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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): JUNE 19, 2000
WEATHERFORD INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
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<S> <C> <C>
DELAWARE 1-13086 04-2515019
(State of Incorporation) (Commission File No.) (I.R.S. Employer Identification No.)
515 POST OAK BLVD., SUITE 600
HOUSTON, TEXAS 77027
(Address of Principal Executive Offices) (Zip Code)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 693-4000
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EXHIBIT INDEX APPEARS ON PAGE 8
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ITEM 5. OTHER EVENTS
ALPINE ACQUISITION
On June 19, 2000, we announced the signing of an agreement to acquire
Alpine Oil Services Corporation (Toronto:ASL) for approximately U.S. $55 million
in our common stock. The Alpine acquisition, which has been approved by Alpine's
and our boards of directors, is subject to the approval of two-thirds of
Alpine's shareholders and Canadian regulatory and judicial authorities. Holders
of approximately 34% of the outstanding shares of Alpine have previously agreed
to support and vote for the acquisition. Under the terms of the agreement, we
have agreed to pay Canadian $2.50 for each share of Alpine common stock, payable
in our common stock. For the purposes of the transaction, the value of our
common stock will be determined based on the average common stock closing price
for the 10 days prior to the close of the acquisition. A copy of the press
release announcing the signing of the Alpine agreement is filed as Exhibit 99.1
and is incorporated in this report by reference.
On June 29, 2000, Alpine obtained an interim order from the Court of
Queen's Bench of Alberta providing for the calling and holding of a meeting of
Alpine shareholders for August 4, 2000. If the Alpine shareholder meeting is
held as scheduled and shareholder approval is obtained and any other necessary
conditions are satisfied or waived, Alpine will apply to the Court of Queen's
Bench of Alberta on August 9, 2000 for a final order approving the transaction.
Closing of the acquisition is expected to occur shortly after the August 9th
hearing.
CONVERTIBLE DEBT OFFERING
On June 26, 2000, we announced the pricing in a private placement of
approximately $500 million of 20-year zero coupon convertible senior debentures
due 2020. A copy of the press release announcing the pricing of the debentures
is filed as Exhibit 99.2 and is incorporated in this report by reference.
On June 30, 2000, we issued $910,000,000 principal amount at maturity
of the debentures pursuant to a Second Supplemental Indenture entered into with
The Bank of New York, as trustee, and a Purchase Agreement, dated June 26, 2000
with Morgan Stanley & Co. Incorporated, as initial purchaser. The issue price
was $551.26 for each $1,000.00 in face value, which provided net proceeds to us
of approximately $491.9 million (potentially up to $567.7 million if the
over-allotment is exercised in full). The issue price represents a
yield-to-maturity of 3%. The debentures will be convertible into shares of our
common stock at a rate of 9.9970 shares per $1,000.00 face value, subject to
adjustment in certain circumstances. We may redeem the debentures at any time
after five years from the date of issuance, and debenture holders will have the
right to require us to repurchase the debentures, in cash or our common stock at
our option, on the fifth, tenth and fifteenth anniversaries of the date of
issuance. We have agreed to register for resale the debentures and the common
stock issuable upon conversion or repurchase of the debentures, pursuant to a
Registration Rights Agreement dated as of June 30, 2000, between us and Morgan
Stanley.
Copies of the Second Supplemental Indenture, Registration Rights
Agreement, Purchase Agreement and the press release announcing the issuance of
the debentures are filed as Exhibits 4.1, 4.2, 10.1 and 99.3 to this report and
are incorporated in this report by reference.
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DAILEY ACQUISITION
We previously announced that on August 31, 1999, we completed the
acquisition of Dailey International Inc. pursuant to a pre-negotiated plan of
reorganization in bankruptcy that was approved by the United States Bankruptcy
Court for the District of Delaware. This current report on Form 8-K contains pro
forma financial information for us and Dailey. For additional pro forma
financial information for us and Dailey, you should read our current reports on
Form 8-K dated May 21, 1999, August 16, 1999, August 31, 1999, October 22, 1999
and November 12, 1999.
The following summary unaudited pro forma condensed consolidated
financial data gives effect to the acquisition of Dailey by us. The financial
data is based on our historical financial data and the historical financial data
of Dailey. The Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the twelve months ended December 31, 1999, gives effect to our
acquisition of Dailey as if the transaction had occurred on January 1, 1999. The
pro forma information set forth below is not necessarily indicative of the
results that actually would have been achieved had such transaction been
consummated as of the aforementioned dates, or that may be achieved in the
future.
All other acquisitions by us are not material individually or in the
aggregate; therefore, pro forma information is not reflected. Because this pro
forma information is a summary, it does not contain all information that may be
important to you. You should also read the following:
o Our Quarterly Report on Form 10-Q for the period ended March 31,
2000.
o Our Annual Report on Form 10-K for the year ended December 31,
1999.
o Our Current Reports on Form 8-K dated May 21, 1999, August 16,
1999, August 31, 1999, October 22, 1999, November 12, 1999,
January 31, 2000, February 11, 2000, March 6, 2000 and
April 17, 2000.
o Dailey's Management's Discussion and Analysis of Financial
Condition and Results of Operations and its financial statements
and related notes thereto contained in its Annual Report on Form
10-K for the year ended December 31, 1998.
o Dailey's Quarterly Report on Form 10-Q for the period ended March
31, 1999.
o Dailey's Quarterly Report on Form 10-Q for the period ended June
30, 1999.
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WEATHERFORD INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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DAILEY HISTORICAL
FOR THE EIGHT
WEATHERFORD MONTHS ENDED PRO FORMA WEATHERFORD
HISTORICAL AUGUST 31, 1999 ADJUSTMENTS PRO FORMA
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Revenues .......................................... $ 1,240,000 $ 68,507 $ (1,264)(a) $ 1,307,443
----------- --------------- ----------- -----------
Costs and expenses:
Cost of sales .................................. 893,893 63,205 (4,181)(a)(b) 952,917
Selling, general and
administrative ............................... 282,107 22,506 2,743 (c) 307,356
Reorganization costs ........................... -- 2,706 -- 2,706
Equity in earnings of
unconsolidated affiliates .................... (2,618) (634) -- (3,252)
----------- --------------- ----------- -----------
1,173,382 87,783 (1,438) 1,259,727
----------- --------------- ----------- -----------
Operating income (loss) ........................... 66,818 (19,276) 174 47,716
----------- --------------- ----------- -----------
Other income (expense):
Interest expense ............................... (44,904) (11,618) 11,105 (d) (45,417)
Interest income ................................ 3,179 983 (1,122)(e) 3,040
Other, net ..................................... 3,291 17 -- 3,308
----------- --------------- ----------- -----------
(38,434) (10,618) 9,983 (39,069)
----------- --------------- ----------- -----------
Income (loss) before income taxes ................. 28,384 (29,894) 10,157 8,647
Provision for income taxes ........................ 8,477 510 3,555 (f) 12,542
----------- --------------- ----------- -----------
Income (loss) before minority interests
19,907 (30,404) 6,602 (3,895)
Minority interest expense,
net of taxes ................................... 3,701 -- -- 3,701
----------- --------------- ----------- -----------
Income (loss) from continuing
operations ..................................... $ 16,206 $ (30,404) $ 6,602 $ (7,596)
=========== =============== =========== ===========
Income (loss) from continuing operations per share:
Basic ........................................ $ 0.16 $ (0.07)
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Diluted ...................................... $ 0.16 $ (0.07)
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Weighted average shares
outstanding:
Basic ........................................ 101,245 104,109(g)
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Diluted ...................................... 102,889 104,109
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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
General
The following notes set forth the assumptions used in preparing the Unaudited
Pro Forma Condensed Consolidated Statement of Operations. The pro forma
adjustments are based on estimates made by Weatherford's management using
information currently available.
Pro Forma Adjustments
The adjustments to the accompanying Unaudited Pro Forma Condensed Consolidated
Statement of Operations are described below:
(a) To eliminate revenue of $1.3 million and related costs of $0.9
million for the eight months ended August 31, 1999 associated with
transactions between Dailey and Weatherford.
(b) To reverse depreciation expense of $3.2 million for the eight
months ended August 31, 1999 to reflect the write-down of
property, plant and equipment to fair market value. Such property,
plant and equipment is being depreciated over five years.
(c) To record amortization of $2.7 million for the eight months ended
August 31, 1999 for goodwill related to acquisition of Dailey.
Such goodwill is being amortized over 20 years.
(d) To eliminate interest expense to reflect the retirement of
Dailey's 9 1/2% Senior Notes due 2008 (the "Senior Notes").
(e) To eliminate Weatherford's interest income related to its
investment in the Senior Notes.
(f) To record the income tax provision related to the effect of the
pro forma adjustments at the statutory rate.
(g) Weatherford's historical shares outstanding and basic weighted
average pro forma shares outstanding as of December 31, 1999 were
108,293,255 and 104,108,955, respectively.
The historical financial statements of Dailey have been previously filed
by us as follows:
o Consolidated financial statements of Dailey as of December 31,
1998 and 1997 and for the year December 31, 1998, the eight month
period ended December 31, 1997 and for each of the two years in
the period ended April 30, 1997 were filed as Exhibit 99.2 to our
Current Report on Form 8-K dated May 21, 1999.
o Condensed Consolidated financial statements of Dailey for the
quarterly period ended March 31, 1999 were filed as Exhibit 99.3
to our Current Report on Form 8-K dated May 21, 1999.
o Condensed Consolidated financial statements of Dailey for the
quarterly period ended June 30, 1999 were filed as Exhibit 99.1 to
our Current Report on Form 8-K dated August 16, 1999.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
4.1 Second Supplemental Indenture dated June 30, 2000, between
Weatherford International, Inc. and The Bank of New York, as
trustee (including form of Debenture).
4.2 Registration Rights Agreement dated June 30, 2000, between
Weatherford International, Inc. and Morgan Stanley & Co.
Incorporated.
10.1 Purchase Agreement, dated June 26, 2000, between Weatherford
International, Inc. and Morgan Stanley & Co. Incorporated.
10.2 Combination Agreement dated as of June 16, 2000, by and among
Weatherford International, Inc., Weatherford Oil Services,
Inc., Weatherford Canada Ltd. and Alpine Oil Services
Corporation (including as exhibits, forms of Plan of
Arrangement, Support Agreement and Voting and Exchange Trust
Agreement).
23.1 Consent of Ernst & Young LLP with respect to the financial
statements of Dailey International Inc.
99.1 Press release dated June 19, 2000, announcing the signing of
the Alpine acquisition agreement.
99.2 Press release dated June 26, 2000, announcing the pricing of
the debentures.
99.3 Press release dated June 30, 2000, announcing the issuance of
the debentures.
99.4 Consolidated financial statements of Dailey International Inc.
as of December 31, 1998 and 1997 and for the year
December 31, 1998, the eight months period ended December 31,
1997 and for each of the two years in the period ended
April 30, 1997 (incorporated by reference to Exhibit 99.2 to
Form 8-K, File 1-13086, dated May 21, 1999).
99.5 Condensed Consolidated financial statements of Dailey
International Inc. for the quarterly period ended
June 30, 1999 (incorporated by reference to Exhibit 99.1 to
Form 8-K, File 1-13086, dated August 16, 1999).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WEATHERFORD INTERNATIONAL, INC.
Dated: July 10, 2000 /s/ LISA W. RODRIGUEZ
--------------------------------------------
Lisa W. Rodriguez
Vice President - Accounting and Controller
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INDEX TO EXHIBITS
4.1 Second Supplemental Indenture dated June 30, 2000, between
Weatherford International, Inc. and The Bank of New York, as
trustee (including form of Debenture).
4.2 Registration Rights Agreement dated June 30, 2000, between
Weatherford International, Inc. and Morgan Stanley & Co.
Incorporated.
10.1 Purchase Agreement, dated June 26, 2000, between Weatherford
International, Inc. and Morgan Stanley & Co. Incorporated.
10.2 Combination Agreement dated as of June 16, 2000, by and among
Weatherford International, Inc., Weatherford Oil Services,
Inc., Weatherford Canada Ltd. and Alpine Oil Services
Corporation (including as exhibits, forms of Plan of
Arrangement, Support Agreement and Voting and Exchange Trust
Agreement).
23.1 Consent of Ernst & Young LLP with respect to the financial
statements of Dailey International Inc.
99.1 Press release dated June 19, 2000, announcing the signing of
the Alpine acquisition agreement.
99.2 Press release dated June 26, 2000, announcing the pricing of
the debentures.
99.3 Press release dated June 30, 2000, announcing the issuance of
the debentures.
99.4 Consolidated financial statements of Dailey International Inc.
as of December 31, 1998 and 1997 and for the year December 31,
1998, the eight month period ended December 31, 1997 and to
each of the two years in the period ended April 30, 1997
(incorporated by reference to Exhibit 99.2 to Form 8-K,
File 1-13086, dated May 21, 1999).
99.5 Condensed Consolidated financial statements of Dailey
International Inc. for the quarterly period ended
June 30, 1999 (incorporated by reference to Exhibit 99.1 to
Form 8-K, File 1-13086, dated August 16, 1999)
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