BAAR, Switzerland,
July 27, 2018 /PRNewswire/ -- Weatherford International
plc (NYSE: WFT) reported a net loss of $264
million, or a loss of $0.26
per share for the second quarter of 2018.
Weatherford's non-GAAP net loss for the second quarter of 2018,
which excludes unusual charges and credits, was $156 million, or $0.16, diluted loss per share. This compares to a
$188 million non-GAAP net loss in the
prior quarter, or $0.19 diluted loss
per share, and a $282 million
non-GAAP net loss for the second quarter of 2017, or $0.28 diluted loss per share.
Significant Highlights
- Segment operating income improved by 73% sequentially and by
195% on a year-over-year basis.
- The annualized impact of recurring transformation benefits
improved to $192 million – an
increase of 78% compared to first quarter 2018 and representing 19%
of our transformation target.
- A definitive agreement was signed to sell Weatherford's land
drilling rig business in Saudi
Arabia, Kuwait and
Algeria for cash proceeds of
$287.5 million.
- Weatherford's Magnus™ push-the-bit rotary steerable
system was successfully launched and completed jobs in multiple
countries.
- An alliance with Valiant Artificial Lift Solutions was formed
to jointly commercialize electrical submersible pumps (ESPs).
- Weatherford sold its 50% interest in the Sunita Hydrocolloids
Inc. joint venture in July 2018.
Revenue in the second quarter of 2018 was $1.45 billion, which increased 2% from the
$1.42 billion of revenue in the prior
quarter and 6% from the $1.36 billion
of revenue reported for the second quarter of 2017. Revenues
increased sequentially on higher rig count and improved product mix
in the U.S., integrated service projects in Mexico, seasonal improvement in the North Sea
and higher activity levels in Saudi
Arabia and Asia, offset by
the seasonal slowdown associated with spring breakup in
Canada.
Year-over-year revenue growth was driven by results in the
Western Hemisphere, attributable to increased production and
completions work in the U.S. and additional integrated service
projects activity in Mexico. In
the Eastern Hemisphere, higher volume in Saudi Arabia was offset by a reduced number of
offshore projects in West Africa
and Asia combined with adverse
exchange rate effects in Russia.
Operating loss for the second quarter of 2018 was $73 million. Excluding unusual charges and
credits, segment operating income in the second quarter of 2018 was
$69 million, up $29 million or 73%, sequentially and up
$142 million, or 195%,
year-over-year. The sequential improvement in the Western
Hemisphere was due to overall increased activity levels, a
favorable product mix and improved operational efficiency
associated with Weatherford's transformation efforts. Eastern
Hemisphere operating income increased primarily due to
transformation initiatives resulting in a lower cost structure.
The year-over-year operating income improvements were driven by
production and completions activity increases in the U.S. and
market share gains in Latin
America, combined with lower operating costs from the
transformation initiatives in both the Western and Eastern
Hemispheres.
In the quarter, we recorded pre-tax charges of $109 million, which consist of $70 million in impairments and asset write-downs,
primarily related to land drilling rigs, $38
million in restructuring and transformation charges and
$11 million in Angolan kwanza
currency devaluation charges, partially offset by a $10 million credit related to the fair value
adjustment of the outstanding warrant.
In the second quarter of 2018, incremental recurring
benefits as a result of the transformation plan were $21 million. Total recognized recurring operating
improvements during the second quarter were $48 million, or $192
million on an annualized basis, representing 19% of our
$1 billion target.
Mark A. McCollum, President and
Chief Executive Officer, commented, "We have taken significant
steps to strengthen our organization and lay the foundation for
sustainable growth. Our second quarter results reflect improvement
in revenues, segment operating income and adjusted EBITDA and
confirm that we are on the path to becoming a stronger and
healthier company. As global activity levels continue to improve
and our transformation continues to gain momentum, I remain
confident that we will reach our previously outlined operational
and financial objectives, including achieving $1 billion in annualized recurring adjusted
EBITDA benefit by year-end 2019."
McCollum continued, "Seasonal trends worked against us this
quarter, causing us to miss our working capital objectives and, in
turn, our cash flow target. The entire organization, however,
remains intensely focused on delivering our objective of breakeven
free cash flow for the year, and remedial actions have already been
implemented to get us back on plan. With a clear mission, the right
structure, and a solid strategy, our team is embracing this
challenge head-on. We are continuing to drive significant change
across all aspects of our business to better position Weatherford
to create value for all of our stakeholders."
Land Drilling Rigs
Weatherford signed a definitive agreement with ADES
International for the sale of the land drilling rig operations in
Saudi Arabia, Kuwait and Algeria as well as two idle rigs in
Iraq for cash proceeds of
$287.5 million. The remainder of the
fleet will be sold over the coming quarters.
Operational highlights in the land drilling rigs business during
the quarter include:
- The business received award letters for contract extensions in
Algeria, Colombia, Egypt, India,
Iraq, Kuwait, Mexico and Saudi
Arabia.
- The fleet achieved the lowest amount of nonproductive time
during rig moves since 2016.
- 10 rigs have operated without a recordable incident for periods
ranging from 1 to 17 years.
Cash Flow
Net cash used by operating activities was $130 million for the second quarter of 2018,
driven by cash payments of $99
million for debt interest and $29
million for cash severance, restructuring and
transformation. Second quarter total capital expenditures of
$48 million, including investments in
held for sale land drilling rigs, increased by $10 million, or 26%, sequentially and increased
$6 million or 14% from the same
quarter in the prior year.
Operating Segments
|
|
Three Months
Ended
|
|
Change
|
(In
Millions)
|
|
6/30/2018
|
|
3/31/2018
|
|
6/30/2017
|
|
Sequential
|
|
YoY
|
Western
Hemisphere
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
769
|
|
|
|
$
|
756
|
|
|
|
$
|
678
|
|
|
|
2
|
|
%
|
|
13
|
|
%
|
Segment Operating
Income (Loss)
|
|
$
|
50
|
|
|
|
$
|
24
|
|
|
|
$
|
(51)
|
|
|
|
108
|
|
%
|
|
198
|
|
%
|
Segment Operating
Margin
|
|
6.5
|
|
%
|
|
3.2
|
|
%
|
|
(7.5)
|
|
%
|
|
330
|
bps
|
|
1,400
|
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eastern
Hemisphere
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
679
|
|
|
|
$
|
667
|
|
|
|
$
|
685
|
|
|
|
2
|
|
%
|
|
(1)
|
|
%
|
Segment Operating
Income (Loss)
|
|
$
|
19
|
|
|
|
$
|
16
|
|
|
|
$
|
(22)
|
|
|
|
19
|
|
%
|
|
186
|
|
%
|
Segment Operating
Margin
|
|
2.8
|
|
%
|
|
2.4
|
|
%
|
|
(3.2)
|
|
%
|
|
40
|
bps
|
|
600
|
|
bps
|
Western Hemisphere
Second quarter revenues of $769
million were up $13 million or
2% sequentially and up $91 million,
or 13%, year-over-year. The sequential growth resulted from higher
U.S. rig counts, more favorable product mix and increased activity
in Mexico, Argentina and Colombia, offset by the spring breakup in
Canada. Year-over-year revenues
increased on higher activity levels for the Completions,
Production and Well Construction product lines in the U.S. and from
growth in integrated service projects in Mexico.
Second quarter segment operating income of $50 million was up $26
million, sequentially and up $101
million year-over-year. The sequential increase resulted
from the revenue drivers described above and reduced operating
costs due to the transformation efforts. Year-over-year results
improved due to increased activity levels in the U.S. and
Mexico, offset by a more severe
impact from the spring breakup in Canada. A change in revenue recognition in
Venezuela reduced operating
results in the second quarter of the prior year.
Operational highlights in the Western Hemisphere during the
quarter include:
- Weatherford was awarded a 5-year contract worth $300 million by a major operator in Argentina. The contract entails fracturing,
coiled tubing, wireline, completions and testing services.
- Weatherford was awarded a 5-year contract worth $270 million to provide multiple product line
services for a major operator in Colombia. The contract includes services for
fracturing, coiled tubing, wireline, fishing, re-entry, tubular
running, completions and testing, among others.
- Indications of demand for Weatherford's RotaFlex®
long-stroke pumping units in the U.S. for the second half of 2018
are double the rate of deliveries we made during the first half of
the year.
- Several U.S. operators in major basins signed new software
contracts with Weatherford. One of the contracts engaged
Weatherford to install ForeSite® production optimization
software on approximately 26,000 wells.
- Weatherford has increased integrated project activity for
development wells in Mexico, with
services ranging from drilling to completions. In one offshore
well, Weatherford reduced the expected operational time by 22 days,
equal to $2 million, by deploying
proven technologies, including two RipTide® drilling
reamers and the Microflux® control system.
- In an onshore oil well in Mexico, the Weatherford Magnus™
rotary steerable system increased the rate of penetration, which
improved the drilling time by approximately 50%.
- In a cased-hole well in Colombia, Weatherford used the shallow-angle
QuickCut™ casing-exit system to complete a sidetrack, which saved
7.5 hours of rig time compared to window-milling estimates. The
sidetrack enabled reaching total depth without drilling a new well,
which saved the customer approximately $2
million.
- Weatherford commercially deployed the recently launched
WFXØ® openhole gravel-pack system for an offshore
project in Brazil. The system was
configured to perform a multizone acid job from a single point, and
oil production increased by 32%.
Eastern Hemisphere
Second quarter revenues of $679
million were up $12 million or
2% sequentially, and down $6 million
or 1% year-over-year. The sequential increase was primarily due to
seasonal improvement in the North Sea and from completions activity
in Saudi Arabia and Asia, offset by decreased Production
deliveries in Kuwait.
Year-over-year revenues decreased slightly with increased
completions and well construction activity in Saudi Arabia offset by fewer offshore projects
in West Africa and Asia combined with adverse exchange rate
effects in Russia.
Second quarter segment operating income of $19 million was up $3
million sequentially, and up $41
million year-over-year. The sequential and year-over-year
increases were primarily due to improvements from transformation
initiatives and a lower cost structure.
Operational highlights in the Eastern Hemisphere during the
quarter include:
- Weatherford delivered managed pressure drilling (MPD)
technologies that mitigated risks in a gas-well drilling campaign
in the Middle East. The
technologies enabled drilling the well sections to total depth
despite the ultranarrow window and high-pressure, high-temperature
conditions. Compared to conventional drilling methods, MPD reduced
the average drilling time by 15 days.
- In two wells in the Middle
East, Weatherford supplied completions and cementing
equipment, including the SwageSet VØ™ packoff stage
tool. The 13 3/8-inch tool size proved successful in its first two
runs and the seal eliminated casing-to-casing annular gas
migration.
- Weatherford marked its return to the Kuwait liner-hanger business by securing a
sizable contract. As a result of the awards, Weatherford will
extend traditional field of operations into the deep drilling
sector.
- Weatherford replaced an incumbent wireline service provider on
an onshore oil well in Kuwait. By
conveying Compact™ tools through drillpipe, Weatherford
secured the requested data with zero nonproductive time.
- Working closely alongside the operator, Weatherford devised a
completion solution including Maxflo® chrome premium
sand screens. The solution maximized reservoir contact for 2,646
feet with the longest 4 1/2-inch Maxflo® sand screen
installation in a 5 7/8-inch openhole gas well.
- Weatherford was awarded a 3-year contract for tubular running
services in 11 wells as part of a critical project for delivering
cleaner burning natural gas in Australia. The win can be credited to
Weatherford's leading technology and track record for delivering
incident-free operations with low nonproductive time.
Reclassifications
In 2018 we adopted pension accounting standards on a
retrospective basis, reclassifying the presentation of non-service
cost components of net periodic pension and post-retirement cost
from our operating income to non-operating Other Income (Expense),
Net. All prior periods have been restated to conform to the current
presentation within the Condensed Consolidated Statements of
Operations and other financial information in the following
pages.
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 740 locations,
including manufacturing, service, research and development and
training facilities and employs approximately 28,600 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 July 27,
2018, at 8:30 a.m. Eastern
Time (ET), 7:30 a.m. Central
Time (CT). Weatherford invites investors to listen to the
call live and review related presentation materials via the
Company's website. Conference call details and presentation
materials can be found at
https://www.weatherford.com/en/investor-relations/financial-information/conference-call-details/.
A recording of the conference call and transcript of the call will
be available in the Investor Relations 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 efficiencies and cost
savings associated with our transformation plans; completion of
potential dispositions, and the changes in spending and payment
timing 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, 2017 and those set forth from
time-to-time in the Company's other filings with the Securities and
Exchange Commission. 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
|
|
Six Months
Ended
|
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
Revenues:
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
|
$
|
769
|
|
|
$
|
678
|
|
|
$
|
1,525
|
|
|
$
|
1,411
|
|
Eastern
Hemisphere
|
|
679
|
|
|
685
|
|
|
1,346
|
|
|
1,338
|
|
Total
Revenues
|
|
1,448
|
|
|
1,363
|
|
|
2,871
|
|
|
2,749
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss):
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
|
50
|
|
|
(51)
|
|
|
74
|
|
|
(81)
|
|
Eastern
Hemisphere
|
|
19
|
|
|
(22)
|
|
|
35
|
|
|
(81)
|
|
Segment
Operating Income (Loss)
|
|
69
|
|
|
(73)
|
|
|
109
|
|
|
(162)
|
|
Corporate
Expenses
|
|
(34)
|
|
|
(33)
|
|
|
(70)
|
|
|
(66)
|
|
Restructuring and
Transformation Charges
|
|
(38)
|
|
|
(31)
|
|
|
(63)
|
|
|
(106)
|
|
Other Charges,
Net
|
|
(70)
|
|
|
(8)
|
|
|
(88)
|
|
|
(25)
|
|
Total
Operating Loss
|
|
(73)
|
|
|
(145)
|
|
|
(112)
|
|
|
(359)
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
|
Interest Expense,
Net
|
|
(152)
|
|
|
(138)
|
|
|
(301)
|
|
|
(279)
|
|
Bond Tender and Call
Premium
|
|
—
|
|
|
—
|
|
|
(34)
|
|
|
—
|
|
Warrant Fair Value
Adjustment
|
|
10
|
|
|
127
|
|
|
56
|
|
|
65
|
|
Currency Devaluation
Charges
|
|
(11)
|
|
|
—
|
|
|
(37)
|
|
|
—
|
|
Other Income
(Expense), Net
|
|
(7)
|
|
|
8
|
|
|
(15)
|
|
|
15
|
|
Net Loss Before
Income Taxes
|
|
(233)
|
|
|
(148)
|
|
|
(443)
|
|
|
(558)
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Provision
|
|
(26)
|
|
|
(17)
|
|
|
(58)
|
|
|
(50)
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
(259)
|
|
|
(165)
|
|
|
(501)
|
|
|
(608)
|
|
Net Income
Attributable to Noncontrolling Interests
|
|
5
|
|
|
6
|
|
|
8
|
|
|
11
|
|
Net Loss Attributable
to Weatherford
|
|
$
|
(264)
|
|
|
$
|
(171)
|
|
|
$
|
(509)
|
|
|
$
|
(619)
|
|
|
|
|
|
|
|
|
|
|
Loss Per Share
Attributable to Weatherford:
|
|
|
|
|
|
|
|
|
Basic &
Diluted
|
|
$
|
(0.26)
|
|
|
$
|
(0.17)
|
|
|
$
|
(0.51)
|
|
|
$
|
(0.63)
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic &
Diluted
|
|
997
|
|
|
990
|
|
|
995
|
|
|
989
|
|
Weatherford
International plc
|
Selected
Statements of Operations Information
|
(Unaudited)
|
(In
Millions)
|
|
Three Months
Ended
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
$
|
769
|
|
|
$
|
756
|
|
|
$
|
759
|
|
|
$
|
767
|
|
|
$
|
678
|
|
Eastern
Hemisphere
|
679
|
|
|
667
|
|
|
731
|
|
|
693
|
|
|
685
|
|
Total
Revenues
|
$
|
1,448
|
|
|
$
|
1,423
|
|
|
$
|
1,490
|
|
|
$
|
1,460
|
|
|
$
|
1,363
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
Operating Income
(Loss):
|
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
$
|
50
|
|
|
$
|
24
|
|
|
$
|
(35)
|
|
|
$
|
3
|
|
|
$
|
(51)
|
|
Eastern
Hemisphere
|
19
|
|
|
16
|
|
|
(48)
|
|
|
(10)
|
|
|
(22)
|
|
Segment
Operating Income (Loss)
|
69
|
|
|
40
|
|
|
(83)
|
|
|
(7)
|
|
|
(73)
|
|
Corporate
Expenses
|
(34)
|
|
|
(36)
|
|
|
(36)
|
|
|
(28)
|
|
|
(33)
|
|
Restructuring and
Transformation Charges
|
(38)
|
|
|
(25)
|
|
|
(43)
|
|
|
(34)
|
|
|
(31)
|
|
Other Charges,
Net
|
(70)
|
|
|
(18)
|
|
|
(1,579)
|
|
|
(1)
|
|
|
(8)
|
|
Total Operating
Loss
|
$
|
(73)
|
|
|
$
|
(39)
|
|
|
$
|
(1,741)
|
|
|
$
|
(70)
|
|
|
$
|
(145)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
Product and
Service Line (a)
Revenues:
|
|
|
|
|
|
|
|
|
|
Production
|
$
|
394
|
|
|
$
|
381
|
|
|
$
|
408
|
|
|
$
|
381
|
|
|
$
|
335
|
|
Completion
|
303
|
|
|
294
|
|
|
339
|
|
|
320
|
|
|
301
|
|
Drilling and
Evaluation
|
341
|
|
|
358
|
|
|
349
|
|
|
347
|
|
|
331
|
|
Well
Construction
|
410
|
|
|
390
|
|
|
394
|
|
|
412
|
|
|
396
|
|
Total Product and
Service Line Revenues
|
$
|
1,448
|
|
|
$
|
1,423
|
|
|
$
|
1,490
|
|
|
$
|
1,460
|
|
|
$
|
1,363
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
Depreciation and
Amortization:
|
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
$
|
56
|
|
|
$
|
60
|
|
|
$
|
80
|
|
|
$
|
89
|
|
|
$
|
92
|
|
Eastern
Hemisphere
|
84
|
|
|
86
|
|
|
109
|
|
|
108
|
|
|
111
|
|
Corporate
|
4
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
1
|
|
Total Depreciation
and Amortization
|
$
|
144
|
|
|
$
|
147
|
|
|
$
|
190
|
|
|
$
|
199
|
|
|
$
|
204
|
|
|
|
(a)
|
Production includes
Artificial Lift Systems, Stimulation and Testing and Production
Services. Completions includes Completion Systems, Liner Systems
and Cementing Products. Drilling and Evaluation includes Drilling
Services, Managed Pressure Drilling, Surface Logging Systems,
Wireline Services and Reservoir Solutions. Well Construction
includes Tubular Running Services, Intervention Services, Drilling
Tools and Rental Equipment and Land Drilling Rigs.
|
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
and comparisons with peer companies. The non-GAAP amounts shown in
the following tables 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
|
|
Six Months
Ended
|
|
|
6/30/2018
|
|
3/31/2018
|
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
Operating
Loss:
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Loss
|
|
$
|
(73)
|
|
|
$
|
(39)
|
|
|
$
|
(145)
|
|
|
$
|
(112)
|
|
|
$
|
(359)
|
|
Restructuring and
Transformation Charges (a)
|
|
38
|
|
|
25
|
|
|
31
|
|
|
63
|
|
|
106
|
|
Impairments, Asset
Write-Downs and Other (b)
|
|
70
|
|
|
18
|
|
|
8
|
|
|
88
|
|
|
25
|
|
Operating
Non-GAAP Adjustments
|
|
108
|
|
|
43
|
|
|
39
|
|
|
151
|
|
|
131
|
|
Non-GAAP Adjusted
Operating Income (Loss)
|
|
$
|
35
|
|
|
$
|
4
|
|
|
$
|
(106)
|
|
|
$
|
39
|
|
|
$
|
(228)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Before Income
Taxes:
|
|
|
|
|
|
|
|
|
|
|
GAAP Loss Before
Income Taxes
|
|
$
|
(233)
|
|
|
$
|
(210)
|
|
|
$
|
(148)
|
|
|
$
|
(443)
|
|
|
$
|
(558)
|
|
Operating Non-GAAP
Adjustments
|
|
108
|
|
|
43
|
|
|
39
|
|
|
151
|
|
|
131
|
|
Bond Tender and Call
Premium (c)
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
|
—
|
|
Warrant Fair Value
Adjustment
|
|
(10)
|
|
|
(46)
|
|
|
(127)
|
|
|
(56)
|
|
|
(65)
|
|
Defined Benefit
Pension Plan Gains (d)
|
|
—
|
|
|
—
|
|
|
(20)
|
|
|
—
|
|
|
(40)
|
|
Currency Devaluation
Charges (e)
|
|
11
|
|
|
26
|
|
|
—
|
|
|
37
|
|
|
—
|
|
Non-GAAP Adjustments Before
Taxes
|
|
$
|
109
|
|
|
$
|
57
|
|
|
$
|
(108)
|
|
|
$
|
166
|
|
|
$
|
26
|
|
Non-GAAP Loss Before
Income Taxes
|
|
$
|
(124)
|
|
|
$
|
(153)
|
|
|
$
|
(256)
|
|
|
$
|
(277)
|
|
|
$
|
(532)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Provision)
Benefit for Income Taxes:
|
|
|
|
|
|
|
|
|
|
|
GAAP Provision for
Income Taxes
|
|
$
|
(26)
|
|
|
$
|
(32)
|
|
|
$
|
(17)
|
|
|
$
|
(58)
|
|
|
$
|
(50)
|
|
Tax Effect on
Non-GAAP Adjustments
|
|
(1)
|
|
|
—
|
|
|
(3)
|
|
|
(1)
|
|
|
(7)
|
|
Non-GAAP Provision
for Income Taxes
|
|
$
|
(27)
|
|
|
$
|
(32)
|
|
|
$
|
(20)
|
|
|
$
|
(59)
|
|
|
$
|
(57)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
Attributable to Weatherford:
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Loss
|
|
$
|
(264)
|
|
|
$
|
(245)
|
|
|
$
|
(171)
|
|
|
$
|
(509)
|
|
|
$
|
(619)
|
|
Non-GAAP
Adjustments, net of tax
|
|
108
|
|
|
57
|
|
|
(111)
|
|
|
165
|
|
|
19
|
|
Non-GAAP Net
Loss
|
|
$
|
(156)
|
|
|
$
|
(188)
|
|
|
$
|
(282)
|
|
|
$
|
(344)
|
|
|
$
|
(600)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Loss Per
Share Attributable to Weatherford:
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted Loss per
Share
|
|
$
|
(0.26)
|
|
|
$
|
(0.25)
|
|
|
$
|
(0.17)
|
|
|
$
|
(0.51)
|
|
|
$
|
(0.63)
|
|
Non-GAAP
Adjustments, net of tax
|
|
0.10
|
|
|
0.06
|
|
|
(0.11)
|
|
|
0.16
|
|
|
0.02
|
|
Non-GAAP Diluted Loss
per Share
|
|
$
|
(0.16)
|
|
|
$
|
(0.19)
|
|
|
$
|
(0.28)
|
|
|
$
|
(0.35)
|
|
|
$
|
(0.61)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Effective Tax
Rate (f)
|
|
(11)%
|
|
|
(15)%
|
|
|
(12)%
|
|
|
(13)%
|
|
|
(9)%
|
|
Non-GAAP Effective
Tax Rate (g)
|
|
(22)%
|
|
|
(21)%
|
|
|
(8)%
|
|
|
(21)%
|
|
|
(11)%
|
|
|
|
(a)
|
Represents severance,
transformation and facility exit costs in 2018.
|
(b)
|
Represents long-lived
asset impairments, other asset write-downs and inventory charges,
partially offset by gains on purchase of the remaining interest in
a joint venture, property sales and a reduction of a contingency
reserve on a legacy contract in 2018.
|
(c)
|
Represents a bond
tender and call premium on the tender offer redemption of our
9.625% senior notes.
|
(d)
|
Represents the
supplemental executive retirement plan gain that was reclassified
from Operating Non-GAAP Adjustments to non-operating Other Income
(Expense), Net upon retrospective adoption of the new pension
accounting standards in the first quarter of 2018.
|
(e)
|
Represents currency
devaluations of the Angolan kwanza and Venezuelan
bolivar.
|
(f)
|
GAAP Effective Tax
Rate is the GAAP provision for income taxes divided by GAAP income
before income taxes and calculated in thousands.
|
(g)
|
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
|
Reconciliation of
GAAP to Non-GAAP Financial Measures - EBITDA
|
(Unaudited)
|
(In Millions, Except
Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
6/30/2018
|
|
3/31/2018
|
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
Attributable to Weatherford
|
|
$
|
(264)
|
|
|
$
|
(245)
|
|
|
$
|
(171)
|
|
|
$
|
(509)
|
|
|
$
|
(619)
|
|
Net Income
Attributable to Noncontrolling Interests
|
|
5
|
|
|
3
|
|
|
6
|
|
|
8
|
|
|
11
|
|
Net
Loss
|
|
(259)
|
|
|
(242)
|
|
|
(165)
|
|
|
(501)
|
|
|
(608)
|
|
Interest Expense,
Net
|
|
152
|
|
|
149
|
|
|
138
|
|
|
301
|
|
|
279
|
|
Income Tax
Provision
|
|
26
|
|
|
32
|
|
|
17
|
|
|
58
|
|
|
50
|
|
Depreciation and
Amortization
|
|
144
|
|
|
147
|
|
|
204
|
|
|
291
|
|
|
412
|
|
EBITDA
|
|
63
|
|
|
86
|
|
|
194
|
|
|
149
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (Income)
Expense Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Warrant Fair Value
Adjustment
|
|
(10)
|
|
|
(46)
|
|
|
(127)
|
|
|
(56)
|
|
|
(65)
|
|
Bond Tender and Call
Premium
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
|
—
|
|
Currency Devaluation
Charges
|
|
11
|
|
|
26
|
|
|
—
|
|
|
37
|
|
|
—
|
|
Other (Income)
Expense, Net
|
|
7
|
|
|
8
|
|
|
(8)
|
|
|
15
|
|
|
(15)
|
|
Restructuring and
Transformation Charges
|
|
38
|
|
|
25
|
|
|
31
|
|
|
63
|
|
|
106
|
|
Impairments, Asset
Write-Downs and Other
|
|
70
|
|
|
18
|
|
|
8
|
|
|
88
|
|
|
25
|
|
Adjusted
EBITDA
|
|
$
|
179
|
|
|
$
|
151
|
|
|
$
|
98
|
|
|
$
|
330
|
|
|
$
|
184
|
|
Weatherford
International plc
|
Selected Balance
Sheet Data
|
(Unaudited)
|
(In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
415
|
|
|
$
|
459
|
|
|
$
|
613
|
|
|
$
|
445
|
|
|
$
|
584
|
|
Accounts Receivable,
Net
|
|
1,167
|
|
|
1,100
|
|
|
1,103
|
|
|
1,236
|
|
|
1,165
|
|
Inventories,
Net
|
|
1,143
|
|
|
1,225
|
|
|
1,234
|
|
|
1,752
|
|
|
1,728
|
|
Assets Held for
Sale
|
|
489
|
|
|
369
|
|
|
359
|
|
|
935
|
|
|
929
|
|
Property, Plant and
Equipment, Net
|
|
2,273
|
|
|
2,580
|
|
|
2,708
|
|
|
3,989
|
|
|
4,111
|
|
Goodwill and
Intangibles, Net
|
|
2,837
|
|
|
2,968
|
|
|
2,940
|
|
|
2,575
|
|
|
2,527
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
754
|
|
|
809
|
|
|
856
|
|
|
815
|
|
|
837
|
|
Short-term Borrowings
and Current Portion of Long-term Debt
|
|
295
|
|
|
153
|
|
|
148
|
|
|
391
|
|
|
152
|
|
Long-term
Debt
|
|
7,634
|
|
|
7,639
|
|
|
7,541
|
|
|
7,530
|
|
|
7,538
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders'
Equity (a)
|
|
(1,312)
|
|
|
(898)
|
|
|
(571)
|
|
|
1,384
|
|
|
1,524
|
|
|
|
(a)
|
On January 1, 2018,
we adopted the accounting standard related to taxes on intra-entity
transfers of non-inventory assets on a modified retrospective basis
and the impact from this adoption was to record the previously
recorded prepaid taxes as an adjustment to retained earnings. In
addition we also adopted the revenue recognition accounting
standard and recorded the cumulative effect of the changes made to
our consolidated balance sheet as an adjustment to retained
earnings.
|
Weatherford
International plc
|
Net Debt
(a)
|
(Unaudited)
|
(In
Millions)
|
|
|
|
|
|
|
|
Change in Net Debt
for the Three Months Ended 6/30/2018:
|
|
|
|
|
|
|
Net Debt at 3/31/2018
(a)
|
|
|
|
|
|
$
|
(7,333)
|
|
Operating
Loss
|
|
|
|
|
|
(73)
|
|
Depreciation and
Amortization
|
|
|
|
|
|
144
|
|
Capital Expenditures
for Property, Plant and Equipment
|
|
|
|
|
|
(39)
|
|
Capital Expenditures
for Assets Held for Sale
|
|
|
|
|
|
(9)
|
|
Proceeds from Sale of
Assets
|
|
|
|
|
|
38
|
|
Acquisition of
Intangibles
|
|
|
|
|
|
(4)
|
|
Increase in Working
Capital (b)
|
|
|
|
|
|
(121)
|
|
Other Financing
Activities
|
|
|
|
|
|
(4)
|
|
Accrued Litigation
and Settlements
|
|
|
|
|
|
(15)
|
|
Income Taxes
Paid
|
|
|
|
|
|
(19)
|
|
Interest
Paid
|
|
|
|
|
|
(99)
|
|
Other
|
|
|
|
|
|
20
|
|
Net Debt at 6/30/2018
(a)
|
|
|
|
|
|
$
|
(7,514)
|
|
|
|
|
|
|
|
|
Change in Net Debt
for the Six Months Ended 6/30/2018:
|
|
|
|
|
|
|
Net Debt at
12/31/2017 (a)
|
|
|
|
|
|
$
|
(7,076)
|
|
Operating
Loss
|
|
|
|
|
|
(112)
|
|
Depreciation and
Amortization
|
|
|
|
|
|
291
|
|
Capital Expenditures
for Property, Plant and Equipment
|
|
|
|
|
|
(68)
|
|
Capital Expenditures
for Assets Held for Sale
|
|
|
|
|
|
(18)
|
|
Proceeds from Sale of
Assets
|
|
|
|
|
|
50
|
|
Acquisition of
Intangibles
|
|
|
|
|
|
(7)
|
|
Other Financing
Activities
|
|
|
|
|
|
(14)
|
|
Increase in Working
Capital (b)
|
|
|
|
|
|
(166)
|
|
Accrued Litigation
and Settlements
|
|
|
|
|
|
(23)
|
|
Income Taxes
Paid
|
|
|
|
|
|
(66)
|
|
Interest
Paid
|
|
|
|
|
|
(273)
|
|
Other
|
|
|
|
|
|
(32)
|
|
Net Debt at 6/30/2018
(a)
|
|
|
|
|
|
$
|
(7,514)
|
|
|
|
|
|
|
|
|
Components of Net
Debt (a)
|
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
Cash
|
|
$
|
415
|
|
|
$
|
459
|
|
|
$
|
613
|
|
Short-term Borrowings
and Current Portion of Long-term Debt
|
|
(295)
|
|
|
(153)
|
|
|
(148)
|
|
Long-term
Debt
|
|
(7,634)
|
|
|
(7,639)
|
|
|
(7,541)
|
|
Net Debt
(a)
|
|
$
|
(7,514)
|
|
|
$
|
(7,333)
|
|
|
$
|
(7,076)
|
|
|
|
(a)
|
"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.
|
(b)
|
Working capital is
defined as the cash changes in accounts receivable plus inventory
less accounts payable.
|
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