What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-10-26 compared with 2022-07-28 · 114 added, 86 removed, 285 unchanged (41% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars and shares in millions, except per share amounts) 2022 2021 2022 2021

12 unchanged sentences

Interest Expense, Net ( 44 ) ( 69 ) ( 140 ) ( 211 )

Loss on Extinguishment of Debt and Bond Redemption Premium ( 2 ) ( 59 ) ( 2 ) ( 59 )

Other Expense, Net ( 12 ) ( 4 ) ( 60 ) ( 19 )

4 unchanged sentences

Net Income (Loss) Attributable to Weatherford $ 28 $ ( 95 ) $ ( 46 ) $ ( 289 )

Basic and Diluted Income (Loss) per Share $ 0.08 $ ( 1.11 ) $ ( 1.04 ) $ ( 2.77 )

Basic Income (Loss) per Share $ 0.39 $ ( 1.36 ) $ ( 0.65 ) $ ( 4.13 )

Basic Weighted Average Shares Outstanding 71 70 71 70

Diluted Income (Loss) per Share $ 0.39 $ ( 1.36 ) $ ( 0.65 ) $ ( 4.13 )

Diluted Weighted Average Shares Outstanding 72 70 71 70

1 unchanged sentence

WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended Six Months Ended

June 30, June 30,

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)

Three Months Ended Nine Months Ended

September 30, September 30,

(Dollars in millions) 2022

1 unchanged sentence

Foreign Currency Translation Adjustments ( 51 ) ( 11 ) 8 —

Comprehensive Income (Loss) 71 ( 58 ) ( 3 ) ( 172 )

Comprehensive Loss ( 14 ) ( 100 ) ( 17 ) ( 272 )

Comprehensive Income Attributable to Noncontrolling Interests 9 6 21 17

Comprehensive Income (Loss) Attributable to Weatherford $ 65 $ ( 63 ) $ ( 15 ) $ ( 183 )

Comprehensive Loss Attributable to Weatherford $ ( 23 ) $ ( 106 ) $ ( 38 ) $ ( 289 )

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars and shares in millions, except par value) June 30, 2022 December 31, 2021

(Dollars and shares in millions, except par value) September 30, 2022 December 31, 2021

Cash and Cash Equivalents $ 933 $ 951

Restricted Cash 210 162

Accounts Receivable, Net of Allowance for Credit Losses of $ 30 at June 30, 2022 and $ 31 at December 31, 2021

Accounts Receivable, Net of Allowance for Credit Losses of $ 29 at September 30, 2022 and $ 31 at December 31, 2021

Inventories, Net 723 670

1 unchanged sentence

Total Current Assets 3,063 2,911

Property, Plant and Equipment, Net of Accumulated Depreciation of $ 718 at June 30, 2022 and $ 623 at December 31, 2021

Intangible Assets, Net of Accumulated Amortization of $ 403 at June 30, 2022 and $ 328 at December 31, 2021

Property, Plant and Equipment, Net of Accumulated Depreciation of $ 753 at September 30, 2022 and $ 623 at December 31, 2021

Intangible Assets, Net of Accumulated Amortization of $ 439 at September 30, 2022 and $ 328 at December 31, 2021

Operating Lease Right-of-Use Assets 111 113

15 unchanged sentences

Ordinary Shares - Par Value $ 0.001 ;

Authorized 1,356 shares, Issued and Outstanding 70 shares at June 30, 2022 and December 31, 2021

Authorized 1,356 shares, Issued and Outstanding 71 shares at September 30, 2022 and 70 at December 31, 2021

Capital in Excess of Par Value 2,923 2,904

Retained Deficit ( 2,443 ) ( 2,397 )

Accumulated Other Comprehensive Income (Loss) 24 ( 35 )

Accumulated Other Comprehensive Loss ( 27 ) ( 35 )

Weatherford Shareholders’ Equity 453 472

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in millions) 2022 2021

1 unchanged sentence

Net Loss $ ( 25 ) $ ( 272 )

Adjustments to Reconcile Net Loss to Net Cash (Used in) Provided by Operating Activities:

Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities:

Depreciation and Amortization 265 337

Loss on Extinguishment of Debt and Bond Redemption Premium 2 59

Asset Write-downs and Other Charges 6 —

5 unchanged sentences

Accounts Receivable

( 99 ) ( 14 )

Accounts Payable

Other Assets and Liabilities, Net 11 36

Net Cash (Used in) Provided by Operating Activities ( 4 ) 120

Net Cash Provided by Operating Activities 156 234

Cash Flows From Investing Activities:

2 unchanged sentences

Other Investing Activities 6 3

Net Cash Provided by (Used in) Investing Activities 7 ( 2 )

Net Cash Used in Investing Activities ( 22 ) ( 2 )

Cash Flows From Financing Activities:

Borrowings of Long-term Debt, Net — 491

Repayments of Long-term Debt ( 62 ) ( 510 )

Repayments of Short-term Debt, Net — ( 4 )

Bond Redemption Premium ( 2 ) ( 22 )

Other Financing Activities ( 25 ) ( 20 )

1 unchanged sentence

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash ( 15 ) ( 6 )

Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash ( 23 ) 102

Net Increase in Cash, Cash Equivalents and Restricted Cash 30 161

Cash, Cash Equivalents and Restricted Cash at Beginning of Period 1,113 1,285

21 unchanged sentences

Please refer to “Note 1 – Summary of Significant Accounting Policies” of our Consolidated Financial Statements from our 2021 Annual Report for the discussion on our significant accounting policies.

Certain reclassifications have been made to the financial statements and accompanying footnotes for the three and six months ended June 30, 2021 to conform to the presentation for the three and six months ended June 30, 2022, including the change in reportable segments made during the fourth quarter of 2021.

Certain reclassifications have been made to these Condensed Consolidated Financial Statements and accompanying footnotes for the three and nine months ended September 30, 2021 to conform to the presentation for the three and nine months ended September 30, 2022, including the change in reportable segments made during the fourth quarter of 2021.

New Accounting Standards

4 unchanged sentences

During the fourth quarter of 2021, our chief operating decision maker changed the information regularly reviewed to be aligned with how we offer our services and technologies in relation to the life cycle of a well and we have realigned our reportable segments to reflect the change.

All of our segments are enabled by a full suite of digital, monitoring, optimization and artificial intelligence solutions providing services throughout the well life cycle, including responsible abandonment.

We have three reportable segments:

4 unchanged sentences

Corporate and other includes business activities related to all other segments (profit and loss), corporate and other expenses (overhead support and centrally managed or shared facilities costs) that do not individually meet the criteria for segment reporting.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Dollars in millions) 2022 2021 2022 2021

17 unchanged sentences

Operating Income $ 121 $ 71 $ 243 $ 83

(a) Other adjustments in six months ended June 30, 2022 primarily include a net credit from the gain on asset sales related to our fulfillment initiatives and collections of previously impaired receivables in the three months ended June 30, 2022 offset by net charges in the three months ended March 31, 2022 that include a $ 20 million restructuring charge and a $ 17 million charge related to Ukraine.

(a) Other adjustments in nine months ended September 30, 2022 primarily include a $ 22 million restructuring charge.

See “Note 4 – Restructuring Charges” for additional information on restructuring around our fulfillment initiatives.

Other adjustments were a net credit for the three and nine months ended September 30, 2021, primarily driven by gains on asset sales.

Disaggregated Revenue

5 unchanged sentences

Equipment revenues recognized under ASU No.

2016-02, Leases (Topic 842) were $ 35 million and $ 66 million in the three and six months ended June 30, 2022, respectively, and $ 35 million and $ 63 million for the three and six months ended June 30, 2021, respectively.

2016-02, Leases (Topic 842) were $ 43 million and $ 109 million in the three and nine months ended September 30, 2022, respectively, and $ 34 million and $ 97 million for the three and nine months ended September 30, 2021, respectively.

The following table disaggregates our revenues from contracts with customers by geographic region and includes equipment rental revenues.

North America in the table below consists of the U.S.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Dollars in millions) 2022 2021 2022 2021

6 unchanged sentences

Contract Balances

The timing of our revenue recognition, billings and cash collections results in the recording of billed and unbilled accounts receivable, contract assets, customer advances and deposits (contract liabilities classified as deferred revenues).

Receivables with customers are included in “Accounts Receivable, Net,” short-term contract assets are included in “Other Current Assets,” long-term contract assets are included in “Other Non-Current Assets” and contract liabilities are included in “Other Current Liabilities” on our Condensed Consolidated Balance Sheets.

The following table summarizes these balances as of June 30, 2022 and December 31, 2021:

(Dollars in millions) June 30, 2022 December 31, 2021

Total Accounts Receivables $ 930 $ 825

The timing of our revenue recognition, billings and cash collections result in the recording of accounts receivable, contract assets, and contract liabilities.

The following table summarizes these balances as of September 30, 2022 and December 31, 2021:

(Dollars in millions) September 30, 2022 December 31, 2021

Receivables for Product and Services in Accounts Receivable, Net $ 893 $ 795

Receivables for Equipment Rentals in Account Receivable, Net $ 34 $ 30

Short-Term Contract Assets in Other Current Assets $ 41 $ 47

Long-term Contract Assets in Other Non-Current Assets $ 18 $ 14

Accounts Receivable, Net $ 927 $ 825

Contract Assets in Other Current Assets $ 31 $ 47

Contract Assets in Other Non-Current Assets $ 19 $ 14

Contract Liabilities in Other Current Liabilities (a)

(a) Revenues recognized during the six months ended June 30, 2022 and 2021 that were included in the contract liabilities balance at the beginning of each year were $ 18 million and $ 25 million, respectively.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASU 2014-09, Revenues from Contracts with Customers (Topic 606).

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

In the following table, estimated revenue for contracts with original performance obligations greater than twelve months are expected to be recognized in the future related to performance obligations that are either unsatisfied or partially unsatisfied as of June 30, 2022.

(Dollars in millions) 2022

Thereafter Total

Service Revenue $ 35 $ 63 $ 65 $ 52 $ 22 $ 237

(a) Revenues recognized during the nine months ended September 30, 2022 and 2021 that were included in the contract liabilities balance at the beginning of each year were approximately $ 35 million and $ 28 million, respectively.

4 – Restructuring Charges

We had nil and $ 20 million in restructuring charges for the three and six months ended June 30, 2022, respectively, presented as “Restructuring Charges” on the accompanying Condensed Consolidated Statements of Operations.

We had $ 2 million and $ 22 million in restructuring charges for the three and nine months ended September 30, 2022, respectively, presented as “Restructuring Charges” on the accompanying Condensed Consolidated Statements of Operations.

The charges were primarily related to the launch of a multi-year footprint consolidation and workforce efficiency initiative aimed at improving fulfillment operations and included $ 14 million in severance and $ 8 million in asset retirement obligations.

No restructuring charges were recognized in the three and six months ended June 30, 2021.

The following table presents total restructuring charges by segment and All Other in the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30, Six Months Ended June 30,

No restructuring charges were recognized in the three and nine months ended September 30, 2021.

The following table presents total restructuring charges by segment and All Other in the three and nine months ended September 30, 2022 and 2021:

Three Months Ended September 30, Nine Months Ended September 30,

(Dollars in millions) 2022

4 unchanged sentences

Total Restructuring Charges $ 2 $ — $ 22 $ —

The following table presents total restructuring reserve activity in the six months ended June 30, 2022:

The following table presents total restructuring reserve activity in the nine months ended September 30, 2022:

(Dollars in millions) December 31, 2021 Charges Cash Payments (Credits)/Other

June 30, 2022

September 30, 2022

Restructuring Reserve $ 17 $ 22 $ ( 13 ) $ — $ 26

5 – Inventories, Net

Inventories, net of reserves of $ 139 million and $ 159 million as of June 30, 2022 and December 31, 2021, respectively, are presented by category in the table below:

(Dollars in millions) June 30, 2022 December 31, 2021

Inventories, net of reserves of $ 129 million and $ 159 million as of September 30, 2022 and December 31, 2021, respectively, are presented by category in the table below:

(Dollars in millions) September 30, 2022 December 31, 2021

Finished Goods $ 642 $ 595

1 unchanged sentence

Inventories, Net $ 723 $ 670

In the three and six months ended June 30, 2022 and 2021, we recognized inventory charges, including excess and obsolete inventory charges, in the following captions on our Condensed Consolidated Statements of Operations:

Three Months Ended June 30, Six Months Ended June 30,

In the three and nine months ended September 30, 2022 and 2021, we recognized inventory charges, including excess and obsolete inventory charges, in the following captions on our Condensed Consolidated Statements of Operations:

Three Months Ended September 30, Nine Months Ended September 30,

(Dollars in millions) 2022 2021 2022 2021

4 unchanged sentences

The components of intangible assets, net were as follows:

(Dollars in millions) June 30, 2022 December 31, 2021

Developed and Acquired Technology, Net of Accumulated Amortization of $ 302 at June 30, 2022 and $ 247 at December 31, 2021

Trade Names, Net of Accumulated Amortization of $ 101 at June 30, 2022 and $ 81 at December 31, 2021

Intangible Assets, Net of Accumulated Amortization of $ 403 at June 30, 2022 and $ 328 at December 31, 2021

Amortization expense was $ 39 million and $ 78 million for both the three and six months ended June 30, 2022 and June 30, 2021, respectively, and is reported in “Selling, General and Administrative” on our Condensed Consolidated Statements of Operations.

(Dollars in millions) September 30, 2022 December 31, 2021

Developed and Acquired Technology, Net of Accumulated Amortization of $ 328 at September 30, 2022 and $ 247 at December 31, 2021

Trade Names, Net of Accumulated Amortization of $ 111 at September 30, 2022 and $ 81 at December 31, 2021

Intangible Assets, Net of Accumulated Amortization of $ 439 at September 30, 2022 and $ 328 at December 31, 2021

Amortization expense was $ 39 million and $ 117 million for both the three and nine months ended September 30, 2022 and September 30, 2021, respectively, and is reported in “Selling, General and Administrative” on our Condensed Consolidated Statements of Operations.

7 – Borrowings and Other Debt Obligations

(Dollars in millions) June 30, 2022 December 31, 2021

(Dollars in millions) September 30, 2022 December 31, 2021

Current Portion of Finance Leases $ 14 $ 12

7 unchanged sentences

Our Exit Notes, 2028 Senior Secured Notes and 2030 Senior Notes (described below) were issued by Weatherford Bermuda and guaranteed by Weatherford International plc and Weatherford Delaware and other subsidiary guarantors party thereto.

We have an outstanding aggregate principal amount of $ 300 million due in 2024 on our 11.00 % senior unsecured notes (“Exit Notes”) with interest payable semiannually on June 1 and December 1.

At June 30, 2022, the carrying value of $ 300 million represents the remaining unpaid principal.

On July 11, 2022, we issued a notice of election to redeem $50 million in principal plus related unpaid interest by August 10, 2022 of our Exit Notes.

We have an outstanding aggregate principal amount of $ 250 million maturing December 1, 2024 on our 11.00 % senior unsecured notes (“Exit Notes”) with interest payable semiannually on June 1 and December 1, and commenced on June 1, 2020.

On August 10, 2022, we redeemed $ 50 million in principal plus related unpaid interest of our Exit Notes.

At September 30, 2022, the carrying value of $ 250 million represents the remaining unpaid principal.

On October 18, 2022, we issued a notice to redeem $ 125 million in principal amount of our Exit Notes on November 17, 2022.

The Exit Notes will be redeemed at 103 % of the principal amount, plus accrued and unpaid interest.

2028 Senior Secured Notes

On September 30, 2021, we issued 6.50 % Senior Secured Notes in aggregate principal amount of $ 500 million maturing September 15, 2028 (the “2028 Senior Secured Notes”).

Interest accrues at the rate of 6.50 % per annum and is payable semiannually on September 15 and March 15 of each year, commencing on March 15, 2022.

Proceeds from this debt issuance were used to fully repay a senior secured note with an aggregate principal amount of $ 500 million with a stated interest rate of 8.75 % per annum due 2024.

Interest is payable semiannually on September 15 and March 15 of each year, and commenced on March 15, 2022.

Proceeds from this debt issuance were used to fully repay a previous senior secured note with an aggregate principal amount of $ 500 million with a stated interest rate of 8.75 % per annum due 2024,

resulting in $ 59 million in charges from the bond redemption premium and noncash loss on extinguishment of debt related to the unamortized debt issuance costs and discount.

2030 Senior Notes

On October 27, 2021, we issued 8.625 % Senior Notes in aggregate principal amount of $ 1.6 billion maturing April 30, 2030 (the “2030 Senior Notes”).

Interest accrues at the rate of 8.625 % per annum and is payable semiannually on June 1 and December 1 of each year, commencing on June 1, 2022.

Interest is payable semiannually on June 1 and December 1 of each year, and commenced on June 1, 2022.

The proceeds from this debt issuance were used to redeem $ 1.6 billion of the above Exit Notes.

We have a senior secured letter of credit agreement (the “LC Agreement”) in an aggregate amount of $ 215 million maturing on May 29, 2024, which is used by the Company and certain of its subsidiaries for the issuance of bid and performance letters of credit.

At June 30, 2022, we had approximately $ 173 million in outstanding letters of credit under the LC Agreement and availability of $ 42 million.

As of June 30, 2022, we had $ 378 million of letters of credit outstanding, consisting of the $ 173 million under the LC Agreement and another $ 205 million under various uncommitted bi-lateral facilities (of which there was $ 205 million in cash collateral held and recorded in “Restricted Cash” on the Condensed Consolidated Balance Sheets).

We had a senior secured letter of credit agreement (the “LC Agreement”) in an aggregate amount of $ 215 million maturing on May 29, 2024, which was used by the Company and certain of its subsidiaries for the issuance of bid and performance letters of credit.

At September 30, 2022, we had approximately $ 163 million in outstanding letters of credit under the LC Agreement and availability of $ 52 million.

As of September 30, 2022, we had $ 357 million of letters of credit outstanding, consisting of the $ 163 million under the LC Agreement and another $ 194 million under various uncommitted bi-lateral facilities (of which there was $ 194 million in cash collateral held and recorded in “Restricted Cash” on the Condensed Consolidated Balance Sheets).

Our letters of credit under various uncommitted bi-lateral facilities increased “Restricted Cash” since December 31, 2021 due to a requirement from a new multi-year contract.

On October 17, 2022, we amended the LC Agreement, the details of which are found in “Note 12 – Subsequent Events”.

Accrued Interest

As of June 30, 2022 and December 31, 2021, we had accrued interest of approximately $ 24 million and $ 35 million, respectively in “Other Current Liabilities” primarily related to the Exit Notes, 2028 Senior Secured Notes and 2030 Senior Notes.

Fair Value of Short and Long-term Borrowings

The carrying value of our short-term borrowings approximates their fair value due to their short maturities.

These short-term borrowings are classified as Level 2 in the fair value hierarchy.

As of September 30, 2022 and December 31, 2021, we had accrued interest of approximately $ 57 million and $ 35 million, respectively, in “Other Current Liabilities” primarily related to the Exit Notes, 2028 Senior Secured Notes and 2030 Senior Notes.

The carrying value of our short-term borrowings, when applicable, approximates their fair value due to their short maturities.

The fair value of our long-term debt fluctuates with changes in applicable interest rates among other factors.

1 unchanged sentence

The fair value of our long-term debt is classified as Level 2 in the fair value hierarchy and is established based on observable inputs in less active markets.

The table below presents the fair value and carrying value of our long-term debt (including the current portion of long-term debt and excluding finance leases).

June 30, 2022 December 31, 2021

The table below presents the fair value and carrying value of our long-term debt (excluding finance leases).

September 30, 2022 December 31, 2021

(Dollars in millions) Carrying Value Fair Value Carrying Value Fair Value

5 unchanged sentences

1,585 1,403 1,584 1,660

Current and Long-Term Debt (excluding Finance Leases) $ 2,374 $ 2,090 $ 2,372 $ 2,499

Long-Term Debt (excluding Finance Leases) $ 2,325 $ 2,114 $ 2,372 $ 2,499

8 – Disputes, Litigation and Legal Contingencies

3 unchanged sentences

If one or more negative outcomes were to occur relative to these cases, the aggregate impact to our financial condition could be material.

Accrued litigation and settlements recorded in “Other Current Liabilities” on the accompanying Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 were $ 41 million and $ 40 million, respectively.

Accrued litigation and settlements recorded in “Other Current Liabilities” on the accompanying Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 were $ 39 million and $ 40 million, respectively.

GAMCO Shareholder Litigation

12 unchanged sentences

9 – Shareholders’ Equity

The following summarizes our shareholders’ equity activity for the three and six months ended June 30, 2022 and 2021:

The following summarizes our shareholders’ equity activity for the three and nine months ended September 30, 2022 and 2021:

(Dollars in millions) Capital in Excess of Par Value Retained

Deficit Accumulated

Comprehensive Income (Loss) Non-controlling Interests “NCI” Total Shareholders’ Equity

Comprehensive Income (Loss) Non-controlling Interests Total Shareholders’ Equity

Balance at December 31, 2021

6 unchanged sentences

Other Comprehensive Income — — 59 — 59

Dividends to NCI — — — ( 11 ) ( 11 )

Dividends to Noncontrolling Interests — — — ( 11 ) ( 11 )

Equity Awards Granted, Vested and Exercised 5 — — — 5

1 unchanged sentence

$ 2,913 $ ( 2,471 ) $ 24 $ 25 $ 491

Net Income — 28 — 9 37

Other Comprehensive Loss — — ( 51 ) — ( 51 )

Dividends to Noncontrolling Interests — — — ( 9 ) ( 9 )

Equity Awards Granted, Vested and Exercised 4 — — — 4

Other 6 — — ( 6 ) —

Balance at September 30, 2022

$ 2,923 $ ( 2,443 ) $ ( 27 ) $ 19 $ 472

Balance at December 31, 2020

1 unchanged sentence

Net Income (Loss) — ( 116 ) — 6 ( 110 )

Dividends to NCI — — — ( 2 ) ( 2 )

Dividends to Noncontrolling Interests — — — ( 2 ) ( 2 )

Other Comprehensive Loss — — ( 4 ) — ( 4 )

3 unchanged sentences

Other Comprehensive Income — — 15 — 15

Dividends to NCI — — — ( 4 ) ( 4 )

Dividends to Noncontrolling Interests — — — ( 4 ) ( 4 )

Equity Awards Granted, Vested and Exercised 2 — — — 2

2 unchanged sentences

$ 2,899 $ ( 2,141 ) $ ( 32 ) $ 33 $ 759

The following table presents the changes in our accumulated other comprehensive income (loss) by component for the six months ended June 30, 2022 and 2021:

Net Income (Loss) — ( 95 ) — 6 ( 89 )

Other Comprehensive Loss — — ( 11 ) — ( 11 )

Dividends to Noncontrolling Interests — — — ( 11 ) ( 11 )

Equity Awards Granted, Vested and Exercised 1 — — — 1

Other — — — ( 2 ) ( 2 )

Balance at September 30, 2021

$ 2,900 $ ( 2,236 ) $ ( 43 ) $ 26 $ 647

The following table presents the changes in our accumulated other comprehensive income (loss) by component for the nine months ended September 30, 2022 and 2021:

(Dollars in millions) Currency Translation Adjustment Defined Benefit Pension Total

2 unchanged sentences

Other Comprehensive Income 8 — 8

Balance at June 30, 2022

Balance at September 30, 2022

$ ( 28 ) $ 1 $ ( 27 )

2 unchanged sentences

Other Comprehensive Income — — —

Balance at June 30, 2021

Balance at September 30, 2021

$ ( 31 ) $ ( 12 ) $ ( 43 )

6 unchanged sentences

A reconciliation of the number of shares used for the basic and diluted income (loss) per share calculation was as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Dollars and shares in millions, except per share amounts) 2022 2021 2022 2021

8 unchanged sentences

The year-to-date effective tax rate treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis.

We provide for income taxes based on the laws and rates in effect in the countries in which operations are conducted, or in which we or our subsidiaries are considered residents for income tax purposes.

In the three and nine months ended September 30, 2022, we recognized tax expense of $ 26 million and $ 66 million, respectively, compared to the three and nine months ended September 30, 2021 where we recognized tax expense of $ 28 million and $ 66 million, respectively.

The relationship between our pre-tax income or loss and our income tax provision or benefit varies from period to period due to various factors which include changes in total pre-tax income or loss, the jurisdictions in which our income is earned, the tax laws in those jurisdictions and in our operating structure.

In the three and six months ended June 30, 2022, we recognized tax expense of $ 12 million and $ 40 million, respectively, on an income before income taxes of $ 24 million and loss before taxes of $ 22 million, respectively, compared to the three and six months ended June 30, 2021 where we recognized tax expense of $ 15 million and $ 38 million, respectively, on a loss before income taxes of $ 58 million and $ 145 million, respectively.

The expense in the three and six months ended June 30, 2022 included a $ 27 million recognition of a benefit from previously uncertain tax positions.

We provide for

income taxes based on the laws and rates in effect in the countries in which operations are conducted, or in which we or our subsidiaries are considered residents for income tax purposes.

Our income tax provisions are primarily driven by income in certain jurisdictions, deemed profit countries and withholding taxes on intercompany and third-party transactions that do not directly correlate to ordinary income or loss and other adjustments.

Impairments and other charges recognized may not result in significant tax benefit due to our inability to forecast realization of the tax benefit of such losses.

The Inflation Reduction Act (“IRA”) was signed into law during the third quarter of 2022 which instituted new tax provisions, including a Minimum Business Tax.

Given our current tax position, it should not have a significant impact on our financial statements.

We will continue to evaluate our position, and potential impact of the IRA.

We routinely undergo tax examination in various jurisdictions.

We cannot predict the timing or outcome regarding resolution of these tax examinations or if they will have a material impact on our financial statements.

As of June 30, 2022, we anticipate that it is reasonably possible that our uncertain tax positions of $ 239 million may decrease by up to $ 13 million in the next twelve months due to expiration of statutes of limitations, settlements and/or conclusions of tax examinations.

The expense in the nine months ended September 30, 2022 included a $ 27 million recognition of a benefit from previously uncertain tax positions.

As of September 30, 2022, we anticipate that it is reasonably possible that our uncertain tax positions of $ 228 million may decrease by up to $ 14 million in the next twelve months due to expiration of statutes of limitations, settlements and/or conclusions of tax examinations.

12 – Subsequent Events

On October 17, 2022, we amended our LC Agreement (as amended and restated, the “Credit Agreement”) to provide for a $ 370 million revolving credit agreement, comprised of $ 280 million for bid and performance letters of credit, and $ 90 million for revolving loans and bid, performance and financial letters of credit.

The revolving loan capacity is $ 45 million.

The maturity date under the Credit Agreement is October 17, 2026;

provided, that if more than $ 50 million of our Exit Notes are outstanding on such date the maturity date will be August 30, 2024.

The Credit Agreement also has (i) a minimum liquidity covenant of $ 250 million, (ii) a minimum interest coverage ratio of 2.00 to 1.00 for the testing period ended September 30, 2022 and 2.50 to 1.00 for each testing period thereafter and (iii) a maximum ratio of funded debt (net of unrestricted cash in excess of $ 400 million) to consolidated adjusted EBITDA of 4.00 to 1.00 for each testing period ending prior to June 30, 2023 and 3.50 to 1.00 for each testing period thereafter.

The obligations under the Credit Agreement, as with our prior LC Agreement, are guaranteed by the Company and certain of our subsidiaries and secured by substantially all of the personal property of the Company and these subsidiaries.

For additional information on the terms of the Credit Agreement, please refer to the Form 8-K filed with the Securities and Exchange Commission on October 18, 2022.

On October 18, 2022, we issued a notice to redeem $ 125 million in principal amount of our Exit Notes on November 17, 2022.

The Exit Notes will be redeemed at 103 % of the principal amount, plus accrued and unpaid interest.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements