Weatherford International plc - FORM 8-K - EX-99.1 - EXHIBIT 99.1 PRO FORMA FINANCIALS OF DISPOSED KUWAIT AND SAUDI RIGS - December 7, 2018

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EX-99.2 - EXHIBIT 99.2 PRESS RELEASE FOR COMPLETED DISPOSITION OF KUWAIT AND SAUDI RIGS - Weatherford International plcex992pr-completeddispositi.htm
8-K - FORM 8-K COMPLETION DISPOSITION OF KUWAIT AND SAUDI DRILLING RIGS - Weatherford International plca8-kcompleteddispositionso.htm


Exhibit 99.1


WEATHERFORD INTERNATIONAL PLC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of November 30, 2018, Weatherford International plc (“Weatherford”) has closed on the first two of a series of four closings of the previously announced sale of its land drilling rigs operations in Algeria, Kuwait and Saudi Arabia, as well as two idle land rigs in Iraq, to ADES International Holding Ltd. (“ADES”), for a purchase price of $287.5 million, subject to potential adjustments based on working capital, net cash, loss or destruction of rigs and drilling contract backlog shortfall. We received gross cash proceeds of $215.5 million in connection with the first two closings of the Kuwait and Saudi Arabia land drilling rigs operations, and the assets, liabilities of these two operations have been transferred to ADES. The closing of the sale of the land drilling rigs operations in Kuwait and Saudi Arabia included 23 drilling rigs and approximately 1,900 employees.

The entire series of transactions includes a total 31 land drilling rigs and related drilling contracts, as well as approximately 2,300 employees and contract personnel. The Sale and Purchase Agreements allow for a series of four closings, on a country-by-country basis, the majority of which are expected to be completed by year-end 2018, following any required regulatory approvals, consents and other customary closing conditions.

The unaudited pro forma condensed consolidated balance sheet of Weatherford International plc as of September 30, 2018 and the unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2017 and for the nine months ended September 30, 2018 were derived from our historical condensed consolidated balance sheet and statements of operations. The unaudited pro forma condensed consolidated statement of operations gives effect to the disposition of land drilling rigs operations in Kuwait and Saudi Arabia as if the dispositions occurred on January 1, 2017. The unaudited pro forma condensed consolidated balance sheet assumes the disposition of land drilling rigs operations in Kuwait and Saudi Arabia occurred on September 30, 2018. The following unaudited pro forma condensed consolidated financial information should be read in conjunction with our historical financial statements and accompanying notes.
    
The pro forma adjustments are based on the best information available and assumptions that management believes are factually supportable and reasonable; however, such adjustments are estimates and subject to change. The unaudited pro forma condensed consolidated information is for illustrative and informational purposes only and is not intended to reflect what our condensed consolidated financial position and results of operations would have been had the disposition occurred on the dates indicated and is not necessarily indicative of our future condensed consolidated financial position and results of operations.

The pro forma adjustments remove the Kuwait and Saudi Arabia land drilling rigs operations, assets, liabilities and results of operations, and give effect to the following items:

•
An adjustment to reflect the net cash proceeds used to repay debt;
•
An adjustment to interest expense associated with the repayment of company debt; and
•
An adjustment to reflect accrued liabilities for estimated professional fees and closing costs related to the sale of the land drilling rigs operations in Kuwait and Saudi Arabia.

Our unaudited pro forma condensed consolidated statements of operations do not include adjustments for all of the costs of operating after the disposition of the land drilling rigs operations in Kuwait and Saudi Arabia, since they are not factually supportable and recurring.


1


WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED DECEMBER 31, 2017
 
 
 
 
 
 
 
 
 
 
 
Weatherford
 
Disposed
 
Pro Forma
 
 
(Dollars in millions, except per share amounts)
 
Historical
 
Businesses
 
Adjustments
 
Pro Forma
Total Revenues
 
5,699

 
(216
)
 
—

 
5,483

 
 
 
 
 
 
 
 
 
Costs and Expenses:
 
 
 
 
 
 
 
 
Cost of Products and Services
 
4,889

 
(219
)
 
—

 
4,670

Research and Development
 
158

 
—

 
—


158

Selling, General and Administrative Attributable to Segments
 
910

 
(14
)
 
—


896

Corporate General and Administrative
 
130

 
—

 
—


130

Long-Lived Asset Impairments, Write-Downs and Other Charges
 
1,664

 
(407
)
 
—

 
1,257

Restructuring Charges
 
183

 
—

 
—

 
183

Gain on Sale of Businesses and Other
 
(106
)
 
—

 
—


(106
)
Total Costs and Expenses
 
$
7,828

 
$
(640
)
 
$
—

 
$
7,188

 
 
 
 
 
 
 
 
 
Operating (Loss) Income
 
$
(2,129
)
 
$
424

 
$
—

 
$
(1,705
)
 
 
 
 
 
 
 
 
 
Net Interest and Other Expense
 
(527
)
 
—

 
12

(a)
(515
)
Loss Before Income Taxes
 
(2,656
)
 
424

 
12

 
(2,220
)
Provision for Income Taxes
 
(137
)
 
1

 
—

 
(136
)
Net Loss
 
(2,793
)
 
425

 
12

 
(2,356
)
Net Income Attributable to Noncontrolling Interests
 
20

 
(2
)
 
—

 
18

Net Loss Attributable to Weatherford
 
$
(2,813
)
 
$
427

 
$
12

 
$
(2,374
)
 
 
 
 
 
 
 
 
 
Loss Per Share Attributable to Weatherford:
 
 
 
 
 
 
 
 
Basic
 
$
(2.84
)
 
 
 
 
 
$
(2.40
)
Diluted
 
$
(2.84
)
 
 
 
 
 
$
(2.40
)
 
 
 
 
 
 
 
 
 
Weighted Average Shares Outstanding:
 
 
 
 
 
 
 
 
Basic
 
990

 
 
 
 
 
990

Diluted
 
990

 
 
 
 
 
990



See accompanying notes to the unaudited pro forma condensed consolidated financial statements.



2


WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 2018
 
 
 
 
 
 
 
 
 
 
 
Weatherford
 
Disposed
 
Pro Forma
 
 
(Dollars in millions, except per share amounts)
 
Historical
 
Businesses
 
Adjustments
 
Pro Forma
Total Revenues
 
4,315

 
(183
)
 
—

 
4,132

 
 
 
 
 
 
 
 
 
Costs and Expenses:
 
 
 
 
 
 
 
 
Cost of Products and Services
 
3,393

 
(151
)
 
—

 
3,242

Research and Development
 
106

 
—

 
—


106

Selling, General and Administrative Attributable to Segments
 
591

 
(10
)
 
—


581

Corporate General and Administrative
 
101

 
—

 
—


101

Long-Lived Assets Impairments, Asset Write-Downs and Other
 
159

 
(47
)
 
—


112

Restructuring and Transformation Charges
 
90

 
—

 
—

 
90

Total Costs and Expenses
 
$
4,440

 
$
(208
)
 
$
—

 
$
4,232

 
 
 
 
 
 
 
 
 
Operating Loss
 
$
(125
)
 
$
25

 
$
—

 
$
(100
)
 
 
 
 
 
 
 
 
 
Net Interest and Other Expense
 
(490
)
 
—

 
9

(a)
(481
)
Income Before Income Taxes
 
(615
)
 
25

 
9

 
(581
)
Provision for Income Taxes
 
(80
)
 
3

 
—

 
(77
)
Net Loss
 
(695
)
 
28

 
9

 
(658
)
Net Income Attributable to Noncontrolling Interests
 
13

 
(2
)
 
—

 
11

Net Loss Attributable to Weatherford
 
$
(708
)
 
$
30

 
$
9

 
$
(669
)
 
 
 
 
 
 
 
 
 
Loss Per Share Attributable to Weatherford:
 
 
 
 
 
 
 
 
Basic & Diluted
 
$
(0.71
)
 
 
 
 
 
$
(0.67
)
 
 
 
 
 
 
 
 
 
Weighted Average Shares Outstanding:
 
 
 
 
 
 
 
 
Basic & Diluted
 
996

 
 
 
 
 
996



See accompanying notes to the unaudited pro forma condensed consolidated financial statements.


3


WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF SEPTEMBER 30, 2018
 
 
 
 
 
 
 
 
 
Weatherford
 
Disposed
 
 
(Dollars in millions, except per share amounts)
 
Historical
 
Businesses
 
Pro Forma
Current Assets:
 
 
 
 
 
 
Cash and Cash Equivalents
 
$
393

 
$
—


$
393

Accounts Receivable, Net
 
1,155

 
—


1,155

Inventories, Net
 
1,097

 
—


1,097

Other Current Assets
 
467

 
8

(b)
475

Current Assets Held for Sale
 
618

 
(254
)
(c)
364

Total Current Assets
 
3,730

 
(246
)
 
3,484

 
 
 
 
 
 
 
Property, Plant and Equipment, Net
 
2,157

 
—

 
2,157

Goodwill
 
2,632

 
—

 
2,632

Other Intangible Assets, Net
 
192

 
—

 
192

Other Non-Current Assets
 
127

 
—

 
127

Total Assets
 
$
8,838

 
$
(246
)
 
$
8,592

 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
Short-term Borrowings and Current Portion of Long-term Debt
 
$
396

 
$
(216
)
(d)
$
180

Accounts Payable
 
728

 
—


728

Accrued Salaries and Benefits
 
241

 
—

 
241

Income Taxes Payable
 
231

 
—

 
231

Other Current Liabilities
 
654

 
8

(e)
662

Current Liabilities Held for Sale
 
49

 
(36
)
(c)
13

Total Current Liabilities
 
2,299

 
(244
)
 
2,055

 
 
 
 
 
 
 
Long-term Debt
 
7,626

 
—

 
7,626

Other Non-Current Liabilities
 
421

 
—


421

Total Liabilities
 
10,346

 
(244
)
 
10,102

 
 
 
 
 
 
 
Shareholders’ Equity:
 
 
 
 
 
 
Shares - Par Value $0.001; Authorized 1,356 shares, Issued and Outstanding 1,000 shares
 
1

 
—

 
1

Capital in Excess of Par Value
 
6,702

 
—

 
6,702

Retained Earnings
 
(6,568
)
 
7

(f)
(6,561
)
Accumulated Other Comprehensive Loss
 
(1,688
)
 
—

 
(1,688
)
Weatherford Shareholders’ Equity
 
(1,553
)
 
7

 
(1,546
)
Noncontrolling Interests
 
45

 
(9
)
(g)
36

Total Shareholders’ Equity
 
(1,508
)
 
(2
)
 
(1,510
)
Total Liabilities and Shareholders’ Equity
 
$
8,838

 
$
(246
)
 
$
8,592


See accompanying notes to the unaudited pro forma condensed consolidated financial statements.


4


WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(a)
Represents the adjustment to interest expense resulting from the assumed repayment of company debt.
(b)
Represents a receivable for the reimbursement of capital expenditures related to the sale of the land drilling rigs operations in Kuwait and Saudi Arabia.
(c)
Represents the removal of the property, plant and equipment, inventory, other assets and liabilities, which were classified as held for sale, from the balance sheet due to the sale of the land drilling rigs operations in Kuwait and Saudi Arabia.
(d)
Represents the cash proceeds of $215.5 million from the sale of the land drilling rigs operations in Kuwait and Saudi Arabia, before closing costs and customary post-closing working capital adjustment, used to repay debt.
(e)
Represents accrued liabilities for estimated professional fees and closing costs related to the sale of the land drilling rigs operations in Kuwait and Saudi Arabia.
(f)
Represents the operating results, including any gain or loss on sales, that would have been recorded as of September 30, 2018.
(g)
Represents the removal of income attributable to noncontrolling interest owners due to the sale of the land drilling rigs operations in Kuwait and Saudi Arabia.





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