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What changed in Weatherford International plc's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Weatherford International plc's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+286 added−262 removedSource: 10-K (2024-02-07) vs 10-K (2023-02-08)

Top changes in Weatherford International plc's 2023 10-K

286 paragraphs added · 262 removed · 201 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

48 edited+11 added−10 removed27 unchanged
Biggest changeWeatherholt (b) 45 Executive Vice President, General Counsel, and Chief Compliance Officer of Weatherford International plc, since July 2020 Senior Vice President and General Counsel of Arena Energy, L.P., from September 2019 to July 2020 Executive Vice President, General Counsel, and Corporate Secretary at Midstates Petroleum Company, Inc., from February 2015 to August 2019 Joseph Mongrain 64 Executive Vice President and Chief People Officer of Weatherford International plc, since November 2021 Senior Vice President and Chief Human Resources Officer of Weatherford International plc, from March 2021 to November 2021 Vice President Human Resources of Anadarko Petroleum Corporation from September 2016 to August 2019 Desmond J.
Biggest changeWeatherholt (a) 46 Executive Vice President, General Counsel, and Chief Compliance Officer of Weatherford International plc, since July 2020 Senior Vice President and General Counsel of Arena Energy, L.P., from September 2019 to July 2020 Executive Vice President, General Counsel, and Corporate Secretary at Midstates Petroleum Company, Inc., from February 2015 to August 2019 Richard D.
Business Weatherford International plc, an Irish public limited company, together with its subsidiaries (“Weatherford,” the “Company,” “we,” “us” and “our”), is a leading global energy services company providing equipment and services used in the drilling, evaluation, well construction, completion, production, intervention and responsible abandonment of wells in the oil and natural gas exploration and production industry as well as new energy platforms.
Weatherford International plc, an Irish public limited company, together with its subsidiaries (“Weatherford,” the “Company,” “we,” “us” and “our”), is a leading global energy services company providing equipment and services used in the drilling, evaluation, well construction, completion, production, intervention, and responsible abandonment of wells in the oil and natural gas exploration and production industry as well as new energy platforms.
We believe that ensuring we have the right talent in place is essential to delivering positive results for the business. We remain focused on developing our talent through training, competency, and mentoring, as well as attracting diverse and qualified individuals who will bring a fresh perspectives and skill sets to the team.
We believe that ensuring we have the right talent in place is essential to delivering positive results for the business. We remain focused on developing our talent through training, competency, and mentoring, as well as attracting diverse and qualified individuals who will bring fresh perspectives and skill sets to the team.
Weatherford has aligned our technology development and operations around these objectives and expanded its role as a market leading provider of solutions that assist our customers in addressing their key operational challenges not just in conventional reservoirs but also in mature fields, unconventionals, offshore, and in digitalization and automation.
Weatherford has aligned our technology development and operations around these objectives and expanded our role as a market leading provider of solutions that assist our customers in addressing their key operational challenges not just in conventional reservoirs but also in mature fields, unconventionals, offshore, and in digitalization and automation.
Russia Ukraine Conflict On February 24, 2022, the military conflict between Russia and Ukraine (“Russia Ukraine Conflict”) began and in response, we evaluated, and continue to evaluate, our operations, with the immediate priority being centered on the safety and well-being of our employees in the impacted regions, as well as operating in full compliance with applicable international laws and sanctions.
Russia Ukraine Conflict On February 24, 2022, the military conflict between Russia and Ukraine (“Russia Ukraine Conflict”) began and in response we evaluated, and continue to evaluate, our operations, with the priority being centered on the safety and well-being of our employees in the impacted regions, as well as operating in full compliance with applicable international laws and sanctions.
As many areas of our business rely on patents and proprietary technology, we seek to protect and defend our intellectual property through trade secrets and patent protection both inside and outside the U.S. for products and methods that we believe to have commercial significance.
As many areas of our business rely on proprietary technology, we seek to protect and defend our intellectual property through trade secrets and patent protection both inside and outside the U.S. for products and methods that we believe to have commercial significance.
Markets Demand for our industry’s products and services is driven by many factors, including commodity prices, the number of oil and gas rigs and wells drilled, depth and drilling conditions of wells, number of well completions, age of existing wells, reservoir depletion, regulatory environment and the level of workover activity worldwide.
Markets Demand for our industry’s products and services is driven by many factors, including commodity prices, the number of oil and gas rigs and wells drilled, depth and drilling conditions of wells, number of well completions, age of existing wells, reservoir depletion, regulatory environments and the level of workover activity worldwide.
Our 2022 expenditures to comply with environmental laws and regulations were not material, and we currently do not expect the cost of compliance with environmental laws and regulations for 2023 to be material. We continuously monitor and strive to maintain compliance with changes in laws and regulations that impact our business.
Our 2023 expenditures to comply with environmental laws and regulations were not material, and we currently do not expect the cost of compliance with environmental laws and regulations for 2024 to be material. We continuously monitor and strive to maintain compliance with changes in laws and regulations that impact our business.
Weatherford International plc – 2022 Form 10-K | 7 Table of Contents Item 1 | Business Executive Officers of Weatherford The following table sets forth, as of February 8, 2023, the names and ages of the executive officers of Weatherford, including all offices and positions held by each for at least the past five years.
Weatherford International plc – 2023 Form 10-K | 7 Table of Contents Item 1 | Business Executive Officers of Weatherford The following table sets forth, as of February 7, 2024, the names and ages of the executive officers of Weatherford, including all offices and positions held by each for at least the past five years.
Our Diversity, Equity, and Inclusion (“DE&I”) Program is a core element of our One Weatherford culture. Through our DE&I efforts, we aim to provide learning, engagement, and philanthropic opportunities to help our people and our communities flourish. Our commitment to embedding our DE&I Program into our organization is championed from the Executive team to the frontline employees.
Our Diversity, Equity, and Inclusion (“DE&I”) Program is a core element of our One Weatherford culture. Our DE&I efforts aim to provide learning, engagement, and philanthropic opportunities to help our people and communities flourish. The executive team and frontline employees champion our commitment to embedding our DE&I Program into our organization.
The performance of the RAP and related expenses are scheduled to be performed over a twenty to thirty-year period and, may cost as much as $11 million, all of which is recorded as an undiscounted obligation on the Consolidated Balance Sheets as of December 31, 2022.
The performance of the RAP and related expenses are scheduled to be performed over a twenty to thirty-year period and, may cost as much as $11 million, all of which were recorded as an undiscounted obligation on the Consolidated Balance Sheets as of December 31, 2022, and remains unchanged as of December 31, 2023.
Some of our operations are subject to union contracts and these contracts cover approximately 13% of our employees.
Some of our operations are subject to union contracts and these contracts cover approximately 17% of our employees.
The SEC maintains a website that contains our reports, proxy and information statements, and our other SEC filings. The address of that site is www.sec.gov. Strategy Our goal is to create and deliver value for our shareholders through industry cycles by creating sustainable profitability that enables cash flow generation in our products and services.
The SEC maintains a website that contains our reports, proxy and information statements, and our other SEC filings. The address of that site is www.sec.gov. Strategy Our goal is to create and deliver value for our shareholders throughout industry cycles by creating sustainable profitability that enables cash flow generation from our products and services regardless of market conditions.
In addition to our commitment to operating sustainably with safety, quality, and integrity, our actions are driven by our Core Values: • Passion: We are energized by our work and inspired to make a positive impact in our industry, for our customers, across our Company, and in our communities; • Accountability: We operate with integrity, enable our people and teams to be successful, and aim to be true to our word; • Innovation: We are driven to deliver advancements that propel our Company, industry, and customers forward; and • Value Creation: We aspire to achieving long-term value for all our stakeholders by providing compelling and unique benefits through technology differentiation and operational excellence.
In addition to our commitment to operating sustainably with safety, quality, and integrity, we are also focused on recruiting, developing, and promoting an employee culture that revolves around the following Core Values: • Passion: We are energized by our work and inspired to make a positive impact in our industry, for our customers, across our Company, and in our communities; • Accountability: We operate with integrity, enable our people and teams to be successful, and aim to be true to our word; • Innovation: We are driven to deliver advancements that propel our Company, industry, and customers forward; and • Value Creation: We aspire to achieving long-term value for all our stakeholders by providing compelling and unique benefits through technology differentiation and operational excellence.
Saligram 51 President and Chief Executive Officer of Weatherford International plc, since October 2020 Senior Vice President and Chief Operating Officer of Exterran Corporation from August 2018 to September 2020 Senior Vice President Global Services of Exterran Corporation from August 2016 to August 2018 Arunava Mitra 50 Executive Vice President and Chief Financial Officer of Weatherford International plc, since January 2023 Executive Vice President and Chief Financial Officer of Mitsubishi Power Americas Inc. from October 2021 to December 2022 Executive Vice President and Chief Financial Officer of Mitsubishi Hitachi Power Systems of Americas Inc. from October 2014 to October 2021 Charles W.
Saligram 52 President and Chief Executive Officer of Weatherford International plc, since October 2020 Senior Vice President and Chief Operating Officer of Exterran Corporation from August 2018 to September 2020 Arunava Mitra 51 Executive Vice President and Chief Financial Officer of Weatherford International plc, since January 2023 Executive Vice President and Chief Financial Officer of Mitsubishi Power Americas Inc. from October 2021 to December 2022 Executive Vice President and Chief Financial Officer of Mitsubishi Hitachi Power Systems of Americas Inc. from October 2014 to October 2021 Scott C.
Weatherholt was the General Counsel at Midstates Petroleum Company, Inc. when the company filed for bankruptcy protection on May 1, 2016 in the Federal Bankruptcy Court for the Southern District of Texas (Houston Division) and served the Weatherford International plc – 2022 Form 10-K | 8 Table of Contents Item 1 | Business company before, during and after its bankruptcy.
Weatherholt was the General Counsel at Midstates Petroleum Company, Inc. when the company filed for bankruptcy protection on May 1, 2016 in the Federal Bankruptcy Court for the Southern District of Texas (Houston Division) and served the company before, during and after its bankruptcy.
In the United States, we continue to raise funds and awareness to find a cure for Multiple Sclerosis (“MS”) through the MS Society and through our annual Weatherford Walks event, we raised more than $400,000 benefiting a number of local organizations.. Employee Statistics As of December 31, 2022, Weatherford had approximately 17,700 employees globally, located in 75 different countries.
In the United States, we continue to raise funds and awareness to find a cure for Multiple Sclerosis (“MS”) through the MS Society and through our annual Weatherford Walks event, we raised approximately $500,000 benefiting a number of local not-for-profit organizations. Employee Statistics As of December 31, 2023, Weatherford had approximately 18,500 employees globally.
Customers continue to seek, test and use production-enabling technologies at an increasing rate. We invest substantial resources into building our technology offerings, which enable our customers to evaluate, develop and produce from their oil and natural gas reservoirs more efficiently. Our products and services enable our customers to increase production rates while reducing their costs of drilling and production.
Customers continue to seek, test and use technologies that accelerate and optimize production at an increasing rate. We invest substantial resources into building our technology offerings, which enable our customers to evaluate, develop and produce from their oil and natural gas reservoirs more efficiently.
Mills 50 Senior Vice President and Chief Accounting Officer of Weatherford International plc, since November 2021 (Interim Chief Financial Officer August 2022 to January 2023) Vice President and Chief Accounting Officer of Weatherford International plc, from March 2021 to November 2021 Segment Compliance Manager, Construction Industries Segment, Caterpillar Inc., from July 2020 to March 2021 Division Chief Financial Officer, Integrated Components and Solutions Division, Caterpillar Inc., from September 2018 to July 2020 Finance Director, Caterpillar Brasil Ltda., Caterpillar Inc., from January 2015 to August 2018 (a) Prior to joining Weatherford, Mr.
Mills 51 Senior Vice President and Chief Accounting Officer of Weatherford International plc, since November 2021 (Interim Chief Financial Officer August 2022 to January 2023) Vice President and Chief Accounting Officer of Weatherford International plc, from March 2021 to November 2021 Segment Compliance Manager, Construction Industries Segment, Caterpillar Inc., from July 2020 to March 2021 Division Chief Financial Officer, Integrated Components and Solutions Division, Caterpillar Inc., from September 2018 to July 2020 Weatherford International plc – 2023 Form 10-K | 8 Table of Contents Item 1 | Business (a) Prior to joining Weatherford, Mr.
We also expanded participation across all employee levels and regions in the Women of Weatherford employee resource group which seeks to engage, support, empower, and inspire women to foster professional growth, advancement, and leadership within Weatherford.
In addition, we expanded participation in the Women of Weatherford (“WOW”), an employee resource group that seeks to engage, support, empower, and inspire women to foster professional growth and advancement across our regions and employee levels.
DRE offerings range from early well planning to reservoir management through innovative tools and expert engineering to optimize reservoir access and productivity. Managed Pressure Drilling helps to manage wellbore pressures to optimize drilling performance.
Products and Services Drilling and Evaluation (“DRE”) offers a suite of services including managed pressure drilling, drilling services, wireline and drilling fluids. DRE offerings range from early well planning to reservoir management through innovative tools and expert engineering to optimize reservoir access and productivity. Managed Pressure Drilling helps to manage wellbore pressures to optimize drilling performance.
Research, Development and Patents We maintain world-class technology and training centers throughout the world. Additionally, we have research, development and engineering teams focused on developing new technologies and improving existing products and services to meet customer demands for improved drilling performance, well integrity, and enhanced reservoir productivity, with emphasis on efficiency, reliability, safety and the environment.
Weatherford International plc – 2023 Form 10-K | 4 Table of Contents Item 1 | Business Research, Development and Patents In addition to maintaining world-class technology and training centers throughout the world, we have research, development, and engineering teams focused on developing new technologies and improving existing products and services to meet customer demands for improved drilling performance, well integrity, and enhanced reservoir productivity, with emphasis on efficiency, reliability, safety and the environment.
Our cementation engineers analyze customer requirements and provide software enabled design input from pre-job planning to installation. Completions offer customers a comprehensive line of completion tools, such as safety valves, production packers, downhole reservoir monitoring, flow control, isolation packers, multistage fracturing systems and sand-control technologies that set the stage for maximum production with minimal cost per barrel.
Completions offer customers a comprehensive line of completion tools, such as safety valves, production packers, downhole reservoir monitoring, flow control, isolation packers, multistage fracturing systems and sand-control technologies that set the stage for maximum production with minimal cost per barrel.
All of our segments are enabled by a suite of digital monitoring, control and optimization solutions using advanced analytics to provide safe, reliable and efficient solutions throughout the well life cycle, including responsible abandonment. Products and Services Drilling and Evaluation (“DRE”) offers a suite of services including managed pressure drilling, drilling services, wireline and drilling fluids.
All of our segments are enabled by a suite of digital monitoring, control and optimization solutions using advanced analytics to provide safe, reliable and efficient solutions throughout the well life cycle, including responsible abandonment at the end of the well’s productive life.
We offer our services and technologies in relation to the well life cycle and have three reportable segments: (1) Drilling and Evaluation (2) Well Construction and Completions, and (3) Production and Intervention.
Our products and services are designed to enable our customers to increase production rates while reducing their costs of drilling and production. Reportable Segments We offer our services and technologies in relation to the well life cycle and have three reportable segments: (1) Drilling and Evaluation (2) Well Construction and Completions, and (3) Production and Intervention.
Digital Solutions (previously Production Automation & Software) provides software, automation and flow measurement solutions. For our customers’ drilling operations, the solutions deliver data aggregation, engineering, and optimization including performance analytics in real-time.
Digital Solutions provides software, automation, and flow measurement solutions. For our customers’ drilling operations, the solutions deliver data aggregation, engineering, and optimization including performance analytics in real-time. For our customers’ production operations, the solutions provide flow measurement, surveillance, and control to deliver production optimization by integrating workflows and data for the well, surface facilities and the reservoir.
Weatherford International plc – 2022 Form 10-K | 4 Table of Contents Item 1 | Business Seasonality The widespread geographical locations of our operations serve to mitigate the overall impact of the seasonal nature of our business in any particular geographic region. Weather and natural phenomena can temporarily affect the level of demand for our products and services.
Seasonality Weather and natural phenomena can temporarily affect the level of demand for our products and services; however, the widespread geographical locations of our operations serve to mitigate the overall impact on our business in any particular geographic region.
Unpredictable or unusually harsh weather conditions could lengthen the periods of reduced activity and have a detrimental impact on our results of operations. In addition, customer spending patterns for our products and services may result in higher activity in the fourth quarter of each calendar year as our customers seek to fully utilize their annual budgets.
In addition, customer spending patterns for our products and services may result in higher activity in the fourth quarter of each calendar year as our customers seek to fully utilize their annual budgets.
As of December 31, 2022, our Russia operations include $30 million in cash, $98 million in other current assets, $65 million in property, plant and equipment and other non-current assets, and $52 million in liabilities.
As of December 31, 2023, our Russia operations included $62 million in cash, $94 million in other current assets, $76 million in property, plant and equipment and other non-current assets, and $62 million in liabilities.
We have obligations and expect to incur capital, operating and maintenance, and remediation expenditures, as a result of compliance with environmental laws and regulations.
Weatherford International plc – 2023 Form 10-K | 5 Table of Contents Item 1 | Business We have obligations and expect to incur capital, operating and maintenance, and remediation expenditures, as a result of compliance with environmental laws and regulations.
Diversity, Equity and Inclusion We understand the importance of operating in a collaborative and inclusive manner across all levels of our organization, embracing the full spectrum of diversity among our employees and recognizing the strength and competitive advantages that our differences afford us as a Company.
Weatherford International plc – 2023 Form 10-K | 6 Table of Contents Item 1 | Business Diversity, Equity and Inclusion We understand the importance of operating collaboratively and inclusively across all levels of our organization, embracing the full spectrum of diversity among our employees, and recognizing the strength and competitive advantages our differences afford us as a Company.
Many of our businesses, including those of our predecessor companies, have been operating for more than 50 years. We conduct operations in approximately 75 countries, answering the challenges of the energy industry with 345 operating locations including manufacturing, research and development, service, and training facilities.
We conduct business in approximately 75 countries, answering the challenges of the energy industry with 335 operating locations including manufacturing, research and development, service, and training facilities.
Additionally, the impact of consolidation and acquisitions of our competitors is difficult to predict and may harm our business as a result. Raw Materials We purchase a wide variety of raw materials, as well as parts and components. We integrate products and components produced by other parties into the products and systems we sell.
The energy services business is highly competitive, which may adversely affect our ability to succeed. Additionally, the consolidations of and acquisitions by our competitors are difficult to predict and may impact our business as a result. Raw Materials We purchase a wide variety of raw materials, as well as parts and components.
Weatherford has significant expertise, trade secrets, intellectual property and know-how with respect to the design, manufacturing and use of our equipment and providing our services.
We also develop technologies for new energy markets, in addition to the existing oil and gas markets in which we traditionally operate. Weatherford has significant expertise, trade secrets, intellectual property and know-how with respect to the design, manufacturing, and use of our equipment and the provision of our services.
We continually evaluate our supplier portfolio to reduce our risk from sole sourcing and to ensure the availability of resources and raw materials and in supporting our sustainability efforts. Customers Substantially all of our customers are engaged in the energy industry and include national oil companies, international and independent oil and natural gas companies as well as new energy companies.
Customers Substantially all of our customers are engaged in the energy industry and include national oil companies, international and independent oil and natural gas companies as well as new energy companies.
Spring months in Canada and winter months in the North Sea and Russia typically have lower demand, driving a negative impact on operations. Additionally, heavy rains, hurricanes, unusual extreme freezes or other climate changes may impact our results.
Spring months in Canada, summer in the Southern hemisphere, and winter months in the North Sea and Russia typically have lower demand, driving a negative impact on operations.
In 2022 we continued to advance our program and awareness throughout the organization, including creating Weatherford International plc – 2022 Form 10-K | 6 Table of Contents Item 1 | Business DE&I strategies for each of our regions, rolling out unconscious bias training, and conducting celebrations across the Company that foster collaboration and important conversations regarding DE&I.
In 2023, we continued to advance our program and awareness throughout the organization, including creating DE&I strategies for each region and conducting celebrations across the Company that foster collaboration and meaningful conversations regarding DE&I.
Pressure Pumping Services offers advanced chemistry-based solutions and associated pumping services for safe and effective production enhancements. In select international markets, we provide pressure pumping and reservoir stimulation services, including acidizing, fracturing, cementing and coiled-tubing intervention. Competition We provide our products and services worldwide and compete in a variety of distinct segments with a number of global and regional competitors.
In select international markets, we provide pressure pumping and reservoir stimulation services, including acidizing, fracturing, cementing, and coiled-tubing intervention. Competition We provide our products and services worldwide and compete with a number of global and regional competitors. Our principal competitors include SLB, Halliburton, Baker Hughes, National Oilwell Varco, ChampionX and Expro Group Holdings.
Technology is critical to the energy services marketplace as a result of the maturity of the world’s oil and natural gas reservoirs, declining production rates and the focus on complex well designs, in both land and offshore markets. With energy security being a driver for many customers and countries, our technology serves as an enabler in that regard.
Weatherford International plc – 2023 Form 10-K | 2 Table of Contents Item 1 | Business Technology is critical to the energy services marketplace as a result of the maturity of the world’s oil and natural gas reservoirs, declining production rates and the nature of complex well designs, in both land and offshore markets.
We include conventional rig services, automated rig systems, real-time torque-monitoring and remote viewing of the makeup and breakout verification process. Cementation Products enable operators to centralize the casing throughout the wellbore and control the displacement of cement and other fluids for proper zonal isolation. Specialized equipment includes plugs, float and stage equipment and torque-and-drag reduction technology.
Cementation Products enable operators to centralize the casing throughout the wellbore and control the displacement of cement and other fluids for proper zonal isolation. Specialized equipment includes plugs, float and stage equipment and torque-and-drag reduction technology. Our cementation engineers analyze customer requirements and provide software enabled design input from pre-job planning to installation.
Well Services provides through tubing products and services which ensure consistent delivery of well solutions that extend the economic life of our customer's assets. Production and Intervention (“PRI”) offers production optimization technologies through the Company’s ability to design and deliver a complete production ecosystem ranging from boosting productivity to responsible abandonment for our customers.
Production and Intervention (“PRI”) offers production optimization technologies through the Company’s ability to design and deliver a complete production ecosystem ranging from boosting productivity to responsible well abandonment for our customers. The primary offerings are intervention services & drilling tools, artificial lift, digital solutions, sub-sea intervention and pressure pumping services in select markets.
We believe our culture of aligning our compensation programs with our strategic priorities supports a cohesive drive towards value creation for all our stakeholders. In the past year, our Company underwent a strategic project to implement a new job structure that provides a consistent methodology and framework to support our organizational goals.
We believe our culture of aligning our compensation programs with our strategic priorities supports a cohesive drive towards value creation for all our stakeholders.
In addition, we have safety programs that are designed to educate employees and our Stop Work Authority program empowers them to intervene when they see unsafe behaviors or conditions. Throughout the past year, we continued to focus on the safety and well-being of our employees as we navigated challenging circumstances including geopolitical events and the continuation of the COVID-19 pandemic.
In addition, we have safety programs that are designed to educate employees and our Stop Work Authority program empowers them to intervene when they see or anticipate unsafe behaviors or conditions. Compensation We believe in aligning our employees’ compensation with the positive performance of our Company and returns realized for our shareholders.
Pivotal to our culture and ensuring we fulfill our mission and vision is our “One Weatherford” spirit – individually, we are impressive, and together, we are unstoppable. Our One Weatherford spirit motivates our global teams to collaborate for shared success and to seek out unique perspectives, fostering a culture where everyone can grow and contribute.
Our One Weatherford spirit motivates our global teams to collaborate for shared success and to seek out unique perspectives, fostering a culture where everyone can grow and contribute. Our global team comprises experts in various disciplines, including engineering, oilfield services support, and multiple corporate functions.
We recorded $6 million as an undiscounted obligation on the Consolidated Balance Sheets as of December 31, 2021. Human Capital Management Focus on People and Culture At Weatherford, our global team is driven to further our mission – producing energy for today and tomorrow.
Human Capital Management Focus on People and Culture At Weatherford, our global team is driven to further our mission – producing energy for today and tomorrow. Pivotal to our culture and ensuring we fulfill our mission and vision is our “One Weatherford” spirit – individually, we are impressive, and together, we are unstoppable.
For our customers’ production operations, the solutions provide flow measurement, surveillance and control to deliver production optimization by integrating workflows and data for the well, surface facilities and the reservoir. Sub-Sea Intervention provides electrical and hydraulic power transmission to subsea equipment in order to facilitate workovers in deep and ultra-deep water operations in select markets.
Sub-Sea Intervention provides electrical and hydraulic power transmission to subsea equipment in order to facilitate workovers and abandonment in deep and ultra-deep-water operations in select markets. Pressure Pumping Services offers advanced chemistry-based solutions and associated pumping services for safe and effective production enhancements.
Competition is based on a number of factors, including performance, safety, quality, reliability, service, price, response time and, in some cases, depth and breadth of products. The energy services business is highly competitive, which may adversely affect our ability to succeed.
We also compete with various other suppliers who provide products and services within a smaller cross section of our product line portfolio either locally, regionally, or globally. Competition is based on a number of factors, including performance, safety, quality, reliability, service, price, response time and, in some cases, depth and breadth of products.
We continue to monitor and intend to remain in full compliance with the evolving sanctions landscape and will continue to fulfill existing contractual obligations within applicable laws and sanctions. Revenues in Russia were approximately 7% of our total revenues for the years ended December 31, 2022, 2021 and 2020.
Revenues in Russia were approximately 6% of our total revenue for the year ended December 31, 2023, and were approximately 7% of our total revenues for the years ended December 31, 2022 and 2021.
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Weatherford International plc – 2022 Form 10-K | 2 Table of Contents Item 1 | Business Reportable Segments The Company's chief operating decision maker, our chief executive officer, regularly reviews information to make operating decisions, allocate resources and assess performance of the business.
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Our focus is on accelerating the strategic deployment of our five strategic priorities of: • Customer Experience enhancement; • Creating the Future through innovation of our products, services and solutions; • Organizational Vitality to hardness employee engagement, attract and retain talent, develop our people and increase leadership effectiveness; • Lean Operations to simplify and drive waste out of the business for increased productivity, quality, decreased cycle-times and for improved service levels, and; • Financial Performance and value throughout industry cycles with sustainable profitability and cash flow generation.
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The primary offerings are intervention services & drilling tools, artificial lift, digital solutions (previously production automation Weatherford International plc – 2022 Form 10-K | 3 Table of Contents Item 1 | Business & software), sub-sea intervention and pressure pumping services in select markets.
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We include conventional rig services, automated rig systems, real-time torque-monitoring, and remote viewing of the makeup and breakout verification process, all underscored by our technology and procedural protocols to provide casing and tubular running operations with superior efficiency, and reduced health, safety, and environmental risks.
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Our principal competitors include SLB, Halliburton, Baker Hughes, National Oilwell Varco, Nabors Industries, ChampionX and Expro Group Holdings. We also compete with various other regional suppliers that provide a range of equipment and services typically focused on local or regional markets.
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Weatherford International plc – 2023 Form 10-K | 3 Table of Contents Item 1 | Business Well Services provides through tubing products and services which ensure consistent delivery of well solutions that extend the economic life of our customer's assets.
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In response to the Russia Ukraine Conflict, the United States, the European Union, the United Kingdom, Switzerland and other countries have imposed certain restrictions and broad sanctions against Russia, certain Russian individuals and entities and certain activities involving Russia or such persons or entities.
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We integrate products and components produced by other parties into the products and systems we sell. We continually evaluate and invest in our integrated supply chain in order to reduce materials constraints and impacts from inflationary pressures, while improving lead times and supporting our sustainability efforts.
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As the Russia Ukraine Conflict and related sanctions persist or are escalated, our business may be negatively impacted, potentially lowering revenues or triggering asset impairments in Russia.
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Additionally, heavy rains, hurricanes, unusual wildfires, extreme freezes or other unpredictable or unusually harsh natural phenomena could lengthen the periods of reduced activity and have a detrimental impact on our results of operations.
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Weatherford International plc – 2022 Form 10-K | 5 Table of Contents Item 1 | Business Our global team comprises experts in various disciplines, including engineering, oilfield services support, and multiple corporate functions.
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As of December 31, 2022, our Russia operations included $30 million in cash, $98 million in other current assets, $65 million in property, plant and equipment and other non-current assets, and $52 million in liabilities. We continue to closely monitor and evaluate the developments in Russia as well as any changes in international laws and sanctions.
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Compensation We believe in aligning our employees’ compensation with the positive performance of our Company and returns realized for our shareholders.
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We believe that operational complexity will increase over time and therefore continually evaluate these potential impacts on our business.
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The new job structure creates a foundation for defined career paths, learning and development, total rewards (i.e., benefits, compensation, and other rewards), workforce planning, and succession planning. We will continue to build out this project throughout the next year as we focus on further enhancing our compensation programs.
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As such, we continue to actively evaluate various options, strategies and contingencies with respect to our business in Russia, including, but not limited to: • continuing the business in compliance with applicable laws and sanctions; • evaluating the continued use or change in products, equipment and service offerings we currently provide in Russia; • curtailing or winding down our activities over time; • potentially divesting some or all of our assets or businesses in Russia, which could include the option of re-entering the country if and when sanctions or applicable laws would allow for the same and; • potential nationalization of the business.
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(a) 54 Executive Vice President and Chief Operations Officer of Weatherford International plc, since January 2023 Executive Vice President of Operational Excellence of Weatherford International plc, from September 2022 to January 2023 President and Chief Executive Officer of Strike, LLC from June 2021 to September 2022 Chief Operating Officer of Oceaneering International from June 2019 to June 2021 Chairman of the Board, President and Chief Executive Officer of Fairfield Geotechnologies from March 2018 to June 2019 President and Chief Executive Officer of Fairfield Geotechnologies from June 2015 to March 2018 Scott C.
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We trained our employees on unconscious bias and continued our focus on NextGen, our field engineering graduate program designed to accelerate the development of defined competencies and skillsets to prepare participants for future leadership positions, as well as our Localization programs for select customers to develop local talent.
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Davison was the President and Chief Executive Officer of Strike, LLC from June 2021 to September 2022 when the company filed for bankruptcy protection on December 6, 2021 in the Federal Bankruptcy Court for the Southern District of Texas (Houston Division) and served the company before, during and after its bankruptcy. (b) Prior to joining Weatherford, Mr.
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Ward 55 Executive Vice President, Global Field Operations of Weatherford International plc, since January 2024 Senior Vice President, Subsea Production Systems of Baker Hughes Co, from May 2021 to December 2022 Senior Vice President, Strategic Planning & Solutions of Baker Hughes Co, from October 2019 to May 2021 Vice President, Marketing, Strategy & Solutions of Baker Hughes Co, from August 2017 to October 2019 David J.
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Reed 50 Executive Vice President and Chief Commercial Officer of Weatherford International plc, since January 2024 Senior Vice President and Chief Commercial Officer of Weatherford International plc, from August 2021 to December 2023 Vice President of Sales, Tenaris, from July 2015 to January 2021 Depinder Sandhu 48 Executive Vice President, Global Product Lines of Weatherford International plc, since January 2024 Senior Vice President, Global Product Lines of Weatherford International plc, from December 2021 to December 2023 Senior Director, Corporate Strategy of Weatherford International plc, from April 2021 to November 2021 Vice President, Business Development & Strategy of Weatherford International plc, from July 2020 to March 2021 Director, Service Delivery of Weatherford International plc, from November 2017 to May 2020 Desmond J.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

46 edited+10 added−4 removed126 unchanged
Biggest changeThe Credit Agreement and the indentures governing our 11.0% Senior Notes maturing on December 1, 2024 (“Exit Notes”) and 6.5% Senior Secured Notes maturing on September 15, 2028 (“2028 Senior Secured Notes”) and our 8.625% Senior Notes maturing April 30, 2030 (the “2030 Senior Notes”), contain certain restrictive covenants that may impose significant operating and financial restrictions on us and may limit our ability to engage in acts that we may believe to be in our long-term best interest, including restrictions on our ability to: • incur additional indebtedness; • pay dividends and make other distributions; • prepay, redeem or repurchase certain debt; • make loans and investments; and • sell assets and incur liens.
Biggest changeThe Credit Agreement and the indentures governing our 6.5% Senior Secured Notes maturing on September 15, 2028 (“2028 Senior Secured Notes”) and our 8.625% Senior Notes maturing April 30, 2030 (the “2030 Senior Notes”), contain certain restrictive or limiting covenants that may impose significant operating and financial restrictions on us and may limit our ability to engage in acts that we may believe to be in our long-term best interest, including the following: • restricting additional indebtedness; • restricting or limiting payment of dividends and other distributions; • limiting prepayment, redemption or repurchase certain debt; • limiting making loans and assets and; • limiting selling assets and incur liens These covenants and other restrictions may limit our ability to effectively operate our business, and to execute our growth strategy or take advantage of new business opportunities.
Factors affecting the prices of oil and natural gas include, but are not limited to: • the level of supply and demand for oil and natural gas; • the ability or willingness of the Organization of Petroleum Exporting Countries (“OPEC”) and the expanded alliance (“OPEC+”) and other high oil exporting non-OPEC+ nations to set and maintain oil production levels; • the level of oil and natural gas production in the U.S. and by other non-OPEC+ countries; • oil refining capacity; • shifts in end-customer preferences toward sustainable energy sources, fuel efficiency and the use of natural gas; • the cost of, and constraints associated with, producing and delivering oil and natural gas; • governmental regulations, including the policies of governments regarding the exploration for and production and development of their oil and natural gas reserves; • weather conditions, natural disasters, and health or similar issues, such as pandemics or epidemics; • worldwide political, military, and economic conditions (including impacts from the Russia Ukraine Conflict); and • increased demand for alternative energy and electric vehicles, including government initiatives to promote the use of sustainable, renewable energy sources and public sentiment around alternatives to oil and natural gas.
Factors affecting the prices of oil and natural gas include, but are not limited to: • the level of supply and demand for oil and natural gas; • the ability or willingness of the Organization of Petroleum Exporting Countries (“OPEC”) and the expanded alliance (“OPEC+”) and other high oil exporting non-OPEC+ nations to set and maintain oil production levels; • the level of oil and natural gas production in the U.S. and by other non-OPEC+ countries; • oil refining capacity; • shifts in end-customer preferences toward sustainable energy sources, fuel efficiency and the use of natural gas; • the cost of, and constraints associated with, producing and delivering oil and natural gas; • governmental regulations, including the policies of governments regarding the exploration for and production and development of their oil and natural gas reserves; • weather conditions, unusual wildfires, natural disasters, and health or similar issues, such as pandemics or epidemics; • worldwide political, military, and economic conditions (including impacts from the Russia Ukraine Conflict); and • increased demand for alternative energy and electric vehicles, including government initiatives to promote the use of sustainable, renewable energy sources and public sentiment around alternatives to oil and natural gas.
Operations in countries other than the U.S. are subject to various risks, including: • global political, economic and market conditions, political disturbances, war, terrorist attacks, changes in global trade policies, weak local economic conditions and international currency fluctuations (including the Russia Ukraine Conflict); Weatherford International plc – 2022 Form 10-K | 11 Table of Contents Item 1A | Risk Factors • general global economic repercussions related to U.S. and global inflationary pressures and potential recessionary concerns; • failure to ensure on-going compliance with current and future laws and government regulations, including but not limited to those related to the Russia Ukraine Conflict, and environmental and tax and accounting laws, rules and regulations; • changes in, and the administration of, treaties, laws, and regulations, including in response to issues related to the Russia Ukraine Conflict and the potential for such issues to exacerbate other risks we face; • exposure to expropriation of our assets, deprivation of contract rights or other governmental actions; • social unrest, acts of terrorism, war or other armed conflict; • fraud and political corruption; • varying international laws and regulations; • adequate responses to the COVID-19 pandemic and related restrictions; • confiscatory taxation or other adverse tax policies; • trade and economic sanctions or other restrictions imposed by the European Union, the United Kingdom, the U.S. or other countries, including in response to the Russia Ukraine Conflict; • exposure under the U.S.
Operations in countries other than the U.S. are subject to various risks, including: • global political, economic and market conditions, political disturbances, war, terrorist attacks, changes in global trade policies, weak local economic conditions and international currency fluctuations (including the Russia Ukraine Conflict); Weatherford International plc – 2023 Form 10-K | 11 Table of Contents Item 1A | Risk Factors • general global economic repercussions related to U.S. and global inflationary pressures and potential recessionary concerns; • failure to ensure on-going compliance with current and future laws and government regulations, including but not limited to those related to the Russia Ukraine Conflict, and environmental and tax and accounting laws, rules and regulations; • changes in, and the administration of, treaties, laws, and regulations, including in response to issues related to the Russia Ukraine Conflict and the potential for such issues to exacerbate other risks we face; • exposure to expropriation of our assets, deprivation of contract rights or other governmental actions; • social unrest, acts of terrorism, war or other armed conflict; • fraud and political corruption; • varying international laws and regulations; • adequate responses to a pandemic and related restrictions; • confiscatory taxation or other adverse tax policies; • trade and economic sanctions or other restrictions imposed by the European Union, the United Kingdom, the U.S. or other countries, including in response to the Russia Ukraine Conflict; • exposure under the U.S.
We believe that in addition to the impacts described above, other impacts included or could in the future include, but are not limited to: • Structural shift in the global economy and its demand for oil and natural gas as a result of changes in the way people work, travel and interact, or in connection with a global or regional recession or depression; • Reduction of our global workforce to adjust to market conditions, including severance payments, retention issues, and an inability to hire employees when market conditions improve; • Infections and quarantining of our employees and the personnel of our customers, suppliers and other third parties in areas in which we operate; • Our insurance policies may not cover losses associated with pandemics or similar global health threats; • Litigation risk and possible loss contingencies related to a pandemic and its impact, including with respect to commercial contracts, employment matters, personal injury and insurance arrangements; and • Cybersecurity incidents, as our reliance on digital technologies increases, those digital technologies may become more vulnerable and experience a higher rate of cybersecurity attacks, intrusions or incidents in the current environment of remote connectivity, as well as increased geopolitical conflicts and tensions.
We believe that a future pandemic may result in similar impacts and could also include, but not limited to: • Structural shift in the global economy and its demand for oil and natural gas as a result of changes in the way people work, travel and interact, or in connection with a global or regional recession or depression; • Reduction of our global workforce to adjust to market conditions, including severance payments, retention issues, and an inability to hire employees when market conditions improve; • Infections and quarantining of our employees and the personnel of our customers, suppliers and other third parties in areas in which we operate; • Our insurance policies may not cover losses associated with pandemics or similar global health threats; • Litigation risk and possible loss contingencies related to a pandemic and its impact, including with respect to commercial contracts, employment matters, personal injury and insurance arrangements; and • Cybersecurity incidents, as our reliance on digital technologies increases, those digital technologies may become more vulnerable and experience a higher rate of cybersecurity attacks, intrusions or incidents in the current environment of remote connectivity, as well as increased geopolitical conflicts and tensions.
Weatherford International plc – 2022 Form 10-K | 10 Table of Contents Item 1A | Risk Factors Failure to effectively and timely address the need to operate more sustainably and with a lower carbon footprint and impact could adversely affect our business, results of operations and cash flows.
Weatherford International plc – 2023 Form 10-K | 10 Table of Contents Item 1A | Risk Factors Failure to effectively and timely address the need to operate more sustainably and with a lower carbon footprint and impact could adversely affect our business, results of operations and cash flows.
Weatherford International plc – 2022 Form 10-K | 9 Table of Contents Item 1A | Risk Factors Our fulfillment system relies on a global network of external suppliers and service providers, which may be impacted by macroeconomic conditions and geopolitical conflict and instability.
Weatherford International plc – 2023 Form 10-K | 9 Table of Contents Item 1A | Risk Factors Our fulfillment system relies on a global network of external suppliers and service providers, which may be impacted by macroeconomic conditions and geopolitical conflict and instability.
Severe weather, including extreme weather conditions, has in the past, and could in the future, adversely affect our business and results of operations. Our business has been, and in the future will likely be, affected by severe weather in areas where we operate, which could materially adversely affect our operations.
Severe weather, including extreme weather conditions and unusual wildfires, has in the past, and could in the future, adversely affect our business and results of operations. Our business has been, and in the future will likely be, affected by severe weather and unusual wildfires in areas where we operate, which could materially adversely affect our operations.
If it is determined that IRC Section 7874 is Weatherford International plc – 2022 Form 10-K | 18 Table of Contents Item 1A | Risk Factors applicable, PLC would be a U.S. corporation for U.S. federal income tax purposes, the taxable year of Weatherford US consolidated group could end on or prior to the emergence from bankruptcy, which could result in additional adverse tax consequences.
If it is determined that IRC Section 7874 is applicable, PLC would be a U.S. corporation for U.S. federal income tax purposes, the taxable year of Weatherford US Weatherford International plc – 2023 Form 10-K | 19 Table of Contents Item 1A | Risk Factors consolidated group could end on or prior to the emergence from bankruptcy, which could result in additional adverse tax consequences.
Given the rapidly evolving nature of cybersecurity incidents, there can be no assurance that the controls we have designed and implemented to prevent or limit the effects of cybersecurity incidents or attacks will be sufficient in preventing all such incidents or attacks, or be able to avoid a material impact to our systems as such incidents or attacks occur.
Given the rapidly evolving nature of cybersecurity incidents, there can be no assurance that the controls we have designed and implemented to prevent or limit the effects of cybersecurity incidents or attacks will be sufficient in preventing or limiting the effects of all such incidents or attacks or be able to avoid a material impact to our systems should such incidents or attacks occur.
In addition, an event of default under the Credit Agreement would permit the lenders thereunder to terminate all commitments. Weatherford International plc – 2022 Form 10-K | 15 Table of Contents Item 1A | Risk Factors Failure to attract, retain and develop qualified personnel could impede our operations.
In addition, an event of default under the Credit Agreement would permit the lenders thereunder to terminate all commitments. Weatherford International plc – 2023 Form 10-K | 16 Table of Contents Item 1A | Risk Factors Failure to attract, retain and develop qualified personnel could impede our operations.
We assess our deferred tax assets on a quarterly basis to determine whether a valuation allowance may be required. We have recorded a valuation allowance on substantially all of our deferred tax assets. If a U.S. person is treated as owning at least 10% of our shares, such holder may be subject to adverse U.S. federal income tax consequences.
We assess our deferred tax assets on a quarterly basis to determine whether a valuation allowance may be required. We have recorded a valuation allowance on approximately 90% of our deferred tax assets. If a U.S. person is treated as owning at least 10% of our shares, such holder may be subject to adverse U.S. federal income tax consequences.
Business and Operational Risks A significant portion of our revenue is derived from our operations outside the U.S., which exposes us to risks inherent in doing business in each of the 75 countries in which we operate. The U.S. accounted for 20%, 19% and 20% of revenues in 2022, 2021 and 2020, respectively.
Business and Operational Risks A significant portion of our revenue is derived from our operations outside the U.S., which exposes us to risks inherent in doing business in each of the approximately 75 countries in which we operate. The U.S. accounted for 16%, 20% and 19% of revenues in 2023, 2022 and 2021, respectively.
Recent widespread ransomware attacks and cybersecurity breaches in the U.S. and elsewhere have affected many companies. To date, none of these have had a material impact on us.
Recent widespread cybersecurity incidents and attacks in the U.S. and elsewhere have affected many companies. To date, none of these have had a material impact on us.
Cybersecurity incidents can result in the disclosure of confidential or proprietary customer, supplier or employee information; theft or loss of intellectual property; impairment in our ability to operate or conduct our business; damage to our reputation with our customers, suppliers, employees and the market; failure to meet customer requirements or result in customer dissatisfaction; legal and regulatory exposure, including fines or legal proceedings (including as a result of our failure to make adequate or timely disclosures to the public, government agencies or affected individuals, whether due to delayed discovery or the time it takes to investigate or remediate); damage to equipment (which could cause environmental or safety issues) and other financial costs and losses, including as a result of any remediation efforts.
Cybersecurity incidents can result in the disclosure of confidential or proprietary customer, supplier or employee information; theft or loss of intellectual property; impairment in our ability to operate or conduct our business; damage to our reputation with our customers, suppliers, employees and the market; failure to meet customer requirements or result in customer dissatisfaction; legal and regulatory exposure, including fines or legal proceedings (including as a result of our failure to make adequate or timely disclosures to the public, government agencies or affected individuals); damage to equipment (which could cause environmental or safety issues) and other financial costs and losses, including as a result of any remediation efforts.
Weatherford International plc – 2022 Form 10-K | 16 Table of Contents Item 1A | Risk Factors Our environmental, social and governance commitments and disclosures may expose us to reputational risks and legal liability.
Weatherford International plc – 2023 Form 10-K | 17 Table of Contents Item 1A | Risk Factors Our environmental, social and governance commitments and disclosures may expose us to reputational risks and legal liability.
Low oil and natural gas prices and declines in global demand for oil and natural gas, including reduced demand as a result of the COVID-19 pandemic, have previously led to our customers, including national oil companies and large oil and natural gas exploration and production companies, to greatly reduce planned future capital expenditures.
Low oil and natural gas prices and decline in global demand for oil and natural gas, including reduced demand as a result of a pandemic, have previously led to our customers, including national oil companies and large oil and natural gas exploration and production companies, to greatly reduce planned future capital expenditures.
Climate change, environmental, social and governance and sustainability initiatives may result in regulatory or structural industry changes that could require significant operational changes and expenditures, reduce demand for our products and services and adversely affect our business, financial condition, results of operations, stock price or access to capital markets.
Climate change, environmental, social and governance (“ESG”) and other sustainability initiatives may result in regulatory or structural industry changes that could require significant operational changes and expenditures, reduce demand for our products and services and adversely affect our business, financial condition, results of operations, stock price or access to capital markets. Sustainability initiatives are a growing global movement.
Our indebtedness and liabilities could limit cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our financial obligations. As of December 31, 2022, we had $45 million of short-term and $2.2 billion of long-term debt, all accruing interest.
Our indebtedness and liabilities could limit cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our financial obligations. As of December 31, 2023, we had $168 million of short-term and $1.7 billion of long-term debt, all accruing interest.
These incidents could arise from numerous sources, not all of which would necessarily be within our control, including fraud or malice on the part of third parties, governmental actors, accidental technological failure, electrical or telecommunication outages, failures of computer servers or other damage to our property or assets, human error, complications encountered as existing systems are maintained, repaired, replaced, or upgraded or outbreaks of hostilities or terrorist acts.
These incidents could arise from numerous sources, including those outside our control, including fraud or malice on the part of third parties, governmental actors, accidental technological failure, electrical or telecommunication outages, failures of computer servers or other damage to our property or assets, human error, complications encountered as existing systems are maintained, repaired, replaced, or upgraded or outbreaks of hostilities or terrorist acts.
These information systems and other digital technology may become increasingly more susceptible to sophisticated cybersecurity attacks, incursions or other incidents such as unauthorized access to data and systems, loss or destruction of data (including confidential customer, supplier and employee information), computer viruses, or other malicious code, phishing and cyberattacks, and other similar events.
These information systems and other digital technology are subject to the risk of increasingly sophisticated cybersecurity attacks, incursions or other incidents such as unauthorized access to data and systems, loss or destruction of data (including confidential customer, supplier and employee information), computer viruses, or other malicious code, phishing and cyberattacks, and other similar events.
While Weatherford imposes strict controls on third-party system connectivity to our systems, the threat of an attack via a third-party system is never null. The occurrence of any cybersecurity incident can go unnoticed for a period of time despite efforts to detect and respond in a timely manner.
While Weatherford imposes controls on third-party system connectivity to our systems, the risks from an attack via a third-party remain. The occurrence of a cybersecurity incident can go unnoticed for a period of time despite efforts to detect and respond in a timely manner.
In addition, the OECD has advanced reforms focused on global profit allocation, and implementing a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as the “two pillar plan.” On October 8, 2021, the OECD announced an accord endorsing and providing an implementation plan for the two pillar plan agreed Weatherford International plc – 2022 Form 10-K | 17 Table of Contents Item 1A | Risk Factors upon by 136 nations.
In addition, the OECD has advanced reforms focused on global profit allocation and implementing a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as “Pillar Two.” On October 8, 2021, the OECD announced an accord endorsing and providing an implementation plan for Pillar Two agreed upon by 136 nations.
While the implementation of the accord is uncertain, if legislation is enacted to implement the accord in some or all of the jurisdictions in which we have operations, it could materially increase the amount of taxes we owe, on a retroactive or prospective basis, thereby negatively affecting our results of operations and our cash flows from operations.
This is not expected to materially increase the taxes we owe; however, if future legislation is enacted to implement the accord in some or all the jurisdictions in which we have operations, it could materially increase the amount of taxes we owe, thereby negatively affecting our results of operations and our cash flows from operations.
Any of these events could have an adverse impact on our business, financial condition and results of operations. There may be circumstances in which the interests of our significant shareholders could be in conflict with the interests of our other shareholders.
Any of these events could have an adverse impact on our business, financial condition and results of operations. There may be circumstances in which the interests of our significant shareholders could be in conflict with the interests of our other shareholders. In the aggregate, certain funds associated with our nine largest shareholders own approximately 51% of our outstanding Ordinary Shares.
In addition, the frequency and severity of extreme weather conditions may also materially affect our operations and financial results. Any such extreme weather-related events could have a material adverse effect on our business, financial condition and results of operations.
In addition, the frequency and severity of these events may also materially affect our operations and financial results. Any such events could have a material adverse effect on our business, financial condition and results of operations. Liability claims resulting from catastrophic incidents could have a material adverse effect on our business, financial condition and results of operations.
As cybersecurity incidents and attacks continue to evolve, we may be required to expend significant additional resources and incur significant expenses to continue to modify or enhance our protective measures or to investigate, respond to or remediate any information security vulnerabilities. Any cybersecurity incident could have a material adverse effect on our business, reputation, financial condition and results of operations.
As cybersecurity incidents and attacks continue to evolve, we may be required to expend significant additional resources and incur significant expenses to continue to modify or enhance our protective measures or to investigate, respond to or remediate any information security vulnerabilities.
Our inability to efficiently and effectively execute for our customers and our inability to make timely investments in our people, processes and systems could have an adverse effect on our business, financial condition and results of operations.
Our inability to efficiently and effectively mitigate these risks, or our inability to make timely investments could have an adverse effect on our business, financial condition and results of operations.
Weatherford International plc – 2022 Form 10-K | 12 Table of Contents Item 1A | Risk Factors The effects of the COVID-19 pandemic in 2020 and 2021, including actions taken by businesses and governments to contain the spread of the virus, resulted in a significant reduction in international and U.S. economic activity and severely impacted our business and our industry.
A future pandemic may result in similar impacts. The effects of the COVID-19 pandemic in 2020 and 2021, including actions taken by businesses and governments to contain the spread of the virus, resulted in a significant reduction in international and U.S. economic activity and severely impacted our business and our industry.
As of December 31, 2022, we had $395 million of letters of credit outstanding, consisting of the $195 million under our senior secured letter of credit agreement, as amended (the “Credit Agreement”) and another $200 million under various uncommitted bi-lateral facilities (of which there was $199 million in cash collateral held and recorded in “Restricted Cash” on the Consolidated Balance Sheets).
As of December 31, 2023, we had zero borrowings outstanding under our amended and restated credit agreement (the “Credit Agreement”), and $376 million of letters of credit outstanding, consisting of the $270 million ($218 million for performance letters of credit and $52 million for financial letters of credit) under the Credit Agreement and another $106 million under various uncommitted bi-lateral facilities (of which there was $101 million in cash collateral held and recorded in “Restricted Cash” on the Consolidated Balance Sheets).
We may not be fully indemnified against financial losses in all circumstances where damage to or loss of property, personal injury, death or environmental harm occur.
Weatherford International plc – 2023 Form 10-K | 14 Table of Contents Item 1A | Risk Factors We may not be fully indemnified against financial losses in all circumstances where damage to or loss of property, personal injury, death or environmental harm occur.
Weatherford International plc – 2022 Form 10-K | 14 Table of Contents Item 1A | Risk Factors Our insurance policies are subject to exclusions, limitations and other conditions and may not apply in all cases, for example where willful wrongdoing on our part is alleged.
Our insurance policies are subject to exclusions, limitations and other conditions and may not apply in all cases, for example where willful wrongdoing on our part is alleged.
Many of these events are outside our control. Typically, we provide products and services at a well site where our personnel and equipment are located together with personnel and equipment of our customer and third parties, such as other service providers.
Typically, we provide products and services at a well site where our personnel and equipment are located together with personnel and equipment of our customer and third parties, such as other service providers. At many sites, we depend on other companies and personnel to conduct drilling and other operations in accordance with appropriate safety standards.
The failure to properly or efficiently modify, upgrade, replace or implement such systems on a timely basis could materially disrupt our operations, and have a material adverse effect on our financial results. If our long-lived assets and other assets are impaired, we may be required to record significant non-cash charges to our earnings.
The failure to properly or efficiently modify, upgrade, replace or implement such systems on a timely basis could materially disrupt our operations, and have a material adverse effect on our financial results.
Weatherford International plc – 2022 Form 10-K | 19 Table of Contents Item 1A | Risk Factors We recognize impairments of long-lived assets when we determine the carrying amount of certain long-lived asset groups exceed their respective fair values.
Weatherford International plc – 2023 Form 10-K | 20 Table of Contents Item 1A | Risk Factors If our long-lived assets and other assets are impaired, we may be required to record significant non-cash charges to our earnings. We recognize impairments of long-lived assets when we determine the carrying amount of certain long-lived asset groups exceed their respective fair values.
Increasing focus on ESG factors has led to enhanced interest in, and review of performance results by investors and other stakeholders, and the potential for litigation and reputational risk. In 2022, we made certain public commitments to various corporate ESG initiatives, including our commitment to achieve net-zero emissions by 2050 and signing on to the UN Global Compact.
In 2022, we made certain public commitments to various corporate ESG initiatives, including our commitment to achieve net-zero emissions for Scope 1 and 2 by 2050 and signing on to the UN Global Compact.
For example, although we maintain product liability insurance, this type of insurance is limited in coverage and it is possible an adverse claim could arise in excess of our coverage. Additionally, insurance rates have in the past been subject to wide fluctuation and may be unavailable on terms that we or our customers believe are economically acceptable.
Additionally, insurance rates have in the past been subject to wide fluctuation and may be unavailable on terms that we or our customers believe are economically acceptable.
Liability claims resulting from catastrophic incidents could have a material adverse effect on our business, financial condition and results of operations Drilling for and producing hydrocarbons, and the associated products and services that we provide, include inherent dangers that may lead to property damage, personal injury, death or the discharge of hazardous materials into the environment.
Drilling for and producing hydrocarbons, and the associated products and services that we provide, include inherent dangers that may lead to property damage, personal injury, death or the discharge of hazardous materials into the environment. Many of these events are outside our control.
These covenants and other restrictions may limit our ability to effectively operate our business, and to execute our growth strategy or take advantage of new business opportunities. These covenants and restrictions include minimum liquidity covenants, minimum interest coverage ratio, maximum ratio of funded debt, and certain other financial ratios, which may apply in certain circumstances, and other restrictions.
These covenants and restrictions include minimum liquidity covenants, minimum interest coverage ratio, maximum ratio of funded debt, and certain other financial ratios, which may apply in certain circumstances, and other restrictions. Our ability to meet the liquidity thresholds or those financial ratios could be affected by events beyond our control.
The COVID-19 pandemic significantly weakened demand for our products and services and had a substantial negative impact on our business, financial condition, results of operations and cash flows. A future pandemic may result in similar impacts.
Depending on the nature and scope of the cybersecurity incident, it could have a material adverse effect on our business, reputation, financial condition and results of operations. A pandemic significantly weakened demand for our products and services and had a substantial negative impact on our business, financial condition, results of operations and cash flows.
Our ability to meet the liquidity thresholds or those financial ratios could be affected by events beyond our control. A breach of the covenants and other restrictions in any of our indebtedness could result in an event of default thereunder.
A breach of the covenants and other restrictions in any of our indebtedness could result in an event of default thereunder.
It is possible an unexpected judgment could be rendered against us in cases in which we could be uninsured and beyond the amounts we currently have reserved or anticipate incurring, and in some cases those potential losses could be material. Our insurance may not be sufficient to cover any particular loss or our insurance may not cover all losses.
It is possible an unexpected judgment could be rendered against us in cases in Weatherford International plc – 2023 Form 10-K | 15 Table of Contents Item 1A | Risk Factors which we could be uninsured and beyond the amounts we currently have reserved or anticipate incurring, and in some cases those potential losses could be material.
Weatherford International plc – 2022 Form 10-K | 13 Table of Contents Item 1A | Risk Factors In Latin America we utilize surety bonds as part of our customary business practice. As of December 31, 2022, we had $415 million of surety bonds outstanding.
In Latin America we utilize surety bonds as part of our customary business practice. As of December 31, 2023, we had $594 million of surety bonds outstanding.
Also, there is increasing societal pressure in some of the areas where we operate, to limit greenhouse gas emissions as well as other global initiatives.
Continuing political and social attention to these issues has resulted in both existing and pending international agreements and national, regional and local legislation, regulatory measures, reporting obligations and policy changes. Also, there is increasing societal pressure in some of the areas where we operate, to limit greenhouse gas emissions as well as other global initiatives.
During such time we are not necessarily able to know the extent of the harm or how best to remediate it, and certain errors or actions could be repeated or compounded before they are discovered and remediated, all or any of which further increase the costs and consequences of a cybersecurity event or other security incident.
Even when an attack has been detected, it is not always immediately apparent what the full nature and scope of any potential harm may be, or how best to remediate it, and Weatherford International plc – 2023 Form 10-K | 12 Table of Contents Item 1A | Risk Factors certain errors or actions could be repeated or compounded before they are discovered and remediated, all or any of which further increase the risks, costs and consequences of a cybersecurity event or other technology disruption.
On December 15, 2022, the European Council formally adopted a European Union directive on the implementation of the plan by January 1, 2024.
On December 15, 2022, the European Council formally adopted a European Union directive on the implementation of the Weatherford International plc – 2023 Form 10-K | 18 Table of Contents Item 1A | Risk Factors plan by January 1, 2024. Numerous countries, including Ireland have enacted legislation implementing Pillar Two effective January 1, 2024.
Foreign Corrupt Practices Act or similar governmental legislation in other countries; and • restrictions on the repatriation of income or capital. Our business could be negatively affected by cybersecurity incidents and other technology disruptions. We rely heavily on information systems and other digital technology to conduct and protect our business.
We rely heavily on information systems and other digital technology to conduct and protect our business.
Removed
Climate change, environmental, social and governance (“ESG”) and sustainability are a growing global movement. Continuing political and social attention to these issues has resulted in both existing and pending international agreements and national, regional and local legislation, regulatory measures, reporting obligations and policy changes.
Added
Foreign Corrupt Practices Act or similar governmental legislation in other countries; and • restrictions on the repatriation of income or capital. A concentration of our accounts receivables and revenues were related to one customer and significant changes to the demand or health of the customer could adversely impact our consolidated results of operations, financial condition and statements of cashflows.
Removed
At many sites, we depend on other companies and personnel to conduct drilling and other operations in accordance with appropriate safety standards.
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Approximately 10% of our 2023 revenue and approximately 22% of our December 31, 2023 accounts receivables were related to our largest customer in Mexico.
Removed
Our business is dependent upon our on our ability to efficiently and effectively perform and provide products and services to our customers. As such, we continue to find ways to improve and invest in our people, processes and systems.
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Additionally, during the fourth quarter of 2023, we entered into a credit default swap (“CDS”) with a third-party financial institution as described in “Note 10 – Derivative Financial Instruments” related to a secured loan between that third-party financial institution and our largest customer in Mexico. The secured loan was utilized by this customer to pay certain of our outstanding receivables.
Removed
In the aggregate, certain funds associated with our eight largest shareholders currently own in excess of 66% of our outstanding Ordinary Shares.
Added
We expect the concentration risk to continue into 2024. Business slowdowns or other items impacting the financial health of the customer could potentially have an adverse impact on our results of operations. Our business could be negatively affected by cybersecurity incidents and other technology disruptions.
Added
Weatherford International plc – 2023 Form 10-K | 13 Table of Contents Item 1A | Risk Factors Our business is dependent upon our ability to efficiently and effectively perform and provide products and services to our customers.
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As such, we are subject to risks associated with cost over-runs, operating cost inflation, global supply chain disruptions, labor availability, supplier and contractor pricing and performance, and our need to continually improve and invest in our people, processes and systems.
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We sometimes provide integrated project management services in the form of long-term, fixed price contracts where we are both the project manager and service provider.
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Accordingly, under these contracts, we assume additional risks associated with engaging with certain third-party subcontractors, operating cost inflation, labor availability and productivity, global supply chain disruptions, supplier pricing and performance, and potential claims for liquidated damages. If we are unable to complete these contracts effectively and timely, it could potentially have an adverse impact on our results of operations.
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Our insurance may not be sufficient to cover any particular loss, or our insurance may not cover all losses. For example, although we maintain product liability insurance, this type of insurance is limited in coverage, and it is possible an adverse claim could arise in excess of our coverage.
Added
Increasing focus on ESG factors has led to enhanced interest in, and review of performance results by investors and other stakeholders, and the potential for litigation and reputational risk.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe own or lease numerous other facilities such as service centers, shops, sales and administrative offices throughout the geographic regions in which we operate. The major service centers we operate to support our segment operations are located specifically in Villahermosa, Mexico; Villavicencio, Colombia; Dhahran, Saudi Arabia; North Rumaila, Iraq; Mina Abdulla, Kuwait; Williston, North Dakota, U.S. and Odessa, Texas, U.S.
Biggest changeThe major service centers where we support our segment operations are located in Villahermosa, Mexico; Villavicencio, Colombia; Dhahran, Saudi Arabia; Neuquen, Argentina; Abu Dhabi, United Arab Emirates; Mina Abdulla, Kuwait; Williston, North Dakota, U.S.; Nimr, Oman and Odessa, Texas, U.S.
Item 2. Properties Our operations are conducted in approximately 75 countries and we have manufacturing facilities, research and technology centers, fluids and processing centers and sales, service and distribution locations throughout the world. Our principal executive offices are in Houston, Texas, U.S.
Item 2. Properties. We conduct business in approximately 75 countries and have manufacturing facilities, research and technology centers, fluids and processing centers and sales, service and distribution locations throughout the world. Our principal executive offices are in Houston, Texas, U.S.
All of our remaining owned properties are unencumbered, however the lenders could require we mortgage certain of these properties as well. We believe the facilities that we currently occupy are suitable for their intended use.
All of our material U.S., Canada and United Kingdom properties are mortgaged to the lenders under our 2028 Senior Secured Notes and Credit Agreement. Our remaining owned properties are unencumbered; however, the lenders could require we mortgage certain of these properties as well. We believe the facilities that we currently occupy are suitable for their intended use.
We operate research and technology centers in Houston, Texas, U.S.; Loughborough, United Kingdom and major manufacturing centers in JiangSu, China; Abu Dhabi, United Arab Emirates; Huntsville, Texas, U.S.; Houston, Texas, U.S.; Vadodara, India and Hannover, Germany. All of our material U.S. and United Kingdom properties are mortgaged to the lenders under our 2028 Senior Secured Notes and Credit Agreement.
We operate research and technology centers in Houston, Texas, U.S.; Loughborough, United Kingdom; and Mumbai, India and have major manufacturing centers in JiangSu, China; Abu Dhabi, United Arab Emirates; Huntsville, Texas, U.S.; Vadodara, India and Hannover, Germany.
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We own or lease numerous other facilities such as service centers, shops, sales and administrative offices throughout the geographic regions in which we operate.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor additional information, see “Item 1A. – Risk Factors – Legal, Tax and Regulatory Risks.” • See also “Item 1. - Business” and “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 14 – Disputes, Litigation and Legal Contingencies.” It is possible 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.
Biggest changeRisk Factors- Legal, Tax and Regulatory Risks. • See also “Item 1. - Business” and “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 12 – Disputes, Litigation and Legal Contingencies.” Weatherford International plc – 2023 Form 10-K | 22 Table of Contents It is possible 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.
Please see the following: • If we are the subject of governmental and internal investigations related to alleged misconduct and violations of U.S. or international laws in the future, it could have a material adverse effect on our business, financial condition and results of operations.
Please see the following: • If we are the subject of governmental and internal investigations related to alleged misconduct and violations of U.S. or international laws in the future, it could have a material adverse effect on our business, financial condition and results of operations. For additional information, see Item 1A.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph assumes $100 was invested in each of the Company’s ordinary shares, and aforementioned indices. Note that past stock price performance is not necessarily indicative of future stock price performance. 06/02/21 12/31/21 12/30/22 02/01/23 Weatherford International plc $ 100 $ 216 $ 398 $ 440 Dow Jones U.S.
Biggest changeNote that past stock price performance is not necessarily indicative of future stock price performance. Weatherford International plc – 2023 Form 10-K | 24 Table of Contents Item 7 | MD&A 06/02/21 12/31/21 12/31/22 12/31/23 Weatherford International plc $100 $216 $398 $764 Dow Jones U.S. Oil Equipment and Services Index $100 $95 $130 $135 Dow Jones U.S.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities On June 1, 2021, NASDAQ approved our application for the listing of our ordinary shares. In connection with the listing, we became subject to the reporting requirements of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”).
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. On June 1, 2021, NASDAQ approved our application for the listing of our ordinary shares and we became subject to the reporting requirements of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”).
Our ordinary shares began trading on The Nasdaq Global Select Market on June 2, 2021 under the ticker symbol “WFRD”. As of February 1, 2023, we had 71 shareholders of record.
Our ordinary shares began trading on the Nasdaq Global Select Market on June 2, 2021 under the ticker symbol “WFRD”. As of February 1, 2024, we had 68 shareholders of record.
The actual number of shareholders is considerably greater than the number of shareholders of record and includes shareholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. We intend to retain future earnings and/or repay debt and do not expect to pay cash dividends in the near future.
The actual number of shareholders is considerably greater than the number of shareholders of record and includes shareholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
The following graph shows a comparison of cumulative total shareholder return on our ordinary shares, the Dow Jones U.S. Oil Equipment and Services Index and the Dow Jones U.S. Index from June 2, 2021 (date we began trading on NASDAQ) to December 30, 2022 (last day of trading in 2022), and an update as of February 1, 2023.
The following graph shows a comparison of cumulative total shareholder return on our ordinary shares, the Dow Jones U.S. Index (“DJI”), the Dow Jones U.S.
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Oil Equipment and Services Index $ 100 $ 95 $ 130 $ 135 Dow Jones U.S. Index $ 100 $ 105 $ 96 $ 99 Weatherford International plc – 2022 Form 10-K | 21
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During the three months ended December 31, 2023, we issued 3,429 ordinary shares upon the exercise of outstanding warrants, resulting in cash proceeds to the Company of $342,763. The ordinary shares were issued pursuant to an exemption from registration under Section 1145 of the Bankruptcy Code.
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On December 13, 2023, the remaining 7,774,134 unexercised warrants expired, and the rights of the warrant holders to purchase ordinary shares were terminated.
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We intend to retain future earnings to reinvest in our business and/or to repay debt, and the declaration and payment of future dividends and/or other forms of shareholder returns will be at the discretion of the Board and will depend, among other things, on future earnings, general financial condition and liquidity restrictions contained in our financing agreements, capital requirements and general business conditions, in addition to legal requirements.
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Oil Equipment and Services Index (“DJUSOI”), the Philadelphia Oil Service Index (“OSX”), the VanEck Oil Services ETF (“OIH”) and the Standard & Poor’s 500 Index (“S&P 500”) from June 2, 2021 (date we began trading on NASDAQ) through 2023.
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During 2023, we elected to include OSX, OIH, and S&P 500 as these either: represent a group of our competitors, is an index in which we are a component of or is an index in which we and our peers benchmark against. The graph assumes $100 was invested in each of the Company’s ordinary shares, and aforementioned indices.
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Index $100 $105 $96 $109 Philadelphia Oil Service Index $100 $82 $131 $131 VanEck Oil Services ETF $100 $83 $136 $139 Standard & Poor’s 500 Index $100 $113 $91 $114 Weatherford International plc – 2023 Form 10-K | 25

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, 2022 2021 2020 North America 898 610 522 International 851 755 825 Worldwide 1,749 1,365 1,347 Weatherford International plc – 2022 Form 10-K | 26 Table of Contents Item 7 | MD&A Segment Results of Operations Favorable Favorable (Unfavorable) (Unfavorable) Year Ended December 31, $ % or bps $ % or bps (Dollars in millions) 2022 2021 2020 2022 vs 2021 2021 vs 2020 Revenues: Drilling and Evaluation (“DRE”) $ 1,328 $ 1,066 $ 1,044 $ 262 25% $ 22 2% Well Construction and Completions (“WCC”) 1,521 1,353 1,414 168 12% (61) (4)% Production and Intervention (“PRI”) 1,395 1,127 1,106 268 24% 21 2% Segment Revenues 4,244 3,546 3,564 698 20% (18) (1)% All Other 87 99 121 (12) (12)% (22) (18)% Total Revenues 4,331 3,645 3,685 686 19% (40) (1)% Segment Adjusted EBITDA: Drilling and Evaluation $ 324 $ 186 $ 132 $ 138 74% $ 54 41% Well Construction and Completions 299 256 273 43 17% (17) (6)% Production and Intervention 261 191 154 70 37% 37 24% Segment Adjusted EBITDA 884 633 559 251 40% 74 13% Corporate and Other (67) (62) (100) (5) (8)% 38 38% Depreciation and Amortization (349) (440) (503) 91 21% 63 13% Shared-based Compensation Expense (25) (25) — — —% (25) n/m Other Adjustments : Goodwill and Long-Lived Assets Impairment — — (1,053) — —% 1,053 100% Restructuring Charges (22) — (206) (22) —% 206 100% Other (Charges) Credits (9) 10 (183) (19) (190)% 193 105% Other Adjustments $ (31) $ 10 $ (1,442) $ (41) (410)% $ 1,452 101% Operating Income (Loss) $ 412 $ 116 $ (1,486) $ 296 255% $ 1,602 108% Segment Adjusted EBITDA Margins [1] : Drilling and Evaluation 24.4 % 17.4 % 12.6 % n/m 700 bps n/m 480 bps Well Construction and Completions 19.7 % 18.9 % 19.3 % n/m 80 bps n/m (40) bps Production and Intervention 18.7 % 16.9 % 13.9 % n/m 180 bps n/m 300 bps Segment Adjusted EBITDA 20.8 % 17.9 % 15.7 % n/m 290 bps n/m 220 bps [1] bps calculates off rounding in this table Weatherford International plc – 2022 Form 10-K | 27 Table of Contents Item 7 | MD&A Segment Revenues 2022 vs 2021 Revenues totaled $4.3 billion in 2022, an increase of 19% compared to 2021, and the primary drivers were discussed in the above consolidated section.
Biggest changeWeatherford International plc – 2023 Form 10-K | 29 Table of Contents Item 7 | MD&A Results of Operations by Segment Favorable Favorable (Unfavorable) (Unfavorable) Year Ended December 31, $ % or bps $ % or bps (Dollars in millions) 2023 2022 2021 2023 vs 2022 2022 vs 2021 Revenues: DRE Revenues $ 1,536 $ 1,328 $ 1,066 $ 208 16% $ 262 25% WCC Revenues 1,800 1,521 1,353 279 18% 168 12% PRI Revenues 1,472 1,395 1,127 77 6% 268 24% All Other 327 87 99 240 276% (12) (12)% Total Revenues 5,135 4,331 3,645 804 19% 686 19% Operating Income: DRE Segment Adjusted EBITDA $ 422 $ 324 $ 186 $ 98 30% $ 138 74% WCC Segment Adjusted EBITDA 455 299 256 156 52% 43 17% PRI Segment Adjusted EBITDA 323 261 191 62 24% 70 37% All Other 38 1 6 37 3700% (5) (83)% Corporate (52) (68) (68) 16 24% — —% Depreciation and Amortization (327) (349) (440) 22 6% 91 21% Share-based Compensation (35) (25) (25) (10) (40)% — —% Other Credits (Charges) (4) (31) 10 27 87% (41) (410)% Operating Income (Loss) $ 820 $ 412 $ 116 $ 408 99% $ 296 255% Margins: DRE Segment Adjusted EBITDA Margin 27.5 % 24.4 % 17.4 % n/m 308 bps n/m 695 bps WCC Segment Adjusted EBITDA Margin 25.3 % 19.7 % 18.9 % n/m 562 bps n/m 74 bps PRI Segment Adjusted EBITDA Margin 21.9 % 18.7 % 16.9 % n/m 323 bps n/m 176 bps Weatherford International plc – 2023 Form 10-K | 30 Table of Contents Item 7 | MD&A DRE Results 2023 vs 2022 DRE revenues of $1.5 billion in 2023 increased by $208 million or 16% compared to 2022 due to higher demand and activity with approximately 70% of the increase from drilling-related services.
Triggering events include, but are not limited to, reduced or expected sustained decreases in cash flows generated by an asset or asset group, negative changes in industry conditions (such as global rig count, commodity prices, and the global economy), a significant change in the long-lived assets’ use or physical condition, the introduction of competing technologies, and legal and regulatory challenges.
Triggering events include, but are not limited to, reduced or expected sustained decreases in cash flows generated by an asset group, negative changes in industry conditions (such as global rig count, commodity prices, and the global economy), a significant change in the long-lived assets’ use or physical condition, the introduction of competing technologies, and legal and regulatory challenges.
The fair value of the asset or asset group is measured using market prices, or in the absence of market prices, is based on an estimate of discounted cash flows. Cash flows are discounted at an interest rate commensurate with our weighted average cost of capital for a similar asset.
The fair value of the asset group is measured using market prices, or in the absence of market prices, is based on an estimate of discounted cash flows. Cash flows are discounted at an interest rate commensurate with our weighted average cost of capital for a similar asset.
The Company concluded it was not able to realize the benefit of its deferred tax assets and has established a valuation allowance. Continued performance improvement in certain jurisdictions could result in a change in our realization of deferred tax asset assessment in the near future, which would release valuation allowance.
The Company concluded it was not able to realize the benefit of certain deferred tax assets and has established a valuation allowance. Continued performance improvement in certain jurisdictions could result in a change in our realization of deferred tax asset assessment in the near future, which would release valuation allowance.
We have long-lived assets, such as facilities, utilized by multiple operating divisions that do not have identifiable cash flows and impairment testing for these long-lived assets is based on the consolidated entity. We did not recognize long-lived assets impairments during 2022 and 2021.
We have long-lived assets, such as facilities, utilized by multiple operating divisions that do not have identifiable cash flows and impairment testing for these long-lived assets is based on the consolidated entity. We did not recognize long-lived assets impairments during 2023, 2022 and 2021.
The Company groups individual assets at the lowest level of identifiable cash flows and, if impairment triggers are present, performs an undiscounted cash flow analysis to identify assets or asset groups that may not be recoverable.
The Company groups individual assets at the lowest level of identifiable cash flows and, if impairment triggers are present, performs an undiscounted cash flow analysis to identify asset groups that may not be recoverable.
Imbalance across geographies driven by geopolitical conflicts, investment variances and supply disruptions is driving a greater focus on energy security, which in turn is creating a shift towards national oil companies.
Imbalance across geographies driven by geopolitical conflicts, investment variances and supply disruptions are driving a greater focus on energy security, which in turn is creating a shift towards national oil companies.
A fair value assessment is performed on assets or asset groups identified as not being recoverable using a discounted cash flow analysis or Level 3 fair value analysis, to determine if an impairment has occurred.
A fair value assessment is performed on asset groups identified as not being recoverable using a discounted cash flow analysis or Level 3 fair value analysis, to determine if an impairment has occurred.
The discounted cash flow analysis consists of estimating the future cash flows that are directly associated with, and are expected to arise from, the use and eventual disposition of the asset over its remaining useful life.
The discounted cash flow analysis consists of estimating the future cash flows that are directly associated with, and are expected to arise from, the use and eventual disposition of the asset group over its remaining useful life.
Risk Factors”, sets forth certain risks and uncertainties relating to our forward-looking statements that may cause actual results to be materially different from our present expectations or projections: Weatherford International plc – 2022 Form 10-K | 35 Table of Contents Forward-Looking Statements • global political, economic and market conditions, political disturbances, war, terrorist attacks, changes in global trade policies, weak local economic conditions and international currency fluctuations (including the Russia Ukraine Conflict); • general global economic repercussions related to U.S. and global inflationary pressures and potential recessionary concerns; • failure to ensure on-going compliance with current and future laws and government regulations, including but not limited to those related to the Russia Ukraine Conflict, and environmental and tax and accounting laws, rules and regulations. • changes in, and the administration of, treaties, laws, and regulations, including in response to issues related to the Russia Ukraine Conflict and the potential for such issues to exacerbate other risks we face, including those related to the other risks and uncertainties listed or referenced; • cybersecurity incidents, as our reliance on digital technologies increases, those digital technologies may become more vulnerable and/or experience a higher rate of cybersecurity attacks, intrusions or incidents in the current environment of remote connectivity, as well as increased geopolitical conflicts and tensions, including as a result of the Russia Ukraine Conflict; • our ability to comply with, and respond to, climate change, environmental, social and governance and other “sustainability” initiatives and future legislative and regulatory measures both globally and in the specific geographic regions in which we and our customers operate; • our ability to effectively and timely address the need to conduct our operations and provision of services to our customers more sustainably and with a lower carbon footprint; • risks associated with disease outbreaks and other public health issues, including the COVID-19 pandemic, their impact on the global economy and the business of our company, customers, suppliers and other partners; • further spread and potential for a resurgence of a pandemic in a given geographic region and related disruptions to our business, employees, customers, suppliers and other partners and additional regulatory measures or voluntary actions that may be put in place to limit the spread of the COVID-19 pandemic, 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; • member-country quota compliance within the Organization of Petroleum Exporting Countries; • 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; • our ability to effectively and timely adapt our technology portfolio, products and services to address and participate in changes to the market demands for the transition to alternate sources of energy such as geothermal, carbon capture and responsible abandonment, including our digitalization efforts; • 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; • our ability to access to capital markets on terms that are commercially acceptable to the Company; • our ability to manage our workforce, supply chain challenges and disruptions, 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; • our ability to service our debt obligations; • potential non-cash asset impairment charges for long-lived assets, intangible assets or other assets; and • adverse weather conditions in certain regions of our operations Many of these factors are macro-economic in nature and are, therefore, beyond our control.
Risk Factors”, sets forth certain risks and uncertainties relating to our forward-looking statements that may cause actual results to be materially different from our present expectations or projections: • global political, economic and market conditions, political disturbances, war, terrorist attacks, changes in global trade policies, weak local economic conditions and international currency fluctuations (including the Russia Ukraine Conflict); • general global economic repercussions related to U.S. and global inflationary pressures and potential recessionary concerns; • failure to ensure on-going compliance with current and future laws and government regulations, including but not limited to those related to the Russia Ukraine Conflict, and environmental and tax and accounting laws, rules and regulations; • changes in, and the administration of, treaties, laws, and regulations, including in response to issues related to the Russia Ukraine Conflict such as nationalization of assets, and the potential for such issues to exacerbate other risks we face, including those related to the other risks and uncertainties listed or referenced; • cybersecurity incidents, as our reliance on digital technologies increases, those digital technologies may become more vulnerable and/or experience a higher rate of cybersecurity attacks, intrusions or incidents in the current environment of remote connectivity, as well as increased geopolitical conflicts and tensions, including as a result of the Russia Ukraine Conflict; • our ability to comply with, and respond to, climate change, environmental, social and governance and other “sustainability” initiatives and future legislative and regulatory measures both globally and in the specific geographic regions in which we and our customers operate; • our ability to effectively and timely address the need to conduct our operations and provision of services to our customers more sustainably and with a lower carbon footprint; • risks associated with disease outbreaks and other public health issues, including a pandemic, their impact on the global economy and the business of our company, customers, suppliers and other partners; • further spread and potential for a resurgence of a pandemic in a given geographic region and related disruptions to our business, employees, customers, suppliers and other partners and additional regulatory measures or voluntary actions that may be put in place to limit the spread of a pandemic, 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; • member-country quota compliance within the Organization of Petroleum Exporting Countries; • 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; • our ability to effectively and timely adapt our technology portfolio, products and services to address and participate in changes to the market demands for the transition to alternate sources of energy such as geothermal, carbon capture and responsible abandonment, including our digitalization efforts; • 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; • our ability to access to capital markets on terms that are commercially acceptable to the Company; • our ability to manage our workforce, supply chain challenges and disruptions, 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; • our ability to service our debt obligations; • potential non-cash asset impairment charges for long-lived assets, intangible assets or other assets; and • adverse weather conditions in certain regions of our operations Many of these factors are macro-economic in nature and are, therefore, beyond our control.
As such, we believe we are well positioned to satisfy our customers’ needs, but the level of improvement in our businesses in the future will continue to depend heavily on pricing, volume of work, our ability to offer cost efficient, innovative and effective technology solutions, and our success in gaining market share in new and existing markets.
We believe we are well positioned to satisfy our customers’ needs, but the level of improvement in our businesses in the future will continue to depend heavily on pricing, volume of work, our ability to offer cost efficient, innovative and effective technology solutions, and our success in gaining market share in new and existing markets.
As of December 31, 2022, we had $395 million of letters of credit outstanding, consisting of the $195 million mentioned above under the Credit Agreement and another $200 million under various uncommitted bi-lateral facilities (of which there was $199 million in cash collateral held and recorded in “Restricted Cash” on the Consolidated Balance Sheets).
As of December 31, 2022, we had $395 million of letters of credit outstanding, consisting of the $195 million under the Credit Agreement and another $200 million under various uncommitted bi-lateral facilities (of which there was $199 million in cash collateral held and recorded in “Restricted Cash” on the Consolidated Balance Sheets).
When the likelihood of the realization of existing deferred tax assets changes, adjustments to the valuation allowance are charged to our income tax provision in the period in which the determination is made. The Company concluded it was not able to realize the benefits of all of its deferred tax assets and has established a valuation allowance.
When the likelihood of the realization of existing deferred tax assets changes, adjustments to the valuation allowance are charged to our income tax provision in the period in which the determination is made. The Company concluded it was not able to realize the benefits of certain of its deferred tax assets and has established a valuation allowance.
Other primary uses of cash from financing activities were $131 million in bond redemption premium payments as a result of the early redemptions and $28 million, primarily for $21 million in dividends to noncontrolling interests that were settled in cash (as certain dividends in the year were settled in other noncash methods).
Other primary uses of cash from financing activities were $131 million in bond redemption premium payments as a result of the early redemptions and $28 million, primarily for $21 million in distributions to noncontrolling interests that were settled in cash (as certain distributions in the year were settled in other noncash methods).
The realizability of the deferred tax assets is dependent upon judgments and assumptions inherent in the determination of future taxable income, including factors such as future operation conditions (particularly as related to prevailing oil prices and market demand for our products and services).
The realizability of the deferred tax assets is dependent upon judgments and assumptions inherent in the determination of future taxable income, including factors such as future operating conditions (particularly as related to prevailing oil prices and market demand for our products and services).
Our income tax provisions in 2022 and 2021 are primarily driven by income in certain jurisdictions, deemed profit countries and withholding taxes on intercompany and third-party transactions that do not directly correlate to ordinary income or loss.
Our income tax provisions in 2023 and 2022 are primarily driven by income in certain jurisdictions, deemed profit countries and withholding taxes on intercompany and third-party transactions that do not directly correlate to ordinary income or loss.
The primary uses of cash from financing activities were repayments of long-term debt of $2.3 billion associated with the partial redemption of our Exit Notes and full redemption of our 2024 Senior Secured Notes as well as finance lease obligations.
The primary uses of cash in financing activities were repayments of long-term debt of $2.3 billion associated with the partial redemption of our Exit Notes and full redemption of our 2024 Senior Secured Notes as well as finance lease obligations.
These include but are not limited to; the impact from geopolitical conflicts; global response to any ongoing pandemics; our customers’ capital expenditures; environmental, social and governance (“ESG”) initiatives; world economic, political and weather conditions; the price of oil and natural gas; and, member-country quota compliance within the Organization of Petroleum Exporting Countries and the expanded alliance.
These include but are not limited to; the impact from geopolitical conflicts; global response to any ongoing pandemics; our customers’ capital expenditures; environmental, social and governance and other sustainability initiatives; world economic, political and weather conditions; the price of oil and natural gas; and, member-country quota compliance within the Organization of Petroleum Exporting Countries and the expanded alliance.
Our valuation allowance on our deferred tax assets was $1.3 billion and $1.5 billion as of December 31, 2022 and December 31, 2021, respectively. 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.
Our valuation allowance on our deferred tax assets was $1.3 billion and $1.3 billion as of December 31, 2023, and December 31, 2022, respectively. 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.
If an impairment has occurred, the Company recognizes a loss for the difference between the carrying amount and the fair value of the asset or asset group. We generally group long-lived assets by product line.
If an impairment has occurred, the Company recognizes a loss for the difference between the carrying amount and the fair value of the asset group. We group long-lived assets by product line.
Finally, our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in our current and past filings with the SEC under the Exchange Act and the Securities Act of 1933, as amended. Weatherford International plc – 2022 Form 10-K | 36 Table of Contents Forward-Looking Statements
Finally, our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in our current and past filings with the SEC under the Exchange Act and the Securities Act of 1933, as amended. Weatherford International plc – 2023 Form 10-K | 40 Table of Contents Forward-Looking Statements
Allowances have been recorded for receivables believed to be uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices. Adjustments to the allowance are made depending on how potential issues are resolved and the financial condition of our customers. See “Note 1 – Summary of Significant Accounting Policies” for additional information.
Allowances have been recorded for receivables believed to be uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices. Adjustments to the allowance are made depending on how potential issues are resolved and the financial condition of our customers. See “Note 1 – Summary of Significant Accounting Policies” and “Item 1A.
In addition, our customers are primarily in fossil fuel-related industries and broad declines might impact the collections of our customer receivables. Accounts Receivable Factoring and Monetization From time to time, we participate in factoring arrangements to sell accounts receivable to third-party financial institutions for cash proceeds net of discount and hold-back.
Risk Factors” for additional information. In addition, our customers are primarily in fossil fuel-related industries and broad declines might impact the collections of our customer receivables. Accounts Receivable Factoring and Monetization From time to time, we participate in factoring arrangements to sell accounts receivable to third-party financial institutions for cash proceeds net of discount and hold-back.
Investing Activities Cash used in investing activities in 2022 was $54 million. The primary uses of cash from investing activities were capital expenditures of $132 million, partially offset by proceeds from the sale of assets of $82 million. Cash used in investing activities in 2021 was $83 million.
The primary uses of cash in investing activities were for capital expenditures of $132 million, partially offset by proceeds from the sale of assets of $82 million. Cash used in investing activities in 2021 was $83 million.
Additionally, higher gains on asset sales and lower inventory charges contributed to the lower cost structure as a percentage of revenues. Selling, general, administrative and research and development costs of $868 million increased $45 million, or 5%, to keep up with increased activity and demand across our segments.
Additionally, higher gains on asset sales and lower inventory charges contributed to the lower cost structure as a percentage of revenues. Selling, general, administrative and research and development costs in 2022 of $868 million increased $45 million, or 5%, when compared to 2021 to keep up with increased activity and demand across our segments.
Guarantees Our Exit Notes and 2028 Senior Secured Notes were issued by Weatherford International Ltd., a Bermuda exempted company (“Weatherford Bermuda”), and guaranteed by the Company and Weatherford International, LLC, a Delaware limited liability company (“Weatherford Delaware”) and other subsidiary guarantors party thereto.
Guarantees Our Exit Notes and 2028 Senior Secured Notes were issued by Weatherford International Ltd., a Bermuda exempted company (“Weatherford Bermuda”), and guaranteed by the Company and Weatherford International, LLC, a Delaware limited liability company (“Weatherford Delaware”) and other subsidiary guarantors party thereto. Our Exit Notes were fully repaid in 2023.
The following discussion should be read in conjunction with our Consolidated Financial Statements and Notes thereto included in “Item 8. Financial Statements and Supplementary Data.” Our discussion includes various forward-looking statements about our markets, the demand for our products and services and our future results. These statements include certain risks and uncertainties.
The following discussion should be read in conjunction with the earlier section “Item 1. Business” and our Consolidated Financial Statements and Notes thereto included later in “Item 8. Financial Statements and Supplementary Data.” Our discussion includes various forward-looking statements about our markets, the demand for our products and services and our future results. These statements include certain risks and uncertainties.
Weatherford International plc – 2022 Form 10-K | 24 Table of Contents Item 7 | MD&A Outlook Growth and spending in the energy services industry is highly dependent on many external factors.
Weatherford International plc – 2023 Form 10-K | 32 Table of Contents Item 7 | MD&A Outlook Growth and spending in the energy services industry is highly dependent on many external factors.
The implementation of new or escalation of existing sanctions imposed against countries in which we operate, including any further escalation of sanctions and other events around the Russia Ukraine Conflict, including increased exposure to cyber-attacks, increasing investor and government focus on ESG factors, supply chain challenges and disruptions, and the cyclicality of the energy industry may negatively impact demand for our products and services.
The implementation of new or escalation of existing sanctions imposed against countries in which we operate, including any further escalation of sanctions and other events around the Russia Ukraine Conflict, including increased exposure to cyberattacks, increasing investor and government focus on sustainability initiatives, supply chain challenges and disruptions, and the cyclicality of the energy industry may negatively impact demand for our products and services.
The primary uses of cash from investing activities were for capital expenditures of $85 million and investments in marketable securities in Argentina of $39 million. The primary source of cash from investing activities was $41 million of proceeds from asset dispositions.
The primary uses of cash in investing activities were for capital expenditures of $85 million and investments in marketable securities in Argentina of $39 million. The primary source of cash from investing activities was $41 million of proceeds from asset dispositions. Financing Activities Cash used in financing activities in 2023 was $514 million.
Our cost of products and services as a percentage of revenues was 69.7% in 2022, an improvement compared to 74.5% in 2021, reflecting improved utilization on a more efficient operating cost structure, and pricing improvements to customers to offset impacts from supply chain disruptions and inflation.
Our cost of products and services as a percentage of revenues was 70% in 2022, an improvement compared to 75% in 2021, reflecting improved utilization on a more efficient operating cost structure, and pricing improvements to customers to offset impacts from supply chain disruptions and inflation.
As of December 31, 2022, we anticipate that it is reasonably possible that the amount of our uncertain tax positions of $191 million may decrease by up to $4 million in the next twelve months due to expiration of statutes of limitations, settlements and/or conclusions of tax examinations.
As of December 31, 2023, we anticipate that it is reasonably possible that the amount of our uncertain tax positions of $203 million may decrease by up to $13 million in the next twelve months due to expiration of statutes of limitations, settlements and/or conclusions of tax examinations.
Additionally, during 2022, we entered into a short-term monetization transaction on accounts receivable balances of $77 million and received cash proceeds of $75 million. The above factoring and monetization proceeds are included as operating cash flows in our Condensed Consolidated Statements of Cash Flows.
During 2022, we also entered into a short-term monetization transaction on accounts receivable balances of $77 million and received cash proceeds of $75 million. These factoring and monetization proceeds are included as operating cash flows in our Consolidated Statements of Cash Flows.
In Latin America we utilize surety bonds as part of our customary business practice. As of December 31, 2022, we had $415 million of surety bonds outstanding.
In Latin America we utilize surety bonds as part of our customary business practice. As of December 31, 2023, we had $594 million of surety bonds outstanding.
In addition, we are unable to recognize tax benefit on our losses. We record deferred tax assets for net operating losses and temporary differences between the book and tax basis of assets and liabilities that are expected to produce tax deductions in future periods.
We record deferred tax assets for net operating losses and temporary differences between the book and tax basis of assets and liabilities that are expected to produce tax deductions in future periods.
We estimate the useful lives of our long-lived asset groups as follows: Asset Category Estimated Useful Lives Buildings and Leasehold I mprovements 10 – 40 years or lease term Rental and Service Equipment 3 – 10 years Machinery and Other 2 – 12 years Intangible Assets 5 – 10 years In estimating the useful lives of our PP&E, we rely primarily on our actual experience with the same or similar assets.
We estimate the useful lives of our long-lived assets over their respective lease terms, if applicable, or as follows: Assets Estimated Useful Lives Buildings and Leasehold I mprovements 10 – 40 years Rental and Service Equipment 3 – 10 years Machinery and Other 2 – 12 years Intangible Assets 5 – 10 years In estimating the useful lives of our PP&E, we rely primarily on our actual experience with the same or similar assets.
The forward-looking statements included herein are only made as of the date of this report, or if earlier, as of the date they were made, and 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 forward-looking statements included herein are only made as of the date of this report, or if earlier, as of the date they were made, and we undertake no obligation to correct, Weatherford International plc – 2023 Form 10-K | 39 Table of Contents Forward-Looking Statements 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.
Weatherford International plc – 2022 Form 10-K | 29 Table of Contents Item 7 | MD&A Liquidity and Capital Resources At December 31, 2022, we had cash and cash equivalents of $910 million and $202 million in restricted cash, compared to $951 million of cash and cash equivalents and $162 million of restricted cash at December 31, 2021.
Weatherford International plc – 2023 Form 10-K | 33 Table of Contents Item 7 | MD&A Liquidity and Capital Resources At December 31, 2023, we had cash and cash equivalents of $958 million and $105 million in restricted cash, compared to $910 million of cash and cash equivalents and $202 million of restricted cash at December 31, 2022.
The accounting policies we believe require management’s most difficult, subjective or complex judgments and are the most critical to our reporting of results of operations and financial position are as follows: Long-Lived Assets Long-lived assets, which include property, plant and equipment (“PP&E”), definite-lived intangibles and operating lease assets, comprise a significant amount of our assets.
The accounting policies we believe require management’s most difficult, subjective or complex judgments and are the most critical to our reporting of results of operations and financial position are as follows: Weatherford International plc – 2023 Form 10-K | 37 Table of Contents Critical Accounting Policies and Estimates Long-Lived Assets Long-lived assets, which include property, plant and equipment (“PP&E”), definite-lived intangibles and operating lease assets, comprise a significant amount of our assets.
The carrying value of our long-lived assets at December 31, 2022 and 2021 was approximately $1.5 billion and $1.8 billion, respectively. The cost of the long-lived assets is then amortized over its expected useful life. A change in the estimated useful lives of our long-lived assets would have an impact on our results of operations.
The carrying value of our long-lived assets at December 31, 2023 and December 31, 2022 was approximately $1.5 billion. The cost of the long-lived assets is then amortized over its expected useful life or their respective lease terms, if applicable. A change in the estimated useful lives of our long-lived assets would have an impact on our results of operations.
We historically have accessed banks for short-term loans and the capital markets for debt and equity offerings. Based upon current and anticipated levels of operations and our recent refinancing transactions, we expect to have sufficient cash from operations and cash on hand to fund our cash requirements (discussed below) and financial obligations, both in the short-term and long-term.
Based upon current and anticipated levels of operations and our recent refinancing transactions, we expect to have sufficient cash from operations and cash on hand to fund our cash requirements (discussed below) and financial obligations, both in the short-term and long-term.
We adjust these reserves upon specific events; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is different from our current estimate of the tax liabilities.
We adjust these reserves upon specific events; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is different from our current estimate of the tax liabilities. If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result.
Cash and cash equivalents and restricted cash are held by subsidiaries outside of Ireland. At December 31, 2022 we had approximately $177 million of our cash and cash equivalents that cannot be immediately repatriated from various countries due to country central bank controls or other regulations.
At December 31, 2023 we had approximately $92 million of our cash and cash equivalents that cannot be immediately repatriated from various countries due to country central bank controls or other regulations.
Weatherford International plc – 2022 Form 10-K | 31 Table of Contents Item 7 | MD&A Customer Receivables We may experience delayed customer payments and payment defaults due to, among other reasons, a weaker economic environment, reductions in our customers’ cash flow from operations, our customers’ inability to access credit markets, as well as unsettled political conditions.
Customer Receivables We may experience delayed customer payments and payment defaults due to, among other reasons, a weaker economic environment, reductions in our customers’ cash flow from operations, our customers’ inability to access credit markets, as well as unsettled political conditions.
Weatherford International plc – 2022 Form 10-K | 33 Table of Contents Critical Accounting Policies and Estimates Long-lived assets to be held and used by us are reviewed to determine whether any events or changes in circumstances, known as triggering events, indicate that we may not be able to recover the carrying amount of the asset or asset group.
Long-lived assets to be held and used by us are reviewed to determine whether any events or changes in circumstances, known as triggering events, indicate that we may not be able to recover the carrying amount of the asset group.
Interest expense, net, of $179 million in 2022, decreased $81 million, or 31%, compared to 2021 primarily due to the early repayments of principal amounts on our 11.00% Senior Notes maturing on December 1, 2024.
Interest expense, net, of $179 million in 2022, decreased $81 million, or 31%, compared to $260 million in 2021 primarily due to the early repayments of principal amounts on our 11.00% Exit Notes maturing on December 1, 2024, having fully repaid in 2021 on our 8.75% Senior Secured Notes maturing on September 1, 2024, and an increase in interest income.
The primary uses of cash from financing activities were for repayments of long-term debt of $198 million, which included finance leases, a repurchase of $8 million of our 2028 Senior Secured Notes and a $175 million early redemption of our Exit Notes. Additionally, we paid dividends to noncontrolling interests of $30 million.
Cash used in financing activities in 2022 was $248 million. The primary uses of cash in financing activities were repayments of long-term debt of $198 million which included finance leases, a repurchase of $8 million of our 2028 Senior Secured Notes and a $175 million early redemption of our Exit Notes.
Any of our outstanding letters of credit or surety bonds could be called by the beneficiaries should we breach certain contractual or performance obligations and could reduce our available liquidity if we are unable mitigate the issue.
Any of our outstanding letters of credit or surety bonds could be called by the beneficiaries should we breach certain contractual or performance obligations and could reduce our available liquidity if we are unable to mitigate the issue. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operation is based upon our Consolidated Financial Statements.
Consolidated Statements of Operations - Non-Operating Summary Interest Expense, Net Interest expense, net primarily represented for each year, the interest on our outstanding long-term debt (see “Note 10 – Borrowings and Other Debt Obligations” to our Consolidated Financial Statements for additional details).
Weatherford International plc – 2023 Form 10-K | 27 Table of Contents Item 7 | MD&A Consolidated Statements of Operations - Non-Operating Summary Interest Expense, Net Interest expense, net primarily represented for each year, the interest on our outstanding long-term debt (see “Note 8 – Borrowings and Other Debt Obligations” to our Consolidated Financial Statements for additional details) offset by interest income.
Cost of products and services of $3.02 billion increased $304 million, or 11%, compared to 2021, to support the increased overall activity across our segments.
Cost of products and services of $3.40 billion increased $375 million, or 12%, in 2023 compared to 2022, to support the increased overall activity across our segments.
The following table summarizes cash provided by (used in) each type of business activity in the periods presented: Year Ended December 31, (Dollars in millions) 2022 2021 2020 Net Cash Provided by Operating Activities $ 349 $ 322 $ 210 Net Cash Used in Investing Activities (54) (83) (75) Net Cash Provided by (Used in) Financing Activities (248) (403) 348 Operating Activities Cash provided by operating activities in 2022 was $349 million, and in 2021 was $322 million.
The following table summarizes cash provided by (used in) each type of business activity in the periods presented: Year Ended December 31, (Dollars in millions) 2023 2022 2021 Net Cash Provided by Operating Activities $ 832 $ 349 $ 322 Net Cash Used in Investing Activities (289) (54) (83) Net Cash Used in Financing Activities (514) (248) (403) Operating Activities The primary source of cash provided by operating activities was attributed to operating income and collections, which offset operating spend, including cash interest.
The primary sources of cash from financing activities were net proceeds of $2.1 billion from the issuance of our 2030 Senior Notes and 2028 Senior Secured Notes.
The primary sources of cash from financing activities were net proceeds of $2.1 billion from the issuance of our 2030 Senior Notes and 2028 Senior Secured Notes. Sources of Liquidity Our sources of available liquidity include cash generated by our operations, cash and cash equivalent balances, and periodic accounts receivable factoring.
Impairments and other charges recognized do not result in significant tax benefit as a result of our inability to forecast realization of the tax benefit of such losses. We are continuously under tax examination in various jurisdictions.
Impairments and other charges recognized do not result in significant tax benefit as a result of being attributed to a non-income tax jurisdiction or our inability to forecast realization of the tax benefit of such losses.
The primary sources of cash from operating activities were from higher operating income as well as effective working capital management, partially offset by interest payments. Cash provided by operating activities was $210 million during 2020. The primary sources of cash from operating activities were collections on our accounts receivables, partially offset by interest payments.
The primary sources of cash from operating activities were from higher operating income as well as effective working capital management, partially offset by interest payments. Investing Activities Cash used in investing activities in 2023 was $289 million.
We expect continued improvements in our customer activity levels and generally positive macroeconomic conditions that may offset inflationary pressures and potential recessionary concerns, all of which are expected to continue to provide a pathway to a multi-year energy demand expansion.
We expect continued improvements in our customer activity levels and generally positive macroeconomic conditions, all of which are expected to continue to provide a pathway to a multi-year energy demand expansion. We continue to closely monitor macroeconomic conditions, potential supply chain disruptions, inflationary factors, and other labor and logistical constraints that could impact our operations and results.
During 2021, we repaid in full our 2024 Senior Secured Notes, repaid $200 million of Exit Notes, and refinanced $1.6 billion of Exit Notes. As such, we recognized a $170 million loss, comprised of a $39 million loss on extinguishment of debt and a $131 million bond redemption premium.
During 2022, we repaid $175 million in principal on our Exit Notes and incurred a $5 million bond redemption premium. During 2021, we repaid in full our 2024 Senior Secured Notes, repaid $200 million of Exit Notes, and refinanced $1.6 billion of Exit Notes.
Weatherford International plc – 2022 Form 10-K | 23 Table of Contents Item 7 | MD&A Income Taxes We provide for income taxes based on the laws and rates in effect in the countries in which operations are conducted, or in which we or our subsidiaries are considered resident for income tax purposes.
Income Taxes We provide for income taxes based on the laws and rates in effect in the countries in which operations are conducted, or in which we or our subsidiaries are considered resident for income tax purposes.
Weatherford International plc – 2022 Form 10-K | 25 Table of Contents Item 7 | MD&A Oil and Natural Gas Prices The table below shows the average oil and natural gas prices for West Texas Intermediate (“WTI”) and Brent North Sea (“Brent”) crude oil and Henry Hub (“HH”) natural gas.
The table below shows the average oil and natural gas prices for West Texas Intermediate (“WTI”) and Brent North Sea (“Brent”) crude oil and Henry Hub (“HH”) natural gas.
During 2022, we sold accounts receivable balances of $96 million and received cash proceeds of $93 million. During 2021, we sold accounts receivable balances of $100 million and received cash proceeds of $85 million. During 2020, we sold accounts receivable of $90 million and received cash proceeds of $79 million.
During 2023, 2022, and 2021 we sold accounts receivable balances of $210 million, $96 million, and $100 million, respectively, and received cash proceeds of $202 million, $93 million, and $85 million, respectively, at the time of factoring.
Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operation is based upon our Consolidated Financial Statements. We prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
We prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The obligations under the Credit Agreement, as with our prior LC Agreement, are guaranteed by the Company and certain of our subsidiaries and secured by substantially all of the personal property of the Company and these subsidiaries.
The Credit Agreement is guaranteed by the Company and certain of our subsidiaries and secured by substantially all of the personal property of the Company and those subsidiaries.
See “Note 18 – Income Taxes” for detailed discussion of results. We recognize the impact of an uncertain tax position taken or expected to be taken on an income tax return in the financial statements at the largest amount that is more likely than not to be sustained upon examination by the relevant taxing authority.
Weatherford International plc – 2023 Form 10-K | 38 Table of Contents Critical Accounting Policies and Estimates We recognize the impact of an uncertain tax position taken or expected to be taken on an income tax return in the financial statements at the largest amount that is more likely than not to be sustained upon examination by the relevant taxing authority.
The year-over-year improvement was due to increased activity across all reporting segments. This activity increase was the result of increased customer demand, market share improvements, pricing improvements and operational focus. Revenues in 2022 reflect a 15% increase in service revenues and a 26% increase in product revenues.
Revenues in 2022 reflect a 15% increase in service revenues and a 26% increase in product revenues. The year-over-year improvement was due to increased activity across all reporting segments with PRI, DRE and WCC contributing 39%, 38%, and 24% of the increase in revenues, respectively.
As of December 31, 2022, we had outstanding debt of $125 million in aggregate principal amount for our Exit Notes maturing on December 1, 2024, $482 million in aggregate principal amount for our 2028 Senior Secured Notes and $1.6 billion in aggregate principal amount for our 2030 Senior Notes.
See further discussion below under “Derivative Financial Instruments” and in “Note 10 – Derivative Financial Instruments”. As of December 31, 2023, we had outstanding debt of $248 million in aggregate principal amount for our 2028 Senior Secured Notes and $1.6 billion in aggregate principal amount for our 2030 Senior Notes.
Segment Adjusted EBITDA 2022 vs 2021 Segment adjusted EBITDA was $884 million in 2022, an increase of 40% compared to 2021, reflecting improved utilization on a more efficient operating cost structure, pricing improvements to customers to offset impacts from supply chain disruptions and inflation, and a proactive focus on higher margin offerings.
Our cost of products and services as a percentage of revenues was 66% in 2023, an improvement compared to 70% in 2022, reflecting improved utilization on a more efficient operating cost structure, and pricing improvements to customers to offset impacts from supply chain disruptions and inflation.
Year Ended December 31, 2022 2021 2020 Oil price - WTI (1) $ 94.79 $ 67.99 $ 39.23 Oil price - Brent (1) $ 100.78 $ 70.68 $ 41.76 Natural Gas price - HH (2) $ 6.42 $ 3.91 $ 2.04 (1) Oil price measured in dollars per barrel (rounded to the nearest $0.01); average WTI and Brent as of January 31, 2023 was $78.08 and $82.44 respectively.
Year Ended December 31, 2023 2022 2021 Oil price - WTI (1) $ 77.64 $ 94.79 $ 67.99 Oil price - Brent (1) $ 82.47 $ 100.78 $ 70.68 Natural Gas price - HH (2) $ 2.54 $ 6.42 $ 3.91 (1) Oil price measured in dollars per barrel (rounded to the nearest $0.01) (2) Natural gas price measured in dollars per million British thermal units (Btu), or MMBtu The table below shows historical average rig counts based on the weekly Baker Hughes Company rig count information.
These costs as a percentage of revenues were 20.0% in 2022, an improvement compared to 22.6% in 2021, reflecting our focus on cost control initiatives. Operating income of $412 million improved 255% in 2022 compared to 2021, due to reasons noted above. 2021 vs 2020 Revenues totaled $3.65 billion in 2021, a decline of 1% compared to 2020.
These costs as a percentage of revenues were 20% in 2022, an improvement compared to 23% in 2021, reflecting our focus on cost control initiatives.
These challenges increase our customers’ requirements for technologies that improve productivity and efficiency and pressures us to deliver our products and services at competitive rates. Over the long-term, we expect demand for oil and natural gas exploration and production industry as well as new energy platforms to continue to require more advanced technology from the energy service industry.
Over the long-term, we expect demand for oil and natural gas exploration and production industry as well as new energy platforms to continue to require more advanced technology from the energy service industry. Weatherford delivers innovative energy services that integrate proven technologies with advanced digitalization to create sustainable offerings for maximized value and return on investment.
Loss on Extinguishment of Debt and Bond Redemption Premium The loss on extinguishment of debt was related to charges on unamortized debt issuance costs and bond redemption premiums, both upon the early redemption of debt. During 2022, we repaid $175 million in principal on our Exit Notes and incurred a $5 million bond redemption premium.
Loss on Extinguishment of Debt and Bond Redemption Premium During 2023, we repaid the remaining $125 million in principal on our Exit Notes and made $243 million in repayments and repurchases of our 6.5% Senior Secured Notes, and incurred a $5 million bond redemption premium.
See “Note 2 – Segment Information”, “Note 7 – Property, Plant and Equipment, Net”, and “Note 8 – Intangible Assets, Net” for additional information. Shared-based Compensation We record shared-based compensation expense in “Selling, General and Administrative” on the accompanying Consolidated Statements of Operations. We recognized $25 million in each of 2022 and 2021, and an immaterial amount during 2020.
Share-based Compensation We record share-based compensation expense in “Selling, General and Administrative” on the accompanying Consolidated Statements of Operations. We recognized $35 million in 2023 and $25 million in each of 2022, and 2021. The increase was primarily attributable to the cost of performance share units. See “Note 13 – Share-Based Compensation” for additional information.
Other expense, net, of $90 million in 2022 increased $61 million compared to 2021 expense of $29 million primarily attributable to currency losses in the Argentinian Peso, Russian Ruble and various other currencies. When economically advantageous, we enter into foreign currency forward contracts to mitigate the risk of future cash flows denominated in a foreign currency.
Other Expense, Net Other expense, net, of $129 million in 2023 increased $39 million compared to 2022 expense of $90 million primarily attributable to currency losses on the Argentine Peso. Other expense, net, in 2022 increased by $61 million compared to the 2021 expense of $29 million primarily attributable to currency losses in the Argentine Peso and the Russian Ruble.
On September 26, 2019, our parent company ceased to be a Swiss tax resident and became an Irish tax resident subject to tax under the Irish tax regime. As a result, our effective rate differs from the Irish statutory tax rate as the majority of our operations are taxed in jurisdictions with different tax rates.
Our effective rate differs from the Irish statutory tax rate as the majority of our operations are taxed in jurisdictions with different tax rates. In addition, we are unable to recognize tax benefit on certain losses.
Imbalance across geographies driven by geopolitical conflicts, investment variances and supply disruptions caused a greater focus on energy security, globally. Our operational initiatives, put in place over the past couple of years, enabled us to regain share in a few product lines and geographies, as well as improve pricing through differentiation.
Our operational initiatives, put in place over the past couple of years, enabled us to regain share in a few product lines and geographies, as well as improve pricing through differentiation. Cost of products and services of $3.02 billion increased $304 million, or 11% compared to 2021, to support the increased overall activity across our segments.
The remaining financing cash uses were primarily for financing fees paid on the Credit Agreement. Cash used in financing activities in 2021 was $403 million.
Additionally, we paid distributions to noncontrolling interests of $30 million. The remaining financing cash uses were primarily for financing fees paid on the Credit Agreement. Weatherford International plc – 2023 Form 10-K | 34 Table of Contents Item 7 | MD&A Cash used in financing activities in 2021 was $403 million.
The income tax provision and respective effective tax rate was $87 million and 63%, $86 million and (25)%, and $85 million and (5)%, for 2022, 2021 and 2020, respectively.
Weatherford International plc – 2023 Form 10-K | 28 Table of Contents Item 7 | MD&A The income tax provision and respective effective tax rate was $57 million and 11%, $87 million and 63%, and $86 million and (25)% for 2023, 2022 and 2021, respectively.
The breakdown by segment revenues is as follows: DRE revenues of $1.3 billion in 2022, increased 25% compared to 2021 due to higher demand and activity across all DRE product lines, and led primarily by managed pressure drilling and drilling services.
DRE segment adjusted EBITDA margin was 27.5% in 2023 compared to 24.4% in 2022. 2022 vs 2021 DRE revenues of $1.3 billion in 2022, increased by $262 million or 25% compared to 2021 due to higher demand and activity with approximately 70% of the increase from managed pressure drilling and drilling services.
Ratings Services’ Credit Ratings Our credit ratings at December 31, 2022 were maintained or improved since December 31, 2021: • Standard and Poor’s (“S&P”) upgraded our corporate family and senior unsecured notes ratings from B- to B, and upgraded our senior secured notes and Credit Agreement ratings from B+ to BB-.
Ratings Services’ Credit Ratings Our credit ratings at December 31, 2023 were upgraded, maintained, or newly initiated since December 31, 2022 as follows: • Standard and Poor (“S&P”) upgraded our issuer credit rating from ‘B’ to ‘B+’.
See “10 – Borrowings and Other Debt Obligations” for additional information. Sources of Liquidity Our sources of available liquidity include cash generated by our operations, cash and cash equivalent balances, and periodic accounts receivable factoring. From time to time, we may enter into transactions to dispose of businesses or capital assets that no longer fit our long-term strategy.
From time to time, we may enter into transactions to dispose 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.
See “Note 10 – Borrowings and Other Debt Obligations” for additional information. Our capital spending for 2023 is projected to be between $200 million to $230 million. Our payments on our operating and finance leases in 2023 are expected to be approximately $73 million and $247 million in the years thereafter. See “Note 9 – Leases” for additional information.
Our payments on our operating and finance leases in 2024 are expected to be approximately $79 million and $254 million in the years thereafter. See “Note 7 – Leases” for additional information. Cash and cash equivalents and restricted cash are held by subsidiaries outside of Ireland.
Improvement in WCC was across all regions and led primarily by the Middle East North Africa/Asia, Latin America and North America regions. PRI revenues of $1.4 billion in 2022, increased 24% compared to 2021 due to higher demand and activity across all PRI product lines, and led primarily by artificial lift and pressure pumping.
Weatherford International plc – 2023 Form 10-K | 31 Table of Contents Item 7 | MD&A 2022 vs 2021 PRI revenues of $1.4 billion in 2022, increased by $268 million or 24% compared to 2021 due to higher demand and activity across all PRI product lines with approximately 75% of the increase from artificial lift and pressure pumping.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFinancial Statements and Supplementary Data, in “Note 1 – Summary of Significant Accounting Policies”, “Note 11 – Fair Value of Financial Instruments, Assets and Other Assets” and “Note 12 – Derivative Instruments”. Weatherford International plc – 2022 Form 10-K | 37 Table of Contents Item 8 | Financial Statements and Supplementary Data
Biggest changeFinancial Statements and Supplementary Data, in “Note 1 – Summary of Significant Accounting Policies”, “Note 9 – Fair Value of Financial Instruments, Assets and Other Assets” and “Note 10 – Derivative Financial Instruments”. Weatherford International plc – 2023 Form 10-K | 41 Table of Contents Item 8 | Financial Statements and Supplementary Data
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Information related to market risk is included earlier in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – “Other Expense, Net” and “Derivatives” and later, in the Notes to Consolidated Financial Statements under Item 8.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Information related to market risk is included earlier in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – “Other Expense, Net” and “Derivative Financial Instruments” and later, in the Notes to Consolidated Financial Statements under Item 8.

Other WFRD 10-K year-over-year comparisons