What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-04-26 compared with 2022-10-26 · 114 added, 159 removed, 240 unchanged (53% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(Dollars and shares in millions, except per share amounts) 2023 2022

12 unchanged sentences

Interest Expense, Net ( 31 ) ( 48 )

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

Other Expense, Net ( 35 ) ( 16 )

10 unchanged sentences

WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)

Three Months Ended Nine Months Ended

September 30, September 30,

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended

(Dollars in millions) 2023

1 unchanged sentence

Foreign Currency Translation Adjustments 3 —

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

Comprehensive Income (Loss) 84 ( 74 )

Comprehensive Income Attributable to Noncontrolling Interests 9 6

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

Comprehensive Income (Loss) Attributable to Weatherford $ 75 $ ( 80 )

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) September 30, 2022 December 31, 2021

(Dollars and shares in millions, except par value) March 31, 2023 December 31, 2022

Cash and Cash Equivalents $ 833 $ 910

Restricted Cash 150 202

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

Accounts Receivable, Net of Allowance for Credit Losses of $ 21 at March 31, 2023 and $ 26 at December 31, 2022

Inventories, Net 719 689

1 unchanged sentence

Total Current Assets 3,043 3,043

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

Property, Plant and Equipment, Net of Accumulated Depreciation of $ 801 at March 31, 2023 and $ 773 at December 31, 2022

Intangible Assets, Net of Accumulated Amortization of $ 520 at March 31, 2023 and $ 480 at December 31, 2022

Operating Lease Assets 130 115

Other Non-Current Assets 143 138

14 unchanged sentences

Ordinary Shares - Par Value $ 0.001 ;

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

Authorized 1,356 shares, Issued and Outstanding 72 shares at March 31, 2023 and 71 at December 31, 2022

Capital in Excess of Par Value 2,885 2,928

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30,

Three Months Ended March 31,

(Dollars in millions) 2023 2022

Cash Flows From Operating Activities:

Net Loss $ ( 25 ) $ ( 272 )

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

Net Income (Loss) $ 81 $ ( 74 )

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

Depreciation and Amortization 80 87

Loss on Extinguishment of Debt and Bond Redemption Premium 2 59

Asset Write-downs and Other Charges — 12

6 unchanged sentences

( 96 ) ( 51 )

( 45 ) ( 31 )

Accounts Payable

Other Assets and Liabilities, Net ( 33 ) ( 34 )

Net Cash Provided by Operating Activities 156 234

Net Cash Provided by (Used in) Operating Activities 84 ( 64 )

Cash Flows From Investing Activities:

2 unchanged sentences

Other Investing Activities ( 7 ) 9

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

Net Cash Provided by (Used in) Investing Activities ( 64 ) 9

Cash Flows From Financing Activities:

Borrowings of Long-term Debt, Net — 491

Repayments of Long-term Debt ( 66 ) ( 4 )

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

Bond Redemption Premium ( 2 ) ( 22 )

Noncontrolling Interest Dividends ( 6 ) —

Tax Remittance on Equity Awards Vested ( 52 ) ( 1 )

Other Financing Activities ( 3 ) —

1 unchanged sentence

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash ( 22 ) 3

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

Net Decrease in Cash, Cash Equivalents and Restricted Cash ( 129 ) ( 57 )

Cash, Cash Equivalents and Restricted Cash at Beginning of Period 1,112 1,113

11 unchanged sentences

Accordingly, certain information and disclosures normally included in our annual consolidated financial statements have been condensed or omitted.

Therefore, these unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Annual Report”).

Therefore, these unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”).

The preparation of the Condensed Consolidated Financial Statements in conformity with U.S.

6 unchanged sentences

Summary of Significant Accounting Policies

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 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.

Please refer to “Note 1 – Summary of Significant Accounting Policies” of our Consolidated Financial Statements from our 2022 Form 10-K for the discussion on our significant accounting policies.

Certain reclassifications have been made to these Condensed Consolidated Financial Statements and accompanying footnotes for the three months ended March 31, 2022 to conform to the presentation for the three months ended March 31, 2023.

New Accounting Standards

2 unchanged sentences

Financial information by segment is summarized below.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies as presented in our 2021 Annual Report.

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.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies as presented in our 2022 Form 10-K.

We have three reportable segments:

(1) Drilling and Evaluation, (2) Well Construction and Completions, and (3) Production and Intervention.

Previously we had two geographic based reportable segments, Western Hemisphere and Eastern Hemisphere.

(1) Drilling and Evaluation “DRE”, (2) Well Construction and Completions “WCC”, and (3) Production and Intervention “PRI”.

Our primary measure of segment profitability is segment adjusted EBITDA, which is based on segment earnings before interest, taxes, depreciation, amortization, share-based compensation expense and other adjustments.

Research and development expenses are included in segment adjusted EBITDA.

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 September 30, Nine Months Ended September 30,

Corporate and other includes results from non-core business activities, 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 March 31,

(Dollars in millions) 2023 2022

Drilling and Evaluation $ 348 $ 278 $ 957 $ 779

Well Construction and Completions 391 345 1,118 1,005

Production and Intervention 357 292 988 829

Segment Revenues 1,096 915 3,063 2,613

DRE Revenues $ 372 $ 292

WCC Revenues 421 344

PRI Revenues 349 286

All Other 44 16

Total Revenues $ 1,186 $ 938

Segment Adjusted EBITDA:

Drilling and Evaluation $ 85 $ 56 $ 213 $ 131

Well Construction and Completions 78 79 212 184

Production and Intervention 66 57 173 144

Segment Adjusted EBITDA $ 229 $ 192 $ 598 $ 459

Operating Income:

DRE Segment Adjusted EBITDA $ 108 $ 59

WCC Segment Adjusted EBITDA 96 67

PRI Segment Adjusted EBITDA 68 39

Corporate and Other ( 3 ) ( 14 )

Depreciation and Amortization ( 80 ) ( 87 )

Share-based Compensation Expense

( 5 ) ( 4 ) ( 18 ) ( 13 )

Other Adjustments (a)

— 8 ( 25 ) 16

Share-Based Compensation ( 9 ) ( 7 )

Restructuring Charges — ( 20 )

Other (Charges) Credits (a)

Operating Income $ 185 $ 18

(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.

(a) Other (charges) credits relate to miscellaneous charges and credits including write-downs of certain assets.

Disaggregated Revenue

4 unchanged sentences

These equipment rental revenues are generally provided based on call-out work orders that include fixed per unit prices and are derived from short-term contracts.

Equipment revenues recognized under ASU No.

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.

Equipment rental revenues were $ 33 million for the three months ended March 31, 2023 and $ 31 million for the three months ended March 31, 2022.

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 September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Dollars in millions) 2023 2022

6 unchanged sentences

Contract Balances

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

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

The following table summarizes these balances as of March 31, 2023 and December 31, 2022:

(Dollars in millions) March 31, 2023 December 31, 2022

Receivables for Product and Services in Accounts Receivable, Net $ 1,052 $ 954

4 unchanged sentences

Contract Liabilities in Other Current Liabilities (a)

(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.

Contract Liabilities in Other Non-Current Liabilities $ 2 $ —

(a) Revenues recognized during the three months ended March 31, 2023 and March 31, 2022 that were included in the contract liabilities balance at the beginning of the year was approximately $ 20 million and $ 22 million, respectively.

4 – Restructuring Charges

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.

Restructuring charges were zero and $ 20 million in the three months ended March 31, 2023 and in the three months ended March 31, 2022, respectively, and presented as “Restructuring Charges” on the accompanying Condensed Consolidated Statements of Operations.

The 2022 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 $ 6 million in asset retirement obligations.

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,

Restructuring liabilities were $ 21 million and $ 25 million as of March 31, 2023 and December 31, 2022, respectively, of which $ 12 million and $ 16 million are recorded in “Other Current Liabilities” as of March 31, 2023 and December 31, 2022, respectively, and $ 9 million are recorded in “Other Non-current Liabilities” as of both March 31, 2023 and December 31, 2022, on the accompanying Consolidated Balance Sheets.

A change in liabilities will include restructuring charges, primarily offset by cash payments.

The following table presents total restructuring charges by segment and All Other in the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

(Dollars in millions) 2023

Drilling and Evaluation $ — $ — $ 5 $ —

Well Construction and Completions — — 7 —

Production and Intervention — — 5 —

All Other — 3

Total Restructuring Charges $ — $ 20

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

September 30, 2022

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

5 – Inventories, Net

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

Inventories, net of reserves of $ 131 million and $ 129 million as of March 31, 2023 and December 31, 2022, respectively, are presented by category in the table below:

(Dollars in millions) March 31, 2023 December 31, 2022

Finished Goods $ 616 $ 601

1 unchanged sentence

Inventories, Net $ 719 $ 689

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,

The change in inventory reserves includes the inventory charges below, primarily offset by the disposal of inventory previously reserved.

Inventory charges were recognized in the following captions on our Condensed Consolidated Statements of Operations:

Three Months Ended March 31,

(Dollars in millions) 2023 2022

4 unchanged sentences

The components of intangible assets, net were as follows:

(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.

(Dollars in millions) March 31, 2023 December 31, 2022

Developed and Acquired Technology, Net of Accumulated Amortization of $ 389 at March 31, 2023 and $ 359 at December 31, 2022

Trade Names, Net of Accumulated Amortization of $ 131 at March 31, 2023 and $ 121 at December 31, 2022

Intangible Assets, Net of Accumulated Amortization of $ 520 at March 31, 2023 and $ 480 at December 31, 2022

Amortization expense was $ 40 million and $ 39 million for the three months ended March 31, 2023 and March 31, 2022, 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) September 30, 2022 December 31, 2021

(Dollars in millions) March 31, 2023 December 31, 2022

Current Portion of Finance Leases $ 15 $ 14

Current Portion of Exit Notes — —

Current Portion of 6.50 % Senior Secured Notes due 2028 “2028 Senior Secured Notes”

Current Portion of 11.00 % Exit Notes due 2024 “Exit Notes”

Current Portion of Long-term Debt $ 120 $ 45

11.00 % Exit Notes due 2024

6.50 % Senior Secured Notes due 2028

8.625 % Senior Notes due 2030

11.00 % Exit Notes due 2024 “Exit Notes”

6.50 % Senior Secured Notes due 2028 “2028 Senior Secured Notes”

8.625 % Senior Notes due 2030 “2030 Senior Notes”

Long-term Portion Finance Leases 40 41

Long-term Debt $ 2,067 $ 2,203

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 $ 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.

On December 13, 2019, Weatherford International Ltd., a Bermuda exempted company (“Weatherford Bermuda”) issued 11.00 % senior unsecured notes in aggregate principal amount of $ 2.1 billion maturing December 1, 2024 (the “Exit Notes”).

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

The Exit Notes have been refinanced or redeemed in the years since issuance and in the first quarter of 2023, we redeemed $ 20 million in principal, leaving a remaining unpaid principal of $ 105 million at March 31, 2023, which also represents the carrying value.

On April 20, 2023, we announced our intent to redeem the remaining principal of $ 105 million of our Exit Notes for a redemption price of 102.75 % on May 22, 2023, 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”).

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

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.

In the first quarter of 2023, we repurchased $ 42 million in principal of our 2028 Senior Secured Notes.

At March 31, 2023, the carrying value represents the remaining unpaid principal of $ 450 million offset by unamortized deferred issuance cost of $ 9 million.

On April 19, 2023, Weatherford Bermuda, the Company and Weatherford International, LLC, a Delaware limited liability company (“Weatherford Delaware”), entered into a Second Supplemental Indenture relating to the 2028 Senior Secured Notes which amended the “Limitation on Restricted Payments” covenant to permit the purchase, repurchase, redemption, defeasance or other acquisition or retirement of the Exit Notes.

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”).

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

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 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”.

At March 31, 2023, the carrying value represents the remaining unpaid principal of $ 1.6 billion offset by unamortized deferred issuance cost of $ 14 million.

Credit Agreement

Weatherford Bermuda, Weatherford Delaware, and Weatherford Canada Ltd.

(“Weatherford Canada”), together, as borrowers, and the Company as parent, have an amended and restated credit agreement (the “Credit Agreement”).

The Credit Agreement allows for a total commitment amount of $ 400 million maturing on October 17, 2026 (subject to a $ 250 million minimum liquidity covenant and a minimum interest coverage ratio and maximum ratio of funded debt), provided that no more than $ 50 million of our Exit Notes are outstanding on August 30, 2024 (otherwise the maturity date becomes August 30, 2024).

On March 24, 2023, we further amended the Credit Agreement to permit unlimited prepayments and other redemptions of

indebtedness subject to (i) the ratio of funded debt (net of unrestricted cash in excess of $ 400 million) to consolidated adjusted EBITDA as defined in the Credit Agreement, not exceeding 2.50 to 1.00, (ii) no default or event of default existing and (iii) aggregate proforma liquidity in the event of a debt reduction equaling or exceeding $ 300 million (which previously was $ 350 million).

The material terms of the Credit Agreement are otherwise unchanged.

The obligations under the Credit Agreement are guaranteed by the Company and certain of our subsidiaries and secured by substantially all of the personal property of the Company and those subsidiaries.

As of March 31, 2023, we had $ 405 million of letters of credit outstanding, consisting of the $ 253 million under the Credit Agreement and another $ 152 million under various uncommitted bi-lateral facilities (of which there was $ 146 million in cash collateral held and recorded in “Restricted Cash” on the Condensed Consolidated Balance Sheets).

At March 31, 2023, we had $ 147 million remaining letters of credit available under our Credit Agreement.

Accrued Interest

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.

As of March 31, 2023 and December 31, 2022, we had accrued interest of approximately $ 51 million and $ 22 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.

3 unchanged sentences

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

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

11 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 September 30, 2022 and December 31, 2021 were $ 39 million and $ 40 million, respectively.

Accrued litigation and settlements recorded in “Other Current Liabilities” on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 were $ 44 million and $ 41 million, respectively.

GAMCO Shareholder Litigation

12 unchanged sentences

9 – Shareholders’ Equity

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

The change in shares issued and outstanding on our Condensed Consolidated Balance Sheets from 71 million as of December 31, 2022 to 72 million as of March 31, 2023, was due to equity awards granted, vested, and exercised, net of shares withheld for taxes.

The following summarizes our shareholders’ equity activity for the three months ended March 31, 2023 and 2022:

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

Deficit Accumulated

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

Comprehensive Income (Loss) Noncontrolling Interests Total Shareholders’ Equity

Balance at December 31, 2022

$ 2,928 $ ( 2,371 ) $ ( 22 ) $ 16 $ 551

Net Income (Loss) — ( 80 ) — 6 ( 74 )

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

Balance at March 31, 2022

$ 2,908 $ ( 2,477 ) $ ( 35 ) $ 30 $ 426

Net Income — 72 — 9 81

Other Comprehensive Income — — 59 — 59

Dividends to Noncontrolling Interests — — — ( 6 ) ( 6 )

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

Balance at June 30, 2022

$ 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

Equity Awards Granted, Vested and Exercised, Net of Shares Withheld for Taxes ( 43 ) — — — ( 43 )

Other Comprehensive Income — — 3 — 3

Balance at March 31, 2023

$ 2,885 $ ( 2,299 ) $ ( 19 ) $ 19 $ 586

2 unchanged sentences

Net Income (Loss) — ( 80 ) — 6 ( 74 )

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

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

Equity Awards Granted, Vested and Exercised, Net of Shares Withheld for Taxes 4 — — — 4

Balance at March 31, 2022

$ 2,908 $ ( 2,477 ) $ ( 35 ) $ 30 $ 426

Net Income (Loss) — ( 78 ) — 5 ( 73 )

Other Comprehensive Income — — 15 — 15

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

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

Other — — — ( 2 ) ( 2 )

Balance at June 30, 2021

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

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:

The following table presents the changes in our accumulated other comprehensive income (loss) by component for the three months ended March 31, 2023 and 2022:

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

2 unchanged sentences

Other Comprehensive Income 3 — 3

Balance at September 30, 2022

Balance at March 31, 2023

$ ( 38 ) $ 19 $ ( 19 )

2 unchanged sentences

Other Comprehensive Income — — —

Balance at September 30, 2021

Balance at March 31, 2022

$ ( 36 ) $ 1 $ ( 35 )

3 unchanged sentences

Antidilutive shares represent potentially dilutive securities which are excluded from the computation of diluted income or loss per share as their impact was antidilutive.

These include potential ordinary shares for restricted share units, performance share units, phantom restricted share units, and outstanding warrants.

Our basic and diluted weighted average shares outstanding for periods presented with net loss are equivalent as the impact of the inclusion of potential dilutive securities are antidilutive.

These include potential ordinary shares issuable for restricted share units, performance share units, phantom restricted share units, and outstanding warrants.

Our basic and dilutive weighted average shares outstanding for periods presented with a net loss are equivalent as the inclusion of potential dilutive securities is antidilutive.

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

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

Three Months Ended March 31,

(Dollars and shares in millions, except per share amounts) 2023 2022

4 unchanged sentences

Antidilutive Shares 9 11

Basic and Diluted Income (Loss) Per Share Attributable to Weatherford $ 0.39 $ ( 1.36 ) $ ( 0.65 ) $ ( 4.13 )

Basic Income (Loss) Per Share Attributable to Weatherford $ 1.00 $ ( 1.14 )

Diluted Income (Loss) Per Share Attributable to Weatherford $ 0.97 $ ( 1.14 )

11 – Income Taxes

We determine our quarterly tax provision using the year-to-date effective tax rate because the estimated annual approach is not reliable given that small changes in estimated ordinary annual income result in significant changes in our estimated annual effective tax rate.

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.

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.

Effective for the three months ended March 31, 2023, the Company changed to calculating the income tax provision using the estimated annual effective tax rate method in accordance with Accounting Standards Codification “ASC” 740 - Income Taxes and is no longer applying the exception, which allowed the use of the year-to-date effective tax rate method.

The Company believes the change is appropriate as it is able to reliably calculate the estimated annual effective tax rate due to sustained profitability and confidence in future earnings.

For the three months ended March 31, 2022, we determined our quarterly tax provision using the year-to-date effective tax rate method because the estimated annual approach was not reliable given that small changes in estimated ordinary annual income resulted in significant changes in our estimated annual effective tax rate.

In the three months ended March 31, 2023, we recognized tax expense of $ 38 million compared to the three months ended March 31, 2022 where we recognized tax expense of $ 28 million.

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.

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.

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.

Certain charges and impairments recognized do not result in significant tax benefit as a result of being attributed to a non-income tax jurisdiction or our inability to forecast realization of the tax benefit of such losses.

This is partially offset by the utilization of previously unbenefited deferred tax assets, such as net operating loss carryforwards.

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.

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.

As of March 31, 2023, we anticipate that it is reasonably possible that our uncertain tax positions of $ 261 million, including interest and penalties, may decrease by up to $ 34 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.

April 19, 2023, Weatherford Bermuda, the Company and Weatherford Delaware, entered into a Second Supplemental Indenture relating to the 2028 Senior Secured Notes which amended the “Limitation on Restricted Payments” covenant to permit the purchase, repurchase, redemption, defeasance or other acquisition or retirement of the Exit Notes.

On April 20, 2023, we announced our intent to redeem the remaining principal of $ 105 million of our Exit Notes for a redemption price of 102.75 % on May 22, 2023, 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