What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-04-24 compared with 2023-10-25 · 138 added, 200 removed, 224 unchanged (60% 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) 2024 2023

2 unchanged sentences

Total Revenue

1,313 1,120 3,773 3,122

Costs and Expenses:

6 unchanged sentences

Operating Income 233 185

Other Expense:

Interest Expense, Net of Interest Income of $ 14 and $ 16

( 29 ) ( 31 )

Loss on Blue Chip Swap Securities — — ( 57 ) —

Other Expense, Net ( 22 ) ( 35 )

1 unchanged sentence

Income Tax Provision ( 59 ) ( 38 )

Net Income (Loss) 131 37 302 ( 25 )

Net Income 123 81

Net Income Attributable to Noncontrolling Interests 11 9

Net Income (Loss) Attributable to Weatherford $ 123 $ 28 $ 277 $ ( 46 )

Basic Income (Loss) per Share $ 1.70 $ 0.39 $ 3.85 $ ( 0.65 )

Net Income Attributable to Weatherford $ 112 $ 72

Basic Income per Share $ 1.54 $ 1.00

Basic Weighted Average Shares Outstanding 72.9 71.5

Diluted Income (Loss) per Share $ 1.66 $ 0.39 $ 3.76 $ ( 0.65 )

Diluted Income per Share $ 1.50 $ 0.97

Diluted Weighted Average Shares Outstanding 74.7 73.5

1 unchanged sentence

WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended Nine Months Ended

September 30, September 30,

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended

(Dollars in millions) 2024

Net Income (Loss) $ 131 $ 37 $ 302 $ ( 25 )

Net Income $ 123 $ 81

Foreign Currency Translation Adjustments ( 24 ) 3

Comprehensive Income (Loss) 96 ( 14 ) 260 ( 17 )

Comprehensive Income Attributable to Noncontrolling Interests 8 9 25 21

Comprehensive Income (Loss) Attributable to Weatherford $ 88 $ ( 23 ) $ 235 $ ( 38 )

Comprehensive Income 99 84

Net Income Attributable to Noncontrolling Interests 11 9

Comprehensive Income Attributable to Weatherford

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

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars and shares in millions, except par value) September 30, 2023 December 31, 2022

(Dollars and shares in millions, except par value) March 31, 2024

December 31, 2023

Cash and Cash Equivalents $ 824 $ 958

Restricted Cash 113 105

Accounts Receivable, Net of Allowance for Credit Losses of $ 15 at September 30, 2023 and $ 26 at December 31, 2022

Accounts Receivable, Net of Allowance for Credit Losses of $ 16 at March 31, 2024 and $ 16 at December 31, 2023

Inventories, Net 850 788

1 unchanged sentence

Total Current Assets 3,312 3,345

Property, Plant and Equipment, Net of Accumulated Depreciation of $ 843 at September 30, 2023 and $ 773 at December 31, 2022

Intangible Assets, Net of Accumulated Amortization of $ 597 at September 30, 2023 and $ 480 at December 31, 2022

Property, Plant and Equipment, Net of Accumulated Depreciation of $ 900 at March 31, 2024 and $ 883 at December 31, 2023

Intangibles, Net of Accumulated Amortization of $ 678 at March 31, 2024 and $ 639 at December 31, 2023

Operating Lease Assets 135 138

15 unchanged sentences

Ordinary Shares - Par Value $ 0.001 ;

Authorized 1,356 shares, Issued and Outstanding 72 shares at September 30, 2023 and 71 at December 31, 2022

Authorized 1,356 shares, Issued and Outstanding 73.2 shares at March 31, 2024 and 72.1 at December 31, 2023

Capital in Excess of Par Value 2,985 2,906

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30,

Three Months Ended March 31,

(Dollars in millions) 2024 2023

Cash Flows From Operating Activities:

Net Income (Loss) $ 302 $ ( 25 )

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

Net Income $ 123 $ 81

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

Depreciation and Amortization 85 80

Loss on Blue Chip Swap Securities 57 —

Asset Write-downs and Other Charges — 6

Foreign Exchange Losses

Inventory Charges 6 11

Gain on Disposition of Assets and Businesses

( 11 ) ( 22 )

Deferred Income Tax Provision (Benefit) ( 67 ) 24

Gain on Disposition of Assets

Deferred Income Tax Provision

Share-Based Compensation 13 9

Changes in Operating Assets and Liabilities, Net:

Changes in Accounts Receivable, Inventory, and Accounts Payable:

Accounts Receivable

2 unchanged sentences

Accounts Payable

Other Assets and Liabilities, Net 105 13

Other Changes, Net

( 52 ) ( 62 )

Net Cash Provided by Operating Activities 131 84

2 unchanged sentences

Proceeds from Disposition of Assets 10 7

Purchases of Blue Chip Swap Securities ( 110 ) —

Proceeds from Sales of Blue Chip Swap Securities 53 —

Business Acquisitions, Net of Cash Acquired

Proceeds from Sale of Investments

Other Investing Activities

1 unchanged sentence

Cash Flows From Financing Activities:

Repayments and Repurchases of Long-term Debt ( 306 ) ( 62 )

Repayments of Long-term Debt

( 172 ) ( 66 )

Distributions to Noncontrolling Interests

Tax Remittance on Equity Awards Vested ( 8 ) ( 52 )

2 unchanged sentences

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash ( 16 ) ( 22 )

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash ( 166 ) 30

Net Decrease in Cash, Cash Equivalents and Restricted Cash ( 126 ) ( 129 )

Cash, Cash Equivalents and Restricted Cash at Beginning of Period 1,063 1,112

3 unchanged sentences

Income Taxes Paid, Net of Refunds $ 35 $ 29

844,702 Shares of Common Stock Issued for Acquisitions

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

16 unchanged sentences

Please refer to “Note 1 – Summary of Significant Accounting Policies” of our Consolidated Financial Statements from our 2023 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 and nine months ended September 30, 2022 to conform to the presentation for the three and nine months ended September 30, 2023.

New Accounting Standards

All new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.

Table of Con t e n t s

Certain reclassifications have been made to these Condensed Consolidated Financial Statements and accompanying footnotes for the three months ended March 31, 2023 to conform to the presentation for the three months ended March 31, 2024.

Accounting Standards Issued Not Yet Adopted

Please refer to “Note 1 – Summary of Significant Accounting Policies” of our Consolidated Financial Statements from our 2023 Form 10-K for the discussion on accounting pronouncements that have been issued but not yet effective for the interim periods presented that are not expected to have a material impact on our financial position or results of operations.

Evaluations of all other new accounting pronouncements that have been issued, but not yet effective are on-going, and at this time are not expected to have a material impact on our Condensed Consolidated Financial Statements.

2 – Segment Information

7 unchanged sentences

All other and corporate do not individually meet the criteria for segment reporting.

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

Three Months Ended March 31,

(Dollars in millions) 2024 2023

14 unchanged sentences

Operating Income $ 233 $ 185

Table of Con t e n t s

Disaggregated Revenue

Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods or services.

The majority of our revenue is derived from short term contracts.

Our products and services are generally sold based upon purchase orders, contracts or other legally enforceable arrangements with our customers that include fixed or determinable prices but do not generally include right of return provisions or other significant post-delivery obligations.

We lease drilling tools, artificial lift pumping equipment and other unmanned equipment to customers as operating leases.

Equipment rental revenue is generally provided based on call-out work orders that include fixed per unit prices and derived from short-term contracts.

Equipment rental revenue was $ 37 million and $ 109 million in the three and nine months ended September 30, 2023, respectively, and $ 43 million and $ 109 million for the three and nine months ended September 30, 2022, respectively.

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

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

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

Equipment rental revenue was $ 34 million in the three months ended March 31, 2024 and $ 33 million for the three months ended March 31, 2023.

During the three months ended March 31, 2024, the U.S.

and the Kingdom of Saudi Arabia accounted for 15 % and 10 %, respectively, of total revenue.

In addition, Mexico accounted for 14 % of total revenue, driven by our largest customer, which accounted for 12 % of our total revenue.

During the three months ended March 31, 2023, the U.S.

and Mexico accounted for 18 % and 12 %, respectively, of total revenue.

No other country accounted for more than 10% of our revenue in the periods presented.

Three Months Ended March 31,

(Dollars in millions) 2024 2023

Revenue by Geographic Areas:

North America (a)

International

Middle East/North Africa/Asia 497 376

North America 269 297 820 803

Latin America 370 317

2 unchanged sentences

$ 1,358 $ 1,186

(a) North America consists of the U.S.

Contract Balances

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 September 30, 2023 and December 31, 2022:

(Dollars in millions) September 30, 2023 December 31, 2022

The following table summarizes these balances as of March 31, 2024 and December 31, 2023:

(Dollars in millions) March 31, 2024 December 31, 2023

Receivables for Product and Services in Accounts Receivable, Net $ 1,221 $ 1,182

5 unchanged sentences

Contract Liabilities in Other Non-Current Liabilities $ 4 $ 5

Table of Con t e n t s

4 – Inventories, Net

Inventories, net of reserves of $ 119 million and $ 129 million as of September 30, 2023 and December 31, 2022, respectively, are presented by category in the table below:

(Dollars in millions) September 30, 2023 December 31, 2022

Inventories, net of reserves of $ 119 million and $ 121 million as of March 31, 2024 and December 31, 2023, respectively, are presented by category in the table below:

(Dollars in millions) March 31, 2024 December 31, 2023

Finished Goods $ 725 $ 688

1 unchanged sentence

Inventories, Net $ 850 $ 788

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 September 30, Nine Months Ended September 30,

(Dollars in millions) 2023 2022 2023 2022

Inventory Charges in “Cost of Products” $ — $ 6 $ 11 $ 26

Inventory Charges in “Other Charges (Credits)” — — — 4

Total Inventory Charges $ — $ 6 $ 11 $ 30

Table of Con t e n t s

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

The net charges are recorded in “Cost of Products” on our Condensed Consolidated Statements of Operations in the amount of $ 6 million and $ 11 million during the three months ended March 31, 2024 and March 31, 2023, respectively.

5 – Intangibles, Net

The components of intangible assets, net were as follows:

(Dollars in millions) September 30, 2023 December 31, 2022

Developed and Acquired Technology, Net of Accumulated Amortization of $ 446 at September 30, 2023 and $ 359 at December 31, 2022

Trade Names, Net of Accumulated Amortization of $ 151 at September 30, 2023 and $ 121 at December 31, 2022

Intangible Assets, Net of Accumulated Amortization of $ 597 at September 30, 2023 and $ 480 at December 31, 2022

Amortization expense was $ 37 million and $ 117 million in the three and nine months ended September 30, 2023, respectively, and $ 39 million and $ 117 million in the three and nine months ended September 30, 2022, respectively, and was reported in “Selling, General and Administrative” on our Condensed Consolidated Statements of Operations.

(Dollars in millions) March 31, 2024 December 31, 2023

Developed and Acquired Technology, Net of Accumulated Amortization of $ 508 at March 31, 2024 and $ 479 at December 31, 2023

Trade Names, Net of Accumulated Amortization of $ 170 at March 31, 2024 and $ 160 at December 31, 2023

Intangibles, Net of Accumulated Amortization of $ 678 at March 31, 2024 and $ 639 at December 31, 2023

Amortization expense was $ 41 million and $ 40 million for the three months ended March 31, 2024 and March 31, 2023, respectively, and is reported in “Selling, General and Administrative” on our Condensed Consolidated Statements of Operations.

The increase was primarily related to intangibles acquired in connection with acquisitions during the three months ended March 31, 2024.

Please refer to “Note 12 – Acquisitions”.

6 – Borrowings and Other Debt Obligations

(Dollars in millions) September 30, 2023 December 31, 2022

(Dollars in millions) March 31, 2024 December 31, 2023

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

Current Portion of Finance Leases 21 17

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

Current Portion of Long-term Debt $ 101 $ 168

3 unchanged sentences

Finance Leases

11.00 % Exit Notes due 2024 “Exit Notes”

Long-term Debt $ 1,629 $ 1,715

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 was payable semiannually on June 1 and December 1 of each year.

The Exit Notes have been refinanced or redeemed in the years since issuance.

During 2023, we redeemed $ 20 million in principal of our Exit Notes in the first quarter and redeemed the remaining principal of $ 105 million in the second quarter.

Table of Con t e n t s

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”).

On September 30, 2021, Weatherford International Ltd.

(“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.

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.

In the third quarter of 2023 and for the nine months ended September 30, 2023, we repurchased $ 72 million and $ 168 million in principal, respectively, of our 2028 Senior Secured Notes.

At September 30, 2023, the carrying value represents the remaining unpaid principal of $ 324 million offset by unamortized deferred issuance cost of $ 7 million.

Proceeds from the issuance were reduced by debt issuance costs.

In the first quarter of 2024 we repurchased $ 167 million in principal of our 2028 Senior Secured Notes.

At March 31, 2024, the carrying value was reclassified as short-term and represents the remaining unpaid principal of $ 82 million offset by unamortized deferred issuance cost of $ 2 million.

At December 31, 2023, the carrying value represented unpaid principal of $ 248 million offset by unamortized deferred issuance cost of $ 5 million.

On October 23, 2023, we redeemed $ 50 million in aggregate principal of our 2028 Senior Secured Notes for a redemption price of 103.00 % plus accrued and unpaid interest.

Since the third quarter of 2023, we also repurchased an additional $ 25 million in principal through the date of this report.

2030 Senior Notes

1 unchanged sentence

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

On December 1, 2022, the indenture related to our 2030 Senior Notes was amended and supplemented to add Weatherford Delaware as co-issuer and co-obligor, and concurrently releases the guarantee of Weatherford Delaware.

At September 30, 2023, the carrying value represents the remaining unpaid principal of $ 1.6 billion offset by unamortized deferred issuance of $ 13 million.

At December 31, 2022, the carrying value represented the remaining unpaid principal of $ 1.6 billion offset by unamortized deferred issuance cost of $ 14 million.

On December 1, 2022, the indenture related to our 2030 Senior Notes was amended and supplemented to add Weatherford International, LLC (“Weatherford Delaware”) as co-issuer and co-obligor, and concurrently releases the guarantee of Weatherford Delaware.

At March 31, 2024 and December 31, 2023, the carrying value represents the remaining unpaid principal of $ 1.6 billion at each date, offset by unamortized deferred issuance cost of $ 12 million and $ 13 million, respectively.

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).

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.

On October 24, 2023, we further amended our Credit Agreement, the details of which are discussed in “Note 12 - Subsequent Events”.

As of September 30, 2023, we had $ 379 million of letters of credit outstanding, consisting of the $ 272 million under the Credit Agreement and another $ 107 million under various uncommitted bi-lateral facilities (of which there was $ 101 million in cash collateral held and recorded in “Restricted Cash” on the Condensed Consolidated Balance Sheets).

As of December 31, 2022, we had $ 395 million of letters of credit outstanding, consisting of the $ 195 million under the Credit Agreement and another $ 200 million under various uncommitted bi-lateral facilities (of which there was $ 199 million in cash collateral held and recorded in “Restricted Cash” on the Condensed Consolidated Balance Sheets).

As of September 30, 2023 and December 31, 2022, our revolving loan capacity available was $ 45 million, respectively.

As mentioned above, on October 24, 2023, we further amended our Credit Agreement, the details of which are discussed in “Note 12 - Subsequent Events”.

Accrued Interest

As of September 30, 2023 and December 31, 2022, we had accrued interest of approximately $ 46 million and $ 22 million, respectively, in “Other Current Liabilities” primarily related to our outstanding debt as of the respective dates.

Table of Con t e n t s

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

Weatherford Bermuda, Weatherford Delaware, Weatherford Canada Ltd.

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

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

At March 31, 2024 and December 31, 2023, the Credit Agreement allowed for a total commitment amount of $ 550 million, maturing on the earlier of October 24, 2028 and 91 days prior to the maturity of the 2028 Senior Secured Notes.

Financial covenants in the Credit Agreement include a $ 250 million minimum liquidity covenant (which may increase up to $ 400 million dependent on the nature of transactions we may decide to enter into), a minimum interest coverage ratio of 2.50 to 1.00, a maximum total net leverage ratio of 3.50 to 1.00, and a maximum secured net leverage ratio of 1.50 to 1.00.

On March 24, 2023, we 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.

On October 24, 2023, we amended the Credit Agreement to, among other things, (i) allow for an increase in total commitment amount from $ 400 million to $ 550 million ($ 250 million for performance letters of credit and $ 300 million for either borrowings or additional performance or financial letters of credit), (ii) extend maturity to October 24, 2028, subject to certain conditions, (iii) allow for dividends, share buybacks, and acquisitions which combined with other permitted transactions, are not to exceed a total net leverage ratio of 2.00 to 1.00 and an aggregate liquidity not less than $ 400 million, (iv) remove the minimum book value of assets requirement, (v) add Weatherford Switzerland as a borrower, and (vi) modify certain pricing provisions and eliminate secured overnight financing rate exposure to certain letters of credit.

The amendment also gives the ability to request an increase in total commitments by up to $ 200 million, upon satisfaction of certain conditions.

We further amended the Credit Agreement on December 20, 2023, to permit a certain specified swap transaction.

As of March 31, 2024, we had zero borrowings outstanding under the Credit Agreement, and $ 374 million of letters of credit outstanding, consisting of the $ 273 million ($ 223 million for performance letters of credit and $ 50 million for financial letters of credit) under the Credit Agreement and another $ 101 million under various uncommitted bi-lateral facilities (of which there was $ 100 million in cash collateral held and recorded in “Restricted Cash” on the Condensed Consolidated Balance Sheets).

As of December 31, 2023, we had zero borrowings outstanding under the Credit Agreement, and $ 376 million of letters of credit outstanding, consisting of the $ 270 million ($ 218 million for performance letters of credit and $ 52 million for financial letters of credit) under the Credit Agreement and another $ 106 million under various uncommitted bi-lateral facilities (of which there was $ 101 million in cash collateral held and recorded in “Restricted Cash” on the Condensed Consolidated Balance Sheets).

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

2 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

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

11.00 % Exit Notes due 2024

$ — $ — $ 125 $ 128

6.50 % Senior Secured Notes due 2028

6 unchanged sentences

We have certain claims, disputes and pending litigation for which we do not believe a negative outcome is probable or for which we can only estimate a range of liability.

It is possible, however, that an unexpected judgment could be rendered against us, or we could decide to resolve a case or cases, that would result in a liability that could be uninsured and beyond the amounts we currently have reserved and in some cases those losses could be material.

It is possible, however, that an unexpected judgment could be rendered against us, or we could decide to resolve a case or cases, which would result in a liability that could be uninsured and beyond the amounts we currently have reserved and in some cases those losses could be material.

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, 2023 and December 31, 2022 were $ 36 million and $ 41 million, respectively.

GAMCO Shareholder Litigation

On September 6, 2019, GAMCO Asset Management, Inc.

(“GAMCO”), purportedly on behalf of itself and other similarly situated shareholders, filed a lawsuit asserting violations of the federal securities laws against certain then-current and former officers and directors of the Company.

GAMCO alleges violations of Sections 10(b) and 20(b) of the Securities Exchange Act of 1934, and violations of Sections 11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”) based on allegations that the Company and certain of its officers made false and/or misleading statements, and alleged non-disclosure of material facts, regarding our business, operations, prospects and performance.

GAMCO seeks damages on behalf of purchasers of the Company’s ordinary shares from October 26, 2016 through May 10, 2019.

GAMCO’s lawsuit was filed in the United States District Court for the Southern District of Texas, Houston Division, and it is captioned GAMCO Asset Management, Inc.

McCollum, et al., Case No.

4:19-cv-03363.

The District Court Judge appointed Utah Retirement Systems (“URS”) as Lead Plaintiff, and on March 16, 2020, URS filed its Amended Complaint.

URS added the Company as a defendant but dropped the claims against non-officer board members and all the claims under the Securities Act.

The defendants filed their motion to dismiss on May 18, 2020, and the Court granted the motion on May 14, 2021.

URS appealed the Court’s Opinion on Dismissal to the Court of Appeals for the Fifth Circuit, and the parties are continuing to await a decision.

We cannot reliably predict the outcome of the claims, including the amount of any possible loss.

Table of Con t e n t s

8 – Shareholders’ Equity

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 September 30, 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 and nine months ended September 30, 2023 and 2022:

The change in shares issued and outstanding on our Condensed Consolidated Balance Sheets from 72.1 million as of December 31, 2023 to 73.2 million as of March 31, 2024, was due to equity awards granted, vested, and exercised, net of shares withheld for taxes.

The change in shares also included the issuance of 844,702 of our ordinary shares in connection with acquisitions during the quarter.

See “Note 12 – Acquisitions” in our Notes to Condensed Consolidated Financial Statements for further details.

The following summarizes our shareholders’ equity activity for the three months ended March 31, 2024 and 2023:

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

Deficit Accumulated

Comprehensive Income (Loss) Noncontrolling Interests Total Shareholders’ Equity

Income (Deficit)

Comprehensive Loss

Noncontrolling Interests Total Shareholders’ Equity

Balance at December 31, 2023

1 unchanged sentence

Net Income — 112 — 11 123

Distributions to Noncontrolling Interests

— — — ( 6 ) ( 6 )

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

Other Comprehensive Income — — 3 — 3

Balance at March 31, 2023

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

Net Income — 82 — 8 90

Distributions to Noncontrolling Interests

Equity Awards Granted, Vested and Exercised, Net of Shares Withheld for Taxes 6 — — — 6

Other Comprehensive Loss — — ( 24 ) — ( 24 )

Balance at June 30, 2023

2,891 ( 2,217 ) ( 29 ) 27 672

Net Income — 123 — 8 131

Distributions to Noncontrolling Interests

— — — ( 15 ) ( 15 )

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

Other Comprehensive Loss — — ( 35 ) — ( 35 )

Other — — — 1 1

Balance at September 30, 2023

Equity Issued for Acquisitions

Balance at March 31, 2024

$ 2,985 $ ( 1,842 ) $ ( 52 ) $ 9 $ 1,100

Table of Con t e n t s

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

Deficit Accumulated

Income (Deficit)

Comprehensive Income (Loss) Noncontrolling Interests Total Shareholders’ Equity

1 unchanged sentence

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

Net Income (Loss) — ( 80 ) — 6 ( 74 )

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 — 72 — 9 81

2 unchanged sentences

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

Other Comprehensive Income — — 59 — 59

Balance at June 30, 2022

( 43 ) — — — ( 43 )

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

Distributions to Noncontrolling Interests

— — — ( 9 ) ( 9 )

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

Other 6 — — ( 6 ) —

Balance at September 30, 2022

Other Comprehensive Income — — 3 — 3

Balance at March 31, 2023

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

The following table presents the changes in our accumulated other comprehensive income (loss) by component for the nine months ended September 30, 2023 and 2022:

The following table presents the changes in our accumulated other comprehensive income (loss) by component for the three months ended March 31, 2024 and 2023:

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

2 unchanged sentences

Other Comprehensive Loss ( 24 ) — ( 24 )

Balance at September 30, 2023

Balance at March 31, 2024

$ ( 67 ) $ 15 $ ( 52 )

2 unchanged sentences

Other Comprehensive Income 3 — 3

Balance at September 30, 2022

Balance at March 31, 2023

$ ( 38 ) $ 19 $ ( 19 )

Table of Con t e n t s

9 – Income (Loss) per Share

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,

9 – Income per Share

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

Three Months Ended March 31,

(Dollars and shares in millions, except per share amounts) 2024 2023

Net Income (Loss) Attributable to Weatherford $ 123 $ 28 $ 277 $ ( 46 )

Net Income Attributable to Weatherford $ 112 $ 72

Basic Weighted Average Shares Outstanding 72.9 71.5

1 unchanged sentence

Diluted Weighted Average Shares Outstanding 74.7 73.5

Basic Income (Loss) per Share $ 1.70 $ 0.39 $ 3.85 $ ( 0.65 )

Diluted Income (Loss) per Share $ 1.66 $ 0.39 $ 3.76 $ ( 0.65 )

Antidilutive Shares:

Basic Income per Share $ 1.54 $ 1.00

Diluted Income per Share $ 1.50 $ 0.97

Antidilutive Weighted Average Shares:

Equity Awards

Total Antidilutive Shares 8 8 9 9

Basic income (loss) per share for all periods presented equals net income (loss) divided by our weighted average shares outstanding during the period.

Diluted income (loss) per share is computed by dividing net income (loss) by our weighted average shares outstanding during the period including potential dilutive ordinary shares.

Antidilutive shares represent securities that could potentially dilute income (loss) per share in the future, which are excluded from the computation as their impact was antidilutive.

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

Warrants to purchase 7.8 million ordinary shares at $ 99.96 per share were issued on December 13, 2019.

As of September 30, 2023, substantially all of the warrants remain outstanding and will expire on December 13, 2023.

These were excluded from the diluted weighted average shares outstanding as the exercise price of the warrants was greater than the average market price of the Company’s ordinary shares or excluded in the period in which the company incurred a net loss.

Table of Con t e n t s

Total Antidilutive Weighted Average Shares

Basic income per share for all periods presented equals net income divided by our weighted average shares outstanding during the period.

Diluted income per share is computed by dividing net income by our weighted average shares outstanding during the period including potential dilutive ordinary shares.

Antidilutive weighted average shares represent securities that could potentially dilute income per share in the future, which are excluded from the computation as their impact was antidilutive.

Warrants to purchase 7.8 million ordinary shares at $ 99.96 per share were issued on December 13, 2019 and expired on December 13, 2023.

For the three months ended March 31, 2023 warrants were excluded from the diluted weighted average shares outstanding as the exercise price of the warrants was greater than the average market price of the Company’s ordinary shares.

10 – Income Taxes

During the first quarter of 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.

We believed the change was appropriate as we are more reliably able to calculate the estimated annual effective tax rate due to sustained profitability and confidence in future earnings.

This method is applied for the three and nine months ended September 30, 2023.

For the three and nine months ended September 30, 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.

We recognized a tax expense of $ 33 million and $ 55 million for the three and nine months ended September 30, 2023, respectively, compared to the three and nine months ended September 30, 2022 where we recognized tax expense of $ 26 million and $ 66 million, respectively.

We recognized a tax expense of $ 59 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 where we recognized tax expense of $ 38 million.

During the three months ended March 31, 2024, income tax expense was higher primarily due to increased earnings before taxes.

We calculate income tax provision using the estimated annual effective tax rate method in accordance with Accounting Standards Codification “ASC” 740 - Income Taxes.

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.

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.

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

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.

During the nine months ended September 30, 2023, income tax expense was lower by $ 67 million due to the release of valuation allowances and the recognition of a benefit from previously uncertain tax positions in the second quarter.

Those benefits were offset by the establishment of a valuation allowance of approximately $ 20 million related to the $ 57 million loss on the sale of Blue Chip Swap securities in Argentina, further described in the following footnote.

During the nine months ended September 30, 2022, income tax expense was lower by $ 27 million, due the recognition of a benefit from previously uncertain tax positions.

In December 2023, Ireland enacted tax legislation that models the Organization of Economic Cooperation and Development reform plans focused on global profit allocation and implementing a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as “Pillar Two.” This is not expected to materially increase the taxes we owe.

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 September 30, 2023, we anticipate that it is reasonably possible that our uncertain tax positions of $ 262 million, including interest and penalties, may decrease by up to $ 12 million in the next twelve months due to expiration of statutes of limitations, settlements and/or conclusions of tax examinations.

11 – Blue Chip Swap Securities - Argentina

The functional currency for our Argentine operations is the U.S.

dollar and we use Argentina’s official exchange rate to remeasure our Argentine peso-denominated net monetary assets into U.S.

dollars at each balance sheet date.

The Central Bank of Argentina has maintained certain currency controls that limited our ability to access U.S.

dollars in Argentina and to remit cash from our Argentine operations.

An indirect foreign exchange mechanism known as a Blue Chip Swap (“BCS”) allows entities to remit U.S.

dollars from Argentina through the purchase and sale of BCS securities.

No BCS transactions were executed during the third quarter of 2023.

During the second quarter of 2023, we completed a series of BCS transactions at implied exchange rates (“BCS rates”) that were approximately 106 % higher than the official exchange rate resulting in a loss of $ 57 million during the second quarter of 2023.

We continue to use the official exchange rate for remeasurement of our Argentine peso-denominated net monetary assets under U.S.

GAAP as the BCS rates do not meet the criteria for remeasurement under U.S.

Table of Con t e n t s

As of March 31, 2024, we anticipate that it is reasonably possible that our uncertain tax positions of $ 286 million, including interest and penalties offset by net operating losses and other tax attributes if settled, may decrease by up to $ 12 million in the next twelve months due to expiration of statutes of limitations, settlements and/or conclusions of tax examinations.

11 – Credit Default Swap

During the fourth quarter of 2023, we entered into a credit default swap (“CDS”) with a third-party financial institution terminating in February of 2026 related to a secured loan between that third-party financial institution and our largest customer in Mexico.

The secured loan was utilized by this customer to pay certain of our outstanding receivables and accordingly, in the fourth quarter of 2023 and January of 2024, we received $ 140 million and $ 142 million, respectively.

Under the CDS terms, within five business days upon notification of default, we could be required to pay the then outstanding notional balance net of recoveries.

As of December 31, 2023, we had a notional balance of $ 130 million outstanding under the CDS, which increased to $ 260 million in January of 2024, following the receipt of the $ 142 million payment.

As of March 31, 2024, the notional balance under the CDS was $ 242 million.

Management expects the total notional balance under the CDS to decrease to $ 161 million, $ 54 million and nil by December 31, 2024, December 31, 2025 and March 31, 2026, respectively.

The fair value of this derivative was not material as of March 31, 2024 and December 31, 2023.

As of the date of this report, we are not aware of any events of default under the loan agreement between that third-party financial institution and our largest customer in Mexico.

12 – Acquisitions

During the three months ended March 31, 2024, we closed on acquisitions with total consideration of $ 136 million, which includes $ 36 million in cash net of cash acquired and 844,702 of our ordinary shares valued at $ 75 million on the closing dates.

The purchases were accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification “ASC” 805 Business Combinations and the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values measured in accordance with the guidance under ASC 820 Fair Value Measurement.

The fair value measurements of the intangible assets were based on inputs not observable in the market and therefore represent Level 3 measurements.

The fair value of intangible assets recorded at the acquisition date was $ 85 million and an immaterial amount was recorded for the goodwill and contingent considerations.

Acquisition-related costs incurred by the Company are expensed as incurred.

The operating results of the acquired businesses were included in the Company’s results of operations from the date of acquisition.

See also “Note 5 – Intangibles, Net” and “Note 8 – Shareholders’ Equity” in our Notes to Condensed Consolidated Financial Statements .

13 – Subsequent Events

On October 23, 2023, we redeemed $ 50 million in aggregate principal of our 2028 Senior Secured Notes for a redemption price of 103.00 %, plus accrued and unpaid interest.

On October 24, 2023, we amended the Credit Agreement to (i) allow for an increase in total commitment amount from $ 400 million to $ 550 million ($ 250 million for performance letters of credit and $ 300 million for either borrowings or additional performance or financial letters of credit), (ii) extend maturity to October 24, 2028, subject to certain conditions, (iii) allow for dividends, share buybacks, and acquisitions which combined with other permitted transactions, are not to exceed a total net leverage ratio of 2.00 to 1.00 and an aggregate liquidity not less than $ 400 million, and (iv) remove the minimum book value of assets requirement.

Table of Con t e n t s

Our Credit Agreement gives us the right, subject to certain terms and conditions, to effectuate from time to time an increase in total commitments by up to $ 200 million.

As such, on April 22, 2024, additional lenders joined the Credit Agreement, providing an increase in total commitments from $ 550 million to $ 680 million (performance letters of credit increased from $ 250 million to $ 309 million and borrowings or additional performance or financial letters of credit increased from $ 300 million to $ 371 million).

On April 23, 2024, we issued a notice to redeem the remainder of our 6.5 % Senior Secured Notes due 2028 on May 23, 2024.

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