Archer announces impairment charges for goodwill and other long lived assets
Hamilton, Bermuda (February 21, 2014)
Archer Limited has substantially completed its year end impairment review for the consolidated financial statements for the financial year ended December 31, 2013 as required under its accounting policies. Based on the review, the company expects a non-cash impairment charge of the goodwill and other long lived assets in its consolidated financial statements for the year ended December 31, 2013 of approximately $430 million. The impairment is primarily due to reduced pricing and low utilization of equipment as a result of an oversupply of land based oilfield services in the United States. The above underlying condition has led to the downward revision of cash flow expectations underlying the valuation of the North American business. The impairment also includes the effect of write down of US based long lived assets in the Emerging Markets & Technologies Area, which have been impacted by the same market conditions. Following this impairment the net equity per share is reduced from $1.87 as of September 30, 2013 to an estimated $ 1.07 at the end of December 31st. 2013. The final figures will be included in the fourth quarter and preliminary 2013 results on 28th. February 2014. The Company’s compliance with financial covenants is unaffected by the above non-cash write down of goodwill and assets.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.