Weatherford International plc 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. As used in this item, “Weatherford”, “the Company,” “we,” “us” and “our” refer to Weatherford International plc, a public limited company organized under the laws of Ireland, and its subsidiaries on a consolidated basis. The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto included in “Item 1. Financial Statements.” Our discussion includes various forward-looking statements about our markets, the demand for our products and services and our future results. These statements include assumptions, certain risks and uncertainties. For information about these assumptions, risks and uncertainties, refer to the section “Forward-Looking Statements” and the section “PART II - Other Information - Item 1A. Risk Factors.” Business Weatherford is a leading global energy services company providing equipment and services used in the drilling, evaluation, well construction, completion, production, intervention and responsible abandonment of wells in the oil and natural gas exploration and production industry as well as new energy platforms. We conduct business in approximately 75 countries, answering the challenges of the energy industry with 340 operating locations including manufacturing, research and development, service, and training facilities. Our operational performance is reviewed and managed across the life cycle of the wellbore, and we report in three segments (1) Drilling and Evaluation, (2) Well Construction and Completions, and (3) Production and Intervention. Drilling and Evaluation (“DRE”) offers a suite of services including managed pressure drilling, drilling services, wireline and drilling fluids. DRE offerings range from early well planning to reservoir management through innovative tools and expert engineering to optimize reservoir access and productivity. Well Construction and Completions (“WCC”) offers products and services for well integrity assurance across the full life cycle of the well. The primary offerings are tubular running services, cementation products, completions, liner hangers and well services. WCC deploys conventional to advanced technologies, providing safe and efficient services in any environment during the well construction phase. Production and Intervention (“PRI”) offers a suite of reservoir stimulation designs, and engineering capabilities that isolate zones and unlock reserves in conventional and unconventional wells, deep water, and aging reservoirs. The primary offerings are intervention services & drilling tools, artificial lift, digital solutions, sub-sea intervention and pressure pumping services in select markets. Industry Trends Demand for our industry’s products and services is driven by many factors, including commodity prices, the number of oil and gas rigs and wells drilled, depth and drilling conditions of wells, number of well completions, age of existing wells, reservoir depletion, regulatory environment, and the level of workover activity worldwide. Lower oil and natural gas prices and lower rig count generally correlate to lower exploration and production spending, and higher oil and natural gas prices and higher rig count generally correlate to higher exploration and production spending. Therefore, our financial results are significantly affected by oil and natural gas prices as well as rig counts. 17 Table of Contents The table below shows the average oil and natural gas prices for West Texas Intermediate (“WTI”), Brent North Sea (“Brent”) crude oil and Henry Hub natural gas. Three Months Ended March 31, 2024 2023 Oil price - WTI (1) $ 77.56 $ 76.08 Oil price - Brent (1) $ 83.00 $ 81.17 Natural gas price - Henry Hub (2) $ 2.13 $ 2.65 (1) Oil price measured in dollars per barrel (rounded to the nearest $0.01) (2) Natural gas price measured in dollars per million British thermal units (rounded to the nearest $0.01) The table below shows historical average rig counts based on the weekly Baker Hughes Company rig count information. Three Months Ended March 31, 2024 2023 North America 831 981 International 965 915 Worldwide 1,796 1,896 Russia Ukraine Conflict On February 24, 2022, the military conflict between Russia and Ukraine (“Russia Ukraine Conflict”) began and in response we evaluated, and continue to evaluate, our operations, with the priority being centered on the safety and well-being of our employees in the impacted regions, as well as operating in full compliance with applicable international laws and sanctions. Revenues in Russia were approximately 5% of our total revenues for the three months ended March 31, 2024, compared to 6% of our total revenues for the three months ended March 31, 2023. As of March 31, 2024, our Russia operations included $50 million in cash, $104 million in other current assets, $73 million in property, plant and equipment and other non-current assets, and $51 million in liabilities. As of December 31, 2023, our Russia operations included $62 million in cash, $94 million in other current assets, $76 million in property, plant and equipment and other non-current assets, and $62 million in liabilities. We continue to closely monitor and evaluate the developments in Russia as well as any changes in international laws and sanctions. We believe that operational complexity will increase over time and therefore continually evaluate these potential impacts on our business. As such, we continue to actively evaluate various options, strategies and contingencies with respect to our business in Russia, including, but not limited to: • continuing the business in compliance with applicable laws and sanctions; • evaluating the continued use or change in products, equipment and service offerings we currently provide in Russia; • curtailing or winding down our activities over time; • potentially divesting some or all of our assets or businesses in Russia, which could include the option of re-entering the country if and when sanctions or applicable laws would allow for the same and; • potential nationalization of the business. 18 Table of Contents Consolidated Statements of Operations - Operating Summary Revenues of $1.4 billion in the three months ended March 31, 2024, increased 15% compared to $1.2 billion in the three months ended March 31, 2023. Year-over-year in the first quarter, product revenues increased 11% and service revenues increased 17%. DRE and WCC contributed 29% and 22% of the increase in revenues, respectively, offset by a 1% decline of revenue in PRI. The remaining revenue increase was due to higher activity in integrated services and projects. Geographically, revenue growth was led by improvements in the Middle East/North Africa/Asia, Latin America and Europe/Sub-Sahara Africa/Russia, which contributed to 70%, 31% and 10% of the increase, respectively, partly offset by a revenue decline in North America. Average oil prices in the three months ended March 31, 2024 increased 2% for both West Texas Intermediate crude oil and Brent North Sea crude oil compared to the same period in 2023. Henry Hub natural gas prices decreased 20% compared to the same period in 2023. Global rig counts decreased 5% compared to three months ended March 31, 2023. The decrease in Henry Hub natural gas prices and rig count in North America and the increase in international rig count was observable in the revenue changes in the respective regions year-over year. Cost of products and services of $884 million in the three months ended March 31, 2024, increased 12% compared to $790 million in the three months ended March 31, 2023, respectively. Our cost of products and services as a percentage of revenues was 65% in the three months ended March 31, 2024 compared to 67% in the three months ended March 31, 2023 reflecting improved utilization on a more efficient operating cost structure. Additionally, lower inventory charges contributed to the lower cost as a percentage of revenues. Selling, general, administrative and research and development costs of $236 million in the three months ended March 31, 2024, increased 9% compared to $216 million in the three months ended March 31, 2023. The increase primarily reflects an increase in overhead to support organization growth and an increase in research and development on newer technologies. Selling, general, administrative and research and development costs as a percentage of revenues was 17% in the three months ended March 31, 2024, an improvement compared to 18% in the three months ended March 31, 2023. Consolidated Statements of Operations - Non-Operating Summary Interest Expense, Net Interest expense, net was $29 million and $31 million in the three months ended March 31, 2024 and 2023, respectively. Interest expense, net is interest expense net of interest income, which has decreased over prior year primarily due to a decrease in interest expense on our outstanding long-term debt. Interest expense was $43 million in the three months ended March 31, 2024, and $47 million in the three months ended March 31, 2023. Interest income was $14 million in the three months ended March 31, 2024 and $16 million in the three months ended March 31, 2023. See “Note 6 – Borrowings and Other Debt Obligations” to our Condensed Consolidated Financial Statements for additional details. Other Expense, Net Other expense, net was $22 million in the three months ended March 31, 2024 and $35 million in the three months ended March 31, 2023. Other expense, net primarily represents foreign exchange losses attributed to currency losses in countries with no or limited markets to hedge, letter of credit fees and other financing charges, including when applicable, bond redemption premiums partially offset by certain investment gains and losses. When economically advantageous, we enter into foreign currency forward contracts to mitigate the risk of future cash flows denominated in a foreign currency. 19 Table of Contents Income Taxes 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. The relationship between our pre-tax income or loss from continuing operations and our income tax benefit or provision varies from period to period as a result of 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, the impacts of tax planning activities and the resolution of tax audits. Our effective rate differs from the Irish statutory tax rate as the majority of our operations are taxed in jurisdictions with different tax rates. In addition, certain charges 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. Charges can be partially offset by the utilization of previously unbenefited deferred tax assets, such as net operating loss carryforwards. Please see “Note 10 – Income Taxes” to our Condensed Consolidated Financial Statements for additional details. Results of Operations by Segment Financial information by segment is summarized below. Favorable Three Months Ended (Unfavorable) March 31, $ % or bps (Dollars in millions) 2024 2023 Change Revenues: DRE Revenues $ 422 $ 372 $ 50 13 % WCC Revenues 458 421 37 9 % PRI Revenues 348 349 (1) — % All Other 130 44 86 195 % Total Revenues $ 1,358 $ 1,186 $ 172 15 % Operating Income: DRE Segment Adjusted EBITDA $ 130 $ 108 $ 22 20 % WCC Segment Adjusted EBITDA 120 96 24 25 % PRI Segment Adjusted EBITDA 73 68 5 7 % All Other 27 9 18 200 % Corporate (14) (12) (2) (17) % Depreciation and Amortization (85) (80) (5) (6) % Share-based Compensation (13) (9) (4) (44) % Other Credits (Charges) (5) 5 (10) (200) % Operating Income $ 233 $ 185 $ 48 26 % Margins: DRE Segment Adjusted EBITDA Margin 30.8 % 29.0 % n/m 177 bps WCC Segment Adjusted EBITDA Margin 26.2 % 22.8 % n/m 340 bps PRI Segment Adjusted EBITDA Margin 21.0 % 19.5 % n/m 149 bps DRE Results DRE revenues of $422 million in the three months ended March 31, 2024, increased $50 million or 13% compared to $372 million in the three months ended March 31, 2023. Of the year-over-year revenue increase in the first quarter of 2024 , approximately all of the increase was equally contributed by wireline and drilling- related services. Geographically, approximately 50% of the overall revenue growth came from Middle East/North Africa/Asia and approximately 35% from the 20 Table of Contents Europe/Sub-Sahara Africa/Russia region. DRE segment adjusted EBITDA of $130 million in the three months ended March 31, 2024, increased $22 million or 20%, compared to $108 million in the three months ended March 31, 2023. DRE segment adjusted EBITDA margin was 30.8% in the three months ended March 31, 2024 compared to 29.0% in the three months ended March 31, 2023. WCC Results WCC revenues of $458 million in the three months ended March 31, 2024, increased $37 million or 9% compared to $421 million in the three months ended March 31, 2023. Of the year-over-year revenue increase in the first quarter 2024 , approximately 70% was from completions and tubular running services. Geographically, Middle East/North Africa/Asia contributed approximately 65% and Latin America approximately 35%, to the regions with revenue growth, offset by a revenue decline in the North America and Europe/Sub-Sahara Africa/Russia regions. WCC segment adjusted EBITDA of $120 million in the three months ended March 31, 2024, increased $24 million or 25% compared to $96 million in the three months ended March 31, 2023. WCC segment adjusted EBITDA margin was 26.2% in the three months ended March 31, 2024, compared to 22.8% in the three months ended March 31, 2023. PRI Results PRI revenues of $348 million in the three months ended March 31, 2024, decreased $1 million compared to $349 million in the three months ended March 31, 2023. Of the year-over-year revenue decrease in the first quarter of 2024 , a modest decline from pressure pumping was partially offset by an increase primarily in artificial lift. Geographically, approximately all of the revenue decrease came from North America, offset by a revenue increase in the Latin America region. PRI segment adjusted EBITDA of $73 million in the three months ended March 31, 2024, increased $5 million or 7%, compared to $68 million in the three months ended March 31, 2023. PRI segment adjusted EBITDA margin was 21.0% in the three months ended March 31, 2024, an improvement compared to 19.5% in the three months ended March 31, 2023. All Other Results All other includes results from non-core business activities that do not individually meet the criteria for segment reporting, including integrated services and projects, which includes pass through and project management services. All Other revenues of $130 million in the three months ended March 31, 2024, increased $86 million or 195%, compared to $44 million in the three months ended March 31, 2023. The year-over-year increase was primarily from our integrated services and projects in the Middle East/North Africa/Asia and Latin America regions. Corporate Corporate was a net expense of $14 million in the three months ended March 31, 2024 compared to $12 million in the three months ended March 31, 2023. Depreciation and Amortization Depreciation and amortization was $85 million in the three months ended March 31, 2024 compared to $80 million in the three months ended March 31, 2023. The year-over-year increase was primarily due to a larger asset base. Share-based Compensation We recognized $13 million of share-based compensation in the three months ended March 31, 2024 compared to $9 million in the three months ended March 31, 2023. The increase was primarily attributable to annual equity awards granted in the first quarter. Outlook Growth and spending in the energy services industry is highly dependent on many external factors. These include but are 21 Table of Contents not limited to; inflation; geopolitical uncertainty; supply chain disruptions; energy policies at local and regional levels; rig counts; and the price of oil and natural gas. We continue to expect overall 2024 growth to outpace 2023, led by international and production-focused activity. We expect continued improvements in our customer activity levels and generally positive macroeconomic conditions, all of which are expected to continue to provide a pathway to a multi-year energy demand expansion. We continue to closely monitor macroeconomic and geopolitical conditions, potential supply chain disruptions, inflationary factors, and other labor and logistical constraints that could impact our operations and results. Liquidity and Capital Resources At March 31, 2024, we had cash and cash equivalents of $824 million and $113 million in restricted cash, compared to $958 million of cash and cash equivalents and $105 million in restricted cash at December 31, 2023. The following table summarizes cash flows provided by (used in) each type of business activity in the periods presented: Three Months Ended March 31, (Dollars in millions) 2024 2023 Net Cash Provided by Operating Activities $ 131 $ 84 Net Cash Used in Investing Activities $ (54) $ (64) Net Cash Used in Financing Activities $ (187) $ (127) Operating Activities Cash provided by operating activities was $131 million for the three months ended March 31, 2024, an increase from the $84 million for the three months ended March 31, 2023. The increase from the prior year was mostly driven by an increase in operating income as well as heightened collections activity which more than offset seasonal working capital requirements. During the fourth quarter of 2023, we entered into a credit default swap with a third-party financial institution 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 us $142 million in the three months ended March 31, 2024 of certain of our outstanding receivables, increasing our net cash provided by operating activities. See further discussion in “Note 11 – Credit Default Swap”. Investing Activities Cash used in investing activities was $54 million for the three months ended March 31, 2024. The primary investing activities were from cash used for capital expenditures of $59 million and cash used for acquisitions, net of cash acquired, of $36 million. The uses of cash were primarily offset by proceeds from sale of investments of $41 million from our marketable securities in Argentina and other outflows of $10 million. Cash used in investing activities was $64 million for the three months ended March 31, 2023. The primary investing activity was cash used for capital expenditures. Financing Activities Cash used in financing activities was $187 million for the three months ended March 31, 2024. The primary uses of cash were $172 million for repayments and repurchases of long-term debt (see “Note 6 – Borrowings and Other Debt Obligations”). The tax remittances on equity awards vested were lower relative to the three months ended March 31, 2023 due to a decrease in the quantity of shares vesting. Cash used in financing activities was $127 million for the three months ended March 31, 2023. The primary uses of cash were for repayments of long-term debt of $66 million and $52 million in tax remittances on equity awards vested. 22 Table of Contents Sources of Liquidity Our sources of available liquidity include cash generated by our operations, cash and cash equivalent balances, and periodic accounts receivable factoring. From time to time, we may enter into transactions to dispose of businesses or capital assets that no longer fit our long-term strategy. We historically have accessed banks for short-term loans and the capital markets for debt and equity offerings. Based upon current and anticipated levels of operations and collections, we expect to have sufficient cash from operations and cash on hand to fund our cash requirements (discussed below), both in the short-term and long-term. Cash Requirements Our cash requirements will continue to include payments for principal and interest on our long-term debt, capital expenditures, payments on our finance and operating leases, payments for short-term working capital needs, operating costs and restructuring payments. As business activity continues to rise, we expect to continue to utilize cash on capital assets and working capital growth. Our cash requirements also include personnel costs including awards under our employee incentive programs and other amounts to settle litigation related matters. In addition, we have derivative financial instruments where we have notional amounts that do not generally represent cash amounts exchanged by the parties and are calculated based on the terms of the derivative instrument, however, in the event of a related default, we could potentially be required to pay. See further discussion in our Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”) and “Note 11 – Credit Default Swap”. As of March 31, 2024, the aggregate principal amount of our primary debt outstanding was $82 million of our 2028 Senior Secured Notes and $1.6 billion of our 2030 Senior Notes. We expect to pay less than $147 million in interest payments in 2024 specific to these notes, of which we have paid $6 million during the three months ended March 31, 2024. See “Note 6 – Borrowings and Other Debt Obligations” for additional information. Our capital spend is expected to be 3-5% of revenue over a 12 to 18 month rolling period and our 2024 capital spend is projected to be within the same framework. Our payments on our operating and finance leases in 2024 are expected to be approximately $61 million and $25 million, respectively. Cash and cash equivalents and restricted cash are held by subsidiaries outside of Ireland. At March 31, 2024 and December 31, 2023, we had approximately $141 million and $92 million, respectively, of our cash and cash equivalents that cannot be immediately repatriated from various countries due to country central bank controls or other regulations. As we continue to conduct business in certain countries with cash that cannot be immediately repatriated, we may consider infrequent transactions to safeguard our cash from exposure to the effects of inflation and currency devaluation. Repatriation of those cash balances might result in incremental taxes or losses. Ratings Services’ Credit Ratings Our credit ratings at December 31, 2023 have been maintained through March 31, 2024. Customer Receivables We may experience delayed customer payments and payment defaults due to, among other reasons, a weaker economic environment, reductions in our customers’ cash flow from operations, our customers’ inability to access credit markets, as well as unsettled political conditions. Allowances have been recorded for receivables believed to be uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices. Adjustments to the allowance are made depending on how potential issues are resolved and the financial condition of our customers. In addition, our customers are primarily in fossil fuel-related industries and broad declines in demand for or pricing of oil or natural gas might impact the collections of our customer receivables. 23 Table of Contents In addition to the exposure in Mexico as noted in the above “Cash Requirements” section and in “Note 11 – Credit Default Swap, as of March 31, 2024 and December 31, 2023, our net accounts receivables in Mexico were 28% and 27% of our total net accounts receivables, respectively, of which our largest customer in the country accounted for 24% and 22% of our total net outstanding accounts receivables, respectively. From time to time, we experience delays in payments from our largest customer in Mexico although the balances due are not in dispute and we do not expect to have any material write-offs of receivables, delays or failure to pay in the future could differ from management’s expectations and negatively impact future results of the Company. As of March 31, 2024 and December 31, 2023, our net accounts receivables in the U.S. was 10% and 11% of total net accounts receivables, respectively. Except for the above, no other country accounted for more than 10% of our net accounts receivables balance. Accounts Receivable Factoring From time to time, we participate in factoring arrangements to sell accounts receivable to third-party financial institutions for cash proceeds net of discounts and hold-back. During the three months ended March 31, 2024 and March 31, 2023, we sold accounts receivable balances of $8 million and $46 million, and received cash proceeds of $8 million and $42 million, respectively, at the time of factoring. Guarantees Our 2028 Senior Secured Notes were issued by Weatherford International Ltd., a Bermuda exempted company (“Weatherford Bermuda”), and guaranteed by the Company and Weatherford International, LLC, a Delaware limited liability company (“Weatherford Delaware”) and other subsidiary guarantors party thereto. Our 2030 Senior Notes were issued by Weatherford Bermuda and guaranteed by the Company and other subsidiary guarantors party thereto. 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 released the guarantee of Weatherford Delaware. Credit Agreement, Letters of Credit and Surety Bonds Weatherford Bermuda, Weatherford Delaware, and 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 amended Credit Agreement as of December 31, 2023 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. 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 $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). In Latin America we utilize surety bonds as part of our customary business practice. As of March 31, 2024 and December 31, 2023, we had surety bonds outstanding of $511 million and $594 million, respectively. Any of our outstanding letters of credit or surety bonds could be called by the beneficiaries should we breach certain contractual or performance obligations and could reduce our available liquidity if we are unable to mitigate the issue. 24 Table of Contents Forward-Looking Statements This report contains various statements relating to future financial performance and results, business strategy, plans, goals and objectives, including certain projections, business trends and other statements that are not historical facts. These statements constitute forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “budget,” “strategy,” “plan,” “guidance,” “outlook,” “may,” “should,” “could,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions, although not all forward-looking statements contain these identifying words. Forward-looking statements reflect our beliefs and expectations based on current estimates and projections. While we believe these expectations, and the estimates and projections on which they are based, are reasonable and were made in good faith, these statements are subject to numerous risks and uncertainties. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. The forward-looking statements included herein are only made as of the date of this report, or if earlier, as of the date they were made, and we undertake no obligation to correct, update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except to the extent required under federal securities laws. The following, together with disclosures under “Part II – Other Information – Item 1A. Risk Factors”, sets forth certain risks and uncertainties relating to our forward-looking statements that may cause actual results to be materially different from our present expectations or projections: • global political, economic and market conditions, political disturbances, war, terrorist attacks, changes in global trade policies, weak local economic conditions and international currency fluctuations (including the Russia Ukraine Conflict); • general global economic repercussions related to U.S. and global inflationary pressures and potential recessionary concerns; • failure to ensure on-going compliance with current and future laws and government regulations, including but not limited to those related to the Russia Ukraine Conflict, and environmental and tax and accounting laws, rules and regulations; • changes in, and the administration of, treaties, laws, and regulations, including in response to issues related to the Russia Ukraine Conflict such as nationalization of assets, and the potential for such issues to exacerbate other risks and uncertainties listed or referenced; • cybersecurity incidents, as our reliance on digital technologies increases, those digital technologies may become more vulnerable and/or experience a higher rate of cybersecurity attacks, intrusions or incidents in the current environment of remote connectivity, as well as increased geopolitical conflicts and tensions, including as a result of the Russia Ukraine Conflict; • our ability to comply with, and respond to, climate change, environmental, social and governance and other “sustainability” initiatives and future legislative and regulatory measures both globally and in the specific geographic regions in which we and our customers operate; • our ability to effectively and timely address the need to conduct our operations and provide services to our customers more sustainably and with a lower carbon footprint; • risks associated with disease outbreaks and other public health issues, including a pandemic, their impact on the global economy and our business, customers, suppliers and other partners; further spread and potential for a resurgence of a pandemic in a given geographic region and related disruptions to our business, employees, customers, suppliers and other partners and additional regulatory measures or voluntary actions that may be put in place to limit the spread of a pandemic, including vaccination requirements and the associated availability of vaccines, restrictions on business operations or social distancing requirements, and the duration and efficacy of such restrictions; • the price and price volatility of, and demand for, oil, natural gas and natural gas liquids; • member-country quota compliance within the Organization of Petroleum Exporting Countries; • our ability to realize expected revenues and profitability levels from current and future contracts; • our ability to generate cash flow from operations to fund our operations; • our ability to effectively and timely adapt our technology portfolio, products and services to address and participate in changes to the market demands for the transition to alternate sources of energy such as geothermal, carbon capture and responsible abandonment, including our digitalization efforts; • increases in the prices, lead times and lack of availability of our procured products and services; • our ability to timely collect from customers; • our ability to realize cost savings and business enhancements from our revenue and cost improvement efforts; • our ability to attract, motivate and retain employees, including key personnel; • our ability to access to capital markets on terms that are commercially acceptable to the Company; 25 Table of Contents • our ability to manage our workforce, supply chain challenges and disruptions, business processes, information technology systems and technological innovation and commercialization, including the impact of our organization restructure, business enhancements, improvement efforts and the cost and support reduction plans; • our ability to service our debt obligations; • potential non-cash asset impairment charges for long-lived assets, intangible assets or other assets; and • adverse weather conditions in certain regions of our operations. Many of these factors are macro-economic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, affect us in ways or to an extent that we currently do not expect or consider to be significant, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this report as anticipated, believed, estimated, expected, intended, planned or projected. Finally, our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in our current and past filings with the SEC under the Exchange Act and the Securities Act of 1933, as amended.