BAAR, Switzerland,
April 24, 2018 /PRNewswire/ -- Weatherford International plc
(NYSE: WFT) reported a net loss of $245
million, or a loss of $0.25
per share for the first quarter of 2018.
First Quarter 2018 Highlights
- Segment operating income improved by 145% year-over-year
- Successfully extended 2019 and 2020 debt maturities through
closing a private offering of $600
million in senior notes
- Estimated recurring benefit of $108
million in annualized cost savings and $41 million in one-time benefits as part of the
transformation effort
- Won OTC Asia Spotlight on New Technology Awards for the
HeatWave ExtremeSM service and the WFX0™ openhole
gravel-pack system
- Launched two of the planned divestitures processes and made
further progress on our Land Drilling Rigs divestiture
Non-GAAP net loss for the first quarter of 2018, excluding
unusual charges and credits, was $188
million, or $0.19, diluted
loss per share. This compares to a $329
million non-GAAP net loss for the fourth quarter of 2017, or
$0.33 diluted loss per share, and a
$318 million non-GAAP net loss for
the first quarter of the prior year, or $0.32 diluted loss per share.
Revenue in the first quarter of 2018 was $1.42 billion, which decreased 4% from revenue of
$1.49 billion for the fourth quarter
of 2017 and was 3% higher than the $1.39
billion of revenue reported for the first quarter of 2017.
The sequential revenue decrease was due to non-repeating year-end
product sales as well as seasonal declines in the North Sea and
Russia. The year-over-year
increase was primarily due to activity increases in the U.S.,
Argentina and Mexico in the Western Hemisphere and
Kuwait, Iraq, Russia
and Saudi Arabia in the Eastern
Hemisphere, partially offset by a decrease in Venezuela as a result of a change in
accounting for revenue to cash basis and depressed offshore markets
in the North Sea, West Africa and
Asia.
Operating loss for the first quarter of 2018 was $39 million. Excluding unusual charges and
credits, segment operating income in the first quarter of 2018 was
$40 million, up $123 million or 148% sequentially, and up
$129 million, or 145%,
year-over-year. The sequential improvement was primarily due to
improved product margins benefiting from a favorable sales mix,
lower personnel and other support costs, the timing of revenue and
cost recognition related to deliveries in Kuwait and lower depreciation expenses
resulting from asset impairments recorded in the prior quarter.
Year-over-year improvement was led by revenue growth in
Production and Well Construction in the U.S. and parts of
Latin America combined with higher
activity and improved service quality across all product lines in
the Middle East and Russia. Results also benefited from an overall
reduction in cost structure as well as lower depreciation due to
asset sales and impairments in prior quarters. These improvements
were partially offset by a decline in revenue in Venezuela after our change in accounting for
revenue to a cash basis last quarter.
In the quarter, we recorded pre-tax charges of $57 million, which include $34 million related to the bond tender and call
premium, $26 million in currency
devaluation charges mostly in the Angolan kwanza, $25 million in restructuring and transformation
charges and $18 million in asset
write-downs and other, net. This was partially offset by
$46 million in credits related to the
fair value adjustment of the outstanding warrant.
In the first quarter of 2018, estimated recurring benefits as a
result of the transformation plan were $27
million or $108 million on an
annualized basis. In addition, we achieved $41 million in one-time benefits, mostly driven
by the sale of surplus or non-strategic assets along with an
improved collections process.
Mark A. McCollum, President and
Chief Executive Officer, commented, "As we continue on our
transformational path, our results for the first quarter of 2018
reflect our focus on planning and executing tangible actions to
improve our position as a strong, viable and innovative
organization. Sequentially and on a year-over-year basis, our
operating income, margins and adjusted EBITDA improved
substantially, as we steadily reduced our core costs and benefited
from an improving market environment. Additionally, we have
increased accountability, efficiency and process discipline across
the entire Company."
McCollum continued, "The goals we have set forth for 2018 and
2019 are realistic and achievable. We are on track and, in the
first quarter, have already achieved 10% of our annualized
recurring benefit target. I am excited about our progress as
we continue to build momentum. We have the right people,
technologies and processes to be successful, and by executing on
the detailed action plans we have developed over the past few
months, we will generate improved returns and create significant
value for our shareholders."
Cash Flow and Financial Covenants
Net cash used in operating activities was $185 million for the first quarter of 2018,
driven by cash payments of $174
million for debt interest and $26
million for cash severance and restructuring costs partially
offset by improved collections of accounts receivables. First
quarter capital expenditures of $38
million, including investments in Land Drilling Rigs
held-for-sale assets, decreased by $40
million, or 51%, sequentially due to lower spending in Well
Construction due to project delays and delayed rig mobilizations,
and decreased $2 million or 5% from
the same quarter in the prior year.
The Company is in compliance with its financial covenants as
defined under our revolving and secured term loan credit facilities
as of March 31, 2018, and expects to
continue to remain in compliance with all covenants based on
current financial projections.
Taxes
The first quarter of 2018 tax provision was $32 million including tax expenses related to
profits in certain jurisdictions, deemed profit countries, and
withholding taxes on intercompany and third-party transactions. The
tax expense is lower sequentially due to the establishment of an
additional valuation allowance and provisions for foreign law
changes, offset by a one-time tax benefit as a result of a U.S. tax
reform, in the prior quarter.
Operating Segments
|
|
Three Months
Ended
|
|
Change
|
(In
Millions)
|
|
3/31/2018
|
|
12/31/2017
|
|
3/31/2017
|
|
Sequential
|
|
YoY
|
Western
Hemisphere
|
|
|
|
|
|
|
|
|
|
|
Net
Revenues
|
|
$
|
756
|
|
|
$
|
759
|
|
|
$
|
733
|
|
|
(0.4)
|
%
|
|
3
|
%
|
Segment Operating
Income (Loss)
|
|
$
|
24
|
|
|
$
|
(35)
|
|
|
$
|
(30)
|
|
|
169
|
%
|
|
180
|
%
|
Segment Operating
Margin
|
|
3.2
|
%
|
|
(4.6)
|
%
|
|
(4.1)
|
%
|
|
780
|
bps
|
|
730
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
Eastern
Hemisphere
|
|
|
|
|
|
|
|
|
|
|
Net
Revenues
|
|
$
|
667
|
|
|
$
|
731
|
|
|
$
|
653
|
|
|
(9)
|
%
|
|
2
|
%
|
Segment Operating
Income (Loss)
|
|
$
|
16
|
|
|
$
|
(48)
|
|
|
$
|
(59)
|
|
|
133
|
%
|
|
127
|
%
|
Segment Operating
Margin
|
|
2.4
|
%
|
|
(6.6)
|
%
|
|
(9.0)
|
%
|
|
900
|
bps
|
|
1,140
|
bps
|
Western Hemisphere
First quarter revenues of $756
million were down $3 million
or 0.4% sequentially, and up $23
million, or 3%, year-over-year. The sequential decrease was
primarily in the U.S. due to non-repeating year-end product sales
of pumping units and the completion of the Pressure Pumping and
Pump-Down Perforating assets sale in the prior quarter, offset by
increased Integrated Services and Projects activity in Mexico and higher activity in Argentina from Production and Drilling
Services.
Year-over-year revenues increased primarily due to higher
adoption of Managed Pressure Drilling and improved utilization of
Drilling Tools in the U.S., growing demand for Pressure Pumping
services in Argentina and
Integrated Services and Projects in Mexico, partially offset by lower revenues in
Venezuela after our change in
accounting for revenue to cash basis last quarter.
First quarter segment operating income of $24 million was up $59
million sequentially, and up $54
million year-over-year. The sequential increase was due to
improved margins resulting from a favorable product mix, lower
personnel expenses and lower depreciation and amortization after
impairments recognized in the prior quarter.
Year-over-year results increased primarily in the U.S. as result
of revenue growth in Production and Well Construction, a decline in
operating costs and lower depreciation. These improvements were
partially offset by lower revenues in Venezuela after our change in accounting for
revenue to a cash basis last quarter.
Operational highlights in the Western Hemisphere during the
quarter include:
- An operator in the Eagle Ford Shale deployed Weatherford logging-while-drilling services to
identify wellbore fractures while drilling. The customer estimates
that the data provided will reduce completions costs while matching
production estimates, saving approximately $300,000 per well.
- Working closely alongside a major operator in the U.S.
Gulf of Mexico, Weatherford developed a new tubular handling
system that enabled the customer to safely and efficiently run
16-in. casing. The solution saved approximately 1 day of
operational time and the customer plans to deploy the same
technology on future jobs.
- Weatherford replaced the
incumbent service provider on a South
Texas well where the operator was experiencing high levels
of nonproductive time and well-control risks. By deploying a
managed pressure drilling solution, Weatherford resolved these issues and saved
the operator approximately $1
million.
- Weatherford deployed a
comprehensive managed pressure drilling system, including the
Microflux® control system and the OneSync® software platform, to
drill a challenging well in the pre-salt area of Brazil. By successfully maintaining constant
bottomhole pressure, the team reached total depth 50 hours ahead of
plan and using a single bit, saving the operator approximately
$780,000 in rig time.
- Working in close collaboration with the operator, Weatherford designed and executed an
innovative completion program for an onshore well in Mexico. First, the team applied a wireline
perforation technique that reduced intervention time by 30%.
Additionally, a stimulated reservoir volume pressure pumping
technique increased production expectations by 250%.
- Weatherford was awarded a
one-year contract for all service and inspection of
reciprocating-rod-lift surface equipment across more than 400 wells
in the Bakken Shale. Through a comprehensive process that included
collecting and analyzing data, performing root-cause analysis, and
delivering an integrated solution, Weatherford reduced the failure rate by 10%
and eliminated thousands of hours of downtime and deferred
production.
- Weatherford was awarded a
3-year exclusive contract to supply Maximizer® pumping units to the
largest operator of reciprocating rod-lift systems in Argentina, replacing the incumbent.
Eastern Hemisphere
First quarter revenues of $667
million were down $64 million
or 9% sequentially, and up $14
million or 2% year-over-year. The sequential decrease was
primarily due to non-repeating product sales as well as seasonally
lower activity in the North Sea and Russia. These factors were partially offset by
increased revenue from Integrated Services and Projects.
Year-over-year revenues increased across the Middle East and Russia due to contract gains and increased rig
activity. These gains were partially offset by lower activity
levels in the North Sea, West
Africa and Asia as offshore
markets remain subdued.
First quarter segment operating income of $16 million was up $64
million sequentially, and up $75
million year-over-year. The sequential increase was
primarily due to a more favorable revenue mix, the timing of
revenue and cost recognition related to deliveries in Kuwait, non-repeating start-up costs in
Asia and an overall lower cost
structure.
Year-over-year operating income increased in all product lines
primarily in the Middle East and
Russia due to higher activity
levels, a reduced cost structure and improved service quality
resulting in greater revenue efficiency.
Operational highlights in the Eastern Hemisphere during the
quarter include:
- Weatherford won a 3-year
wireline services contract in Algeria. Together with a major drilling
services contract won in the fourth quarter of 2017, this award
significantly expands the Company's exposure and footprint in
Algeria.
- Weatherford won a 4-year
contract for logging while drilling, surface logging systems,
tubular running services and float equipment for a major
international operator in the Gulf of Thailand. Weatherford secured the win in large part due
to the strength of the HeatWaveSM logging-while-drilling
service, which was developed specifically to acquire high-quality
formation evaluation data in the ultrahigh-temperature environments
common in the Gulf of Thailand.
- Weatherford won a 5-year
contract to provide intervention services including fishing,
re-entry and thru-tubing services in the Middle East. The customer selected
Weatherford from a large number of
competitors because of the Company's service quality record and
advanced technologies in this area.
- Weatherford deployed the
AcidSure® system on an underperforming well in a highly fractured
carbonate reservoir in the Middle
East. The stimulation operation avoided the need for a
workover and resulted in a 600% production increase.
- Weatherford deployed the
AccuView® real-time remote support system to execute a
shallow-angle casing exit in Sakhalin Island, Russia. The software system facilitated
real-time analysis of foot-by-foot performance, which enabled the
operator to complete the casing exit in a single trip.
- Weatherford successfully
executed three casing exits from an offshore platform in
Malaysia using the QuickCut™
whipstock system. By meeting all targets on a short lead time,
Weatherford enabled the customer
to complete three infill wells.
- Weatherford Land Drilling Rigs reduced nonproductive time to
1.6%, which represents a 43% decrease from the business's 2017
average and marks the best quarter on record.
- Despite mobilization delays, profitability for the Land
Drilling Rigs business increased sequentially.
Reclassifications
In the first quarter of 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 780 locations, including manufacturing,
service, research and development, and training facilities and
employs approximately 28,700 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
24, 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 can be found at
https://www.weatherford.com/en/investor-relations/financial-information/conference-call-details/ and
presentation materials can be found at
https://www.weatherford.com/en/investor-relations/investor-presentations/.
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
|
|
|
3/31/2018
|
|
3/31/2017
|
Net
Revenues:
|
|
|
|
|
Western
Hemisphere
|
|
$
|
756
|
|
|
$
|
733
|
|
Eastern
Hemisphere
|
|
667
|
|
|
653
|
|
Total
Net Revenues
|
|
1,423
|
|
|
1,386
|
|
|
|
|
|
|
Operating Income
(Loss):
|
|
|
|
|
Western
Hemisphere
|
|
24
|
|
|
(30)
|
|
Eastern
Hemisphere
|
|
16
|
|
|
(59)
|
|
Segment
Operating Income (Loss)
|
|
40
|
|
|
(89)
|
|
Corporate
Expenses
|
|
(36)
|
|
|
(33)
|
|
Restructuring and
Transformation Charges
|
|
(25)
|
|
|
(75)
|
|
Other Charges,
Net
|
|
(18)
|
|
|
(17)
|
|
Total
Operating Loss
|
|
(39)
|
|
|
(214)
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
Interest Expense,
Net
|
|
(149)
|
|
|
(141)
|
|
Bond Tender and Call
Premium
|
|
(34)
|
|
|
—
|
|
Warrant Fair Value
Adjustment
|
|
46
|
|
|
(62)
|
|
Currency Devaluation
Charges
|
|
(26)
|
|
|
—
|
|
Other Income
(Expense), Net
|
|
(8)
|
|
|
7
|
|
Net Loss Before
Income Taxes
|
|
(210)
|
|
|
(410)
|
|
|
|
|
|
|
Income Tax
Provision
|
|
(32)
|
|
|
(33)
|
|
|
|
|
|
|
Net Loss
|
|
(242)
|
|
|
(443)
|
|
Net Income
Attributable to Noncontrolling Interests
|
|
3
|
|
|
5
|
|
Net Loss Attributable
to Weatherford
|
|
$
|
(245)
|
|
|
$
|
(448)
|
|
|
|
|
|
|
Loss Per Share
Attributable to Weatherford:
|
|
|
|
|
Basic &
Diluted
|
|
$
|
(0.25)
|
|
|
$
|
(0.45)
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
Basic &
Diluted
|
|
994
|
|
|
988
|
|
Weatherford
International plc
|
Selected
Statements of Operations Information
|
(Unaudited)
|
(In
Millions)
|
|
Three Months
Ended
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
Net
Revenues:
|
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
$
|
756
|
|
|
$
|
759
|
|
|
$
|
767
|
|
|
$
|
678
|
|
|
$
|
733
|
|
Eastern
Hemisphere
|
667
|
|
|
731
|
|
|
693
|
|
|
685
|
|
|
653
|
|
Total Net
Revenues
|
$
|
1,423
|
|
|
$
|
1,490
|
|
|
$
|
1,460
|
|
|
$
|
1,363
|
|
|
$
|
1,386
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
Operating Income
(Loss):
|
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
$
|
24
|
|
|
$
|
(35)
|
|
|
$
|
3
|
|
|
$
|
(51)
|
|
|
$
|
(30)
|
|
Eastern
Hemisphere
|
16
|
|
|
(48)
|
|
|
(10)
|
|
|
(22)
|
|
|
(59)
|
|
Segment
Operating Income (Loss)
|
40
|
|
|
(83)
|
|
|
(7)
|
|
|
(73)
|
|
|
(89)
|
|
Corporate
Expenses
|
(36)
|
|
|
(36)
|
|
|
(28)
|
|
|
(33)
|
|
|
(33)
|
|
Restructuring and
Transformation Charges
|
(25)
|
|
|
(43)
|
|
|
(34)
|
|
|
(31)
|
|
|
(75)
|
|
Other Charges,
Net
|
(18)
|
|
|
(1,579)
|
|
|
(1)
|
|
|
(8)
|
|
|
(17)
|
|
Total
Operating Loss
|
$
|
(39)
|
|
|
$
|
(1,741)
|
|
|
$
|
(70)
|
|
|
$
|
(145)
|
|
|
$
|
(214)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
Product and
Service Line (a)
Revenues:
|
|
|
|
|
|
|
|
|
|
Production
|
$
|
381
|
|
|
$
|
408
|
|
|
$
|
381
|
|
|
$
|
335
|
|
|
$
|
341
|
|
Completion
|
294
|
|
|
339
|
|
|
320
|
|
|
301
|
|
|
304
|
|
Drilling and
Evaluation
|
358
|
|
|
349
|
|
|
347
|
|
|
331
|
|
|
364
|
|
Well
Construction
|
390
|
|
|
394
|
|
|
412
|
|
|
396
|
|
|
377
|
|
Total
Product and Service Line Revenues
|
$
|
1,423
|
|
|
$
|
1,490
|
|
|
$
|
1,460
|
|
|
$
|
1,363
|
|
|
$
|
1,386
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
Depreciation and
Amortization:
|
|
|
|
|
|
|
|
|
|
Western
Hemisphere
|
$
|
60
|
|
|
$
|
80
|
|
|
$
|
89
|
|
|
$
|
92
|
|
|
$
|
91
|
|
Eastern
Hemisphere
|
86
|
|
|
109
|
|
|
108
|
|
|
111
|
|
|
115
|
|
Corporate
|
1
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
2
|
|
Total
Depreciation and Amortization
|
$
|
147
|
|
|
$
|
190
|
|
|
$
|
199
|
|
|
$
|
204
|
|
|
$
|
208
|
|
|
|
(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
|
|
|
3/31/2018
|
|
12/31/2017
|
|
3/31/2017
|
Operating
Loss:
|
|
|
|
|
|
|
GAAP Operating
Loss
|
|
$
|
(39)
|
|
|
$
|
(1,741)
|
|
|
$
|
(214)
|
|
Restructuring
and Transformation Charges (a)
|
|
25
|
|
|
43
|
|
|
75
|
|
Litigation
Charges, Net
|
|
—
|
|
|
(6)
|
|
|
—
|
|
Impairments,
Asset Write-Downs and Other (b)
|
|
18
|
|
|
1,681
|
|
|
17
|
|
Gain from
Dispositions (c)
|
|
—
|
|
|
(96)
|
|
|
—
|
|
Operating
Non-GAAP Adjustments
|
|
43
|
|
|
1,622
|
|
|
92
|
|
Non-GAAP Adjusted
Operating Income (Loss)
|
|
$
|
4
|
|
|
$
|
(119)
|
|
|
$
|
(122)
|
|
|
|
|
|
|
|
|
Loss Before Income
Taxes:
|
|
|
|
|
|
|
GAAP Loss Before
Income Taxes
|
|
$
|
(210)
|
|
|
$
|
(1,872)
|
|
|
$
|
(410)
|
|
Operating
Non-GAAP Adjustments
|
|
43
|
|
|
1,622
|
|
|
92
|
|
Bond Tender
and Call Premium (d)
|
|
34
|
|
|
—
|
|
|
—
|
|
Warrant Fair
Value Adjustment
|
|
(46)
|
|
|
(28)
|
|
|
62
|
|
Defined
Benefit Pension Plan Gains (e)
|
|
—
|
|
|
—
|
|
|
(20)
|
|
Currency
Devaluation Charges (f)
|
|
26
|
|
|
—
|
|
|
—
|
|
Non-GAAP Loss Before
Income Taxes
|
|
$
|
(153)
|
|
|
$
|
(278)
|
|
|
$
|
(276)
|
|
|
|
|
|
|
|
|
(Provision)
Benefit for Income Taxes:
|
|
|
|
|
|
|
GAAP Provision for
Income Taxes
|
|
$
|
(32)
|
|
|
$
|
(62)
|
|
|
$
|
(33)
|
|
Tax Effect on
Non-GAAP Adjustments
|
|
—
|
|
|
15
|
|
|
(4)
|
|
Non-GAAP Provision
for Income Taxes
|
|
$
|
(32)
|
|
|
$
|
(47)
|
|
|
$
|
(37)
|
|
|
|
|
|
|
|
|
Net Loss
Attributable to Weatherford:
|
|
|
|
|
|
|
GAAP Net
Loss
|
|
$
|
(245)
|
|
|
$
|
(1,938)
|
|
|
$
|
(448)
|
|
Non-GAAP
Adjustments, net of tax
|
|
57
|
|
|
1,609
|
|
|
130
|
|
Non-GAAP Net
Loss
|
|
$
|
(188)
|
|
|
$
|
(329)
|
|
|
$
|
(318)
|
|
|
|
|
|
|
|
|
Diluted Loss Per
Share Attributable to Weatherford:
|
|
|
|
|
|
|
GAAP Diluted Loss per
Share
|
|
$
|
(0.25)
|
|
|
$
|
(1.95)
|
|
|
$
|
(0.45)
|
|
Non-GAAP
Adjustments, net of tax
|
|
0.06
|
|
|
1.62
|
|
|
0.13
|
|
Non-GAAP Diluted Loss
per Share
|
|
$
|
(0.19)
|
|
|
$
|
(0.33)
|
|
|
$
|
(0.32)
|
|
|
|
|
|
|
|
|
GAAP Effective Tax
Rate (g)
|
|
(15)%
|
|
|
(3)%
|
|
|
(8)%
|
|
Non-GAAP Effective
Tax Rate (h)
|
|
(21)%
|
|
|
(16)%
|
|
|
(14)%
|
|
|
|
(a)
|
Represents $11
million in severance costs, $9 million in transformation costs and
$5 million in facility exit costs in the first quarter of
2018.
|
(b)
|
Represents $26
million in long-lived asset impairments and $8 million in net
credits in the first quarter of 2018. The fourth quarter of 2017,
impairments, asset write-downs and other include $928 million in
long-lived asset impairments (of which $740 million relates to Land
Drilling Rigs assets reclassified to held for sale), $440 million
in inventory write-downs, $230 million in the write-down of
Venezuelan receivables, $83 million of other write-downs charges
and credits of which $4 million were related to transformation
costs.
|
(c)
|
Represents the sale
of U.S. Pressure Pumping and Pump-Down Perforating
assets.
|
(d)
|
Represents a bond
tender premium of $30 million and a call premium of $4 million on
the 9.625% senior notes.
|
(e)
|
Represents the
supplemental executive retirement plan gain that was reclassified
from Operating Non-GAAP Adjustments to non-operating Other Income
(Expense), Net in the first quarter of 2018 upon retrospective
adoption of the new pension accounting standards.
|
(f)
|
Represents currency
devaluations of the Angolan kwanza and Venezuelan
bolivar.
|
(g)
|
GAAP Effective Tax
Rate is the GAAP provision for income taxes divided by GAAP income
before income taxes and calculated in thousands.
|
(h)
|
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
|
|
|
3/31/2018
|
|
12/31/2017
|
|
3/31/2017
|
|
|
|
|
|
|
|
Net Loss
Attributable to Weatherford
|
|
$
|
(245)
|
|
|
$
|
(1,938)
|
|
|
$
|
(448)
|
|
Net Income
Attributable to Noncontrolling Interests
|
|
3
|
|
|
4
|
|
|
5
|
|
Net
Loss
|
|
(242)
|
|
|
(1,934)
|
|
|
(443)
|
|
Interest Expense,
Net
|
|
149
|
|
|
152
|
|
|
141
|
|
Income Tax
Provision
|
|
32
|
|
|
62
|
|
|
33
|
|
Depreciation and
Amortization
|
|
147
|
|
|
190
|
|
|
208
|
|
EBITDA
|
|
86
|
|
|
(1,530)
|
|
|
(61)
|
|
|
|
|
|
|
|
|
Other (Income)
Expense Adjustments:
|
|
|
|
|
|
|
Warrant Fair Value
Adjustment
|
|
(46)
|
|
|
(28)
|
|
|
62
|
|
Bond Tender and Call
Premium
|
|
34
|
|
|
—
|
|
|
—
|
|
Currency Devaluation
Charges
|
|
26
|
|
|
—
|
|
|
—
|
|
Other (Income)
Expense, Net
|
|
8
|
|
|
7
|
|
|
(7)
|
|
Restructuring and
Transformation Charges
|
|
25
|
|
|
43
|
|
|
75
|
|
Impairments, Asset
Write-Downs and Other
|
|
18
|
|
|
1,681
|
|
|
17
|
|
Litigation Charges,
Net
|
|
—
|
|
|
(6)
|
|
|
—
|
|
Gain from
Dispositions
|
|
—
|
|
|
(96)
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
151
|
|
|
$
|
71
|
|
|
$
|
86
|
|
Weatherford
International plc
|
Selected Balance
Sheet Data
|
(Unaudited)
|
(In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
459
|
|
|
$
|
613
|
|
|
$
|
445
|
|
|
$
|
584
|
|
|
$
|
546
|
|
Accounts Receivable,
Net
|
|
1,100
|
|
|
1,103
|
|
|
1,236
|
|
|
1,165
|
|
|
1,292
|
|
Inventories,
Net
|
|
1,225
|
|
|
1,234
|
|
|
1,752
|
|
|
1,728
|
|
|
1,700
|
|
Assets Held for
Sale
|
|
369
|
|
|
359
|
|
|
935
|
|
|
929
|
|
|
860
|
|
Property, Plant and
Equipment, Net
|
|
2,580
|
|
|
2,708
|
|
|
3,989
|
|
|
4,111
|
|
|
4,265
|
|
Goodwill and
Intangibles, Net
|
|
2,968
|
|
|
2,940
|
|
|
2,575
|
|
|
2,527
|
|
|
2,602
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
809
|
|
|
856
|
|
|
815
|
|
|
837
|
|
|
803
|
|
Short-term Borrowings
and Current Portion of Long-term Debt
|
|
153
|
|
|
148
|
|
|
391
|
|
|
152
|
|
|
240
|
|
Long-term
Debt
|
|
7,639
|
|
|
7,541
|
|
|
7,530
|
|
|
7,538
|
|
|
7,299
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders'
Equity (a)
|
|
(898)
|
|
|
(571)
|
|
|
1,384
|
|
|
1,524
|
|
|
1,691
|
|
|
|
(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 3/31/2018:
|
|
|
|
|
|
|
Net Debt
at 12/31/2017 (a)
|
|
|
|
|
|
$
|
(7,076)
|
|
Operating
Loss
|
|
|
|
|
|
(39)
|
|
Depreciation
and Amortization
|
|
|
|
|
|
147
|
|
Capital
Expenditures for Property, Plant and Equipment
|
|
|
|
|
|
(29)
|
|
Capital
Expenditures for Assets Held for Sale
|
|
|
|
|
|
(9)
|
|
Proceeds from
Sale of Assets
|
|
|
|
|
|
12
|
|
Acquisition of
Intangibles
|
|
|
|
|
|
(3)
|
|
Increase in
Working Capital (b)
|
|
|
|
|
|
(45)
|
|
Other Financing
Activities
|
|
|
|
|
|
(10)
|
|
Accrued
Litigation and Settlements
|
|
|
|
|
|
(8)
|
|
Income Taxes
Paid
|
|
|
|
|
|
(47)
|
|
Interest
Paid
|
|
|
|
|
|
(174)
|
|
Other
|
|
|
|
|
|
(52)
|
|
Net Debt at 3/31/2018
(a)
|
|
|
|
|
|
$
|
(7,333)
|
|
|
|
|
|
|
|
|
Components of Net
Debt (a)
|
|
3/31/2018
|
|
12/31/2017
|
|
3/31/2017
|
Cash
|
|
$
|
459
|
|
|
$
|
613
|
|
|
$
|
546
|
|
Short-term
Borrowings and Current Portion of Long-term Debt
|
|
(153)
|
|
|
(148)
|
|
|
(240)
|
|
Long-term
Debt
|
|
(7,639)
|
|
|
(7,541)
|
|
|
(7,299)
|
|
Net Debt
(a)
|
|
$
|
(7,333)
|
|
|
$
|
(7,076)
|
|
|
$
|
(6,993)
|
|
|
|
(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 accounts receivable plus inventory less accounts
payable.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/weatherford-reports-first-quarter-2018-results-300635045.html
SOURCE Weatherford International plc