Our principal business is to provide equipment and services to the oil and natural gas exploration and production industry both onshore and offshore. During the second quarter of 2020, in order to support the streamlining and realignment of the business, we combinedas well as new energy platforms across our prior reported four product lines into two product lines. Our two product lines are: (1) Completion and Production and (2) Drilling, Evaluation and Intervention. Our new combined Completion and Productionthree product line was previously reported as two separate product lines. Our new Drilling, Evaluation and Intervention product line was previously reported as two separate product lines of (i)segments: (1) Drilling and Evaluation (2) Well Construction and (ii) Well Construction.Completions, and (3) Production and Intervention. All of our segments are enabled by a full suite of digital, monitoring, optimization and artificial intelligence solutions providing services throughout the well life cycle, including responsible abandonment.

We provide our products and services worldwide and compete in a variety of distinct segments with a number of global and regional competitors. Our principal competitors include Schlumberger, Halliburton, Baker Hughes, National Oilwell Varco, Nabors Industries, ChampionX Corporation and Frank’s International.Expro Group Holdings. We also compete with various other regional suppliers that provide a limited range of equipment and services tailored forfocused on the local markets. Competition is based on a number of factors, including performance, safety, quality, reliability, service, price, response time and, in some cases, depth and breadth of products. The oilfieldenergy services business is highly competitive, which may adversely affect our ability to succeed. Additionally, the impact of consolidation and acquisitions of our competitors is difficult to predict and may harm our business as a result.

 

We purchase a wide variety of raw materials, as well as, parts and components made by other manufacturers and suppliers for use in our manufacturing facilities. Many of the products or components of products sold by us are manufactured by other parties. We are not dependent in any material respect on any singleconsistently evaluate our supplier forportfolio to reduce our risk from sole sourcing and to ensure the availability of resources and raw materials or purchased components.materials.

 

Substantially all of our customers are engaged in the energy industry. Most of ourindustry and include international sales are to large international or nationaland independent oil and gas companies and North America sales are to independent oilas well as new energy companies. As of December 31, 2020, the Eastern and Western Hemisphere accounted for 54% and 46%, respectively, of our total net outstanding accounts receivable from customers balance. As of December 31, 2020,2021, customer receivables in Mexico and the U.S. accounted for 23%22% and 12%15%, respectively, of our total net outstanding accounts receivablesreceivable from customers. No other country accounted for more than 10% of our net outstanding accounts receivablesreceivable balance. For the years ended December 31, 2021, 2020 2019 and 2018,2019, no individual customer accounted for more than 10% of our consolidated revenues.

Our services are usually short-term, day-rate based and cancellable should our customers wish to alter the scope of work. Consequently, our backlog of firm orders is not a material toindicator of our future business.

We maintain world-class technology and training centers throughout the world. Additionally, we have research, development and engineering facilities that are focused on developing new technologies and improving existing products and services and developing new technologies to meet customer demands for improved drilling performance, well integrity, and enhanced reservoir productivity.productivity, with emphasis on safety and the environment. Weatherford has significant expertise, trade secrets, intellectual property and know-how with respect to manufacturing our equipment and providing our services. As many areas of our business rely on patents and proprietary technology, we seek and ensure patent protection both inside and outside the U.S. for products and methods that appearwe believe to have commercial significance. Although in the aggregate our patents are important to the manufacturing and marketing of many of our products and services, we do not believe that the expiration of any one of our patents would have a materially adverse effect on our business.

The widespread geographical locations of our operations serve to mitigate the overall impact of the seasonal nature of our business in certainany particular geographic regions.region. Weather and natural phenomena can temporarily affect the level of demand for our products and services. Spring months in Canada and winter months in the North Sea and Russia can affect our operations negatively. Additionally, heavy rains, hurricanes, or an exceedingly cold winter in a given regionunusual extreme freezes or other climate changes may impact our results. Unpredictable or unusually harsh weather conditions could lengthen the periods of reduced activity and have a detrimental impact toon our results of operations. In addition, customer spending patterns for our products and services may result in higher activity in the fourth quarter of each calendar year as our customers seek to fully utilize their annual budgets. Conversely, customer budget constraints may lead to lower demand for our services and products in the fourth quarter of each year.

Our operations are subject to federal, state and local laws and regulations in the U.S. and globally relating to the energy industry in general and the environment in particular. Our 20202021 expenditures to comply with environmental laws and regulations were not material, and we currently do not expect the cost of compliance with environmental laws and regulations for 20212022 to be material.

We have obligations and expect to incur capital, operating and maintenance, and remediation expenditures, as a result of compliance with environmental laws and regulations. Among those obligations, are the current requirements imposed by the Texas Commission on Environmental Quality (“TCEQ”) at the former Universal Compression facility in Midland, Texas. At this location we are performing a TCEQ-approved Remedial Action Plan (“RAP”) to address contaminated ground water. The performance of the RAP and related expenses are scheduled to be performed over a ten to twenty-year period and, may cost as much as $6 million, all of which is recorded as an undiscounted obligation on the Consolidated Balance Sheets as of December 31, 2021 and 2020. We continuously monitor and strive to maintain compliance with changes in laws and regulations that impact our business.

Throughout the COVID-19 crisis,pandemic, we have remained focused on protecting the health, safety and safetywell-being of our customersemployees and employees. Shortly aftercustomers. We are closely following the outset of COVID-19, we adopted enhanced safety measuresguidance set forth by the medical community, including the World Health Organization (“WHO”) and practices acrossthe Centers for Disease Control and Prevention (“CDC”), to ensure our organization to protect employeeoperations are aligned with recommended health and safety procedures and ensure thatregularly communicate with our stakeholders regarding the protective measures in place. In addition, we would continuehave focused on employee wellness and we remain committed to be able to playnurturing our culture and creating a critical rolesense of unity, even during times of physical distancing. For example, in providing energy. We monitor2021 we increased employee recognition efforts across the globe - spotlighting the successes and trackcontributions of our team - and provided opportunities for virtual collaboration on topics such as innovation, navigating the impact of theCOVID-19 pandemic on our employees and within our operations,diversity, equity and proactively modify or adopt new practices to promote their health and safety.inclusion.

We believe in aligning our employees’ compensation with the positive performance of our Company. Our goal in our compensation programs is to provide competitive compensation opportunities to each of our employees that are well-balanced between our short-current and long-term strategic priorities, that discourage excessive or unnecessary risk taking and that reward our employees appropriately for their efforts. We are committed to maintaining and fostering a culture grounded in the principles inherent in pay-for-performance over the short and long-term for our employees eligible to receive a bonus. Through this culture, we strive to attract, motivate, retain and reward our employees for their work that contributes to building our brand and to sustaining our success in the marketplace. We believe our culture of aligning our strategic priorities with our compensation programs supports a cohesive drive towards value creation for all our stakeholders.

We are committed to fostering a diverse and inclusive environment where everyone feels comfortable bringing their true selves to work. It is important that we operateunderstand the importance of operating in a collaborative and inclusive manner across all levels of our organization, embracing gender, racial and ethnicthe full spectrum of diversity among our employees and recognizing the strength and competitive advantages that our differences afford us as a Company. Our Diversity, Equity and Inclusion (“DE&I”) Program is a core element of our One Weatherford culture. Through our DE&I efforts, we aim to provide learning, engagement and philanthropic opportunities to help our people and our communities flourish.

Our commitment to embedding our differences afford usDE&I Program into our organization is championed from the Executive team to the frontline employees. To continue advancing our program, in 2021 we also established a DE&I Champions Network as an individualintegrated approach to build, educate and promote ongoing DE&I initiatives in a company. Our Diversityway that best aligns with local considerations. This team is comprised of key members from various business functions, job disciplines and Inclusion (“D&I”) Program promotes partnerships, engagement,with all our geographical areas represented. Their goal is to reinforce all aspects of diversity, equity, and collaboration acrossinclusion in the workplace. Furthermore, our organization.

As of December 31, 2020,2021, Weatherford had approximately 17,20017,000 employees globally, located in 75 different countries. In responseAs a result of efforts to the price of crude oil and a lower level of exploration and production spending, in addition to other overall cost reductions, we reducedcontinuously streamline our processes our workforce reduced by 28% and 35% from our workforce totals at1% in 2021 compared to December 31, 2019 and 2018, respectively. Certain2020. Some of our operations are subject to union contracts and these contracts cover approximately 17%19% of our employees.

The following table sets forth, as of February 19, 2021,17, 2022, the names and ages of the executive officers of Weatherford, including all offices and positions held by each for at least the past five years. There are no family relationships between the executive officers of the Company or between any director and any executive officer of the Company.

An investment in our securities involves various risks. You should consider carefully all the risk factors described below, the matters discussed herein under “Forward-Looking Statements” and other information included and incorporated by reference in this Form 10-K, as well as in other reports and materials that we file with the SEC. If any of the risks described below, or elsewhere in this Form 10-K, were to materialize, our business, financial condition, results of operations, cash flows and or prospects could be materially adversely affected. In such case, the trading price of our ordinary shares could decline and investors could lose part or all of their investment. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also materially adversely affect our financial condition, results of operations and cash flows.

OilfieldEnergy Services Industry Risks

Demand for our services and products is tied to the level of exploration, development and production activity and the corresponding capital and operating spending by oil and natural gas exploration and production companies, including national oil companies. The level of exploration, development and production activity is directly affected by fluctuations in oil and natural gas prices, which historically have been volatile and are likely to continue to be volatile in the future, especially given current geopolitical and economic conditions. Sustained lowLow oil and natural gas prices and decliningdeclines in global demand for oil and natural gas, including reduced demand as a result of the COVID-19 pandemic, have previously led to our customers, including large oil and gas exploration and production companies, to greatly reduce planned future capital expenditures. Factors affecting the prices of oil and natural gas include, but are not limited to: (1) the level of supply and demand for oil and natural gas; (2) the ability or willingness of the Organization of Petroleum Exporting Countries (“OPEC”) and the expanded alliance collectively known as (“OPEC+”) and other high oil exporting non-OPEC+ nations to set and maintain oil production levels; (3) the level of oil and natural gas production in the U.S. and by other non-OPEC+ countries; (4) oil refining capacity andcapacity; (5) shifts in end-customer preferences toward sustainable energy sources, fuel efficiency and the use of natural gas; (5)(6) the cost of, and constraints associated with, producing and delivering oil and natural gas; (6)(7) governmental regulations, including the policies of governments regarding the exploration for and production and development of their oil and natural gas reserves; (7)(8) weather conditions, natural disasters, and health or similar issues, such as pandemics or epidemics; (8)(9) worldwide political, military, and economic conditions; and (9)(10) increased demand for alternative energy and electric vehicles, including government initiatives to promote the use of sustainable, renewable energy sources and public sentiment around alternatives to oil and gas.

In addition, lowactual and anticipated declines in commodity prices, the short-term tenor of most of our contracts and the financial stress experienced by some of our customers have combined to increase the demands by many of our customers for reductions in the prices we receive for our products and services. Further reductionsservices in the past. Reductions in capital spending or requests for further cost reductions by our customers could directly impact our business by reducing demand and pricing for our services and products which would have a material adverse effect on our business, financial condition and results of operations and prospects.operations. Spending by exploration and production companies can also be impacted by conditions in the capital markets, which have been volatile in recent years. Limitations on the availability of capital or higher costs of capital may cause exploration and production companies to make additional reductions to capital budgets even if oil and natural gas prices increase from current levels. In addition, the transition of the global energy sector from primarily a fossil fuel-based system to renewable energy sources could affect our customers' levels of expenditures. Any such cuts in spending would curtail drilling programs, as well as discretionary spending on well services, which may result in a reduction in the demand for our services, the rates we can charge and the utilization of our assets, any or all of which could have a material adverse effect on our business, financial condition and results of operations and cash flow.operations.

Climate change, ESGenvironmental, social and governance (“ESG”) and sustainability are a growing global movement. Continuing political and social attention to these issues has resulted in both existing and pending international agreements and national, regional or local legislation, and regulatory measures as well as societyand policy changes. Also, there is increasing societal pressure in some areas, to limit greenhouse gas emissions and has been stated in the U.S. to be, is a stated priority of the new Biden Administration, as well as other global initiatives. These agreements and measures, including the Paris Climate Accord, may require, or could result in future legislation,

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used by some investors to inform their investment and voting decisions. Unfavorable ESG ratings may lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on the price of our stock pricesecurities and our access to and costs of capital.

Our business has been, and in the future will likely be, affected by severe weather in areas where we operate, which could materially affect our operations and financial results. In addition, impacts of climate change could increase the frequency and severity of extreme weather conditions. Any such extreme weather-related events could have a material adverse effect on our business, financial condition and results of operations.

Drilling for and producing hydrocarbons, and the associated products and services that we provide, include inherent dangers that may lead to property damage, personal injury, death or the discharge of hazardous materials into the environment. Many of these events are outside our control. Typically, we provide products and services at a well site where our personnel and equipment are located together with personnel and equipment of our customer and third parties, such as other service providers. At many sites, we depend on other companies and personnel to conduct drilling and other operations in accordance with appropriate safety standards. From time to time, personnel are injured or equipment or property is damaged or destroyed, as a result of accidents, failed equipment, faulty products or services, failure of safety measures, uncontained formation pressures or other dangers inherent in drilling for or producing oil and natural gas. Any of these events can be the result of human error. With increasing frequency, our products and services are deployed on more challenging prospects both onshore and offshore, where the occurrence of the types of events mentioned above can have an even more catastrophic impact on people, equipment andor the environment. Such events may expose us to significant potential losses which could have a material adverse effect on our business, financial condition and results of operations.

Business and Operational Risks

The effects of the COVID-19 pandemic, including actions taken by businesses and governments to contain the spread of the virus, have resulted in a significant and swift reduction in international and U.S. economic activity.activity and we have not yet reached pre-pandemic activity levels. These effects materially adversely affected the demand for oil and natural gas, as well as for our services and products. The collapse in the demand for oil in March 2020 caused in large part by this unprecedented global health and economic crisis, and the corresponding decline in our customers’ demand for our services and products has had a substantial negative impact on our financial condition, results of operations and cash flows in 2020.

The COVID-19 pandemic impacts severely impacted our business and our industry.industry in 2020 and 2021. These effects included, and may continue to include, adverse revenue and net income effects; disruptions to our operations; customer shutdowns of oil and gas exploration and production; employee impacts from illness, school closures and other community response measures; and temporary closures of our facilities or the facilities of our customers and suppliers.

Given the nature and significance of the events described above, we are not able to enumerate all potential risks to our business;business and operations; however, we believe that in addition to the impacts described above, other current and potential impacts of these recent events include, but are not limited to:

We purchase a variety of raw materials, as well as, parts and components made by other manufacturers and suppliers for use in our manufacturing facilities. A disruption in deliveries to or from suppliers or decreased availability of materials could have an adverse effect on our ability to meet our commitments to customers or increase our operating costs. Also, certain parts and equipment that we use in our operations may be available only from a small number of suppliers, manufacturers or cash flowsservice providers, or in some cases may be sourced through a single supplier, manufacturer or service provider. A disruption in the pacedeliveries from such third‑party suppliers, manufacturers or extentservice providers, capacity constraints, production disruptions, price increases, quality control issues, recalls or other decreased availability of any subsequent recovery.parts and equipment could adversely affect our ability to meet our commitments to customers and have a material adverse effect on our business, financial condition and results of operations.

Our liquidity, including our ability to meet our ongoing operational obligations, as well as service our debt, is dependent upon, among other things: (i) our ability to maintain adequate cash on hand; (ii) our ability to generate cash flow from operations; and (iii) our ability to access the capital markets; and (iv) changes in market conditions that negatively impact our revenue.

The energy industry faces negative sentiment in the capital markets which has impacted the ability of participants to access appropriate amounts of capital under suitable terms. This negative sentiment in the energy industry has not only impacted our customers in North America, it is also affecting the availability and the pricing for most credit lines and other capital resources extended to participants in the industry.

As of December 31, 2020,2021, we had $338$342 million of letters of credit outstanding, consisting of $167$181 million under the LCour senior secured letter of credit agreement (the “LC Credit AgreementAgreement”) and $171$161 million under various uncommitted facilities (of which there was $164$158 million in cash collateral held and recorded in “Restricted Cash” on the Consolidated Balance Sheets). In Latin America, we utilize surety bonds as part of our customary business practice. As of December 31, 2020,2021, we had outstanding surety bonds outstanding of $326 million, primarily in Latin America.$293 million. Any of our outstanding letters of credit or surety bonds could be called by the beneficiaries should we breach certain contractual or performance obligations. If the beneficiaries were to call the letters of credit under the LC Credit Agreement or the surety bonds, our available liquidity would be reduced by the amount called.

As is customary in our industry, our contracts typically require that our customers indemnify us for claims arising from the injury or death of their employees (and those of their other contractors), the loss or damage of their equipment (and that of their other contractors), damage to the well or reservoir and pollutionenvironmental impacts originating from the customer’s equipment or from the reservoir (including uncontained oil flow from a reservoir) and claims arising from catastrophic events, such as a well blowout, fire, explosion and from pollutionenvironmental impacts below the surface. Conversely, we typically indemnify our customers for claims arising from the injury or death of our employees, the loss or damage of our equipment (other than equipment lost in the hole) or pollutionenvironmental impacts originating from our equipment above the surface of the earth or water.

Our indemnification arrangements may not protect us in every case. For example, our indemnity arrangements may be held to be overly broad in some courts and/or contrary to public policy in some jurisdictions, and to that extent may be unenforceable. Additionally, some jurisdictions which permit indemnification nonetheless limit its scope by applicable law, rule, order or statute. We may be subject to claims brought by third parties or government agencies with respect to which we are not indemnified. Furthermore, the parties from which we seek indemnity may not be solvent, may become bankrupt, may lack resources or insurance to honor their indemnities or may not otherwise be able to satisfy their indemnity obligations to us. The lack of enforceable indemnification could expose us to significant potential losses.

Further, our assets generally are not insured against loss from political violence such as war, terrorism or civil unrest. If any of our assets are damaged or destroyed as a result of an uninsured cause, we could recognize a loss of those assets.

As of December 31, 2020,2021, we had approximately $2.6$2.4 billion of long-term debt with $2.1 billion$300 million in aggregate principal amount of our 11.0% Senior Notes maturing on December 1, 2024 (“Exit Notes”) and $500 million in aggregate principal amount of our 8.75%6.5% Senior Secured Notes maturing on September 1, 202415, 2028 (“2028 Senior Secured Notes”) and $1.6 billion in aggregate principal amount of our 8.625% Senior Notes maturing on April 30, 2030 (“2030 Senior Notes”). Pursuant to the terms of our Exit Notes, and2028 Senior Secured Notes and 2030 Senior Notes, we expect to havemake $215 million in interest payments ofin 2022 and approximately $275$204 million in interest payments annually until maturity. Ourthe maturity of our long-term debt obligations. If business activity declines, or otherwise does not increase, our level of indebtedness hascould have negative consequences for our business, financial condition and results of operations, including:

In the ordinary course of business, we become the subject of various claims and litigation. We maintain liability insurance, which includes insurance against damage to people, property and the environment, up to maximum limits of $350 million,in commercially reasonable amounts, subject to self-insured retentions and deductibles.

Our insurance policies are subject to exclusions, limitations and other conditions and may not apply in all cases, for example where willful wrongdoing on our part is alleged. It is possible an unexpected judgment could be rendered against us in cases in which we could be uninsured and beyond the amounts we currently have reserved or anticipate incurring, and in some cases those potential losses could be material.

Our insurance may not be sufficient to cover any particular loss or our insurance may not cover all losses. For example, although we maintain product liability insurance, this type of insurance is limited in coverage and it is possible an adverse claim could arise in excess of our coverage. Additionally, insurance rates have in the past been subject to wide fluctuation and may be unavailable on terms that we or our customers believe are economically acceptable. Reductions in coverage, changes in the insurance markets and accidents affecting our industry may result in further increases in our cost and higher deductibles and retentions in future years and may also result in reduced activity levels in certain markets. As a result, we may not be able to continue to obtain insurance on commercially reasonable terms. Any of these events could have an adverse impact on our business, financial condition and results of operations.

Upon our emergence from bankruptcy, we adopted fresh start accountingFresh Start Accounting and adjusted our assets and liabilities to fair values and our accumulated deficit was restated to zero as of December 13, 2019, which resulted in the Company becoming a new entity for financial reporting purposes. Accordingly, our financial condition and results of operations following our emergence from bankruptcy will not be comparable to the financial condition and results of operations reflected in our pre-December 13, 2019 historical financial statements. Implementation of the Plan and the transactions contemplated thereby materially changed the amounts and classifications reported in our consolidated historical financial statements. The lack of recent comparable historical financial information may discourage investors from purchasing our ordinary shares.shares or debt securities or providing credit or financing on commercially acceptable terms to the Company.

In the aggregate, certain funds associated with our six largest eight shareholders currently own in excess of 80%68% of our outstanding ordinary shares.Ordinary Shares. Circumstances may arise in which these shareholders may have an interest in pursuing or preventing acquisitions, divestitures or other transactions, including the issuance of additional equity or debt, that, in their judgment, could enhance their investment in us or another company in which they invest. Such transactions might adversely affect us or other holderscould be in conflict with the interest of our ordinary shares.other shareholders. In addition, our significant concentration of share ownership may adversely affect the trading price of our ordinary sharessecurities because investors may perceive disadvantages in owning sharessecurities in companies with significant shareholders.shareholders and may restrict the trading volume in our ordinary shares.

On June 1, 2021, NASDAQ approved our application for the listing of our ordinary shares. In connection with the listing, we became subject to the reporting requirements of the Exchange Act. Our ordinary shares are listed for quotationbegan trading on The Nasdaq Global Select Market on June 2, 2021 under the OTC Pink Marketplace.ticker symbol “WFRD”. We cannot predict the extent to which investor interest in us will lead to the development of ana continued active trading market or how liquid that market might become. In addition, no

Even if an active trading market developscontinues for our ordinary shares, the market price of our ordinary shares may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume of our ordinary shares may fluctuate and cause significant price variations to occur. Volatility in the market price of our ordinary shares may prevent one from being able to sell shares at or above the ordinary share issuance price or above the price one paid to acquire the ordinary shares.

The LC Credit Agreement and the indentures governing our Exit Notes, and2028 Senior Secured Notes and 2030 Senior Notes contain restrictive covenants that could impose significant operating and financial restrictions on us and may limit our ability to engage in acts that we may believe to be in our long-term best interest, including restrictions on our ability to:

These covenants and other restrictions may limit our ability to effectively operate our business, and to execute our growth strategy or take advantage of new business opportunities. These covenants and restrictions include minimum liquidity covenants, certain financial ratios, which may apply in certain circumstances, and other restrictions. Our ability to meet the liquidity thresholds and those financial ratios can be affected by events beyond our control.

A breach of the covenants and other restrictions under the LC Credit Agreement, the indentures governing our Exit Notes, 2028 Senior Secured Notes and Exit2030 Senior Notes or our other indebtedness could result in an event of default thereunder. Such a default may allow the lenders, holders or the trustee, as applicable, to accelerate the related indebtedness and may result in the acceleration of any other indebtedness to which a cross-acceleration or cross-default provision applies. In addition, an event of default under LC Credit Agreements would permit the lenders thereunder to terminate all commitments.

Legal, Tax and Regulatory Risks

We are subject to various laws and regulations relatedapplicable to the energy industry specifically,related to pollution, protection of the environment and natural resources, public and worker health and safety, and treaties and international agreements related to climate change and the environment in particular. Inregulation of greenhouse gasses. These laws and regulations sometimes provide for strict liability for remediation costs, damages to natural resources, or threats to public health and safety. Strict liability can render us liable for damages without regard to our degree of care or fault. Some environmental laws also provide for joint and several strict liability for remediation of spills and releases of hazardous substances, and, as a result, we could be liable for the caseactions of environmental regulations,others. Thus, an environmental claim could arise with respect to one or more of our current businesses, operations, products or services, or a business or property that one of our predecessors owned or used, and such claims could involve material expenditures. Generally, environmental laws have in recent years become more stringent and have sought to impose greater liability on a larger number of potentially responsible parties and have required increased the costs associatedto comply with complying with the more stringent laws and regulations.their requirements. The scope of regulation of our industry and our products and services may increase further, including possible increases in liabilities, financial assurance, or funding requirements imposed by governmental agencies. Additional regulations on deepwater drilling in the Gulf of Mexico and elsewhere in the world could be imposed, and those regulations could limit our business where they are imposed.

In addition, members of the U.S. Congress, the U.S. Environmental Protection Agency and various agencies of several states within the U.S. frequently review, consider and propose more stringent regulation of hydraulic fracturing, a stimulation treatment routinely performed on oil and gas wells in low-permeability reservoirs. We previously provided (and may, in the future, resume providing) fracturing services to customers. Regulators are investigatingperiodically investigate whether any chemicals used in the hydraulic fracturing

Changes in tax laws could significantly increase our tax expense and require us to take actions, at potential significant expense, to seek to preserve our current level of tax expense.

In 2002, we reorganized from the United States to a foreign jurisdiction. There are frequent legislative proposals in the United States that attempt to treat companies that have undertaken similar transactions as U.S. corporations subject to U.S. taxes or to limit the tax deductions or tax credits available to United States subsidiaries of these corporations. Our tax expense could be impacted by changes in tax laws, tax treaties or tax regulations or the interpretation or enforcement thereof or differing interpretation or enforcement of applicable law by the U.S. Internal Revenue Service and other taxing jurisdictions, acting in unison or separately. The inability to reduce our tax expense could have a material impact on our consolidated financial statements.

The Organization of Economic Cooperation and Development (“OECD”), which represents a coalition of member countries, issued various white papers addressing Tax Base Erosion and Jurisdictional Profit Shifting. The recommendations in these white papers are generally aimed at combating what they believe is tax avoidance. Numerous jurisdictions in which we operate have been influenced by these white papers as well as other factors and are increasingly active in evaluating changes to their tax laws. In addition, the OECD has advanced reforms focused on global profit allocation, and implementing a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as the “two pillar plan.” On October 8, 2021, the OECD announced an accord endorsing and providing an implementation plan for the two pillar plan agreed upon by 136 nations. While the implementation of the accord is uncertain, if legislation is enacted to implement the accord in some or all of the jurisdictions in which we have operations, it could materially increase the amount of taxes we owe, on a retroactive or prospective basis, thereby negatively affecting our results of operations and our cash flows from operations.

Our effective tax rate has fluctuated in the past and may fluctuate in the future. Future effective tax rates could be affected by changes in the composition of earnings in countries in which we operate with differing tax rates, non-income-based taxes, changes in tax laws, or changes in deferred tax assets and liabilities. We assess our deferred tax assets on a quarterly basis to determine whether a valuation allowance may be required. We have recorded a valuation allowance on substantially all of our deferred tax assets.

As a result of the Tax Cuts and Jobs Act of 2017, (“TCJA”), many of our non-U.S. subsidiaries are now classified as “controlled foreign corporations” for U.S. federal income tax purposes due to the expanded application of certain ownership attribution rules within a multinational corporate group. If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our shares, such person may be treated as a “United States shareholder” with respect to one or more of our controlled foreign corporation subsidiaries.  In addition, if our shares are treated as owned more than 50% by United States shareholders, we would be treated as a controlled foreign corporation. A United States shareholder of a controlled foreign corporation may be required to annually report and include in its U.S. taxable income, as ordinary income, its pro rata share of “Subpart F income,” “global intangible low-taxed income” and investments in U.S. property by controlled foreign corporations, whether or not we make any distributions to such United States shareholder. An individual United States shareholder generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a corporate United States shareholder with respect to a controlled foreign corporation.  A failure by a United States shareholder to comply with its reporting obligations may subject the United States shareholder to significant monetary penalties and may extend the statute of limitations with respect to the United States shareholder’s U.S. federal income tax return for the year for which such reporting was due.  We cannot provide any assurances that we will assist investors in determining whether we or any of our non-U.S. subsidiaries are controlled foreign corporations or whether any investor is a United States shareholder with respect to any such controlled foreign corporations. We also cannot guarantee that we will furnish to United States shareholders information that may be necessary for them to comply with the aforementioned obligations.  United States investors should consult their own advisors regarding the potential application of these rules to their investments in us. The risk of being subject to increased taxation

As an Irish company, we are governed by the Irish Companies Act, which differs in some material respects from laws generally applicable to U.S. corporations and shareholders, including, among others, provisions relating to interested directors, mergers and acquisitions, takeovers, shareholder lawsuits and indemnification of directors. Likewise, the duties of directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances. Accordingly, holders of our securities may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in a jurisdiction of the United States.

We are organized under the laws of Ireland, and a significant portion of our assets are located outside the United States. The United States currently does not have a treaty with Ireland providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. As such, a shareholder who obtains a court judgment based on the civil liability provisions of U.S. federal or state securities laws may be unable to enforce the judgment against us in Ireland. In addition, there is some doubt as to whether the courts of Ireland and other countries would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers based on the civil liabilities provisions of the federal or state securities laws of the United States or would hear actions against us or those persons based on those laws. The laws of Ireland do, however, as a general rule, provide that the judgments of the courts of the United States have the same validity in Ireland as if rendered by Irish Courts. Certain important requirements must be satisfied before the Irish Courts will recognize the U.S. judgment. The originating court must have been a court of competent jurisdiction, the judgment must be final and conclusive, and the judgment may not be recognized if it was obtained by fraud or its recognition would be contrary to Irish public policy. Any judgment obtained in contravention of the rules of natural justice or that is irreconcilable with an earlier foreign judgment would not be enforced in Ireland.

Similarly, judgments might not be enforceable in countries other than the United States where we have assets.

General Risks

We recognize impairments of long-lived assets when we determine the carrying amount of certain long-lived asset groups exceed their respective fair values. Our impairment assessment includes analysis of the undiscounted cash flow of our asset groups, which include property, plant and equipment, definite-lived intangible assets, and right of use assets. Based on the uncertainty of forecasted revenue, forecasted operating margins, and discount rate assumptions used to estimate our asset groups’ fair value, future reductions in our expected cash flows could cause a material non-cash impairment charge of long-lived assets, which could have a material adverse effect on our results of operations and financial condition.

We rely heavily on information systems to conduct and protect our business. These information systems are increasingly subject to sophisticated cybersecurity incidents such as unauthorized access to data and systems, loss or destruction of data (including confidential customer, supplier and employee information), computer viruses, or other malicious code, phishing and cyberattacks, and other similar events. These incidents arise from numerous sources, not all of which are within our control, including fraud or malice on the part of third parties, accidental technological failure, electrical or telecommunication outages, failures of computer servers or other damage to our property or assets, human error, complications encountered as existing systems are maintained, repaired, replaced, or upgraded or outbreaks of hostilities or terrorist acts.

None.

All of our material U.S. properties are mortgaged to the lenders under our 2028 Senior Secured Notes and LC Credit Agreement. All of our remaining owned properties are unencumbered, however the lenders could require we mortgage themcertain of these properties as well. We believe the facilities that we currently occupy are suitable for their intended use.

In the ordinary course of business, we are the subject of various claims and litigation. We maintain insurance to cover many of our potential losses, and we are subject to various self-retention limits and deductibles with respect to our insurance. Please see the following:

Although we are subject to various on-going litigation, we do not believe it is probable that any of our litigation to which we are currently subject will result in any material uninsured losses to us. It is possible, however, that an unexpected judgment could be rendered against us, or we could decide to resolve a case or cases that would result in a liability that could be uninsured and beyond the amounts we currently have reserved and in some cases those losses could be material.

 

Not applicable.

On April 17, 2020,June 1, 2021, NASDAQ approved our application for the NYSE filed a Form 25 with the SEC. The delistinglisting of our ordinary shares fromshares. In connection with the New York Stocklisting, we became subject to the reporting requirements of the Exchange became effective on April 27, 2020.Act. Our ordinary shares were deregistered under Section 12(b) of the Exchange Actbegan trading on

As used in this item, the “Company,“Weatherford”, “the Company,” “we,” “us” and “our” refer to Weatherford International plc, a public limited company organized under the laws of Ireland, and its subsidiaries on a consolidated basis.

The following discussion should be read in conjunction with our Consolidated Financial Statements and Notes thereto included in “Item 8. – Financial Statements and Supplementary Data.” Our discussion includes various forward-looking statements about our markets, the demand for our products and services and our future results. These statements include certain risks and uncertainties. For information about these risks and uncertainties, refer to the section entitled “Forward-Looking Statements” and the section entitled “Item 1A. – Risk Factors.” As described in “Note 1 – Summary of Significant Accounting Policies” references to “Predecessor” relate to the Consolidated Statements of Operations for the period from January 1, 2019 through and including the adjustments from the application of Fresh Start Accounting on December 13, 2019 and for the year ended December 31, 2018 (“Predecessor Periods”Period”). References to “Successor” relate to the Consolidated Statements of Operations for the yearyears ended December 31, 2021 and 2020 and for the period from December 14, 2019 through December 31, 2019 (“2021 Successor Period, 2020 Successor Period and 2019 Successor Period”, respectively) and are not comparable to the Consolidated Financial Statements of the Predecessor PeriodsPeriod as indicated by the “Black“black line” division in the financials and footnote tables, which emphasizes the lack of comparability between amounts presented.

References and comparisons to results for the year ended December 31, 2019 relate to the combined Successor and Predecessor Period (“2019 Combined Period”) as the 18 days of the Successor Period is not a significant period of time impacting the combined results.

Revenues totaled $3.65 billion in 2021, a decline of 1% compared to 2020. We conduct operationsexperienced significant declines in over 75 countriesactivity after the start of the pandemic in March of 2020 and havealthough revenues are slightly lower in 2021, our revenues in 2021 reflect the ongoing recovery in business activity. Revenues in 2021 reflect a 5% increase in service revenues, which was offset by a 10% decline in product revenues. The revenue increases were related to higher demand for Drilling and sales locations in oil and natural gas producing regions globally. Our operational performance is reviewed on a geographic basis, and we report the Western Hemisphere and Eastern Hemisphere as separate, distinct reporting segments.

Operating income of $116 million improved $1.6 billion in 2021 compared to 2020, primarily from the absence of impairment and restructuring charges, the decline in cost of services ranging from earlyand products as well planning to reservoir management.as the decline in selling, general and administrative, corporate, and research and development expense. The improvement in operating income was driven by increased service activity levels, increased service versus product mix, higher adoption of our technology offerings and increased demand in our DRE and PRI businesses primarily for managed pressure drilling, wireline, intervention, pressure pumping services. Our exit of certain drilling services offer innovative tools and expert engineeringin North America in the fourth quarter of 2020 also positively contributed to increase efficiency and maximize reservoir exposure. The evaluation services merge wellsite capabilities including wireline and managed pressure drilling. We also build or rebuild well integrity for the full life cycle of the well. Using conventional to advancedimprovement.

Successor revenuesRevenues totaled $3.7 billion in 2020, a decreasedecline of $1.5 billion, or 29%, compared to the 2019 Combined Period, revenues, as the unprecedented global health and economic crisis sparked by the COVID-19 pandemic negatively impacted industry activity. The lower demand for oil and gas together with uncertainty around the extent and timing for an economic recovery, caused significant reductions to the capital spending plans of exploration and production companies. Our revenue decline was predominantly driven by lower activity levels impacting all our product line segments, with revenue declines of 29% in DRE, 37% in PRI and 15% in WCC. Revenue declined in North America as a result of lower demand for our products and services in the United States, but was also impacted by declines in activity internationally, primarily in Latin America, the Middle East, North Africa and Russia. The pandemic had an immediate negative impact beginning in the second quarter of 2020 in the North America while taking longer to significantly impact our business internationally.

Successor consolidated operatingOperating loss of $1.5 billion worsened $305 million, or 26%, in 2020 compared to the 2019 Combined Period, consolidated operating loss of $1.2 billion. The higher operating loss in 2020 primarily reflectsfrom the decline in business demand due to the COVID-19 pandemic, long-lived assetassets impairment charges, goodwill impairment, and inventory charges, partially offset by the lower retention expenses and cost savings from our various restructuring activities.

The COVID-19 pandemic,We expect continued improvements in our customer activity shutdowns, travel constraintslevels with the relaxing of COVID-19 restrictions globally and access restrictionsimproved macroeconomic conditions generally, all of which are expected to customer work locations caused significant uncertainty for the global economy, resultingprovide a measured pathway to energy demand recovery in the significant decline in the global demand for oil2022. We believe that industry activity will continue to recover and gas. The impacts of the COVID-19 pandemic together with uncertainty around the extent and timing for an economic recovery, caused extreme market volatility for commodity prices and resulted in significant reductionsour 2022 consolidated revenues are anticipated to the capital spending during 2020 of our primary customer base, with lowering expectations of oil and gas related spending into 2021 and beyond.increase by high single to low double digits above 2021.

We continue to closely monitor the ongoing global impacts surrounding the COVID-19 pandemic, including operational and manufacturing disruptions, escalating costs, logistical constraints and travel restrictions. We have experienced and expect to continue to experience delays or a lack of availability of key components from our suppliers, shipping and other logistical delays and disruptions, customer restrictions that prevent access to their sites, community measures to contain the spread of the virus, and changes to Weatherford’s policies that have both restricted and changed the way our employees work. We expect most, if not all, of these disruptions and constraints will continue to effect how we and our customers and suppliers work in the future.

The levelWe continue to experience impacts from the COVID-19 pandemic, including inflationary pressures and delays and supply shortages when sourcing raw materials and services as everyone manages through the challenges around reopening and returning to work. Shipping and other logistic activities are experiencing tight availability for carriers, containers and shipping materials, exacerbating the delays and lack of spending inavailability of key components. In addition, we continue to experience certain customer restrictions that prevent access to their sites, community measures to contain the energy industry is heavily influenced by the current and expected future prices of oil and natural gas. Changes in expenditures result in an increased or decreased demand for our products and services. Rig count is an indicatorspread of the level of spending forCOVID-19 virus, and changes to our policies that have both restricted and changed the exploration for and production of oil and natural gas reserves. The following charts set forth certain statistics that reflect historical market conditions. way our employees work.

As production decline rates persist and reservoir productivity complexities increase, our customers continue to face challenges in balancing the cost of extraction activities with securing desired rates of production while achieving acceptable rates of return on investment. These challenges increase our customers’ requirements for technologies that improve productivity and efficiency which in turn puts pressure onand pressures us to deliver our products and services at competitive rates. In addition, as consolidation of the oil and gasenergy services industry continues due to market conditions, there has been an increased demand for companies withto provide specialized products, services and technologies. We believe we are well positioned to satisfy our customers’ needs, but the level of improvement in our businesses in the future will depend heavily on pricing, volume of work, and our ability to offer technology solutions to more efficiently extract oil and gas controlwhile controlling costs, and penetrateour success in penetrating new and existing markets with our newly developed technologies. Over the long-term, we expect the world’s demand for energy willto continue to rise from current levels requiring increased oil field services and require more advanced technology from the oilfieldenergy service industry. We remain focused on delivering innovative and cost-efficient solutions for customers to assist them in achieving their operational, safety and environmental objectives.

Our challenges also include adverse market conditions that could make it more difficult to obtain our targeted cost reduction benefits more difficultand to recruit, newmotivate and retain existing employees. Oil prices have risen recently, buoyed by recent supply-led OPEC+ policy,employees, including key personnel. Increasing investor and government focus on ESG factors, the ongoing COVID-19 vaccine rollout, and multinational economic stimulus actions which is providing a runway for a meaningful oil demand recovery throughout 2021. We continue to anticipate a multi-year dislocation across the industry, particularly in North America, Europe, Latin America and Sub Saharan Africa. In addition, continued negative sentiment for the energy industry in the capital markets has impacted, and may continue to impact, demand for our products and services, as our customers, particularly those in North America, have experienced and likely will continue to experience challenges securing appropriate amounts of capital under suitable terms to finance their operations. The cyclicality of the energy industry and the ongoing COVID-19 pandemic continues tomay negatively impact the demand for our products and services which strongly depend on the level of exploration and development activity and the completion phase of the well life cycle or on the number of wells and the type of production systems used.services. We are following our long-term strategy aimed at achieving sustainable profitability in our businesses, servicing our customers and creating value for our shareholders. Our long-term success will be determined by our ability to manage effectively the cyclicality of our industry, including the ongoing andpotential prolonged industry downturn,downturns, our ability to respond to industry demands andin periods of over-supply or uncertain oil prices, and ultimately to generate consistent positive cash flow and positive returns on the invested capital.

The delistingOn June 1, 2021, NASDAQ approved our application for the listing of our ordinary shares fromshares. In connection with the New York Stocklisting, we became subject to the reporting requirements of the Exchange (“NYSE”) became effective on April 27, 2020.Act. Our ordinary shares were deregistered under Section 12(b) of the Exchange Actbegan trading on July 16, 2020. We continue to evaluate listing options and intend to relist our ordinary shares when our Board of Directors determines market conditions are appropriate. The Company intends to continue filing periodic reports with the Securities and Exchange Commission (“SEC”)Nasdaq Global Select Market on a voluntary basis. Our ordinary shares continue to trade on the OTC Pink MarketplaceJune 2, 2021 under the ticker symbol “WFTLF”“WFRD”.

Our emergence from bankruptcy and the adoption of Fresh Start Accounting resulted in a new reporting entity, referred to herein as the “Successor,” for financial reporting purposes. To facilitate discussion and analysis of our financial condition and results of operations, we refer to the reorganized Weatherford Parties as the Successor for periods subsequent to December 13, 2019 and as the “Predecessor” for periods on or prior to December 13, 2019. As a result of the adoption of Fresh Start Accounting and the effects of the implementation of the Plan, our consolidated financial statements subsequent to December 13, 2019 are not comparable to our consolidated financial statements on or prior to December 13, 2019, and as such, “Black-line” financial statements are presented to distinguish between the Predecessor and Successor companies. References to “Successor” relate to the Consolidated Statements of Operations for the year ended December 31, 2020 and from December 14, 2019 through December 31, 2019 (“Successor Periods”).

Debt TransactionsThe Company's chief operating decision maker (“CODM”), our chief executive officer, regularly reviews information to make operating decisions, allocate resources and Equity Issuancesassess performance of the business. During the fourth quarter of 2021, the CODM changed the information regularly reviewed to be aligned with how we offer our services and technologies in relation to the well life cycle and we have realigned our reportable segments to reflect the change. We now have three reportable segments: (1) Drilling and Evaluation (2) Well Construction and Completions, and (3) Production and Intervention. Previously we had two geographic based reportable segments, Western Hemisphere and Eastern Hemisphere.

On August 28, 2020, we completed a series of financing transactions that meaningfully enhancedTotal revenues are from external customers and segment revenues are specific to our liquidity, including issuing $500 million of 8.75% Senior Secured Notes (“Senior Secured Notes”), terminatingthree reportable segments and all other revenues are specific to our ABL Credit Agreement, and amending and increasing the size of our senior secured letter of credit agreement (the “LC Credit Agreement”) to $215 million. Seenon-operating segment revenues. Revenues are further described in “Note 145 – Borrowings and Other Debt Obligations” for additional details.Revenues.”

On July 3, 2019,Additionally, we have changed our primary measure of segment profitability to segment adjusted EBITDA, which is based on segment earnings before interest, taxes, depreciation, amortization, share-based compensation expense and other adjustments. Research and development expenses are included in segment adjusted EBITDA. Corporate and other includes business activities related to all other segments (profit and loss), corporate and other expenses (overhead support and centrally managed or shared facilities costs) that do not individually meet the Weatherford Parties borrowed approximately $1.4 billion under the DIP Credit Agreementcriteria for segment reporting. We have revised our segment reporting to reflect our current management approach and the proceeds were usedrecast prior periods to repay certain prepetition indebtedness, cash collateralize certain obligations with respect to letters of credit and similar instruments and finance the working capital needs and general corporate purposes of the Weatherford Parties and certain of their subsidiaries. On July 3, 2019, the Company repaid all outstanding amounts due under the secured Term Loan Agreement and 364-Day Credit Agreement totaling approximately $616 million with borrowings from our DIP Credit Agreement. In addition, we cash collateralized approximately $271 million of letters of credit and similar instruments with borrowings from the DIP Credit Agreement. See “Note 2 – Emergence from Chapter 11 Bankruptcy Proceedings” for additional details. The DIP Credit Agreement was repaid in full upon emergence from Bankruptcy on December 13, 2019.

The following table sets forthshows our consolidated results of operations and financial information by operating segment and other selected information for the periods indicated.referenced periods. The 2021, 2020 and 2019 Successor Periods and the 2019 and 2018 Predecessor Periods are distinct reporting periods from the 2019 Predecessor Period as a result of our emergence from bankruptcy on December 13, 2019. References in theseWe have combined results of operations to the change and the percentage change combine(“2019 Combined Period”) for the 2019 Successor Period and 2019 Predecessor Period results for the year ended December 31, 2019 in order to provide some comparability of such information to the years ended December 31, 2020 and December 31, 2018. While this combined presentation isPeriods which are not presented according to generally accepted accounting principles in the United States (“GAAP”) and no comparable GAAP measure areis presented, however, management believes that providing thisthe combined financial information is the most relevant andmay be useful method for making comparisons to the years ended December 31, 2020 and December 31, 2018 as the eighteen days of the Successor Period is not a significant period of time impacting the combined results.certain year-to-date comparisons.

ConsolidatedRevenues totaled $3.65 billion in 2021, a decline of 1% compared to 2020 and reflected in our segment revenues as follows:

DRE revenues of $1.1 billion in 2021, increased 2% compared to 2020 primarily due to higher demand for managed pressure drilling and and wireline services and products, partially offset by a decline in drilling services and drilling fluids. The year-over-year improvement was driven by increased activity levels, an increase in services versus product mix, and higher adoption of our technology offerings internationally. The decline in drilling services revenue reflects the exit of certain drilling services in North America in the fourth quarter of 2020.

Revenues totaled $3.7 billion decreased $1.5 billion, orin 2020, a decline of 29%, compared to the 2019 Combined Period. ThePeriod, as the unprecedented global health and economic crisis sparked by the COVID-19 pandemic negatively impacted industry activity. The lower demand for oil and gas created by the impact of the COVID-19 pandemic, together with uncertainty around the extent and timing for an economic recovery, have caused significant reductions to the capital spending plans of exploration and production companies.

Segment adjusted EBITDA was $633 million in the year ended December 31, 2020 declined $32 million,2021, an increase of 13% compared to 2020 which is reflected in our segments as follows:

DRE segment adjusted EBITDA of $186 million in 2021, increased 41% compared to 2020 primarily due to higher demand for managed pressure drilling and wireline services and products and lower operating costs as a result of cost improvement initiatives that were implemented during 2020 and early 2021, partially offset by a decline in drilling fluids. Positively impacting DRE segment adjusted EBITDA was the 2019 Combined Period. The segment income decline was impacted by lower activity levelsexit of certain drilling services in North America Argentinain the fourth quarter of 2020. The year-over-year segment adjusted EBITDA improvement was driven by increased activity levels, increase in services versus product mix, higher adoption of our technology offerings and Colombia, the deterioration ingreater demand for services due to the COVID-19 pandemic and weakening demand for oil and gas.globally.

Eastern Hemisphere SuccessorWCC segment reported operating incomeadjusted EBITDA of $37$256 million for the year ended December 31, 2020 was down by $107 millionin 2021, decreased 6% compared to the 2019 Combined Period. The segment income decline was impacted by slowing activity levels, deterioration in demand for services2020 primarily due to lower activity for cementation products, liner hangers and tubular running services, which was partially offset by improvements in completions margins and cost efficiencies as a result of initiatives implemented during 2020 and early 2021. Internationally we experienced lower well construction and completions activity in the COVID-19 pandemicMiddle East and weakening demand for oilRussia resulting in decrease segment profit, which was partially offset by higher margin activity in North America and gas.Latin America.

Operating loss of $1.5 billion worsened 26% in 2020 compared to the 2019 Combined Period, compared 2018. The decrease was driven by lower activity levels, an unfavorable product mix in Canada and the United States, and start-up costs for projects in Latin America. These declines were partially offset by improved operating results from higher integrated service project activity in Latin America and operational improvements in the Eastern Hemisphere. Excluding the impact of operating resultsprimarily from the divested portion ofdecline in business demand due to the land drilling rigs, laboratory servicesCOVID-19 pandemic, long-lived assets impairment charges, goodwill impairment, and surface logging businesses, segment operating results in 2019 declined $55 million compared to 2018.inventory charges.

ConsolidatedInterest expense, net was $260 million for the year ended December 31, 2021, and primarily represented interest on our Exit Notes and 2024 Senior Secured Notes, and a portion from our 2028 Senior Secured Notes and 2030 Senior Notes, newly issued later in the year. The $251 million of interest expense, of $266 millionnet for year ended December 31, 2020 representsprimarily represented interest on our 11.0% Exit Notes our 8.75%and later in the year, the 2024 Senior Secured Notes.

The $12 million for the 2019 Successor Period represented interest expense on our Exit Notes and the write-off$362 million for the 2019 Predecessor Period represented a half year of unamortized deferredinterest expense on the Predecessor’s debt. Upon filing for Chapter 11 cases, which began July 1, 2019, we no longer recognized interest expense on Predecessor debt issuance costs of $15 million associatedin accordance with the termination of our senior secured lending agreement (“ABL Credit Agreement”). ASC 852.

Other expense, net was $12$29 million for the Successor Period 2019 representing interest expense on our Exit Notes and $362year ended December 31, 2021 compared to $53 million for the 2019 Predecessor Period, as comparedyear ended December 31, 2020. Other expense is comprised of letter of credit fees, other financing charges and foreign exchange losses, primarily attributed to $614 million for the Predecessorcurrency losses in 2018.countries with no or limited markets to hedge. The decrease in interest expense for 2019year-over-year improvement was primarily due to unrecognized contractual interest (no longer accruing interest) on our unsecured senior notes as well aslower currency volatility in 2021 compared to the eliminationsignificant volatility in the same period in the prior year following the start of the amortization of deferred financing costs and debt discounts during the Chapter 11 proceedings, which began July 1, 2019, partially offset by interest on debtor-in-possession financing and default interest on our A&R Credit Agreement.

Successor other expense was $53 million for the year ended December 31, 2020 compared to Predecessor other expense of $26 million in 2019 and $59 million in 2018.2019. Other expense was primarily driven by foreign currency exchange losses of $34 million for the year ended December 31, 2020 compared to $14 million for the 2019 Combined Period. The unfavorable change primarily relates to the weakening of foreign currencies following the onset of the COVID-19 pandemic. Other expense also includes letter of credit fees and other financing fees.

In 2019, and 2018, other expense was primarily driven by foreign currency exchange losses, letter of credit fees, other financing fees and non-service periodic pension and other post-retirement benefit expenses. Foreign exchange losses are typically due to the strengthening U.S. dollar compared to our foreign denominated operations. Included in other expense on the accompanying Consolidated Statements of Operations for the year ended December 31, 2018, was currency devaluation expense of $49 million primarily related to the devaluation of the Angolan kwanza due to a change in Angolan central bank policy in 2018.

We provide for income taxes based on the laws and rates in effect in the countries in which operations are conducted, or in which we or our subsidiaries are considered resident for income tax purposes. The relationship between our pre-tax income or loss from continuing operations and our income tax benefit or provision varies from period to period as a result of various factors, which include changes in total pre-tax income or loss, the jurisdictions in which our income is earned, the tax laws in those jurisdictions, the impacts of tax planning activities and the resolution of tax audits. On September 26, 2019, our parent company ceased to be a Swiss tax resident and became an Irish tax resident subject to tax under the Irish tax regime. As a result, our effective rate differs from the Irish statutory tax rate as the majority of our operations are taxed in jurisdictions with different tax rates. In addition, we are unable to recognize tax benefit on our losses.

We record deferred tax assets for net operating losses and temporary differences between the book and tax basis of assets and liabilities that are expected to produce tax deductions in future periods. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those deferred tax assets would be deductible. The Company assesses the realizability of its deferred tax assets each period by considering whether it is more likely than not that all or a portion of the deferred tax assets will not be realized. The Company considers all available evidence (both positive and negative) when determining whether a valuation allowance is required.required, with emphasis on our past operating results, the existence of cumulative losses in the most recent years and our forecast of near-term taxable income. The Company evaluates possible sources of taxable income that may be available to realize the benefit of deferred tax assets, including projected future taxable income, the reversal of existing temporary differences, taxable income in carryback years and available tax planning strategies, and the impact of fresh start accountingFresh Start Accounting in making this assessment. The realizability of the deferred tax assets is dependent upon judgments and assumptions inherent in the determination of future taxable income, including factors such as future operation conditions (particularly as related to prevailing oil prices and market demand for our products and services). The Company concluded it was not able to realize the benefit of its deferred tax assets and has established a valuation allowance. Continued performance improvement in certain jurisdictions could result in a change in our realization of deferred tax asset assessment in the near future, which would release valuation allowance.

The income tax provision for the Successor year 2020and respective effective tax rate was $86 million and (25)%, $85 million as compared to a tax provision ofand (5)%, $9 million for the Successor Periodand (60)%, and $135 million and 3%, for the 2021, 2020, 2019 Successor Periods and 2019 Predecessor Period, of 2019,respectively.

Our income tax provisions in 2021 and $34 million in 2018, which resulted in an effective tax rate of (5)%, (60)%, 3% and (1)%, respectively. Our tax expense is2020 are primarily driven by profitsincome in certain jurisdictions, deemed profit countries and withholding taxes on intercompany and third-party transactions that do not directly correlate to ordinary income or loss. Impairments and other charges are subject to tax rules in our various jurisdiction as to their deductibility, but generallyrecognized do not result in significant tax benefits to us due tobenefit as a result of our inability to forecast realization of the tax benefit of such benefits.losses.

Our results for the 2019 Predecessor period include $32 million of tax expense related to the Fresh Start accountingAccounting impacts and $14 million of tax benefit primarily related to goodwill and other asset impairments and write-downs. We also recognized $4.3 billion gain on Settlement of Liabilities Subject to Compromise as a result of the bankruptcy (See “Note 3 – Fresh Start Accounting”) with no tax impact due to it being attributed to Bermuda, which has no income tax regime, and the U.S., which resulted in the reduction of our U.S. unbenefited net operating losses carryforward under the operative tax statute and applicable regulations offset by the release of a similar amount of valuation allowance. Prepetition charges (charges prior to Petition Date) and reorganization items (charges after Petition Date) had no significant tax impact.

At December 31, 2020,2021, we had total cash and cash equivalents andplus restricted cash of $1.1 billion, of which $162 million was restricted cash, compared to $1.3 billion at December 31, 2020, of which $167 million was restricted cash, compared to total cash and cash equivalents and restricted cash of $800 million of which $182 million was restricted cash at December 31, 2019.cash. The following table summarizes cash provided by (used in) each type of business activity forin the years ended December 31, 2020, 2019 and 2018:periods presented: