Weatherford Announces Fourth-Quarter and Full-Year 2020 Results
HOUSTON, Feb. 17, 2021 /PRNewswire/ -- Weatherford International plc (OTC Pink: WFTLF) ("Weatherford" or the "Company") announced today its results for the fourth quarter and full-year 2020.
Revenues for the fourth quarter of 2020 were $842 million, compared to revenue of $985 million and $261 million in the Predecessor and Successor periods of the fourth quarter of 2019, respectively. Reported operating loss was $107 million in the fourth quarter of 2020, compared to an operating loss of $316 million and operating income of $1 million in the Predecessor and Successor periods of the fourth quarter of 2019, respectively. The Company's fourth-quarter 2020 net loss was $200 million, compared to net income of $5.3 billion and a net loss of $26 million in the Predecessor and Successor periods of the fourth quarter of 2019, respectively. Fourth-quarter 2020 cash flows provided by operations were $22 million, compared to cash flows used in operations of $68 million and cash flows provided by operations of $61 million in the Predecessor and Successor periods of the fourth quarter of 2019, respectively. Capital expenditures were $54 million in the fourth quarter of 2020, compared to $73 million and $20 million in the Predecessor and Successor periods of the fourth quarter of 2019, respectively.
Revenues for full-year 2020 were $3.7 billion, compared to revenue of $5.0 billion and $261 million in the Predecessor and Successor periods in 2019, respectively. Reported full-year operating loss was $1.5 billion in 2020, compared to a $1.2 billion loss and income of $1 million in the Predecessor and Successor periods in 2019, respectively. The Company's full-year 2020 net loss was $1.9 billion, compared to net income of $3.7 billion and a net loss of $26 million in the Predecessor and Successor periods in 2019, respectively. Full-year 2020 cash flows provided by operations were $210 million, compared to cash flows used in operations of $747 million and provided by operations of $61 million in the Predecessor and Successor periods in 2019, respectively. Capital expenditures for full-year 2020 were $154 million, compared to $250 million and $20 million in the Predecessor and Successor periods in 2019, respectively.
On a non-GAAP basis:
-- Fourth-quarter 2020
-- Adjusted EBITDA ([1][2]) of $98 million declined 6% sequentially and
37% versus the combined fourth quarter of 2019, reflecting
year-on-year decrementals of 14% ([4]). Excluding the one-time gain
on sale of operational assets from the third quarter of 2020,
adjusted EBITDA increased by 7% sequentially
-- Unlevered free cash flow ([1]) of $95 million improved $167 million
versus the combined fourth quarter of 2019
-- Full-year 2020
-- Adjusted EBITDA ([1][2]) of $459 million decreased 22% versus the
combined full-year 2019, reflecting year-on-year decrementals of 9%
([4]); associated margins improved by 112 basis points year-on-year
to 12%
-- Free cash flow ([1]) of $78 million improved $950 million from the
combined full-year 2019
Girish Saligram, President and Chief Executive Officer, commented, "The past year was extremely challenging for our industry, and I'm pleased with the Company's performance in a tough environment. Our focus on leveraging our portfolio, expanding margins and enhancing liquidity continued to build through the fourth quarter, resulting in strong operational performance. Fourth-quarter 2020 revenues increased by 4% sequentially, comprised of growth of 15% in North America and 2% internationally. We achieved another quarter of double-digit adjusted EBITDA margins, and full-year 2020 adjusted EBITDA decrementals were limited to 9% year-on-year. Our results are a testament to our employees' commitment to performance and I am extremely grateful for their resilience, creativity and dedication to our customers and the Company.
"I have outlined our multi-year objective of delivering sustainable profitability and free cash flow, and in 2020 we built a strong foundation to enable the achievement of this goal. We leveraged our broad product and service portfolio, driving full-year revenue growth in strategic international markets, including a number of countries in the Middle East, despite significant reductions in activity and customer spending. We acted decisively, implementing actions that exceeded our annualized cost savings targets of over $800 million. We generated $78 million of positive free cash flow in 2020, an improvement of $950 million year-on-year, through improved operating performance, disciplined capital allocation and expenditures, and reduced working capital. In conjunction with the refinancing transactions, these actions strengthened the Company's liquidity position, with Weatherford ending the year with $1.3 billion of total cash, which provides flexibility to operate through this environment.
"While commodity prices and industry activity have generally improved from earlier this year and we are optimistic that the market is in the early stages of a broader recovery, particularly as we look ahead to the second half of 2021, there is continued uncertainty around the timing and magnitude of a recovery, primarily due to the COVID-19 pandemic and its impact on economic activity.
"To continue our journey towards achieving sustainable profitability and positive free cash flow, we have built our 2021 cost plan assuming activity levels remain flat versus 2020 exit levels. We have also identified several focus areas to continue driving improvements. To further our margin expansion, we will continue to improve our profitability in North America, simplify our organization, and we are implementing initiatives to improve the variable cost profile of our operations. To drive our cash flow performance, we will capitalize on our margin improvements, remain disciplined when evaluating and allocating capital expenditures, and we will implement new processes to catalyze further working capital efficiencies. The achievement of these focus areas is not predicated on a recovery in market activity and we look forward to sharing updates on our progress throughout the year."
Note: Upon completing its financial restructuring in late 2019, the Company adopted fresh-start accounting resulting in Weatherford becoming a new entity for accounting and financial reporting purposes. As required by GAAP, results up to and including December 13, 2019 are presented separately as the predecessor period (the "Predecessor" period) and results from December 14, 2019 and onwards are presented as the successor period (the "Successor" period). The results from these Predecessor and Successor periods are not comparable. Nevertheless, for discussion purposes herein, the Company combined the results of the Predecessor and Successor periods as we believe the 18 days of the Successor period in 2019 is not a significant period of time impacting the 2019 combined results and that this provides the most meaningful basis to analyze our results.
Notes:
([1] )Adjusted EBITDA excludes, among other items, impairments of long-lived assets and goodwill as well as write-offs of property plant and equipment, right-of-use assets, and inventory. Free cash flow is calculated as cash flows provided by (used in) operating activities, less capital expenditures plus proceeds from the disposition of assets. Unlevered free cash flow is calculated as free cash flow plus cash paid for interest. Adjusted EBITDA, free cash flow and unlevered free cash flow are non-GAAP measures. Each measure is defined and reconciled to the most directly comparable GAAP measure in the tables below.
([2]) In the first quarter of 2020 the Company began reporting adjusted EBITDA excluding stock-based compensation expense. Additional detail for the current and historical periods is provided in the tables below.
([3]) Includes cash and cash equivalents and restricted cash.
([4]) Decrementals calculated as the change in adjusted EBITDA between two periods divided by the corresponding change in revenue.
Leveraging Our Portfolio
-- Weatherford was awarded a contract from a major operator in Asia to
deploy the TR1P(TM) single-trip completion system for two deepwater
wells. TR1P is the industry's first digitally-enabled single-trip
deepwater completion system. Our equipment will be used exclusively to
install the upper and lower sand face completion. The award is
recognition of the value that TR1P is delivering to customers, including
through reductions in rig time, personnel on board, improved logistics,
and eliminating the need for intervention services.
-- Weatherford was awarded two five-year contract extensions from a
National Oil Company in the Middle East for Liner Hangers and Tubular
Running Services, including the Company's Vero(TM) automated connection
integrity solution. The extensions enable Weatherford to continue to
deliver on its consistent service quality and safety metrics, having
gone nearly 20 years without a lost-time incident resulting from its
liner hanger operations in this country, and to continue deploying
technology to improve efficiencies.
-- A major integrated energy operator awarded the Company a multi-year
contract to provide annular Safety Valve solutions in the Caspian Sea.
Apart from delivering unmatched performance, our offering utilizes
unique technology that enables installations to be completed faster and
safer than traditional operations.
-- In the Middle East, an operator utilized multiple applications of
Weatherford's Managed Pressure Drilling (MPD) solution to drill the
longest-ever offshore well section in the region (6,700 ft). The
operation used pressurized mud cap drilling as well as constant bottom
hole pressure applications to drill the section, install and cement a
liner. The use of these managed pressure methods enabled the well to be
delivered days ahead of schedule, saving the customer millions of
dollars in rig time.
-- Weatherford provided an integrated solution to an IOC in Argentina in
the Vaca Muerta formation to complete a well in the region's fastest
recorded time. The Company combined its Revolution(®) rotary steerable
system, MPD, and Vero solutions, enabling the customer to drill the
well's production section in under seven days or approximately 60% off
the original plan. Moreover, the Vero solution delivered the customer's
fastest-ever casing running in this field.
-- The Company recorded several production-related achievements in the
United States. In the Bakken, Weatherford deployed its Rotaflex(®) 1160
long-stroke pumping unit for the first time, bridging the gap between
ESP and traditional forms of lift, thus eliminating the need for the
commonly used secondary ESP and saving the customer significant OPEX
costs. The Company also received an award to install its ForeSite(®)
Flow multiphase flowmeter package on an operator's wells in the Permian
Basin. Additionally, Weatherford received approval from regulatory
agencies in North Dakota and Texas to use ForeSite Flow as an allocation
measurement tool, replacing the cost and footprint of a traditional test
separator package and allowing for continuous flow measurement on each
well.
-- Weatherford received multiple safety awards during the quarter in the
Middle East, Latin America, and Russia, including two CEO HSE awards
from National Oil Companies in the Middle East in recognition of the
Company's outstanding HSE performance.
Expanding Our Margins
Full-year 2020 adjusted EBITDA margins improved by 112 basis points year-on-year, despite a 29% reduction in revenue. The corresponding EBITDA decrementals were limited to 9%, primarily due to the Company's meaningful cost reduction actions.
Fourth-quarter 2020 adjusted EBITDA margins declined 129 basis points sequentially, largely due to the non-repeat of a $12 million gain on the sale of operational assets during the third quarter. Excluding the impact of that transaction, adjusted EBITDA margins increased 20 basis points sequentially.
Enhancing Our Liquidity
The Company maintained its disciplined focus on cash flow during the quarter and ended the year with ample liquidity. Unlevered free cash flow of $95 million in the fourth quarter of 2020 improved by over $165 million versus the prior year, despite a 37% reduction in adjusted EBITDA. Full-year 2020 free cash flow of $78 million and unlevered free cash flow of $310 million, improved by over $900 million year-on-year due to the Company's efforts to control costs and reduce net working capital and capital expenditures, as well as the non-repeat of cash outflows in 2019 associated with the Company's financial restructuring. Total cash of approximately $1.3 billion as of December 31, 2020 was essentially unchanged from the prior quarter and liquidity improved by approximately $270 million year-on-year as the net benefit from the refinancing transactions was bolstered by positive free cash flow.
Results by Operating Segment
Western Hemisphere
Successor Predecessor Q4 2019
Period From Period From Non-GAAP
Quarter Ended 12/14/19 to 10/01/19 to Combined
Variance
($ in Millions) 12/31/20 9/30/20 12/31/19 12/13/19 Results Seq. YoY
---
Revenues:
North America $
201 $
175 $
68 $
289 $
357 15 (44)
% %
Latin America 171 141 53 211 264 21 (35)
% %
---
Total Revenues $
372 $
316 $
121 $
500 $
621 18 (40)
% %
===
Adjusted Segment $
41 29 $
10 $
54 $
64 41 (36)
EBITDA % %
% Margin 11 9 8 11 10
%
%
%
%
% 180 bps 70 bps
Fourth-quarter 2020 Western Hemisphere revenues of $372 million increased 18% sequentially and decreased 40% year-on-year.
In North America, fourth-quarter 2020 revenues of $201 million increased by 15% sequentially primarily due to increased Completion and Production sales in the United States and Canada and seasonal activity increases in Canada.
Fourth-quarter 2020 revenues of $171 million in Latin America increased 21% sequentially, driven by increased activity and year-end product sales in Argentina and Colombia, partially offset by lower activity in Mexico largely due to weather-related project delays.
Fourth-quarter 2020 adjusted segment EBITDA of $41 million increased $12 million sequentially and associated margins of 11% improved by 180 basis points versus the third quarter of 2020. The growth in adjusted segment EBITDA was primarily driven by increased activity and product sales in Latin America.
Eastern Hemisphere
Successor Predecessor Q4 2019
Period From Period From Non-GAAP
Quarter Ended 12/14/19 to 10/01/19 to Combined Variance
($ in Millions) 12/31/20 9/30/20 12/31/19 12/13/19 Results Seq. YoY
---
Revenues:
Middle East, North $
289 $
319 $
88 $
298 $
386 (9) (25)
Africa & Asia %
%
Europe, SSA & 181 172 52 187 239 5 (24)
Russia %
%
---
Total Revenues $
470 $
491 $
140 $
485 $
625 (4) (25)
%
%
===
Adjusted Segment $
87 104 $
30 $
84 $
114 (16) (24)
EBITDA %
%
% Margin 19 21 21 17 18
% % % % % (270) bps 30 bps
Fourth-quarter 2020 Eastern Hemisphere revenues of $470 million declined 4% sequentially and 25% year-on-year.
In the Middle East, North Africa, and Asia, fourth-quarter 2020 revenues of $289 million declined 9% sequentially, primarily due to reduced drilling activity across the Middle East, the non-repeat of Completion and Production sales in Saudi Arabia from the third quarter of 2020 and projects reaching the end of their work scope in Asia.
Fourth-quarter 2020 revenues in Europe, Sub Saharan Africa and Russia of $181 million increased 5% sequentially, primarily due to increased Completion and Production sales in the North Sea and the Mediterranean, which was partially offset by seasonally lower drilling activity in Russia.
Fourth-quarter 2020 adjusted segment EBITDA of $87 million decreased $17 million sequentially, and associated margins of 19% declined 270 basis points versus the third quarter of 2020. The sequential decline in adjusted segment EBITDA was driven primarily by the non-repeat of a $12 million one-time gain on operational asset sales and, to a lesser extent, lower activity and product sales in the Middle East and Asia. Excluding the impact of the one-time gain on operational asset sales, fourth quarter 2020 adjusted segment EBITDA margins declined by 20 basis points.
Restructuring Charges
Weatherford recorded restructuring and other charges of $89 million during the quarter, primarily related to the Company's facility consolidations and headcount reductions.
About Weatherford
Weatherford is a leading wellbore and production solutions company. Operating in more than 75 countries, the Company answers the challenges of the energy industry with its global talent network of approximately 17,200 team members and approximately 390 operating locations, including manufacturing, research and development, service, and training facilities. Visit https://www.weatherford.com/ for more information or connect on LinkedIn, Facebook, Twitter, Instagram, or YouTube.
Conference Call Details
Weatherford will host a conference call on Thursday, February 18, 2021, to discuss the results for the fourth quarter and full year ending December 31, 2020. The conference call will begin at 9:00 a.m. Eastern Time (8:00 a.m. Central Time).
Listeners are encouraged to download the accompanying presentation slides which will be available in the investor relations section of the Company's website.
Listeners can participate in the conference call via a live webcast at https://www.weatherford.com/en/investor-relations/investor-news-and-events/events/ or by dialing +1 877-328-5344 (within the U.S.) or +1 412-902-6762 (outside of the U.S.) and asking for the Weatherford conference call. Listeners should log in or dial in approximately 10 minutes prior to the start of the call.
A telephonic replay of the conference call will be available until March 4, 2021, at 5:00 p.m. Eastern Time. To access the replay, please dial +1 877-344-7529 (within the U.S.) or +1 412-317-0088 (outside of the U.S.) and reference conference number 10150677.
Contacts
For Investors:
Sebastian Pellizzer
Senior Director, Investor Relations
+1 713-836-7777
investor.relations@weatherford.com
For Media:
Kelley Hughes
Director, Global Communications
+1 713-836-4193
kelley.hughes@weatherford.com
Forward-Looking Statements
This news release contains forward-looking statements concerning, among other things, the Company's quarterly and full-year net debt, forecasts or expectations regarding business outlook, cost savings plans, 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 cautioned that forward-looking statements are only predictions and may differ materially from actual future events or results, including the price and price volatility of oil and natural gas; the extent or duration of business interruptions, demand for oil and gas and depressed commodity prices associated with COVID-19 pandemic; general global economic repercussions related to COVID-19 pandemic; the macroeconomic outlook for the oil and gas industry; and operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees, remote work arrangements, performance of contracts and supply chain disruptions; our ability to generate cash flow from operations to fund our operations; and the realization of additional cost savings and operational efficiencies. 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, 2020, 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
Quarterly Condensed Consolidated Statements of Operations (Unaudited)
($ in Millions, Except Per Share Amounts)
Successor Predecessor Q4 2019
Period From Period From Non-GAAP
Quarter Ended 12/14/19 to 10/1/19 to Combined
12/31/20 09/30/20 12/31/19 12/13/19 Results
Revenues:
Western Hemisphere $
372 $
316 $
121 $
500 $
621
Eastern Hemisphere 470 491 140 485 625
---
Total Revenues 842 807 261 985 1,246
Operating Income (Loss):
Western Hemisphere 14 (2) (4) 19 15
Eastern Hemisphere (1) 5 10 30 40
---
Segment Operating Income 13 3 6 49 55
Corporate (31) (28) (5) (23) (28)
Impairments and Other Charges [1] 3 (16) (254) (254)
Restructuring Charges (92) (31) (96) (96)
Gain on Sale of Operational Assets 12
Gain on Sale of Business 8 8
---
Total Operating Income (Loss) (107) (60) 1 (316) (315)
Other Income (Expense):
Interest Expense, Net (70) (79) (12) (21) (33)
Reorganization Items (4) 5,692 5,688
Other Expense, Net 3 (20) (8) (8)
---
Net Income (Loss) Before Income
Taxes (174) (159) (15) 5,347 5,332
Income Tax Provision (21) (8) (9) (59) (68)
---
Net Income (Loss) (195) (167) (24) 5,288 5,264
Net Income Attributable to
Noncontrolling Interests 5 7 2 9 11
---
Net Income (Loss) Attributable to
Weatherford $
(200) $
(174) $
(26) $
5,279 $
5,253
===
Basic and Diluted Loss Per Share $
(2.87) $
(2.48) $
(0.37) $
5.26 n/a
Basic and Diluted Weighted Average
Shares Outstanding 70 70 70 1,004 n/a
[1] See Quarterly Selected
Statements of Operations
Information Table for details
of the impairments and other
charges by quarter.
Weatherford International plc
Full Year Condensed Consolidated Statements of Operations (Unaudited)
($ in Millions, Except Per Share Amounts)
Successor Predecessor 2019
Year Period From Period From Non-GAAP
Ended 12/14/19 to 1/1/19 to Combined
12/31/20 12/31/19 12/13/19 Results
---
Revenues:
Western Hemisphere $
1,586 $
121 $
2,620 $
2,741
Eastern Hemisphere 2,099 140 2,334 2,474
---
Total Revenues 3,685 261 4,954 5,215
Operating Income (Loss):
Western Hemisphere 18 (4) 54 50
Eastern Hemisphere 37 10 134 144
---
Segment Operating Income 55 6 188 194
Corporate (111) (5) (118) (123)
Impairments and Other
Charges [1] (1,236) (1,104) (1,104)
Restructuring Charges (206) (189) (189)
Prepetition Charges - (86) (86)
Gain on Sale of
Operational Assets 12 15 15
Gain on Sale of Business - 112 112
---
Total Operating Income
(Loss) (1,486) 1 (1,182) (1,181)
Other Income (Expense):
Interest Expense, Net (266) (12) (362) (374)
Reorganization Items (9) (4) 5,389 5,385
Other Expense, Net (53) (26) (26)
---
Net Income (Loss) Before
Income Taxes (1,814) (15) 3,819 3,804
Income Tax Provision (85) (9) (135) (144)
---
Net Income (Loss) (1,899) (24) 3,684 3,660
Net Income Attributable to
Noncontrolling Interests 22 2 23 25
---
Net Income (Loss)
Attributable to
Weatherford $
(1,921) $
(26) $
3,661 $
3,635
===
Basic and Diluted Loss Per
Share $
(27.44) $
(0.37) $
3.65 n/a
Basic and Diluted Weighted
Average Shares
Outstanding 70 70 1,004 n/a
[1] See Full Year Selected
Statements of Operations
Information Table for details
of the impairments and other
charges by quarter.
Weatherford International plc
Selected Balance Sheet Data (Unaudited)
($ in Millions)
12/31/2020 12/31/2019
---
Assets:
Cash and Cash
Equivalents $
1,118 $
618
Restricted Cash 167 182
Accounts Receivable,
Net 826 1,241
Inventories, Net 717 972
Property, Plant and
Equipment, Net 1,236 2,122
Goodwill - 239
Intangibles, Net 810 1,114
Liabilities:
Accounts Payable 325 585
Short-term Borrowings
and Current Portion of
Long-term Debt 13 13
Long-term Debt 2,601 2,151
Shareholders' Equity:
Total Shareholders'
Equity 937 2,916
Components of Net Debt [1]:
Short-term Borrowings
and Current Portion of
Long-term Debt 13 13
Long-term Debt 2,601 2,151
Less: Cash and Cash
Equivalents 1,118 618
Less: Restricted Cash 167 182
---
Net Debt [1] $
1,329 $
1,364
===
[1] Net debt is a non-GAAP
measure calculated as total
short- and long-term debt
less cash and cash
equivalents and restricted
cash.
Weatherford International plc
Selected Cash Flows Information (Unaudited)
($ in Millions)
Successor Predecessor 2019 Successor
---
Year Period From Period From Non-GAAP Three Months
Ended 12/14/19 to 01/01/2019 to Combined Ended
12/31/2020 12/31/2019 12/13/2019 Results 12/31/2020
---
Cash Flows From Operating Activities:
Net Income (Loss) $
(1,899) $
(24) $
3,684 $
3,660 $
(195)
Adjustments to Reconcile Net Income (Loss)
to Net Cash Provided By (Used In)
Operating Activities:
Depreciation and
Amortization 503 34 447 481 116
Gain on Settlement of
Liabilities Subject to
Compromise - (4,297) (4,297)
Reorganization Items - (1,161) (1,161)
Impairments and Other
Adjustments 1,318 1,013 1,013 75
Working Capital [a] 192 (25) (422) (447) 86
Other Operating Activities 96 76 (11) 65 (60)
---
Net Cash Provided By (Used
In) Operating Activities 210 61 (747) (686) 22
---
Cash Flows From Investing Activities:
Capital Expenditures for
Property, Plant and
Equipment (154) (20) (250) (270) (54)
Proceeds from Disposition
of Assets 22 84 84 9
Proceeds from Disposition
of Businesses and
Investments 11 7 328 335 10
Other Investing Activities 46 (1) (13) (14) 25
---
Net Cash Provided by (Used
in) Investing Activities (75) (14) 149 135 (10)
---
Cash Flows From Financing Activities:
Borrowings of Long-term
Debt 453 1,600 1,600 (4)
Repayments of Long-term
Debt (9) (1) (318) (319) (2)
Borrowings (Repayments) of
Short-term Debt, Net (27) (1) (347) (348) (5)
Debtor in Possession
Financing Fees and
Payments on Backstop
Agreement - (137) (137)
Other Financing Activities (69) (49) (49) (17)
---
Net Cash Provided by (Used
In) Financing Activities $
348 $
(2) $
749 $
747 $
(28)
---
[a] Working capital is defined
as the cash changes in
accounts receivable plus
inventory less accounts
payable.
Weatherford International plc
Quarterly Selected Statements of Operations Information (Unaudited)
($ in Millions)
Successor Predecessor Q4 2019
Period From Period From Non-GAAP
Quarter Ended 12/14/19 to 10/01/19 to Combined
12/31/20 9/30/20 12/31/19 12/13/19 Results
---
Revenues
Western Hemisphere $
372 $
316 $
121 $
500 $
621
Eastern Hemisphere 470 491 140 485 625
---
Total Revenues $
842 $
807 $
261 $
985 $
1,246
===
Adjusted EBITDA[1]
Western Hemisphere $
41 $
29 $
10 $
54 $
64
Eastern Hemisphere 87 104 30 84 114
---
Adjusted Segment
EBITDA 128 133 40 138 178
Corporate (30) (29) (5) (18) (23)
---
Total Adjusted
EBITDA $
98 $
104 $
35 $
120 $
155
===
Operating Income (Loss)
Western Hemisphere $
14 $
(2) $
(4) 19 $
15
Eastern Hemisphere (1) 5 10 30 40
---
Segment Operating
Income 13 3 6 49 55
Corporate (31) (28) (5) (23) (28)
Long-lived Asset
Impairments 4
Other Charges (1) (16) (254) (254)
Restructuring
Charges (92) (31) (96) (96)
Gain on Sale of
Operational Assets - 12
Gain on Sale of
Business - 8 8
---
Total Operating
Income (Loss) $
(107) $
(60) $
1 $
(316) $
(315)
===
Depreciation and Amortization
Western Hemisphere $
27 31 $
14 $
34 $
48
Eastern Hemisphere 88 87 20 54 74
Corporate 1 (1) 2 2
---
Total Depreciation
and Amortization $
116 117 $
34 $
90 $
124
===
[1] In the first quarter of 2020 the
Company began reporting adjusted
EBITDA excluding the burden of
share-based compensation and
historical periods have been
restated to reflect this
methodology. We had an immaterial
amount of share-based
compensation during 2020 and $4
million and $24 million for the
three and twelve months
Predecessor Period ended December
31, 2019, respectively. A portion
of share-based compensation
related to a reorganization
adjustment for the acceleration of
share-based compensation is
recorded in Other Charges above.
Total share-based compensation
for 2019 was $46 million. For
certain of the periods presented,
the Eastern Hemisphere Adjusted
Segment EBITDA includes the Gain
on Sale of Operational Assets.
Weatherford International plc
Full Year Selected Statements of Operations Information (Unaudited)
($ in Millions)
Successor Predecessor 2019
Year Period From Period From Non-GAAP
Ended 12/14/19 to 01/01/19 to Combined
12/31/20 12/31/19 12/13/19 Results
---
Revenues
Western Hemisphere $
1,586 $
121 $
2,620 $
2,741
Eastern Hemisphere 2,099 140 2,334 2,474
---
Total Revenues $
3,685 $
261 $
4,954 $
5,215
===
Adjusted EBITDA[1]
Western Hemisphere $
152 $
10 $
229 $
239
Eastern Hemisphere 418 30 421 451
---
Adjusted Segment EBITDA 570 40 650 690
Corporate (111) (5) (94) (99)
---
Total Adjusted EBITDA 459 35 556 $
591
===
Operating Income (Loss)
Western Hemisphere $
18 $
(4) $
54 $
50
Eastern Hemisphere 37 10 134 144
---
Segment Operating
Income 55 6 188 194
Corporate (111) (5) (118) (123)
Goodwill Impairment (239) (730) (730)
Long-lived Asset
Impairments (814) (20) (20)
Restructuring Charges (206) (189) (189)
Other Charges (183) (354) (354)
Prepetition Charges - (86) (86)
Gain on Sale of
Operational Assets 12 15 15
Gain on Sale of
Business - 112 112
---
Total Operating Income
(Loss) $
(1,486) $
1 $
(1,182) $
(1,181)
===
Depreciation and Amortization
Western Hemisphere $
134 $
14 $
171 $
185
Eastern Hemisphere 369 20 269 289
Corporate - 7 7
---
Total Depreciation and
Amortization $
503 $
34 $
447 $
481
===
[1] In the first quarter of 2020 the
Company began reporting adjusted
EBITDA excluding the burden of
share-based compensation and
historical periods have been
restated to reflect this
methodology. We had an immaterial
amount of share-based
compensation during 2020 and $4
million and $24 million for the
three and twelve months
Predecessor Period ended December
31, 2019, respectively. A portion
of share-based compensation
related to a reorganization
adjustment for the acceleration of
share-based compensation is
recorded in Other Charges above.
Total share-based compensation
for 2019 was $46 million. For
certain of the periods presented,
the Eastern Hemisphere Adjusted
Segment EBITDA includes the Gain
on Sale of Operational Assets.
Weatherford International plc
($ in Millions)
Quarterly Selected Statements of Operations Information (Unaudited) - Product Line Revenues
Successor Predecessor Q4 2019
Period From Period From Non-GAAP
Quarter Ended 12/14/19 to 10/01/19 to Combined
Product Line
Revenues 12/31/20 9/30/20 12/31/19 12/13/19 Results
Product Line Revenue by
Hemisphere:
Completion and
Production $
227 $
170 $
69 $
261 $
330
Drilling,
Evaluation and
Intervention 145 146 52 239 291
Western Hemisphere 372 316 121 500 621
Completion and
Production 237 241 67 205 272
Drilling,
Evaluation and
Intervention 233 250 73 280 353
Eastern Hemisphere 470 491 140 485 625
Total Completion
and Production 464 411 136 466 602
Total Drilling,
Evaluation and
Intervention 378 396 125 519 644
Total Product Line
Revenues $
842 $
807 $
261 $
985 $
1,246
Full Year Selected Statements of Operations Information (Unaudited) - Product Line Revenues
Successor Predecessor 2019
Year Period From Period From Non-GAAP
Ended 12/14/19 to 1/1/19 to Combined
Product Line
Revenues 12/31/20 12/31/19 12/13/19 Results
Product Line Revenue by
Hemisphere:
Completion and
Production $
859 $
69 $
1,357 $
1,426
Drilling,
Evaluation and
Intervention 727 52 1,263 1,315
Western Hemisphere 1,586 121 2,620 2,741
Completion and
Production 1,020 67 975 1,042
Drilling,
Evaluation and
Intervention 1,079 73 1,359 1,432
Eastern Hemisphere 2,099 140 2,334 2,474
Total Completion
and Production 1,879 136 2,332 2,468
Total Drilling,
Evaluation and
Intervention 1,806 125 2,622 2,747
Total Product Line
Revenues $
3,685 $
261 $
4,954 $
5,215
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 and Item 10(e) of Regulation S-K) 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
Quarterly Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
($ in Millions, Except Per Share Amounts)
Successor Predecessor Q4 2019
Period From Period From Non-GAAP
Quarter Ended 12/14/19 to 10/1/19 to Combined
12/31/20 9/30/20 12/31/19 12/13/19 Results
---
Operating Income (Loss):
GAAP Operating Income
(Loss) $
(107) $
(60) $
1 $
(316) $
(315)
Impairments and Other
Charges (3) 16 254 254
Restructuring Charges 92 31 96 96
Gain on Sale of
Operational Assets - (12)
Gain on Sale of Business - (8) (8)
---
Operating Non-GAAP
Adjustments 89 35 342 342
---
Non-GAAP Adjusted
Operating Income (Loss) $
(18) $
(25) $
1 $
26 $
27
===
Income (Loss) Before Income Taxes:
GAAP Income (Loss) Before
Income Taxes $
(174) $
(159) $
(15) $
5,347 $
5,332
Operating Non-GAAP
Adjustments 89 35 342 342
Reorganization Items - 4 (5,692) (5,688)
---
Non-GAAP Adjustments
Before Taxes 89 35 4 (5,350) (5,346)
---
Non-GAAP Loss Before
Income Taxes $
(85) $
(124) $
(11) $
(3) $
(14)
===
Benefit (Provision) for Income Taxes:
GAAP Provision for Income
Taxes $
(21) $
(8) $
(9) $
(59) $
(68)
Tax Effect on Non-GAAP
Adjustments (3) (3) 24 24
---
Non-GAAP Benefit
(Provision) for Income
Taxes $
(24) $
(11) $
(9) $
(35) $
(44)
===
Net Income (Loss) Attributable to
Weatherford:
GAAP Net Income (Loss) $
(200) $
(174) $
(26) $
5,279 $
5,253
Non-GAAP Adjustments, net
of tax 86 32 4 (5,326) (5,322)
---
Non-GAAP Net Loss $
(114) $
(142) $
(22) $
(47) $
(69)
===
Diluted Loss Per Share Attributable to
Weatherford:
GAAP Diluted Loss per
Share $
(2.87) $
(2.48) $
(0.37) $
5.26 n/a
Non-GAAP Adjustments, net
of tax 1.24 0.45 0.06 (5.31) n/a
---
Non-GAAP Diluted Loss per
Share $
(1.63) $
(2.03) $
(0.31) $
(0.05) n/a
===
Weatherford International plc
Full Year Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
($ in Millions, Except Per Share Amounts)
Successor Predecessor 2019
Year Period From Period From Non-GAAP
Ended 12/14/19 to 01/01/19 to Combined
12/31/20 12/31/19 12/13/19 Results
---
Operating Income (Loss):
GAAP Operating Income
(Loss) $
(1,486) $
1 $
(1,182) $
(1,181)
Impairments and Other
Charges 1,236 1,104 1,104
Restructuring Charges 206 189 189
Prepetition Charges - 86 86
Gain on Sale of
Operational Assets (12) (15) (15)
Gain on Sale of Business - (112) (112)
---
Operating Non-GAAP
Adjustments 1,430 1,252 1,252
---
Non-GAAP Adjusted
Operating Income (Loss) $
(56) $
1 $
70 $
71
===
Income (Loss) Before Income Taxes:
GAAP Income (Loss) Before
Income Taxes $
(1,814) $
(15) $
3,819 $
3,804
Operating Non-GAAP
Adjustments 1,430 1,252 1,252
Reorganization Items 9 4 (5,389) (5,385)
---
Non-GAAP Adjustments
Before Taxes 1,439 4 (4,137) (4,133)
---
Non-GAAP Loss Before
Income Taxes $
(375) $
(11) $
(318) $
(329)
===
Provision for Income Taxes:
GAAP Provision for Income
Taxes (85) (9) $
(135) $
(144)
Tax Effect on Non-GAAP
Adjustments (15) 14 14
---
Non-GAAP Provision for
Income Taxes $
(100) $
(9) $
(121) $
(130)
===
Net Income (Loss) Attributable to
Weatherford:
GAAP Net Income (Loss) $
(1,921) $
(26) $
3,661 $
3,635
Non-GAAP Adjustments, net
of tax 1,424 4 (4,123) (4,119)
---
Non-GAAP Net Loss $
(497) $
(22) $
(462) $
(484)
===
Diluted Income (Loss) Per Share
Attributable to Weatherford:
GAAP Diluted Income (Loss)
per Share $
(27.44) $
(0.37) $
3.65 n/a
Non-GAAP Adjustments, net
of tax 20.34 0.06 (4.11) n/a
---
Non-GAAP Diluted Loss per
Share $
(7.10) $
(0.31) $
(0.46) n/a
===
Weatherford International plc
($ in Millions)
Quarterly Reconciliation of GAAP to Non-GAAP Financial Measures - EBITDA (Unaudited)
Successor Predecessor Q4 2019
Period From Period From Non-GAAP
Quarter Ended 12/14/19 to 10/1/19 to Combined
12/31/20 09/30/20 12/31/19 12/13/19 Results
---
Net Income (Loss)
Attributable to Weatherford $
(200) $
(174) $
(26) $
5,279 $
5,253
Net Income Attributable to
Noncontrolling Interests 5 7 2 9 11
---
Net Income (Loss) (195) (167) (24) 5,288 5,264
Interest Expense, Net 70 79 12 21 33
Income Tax Provision 21 8 9 59 68
Depreciation and
Amortization 116 117 34 90 124
---
EBITDA 12 37 31 5,458 5,489
Other (Income) Expense Adjustments:
Reorganization Items - 4 (5,692) (5,688)
Impairments and Other
Charges (3) 16 254 254
Restructuring Charges 92 31 96 96
Gain on Sale of Business - (8) (8)
Share-Based Compensation - 4 4
Other Expense, Net (3) 20 8 8
---
Adjusted EBITDA [1] $
98 $
104 $
35 $
120 $
155
===
Full Year Reconciliation of GAAP to Non-GAAP Financial Measures - EBITDA (Unaudited)
Successor Predecessor 2019
Year Period From Period From Non-GAAP
Ended 12/14/19 to 01/01/19 to Combined
12/31/20 12/31/19 12/13/19 Results
---
Net Income (Loss)
Attributable to Weatherford $
(1,921) $
(26) $
3,661 $
3,635
Net Income Attributable to
Noncontrolling Interests 22 2 23 25
---
Net Income (Loss) (1,899) (24) 3,684 3,660
Interest Expense, Net 266 12 362 374
Income Tax Provision 85 9 135 144
Depreciation and
Amortization 503 34 447 481
---
EBITDA (1,045) 31 4,628 4,659
Other (Income) Expense Adjustments:
Impairments and Other
Charges 1,236 1,104 1,104
Restructuring Charges 206 189 189
Prepetition Charges - 86 86
Reorganization Items 9 4 (5,389) (5,385)
Share-Based Compensation - 24 24
Gain on Sale of Business - (112) (112)
Other Expense, Net 53 26 26
---
Adjusted EBITDA [1] $
459 $
35 $
556 $
591
===
[1] In the first quarter of 2020 the
Company began reporting adjusted
EBITDA excluding the burden of
share-based compensation.
Historical periods have been
restated to reflect this
methodology. For certain of the
periods presented, Adjusted EBITDA
includes the Gain on Sale of
Operational Assets. See
continuation of Adjusted EBITDA to
Unlevered Free Cash Flow and Free
Cash Flow in the last table.
Weatherford International plc
Adjusted EBITDA to Unlevered Free Cash Flow and Free Cash Flow (Unaudited) (Continued From EBITDA Tables)
($ in Millions)
Quarterly Year GAAP to Non-GAAP Financial Measures
Successor Predecessor Q4 2019
Period From Period From Non-GAAP
Quarter Ended 12/14/19 to 10/1/19 to Combined
12/31/20 9/30/20 12/31/19 12/13/19 Results
Adjusted EBITDA [1] $
98 $
104 $
35 $
120 $
155
Cash From (Used) for Working
Capital 86 59 (25) (18) (43)
Capital Expenditures for
Property, Plant and Equipment (54) (27) (20) (73) (93)
Cash Paid for Taxes (19) (20) (2) (24) (26)
Cash Paid for Severance and
Restructuring (28) (34) (20) (20)
Other 12 25 53 (98) (45)
Unlevered Free Cash Flow $
95 $
107 $
41 $
(113) $
(72)
Cash Paid for Interest (118) (2) (24) (24)
Free Cash Flow [2] $
(23) $
105 $
41 $
(137) $
(96)
Full Year GAAP to Non-GAAP Financial Measures
Successor Predecessor 2019
Year Period From Period From Non-GAAP
Ended 12/14/19 to 1/1/19 to Combined
12/31/20 12/31/19 12/13/19 Results
Adjusted EBITDA [1] $
459 $
35 $
556 $
591
Cash From (Used) for Working
Capital 192 (25) (422) (447)
Capital Expenditures for
Property, Plant and Equipment (154) (20) (250) (270)
Cash Paid for Taxes (79) (2) (89) (91)
Cash Paid for Severance and
Restructuring (137) (120) (120)
Other 29 53 (316) (263)
Unlevered Free Cash Flow $
310 $
41 $
(641) $
(600)
Cash Paid for Interest (232) (272) (272)
Free Cash Flow [2] $
78 $
41 $
(913) $
(872)
===
[1] In the first quarter of 2020 the
Company began reporting adjusted
EBITDA excluding the burden of
share-based compensation.
Historical periods have been
restated to reflect this
methodology. For certain of the
periods presented, Adjusted EBITDA
includes the Gain on Sale of
Operational Assets.
[2] Free cash flow is a non-GAAP
measure calculated as cash flows
provided by (used in) operating
activities, less capital
expenditures for property, plant
and equipment plus proceeds from
the disposition of assets.
Management believes free cash flow
is useful to understand liquidity
and should be considered in
addition to but not substitute cash
flows provided by (used in)
operating activities.
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SOURCE Weatherford International plc
