BAAR, Switzerland, Nov. 1,
2017 /PRNewswire/ -- Weatherford International plc (NYSE: WFT)
reported a net loss of $256 million,
or a loss of $0.26 per share, and a
non-GAAP net loss of $221 million
before charges and credits ($0.22
non-GAAP loss per share) on revenues of $1.46 billion for the third quarter of 2017.
Third Quarter 2017 Highlights
- Segment operating income of $34
million, a sequential improvement of 187%;
- Transition tasks for OneStimSM joint venture are
largely complete and closing is expected before year end;
- Commenced a reorganization as a first step toward a
more substantial business transformation; and
- Received multiple awards for best technologies and operational
excellence at the 2017 World Oil Awards.
Mark A. McCollum, President and
Chief Executive Officer, commented, "I'm pleased with the progress
we've made over the past three months and I am satisfied with the
improvements in our financial results, with the exception of
negative free cash flow during the quarter. Our highest priority is
free cash flow generation. To that end, we have initiated a
substantial transformation program targeting improvements in our
operating results of approximately $1
billion. We are driving this plan on a timeline to achieve
these savings over the next 18-24 months. Specific actions to
achieve $300 million in cost savings
are already underway. For example, we have already taken the first
steps on our path to becoming a leaner and flatter organization.
These first steps will result in annualized cost savings of
approximately $115 million. With the
new organizational foundation in place, we are now well positioned
to address the cultural barriers to change and to drive the
necessary process standardization that will accelerate our
transition into a more efficient Company. This will enable a high
level of consistency in our processes and will allow us to better
integrate our product and service offerings in order to provide
more competitive solutions to our customers. I am confident that
these changes will lead to positive and measurable results in the
coming quarters, beginning with our target of break-even free cash
flow excluding restructuring and legal settlements in the fourth
quarter."
McCollum continued, "Our focus is now turning to relentlessly
and reliably delivering on our promises to our customers, our
investors and our employees. We have a vast number of products and
technologies that customers want and value. We also have a highly
skilled and motivated global workforce and strong customer
relationships. I am convinced that with this foundation, combined
with an improved ability to consistently and more efficiently serve
our customers, we will be able to unlock the tremendous potential
that exists within Weatherford."
|
|
Three Months
Ended
|
|
Change
|
(In Millions, Except
Per Share Amounts)
|
|
9/30/2017
|
|
6/30/2017
|
|
9/30/2016
|
|
Sequential
|
|
Year-on-Year
|
Total Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,460
|
|
|
|
$
|
1,363
|
|
|
|
$
|
1,356
|
|
|
|
7
|
|
%
|
|
8
|
|
%
|
Segment Operating
Income (Loss)
|
|
$
|
34
|
|
|
|
$
|
(39)
|
|
|
|
$
|
(111)
|
|
|
|
187
|
|
%
|
|
130
|
|
%
|
Segment Operating
Margin
|
|
2.3
|
|
%
|
|
(2.8)
|
|
%
|
|
(8.2)
|
|
%
|
|
512
bps
|
|
|
|
1,046
bps
|
|
|
Segment
Incrementals
|
|
|
|
|
|
|
|
|
|
|
74
|
|
%
|
|
138
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(256)
|
|
|
|
$
|
(171)
|
|
|
|
$
|
(1,780)
|
|
|
|
(50)
|
|
%
|
|
86
|
|
%
|
Non-GAAP Net
Loss
|
|
$
|
(221)
|
|
|
|
$
|
(282)
|
|
|
|
$
|
(349)
|
|
|
|
22
|
|
%
|
|
37
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Loss per
Share
|
|
$
|
(0.26)
|
|
|
|
$
|
(0.17)
|
|
|
|
$
|
(1.98)
|
|
|
|
(53)
|
|
%
|
|
87
|
|
%
|
Non-GAAP Diluted Loss
per Share
|
|
$
|
(0.22)
|
|
|
|
$
|
(0.28)
|
|
|
|
$
|
(0.39)
|
|
|
|
22
|
|
%
|
|
43
|
|
%
|
Third Quarter 2017 Results
Revenue for the third quarter of 2017 was $1.46 billion compared with $1.36 billion in the second quarter of 2017, or a
7% increase, and was 8% higher than the $1.36 billion of revenue reported in the third
quarter of 2016. Sequentially, North
America revenue increased 13% due to higher average land rig
count in the United States and the
seasonal recovery from the spring break-up in Canada. International revenue increased 4%
sequentially, led by improvements in Europe and Russia while Latin
America revenues increased due to the negative impact of the
adjustment for the Venezuela
revenue recognition in the prior quarter. Revenue for Land Drilling
Rigs improved 5% sequentially. While most product lines reported
higher revenue, Artificial Lift, Well Construction and Wireline
Services led the sequential improvement in revenue.
Net loss for the third quarter of 2017 was $256 million (diluted net loss of $0.26 per share), compared to a $171 million loss in the second quarter of 2017
(diluted net loss of $0.17 per
share), and a $1.78 billion loss in
the third quarter of the prior year (diluted net loss of
$1.98 per share). The increase in the
third quarter net loss compared to the prior quarter was primarily
due to the $127 million gain on the
outstanding warrant in the second quarter that did not repeat,
which was partially offset by improved segment operating income in
the third quarter.
Non-GAAP net loss for the third quarter of 2017 was $221 million (non-GAAP diluted net loss of
$0.22 per share), compared to a
non-GAAP net loss of $282 million in
the second quarter of 2017 (non-GAAP diluted net loss of
$0.28 per share) and a non-GAAP net
loss of $349 million in the third
quarter of the prior year (non-GAAP diluted net loss of
$0.39 per share).
Non-GAAP adjustments, net of tax, of $35
million in charges for the third quarter include:
- $34 million in severance and
restructuring charges;
- $7 million in charges related to
the fair value adjustment of the outstanding warrant compared to a
$127 million gain in the second
quarter; and
- $6 million in other net
credits.
Segment operating margins improved 512 basis points sequentially
and 1,046 basis points year-on-year. Compared to last quarter, all
our regions and product lines reported improved results, as
activity levels improved and cost saving measures showed results.
Year-on-year, margin improvements were primarily driven by the
realization of savings from cost reduction measures and the impact
from the shutdown of Pressure Pumping operations in the United States in the fourth quarter of
2016 as well as the recovery of activity levels in North America.
Cash Flow and Financial Covenants
Net cash used in operating activities was $243 million for the third quarter of 2017 and
includes cash payments of $183
million for debt interest, $46
million for cash severance and restructuring costs and
$30 million for the final installment
of our SEC legal settlement. Capital expenditures of $65 million increased by $23 million or 55% sequentially, and increased
$3 million or 5% from the same
quarter in the prior year. The Company remains in compliance with
its financial covenants as defined in our revolving and secured
term loan credit facilities as of September
30, 2017. Further, based on current financial projections,
Weatherford expects to continue to remain in compliance with all
covenants.
Technology Highlights
Weatherford announced the commercial release of the following
technologies during the quarter:
- The AutoTong™ system is the world's first technology to
automate pipe makeup and to provide autonomous connection
evaluation. By eliminating the element of human error from the
physical makeup and connection validation processes, the AutoTong
system sharply increases the safety and efficiency of well
construction operations.
- The ISO Extreme retrievable well barrier is qualified to ISO
14310 V0 standards for gas-tight isolation in high-pressure,
high-temperature wellbores. The barrier has a large operational
envelope to reduce the loss-of-containment risk in extreme
environments. It can be deployed using a variety of options,
including electric line, slickline, tubing and coiled tubing.
- The PressurePro® control system, a fully integrated rotating
control device (RCD) and choke system for wellbore pressure
management on land, combines the SafeShield® 5M RCD with the
PressurePro® set-point choke. The system can be used for managed
pressure drilling (MPD), underbalanced drilling and foam drilling
applications.
Region and Segment Highlights
North America
|
|
Three Months
Ended
|
|
|
Change
|
|
(In
Millions)
|
|
9/30/2017
|
|
|
6/30/2017
|
|
|
9/30/2016
|
|
|
Sequential
|
|
|
Year-on-Year
|
|
North
America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
538
|
|
|
|
$
|
475
|
|
|
|
$
|
449
|
|
|
|
13
|
|
%
|
|
20
|
|
%
|
Segment Operating
Income (Loss)
|
|
$
|
33
|
|
|
|
$
|
2
|
|
|
|
$
|
(95)
|
|
|
|
1,163
|
|
%
|
|
134
|
|
%
|
Segment Operating
Margin
|
|
6.0
|
|
%
|
|
0.5
|
|
%
|
|
(21.2)
|
|
%
|
|
547
bps
|
|
|
|
2,724
bps
|
|
|
Third quarter revenues of $538
million were up $63 million or
13% sequentially, and up $89 million,
or 20%, over the same period last year. Sequential revenues
increased due to the seasonal recovery from the Canadian spring
break-up and an increase in both the Canadian and United States average rig count. While all
product lines reported sequential improvements, the largest
increases were from Well Construction, Completions and Artificial
Lift. Excluding the impact of the United States Pressure Pumping
operations that was shut down during the fourth quarter 2016,
year-on-year revenues improved 37%.
Third quarter segment operating income of $33 million (6.0% margin) improved by
$31 million sequentially from income
of $2 million (0.5% margin).
Sequential margin improvement was driven by a favorable product
mix, a lower cost structure in the United
States combined with increased activity levels in both
the United States and in
Canada. Compared to the same
period last year, segment operating income improved by $128 million or 134%, due to generally increased
activity levels, the absence of large losses in Pressure Pumping
incurred in the third quarter of 2016 prior to the shut-down of
operations in the fourth quarter of last year and the realization
of savings following the implementation of cost cutting measures
throughout previous quarters.
Operational highlights in North
America during the quarter include:
- Weatherford was awarded a contract to install the ForeSite™
production optimization platform on approximately 1,800
reciprocating-rod lift units in the
United States.
- Weatherford was awarded a two-year, extendable contract for MPD
services in the Gulf of Mexico.
The contract scope includes work in waters offshore the United States, Mexico, Trinidad and
Tobago.
- By deploying the MetalSkin® monobore openhole liner,
Weatherford enabled an operator in the U.S. Gulf of Mexico to extend existing casing and
thereby access additional pay. The operation enabled immediate
access to additional production without the time and expense of
installing new production facilities.
International Operations
|
|
Three Months
Ended
|
|
Change
|
(In
Millions)
|
|
9/30/2017
|
|
6/30/2017
|
|
9/30/2016
|
|
Sequential
|
|
Year-on-Year
|
International
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
816
|
|
|
|
$
|
787
|
|
|
|
$
|
809
|
|
|
|
4
|
|
%
|
|
1
|
|
%
|
Segment Operating
Income (Loss)
|
|
$
|
17
|
|
|
|
$
|
(21)
|
|
|
|
$
|
3
|
|
|
|
184
|
|
%
|
|
358
|
|
%
|
Segment Operating
Margin
|
|
2.1
|
|
%
|
|
(2.6)
|
|
%
|
|
0.5
|
|
%
|
|
465
bps
|
|
|
|
163
bps
|
|
|
Third quarter revenues of $816
million were up 4% sequentially and up 1% year-on-year.
Third quarter segment operating income of $17 million (2.1% margin) improved $38 million from an operating loss of
$21 million (-2.6% margin) in the
prior quarter. Year-on-year third quarter operating income improved
by $14 million.
Third quarter revenues of $229
million were up $26 million,
or 12% sequentially. Excluding the out-of-period adjustment related
to our largest customer in Venezuela in the second quarter 2017,
amounting to $31 million, sequential
revenues were down $5 million mainly
as a result of non-repeating product sales in Brazil in the previous quarter. Compared to
the same quarter last year, revenues were down $26 million, or 10%, due to the change in
revenue recognition which started last quarter.
Third quarter operating loss of $5
million (-2.3% margin) improved by $30 million sequentially, as a result of the
out-of-period adjustment in the second quarter mentioned above.
Compared to the same period last year, third quarter operating loss
deteriorated by $19 million from an
operating income of $14 million (5.1%
margin), as a result of the difficult situation in Venezuela.
Operational highlights in Latin
America during the quarter include:
- By deploying an MPD and underbalanced drilling program for a
customer in Colombia, Weatherford
enabled the operator to drill an additional 3,000 feet beyond the
planned target depth. Even with the additional length, the well was
drilled 7 days more quickly than previous wells in the field. The
customer also saved nearly $1 million
by eliminating costs related to mud losses.
- Work on the integrated services contract in the shallow-water
Gulf of Mexico continued through
the third quarter. Weatherford worked with the operator to improve
well construction procedures, which delivered a reduction of 43
days in rig time.
- Europe/Sub-Sahara
Africa/Russia
Third quarter revenues of $252
million were up $8 million, or
4% sequentially, and up $27 million,
or 12% compared to the same quarter last year. Third quarter
operating income of $14 million (5.7%
margin) increased from operating income of $5 million (2.0% margin) sequentially, and
increased from operating loss of $3
million (-1.0% margin) year-on-year, benefiting from
significant cost reductions mainly in Sub-Sahara Africa. Outside
these cost reductions, sequential revenue and operating income
improvements were primarily due to increased activity and a
favorable product mix in the North Sea and an increase in
completions-related work in Russia, partially offset by a continued
decline of activity in Sub-Sahara Africa as deeper-water offshore
work continues to decline.
Operational highlights in Europe/Sub-Sahara Africa/Russia during the quarter include:
- Weatherford delivered record-setting directional drilling
results in several fields across Russia. In one well, the company achieved a
daily drilling progress of 1,125 meters and acquired high-quality
logging-while-drilling data in the production casing section,
eliminating the need for an additional logging trip.
- Weatherford and Seadrill jointly installed and operated an MPD
system on Seadrill's West Capella drillship off the coast of
Cyprus, which helped to deliver
Total's Onesiphoros West-1 exploration well safely, on time and
below planned cost.
- Weatherford replaced the incumbent service provider on multiple
Tubular Running Services contracts in the North Sea based on the
exceptional service quality demonstrated by Weatherford on previous
projects. The same operator also awarded Weatherford a contract for
integrated Directional Drilling, Managed Pressure Drilling and
Tubular Running Services in the UK North Sea. This represents a
significant market share gain in the North Sea well construction
market.
- Weatherford was awarded a contract for plug and abandonment
services by Repsol Norge AS. The contract scope encompasses
multiple services, including fishing, cutting and milling; casing
pulling; and drilling and pinning multiple strings of casing.
Weatherford will provide these services on up to 50 wells which are
to be plugged and abandoned. The work commenced in October 2017 and is estimated to be completed
over a period of three years.
- Middle East/North Africa/Asia
Pacific
Third quarter revenues of $335
million were down $5 million,
or 2% sequentially, and up $6
million, or 2% compared to the same quarter last year. Third
quarter segment operating income of $8
million (2.4% margin) decreased marginally from operating
income of $9 million (2.8% margin) in
the prior quarter and improved from operating loss of $8 million (-2.2% margin) year-on-year. The
decrease in sequential revenue was primarily due to lower product
sales and service activity in Asia
Pacific while improvements in product sales and higher
service activity in Kuwait were
offset by lower activity in the United
Arab Emirates and Pakistan.
Operational highlights in the Middle
East/North
Africa/Asia Pacific during
the quarter include:
- Weatherford was awarded a $23
million contract to provide 11 offshore wireline units for a
major Middle Eastern NOC.
- Weatherford won a five-year, extendable contract to provide
Tubular Running Services on 27 wells in a remote, offshore area of
Indonesia. Work is expected to
commence in November.
- Weatherford worked collaboratively with a major Middle Eastern
NOC to plan and drill a high-build-rate horizontal well. The job
was executed safely and efficiently, and the well is now producing
at a rate of 3,500 BOPD with zero water cut.
- In Saudi Arabia, Weatherford
posted the best comparative service quality results among all
service providers in the Kingdom.
- Weatherford deployed its Compact™ suite of tools to log two
wells in Pakistan. Weatherford
logged the first, 45-degree well with difficult hole conditions in
just two runs and 80 hours, with zero tool failures. In the second
well, after another service provider had spent 12 days trying
unsuccessfully, Weatherford completed the job in just 35
hours.
Land Drilling Rigs
Third quarter revenues of $106
million were up $5 million, or
5% sequentially and up $8 million, or
8% compared to the same quarter in the prior year. Third quarter
operating loss of $16 million (-14.9%
margin) improved sequentially by $4
million from an operating loss of $20
million (-20.7% margin) and improved year-on-year by
$3 million from an operating loss of
$19 million (-19.4%). The sequential
and year-over-year improvement in revenues was due to improved
operational efficiency, higher chargeable days and increased
drilling activity in Saudi Arabia.
Year-over-year improvements were driven by Algeria and Kuwait being fully operational. Improvements
in rig utilization and lower operating costs accelerated during the
quarter and are expected to extend into the fourth quarter.
Operational highlights in the Land Drilling Rigs business during
the quarter include:
- Rig 155 in Kuwait surpassed 18
years without a lost-time incident.
- Rig 40 in Saudi Arabia ranked
highest among all drilling rigs in Saudi
Arabia with zero non-productive time.
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 860 locations,
including manufacturing, service, research and development, and
training facilities and employs approximately 29,500 people. For
more information, visit www.weatherford.com and connect with
Weatherford on LinkedIn, Facebook, Twitter and YouTube.
Conference Call
The Company will host a conference call with financial analysts
to discuss the quarterly results on November 1, 2017, at
8:30 a.m. eastern time (ET),
7:30 a.m. central time (CT).
Weatherford invites investors to listen to the call live via the
Company's website, at
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); the success and
closing of our joint ventures and strategic partnerships; and the
changes in spending by our clients and customers. Forward-looking
statements are also affected by the risk factors described in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2016, the Company's
Quarterly Reports on Form 10-Q, and those set forth from
time-to-time in the Company's other filings with the Securities and
Exchange Commission. 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
|
|
Nine Months
Ended
|
|
|
|
9/30/2017
|
|
9/30/2016
|
|
9/30/2017
|
|
9/30/2016
|
|
Net
Revenues:
|
|
|
|
|
|
|
|
|
|
North
America
|
|
$
|
538
|
|
|
$
|
449
|
|
|
$
|
1,503
|
|
|
$
|
1,393
|
|
|
Middle East/North
Africa/Asia Pacific
|
|
335
|
|
|
329
|
|
|
996
|
|
|
1,090
|
|
|
Europe/SSA/Russia
|
|
252
|
|
|
225
|
|
|
740
|
|
|
725
|
|
|
Latin
America
|
|
229
|
|
|
255
|
|
|
674
|
|
|
809
|
|
|
Land Drilling
Rigs
|
|
106
|
|
|
98
|
|
|
296
|
|
|
326
|
|
|
Total Net
Revenues
|
|
1,460
|
|
|
1,356
|
|
|
4,209
|
|
|
4,343
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss):
|
|
|
|
|
|
|
|
|
|
North
America
|
|
33
|
|
|
(95)
|
|
|
17
|
|
|
(324)
|
|
|
Middle East/North
Africa/Asia
|
|
8
|
|
|
(8)
|
|
|
14
|
|
|
(2)
|
|
|
Europe/SSA/Russia
|
|
14
|
|
|
(3)
|
|
|
9
|
|
|
(3)
|
|
|
Latin
America
|
|
(5)
|
|
|
14
|
|
|
(31)
|
|
|
59
|
|
|
Land Drilling
Rigs
|
|
(16)
|
|
|
(19)
|
|
|
(66)
|
|
|
(62)
|
|
|
Adjusted
Segment Operating Income (Loss)
|
|
34
|
|
|
(111)
|
|
|
(57)
|
|
|
(332)
|
|
|
Research and
Development
|
|
(42)
|
|
|
(33)
|
|
|
(117)
|
|
|
(119)
|
|
|
Corporate
Expenses
|
|
(28)
|
|
|
(30)
|
|
|
(94)
|
|
|
(107)
|
|
|
Other Charges,
Net
|
|
(28)
|
|
|
(771)
|
|
|
(119)
|
|
|
(1,294)
|
|
|
Total
Operating Loss
|
|
(64)
|
|
|
(945)
|
|
|
(387)
|
|
|
(1,852)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
|
|
Interest Expense,
Net
|
|
(148)
|
|
|
(129)
|
|
|
(427)
|
|
|
(363)
|
|
|
Bond Tender Premium,
Net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78)
|
|
|
Warrant Fair Value
Adjustment
|
|
(7)
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|
Currency Devaluation
Charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31)
|
|
|
Other Expense,
Net
|
|
(7)
|
|
|
(10)
|
|
|
(28)
|
|
|
(16)
|
|
|
Net Loss Before
Income Taxes
|
|
(226)
|
|
|
(1,084)
|
|
|
(784)
|
|
|
(2,340)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Provision
|
|
(25)
|
|
|
(692)
|
|
|
(75)
|
|
|
(489)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
(251)
|
|
|
(1,776)
|
|
|
(859)
|
|
|
(2,829)
|
|
|
Net Income
Attributable to Noncontrolling Interests
|
|
5
|
|
|
4
|
|
|
16
|
|
|
14
|
|
|
Net Loss Attributable
to Weatherford
|
|
$
|
(256)
|
|
|
$
|
(1,780)
|
|
|
$
|
(875)
|
|
|
$
|
(2,843)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Per Share
Attributable to Weatherford:
|
|
|
|
|
|
|
|
|
|
Basic &
Diluted
|
|
$
|
(0.26)
|
|
|
$
|
(1.98)
|
|
|
$
|
(0.88)
|
|
|
$
|
(3.27)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
Basic &
Diluted
|
|
990
|
|
|
899
|
|
|
989
|
|
|
871
|
|
|
Weatherford
International plc
|
Selected
Statements of Operations Information
|
(Unaudited)
|
(In
Millions)
|
|
Three Months
Ended
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
|
12/31/2016
|
|
9/30/2016
|
Net
Revenues:
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
538
|
|
|
$
|
475
|
|
|
$
|
490
|
|
|
$
|
485
|
|
|
$
|
449
|
|
Middle East/North
Africa/Asia Pacific
|
335
|
|
|
340
|
|
|
321
|
|
|
363
|
|
|
329
|
|
Europe/SSA/Russia
|
252
|
|
|
244
|
|
|
244
|
|
|
214
|
|
|
225
|
|
Latin
America
|
229
|
|
|
203
|
|
|
242
|
|
|
250
|
|
|
255
|
|
Land Drilling
Rigs
|
106
|
|
|
101
|
|
|
89
|
|
|
94
|
|
|
98
|
|
Total Net
Revenues
|
$
|
1,460
|
|
|
$
|
1,363
|
|
|
$
|
1,386
|
|
|
$
|
1,406
|
|
|
$
|
1,356
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
|
12/31/2016
|
|
9/30/2016
|
Operating Income
(Loss):
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
33
|
|
|
$
|
2
|
|
|
$
|
(18)
|
|
|
$
|
(58)
|
|
|
$
|
(95)
|
|
Middle East/North
Africa/Asia Pacific
|
8
|
|
|
9
|
|
|
(3)
|
|
|
9
|
|
|
(8)
|
|
Europe/SSA/Russia
|
14
|
|
|
5
|
|
|
(10)
|
|
|
(8)
|
|
|
(3)
|
|
Latin
America
|
(5)
|
|
|
(35)
|
|
|
9
|
|
|
6
|
|
|
14
|
|
Land Drilling
Rigs
|
(16)
|
|
|
(20)
|
|
|
(30)
|
|
|
(25)
|
|
|
(19)
|
|
Adjusted
Segment Operating Income (Loss)
|
34
|
|
|
(39)
|
|
|
(52)
|
|
|
(76)
|
|
|
(111)
|
|
Research and
Development
|
(42)
|
|
|
(36)
|
|
|
(39)
|
|
|
(40)
|
|
|
(33)
|
|
Corporate
Expenses
|
(28)
|
|
|
(33)
|
|
|
(33)
|
|
|
(32)
|
|
|
(30)
|
|
Other Charges,
Net
|
(28)
|
|
|
(19)
|
|
|
(72)
|
|
|
(251)
|
|
|
(771)
|
|
Total
Operating Loss
|
$
|
(64)
|
|
|
$
|
(127)
|
|
|
$
|
(196)
|
|
|
$
|
(399)
|
|
|
$
|
(945)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
|
12/31/2016
|
|
9/30/2016
|
Product and
Service Line Revenues
(a):
|
|
|
|
|
|
|
|
|
|
Formation Evaluation
and Well Construction
|
$
|
856
|
|
|
$
|
811
|
|
|
$
|
824
|
|
|
$
|
773
|
|
|
$
|
765
|
|
Completion and
Production
|
498
|
|
|
451
|
|
|
473
|
|
|
539
|
|
|
493
|
|
Land Drilling
Rigs
|
106
|
|
|
101
|
|
|
89
|
|
|
94
|
|
|
98
|
|
Total Product
Service Line Revenues
|
$
|
1,460
|
|
|
$
|
1,363
|
|
|
$
|
1,386
|
|
|
$
|
1,406
|
|
|
$
|
1,356
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
|
12/31/2016
|
|
9/30/2016
|
Depreciation and
Amortization:
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
39
|
|
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
41
|
|
|
$
|
55
|
|
Middle East/North
Africa/Asia Pacific
|
49
|
|
|
51
|
|
|
51
|
|
|
52
|
|
|
60
|
|
Europe/SSA/Russia
|
36
|
|
|
39
|
|
|
39
|
|
|
41
|
|
|
45
|
|
Latin
America
|
49
|
|
|
48
|
|
|
51
|
|
|
55
|
|
|
56
|
|
Land Drilling
Rigs
|
23
|
|
|
23
|
|
|
24
|
|
|
22
|
|
|
22
|
|
Research and
Development and Corporate
|
3
|
|
|
3
|
|
|
3
|
|
|
4
|
|
|
4
|
|
Total
Depreciation and Amortization
|
$
|
199
|
|
|
$
|
204
|
|
|
$
|
208
|
|
|
$
|
215
|
|
|
$
|
242
|
|
|
|
(a)
|
Formation Evaluation
and Well Construction includes Managed-Pressure Drilling, Drilling
Services, Tubular Running Services, Drilling Tools and Rental
Equipment, Wireline Services, Testing and Production Services,
Re-entry and Fishing Services, Cementing Products, Liner Systems,
Reservoir Solutions and Surface Logging. Completion and Production
includes Artificial Lift Systems, Stimulation and Completion
Systems.
|
We report our financial results in accordance with U.S.
generally accepted accounting principles (GAAP). However,
Weatherford's management believes that certain non-GAAP financial
measures and ratios (as defined under the SEC's Regulation G) may
provide users of this financial information, additional meaningful
comparisons between current results and results of prior periods.
The non-GAAP amounts shown 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
|
|
Nine Months
Ended
|
|
|
|
9/30/2017
|
|
6/30/2017
|
|
9/30/2016
|
|
9/30/2017
|
|
9/30/2016
|
|
Operating
Loss:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
Loss
|
|
$
|
(64)
|
|
|
$
|
(127)
|
|
|
$
|
(945)
|
|
|
$
|
(387)
|
|
|
$
|
(1,852)
|
|
|
Severance,
Restructuring and Exited Businesses
|
|
34
|
|
|
31
|
|
|
22
|
|
|
140
|
|
|
150
|
|
|
Litigation
Charges, Net
|
|
(4)
|
|
|
—
|
|
|
9
|
|
|
(4)
|
|
|
190
|
|
|
Impairments,
Asset Write-Downs and Other (a)
|
|
(2)
|
|
|
(12)
|
|
|
740
|
|
|
(17)
|
|
|
952
|
|
|
Legacy
Contract
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
Total
Non-GAAP Adjustments
|
|
28
|
|
|
19
|
|
|
771
|
|
|
119
|
|
|
1,294
|
|
|
Non-GAAP Adjusted
Operating Loss
|
|
$
|
(36)
|
|
|
$
|
(108)
|
|
|
$
|
(174)
|
|
|
$
|
(268)
|
|
|
$
|
(558)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Before Income
Taxes:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Loss Before
Income Taxes
|
|
$
|
(226)
|
|
|
$
|
(148)
|
|
|
$
|
(1,084)
|
|
|
$
|
(784)
|
|
|
$
|
(2,340)
|
|
|
Operating
Income Adjustments
|
|
28
|
|
|
19
|
|
|
771
|
|
|
119
|
|
|
1,294
|
|
|
Bond Tender
Premium, Net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|
Warrant Fair
Value Adjustment
|
|
7
|
|
|
(127)
|
|
|
—
|
|
|
(58)
|
|
|
—
|
|
|
Currency
Devaluation Charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
Non-GAAP Loss Before
Income Taxes
|
|
$
|
(191)
|
|
|
$
|
(256)
|
|
|
$
|
(313)
|
|
|
$
|
(723)
|
|
|
$
|
(937)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Provision)
Benefit for Income Taxes:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Provision for
Income Taxes
|
|
$
|
(25)
|
|
|
$
|
(17)
|
|
|
$
|
(692)
|
|
|
$
|
(75)
|
|
|
$
|
(489)
|
|
|
Tax Effect on
Non-GAAP Adjustments
|
|
—
|
|
|
(3)
|
|
|
660
|
|
|
(7)
|
|
|
599
|
|
|
Non-GAAP (Provision)
Benefit for Income Taxes
|
|
$
|
(25)
|
|
|
$
|
(20)
|
|
|
$
|
(32)
|
|
|
$
|
(82)
|
|
|
$
|
110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
Attributable to Weatherford:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Loss
|
|
$
|
(256)
|
|
|
$
|
(171)
|
|
|
$
|
(1,780)
|
|
|
$
|
(875)
|
|
|
$
|
(2,843)
|
|
|
Non-GAAP
Adjustments, net of tax
|
|
35
|
|
|
(111)
|
|
|
1,431
|
|
|
54
|
|
|
2,002
|
|
|
Non-GAAP Net
Loss
|
|
$
|
(221)
|
|
|
$
|
(282)
|
|
|
$
|
(349)
|
|
|
$
|
(821)
|
|
|
$
|
(841)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Loss Per
Share Attributable to Weatherford:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted Loss per
Share
|
|
$
|
(0.26)
|
|
|
$
|
(0.17)
|
|
|
$
|
(1.98)
|
|
|
$
|
(0.88)
|
|
|
$
|
(3.27)
|
|
|
Non-GAAP
Adjustments, net of tax
|
|
0.04
|
|
|
(0.11)
|
|
|
1.59
|
|
|
0.05
|
|
|
2.30
|
|
|
Non-GAAP Diluted Loss
per Share
|
|
$
|
(0.22)
|
|
|
$
|
(0.28)
|
|
|
$
|
(0.39)
|
|
|
$
|
(0.83)
|
|
|
$
|
(0.97)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Effective Tax
Rate (b)
|
|
(11)%
|
|
|
(12)%
|
|
|
(64)%
|
|
|
(10)%
|
|
|
(21)%
|
|
|
Non-GAAP Effective
Tax Rate (c)
|
|
(13)%
|
|
|
(8)%
|
|
|
(10)%
|
|
|
(11)%
|
|
|
12%
|
|
|
|
|
(a)
|
Impairments, asset
write-downs and other of $740 million in the third quarter of 2016
include $436 million of long-lived asset impairments and $304
million of inventory write-downs, accounts receivable and other
charges.
|
(b)
|
GAAP Effective Tax
Rate is the GAAP provision for income taxes divided by GAAP income
before income taxes.
|
(c)
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
|
12/31/2016
|
|
9/30/2016
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
445
|
|
|
$
|
584
|
|
|
$
|
546
|
|
|
$
|
1,037
|
|
|
$
|
440
|
|
Accounts Receivable,
Net
|
|
1,236
|
|
|
1,165
|
|
|
1,292
|
|
|
1,383
|
|
|
1,414
|
|
Inventories,
Net
|
|
1,752
|
|
|
1,728
|
|
|
1,700
|
|
|
1,802
|
|
|
1,917
|
|
Assets Held for
Sale
|
|
935
|
|
|
929
|
|
|
860
|
|
|
23
|
|
|
11
|
|
Property, Plant and
Equipment, Net
|
|
3,989
|
|
|
4,111
|
|
|
4,265
|
|
|
4,480
|
|
|
4,708
|
|
Goodwill and
Intangibles, Net
|
|
2,575
|
|
|
2,527
|
|
|
2,602
|
|
|
3,045
|
|
|
3,104
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
815
|
|
|
837
|
|
|
803
|
|
|
845
|
|
|
666
|
|
Liabilities Held for
Sale
|
|
54
|
|
|
90
|
|
|
96
|
|
|
—
|
|
|
—
|
|
Short-term Borrowings
and Current Portion of Long-term Debt
|
|
391
|
|
|
152
|
|
|
240
|
|
|
179
|
|
|
555
|
|
Long-term
Debt
|
|
7,530
|
|
|
7,538
|
|
|
7,299
|
|
|
7,403
|
|
|
6,937
|
|
Weatherford
International plc
|
Net Debt
(a)
|
(Unaudited)
|
(In
Millions)
|
|
|
|
|
|
|
|
Change in Net Debt
for the Three Months Ended 9/30/2017:
|
|
|
|
|
|
|
Net Debt at 6/30/2017
(a)
|
|
|
|
|
|
$
|
(7,106)
|
|
Operating
Loss
|
|
|
|
|
|
(64)
|
|
Depreciation
and Amortization
|
|
|
|
|
|
199
|
|
Capital
Expenditures for Property, Plant and Equipment
|
|
|
|
|
|
(65)
|
|
Acquisition of
Assets Held for Sale
|
|
|
|
|
|
(1)
|
|
Proceeds from
Sale of Assets
|
|
|
|
|
|
11
|
|
Acquisition of
Intangibles
|
|
|
|
|
|
(4)
|
|
Other
Investing Activities
|
|
|
|
|
|
(27)
|
|
Increase in
Working Capital (b)
|
|
|
|
|
|
(140)
|
|
Accrued
Litigation and Settlements
|
|
|
|
|
|
(31)
|
|
Income Taxes
Paid
|
|
|
|
|
|
(24)
|
|
Interest
Paid
|
|
|
|
|
|
(183)
|
|
Other
|
|
|
|
|
|
(41)
|
|
Net Debt at 9/30/2017
(a)
|
|
|
|
|
|
$
|
(7,476)
|
|
|
|
|
|
|
|
|
Change in Net Debt
for the Nine Months Ended 9/30/2017:
|
|
|
|
|
|
|
Net Debt at
12/31/2016 (a)
|
|
|
|
|
|
$
|
(6,545)
|
|
Operating
Loss
|
|
|
|
|
|
(387)
|
|
Depreciation
and Amortization
|
|
|
|
|
|
611
|
|
Capital
Expenditures for Property, Plant and Equipment
|
|
|
|
|
|
(147)
|
|
Acquisition of
Assets Held for Sale
|
|
|
|
|
|
(244)
|
|
Proceeds from
Sale of Assets
|
|
|
|
|
|
36
|
|
Acquisition of
Intangibles
|
|
|
|
|
|
(13)
|
|
Other
Investing Activities
|
|
|
|
|
|
(33)
|
|
Increase in
Working Capital (b)
|
|
|
|
|
|
(215)
|
|
Proceeds from
Note Receivable
|
|
|
|
|
|
59
|
|
Accrued
Litigation and Settlements
|
|
|
|
|
|
(93)
|
|
Income Taxes
Paid
|
|
|
|
|
|
(71)
|
|
Interest
Paid
|
|
|
|
|
|
(434)
|
|
Net Debt at 9/30/2017
(a)
|
|
|
|
|
|
$
|
(7,476)
|
|
|
|
|
|
|
|
|
Components of Net
Debt (a)
|
|
9/30/2017
|
|
6/30/2017
|
|
12/31/2016
|
Cash
|
|
$
|
445
|
|
|
$
|
584
|
|
|
$
|
1,037
|
|
Short-term
Borrowings and Current Portion of Long-term Debt
|
|
(391)
|
|
|
(152)
|
|
|
(179)
|
|
Long-term
Debt
|
|
(7,530)
|
|
|
(7,538)
|
|
|
(7,403)
|
|
Net Debt
(a)
|
|
$
|
(7,476)
|
|
|
$
|
(7,106)
|
|
|
$
|
(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.
|
(b)
|
Working capital is
defined as accounts receivable plus inventory less accounts
payable.
|
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