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 6.80% senior notes of Weatherford Delaware were guaranteed by Weatherford Bermuda at December 31, 2017 and 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 December 31, 2017 and 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 and (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) 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 (7,856 ) — (7,828 ) Operating Income (Loss) (19 ) 45 2 (2,157 ) — (2,129 ) 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 (11 ) (8 ) 52 Income (Loss) Before Income Taxes (2,813 ) (1,287 ) (660 ) (2,247 ) 4,351 (2,656 ) (Provision) 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 (7,851 ) — (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 ) 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 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 ) (Provision) 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 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’ (Deficiency) Equity (626 ) 375 4,343 11,311 (16,029 ) (626 ) Noncontrolling Interests — — — 55 — 55 Total Liabilities and Shareholders’ (Deficiency) Equity $ (459 ) $ 8,201 $ 8,529 $ 14,316 $ (20,840 ) $ 9,747 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 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) Related to Sale of Businesses and Equity Investment, Net — — — (1 ) — (1 ) Proceeds from Sale of Assets and U.S. Pressure Pumping and Pump-Down Perforating Assets and Other Assets — — — 481 — 481 Other Investing Activities — — — (51 ) — (51 ) Net Cash 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 Financing Activities 212 (1,070 ) (39 ) 917 — 20 Effect of Exchange Rate Changes On Cash and Cash Equivalents — — — 6 — 6 Net Increase (Decrease) 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 Business and Equity Investment, Net — — — (6 ) — (6 ) Net Cash 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 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 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 ) 3,025 — 3,114 Net Cash Provided by (Used in) Operating Activities (136 ) (144 ) (2 ) 997 — 715 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 Related to Sale of Businesses and Equity Investment, Net — — — 8 — 8 Proceeds from Sale of Assets — — — 37 — 37 Net Cash 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 — — — (32 ) — (32 ) Net Cash Provided by Financing Activities 135 146 2 (280 ) — 3 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 Period 1 — 22 451 — 474 Cash and Cash Equivalents at End of Period $ — $ 2 $ 22 $ 443 $ — $ 467 |