Consolidating Financial Statements | Consolidating Financial Statements 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 our subsidiaries – Weatherford Bermuda and Weatherford Delaware, including the notes and credit facilities listed below. The following obligations of Weatherford Delaware were guaranteed by Weatherford Bermuda at December 31, 2016 and 2015 : (1) 6.35% senior notes and (2) 6.80% senior notes. The following obligations of Weatherford Bermuda were guaranteed by Weatherford Delaware at December 31, 2016 and 2015 : (1) 6.50% senior notes, (2) 6.00% senior notes, (3) 7.00% senior notes, (4) 9.625% senior notes, (5) 9.875% senior notes due 2039, (6) 5.125% senior notes, (7) 6.75% senior notes, (8) 4.50% senior notes and (9) 5.95% senior notes. At December 31, 2015, Weatherford Delaware also guaranteed the revolving credit facility and the 5.50% senior notes of Weatherford Bermuda. The following obligations of Weatherford Bermuda were guaranteed by Weatherford Delaware at December 31, 2016 : (1) Revolving Credit Agreement, (2) Term Loan Agreement, (3) 5.875% exchangeable senior notes, (4) 7.75% senior notes, (5) 8.25% senior notes and (6) 9.875% senior notes due 2024. Additionally, the 364 -day term loan facility held by Weatherford Bermuda and guaranteed by Weatherford Delaware was repaid during 2015. As a result of these guarantee arrangements, we are required 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, 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 (7,851 ) — (8,000 ) Operating Income (Loss) (151 ) (3 ) 5 (2,102 ) — (2,251 ) 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 (78 ) (70 ) (127 ) Income (Loss) Before Income Taxes (3,392 ) (2,905 ) (1,141 ) (2,450 ) 7,011 (2,877 ) (Provision) 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 Statement of Operations and Comprehensive Income (Loss) Year Ended December 31, 2015 (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Revenues $ — $ — $ — $ 9,433 $ — $ 9,433 Costs and Expenses (101 ) (7 ) 2 (10,873 ) — (10,979 ) Operating Income (Loss) (101 ) (7 ) 2 (1,440 ) — (1,546 ) Other Income (Expense): Interest Expense, Net — (398 ) (57 ) (13 ) — (468 ) Intercompany Charges, Net (83 ) (110 ) (282 ) (403 ) 878 — Equity in Subsidiary Income (1,801 ) (1,868 ) (492 ) — 4,161 — Other Income (Expense), Net — 51 11 (144 ) — (82 ) Income (Loss) Before Income Taxes (1,985 ) (2,332 ) (818 ) (2,000 ) 5,039 (2,096 ) Benefit for Income Taxes — — 114 31 — 145 Net Income (Loss) (1,985 ) (2,332 ) (704 ) (1,969 ) 5,039 (1,951 ) Net Income Attributable to Noncontrolling Interests — — — 34 — 34 Net Income (Loss) Attributable to Weatherford $ (1,985 ) $ (2,332 ) $ (704 ) $ (2,003 ) $ 5,039 $ (1,985 ) Comprehensive Income (Loss) Attributable to Weatherford $ (2,745 ) $ (2,610 ) $ (754 ) $ (2,762 ) $ 6,126 $ (2,745 ) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Year Ended December 31, 2014 (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Revenues $ — $ — $ — $ 14,911 $ — $ 14,911 Costs and Expenses (59 ) (18 ) 3 (14,332 ) — (14,406 ) Operating Income (Loss) (59 ) (18 ) 3 579 — 505 Other Income (Expense): Interest Expense, Net — (422 ) (57 ) (19 ) — (498 ) Intercompany Charges, Net (99 ) 7,291 (266 ) (8,802 ) 1,876 — Equity in Subsidiary Income (424 ) (430 ) 407 (2 ) 449 — Other Income (Expense), Net — 20 (3 ) (279 ) — (262 ) Income (Loss) Before Income Taxes (582 ) 6,441 84 (8,523 ) 2,325 (255 ) (Provision) Benefit for Income Taxes (2 ) — 131 (413 ) — (284 ) Net Income (Loss) (584 ) 6,441 215 (8,936 ) 2,325 (539 ) Net Income Attributable to Noncontrolling Interests — — — 45 — 45 Net Income (Loss) Attributable to Weatherford $ (584 ) $ 6,441 $ 215 $ (8,981 ) $ 2,325 $ (584 ) Comprehensive Income (Loss) Attributable to Weatherford $ (1,278 ) $ 5,811 $ (128 ) $ (9,674 ) $ 3,991 $ (1,278 ) Condensed Consolidating Balance Sheet December 31, 2016 (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Current Assets: Cash and Cash Equivalents $ — $ 586 $ 4 $ 447 $ — $ 1,037 Other Current Assets 1 — 512 3,891 (531 ) 3,873 Total Current Assets 1 586 516 4,338 (531 ) 4,910 Equity Investments in Affiliates 2,415 8,669 8,301 1,037 (20,422 ) — Intercompany Receivables, Net — — — 3,762 (3,762 ) — Other Assets 2 13 — 7,751 (12 ) 7,754 Total Assets $ 2,418 $ 9,268 $ 8,817 $ 16,888 $ (24,727 ) $ 12,664 Current Liabilities: Short-term Borrowings and Current Portion of Long-Term Debt $ — $ 53 $ 94 $ 32 $ — $ 179 Accounts Payable and Other Current Liabilities 105 198 — 2,488 (542 ) 2,249 Total Current Liabilities 105 251 94 2,520 (542 ) 2,428 Long-term Debt — 6,944 148 204 107 7,403 Intercompany Payables, Net 145 224 3,393 — (3,762 ) — Other Long-term Liabilities 156 152 146 457 (146 ) 765 Total Liabilities 406 7,571 3,781 3,181 (4,343 ) 10,596 Weatherford Shareholders’ Equity 2,012 1,697 5,036 13,651 (20,384 ) 2,012 Noncontrolling Interests — — — 56 — 56 Total Liabilities and Shareholders’ Equity $ 2,418 $ 9,268 $ 8,817 $ 16,888 $ (24,727 ) $ 12,664 Condensed Consolidating Balance Sheet December 31, 2015 (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Current Assets: Cash and Cash Equivalents $ — $ 2 $ 22 $ 443 $ — $ 467 Other Current Assets 4 — 651 5,146 (704 ) 5,097 Total Current Assets 4 2 673 5,589 (704 ) 5,564 Equity Investments in Affiliates 5,693 8,709 9,187 3,483 (27,072 ) — Intercompany Receivables, Net — — — 10,423 (10,423 ) — Other Assets 3 2 16 9,175 — 9,196 Total Assets $ 5,700 $ 8,713 $ 9,876 $ 28,670 $ (38,199 ) $ 14,760 Current Liabilities: Short-term Borrowings and Current Portion of Long-Term Debt $ — $ 1,503 $ 6 $ 73 $ — $ 1,582 Accounts Payable and Other Current Liabilities 19 212 — 2,922 (704 ) 2,449 Total Current Liabilities 19 1,715 6 2,995 (704 ) 4,031 Long-term Debt — 4,885 862 105 — 5,852 Intercompany Payables, Net 1,362 6,147 2,914 — (10,423 ) — Other Long-term Liabilities 15 77 10 410 — 512 Total Liabilities 1,396 12,824 3,792 3,510 (11,127 ) 10,395 Weatherford Shareholders’ Equity 4,304 (4,111 ) 6,084 25,099 (27,072 ) 4,304 Noncontrolling Interests — — — 61 — 61 Total Liabilities and Shareholders’ Equity $ 5,700 $ 8,713 $ 9,876 $ 28,670 $ (38,199 ) $ 14,760 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 1,057 59 2,678 Net Cash Provided by (Used in) Operating Activities 1,095 (431 ) 128 (1,106 ) — (314 ) 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 Asset Casualty Loss — — — 39 — 39 Proceeds (Payment) Related to Sale of Businesses and Equity Investment, Net — — — (6 ) — (6 ) Proceeds from Sale of Assets — — — 49 — 49 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 — — — (206 ) — (206 ) Net Cash Provided by (Used in) Financing Activities (1,095 ) 1,015 (146 ) 1,297 — 1,071 Effect of Exchange Rate Changes On Cash and Cash Equivalents — — — (50 ) — (50 ) Net Increase (Decrease) in Cash and Cash Equivalents — 584 (18 ) 4 — 570 Cash and Cash Equivalents at Beginning of Year — 2 22 443 — 467 Cash and Cash Equivalents at End of Year $ — $ 586 $ 4 $ 447 $ — $ 1,037 Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2015 (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Cash Flows from Operating Activities: Net Income (Loss) $ (1,985 ) $ (2,332 ) $ (704 ) $ (1,969 ) $ 5,039 $ (1,951 ) Adjustments to Reconcile Net Income(Loss) to Net Cash Provided (Used) by Operating Activities: Charges from Parent or Subsidiary 83 110 282 403 (878 ) — Equity in (Earnings) Loss of Affiliates 1,801 1,868 492 — (4,161 ) — Deferred Income Tax Provision (Benefit) — — 14 (462 ) — (448 ) Other Adjustments (35 ) 210 (86 ) 3,016 — 3,105 Net Cash Provided by (Used in) Operating Activities (136 ) (144 ) (2 ) 988 — 706 Cash Flows from Investing Activities: Capital Expenditures for Property, Plant and Equipment — — — (682 ) — (682 ) Acquisitions of Businesses, Net of Cash Acquired — — — (14 ) — (14 ) Acquisition of Intellectual Property — — — (8 ) — (8 ) Proceeds (Payment) Related to Sale of Businesses and Equity Investment, Net — — — 8 — 8 Proceeds from Sale of Assets — — — 37 — 37 Net Cash Provided by (Used in) Investing Activities — — — (659 ) — (659 ) Cash Flows from Financing Activities: Borrowings (Repayments) Short-term Debt, Net — 535 — (30 ) — 505 Borrowings (Repayments) Long-term Debt, Net — (411 ) (31 ) (28 ) — (470 ) Borrowings (Repayments) Between Subsidiaries, Net 135 22 33 (190 ) — — Other, Net — — — (23 ) — (23 ) Net Cash Provided by (Used in) Financing Activities 135 146 2 (271 ) — 12 Effect of Exchange Rate Changes On Cash and Cash Equivalents — — — (66 ) — (66 ) Net Increase in Cash and Cash Equivalents (1 ) 2 — (8 ) — (7 ) Cash and Cash Equivalents at Beginning of Year 1 — 22 451 — 474 Cash and Cash Equivalents at End of Year $ — $ 2 $ 22 $ 443 $ — $ 467 Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2014 (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Cash Flows from Operating Activities: Net Income (Loss) $ (584 ) $ 6,441 $ 215 $ (8,936 ) $ 2,325 $ (539 ) Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities: Charges from Parent or Subsidiary 99 (7,291 ) 266 8,802 (1,876 ) — Equity in (Earnings) Loss of Affiliates 424 430 (407 ) 2 (449 ) — Deferred Income Tax (Provision) Benefit — — (25 ) (41 ) — (66 ) Other Adjustments 23 (180 ) (42 ) 1,767 — 1,568 Net Cash Provided by (Used in) Operating Activities (38 ) (600 ) 7 1,594 — 963 Cash Flows from Investing Activities: Capital Expenditures for Property, Plant and Equipment — — — (1,450 ) — (1,450 ) Acquisitions of Businesses, Net of Cash Acquired — — — 18 — 18 Acquisition of Intellectual Property — — — (5 ) — (5 ) Acquisition of Equity Investments in Unconsolidated Affiliates — — — (3 ) — (3 ) Proceeds (Payment) Related to Sale of Businesses and Equity Investment, Net — — — 1,711 — 1,711 Proceeds from Sale of Assets — — — 59 — 59 Net Cash Provided by (Used in) Investing Activities — — — 330 — 330 Cash Flows from Financing Activities: Borrowings (Repayments) Short-term Debt, Net — (827 ) — (97 ) — (924 ) Borrowings (Repayments) Long-term Debt, Net — (153 ) (92 ) (14 ) — (259 ) Borrowings (Repayments) Between Subsidiaries, Net 39 1,580 107 (1,726 ) — — Proceeds from Sale of Executive Deferred Compensation Ordinary Shares — — — 22 — 22 Other, Net — — — (19 ) — (19 ) Net Cash Provided by (Used in) Financing Activities 39 600 15 (1,834 ) — (1,180 ) Effect of Exchange Rate Changes on Cash and Cash Equivalents — — — (74 ) — (74 ) Net Increase in Cash and Cash Equivalents 1 — 22 16 — 39 Cash and Cash Equivalents at Beginning of Period — — — 435 — 435 Cash and Cash Equivalents at End of Period $ 1 $ — $ 22 $ 451 $ — $ 474 |