Consolidating Financial Statements | 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 |