23. Consolidating Financial Statements

Weatherford International plc (“Weatherford Ireland”), a public limited company organized under the laws of Ireland, a Swiss tax resident, and the ultimate parent of the Weatherford group, guarantees the obligations of its subsidiaries – Weatherford International Ltd., a Bermuda exempted company (“Weatherford Bermuda”), and Weatherford International, LLC, a Delaware limited liability company (“Weatherford Delaware”), including the notes and credit facilities listed below.

The 6.80% senior notes due 2037 of Weatherford Delaware were guaranteed by Weatherford Bermuda at December 31, 2018 and December 31, 2017. At December 31, 2018, Weatherford Bermuda also guaranteed the 9.875% senior notes due 2025.

The following obligations of Weatherford Bermuda were guaranteed by Weatherford Delaware at December 31, 2018 and December 31, 2017: (1) A&R Credit Agreement, (2) Term Loan Agreement, (3) 6.50% senior notes due 2036, (4) 7.00% senior notes due 2038, (5) 9.875% senior notes due 2039, (6) 5.125% senior notes due 2020, (7) 6.75% senior notes due 2040, (8) 4.50% senior notes due 2022, (9) 5.95% senior notes due 2042, (10) 5.875% exchangeable senior notes due 2021, (11) 7.75% senior notes due 2021, (12) 8.25% senior notes due 2023 and (13) 9.875% senior notes due 2024. Weatherford Delaware also guaranteed the 6.00% senior notes due 2018, which were repaid in full in March 2018 and the 9.625% senior notes due 2019, which were repaid in full through early redemption of the bond in April 2018. At December 31, 2018, Weatherford Delaware also guaranteed the 364-Day Credit Agreement.

Certain of these guarantee arrangements require us to present the following condensed consolidating financial information. The accompanying guarantor financial information is presented on the equity method of accounting for all periods presented. Under this method, investments in subsidiaries are recorded at cost and adjusted for our share in the subsidiaries’ cumulative results of operations, capital contributions and distributions and other changes in equity. Elimination entries relate primarily to the elimination of investments in subsidiaries and associated intercompany balances and transactions.

Condensed Consolidating Statement of Operations and

Comprehensive Income (Loss)

Year Ended December 31, 2018



(Dollars in Millions)	Weatherford Ireland			Weatherford Bermuda			Weatherford Delaware			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	—		$	—		$	5,744		$	—		$	5,744
Costs and Expenses	(14		)	(3		)	—			(7,811		)	—			(7,828		)
Operating Income (Loss)	(14		)	(3		)	—			(2,067		)	—			(2,084		)

Other Income (Expense):
Interest Expense, Net	—			(563		)	(89		)	17			21			(614		)
Intercompany Charges, Net	(16		)	125			(90		)	(733		)	714			—
Equity in Subsidiary Income	(2,851		)	(748		)	(770		)	—			4,369			—
Other Income (Expense), Net	70			85			133			(209		)	(138		)	(59		)
Income (Loss) Before Income Taxes	(2,811		)	(1,104		)	(816		)	(2,992		)	4,966			(2,757		)
(Provision) for Income Taxes	—			—			148			(182		)	—			(34		)
Net Income (Loss)	(2,811		)	(1,104		)	(668		)	(3,174		)	4,966			(2,791		)
Net Income Attributable to Noncontrolling Interests	—			—			—			20			—			20
Net Income (Loss) Attributable to Weatherford	$	(2,811	)	$	(1,104	)	$	(668	)	$	(3,194	)	$	4,966		$	(2,811	)
Comprehensive Income (Loss) Attributable to Weatherford	$	(3,038	)	$	(1,117	)	$	(624	)	$	(3,422	)	$	5,163		$	(3,038	)

Condensed Consolidating Statement of Operations and

Comprehensive Income (Loss)

Year Ended December 31, 2017



(Dollars in millions)	Weatherford Ireland			Weatherford Bermuda			Weatherford Delaware			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	—		$	—		$	5,699		$	—		$	5,699
Costs and Expenses	(19		)	45			2			(7,897		)	—			(7,869		)
Operating Income (Loss)	(19		)	45			2			(2,198		)	—			(2,170		)

Other Income (Expense):
Interest Expense, Net	—			(583		)	(38		)	24			18			(579		)
Intercompany Charges, Net	12			148			(192		)	(103		)	135			—
Equity in Subsidiary Income	(2,891		)	(878		)	(437		)	—			4,206			—
Other Income (Expense), Net	85			(19		)	5			30			(8		)	93
Income (Loss) Before Income Taxes	(2,813		)	(1,287		)	(660		)	(2,247		)	4,351			(2,656		)
(Provision) Benefit for Income Taxes	—			—			—			(137		)	—			(137		)
Net Income (Loss)	(2,813		)	(1,287		)	(660		)	(2,384		)	4,351			(2,793		)
Net Income Attributable to Noncontrolling Interests	—			—			—			20			—			20
Net Income (Loss) Attributable to Weatherford	$	(2,813	)	$	(1,287	)	$	(660	)	$	(2,404	)	$	4,351		$	(2,813	)
Comprehensive Income (Loss) Attributable to Weatherford	$	(2,722	)	$	(1,307	)	$	(700	)	$	(2,312	)	$	4,319		$	(2,722	)

Condensed Consolidating Statement of Operations and

Comprehensive Income (Loss)

Year Ended December 31, 2016



(Dollars in millions)	Weatherford Ireland			Weatherford Bermuda			Weatherford Delaware			Other Subsidiaries			Eliminations			Consolidation
Revenues	$	—		$	—		$	—		$	5,749		$	—		$	5,749
Costs and Expenses	(151		)	(3		)	5			(7,845		)	—			(7,994		)
Operating Income (Loss)	(151		)	(3		)	5			(2,096		)	—			(2,245		)

Other Income (Expense):
Interest Expense, Net	—			(465		)	(49		)	4			11			(499		)
Intercompany Charges, Net	(76		)	4			(196		)	(274		)	542			—
Equity in Subsidiary Income	(3,181		)	(2,403		)	(944		)	—			6,528			—
Other Income (Expense), Net	16			(38		)	43			(84		)	(70		)	(133		)
Income (Loss) Before Income Taxes	(3,392		)	(2,905		)	(1,141		)	(2,450		)	7,011			(2,877		)
(Provision) Benefit for Income Taxes	—			—			(154		)	(342		)	—			(496		)
Net Income (Loss)	(3,392		)	(2,905		)	(1,295		)	(2,792		)	7,011			(3,373		)
Net Income Attributable to Noncontrolling Interests	—			—			—			19			—			19
Net Income (Loss) Attributable to Weatherford	$	(3,392	)	$	(2,905	)	$	(1,295	)	$	(2,811	)	$	7,011		$	(3,392	)
Comprehensive Income (Loss) Attributable to Weatherford	$	(3,361	)	$	(3,081	)	$	(1,425	)	$	(2,780	)	$	7,286		$	(3,361	)

Condensed Consolidating Balance Sheet

December 31, 2018



(Dollars in millions)	Weatherford Ireland			Weatherford Bermuda		Weatherford Delaware		Other Subsidiaries		Eliminations			Consolidation
Current Assets:
Cash and Cash Equivalents	$	—		$	284	$	—	$	318	$	—		$	602
Other Current Assets	1			—		654		2,887		(694		)	2,848
Total Current Assets	1			284		654		3,205		(694		)	3,450

Equity Investments in Affiliates	(3,694		)	7,531		7,203		354		(11,394		)	—
Intercompany Receivables, Net	—			103		—		2,966		(3,069		)	—
Other Assets	—			15		4		3,132		—			3,151
Total Assets	$	(3,693	)	$	7,933	$	7,861	$	9,657	$	(15,157	)	$	6,601

Current Liabilities:
Short-term Borrowings and Current Portion of Long-Term Debt	$	—		$	373	$	—	$	10	$	—		$	383
Accounts Payable and Other Current Liabilities	9			174		—		2,428		(694		)	1,917
Total Current Liabilities	9			547		—		2,438		(694		)	2,300

Long-term Debt	—			6,632		775		130		68			7,605
Intercompany Payables, Net	3			—		3,066		—		(3,069		)	—
Other Long-term Liabilities	—			7		—		362		(7		)	362
Total Liabilities	12			7,186		3,841		2,930		(3,702		)	10,267

Weatherford Shareholders’ (Deficiency) Equity	(3,705		)	747		4,020		6,688		(11,455		)	(3,705		)
Noncontrolling Interests	—			—		—		39		—			39
Total Liabilities and Shareholders’ (Deficiency) Equity	$	(3,693	)	$	7,933	$	7,861	$	9,657	$	(15,157	)	$	6,601

Condensed Consolidating Balance Sheet

December 31, 2017



(Dollars in millions)	Weatherford Ireland			Weatherford Bermuda		Weatherford Delaware		Other Subsidiaries		Eliminations			Consolidation
Current Assets:
Cash and Cash Equivalents	$	—		$	195	$	—	$	418	$	—		$	613
Other Current Assets	1			—		516		3,298		(550		)	3,265
Total Current Assets	1			195		516		3,716		(550		)	3,878

Equity Investments in Affiliates	(460		)	7,998		8,009		530		(16,077		)	—
Intercompany Receivables, Net	—			—		—		4,213		(4,213		)	—
Other Assets	—			8		4		5,857		—			5,869
Total Assets	$	(459	)	$	8,201	$	8,529	$	14,316	$	(20,840	)	$	9,747

Current Liabilities:
Short-term Borrowings and Current Portion of Long-Term Debt	$	—		$	128	$	—	$	20	$	—		$	148
Accounts Payable and Other Current Liabilities	10			183		—		2,439		(550		)	2,082
Total Current Liabilities	10			311		—		2,459		(550		)	2,230

Long-term Debt	—			7,127		166		159		89			7,541
Intercompany Payables, Net	87			242		3,884		—		(4,213		)	—
Other Long-term Liabilities	70			146		136		332		(137		)	547
Total Liabilities	167			7,826		4,186		2,950		(4,811		)	10,318

Weatherford Shareholders’ Equity	(626		)	375		4,343		11,311		(16,029		)	(626		)
Noncontrolling Interests	—			—		—		55		—			55
Total Liabilities and Shareholders’ Equity	$	(459	)	$	8,201	$	8,529	$	14,316	$	(20,840	)	$	9,747

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2018



(Dollars in millions)	Weatherford Ireland			Weatherford Bermuda			Weatherford Delaware			Other Subsidiaries			Eliminations			Consolidation
Cash Flows from Operating Activities:
Net Income (Loss)	$	(2,811	)	$	(1,104	)	$	(668	)	$	(3,174	)	$	4,966		$	(2,791	)
Adjustments to Reconcile Net Income(Loss) to Net Cash Provided (Used) by Operating Activities:
Charges from Parent or Subsidiary	16			(125		)	90			733			(714		)	—
Equity in (Earnings) Loss of Affiliates	2,851			748			770			—			(4,369		)	—
Deferred Income Tax Provision (Benefit)	—			—			—			(79		)				(79		)
Other Adjustments	93			1,003			(1,688		)	3,103			117			2,628
Net Cash Used in Operating Activities	149			522			(1,496		)	583			—			(242		)
Cash Flows from Investing Activities:
Capital Expenditures for Property, Plant and Equipment	—			—			—			(186		)	—			(186		)
Acquisition of Assets Held for Sale	—			—			—			(31		)	—			(31		)
Acquisitions of Businesses, Net of Cash Acquired	—			—			—			4			—			4
Acquisition of Intellectual Property	—			—			—			(28		)	—			(28		)
Proceeds from Sale of Businesses and Equity Investment, Net	—			—			—			257			—			257
Proceeds from Sale of Assets	—			—			—			106			—			106
Net Cash Provided by (Used in) Investing Activities	—			—			—			122			—			122
Cash Flows from Financing Activities:
Borrowings (Repayments) Short-term Debt, Net	—			188			—			(30		)	—			158
Borrowings (Repayments) Long-term Debt, Net	—			(491		)	587			(12		)	—			84
Borrowings (Repayments) Between Subsidiaries, Net	(149		)	(130		)	909			(630		)	—			—
Other, Net	—			—			—			(74		)	—			(74		)
Net Cash Provided by Financing Activities	(149		)	(433		)	1,496			(746		)	—			168
Effect of Exchange Rate Changes On Cash and Cash Equivalents	—			—			—			(59		)	—			(59		)
Net Increase (Decrease) in Cash and Cash Equivalents	—			89			—			(100		)	—			(11		)
Cash and Cash Equivalents at Beginning of Year	—			195			—			418			—			613
Cash and Cash Equivalents at End of Year	$	—		$	284		$	—		$	318		$	—		$	602

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2017



(Dollars in millions)	Weatherford Ireland			Weatherford Bermuda			Weatherford Delaware			Other Subsidiaries			Eliminations			Consolidation
Cash Flows from Operating Activities:
Net Income (Loss)	$	(2,813	)	$	(1,287	)	$	(660	)	$	(2,384	)	$	4,351		$	(2,793	)
Adjustments to Reconcile Net Income(Loss) to Net Cash Provided (Used) by Operating Activities:
Charges from Parent or Subsidiary	(12		)	(148		)	192			103			(135		)	—
Equity in (Earnings) Loss of Affiliates	2,891			878			437			—			(4,206		)	—
Deferred Income Tax Provision (Benefit)	—			—			—			(25		)	—			(25		)
Other Adjustments	(278		)	1,236			66			1,416			(10		)	2,430
Net Cash Provided by (Used in) Operating Activities	(212		)	679			35			(890		)	—			(388		)
Cash Flows from Investing Activities:
Capital Expenditures for Property, Plant and Equipment	—			—			—			(225		)	—			(225		)
Acquisition of Assets Held for Sale	—			—			—			(244		)	—			(244		)
Acquisitions of Businesses, Net of Cash Acquired	—			—			—			(7		)	—			(7		)
Acquisition of Intellectual Property	—			—			—			(15		)	—			(15		)
Proceeds (Payment) from Disposition of Businesses and Investments	—			—			—			429			—			429
Proceeds from Disposition of Assets	—			—			—			51			—			51
Other Investing Activities	—			—			—			(51		)	—			(51		)
Net Cash Provided by (Used in) Investing Activities	—			—			—			(62		)	—			(62		)
Cash Flows from Financing Activities:
Borrowings (Repayments) Short-term Debt, Net	—			(17		)	—			(111		)	—			(128		)
Borrowings (Repayments) Long-term Debt, Net	—			200			(94		)	75			—			181
Borrowings (Repayments) Between Subsidiaries, Net	212			(1,253		)	55			986			—			—
Other, Net	—			—			—			(33		)	—			(33		)
Net Cash Provided by (Used in) Financing Activities	212			(1,070		)	(39		)	917			—			20
Effect of Exchange Rate Changes On Cash and Cash Equivalents	—			—			—			6			—			6
Net Increase in Cash and Cash Equivalents	—			(391		)	(4		)	(29		)	—			(424		)
Cash and Cash Equivalents at Beginning of Year	—			586			4			447			—			1,037
Cash and Cash Equivalents at End of Year	$	—		$	195		$	—		$	418		$	—		$	613

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2016



(Dollars in millions)	Weatherford Ireland			Weatherford Bermuda			Weatherford Delaware			Other Subsidiaries			Eliminations			Consolidation
Cash Flows from Operating Activities:
Net Income (Loss)	$	(3,392	)	$	(2,905	)	$	(1,295	)	$	(2,792	)	$	7,011		$	(3,373	)
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities:
Charges from Parent or Subsidiary	76			(4		)	196			274			(542		)	—
Equity in (Earnings) Loss of Affiliates	3,181			2,403			944			—			(6,528		)	—
Deferred Income Tax (Provision) Benefit	—			—			26			355			—			381
Other Adjustments	1,230			75			257			1,067			59			2,688
Net Cash Provided by (Used in) Operating Activities	1,095			(431		)	128			(1,096		)	—			(304		)
Cash Flows from Investing Activities:
Capital Expenditures for Property, Plant and Equipment	—			—			—			(204		)	—			(204		)
Acquisitions of Businesses, Net of Cash Acquired	—			—			—			(5		)	—			(5		)
Acquisition of Intellectual Property	—			—			—			(10		)	—			(10		)
Insurance Proceeds Related to Insurance Casualty Loss	—			—			—			39			—			39
Proceeds from Sale of Assets	—			—			—			49			—			49
Proceeds (Payment) Related to Sale of Businesses and Equity Investment, Net	—			—			—			(6		)	—			(6		)
Net Cash Provided by (Used in) Investing Activities	—			—			—			(137		)	—			(137		)
Cash Flows from Financing Activities:
Borrowings (Repayments) Short-term Debt, Net	—			(1,497		)	—			(15		)	—			(1,512		)
Borrowings (Repayments) Long-term Debt, Net	—			2,299			(516		)	(65		)	—			1,718
Borrowings (Repayments) Between Subsidiaries, Net	(1,095		)	213			370			512			—			—
Proceeds from Issuance of Ordinary Common Shares and Warrant	—			—			—			1,071			—			1,071
Other, Net	—			—			—			(216		)	—			(216		)
Net Cash Provided by (Used in) Financing Activities	(1,095		)	1,015			(146		)	1,287			—			1,061
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			—			(50		)	—			(50		)
Net Increase in Cash and Cash Equivalents	—			584			(18		)	4			—			570
Cash and Cash Equivalents at Beginning of Period	—			2			22			443			—			467
Cash and Cash Equivalents at End of Period	$	—		$	586		$	4		$	447		$	—		$	1,037