
|
100
|
|
Non-GAAP
Income Before Income Taxes
|
|
$
|
151
|
|
|
$
|
110
|
|
|
$
|
173
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
Income Taxes:
|
|
|
|
|
|
|
|
|
|
GAAP Provision
for Income Taxes
|
|
$
|
(27)
|
|
|
$
|
(70)
|
|
|
$
|
(5)
|
|
Tax Effect on
Non-GAAP Adjustments
|
|
(16)
|
|
|
20
|
|
|
(43)
|
|
Non-GAAP
Provision for Income Taxes
|
|
$
|
(43)
|
|
|
$
|
(50)
|
|
|
$
|
(48)
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Weatherford:
|
|
|
|
|
|
|
|
|
|
GAAP Net
Income (Loss)
|
|
$
|
(41)
|
|
|
$
|
(271)
|
|
|
$
|
22
|
|
Restructuring, Exited Businesses and Severance Cost
|
|
71
|
|
|
25
|
|
|
6
|
|
Legacy Contracts
|
|
47
|
|
|
171
|
|
|
8
|
|
Devaluation of Venezuelan Bolivar
|
|
—
|
|
|
33
|
|
|
61
|
|
Accounts Receivable Reserves and Write-offs
|
|
—
|
|
|
96
|
|
|
—
|
|
Tax Remediation and Restatement Expenses
|
|
4
|
|
|
(2)
|
|
|
18
|
|
Investigation Related Expenses
|
|
—
|
|
|
2
|
|
|
3
|
|
Professional Fees and Other (c)
|
|
18
|
|
|
(1)
|
|
|
(1)
|
|
Total Charges, net of tax
|
|
140
|
|
|
324
|
|
|
95
|
|
Non-GAAP Net
Income
|
|
$
|
99
|
|
|
$
|
53
|
|
|
$
|
117
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share Attributable to Weatherford:
|
|
|
|
|
|
|
|
|
|
GAAP Diluted
Earnings (Loss) per Share
|
|
$
|
(0.05)
|
|
|
$
|
(0.35)
|
|
|
$
|
0.03
|
|
Total Charges, net of tax
|
|
0.18
|
|
|
0.42
|
|
|
0.12
|
|
Non-GAAP
Diluted Earnings per Share
|
|
$
|
0.13
|
|
|
$
|
0.07
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Effective Tax
Rate (d)
|
|
(540)%
|
|
|
(36)%
|
|
|
14%
|
|
Non-GAAP Effective
Tax Rate (e)
|
|
28%
|
|
|
45%
|
|
|
28%
|
|
|
|
(a)
|
Restructuring, Exited
Businesses and Severance Cost includes $70 million in severance and
exit costs associated with our 2014 workforce and cost reduction
initiatives, as well as $14 million in operating losses related to
businesses exited in the three months ended March 31, 2014. These
results are presented in comparison to the severance amounts
recognized in the prior periods.
|
(b)
|
The revenues
associated with the legacy lump sum contracts in Iraq were $95
million, $52 million and $166 million for the three months ended
3/31/2014, 12/31/2013 and 3/31/2013, respectively.
|
(c)
|
Professional Fees and
Other, during the three months ended March 31, 2014, includes the
cost of our divestiture program, the restatement related
litigation, and the cost incurred to date in association with our
planned redomiciliation.
|
(d)
|
GAAP Effective Tax
Rate is GAAP provision for income taxes divided by GAAP income
before income taxes.
|
(e)
|
Non-GAAP Effective
Tax Rate is the Non-GAAP provision for income taxes divided by
Non-GAAP income before income taxes.
|
Weatherford
International Ltd.
|
Selected Balance
Sheet Data
|
(Unaudited)
|
(Stated In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2014
|
|
12/31/2013
|
|
9/30/2013
|
|
6/30/2013
|
|
3/31/2013
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
367
|
|
|
$
|
435
|
|
|
$
|
316
|
|
|
$
|
295
|
|
|
$
|
286
|
|
Accounts Receivable,
Net
|
|
3,723
|
|
|
3,594
|
|
|
4,004
|
|
|
3,837
|
|
|
3,850
|
|
Inventories,
Net
|
|
3,403
|
|
|
3,371
|
|
|
3,580
|
|
|
3,637
|
|
|
3,744
|
|
Property, Plant and
Equipment, Net
|
|
8,213
|
|
|
8,368
|
|
|
8,397
|
|
|
8,333
|
|
|
8,299
|
|
Goodwill and
Intangibles, Net
|
|
4,241
|
|
|
4,335
|
|
|
4,421
|
|
|
4,402
|
|
|
4,485
|
|
Equity
Investments
|
|
297
|
|
|
296
|
|
|
686
|
|
|
671
|
|
|
660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
2,012
|
|
|
2,091
|
|
|
2,117
|
|
|
2,144
|
|
|
2,191
|
|
Short-term Borrowings
and Current Portion of Long-term Debt
|
|
2,293
|
|
|
1,666
|
|
|
2,230
|
|
|
2,148
|
|
|
1,896
|
|
Long-term
Debt
|
|
7,039
|
|
|
7,061
|
|
|
7,065
|
|
|
7,087
|
|
|
7,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weatherford
International Ltd.
|
Net
Debt
|
(Unaudited)
|
(Stated In
Millions)
|
|
|
|
|
|
|
|
|
|
|
Change in Net Debt
for the Three Months Ended 3/31/2014:
|
|
|
|
|
|
|
|
|
|
Net Debt at
12/31/2013
|
|
|
|
|
|
|
|
$
|
(8,292)
|
|
Operating Income
|
|
|
|
|
|
|
|
130
|
|
Depreciation and Amortization
|
|
|
|
|
|
|
|
351
|
|
Capital Expenditures
|
|
|
|
|
|
|
|
(286)
|
|
Increase in Working Capital
|
|
|
|
|
|
|
|
(284)
|
|
Income Taxes Paid
|
|
|
|
|
|
|
|
(103)
|
|
Interest Paid
|
|
|
|
|
|
|
|
(179)
|
|
FCPA / Sanctioned Country Matters Payment
|
|
|
|
|
|
|
|
(253)
|
|
Acquisitions and Divestitures of Assets and Businesses,
Net
|
|
|
|
|
|
|
|
12
|
|
Net Change in Billing in Excess/Costs in Excess
|
|
|
|
|
|
|
|
(66)
|
|
Other
|
|
|
|
|
|
|
|
5
|
|
Net Debt at
3/31/2014
|
|
|
|
|
|
|
|
$
|
(8,965)
|
|
|
|
|
|
|
|
|
|
|
|
Components of
Net Debt
|
|
3/31/2014
|
|
12/31/2013
|
|
3/31/2013
|
Cash
|
|
$
|
367
|
|
|
$
|
435
|
|
|
$
|
286
|
|
Short-term Borrowings and Current Portion of Long-term
Debt
|
|
(2,293)
|
|
|
(1,666)
|
|
|
(1,896)
|
|
Long-term Debt
|
|
(7,039)
|
|
|
(7,061)
|
|
|
(7,032)
|
|
Net Debt
|
|
$
|
(8,965)
|
|
|
$
|
(8,292)
|
|
|
$
|
(8,642)
|
|
|
"Net Debt" is debt
less cash. Management believes that Net Debt provides useful
information regarding the level of Weatherford indebtedness by
reflecting cash that could be used to repay debt.
|
|
Working capital is
defined as accounts receivable plus inventory less accounts
payable.
|
|
We report our
financial results in accordance with U.S. generally accepted
accounting principles (GAAP). However, Weatherford's
management believes that certain non-GAAP financial measures and
ratios (as defined under the SEC's Regulation G) may provide users
of this financial information, additional meaningful comparisons
between current results and results of prior periods. The
non-GAAP amounts shown below should not be considered as
substitutes for cash flow information prepared and reported in
accordance with GAAP, but should be viewed in addition to the
Company's reported cash flow statements prepared in accordance with
GAAP.
|
|
Weatherford
International Ltd.
|
Selected Cash Flow
Data
|
(Unaudited)
|
(Stated In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
3/31/2014
|
|
12/31/2013
|
|
3/31/2013
|
Net Cash Used in
Operating Activities
|
|
$
|
(406)
|
|
|
$
|
662
|
|
|
$
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
Less: Capital
Expenditures for Property, Plant and equipment
|
|
(286)
|
|
|
(364)
|
|
|
(400)
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow
|
|
$
|
(692)
|
|
|
$
|
298
|
|
|
$
|
(411)
|
|
|
Free cash flow is
defined as net cash provided by or used in operating activities
less capital expenditures. Free cash flow is an important
indicator of how much cash is generated or used by our normal
business operations, including capital expenditures.
Management uses free cash flow as a measure of progress on its
capital efficiency and cash flow initiatives.
|
Photo -
http://photos.prnewswire.com/prnh/19990308/WEATHERFORDLOGO
SOURCE Weatherford International Ltd.