WFTLF - Earnings call transcript Q4 2018 | Weatherford International plc

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Operator

Good morning. My name is Carol, and I will be your conference operator today. At this time, I would like to welcome everyone to the Weatherford International Fourth Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. reminder, gentlemen, a being call As recorded. Instructions] ladies today's and is [Operator you. Thank like conference Marketing I David-Green, turn would to now the President, Engagement Senior Stakeholder over and Chief Officer. Vice Karen to your conference. Ma'am, you may begin

Karen David-Green

recorded, International call Thank you, and McCollum, a call, Weatherford's Conference President morning, and Bausch, Carol. President today's Chief is and With on Officer. have Officer; and Fourth and days. Executive be the me Christoph will welcome Call. we available Quarter for to website Good being Weatherford Today's Mark Chief Financial replay Executive Vice on XX

A Before statements, risk comments our our to factors of differ non-GAAP statements. and our may transformation. refer remind Mark's statements. presentation, for with GAAP is an Form by uncertainties our and may be we today's statements. actual audience results XX-K, Please and X-Ks forward-looking and begin cause release quarter matters which cautions SEC These our our I'd fourth like other measures forward-looking on website. and in filings accompanying strategy can to our now results, to found quarter financial could regarding our overview from provide progress include will press of comments materially our involve prepared that latest followed some on fourth risks to forward-looking reconciliation Christoph the of of included our that

now, questions. like call your Following turn welcome to And I'd these statements, prepared we Christoph. over to the

Christoph Bausch

and than $X.X levels East the reported fourth activity to was integrated XXXX. in billion, in Europe quarter Karen. oil increased drilling activity production widening from Middle a revenue essentially rigs in Revenue XXXX of and higher crude lower for United projects flat the Drilling you, Latin sales, compared and the decreased XXXX by as Evaluation third of of the in the differentials. the product America, result and $X.X of larger revenues of services the Sequentially, our fourth of quarter divestiture on billion quarter offset revenue Continental Thank Canada States lower resulting in and land modestly

loss Hemisphere. by sale to Excluding offset cloud-based activity drilling America. to quarter a increased for Latin increased Canada, in contributions compared not in majority with the reductions exchange third the levels United write-off land product loss $X.XX result revenues lower Kuwait of Europe. the provision accounting non-GAAP and The related On items States, reduced in year-end billion. low in quarter international improvements XXXX. solutions reduction of the XXXX than for in sales our exceptional of the of higher line XXXX resulted were XXXX by lower with XXXX for in charges revenues and and by and rigs, These both expenses as from in negatively were of litigation the Continental divested Negative reduced service impacted was drilling compares entirely cash a transformation diluted steep of year-over-year Canada more share product pretax $XXX America about income $XXX million year loss States, by net XXXX. $XXX and The net billion, to loss million Middle resulting the $X.XX of by goodwill. driven of of sales Weatherford Arabia, Segment driven change result in the did of were efficiencies transformation. rigs XXXX. including in portion the in with of diluted loss down our a costs in share. we million share improvements sequentially operating also and basis to America relates charge impacts million spending a or share. hemispheres XX% for in XXXX million, income in year-over-year. quarter with reduced Latin the write-off Saudi goodwill operating in of GAAP which fourth in or million sector, improved recorded sequential were U.S. as from quarter the results was efforts in of offset X% operating our capital services overall $XX to In per our the in associated quarter accounting in E&P projects fourth basis, of in United the of a efficiencies for net Eastern lower digital Non-GAAP significant impacts decline credits, sales loss rigs pumping drilling prices the East amortization a price, the quarter impacts sharp activity resulting and year-end the foreign sale per goodwill expectations $X.X a and assets oil impairment and and up unusual integrated oilfield repeat Latin land a and the were settlement and GAAP a of billion. associated improvements realized fourth the driven levels share margin The pressure the triggered operating product XXXX, a the by principles. Venezuela $X.XX almost in in and or $X vast Year-over-year, the lower was prices infrastructure a fourth $XXX in improved This non-GAAP and diluted third loss from excluding U.S. for $XXX charges per quarter, prior revenue in fourth $X quarter a

these of and liquidity point year-end two impairment any has balance about this debt was non-cash time As lowers current covenants. our goodwill an prior at from accounting a This and on by in goodwill determined levels. our required. no charge a impairment we of or This analysis, our thirds is our standard impact result factors

$X divestiture the were $XX changes and during majority and of million the by which of group we write-downs, and the to In other asset partially An offset value goodwill charge, additional million charges rigs were addition drilling These outstanding several $X in to currency non-cash related quarter. transformation, a million land fair to devaluation the $XX to credit related adjustment following in the related million the related to adjusting Angola. for restructuring recognize impairments warrant. charges

America Moving absence in as higher a and by on end Year-over-year and increased with for America, effects activity cost in America the improvements our quarter the exchange by United segment integrated a pressure of in with results $XX transformation contributions sequentially, million by increased revenues services impacts pumping hemisphere. our initiatives the revenue of rig Western in foreign quarter driven million Canada Latin America hemisphere. The Latin Compared of on United Decrementals on revenues up services Fourth was associated our and lower by overall quarter and the primarily but basis. to efforts. and pressure efficiency of by a driven transformation year-over-year sold in pump-down decreased to from In as Latin positive decrease projects $XX activity Hemisphere of resulting counts drilling parts both XXXX. incremental were result were integrated the declined across and in up million basis. revenues Canada of offset gains lower from sales higher income services oil third elevated inflation million America $XXX XXXX, as result offset The down year-over-year in by crude and U.S. were in and in Hemisphere, higher and operating from Canada the our sequential managed sequentially litigation Latin the negative fourth X%, was $XX activity differentials. services of Western Latin settlement million at levels provision offset a of the in a positive activity business integrated levels activity increased States, we States. from $XX a levels year-over-year savings

to $XX driven negatively sales year efficiencies, to Asia number in year-over-year operating portion XXXX. fourth $X In the low-margin the product the divested services repeat a year-over-year segment result the revenue divestiture, items, products in sales of not Middle of in did from lower revenues of Compared resulted year-over-year. production higher Middle by East, transformation sequentially million of a basis, quarter $XX sale XX% Europe Europe fourth X% improvements in benefited rigs including contributions $XX of XXXX rigs fourth improved change sales million operating and reduction positive impact exceptional production the of the than an the in in of increased were million Absent quarter decreased from more Fourth the repeat accounting $XX On in was drilling in declined revenues primarily sequentially. our drilling cash and Eastern large results activity by quarter compared Year-end Venezuela revenues The East income increased on our from land up by quarter improved of Middle million impacted million XXXX, negatively sequential our not negatively the impacted operating costs efforts. XXXX up as when In lower by $XXX quarter and a East. of product the rigs revenue quarter a a to revenues results the down mix did of last drilling Hemisphere, land from the and approximately as third about XXXX. in Eastern in fourth million in basis. addition, improved impacted offsetting of and results the that impacts sequentially Hemisphere and results. in were or basis a

of recurring XXXX, million, process were with by the goal. and an the that a In previous combined with cash debt decrease $XXX the cash quarter the DSO declined first in for restructuring and put result about run overall million the Our our $XXX X XXXX, million to our cash inventory by costs. $XX operating call. approximately Inventory by improvements a manage transformation activities better decrease levels. overall million, receivables capital for $XX million decreased transformation was three of year, driven sequential provided in at as million severance, guidance us XX interest, the the by benefits were rate days. compared or line to with offset quarter previous the Customer associated recurring decreased initiative EBITDA conference day annualized initiatives provided our quarters delivered around for in a XX% amounts realized $XX working by transformation $XX fourth and of by which, fourth during in of the of Net quarter payments to

during capital segments, and were days now to million the $XX Evaluation quarter expenditures of wireline operating source a new result, Net Free for investments working during totaled As decreased capital cash the debt tools. sequentially quarter million. XXXX. DSI in Overall, flow. days. after quarter, cash expenditures million. cash decreased $XX our by and quarter directional Drilling to $XX million drilling changes by quarter contributing the XX highlighted the flow was The a were X in $XX million of during positive largest fourth $XXX outlays capital of Fourth by

During our that international land asset made associated programs. the received fourth the third the we proceeds on X at progress with the rig our cash sale divestiture announced non-core of positive the was first beginning quarter, of quarter. We tranches

$XX cash Saudi received as our of XX, in These of million Arabia. the December for XXXX. another reflected Kuwait and balances have proceeds in are for rigs $XXX the funds cash rigs We million

in closing of to our final announced in cash. for namely line the the we We total sale lines data business stated October, our business to million core through and and to operating strategy Logging CSL deal our continue Both balance X the Excellence of on transactions will Iraq. to $XX laboratory land our are with for service product the help rigs our proceeds rig December, In in going of the in to cash. forward these to logging portions surface of delever for in idle sale that sale, transactions work focus million announced we Algeria sheet. of rigs And the $XXX in complete

in generated improved the last liquidity logging to over have divestiture, data proceeds during the of the the first flow from the compared of receive labs the to of position two from combination The surface XXXX meaningfully and rigs XXXX. half net cash positive tranches of land and closing quarter the We course of expect first first sale quarter our of our quarter. the we the the and transaction free

of adjusted Our debt EBITDA whereas XXXX. net times month times XX the end metric to stood the as end ratio below dropped trailing at of of at XX XX this XXXX,

and end flow EBITDA proceeds, expect We to of free month generated EBITDA the combination by further trailing third net ratio by of XXXX. sale our to one the debt cash reduce XX

spending XXXX, total fourth to the the revenues drilling outlook. mid-single quarter Moving of down and land to we of oil prices on to from be quarter impact from the the but year, we some compared of the E&P first In positive dampen our Western some in fourth to seasonality products due likely international seasonal benefits our and the quarter U.S. rigs. delayed to are start of deliveries divestiture should digits Canada. expect to Hemisphere in impacts Subdued see the in the typical

impacted EBITDA the to weakness We North the of our a flat expect by That Sea of the as East. experience by transformation Eastern created are rigs result relatively international the in positively Russia lower divestiture Middle as seasonal revenue efforts. uplift we sequentially, and Hemisphere be to said, land adjusted our in continued well forecasting as

from expect $XX to of XXXX. to will another This quarter recurring to million rate to end during run us quarter. million. reach efforts transformation have million provide opportunity in EBITDA initiatives about XX% $XXX million $XXX completed totaling targets action benefits transformation be We overall addition plans the the of The recurring the benefits recurring is we To the first benefits by realized. to first our the of $XXX date, resulting our already incremental specific realize the expected

we sequentially. is previous capital million during traditional transformation are quarter. severance, $XX quarter. transformation collections, anticipated in expect $XX interest to $XX to a for built-in about to costs a point be The million but rise are seasonal million resulting hold. million are usually is expected to of lower be net typically remains the low and $XX first quarter and patterns $XX Cash our first cash seasonal forecasted capital taxes million expenditures million, for balances. by efforts, priority the to expected about $XX about working increase million the by $XX Working million Capital between expense $XX management a to restructuring Cash to to than to

XXXX. free expect In million contract of addition, and United to quarter. cash the in resulting to first to XXXX, States take-or-pay the settlement expected from we weakness These for previously flow the divestitures over in seasonal a proceeds related a announced make sale million payment factors for a negative overall cash related cash the litigation $XX than $XX in from flow quarter of our but more operating overcome should flows, positive the suggest

adjusted the For to full will XXXX. EBITDA initiatives year, continue during transformation drive improvement in our

$XXX We on are between with currently million forecasting deliveries to focus during and $XXX capital demand. by customer a expenditures million driven technology XXXX, be new

during the discussed cash expect we As XXXX. free prior generate on to conference call, flow positive

transformation, liquidity concern publicly our upcoming we maturities, a prices particularly result as market. on we available over of As ratio, XXXX, oil in a at created our the million year of in in high as of that combined $XXX with recognize sharp have experienced the progress our we the in end our made leverage significant reduction share continued decline price and the have debt. our the Despite well our traded

our these We part relationships key will over as that, Mark. lending call to the I concerns address explore coming will annual months. turn with discussions solutions over the With to of our

Mark McCollum

Thanks, Christoph.

throughout improve a a culture, to-date plan, to improvements. not testament beginning a the fourth establishing of a plan. variables appetites prices positive patch. or a in on to oil and thrown organization the embraced achieved repeatedly on collaborate issues, fix. to incremental solutions on and avoid their initiatives for since the is despite always risk. solid Our we've the create this their that company we made are improvements best through have our market of We of said box-checking the these We and don't completing the lot find on change, our by efficiency, changing stock that can focusing influence a EBITDA We the instead control. thrive directly foundation a needs them, over the values to whether up price, I've in directly impact also process I've do fundamentally These related all clear that for such refer far executed focus We're has can not quarter customers have results our to value. at and progress have the continue our the They're for We've plan core the cycles could oil we've we operating the can decreasing transformation non-productive meet progress It's our certain would We create work hard business evident. or exercise detailed to our with by or milestones sleeves the operating sidetracked factors a that that necessary all based of transformation that said are challenges gravity drives cost to rolled results reducing our we who and us. made path our getting the and and that so a people easy. time. be creating specific transformation these as individual our themselves. process things as to speak one-time plan, investors' internally

made to a have recognize very way that we have we go. great strides, long We also but

maturities One transformation As Weatherford. the everything targets. progress and goes mindful year, on long-term difficult working applaud of Christoph we steady results. towards said, a made we accomplish Thank impressive we we our I the our It our can the what -- and you. accomplish ensure work pressing debt Through as this challenge of of circumstances who've delivered taken company. to can show on to when together under and health we're current can all diligently our We're sustainable basis. cash on we generate need levels to employees flow

quarter final recall goal the realized transformation run distribution toward the XXXX. fourth and XXXX. most quarter quarter where at workstreams. basis more EBITDA Each We You'll by XXXX doubled XX% this The of uplift significant quarters EBITDA the a in this they on the September. the more for combined. each compared came procurement, by target end stood the manufacturing We of of rate recurring incremental to the transformation X logistics the reach $X is and our of progress end year-to-date than recognized fourth during billion of year than first a to end from of the target progress had

the recurring we an of This $XXX completed million improvements. nearly increase necessary work have call. As since today, for number conference the $XXX million represents last in of EBITDA approximately

Our transformation a from The that to increase work bound believe planning our internal range We EBITDA XXXX. we billion timeline, commitment for the $XX our to on market, designed we per help in didn't create and against still market plan transformation remains the we on value but and lot to a the market and generally WTI can collapse. end $XX deliver was target continue weren't of of anticipate our don't $X same time, at by barrel environment. a

pumping the in the customer of Consensus commodity activity around have this mitigation the to levels specific subsectors. versus being some across headed created geographies and level in States most While prices seen the for time spending associated against flat volatile pricing XXXX product our centering to lines and activity market Expectations uncertainty provides dislocations. its United spending into declines the since some down on views quarter. shifts terms XXXX, levels impacts have subsector XXXX in with last biggest negative pressure diversification E&P are and related

artificial less pumping on insulated start year Later-cycle, end at such the relatively are we pressure these the subsectors exiting know, better after from count-dependent all you look lift, the rig services, footing. to as market XXXX. of As

demand units, artificial-lift rod-lift XXXX. production maximize drive We expect strong demand on including ForeSite long-stroke systems systems, rates. for platforms, higher Declining our oil our older continuing add patch services Rotaflex will rod-lift legacy to than high relatively better digitization for the shale wells production. optimization work in with which our with production flow asset-wide which our for to harness We're data to wells

ESP and drilling with year announced technology A recently our from full This world, CapEx offerings. our out our will to to our portion wells. of new steerable working significant In Magnus both meet is addition, tools a push-the-bit on lift has the rounds Valiant include been system. customers' from budget XXXX benefit to demand. land alliance well-received allocated Magnus offshore rotary directional portfolio around our contribution

activity outlook with Our positive come on levels prior seems the stated and pricing, this essentially agreement have it our peers into the from us trend overall point. unchanged is We conference we've international an on International anticipate call. views now and in

for technologies believe and markets. overall launched single-trip introduced already are and suggest grow will have and in When TRXP the an at to the and international indicators XXXX. We shoots. grow. in RFID-enabled of markets Magnus oil in to RSS, technologies, commercialization Vero businesses benefited will we the and the in will with markets gas this demand core benefit continue together, new transformation the modest market, overall combined system believe, running of global our green growth offshore activity rate a some seeing we tubular taken XXXX supply continue completions and When continued initiatives and the our high automated environment, current to market the XXXX, including system. we backdrop favorable some from from signs single-digit International see increased new We've

our year-over-year the be no driver internal market toward Our our transformation significant ultimate also We've will the but main XXXX. EBITDA initiatives discipline goals, improvement continue to made in matter the complete to what exercising progress of brings. we're

the a establishing than and is clients We're noted time, commercial maintained the efficient, the We've launched customer to need. organization. same processes on our our before, a new they sustainable others enhanced solutions and technologies our relationships systems provide terms. As more more and pricing At we've support to new focus transformation and with about cost-cutting.

and a stories Year, we product lines success a financial to head line of New continued the multiple operational demonstrate number improvement. of As into across clear sight

In continued in horizontal performance RSS envelope longest in to-date. Mid-Continent major deployed of X drilled ahead On the its the RSS time During offshore for the the for we the the world. our push-the-bit first the fourth in In job the runs pushed profiles most around recent Mexico, The Magnus location. in separate Permian section. locations operator a drilled planned an RSS and in In quarter, quarter the RSS miles, wells, first successfully run, laterals Basin, completed directional drilling RSS our the the a X Magnus for was single at commercial the long region, U.S. customers inch runs. XX XXX schedule.

in Middle we challenging of also the vertical before East, curve and in We've East, We to several the quarter XXXX. launched anticipate RSS the ahead the countries activity where section deployed it significant kicked penetrating single first drilling drilling of across off well layers schedule. Middle a a run from anhydrite during multiple tools

of Vero rounds a tubular leaks. past inspections, in This detection tubular solutions demonstrated which risk installed of the up intelligence been using job operation per running provide technologies during prevented than year, launch our tubulars the requirements as as we well catastrophic on being production on X floor On value fourth recent personnel for company XX%, artificial equipment rig detected X,XXX Vero well the Vero by solution lift. into high-flow Vero. every as quarter, solutions the made XX improving damaged segment on This the used more further and hour from received. seven Furthermore, while well to To-date, has of of both rig-down and the and automated completions future to we much complete form removed running adds connections. to XX%. East prior to speeds from the Our run use and the XX% its passed our Middle connection capabilities connections, Vero In installations, by space, only focused the a made streamlining several installation, and reduce very and integrity, by that up have runs rig-up previously time well. reducing

to to and Pumping is ESP commercialization these by adds of surface efficiency revenue Valiant. importance operations. is powered The and ESP an that One the on solution. HPS Weatherford uptime essentially fluid The the transfer has potential Horizontal System, equal the HPS

During solution the position operator us provider the helping of quarter, is an for project, which an Iraq systems. choice company in to awarded production fourth high-flow as HPS our

to long-stroke conventional adds to perform the Rotaflex is considering portfolio. in Muerta. to Vaca in pumping technology our turned operator unit application Weatherford. Our expectations, pumping for unit high-flow the operator An Argentina failed unit competitor's an After another unconventional a to

our optimization artificial-lift our we're ForeSite analysis also technologies production geographic of of the market on which Now whole future create impact excited unit in platform. We've as new unconventional could up also us. a solutions. wells - a part installing there an enterprise-wide This allows we're to in open software for for Argentina, production platform customers

CygNet to as company cost on infrastructure of matter and global a decision fact, ForeSite the requirements. deploy reduce ForeSite its Google the oil platform. months, As platforms production a large and made international software Cloud has to optimization In recent we our released

enhancement frequency, a and ForeSite ESP customers production. failure ESPs. By reduce predictive the undergone an to reducing that downtime failure Additionally, failure has can platform before analytics major happens, it expands total our minimizing lost predicting

wells, design. Rather In relatively X a than intervention-free, XXX% TRXP enables just control the operating using capabilities pressures RFID-activated in workover makes well completions a technology tubing reading. trip. coil and washpipe, adjust introduced offshore and This lower market, surveillance, ForeSite our completions upper system, without with our installing easy adds plunger-lifted or lines, for which XX,XXX and wireline, in we've installation modeling ForeSite complete plunger-lifted wells. enables to method trial-and-error along the optimization real-time world's platform plunger-cycle intelligent the alerts, Additionally, optimization platform

West identical adjacent the in operator wells During days the we to fourth deployed first the of quarter, completed X of This the system Africa, rig Coast off time saved system time. for the this compared field.

integrated and for for rigs, rate also spread savings daily millions the in equates this contracts signed number per quarter. to a the of of latest dollars services semisubmersible of fourth We've well. the drillships Given generation

integrated a efforts well Weatherford various services In Hemisphere, commitment drilling, related awarded ADNOC helped $XXX and have intervention major and drilling and rental across product Value us services. and with the in new other a entails to equipment In In-Country for our supporting pressure managed with us operator and construction million up services. pressure facilitate a Our Eastern successful and lessons selected Offshore strategy Colombia, the other regions. X-year for contract to learned The transformation contract awarded million sector. cross-selling ADNOC's provide contract control activities. The was geographic lines. tools, private our have opportunities completions opened contract engaging the local in line $XX for results

contracts pressure The in involve United managed signing last In hangers begun contracts X-year we drilling contract drilling, have on in Kingdom first liner us integrated work contracts execution tools, awarded we an this XXXX. XX Besides the fishing others. exploration and for rental the tubular abandonments. on quarter and and began operator addition, running, X a example, of In Argentina, second quarter, in mentioned services. we service that wells

$XXX coiled in this project includes fracturing, out operator X recall, you If integrated year first tubing, and wireline, major contract Mexico, million an In treatment. completions carried fracturing unconventional testing with services. a our Weatherford

improvements a the terms. value the in production are expect validation not important and customer to also integrated part are execution, regarding under the for expectations, also on They we our contracts service internal coming of what meaningful quality see work discipline and illustrate of Our we've the exceed what the of operations wins to provided and our enabled the reinforcing we flawless These services growth commercial create only years. more prospect. increasingly customers perform but an we contract made will our The recent collaboration.

obvious quarter operations Our on and the our have each an our our contracts to results. from year-end impact technologies, next

We during XX% EBITDA highlight made outpacing goals $XXX plan, XXXX our adjusted approximately market. basis, year-over-year about halfway million that transformation to by grew the reached million the target. of we've point progress increased $XXX of achieved well transformation ultimate I'd by We have transformation Now just XXXX. over we operating our a and income towards our on XXX% like or the

in more to exceeded the service and operating have realized made represents well-received our impressive proceeds our to We ahead. levels market straight year reduction in have benefits fluctuations established customers the commercialized year improve the This during $XXX been $XXX will and our liquidity on transformation previously of technologies service enhanced support and quality We a we divestitures committed for with by us. intended, growth several drilling XX% remain land As of the this total time. two experienced this our basis. gross -- is We of by transformation years all new in this approximately from year-over-year annualized We time technology considering for XX% our quality, non-productive the fourth rigs closing customers safety, come we've highest to metric our the with expect tranches million, which of goal. recurring targets that that million. of announced distinctive a

announced In and addition, services sell laboratory we data to our business logging business. agreements surface our

of reshaped and discipline rigorous as fourth sense many witnessed been building assets. progress specifically, the Again, market goal. our forward. culture, in values, and We There your for commitment culture. new common to significant delivered collaboration I additional workshops did XXXX We demonstrated to appreciate an we're fortitude. get the dedication networks non-core distinctive mission all, this we heartfelt company technologies, well defining In Above employees launched have of and conducting also in can secured and us accomplish. our toward and results culture-shaping continue happen. truly in to financial far, firsthand we the all nights establishing strong we involved fostering difficult spite you and business driving a urgency as us made I progress, And partners foundation circumstances. thank to this unyielding and a contracts and quarter, making unite long of days a and our all that incredible during spirit this conclusion, and outstanding

Carol? transformation toward ahead, one continue you. over As Weatherford process I with that turn our spirit sustainable expect profitability coupled see urgency, forward. growth. Thank to The spirit, discipline, plan carry and our to to individual long-term back of back a that, we journey engagement, will sense the operator. transformational forge With call I'll the active accountability and

Operator

Our [Operator Hallead first from you. RBC. Kurt question Thank Kurt? comes Great. Instructions] of

Mark McCollum

now? We the for this Kurt. on technical Hi, are difficulty. apologize line you Kurt,

Kurt Hallead

we that we here? try are And again,

Mark McCollum

on. you’re Yea,

Kurt Hallead

right. All

Mark McCollum

We’re sorry.

call so We’re our from first on we’re got a the and doing line backup. Switzerland disconnect,

Kurt Hallead

opportunity thank No for as Thank And you worries. right. to you. All the questions.

to heading some the I stock the occur mind, may, voluntary restructuring in were to consideration that for as have to along out the I and play, at your it room And if capital I'm trading be guess, you where elephant last lines answered and seems most some often there of you having provided of in sort guys and given from some latter be year-end around going year. questions question XXXX. a the - in would bankruptcy? lot conversations more like guys into I the toward were of have part a serious you dynamics getting we So the That question of right, the or And the the the day with investors of of what, is lines Mark, investors. is,

could So maybe that. your provide perspective you on

Mark McCollum

recognize get real we've Obviously, the right? I'm going obviously, we these out tower most. maturities that there. XXXX to be that is are honest, mean, I we that the got question

have honest a you long have I lot time I answer thinking planning time a that For fail. of or to waste is realize away. give how like The to that us, significantly don't that, you, that to seems Kurt,

improve ultimately well of continuing coming can quarter Our be addressing customers out XXX% plan and working to to control, on for out, that as there will path focused needs our that cash transformation energy our us, continue take technologies the we this metrics, to these quarter which our and forward the and ability saying, can drive a that team forward that which The continue new and execute profitability, we and in the here is field the path is getting to and execute service to the as the do are are actions succeed. to to we as to Weatherford need credit improve flow fulfill. organization quality us improve in

trying these that we've I profitability. right pretty operationally stay do dramatic. hill if we've on But driving is in mean, equally laser-focused all we're transformation, an these significant got as now execution, to increases accomplished, really as what various it's what initiatives so are both of to steep well And you look at we our key in months, this relationships conversations, look address in at we the our maturities lending talk And that And We'll to XXXX, coming our where those energy that's year. begin to climb revolver. those go we will to maturities. will context about in is. the of have and solutions forward have as

Kurt Hallead

that candor Mark, answers. appreciate your I Great. addressing in and your you

standpoint generate as out positive call, you excess do reiterating third it again to to you'd and about generating that still were 'XX. to believe we billion $X would today. in So you an now cash EBITDA conference I an free of operational be move 'XX order in assume forward, right, guess, flow get safe quarter standpoint, in of have the from something made, talking I in that there from as in coming overall

calibrate So could dynamic? or you that help us kind recalibrate of

Christoph Bausch

Christoph Yes. here. it's Kurt,

I generate think whose there we improving most for transformation results, out. various cash results EBITDA pointed importantly flow I that us in will in XXXX further, is components getting positive the as

we our we that We promising market up working down is dial or generate which positive commitment an XXXX. I without flow free evolves. will can cash and and target betting have we the EBITDA in on investments, our our also or as capital, focus leverage around really But think

Kurt Hallead

Mark That’s it I’ll great. I and I Okay, opportunity, appreciate the turn candor appreciate your great. back.

Christoph Bausch

Thanks, Kurt.

Operator

question go next Please Suisse. from from Credit James Wicklund Our ahead. comes

James Wicklund

Kurt, primary us of Good had. all first for thank you asking question, guys. morning, And question the the which is

means - and just the candor Mark, that you, again, now talk thank about was operational the So that we and stuff. answer

Mark McCollum

like that. That's I good.

James Wicklund

first little sometimes little a think think talked with least, not a by contracts. surprised people level the bit thing investors, the market technology Weatherford, service integrated I surprised of That's about. at then the were - that and usually there's was of the you

of of highly service going you couple about? is on these that hearing basically, wormed things? and, harsh margin your projects things. these turnkey stories hearing What been have contracts to we were difference keep bid and contracts on Now lump-sum competitively lump-sum between for the quarters integrated these the generate we past Are a

Mark McCollum

from Mexico strategy, the don't think confident of far. won have that same an On honest that we've to projects. talking good margins highly have those we're into, is answer The in we been we're - ones on about overall things. we're successful The that going thus particularly generate kinds I contracts entered and the

product best really the the Weatherford improving work, to think work shaping I two across to we really to our for really us, culture that lines. hard of collaborate things. are means difference and to mean, the entity, our had their you which as them bring managing executing That's get speaks as on execution been ability a to white relying so I there on transformational not technologies we One, customers part service results. in improving overall forward, your your space only well, the and these order but best contracts. your good at do well, out

significantly, so helping and And improved on we've worked us there. have that and that that's

the price sort at they've the buying going customer situations cases, to The seen through side, other is hope wasn't in somebody market the I customer. some honest, bring to They're share. it the to win to where it with going being to And enough chase these that least decides profitability. think when so, in upsells that in so secured I'm a some bought contract, also -- disciplined and their just other market being has in the something you've line but of improve order of not they're in - top to - the get doing initially else their

doesn't that's relationships. a dangerous things for I customer I think, margins. lower and I game. tease it obviously, And also, lower returns It think up build think

side mean, ideals and well. obviously, my that doing services taking disciplined on other been, executing around even prior our as geology, bets I've The well, on I in position, always right,

I not not in a so we're that time. risk. at taking that that. of of that market requires the think time you that geologic at We're that some this know this I entailed point the taking the that frankly, on risk because to discipline see contracts don't in I production doing are so part with That's that higher that have really offset We're doing risk and And quite around in game, pricing execution.

James Wicklund

restructured communications siloed be involve was how - manufacturing a it transition helpful. of little tried company. service, a How what you has talk Weatherford. that's a to different - and to about the a the exceptionally was provider Can - been silos accomplish Okay, part drill And integrated used -- I The And has acquisitions I'm somewhat just make of a ago made, are if And to internal service Baker operations but from silos down it work? I you've in bit, that it to that? Hughes little product lost going you by difficult. company decade how contracts in bit the to lot making siloed. the this Weatherford and typically whole could. completely

Mark McCollum

So of ways. a different couple

the of XXXX did end of the that is we the the way things operated. change matrix is Weatherford at One organizationally

people lines they on execution phase because to Before, all had each in bright and to every coal the whatever independent we line were other, technology the other. come is sort interface. way in I operated from all see the in. everything a and operating capital we And from somewhat that calling from customers terms allocation product independent product and market but of of have mean, dozens of from Weatherford, I love customer say, customer each dozens us line they

charge the relationship primary and is so, in execution our then manufacturing, of are lines sort serve the but them, in of up the capital in hemispheres. geozone in the the of And product customer of customer allocation, leadership tucked relationship technologies, So owned hands new the the product business by under business to to them the restructured geozones. doing strategy, we line right? the put The

them work but listening and doing need they're gives organization, an and you that's We deeper the support have manager working strategic by having part account craft from as more that's of all all sounds and... supported lot sales who's us customers But also the them, that going that. we've and what chart, each a sales the when that work of our -- account a still doing do lines with right? force made But technical squishy, culture, a been lines on scenes there, being relationships. where yet, it an to and similar changes to across opportunity that of organization structure product solution product to their team now multi-product building right, helps that an the management they that's the to line, Behind stronger

James Wicklund

to had your culture. you've Yes, change

Mark McCollum

transformation, hats to off and my still and team my Where I when sales were at each okay, sharing -- you different sales we exactly. have of I than They're a and through refocusing developing time done we're spending to culture-shaping in mean, out just to collaborating trying grow a and know I together way. but job borne relationships, environment these at we better on and Yes, hard have they're we they're - 'XX, on other. just we're results, just the still look honestly, do be and fruit an create our And it's to mean, And working, better that of just this see -- That when to all - leadership process. is we're permeating as we more try mean, more We think to But guys going that basis. starts did. going who you're foster I go could collaborative this been and working top. just overall part

James Wicklund

Thank you. its working. like Best of luck. Mark, Looks I it. appreciate

Mark McCollum

Thanks, James.

Operator

comes Sean Our go question from ahead. JPMorgan. next from Please Meakim

Mark McCollum

Sean. Hey,

Sean Meakim

Thank you. Hi.

So revolver. liquidity the I I right in sheet. latest hoping was on just that's can priority managing maybe the the now your in top I get assume thinking terms balance of

towards months? that at the worked will is case few base focus the And the point the say turn some out XXXX away to fair it is chipping at Just, to then next and in XXXX? get

Christoph Bausch

is this Sean, Christoph. Yes.

exactly that, we what As in remarks prepared doing. are I mentioned that's my

key - we at maturities. other And relationships revolver. discussing the are we of our annual our part pieces of process, of are looking looking renewal as We upcoming also lending with are

well, So We'll -- let you and we land. proceed where we on stay know tuned. as

Sean Meakim

EBITDA that you reduction just pieces those work - about management? as And of I'm liability much how enough. that year-end in would growth terms how much EBITDA the 'XX, thinking how Fair thinking the of you're Okay. about third characterize one together. versus talking about of

Christoph Bausch

both together. They work

we before. little have we think And pieces that of our gave can you, talked of out. think So improvements. it bit it's I And EBITDA I a we about you model divestitures the the pieces

and to on We are execute work on continuing them them.

will combination which So to reduction. X/X both, it's contribute of that a Sean,

Mark McCollum

point difficult, I which cash we've notional at on -- right? either this of talked using the and guess positive time dispositions the position be a we've in while reducing collection period some in not flow. that year, to from buttress net at time, debt. those our that point, expect the we're done and, means EBITDA us liquidity we're dispositions, some of reduce debt cash As we about, add the help we'll That flow during means the monies the to basis real but the to

Sean Meakim

one if Got last it. that, And of could. I piece

about the convertible bucket, thinking thinking about XXXX you the Just than differently are unsecured? the notes

Mark McCollum

out time, that's tuned. we'll that As in there. so we've talked stay -- -- Not about, address we're

Sean Meakim

Okay. Thank you.

Operator

comes next go James ISI. from ahead. question Our from Please West Evercore

Mark McCollum

James. Hi,

James West

you've has. addressed lot the market a guess I And done concerns, that of a the I you've think, great job.

on guys as front. transformation done You have job a the great organization an

organization One want R&D of applaud, kind on of keep infrastructure of certainly as which there's I background with back the sure we within CapEx, in profitability? to competition? is enough reduction no make in you to I up have the concerns get the that kind to but going the sustainable spending you on atrophy the with are

Mark McCollum

efforts kind of any The mean, answer reduction is of R&D I don't yes, spend. result transformational we believe our we are. in

more put into anything, monies if at it. to fact, some trying we're In margin, the

and a we're entered the RSS, Magnus there's that's concept from believe these faster any I on. not be technology we're Magnus. but ever And see I up, the in tool mean, to where what And trying you steerable don't so market new about than we're working spending it's not it's introductions, dramatic, doubling commercialization, as the rotary to money prudent

that really it's so And save execution, sort there. dollars around around to

of East. enhancing is the increases serve spending, We're around We to to world we're make may expand or in around facilities. the the in as capital Middle facilities we we're our our build seeing manufacturing. like and consolidating but other camps our continue out. to work ability enhancements SCOOP/STACK areas consolidating customers. part and of efficiency areas product own out there. side, transformation, the part camps And the That Basin, get U.S. other consolidating we're our the That The in our in and Permian

So there's capital being spent there.

the kind that pressure others. on fairly And have to we return-generating rigs. the that shopping of down And continuing, the business of continuing term, others requirements a of spend around few we're not to to that pumping organization. on we're the that we're lines manage us, we're capital good significant real money trying have reason look part a spend not to news relative having For numbers money have and be to on down and, year-over-year, basis, on several that is and having lean we're a be long our focus light

James West

then Okay, from on side the a And international of perfect. me follow-up the business.

that points actually very picking data I'm up being pricing, a -- disciplined guys you tenders. is large the that high you high already are on on are While a bidder several

for of sort can more rational behaving get mean behaving, for to -- growth. industry. more single-digit some high rest undercutting not Or Is what you're of single So market leverage rational, the real this so you? we see the the that pricing by I

Mark McCollum

I could on that say all would I think could We say, mean, we I you -- of you there and obviously -- do do better, all okay? pockets better. guys rationality calls. are other onto

investors You're expect. certainly that -- is to as for I'm sort not. mean, going I anything. an entire not say us of in not our the room generating we're returns sector the We're elephant

asset of discipline, to step our takes and it. for being also trying in is and cover but We have to do we're price part. a And understanding well efficiency And in there it there's -- long being go. that way part what to costs our and ask

still to You see it, a ways but we have go.

James West

it. Got

Thanks, Okay. Mark.

Mark McCollum

Thanks, James.

Operator

from Tudor, Pickering, Pope Holt. question Our Please next go from comes Byron ahead.

Byron Pope

this of for Eastern through of all this see in you the do budgeting operating business it X frame context growth where growth be North But aside coming Weatherford from went business units, for and near-term X whether most year, you could some where and America thinking or global year the headwinds? opportunities, as your Hemisphere? again, are capital Mark, the units, morning. Western at the putting process excited for Good you about the the the about in you us

Mark McCollum

around spread ticket, our significantly. of try I a price. mean. kind to budgets could it dollars Well, see what be we highlight customers, completions American completions mean, because that is down everybody you through hear apply. I may and I are of to down, coming maybe those back America. and customers, more North think even well as come of to got I I focus tied they've more around customers in in, that through And while have telling has speak are talked about them, -- going -- issues budgets capital you North has will up, pricing mean, have despite in things be XX% the the cost I one few mean, the they may me But their that to when 'XX We -- enhancing we production. of the interesting come key from worked capital us

their or that the pads their of the or right pads in cash elsewhere. production them they flows in I zeroed them put getting pretty I to the realizing that's as start insight particularly So ForeSite And spend call up more for our intrigued cycle a got systems. to into ability to and systems, production about fulfilled. turns drive programs enhancing our of well platform we happening have later-cycle cash really is how as right? artificial-lift what excited even - wheelhouse, are returns, guys and could number sort that's pocket You am behaving are talked gain getting various that going by customers are of that's our Well in more capabilities our actually as artificial-lift about, on what

could I'm most leading about enhance. I it lend to has this continue it's the it us we're in been excited would So about the -- for -- area, will production. really that excited U.S, and I'm East Middle seeing say in And but what

is hiccups. had Middle right? Magnus. everybody, from directional get customers in we I The view, The but been, Permian, through. successful. about earlier, it they some Magnus performing it. But drilling, I'm you my hoping the was talked telling second is now, East in We We've it our the And want even to the exceptionally in worked well. we'd widely has right that

we'll application, able In runs and they're less to so going build because of biggest fact, sure the at is go tools maintenance. I -- those news that good to enough with tools actually being Christoph. require less because those challenge is looking hot. making work they're they I'm and in do think And per Christoph's of the we fast go single

And so I'm excited services, the about I that's portends. directional Vero, drilling Tubular managed running what drilling. in that mean, and pressure

of offshore, running tubular on that number The we're service a that have packages green in being beginning are managed most we're space. to experiencing and shoots sold. pressure at We drilling see the

many business. I'm It's demand. that's thinking we that, to times to there's the been were capital 'XX, one pick spend, of up. Completions market out. to just tools of trying to deliver execute ability because in continue continues so to through transformation our our is And more steady going most along our profitable. of the improve Part to sort And sold are Eddy It actually the -- go way.

that we feel to well. about good so continue as And

Byron Pope

really I helpful. appreciate Thanks, it. Its Mark.

Mark McCollum

Sure.

Mark McCollum

right. All

of I back can Carol, think we we hand time. you over close are it out to call. to the

Operator

call, conclude This does Certainly. and conference may disconnect. today's you now

Weatherford International (WFRD) 1 Feb 192018 Q4 Earnings call transcript