BAAR, Switzerland, Feb. 2,
2018 /PRNewswire/ -- Weatherford International plc (NYSE: WFT)
reported a net loss of $1.94 billion,
or a loss of $1.95 per share for the
fourth quarter of 2017. Non-GAAP net loss for the fourth quarter of
2017, excluding charges and credits, was $329 million, or $0.33 diluted loss per share. This compares to a
$221 million non-GAAP net loss for
the third quarter of 2017, or $0.22
diluted loss per share, and a $303
million non-GAAP net loss for the fourth quarter of the
prior year, or $0.32 diluted loss per
share. Revenue in the fourth quarter of 2017 was $1.49 billion, which increased 2% from revenue of
$1.46 billion for the third quarter
of 2017 and was 6% higher than the $1.41
billion of revenue reported for the fourth quarter of 2016.
The sequential and year-over-year increase was primarily led by the
Eastern Hemisphere, with increased activity from contract
deliveries and sales. Net cash provided by operating activities was
$96 million for the fourth quarter of
2017, as compared to net cash used of $243
million during the third quarter of 2017.
Operating loss for the fourth quarter of 2017 was $1.74 billion. Excluding charges and credits,
segment operating loss for the fourth quarter of 2017 was
$84 million, compared to a loss of
$8 million for the third quarter of
2017. The sequential decline was almost equally attributed to both
hemispheres and included a number of exceptional items negatively
impacting operating income by $49
million, or $0.05 diluted loss
per share. A change in accounting for revenue to a cash basis, as
well as lower activity in Venezuela, negatively impacted operating
income by $17 million, or
$0.02 diluted loss per share and
lower margins on year-end product sales out of existing inventory
negatively impacted operating results by $17
million, or $0.02 diluted loss
per share.
Segment operating results for the fourth quarter of 2017
improved $32 million, or 28%,
compared to the fourth quarter of 2016. The year-over-year
improvement was primarily driven by growth in Completions in
North America, realization of
savings from cost reduction measures and the impact
from the shutdown of Pressure Pumping operations in
the United States in the prior
year fourth quarter as well as the recovery of activity levels in
North America. This improvement
was partially offset by lower results in Venezuela related to the change in accounting
for revenue to cash basis, continued weakness in offshore markets
in the Eastern Hemisphere, which were partially offset by market
share gains in land markets in the Middle
East, Russia and
Continental Europe.
Mark A. McCollum, President and
Chief Executive Officer, commented, "During the fourth quarter, we
took assertive steps to improve our operational structure and our
balance sheet. We completed an organizational realignment that
enhances synergies between our product and service offerings and
brings decision making closer to the field level. We successfully
achieved our initial cost savings targets and monetized our U.S.
pressure pumping and pump-down perforating assets. Our revenue
increased sequentially and we exceeded free cash flow targets.
However, EBITDA was negatively impacted by the monetization of
inventory at low margins, as well as a number of exceptional
non-cash items. We expect significant sequential improvements in
EBITDA for the first quarter of 2018."
Full year 2017 revenue was $5.70
billion, a slight decrease of $50
million, or 1%, from 2016. Full year operating loss for 2017
was $2.13 billion, compared to a loss
of $2.25 billion for 2016. Excluding
charges and credits, full year adjusted segment operating loss for
2017 was $258 million compared to a
loss of $567 million for 2016. This
significant year-over-year improvement in segment operating
performance was led by North
America, as a result of improvements in the underlying
business, cost reductions and efficiency improvements as well as
the shutdown of U.S. pressure pumping during the fourth quarter of
2016.
McCollum continued, "In 2017, we set the stage for the future of
Weatherford. We have made significant progress, taking decisive and
strategic actions throughout 2017. In addition to realigning and
flattening our structure, we initiated an organizational
transformation plan that will create an estimated $1 billion in profit improvements over the next
18 to 24 months. Since announcing this plan last quarter, we have
taken further steps as an organization to develop rigorous,
detailed plans and validate our ability to meet this target."
In the quarter, we recorded pre-tax charges of $1.59 billion, the majority of which are
non-cash. These charges primarily include $1.68 billion in impairments and asset
write-downs, a $96 million gain on
the disposition of our U.S. pressure pumping and pump-down
perforating assets, $43 million in
severance and restructuring charges and $28
million in credits related to the fair value adjustment of
the outstanding warrant.
Cash Flow and Financial Covenants
Net cash provided by operating activities was $96 million for the fourth quarter of 2017,
driven by improved accounts receivable collections and a reduction
in inventory levels from year-end product sales, partially offset
by cash payments of $104 million for
debt interest, $38 million for cash
severance and restructuring costs and $30
million for legal settlements. Fourth quarter capital
expenditures of $78 million increased
by $13 million or 20% sequentially,
and increased $10 million or 15% from
the same quarter in the prior year. Full year 2017 capital
expenditures were $225 million,
primarily representing investments in our Well Construction and
Drilling and Evaluation business units. Excluding Land Drilling
Rigs, we expect capital expenditures in 2018 to remain broadly in
line with 2017.
On December 29, 2017, we completed
the sale of our U.S. hydraulic fracturing and pump-down perforating
assets for $430 million in cash.
The proceeds from the sale were used to reduce outstanding
debt.
The Company remains in compliance with its financial covenants
as defined in our revolving and secured term loan credit facilities
as of December 31, 2017, and expects
to continue to remain in compliance with all covenants based on
current financial projections.
Taxes
The fourth quarter non-GAAP tax provision was $47 million, and includes a higher tax expense of
$10 million associated with entities
that are no longer being benefited due to the establishment of a
valuation allowance in the fourth quarter and an increase in
uncertain tax positions of $10
million. The sum of these exceptional tax charges
during the fourth quarter totaled $0.02 diluted loss per share. Excluding these
exceptional items, tax expense from recurring operations was due to
profits in certain jurisdictions, deemed profit countries and
withholding taxes on intercompany charges.
Technology and Highlights
- Weatherford was named Wells Supplier of the Year 2017 by Shell
International Exploration & Production Inc. in recognition of
outstanding safety and service quality as well as the Company's
collaborative, solutions-based approach.
- Weatherford reduced nonproductive time 23% year-over-year.
- The AutoTong™ system, which was introduced by the Company in
September, has been successfully deployed on four jobs globally,
including land and offshore operations. The system delivered
consistent connection makeup and immediately alerted the customer
to any connections that did not meet the established parameters,
assuring greater well integrity.
- Several operators in the U.S. and the Middle East have begun shifting their wells
from electric submersible pumps to jet-lift and gas-lift systems.
Weatherford jet-lift and gas-lift systems can be installed without
a rig, which reduces deferred production and saves operational
costs. This trend is especially strong in the Permian Basin.
- The ForeSite™ production optimization platform has gained
significant traction, with installations in progress on 1,800
reciprocating-rod lift units in the U.S. After installations are
completed in mid-February, the production monitoring phase of the
project will commence.
- The Land Drilling Rigs business achieved a 25% decrease in
nonproductive time year-over-year.
Operating Segments
In the fourth quarter of 2017, we realigned our organization
into two operating segments, Western Hemisphere and Eastern
Hemisphere. Our Western Hemisphere segment represents the prior
North America and Latin America segments as well as land
drilling rig operations in Colombia and Mexico. Our Eastern Hemisphere segment
represents the prior MENA/Asia
Pacific segment and Europe/SSA/Russia segment as well as land drilling rig
operations in the Eastern Hemisphere. Research and development
expenses are now included in the Western and Eastern Hemisphere
segment results.
|
|
Three Months
Ended
|
|
Change
|
(In
Millions)
|
|
12/31/2017
|
|
9/30/2017
|
|
12/31/2016
|
|
Sequential
|
|
YoY
|
Western
Hemisphere
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenues
|
|
$
|
759
|
|
|
|
$
|
767
|
|
|
|
$
|
736
|
|
|
|
(1)
|
|
%
|
|
3
|
|
%
|
Segment Operating
Income (Loss)
|
|
$
|
(35)
|
|
|
|
$
|
3
|
|
|
|
$
|
(74)
|
|
|
|
(1,267)
|
|
%
|
|
53
|
|
%
|
Segment Operating
Margin
|
|
(4.6)
|
|
%
|
|
0.4
|
|
%
|
|
(10.1)
|
|
%
|
|
(500) bps
|
|
|
|
550 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eastern
Hemisphere
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenues
|
|
731
|
|
|
|
693
|
|
|
|
670
|
|
|
|
5
|
|
%
|
|
9
|
|
%
|
Segment Operating
Loss
|
|
(49)
|
|
|
|
(11)
|
|
|
|
(42)
|
|
|
|
(345)
|
|
%
|
|
(17)
|
|
%
|
Segment Operating
Margin
|
|
(6.7)
|
|
%
|
|
(1.6)
|
|
%
|
|
(6.3)
|
|
%
|
|
(510) bps
|
|
|
|
(40) bps
|
|
|
Western Hemisphere
Fourth quarter revenues of $759
million were down $8 million
or 1% sequentially, and up $23
million, or 3%, year-over-year. The sequential decrease was
primarily from the change in accounting for revenue with our
customers in Venezuela to a cash
basis during the quarter and project delays in Argentina, offset by higher activity in
Mexico and seasonal recovery in
Canada. Year-over-year revenues
increased primarily in Canada, the
U.S. and Mexico, offset by a
decrease in Venezuela.
Fourth quarter segment operating loss of $35 million was down $38
million sequentially from segment operating income of
$3 million in the third quarter. The
sequential decrease was a result of the change in accounting for
revenue with our customers in Venezuela to a cash basis as well as overall
lower activity levels. A delay in the startup of integrated
Completions operations in Argentina, combined with a high level of
exceptional and startup expenses, also impacted results. In the
U.S., the quarter was negatively affected by an unfavorable mix of
products and services as well as exceptional items.
Year-over-year improvement was primarily driven by growth in
Completions in North America,
realization of savings from cost reduction measures and the impact
from the shutdown of Pressure Pumping operations in
the United States in the prior
year fourth quarter as well as the recovery of activity levels in
North America. These results were
partially offset by a difficult geopolitical climate in
Venezuela.
Operational highlights in the Western Hemisphere during the
quarter include:
- Weatherford set a new single-run drilling record in the
northeast U.S. using a suite of directional drilling technologies.
The well design included a 45-degree curve and an extended lateral
for a total of 13,571 feet. Weatherford drilled the curve and
lateral in a single run with a high rate of penetration and without
any safety incidents.
- Weatherford commenced work on a two-year contract providing
Tubular Running Services on two rigs in the Gulf of Mexico and Trinidad and Tobago. The operator, a
super-major IOC, awarded Weatherford the contract based on a record
of exceptional performance as well as a strong, collaborative
relationship.
- Weatherford set two benchmarks for operators in Brazil. First, Weatherford successfully
completed an offshore well with a record-length, 2,900-meter liner.
On a separate job, Weatherford ran a tieback string at a record
rate of 19.1 joints per hour without any health, safety or
environmental incidents. The previous record was 15.7 joints per
hour.
Eastern Hemisphere
Fourth quarter revenues of $731
million were up $38 million or
5% sequentially, and up $61 million,
or 9% year-over-year. The sequential increase was primarily led by
higher activity and higher year-end product sales in Kuwait, Saudi
Arabia and Russia.
Year-over-year revenues increased primarily in Kuwait and Russia, offset by an overall decrease from
Australia, Oman and Pakistan.
Fourth quarter segment operating loss of $49 million decreased $38
million sequentially from a loss of $11 million. The sequential decrease was
primarily attributed to a delay in timing between recognition of
revenue and cost in Kuwait, as
well as low-margin year-end product sales, startup costs for
offshore projects in Asia and
other exceptional items.
Year-over-year results were down primarily due to continued
weakness in offshore markets, partially offset by market share
gains in land markets in the Middle
East, Russia and
Continental Europe.
Operational highlights in the Eastern Hemisphere during the
quarter include:
- Weatherford was recognized by Rosneft as the Best Technical
Support Service Company - Cementing Operations, 2016–2017.
- Weatherford won a 3-year contract to provide directional
drilling services, including rotary-steerable systems and
measurement and logging while drilling, on six rigs in Russia. The tender was awarded based on the
merits of Weatherford's technology as well as a positive existing
relationship with the operator. Work is currently underway.
- In the Middle East, by
applying managed pressure drilling (MPD) services on three wells
with narrow drilling windows, Weatherford achieved new field
records for speed and footage per bit. Following the successful
drilling operation, Weatherford adapted the MPD system to monitor
fluids displacement while cementing a long completion string in one
of the wells. As a result of these efficiencies, the operator saved
an estimated $350,000 to $500,000 per well.
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 800 locations,
including manufacturing, service, research and development, and
training facilities and employs approximately 29,200 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 February
2, 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 via the Company's website, 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 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 efficiencies and cost
savings associated with our transformation plans (i.e. the
restructuring of our product lines and regions); 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, 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. 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
|
|
Year
Ended
|
|
|
|
12/31/2017
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2016
|
|
Net
Revenues:
|
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
|
$
|
759
|
|
|
$
|
736
|
|
|
$
|
2,937
|
|
|
$
|
2,942
|
|
|
Eastern
Hemisphere
|
|
731
|
|
|
670
|
|
|
2,762
|
|
|
2,807
|
|
|
Total
Net Revenues
|
|
1,490
|
|
|
1,406
|
|
|
5,699
|
|
|
5,749
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Loss:
|
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
|
(35)
|
|
|
(74)
|
|
|
(115)
|
|
|
(409)
|
|
|
Eastern
Hemisphere
|
|
(49)
|
|
|
(42)
|
|
|
(143)
|
|
|
(158)
|
|
|
Adjusted
Segment Operating Loss
|
|
(84)
|
|
|
(116)
|
|
|
(258)
|
|
|
(567)
|
|
|
Corporate
Expenses
|
|
(36)
|
|
|
(32)
|
|
|
(130)
|
|
|
(139)
|
|
|
Other Charges,
Net
|
|
(1,622)
|
|
|
(251)
|
|
|
(1,741)
|
|
|
(1,545)
|
|
|
Total
Operating Loss
|
|
(1,742)
|
|
|
(399)
|
|
|
(2,129)
|
|
|
(2,251)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
|
|
Interest Expense,
Net
|
|
(152)
|
|
|
(136)
|
|
|
(579)
|
|
|
(499)
|
|
|
Bond Tender Premium,
Net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78)
|
|
|
Warrant Fair Value
Adjustment
|
|
28
|
|
|
16
|
|
|
86
|
|
|
16
|
|
|
Currency Devaluation
Charges
|
|
—
|
|
|
(10)
|
|
|
—
|
|
|
(41)
|
|
|
Other Expense,
Net
|
|
(6)
|
|
|
(8)
|
|
|
(34)
|
|
|
(24)
|
|
|
Net Loss Before
Income Taxes
|
|
(1,872)
|
|
|
(537)
|
|
|
(2,656)
|
|
|
(2,877)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Provision
|
|
(62)
|
|
|
(7)
|
|
|
(137)
|
|
|
(496)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
(1,934)
|
|
|
(544)
|
|
|
(2,793)
|
|
|
(3,373)
|
|
|
Net Income
Attributable to Noncontrolling Interests
|
|
4
|
|
|
5
|
|
|
20
|
|
|
19
|
|
|
Net Loss Attributable
to Weatherford
|
|
$
|
(1,938)
|
|
|
$
|
(549)
|
|
|
$
|
(2,813)
|
|
|
$
|
(3,392)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Per Share
Attributable to Weatherford:
|
|
|
|
|
|
|
|
|
|
Basic &
Diluted
|
|
$
|
(1.95)
|
|
|
$
|
(0.59)
|
|
|
$
|
(2.84)
|
|
|
$
|
(3.82)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
Basic &
Diluted
|
|
993
|
|
|
937
|
|
|
990
|
|
|
887
|
|
|
Weatherford
International plc
|
Selected
Statements of Operations Information
|
(Unaudited)
|
(In
Millions)
|
|
Three Months
Ended
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
|
12/31/2016
|
Net
Revenues:
|
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
$
|
759
|
|
|
$
|
767
|
|
|
$
|
678
|
|
|
$
|
733
|
|
|
$
|
736
|
|
Eastern
Hemisphere
|
731
|
|
|
693
|
|
|
685
|
|
|
653
|
|
|
670
|
|
Total Net
Revenues
|
$
|
1,490
|
|
|
$
|
1,460
|
|
|
$
|
1,363
|
|
|
$
|
1,386
|
|
|
$
|
1,406
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
|
12/31/2016
|
Operating Income
(Loss):
|
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
$
|
(35)
|
|
|
$
|
3
|
|
|
$
|
(52)
|
|
|
$
|
(31)
|
|
|
$
|
(74)
|
|
Eastern
Hemisphere
|
(49)
|
|
|
(11)
|
|
|
(23)
|
|
|
(60)
|
|
|
(42)
|
|
Adjusted
Segment Operating Loss
|
(84)
|
|
|
(8)
|
|
|
(75)
|
|
|
(91)
|
|
|
(116)
|
|
Corporate
Expenses
|
(36)
|
|
|
(28)
|
|
|
(33)
|
|
|
(33)
|
|
|
(32)
|
|
Other Charges,
Net
|
(1,622)
|
|
|
(28)
|
|
|
(19)
|
|
|
(72)
|
|
|
(251)
|
|
Total
Operating Loss
|
$
|
(1,742)
|
|
|
$
|
(64)
|
|
|
$
|
(127)
|
|
|
$
|
(196)
|
|
|
$
|
(399)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
|
12/31/2016
|
Product and
Service Line (a)
Revenues:
|
|
|
|
|
|
|
|
|
|
Production
|
$
|
408
|
|
|
$
|
381
|
|
|
$
|
335
|
|
|
$
|
341
|
|
|
$
|
402
|
|
Completion
|
339
|
|
|
320
|
|
|
301
|
|
|
304
|
|
|
306
|
|
Drilling and
Evaluation
|
349
|
|
|
347
|
|
|
331
|
|
|
364
|
|
|
326
|
|
Well
Construction
|
394
|
|
|
412
|
|
|
396
|
|
|
377
|
|
|
372
|
|
Total Product
and Service Line Revenues
|
$
|
1,490
|
|
|
$
|
1,460
|
|
|
$
|
1,363
|
|
|
$
|
1,386
|
|
|
$
|
1,406
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
|
12/31/2016
|
Depreciation and
Amortization:
|
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
$
|
80
|
|
|
$
|
89
|
|
|
$
|
92
|
|
|
$
|
91
|
|
|
$
|
99
|
|
Eastern
Hemisphere
|
109
|
|
|
108
|
|
|
111
|
|
|
115
|
|
|
114
|
|
Corporate
|
1
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|
2
|
|
Total
Depreciation and Amortization
|
$
|
190
|
|
|
$
|
199
|
|
|
$
|
204
|
|
|
$
|
208
|
|
|
$
|
215
|
|
|
|
(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.
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
|
|
Year
Ended
|
|
|
|
12/31/2017
|
|
9/30/2017
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2016
|
|
Operating
Loss:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Loss
|
|
$
|
(1,742)
|
|
|
$
|
(64)
|
|
|
$
|
(399)
|
|
|
$
|
(2,129)
|
|
|
$
|
(2,251)
|
|
|
Severance,
Restructuring and Exited Businesses
|
|
43
|
|
|
34
|
|
|
130
|
|
|
183
|
|
|
280
|
|
|
Litigation Charges,
Net
|
|
(6)
|
|
|
(4)
|
|
|
30
|
|
|
(10)
|
|
|
220
|
|
|
Impairments, Asset
Write-Downs and Other (a)(b)(c)(d)
|
|
1,681
|
|
|
(2)
|
|
|
91
|
|
|
1,664
|
|
|
1,043
|
|
|
Legacy
Contract
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
Gain from Disposition
of U.S. Pressure Pumping and Pump-Down Perforating
Assets
|
|
(96)
|
|
|
—
|
|
|
—
|
|
|
(96)
|
|
|
—
|
|
|
Operating Non-GAAP
Adjustments
|
|
1,622
|
|
|
28
|
|
|
251
|
|
|
1,741
|
|
|
1,545
|
|
|
Non-GAAP Adjusted
Operating Loss
|
|
$
|
(120)
|
|
|
$
|
(36)
|
|
|
$
|
(148)
|
|
|
$
|
(388)
|
|
|
$
|
(706)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Before Income
Taxes:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Loss Before
Income Taxes
|
|
$
|
(1,872)
|
|
|
$
|
(226)
|
|
|
$
|
(537)
|
|
|
$
|
(2,656)
|
|
|
$
|
(2,877)
|
|
|
Operating
Income Adjustments
|
|
1,622
|
|
|
28
|
|
|
251
|
|
|
1,741
|
|
|
1,545
|
|
|
Bond Tender
Premium, Net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|
Warrant Fair
Value Adjustment
|
|
(28)
|
|
|
7
|
|
|
(16)
|
|
|
(86)
|
|
|
(16)
|
|
|
Currency
Devaluation Charges
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
41
|
|
|
Non-GAAP Loss Before
Income Taxes
|
|
$
|
(278)
|
|
|
$
|
(191)
|
|
|
$
|
(292)
|
|
|
$
|
(1,001)
|
|
|
$
|
(1,229)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Provision)
Benefit for Income Taxes:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Provision for
Income Taxes
|
|
$
|
(62)
|
|
|
$
|
(25)
|
|
|
$
|
(7)
|
|
|
$
|
(137)
|
|
|
$
|
(496)
|
|
|
Tax Effect on
Non-GAAP Adjustments
|
|
15
|
|
|
—
|
|
|
1
|
|
|
8
|
|
|
600
|
|
|
Non-GAAP (Provision)
Benefit for Income Taxes
|
|
$
|
(47)
|
|
|
$
|
(25)
|
|
|
$
|
(6)
|
|
|
$
|
(129)
|
|
|
$
|
104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
Attributable to Weatherford:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Loss
|
|
$
|
(1,938)
|
|
|
$
|
(256)
|
|
|
$
|
(549)
|
|
|
$
|
(2,813)
|
|
|
$
|
(3,392)
|
|
|
Non-GAAP
Adjustments, net of tax
|
|
1,609
|
|
|
35
|
|
|
246
|
|
|
1,663
|
|
|
2,248
|
|
|
Non-GAAP Net
Loss
|
|
$
|
(329)
|
|
|
$
|
(221)
|
|
|
$
|
(303)
|
|
|
$
|
(1,150)
|
|
|
$
|
(1,144)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Loss Per
Share Attributable to Weatherford:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted Loss per
Share
|
|
$
|
(1.95)
|
|
|
$
|
(0.26)
|
|
|
$
|
(0.59)
|
|
|
$
|
(2.84)
|
|
|
$
|
(3.82)
|
|
|
Non-GAAP
Adjustments, net of tax
|
|
1.62
|
|
|
0.04
|
|
|
0.27
|
|
|
1.68
|
|
|
2.53
|
|
|
Non-GAAP Diluted Loss
per Share
|
|
$
|
(0.33)
|
|
|
$
|
(0.22)
|
|
|
$
|
(0.32)
|
|
|
$
|
(1.16)
|
|
|
$
|
(1.29)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Effective Tax
Rate (e)
|
|
(3)%
|
|
|
(11)%
|
|
|
(1)%
|
|
|
(5)%
|
|
|
(17)%
|
|
|
Non-GAAP Effective
Tax Rate (f)
|
|
(16)%
|
|
|
(13)%
|
|
|
(2)%
|
|
|
(13)%
|
|
|
8%
|
|
|
|
|
(a)
|
The fourth quarter of
2017, impairments, asset write-downs and other include $934 million
in long-lived asset impairments (of which $740 million relates to
Land Drilling Rigs assets reclassified to held for sale), $434
million in inventory write-downs, $230 million in the write-down of
Venezuelan receivables and $83 million of other write-downs charges
and credits.
|
(b)
|
During 2017,
impairments, asset write-downs and other include $934 million in
long-lived asset impairments (of which $740 million relates to Land
Drilling Rigs assets reclassified to held for sale), $434 million
in inventory write-downs, $230 million in the write-down of
Venezuelan receivables and $66 million of other write-downs charges
and credits.
|
(c)
|
The fourth quarter of
2016, impairments, asset write-downs and other include $69 million
in pressure pumping shutdown costs and $22 million of other charges
and credits.
|
(d)
|
During 2016,
impairments, asset write-downs and other include $710 million in
long-lived asset impairments and other charges and credits, $219
million in inventory write-downs, $114 million in pressure pumping
business related charges.
|
(e)
|
GAAP Effective Tax
Rate is the GAAP provision for income taxes divided by GAAP income
before income taxes.
|
(f)
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
|
12/31/2016
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
613
|
|
|
$
|
445
|
|
|
$
|
584
|
|
|
$
|
546
|
|
|
$
|
1,037
|
|
Accounts Receivable,
Net
|
|
1,103
|
|
|
1,236
|
|
|
1,165
|
|
|
1,292
|
|
|
1,383
|
|
Inventories,
Net
|
|
1,234
|
|
|
1,752
|
|
|
1,728
|
|
|
1,700
|
|
|
1,802
|
|
Assets Held for
Sale
|
|
359
|
|
|
935
|
|
|
929
|
|
|
860
|
|
|
23
|
|
Property, Plant and
Equipment, Net
|
|
2,708
|
|
|
3,989
|
|
|
4,111
|
|
|
4,265
|
|
|
4,480
|
|
Goodwill and
Intangibles, Net
|
|
2,940
|
|
|
2,575
|
|
|
2,527
|
|
|
2,602
|
|
|
3,045
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
856
|
|
|
815
|
|
|
837
|
|
|
803
|
|
|
845
|
|
Short-term Borrowings
and Current Portion of Long-term Debt
|
|
148
|
|
|
391
|
|
|
152
|
|
|
240
|
|
|
179
|
|
Long-term
Debt
|
|
7,541
|
|
|
7,530
|
|
|
7,538
|
|
|
7,299
|
|
|
7,403
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders'
Equity
|
|
(571)
|
|
|
1,384
|
|
|
1,524
|
|
|
1,691
|
|
|
2,068
|
|
Weatherford
International plc
|
Net Debt
(a)
|
(Unaudited)
|
(In
Millions)
|
|
|
|
|
|
|
|
Change in Net Debt
for the Three Months Ended 12/31/2017:
|
|
|
|
|
|
|
Net Debt at 9/30/2017
(a)
|
|
|
|
|
|
$
|
(7,476)
|
|
Operating
Loss
|
|
|
|
|
|
(1,742)
|
|
Depreciation
and Amortization
|
|
|
|
|
|
190
|
|
Capital
Expenditures for Property, Plant and Equipment
|
|
|
|
(78)
|
|
Proceeds from
Sale of Assets
|
|
|
|
|
|
15
|
|
Acquisition of
Intangibles
|
|
|
|
|
|
(2)
|
|
Other
Investing Activities
|
|
|
|
|
|
(26)
|
|
Proceeds from
Disposition of U.S. Pressure Pumping and Pump-Down Perforating
Assets
|
|
430
|
|
Increase in
Working Capital (b)
|
|
|
|
|
|
154
|
|
Long-Lived
Asset Impairments
|
|
|
|
|
|
934
|
|
Inventory
Write-Downs
|
|
|
|
|
|
434
|
|
Venezuelan
Receivables Write-Down
|
|
|
|
230
|
|
Accrued
Litigation and Settlements
|
|
|
|
|
|
(30)
|
|
Income Taxes
Paid
|
|
|
|
|
|
(16)
|
|
Interest
Paid
|
|
|
|
|
|
(104)
|
|
Other
|
|
|
|
|
|
11
|
|
Net Debt at
12/31/2017 (a)
|
|
|
|
|
|
$
|
(7,076)
|
|
|
|
|
|
|
|
|
Change in Net Debt
for the Twelve Months Ended12/31/2017:
|
|
|
|
|
|
|
Net Debt at
12/31/2016 (a)
|
|
|
|
|
|
$
|
(6,545)
|
|
Operating
Loss
|
|
|
|
|
|
(2,129)
|
|
Depreciation
and Amortization
|
|
|
|
|
|
801
|
|
Capital
Expenditures for Property, Plant and Equipment
|
|
|
(225)
|
|
Acquisition of
Assets Held for Sale
|
|
|
|
|
|
(244)
|
|
Proceeds from
Sale of Assets
|
|
|
|
|
|
51
|
|
Acquisition of
Intangibles
|
|
|
|
|
|
(15)
|
|
Other
Investing Activities
|
|
|
|
|
|
(59)
|
|
Proceeds from
Disposition of U.S. Pressure Pumping and Pump-Down Perforating
Assets
|
|
430
|
|
Increase in
Working Capital (b)
|
|
|
|
|
|
(61)
|
|
Proceeds from
Note Receivable
|
|
|
|
|
|
59
|
|
Long-Lived
Asset Impairments
|
|
|
|
|
|
934
|
|
Inventory
Write-Downs
|
|
|
|
|
|
434
|
|
Venezuelan
Receivables Write-Down
|
|
|
|
|
230
|
|
Accrued
Litigation and Settlements
|
|
|
|
|
|
(123)
|
|
Income Taxes
Paid
|
|
|
|
|
|
(87)
|
|
Interest
Paid
|
|
|
|
|
|
(538)
|
|
Other
|
|
|
|
|
|
11
|
|
Net Debt at
12/31/2017 (a)
|
|
|
|
|
|
$
|
(7,076)
|
|
|
|
|
|
|
|
|
Components of Net
Debt (a)
|
|
12/31/2017
|
|
9/30/2017
|
|
12/31/2016
|
Cash
|
|
$
|
613
|
|
|
$
|
445
|
|
|
$
|
1,037
|
|
Short-term Borrowings
and Current Portion of Long-term Debt
|
|
(148)
|
|
|
(391)
|
|
|
(179)
|
|
Long-term
Debt
|
|
(7,541)
|
|
|
(7,530)
|
|
|
(7,403)
|
|
Net Debt
(a)
|
|
$
|
(7,076)
|
|
|
$
|
(7,476)
|
|
|
$
|
(6,545)
|
|
|
|
(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.
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(b)
|
Working capital is
defined as accounts receivable plus inventory less accounts
payable.
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