
			UNITED STATES
			SECURITIES AND EXCHANGE COMMISSION
			WASHINGTON, D.C. 20549

(Mark One)

Form

10-Q

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

June 30, ~~2020~~2021

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________________________to __________________________________

Commission file number

001-36504

Weatherford International plc

(Exact Name of Registrant as Specified in Its Charter)

Ireland

98-0606750

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

2000 St. James Place

Houston

Texas

77056

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: 713.836.4000

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:⁽¹⁾


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, $0.001 par value per share	WFRD	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No þ

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

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Accelerated filer

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Non-accelerated filer

☐☑

Smaller reporting company

☑☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☑ No ☐

~~Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.~~

As of July ~~30, 2020,~~15, 2021, there were ~~70,017,356~~70,120,242 Weatherford ordinary shares, $0.001 par value per share, outstanding.

~~______________~~

^{( 1)} On April 17, 2020, the New York Stock Exchange (the “NYSE”) filed a Form 25 (the “Form 25”) with the Securities and Exchange Commission. In accordance with Rule 12d2-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the de-registration of our ordinary shares under Section 12(b) of the Exchange Act became effective on July 16, 2020.

Weatherford International public limited company

Form 10-Q for the Second Quarter and Six Months Ended June 30, ~~2020~~2021

Table o fof Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


		Successor		Predecessor		Successor		Predecessor			Three Months Ended				Six Months Ended
(Dollars and shares in millions,		Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
except per share amounts)		6/30/2020		6/30/2019		6/30/2020		6/30/2019
											June 30,				June 30,
(Dollars and shares in millions, except per share amounts)										(Dollars and shares in millions, except per share amounts)	2021		2020		2021		2020
Revenues:	Revenues:									Revenues:
Services										Services	588		512		1,111		1,277
Products	Products	$	309	$	498	$	759	$	994	Products	$	315	$	309	$	624	$	759
Services		512		811		1,277		1,661
Total Revenues	Total Revenues	821		1,309		2,036		2,655		Total Revenues	903		821		1,735		2,036

Costs and Expenses:	Costs and Expenses:									Costs and Expenses:
Cost of Services										Cost of Services	392		356		748		877
Cost of Products	Cost of Products	253		467		645		935		Cost of Products	285		253		565		645
Cost of Services		356		552		877		1,166
Research and Development	Research and Development	23		36		56		72		Research and Development	21		23		42		56
Selling, General and Administrative	Selling, General and Administrative	223		247		471		478		Selling, General and Administrative	188		223		376		471
Long-lived Assets Impairments		178		13		818		20
Goodwill Impairment		72		102		239		331
Inventory Charges		134		—		134		—
Restructuring, Facility and Severance		57		20		83		40
Other Operating Charges		22		28		32		58
Prepetition Charges		—		76		—		86
Gain on Sale of Businesses, Net		—		(114)		—		(112)
Impairments and Other Charges (Credits), Net										Impairments and Other Charges (Credits), Net	(8)		406		(8)		1,223

Restructuring Charges										Restructuring Charges	0		57		0		83
Total Costs and Expenses	Total Costs and Expenses	1,318		1,427		3,355		3,074		Total Costs and Expenses	878		1,318		1,723		3,355

Operating Loss		(497)		(118)		(1,319)		(419)

Other Expense:
Operating Income (Loss)										Operating Income (Loss)	25		(497)		12		(1,319)
Interest Expense, Net	Interest Expense, Net	(59)		(160)		(117)		(315)		Interest Expense, Net	(72)		(59)		(142)		(117)
Reorganization Items	Reorganization Items	—		—		(9)		—		Reorganization Items	0		0		0		(9)
Other Expense, Net	Other Expense, Net	(11)		(1)		(36)		(10)		Other Expense, Net	(11)		(11)		(15)		(36)

Loss Before Income Taxes	Loss Before Income Taxes	(567)		(279)		(1,481)		(744)		Loss Before Income Taxes	(58)		(567)		(145)		(1,481)
Income Tax Provision	Income Tax Provision	(12)		(33)		(56)		(45)		Income Tax Provision	(15)		(12)		(38)		(56)
Net Loss	Net Loss	(579)		(312)		(1,537)		(789)		Net Loss	(73)		(579)		(183)		(1,537)
Net Income Attributable to Noncontrolling Interests	Net Income Attributable to Noncontrolling Interests	2		4		10		8		Net Income Attributable to Noncontrolling Interests	5		2		11		10
Net Loss Attributable to Weatherford	Net Loss Attributable to Weatherford	$	(581)	$	(316)	$	(1,547)	$	(797)	Net Loss Attributable to Weatherford	$	(78)	$	(581)	$	(194)	$	(1,547)

Loss Per Share Attributable to Weatherford:
Basic & Diluted		$	(8.30)	$	(0.31)	$	(22.10)	$	(0.79)

Weighted Average Shares Outstanding:
Basic & Diluted		70		1,004		70		1,003
Basic & Diluted Loss per Share										Basic & Diluted Loss per Share	$	(1.11)	$	(8.30)	$	(2.77)	$	(22.10)
Basic & Diluted Weighted Average Shares Outstanding										Basic & Diluted Weighted Average Shares Outstanding	70		70		70		70

The accompanying notes are an integral part of these ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

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WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)


		Successor		Predecessor		Successor		Predecessor			Three Months Ended				Six Months Ended
		Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended			June 30,				June 30,
(Dollars in millions)	(Dollars in millions)	6/30/2020		6/30/2019		6/30/2020		6/30/2019		(Dollars in millions)	2021		2020		2021		2020
Net Loss	Net Loss	$	(579)	$	(312)	$	(1,537)	$	(789)	Net Loss	$	(73)	$	(579)	$	(183)	$	(1,537)
Foreign Currency Translation Adjustments	Foreign Currency Translation Adjustments	29		30		(66)		63		Foreign Currency Translation Adjustments	15		29		11		(66)

Comprehensive Loss	Comprehensive Loss	(550)		(282)		(1,603)		(726)		Comprehensive Loss	(58)		(550)		(172)		(1,603)
Comprehensive Income Attributable to Noncontrolling Interests	Comprehensive Income Attributable to Noncontrolling Interests	2		4		10		8		Comprehensive Income Attributable to Noncontrolling Interests	5		2		11		10
Comprehensive Loss Attributable to Weatherford	Comprehensive Loss Attributable to Weatherford	$	(552)	$	(286)	$	(1,613)	$	(734)	Comprehensive Loss Attributable to Weatherford	$	(63)	$	(552)	$	(183)	$	(1,613)

The accompanying notes are an integral part of these ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

Table o fof Contents

WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


(Dollars and shares in millions, except par value)	(Dollars and shares in millions, except par value)	6/30/2020		12/31/2019		(Dollars and shares in millions, except par value)	6/30/2021		12/31/2020
		(Unaudited)					(Unaudited)
Assets:	Assets:					Assets:
Cash and Cash Equivalents	Cash and Cash Equivalents	$	680	$	618	Cash and Cash Equivalents	$	1,217	$	1,118
Restricted Cash	Restricted Cash	76		182		Restricted Cash	170		167
Accounts Receivable, Net of Allowance for Credit Losses of $25 at June 30, 2020 and $0 at December 31, 2019		927		1,241
Accounts Receivable, Net of Allowance for Credit Losses of $38 at June 30, 2021 and $32 at December 31, 2020						Accounts Receivable, Net of Allowance for Credit Losses of $38 at June 30, 2021 and $32 at December 31, 2020	782		826
Inventories, Net	Inventories, Net	862		972		Inventories, Net	662		717
Other Current Assets	Other Current Assets	382		440		Other Current Assets	295		349
Total Current Assets	Total Current Assets	2,927		3,453		Total Current Assets	3,126		3,177

Property, Plant and Equipment, Net of Accumulated Depreciation of $210 at June 30, 2020 and $25 at December 31, 2019		1,367		2,122
Goodwill		—		239
Intangible Assets, Net of Accumulated Amortization of $95 at June 30, 2020 and $9 at December 31, 2019		875		1,114
Property, Plant and Equipment, Net of Accumulated Depreciation of $505 at June 30, 2021 and $367 at December 31, 2020						Property, Plant and Equipment, Net of Accumulated Depreciation of $505 at June 30, 2021 and $367 at December 31, 2020	1,108		1,236
Intangible Assets, Net of Accumulated Amortization of $251 at June 30, 2021 and $173 at December 31, 2020						Intangible Assets, Net of Accumulated Amortization of $251 at June 30, 2021 and $173 at December 31, 2020	734		810
Operating Lease Right-of-Use Assets	Operating Lease Right-of-Use Assets	155		256		Operating Lease Right-of-Use Assets	126		138
Other Non-Current Assets	Other Non-Current Assets	85		109		Other Non-Current Assets	66		73
Total Assets	Total Assets	$	5,409	$	7,293	Total Assets	$	5,160	$	5,434

Liabilities:	Liabilities:					Liabilities:
Short-term Borrowings and Current Portion of Long-term Debt		32		13
Short-term Borrowings and Current Portion of Finance Leases						Short-term Borrowings and Current Portion of Finance Leases	10		13
Accounts Payable	Accounts Payable	384		585		Accounts Payable	348		325
Accrued Salaries and Benefits	Accrued Salaries and Benefits	269		270		Accrued Salaries and Benefits	287		297
Income Taxes Payable	Income Taxes Payable	203		205		Income Taxes Payable	140		185
Current Portion of Operating Lease Liabilities	Current Portion of Operating Lease Liabilities	73		79		Current Portion of Operating Lease Liabilities	68		71
Other Current Liabilities	Other Current Liabilities	465		520		Other Current Liabilities	390		471
Total Current Liabilities	Total Current Liabilities	1,426		1,672		Total Current Liabilities	1,243		1,362

Long-term Debt	Long-term Debt	2,148		2,151		Long-term Debt	2,605		2,601
Operating Lease Liabilities	Operating Lease Liabilities	195		213		Operating Lease Liabilities	149		177
Other Non-Current Liabilities	Other Non-Current Liabilities	335		341		Other Non-Current Liabilities	404		357
Total Liabilities	Total Liabilities	$	4,104	$	4,377	Total Liabilities	$	4,401	$	4,497

Shareholders’ Equity:	Shareholders’ Equity:					Shareholders’ Equity:
Ordinary Shares - Par Value $0.001; Authorized 1,356 shares, Issued and Outstanding 70 shares at June 30, 2020 and December 31, 2019		$	—	$	—
Ordinary Shares - Par Value $0.001; Authorized 1,356 shares, Issued and Outstanding 70 shares at June 30, 2021 and December 31, 2020						Ordinary Shares - Par Value $0.001; Authorized 1,356 shares, Issued and Outstanding 70 shares at June 30, 2021 and December 31, 2020	$	0	$	0
Capital in Excess of Par Value	Capital in Excess of Par Value	2,897		2,897		Capital in Excess of Par Value	2,899		2,897
Retained Deficit	Retained Deficit	(1,573)		(26)		Retained Deficit	(2,141)		(1,947)
Accumulated Other Comprehensive Income (Loss)		(57)		9
Accumulated Other Comprehensive Loss						Accumulated Other Comprehensive Loss	(32)		(43)
Weatherford Shareholders’ Equity	Weatherford Shareholders’ Equity	1,267		2,880		Weatherford Shareholders’ Equity	726		907
Noncontrolling Interests	Noncontrolling Interests	38		36		Noncontrolling Interests	33		30
Total Shareholders’ Equity	Total Shareholders’ Equity	1,305		2,916		Total Shareholders’ Equity	759		937
Total Liabilities and Shareholders’ Equity	Total Liabilities and Shareholders’ Equity	$	5,409	$	7,293	Total Liabilities and Shareholders’ Equity	$	5,160	$	5,434

The accompanying notes are an integral part of these ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

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WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


		Successor		Predecessor
		Six Months Ended		Six Months Ended			Six Months Ended June 30,
(Dollars in millions)	(Dollars in millions)	6/30/2020		6/30/2019		(Dollars in millions)	2021		2020
Cash Flows From Operating Activities:	Cash Flows From Operating Activities:					Cash Flows From Operating Activities:
Net Loss	Net Loss	$	(1,537)	$	(789)	Net Loss	$	(183)	$	(1,537)
Adjustments to Reconcile Net Loss to Net Cash Provided by (Used in) Operating Activities:	Adjustments to Reconcile Net Loss to Net Cash Provided by (Used in) Operating Activities:					Adjustments to Reconcile Net Loss to Net Cash Provided by (Used in) Operating Activities:
Depreciation and Amortization	Depreciation and Amortization	270		239		Depreciation and Amortization	225		270
Goodwill Impairment	Goodwill Impairment	239		331		Goodwill Impairment	0		239

Long-lived Asset Impairments and Other Charges		967		78

Gain on Sale Businesses, Net		—		(112)
Deferred Income Tax Provision (Benefit)		21		(10)
Other Net Income Adjustments		45		52
Change in Operating Assets and Liabilities:
Long-lived Asset Impairments						Long-lived Asset Impairments	0		818
Inventory Charges						Inventory Charges	39		138
(Gain) Loss on Disposition of Assets						(Gain) Loss on Disposition of Assets	(13)		4
Deferred Income Tax Provision						Deferred Income Tax Provision	6		21
Share-Based Compensation						Share-Based Compensation	9		0
Changes in Operating Assets and Liabilities, Net:						Changes in Operating Assets and Liabilities, Net:
Accounts Receivable	Accounts Receivable	277		(84)		Accounts Receivable	41		277
Inventories	Inventories	(33)		(87)		Inventories	15		(33)
Accounts Payable	Accounts Payable	(197)		(3)		Accounts Payable	16		(197)
Other, Net		9		(93)
Net Cash Provided by (Used in) Operating Activities		61		(478)

Other Assets and Liabilities, Net						Other Assets and Liabilities, Net	(35)		61
Net Cash Provided by Operating Activities						Net Cash Provided by Operating Activities	120		61
Cash Flows From Investing Activities:	Cash Flows From Investing Activities:					Cash Flows From Investing Activities:
Capital Expenditures for Property, Plant and Equipment	Capital Expenditures for Property, Plant and Equipment	(73)		(114)		Capital Expenditures for Property, Plant and Equipment	(24)		(73)
Proceeds from Disposition of Assets	Proceeds from Disposition of Assets	8		45		Proceeds from Disposition of Assets	22		8
Payments of Deferred Consideration on the Acquisition of Equity Investment		(24)		—
Acquisition of Intangible Assets		(2)		(9)
Proceeds from Disposition of Businesses, Net		—		301
Other Investing Activities	Other Investing Activities	5		—		Other Investing Activities	0		3
Net Cash Provided by (Used in) Investing Activities		(86)		223

Net Cash Used in Investing Activities						Net Cash Used in Investing Activities	(2)		(62)
Cash Flows From Financing Activities:	Cash Flows From Financing Activities:					Cash Flows From Financing Activities:

Repayments of Long-term Debt	Repayments of Long-term Debt	(5)		(17)		Repayments of Long-term Debt	(5)		(5)
Borrowings (Repayments) of Short-term Debt, Net		7		298
Repayments of Short-term Debt, Net						Repayments of Short-term Debt, Net	(4)		7
Deferred Consideration Payment						Deferred Consideration Payment	0		(24)

Other Financing Activities	Other Financing Activities	(14)		(12)		Other Financing Activities	(6)		(14)
Net Cash Provided by (Used in) Financing Activities		(12)		269
Net Cash Used in Financing Activities						Net Cash Used in Financing Activities	(15)		(36)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	(7)		2		Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	(1)		(7)

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash	Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash	(44)		16		Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash	102		(44)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	Cash, Cash Equivalents and Restricted Cash at Beginning of Period	800		602		Cash, Cash Equivalents and Restricted Cash at Beginning of Period	1,285		800
Cash, Cash Equivalents and Restricted Cash at End of Period	Cash, Cash Equivalents and Restricted Cash at End of Period	$	756	$	618	Cash, Cash Equivalents and Restricted Cash at End of Period	$	1,387	$	756

Supplemental Cash Flow Information:	Supplemental Cash Flow Information:					Supplemental Cash Flow Information:

Interest Paid	Interest Paid	$	112	$	224	Interest Paid	$	141	$	112
Income Taxes Paid, Net of Refunds	Income Taxes Paid, Net of Refunds	$	40	$	51	Income Taxes Paid, Net of Refunds	$	32	$	40
Non-cash Financing Obligations		$	14	$	—

The accompanying notes are an integral part of these ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

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WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. General

The accompanying unaudited Condensed Consolidated Financial Statements of Weatherford International plc (the “Company,” or “Weatherford”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the ~~SEC~~Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, certain information and disclosures normally included in our annual consolidated financial statements have been condensed or omitted. Therefore, these unaudited ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 (“~~2019~~2020 Annual Report”).

The preparation of the ~~financial statements~~Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the ~~financial statements~~Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. Ultimate results could differ from our estimates.

In the opinion of management, the Condensed Consolidated Financial Statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary by management to fairly state ~~our~~the results of operations, financial position and cash flows of Weatherford and its subsidiaries for the periods presented and are not necessarily indicative of the results that may be expected for a full year. Our financial statements have been prepared on a consolidated basis. Under this basis, our financial statements consolidate all wholly owned subsidiaries and controlled joint ventures. All intercompany accounts and transactions have been eliminated.

Summary of Significant Accounting Policies

Please refer to “Note 1 – Summary of Significant Accounting Policies” of our Consolidated Financial Statements from our ~~2019~~2020 Annual Report for the discussion on our significant accounting policies. Certain reclassifications of the financial statements and accompanying footnotes for the three and six months ended June 30, ~~2019~~2020 have been made to conform to the presentation for the three and six months ended June 30, ~~2020. Please refer to “Note 2 – New Accounting Pronouncements” for changes to our accounting policies.~~2021.

~~As described~~

2. Impairments and Other Charges (Credits), Net

We recorded the following in ~~“Note 1 – Summary of Significant Accounting Policies”~~“Impairments and Other Charges (Credits), “Note 2 – Emergence from Bankruptcy Proceedings”, and “Note 3 – Fresh Start Accounting” of our Consolidated Financial Statements from our 2019 Annual Report, we filed voluntary petitions for bankruptcyNet” on ~~July 1, 2019, then emerged from bankruptcy on December 13, 2019 and adopted fresh-start accounting upon emergence. References to “Predecessor” herein relate to~~ the accompanying Condensed Consolidated Statements of Operations of the Company prior to the emergence from bankruptcy on December 13, 2019 for the period ended June 30, 2019. References to “Successor” herein relate to the Condensed Consolidated Balance Sheets of the reorganized Company as of June 30, 2020 and December 31, 2019 and the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 (“Successor Period”) and are not comparable to the Condensed Consolidated Financial Statements of the Predecessor Periods for the three and six months ended June 30, 2019 (“Predecessor Period”), as indicated by the “black line” division in the financials and footnote tables, which emphasizes the lack of comparability between amounts presented. Our financial results for future periods will be different from historical trends and the differences may be material.Operations:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(Dollars in millions)	2021		2020		2021		2020
Long-lived Asset Impairments	$	0	$	178	$	0	$	818
Goodwill Impairment	0		72		0		239
Inventory Charges	6		134		7		134
Other Charges (Credits)	(14)		22		(15)		32
Total Impairments and Other Charges (Credits), Net	$	(8)	$	406	$	(8)	$	1,223

~~Impact of COVID-19 Pandemic and Oil Price Declines on Our Operations and Liquidity~~

The COVID-19 pandemic, customer activity shutdowns, travel constraints and access restrictions to customer work locations have created significant uncertainty for the global economy as well as for the trajectory of the industry and the Company, lowering expectations of oil and gas related spending throughout the remainder of 2020 and beyond, resulting in a significant decline in the global demand for oil and gas. This caused an imbalance in supply and demand for oil and gas, as well as demand destruction for oil and gas. The demand destruction associated with the COVID-19 pandemic caused commodity price uncertainty and correspondingly, significant activity declines in the industry.

The impacts of the COVID-19 pandemic together with uncertainty around the extent and timing for an economic recovery, have caused extreme market volatility of commodity prices and resulted in significant reductions to the capital spending of exploration and production companies. Although the price and demand of oil and gas stabilized somewhat during the second quarter of 2020, we do not expect the industry to recover in the near term. It is unclear when a stable oil market will return as record crude inventories will dampen the pace of any recovery, translating to near-term uncertainties in activity and challenges in forecasting our business. In addition, continued negative sentiment for the energy industry in the capital markets has

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impacted demand for our products and services, as our customers, particularly those in North America, have experienced challenges securing appropriate amounts of capital under suitable terms to finance their operations.

The global impacts surrounding the COVID-19 pandemic, including operational and manufacturing disruptions, logistical constraints and travel restrictions, are constantly evolving. We have experienced and expect to continue to experience actions that will negatively impact our ability to operate, including 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 to have lasting effects on how we and our customers and suppliers work in the future. The demand destruction associated with the COVID-19 pandemic caused commodity price uncertainty and correspondingly, significant activity declines in the industry.

Revenue in the second quarter of 2020 declined 37% compared to the second quarter of 2019 and 32% sequentially due to lower business activity resulting from the factors described above. Demand for our products and services have weakened and we continue to expect lower than normal demand for our products and services through the remainder of 2020 and, potentially, 2021. As a result, our financial outlook for the remainder of the year, has been and continues to be materially and negatively impacted. We continue to anticipate significant constraints on our ability to generate revenues, profits and cash flows. We anticipate a multi-year (2020 to 2021 and potentially beyond) dislocation across the industry, particularly in North America, Europe, Latin America and Sub Saharan Africa.

Entering 2020, we had taken a number of actions that were yielding improvements in our cost structure. In the second quarter of 2020, we implemented more aggressive actions to right-size our business to address current market conditions. At June 30, 2020, we had adequate liquidity and were compliant with our financial covenants under the agreements governing our outstanding indebtedness. However, our rapidly changing operating environment has led to an inability to predict the ultimate length and depth of the adverse economic impact from the COVID-19 pandemic and uncertainty in the global oil markets on our industry and the Company, though the effects have been, and are expected to continue to be, significant. Given the material decline in our business as a result of the decrease in demand for oil and gas worldwide, we expect that a breach of our covenants under our ABL Credit Agreement could occur in the first half of 2021. See discussion below under the subheading “~~Liquidity Concerns and Actions to Address Liquidity Needs; Going Concern” for further details regarding a potential covenant breach.~~

~~Liquidity Concerns and Actions to Address Liquidity Needs; Going Concern~~

The significant uncertainty on the long-term impacts of the COVID-19 pandemic, the global economy, and the oil and gas industry for 2020 and beyond is having a negative impact on our business. As a result of these impacts, in the second quarter of 2020, we increased and accelerated our workforce reduction plan, reduced certain management and employee pay, reduced other operating costs, and initiated further consolidation of our operations. Many of these cost reduction actions, like workforce reduction and temporary pay reductions, have been extended into the third quarter of 2020. Despite the actions of management, given the material decline in our business as a result of the decline in demand for oil and gas worldwide, we expect that a breach of our covenants under our ABL Credit Agreement could occur in the first half of 2021. A breach of these financial covenants would constitute an event of default under our ABL Credit Agreement which if not timely cured or waived, would constitute an event of default under our LC Credit Agreement and our unsecured 11% senior notes due 2024 (“Exit Notes”) as described in “Note 9 – Borrowings and Other Obligations” to our Condensed Consolidated Financial Statements. An event of default under these agreements would result in the obligations under these agreements being accelerated or required to be cash collateralized. Such result would constrain our liquidity and we may not be able to service the interest on our debt or pay other obligations and thus, raises substantial doubt on our ability to continue as a going concern within the next 12 months. The Condensed Consolidated Financial Statements have been prepared in conformity with U.S. GAAP which contemplate the continuation of the Company as a going concern and do not include any adjustments that might be necessary should we be unable to continue as a going concern.

In an effort to proactively address potential liquidity constraints, on August 4, 2020 we executed a binding commitment letter for $500 million in senior secured first lien notes, with a stated interest rate of 8.75% (“New Senior Secured Notes”) that would mature in September 2024. The commitment letter, which was originally scheduled to expire on August 14, 2020, has been extended to August 21, 2020. The extension of the binding commitment letter allows additional time for the conditions specified in the binding commitment letter to be satisfied or waived and the notes to be issued, which will improve our liquidity. See “Note 17 – Subsequent Event” to the Condensed Consolidated Financial Statements for further details.

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~~2. New Accounting Pronouncements~~

~~Accounting Changes~~

~~On January 1, 2020, we adopted Financial Accounting Standards Board Accounting Standards Update No. 2016-13,~~ ~~Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,~~ which replaces the incurred loss impairment methodology in previous U.S. GAAP with a methodology (Current Expected Credit Losses model, or CECL) that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. We estimate expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Our customer base has generally similar collectability risk characteristics, although risk profiles can vary between larger independent customers and state-owned customers, which may have a lower risk than smaller independent customers. The updated guidance applies to (i) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, and (ii) loan commitments and other off-balance sheet credit exposures. The adoption of this standard update did not have a material impact on our Condensed Consolidated Financial Statements.

3. Accounts Receivable Factoring

From time to time, we participate in factoring arrangements to sell accounts receivable to third-party financial institutions. Our factoring transactions in the ~~Successor Periods~~three and ~~Predecessor Periods~~six months ended June 30, 2021 and 2020 were recognized as sales of accounts receivable, and the proceeds are included as operating cash flows in our Condensed Consolidated Statements of Cash Flows. The loss on sale of accounts receivable sold was immaterial for ~~all Successor Periods~~the three and ~~Predecessor Periods.~~six months of 2021 and 2020. The following table presents accounts receivable sold and cash proceeds from the sale of accounts ~~receivable.~~receivable, net of discount and hold-back amounts:


		Successor		Predecessor		Successor		Predecessor
		Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended			Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	(Dollars in millions)	6/30/2020		6/30/2019		6/30/2020		June 30, 2019		(Dollars in millions)	2021		2020		2021		2020
Accounts Receivable Sold	Accounts Receivable Sold	$	17	$	78	$	23	$	162	Accounts Receivable Sold	$	34	$	17	$	40	$	23
Cash Proceeds from Sale of Accounts Receivable	Cash Proceeds from Sale of Accounts Receivable	$	15	$	71	$	21	$	152	Cash Proceeds from Sale of Accounts Receivable	$	29	$	15	$	34	$	21

4. Inventories, Net

Inventories, net of reserves of $147 million and $119 million as of June 30, 2021 and December 31, 2020, respectively, are presented by category in the table below:


(Dollars in millions)	6/30/2021		12/31/2020
Finished Goods	$	593	$	655
Work in Process and Raw Materials, Components and Supplies	69		62


Inventories, Net	$	662	$	717

In the three and six months ended June 30, 2021 and 2020, we recognized inventory charges, including excess and obsolete inventory charges, in the following captions on our Condensed Consolidated Statements of Operations:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(Dollars in millions)	2021		2020		2021		2020
Inventory Charges in “Impairments and Other Charges”	$	6	$	134	$	7	$	134
Inventory Charges in “Cost of Products”	16		2		32		4

Total Inventory Charges	$	22	$	136	$	39	$	138

5. Long-lived Asset Impairments

We did not recognize any long-lived asset impairments in the three and six months ended June 30, 2021.

During the first half of 2020, the global economic and industry conditions resulting from the decline in demand and impact from the COVID-19 pandemic were identified as impairment indicators. As a result, we performed interim impairment assessments of our property, plant and equipment, definite-lived intangible assets, and right of use assets with the assistance of third-party valuation advisors. Based on our impairment tests, we determined the carrying amount of certain long-lived assets exceeded their respective fair values and recognized long-lived asset impairments presented in the table below.

The fair values of our long-lived assets were determined using discounted cash flows under the income approach, a Level 3 fair value analysis. The income approach required significant assumptions to determine the fair value of an asset or asset group including the estimated discounted future cash flows, specifically the forecasted revenue, forecasted operating margins and the discount rate.

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~~4. Inventories, Net~~

~~Inventories, net of reserves of $137 million and $0 as of June 30, 2020 and December 31, 2019, respectively by category were as follows:~~

(Dollars in millions) 6/30/2020 12/31/2019
Finished Goods $ 752 $ 830
Work in Process and Raw Materials, Components and Supplies 110 142
$ 862 $ 972

During the second quarter of 2020, we recognized inventory charges and write-downs of $134 million primarily for excess and obsolete inventory as a result of the decline in oil and gas commodity demand, the downturn in the oil and gas industry and the impact of COVID-19 pandemic. The near-term utilization of certain inventory has been deemed to be commercially unviable or technologically obsolete considering current and anticipated future demand. These inventory charges are included in “Inventory Charges” on the accompanying Condensed Consolidated Statements of Operations.

~~5. Acquisitions and Divestitures~~

~~Acquisitions~~

We did not have any acquisitions of businesses in the three and six months ended June 30, 2020 or 2019. We paid $12 million in March 2020 and an additional $12 million in April 2020 as final settlement of the deferred consideration associated with our acquisition of the remaining 50% equity interest in our Qatari joint venture, which took place in the first quarter of 2018.

~~Divestitures~~

We did not have any significant dispositions of businesses in the three and six months ended June 30, 2020. In the second quarter of 2019 we completed the sale of our reservoir solutions and our surface data logging businesses for an aggregate sale price of $256 million. We recognized a gain of $117 million and divested a carrying amount of $95 million in net assets on these two business dispositions in the second quarter of 2019.

In the first quarter of 2019, we received the remaining gross proceeds of $72 million to complete the final closings pursuant to the purchase and sale agreements entered into with ADES International Holding Ltd. in July of 2018 to sell our land drilling rig operations in Algeria, Kuwait and Saudi Arabia for an aggregate purchase price of $288 million. The loss on the sale of land drilling rigs operations recognized in 2019 was $6 million and the divested carrying amount of net assets was $66 million.

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~~6. Long-lived Assets Impairment~~

As a result of the unprecedented global economic and industry conditions described in “Note 1 – General” to our Condensed Consolidated Financial Statements which we identified as impairment indicators, we completed impairment assessments of our property, plant and equipment, definite-lived intangible assets, goodwill and right of use assets with the assistance of third-party valuation advisors as of March 31, 2020 and again as of June 30, 2020. Based on our impairment test, we determined the carrying amount of certain long-lived assets exceeded their respective fair values. Therefore, during the three and six months ended June 30, 2020, we recognized long-lived asset impairments in “Long-lived Assets Impairments” on the accompanying Condensed Consolidated Statements of Operations of $178 million and $818 million, respectively. The fair values of our long-lived assets were determined using discounted cash flow or Level 3 fair value analyses. The unobservable inputs to the income approach included the assets’ estimated future cash flows, estimates of discount rates commensurate with the assets’ risks, revenue growth rates, profitability margins, and the remaining useful life of the primary asset. Given the dynamic nature of the COVID-19 pandemic and related market conditions, we cannot estimate the period of time that these events will persist or the full extent of the impact on our business. If, in addition to other factors, market conditions deteriorate further than we anticipate, we may record further impairments related to the carrying amount of our long-lived assets, definite-lived intangibles and right of use assets.

The table below details the ~~Successor long-lived asset impairment by asset and segment:~~

Three Months Ended June 30, 2020 Six Months Ended June 30, 2020
(Dollars in millions) Western Hemisphere Eastern Hemisphere Total Western Hemisphere Eastern Hemisphere Total
Property, Plant and Equipment $ 94 $ 47 $ 141 $ 316 $ 255 $ 571
Intangible Assets 13 9 22 44 115 159
Right of Use Assets 7 8 15 56 32 88
Total Impairment Charges $ 114 $ 64 $ 178 $ 416 $ 402 $ 818

During the second quarter of 2020, we recorded a $65 million charge to “Long-Lived Asset Impairments” in our Condensed Consolidated Statements of Operations to correct an immaterial error relating to our estimates of impairment of certain assets associated with our Drilling Services business in the Western Hemisphere that should have been recognized in the first quarter of 2020. This charge would have increased “Long-Lived Asset Impairments”, “Operating Loss”, “Loss Before Income Taxes” and “Net Loss” by $65 million in the three months ended March 31, 2020. The adjustment would not have affected our compliance with financial covenants under our ABL Credit Agreement and would not have had an impact to cash flow from operating activities or any other cash flow measures for that period or on our year-to-date results of operations.

~~We recognized Predecessor~~ long-lived asset impairments ~~of $13 million~~by asset class and ~~$20 million, respectively,~~segment recognized for the three and six months ended June 30, 2019. The long-lived asset impairments were primarily related to the Predecessor’s Western Hemisphere segment in the second quarter of 2019 and the Predecessor’s Eastern Hemisphere segment in the first quarter of 2019.2020:













	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
(Dollars in millions)	Western Hemisphere		Eastern Hemisphere		Total		Western Hemisphere		Eastern Hemisphere		Total
Property, Plant and Equipment	$	94	$	47	$	141	$	316	$	255	$	571
Intangible Assets	13		9		22		44		115		159
Right of Use Assets	7		8		15		56		32		88
Total Long-Lived Asset Impairments	$	114	$	64	$	178	$	416	$	402	$	818

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7.6. Goodwill and Intangible Assets

Goodwill

WeAs of June 30, 2021 and December 31, 2020, we had no goodwill. The cumulative impairment loss for goodwill was $239 million, all of which was fully impaired in the first half of 2020.

During 2020, based on our interim goodwill impairment assessments that determined ~~that~~ the ~~unprecedented industry conditions described~~fair value of our reporting units were less than their carrying values, we recognized goodwill impairment charges presented in “Note 12 – ~~General” are triggering events in our qualitative goodwill assessment that required us to review the recoverability of our long-lived assets~~Impairments and Other Charges (Credits), Net.” We identified impairment indicators as discussed in “Note ~~6 - Long-Lived~~5 – Long-lived Asset Impairments” ~~and then subsequent to the recognition of long-lived assets impairment, we performed an~~that triggered these interim quantitative goodwill ~~assessment as~~assessments. The fair values of ~~March 31, 2020~~our reporting units were determined using a combination of the income approach and ~~as of June 30, 2020. Our quantitative goodwill impairment assessment is based on discounted cash flow analysis and a multiples-based~~the market approach for comparable companies in our industry, a Level 3 fair value analysis. ~~The analysis includes~~Determining the fair value of the reporting units requires management to develop significant judgments, including ~~estimated~~estimating and discounting future cash flows ~~estimates of discount rates,~~by reporting unit, specifically forecasted revenue, ~~growth rates, profitability~~forecasted operating margins and ~~capital expenditures. Goodwill impairment occurs when the carrying amount of a reporting unit exceeds the fair value. Based upon our~~discount rates. See goodwill impairment assessment, in the second quarter of 2020 we recognized a goodwill impairment of $72 million on our Russia reporting unit in addition to the goodwill impairment recognized in the first quarter of 2020 of $167 million for our Middle East & North Africa (“MENA”) and Russia reporting units. The total goodwill impairment for the six months ended June 30, 2020 was $239 million. These recognized impairments reduced the carrying value of our goodwill in our MENA reporting unit by $127 million and our Russia reporting unit by $112 million, which are both part of our Eastern Hemisphere segment.

~~The changes in the carrying amount of goodwill by reporting segment at June 30, 2020, are~~charges presented in ~~the following table.~~

(Dollars in millions) Western Hemisphere Eastern Hemisphere Total
Balance at December 31, 2019 $ — $ 239 $ 239
Impairment — (239) (239)
Balance at June 30, 2020 $ — $ — $ —

~~For the three~~“Note 2 – Impairments and six months ended June 30, 2019, the Predecessor goodwill impairment tests indicated that goodwill was impaired and as a result the Predecessor incurred a charge of $102 million and $331 million, respectively. The impairment indicators were a result of lower activity levels and lower exploration and production capital spending that resulted in a decline in drilling activity and forecasted growth in the North America, Asia and MENA reporting units.Other Charges (Credits), Net.”

Intangible Assets

The components of definite-lived intangible assets, net of accumulated amortization, were as follows:

(Dollars in millions) 6/30/2020 12/31/2019
Developed and Acquired Technology $ 502 $ 721
Trade Names 373 393
Totals $ 875 $ 1,114


(Dollars in millions)	6/30/2021		12/31/2020
Developed and Acquired Technology, Net of Accumulated Amortization of $190 at June 30, 2021 and $132 at December 31, 2020	$	400	$	456
Trade Names, Net of Accumulated Amortization of $61 at June 30, 2021 and $41 at December 31, 2020	334		354
Intangible Assets, Net of Accumulated Amortization of $251 at June 30, 2021 and $173 at December 31, 2020	$	734	$	810

~~For~~Amortization expense was $39 million and $78 million in the three and six months ended ~~of 2020, based on our impairment test, we recognized impairments of $22 million~~June 30, 2021, respectively, and ~~$159 million, respectively, of our developed and acquired technology. Amortization expense was~~ $40 million and $86 million ~~for~~in the three and six months ended June 30, 2020, respectively, and ~~$16 million and $32 million for the three and six months ended June 30, 2019 and~~ is reported in ~~Selling,~~“Selling, General and ~~Administrative~~Administrative” on our Condensed Consolidated Statements of Operations. ~~At June 30, 2020, accumulated amortization was $73 million for Developed and Acquired Technology and $22 million for Trade Names.~~

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8.7. Restructuring ~~Facility Consolidation and Severance~~ Charges

~~During~~The following table presents restructuring charges in the three and six months ended June 30, 2021 and 2020 in response to the impact on our business from the COVID-19 pandemic and the significant decline in oil prices as discussed in “Note 1 – General”, we initiated additional immediate actions and developed plans to reduce our future cost structure. As a result, during the three and six months ended June 30, 2020, we incurred restructuring and severance charges of $57 million and $83 million, respectively in “Restructuring ~~Facility and Severance”~~Charges” on the accompanying Condensed Consolidated Statements of Operations. Additional charges with respect to our ongoing cost reduction actions ~~are expected to~~may be ~~recorded~~recognized in ~~the second half of 2020 and could result in additional charges in future periods as we execute and revise our plans.~~subsequent periods.

~~The following table presents restructuring and severance charges for the Successor Period and Predecessor Period.~~

Successor Predecessor Successor Predecessor
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
(Dollars in millions) 6/30/2020 6/30/2019 6/30/2020 6/30/2019
Severance Charges $ 55 $ 1 $ 78 $ 3
Facility Consolidation and Other Charges 2 15 5 29
Asset Related Charges (non-cash) — 4 — 8
Total Restructuring and Severance Charges $ 57 $ 20 $ 83 $ 40


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2021		2020		2021		2020
Severance Charges	$	0	$	55	$	0	$	78
Facility Exit Charges	0		2		0		5

Total Restructuring Charges	$	0	$	57	$	0	$	83

The following table presents total restructuring ~~and severance~~ charges by reporting segment and Corporate ~~for~~in the ~~Successor Period~~three and ~~Predecessor Period.~~six months ended June 30, 2021 and 2020:


		Successor		Predecessor		Successor		Predecessor
		Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended			Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	(Dollars in millions)	6/30/2020		6/30/2019		6/30/2020		6/30/2019		(Dollars in millions)	2021		2020		2021		2020
Western Hemisphere	Western Hemisphere	$	26	$	10	$	41	$	15	Western Hemisphere	$	0	$	26	$	0	$	41
Eastern Hemisphere	Eastern Hemisphere	11		2		17		7		Eastern Hemisphere	0		11		0		17
Corporate	Corporate	20		8		25		18		Corporate	0		20		0		25
Total Restructuring Charges										Total Restructuring Charges	$	0	$	57	$	0	$	83
		$	57	$	20	$	83	$	40

The following table presents total restructuring ~~and severance~~ accrual activity ~~charges, payments and other changes for~~in the ~~Successor Period~~six months ended June 30, ~~2020.~~2021:

(Dollars in millions) Accrued Balance at December 31, 2019 Charges Cash Payments
Other
Accrued Balance at June 30, 2020
Restructuring and Severance Reserve $ 66 $ 83 $ (75) $ (12) $ 62


(Dollars in millions)	Accrued Balance at December 31, 2020		Charges		Cash Payments		(Credits)/Other		Accrued Balance at June 30, 2021
Restructuring Reserve	$	53	$	0	$	(21)	$	(5)	$	27

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9.8. Borrowings and Other Obligations


(Dollars in millions)	(Dollars in millions)	6/30/2020		12/31/2019		(Dollars in millions)	6/30/2021		12/31/2020

Finance Lease Current Portion	Finance Lease Current Portion	$	8	$	10	Finance Lease Current Portion	$	10	$	9
Other Short-term Loans		24		3
Other Short-term Financing Arrangements						Other Short-term Financing Arrangements	0		4

Short-term Borrowings	Short-term Borrowings	$	32	$	13	Short-term Borrowings	$	10	$	13

11.00% Exit Notes due 2024						11.00% Exit Notes due 2024	$	2,098	$	2,098
8.75% Senior Secured Notes due 2024						8.75% Senior Secured Notes due 2024	460		455
Finance Lease Long-term Portion						Finance Lease Long-term Portion	47		48
Long-term Debt	Long-term Debt	$	2,148	$	2,151	Long-term Debt	$	2,605	$	2,601

~~Credit Agreements~~Exit Notes

~~ABL Credit Agreement~~

OnUpon our emergence from bankruptcy on December 13, 2019, we entered into ~~a senior secured asset-based revolving credit agreement~~an indenture and issued unsecured 11.00% Exit Notes in an aggregate principal amount of ~~$450 million~~$2.1 billion maturing on December 1, 2024 (the ~~“ABL Credit Agreement~~”“Exit Notes”) ~~with~~. Interest on the ~~lenders party thereto~~Exit Notes accrues at the rate of 11.00% per annum and ~~Wells Fargo Bank, N.A. as administrative agent. Among other things, proceeds of loans under the ABL Credit Agreement may be used to finance ongoing working capital~~is payable semiannually in arrears on June 1 and ~~general corporate needs of the Company and certain of its subsidiaries. The facility may also be used for issuing letters of credit. The maturity date of loans made under the ABL Credit Agreement is~~December 1, which commenced on June 13, 2024. At June 30, 2020, borrowings under our ABL Credit Agreement was $20 million, outstanding letters of credit was $123 million, and we had approximately $91 million borrowing and/or letters of credit availability under the facility.1, 2020.

~~The applicable terms, interest rates~~Senior Secured Notes

On August 28, 2020, we entered into an indenture and ~~fees for borrowings under~~issued the ~~ABL Credit Agreement are~~8.75% Senior Secured Notes in an aggregate principal amount of $500 million maturing September 1, 2024 (the “Senior Secured Notes”). Interest on the ~~same as those presented~~Senior Secured Notes accrues at the rate of 8.75% per annum and is payable semiannually in ~~“Note 13 – Short-Term Borrowings~~arrears on March 1 and ~~other Debt Obligations” in our 2019 Annual Report.~~September 1, which commenced on March 1, 2021.

LC Credit Agreement

On December 13, 2019, we entered into athe senior secured letter of credit agreement in an aggregate amount of $195 million maturing on June 13, 2024 (the “LC Credit ~~Agreement,” together with the ABL Credit Agreement, the “Exit Credit Agreements”~~Agreement”) ~~with the lenders party thereto and Deutsche Bank Trust Company Americas as administrative agent.~~. The LC Credit Agreement is used for the issuance of bid and performance letters of credit of the Company and certain of its subsidiaries. ~~The maturity date under~~On August 28, 2020, we amended the LC Credit Agreement ~~is June 13, 2024.~~ to, among other things, increase the aggregate commitments to $215 million, modify the maturity date to May 29, 2024 and reduce the minimum liquidity covenant to $175 million.

At June 30, ~~2020,~~2021, we had approximately ~~$129~~$160 million in outstanding letters of credit under the LC Credit Agreement and availability of ~~$66~~$55 million.

~~The applicable terms, interest rates and fees for borrowings~~As of June 30, 2021, we had $331 million of letters of credit outstanding, consisting of the $160 million mentioned above under the LC Credit Agreement ~~are the same as those presented~~and another $171 million under various uncommitted facilities (of which there was $165 million in ~~“Note 13 – Short-Term Borrowings~~cash collateral held and ~~other Debt Obligations”~~recorded in “Restricted Cash” on our ~~2019 Annual Report.~~Condensed Consolidated Balance Sheets).

Accrued Interest

As of June 30, ~~2020, we were in compliance with the financial covenants as defined in the Exit Credit Agreements~~2021 and the covenants under our indentures. However, the full impact that the pandemic and the precipitous decline in oil prices will have on our results of operations, financial condition, liquidity and cash flows in 2020 and future years is uncertain. The actions taken by management to preserve liquidity and capital include the reduction of capital expenditures, consolidation of product lines to eliminate redundancy, exiting from sub-scale locations and a higher level of headcount reductions. The decline in activity has and will continue to result in a significant reduction in our accounts receivable, inventory and rental tools, particularly in North America, which comprise the most significant components of the borrowing base of our credit facility and as a result will impair our ability to comply with the covenants under the ABL Credit Agreement. Despite the actions of management, given the material decline in our business as a result of the decline in demand for oil and gas worldwide, we expect that a breach of our covenants under our ABL Credit Agreement could occur in the first half of 2021. A covenant breach would occur if our Excess Availability and our Fixed Charge Coverage Ratio (as such terms are defined in the ABL Credit Agreement) were to each fall below the minimum requirement as defined in the ABL Credit Agreement. Further, a breach of these financial covenants would constitute an event of default under our ABL Credit Agreement which if not timely cured or waived, would constitute an event of default under our LC Credit Agreement. An event of default under these agreements would result in our obligations being accelerated, including cash collateralizing our letters of credit. Such result would constrain our liquidity and we may not be able to service the interest on our debt or pay other obligations and thus, raises substantial doubt on our ability to continue as a going concern within the next 12 months. See “Note 1 – General” for further details.

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~~Other Short-term Arrangements and Debt Activity~~

~~We have short-term borrowings with various domestic and international institutions pursuant to uncommitted credit facilities and other financing arrangements. At June 30,~~December 31, 2020, we had ~~$24 million in short-term borrowings under these arrangements.~~

As of June 30, 2020, we had $335 million of letters of credit and performance and bid bonds outstanding, consisting of $123 million of letters of credit under the ABL Credit Agreement, $129 million of letters of credit under the LC Credit Agreement and $83 million of letters of credit under various uncommitted facilities. At June 30, 2020, we had cash collateral of $72 million, included in Restricted Cash supporting letters of credit under our various uncommitted facilities.

~~Long-term Debt~~

~~On December 13, 2019, we issued our Exit Notes in an aggregate principal amount of $2.1 billion. Interest on~~accrued interest primarily related to the Exit Notes ~~accrues at the rate~~and Senior Secured Notes of ~~11.00% per annum and is payable semiannually~~$34 million in ~~arrears~~both periods, respectively, in “Other Current Liabilities” on ~~June 1 and December 1. The Exit Notes are unsecured and mature on December 1, 2024.~~

~~The indenture governing the Exit Notes contains covenants that limit, among other things,~~ our ability and the ability of certain of our subsidiaries, to: incur, assume or guarantee additional indebtedness; pay dividends or distributions on capital stock or redeem or repurchase capital stock; make investments; sell stock of our subsidiaries; transfer or sell assets; create liens; enter into transactions with affiliates; and enter into mergers or consolidations. At June 30, 2020, we are in compliance with our indenture covenants. However, as noted above, a breach of covenants under the ABL Credit Agreement that is not cured or waived, would trigger an event of default under our Exit Notes if it is (a) caused by a failure to pay at its stated maturity principal of an indebtedness within the applicable express grace period and any extensions thereof, or (b) results in the acceleration of such indebtedness prior to its stated maturity, and, in each case, the principal amount of such indebtedness, together with the principal amount of any other indebtedness with respect to which an event described in clause (a) or (b) has occurred and is continuing aggregates $75 million or more.Condensed Consolidated Balance Sheets.

Fair Value of Short and Long-term Borrowings

The carrying value of our short-term borrowings approximates their fair value due to their short maturities. These short-term borrowings are classified as Level 2 in the fair value hierarchy.

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The fair value of our long-term debt fluctuates with changes in applicable interest rates among other factors. Fair value will exceed carrying value when the current market interest rate is lower than the interest rate at which the debt was originally issued and will be less than the carrying value when the market rate is greater than the interest rate at which the debt was originally issued. The fair value of our long-term debt is classified as Level 2 in the fair value hierarchy and is established based on observable inputs in less active markets.

(Dollars in millions) 6/30/2020 12/31/2019
Fair Value $ 1,461 $ 2,252
Carrying Value 2,098 2,097

The ~~total~~table below presents the fair value ~~of our debt decreased significantly primarily due to the negative impact on our business~~ and industry associated with the COVID-19 pandemic and credit rating agency downgrades as described in “Note 1 – General”. These events have collectively increased the credit spreads for our publicly traded bonds, thus reducing the associated fair value.

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~~10. Fair Value of Financial Instruments~~

Our assets and liabilities measured at fair value on a recurring basis consist solely of our derivative instruments. We monitor the creditworthiness of our counterparties, which are multinational commercial banks. The fair values of all our outstanding derivative instruments are determined using a model with Level 2 inputs including quoted market prices for contracts with similar terms and maturity dates. Our derivative activity is not material to our financial statements.

Our other financial instruments include cash and cash equivalents, accounts receivable, accounts payable, held-to-maturity investments, short-term borrowings and long-term debt. Except for short-term borrowings and long-term debt, the estimated fair value of these financial instruments approximates their carrying values as reflected in our Condensed Consolidated Financial Statements. The fair value of our short-term and long-term borrowings are discussed in “Note 9 – Borrowings and Other Obligations.”

As of June 30, 2020 and December 31, 2019, we had $45 million and $50 million, respectively, of held-to-maturity Angolan government bonds primarily maturing in the third and fourth quarters of 2020. During the second quarter of 2020, we received proceeds of $5 million from the maturity of a portion of our Angolan government bonds. The carrying value of ~~these bonds approximated their fair value as of June 30, 2020~~the Exit Notes and ~~December 31, 2019, respectively.~~Senior Secured Notes.


	6/30/2021				12/31/2020
(Dollars in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
11.00% Exit Notes due 2024	$	2,098	$	2,190	$	2,098	$	1,628
8.75% Senior Secured Notes due 2024	460		524		455		507

~~11.~~9. Disputes, Litigation and Legal Contingencies

We are subject to lawsuits and claims arising out of the nature of our business. We have certain claims, disputes and pending litigation for which we do not believe a negative outcome is probable or for which we can only estimate a range of liability. 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. If one or more negative outcomes were to occur relative to these cases, the aggregate impact to our financial condition could be material. Due to the COVID-19 pandemic, ~~courts in~~ many ~~jurisdictions around~~of the ~~world~~Company’s litigation matters and other disputes have been ~~temporarily closed for trials and hearings, which has resulted in delays in many of our litigation matters.~~

Accrued litigation and settlements recorded in “Other Current Liabilities” on the accompanying Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019 were $40 million and $44 million, respectively.

~~Shareholder Litigation~~delayed due to court closures or other mandated accommodations.

GAMCO Shareholder Litigation

On September 6, 2019, GAMCO Asset Management, Inc. (“GAMCO”), purportedly on behalf of itself and other similarly situated shareholders, filed a lawsuit asserting violations of the federal securities laws against certain then-current and former officers and directors of the Company. GAMCO alleges violations of Sections 10(b) and 20(b) of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), and violations of Sections 11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”) based on allegations that the Company and certain of its officers made false and/or misleading statements, and alleged non-disclosure of material facts, regarding our business, operations, prospects and performance. GAMCO seeks damages on behalf of purchasers of the Company’s ordinary shares from October 26, 2016 through May 10, 2019. GAMCO’s lawsuit was filed in the United States District Court for the Southern District of Texas, Houston Division, and it is captioned GAMCO Asset Management, Inc. v. McCollum, et al., Case No. 4:19-cv-03363. The District Court Judge appointed Utah Retirement Systems (“URS”) as Lead Plaintiff, and on March 16, 2020, URS filed its Amended Complaint. URS added the Company as a defendant but dropped the claims against non-officer board members and all the claims under the Securities Act. The defendants filed their motion to dismiss on May 18, 2020, and plaintiffs filed their response on July 3, 2020. The defendants filed a reply brief on August 3, ~~2020,~~2020. On May 14, 2021, the District Court dismissed the case with prejudice for failure to state a claim. On June 11, 2021, the plaintiffs filed their Notice of Appeal with the District Court. The Appellate Court clerk will receive the District Court’s docket and ~~now the Court will rule on the motion to dismiss.~~issue a briefing schedule. We cannot reliably predict the outcome of the claims, including the amount of any possible loss.

~~Prior Shareholder Litigation~~

In 2010, 3 shareholder derivative actions were filed, and in 2014 a fourth shareholder derivative action was filed, purportedly on behalf of the Company, asserting breach of duty and other claims against certain then-current and former officers and directors of the Company related to the United Nations oil-for-food program governing sales of goods into Iraq, the

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Foreign Corrupt Practices Act of 1977 and trade sanctions related to the U.S. government investigations disclosed in our SEC filings since 2007. Those shareholder derivative cases were filed in Harris County, Texas state court and consolidated under the caption ~~Neff v. Brady, et al., No. 2010040764 (collectively referred to as the “Neff Case~~”). A motion to dismiss was granted May 15, 2015, and an appeal was filed on June 15, 2015. Following briefing and oral argument, on June 29, 2017, the Texas Court of Appeals denied in part and granted in part the shareholders’ appeal. The Court ruled that the shareholders lacked standing to bring claims that arose prior to the Company’s redomestication to Switzerland in 2009 and upheld the dismissal of those claims. The Court reversed as premature the trial court’s dismissal of claims arising after the redomestication and remanded to the trial court for further proceedings. On February 1, 2018, the individual defendants and nominal defendant Weatherford filed a motion for summary judgment on the remaining claims in the case. On February 13, 2018, the trial court dismissed with prejudice certain directors for lack of jurisdiction. Although the plaintiffs appealed the jurisdictional ruling, on June 19, 2020, the plaintiffs filed a motion to dismiss the appeal with prejudice. This litigation has concluded.

~~12.~~10. Shareholders’ Equity ~~(Deficiency)~~

The following summarizes our shareholders’ equity ~~(deficiency)~~ activity ~~for~~in the three and six months ended June 30, ~~2020~~2021 and ~~2019.~~2020:

(Dollars in Millions) Par Value of Issued Shares Capital in Excess of Par Value Retained
Deficit Accumulated
Other
Comprehensive
Income (Loss) Non-controlling Interests Total Shareholders’ Equity (Deficiency)
Balance at December 31, 2019 (Successor) $ — $ 2,897 $ (26) $ 9 $ 36 $ 2,916
Net Income (Loss) — — (966) — 8 (958)
Other Comprehensive Loss — — — (95) — (95)
Balance at March 31, 2020 (Successor) $ — $ 2,897 $ (992) $ (86) $ 44 $ 1,863
Net Income (Loss) — — (581) — 2 (579)
Other Comprehensive Loss — — — 29 — 29
Dividends to Noncontrolling Interests — — — — (8) (8)
Balance at June 30, 2020 (Successor) $ — $ 2,897 $ (1,573) $ (57) $ 38 $ 1,305
Balance at December 31, 2018 (Predecessor) $ 1 $ 6,711 $ (8,671) $ (1,746) $ 39 $ (3,666)
Net Income (Loss) — — (481) — 4 (477)
Other Comprehensive Income — — — 33 — 33
Dividends to Noncontrolling Interests — — — — (5) (5)
Awards Granted, Vested and Exercised — 8 — — — 8
Other — — — — 1 1
Balance at March 31, 2019 (Predecessor) 1 6,719 (9,152) (1,713) 39 (4,106)
Net Income (Loss) — — (316) — 4 (312)
Other Comprehensive Income — — — 30 — 30
Dividends to Noncontrolling Interests — — — — (6) (6)
Awards Granted, Vested and Exercised — 5 — — — 5
Balance at June 30, 2019 (Predecessor) $ 1 $ 6,724 $ (9,468) $ (1,683) $ 37 $ (4,389)

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(Dollars in millions)	Capital in Excess of Par Value		Retained Deficit		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interests		Total Shareholders’ Equity
Balance at December 31, 2020	$	2,897	$	(1,947)	$	(43)	$	30	$	937
Net Income (Loss)	—		(116)		—		6		(110)
Other	—		—		—		(2)		(2)
Other Comprehensive Loss	—		—		(4)		—		(4)
Balance at March 31, 2021	$	2,897	$	(2,063)	$	(47)	$	34	$	821
Net Income (Loss)	—		(78)		—		5		(73)
Other Comprehensive Loss	—		—		15		—		15
Dividends to Noncontrolling Interests	—		—		—		(4)		(4)
Equity Awards Granted, Vested and Exercised	2		—		—		—		2
Other	—		—		—		(2)		(2)

Balance at June 30, 2021	$	2,899	$	(2,141)	$	(32)	$	33	$	759

Balance at December 31, 2019	$	2,897	$	(26)	$	9	$	36	$	2,916
Net Income (Loss)	—		(966)		—		8		(958)
Other Comprehensive Loss	—		—		(95)		—		(95)


Balance at March 31, 2020	$	2,897	$	(992)	$	(86)	$	44	$	1,863
Net Income (Loss)	—		(581)		—		2		(579)
Other Comprehensive Loss	—		—		29		—		29
Dividends to Noncontrolling Interests	—		—		—		(8)		(8)

Balance at June 30, 2020	$	2,897	$	(1,573)	$	(57)	$	38	$	1,305

The following table presents the changes in our accumulated other comprehensive income (loss) by component ~~for~~in the six months ended June 30, ~~2020 for the Successor~~2021 and ~~six months ended June 30, 2019 for the Predecessor:~~2020:

(Dollars in millions) Currency Translation Adjustment Defined Benefit Pension Deferred Loss on Derivatives Total
Balance at December 31, 2019 (Successor) $ 7 $ 2 $ — $ 9
Other Comprehensive Loss $ (66) $ — $ — $ (66)
Balance at June 30, 2020 (Successor) $ (59) $ 2 $ — $ (57)
Balance at December 31, 2018 (Predecessor) $ (1,724) $ (14) $ (8) $ (1,746)
Other Comprehensive Income 63 — — 63
Balance at June 30, 2019 (Predecessor) $ (1,661) $ (14) $ (8) $ (1,683)


(Dollars in millions)	Currency Translation Adjustment		Defined Benefit Pension		Total
Balance at December 31, 2020	$	(31)	$	(12)	$	(43)

Other Comprehensive Loss	$	11	$	0	$	11



Balance at June 30, 2021	$	(20)	$	(12)	$	(32)

Balance at December 31, 2019	$	7	$	2	$	9

Other Comprehensive Loss	(66)		0		(66)



Balance at June 30, 2020	$	(59)	$	2	$	(57)

~~13.~~

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11. Loss per Share

Basic earnings (loss) per share for all periods presented equals net income (loss) divided by our weighted average shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by our weighted average shares outstanding during the period including potential dilutive ordinary shares.

The following table presents our basic and diluted weighted average shares outstanding and loss per share ~~for~~in the three and six months ended June 30, ~~2020~~2021 and ~~2019:~~2020:

Successor Predecessor Successor Predecessor
(Dollars and shares in millions, Three Months Ended Three Months Ended Six Months Ended Six Months Ended
except per share amounts) 6/30/2020 6/30/2019 6/30/2020 6/30/2019
Net Loss Attributable to Weatherford $ (581) $ (316) $ (1,547) $ (797)
Basic and Diluted weighted average shares outstanding 70 1,004 70 1,003
Basic and Diluted Loss Per Share Attributable to Weatherford $ (8.30) $ (0.31) $ (22.10) $ (0.79)


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars and shares in millions, except per share amounts)	2021		2020		2021		2020
Net Loss Attributable to Weatherford	$	(78)	$	(581)	$	(194)	$	(1,547)
Basic and Diluted Weighted Average Shares Outstanding	70		70		70		70
Basic and Diluted Loss Per Share Attributable to Weatherford	$	(1.11)	$	(8.30)	$	(2.77)	$	(22.10)

Our basic and diluted weighted average shares outstanding for the ~~Successor Period and Predecessor Period~~periods presented are equivalent due to the net loss attributable to shareholders. Diluted weighted average shares outstanding ~~for both~~in the three and six months ended June 30, 2021 and 2020 exclude ~~8 million potential ordinary shares, and the three and six months ended June 30, 2019 exclude 211~~10 million and ~~231~~8 million potential ordinary shares, respectively, for restricted share units, performance share units, ~~exchangeable senior notes~~phantom restricted share units, and warrants outstanding as we ~~have~~had net losses for those periods and their inclusion would be anti-dilutive.

~~14.~~12. Revenues

Revenue by Product Line and Geographic Region

Revenues are attributable to countries based on the ultimate destination of the sale of products or performance of services. During the second quarter of 2020 to support the streamlining and realignment of the businesses, we combined our prior reported four product lines into two product lines, and all prior periods have been retrospectively recast to conform to this new presentation. Our two ~~primary~~ product lines are as follows: (1) ~~Production~~Completion and ~~Completions~~Production and (2) Drilling, Evaluation and Intervention. Our new combined Production and Completion 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 Drilling and Evaluation and Well Construction. The unmanned equipment that we lease to customers as operating leases consists primarily of drilling rental tools (in the Drilling, Evaluation and Intervention product line) and artificial lift pumping ~~equipment.~~equipment (in the Completion and Production product line). These equipment rental revenues are generally provided based on call-out work orders that include fixed per unit prices and are derived from short-term contracts. ~~Equipment rental revenues, which are included in Products revenues, recognized under ASC 842 were $32 million and $89 million for the three~~

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~~and six months Successor Periods ended June 30, 2020 and $84 million and $162 million for the three and six months Predecessor Periods ended June 30, 2019.~~

The following tables disaggregate our product and service revenues ~~from contracts with customers~~ by major product line and geographic region for the three and six months ended June 30, 2021 and 2020 and ~~2019.~~

Successor Predecessor Successor Predecessor
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
(Dollars in millions) 6/30/2020 6/30/2019 6/30/2020 6/30/2019
Product Line Revenue by Hemisphere:
  Production and Completions $ 165 $ 371 $ 462 $ 750
  Drilling, Evaluation and Intervention 145 348 436 695
Western Hemisphere $ 310 $ 719 $ 898 $ 1,445
  Production and Completions $ 240 $ 265 $ 542 $ 527
  Drilling, Evaluation and Intervention 271 325 596 683
Eastern Hemisphere $ 511 $ 590 $ 1,138 $ 1,210
Total Revenue $ 821 $ 1,309 $ 2,036 $ 2,655

Successor Predecessor Successor Predecessor
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
(Dollars in millions) 6/30/2020 6/30/2019 6/30/2020 6/30/2019
Revenue by Geographic Areas:
  North America $ 172 $ 420 $ 513 $ 876
  Latin America 138 299 385 569
Western Hemisphere $ 310 $ 719 $ 898 $ 1,445
  Middle East & North Africa and Asia $ 341 $ 362 $ 744 $ 752
  Europe/Sub-Sahara Africa/Russia 170 228 394 458
Eastern Hemisphere $ 511 $ 590 $ 1,138 $ 1,210
Total Revenues $ 821 $ 1,309 $ 2,036 $ 2,655

~~The following table provides information about receivables for product~~includes equipment revenues recognized under lease accounting standards of $35 million and ~~services included~~$63 million in ~~Accounts Receivable, Net, Contrast Assets~~the three and ~~Contract Liabilities at~~six months ended June 30, ~~2020~~2021, respectively, and ~~December 31, 2019.~~

(Dollars in millions) 6/30/2020 12/31/2019
Receivables for Product and Services in Accounts Receivable, Net $ 884 $ 1,156
Receivables for Equipment Rentals in Account Receivable, Net $ 43 $ 85
Contract Assets $ 2 $ 3
Contract Liabilities $ 34 $ 12

~~Revenue recognized~~$32 million and $89 million for the three and six months ended June 30, 2020, ~~that were included in the contract liabilities balance at the beginning of 2020 was $5 million.~~respectively.

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	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2021		2020		2021		2020
Product Line Revenue for Western Hemisphere
Completion and Production	$	231	$	165	$	456	$	462
Drilling, Evaluation and Intervention	194		145		359		436
Total Western Hemisphere Revenue	425		310		$	815	$	898

Product Line Revenue for Eastern Hemisphere
Completion and Production	214		240		$	412	$	542
Drilling, Evaluation and Intervention	264		271		508		596
Total Eastern Hemisphere Revenue	478		511		$	920	$	1,138

Total Revenues	$	903	$	821	$	1,735	$	2,036


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2021		2020		2021		2020
Revenue by Geographic Areas:
North America	$	220	$	172	$	434	$	513
Latin America	205		138		381		385
Western Hemisphere	425		310		$	815	$	898

Middle East & North Africa and Asia	289		341		$	556	$	744
Europe/Sub-Sahara Africa/Russia	189		170		364		394
Eastern Hemisphere	478		511		$	920	$	1,138

Total Revenues	$	903	$	821	$	1,735	$	2,036

Contract Balances

The timing of our revenue recognition, billings and cash collections results in the recording of billed accounts receivable, contract assets (including unbilled receivables), customer advances and deposits (contract liabilities classified as deferred revenues). Our receivables are primarily derived from contract sales of products and services, which are included in “Accounts Receivable, Net” on the Condensed Consolidated Balance Sheets. Contract assets were immaterial as of June 30, 2021 and December 31, 2020. Revenue recognized during the six months ended June 30, 2021 that was included in the contract liabilities balance at the beginning of 2021 was $25 million. The following table summarizes these balances as of June 30, 2021 and December 31, 2020:



(Dollars in millions)	6/30/2021		12/31/2020
Receivables for Product and Services in Accounts Receivable, Net	$	744	$	792
Total Accounts Receivables	$	782	$	826


Contract Liabilities	$	36	$	37

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Performance Obligations

In the following table, estimated revenue for contracts with original performance obligations greater than twelve months are expected to be recognized in the future related to performance obligations that are either unsatisfied or partially unsatisfied as of June 30, ~~2020 primarily relate to subsea services and an artificial lift contract.~~2021.


(Dollars in millions)	(Dollars in millions)	2020		2021		2022		2023		Thereafter		Total		(Dollars in millions)	2021		2022		2023		2024		Thereafter		Total
Service Revenue	Service Revenue	$	43	$	27	$	33	$	32	$	35	$	170	Service Revenue	$	27	$	42	$	39	$	40	$	54	$	202

~~15.~~13. Segment Information

Financial information by segment is summarized below. The accounting policies of the segments are the same as those described in the summary of significant accounting policies as presented in our ~~2019~~2020 Annual Report.


		Successor		Predecessor		Successor		Predecessor
		Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended			Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	(Dollars in millions)	6/30/2020		6/30/2019		6/30/2020		6/30/2019		(Dollars in millions)	2021		2020		2021		2020
Revenue:	Revenue:									Revenue:
Western Hemisphere	Western Hemisphere	$	310	$	719	$	898	$	1,445	Western Hemisphere	$	425	$	310	$	815	$	898
Eastern Hemisphere	Eastern Hemisphere	511		590		1,138		$	1,210	Eastern Hemisphere	478		511		920		$	1,138
Total Revenue	Total Revenue	$	821	$	1,309	$	2,036	$	2,655	Total Revenue	903		821		$	1,735	$	2,036
Operating Income (Loss):	Operating Income (Loss):									Operating Income (Loss):
Western Hemisphere	Western Hemisphere	$	(23)	11		$	6	$	20	Western Hemisphere	28		(23)		$	52	$	6
Eastern Hemisphere	Eastern Hemisphere	15		28		33		48		Eastern Hemisphere	6		15		(13)		33
Total Segment Operating Income (Loss)	Total Segment Operating Income (Loss)	(8)		39		39		68		Total Segment Operating Income (Loss)	34		(8)		39		39
Impairment and Other Charges ^{(a) (b)}		(463)		(239)		(1,306)		(535)
Corporate		(26)		(32)		(52)		(64)
Corporate (a)										Corporate (a)	(17)		(26)		(35)		(52)
Total Operating Income (Loss) Before Impairments, Restructuring and Other (Charges) Credits										Total Operating Income (Loss) Before Impairments, Restructuring and Other (Charges) Credits	17		(34)		4		(13)
Impairments and Other (Charges) Credits, Net (b)										Impairments and Other (Charges) Credits, Net (b)	8		(406)		8		(1,223)
Restructuring Charges										Restructuring Charges	0		(57)		0		(83)

Gain on Sale of Businesses, Net ^(c)		—		114		—		112
Total Operating Loss		$	(497)	$	(118)	$	(1,319)	$	(419)
Total Operating Income (Loss)										Total Operating Income (Loss)	25		(497)		$	12	(1,319)
Interest Expense, Net	Interest Expense, Net	(59)		(160)		(117)		(315)		Interest Expense, Net	(72)		(59)		(142)		(117)
Reorganization Items	Reorganization Items	—		—		(9)		—		Reorganization Items	0		0		0		(9)
Other Expense, Net	Other Expense, Net	(11)		(1)		(36)		(10)		Other Expense, Net	(11)		(11)		(15)		(36)
Loss Before Income Taxes	Loss Before Income Taxes	$	(567)	$	(279)	$	(1,481)	$	(744)	Loss Before Income Taxes	$	(58)	$	(567)	$	(145)	$	(1,481)

(a)InCorporate also includes eliminations of intercompany margins associated with transfers of assets and inventory that were $1 million and $10 million in the three months ended June 30, 2021 and 2020, respectively. The six months ended June 30, 2021 and 2020, included elimination of intercompany margins of $1 million and $18 million, respectively.

(b)The three and six months ended June 30, 2021 primarily included gains on the disposition of assets, lease terminations and litigation matters, partially offset by the write-down of inventory. The three and six months ended June 30, 2020, primarily includes the impairment onof goodwill, property, plant and equipment, intangibles and right of use assets ~~inventory excess and obsolete charges (in the second quarter of 2020), and restructuring~~ and other ~~charges, due to the decline in oil and gas commodity demand in our industry.~~charges. See “Note 45 – ~~Inventories, Net”,~~Long-lived Asset Impairments” and “Note 6 ~~- Long-Lived Asset Impairments”, “Note 7~~ – Goodwill and Intangible Assets”~~, and “Note 8 – Restructuring, Facility Consolidation and Severance Charges”~~ for additional information.

~~(b)~~In the three and six months ended June 30, 2019, includes prepetition charges for professional and other fees related to the Predecessor bankruptcy cases, goodwill and asset impairments and other fees, partially offset by a reduction of a contingency reserve on a legacy contract (in the first quarter of 2019).

~~(c)Primarily includes the gain on sale of our laboratory services business in the second quarter of 2019.~~

~~The following table presents total assets by segment at for each period presented:~~

(Dollars in millions) 6/30/2020 12/31/2019
Western Hemisphere $ 1,761 $ 2,514
Eastern Hemisphere 3,426 4,392
Corporate 222 387
Total $ 5,409 $ 7,293

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~~16.~~14. Income Taxes

We ~~use the discrete method to determine~~determined our quarterly tax provision using the year-to-date effective tax rate because small changes in estimated ordinary annual income result in significant changes in our estimated annual effective tax rate. The ~~discrete method~~year-to-date effective tax rate treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis. ~~For~~

In the ~~Successor~~ three and six months ended June 30, 2021, we recognized tax expense of $15 million and $38 million, respectively, on a loss before income taxes of $58 million and $145 million, respectively, compared to the three and six months ended June 30, 2020 where we recognized tax expense of $12 million and $56 million, respectively, on a loss before income taxes of $567 million and $1.5 billion, ~~respectively, as compared to the Predecessor three~~respectively. Our income tax provisions are primarily driven by income in certain jurisdictions, deemed profit countries and six months ended June 30, 2019 where we recognized tax expense of $33 million and $45 million, respectively, on a loss before income taxes of $279 million and $744 million, respectively. Tax expense for the three and six months ended June 30, 2020 and 2019 includes withholding taxes ~~minimum taxes~~on intercompany and ~~deemed profit taxes~~third-party transactions that do not directly correlate to ordinary income or loss. Impairments and other charges ~~did~~recognized do not result in significant tax benefit as a result of our inability to forecast realization of the tax benefit of such losses. Tax expense in ~~either period.~~the three and the six months ended June 30, 2021 includes a $13 million tax benefit attributed to the reversal of a tax accrual in connection with an internal restructuring transaction completed in the second quarter of 2021. Tax expense for the six months ended June 30, 2020 ~~includes~~included $20 million recorded in the first quarter of 2020 to recognize valuation allowance in jurisdictions where we ~~are~~were no longer able to forecast taxable income.

We routinely undergo tax examination in various jurisdictions. We cannot predict the timing or outcome regarding resolution of these tax examinations or if they will have a material impact on our financial statements. As of June 30, ~~2020,~~2021, we anticipate that it is reasonably possible that our uncertain tax positions of ~~$210~~$241 million may decrease by up to $2$13 million in the next twelve months due to expiration of statutes of limitations, settlements and/or conclusions of tax examinations.

In response to the COVID-19 pandemic, many countries have enacted tax relief measures to provide aid and economic stimulus to companies impacted by the COVID-19 pandemic. For the second quarter and six months ended June 30, 2020, there were no material tax impacts to our financial statements as it relates to COVID-19 tax relief measures.

~~17. Subsequent Event~~

~~Senior Secured First Lien Notes~~

The extension of the binding commitment letter allows additional time for the conditions specified in the binding commitment letter to be satisfied or waived and the notes to be issued, which will improve our liquidity. The purchasers’ obligations to purchase the New Senior Secured Notes under the commitment letter are subject to certain conditions precedent, including, among others, (a) execution and delivery of all documentation related to the New Senior Secured Notes (subject to post-closing periods to be agreed for certain security matters), (b) execution and delivery of an amendment to the LC Credit Agreement in form and substance satisfactory to the purchasers, which, among other things, shall permit the issuance of the New Senior Secured Notes on the terms contemplated in the commitment letter, (c) execution and delivery of an intercreditor agreement between the trustee for the New Senior Secured Notes and the agent under the LC Credit Agreement, in form and substance reasonably satisfactory to the purchasers, and (d) execution and delivery of a customary notes purchase agreement in form and substance reasonably satisfactory to the purchasers.

There can be no assurance that the conditions precedent to consummating the financing transaction, many of which are beyond our control, will be fully satisfied or waived before the binding commitment letter expires on August 21, 2020. If the conditions precedent cannot be satisfied and are not waived by such date, there are no assurances that the purchasers will further extend such expiration date. Additionally, under such circumstances, there can be no assurance that we would be able to obtain alternative financing to the transactions contemplated by the binding commitment letter. To the extent we are not able to obtain alternative financing to replace the ABL Credit Agreement, any event of default under the ABL Credit Agreement could result in the obligations under the ABL Credit Agreement, the LC Credit Agreement and the Exit Notes being accelerated, which could have a material adverse effect on our business, financial condition and results of operations.

2016

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

As used herein, “Weatherford,” the “Company,” “we,” “us” and ~~“our”~~“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 the Condensed Consolidated Financial Statements and Notes thereto included in “Item 1. Financial Statements.” Our discussion includes various forward-looking statements about our markets, the demand for our products and services and our future results. These statements are based on certain assumptions we consider reasonable. For information about these assumptions, please review the section entitled “Forward-Looking Statements” and the section entitled “Part II – Other Information – Item 1A. – Risk Factors.”

Overview

~~General~~

We conduct operations in approximately 8075 countries and have service and sales locations in ~~virtually all of the~~ oil and natural gas producing regions ~~in the world.~~globally. Our operational performance is reviewed on a geographic basis, and we report the ~~following~~Western Hemisphere and Eastern Hemisphere as separate, distinct reporting ~~segments: Western Hemisphere and Eastern Hemisphere.~~segments.

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 to support the streamlining and realignment of the businesses, we combined our prior reported four product lines into two product lines.~~ Our two ~~primary~~ product lines are as follows: (1) ~~Production~~Completion and ~~Completions~~Production and (2) Drilling, Evaluation and Intervention. Our new combined Production and Completion 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 Drilling and Evaluation and Well Construction.

•~~Production~~Completion and ~~Completions~~Production (“C&P”) offers a suite of modern completion products, reservoir stimulation designs, and engineering capabilities that isolate zones and unlock reserves in deepwater, unconventional, and aging reservoirs and production optimization services and a complete production ecosystem, featuring our artificial-lift portfolio, testing and flow-measurement solutions, and optimization software, to boost productivity and profitability. In addition, we have a suite of modern completion products, reservoir stimulation designs, and engineering capabilities that isolate zones and unlock reserves in deepwater, unconventional, and aging reservoirs.

•Drilling, Evaluation and Intervention(“DEI”) comprises a suite of services ranging from early well planning to reservoir management. The drilling services offer innovative tools and expert engineering to increase efficiency and maximize reservoir exposure. ~~The evaluation~~Evaluation services merge wellsite capabilities including wireline and managed pressure drilling. We also build orand rebuild well integrity for the full life cycle of the well. Using conventional to advanced equipment, we offer safe and efficient tubular running services in any environment. Our skilled fishing and re-entry teams execute under any contingency from drilling to abandonment, and our drilling tools provide reliable pressure control even in extreme wellbores.

~~Outlook~~Financial Results and ~~Significant Events~~Overview

Revenues totaled $903 million and $1.7 billion in the second quarter and first six months of 2021, respectively, an improvement of $82 million, or 10%, and a decline of $301 million, or 15%, compared to the second quarter and first six months of 2020, respectively.

The ~~COVID-19 pandemic, customer activity shutdowns, travel constraints~~second quarter of 2021 year-over-year improvement reflects a 15% increase in service revenues driven by higher demand in certain C&P and ~~access restrictions to customer work locations have created significant uncertainty for~~DEI sub-product lines, primarily in the ~~global economy as well as for~~United States and Mexico, which also spurred the ~~trajectory of~~37% growth in the ~~industry and the Company, lowering expectations of oil and gas related spending throughout the remainder of 2020 and beyond, resulting in~~Western Hemisphere, partially offset by a ~~significant~~6% decline in the global demand for oil and gas. This caused an imbalance in supply and demand for oil and gas, as well as demand destruction for oil and gas. The demand destruction associated with the COVID-19 pandemic caused commodity price uncertainty and correspondingly, significant activity declines in the industry.Eastern Hemisphere.

The decline in the first six months of 2021 was primarily due to the negative impacts of the COVID-19 pandemic, ~~together with uncertainty around the extent and timing for an economic recovery, have caused extreme market volatility of commodity prices and resulted~~which began in ~~significant reductions to the capital spending of exploration and production companies. Although the price and demand of oil and gas stabilized somewhat during~~ the second quarter of 2020, ~~we do not expect the industry to recover~~following results from a pre-pandemic first quarter of 2020. The pandemic had an immediate negative impact in the ~~near term. It is unclear when~~Western Hemisphere while taking longer to impact the Eastern Hemisphere, however, faster vaccine rollouts have resulted in a ~~stable oil market will return as record crude inventories will dampen~~swifter recovery in parts of the pace of any recovery, translating to near-term uncertainties in activity and challenges in forecasting our business. In addition, continued negative sentiment for the energy industry in the capital markets has impacted demand for our products and services, as our customers, particularly those in North America, have experienced challenges securing appropriate amounts of capital under suitable terms to finance their operations.Western Hemisphere.

Total operating income improved $522 million and $1.3 billion in the second quarter of 2021 and first six months of 2021 compared to the second quarter and first six months of 2020, respectively, primarily from lower impairment and restructuring charges. Selling, general and administrative, corporate, and research and development expense declined in the second quarter and first six months of 2021, reflecting the benefits of the cost improvement initiatives that were implemented during 2020 and earlier in 2021.

Segment operating income was $34 million and $39 million in the second quarter and first six months of 2021, respectively, an increase of $42 million and was flat, respectively, compared to the second quarter and first six months of 2020.

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The second quarter of 2021 year-over-year improvement was driven by the increased activity levels and demand for services across both our C&P and DEI product lines, including integrated service project (“ISP”) sales in Mexico.

Impairments and Other Charges (Credits), Net

Please see summary of details at “Note 2 – Impairments and Other Charges (Credits), Net” to our Condensed Consolidated Financial Statements.

Exchange Listing

On June 1, 2021, The Nasdaq Stock Market LLC stock exchange (“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 began trading on The Nasdaq Global Select Market on June 2, 2021 under the ticker symbol “WFRD”.

Industry Trends

The level of spending in the energy industry is heavily influenced by the current and expected future prices of oil and natural gas. Changes in expenditures result in an increase or decrease in demand for our products and services. Rig count is an indicator of the level of spending for the exploration for and production of oil and natural gas reserves. The following charts set forth certain statistics that reflect historical market conditions.

The table below shows the average oil and natural gas prices for West Texas Intermediate (“WTI”), United Kingdom Brent crude oil and Henry Hub natural gas.


	Three Months Ended		Year Ended
	6/30/2021	6/30/2020		12/31/2020
Oil price - WTI (1)	$66.09	$27.81		$39.23
Oil price - Brent (1)	$68.83	$29.34		$41.76
Natural gas price - Henry Hub (2)	$2.94	$1.71		$2.04
(1) Oil price measured in dollars per barrel
(2) Natural gas price measured in dollars per million British thermal units (Btu), or MMBtu

The average rig counts based on the weekly Baker Hughes Company rig count information were as follows:


	Three Months Ended		Six Months Ended
	6/30/2021	6/30/2020		6/30/2021	6/30/2020
North America	522	417		529	698
International	734	834		716	954
Worldwide	1,256	1,251		1,245	1,652

Business Outlook

There are improving indications that the global economic and demand recovery from the COVID-19 pandemic is continuing to build towards pre-pandemic levels as both COVID-19 vaccination rates and global economic activity increase. However, with the recent resurgence of infection rates particularly among the unvaccinated and a number of international governments pushing for a return to social distancing practices we continue to be cautious about a broad-based recovery in the oil and gas industry. Oil prices have risen during the year, buoyed by supply policies led by the Organization of Petroleum Exporting Countries and the expanded alliance (“OPEC+”) and other high oil exporting non-OPEC+ nations. Average oil prices for the second quarter of 2021 are more than double the average oil prices for the second quarter of 2020 and natural gas prices have increased 72%. WTI oil spot prices have recovered to pre-pandemic levels, averaging approximately $66 per barrel during the second quarter of 2021. However, the North America and International average rig count continues to be well below pre-pandemic levels.

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We expect continued improvements in our customer activity levels with the ongoing COVID-19 vaccine rollout globally and multinational economic stimulus actions which are expected to provide a measured pathway to oil and natural gas demand recovery throughout 2021. We believe that industry activity will likely continue to recover in the second half of 2021 and our consolidated revenues are expected to increase by mid- to high-single digits over the first half of 2021, which with our continued focus on managing our costs should lead to further margin expansion in the second half of 2021. We expect both our Western and Eastern Hemisphere segments to grow revenues in the second half of 2021.

We continue to closely monitor the ongoing global impacts surrounding the COVID-19 pandemic, including operational and manufacturing disruptions, logistical constraints and travel ~~restrictions, are constantly evolving.~~ restrictions. The oilfield services industry growth is highly dependent on many external factors, such as the global response to the COVID-19 pandemic, our customers’ capital expenditures, world economic and political conditions, the price of oil and natural gas, member-country quota compliance within the OPEC+, weather conditions and other factors.

COVID-19 Pandemic Impacts

We have experienced and expect to continue to experience ~~actions that will negatively impact our ability to operate, including~~ delays orand a lack of availability of key components ~~from~~as our ~~suppliers, shipping~~supplier base returns to work, manages component shortages and generally higher demand for supplies. Shipping and other ~~logistical~~logistics activities are experiencing tight availability for carriers, containers and shipping materials. This has exacerbated specific shortages and delays ~~and disruptions,~~with supplied materials. In addition, we continue to experience certain customer restrictions that prevent access to their sites, community measures to contain the spread of the COVID-19 virus, and changes to ~~Weatherford’s~~our policies that have both restricted and changed the way our employees work. We expect most, if not all, of these disruptions and constraints to have lasting effects on how we and our customers and suppliers work in the future. The demand destruction associated with the COVID-19 pandemic caused commodity price uncertainty and correspondingly, significant activity declines in the industry.

~~During the second quarter of 2020, we supplemented our cost reduction initiatives with a number of actions, including:~~

•~~Temporary pay reductions of 20% for management and to the Board of Directors’ annual cash retainer;~~

•~~Total headcount reductions across North American operations and the global support structure of 38% and 25%, respectively;~~

•~~Furloughs and pay reductions for remaining employees in the United States and selected international locations;~~

•~~Reducing planned capital expenditures by approximately 50% in 2020 versus 2019 levels; and~~

•~~Further consolidating geographic and product line structures to better align with market conditions.~~

Many of the cost reduction initiatives listed above, like temporary pay reductions and headcount reductions, have been extended into the third quarter of 2020. Weatherford’s financial results for the second quarter and remainder of 2020 has and will continue to be impacted by the above factors, the continued global economic uncertainty due to the COVID-19 pandemic and the uncertainty in oil prices, a possibility we disclosed in our risk factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “2019 Annual Report”) and expanded upon in our quarterly report on Form 10-Q for the first quarter of 2020 filed on May 11, 2020. The extent to which our future results are affected by COVID-19 pandemic and the associated impact on the oil and gas markets will depend on various factors and consequences beyond our control, such as the duration and scope of the pandemic; additional actions by businesses and governments in response to the pandemic, the speed and effectiveness of responses to combat the virus, global supply and demand of oil and gas and the resulting prices of oil and natural gas, the capital expenditure and activity levels of our customers, the timely collection of receivables from customers, member-country quota compliance within the Organization of Petroleum Exporting Countries and weather conditions and other factors, including those described in the section entitled “Forward-Looking Statements” and the section entitled “Item 1A. Risk Factors.” The COVID-19 pandemic, and the volatile regional and global economic conditions stemming from the pandemic, could also aggravate the risk factors identified in our 2019 Annual Report. It may also materially and adversely affect our results in a manner that is either not currently known or that we do not currently consider to be a significant risk to its business.

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~~Liquidity Concerns and Actions to Address Liquidity Needs; Going Concern~~

The significant uncertainty on the long-term impacts of the COVID-19 pandemic, the global economy, and the oil and gas industry for 2020 and beyond is having a negative impact on our business. As a result of these impacts, in the second quarter of 2020, we increased and accelerated our workforce reduction plan, reduced certain management and employee pay, reduced other operating costs, and initiated further consolidation of our operations. Many of these cost reduction actions, like workforce reduction and temporary pay reductions, have been extended into the third quarter of 2020. Despite the actions of management, given the material decline in our business as a result of the decline in demand for oil and gas worldwide, we expect that a breach of our covenants under our ABL Credit Agreement could occur in the first half of 2021. A breach of these financial covenants would constitute an event of default under our ABL Credit Agreement which if not timely cured or waived, would constitute an event of default under our LC Credit Agreement and our unsecured 11% senior notes due 2024 (“Exit Notes”) as described in “Note 9 – Borrowings and Other Obligations” to our Condensed Consolidated Financial Statements. An event of default under these agreements could result in the obligations under these agreements being accelerated or required to be cash collateralized. Such result would constrain our liquidity and we may not be able to service the interest on our debt or pay other obligations and thus, raises substantial doubt on our ability to continue as a going concern within the next 12 months. The Condensed Consolidated Financial Statements have been prepared in conformity with U.S. GAAP which contemplate the continuation of the Company as a going concern and do not include any adjustments that might be necessary should we be unable to continue as a going concern.

In an effort to proactively address potential liquidity constraints, on August 4, 2020 we executed a binding commitment letter for $500 million in senior secured first lien notes, with a stated interest rate of 8.75% (“New Senior Secured Notes”) that would mature in September 2024. The commitment letter, which was originally scheduled to expire on August 14, 2020, has been extended to August 21, 2020. The extension of the binding commitment letter allows additional time for the conditions specified in the binding commitment letter to be satisfied or waived and the notes to be issued, which will improve our liquidity. Upon issuance of the New Senior Secured Notes and the reduction of commitments under the ABL Credit Agreement we expect that the substantial doubt as to our ability to continue as a going concern would be alleviated.

~~NYSE Delisting~~

We ~~evaluated~~continuously improve crew rotations and management practices to minimize our ~~options~~employees’ exposure to the COVID-19 virus while at client facilities. We constantly refine and update our identification and management of COVID-19 cases consistent with ~~respect~~the latest guidance, from the Centers of Disease Control and Prevention and the World Health Organization through the development of updated protocols, advanced testing and response procedures. Faced with these challenges, we evolved our digital portfolio and enhanced our applications to offer fully integrated digital oilfield solutions. We also increased our offerings of automated well construction and remote monitoring and predictive analytics related to our New York Stock Exchange (“NYSE”) listing and, after careful deliberations, the Board of Directors determined that delisting was in the best interest of the Company given the COVID-19 pandemic and related uncertainties in the oil and gas market. As a result, we withdrew our appeal to the delisting proceedings by the NYSE. On April 17, 2020, the NYSE filed a Form 25 (the “Form 25”) with the U.S. Securities and Exchange Commission (the “SEC”) to delist our ordinary shares from trading on the NYSE. The delisting became effective 10 days after the filing of the Form 25 and our ordinary shares were deregistered under Section 12(b) of the Exchange Act on July 16, 2020. We continue to evaluate listing options and intend to list on the NYSE or National Association of Securities Dealers Automated Quotations (“NASDAQ”) when the Board determines market conditions are appropriate. The Company intends to continue filing periodic reports with the SEC on a voluntary basis. We continue to trade on the OTC Pink Marketplace under the ticker symbol “WFTLF”.

~~Appointment of Interim Principal Financial Officer~~

The Board of Directors has appointed Karl Blanchard to serve as the Company’s principal financial officer, effective August 5, 2020, on an interim basis until H. Keith Jennings joins the Company on September 1, 2020 to serve as the Company’s Executive Vice President and Chief Financial Officer.product offerings.

Opportunities and Challenges

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 on us to deliver our products and services at competitive rates. In addition, as consolidation of the oil and gas services industry continues due to market conditions, there has been an increased demand for companies with 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 solutions to more efficiently extract oil and gas ~~control~~while controlling costs, and ~~penetrate~~our success in penetrating new and existing markets with our newly developed technologies. Over the long-term, we expect the world’s demand for energy will rise from current levels requiring increased oil field services and more advanced technology from the oilfield 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.

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Our challenges also include adverse market conditions that could make it more difficult to obtain our targeted cost reduction benefits ~~more difficult~~and to ~~obtain and the ability to~~ recruit, motivate and retain employees, ~~problematic. The imbalance between supply~~including key personnel. Increasing investor and ~~demand for oil created by~~government focus on environmental and social governance factors, the ~~simultaneous impact~~cyclicality of the COVID-19 pandemic, together with uncertainty around the extent and timing for an economic recovery, have caused extreme market volatility and resulted in a decline in commodity prices during late March and for most of the second quarter of 2020 and significant reductions to the capital spending plans of exploration and production companies. In addition, continued negative sentiment for the energy industry inand the ~~capital markets has impacted, and~~ongoing COVID-19 pandemic may ~~continue to~~negatively 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 continues to impact the demand for our products and services, such as our drilling and evaluation services, well construction and well completion services, which strongly depend on the level of exploration and development activity and the completion phase of the well life cycle. Other products and services, such as our production optimization and artificial lift systems, are dependent 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 ~~stakeholders.~~shareholders. Our long-term success will be determined by our ability to manage effectively the cyclicality of our industry, including ~~the ongoing and~~potential prolonged industry ~~downturn,~~downturns, our ability to respond to industry demands and periods of over-supply or ~~low~~uncertain oil prices, and ultimately to generate consistent positive cash flow and positive returns on the invested capital.

~~Industry Trends~~

The level of spending in 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 indicator of the level of spending for the exploration for and production of oil and natural gas reserves. The following charts set forth certain statistics that reflect historical market conditions.

The table below shows the closing oil and natural gas prices for West Texas Intermediate (“WTI”) and Henry Hub natural gas. Commodity prices dramatically decreased towards the latter part of the first quarter of 2020 following the dual impact of the COVID-19 pandemic and the inability of Organization of Petroleum Exporting Countries (“OPEC”) and other high oil exporting non-OPEC nations (“OPEC+”) to agree on production cuts.

Three Months Ended
6/30/2020 6/30/2019
Oil price - WTI ⁽¹⁾
$28.00 $59.92
Natural Gas price - Henry Hub ⁽²⁾
$1.75 $2.52
⁽¹⁾ Oil price measured in dollars per barrel (rounded to the nearest dollar)
⁽²⁾ Natural gas price measured in dollars per million British thermal units (Btu), or MMBtu

~~The historical average rig counts based on the weekly Baker Hughes Incorporated rig count information were as follows:~~

Three Months Ended Six Months Ended
6/30/2020 6/30/2019 6/30/2020 6/30/2019
North America 417 1,071 698 1,149
International 834 1,109 954 1,069
Worldwide 1,251 2,180 1,652 2,218

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During the six months ended June 30, 2020, WTI oil prices ranged from a high of $63.27 per barrel in early January to a low of negative $37.63 per barrel in mid-April. The drop to a negative per barrel price for WTI was a short term effect of a combination of forward contracts expiring, coupled with the decrease in demand and the absence of available storage capacity. For the six months ended June 30, 2020, natural gas ranged from a high of $2.20 MMBtu in mid-January to a low of $1.48 MMBtu in late-June. Factors influencing oil and natural gas prices during the period include the imbalance between supply and demand for oil created by the simultaneous impact of the COVID-19 pandemic and actions by certain OPEC+ nations, the uncertainty around the extent and timing for an economic recovery, extreme global market volatility, resulting in a precipitous decline in commodity prices, rising hydrocarbon inventory levels, decreased realized and expected levels of hydrocarbon demand, decreased level of production capacity as well as weather and geopolitical uncertainty. While OPEC+ agreed in April to cut production, downward pressure on commodity prices has continued and could continue for the foreseeable future, particularly given concerns over available storage capacity. As of June 30, 2020, the North American and International Rig Count had declined to a total of 278 and 781, respectively.

~~Financial Results and Overview~~

Successor revenues totaled $821 million in the second quarter ended June 30, 2020 and $2.0 billion in the Successor six months ended June 30, 2020, a decrease of $488 million, or 37%, and $619 million, or 23%, compared to the Predecessor revenues in Predecessor second quarter and six months ended June 30, 2019, respectively, as the unprecedented global health and economic crisis sparked by the COVID-19 pandemic negatively impacted industry activity during the second quarter as discussed in “Note 1 – General” to our Condensed Consolidated Financial Statements. Our revenue decline was predominantly driven by lower activity levels in North America and lower demand for services in the United States.

Successor consolidated operating results declined $379 million in the Successor second quarter ended June 30, 2020 and $900 million in the Successor six months ended June 30, 2020 compared to the Predecessor consolidated operating results in the Predecessor second quarter and six months ended June 30, 2019. The decline in operating results in the Successor second quarter and six months ended June 30, 2020 was primarily due to the impact of the decline in demand due to COVID-19 pandemic, long-lived impairment charges, goodwill impairment, and inventory charges, partially offset by the lower retention expenses and improvements in our organizational structure.

Successor segment operating loss was $8 million in the Successor second quarter ended June 30, 2020 and Successor segment operating income was $39 million in the Successor six months ended June 30, 2020, a decrease of $47 million and $29 million, respectively, compared to the Predecessor segment operating income in the Predecessor second quarter and six months ended June 30, 2019. The decrease was driven by the decline in demand for services related to COVID-19 pandemic, partially offset by our lower cost structure.

~~Significant Operating Charges~~

For the Successor three months ended June 30, 2020, significant charges incurred totaled $463 million and included $178 million related to long-lived asset impairments, $134 million for inventory charges, $72 million of goodwill impairment, $79 million of restructuring, severance and other charges. For the Predecessor three months ended June 30, 2019, significant charges incurred totaled $239 million and included $102 million goodwill impairment, $76 million of prepetition charges, $20 million of restructuring charges and $41 million of other asset write-downs. Included in the second quarter 2020 long-lived asset impairment charge is the correction of an immaterial error related to the impairment of certain assets in associated with our Drilling Services business in the Western Hemisphere. See “Note 6 - Long-Lived Asset Impairments” to our Condensed Consolidated Financial Statements for additional details.

For the Successor six months ended June 30, 2020, significant charges incurred totaled $1.3 billion and included $818 million related to long-lived asset impairments, $239 million of goodwill impairments, $134 million for inventory charges, and $115 million of restructuring, severance and other charges. For the Predecessor six months ended June 30, 2019, significant charges incurred totaled $535 million and included $331 million goodwill impairment, $86 million of prepetition charges, $40 million of restructuring charges and $78 million of other asset write-downs.

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Results of Operations

The following table sets forth consolidated results of operations and financial information by operating segment and other selected information for the periods indicated. ~~The Successor Period and the Predecessor Period are distinct reporting periods as a result of our emergence from bankruptcy on December 13, 2019.~~


		Successor		Predecessor												Favorable
		Three Months Ended		Three Months Ended		Favorable					Three Months Ended				(Unfavorable)
(Dollars and shares in millions, except per share data)	(Dollars and shares in millions, except per share data)	6/30/2020		6/30/2019		(Unfavorable)		% Change		(Dollars and shares in millions, except per share data)	06/30/21		06/30/20			% Change
Revenues:	Revenues:									Revenues:
Western Hemisphere	Western Hemisphere	$	310	$	719	$	(409)	(57)	%	Western Hemisphere	$	425	$	310		37	%
Eastern Hemisphere	Eastern Hemisphere	511		590		(79)		(13)	%	Eastern Hemisphere	478		511			(6)	%
Total Revenues	Total Revenues	821		1,309		(488)		(37)	%	Total Revenues	903		821			10	%

Operating Income (Loss):	Operating Income (Loss):									Operating Income (Loss):
Western Hemisphere	Western Hemisphere	(23)		11		(34)		(309)	%	Western Hemisphere	28		(23)			222	%
Eastern Hemisphere	Eastern Hemisphere	15		28		(13)		(46)	%	Eastern Hemisphere	6		15			(60)	%
Total Segment Operating Income (Loss)	Total Segment Operating Income (Loss)	(8)		39		(47)		(121)	%	Total Segment Operating Income (Loss)	34		(8)			525	%
Impairments and Other Charges		(463)		(239)		(224)		(94)	%
Corporate General and Administrative		(26)		(32)		6		19	%
Corporate										Corporate	(17)		(26)			35	%
Total Operating Income (Loss) Before Impairments and Other (Charges) Credits and Restructuring Charges										Total Operating Income (Loss) Before Impairments and Other (Charges) Credits and Restructuring Charges	17		(34)			150	%
Impairments and Other (Charges) Credits, Net										Impairments and Other (Charges) Credits, Net	8		(406)			102	%
Restructuring Charges										Restructuring Charges	—		(57)			100	%
Total Operating Income (Loss)										Total Operating Income (Loss)	25		(497)			105	%
Interest Expense, Net										Interest Expense, Net	(72)		(59)			(22)	%

Gain Sale of Businesses, Net		—		114		(114)		(100)	%
Total Operating Loss		(497)		(118)		(379)		(321)	%

Interest Expense, Net		(59)		(160)		101		63	%
Reorganization Items		—		—		—		—	%
Other Expense, Net	Other Expense, Net	(11)		(1)		(10)		(1,000)	%	Other Expense, Net	(11)		(11)			—	%
Loss Before Income Taxes	Loss Before Income Taxes	(567)		(279)		(288)		(103)	%	Loss Before Income Taxes	(58)		(567)			90	%
Income Tax Provision	Income Tax Provision	(12)		(33)		21		64	%	Income Tax Provision	(15)		(12)			(25)	%
Net Loss	Net Loss	(579)		(312)		(267)		(86)	%	Net Loss	$	(73)	$	(579)		87	%
Net Income Attributable to Noncontrolling Interests	Net Income Attributable to Noncontrolling Interests	2		4		2		50	%	Net Income Attributable to Noncontrolling Interests	5		2			(150)	%
Net Loss Attributable to Weatherford	Net Loss Attributable to Weatherford	$	(581)	$	(316)	$	(265)	(84)	%	Net Loss Attributable to Weatherford	$	(78)	$	(581)		87	%

Net Loss per Diluted Share	Net Loss per Diluted Share	$	(8.30)	$	(0.31)	$	(7.99)	(2,577)	%	Net Loss per Diluted Share	$	(1.11)	$	(8.30)		87	%
Weighted Average Diluted Shares Outstanding	Weighted Average Diluted Shares Outstanding	70		1,004		934		93	%	Weighted Average Diluted Shares Outstanding	70		70			N/A
Depreciation and Amortization	Depreciation and Amortization	$	113	$	116	$	3	3	%	Depreciation and Amortization	$	114	$	113		(1)	%

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		Successor		Predecessor											Favorable
		Six Months Ended		Six Months Ended							Six Months Ended				(Unfavorable)
(Dollars and shares in millions, except per share data)	(Dollars and shares in millions, except per share data)	6/30/2020		6/30/2019		Favorable (Unfavorable)		Percentage Change		(Dollars and shares in millions, except per share data)	6/30/2021		6/30/2020		% Change
Revenues:	Revenues:									Revenues:
Western Hemisphere	Western Hemisphere	$	898	$	1,445	$	(547)	(38)	%	Western Hemisphere	$	815	$	898	(9)	%
Eastern Hemisphere	Eastern Hemisphere	1,138		1,210		(72)		(6)	%	Eastern Hemisphere	920		1,138		(19)	%
Total Revenues	Total Revenues	2,036		2,655		(619)		(23)	%	Total Revenues	1,735		2,036		(15)	%

Operating Income (Loss):	Operating Income (Loss):									Operating Income (Loss):
Western Hemisphere	Western Hemisphere	6		20		(14)		(70)	%	Western Hemisphere	52		6		767	%
Eastern Hemisphere	Eastern Hemisphere	33		48		(15)		(31)	%	Eastern Hemisphere	(13)		33		(139)	%
Total Segment Operating Income	Total Segment Operating Income	39		68		(29)		(43)	%	Total Segment Operating Income	39		39		—	%
Impairments and Other Charges		(1,306)		(535)		(771)		(144)	%
Corporate General and Administrative		(52)		(64)		12		19	%

Gain on Sale of Businesses, Net		—		112		(112)		(100)	%
Total Operating Loss		(1,319)		(419)		(900)		(215)	%

Corporate										Corporate	(35)		(52)		33	%
Total Operating Income (Loss) Before Impairments and Other (Charges) Credits and Restructuring Charges										Total Operating Income (Loss) Before Impairments and Other (Charges) Credits and Restructuring Charges	4		(13)		131	%
Impairments and Other (Charges) Credits, Net										Impairments and Other (Charges) Credits, Net	8		(1,223)		101	%
Restructuring Charges										Restructuring Charges	—		(83)		100	%
Total Operating Income (Loss)										Total Operating Income (Loss)	12		(1,319)		101	%
Interest Expense, Net	Interest Expense, Net	(117)		(315)		198		63	%	Interest Expense, Net	(142)		(117)		(21)	%
Reorganization Items	Reorganization Items	(9)		—		(9)		—	%	Reorganization Items	—		(9)		100	%
Other Expense, Net	Other Expense, Net	(36)		(10)		(26)		(260)	%	Other Expense, Net	(15)		(36)		58	%
Loss Before Income Taxes	Loss Before Income Taxes	(1,481)		(744)		(737)		(99)	%	Loss Before Income Taxes	(145)		(1,481)		90	%
Income Tax Provision	Income Tax Provision	(56)		(45)		(11)		(24)	%	Income Tax Provision	(38)		(56)		32	%
Net Loss	Net Loss	(1,537)		(789)		(748)		(95)	%	Net Loss	(183)		(1,537)		88	%
Net Income Attributable to Noncontrolling Interests	Net Income Attributable to Noncontrolling Interests	10		8		(2)		(25)	%	Net Income Attributable to Noncontrolling Interests	11		10		(10)	%
Net Loss Attributable to Weatherford	Net Loss Attributable to Weatherford	$	(1,547)	$	(797)	$	(750)	(94)	%	Net Loss Attributable to Weatherford	$	(194)	$	(1,547)	87	%

Net Loss per Diluted Share	Net Loss per Diluted Share	$	(22.10)	$	(0.79)	$	(21.31)	(2,697)	%	Net Loss per Diluted Share	$	(2.77)	$	(22.10)	87	%
Weighted Average Diluted Shares Outstanding	Weighted Average Diluted Shares Outstanding	70		1,003		933		93	%	Weighted Average Diluted Shares Outstanding	70		70		N/A
Depreciation and Amortization	Depreciation and Amortization	$	270	$	239	$	(31)	(13)	%	Depreciation and Amortization	$	225	$	270	17	%

Segment Revenues

Western Hemisphere revenues increased $115 million, or 37%, in the second quarter of 2021 and decreased $83 million, or 9%, in the first six months of 2021 compared to the second quarter and first six months of 2020. The second quarter of 2021 year-over-year growth in the Western Hemisphere was due to increased demand for service and products across both our C&P and DEI product lines in the U.S. and increased ISP sales in Mexico.

The Western Hemisphere revenues decline of 9% in the first six months of 2021 was driven by lower activity levels for services and products across both our C&P and DEI product lines related to the global health and economic crisis due to the COVID-19 pandemic, which began negatively impacting our business and industry during the second quarter 2020.

Eastern Hemisphere revenues decreased $33 million, or 6%, in the second quarter of 2021 and $218 million, or 19%, in the first six months of 2021 compared to the second quarter and first six months of 2020 due to a decline in activity resulting in lower service and product sales in both our C&P and DEI product lines since the COVID-19 pandemic impact in the second quarter of 2020.

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Segment ~~Revenues~~Operating Results

Western Hemisphere ~~revenues decreased $409~~segment operating income of $28 million ~~or 57%,~~and $52 million in the second quarter ~~ended June 30, 2020~~ and ~~$547 million, or 38%, for the~~first six months ~~ended June 30, 2020~~2021, respectively, increased $51 million and $46 million compared to the second quarter and first six months ~~ended June 30, 2019 as the unprecedented global health and economic crisis sparked~~of 2020, respectively. The year-over-year improvements were driven by the ~~COVID-19 pandemic negatively impacted industry activity during the second quarter of 2020. The lower~~increased demand for ~~oil~~services across both our C&P and ~~gas created by the impact of the COVID-19 pandemic, together with uncertainty around the extent~~DEI product lines, as well as lower operational and timing for an economic recovery, have caused extreme market volatility in commodity prices during the second quarter of 2020 and significant reductions to the capital spending plans of exploration and production companies. This resulted in lower activity levels in the U.S. and Canada as a result of a decline in rig related activity and exploration spending, which has reduced demand for drilling, completion and production products and services. We also experienced declines in Latin America with significant activity reductions in Argentina and Columbia due to the COVID-19 pandemic and lower demand for oil and gas.employee costs.

Eastern Hemisphere ~~revenues decreased $79~~segment operating income of $6 million ~~or 13%,~~ in the second quarter ~~ended June 30, 2020~~of 2021 and ~~$72~~segment operating loss of $13 million ~~or 6%, for~~in the first six months ~~ended June 30, 2020~~of 2021, decreased $9 million and $46 million, respectively, compared to the second quarter and first six months ~~ended June 30, 2019 related to a decline in activity in the Middle East, North Africa, Asia and Russia due to COVID-19 pandemic.~~

~~Segment Operating Results~~

~~Successor segment operating loss~~of 2020. The deterioration was $8 million in the second quarter ended June 30, 2020 and Successor segment operating income was $39 million for the six months ended June 30, 2020, a decrease of $47 million and $29 million, respectively, compared to the Predecessor second quarter and six months ended June 30, 2019. The result was principally driven by lower activity levels ~~in North America~~across both our C&P and ~~the impact of COVID-19 pandemic.~~

Western Hemisphere Successor segment operating loss of $23 million in the second quarter ended June 30, 2020 and Successor segment operating income of $6 million for the six months ended June 30, 2020, declined $34 million and $14 million, respectively, comparedDEI product lines related to the ~~Predecessor second quarter~~global health and six months ended June 30, 2019. The segment income decline was impacted by lower activity levels in North America, deterioration in demand for services due to the COVID-19 pandemic and weakening demand for oil and gas.

Eastern Hemisphere Successor segment operating income of $15 million in the second quarter ended June 30, 2020 and $33 million for the six months ended June 30, 2020 was down by $13 million and $15 million, respectively, compared to the Predecessor second quarter and six months ended June 30, 2019. The segment income decline was impacted by slowing activity levels, deterioration in demand for services due to the COVID-19 pandemic and weakening demand for oil and gas,economic crisis, partially offset by ~~improved margins on product sales in the Middle East,~~ lower operational ~~costs~~ and ~~reduced~~ employee ~~retention expenses.~~costs.

Interest Expense, Net

~~Successor~~Net interest expense was ~~$59~~$72 million and $142 million in the second quarter ~~ended June 30, 2020~~and first six months of 2021, respectively, and primarily represents interest on our 11.0% Exit Notes due 2024 (“Exit Notes”) and our 8.75% Senior Secured Notes due 2024 (“Senior Secured Notes”) as well as accretion expense amortized on our deferred issuance costs and discount on our Senior Secured Notes. Interest expense was $59 million and $117 ~~million for six months ended June 30, 2020 compared to Predecessor interest expense of $160~~ million in the second quarter ~~ended June 30, 2019~~ and ~~$315 million for the~~first six months ~~ended June 30, 2019. The decrease in~~of 2020, respectively, and primarily represents interest ~~expense for the second quarter~~on our Exit Notes. See “Note 8 – Borrowings and ~~six months ended June 30, 2020 is primarily due~~Other Obligations” to the ~~significant reduction in debt related to our December 13, 2019 emergence from bankruptcy proceedings.~~Condensed Consolidated Financial Statements for further details.

Other Expense, Net ~~interest~~

Other expense was $11 million and $15 million in the second quarter and first six months ~~ended June 30, 2019 primarily represents interest on Predecessor senior notes and credit agreements.~~

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~~Other Income (Expense)~~

~~Successor~~2021, respectively, compared to other expense ~~was~~of $11 million and $36 million in the second quarter ~~ended June 30, 2020~~ and ~~$36 million for the~~first six months ~~ended June 30,~~of 2020, ~~compared to Predecessor other expense of $1 million in the second quarter ended June 30, 2019 and $10 million for the six months ended June 30, 2019.~~respectively. Other expense ~~was primarily driven by foreign currency exchange losses,~~is comprised of letter of credit fees, ~~and~~ other financing ~~fees.~~charges and foreign exchange losses, primarily attributed to currency losses in countries with no or limited markets to hedge. The ~~unfavorable change~~first six months year-over-year improvement was primarily ~~relates~~due to lower currency volatility in 2021 compared to the ~~weakening~~significant volatility in the same period of ~~foreign currencies~~the prior year following the start of the COVID-19 ~~pandemic fallout.~~pandemic.

Income Taxes

~~We have determined that because small changes in estimated ordinary annual income would result in significant changes in~~In the estimated annual effective tax rate, the use of a discrete effective tax rate is appropriate for determining the quarterly provision for income taxes. The discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis. We will continue to use this method each quarter until the annual effective tax rate method is deemed appropriate. For the Successor three and six months ended June 30, 2021, we recognized tax expense of $15 million and $38 million, respectively, on a loss before income taxes of $58 million and $145 million, respectively, compared to the three and six months ended June 30, 2020 where we recognized tax expense of $12 million and $56 million, respectively, on a loss before income taxes of $567 million and $1.5 billion, ~~respectively, as compared to the Predecessor three~~respectively. Our income tax provisions are primarily driven by income in certain jurisdictions, deemed profit countries and six months ended June 30, 2019 where we recognized tax expense of $33 million and $45 million, respectively, on a loss before income taxes of $279 million and $744 million, respectively. Tax expense for the three and six months ended June 30, 2020 and 2019 includes withholding taxes ~~minimum taxes~~on intercompany and ~~deemed profit taxes~~third-party transactions that do not directly correlate to ordinary income or loss. ~~Impairments~~Tax expense in the three and ~~other charges did not result in significant~~the six months ended June 30, 2021 includes a $13 million tax benefit attributed to the reversal of a tax accrual in ~~either period.~~connection with an internal restructuring transaction completed in the second quarter of 2021. Tax expense for the six months ended June 30, 2020 ~~includes~~included $20 million recorded in the first quarter of 2020 to recognize valuation allowance in jurisdictions where we ~~are~~were no longer able to forecast taxable income.

We routinely undergo tax examination in various jurisdictions. We cannot predict the timing or outcome regarding resolution of these tax examinations or if they will have a material impact on our financial statements. As of June 30, 2020, we anticipate that it is reasonably possible that our uncertain tax positions of $210 million may decrease by up to $2 million in the next twelve months due to expiration of statutes of limitations, settlements and/or conclusions of tax examinations.

In response to the COVID-19 pandemic, many countries have enacted tax relief measures to provide aid and economic stimulus to companies impacted by the COVID-19 pandemic. For the second quarter and six months ended June 30, 2020, there were no material tax impacts Please see “Note 14 – Income Taxes” to our ~~financial statements as it relates to COVID-19 tax relief measures.~~Condensed Consolidated Financial Statements for additional details.

Restructuring, Facility Consolidation and Severance Charges

During the three and six months ended June 30, 2020, in response to the impact on our business from the COVID-19 pandemic and the significant decline in oil prices as discussed in “Note 1 – General” to our Condensed Consolidated Financial Statements, we initiated additional immediate actions and developed plans to reduce our future cost structure. As a result, during the three and six months ended June 30, 2020, we incurred restructuring and severance charges of $57 million and $83 million, respectively. Additional charges with respect to our ongoing cost reduction actions are expected to be recorded in the second half of 2020 and could result in additional charges in future periods as we execute and revise our plans.

Please see “Note 87 – Restructuring, Facility Consolidation and Severance Charges” to our Condensed Consolidated Financial Statements for additional details of our charges by segment.

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Liquidity and Capital Resources

The effects of the COVID-19 pandemic have resulted in a significant and swift reduction in international and U.S. economic activity. The imbalance between supply and demand for oil created by the impact of the COVID-19 pandemic, together with uncertainty around the extent and timing for an economic recovery, have caused extreme market volatility in commodity prices during March 2020 and the second quarter of 2020 and significant reductions to the capital spending plans of exploration and production companies. This has resulted in weakened demand for our products and services in the second quarter of 2020, through the remainder of 2020 and, potentially, 2021, and caused significant volatility and disruption of the financial markets. This period of extreme economic disruption, low oil prices and reduced demand for our products and services has had, and is likely to continue to have, a significantly damaging impact on our business, results of operation, financial condition and our sources of liquidity. We face uncertainty regarding the adequacy of our liquidity and capital resources and have extremely limited, if any, access to additional financing beyond the ABL Credit Agreement and LC Credit Agreement.

At June 30, ~~2020,~~2021, we had total cash and cash equivalents ~~of $680 million~~ and restricted cash of ~~$76~~$1.4 billion, which increased $102 million compared to the year ended December 31, 2020. Included in total cash and cash equivalents ~~of $618~~was $170 million and $167 million of restricted cash ~~of $182 million~~ at June 30, 2021 and December 31, ~~2019. At June 30,~~ 2020, ~~we had available liquidity in excess~~respectively. Restricted cash is primarily cash collateral for letters of ~~$770 million, which was calculated as cash and cash equivalents plus ABL Credit Agreement availability~~credit not held under the senior secured letter of ~~$91 million.~~credit agreement. The following table summarizes cash flows provided by (used in) each type of activity and a reconciliation of operating cash flow to non-GAAP free cash flow for the six months ended June 30, ~~2020~~2021 and June 30, ~~2019:~~2020:

Successor Predecessor
Six Months Ended Six Months Ended
(Dollars in millions) 6/30/2020 6/30/2019
Net Cash Provided by (Used in) Operating Activities $ 61 $ (478)
Net Cash Provided by (Used in) Investing Activities (86) 223
Net Cash Provided by (Used in) Financing Activities (12) 269

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	Six Months Ended June 30,
(Dollars in millions)	2021		2020
Net Cash Provided by Operating Activities	$	120	$	61
Net Cash Used in Investing Activities	(2)		(62)
Net Cash Used in Financing Activities	(15)		(36)

Reconciliation of Operating Cash Flow to Non-GAAP Free Cash Flow:
Net Cash Provided by Operating Activities	$	120	$	61
Capital Expenditures for Property, Plant and Equipment	(24)		(73)
Proceeds from Disposition of Assets	22		8
Non-GAAP Free Cash Flow	$	118	$	(4)

Operating Activities

Cash provided by operating activities was $120 million for the ~~Successor was~~six months ended June 30, 2021 compared to $61 million for the six months ended June 30, ~~2020 compared to cash used in operating activities for the Predecessor of $478 million for~~2020. During the six months ended June 30, ~~2019. Cash~~2021, the primary sources of cash provided by ~~Successor~~ operating activities ~~for~~were driven by higher operating income, continued collections on our accounts receivables and inventory utilization, partially offset by higher interest payments.

During the six months ended June 30, 2020, ~~was driven~~the primary sources of cash provided by ~~improved~~operating activities were from collections on our accounts receivables, and lower payments for working capital activities, ~~lower~~ retention and performance cash bonuses, ~~and was~~ partially offset by payments for interest. Cash used in Predecessor operating activities in 2019 was driven by working capital needs, payments for interest, performance and retention bonuses, severance and other restructuring and transformation costs. In 2019, primarily in the second quarter, cash used in operating activities included payments for prepetition charges primarily for professional and other fees.

Investing Activities

Cash used in investing activities ~~for the Successor~~ was ~~$86~~$2 million for the six months ended June 30, ~~2020~~2021 compared to ~~cash provided by investing activities for the Predecessor of $223~~$62 million for the six months ended June 30, ~~2019.~~

2020. During the six months ended June 30, 2021, the primary uses of cash were capital expenditures of $24 million for property, plant and equipment, offset by proceeds of $22 million from asset dispositions. During the six months ended June 30, 2020, the primary uses of cash ~~in investing activities~~ were ~~(i)~~ capital expenditures of $73 million for property, plant and equipment, offset by proceeds of $8 million from other asset dispositions.

Financing Activities

Cash used in financing activities was $15 million for the six months ended June 30, 2021 compared to $36 million for the six months ended June 30, 2020. During the six months ended June 30, 2021, the primary uses of cash were for the repayment of finance lease obligations and ~~(ii) cash~~dividends paid ~~of $24 million related~~ to ~~a deferred payment for our acquisition of the Al Shaheen joint venture.~~noncontrolling interests. During the six months ended June 30, 2020, the ~~sources~~primary uses of cash ~~primarily included $8~~were for a $24 million ~~from other asset dispositions~~deferred payment for our acquisition of a joint venture in the Middle East and ~~$5 million of~~dividends paid to noncontrolling interests.

Non-GAAP Free Cash Flow

Non-GAAP free cash flow (“free cash flow”) represents cash provided by (used in) operating activities less capital expenditures for property, plant and equipment plus proceeds from ~~Angolan government bonds. The amount we spend~~the disposition of assets. Operating cash flow was $120 million and $61 million in the six months ended June 30, 2021 and 2020, respectively. Free cash flow was a positive $118 million and negative $4 million in the six months ended June 30, 2021 and 2020, respectively. Management believes that free cash flow is useful to investors and management as an important liquidity measure of our ability to generate cash, pay obligations and grow the business and shareholder value. It is a non-GAAP financial measure that should be considered in addition to, not as substitute for ~~capital expenditures varies each year and is based on the types of contracts into which we enter, our asset availability and our expectations with respect~~or superior to, ~~activity levels.~~cash provided by (used in) operating activities.

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During the six months ended June 30, 2019, the primary uses of cash in investing activities were (i) capital expenditures of $114 million for property, plant and equipment and the acquisition of assets held for sale and (ii) cash paid of $9 million to acquire intellectual property and other intangibles. During the six months ended June 30, 2019, the primary sources of cash were (i) proceeds from the sale of business of $301 million, primarily from the completed dispositions of our rigs business, laboratory services and surface data logging businesses and (ii) proceeds of $45 million from the disposition of other assets.

~~Financing Activities~~

Our cash used in financing activities for the Successor was $12 million for the six months ended June 30, 2020 compared to cash provided by financing activities for the Predecessor of $269 million for the six months ended June 30, 2019. For the six months ended June 30, 2020 cash used in financing activities was primarily for the repayment of debt, net of borrowings.

For the six months ended June 30, 2019, the Predecessor had short-term borrowings net of repayments of $298 million primarily from the Predecessor revolving credit agreements, and long-term debt repayments of $17 million for payments on the Predecessor term loan agreement and financed leases.

Sources of Liquidity

Our sources of available liquidity ~~going forward~~ include cash generated by our operations, cash and cash equivalent balances, ~~cash generated by our operations,~~ accounts receivable factoring, ~~dispositions,~~ and availability under committed lines of credit. We have a senior secured asset-based revolving credit agreement in an aggregate amount of $450 million under the ABL Credit Agreement and a senior secured letter of credit agreement in an aggregate amount of $195 million under the LC Credit Agreement for issuance of bid and performance letters of credit. At June 30, 2020, we had available liquidity in excess of $770 million, which is calculated as cash and cash equivalents plus ABL Credit Agreement availability of $91 million. Our availability under the ABL Credit Agreement may be reduced as the assets underlying the borrowing base are impacted due to lower activity. primarily in North America. At June 30, 2020, we had adequate liquidity and were compliant with our financial covenants under the agreements governing our outstanding indebtedness. However, our changing operating environment has led to an inability to predict the ultimate length and depth of the adverse economic impact from the COVID-19 pandemic and uncertainty in the global oil markets on our industry and the Company continue to be significant. The decline in activity has and will continue to result in a significant decline in our accounts receivable, inventory and rental tools, particularly in North America, which comprises the most significant component of our credit facility borrowing base and will impair our ability to comply with the covenants under the ABL Credit Agreement.

Despite the actions of management, given the material decline in our business as a result of the decline in demand for oil and gas worldwide, we expect that a breach of our covenants under our ABL Credit Agreement could occur in the first half of 2021. A covenant breach would occur if our Excess Availability and our Fixed Charge Coverage Ratio (as such terms are defined in the ABL Credit Agreement) were to each fall below the minimum requirement as defined in the ABL Credit Agreement. Further, a breach of these financial covenants would constitute an event of default under our ABL Credit Agreement which if not timely cured or waived, would constitute an event of default under our LC Credit Agreement. An event of default under these agreements would result in our obligations being accelerated, including cash collateralizing our letters of credit. Such result would constrain our liquidity and we may not be able to service the interest on our debt or pay other obligations and thus, raises substantial doubt on our ability to continue as a going concern within the next 12 months. See “Note 1 – General” to our Condensed Consolidated Financial Statements for further details.

In an effort to proactively address potential liquidity constraints, on August 4, 2020 we executed a binding commitment letter for $500 million in senior secured first lien notes, with a stated interest rate of 8.75% (“New Senior Secured Notes”) that would mature in September 2024. The commitment letter, which was originally scheduled to expire on August 14, 2020, has been extended to August 21, 2020. The extension of the binding commitment letter allows additional time for the conditions specified in the binding commitment letter to be satisfied or waived and the notes to be issued, which will improve our liquidity. We cannot provide any assurances on if or when we will reach agreement on terms with our note holders or consummate any potential transactions. See “Note 1 – General” to our Condensed Consolidated Financial Statements for further details.

The energy industry continues to have negative sentiment in the market which has impacted the ability of energy sector participants to access appropriate amounts of capital and under suitable terms. This negative sentiment in the energy industry

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~~has not only impacted our customers in North America, it is also affecting the availability and the pricing for most credit lines extended to participants in the industry.~~

We also historically have accessed banks for short-term loans from uncommitted borrowing arrangements and have accessed the capital markets with debt and equity offerings. From time to time we may and have entered into transactions to disposedispositions of businesses or capital assets that no longer fit our long-term strategy. We historically have accessed banks for short-term loans and the capital markets for debt and equity offerings. While the market has stabilized recently, the energy industry’s access to capital is improving and although we may have access to capital markets, it may not be on terms that are commercially acceptable to the Company. Based upon current and anticipated levels of operations, we believe we will have sufficient cash from operations and cash on hand to fund our expected financial obligations and cash requirements (discussed below) both in the short-term and long-term.

Customer Receivables

In weak economic environments, we may experience increased delays and failures to pay our invoices due to, among other reasons, a reduction in our customers’ cash flow from operations and their access to the credit markets as well as unsettled political conditions. ~~Given~~If the ~~nature and significance of the pandemic and disruption in the oil and gas industry,~~economic environment weakens we could experience delayed customer payments and payment defaults associated with customer liquidity issues and bankruptcies. If our customers delay paying or fail to pay us a significant amount of our outstanding receivables, it could have a significant and detrimental effect on our liquidity, consolidated results of operations and consolidated financial condition.issues.

Cash Requirements

~~We anticipate our~~Our cash requirements will continue to include interest payments ~~primarily from~~ on our long-term debt, ~~and credit agreements,~~ payments for capital expenditures, repayment ~~of financed~~on finance leases, payments for short-term working capital needs and costs associated with our revenue and ~~cost improvement efforts under our~~ restructuring ~~plans,~~payments, including ~~severance and professional consulting payments.~~severance. Our cash requirements may also include ~~business acquisitions,~~ awards under our employee incentive programs and other amounts to settle litigation related matters. ~~We anticipate funding these requirements from cash and cash equivalent balances, availability under our credit agreements, accounts receivable factoring and proceeds from disposals~~

As of ~~businesses or capital assets that no longer fit our long-term strategy. At~~ June 30, ~~2020,~~2021, we had ~~adequate liquidity~~$2.1 billion in aggregate principal amount maturing on December 1, 2024 and were compliant with our financial covenants. However, the weak operating environment has led to the inability to predict the depth and length of the industry’s weakness. The actions taken by management to preserve liquidity and capital include the reduction of capital expenditures, consolidation of product lines to eliminate redundancy, exiting from sub-scale locations and a higher level of headcount reductions. In addition, the decline$500 million in activity has resulted in a significant decline in our accounts receivable balance, particularly in North America, which comprises the most significant component of our credit facility borrowing base, and will impair our ability to comply with the covenants under the ABL Credit Agreement. A breach of the financial covenants under our ABL Credit Agreement would constitute an event of default under our ABL Credit Agreement and if not cured or waived, would constitute an event of default under our LC Credit Agreement andaggregate principal amount maturing on September 1, 2024 for our Exit Notes ~~as described in~~and Senior Secured Notes, respectively. We expect to have interest payments of approximately $275 million annually until their maturity. Please see “Note 98 – Borrowings and Other Obligations” to our Condensed Consolidated Financial Statements. An event of default under these agreements could result in the obligations under these agreements being accelerated or required to be cash collateralized. Such result would constrain our liquidity and we may not be able to service the interestStatements for additional details. Our 2021 payments on ~~our debt or pay other obligations and thus, raises substantial doubt on our ability to continue as a going concern within the next 12 months.~~

~~In light of the challenging outlook, our capital spending for 2020 is projected to be between approximately $100 - $135 million, a reduction of approximately 50% from 2019. Expenditures~~operating leases are expected to be ~~used primarily~~$91 million and capital spending is expected to support the ongoing activities and commitments in our core business. If we are unable to generate sufficient cash flows or access other sources of liquidity described in the previous paragraph, we may need to reduce or eliminate our anticipated capital expenditures in 2020 which would further impact the business.be approximately $100 - $110 million.

Cash and cash equivalents ~~including~~(including restricted cash of ~~$76~~$170 million primarily related to cash collateral on our letters of ~~credit,~~credit) totaled ~~$756 million~~$1.4 billion at June 30, ~~2020,~~2021, and are held by subsidiaries outside of ~~Ireland, our taxing jurisdiction. In addition,~~Ireland. At June 30, 2021 we had ~~in excess of $130~~$175 million of our cash and cash equivalents that cannot be immediately repatriated from various countries due to country central bank controls or other regulations. Based on the nature of our structure, other than the restrictions noted above, we ~~are generally~~foresee we will be able to redeploy cash with minimal to no incremental tax.

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Ratings Services’ Credit Ratings

On ~~March 30, 2020, Moody’s Investor Services downgraded~~July 1, 2021, our ~~issuer~~S&P credit ~~rating~~ratings improved to ~~B2 from B1, downgraded~~a B, with a stable outlook, on our ~~Exit~~Senior Secured Notes ~~to B3 from B2~~ and ~~downgraded our~~the senior secured ~~ABL~~letter of credit agreement (the “LC Credit ~~Agreement in an aggregate amount of $450 million and senior secured LC Credit Agreement in an aggregate amount of $195 million (together with the ABL Credit Agreement, the “Exit Credit Agreements”~~Agreement”) ~~to Ba3 from Ba2, with a negative outlook. On April 2, 2020,~~. The S&P ~~downgraded our issuer credit rating and ratings on our Exit Notes to CCC+ from B- and lowered the~~ credit rating on our Exit ~~Credit Agreements~~Notes improved to ~~B from B+,~~a CCC+ with a ~~negative~~stable outlook. ~~On April 15, 2020, S&P further downgraded~~As of June 30, 2021, our ~~issuer credit rating and ratings on our Exit Notes to CCC from CCC+ and lowered the~~Moody’s Investor Services credit rating on ~~our Exit~~the Senior Secured Notes and the LC Credit ~~Agreements to B- from B,~~Agreement was Ba3, with a negative outlook. Our Exit Notes have a credit ~~ratings could continue to be lowered if we announce~~rating of B3 with a ~~debt refinancing or other transaction viewed as being distressed for us.~~negative outlook.

While we ~~expect to~~may continue to have access to credit markets, our ~~non-investment grade status~~credit ratings, restrictions under our Exit Notes, Senior Secured Notes and ~~the industry downturn may~~LC Credit Agreement, could limit our ability to raise capital, refinance our existing debt, or could cause us to refinance or issue debt with less favorable and more restrictive terms and conditions, and could increase certain fees and interest of our borrowings. Suppliers and financial institutions may lower or eliminate the level of credit provided through payment or intraday funding when dealing with us thereby increasing the need for higher levels of cash on hand, which could decrease our ability to repay debt balances, negatively affect our cash flow and impact our access to the inventory and services needed to operate our business.

Off Balance Sheet Arrangements

Guarantees

Weatherford International plc, a public limited company organized under the laws of Ireland, and as the ultimate parent of the Weatherford group, guarantees the obligations of its subsidiaries. Please see our discussion on guarantees in “Part II - Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operation” of our ~~2019~~ Annual ~~Report.~~Report on Form 10-K for the year ended December 31, 2020 (“2020 Annual Report”).

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Letters of Credit and ~~Performance and Bid~~Surety Bonds

~~We use letters of credit and performance and bid bonds in the normal course of our business.~~ As of June 30, ~~2020,~~2021, we had ~~$335~~$331 million of letters of credit ~~and performance and bid bonds~~ outstanding, consisting of ~~$123~~$160 million ~~of letters of credit under the ABL Credit Agreement, $129 million of letters of credit~~ under the LC Credit Agreement and ~~$83~~$171 million ~~of letters of credit~~ under various uncommitted ~~facilities. At~~facilities (of which there was $165 million in cash collateral held and recorded in “Restricted Cash” on our Consolidated Balance Sheets).

As of June 30, ~~2020,~~2021, we had ~~cash collateral~~outstanding surety bonds of ~~$72~~$307 million, ~~included~~which were primarily in ~~restricted cash supporting letters of credit under our various uncommitted facilities. In~~ Latin America where we utilize surety bonds as part of our customary business practice. ~~These obligations~~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 our ~~committed facilities,~~LC Credit Agreement or surety bonds, our available liquidity would be reduced by the amount ~~called and it could have an adverse impact on our business, operations and financial condition.~~called.

~~Table of Contents~~

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operation is based upon our Condensed Consolidated Financial Statements. We prepare these financial statements in conformity with U.S. GAAP. As such, we are required to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience, available information and various other assumptions we believe to be reasonable under the circumstances. On an on-going basis, we evaluate our estimates, however, actual results may differ from these estimates under different assumptions or conditions. There have been no material changes or developments in our evaluation of the accounting estimates and the underlying assumptions or methodologies that we believe to be critical accounting policies and estimates as disclosed in our ~~2019~~2020 Annual ~~Report, except as noted below.~~

~~Long-Lived Assets~~

As a result of the unprecedented industry conditions described in “Note 1 – General” to our Condensed Consolidated Financial Statements which we identified as impairment indicators, we completed impairment assessments of our property, plant and equipment, definite-lived intangible assets and right of use assets with the assistance of third-party valuation advisors. Based on our impairment test, we determined the carrying amount of certain long-lived assets exceeded their respective fair values. Therefore, during the three months and six months ended June 30, 2020, we recorded total long-lived asset impairments of $178 million and $818 million, respectively. The fair values of our long-lived assets were based on discounted cash flow analysis or Level 3 fair values analysis. The unobservable inputs to the income approach included the assets’ estimated future cash flows, estimates of discount rates commensurate with the assets’ risks, revenue growth rates, profitability margins, and the remaining useful life of the primary asset.

The decline and its impact on demand represent a significant change in the business climate and an indication that some of our long-lived assets may not be recoverable. Based on the impairment indicators noted we performed an analysis of our long-lived assets for the three and six months ended June 30, 2020 and recorded long-lived and other asset impairment charges to adjust to fair value. See “Note 6 - Long-Lived Asset Impairments” to our Condensed Consolidated Financial Statements for additional information regarding the long-lived assets impairment.

Our estimates of fair value are sensitive to the aforementioned inputs to the valuation approach. Some of the inputs, such as forecasts of revenue and earnings growth, are subject to change given their uncertainty. Other inputs, such as the discount rate used in the income approach, are subject to change as they are outside of our control.

Management cannot predict the occurrence of future impairment-triggering events, so we continue to assess whether indicators of impairment to long-lived assets exist due to the current business conditions in the oilfield services industry. Given the dynamic nature of the COVID-19 pandemic and related market conditions, we cannot estimate the period of time that these events will persist or the full extent of the impact on our business. If, in addition to other factors, market conditions deteriorate further than we anticipate, we may record further impairments related to the carrying amount of our property, plant and equipment, definite-lived intangible assets and right of use assets.

~~Goodwill~~

We identified lower exploration and production capital spending during the quarter that resulted in lower drilling activity and forecasted activity as impairment indicators and performed an interim goodwill impairment test as of the first quarter ended March 31, 2020 and the second quarter ended June 30, 2020. We determined the unprecedented industry conditions described in “Note 1 – General” to our Condensed Consolidated Financial Statements are triggering events in our qualitative goodwill assessment that required us to review the recoverability of our long-lived assets as discussed in “Note 6 - Long-Lived Asset Impairments” to our Condensed Consolidated Financial Statements and perform an interim quantitative goodwill assessment as of March 31, 2020 and June 30, 2020. Our quantitative goodwill impairment assessment is based on discounted cash flow analysis and a multiples-based market approach for comparable companies in our industry. The analysis includes significant judgments, including estimated future cash flows, estimates of discount rates, revenue growth rates, profitability margins and capital expenditures. Goodwill impairment occurs when the carrying amount of a reporting unit exceeds the fair value. Based upon our goodwill impairment assessment, in the second quarter of 2020 we recognized a goodwill impairment of $72 million on our Russia Reporting unit in addition to the goodwill impairment recognized in the first quarter of 2020 of $167 million for our Middle East & North Africa (“MENA”) and Russia reporting units. The total goodwill impairment for the six months ended June 30, 2020 was $239 million. These impairments recognized reduced the carrying value of our goodwill in our MENA

~~Table of Contents~~

~~reporting unit by $127 million and our Russia reporting unit by $112 million, which are both part of our Eastern Hemisphere segment.~~

~~Refer also to “Note 7 – Goodwill and Intangible Assets” to our Condensed Consolidated Financial Statements.~~

~~Inventory Reserves~~

Inventory represents a significant component of current assets and is stated at the lower of cost or net realizable value using either the first-in, first-out (“FIFO”) or average cost method. To maintain a book value that is the lower of cost or net realizable value, we maintain reserves for excess, slow moving and obsolete inventory. To determine these reserve amounts, we review inventory quantities on hand, future product demand, market conditions, production requirements and technological obsolescence. This review requires us to make judgments regarding potential future outcomes. During the second quarter of 2020, we recognized inventory charges, primarily excess and obsolete charges, of $134 million due to the decline in oil and gas commodity demand, the downturn in the oil and gas industry and the impact of COVID-19 pandemic. The near-term utilization of certain inventory has been deemed to be commercially unviable or technologically obsolete considering current and anticipated future demand. We believe that our reserves are adequate to properly value excess, slow-moving and obsolete inventory under current conditions.Report.

~~New Accounting Pronouncements~~

~~See “Note 2 – New Accounting Pronouncements” to our Condensed Consolidated Financial Statements.~~

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Forward-Looking Statements

This report contains various statements relating to future financial performance and results, business strategy, plans, goals and objectives, including certain projections, business trends and other statements that are not historical facts. These statements constitute forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “budget,” “strategy,” “plan,” “guidance,” “outlook,” “may,” “should,” “could,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions, although not all forward-looking statements contain these identifying words.

Forward-looking statements reflect our beliefs and expectations based on current estimates and projections. While we believe these expectations, and the estimates and projections on which they are based, are reasonable and were made in good faith, these statements are subject to numerous risks and uncertainties. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. ~~Furthermore, from time to time, we update the various factors we consider in making our forward-looking statements and the assumptions we use in those statements. However, we~~We undertake no obligation to correct, update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except to the extent required under federal securities laws. The following, together with disclosures under “Part II – Other Information - Item 1A. – Risk Factors”, sets forth ~~various assumptions we use in our forward-looking statements, as well as~~certain risks and uncertainties relating to ~~those statements. Certain of these risks and uncertainties~~our forward-looking statements that may cause actual results to be materially different from ~~projected results contained in forward-looking statements in this report~~our present expectations or projections:

•risks associated with disease outbreaks and ~~in our~~ other ~~disclosures. These risks~~public health issues, including COVID-19 and ~~uncertainties include, but are not limited to, those described below under “Part II – Other Information – Item 1A. – Risk Factors”~~COVID-19 variants, their impact on the global economy and the ~~following:~~business of our Company, customers, suppliers and other partners, changes in, and the administration of, treaties, laws, and regulations, including in response to such issues and the potential for such issues to exacerbate other risks we face, including those related to the factors listed or referenced below;

•further spread and potential for a resurgence of COVID-19 in a given geographic region and related disruptions to our business, customers, suppliers and other partners and additional regulatory measures or voluntary actions that may be put in place to limit the spread of COVID-19, including vaccination requirements and the associated availability of vaccines, restrictions on business operations or social distancing requirements, and the duration and efficacy of such restrictions;

•the price and price volatility of, and demand for, oil, natural gas and natural gas liquids;

•~~the impact of the COVID-19 pandemic and other global public health threats and pandemics, such as influenza and other highly communicable viruses or diseases;~~

•the COVID-19 pandemic, the related public health measures implemented by governments worldwide and the precipitous decline in oil prices during 2020, including the duration and severity of the outbreak, the duration of the price decline and the extent of disruptions to our operations

•member-country quota compliance within the ~~OPEC;~~Organization of Petroleum Exporting Countries and the expanded alliance;

•our ability to realize expected revenues and profitability levels from current and future contracts;

•our ability to generate cash flow from operations to fund our operations;

•~~the outcome of any discussions with our lenders and bondholders regarding the terms of our financing transaction;~~

•~~our failure to satisfy the obligations with respect to our indebtedness, which could result in an event of default that raises substantial doubt about our ability to continue as a going concern;~~

•global political, economic and market conditions, political disturbances, war, terrorist attacks, changes in global trade policies, weak local economic conditions and international currency fluctuations;

•increases in the prices and lack of availability of our procured products and services;

•our ability to timely collect from customers;

•our ability to realize cost savings and business enhancements from our revenue and cost improvement efforts;

•our ability to attract, motivate and retain employees, including key personnel;

•~~changes~~our ability to ~~senior management and Board of Directors resulting from voting~~access capital markets on terms that are commercially acceptable to the Company, or at ~~the annual general shareholder meeting;~~all;

•our ability to manage our workforce, supply chain and business processes, information technology systems and technological innovation and commercialization, including the impact of our organization restructure, business enhancements, improvement efforts and the cost and support reduction plans;

•potential non-cash asset impairment charges for long-lived assets, intangible assets or other assets;

•adverse weather conditions in certain regions of our operations; and

•failure to ensure on-going compliance with current and future laws and government regulations, including but not limited to environmental and tax and accounting laws, rules and ~~regulations.~~regulations as well as stock exchange listing rules.

Many of these factors are macro-economic in nature and are, therefore, beyond our control. In addition, the COVID-19 pandemic, responses to the pandemic by governments and businesses and its impact on the price and price volatility of oil and gas, have significantly increased financial and economic volatility and uncertainty, exacerbating the risks and potential impact of these factors. Should one or more of these risks or uncertainties materialize, affect us in ways or to an extent that we currently do not expect or consider to be significant, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this quarterly report as anticipated, believed, estimated, expected, intended, planned or projected.

~~Table of Contents~~

Finally, our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in our other filings with the SEC under the ~~Securities~~ Exchange Act ~~of 1934 (as amended, the “Exchange Act”)~~ and the Securities ~~Act of 1933 (as amended, the “Securities Act”).~~Act. For additional information regarding risks and uncertainties, see our other filings with the SEC. ~~Our annual reports on Form 10-K, quarterly reports on Form 10-Q,~~In the event of an inconsistency between any prior or current ~~reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d)~~SEC filing, the most current SEC filing would control.

Table of the Exchange Act are made available free of charge on our web site www.weatherford.com under “Investor Relations” as soon as reasonably practicable after we have electronically filed the material with, or furnished it to, the SEC.Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

For quantitative and qualitative disclosures about market risk, see “Part II – Other Information – Item 7A. – Quantitative and Qualitative Disclosures about Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Other than the ~~decrease~~change in the fair value of our debt as discussed in “Note 98 – Borrowings and Other Obligations” to our Condensed Consolidated Financial Statements, our exposure to market risk has not changed materially since December 31, ~~2019.~~2020.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the ~~Securities~~ Exchange ~~Act of 1934) (as amended, the “Exchange Act”)~~Act) are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the ~~U.S. Securities and Exchange Commission’s~~SEC’s rules and forms. This information is collected and communicated to management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosures.

In connection with the performance of its long-lived asset impairment assessment for the three months ended June 30, 2020, the Company identified an error in its March 31, 2020 long-lived assets impairment assessment. The error related to the proper determination of net book value by long-lived asset group. See “Note 6 –Long-Lived Asset Impairments” to our Condensed Consolidated Financial Statements for further information. Specifically, control activities were not designed and maintained over the review of the net book values by long-lived asset group by hemisphere used in the impairment assessment. Our management, under the supervision and with the participation of our CEO and CFO, ~~has identified a material weakness in internal control over financial reporting related to this matter. As a result,~~evaluated the effectiveness of the design and operation of our disclosure controls and procedures at June 30, 2021. Based on that evaluation, our CEO and CFO ~~have~~ concluded that our disclosure controls and procedures were effective as of ~~the end of the period covered by this Quarterly Report on Form-10-Q~~were not effective. Management took immediate actions to address the material weakness described above, including the implementation of controls to ensure the proper and timely completion of the review and approval of net book value by hemisphere and product line.June 30, 2021.

~~Other than the material weakness described above, there were~~Our management identified no ~~other changes~~change in our internal control over financial reporting that occurred during the three months ended June 30, ~~2020~~2021 that ~~have~~has materially affected, or ~~are~~is reasonably likely to materially affect, our internal control over financial reporting.

PART II – Other Information

Item 1. Legal Proceedings.

Disputes and Litigation

See “Note 119 – Disputes, Litigation and Contingencies” to our Condensed Consolidated Financial Statements for details regarding our ongoing disputes and litigation.

~~Table of Contents~~

Item 1A. Risk Factors.

An investment in our securities involves various risks. You should consider carefully all of the risk factors described in our ~~2019~~2020 Annual Report, Part I, under the heading “Item 1A. – Risk Factors”, our Amendment No. 2 to the Registration Statement filed with the SEC on May 26, 2021 (as amended, the “Registration Statement”), Part I, under the heading “Item 1A. – Risk Factors,” and other information included and incorporated by reference in this report. As of June 30, ~~2020,~~2021, there have been no material changes in our assessment of our risk factors from those set forth in our ~~2019~~2020 Annual Report and our first quarter Form 10-Q filed on May 11, 2020, except as noted below. To the extent any inconsistency or conflict exists between the information included in the below risk factors and the information presented in the risk factors included in the 2019 Annual Report or our first quarter Form 10-Q filed on May 11, 2020, the risk factors below update and supersede such information.

We have experienced significant changes with respect to our executive team and the members of our board of directors, and our business could be adversely affected by these and other changes in our senior management team.

We experienced significant changes to our executive team and among the members of our board of directors during the second and third quarter of 2020, including the departure of our former Chief Executive Officer, former Chief Financial Officer and former General Counsel. We also had three members of our board of directors who were not re-elected at our annual general meeting of shareholders. As a result of these changes, our remaining management team and members of our board of directors have been required to take on increased responsibilities, which could divert attention from key business areas. If we continue to experience similar changes in the future, we may experience distractions or disruptions to our business.

Management transitions are often difficult and inherently cause some loss of institutional knowledge, which could negatively affect our results of operations and financial condition. Our ability to execute our business strategies may be adversely affected by the uncertainty associated with these changes and the time and attention from the board of directors and our senior management team needed to fill any future vacant roles could disrupt our business. The uncertainty caused by management changes could result in increased employee turnover and harm to our business and customer relationships, growth, financial condition, results of operations and cash flows.

Further, we cannot guarantee that we will not face similar changes in the future. We select our senior management based in part on their specialized knowledge of our business and industry, and any further changes could negatively affect our business, customer relationships, growth, financial conditions, results of operations and cash flows.

Registration Statement.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~None.~~During May 2021, we issued an aggregate of 53 ordinary shares upon the exercise of outstanding warrants, resulting in cash proceeds to the Company of approximately $5,000. The ordinary shares were issued pursuant to an exemption from registration under Section 4(a)(2) and Regulation D of the Securities Act of 1933.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Table of Contents

Item 5. Other Information.

None.

~~Table of Contents~~

Item 6. Exhibits.

All exhibits designated with a dagger (†) are filed herewith or double dagger (††) are furnished herewith.

Exhibit Number

Description

Original Filed Exhibit

File Number

~~3.1~~

~~Amended and Restated Memorandum and Articles of Association of Weatherford International public limited company.~~

Exhibit 3.1 of the
Company’s Current
Report on Form 8-K
filed December 18, 2019

~~File No. 1-36504~~

*10.1

~~Weatherford International Plc Amended and Restated 2019 Equity Incentive Plan~~

Exhibit 10.1 of the Company’s
Current Report on Form 8-K
filed April 15, 2020

~~File No. 1-36504~~

*10.2

~~Executive Non-Equity Incentive Compensation Plan (as Amended and Restated)~~

Exhibit 10.2 of the Company’s
Current Report on Form 8-K
filed on April 15, 2020

~~File No. 1-36504~~

*10.3

~~Form of Christian A. Garcia Award Agreement~~

Exhibit 10.3 of the Company’s
Current Report on Form 8-K
filed April 15, 2020

~~File No. 1-36504~~

*10.4

~~Weatherford International plc 2020 Long-Term Cash Incentive Plan~~

Exhibit 10.1 of the Company’s
Current Report on Form 8-K
filed April 24, 2020

~~File No. 1-36504~~

*10.5

~~Award Agreement (Weatherford International plc 2020 Long-Term Cash Incentive Plan)~~

Exhibit 10.2 of the Company’s
Current Report on Form 8-K
filed April 24, 2020

~~File No. 1-36504~~

~~†*10.6~~

~~Letter Agreement with Karl Blanchard dated June 10, 2020~~

~~File No. 1-36504~~

~~†*^10.7~~

~~Form of Amendment to Change in Control Agreement~~

~~File No. 1-36504~~

†*^10.1

Offer Letter to Joseph H. Mongrain dated March 11, 2021.

File No. 1-36504

†31.1

Certification of Chief Executive Officer ~~and Principal~~pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

File No. 1-36504

†31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

File No. 1-36504

††32.1

Certification of Chief Executive Officer ~~and Principal~~pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

File No. 1-36504

††32.2

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

File No. 1-36504

†101.INS

XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document

†101.SCH

XBRL Taxonomy Extension Schema Document

†101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

†101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

†101.LAB

XBRL Taxonomy Extension Label Linkbase Document

†101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)



*			Management contract or compensatory plan or arrangement
^			The Company has replaced ~~its~~it prior Exhibit ~~10.7~~10.35 originally filed with the Company’s ~~Current Report on~~Amendment No. 2 to Form ~~8-K~~10 filed on ~~December 18, 2019~~May 26, 2021 with the revised ~~Exhibit 10.7~~exhibit 10.1 filed ~~herewith.~~
			herewith

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Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			Weatherford International plc

Date:	~~August 14, 2020~~July 29, 2021	By:	/s/ ~~Karl Blanchard~~H. Keith Jennings
			~~Karl Blanchard~~H. Keith Jennings
			~~Interim Chief Executive Officer,~~ Executive Vice President ~~Principal~~and
			Chief Financial ~~Officer and Chief Operating~~ Officer



Date:	~~August 14, 2020~~July 29, 2021	By:	/s/ ~~Stuart Fraser~~Desmond J. Mills
			~~Stuart Fraser~~Desmond J. Mills
			Vice President and
			Chief Accounting Officer

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	PAGE
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.		2
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.		2117
Item 3. Quantitative and Qualitative Disclosures About Market Risk.		3727
Item 4. Controls and Procedures.		3727

PART II – OTHER INFORMATION
Item 1. Legal Proceedings.		3727
Item 1A. Risk Factors.		3827
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		3827
Item 3. Defaults Upon Senior Securities.		3827
Item 4. Mine Safety Disclosures.		3827
Item 5. Other Information.		3828
Item 6. Exhibits.		3928
SIGNATURES		4029


(Dollars in millions)	Accrued Balance at December 31, 2019		Charges		Cash Payments		Other		Accrued Balance at June 30, 2020
Restructuring and Severance Reserve	$	66	$	83	$	(75)	$	(12)	$	62


(Dollars in Millions)	Par Value of Issued Shares		Capital in Excess of Par Value		Retained Deficit		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interests		Total Shareholders’ Equity (Deficiency)
Balance at December 31, 2019 (Successor)	$	—	$	2,897	$	(26)	$	9	$	36	$	2,916
Net Income (Loss)	—		—		(966)		—		8		(958)
Other Comprehensive Loss	—		—		—		(95)		—		(95)


Balance at March 31, 2020 (Successor)	$	—	$	2,897	$	(992)	$	(86)	$	44	$	1,863
Net Income (Loss)	—		—		(581)		—		2		(579)
Other Comprehensive Loss	—		—		—		29		—		29
Dividends to Noncontrolling Interests	—		—		—		—		(8)		(8)

Balance at June 30, 2020 (Successor)	$	—	$	2,897	$	(1,573)	$	(57)	$	38	$	1,305






















Balance at December 31, 2018 (Predecessor)	$	1	$	6,711	$	(8,671)	$	(1,746)	$	39	$	(3,666)
Net Income (Loss)	—		—		(481)		—		4		(477)
Other Comprehensive Income	—		—		—		33		—		33
Dividends to Noncontrolling Interests	—		—		—		—		(5)		(5)
Awards Granted, Vested and Exercised	—		8		—		—		—		8
Other	—		—		—		—		1		1
Balance at March 31, 2019 (Predecessor)	1		6,719		(9,152)		(1,713)		39		(4,106)
Net Income (Loss)	—		—		(316)		—		4		(312)
Other Comprehensive Income	—		—		—		30		—		30
Dividends to Noncontrolling Interests	—		—		—		—		(6)		(6)
Awards Granted, Vested and Exercised	—		5		—		—		—		5

Balance at June 30, 2019 (Predecessor)	$	1	$	6,724	$	(9,468)	$	(1,683)	$	37	$	(4,389)