Condensed Consolidating Financial Statements | Condensed 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 of Weatherford Delaware were guaranteed by Weatherford Bermuda at September 30, 2017 and December 31, 2016 . At December 31, 2016 , Weatherford Bermuda also guaranteed the 6.35% senior notes of Weatherford Delaware. The following obligations of Weatherford Bermuda were guaranteed by Weatherford Delaware at September 30, 2017 and December 31, 2016 : (1) Revolving Credit Agreement, (2) Term Loan Agreement, (3) 6.50% senior notes, (4) 6.00% senior notes, (5) 7.00% senior notes, (6) 9.625% senior notes, (7) 9.875% senior notes due 2039, (8) 5.125% senior notes, (9) 6.75% senior notes, (10) 4.50% senior notes, (11) 5.95% senior notes, (12) 5.875% exchangeable senior notes, (13) 7.75% senior notes, (14) 8.25% senior notes and (15) 9.875% senior notes due 2024. As a result of certain 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) Three Months Ended September 30, 2017 (Unaudited) (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Revenues $ — $ — $ — $ 1,460 $ — $ 1,460 Costs and Expenses (3 ) 6 1 (1,528 ) — (1,524 ) Operating Income (Loss) (3 ) 6 1 (68 ) — (64 ) Other Income (Expense): Interest Expense, Net — (149 ) (10 ) 6 5 (148 ) Intercompany Charges, Net (2 ) 1 (59 ) 60 — — Equity in Subsidiary Income (Loss) (244 ) (518 ) (445 ) — 1,207 — Other, Net (7 ) (54 ) (53 ) 48 52 (14 ) Income (Loss) Before Income Taxes (256 ) (714 ) (566 ) 46 1,264 (226 ) (Provision) Benefit for Income Taxes — — — (25 ) — (25 ) Net Income (Loss) (256 ) (714 ) (566 ) 21 1,264 (251 ) Noncontrolling Interests — — — 5 — 5 Net Income (Loss) Attributable to Weatherford $ (256 ) $ (714 ) $ (566 ) $ 16 $ 1,264 $ (256 ) Comprehensive Income (Loss) Attributable to Weatherford $ (168 ) $ (687 ) $ (538 ) $ 104 $ 1,121 $ (168 ) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Three Months Ended September 30, 2016 (Unaudited) (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Revenues $ — $ — $ — $ 1,356 $ — $ 1,356 Costs and Expenses (3 ) (6 ) (1 ) (2,291 ) — (2,301 ) Operating Income (Loss) (3 ) (6 ) (1 ) (935 ) — (945 ) Other Income (Expense): Interest Expense, Net — (127 ) (13 ) 7 4 (129 ) Intercompany Charges, Net (3 ) 11 (50 ) 42 — — Equity in Subsidiary Income (1,774 ) (1,662 ) (1,291 ) — 4,727 — Other, Net — (62 ) (49 ) 60 41 (10 ) Income (Loss) Before Income Taxes (1,780 ) (1,846 ) (1,404 ) (826 ) 4,772 (1,084 ) (Provision) Benefit for Income Taxes — — (138 ) (554 ) — (692 ) Net Income (Loss) (1,780 ) (1,846 ) (1,542 ) (1,380 ) 4,772 (1,776 ) Noncontrolling Interests — — — 4 — 4 Net Income (Loss) Attributable to Weatherford $ (1,780 ) $ (1,846 ) $ (1,542 ) $ (1,384 ) $ 4,772 $ (1,780 ) Comprehensive Income (Loss) Attributable to Weatherford $ (1,822 ) $ (1,861 ) $ (1,554 ) $ (1,427 ) $ 4,842 $ (1,822 ) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Nine Months Ended September 30, 2017 (Unaudited) (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Revenues $ — $ — $ — $ 4,209 $ — $ 4,209 Costs and Expenses (11 ) 45 2 (4,632 ) — (4,596 ) Operating Income (Loss) (11 ) 45 2 (423 ) — (387 ) Other Income (Expense): Interest Expense, Net — (432 ) (30 ) 21 14 (427 ) Intercompany Charges, Net 2 (89 ) (102 ) 189 — — Equity in Subsidiary Income (Loss) (924 ) (650 ) (265 ) — 1,839 — Other, Net 58 (23 ) (1 ) (2 ) (2 ) 30 Income (Loss) Before Income Taxes (875 ) (1,149 ) (396 ) (215 ) 1,851 (784 ) (Provision) Benefit for Income Taxes — — — (75 ) — (75 ) Net Income (Loss) (875 ) (1,149 ) (396 ) (290 ) 1,851 (859 ) Noncontrolling Interests — — 62 — 16 — 16 Net Income (Loss) Attributable to Weatherford $ (875 ) $ (1,149 ) $ (396 ) $ (306 ) $ 1,851 $ (875 ) Comprehensive Income (Loss) Attributable to Weatherford $ (754 ) $ (1,153 ) $ (436 ) $ (184 ) $ 1,773 $ (754 ) Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Nine Months Ended September 30, 2016 (Unaudited) (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Revenues $ — $ — $ — $ 4,343 $ — $ 4,343 Costs and Expenses (150 ) (6 ) 4 (6,043 ) — (6,195 ) Operating Income (Loss) (150 ) (6 ) 4 (1,700 ) — (1,852 ) Other Income (Expense): Interest Expense, Net — (331 ) (39 ) — 7 (363 ) Intercompany Charges, Net 9 (30 ) (96 ) (223 ) 340 — Equity in Subsidiary Income (2,702 ) (1,922 ) (1,479 ) — 6,103 — Other, Net — (148 ) (76 ) 48 51 (125 ) Income (Loss) Before Income Taxes (2,843 ) (2,437 ) (1,686 ) (1,875 ) 6,501 (2,340 ) (Provision) Benefit for Income Taxes — — (114 ) (375 ) — (489 ) Net Income (Loss) (2,843 ) (2,437 ) (1,800 ) (2,250 ) 6,501 (2,829 ) Noncontrolling Interests — — — 14 — 14 Net Income (Loss) Attributable to Weatherford $ (2,843 ) $ (2,437 ) $ (1,800 ) $ (2,264 ) $ 6,501 $ (2,843 ) Comprehensive Income (Loss) Attributable to Weatherford $ (2,751 ) $ (2,501 ) $ (1,840 ) $ (2,173 ) $ 6,514 $ (2,751 ) Condensed Consolidating Balance Sheet September 30, 2017 (Unaudited) (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Current Assets: Cash and Cash Equivalents $ — $ 57 $ — $ 388 $ — $ 445 Other Current Assets 1 — 512 4,628 (543 ) 4,598 Total Current Assets 1 57 512 5,016 (543 ) 5,043 Equity Investments in Affiliates 1,662 7,979 8,025 1,028 (18,694 ) — Intercompany Receivables, Net — 219 — 3,571 (3,790 ) — Other Assets — 10 4 6,956 — 6,970 Total Assets $ 1,663 $ 8,265 $ 8,541 $ 16,571 $ (23,027 ) $ 12,013 Current Liabilities: Short-term Borrowings and Current Portion of Long-Term Debt $ — $ 344 $ — $ 47 $ — $ 391 Accounts Payable and Other Current Liabilities 6 138 — 2,478 (543 ) 2,079 Total Current Liabilities 6 482 — 2,525 (543 ) 2,470 Long-term Debt — 7,127 161 148 94 7,530 Intercompany Payables, Net 232 — 3,559 — (3,791 ) — Other Long-term Liabilities 97 150 143 382 (143 ) 629 Total Liabilities 335 7,759 3,863 3,055 (4,383 ) 10,629 Weatherford Shareholders’ Equity 1,328 506 4,678 13,460 (18,644 ) 1,328 Noncontrolling Interests — — — 56 — 56 Total Liabilities and Shareholders’ Equity $ 1,663 $ 8,265 $ 8,541 $ 16,571 $ (23,027 ) $ 12,013 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 Statement of Cash Flows Nine Months Ended September 30, 2017 (Unaudited) (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Cash Flows from Operating Activities: Net Income (Loss) $ (875 ) $ (1,149 ) $ (396 ) $ (290 ) $ 1,851 $ (859 ) Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities: Charges from Parent or Subsidiary (2 ) 89 102 (189 ) — — Equity in (Earnings) Loss of Affiliates 924 650 265 — (1,839 ) — Deferred Income Tax Provision (Benefit) — — — (7 ) (7 ) Other Adjustments (129 ) 241 52 230 (12 ) 382 Net Cash Provided (Used) by Operating Activities (82 ) (169 ) 23 (256 ) — (484 ) Cash Flows from Investing Activities: Capital Expenditures for Property, Plant and Equipment — — — (147 ) — (147 ) Cash Paid for Assets Held for Sale — — — (244 ) — (244 ) Acquisitions of Businesses, Net of Cash Acquired — — — (7 ) — (7 ) Acquisition of Intellectual Property — — — (13 ) — (13 ) Proceeds from Sale of Assets — — — 36 — 36 Payment Related to Sale of Businesses, Net — — — (1 ) — (1 ) Other Investing Activities — — — (25 ) — (25 ) Net Cash Provided (Used) by Investing Activities — — — (401 ) — (401 ) Cash Flows from Financing Activities: Borrowings (Repayments) Short-term Debt, Net — 225 — (107 ) — 118 Borrowings (Repayments) Long-term Debt, Net — 212 (94 ) 79 — 197 Borrowings (Repayments) Between Subsidiaries, Net 82 (797 ) 67 648 — — Other, Net — — — (28 ) — (28 ) Net Cash Provided (Used) by Financing Activities 82 (360 ) (27 ) 592 — 287 Effect of Exchange Rate Changes On Cash and Cash Equivalents — — — 6 — 6 Net Increase (Decrease) in Cash and Cash Equivalents — (529 ) (4 ) (59 ) — (592 ) Cash and Cash Equivalents at Beginning of Period — 586 4 447 — 1,037 Cash and Cash Equivalents at End of Period $ — $ 57 $ — $ 388 $ — $ 445 Condensed Consolidating Statement of Cash Flows Nine Months Ended September 30, 2016 (Unaudited) (Dollars in millions) Weatherford Ireland Weatherford Bermuda Weatherford Delaware Other Subsidiaries Eliminations Consolidation Cash Flows from Operating Activities: Net Income (Loss) $ (2,843 ) $ (2,437 ) $ (1,800 ) $ (2,250 ) $ 6,501 $ (2,829 ) Adjustments to Reconcile Net Income(Loss) to Net Cash Provided (Used) by Operating Activities: Charges from Parent or Subsidiary (9 ) 30 96 223 (340 ) — Equity in (Earnings) Loss of Affiliates 2,702 1,922 1,479 — (6,103 ) — Deferred Income Tax Provision (Benefit) — — 114 312 — 426 Other Adjustments 877 180 327 633 (58 ) 1,959 Net Cash Provided (Used) by Operating Activities 727 (305 ) 216 (1,082 ) — (444 ) Cash Flows from Investing Activities: Capital Expenditures for Property, Plant and Equipment — — — (136 ) — (136 ) Acquisitions of Intellectual Property — — — (5 ) — (5 ) Acquisition of Intellectual Property — — — (10 ) — (10 ) Insurance Proceeds Related to Rig Loss — — — 39 — 39 Proceeds from Sale of Assets and Businesses, Net — — — 28 — 28 Other Investing Activities — — — (20 ) — (20 ) Net Cash Provided (Used) by Investing Activities — — — (104 ) — (104 ) Cash Flows from Financing Activities: Borrowings (Repayments) Short-term Debt, Net — (1,167 ) — 29 — (1,138 ) Borrowings (Repayments) Long-term Debt, Net — 1,834 (515 ) (61 ) — 1,258 Borrowings (Repayments) Between Subsidiaries, Net (727 ) (343 ) 277 793 — — Proceeds from Issuance of Ordinary Shares — — — 623 — 623 Other, Net — — — (186 ) — (186 ) Net Cash Provided (Used) by Financing Activities (727 ) 324 (238 ) 1,198 — 557 Effect of Exchange Rate Changes On Cash and Cash Equivalents — — — (36 ) — (36 ) Net Increase (Decrease) in Cash and Cash Equivalents — 19 (22 ) (24 ) — (27 ) Cash and Cash Equivalents at Beginning of Period — 2 22 443 — 467 Cash and Cash Equivalents at End of Period $ — $ 21 $ — $ 419 $ — $ 440 |