WEATHERFORD INTERNATIONAL LTD 
By GENEVA, Jan. 25 /PRNewswire-FirstCall/ -- Weatherford International Ltd. (NYSE: WFT) today reported fourth quarter 2009 income from continuing operations of $15 million, or $0.02 per diluted share, excluding an after tax loss of $0.06 for investigation and exit costs incurred in connection with the company's withdrawal from sanctioned countries, severance costs principally associated with restructuring activities and a tax provision related to a legal entity reorganization. Fourth quarter diluted earnings per share from continuing operations reflect a decrease of 96 percent over the fourth quarter of 2008 diluted earnings per share from continuing operations of $0.53, before severance and investigation costs. Fourth quarter results include the following items:
-- $21 million in inventory reserves and write-offs;
-- $12 million in expenses associated with business process and supply
chain improvement projects, which will be ongoing for the next nine
quarters;
-- An $8 million legal charge regarding settlement of a multi-year dispute;
-- $4 million of expenses incurred in connection with the completion of the
company's global tax reorganization during the fourth quarter; and
-- A $3 million net gain on acquisition and divestiture activities
(Logo: http://www.newscom.com/cgi-bin/prnh/19990308/WEATHERFORDLOGO)
Fourth quarter revenues were $2,426 million, or eight percent lower than the same period last year, against a backdrop of a 29 percent decrease in global rig count. North America was primarily responsible for the decline, with revenues decreasing 37 percent against a 40 percent decline in rig count. International revenues were up 16 percent against an eight percent decrease in international rig count.
Sequentially, the company's fourth quarter diluted earnings per share from continuing operations, before severance, reorganization and investigation costs, were $0.11 lower than the third quarter of 2009 diluted earnings per share from continuing operations of $0.13, before severance and investigation costs.
For the year ended December 31, 2009, revenues were $8.8 billion, eight percent lower than 2008, and income from continuing operations before severance, reorganization and investigation costs was $364 million, or $0.50 per diluted share, a decrease of 75 percent from 2008. In 2008, the company reported revenues for the year of $9.6 billion and income from continuing operations of $1,399 million, or $2.00 per diluted share, before non-recurring items. The non-recurring items during 2008 were primarily for investigation and exit costs incurred in connection with the company's withdrawal from sanctioned countries, which were partially offset by a gain on the restructuring of a Qatar operation into a JV.
North America
Revenues for the quarter were $736 million, which is a 37 percent decrease over the same quarter in the prior year, as compared to a 40 percent rig count decrease. Sequentially, revenues were up 19 percent in line with a 20 percent rig count increase. All product lines showed sequential growth with the exception of Pipeline.
Operating income was $42 million, which is down $255 million compared to the same quarter in the prior year and up $8 million sequentially.
Middle East/North Africa/Asia
Fourth quarter revenues of $593 million were 12 percent lower than the fourth quarter of 2008 and one percent lower than the prior quarter. On a sequential basis, strong performances were posted in Iraq, Malaysia and China offset by weakness in Saudi Arabia, Qatar, Oman, Libya, Egypt, Indonesia and Australia.
The current quarter's operating income of $82 million decreased 49 percent as compared to the same quarter in the prior year and decreased 19 percent as compared to the prior quarter due to the continued impact of significant start-up and delay costs in several countries.
Latin America
Fourth quarter revenues of $618 million were 59 percent higher than the fourth quarter of 2008 and 18 percent higher than the prior quarter. Mexico, Brazil, Columbia and Ecuador posted strong improvements sequentially.
The current quarter's operating income of $49 million declined 44 percent as compared to the same quarter in the prior year. Sequentially, operating income declined nine percent as decreased activity in natural gas projects in Mexico prevented adequate fixed cost absorption.
Europe/West Africa/FSU
Fourth quarter revenues of $478 million were 22 percent higher than the fourth quarter of 2008 and 18 percent higher than the prior quarter. The sequential increase was driven by a full quarter of our acquisition of TNK-BP's oilfield service business and improvements in Norway, Romania, Angola and Nigeria.
The current quarter's operating income of $43 million declined 52 percent as compared to the same quarter in the prior year and decreased 41 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 fourth quarter results on January 26, 2010 at 7:30 a.m. (CST). 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 Twelve Months
Ended December 31, Ended December 31,
------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
Net Revenues:
North America $736,443 $1,177,936 $2,765,707 $4,460,147
Middle East/North
Africa/Asia 593,154 675,513 2,368,118 2,391,520
Europe/West
Africa/FSU 478,259 393,005 1,616,460 1,539,190
Latin America 618,225 388,172 2,076,648 1,209,707
------- ------- --------- ---------
2,426,081 2,634,626 8,826,933 9,600,564
--------- --------- --------- ---------
Operating Income (Expense):
North America 41,625 296,407 197,211 1,125,199
Middle East/North
Africa/Asia 82,452 163,238 441,974 561,012
Europe/West
Africa/FSU 42,598 88,158 251,991 382,772
Latin America 49,271 88,720 281,590 277,094
Research and
Development (50,216) (53,564) (194,650) (192,659)
Corporate Expenses (48,990) (35,355) (173,695) (135,012)
Exit and
Restructuring (26,897) (16,253) (100,566) (39,857)
------- ------- -------- -------
89,843 531,351 703,855 1,978,549
Other Income (Expense):
Interest Expense, Net (91,902) (67,956) (366,748) (243,679)
Other, Net (9,177) (31,930) (37,633) (44,956)
------ ------- ------- -------
Income (Loss) from Continuing
Operations
Before Income Taxes (11,236) 431,465 299,474 1,689,914
Benefit (Provision) for
Income Taxes:
Benefit (Provision) for
Operations 2,710 (74,321) (10,157) (296,117)
Provision for Tax
Reorganization (24,190) - (24,190) -
Benefit from Exit and
Restructuring 5,466 - 14,798 7,306
----- - ------ -----
(16,014) (74,321) (19,549) (288,811)
Income (Loss) from
Continuing
Operations, Net of Taxes (27,250) 357,144 279,925 1,401,103
Loss from Discontinued
Operation, Net of Taxes - - - (12,928)
- - - -------
Net Income (Loss) (27,250) 357,144 279,925 1,388,175
Net Income Attributable to
Noncontrolling Interest (3,141) (9,026) (26,159) (34,272)
------ ------ ------- -------
Net Income (Loss)
Attributable to
Weatherford $(30,391) $348,118 $253,766 $1,353,903
======= ======== ======== ==========
Basic Earnings (Loss) Per
Share Attributable
to Weatherford:
Income (Loss) from
Continuing
Operations $(0.04) $0.51 $0.35 $2.00
Loss from Discontinued
Operation - - - (0.02)
- - - -----
Net Income (Loss) $(0.04) $0.51 $0.35 $1.98
====== ===== ===== =====
Diluted Earnings (Loss)
Per Share Attributable
to Weatherford:
Income (Loss) from
Continuing
Operations $(0.04) $0.50 $0.35 $1.96
Loss from Discontinued
Operation - - - (0.02)
- - - -----
Net Income (Loss) $(0.04) $0.50 $0.35 $1.94
====== ===== ===== =====
Amounts Attributable to
Weatherford Common
Shareholders:
Income (Loss) from
Continuing
Operations, Net of Taxes $(30,391) $348,118 $253,766 $1,366,831
Loss from Discontinued
Operation,
Net of Taxes - - - (12,928)
- - - -------
Net Income (Loss) $(30,391) $348,118 $253,766 $1,353,903
======= ======== ======== ==========
Weighted Average Shares
Outstanding:
Basic 737,059 686,222 714,981 682,704
Diluted 737,059 692,414 723,449 698,178
Weatherford International Ltd.
Selected Income Statement Information
(Unaudited)
(In 000's)
Three Months
Ended
-----
12/31/2009 9/30/2009 6/30/2009 3/31/2009 12/31/2008
---------- --------- --------- --------- ----------
Net Revenues:
North America $736,443 $620,496 $571,415 $837,353 $1,177,936
Middle East/
North Africa/
Asia 593,154 600,110 592,908 581,946 675,513
Europe/West
Africa/FSU 478,259 404,390 364,968 368,843 393,005
Latin America 618,225 524,883 465,541 467,999 388,172
------- ------- ------- ------- -------
$2,426,081 $2,149,879 $1,994,832 $2,256,141 $2,634,626
========== ========== ========== ========== ==========
Operating Income
(Expense):
North America $41,625 $33,259 $(709) $123,036 $296,407
Middle East/
North Africa/
Asia 82,452 101,943 123,553 134,026 163,238
Europe/West
Africa/FSU 42,598 71,836 62,614 74,943 88,158
Latin America 49,271 54,343 85,759 92,217 88,720
Research and
Development (50,216) (49,300) (46,113) (49,021) (53,564)
Corporate
Expenses (48,990) (44,272) (40,834) (39,599) (35,355)
Exit and
Restructuring (26,897) (17,887) (30,905) (24,877) (16,253)
------- ------- ------- ------- -------
$89,843 $149,922 $153,365 $310,725 $531,351
======= ======== ======== ======== ========
Supplemental Information
(Unaudited)
(In 000's)
Three Months
Ended
-----
12/31/2009 9/30/2009 6/30/2009 3/31/2009 12/31/2008
---------- --------- --------- --------- ----------
Depreciation and
Amortization:
North America $83,658 $79,737 $77,253 $75,098 $80,555
Middle East/
North Africa/
Asia 72,739 65,771 60,921 57,634 55,587
Europe/West
Africa/FSU 50,376 44,864 35,190 34,678 33,825
Latin America 42,751 43,403 35,971 30,442 30,331
Research and
Development 1,980 1,940 2,017 1,933 1,931
Corporate 2,197 2,194 2,341 1,609 1,449
----- ----- ----- ----- -----
$253,701 $237,909 $213,693 $201,394 $203,678
======== ======== ======== ======== ========
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 December 31, 2009, September 30, 2009, and December 31,
2008 and for the years ended December 31, 2009 and December 31, 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 Year Ended
------------------ ----------
December September December December December
31, 30, 31, 31, 31,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Operating Income:
GAAP Operating
Income $89,843 $149,922 $531,351 $703,855 $1,978,549
Exit and
Re-
structuring 26,897(a) 17,887(b) 16,253(c) 100,566(d) 39,857(e)
------ ------ ------ ------- ------
Non-GAAP
Operating
Income $116,740 $167,809 $547,604 $804,421 $2,018,406
======== ======== ======== ======== ==========
Benefit
(Provision)
for
Income Taxes:
GAAP Benefit
(Provision)
for Income
Taxes $(16,014) $34,369 $(74,321) $(19,549) $(288,811)
Tax
Re-
organization
Charges 24,190(a) - - 24,190(d) -
Tax impact
of
Exit and
Re-
structuring (5,466)(a) (2,603)(b) -(c) (14,798)(d) (7,306)(e)
------ ------ - ------- ------
Non-GAAP
Benefit
(Provision)
for
Income Taxes $2,710 $31,766 $(74,321) $(10,157) $(296,117)
======= ======= ======== ======== =========
Income from
Continuing
Operations
Attributable
to Weatherford:
GAAP Income
from
Continuing
Operations $(30,391) $77,374 $348,118 $253,766 $1,366,831
Total Charges,
net of tax 45,621(a) 15,284(b) 16,253(c) 109,958(d) 32,551(e)
------ ------ ------ ------- ------
Non-GAAP Income
from
Continuing
Operations $15,230 $92,658 $364,371 $363,724 $1,399,382
======= ======= ======== ======== ==========
Diluted
Earnings Per
Share From
Continuing
Operations
Attributable to
Weatherford:
GAAP Diluted
Earnings per
Share
From
Continuing
Operations $(0.04) $0.11 $0.50 $0.35 $1.96
Total Charges,
net of tax 0.06(a) 0.02(b) 0.03(c) 0.15(d) 0.04(e)
---- ---- ---- ---- ----
Non-GAAP Diluted
Earnings per
Share
From
Continuing
Operations $0.02 $0.13 $0.53 $0.50 $2.00
===== ===== ===== ===== =====
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 restructuring activities. In addition, the Company incurred
a tax charge of $24.2 million as a result of a tax reorganization initiative completed during the fourth quarter of 2009.
Note (b): 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 restructuring 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 restructuring activities. In addition, the Company
incurred a tax charge of $24.2 million as a result of a tax reorganization
initiative completed during the fourth quarter of 2009.
Note (e): This amount represents investigation costs incurred in
conjunction 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.
Also included are severance charges associated with the Company's
restructuring activities.
SOURCE Weatherford International Ltd.
