WFRD 10-Q

Weatherford International plc (WFRD)

10-Q 2020-08-14 For: 2020-06-30

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Added on April 10, 2026


TABLE OF CONTENTS									PAGE
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.									2
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.									21
Item 3. Quantitative and Qualitative Disclosures About Market Risk.									37
Item 4. Controls and Procedures.									37

PART II – OTHER INFORMATION
Item 1. Legal Proceedings.									37
Item 1A. Risk Factors.									38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.									38
Item 3. Defaults Upon Senior Securities.									38
Item 4. Mine Safety Disclosures.									38
Item 5. Other Information.									38
Item 6. Exhibits.									39
SIGNATURES									40


	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
Revenues:
Products	$	309	$	498	$	759	$	994
Services	512		811		1,277		1,661
Total Revenues	821		1,309		2,036		2,655

Costs and Expenses:
Cost of Products	253		467		645		935
Cost of Services	356		552		877		1,166
Research and Development	23		36		56		72
Selling, General and Administrative	223		247		471		478
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)
Total Costs and Expenses	1,318		1,427		3,355		3,074

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

Other Expense:
Interest Expense, Net	(59)		(160)		(117)		(315)
Reorganization Items	—		—		(9)		—
Other Expense, Net	(11)		(1)		(36)		(10)

Loss Before Income Taxes	(567)		(279)		(1,481)		(744)
Income Tax Provision	(12)		(33)		(56)		(45)
Net Loss	(579)		(312)		(1,537)		(789)
Net Income Attributable to Noncontrolling Interests	2		4		10		8
Net Loss Attributable to Weatherford	$	(581)	$	(316)	$	(1,547)	$	(797)

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


	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
Net Loss	$	(579)	$	(312)	$	(1,537)	$	(789)
Foreign Currency Translation Adjustments	29		30		(66)		63



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



(Dollars and shares in millions, except par value)	6/30/2020		12/31/2019
	(Unaudited)
Assets:
Cash and Cash Equivalents	$	680	$	618
Restricted Cash	76		182
Accounts Receivable, Net of Allowance for Credit Losses of $25 at June 30, 2020 and $0 at December 31, 2019	927		1,241
Inventories, Net	862		972
Other Current Assets	382		440
Total Current Assets	2,927		3,453

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
Operating Lease Right-of-Use Assets	155		256
Other Non-Current Assets	85		109
Total Assets	$	5,409	$	7,293

Liabilities:
Short-term Borrowings and Current Portion of Long-term Debt	32		13
Accounts Payable	384		585
Accrued Salaries and Benefits	269		270
Income Taxes Payable	203		205
Current Portion of Operating Lease Liabilities	73		79
Other Current Liabilities	465		520
Total Current Liabilities	1,426		1,672

Long-term Debt	2,148		2,151
Operating Lease Liabilities	195		213
Other Non-Current Liabilities	335		341
Total Liabilities	$	4,104	$	4,377



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	$	—	$	—
Capital in Excess of Par Value	2,897		2,897
Retained Deficit	(1,573)		(26)
Accumulated Other Comprehensive Income (Loss)	(57)		9
Weatherford Shareholders’ Equity	1,267		2,880
Noncontrolling Interests	38		36
Total Shareholders’ Equity	1,305		2,916
Total Liabilities and Shareholders’ Equity	$	5,409	$	7,293


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



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:
Accounts Receivable	277		(84)
Inventories	(33)		(87)
Accounts Payable	(197)		(3)
Other, Net	9		(93)
Net Cash Provided by (Used in) Operating Activities	61		(478)

Cash Flows From Investing Activities:
Capital Expenditures for Property, Plant and Equipment	(73)		(114)
Proceeds from Disposition of Assets	8		45
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	5		—
Net Cash Provided by (Used in) Investing Activities	(86)		223

Cash Flows From Financing Activities:



Repayments of Long-term Debt	(5)		(17)
Borrowings (Repayments) of Short-term Debt, Net	7		298


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

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

Supplemental Cash Flow Information:

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


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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered


	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


(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)


(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)	2020		2021		2022		2023		Thereafter		Total
Service Revenue	$	43	$	27	$	33	$	32	$	35	$	170



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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 prior Exhibit 10.7 originally filed with the Company’s Current Report on Form 8-K filed on December 18, 2019 with the revised Exhibit 10.7 filed herewith.


			Weatherford International plc

Date:	August 14, 2020	By:	/s/ Karl Blanchard
			Karl Blanchard
			Interim Chief Executive Officer, Executive Vice President, Principal Financial Officer and Chief Operating Officer



Date:	August 14, 2020	By:	/s/ Stuart Fraser
			Stuart Fraser
			Vice President and
			Chief Accounting Officer


(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


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


	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