EX-99.1 2 h64562exv99w1.htm EXHIBIT 99.1 exv99w1
Exhibit 99.1
     
(WEATHERFORD LOGO)
  News Release
Weatherford Reports Third Quarter Income from Continuing Operations of $0.55 Per Diluted Share, Before Non-Recurring Items
28 Percent Increase Over Prior Year
HOUSTON, October 20, 2008 — 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.
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.
# # #
         
Contact:
  Andrew P. Becnel   (713) 693-4136
 
  Chief Financial Officer    
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,  
    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 30,     June 30,     September 30,     September 30,     September 30,  
    2008     2008     2007     2008     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.