BAAR, Switzerland,
April 28, 2017 /PRNewswire/ -- Weatherford International
plc (NYSE: WFT) reported a net loss of $448
million, or a loss of $0.45
per share, and non-GAAP net loss of $318
million before charges and credits ($0.32 non-GAAP loss per share) on revenues of
$1.39 billion for the first quarter
of 2017.
First Quarter 2017 Highlights
- Net cash used in operating activities was $179 million;
- Operating margins improved by 166 basis points sequentially,
with 123% incrementals;
- OneStimSM joint venture agreement was reached with
Schlumberger;
- Closed six manufacturing facilities; and
- Received the Offshore Technology Conference 2017 Spotlight New
Technology Award for our AutoFrac® RFID-enabled stimulation
system.
Mark A. McCollum, President and
Chief Executive Officer, commented, "I am honored to have the
opportunity to lead Weatherford, an organization with a reputation
for exceptional technologies and collaborative customer
relationships, a strong global market presence and a high-caliber,
diverse workforce. Building on a rich base of opportunities, I look
forward to guiding our Company to reach its full potential."
"In our next chapter, we intend to intensely focus on execution
and process discipline, which will serve as our cornerstones for
improved profitability and returns. As we emerge from the worst
downturn in oilfield history, there has never been a more important
time for collaboration across our organization as well as with our
clients, reinforcing our commitment to being a trusted business
partner to those we serve. Guided by our core values of ethics,
integrity and accountability, we will challenge ourselves to
consistently deliver greater value for our customers and our
shareholders."
|
|
Three Months
Ended
|
|
Change
|
(In Millions, Except
Per Share Amounts)
|
|
3/31/2017
|
|
12/31/2016
|
|
3/31/2016
|
|
Sequential
|
|
Year-on-Year
|
Total Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,386
|
|
|
|
$
|
1,406
|
|
|
|
$
|
1,585
|
|
|
|
(1)
|
|
%
|
|
(13)
|
|
%
|
Segment Operating
Loss
|
|
$
|
(52)
|
|
|
|
$
|
(76)
|
|
|
|
$
|
(157)
|
|
|
|
32
|
|
%
|
|
67
|
|
%
|
Segment Operating
Margin
|
|
(3.8)
|
|
%
|
|
(5.4)
|
|
%
|
|
(9.9)
|
|
%
|
|
166
|
|
bps
|
|
615
|
|
bps
|
Adjusted Segment
Operating Loss *
|
|
$
|
(52)
|
|
|
|
$
|
(76)
|
|
|
|
$
|
(105)
|
|
|
|
32
|
|
%
|
|
50
|
|
%
|
Adjusted Segment
Operating Margin *
|
|
(3.8)
|
|
%
|
|
(5.4)
|
|
%
|
|
(6.6)
|
|
%
|
|
166
|
|
bps
|
|
285
|
|
bps
|
Adjusted Segment
Incrementals **
|
|
|
|
|
|
|
|
|
|
|
123
|
|
%
|
|
27
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(448)
|
|
|
|
$
|
(549)
|
|
|
|
$
|
(498)
|
|
|
|
18
|
|
%
|
|
10
|
|
%
|
Adjusted Net Loss
*
|
|
$
|
(318)
|
|
|
|
$
|
(303)
|
|
|
|
$
|
(239)
|
|
|
|
(5)
|
|
%
|
|
(33)
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Loss per
Share
|
|
$
|
(0.45)
|
|
|
|
$
|
(0.59)
|
|
|
|
$
|
(0.61)
|
|
|
|
24
|
|
%
|
|
26
|
|
%
|
Adjusted Diluted Loss
per Share *
|
|
$
|
(0.32)
|
|
|
|
$
|
(0.32)
|
|
|
|
$
|
(0.29)
|
|
|
|
—
|
|
%
|
|
(10)
|
|
%
|
*
|
Adjusted Segment
Operating Loss, Operating Margin, Net Loss and Diluted Loss per
Share here and elsewhere in this filing are non-GAAP measures and
exclude the first quarter 2016 charges on the Zubair
contract.
|
**
|
Adjusted Segment
Incrementals here and elsewhere in this press release are
calculated by taking the change in adjusted segment operating loss
over the change in revenue.
|
McCollum continued, "Our recently announced joint venture with
Schlumberger, OneStimSM, will offer a significant
North America land-based
multistage completions portfolio combined with one of the largest
hydraulic fracturing fleets in the industry for the development of
unconventional resource plays in land markets in the United States and Canada. This agreement enables us to take
another step toward improving our balance sheet and strengthening
our returns. It also confirms our commitment to creating strategic
partnerships, sharing resources and capabilities to develop new
technologies and achieve critical mass as a means to provide our
clients with the lowest cost per barrel."
"Our highest priority will be to improve and strengthen our
balance sheet. Through more disciplined cost management, we will
continue to streamline our operations, becoming a more efficient
and leaner organization. This includes the completion of the
OneStim joint venture and the divestiture of our Land Drilling Rigs
business. Delivering heightened service quality and reliability
will position our Company on a solid path toward long-term
profitability. Improved profitability will in turn drive cash flow,
and stronger cash flow will improve our balance sheet. We realize
the responsibility of being good stewards and recognize that there
is work to be done to earn your trust and confidence. We are
committed to meaningfully improving our returns and increasing
shareholder value."
First Quarter 2017 Results
Revenue for the first quarter of 2017 was $1.39 billion compared with $1.41 billion in the fourth quarter of 2016, or a
1% decrease, and was 13% lower than $1.59
billion of revenue reported in the first quarter of 2016.
North America revenue increased
1%, despite the shutdown of the U.S. pressure pumping operations.
International revenue declined 2% and Land Drilling Rigs revenue
declined 6% sequentially.
Net loss for the first quarter of 2017 was $448 million (diluted net loss of $0.45 per share), compared to a $549 million loss in the fourth quarter of 2016
(diluted net loss of $0.59 per
share), and a $498 million loss in
the first quarter of the prior year (diluted net loss of
$0.61 per share).
Non-GAAP adjusted net loss for the first quarter of 2017 was
$318 million (non-GAAP diluted net
loss of $0.32 per share), compared to
a non-GAAP $303 million loss in the
fourth quarter of 2016 (non-GAAP diluted net loss of $0.32 per share), and a non-GAAP $239 million loss in the first quarter of the
prior year (non-GAAP diluted net loss of $0.29 per share).
After-tax charges, net of credits, of $130 million for the first quarter include:
- $69 million in severance and
restructuring charges;
- $62 million in charges related to
the fair value adjustment of our outstanding warrant; and
- $1 million of income in other
charges and credits.
Segment operating margins improved 166 basis points sequentially
as rig count and activity increases from the continued recovery in
North America. Artificial Lift,
Completion, Drilling Services and Wireline drove the margin
improvements. Year-on-year segment operating margin and adjusted
segment operating margin improved 615 basis points and 285 basis
points, respectively, due to reduced operating expenses from the
shutdown of our pressure pumping operations in North America, the realization of savings from
our cost reduction measures, and the increased activity in
North America.
Cash Flow and Financial Covenants
Net cash used in operating activities was $179 million for the first quarter of 2017,
including $144 million of debt
interest payments, $43 million of
cash severance and restructuring costs, and $30 million of SEC legal settlement costs,
partially offset by reductions in working capital balances totaling
$3 million. Capital expenditures of
$40 million decreased by $28 million or 41% sequentially, and decreased
$3 million or 7% from the same
quarter in the prior year. In January
2017, we purchased certain leased equipment utilized in our
North America pressure pumping
business for a total amount of $240
million, which upon the closing of the transaction, will be
contributed to the OneStim SM joint venture. As of
March 31, 2017, we remained in
compliance with our financial covenants as defined in our revolving
and secured term loan credit facilities. Based on our current
financial projections, we believe that we will remain in compliance
with these covenants for the remainder of 2017.
Region and Segment Highlights
North America
|
|
Three Months
Ended
|
|
|
Change
|
|
(In
Millions)
|
|
3/31/2017
|
|
|
12/31/2016
|
|
|
3/31/2016
|
|
|
Sequential
|
|
|
Year-on-Year
|
|
North
America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
490
|
|
|
|
$
|
485
|
|
|
|
$
|
543
|
|
|
|
1
|
|
%
|
|
(10)
|
|
%
|
Segment Operating
Loss
|
|
$
|
(18)
|
|
|
|
$
|
(58)
|
|
|
|
$
|
(128)
|
|
|
|
68
|
|
%
|
|
86
|
|
%
|
Segment Operating
Margin
|
|
(3.7)
|
|
%
|
|
(11.9)
|
|
%
|
|
(23.6)
|
|
%
|
|
811
|
|
bps
|
|
1,990
|
|
bps
|
First quarter revenues of $490
million were up $5 million or
1% sequentially, and down $53
million, or 10%, over the same period last year. Excluding
the impact of the U.S. pressure pumping operations, sequential
revenues improved 16% while year-on-year revenues improved 7%. The
increase in sequential revenue in the region was attributed to the
increase in average rig count of 63% in Canada and 26% in the U.S., positively
impacting most of our product lines. First quarter segment
operating loss improved by $40
million sequentially to a loss of $18
million (-3.7% margin). Compared to the same period last
year, first quarter segment operating loss improved by 86%. The
improvement in operating income was due to reduced operating
expenses as a result of the shutdown of our pressure pumping
operations and the realization of savings from cost cutting
measures.
Operational highlights in North
America during the first quarter include:
- In the Eagle Ford Shale, the Weatherford
hostile-environment-logging (HEL) system enabled failure-free
drilling of 57 wells, saving more than $1
million. The operator had previously experienced
measurement-while-drilling (MWD) system failures due to high
downhole temperatures in the field. The average MWD system failure
incurred 24 hours of nonproductive time (NPT), valued at
$75,000 per incident. Seeking to
reduce NPT, the operator contracted Weatherford to deploy its HEL
system, which is designed for performance in high-temperature
environments.
- Over the past five years, Weatherford has completed multiple
wells for a supermajor operator in the deepwater Gulf of Mexico using TerraForm® openhole
packers. By achieving secure and compliant well integrity in an
open hole, TerraForm packers eliminate the need for casing, cement,
perforation and other costs related to cased-hole completions. The
estimated savings achieved by using TerraForm packers are
$15 to $20 million per well. As a
result of this outstanding track record, the client recently
ordered 25 more TerraForm packers for deployment in this
field.
- Weatherford won a contract for more than 40 pumping units for
an operator in Western Canada,
replacing the incumbent artificial lift systems provider in that
field. Deployment is underway, with 20 units delivered in the first
quarter.
International Operations
|
|
Three Months
Ended
|
|
Change
|
(In
Millions)
|
|
3/31/2017
|
|
12/31/2016
|
|
3/31/2016
|
|
Sequential
|
|
Year-on-Year
|
International
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
807
|
|
|
|
$
|
827
|
|
|
|
$
|
923
|
|
|
|
(2)
|
|
%
|
|
(13)
|
|
%
|
Segment Operating
Income (Loss)
|
|
$
|
(4)
|
|
|
|
$
|
7
|
|
|
|
$
|
(3)
|
|
|
|
(175)
|
|
%
|
|
(33)
|
|
%
|
Adjusted Segment
Operating Income (Loss) *
|
|
$
|
(4)
|
|
|
|
$
|
7
|
|
|
|
$
|
49
|
|
|
|
(175)
|
|
%
|
|
(109)
|
|
%
|
Adjusted Segment
Operating Margin *
|
|
(0.5)
|
|
%
|
|
0.7
|
|
%
|
|
5.4
|
|
%
|
|
(122)
|
|
bps
|
|
(588)
|
|
bps
|
*
|
Adjusted Segment
Operating Income (Loss) and Margin here and elsewhere in this
filing are non-GAAP measures and exclude the first quarter 2016
charges on the Zubair contract.
|
First quarter revenues of $807
million were down 2% sequentially and down 13% year-on-year.
First quarter operating loss was $4
million (-0.5% margin), down from operating income of
$7 million (0.7% margin) in the prior
quarter. First quarter operating loss deteriorated by
$1 million year-on-year, and first
quarter adjusted segment operating loss, which excluded the effect
from the Zubair contract in 2016, deteriorated by $53 million year-on-year.
First quarter revenues of $242
million were down $8 million,
or 3% sequentially, and down $63
million, or 21%, compared to the same quarter last year.
First quarter operating income of $9
million (3.8% margin) was up $3
million sequentially but down 80% compared to the same
period last year. The decrease in revenue was mainly driven by
lower activity combined with project delays in Argentina as a result of a change in the
compensation structure for union based employees, partially offset
by increased activity in Colombia
which benefited from an increase in the number of operating rigs.
Despite this reduction in revenue, operating margins improved
primarily due to favorable product line mix led by Well
Construction and Secure Drilling Services.
Operational highlights in Latin
America during the first quarter include:
- Weatherford won a 30-month, $178
million contract to provide integrated services in
shallow-water Mexico. The contract
scope encompasses numerous product lines, technologies and
capabilities, including Secure Drilling Services, Tubular Running
Services, Wireline, Drilling Services, Surface Logging Systems,
Drilling Fluids and Reservoir Solutions. Planning, land logistics
and execution across all product lines and third parties will be
managed by Weatherford's Integrated Services and Projects product
line.
- By installing the Red Eye® multiphase metering system, an
operator in Colombia optimized its
well-testing process, decreasing the amount of diluent needed by
70%, while increasing the frequency of tests per month. This change
has enabled the operator to reduce personnel by a 10 to 1 ratio and
save approximately $10 million per
year.
- Europe/Sub-Sahara
Africa/Russia
First quarter revenues of $244
million were up $30 million or
14% sequentially, and down $13
million, or 5%, compared to the same quarter last year.
First quarter operating loss of $10
million (-4.1% margin) increased from operating loss of
$8 million (-4.0% margin)
sequentially, and increased from operating loss of $1 million (-0.4% margin) year-on-year.
Sequential revenues increased due to low margin product sales in
Sub-Sahara Africa and Europe
partially offset by lower seasonal activity in the Norwegian
Continental Shelf and parts of Russia. The increase in sequential operating
loss was primarily driven by higher costs in Russia to prepare for an expected seasonal
rebound of activity levels in the second quarter.
Operational highlights in Europe/Sub-Sahara Africa/Russia during the first quarter include:
- During a deepwater completion operation in the North Sea, the
Weatherford RFID-enabled reservoir isolation valve eliminated the
need for an intermediate completion, reducing rig time by 24 to 36
hours and mitigating high health, safety and environmental (HSE)
risks.
- In January 2017, Gazprom Neft
Orenberg named Weatherford the Best Service Company of 2016.
Service companies were evaluated based on multiple performance
indicators, including technical parameters, service quality and
NPT. Weatherford earned the award thanks to high HSE standards,
guaranteed service quality, and reliability of technical solutions,
specifically in the area of directional drilling.
- In Western Siberia, an
operator seeking to reduce total well construction time contracted
Weatherford to plan and deploy an optimized drilling bottomhole
assembly. Pre-drill planning combined with use of Weatherford
measurement and logging-while-drilling tools helped to increase
rate of penetration and limit wiper trips. As a result, the
operator finished drilling operations 17 days ahead of
schedule.
- Middle East/North Africa/Asia
Pacific
First quarter revenues of $321
million were down 12% sequentially and down 11% from the
same quarter in the prior year. Operating loss of $3 million (-1.1% margin) deteriorated from
operating income of $9 million (2.4%
margin) in the prior quarter, but improved compared to an operating
loss of $46 million (-12.7% margin)
in the same quarter last year. Compared to adjusted operating
income of $6 million (1.7% margin)
for the first quarter of 2016, which excluded the impact from
charges related to the Zubair contract, operating income in the
first quarter 2017 deteriorated by 156%. The sequential decrease in
revenue was primarily due to lower product sales across the
region as well as continued pricing pressure, partially offset by
increased service revenue from new contracts. Lower product costs
were offset by startup costs for our Wireline contract in
Kuwait, which commenced at the end
of the quarter.
Operational highlights in the Middle
East/North
Africa/Asia Pacific during
the first quarter include:
- On two separate jobs, the Weatherford inflatable packoff stage
tool (POST) enabled a large Middle Eastern national oil company
(NOC) to drill to total depth and land casing at setting depth with
zero NPT, saving between 40 and 48 hours of rig time on each well.
The tool facilitated efficient two-stage cementing by eliminating
the need to pull casing and recondition the hole or to perform a
remedial cement job.
- A large NOC in the Middle East
executed a drilling campaign planned for 180 days in just 133 days
using the Microflux® control system. The rig time savings are
valued at approximately $4 million.
Based on the success on this job, Weatherford is now established as
a proven service provider in managed pressure drilling for this
large NOC.
- In Indonesia, the Microflux®
automated control system powered by OneSync® managed pressure
drilling software enabled an operator to drill 2,000 feet deeper
than planned.
Land Drilling Rigs
First quarter revenues of $89
million were down $5 million,
or 6% sequentially and down $30
million, or 25%, compared to the same quarter in the prior
year. First quarter operating loss of $30
million (-33.3% margin) deteriorated sequentially and
year-on-year by $5 million and
$4 million, respectively. The
decrease in revenues and operating results was due to a decline in
drilling and contract activity in the Gulf States, combined with
lower operational efficiency during the first quarter 2017,
partially offset by the startup of new drilling contracts in
North Africa.
Despite select operational issues that weighed on the quarter,
there were noteworthy wins in the Middle
East:
- Land rigs in Oman set four
field records in a single campaign, with the fastest well delivered
6 days ahead of schedule. Additionally, an operator in Algeria recognized Weatherford land rigs for
drilling a well 7.45 days ahead of plan.
- Contracts with two large NOCs have been extended through
2018.
About Weatherford
Weatherford is one of the largest multinational oilfield service
companies providing innovative solutions, technology and services
to the oil and gas industry. The Company operates in over 90
countries and has a network of approximately 880 locations,
including manufacturing, service, research and development, and
training facilities and employs approximately 29,500 people. For
more information, visit www.weatherford.com and connect
with Weatherford on LinkedIn, Facebook, Twitter and YouTube.
Conference Call
The Company will host a conference call with financial analysts
to discuss the quarterly results on April 28, 2017, at
8:30 a.m. eastern time (ET),
7:30 a.m. central time (CT).
Weatherford invites investors to listen to the call live via the
Company's website, at
http://ir.weatherford.com/conference-call-details. 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:
|
|
Christoph
Bausch
|
+1.713.836.4615
|
|
|
Executive Vice
President and Chief Financial Officer
|
|
|
|
|
|
|
|
Karen
David-Green
|
+1.713.836.7430
|
|
|
Vice President –
Investor Relations, Marketing and Communications
|
|
Forward-Looking Statements
This news release contains, and the conference call announced in
this release may include, forward-looking statements. These
forward-looking statements include, among other things, the
Company's quarterly non-GAAP earnings per share, effective tax
rate, net debt, forecasts or expectations regarding business
outlook, and capital expenditures, and are also generally
identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "outlook," "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,
including possible changes in the expected savings associated with
our cost cutting reductions, including the closing of our pressure
pumping operations; the success and closing of our joint ventures
and strategic partnerships; and the changes in spending by our
clients and customers. Forward-looking statements are also affected
by the risk factors described in the Company's Annual Report on
Form 10-K for the year ended December 31,
2016, the Company's Quarterly Reports on Form 10-Q, and
those set forth from time-to-time in the Company's 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 plc
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
(In Millions, Except
Per Share Amounts)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
3/31/2017
|
|
3/31/2016
|
|
Net
Revenues:
|
|
|
|
|
|
North
America
|
|
$
|
490
|
|
|
$
|
543
|
|
|
Middle East/North
Africa/Asia Pacific
|
|
321
|
|
|
361
|
|
|
Europe/SSA/Russia
|
|
244
|
|
|
257
|
|
|
Latin
America
|
|
242
|
|
|
305
|
|
|
Land Drilling
Rigs
|
|
89
|
|
|
119
|
|
|
Total
Net Revenues
|
|
1,386
|
|
|
1,585
|
|
|
|
|
|
|
|
|
Operating Income
(Loss):
|
|
|
|
|
|
North
America
|
|
(18)
|
|
|
(128)
|
|
|
Middle East/North
Africa/Asia
|
|
(3)
|
|
|
6
|
|
|
Europe/SSA/Russia
|
|
(10)
|
|
|
(1)
|
|
|
Latin
America
|
|
9
|
|
|
44
|
|
|
Land Drilling
Rigs
|
|
(30)
|
|
|
(26)
|
|
|
Adjusted
Segment Operating Loss
|
|
(52)
|
|
|
(105)
|
|
|
Research and
Development
|
|
(39)
|
|
|
(45)
|
|
|
Corporate
Expenses
|
|
(33)
|
|
|
(43)
|
|
|
Other Charges,
Net
|
|
(72)
|
|
|
(254)
|
|
|
Total
Operating Loss
|
|
(196)
|
|
|
(447)
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
Interest Expense,
Net
|
|
(141)
|
|
|
(115)
|
|
|
Warrant Fair Value
Adjustment
|
|
(62)
|
|
|
—
|
|
|
Currency Devaluation
Charges
|
|
—
|
|
|
(31)
|
|
|
Other Income
(Expense), Net
|
|
(11)
|
|
|
1
|
|
|
Net Loss Before
Income Taxes
|
|
(410)
|
|
|
(592)
|
|
|
|
|
|
|
|
|
Income Tax
(Provision) Benefit
|
|
(33)
|
|
|
101
|
|
|
|
|
|
|
|
|
Net Loss
|
|
(443)
|
|
|
(491)
|
|
|
Net Income
Attributable to Noncontrolling Interests
|
|
5
|
|
|
7
|
|
|
Net Loss Attributable
to Weatherford
|
|
$
|
(448)
|
|
|
$
|
(498)
|
|
|
|
|
|
|
|
|
Loss Per Share
Attributable to Weatherford:
|
|
|
|
|
|
Basic &
Diluted
|
|
$
|
(0.45)
|
|
|
$
|
(0.61)
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
|
Basic &
Diluted
|
|
988
|
|
|
813
|
|
|
Weatherford
International plc
|
Selected
Statements of Operations Information
|
(Unaudited)
|
(In
Millions)
|
|
Three Months
Ended
|
|
3/31/2017
|
|
12/31/2016
|
|
9/30/2016
|
|
6/30/2016
|
|
3/31/2016
|
Net
Revenues:
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
490
|
|
|
$
|
485
|
|
|
$
|
449
|
|
|
$
|
401
|
|
|
$
|
543
|
|
Middle East/North
Africa/Asia Pacific
|
321
|
|
|
363
|
|
|
329
|
|
|
400
|
|
|
361
|
|
Europe/SSA/Russia
|
244
|
|
|
214
|
|
|
225
|
|
|
243
|
|
|
257
|
|
Latin
America
|
242
|
|
|
250
|
|
|
255
|
|
|
249
|
|
|
305
|
|
Land Drilling
Rigs
|
89
|
|
|
94
|
|
|
98
|
|
|
109
|
|
|
119
|
|
Total Net
Revenues
|
$
|
1,386
|
|
|
$
|
1,406
|
|
|
$
|
1,356
|
|
|
$
|
1,402
|
|
|
$
|
1,585
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
3/31/2017
|
|
12/31/2016
|
|
9/30/2016
|
|
6/30/2016
|
|
3/31/2016
|
Operating Income
(Loss):
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
(18)
|
|
|
$
|
(58)
|
|
|
$
|
(95)
|
|
|
$
|
(101)
|
|
|
$
|
(128)
|
|
Middle East/North
Africa/Asia Pacific
|
(3)
|
|
|
9
|
|
|
(8)
|
|
|
—
|
|
|
6
|
|
Europe/SSA/Russia
|
(10)
|
|
|
(8)
|
|
|
(3)
|
|
|
1
|
|
|
(1)
|
|
Latin
America
|
9
|
|
|
6
|
|
|
14
|
|
|
1
|
|
|
44
|
|
Land Drilling
Rigs
|
(30)
|
|
|
(25)
|
|
|
(19)
|
|
|
(17)
|
|
|
(26)
|
|
Adjusted
Segment Operating Loss
|
(52)
|
|
|
(76)
|
|
|
(111)
|
|
|
(116)
|
|
|
(105)
|
|
Research and
Development
|
(39)
|
|
|
(40)
|
|
|
(33)
|
|
|
(41)
|
|
|
(45)
|
|
Corporate
Expenses
|
(33)
|
|
|
(32)
|
|
|
(30)
|
|
|
(34)
|
|
|
(43)
|
|
Other Charges,
Net
|
(72)
|
|
|
(251)
|
|
|
(771)
|
|
|
(269)
|
|
|
(254)
|
|
Total
Operating Loss
|
$
|
(196)
|
|
|
$
|
(399)
|
|
|
$
|
(945)
|
|
|
$
|
(460)
|
|
|
$
|
(447)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
3/31/2017
|
|
12/31/2016
|
|
9/30/2016
|
|
6/30/2016
|
|
3/31/2016
|
Product and
Service Line Revenues
(a):
|
|
|
|
|
|
|
|
|
|
Formation Evaluation
and Well Construction
|
$
|
824
|
|
|
$
|
773
|
|
|
$
|
765
|
|
|
$
|
806
|
|
|
$
|
890
|
|
Completion and
Production
|
473
|
|
|
539
|
|
|
493
|
|
|
487
|
|
|
576
|
|
Land Drilling
Rigs
|
89
|
|
|
94
|
|
|
98
|
|
|
109
|
|
|
119
|
|
Total Product
Service Line Revenues
|
$
|
1,386
|
|
|
$
|
1,406
|
|
|
$
|
1,356
|
|
|
$
|
1,402
|
|
|
$
|
1,585
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
3/31/2017
|
|
12/31/2016
|
|
9/30/2016
|
|
6/30/2016
|
|
3/31/2016
|
Depreciation and
Amortization:
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
40
|
|
|
$
|
41
|
|
|
$
|
55
|
|
|
$
|
58
|
|
|
$
|
54
|
|
Middle East/North
Africa/Asia Pacific
|
51
|
|
|
52
|
|
|
60
|
|
|
60
|
|
|
61
|
|
Europe/SSA/Russia
|
39
|
|
|
41
|
|
|
45
|
|
|
48
|
|
|
48
|
|
Latin
America
|
51
|
|
|
55
|
|
|
56
|
|
|
56
|
|
|
61
|
|
Land Drilling
Rigs
|
24
|
|
|
22
|
|
|
22
|
|
|
23
|
|
|
22
|
|
Research and
Development and Corporate
|
3
|
|
|
4
|
|
|
4
|
|
|
4
|
|
|
4
|
|
Total
Depreciation and Amortization
|
$
|
208
|
|
|
$
|
215
|
|
|
$
|
242
|
|
|
$
|
249
|
|
|
$
|
250
|
|
|
|
(a)
|
Formation Evaluation
and Well Construction includes Managed-Pressure Drilling, Drilling
Services, Tubular Running Services, Drilling Tools and Rental
Equipment, Wireline Services, Testing and Production Services,
Re-entry and Fishing Services, Cementing Products, Liner Systems,
Integrated Laboratory Services and Surface Logging. Completion and
Production includes Artificial Lift Systems, Stimulation and
Completion Systems.
|
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 plc
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
(Unaudited)
|
(In Millions, Except
Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
3/31/2017
|
|
12/31/2016
|
|
3/31/2016
|
|
Operating
Loss:
|
|
|
|
|
|
|
|
GAAP Operating
Loss
|
|
$
|
(196)
|
|
|
$
|
(399)
|
|
|
$
|
(447)
|
|
|
Severance,
Restructuring and Exited Businesses
|
|
75
|
|
|
130
|
|
|
77
|
|
|
Litigation
Charges, Net
|
|
—
|
|
|
30
|
|
|
67
|
|
|
Impairments,
Asset Write-Downs and Other (a) (b)
|
|
(3)
|
|
|
91
|
|
|
58
|
|
|
Legacy
Contract
|
|
—
|
|
|
—
|
|
|
52
|
|
|
Total Non-GAAP
Adjustments
|
|
72
|
|
|
251
|
|
|
254
|
|
|
Non-GAAP Adjusted
Operating Loss
|
|
$
|
(124)
|
|
|
$
|
(148)
|
|
|
$
|
(193)
|
|
|
|
|
|
|
|
|
|
|
Loss Before Income
Taxes:
|
|
|
|
|
|
|
|
GAAP Loss Before
Income Taxes
|
|
$
|
(410)
|
|
|
$
|
(537)
|
|
|
$
|
(592)
|
|
|
Operating
Income Adjustments
|
|
72
|
|
|
251
|
|
|
254
|
|
|
Warrant Fair
Value Adjustment
|
|
62
|
|
|
(16)
|
|
|
—
|
|
|
Currency
Devaluation Charges
|
|
—
|
|
|
10
|
|
|
31
|
|
|
Non-GAAP Loss Before
Income Taxes
|
|
$
|
(276)
|
|
|
$
|
(292)
|
|
|
$
|
(307)
|
|
|
|
|
|
|
|
|
|
|
(Provision)
Benefit for Income Taxes:
|
|
|
|
|
|
|
|
GAAP (Provision)
Benefit for Income Taxes
|
|
$
|
(33)
|
|
|
$
|
(7)
|
|
|
$
|
101
|
|
|
Tax Effect on
Non-GAAP Adjustments
|
|
(4)
|
|
|
1
|
|
|
(26)
|
|
|
Non-GAAP (Provision)
Benefit for Income Taxes
|
|
$
|
(37)
|
|
|
$
|
(6)
|
|
|
$
|
75
|
|
|
|
|
|
|
|
|
|
|
Net Loss
Attributable to Weatherford:
|
|
|
|
|
|
|
|
GAAP Net
Loss
|
|
$
|
(448)
|
|
|
$
|
(549)
|
|
|
$
|
(498)
|
|
|
Total Charges,
net of tax
|
|
130
|
|
|
246
|
|
|
259
|
|
|
Non-GAAP Net
Loss
|
|
$
|
(318)
|
|
|
$
|
(303)
|
|
|
$
|
(239)
|
|
|
|
|
|
|
|
|
|
|
Diluted Loss Per
Share Attributable to Weatherford:
|
|
|
|
|
|
|
|
GAAP Diluted Loss per
Share
|
|
$
|
(0.45)
|
|
|
$
|
(0.59)
|
|
|
$
|
(0.61)
|
|
|
Total Charges,
net of tax
|
|
0.13
|
|
|
0.27
|
|
|
0.32
|
|
|
Non-GAAP Diluted Loss
per Share
|
|
$
|
(0.32)
|
|
|
$
|
(0.32)
|
|
|
$
|
(0.29)
|
|
|
|
|
|
|
|
|
|
|
GAAP Effective Tax
Rate (c)
|
|
(8)
|
%
|
|
(1)
|
%
|
|
17
|
%
|
|
Non-GAAP Effective
Tax Rate (d)
|
|
(14)
|
%
|
|
(2)
|
%
|
|
24
|
%
|
|
|
|
(a)
|
Impairments, asset
write-downs and other of $91 million in the fourth quarter of 2016
include $69 million in pressure pumping business related shutdown
costs and other charges, and $22 million of other charges and
credits.
|
(b)
|
Impairments, asset
write-downs and other of $58 million in the first quarter of 2016
include $35 million of pressure pumping business related charges
and $23 million primarily related to a land drilling rig loss and
other charges and credits.
|
(c)
|
GAAP Effective Tax
Rate is the GAAP provision for income taxes divided by GAAP income
before income taxes.
|
(d)
|
Non-GAAP Effective
Tax Rate is the Non-GAAP provision for income taxes divided by
Non-GAAP income before income taxes and calculated in
thousands.
|
Weatherford
International plc
|
Selected Balance
Sheet Data
|
(Unaudited)
|
(In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2017
|
|
12/31/2016
|
|
9/30/2016
|
|
6/30/2016
|
|
3/31/2016
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
546
|
|
|
$
|
1,037
|
|
|
$
|
440
|
|
|
$
|
452
|
|
|
$
|
464
|
|
Accounts Receivable,
Net
|
|
1,292
|
|
|
1,383
|
|
|
1,414
|
|
|
1,484
|
|
|
1,693
|
|
Inventories,
Net
|
|
1,700
|
|
|
1,802
|
|
|
1,917
|
|
|
2,195
|
|
|
2,302
|
|
Assets Held for
Sale
|
|
860
|
|
|
23
|
|
|
11
|
|
|
14
|
|
|
2
|
|
Property, Plant and
Equipment, Net
|
|
4,265
|
|
|
4,480
|
|
|
4,708
|
|
|
5,247
|
|
|
5,471
|
|
Goodwill and
Intangibles, Net
|
|
2,602
|
|
|
3,045
|
|
|
3,104
|
|
|
3,182
|
|
|
3,216
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
803
|
|
|
845
|
|
|
666
|
|
|
790
|
|
|
934
|
|
Liabilities Held for
Sale
|
|
96
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Short-term Borrowings
and Current Portion of Long-term Debt
|
|
240
|
|
|
179
|
|
|
555
|
|
|
290
|
|
|
1,212
|
|
Long-term
Debt
|
|
7,299
|
|
|
7,403
|
|
|
6,937
|
|
|
6,943
|
|
|
5,846
|
|
Weatherford
International plc
|
Net
Debt
|
(Unaudited)
|
(In
Millions)
|
|
|
|
|
|
|
|
Change in Net Debt
for the Three Months Ended 3/31/2017:
|
|
|
|
|
|
|
Net Debt at
12/31/2016
|
|
|
|
|
|
$
|
(6,545)
|
|
Operating
Loss
|
|
|
|
|
|
(196)
|
|
Depreciation
and Amortization
|
|
|
|
|
|
208
|
|
Capital
Expenditures for Property, Plant and Equipment
|
|
|
|
|
|
(40)
|
|
Acquisition of
Assets Held for Sale
|
|
|
|
|
|
(240)
|
|
Proceeds from
Sale of Assets
|
|
|
|
|
|
4
|
|
Decrease in
Working Capital
|
|
|
|
|
|
3
|
|
Litigation
Payments
|
|
|
|
|
|
(30)
|
|
Income Taxes
Paid
|
|
|
|
|
|
(43)
|
|
Interest
Paid
|
|
|
|
|
|
(144)
|
|
Other
|
|
|
|
|
|
30
|
|
Net Debt at
3/31/2017
|
|
|
|
|
|
$
|
(6,993)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Net
Debt
|
|
3/31/2017
|
|
12/31/2016
|
|
3/31/2016
|
Cash
|
|
$
|
546
|
|
|
$
|
1,037
|
|
|
$
|
464
|
|
Short-term Borrowings
and Current Portion of Long-term Debt
|
|
(240)
|
|
|
(179)
|
|
|
(1,212)
|
|
Long-term
Debt
|
|
(7,299)
|
|
|
(7,403)
|
|
|
(5,846)
|
|
Net Debt
|
|
$
|
(6,993)
|
|
|
$
|
(6,545)
|
|
|
$
|
(6,594)
|
|
|
"Net Debt" is defined
as debt less cash. Management believes that it provides useful
information regarding our level of indebtedness by reflecting cash
that could be used to repay debt.
|
|
Working capital is
defined as accounts receivable plus inventory less accounts
payable.
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