UNITED STATES | |||||
SECURITIES AND EXCHANGE COMMISSION | |||||
Washington, D.C. 20549 |
Form |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||
For the fiscal year ended | |||||||||||
or | |||||||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||
For the transition period from __________________________________to __________________________________ | |||||||||||
Commission file number |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | ☐ | Smaller reporting company | Emerging growth company |
PAGE | ||||||||
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Item 1B | ||||||||
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Item 3 | ||||||||
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Item 7A | ||||||||
Item 8 | ||||||||
Item 9 | ||||||||
Item 9A | ||||||||
Item 9B | ||||||||
Item 10 | ||||||||
Item 11 | ||||||||
Item 12 | ||||||||
Item 13 | ||||||||
Item 14 | ||||||||
Item 15 | ||||||||
Item 16 | ||||||||
Name | Age | Current Position and Five-Year Business Experience | ||||||
Girishchandra K. Saligram | 49 | 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 | ||||||||
Positions of increasing responsibilities at GE Oil & Gas ending with General Manager, Downstream Products & Services, in August 2016 | ||||||||
Karl Blanchard (a) | 61 | Executive Vice President and Chief Operating Officer of Weatherford International plc, from August 2017 to present; Interim Chief Executive Officer of Weatherford International plc, from June 2020 to October 2020; Principal Financial Officer of Weatherford International plc from August 2020 to September 2020 | ||||||
Chief Operating Officer of Seventy Seven Energy, Inc., June 2014 to April 2017 | ||||||||
H. Keith Jennings | 51 | Executive Vice President and Chief Financial Officer of Weatherford International plc, since September 2020 | ||||||
Executive Vice President and Chief Financial Officer of Calumet Specialty Products Partners, L.P. from November 2019 to September 2020 | ||||||||
Vice President, Finance of Eastman Chemical Company, May 2018 to October 2019 | ||||||||
Vice President and Treasurer of Eastman Chemical Company from August 2016 to May 2018 | ||||||||
Vice President and Treasurer of Cameron International Corporation from June 2009 to April 2016 | ||||||||
Scott C. Weatherholt (b) | 43 | 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 |
Region | Specific Location | ||||
Western Hemisphere: | Houston, Huntsville, Longview, Odessa and San Antonio, Texas; Broussard, Louisiana; Williston, North Dakota; Colorado Springs, Colorado; Bakersfield, California; Edmonton and Nisku, Canada; Neuquén, Argentina; Macae, Brazil; Venustiano Carranza and Villahermosa, Mexico; and Villavicencio, Colombia. | ||||
Eastern Hemisphere: | Aberdeen, UK; Stavanger, Norway; Baku, Azerbaijan; Ploiesti, Romania; Luanda, Angola; Port Harcourt, Nigeria; Langenhagen, Germany; Aktobe, Kazakhstan; Nizhnevartovsk and Noyabrsk, Russia; Hassi Messaoud, Algeria; Cairo, Egypt; North Rumaila and Erbil, Iraq; Mina Abdulla, Kuwait; Nimr, Oman; Karachi, Pakistan; Dhahran, Saudi Arabia; Abu Dhabi and Dubai, United Arab Emirates; Malaga, Australia; Jiangsu, China; and Barmer, India. |
Years Ended | ||||||||||||||
12/31/2020 | 12/31/2019 | 12/31/2018 | ||||||||||||
Oil price - WTI (1) | $39.23 | $56.98 | $64.94 | |||||||||||
Natural Gas price - Henry Hub (2) | $2.04 | $2.57 | $3.17 | |||||||||||
(1) Oil price measured in dollars per barrel (rounded to the nearest dollar) | ||||||||||||||
(2) Natural gas price measured in dollars per million British thermal units (Btu), or MMBtu |
Years Ended | ||||||||||||||
12/31/2020 | 12/31/2019 | 12/31/2018 | ||||||||||||
North America | 522 | 1,077 | 1,223 | |||||||||||
International | 825 | 1,098 | 988 | |||||||||||
Worldwide | 1,347 | 2,175 | 2,211 |
Successor | Predecessor | Combined Change | Combined Change | ||||||||||||||||||||||||||||||||||||||
From | From | Favorable | Favorable | ||||||||||||||||||||||||||||||||||||||
Year | 12/14/19 | 01/01/19 | Year | (Unfavorable) | (Unfavorable) | ||||||||||||||||||||||||||||||||||||
Ended | through | through | Ended | $ | % | $ | % | ||||||||||||||||||||||||||||||||||
(Dollars in millions, except per share data) | 12/31/20 | 12/31/19 | 12/13/19 | 12/31/18 | 2020 vs 2019 | 2019 vs 2018 | |||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||
Western Hemisphere | $ | 1,586 | $ | 121 | $ | 2,620 | $ | 3,063 | $ | (1,155) | (42) | % | $ | (322) | (11) | % | |||||||||||||||||||||||||
Eastern Hemisphere | 2,099 | 140 | 2,334 | 2,681 | (375) | (15) | % | (207) | (8) | % | |||||||||||||||||||||||||||||||
Total Revenues | 3,685 | 261 | 4,954 | 5,744 | (1,530) | (29) | % | (529) | (9) | % | |||||||||||||||||||||||||||||||
Operating Income (Loss): | |||||||||||||||||||||||||||||||||||||||||
Western Hemisphere | 18 | (4) | 54 | 208 | (32) | (64) | % | (158) | (76) | % | |||||||||||||||||||||||||||||||
Eastern Hemisphere | 37 | 10 | 134 | 119 | (107) | (74) | % | 25 | 21 | % | |||||||||||||||||||||||||||||||
Total Segment Operating Income | 55 | 6 | 188 | 327 | (139) | (72) | % | (133) | (41) | % | |||||||||||||||||||||||||||||||
Corporate | (111) | (5) | (118) | (130) | 12 | 10 | % | 7 | 5 | % | |||||||||||||||||||||||||||||||
Impairments and Other Charges | (1,236) | — | (1,104) | (2,155) | (132) | (12) | % | 1,051 | 49 | % | |||||||||||||||||||||||||||||||
Restructuring Charges | (206) | — | (189) | (126) | (17) | (9) | % | (63) | (50) | % | |||||||||||||||||||||||||||||||
Prepetition Charges | — | — | (86) | — | 86 | 100 | % | (86) | NA | ||||||||||||||||||||||||||||||||
Gain on Operational Assets Sale | 12 | — | 15 | — | (3) | (20) | % | 15 | NA | ||||||||||||||||||||||||||||||||
Gain on Sale of Businesses, Net | — | — | 112 | — | (112) | (100) | % | 112 | NA | ||||||||||||||||||||||||||||||||
Total Operating Income (Loss) | (1,486) | 1 | (1,182) | (2,084) | (305) | (26) | % | 903 | 43 | % | |||||||||||||||||||||||||||||||
Reorganization Items | (9) | (4) | 5,389 | — | (5,394) | (100) | % | 5,385 | NA | ||||||||||||||||||||||||||||||||
Interest Expense, Net | (266) | (12) | (362) | (614) | 108 | 29 | % | 240 | 39 | % | |||||||||||||||||||||||||||||||
Total Other Expense, Net | (53) | — | (26) | (59) | (27) | (104) | % | 33 | 56 | % | |||||||||||||||||||||||||||||||
Income (Loss) before Income Taxes | (1,814) | (15) | 3,819 | (2,757) | (5,618) | (148) | % | 6,561 | 238 | % | |||||||||||||||||||||||||||||||
Income Tax Provision | (85) | (9) | (135) | (34) | 59 | 41 | % | (110) | (324) | % | |||||||||||||||||||||||||||||||
Net Income (Loss) | $ | (1,899) | $ | (24) | $ | 3,684 | $ | (2,791) | $ | (5,559) | (152) | % | $ | 6,451 | 231 | % | |||||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Period From | Period From | ||||||||||||||||||||||
Year | 12/14/19 | 01/01/19 | Year | ||||||||||||||||||||
Ended | through | through | Ended | ||||||||||||||||||||
12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | ||||||||||||||||||||
Completion and Production | 51 | % | 52 | % | 47 | % | 47 | % | |||||||||||||||
Drilling, Evaluation and Intervention | 49 | 48 | 53 | 53 | |||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Successor | Predecessor | ||||||||||||||||||||||
From | From | ||||||||||||||||||||||
Year | 12/14/2019 | 1/1/2019 | Year | ||||||||||||||||||||
Ended | through | through | Ended | ||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | |||||||||||||||||||
Net Cash Provided by (Used in) Operating Activities | $ | 210 | $ | 61 | $ | (747) | (242) | ||||||||||||||||
Net Cash Provided by (Used in) Investing Activities | (75) | (14) | 149 | 122 | |||||||||||||||||||
Net Cash Provided by (Used in) Financing Activities | 348 | (2) | 749 | 168 |
Asset Category | Estimated Useful Lives | ||||
Buildings and Leasehold Improvements | 10 – 40 years or lease term | ||||
Rental and Service Equipment | 3 – 10 years | ||||
Machinery and Other | 2 – 12 years | ||||
Intangible Assets | 5 – 10 years |
PAGE | |||||
Financial Statement Schedule II: | |||||
WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES | |||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Period From | Period From | ||||||||||||||||||||||
Year | 12/14/2019 | 1/1/2019 | |||||||||||||||||||||
Ended | through | through | Year Ended | ||||||||||||||||||||
(Dollars and shares in millions, except per share amounts) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | |||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Products | $ | $ | $ | $ | |||||||||||||||||||
Services | |||||||||||||||||||||||
Total Revenues | |||||||||||||||||||||||
Costs and Expenses: | |||||||||||||||||||||||
Cost of Products | |||||||||||||||||||||||
Cost of Services | |||||||||||||||||||||||
Research and Development | |||||||||||||||||||||||
Selling, General and Administrative | |||||||||||||||||||||||
Impairments and Other Charges | |||||||||||||||||||||||
Restructuring Charges | |||||||||||||||||||||||
Prepetition Charges | |||||||||||||||||||||||
Gain on Sale of Operational Assets | ( | ( | |||||||||||||||||||||
Gain on Sale of Businesses, Net | ( | ||||||||||||||||||||||
Total Costs and Expenses | |||||||||||||||||||||||
Operating Income (Loss) | ( | ( | ( | ||||||||||||||||||||
Other Income (Expense): | |||||||||||||||||||||||
Reorganization Items | ( | ( | |||||||||||||||||||||
Interest Expense, Net | ( | ( | ( | ( | |||||||||||||||||||
Other Expense, Net | ( | ( | ( | ||||||||||||||||||||
Income (Loss) Before Income Taxes | ( | ( | ( | ||||||||||||||||||||
Income Tax Provision | ( | ( | ( | ( | |||||||||||||||||||
Net Income (Loss) | ( | ( | ( | ||||||||||||||||||||
Net Income Attributable to Noncontrolling Interests | |||||||||||||||||||||||
Net Income (Loss) Attributable to Weatherford | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Basic and Diluted Loss Per Share Attributable to Weatherford | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Basic and Diluted Weighted Average Shares Outstanding |
WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES | |||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Period From | Period From | ||||||||||||||||||||||
12/14/2019 | 1/1/2019 | ||||||||||||||||||||||
Year Ended | through | through | Year Ended | ||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | |||||||||||||||||||
Net Income (Loss) | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Foreign Currency Translation | ( | ( | |||||||||||||||||||||
Defined Benefit Pension Activity | ( | ( | |||||||||||||||||||||
Interest Rate Derivative Loss | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Other Comprehensive Income (Loss) | ( | ( | |||||||||||||||||||||
Comprehensive Income (Loss) | ( | ( | ( | ||||||||||||||||||||
Comprehensive Income Attributable to Noncontrolling Interests | |||||||||||||||||||||||
Comprehensive Income (Loss) Attributable to Weatherford | $ | ( | $ | ( | $ | $ | ( |
WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
December 31, | ||||||||
(Dollars and shares in millions, except par value) | 2020 | 2019 | ||||||
Assets: | ||||||||
Cash and Cash Equivalents | $ | $ | ||||||
Restricted Cash | 167 | |||||||
Accounts Receivable, Net of Allowance for Credit Losses of $ and $ | ||||||||
Inventories, Net | ||||||||
Other Current Assets | ||||||||
Total Current Assets | ||||||||
Property, Plant and Equipment, Net of Accumulated Depreciation of $ | ||||||||
Goodwill | ||||||||
Intangible Assets, Net of Accumulated Amortization of $ $ | ||||||||
Operating Lease Right-of-Use Assets | ||||||||
Other Non-current Assets | ||||||||
Total Assets | $ | $ | ||||||
Liabilities: | ||||||||
Short-term Borrowings and Current Portion of Long-term Debt | $ | $ | ||||||
Accounts Payable | ||||||||
Accrued Salaries and Benefits | ||||||||
Income Taxes Payable | ||||||||
Current Portion of Operating Lease Liabilities | ||||||||
Other Current Liabilities | ||||||||
Total Current Liabilities | ||||||||
Long-term Debt | ||||||||
Operating Lease Liabilities | ||||||||
Other Non-current Liabilities | ||||||||
Total Liabilities | ||||||||
Shareholders’ Equity: | ||||||||
Ordinary Shares - Par value $ Outstanding | ||||||||
Capital in Excess of Par Value | ||||||||
Retained Deficit | ( | ( | ||||||
Accumulated Other Comprehensive Income (Loss) | ( | |||||||
Weatherford Shareholders’ Equity | ||||||||
Noncontrolling Interests (“NCI”) | ||||||||
Total Shareholders’ Equity | ||||||||
Total Liabilities and Shareholders’ Equity | $ | $ |
WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIENCY) | |||||||||||||||||||||||||||||||||||
(Dollars in millions) | Par Value of Issued Shares | Capital In Excess of Par Value | Retained Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interests | Total Shareholders’ (Deficiency) Equity | |||||||||||||||||||||||||||||
Balance at December 31, 2017 (Predecessor) | $ | $ | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Net Income (Loss) | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
Other Comprehensive Loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Dividends Paid to NCI | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Adoption of Accounting Standard | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Equity Awards Granted, Vested and Exercised | — | — | — | ||||||||||||||||||||||||||||||||
Other | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
Balance at December 31, 2018 (Predecessor) | $ | $ | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Net Income (Loss) | |||||||||||||||||||||||||||||||||||
Other Comprehensive Income | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends Paid to NCI | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Equity Awards Granted, Vested and Exercised | — | — | — | — | |||||||||||||||||||||||||||||||
Equity Awards Vested and Cancelled in Connection With the Plan | — | — | — | — | |||||||||||||||||||||||||||||||
Other Activity | — | — | — | ||||||||||||||||||||||||||||||||
Elimination of Predecessor Equity Balances | ( | ( | ( | ||||||||||||||||||||||||||||||||
Issuance of New Ordinary Shares to Creditors in Connection with the Plan | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of New Ordinary Shares to Prior Shareholders | — | — | — | — | |||||||||||||||||||||||||||||||
Equity Value of Warrants | — | — | — | — | |||||||||||||||||||||||||||||||
Fresh Start Adjustment to NCI | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
Balance at December 13, 2019 (Successor) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Net Income (Loss) | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
Other Comprehensive Income | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at December 31, 2019 (Successor) | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Net Income (Loss) | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
Other Comprehensive Income | — | — | — | $ | ( | — | ( | ||||||||||||||||||||||||||||
Dividends Paid to NCI | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance at December 31, 2020 (Successor) | $ | $ | $ | ( | $ | ( | $ | $ |
WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES | |||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Period From | Period From | ||||||||||||||||||||||
Year | 12/14/2019 | 1/1/2019 | Year | ||||||||||||||||||||
Ended | through | through | Ended | ||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | |||||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||||||
Net Income (Loss) | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities: | |||||||||||||||||||||||
Depreciation and Amortization | |||||||||||||||||||||||
Gain on Settlement of Liabilities Subject to Compromise | ( | ||||||||||||||||||||||
Reorganization Items | ( | ||||||||||||||||||||||
Long-lived Asset Impairments | |||||||||||||||||||||||
Goodwill Impairment | |||||||||||||||||||||||
Inventory Charges | |||||||||||||||||||||||
Asset Write-Downs and Other Charges | |||||||||||||||||||||||
Employee Share-Based Compensation Expense | |||||||||||||||||||||||
Gain on Sale Businesses, Net | ( | ||||||||||||||||||||||
Deferred Income Tax Provision (Benefit) | ( | ( | |||||||||||||||||||||
Change in Operating Assets and Liabilities, Net: | |||||||||||||||||||||||
Accounts Receivable | ( | ( | |||||||||||||||||||||
Inventories | ( | ||||||||||||||||||||||
Accounts Payable | ( | ( | ( | ( | |||||||||||||||||||
Other Assets and Liabilities, Net | ( | ( | |||||||||||||||||||||
Net Cash Provided by (Used in) Operating Activities | $ | $ | $ | ( | $ | ( | |||||||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||||||||
Capital Expenditures for Property, Plant and Equipment | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Acquisition of Assets Held for Sale | ( | ||||||||||||||||||||||
Acquisitions of Businesses, Net of Cash Acquired | |||||||||||||||||||||||
Acquisition of Intangible Assets | ( | ( | ( | ( | |||||||||||||||||||
Proceeds from Divestiture of Businesses and Investments | |||||||||||||||||||||||
Proceeds from Disposition of Assets | |||||||||||||||||||||||
Proceeds from Bond Maturities | |||||||||||||||||||||||
Net Cash Provided by (Used in) Investing Activities | $ | ( | $ | ( | $ | $ | |||||||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||||||
Borrowings of Long-term Debt | $ | $ | $ | $ | |||||||||||||||||||
Borrowings on Debtor in Possession (“DIP”) Credit Agreement | |||||||||||||||||||||||
Repayment on DIP Credit Agreement upon Emergence | ( | ||||||||||||||||||||||
Repayments of Long-term Debt | ( | ( | ( | ( | |||||||||||||||||||
Repayments of Short-term Debt, Net | ( | ( | ( | ||||||||||||||||||||
DIP Financing Fees and Payments on Backstop Agreement | ( | ||||||||||||||||||||||
Deferred Consideration Payment | ( | ||||||||||||||||||||||
Other Financing Activities, Net | ( | ( | ( | ||||||||||||||||||||
Net Cash Provided by (Used in) Financing Activities | $ | $ | ( | $ | $ | ||||||||||||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | ( | ||||||||||||||||||||||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | ( | ||||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | |||||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash at End of Period | $ | $ | $ | $ | |||||||||||||||||||
Supplemental Cash Flow Information | |||||||||||||||||||||||
Interest Paid | $ | $ | $ | $ | |||||||||||||||||||
Income Taxes Paid, Net of Refunds | $ | $ | $ | $ | |||||||||||||||||||
Major Classes of Property, Plant and Equipment | PP&E Estimated Useful Lives | ||||
Buildings and leasehold improvements | |||||
Rental and service equipment | |||||
Machinery and other |
Successor | Predecessor | |||||||||||||||||||
Period From | Period From | |||||||||||||||||||
12/14/2019 | 1/1/2019 | |||||||||||||||||||
Year Ended | through | through | ||||||||||||||||||
Reorganization Gain (Expense) (Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | |||||||||||||||||
Gain on Settlement of Liabilities Subject to Compromise | $ | $ | $ | |||||||||||||||||
Fresh Start Valuation Adjustments | ||||||||||||||||||||
Reorganization Items for Plan Effects (Non-Cash) | ||||||||||||||||||||
Unamortized Debt Issuance and Discount | $ | $ | $ | ( | ||||||||||||||||
Unamortized Interest Rate Derivative Loss | ( | |||||||||||||||||||
Reorganization Items (Non-Cash) | ( | |||||||||||||||||||
Backstop Commitment Fees | $ | $ | $ | ( | ||||||||||||||||
DIP Financing Fees | ( | |||||||||||||||||||
Professional Fees | ( | ( | ( | |||||||||||||||||
Reorganization Fees | ( | ( | ( | |||||||||||||||||
Total Reorganization Items | $ | ( | $ | ( | $ | |||||||||||||||
Reorganization Items (Fees) Unpaid | $ | $ | $ | |||||||||||||||||
Reorganization Items (Fees) Paid | $ | $ | $ |
Predecessor | ||||||||
December 13, | ||||||||
(Dollars in millions) | 2019 | |||||||
$ | ||||||||
Accrued Interest on Senior Notes and Exchangeable Senior Notes | ||||||||
Liabilities Subject to Compromise | $ |
(Dollars in millions) | Fresh Start Reporting Date | ||||
Enterprise Value | $ | ||||
Plus: Cash and Cash Equivalents (includes $25 million cash collateral released from restricted cash on 12/17/19) | |||||
Less: Fair Value of Debt | ( | ||||
Fair Value of Successor Equity | $ | ||||
(Dollars in millions) | Fresh Start Reporting Date | ||||
Enterprise Value | $ | ||||
Plus: Cash and Cash Equivalents (includes $25 million cash collateral released from restricted cash on 12/17/19) | |||||
Plus: Current Liabilities Excluding Short-term Borrowings and Current Portion of Long-term Debt | |||||
Plus: Non-current Liabilities Excluding Long-term Debt | |||||
Reorganization Value of Successor’s Assets to be Allocated | $ |
As of December 13, 2019 | |||||||||||||||||||||||
Fresh Start | |||||||||||||||||||||||
Reorganization | Accounting | ||||||||||||||||||||||
(Dollars in millions) | Predecessor | Adjustments (1) | Adjustments | Successor | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash and Cash Equivalents | $ | $ | ( | (2) | $ | $ | |||||||||||||||||
Restricted Cash | ( | (3) | |||||||||||||||||||||
Accounts Receivable, Net | |||||||||||||||||||||||
Inventories, Net | ( | (17) | |||||||||||||||||||||
Other Current Assets | ( | (4) | ( | (18) | |||||||||||||||||||
Total Current Assets | ( | ( | |||||||||||||||||||||
Property, Plant and Equipment, Net | (19) | ||||||||||||||||||||||
Goodwill | (20) | ||||||||||||||||||||||
Intangible Assets, Net | (21) | ||||||||||||||||||||||
Other Non-current Assets | (5) | (22) | |||||||||||||||||||||
Total Assets | $ | $ | ( | $ | $ | ||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Debtor in Possession Financing | $ | $ | ( | (6) | $ | $ | |||||||||||||||||
Short-term Borrowings and Current Portion of Long-term Debt | ( | (7) | ( | (23) | |||||||||||||||||||
Accounts Payable | ( | (8) | |||||||||||||||||||||
Accrued Salaries and Benefits | — | — | |||||||||||||||||||||
Income Taxes Payable | — | — | |||||||||||||||||||||
Other Current Liabilities | ( | (9) | ( | (24) | |||||||||||||||||||
Total Current Liabilities | ( | ( | |||||||||||||||||||||
Long-term Debt | (10) | ( | (25) | ||||||||||||||||||||
Other Non-current Liabilities | (26) | ||||||||||||||||||||||
Total Liabilities Not Subject to Compromise | |||||||||||||||||||||||
Liabilities Subject to Compromise | ( | (11) | — | ||||||||||||||||||||
Shareholders’ Equity (Deficiency): | |||||||||||||||||||||||
Predecessor Ordinary Shares | ( | (12) | — | ||||||||||||||||||||
Successor Ordinary Shares | (13) | — | |||||||||||||||||||||
Predecessor Capital in Excess of Par Value | ( | (14) | ( | (27) | — | ||||||||||||||||||
Successor Capital in Excess of Par Value | — | (15) | — | (28) | |||||||||||||||||||
Retained Earnings (Deficit) | ( | (16) | (27) | — | |||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ( | (27) | — | ||||||||||||||||||||
Weatherford Shareholders’ Equity (Deficiency) | ( | ||||||||||||||||||||||
Noncontrolling Interests | — | ( | (28) | ||||||||||||||||||||
Total Shareholders’ Equity (Deficiency) | ( | ||||||||||||||||||||||
Total Liabilities and Shareholders’ Equity (Deficiency) | $ | $ | ( | $ | $ |
Proceeds from Exit Notes | $ | ||||
Cash Collateral Released | |||||
Payment in full on the DIP Credit Agreement and related unpaid interest | ( | ||||
Payment in full on the A&R Credit Agreement and related unpaid interest | ( | ||||
Payment to Escrow Remaining Professional Fees | ( | ||||
Payment on Deferred Financing Fees for Exit Credit Agreements | ( | ||||
Payments on Other Liabilities | ( | ||||
Payment on Professional Fees not escrowed | ( | ||||
Net Change in Cash and Cash Equivalents | $ | ( |
Payment to Escrow Professional Fees | $ | ||||
Cash Collateral Released | ( | ||||
Net Change in Restricted Cash | $ | ( |
Payment on Deferred Financing Fees, Including Professional Fees, on the Exit Credit Agreements. | $ | ||||
Reclass of amounts from Other Current Assets to deferred financing fees on the Exit Credit Agreements. | |||||
Accrual of Deferred Financing Fees on the Exit Credit Agreements | |||||
Write-off of Deferred Financing Fees on the A&R Credit Agreement | ( | ||||
Net Change in Other Non-current Assets | $ |
Payments of Other Liabilities | $ | ( | |||
Payment of Interest on the DIP Credit Agreement | ( | ||||
Payment of Interest on the A&R Credit Agreement | ( | ||||
Net Change in Other Current Liabilities | $ | ( |
Liabilities Subject to Compromise | $ | ||||
Distribution of equity to creditors | ( | ||||
Issue Exit Takeback Notes to creditors | ( | ||||
Gain on Settlement of Liabilities Subject to Compromise | $ |
Acceleration of share-based compensation | $ | ||||
Cancellation of Predecessor Ordinary Shares | |||||
Issuance of New Ordinary Shares to Prior Ordinary Share Holders | ( | ||||
Issuance of New Warrant to Prior Ordinary Share Holders | $ | ( | |||
Net Change in Predecessor Capital in Excess of Par Value | $ | ( |
Issuance of New Ordinary Shares to Creditors | $ | ||||
Issuance of New Warrant to Prior Ordinary Share Holders | |||||
Issuance of New Ordinary Shares to Prior Ordinary Share Holders | |||||
Net Change in Successor Capital in Excess of Par Value | $ |
Gain on Settlement of Liabilities Subject to Compromise | $ | ||||
Acceleration of share-based compensation | ( | ||||
Write-off of deferred financing fees on the A&R Credit Agreement | ( | ||||
Net Change in Retained Deficit | $ |
Successor Fair Value | Predecessor Historical Value | |||||||||||||
Raw Materials, Components and Supplies | $ | |||||||||||||
Work in Process | ||||||||||||||
Finished Goods | ||||||||||||||
Totals | $ | $ |
Successor Fair Value | Predecessor Historical Value | |||||||||||||
Land, Buildings and Leasehold Improvements | $ | $ | ||||||||||||
Rental and Service Equipment | ||||||||||||||
Machinery and Other | ||||||||||||||
Less: Accumulated Depreciation | ( | |||||||||||||
Property, Plant and Equipment, Net | $ | $ |
Successor Fair Value | Predecessor Historical Value | |||||||||||||
Developed and Acquired Technology | $ | $ | ||||||||||||
Trade Name | ||||||||||||||
Customer Relationships and Contracts | ||||||||||||||
Other | ||||||||||||||
Totals | $ | $ |
Successor | Predecessor | |||||||||||||||||||||||||
Period From | Period From | |||||||||||||||||||||||||
Year | 12/14/2019 | 1/1/2019 | ||||||||||||||||||||||||
Ended | through | through | Year Ended | |||||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | ||||||||||||||||||||||
Long-lived Asset Impairments | $ | $ | $ | $ | ||||||||||||||||||||||
Goodwill Impairment | ||||||||||||||||||||||||||
Inventory Charges | ||||||||||||||||||||||||||
Asset Write-downs and Rigs Related Charges | ||||||||||||||||||||||||||
Other Charges, Net | ||||||||||||||||||||||||||
Total Impairment and Other Charges | $ | $ | $ | $ | ||||||||||||||||||||||
Successor | Predecessor | |||||||||||||||||||||||||
Period From | Period From | |||||||||||||||||||||||||
Year | 12/14/2019 | 1/1/2019 | Year | |||||||||||||||||||||||
Ended | through | through | Ended | |||||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | ||||||||||||||||||||||
Accounts Receivable Sold | $ | $ | $ | $ | ||||||||||||||||||||||
Cash Proceeds from Sale of Accounts Receivable | $ | $ | $ | $ | ||||||||||||||||||||||
December 31, | ||||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Finished Goods | $ | $ | ||||||
Raw Materials, Components and Supplies | ||||||||
Total Inventory | $ | $ |
Successor | Predecessor | |||||||||||||||||||||||||
Period From | Period From | |||||||||||||||||||||||||
Year | 12/14/2019 | 1/1/2019 | Year | |||||||||||||||||||||||
Ended | through | through | Ended | |||||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | ||||||||||||||||||||||
Inventory Charges in “Impairments and Other Charges” | $ | $ | $ | $ | ||||||||||||||||||||||
Inventory Charges in “Cost of Products” | ||||||||||||||||||||||||||
Inventory Charges in “Restructuring Charges” | ||||||||||||||||||||||||||
Total Inventory Charges | $ | $ | $ | $ |
December 31, | ||||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Land, Buildings and Leasehold Improvements | $ | $ | ||||||
Rental and Service Equipment | ||||||||
Machinery and Other | ||||||||
Less: Accumulated Depreciation | ||||||||
Property, Plant and Equipment, Net | $ | $ |
(Dollars in millions) | Western Hemisphere | Eastern Hemisphere | Total | |||||||||||
Property, Plant and Equipment | $ | $ | $ | |||||||||||
Intangible Assets | ||||||||||||||
Right of Use Assets | ||||||||||||||
Total Impairment Charges | $ | $ | $ | |||||||||||
(Dollars in millions) | Western Hemisphere | Eastern Hemisphere | Total | ||||||||||||||
Balance at December 31, 2018 (Predecessor) | $ | $ | $ | ||||||||||||||
Impairment | ( | ( | ( | ||||||||||||||
Reclassification from assets held for sale | |||||||||||||||||
Foreign currency translation | |||||||||||||||||
Balance at December 13, 2019 (Predecessor) | |||||||||||||||||
Fresh Start Accounting Valuation | |||||||||||||||||
Balance at December 31, 2019 (Successor) | $ | $ | $ | ||||||||||||||
Impairment | $ | $ | ( | $ | ( | ||||||||||||
Balance at December 31, 2020 (Successor) | $ | $ | $ |
December 31, 2020 | |||||||||||||||||
Gross | Net | ||||||||||||||||
Carrying | Accumulated | Intangible | |||||||||||||||
(Dollars in millions) | Amount | Amortization | Assets | ||||||||||||||
Developed and Acquired Technology | $ | $ | ( | $ | |||||||||||||
Trade Names | ( | ||||||||||||||||
Totals | $ | $ | ( | $ | |||||||||||||
December 31, 2019 | |||||||||||||||||
Gross | Net | ||||||||||||||||
Carrying | Accumulated | Intangible | |||||||||||||||
(Dollars in millions) | Amount | Amortization | Assets | ||||||||||||||
Developed and Acquired Technology | $ | $ | ( | $ | |||||||||||||
Trade Names | ( | ||||||||||||||||
Totals | $ | $ | ( | $ |
Period | Amount | ||||
2021 | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 |
Successor | Predecessor | ||||||||||||||||||||||||||||
Period From | Period From | ||||||||||||||||||||||||||||
Year | 12/14/2019 | 01/01/2019 | Year | ||||||||||||||||||||||||||
Ended | through | through | Ended | ||||||||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | |||||||||||||||||||||||||
Severance Charges | $ | $ | $ | $ | |||||||||||||||||||||||||
Facility Exit Charges | |||||||||||||||||||||||||||||
Inventory Charges | |||||||||||||||||||||||||||||
Property, Plant and Equipment | |||||||||||||||||||||||||||||
Right of Use and Other Assets | |||||||||||||||||||||||||||||
Total Restructuring Charges | $ | $ | $ | $ |
Successor | Predecessor | |||||||||||||||||||||||||
Period From | Period From | |||||||||||||||||||||||||
Year | 12/14/2019 | 01/01/2019 | Year | |||||||||||||||||||||||
Ended | through | through | Ended | |||||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | ||||||||||||||||||||||
Western Hemisphere | $ | $ | $ | $ | ||||||||||||||||||||||
Eastern Hemisphere | ||||||||||||||||||||||||||
Corporate | ||||||||||||||||||||||||||
Total Restructuring Charges | $ | $ | $ | $ | ||||||||||||||||||||||
(Dollars in millions) | Accrued Balance at Beginning of Period | Charges | Cash Payments | Other | Accrued Balance at End of Period | ||||||||||||||||||||||||
Successor Year Ended December, 31, 2020 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Successor Period - 2019 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Predecessor Period - 2019 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Predecessor Year Ended December 31, 2018 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||
Period From | Period From | ||||||||||||||||||||||
Year | 12/14/2019 | 1/1/2019 | |||||||||||||||||||||
Ended | through | through | |||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | ||||||||||||||||||||
Lease Expense Components: | |||||||||||||||||||||||
Operating Lease Expense | $ | $ | $ | ||||||||||||||||||||
Short-term and Variable Lease Expense | |||||||||||||||||||||||
Subtotal of Operating Lease Expense | $ | $ | $ | ||||||||||||||||||||
Finance Lease Expense: Amortization of ROU Assets and Interest on Lease Liabilities | |||||||||||||||||||||||
Sublease Income | ( | ( | ( | ||||||||||||||||||||
Total Lease Expense | $ | $ | $ |
Operating | Finance | ||||||||||
(Dollars in millions) | Leases | Leases | |||||||||
Maturity of Lease Liabilities as of December 31, 2020: | |||||||||||
2021 | $ | $ | |||||||||
2022 | |||||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
After 2025 | |||||||||||
Total Lease Payments | |||||||||||
Less: Interest | |||||||||||
Present Value of Lease Liabilities | $ | $ |
Successor | Predecessor | ||||||||||||||||
Period From | Period From | ||||||||||||||||
12/14/2019 | 1/1/2019 | ||||||||||||||||
Year Ended | through | through | |||||||||||||||
(Dollars in millions except years and percentages) | 12/31/2020 | 12/31/2019 | 12/13/2019 | ||||||||||||||
Other Supplemental Information: | |||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
Operating cash outflows from operating leases | $ | $ | $ | ||||||||||||||
Operating cash outflows from finance leases | $ | $ | $ | ||||||||||||||
Financing cash outflows from finance leases | $ | $ | $ | ||||||||||||||
ROU assets obtained in exchange of new operating lease liabilities | $ | $ | $ | ||||||||||||||
ROU assets obtained in exchange of new finance lease liabilities | $ | $ | $ | ||||||||||||||
Loss on sale leaseback transactions (short-term) (a) | $ | $ | $ | ||||||||||||||
December 31, 2020 | December 31, 2019 | ||||||||||||||||
Weighted-average remaining lease term (years) | |||||||||||||||||
Operating leases | |||||||||||||||||
Finance leases | |||||||||||||||||
Weighted-average discount rate (percentages) | |||||||||||||||||
Operating leases | % | % | |||||||||||||||
Finance leases | % | % |
December 31, | |||||||||||
(Dollars in millions) | 2020 | 2019 | |||||||||
Finance Lease Current Portion | $ | $ | |||||||||
Other Short-term Financing Arrangements | |||||||||||
Short-term Borrowings | $ | $ | |||||||||
$ | $ | ||||||||||
$ | |||||||||||
Finance Lease Long-term Portion | $ | ||||||||||
Long-term Debt | $ | $ |
(Dollars in millions) | |||||
2021 | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total Debt Maturities | $ | ||||
Unamortized Debt Issuance and Discount | $ | ( | |||
Total Debt Carrying Value | $ |
December 31, | December 31, | |||||||
(Dollars in millions) | 2020 | 2019 | ||||||
11.00% Exit Notes due 2024 | $ | $ | ||||||
8.75% Senior Secured Notes due 2024 | ||||||||
Total Fair Value of Senior Notes | $ | $ | ||||||
Carrying Value of Senior Notes | $ | $ |
Years Ended December 31, | ||||||||
2020 | 2019 | |||||||
Discount rate: | ||||||||
United States Plans | ||||||||
International Plans | ||||||||
Rate of Compensation Increase: | ||||||||
United States Plans | ||||||||
International Plans |
Successor | Predecessor | ||||||||||||||||||||||
Period From | Period From | ||||||||||||||||||||||
12/14/2019 | 1/1/2019 | ||||||||||||||||||||||
Year Ended | through | through | Year Ended | ||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 2018 | |||||||||||||||||||
Total Current Provision | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Total Deferred (Provision) Benefit | ( | ||||||||||||||||||||||
Provision for Income Taxes | $ | ( | $ | ( | $ | ( | $ | ( |
Successor | Predecessor | ||||||||||||||||||||||
Period From | Period From | ||||||||||||||||||||||
12/14/2019 | 1/1/2019 | ||||||||||||||||||||||
Year Ended | through | through | Year Ended | ||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 2018 | |||||||||||||||||||
Irish or Swiss Income Tax rate at | $ | $ | $ | ( | $ | ||||||||||||||||||
Tax on Operating Earnings/Losses Subject to Rates Different than the Irish or Swiss Federal Income Tax Rate | ( | ( | ( | ||||||||||||||||||||
Change in Valuation Allowance | ( | ||||||||||||||||||||||
Change in Uncertain Tax Positions | ( | ( | ( | ( | |||||||||||||||||||
Estimated Tax on Settlement of Liabilities Subject to Compromise and Fresh Start Accounting | ( | ||||||||||||||||||||||
Change in Valuation Allowance Attributed to Estimated Tax on Settlement of Liabilities Subject to Compromise and Fresh Start Accounting | |||||||||||||||||||||||
Provision for Income Taxes | $ | ( | $ | ( | $ | ( | $ | ( |
December 31, | December 31, | |||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Deferred Tax Assets: | ||||||||
Net Operating Losses Carryforwards | $ | $ | ||||||
Unused Recognized Built in Losses | ||||||||
Accrued Liabilities and Reserves | ||||||||
Tax Credit Carryforwards | ||||||||
Employee Benefits | ||||||||
Property, Plant and Equipment | ||||||||
Inventory | ||||||||
U.S. Interest Deferral | ||||||||
State Deferred | ||||||||
Other Differences between Financial and Tax Basis | ||||||||
Valuation Allowance | ( | ( | ||||||
Total Deferred Tax Assets | ||||||||
Deferred Tax Liabilities: | ||||||||
Intangible Assets | ( | ( | ||||||
Other Differences between Financial and Tax Basis | ( | ( | ||||||
Total Deferred Tax Liabilities | ( | ( | ||||||
Net Deferred Tax Asset (Liability) | $ | $ | ( |
Successor | Predecessor | ||||||||||||||||||||||
Period From | Period From | ||||||||||||||||||||||
12/14/2019 | 1/1/2019 | ||||||||||||||||||||||
Year Ended | through | through | Year Ended | ||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 2018 | |||||||||||||||||||
Balance at Beginning of Year | $ | $ | $ | $ | |||||||||||||||||||
Additions as a Result of Tax Positions Taken During a Prior Period | |||||||||||||||||||||||
Reductions as a Result of Tax Positions Taken During a Prior Period | ( | ( | ( | ||||||||||||||||||||
Additions as a Result of Tax Positions Taken During the Current Period | |||||||||||||||||||||||
Reductions Relating to Settlements with Taxing Authorities | ( | ( | ( | ( | |||||||||||||||||||
Reductions as a Result of a Lapse of the Applicable Statute of Limitations | ( | ( | ( | ||||||||||||||||||||
Foreign Exchange Effects | ( | ( | ( | ||||||||||||||||||||
Balance at End of Year | $ | $ | $ | $ |
Tax Jurisdiction | Tax Years under Examination | ||||
Canada | |||||
Mexico | |||||
Russia | |||||
Switzerland | |||||
United States |
(Shares in millions) | Issued | ||||
Balance at December 31, 2018 (Predecessor) | |||||
Equity Awards Granted, Vested and Exercised | |||||
Predecessor Shares Cancellation | ( | ||||
Balance at December 13, 2019 (Predecessor) | |||||
Share Issuance | |||||
Balance at December 13, 2019 (Successor) | |||||
Share Issuance | |||||
Balance at December 31, 2019 (Successor) | |||||
Share Issuance | |||||
Balance at December 31, 2020 (Successor) |
(Dollars in millions) | Currency Translation Adjustment | Defined Benefit Pension | Deferred Loss on Derivatives | Total | |||||||||||||||||||
Balance at December 31, 2018 (Predecessor) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other Comprehensive Income (Loss) before Reclassifications | ( | ||||||||||||||||||||||
Reclassifications | |||||||||||||||||||||||
Net Activity | ( | ||||||||||||||||||||||
Balance at December 13, 2019 (Predecessor) | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Elimination of Predecessor Equity Balances | |||||||||||||||||||||||
Balance at December 13, 2019 (Successor) | $ | $ | $ | $ | |||||||||||||||||||
Other Comprehensive Income | |||||||||||||||||||||||
Balance at December 31, 2019 (Successor) | $ | $ | $ | $ | |||||||||||||||||||
Other Comprehensive Income | ( | ( | ( | ||||||||||||||||||||
Balance at December 31, 2020 (Successor) | $ | ( | $ | ( | $ | $ | ( |
Successor | Predecessor | ||||||||||||||||||||||
Period From | Period From | ||||||||||||||||||||||
Year | 12/14/19 | 1/1/2019 | Year | ||||||||||||||||||||
Ended | through | through | Ended | ||||||||||||||||||||
(Shares in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | |||||||||||||||||||
Net Income (Loss) Attributable to Weatherford | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Basic and Diluted Weighted Average Shares Outstanding | |||||||||||||||||||||||
Basic and Diluted Income (Loss) Per Share Attributable to Weatherford | $ | ( | $ | ( | $ | $ | ( |
Successor | Predecessor | |||||||||||||||||||||||||
Period From | Period From | |||||||||||||||||||||||||
12/14/2019 | 1/1/2019 | |||||||||||||||||||||||||
Year Ended | through | through | Year Ended | |||||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | ||||||||||||||||||||||
Product Line Revenue by Hemisphere: | ||||||||||||||||||||||||||
Completion and Production | $ | $ | $ | $ | ||||||||||||||||||||||
Drilling, Evaluation and Intervention | ||||||||||||||||||||||||||
Western Hemisphere | $ | $ | $ | $ | ||||||||||||||||||||||
Completion and Production | $ | $ | $ | $ | ||||||||||||||||||||||
Drilling, Evaluation and Intervention | ||||||||||||||||||||||||||
Eastern Hemisphere | $ | $ | $ | $ | ||||||||||||||||||||||
Total Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Successor | Predecessor | |||||||||||||||||||||||||
Period From | Period From | |||||||||||||||||||||||||
12/14/2019 | 1/1/2019 | |||||||||||||||||||||||||
Year Ended | through | through | Year Ended | |||||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | ||||||||||||||||||||||
Revenue by Geographic Areas: | ||||||||||||||||||||||||||
North America | $ | $ | $ | $ | ||||||||||||||||||||||
Latin America | ||||||||||||||||||||||||||
Western Hemisphere | $ | $ | $ | $ | ||||||||||||||||||||||
Middle East & North Africa and Asia | $ | $ | $ | $ | ||||||||||||||||||||||
Europe/Sub-Sahara Africa/Russia | ||||||||||||||||||||||||||
Eastern Hemisphere | $ | $ | $ | $ | ||||||||||||||||||||||
Total Revenues | $ | $ | $ | $ |
(Dollars in millions) | 12/31/2020 | 12/31/2019 | ||||||
Receivables for Product and Services in Accounts Receivable, Net | $ | $ | ||||||
Receivables for Equipment Rentals in Account Receivable, Net | $ | $ | ||||||
Contract Assets included in Other Current Assets | $ | $ | ||||||
Contract Liabilities included in Other Current Liabilities | $ | $ |
(Dollars in millions) | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | ||||||||||||||
Service revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||
Successor | Predecessor | ||||||||||||||||||||||||||||
Period From | Period From | ||||||||||||||||||||||||||||
12/14/2019 | 1/1/2019 | ||||||||||||||||||||||||||||
Year Ended | through | through | Year Ended | ||||||||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | |||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||
Western Hemisphere | $ | $ | $ | $ | |||||||||||||||||||||||||
Eastern Hemisphere | $ | $ | |||||||||||||||||||||||||||
Total Revenue | $ | $ | $ | $ | |||||||||||||||||||||||||
Operating Income (Loss): | |||||||||||||||||||||||||||||
Western Hemisphere | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
Eastern Hemisphere | |||||||||||||||||||||||||||||
Total Segment Operating Income | $ | $ | $ | $ | |||||||||||||||||||||||||
Corporate | ( | ( | ( | ( | |||||||||||||||||||||||||
Impairments and Other Charges (a) | ( | ( | ( | ||||||||||||||||||||||||||
Restructuring Charges (b) | ( | ( | ( | ||||||||||||||||||||||||||
Prepetition Charges (c) | ( | ||||||||||||||||||||||||||||
Gain on Operational Assets Sale | |||||||||||||||||||||||||||||
Gain on Sale of Businesses, Net (d) | |||||||||||||||||||||||||||||
Total Operating Income (Loss) | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||
Interest Expense, Net | ( | ( | ( | ( | |||||||||||||||||||||||||
Reorganization Items (c) | ( | ( | |||||||||||||||||||||||||||
Other Expense, Net | ( | ( | ( | ||||||||||||||||||||||||||
Income (Loss) Before Income Taxes | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||
Depreciation and Amortization: | |||||||||||||||||||||||||||||
Western Hemisphere | $ | $ | $ | $ | |||||||||||||||||||||||||
Eastern Hemisphere | |||||||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Successor | Predecessor | |||||||||||||||||||||||||
Period From | Period From | |||||||||||||||||||||||||
Year | 12/14/2019 | 1/1/2019 | Year | |||||||||||||||||||||||
Ended | through | through | Ended | |||||||||||||||||||||||
(Dollars in millions) | 12/31/2020 | 12/31/2019 | 12/13/2019 | 12/31/2018 | ||||||||||||||||||||||
Capital Expenditures: | ||||||||||||||||||||||||||
Western Hemisphere | $ | $ | $ | $ | ||||||||||||||||||||||
Eastern Hemisphere | ||||||||||||||||||||||||||
Corporate | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, | |||||||||||
(Dollars in millions) | 2020 | 2019 | |||||||||
Western Hemisphere | $ | $ | |||||||||
Eastern Hemisphere | |||||||||||
Corporate | |||||||||||
Total | $ | $ |
December 31, | |||||||||||
(Dollars in millions) | 2020 | 2019 | |||||||||
North America | $ | $ | |||||||||
Latin America | |||||||||||
Western Hemisphere | $ | $ | |||||||||
Middle East & North Africa and Asia | $ | $ | |||||||||
Europe/Sub-Sahara Africa/Russia | |||||||||||
Eastern Hemisphere | $ | $ | |||||||||
Total | $ | $ |
Equity Compensation Plan Information | |||||||||||||||||
Plan Category (Shares in thousands, except share prices) | Numbers of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Available for Future Issuance Under Equity Compensation Plans (a) | ||||||||||||||
Equity compensation plans approved by shareholders (b) | 339 | $ | — | 8,238 |
Exhibit Number | Description | Original Filed Exhibit | File Number | |||||||||||||||||
3.1 | Exhibit 3.1 of the Company’s Current Report on Form 8-K filed December 18, 2019 | File No. 1-36504 | ||||||||||||||||||
† 4.1 | ||||||||||||||||||||
4.2 | Exhibit 4.1 of the Company’s Current Report on Form 8-K filed December 18, 2019 | File No. 1-36504 | ||||||||||||||||||
4.3 | Included in Exhibit 4.1 of the Company’s Current Report on Form 8-K filed December 18, 2019 | File No. 1-36504 | ||||||||||||||||||
4.4 | Included in Exhibit 10.4 of the Company’s Current Report on Form 8-K filed December 18, 2019 | File No. 1-36504 | ||||||||||||||||||
4.5 | Exhibit 4.1 of the Company’s Current Report on Form 8-K filed August 28, 2020 | File No. 1-36504 | ||||||||||||||||||
4.6 | Included in Exhibit 4.1 of the Company’s Current Report on Form 8-K filed August 28, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.1 | Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed April 28, 2017 | File No. 1-36504 |
Exhibit Number | Description | Original Filed Exhibit | File Number | |||||||||||||||||
*10.2 | Exhibit 10.3 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed March 16, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.3 | Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 filed August 14, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.4 | Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed November 4, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.5 | Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q for the third quarter ended September 30, 2020 filed November 4, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.6 | Exhibit 10.11 of the Company’s Current Report on Form 8-K12B filed June 17, 2014 | File No. 1-36504 | ||||||||||||||||||
*10.7 | Exhibit 10.12 of the Company’s Current Report on Form 8-K12B filed June 17, 2014 | File No. 1-36504 |
Exhibit Number | Description | Original Filed Exhibit | File Number | |||||||||||||||||
*10.8 | Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 | File No. 1-36504 | ||||||||||||||||||
*10.9 | Exhibit 10.1 of the Company’s Current Report on Form 8-K filed December 15, 2016 | File No. 1-36504 | ||||||||||||||||||
*10.10 | Exhibit 10.7 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 filed filed August 14, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.11 | Exhibit 10.1 of the Company’s Current Report on Form 8-K filed November 20, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.12 | Exhibit 99.1 of the Company’s Current Report on Form 8-K filed April 2, 2019 | File No. 1-36504 | ||||||||||||||||||
*10.13 | Exhibit 99.2 of the Company’s Form 8-K filed April 2, 2019 | File No. 1-36504 | ||||||||||||||||||
*10.14 | Exhibit 10.2 of the Company’s Current Report on Form 8-K filed April 15, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.15 | Exhibit 10.8 of the Company’s Current Report on Form 8-K filed December 18, 2019 | File No. 1-36504 |
Exhibit Number | Description | Original Filed Exhibit | File Number | |||||||||||||||||
*10.16 | Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 filed August 14, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.17 | Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed November 4, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.18 | Exhibit 10.3 of the Company’s Current Report on Form 8-K filed April 15, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.19 | Exhibit 10.3 of the Company’s Current Report on Form 8-K filed November 20, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.20 | Exhibit 10.4 of the Company’s Current Report on Form 8-K filed November 20, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.21 | Exhibit 10.2 of the Company’s Current Report on Form 8-K filed January 8, 2021 | File No. 1-36504 | ||||||||||||||||||
*10.22 | Exhibit 10.3 of the Company’s Current Report on Form 8-K filed January 8, 2021 | File No. 1-36504 | ||||||||||||||||||
*10.23 | Exhibit 10.4 of the Company’s Current Report on Form 8-K filed January 8, 2021 | File No. 1-36504 | ||||||||||||||||||
†*10.24 |
Exhibit Number | Description | Original Filed Exhibit | File Number | |||||||||||||||||
*10.25 | Exhibit 10.1 of the Company’s Current Report on Form 8-K filed January 8, 2021 | File No. 1-36504 | ||||||||||||||||||
*10.26 | Exhibit 10.1 of the Company’s Current Report on Form 8-K filed April 24, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.27 | Exhibit 10.2 of the Company’s Current Report on Form 8-K filed April 24, 2020 | File No. 1-36504 | ||||||||||||||||||
*10.28 | Exhibit 10.2 of the Company’s Current Report on Form 8-K filed November 20, 2020 | File No. 1-36504 | ||||||||||||||||||
10.29 | Exhibit 10.1 of the Company’s Current Report on Form 8-K filed December 18, 2019 | File No. 1-36504 | ||||||||||||||||||
10.30 | Exhibit 10.2 of the Company’s Current Report on Form 8-K filed December 18, 2019 | File No. 1-36504 | ||||||||||||||||||
10.31 | Exhibit 10.1 of the Company’s Current Report on Form 8-K filed August 28, 2020 | File No. 1-36504 | ||||||||||||||||||
10.32 | Exhibit 10.3 of the Company’s Current Report on Form 8-K filed December 18, 2019 | File No. 1-36504 |
Exhibit Number | Description | Original Filed Exhibit | File Number | |||||||||||||||||
10.33 | Exhibit 10.3 of the Company’s Current Report on Form 8-K filed August 28, 2020 | File No. 1-36504 | ||||||||||||||||||
10.34 | Exhibit 10.4 of the Company’s Current Report on Form 8-K filed December 18, 2019 | File No. 1-36504 | ||||||||||||||||||
10.35 | Exhibit 10.5 of the Company’s Current Report on Form 8-K filed December 18, 2019 | File No. 1-36504 | ||||||||||||||||||
†21.1 | ||||||||||||||||||||
†31.1 | ||||||||||||||||||||
†31.2 | ||||||||||||||||||||
††32.1 | ||||||||||||||||||||
††32.2 | ||||||||||||||||||||
†101.INS | XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document | |||||||||||||||||||
†101.SCH | XBRL Taxonomy Extension Schema Document | |||||||||||||||||||
†101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||||||||
†101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||||||||
†101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||||||||
†101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
Balance at | Balance at | |||||||||||||||||||
Beginning | End of | |||||||||||||||||||
(Dollars in millions) | of Period | Expense | Recoveries | Other (c) | Period | |||||||||||||||
Year Ended December 31, 2020 (Successor): | ||||||||||||||||||||
Allowance for Credit Losses on Accounts Receivable | $ | $ | $ | $ | ||||||||||||||||
Valuation Allowance on Deferred Tax Assets | $ | $ | $ | $ | $ | |||||||||||||||
Excess and Obsolete Inventory Reserve | $ | $ | $ | $ | ( | $ | ||||||||||||||
Year Ended December 31, 2019 (Successor): | ||||||||||||||||||||
Allowance for Credit Losses on Accounts Receivable | $ | $ | $ | $ | $ | |||||||||||||||
Valuation Allowance on Deferred Tax Assets | $ | $ | ( | $ | $ | $ | ||||||||||||||
Excess and Obsolete Inventory Reserve | $ | $ | $ | $ | $ | |||||||||||||||
Year Ended December 13, 2019 (Predecessor): | ||||||||||||||||||||
Current Allowance for Uncollectible Accounts Receivable | $ | $ | $ | ( | $ | ( | $ | |||||||||||||
Long-term Allowance for Uncollectible Accounts Receivable (a) | ( | ( | ||||||||||||||||||
Total Allowance for Uncollectible Accounts Receivable | $ | $ | $ | ( | $ | ( | $ | |||||||||||||
Valuation Allowance on Deferred Tax Assets | $ | $ | ( | $ | $ | $ | ||||||||||||||
Excess and Obsolete Inventory Reserve | $ | $ | $ | ( | $ | ( | $ | |||||||||||||
Year Ended December 31, 2018 (Predecessor): | ||||||||||||||||||||
Current Allowance for Uncollectible Accounts Receivable | $ | $ | $ | ( | $ | ( | $ | |||||||||||||
Long-term Allowance for Uncollectible Accounts Receivable (a) | ( | |||||||||||||||||||
Total Allowance for Uncollectible Accounts Receivable (b) | $ | $ | $ | ( | $ | ( | $ | |||||||||||||
Valuation Allowance on Deferred Tax Assets | $ | ( | ( | $ | ||||||||||||||||
Excess and Obsolete Inventory Reserve | $ | ( | ( | $ |
Signatures | Title | Date | ||||||
/s/ Girishchandra K. Saligram | President, Chief Executive Officer and Director | February 19, 2021 | ||||||
Girishchandra K. Saligram | (Principal Executive Officer) | |||||||
/s/ H. Keith Jennings | Executive Vice President and | February 19, 2021 | ||||||
H. Keith Jennings | Chief Financial Officer | |||||||
(Principal Financial Officer) | ||||||||
/s/ Stuart Fraser | Vice President and | February 19, 2021 | ||||||
Stuart Fraser | Chief Accounting Officer | |||||||
(Principal Accounting Officer) | ||||||||
/s/ Charles M. Sledge | Chairman of the Board and Director | February 19, 2021 | ||||||
Charles M. Sledge | ||||||||
/s/ Benjamin C. Duster IV | Director | February 19, 2021 | ||||||
Benjamin C. Duster IV | ||||||||
/s/ Neal P. Goldman | Director | February 19, 2021 | ||||||
Neal P. Goldman | ||||||||
/s/ Jacqueline Mutschler | Director | February 19, 2021 | ||||||
Jacqueline Mutschler | ||||||||
Name of Company | Jurisdiction | ||||
Weatherford Al-Rushaid Co. Ltd. | Saudi Arabia | ||||
Weatherford Artificial Lift Systems, LLC | Delaware | ||||
Weatherford Canada Ltd. | Canada | ||||
Weatherford de Mexico, S. de R.L. de C.V. | Mexico | ||||
Weatherford Industria e Comercio Ltda. | Brazil | ||||
Weatherford International de Argentina S.A. | Argentina | ||||
Weatherford International Ltd. | Bermuda | ||||
Weatherford International, LLC | Delaware | ||||
Weatherford Management Company Switzerland Sarl | Switzerland | ||||
Weatherford Norge AS | Norway | ||||
Weatherford Oil Tool GmbH | Germany | ||||
Weatherford Oil Tool Middle East Limited | British Virgin Islands | ||||
Weatherford Products GmbH | Switzerland | ||||
Weatherford Energy Services Saudi Arabia Co. Ltd. | Saudi Arabia | ||||
Weatherford Switzerland Trading and Development GmbH | Switzerland | ||||
Weatherford U.K. Limited | England | ||||
Weatherford U.S., L.P. | Louisiana | ||||
Weatherford, LLC | Russia | ||||
Weatherford Well Services L.L.C. | Qatar | ||||
WEUS Holding, LLC | Delaware |
Date: | February 19, 2021 | |||||||
/s/ Girishchandra K. Saligram | ||||||||
Girishchandra K. Saligram | ||||||||
President and Chief Executive Officer |
Date: | February 19, 2021 | |||||||
/s/ H. Keith Jennings | ||||||||
H. Keith Jennings | ||||||||
Executive Vice President and | ||||||||
Chief Financial Officer |
/s/ Girishchandra K. Saligram | |||||||||||
Name: | Girishchandra K. Saligram | ||||||||||
Title: | President and Chief Executive Officer | ||||||||||
Date: | February 19, 2021 | ||||||||||
/s/ H. Keith Jennings | |||||||||||
Name: | H. Keith Jennings | ||||||||||
Title: | Executive Vice President and Chief Financial Officer | ||||||||||
Date: | February 19, 2021 | ||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Net Income (Loss) | $ (24) | $ 3,684 | $ (1,899) | $ (2,791) |
Comprehensive Income Attributable to Noncontrolling Interests | ||||
Foreign Currency Translation | 7 | 52 | (38) | (240) |
Defined Benefit Pension Activity | 2 | (11) | (14) | 12 |
Interest Rate Derivative Loss | 0 | 8 | 0 | 0 |
Other | 0 | 0 | 0 | 1 |
Other Comprehensive Income (Loss), Net of Tax | 9 | 49 | (52) | (227) |
Comprehensive Income (Loss) | (15) | 3,733 | (1,951) | (3,018) |
Comprehensive Income Attributable to Noncontrolling Interests | (2) | (23) | (22) | (20) |
Comprehensive Income (Loss) Attributable to Weatherford | $ (17) | $ 3,710 | $ (1,973) | $ (3,038) |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets: | ||
Accounts Receivable, Allowance for Credit Loss, Current | $ 32 | $ 0 |
Less: Accumulated Depreciation | 367 | 25 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 173 | $ 9 |
Shareholders' Equity: | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 1,356 | 1,356 |
Common Stock, Shares, Issued | 70 | 70 |
Common Stock, Shares, Outstanding | 70 | 70 |
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Organization and Nature of Operations Weatherford International plc (“Weatherford Ireland”), an Irish public limited company, together with its subsidiaries (“Weatherford,” the “Company,” “we,” “us” and “our”), is a multinational oilfield service company. Weatherford is one of the world’s leading providers of equipment and services used in the drilling, evaluation, completion, production and intervention of oil and natural gas wells. We operate in over 75 countries and have service and sales locations in oil and natural gas producing regions globally. Many of our businesses, including those of our predecessor companies, have been operating for more than 50 years. The authorized share capital of Weatherford includes 1.356 billion ordinary shares with a par value of $0.001 per share. The delisting of our ordinary shares from the New York Stock Exchange (“NYSE”) became effective on April 27, 2020. Our ordinary shares were deregistered under Section 12(b) of the Exchange Act on July 16, 2020. We continue to evaluate listing options and intend to relist our ordinary shares when our Board of Directors determines market conditions are appropriate. The Company intends to continue filing periodic reports with the Securities and Exchange Commission (“SEC”) on a voluntary basis. Our ordinary shares trade on the OTC Pink Marketplace under the ticker symbol “WFTLF”. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the SEC for annual financial information. We consolidate all wholly owned subsidiaries and controlled joint ventures. All material intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation, including those related to the adoption of new accounting standards. Prior year net income (loss) and shareholders’ equity (deficiency) were not affected by these reclassifications. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting period, and disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and assumptions, including those related to allowance for credit losses, inventory valuation reserves, recoverability of long-lived assets, valuation of goodwill, useful lives used in depreciation and amortization, income taxes and related valuation allowance, accruals for contingencies, actuarial assumptions to determine costs and liabilities related to employee benefit plans, and share-based compensation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. For information about our use of estimates relating to Fresh Start Accounting, refer to Note 3 – Fresh Start Accounting for further details. Bankruptcy and Fresh Start Accounting On July 1, 2019 (the “Petition Date”), Weatherford Ireland, Weatherford International Ltd. (“Weatherford Bermuda”), and Weatherford International, LLC (“Weatherford Delaware”) (collectively, “Weatherford Parties”), filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code (“Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Texas (“Bankruptcy Court”). On December 13, 2019 (“Effective Date” or “Fresh Start Reporting Date”) after all conditions to effectiveness were satisfied, we emerged from bankruptcy after successfully completing the reorganization pursuant to the Plan. During bankruptcy in 2019 we segregated liabilities and obligations whose treatment and satisfaction were dependent on the outcome of the Chapter 11 proceedings and classified these items as “Liabilities Subject to Compromise” with respect to the Predecessor (as defined below) as shown in “Note 3 – Fresh Start Accounting”. In addition, we classified all income, expenses, gains or losses that were incurred or realized as a result of the Chapter 11 proceedings as “Reorganization Items” in our 2019 Consolidated Statements of Operations through the Effective Date. In accordance with ASC 852, we qualified for and adopted fresh start accounting (“Fresh Start Accounting”) on the Fresh Start Reporting Date, at which point we became a new entity for financial reporting because (i) the holders of the then existing ordinary shares of the Predecessor company received less than 50% of the new ordinary shares of the Successor company outstanding upon emergence and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims. Upon adoption of Fresh Start Accounting as reflected in “Note 3 – Fresh Start Accounting,” the reorganization value derived from the enterprise value associated with the Plan was allocated to the Company’s identifiable tangible and intangible assets and liabilities based on their estimated fair values (except for deferred income taxes), with the remaining excess value allocated to Goodwill in accordance with ASC 805 – Business Combinations. Deferred income tax amounts were determined in accordance with ASC 740 – Income Taxes. The Effective Date fair values of the Company’s assets and liabilities differ materially from their recorded values as reflected on the Predecessor balance sheets. References to “Predecessor” relate to the Consolidated Statements of Operations for the period from January 1, 2019 through and including the adjustments from the application of Fresh Start Accounting on December 13, 2019 and for the year ended December 31, 2018 (“Predecessor Periods”). References to “Successor” relate to the Consolidated Balance Sheets of the reorganized Company as of December 31, 2020 and 2019 and Consolidated Statements of Operations for the year ended December 31, 2020 and for the period from December 14, 2019 through December 31, 2019 (“Successor Periods”) and are not comparable to the Consolidated Financial Statements of the Predecessor as indicated by the “black line” division in the financials and footnote tables, which emphasizes the lack of comparability between amounts presented. In addition, “Note 3 – Fresh Start Accounting” provides a summary of the Predecessor Consolidated Balance Sheet as of December 13, 2019 in the first column, and then presents adjustments to reflect the Plan and fresh start impacts to derive the opening Successor Consolidated Balance Sheet as of December 13, 2019. The Company’s financial results for periods following the application of Fresh Start Accounting will be different from historical trends and the differences may be material. Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Restricted Cash Our restricted cash balance of $167 million at December 31, 2020 and $182 million at December 31, 2019 primarily includes cash collateral for certain of our letters of credit facilities. At December 31, 2019, restricted cash also included cash escrowed for the payment of bankruptcy professional fees. Allowance for Credit Losses on Accounts Receivables We establish an allowance for credit losses based on various factors to include historical experience, current conditions and environments in which our customers operate, the aging status and reasonable and supportable forecasts. Our customer base has generally similar collectability risk characteristics, although risk profiles can vary between larger independent customers and state-owned customers, which may have a lower risk than smaller independent customers. Provisions for credit losses are recorded based on estimated losses that customer accounts are uncollectible. Major Customers and Credit Risk Substantially all of our customers are engaged in the energy industry. This concentration of customers may impact our overall exposure to credit risk, either positively or negatively, in that customers may be similarly affected by changes in economic and industry conditions. We perform periodic credit evaluations of our customers and do not generally require collateral in support of our trade receivables. We maintain allowances for credit losses. International sales also present various risks, including risks of war, civil disturbances and governmental activities that may limit or disrupt markets, restrict the movement of funds, or result in the deprivation of contract rights or the taking of property without fair consideration. Most of our international sales are to large international or national oil companies and these sales may result in a concentration of receivables from such companies. As of December 31, 2020, the Eastern and Western Hemisphere accounted for 54% and 46%, respectively, of our total net outstanding accounts receivable on our Consolidated Balance Sheets. As of December 31, 2020, accounts receivable in Mexico and the U.S. accounted for 23% and 12%, respectively, of our total net outstanding account receivables. No other country accounted for more than 10% of our net outstanding accounts receivables balance. For the years ended December 31, 2020, 2019 and 2018, no individual customer accounted for more than 10% of our consolidated revenues. Inventories We state our inventories at the lower of cost or net realizable value using either the first-in, first-out (“FIFO”) or average cost method. Cost represents third-party invoice or production cost. Production cost includes material, labor and manufacturing overhead. To maintain a carrying value that is the lower of cost or net realizable value, we regularly review inventory quantities on hand and compare to estimates of future product demand, market conditions, our production requirements, and technological developments. We maintain reserves for excess, slow moving and obsolete inventory and we may periodically recognize additional charges for inventory in which we determine there is no forecasted demand. Inventory held as of our 2019 emergence date was remeasured to fair value. Refer to Note 3 – Fresh Start Accounting for further details. Property, Plant and Equipment (“PP&E”) PP&E, both owned and under finance leases, is initially stated at cost and depreciated over its estimated life. Subsequently, PP&E is measured at cost less accumulated depreciation and impairment losses. The carrying values are based on our estimates and judgments relative to capitalized costs, useful lives and salvage value, where applicable. We expense maintenance and repairs as incurred. We capitalize expenditures for improvements as well as renewals and replacements that extend the useful life of the asset. We depreciate our fixed assets on a straight-line basis over their estimated useful lives, allowing for salvage value where applicable. The estimated useful lives of our major classes of PP&E are as follows:
PP&E held as of our 2019 emergence date was remeasured to fair value and new estimated useful lives were determined. Refer to Note 3 – Fresh Start Accounting for further details. Goodwill and Intangible Assets Goodwill represents the excess of consideration paid (or with respect to our 2019 Fresh Start Accounting, the excess of reorganization value) over the fair value of net tangible and identifiable intangible assets acquired. Goodwill is not amortized but is evaluated for impairment. When we have recognized goodwill on our consolidated balance sheet, we performed an impairment test for goodwill annually as of October 1 or more frequently whenever events and changes in the circumstances indicates that the carrying value of a reporting unit might exceed its fair value. The quantitative step of the goodwill impairment test involves a comparison of the fair value of each of our reporting units that have goodwill assigned with their carrying values. If the carrying value of a reporting unit’s goodwill were to exceed its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. With respect to the Successor and as a result of Fresh Start Accounting, our newly established identifiable intangible assets included developed technologies and our trade name. Successor identifiable intangible assets are being amortized on a straight-line basis over their estimated economic lives generally ranging from to 10 years. As many areas of our business rely on patents and proprietary technology, we seek patent protection both inside and outside the U.S. for products and methods that appear to have commercial significance. We capitalize patent defense costs when we determine that a successful defense is probable. Long-Lived Assets Long-lived assets consisting of PP&E, intangible assets, and operating lease right-of-use assets are initially recorded at cost and reviewed whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. Factors that might indicate a potential impairment may include, but are not limited to, significant decreases in the market value of the long-lived asset or asset group, a significant change in the long-lived asset’s physical condition, the introduction of competing technologies, legal challenges, a reduction in the utilization rate of the assets, a change in industry conditions or a reduction in cash flows associated with the use of the long-lived asset. If these or other factors are present, the Company performs an undiscounted cash flow analysis to identify if the asset or asset group may not be recoverable. A fair value assessment is performed on assets or asset groups identified as not being recoverable using a discounted cash flow analysis to determine if an impairment has occurred. If an impairment has occurred, we recognize a loss for the difference between the carrying amount and the fair value of the asset or asset group. We estimate the fair value of the asset or asset group using market prices when available or, in the absence of market prices, based on an estimate of discounted cash flows or replacement cost. Cash flows are generally discounted using an interest rate commensurate with a weighted average cost of capital for a similar asset. Long-lived assets held as of our 2019 emergence date were remeasured to fair value. Refer to Note 3 – Fresh Start Accounting for further details. Research and Development Expenditures Research and development expenditures are expensed as incurred. Derivative Financial Instruments We record derivative instruments on the balance sheet at their fair value as either assets or liabilities. Changes in the fair value of derivatives are recorded each period in current earnings. Foreign Currency Results of operations for our foreign subsidiaries with functional currencies other than the U.S. dollar are translated using average exchange rates during the period. Assets and liabilities of these foreign subsidiaries are translated using the exchange rates in effect at the balance sheet dates, and the resulting translation adjustments are included in “Accumulated Other Comprehensive Income (Loss)”, a component of Shareholders’ Equity (Deficiency). For our subsidiaries that have a functional currency that differs from the currency of their balances and transactions, inventories, PP&E and other non-monetary assets and liabilities, together with their related elements of expense or income, are remeasured into the functional currency using historical exchange rates. All monetary assets and liabilities are remeasured into the functional currency at current exchange rates. All revenues and expenses are translated into the functional currency at average exchange rates. Remeasurement gains and losses for these subsidiaries are recognized in our results of operations during the period incurred. We record net foreign currency gains and losses on foreign currency derivatives (see “Note 16 – Derivative Instruments”) and currency devaluation charges, when incurred, in “Other Income (Expense), Net” on the accompanying Consolidated Statements of Operations. Share-Based Compensation We account for all share-based payment awards, including shares issued under restricted shares, restricted share units and performance units by measuring these awards at the date of grant and recognizing the grant date fair value as an expense, net of expected forfeitures, over the service period, which is usually the vesting period. Income Taxes We account for taxes under the asset and liability method. Income taxes have been provided based upon the tax laws and rates in the countries in which our operations are conducted and income is earned. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. The impact of an uncertain tax position taken or expected to be taken on an income tax return is recognized in the financial statements at the largest amount that is more likely than not to be sustained upon examination by the relevant taxing authority. Leases We lease certain facilities, land, vehicles, and equipment. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Effective January 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842). Upon adoption, operating right of use (“ROU”) assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Operating leases in effect prior to January 1, 2019 were recognized at the present value of the remaining payments on the remaining lease term as of January 1, 2019. We determine if an arrangement is classified as a lease at inception of the arrangement. As most of our leases do not provide an implicit rate of return, we use our incremental borrowing rate, together with the lease term information available at commencement date of the lease, in determining the present value of lease payments, which is updated on a quarterly basis. For certain equipment leases, such as copiers and vehicles, we account for the leases under a portfolio method. Operating lease payments include related options to extend or terminate lease terms that are reasonably certain of being exercised. Upon emergence from bankruptcy on December 13, 2019, our lease liabilities were remeasured to fair value using the present value of the remaining lease payments as if we acquired new leases. The remeasurement was based on our incremental borrowing rate as of December 13, 2019. Additionally, the ROU assets were revalued based upon the present value of market-based rent. The remeasurement of our ROU assets was based on the market discount rate as of December 13, 2019. Disputes, Litigation and Contingencies We accrue an estimate of costs to resolve certain disputes, legal matters and contingencies when a loss on these matters is deemed probable and reasonably estimable. For matters not deemed probable or not reasonably estimable, we have not accrued any amounts. Our contingent loss estimates are based upon an analysis of potential results, assuming a combination of possible litigation and settlement strategies. The accuracy of these estimates is impacted by the complexity of the associated issues. Revenue Recognition We account for revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and all of the related amendments, collectively referred to as “Topic 606”. Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The majority of our revenue is derived from short term contracts. Our services and products are generally sold based upon purchase orders, contracts or other legally enforceable arrangements with our customers that included fixed or determinable prices but do not generally include right of return provisions or other significant post-delivery obligations. The unmanned equipment that we lease to customers under operating leases consist primarily of drilling rental tools and artificial lift pumping equipment. These equipment rental revenues are generally provided based on call-out work orders that include fixed per unit prices and are derived from short-term contracts. We include revenue from these leases within “Services Revenue” on our Consolidated Statement of Operations. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets (including unbilled receivables), and customer advances and deposits (contract liabilities classified as deferred revenues). Receivables for products and services with customers are included in “Accounts Receivable, Net,” contract assets are included in “Other Current Assets” and contract liabilities are included in “Other Current Liabilities” on our Consolidated Balance Sheets. Consideration under certain contracts such as turnkey or lump sum contracts may be classified as contract assets as the invoicing occurs once the performance obligations have been satisfied while the customer simultaneously receives and consumes the benefits provided. We also have receivables for work completed on service contracts but not billed in which the rights to consideration are conditional and would be classified as contract assets. We may also have contract liabilities and defer revenues for certain product sales that are not distinct from their installation. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Generally, our revenue is recognized for services over time as the services are rendered and we primarily utilize an output method such as time elapsed or footage drilled which coincides with how customers receive the benefit. Both contract drilling and pipeline service revenue is contractual by nature and generally governed by day-rate based contracts. Revenue is recognized on product sales at a point in time when control passes and is generally upon delivery but is dependent on the terms of the contract. Our services and products are generally sold based upon purchase orders, contracts or call-out work orders that include fixed per unit prices or variable consideration but do not generally include right of return provisions or other significant post-delivery obligations. We generally bill our sales of services and products upon completion of the performance obligation. Product sales are billed and recognized when control passes to the customer. Our products are produced in a standard manufacturing operation, even if produced to our customer’s specifications. Revenues are recognized at the amount to which we have the right to invoice for services performed. Our payment terms vary by the type and location of our customer and the products or services offered. For certain products or services and customer types, we require payment before the products or services are delivered to the customer and record as a contract liability. We defer revenue recognition on such payments until the products or services are delivered to the customer. From time to time, we may enter into bill and hold arrangements. When we enter into these arrangements, we determine if the customer has obtained control of the product by determining (a) the reason for the bill-and-hold arrangement; (b) whether the product is identified separately as belonging to the customer; (c) whether the product is ready for physical transfer to the customer; and (d) whether we are unable to utilize the product or direct it to another customer. We account for individual products and services separately if they are distinct and the product or service is separately identifiable from other items in the contract and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The consideration, including any discounts, is allocated between separate products and services based on their standalone selling prices. The standalone selling prices are determined based on the prices at which we separately sell our products and services. For items not sold separately (e.g. term software licenses in our Completion and Production product line), we estimate standalone selling prices using the adjusted market assessment approach. Costs of relocating equipment without contracts are expensed as incurred. The nature of our contracts gives rise to several types of variable consideration, including claims and lost-in-hole charges. Our claims are not significant and lost-in-hole charges are constrained variable consideration. We do not estimate revenue associated with these types of variable consideration. Under certain contracts, we may incur rebillable expenses including shipping and handling, third-party inspection and repairs, and customs costs and duties. If reimbursable by customers we recognize the revenue associated with these rebillable expenses as “Product Revenues” and all related costs as “Cost of Products” in the accompanying Consolidated Statements of Operations. We provide certain assurance warranties on product sales which range from to five years but do not offer extended warranties on any of our products or services. These assurance warranties are not separate performance obligations thus no portion of the transaction price is allocated to our obligations under these warranties. Earnings (Loss) per Share Basic earnings (loss) per share for all periods presented equals net income (loss) divided by the weighted average shares outstanding during the period including participating securities. Diluted earnings (loss) per share is computed by dividing net income (loss) by our weighted average shares outstanding during the period including participating securities and any potential dilutive shares, when applicable. Unvested share-based payment awards and other instruments issued by the Company that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and are included in the computation of earnings per share following the two-class method.
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Chapter 11 Proceedings and Ability to continue as a Going Concern (Notes) |
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Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chapter 11 Proceedings | 2. Emergence from Chapter 11 Bankruptcy Proceedings Restructuring Support Agreement; Voluntary Reorganization Under Chapter 11 of the U.S. Bankruptcy Code On May 10, 2019, the Weatherford Parties entered into the Restructuring Support Agreement (“RSA”) with certain holders of our unsecured notes (“Consenting Creditors”), setting forth, subject to certain conditions, the terms of the proposed capital financial restructuring of the Company (“Transaction”). The RSA included certain milestones for the progress of the upcoming court proceedings, which included the dates by which the Weatherford Parties were required to, among other things, obtain certain court orders and complete the Transaction. On July 1, 2019, Weatherford Ireland, Weatherford Bermuda, and Weatherford Delaware, filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas (the “Cases”). Payments Due on Certain Indebtedness The Weatherford Parties’ 7.75% Senior Notes due 2021, 8.25% Senior Notes due 2023 and 6.80% Senior Notes due 2037 (together, “Certain Senior Notes”) provided for an aggregate $69 million interest payment that became due on June 15, 2019. The applicable indenture governing the Certain Senior Notes provided a 30-day grace period that extended the latest date for making this interest payment to July 16, 2019, before an event of default would occur under the applicable indenture. The Weatherford Parties elected to not make this interest payment on the due date and to utilize the 30-day grace period provided by the indentures. As a result of filing the Cases on July 1, 2019, an event of default occurred under each indenture governing these unsecured notes, which automatically accelerated maturity of the principal, plus any accrued and unpaid interest, on such series of unsecured notes and certain other obligations of the Weatherford Parties. Any efforts to enforce such payment obligations under the unsecured notes or other accelerated obligations of the Weatherford Parties were automatically stayed as a result of the Cases, and the creditors’ rights of enforcement in respect of the unsecured notes and other accelerated obligations of the Weatherford Parties were subject to the applicable provisions of the Bankruptcy Code. In addition, all of the Weatherford Parties’ prepetition unsecured senior notes and related unpaid interest were classified as “Liabilities Subject to Compromise” on our 2019 Consolidated Balance Sheets during bankruptcy as further defined herein and in subsequent disclosures throughout and with respect to the Predecessor as shown in “Note 3 – Fresh Start Accounting”. The Weatherford Parties’ Term Loan Agreement required a quarterly payment of $12.5 million plus interest that became due on June 30, 2019. On July 1, 2019, the Weatherford Parties and the Term Loan Lenders entered into a Term Loan Forbearance Agreement where the lenders agreed to forbear from exercising their rights and remedies available to them, including the right to accelerate any indebtedness, for a specified period of time. On July 3, 2019, all unpaid principal and interest under the Term Loan Agreement were repaid in full. See discussion below. Forbearance Agreements On July 1, 2019, the Weatherford Parties and the Credit Agreement Lenders under the Amended and Restated Credit Agreement (the “A&R Credit Agreement”), dated as of May 9, 2016, among WOFS Assurance Limited and Weatherford Bermuda, as borrowers, the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto entered into a forbearance agreement (the “Credit Agreement Forbearance Agreement”) with respect to certain defaults under the A&R Credit Agreement, including those arising from the Weatherford Parties’ commencement of the Cases. On July 1, 2019, the Weatherford Parties and the Term Loan Lenders under the Term Loan Agreement, dated as of May 4, 2016, among Weatherford Bermuda, as borrower, the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto (the “Term Loan Agreement”) entered into a forbearance agreement (the “Term Loan Forbearance Agreement”) with respect to certain defaults under the Term Loan Agreement. On July 3, 2019, the Company repaid in full its outstanding indebtedness under the Term Loan. On July 1, 2019, the Weatherford Parties and the 364-Day Lenders under the 364-Day Revolving Credit Agreement, dated August 16, 2018, among Weatherford Bermuda, as borrower, the other borrowers party thereto, the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto (“364-Day Credit Agreement”) entered into a forbearance agreement (the “364-Day Revolving Forbearance Agreement”) with respect to certain defaults under the 364-Day Credit Agreement. On July 3, 2019, the Company repaid in full its outstanding indebtedness under the 364-Day Revolving Credit Agreement. On July 1, 2019, the Weatherford Parties and three lenders under the DIP Credit Agreement (the “Swap Counterparties”) each party to a hedging agreement with Weatherford Bermuda for the purpose of hedging foreign currency exposure incurred by the Weatherford Parties (each, a “Swap Agreement” and, collectively, the “Swap Agreements”) entered into a consent to swap agreement termination forbearance (the “Swap Forbearance Agreement”) with respect to certain defaults under the Swap Agreements. Specifically, under the Swap Forbearance Agreement, the Swap Counterparties agreed to forbear from exercising their rights and remedies available to them due to certain Events of Default and Termination Events defined in the agreements for a specified period of time. On July 3, 2019, the Weatherford Parties entered into amended and restated Swap Agreements with such Swap Counterparties to govern existing and future foreign currency transactions entered into with such Swap Counterparties. Backstop Commitment Agreement On July 1, 2019, the Weatherford Parties and the commitment parties thereto (the “Initial Commitment Parties”) entered into a Backstop Commitment Agreement. Pursuant to the terms of the Plan, and subject to approval by the Bankruptcy Court in connection with confirmation of the Plan, the Company agreed to offer to holders of its existing unsecured notes, including the Commitment Parties, subscription rights to purchase the Exit Notes in aggregate principal amount of $1.25 billion, upon the Company’s emergence from bankruptcy. On September 9, 2019, the Weatherford Parties, certain of the Initial Commitment Parties and certain additional commitment parties (the “Additional Commitment Parties” and, together with the Initial Commitment Parties, the “Commitment Parties”) entered into an amendment to the Backstop Commitment Agreement. The Backstop Commitment Agreement Amendment provided for (i) the joinder of the Additional Commitment Parties to the Backstop Commitment Agreement, (ii) the increase in the backstop commitment by $350 million (the “Increased Commitment”) from $1.25 billion to up to $1.6 billion, and (iii) an amendment to the Backstop Commitment Agreement to account for the changes reflected in the Third RSA Amendment. Subject to the terms and conditions contained in the Backstop Commitment Agreement, the Consenting Creditors agreed to purchase any Exit Notes that were not duly subscribed for pursuant to the rights offering at a price equal to $1,000 per $1,000 in principal amount of the Exit Notes purchased by such Commitment Party. On July 1, 2019, as consideration for the commitment, the Weatherford Parties made an aggregate payment of $62.5 million in cash to the Commitment Parties. As consideration for the Increased Commitment agreed to on September 9, 2019, the Weatherford Parties made an aggregate payment of $18.7 million in cash to certain of the Commitment Parties upon our emergence date. Debtor in Possession Credit Agreement On July 3, 2019, the Weatherford Parties entered into a senior secured superpriority debtor in possession credit agreement (the “DIP Credit Agreement”). The DIP Credit Agreement had two debtor in possession (“DIP”) facilities to provide liquidity during the pendency of the Cases. The facilities consisted of (a) a DIP revolving credit facility in the principal amount of up to $750 million provided by banks or other lenders and (b) a DIP term loan facility in the amount of up to $1.0 billion, which was fully backstopped by the Consenting Creditors. The DIP Credit Agreement matured on the date of completion of the Transaction. On July 3, 2019, the Weatherford Parties borrowed approximately $1.4 billion under the DIP Credit Agreement and the proceeds were used to repay certain prepetition indebtedness, cash collateralize certain obligations with respect to letters of credit and similar instruments and finance the working capital needs and general corporate purposes of the Weatherford Parties and certain of their subsidiaries. On July 3, 2019, the Company repaid all outstanding amounts due under the secured Term Loan Agreement and 364-Day Credit Agreement totaling approximately $616 million with borrowings from our DIP Credit Agreement. In addition, the Company cash collateralized approximately $271 million of letters of credit and similar instruments with borrowings from the DIP Credit Agreement. We repaid our DIP Credit Agreement borrowings in full on the Effective Date. Amended RSA; Plan Confirmation On August 23, 2019, the Weatherford Parties entered into the second amendment of the RSA (the “Second RSA Amendment”) with certain of the noteholders, and certain equity holders who collectively held approximately 208 million shares of the Weatherford’s outstanding ordinary shares (the “Consenting Equity Holders”) which joined the Consenting Equity Holders as parties to the RSA. In addition, it provided for the payment of $250 thousand to the Consenting Equity Holders’ counsel and amended the terms of the new warrants to be issued under the Plan to the holders of the Company’s existing ordinary shares. The amended new warrant terms include extending the maturity date of the warrants to four years after the effective date of the Plan and reduced the exercise price. Pursuant to the terms of the Third RSA Amendment, the Weatherford Parties agreed to issue a single tranche of up to $2.1 billion aggregate principal amount of new unsecured notes (“Exit Notes”) upon emergence from bankruptcy, consisting of up to $1.6 billion of Exit Notes were issued for cash to holders of subscription rights issued in a rights offering (the “Exit Rights Offering Notes”) and to holders of Unsecured Notes Claims and $500 million of Exit Notes issued on a pro rata basis (the “Exit Takeback Notes”). The Exit Notes were issued in lieu of the two tranches of new unsecured notes in aggregate principal amount of $2.5 billion previously contemplated by the original RSA. On September 11, 2019, the Transaction was approved through the confirmation of the Plan filed in the Cases. The amended RSA and the confirmed Plan contemplated a comprehensive deleveraging of our balance sheet and provided, in pertinent part, and were executed as follows (as further described in later paragraphs): •Our existing unsecured notes were cancelled and exchanged for 99% of the ordinary shares of the reorganized Company (“New Common Stock”) and the Weatherford Parties issued a single tranche of up to $2.1 billion aggregate principal amount of new Exit Notes upon emergence from bankruptcy, consisting of up to $1.6 billion of Exit Rights Offering Notes (fully backstopped by Commitment Parties in the Backstop Commitment Agreement) issued for cash to holders of subscription rights issued in a rights offering and $500 million of Exit Takeback Notes issued on a pro rata basis with a five-year maturity. •All trade claims against the Company whether arising prior to or after the commencement of the Cases were paid in full in the ordinary course of business. •Our existing equity was cancelled and exchanged for 1% of the New Common Stock and four-year warrants to purchase 10% of the New Common Stock, both subject to dilution on account of the equity issued pursuant to the management incentive plan. The strike price of the warrants was set at an equity value at which the noteholders received a recovery equal to par as of the date of the commencement of the Cases in respect of the existing unsecured notes and all other general unsecured claims that were pari passu with the existing unsecured notes. Our affiliates entities that did not file voluntary petitions under the Bankruptcy Code continued operating their businesses and facilities without disruption to customers, vendors, partners or employees. Weatherford Bermuda commenced provisional liquidation proceedings (“Bermuda Proceedings”) pursuant to the Bermuda Companies Act 1981 by presenting a winding up petition to the Supreme Court of Bermuda (“Bermuda Court”). The Bermuda Court appointed a provisional liquidator who acted as an officer of the Bermuda Court. The appointment of the provisional liquidator provided an automatic statutory stay of proceedings in Bermuda against Weatherford Bermuda and its assets. On the return date of September 6, 2019 for the Bermuda petition - similar to a second day hearing in a Chapter 11 proceeding - Weatherford Bermuda postponed its petition for a specified period, while the Cases were administered. Before the Weatherford Parties emerged from Chapter 11, Weatherford Bermuda, along with the provisional liquidator and subject to the direction of the Bermuda Court, convened meetings of the impaired creditors in order to consider and approve, if appropriate, a scheme of arrangement pursuant to the Bermuda Companies Act 1981. The terms of the approved Bermuda scheme mirrored the terms of the Plan and was a mechanism for ensuring that all of the impaired creditors of Weatherford Bermuda were bound by the terms of the Bermuda scheme. The Bermuda Scheme was effective as of November 25, 2019. On September 23, 2019, Weatherford Ireland filed a petition under the Irish Companies Act 2014 in Ireland (“Irish Examinership Proceeding”) to seek approval for its scheme of arrangement following confirmation of the Plan in the U.S. The filing of the Irish Examinership Proceeding commenced a 100-calendar day protection period under Irish law, during which Weatherford Ireland had the benefit of protection against enforcement and other actions by its creditors. Weatherford Ireland continued operating its business in the ordinary course during the protection period. The approved terms of the Irish scheme mirrored the terms of the Plan. The Irish scheme was approved by the Irish High Court on December 12, 2019. Subject to certain exceptions, under the Bankruptcy Code, the filing of the Cases automatically enjoined, or stayed, the continuation of most judicial or administrative proceedings or filing of other actions against the Weatherford Parties or their property to recover, collect or secure a claim arising prior to the date of the Cases. In addition, all of the Weatherford Parties’ prepetition unsecured senior notes and related unpaid interest were liabilities subject to compromise, further discussed below. Since the commencement of the Cases until emergence, the Weatherford Parties continued to operate their businesses as debtors-in-possession under the jurisdiction of and in accordance with the applicable provisions of the Bankruptcy Code, orders of the Bankruptcy Court, the Irish Examinership Proceeding and the Bermuda Proceeding. Emergence On the Effective Date of December 13, 2019, except as noted below: (1)the Company amended and restated its certificate of incorporation and bylaws on December 10, 2019; (2)the Company appointed new members to the Successor’s board of directors to replace the directors of the Predecessor; (3)all outstanding obligations under our unsecured senior and exchangeable notes were cancelled and the applicable agreements governing such obligations were terminated; (4)the senior secured superpriority debtor-in-possession credit agreement (the “DIP Credit Agreement”) the Company previously entered into was paid in full and terminated; (5)the Company issued a $2.1 billion aggregate principal amount of unsecured 11.00% Exit Notes due 2024; for additional details see “Note 14 – Borrowings and Other Debt Obligations”; (6)the Company entered into a senior secured asset-based revolving credit agreement in an aggregate amount of $450 million (the “ABL Credit Agreement”) with the lenders party thereto and Wells Fargo Bank, N.A. as administrative agent; for additional details see Note 14 – Borrowings and Other Debt Obligations; (7)the Company entered into a senior secured letter of credit agreement in an aggregate amount of $195 million (the “LC Credit Agreement”) for issuance of bid and performance letters of credit; for additional details see Note 14 – Borrowings and Other Debt Obligations; (8)the Company issued 69,999,954 shares of Successor new ordinary shares (“New Ordinary Shares”) to the holders of the Company’s existing senior notes and holders of the existing ordinary shares (“Old Ordinary Shares”); for additional details see “Note 20 – Shareholders’ Equity (Deficiency)”; (9)the Company issued warrants (the “New Warrants”), to holders of the Company’s existing Old Ordinary Shares, to purchase up to an aggregate of 7,777,779 New Ordinary Shares in the Company at an exercise price of $99.96 per ordinary share. The New Warrants are exercisable until the earlier of December 13, 2023 and the date of consummation of any liquidity event as defined in the Warrant Agreement; for additional details see “Note 20 – Shareholders’ Equity (Deficiency)”. Prepetition Charges Expenses, gains and losses were realized or incurred before July 1, 2019 and in relation to the Cases are recorded under the caption “Prepetition Charges” on our 2019 Predecessor Consolidated Statements of Operations. The $86 million of prepetition charges primarily consisted of professional and other fees related to the Cases. Reorganization Items Any expenses, gains and losses that are realized or incurred as of or subsequent to the Petition Date and as a direct result of the Cases are recorded under “Reorganization Items” on our Consolidated Statements of Operations for the Predecessor and Successor Periods and consisted of the following:
Liabilities Subject to Compromise The Weatherford Parties’ prepetition principal balance on the Predecessor’s unsecured Senior and Exchangeable Senior Notes and related unpaid accrued interest as of the Petition Date were reclassified from “Long-term Debt” and “Other Current Liabilities”, respectively, to “Liabilities Subject to Compromise” on our Consolidated Balance Sheets on July 2, 2019 and during the bankruptcy proceedings at the amounts that were allowed as claims by the Bankruptcy Court. See also “Note 3 – Fresh Start Accounting” for further details. Upon emergence from bankruptcy, the liabilities subject to compromise of $7.6 billion were cancelled and the applicable agreements governing such obligations were terminated.
Fresh Start Accounting Upon emergence from bankruptcy, we qualified for and adopted Fresh Start Accounting in accordance with ASC 852, which resulted in the Company becoming a new entity for financial reporting purposes because (1) the holders of the then existing common shares of the Predecessor received less than 50 percent of the new common shares of the Successor outstanding upon emergence and (2) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims. The reorganization value derived from the range of enterprise values associated with the Plan was allocated to the Company’s identifiable tangible and intangible assets and liabilities based on their estimated fair values (except for deferred income taxes) with the remaining excess value allocated to goodwill in accordance with ASC 805 – Business Combinations. The amount of deferred income taxes recorded was determined in accordance with ASC 740 – Income Taxes. The Effective Date fair values of the Company’s assets and liabilities differ materially from their recorded values as reflected on the historical balance sheets. Reorganization Value Under ASC 852, the Successor determined a value to be assigned to the equity of the emerging entity as of the date of adoption of Fresh Start Accounting. Based on the Company’s revised projections filed with the SEC on a Form 8-K on October 7, 2019 and October 16, 2019, management and its investment bankers reassessed the value of the Company, resulting in an estimated range of enterprise value between $4.5 billion and $6.0 billion. The Company engaged third-party valuation advisors to assist in determining a point estimate of enterprise value within the range. Management concluded that the best point estimate of enterprise value was $4.5 billion. The Company engaged valuation experts to assist management in the allocation of such enterprise value to the assets and liabilities for financial reporting purposes based on management’s latest outlook as of the effective date. Based on this reassessment, the Company deemed it appropriate to use a final enterprise value of $4.5 billion for financial reporting purposes. The following table reconciles the enterprise value to the estimated fair value of our Successor common shares as of the Fresh Start Reporting Date:
The following table reconciles the enterprise value to the reorganization value of the Successor’s assets to be allocated to the Company’s individual assets as of the Fresh Start Reporting Date:
With the assistance of third-party valuation advisors, we determined the enterprise and corresponding equity value of the Successor using various valuation methods, including: (i) a calculation of the present value of future cash flows based on our financial projections, and (ii) a peer group trading analysis. The enterprise value and corresponding equity value were dependent upon achieving the future financial results set forth in our valuations, as well as the realization of certain other assumptions. All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the financial projections, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, upon emergence we could not assure that the estimates, assumptions, valuations or financial projections would be realized, and actual results could vary materially. Valuation Process The fair values of the Company’s principal assets, including inventory, rental and service equipment, real property, and intangible assets were estimated with the assistance of third-party valuation advisors. In addition, we also estimated the fair value of the Company’s lease liabilities, Exit Notes, and New Warrants. Inventory The fair value of the inventory was determined by using both a cost approach and income approach. Inventory was segregated into raw materials, spare parts, work in process (“WIP”), and finished goods. Fair value of raw materials and spare parts inventory were determined using the cost approach. Fair value of WIP and finished goods inventory were determined by estimating the net realizable value of the inventory, adjusted for holding period before an item is sold. Additional obsolescence assessment was performed on the estimated fair value of inventory to determine if further adjustments were necessary. Property, Plant and Equipment Land, Buildings and Leasehold Improvements The fair value of real property locations were estimated using the sales comparison (market) approach and cost approach. As part of the valuation process, the third-party advisors obtained information on the Company’s current usage, building type, year built, and history of major capital expenditures made by the Company. Certain site inspections were conducted and review of market information such as comparable sales and current listings were obtained for the Company’s largest sites. In addition, an obsolescence assessment for real property locations at the reporting unit level was reviewed to determine if adjustments to fair value estimates were needed. Rental and Service Equipment, Machinery and Other The fair values of rental and service equipment and machinery were estimated using a direct and indirect cost approach depending upon the asset type. The cost approach estimates fair value by considering the amount required to construct or purchase a new asset of equal utility at current prices, with adjustments for asset function, age, physical deterioration, and obsolescence. For certain assets, such as trucks, trailers and metalworking equipment, where an active secondary market exists, fair value was estimated using the market approach. Intangible Assets We applied the income approach methodology to estimate the value of developed and acquired technology and trade name (the “Intangible Assets”). The value of the Company’s trade name and developed and acquired technology were estimated through the relief from royalty method based on the present value of the cost savings realized due to the Company’s ownership of the assets. For acquired and developed technology, the present values of the hypothetical royalty savings were applied to revenue attributable to technologies after obsolescence. The hypothetical royalty savings percentage ranged from 1% to 7% of revenue depending on the segment, reporting unit and market differentiation the technologies. For the Company’s trade name, the present value of hypothetical royalty savings applied to revenue attributable to trade name ranged from 1.5% to 2% depending on the reporting unit. The present value of the after tax cash flows for all Intangible Assets were estimated based on a discount rate between 12.8% and 16%. Lease liabilities and right of use assets The fair value of lease liabilities was measured as the present value of the remaining lease payments, as if the lease were a new lease as of the Effective Date. The Company used its incremental borrowing rate (“IBR”) as the discount rate in determining the present value of the remaining lease payments, which is consistent with the market yield utilized in determining the fair value of the Company’s Exit Notes, discussed below. Based upon the corresponding lease term, the IBR ranged from 8.45% to 10.35%. Upon emergence from bankruptcy on December 13, 2019, the ROU assets were revalued based upon the present value of market-based rent. The remeasurement of our ROU assets was based on the real estate market discount rate as of December 13, 2019. Exit Notes The fair value of the Exit Notes was estimated to approximate par value based on third-party valuation advisors’ analysis of the Company’s collateral coverage, financial metrics, and interest rate for the Exit Notes relative to market rates. New Warrants The fair value of the new warrants was estimated by applying a Black-Scholes model. The Black-Scholes model is a pricing model used to estimate the theoretical price or fair value for a European-style call or put option/warrant based on current stock price, strike price, time to maturity, risk-free rate, volatility, and dividend yield. Consolidated Balance Sheet The adjustments included in the following fresh start consolidated balance sheet reflect the effects of the transactions contemplated by the Plan and executed by the Company on the Fresh Start Reporting Date (reflected in the column “Reorganization Adjustments”), and fair value and other required accounting adjustments resulting from the adoption of Fresh Start Accounting (reflected in the column “Fresh Start Accounting Adjustments”). The explanatory notes provide additional information and significant assumptions with regard to the adjustments recorded and the methods used to determine the fair values.
Reorganization Adjustments (Dollars in Millions) Reorganization adjustments required in connection with the application of Fresh Start Accounting and the allocation of the enterprise value to our individual assets and liabilities by reporting unit resulted in the following Reorganization Adjustments. (1)Represent amounts recorded as of the Effective Date for the implementation of the Plan, including, among other items, settlement of the Predecessor’s liabilities subject to compromise, repayment of certain of the Predecessor’s debt, issuances of the Successor’s common shares, proceeds received from the Successor’s debt offering and transfer of restricted cash for the issuance of the Successor’s debt. (2)Net change in Cash and Cash Equivalents:
(3)Net change in Restricted Cash:
(4)Represents the reclass of amounts to deferred financing fees on the Exit Credit Agreements. (5)Net change in Other Non-current Assets include the following:
(6)Represents the payment in full on the DIP Credit Agreement Principal. (7)Represents the payment in full on the A&R Credit Agreement Principal. (8)The decrease in Accounts Payable represents the payment on professional fees offset by the accrual of deferred financing fees. (9)Net change in Other Current Liabilities include the following:
(10)Changes in Long-term debt include the issuance of the unsecured 11.00% Exit Notes Due 2024 which is comprised of $1.6 billion of the Exit Rights Offering Notes and $500 million of the Exit Takeback Notes, offset by the accrual of deferred financing fees. (11)Liabilities Subject to Compromise to be settled in accordance with the Plan and the resulting gain were determined as follows:
(12)Represents the cancellation of Predecessor Ordinary Shares at Par Value. (13)Represents the issuance of New Ordinary Shares to Creditors and Prior Ordinary Share Holders at Par Value. (14)Net change in Predecessor Capital in Excess of Par Value include the following:
(15)Net change in Successor Capital in Excess of Par Value include the following:
(16)Net Change in Retained Deficit include the following:
Fresh Start Adjustments (Dollars in Millions) (17)Changes in Inventories, Net reflect the fair value adjustment of $84 million.
(18)Reflects the elimination of current deferred costs associated with contracts with customers of $10 million and the elimination of certain prepaid taxes of $4 million due to the adoption of Fresh Start Accounting. (19)Changes in Property, Plant and Equipment, Net reflect the fair value adjustment of $289 million.
(20)Reflects the recognition of Goodwill. (21)Changes in Intangible Assets reflect the fair value adjustment of $957 million.
(22)Reflects the fair value adjustment to the increase the Company’s Right of Use Assets by $13 million and Non-current Deferred Tax Asset by $14 million. (23)Reflects the fair value adjustment to the Company’s current portion of financed lease obligations. (24)Reflects the fair value adjustments to (i) increase the current portion of operating lease obligations by $5 million, (ii) decrease deferred revenues associated with contracts with customers by $29 million, and (iii) decrease intangible liability by $15 million. (25)Reflects the fair value adjustment to the Company’s long-term portion of financed lease obligations. (26)Reflects the fair value adjustment to (i) increase the long-term portion of operating lease obligations by $22 million, (ii) decrease the intangible liability by $7 million, and (iii) record a Non-current Deferred Tax Liability of $43 million. (27)Reflects the cumulative impact of Fresh Start Accounting adjustments discussed herein and the elimination of Predecessor accumulated other comprehensive loss and Predecessor accumulated deficit. (28)Reflects the fair value adjustment to noncontrolling ownership interests in certain subsidiaries.
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Fresh Start Accounting | 2. Emergence from Chapter 11 Bankruptcy Proceedings Restructuring Support Agreement; Voluntary Reorganization Under Chapter 11 of the U.S. Bankruptcy Code On May 10, 2019, the Weatherford Parties entered into the Restructuring Support Agreement (“RSA”) with certain holders of our unsecured notes (“Consenting Creditors”), setting forth, subject to certain conditions, the terms of the proposed capital financial restructuring of the Company (“Transaction”). The RSA included certain milestones for the progress of the upcoming court proceedings, which included the dates by which the Weatherford Parties were required to, among other things, obtain certain court orders and complete the Transaction. On July 1, 2019, Weatherford Ireland, Weatherford Bermuda, and Weatherford Delaware, filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas (the “Cases”). Payments Due on Certain Indebtedness The Weatherford Parties’ 7.75% Senior Notes due 2021, 8.25% Senior Notes due 2023 and 6.80% Senior Notes due 2037 (together, “Certain Senior Notes”) provided for an aggregate $69 million interest payment that became due on June 15, 2019. The applicable indenture governing the Certain Senior Notes provided a 30-day grace period that extended the latest date for making this interest payment to July 16, 2019, before an event of default would occur under the applicable indenture. The Weatherford Parties elected to not make this interest payment on the due date and to utilize the 30-day grace period provided by the indentures. As a result of filing the Cases on July 1, 2019, an event of default occurred under each indenture governing these unsecured notes, which automatically accelerated maturity of the principal, plus any accrued and unpaid interest, on such series of unsecured notes and certain other obligations of the Weatherford Parties. Any efforts to enforce such payment obligations under the unsecured notes or other accelerated obligations of the Weatherford Parties were automatically stayed as a result of the Cases, and the creditors’ rights of enforcement in respect of the unsecured notes and other accelerated obligations of the Weatherford Parties were subject to the applicable provisions of the Bankruptcy Code. In addition, all of the Weatherford Parties’ prepetition unsecured senior notes and related unpaid interest were classified as “Liabilities Subject to Compromise” on our 2019 Consolidated Balance Sheets during bankruptcy as further defined herein and in subsequent disclosures throughout and with respect to the Predecessor as shown in “Note 3 – Fresh Start Accounting”. The Weatherford Parties’ Term Loan Agreement required a quarterly payment of $12.5 million plus interest that became due on June 30, 2019. On July 1, 2019, the Weatherford Parties and the Term Loan Lenders entered into a Term Loan Forbearance Agreement where the lenders agreed to forbear from exercising their rights and remedies available to them, including the right to accelerate any indebtedness, for a specified period of time. On July 3, 2019, all unpaid principal and interest under the Term Loan Agreement were repaid in full. See discussion below. Forbearance Agreements On July 1, 2019, the Weatherford Parties and the Credit Agreement Lenders under the Amended and Restated Credit Agreement (the “A&R Credit Agreement”), dated as of May 9, 2016, among WOFS Assurance Limited and Weatherford Bermuda, as borrowers, the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto entered into a forbearance agreement (the “Credit Agreement Forbearance Agreement”) with respect to certain defaults under the A&R Credit Agreement, including those arising from the Weatherford Parties’ commencement of the Cases. On July 1, 2019, the Weatherford Parties and the Term Loan Lenders under the Term Loan Agreement, dated as of May 4, 2016, among Weatherford Bermuda, as borrower, the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto (the “Term Loan Agreement”) entered into a forbearance agreement (the “Term Loan Forbearance Agreement”) with respect to certain defaults under the Term Loan Agreement. On July 3, 2019, the Company repaid in full its outstanding indebtedness under the Term Loan. On July 1, 2019, the Weatherford Parties and the 364-Day Lenders under the 364-Day Revolving Credit Agreement, dated August 16, 2018, among Weatherford Bermuda, as borrower, the other borrowers party thereto, the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto (“364-Day Credit Agreement”) entered into a forbearance agreement (the “364-Day Revolving Forbearance Agreement”) with respect to certain defaults under the 364-Day Credit Agreement. On July 3, 2019, the Company repaid in full its outstanding indebtedness under the 364-Day Revolving Credit Agreement. On July 1, 2019, the Weatherford Parties and three lenders under the DIP Credit Agreement (the “Swap Counterparties”) each party to a hedging agreement with Weatherford Bermuda for the purpose of hedging foreign currency exposure incurred by the Weatherford Parties (each, a “Swap Agreement” and, collectively, the “Swap Agreements”) entered into a consent to swap agreement termination forbearance (the “Swap Forbearance Agreement”) with respect to certain defaults under the Swap Agreements. Specifically, under the Swap Forbearance Agreement, the Swap Counterparties agreed to forbear from exercising their rights and remedies available to them due to certain Events of Default and Termination Events defined in the agreements for a specified period of time. On July 3, 2019, the Weatherford Parties entered into amended and restated Swap Agreements with such Swap Counterparties to govern existing and future foreign currency transactions entered into with such Swap Counterparties. Backstop Commitment Agreement On July 1, 2019, the Weatherford Parties and the commitment parties thereto (the “Initial Commitment Parties”) entered into a Backstop Commitment Agreement. Pursuant to the terms of the Plan, and subject to approval by the Bankruptcy Court in connection with confirmation of the Plan, the Company agreed to offer to holders of its existing unsecured notes, including the Commitment Parties, subscription rights to purchase the Exit Notes in aggregate principal amount of $1.25 billion, upon the Company’s emergence from bankruptcy. On September 9, 2019, the Weatherford Parties, certain of the Initial Commitment Parties and certain additional commitment parties (the “Additional Commitment Parties” and, together with the Initial Commitment Parties, the “Commitment Parties”) entered into an amendment to the Backstop Commitment Agreement. The Backstop Commitment Agreement Amendment provided for (i) the joinder of the Additional Commitment Parties to the Backstop Commitment Agreement, (ii) the increase in the backstop commitment by $350 million (the “Increased Commitment”) from $1.25 billion to up to $1.6 billion, and (iii) an amendment to the Backstop Commitment Agreement to account for the changes reflected in the Third RSA Amendment. Subject to the terms and conditions contained in the Backstop Commitment Agreement, the Consenting Creditors agreed to purchase any Exit Notes that were not duly subscribed for pursuant to the rights offering at a price equal to $1,000 per $1,000 in principal amount of the Exit Notes purchased by such Commitment Party. On July 1, 2019, as consideration for the commitment, the Weatherford Parties made an aggregate payment of $62.5 million in cash to the Commitment Parties. As consideration for the Increased Commitment agreed to on September 9, 2019, the Weatherford Parties made an aggregate payment of $18.7 million in cash to certain of the Commitment Parties upon our emergence date. Debtor in Possession Credit Agreement On July 3, 2019, the Weatherford Parties entered into a senior secured superpriority debtor in possession credit agreement (the “DIP Credit Agreement”). The DIP Credit Agreement had two debtor in possession (“DIP”) facilities to provide liquidity during the pendency of the Cases. The facilities consisted of (a) a DIP revolving credit facility in the principal amount of up to $750 million provided by banks or other lenders and (b) a DIP term loan facility in the amount of up to $1.0 billion, which was fully backstopped by the Consenting Creditors. The DIP Credit Agreement matured on the date of completion of the Transaction. On July 3, 2019, the Weatherford Parties borrowed approximately $1.4 billion under the DIP Credit Agreement and the proceeds were used to repay certain prepetition indebtedness, cash collateralize certain obligations with respect to letters of credit and similar instruments and finance the working capital needs and general corporate purposes of the Weatherford Parties and certain of their subsidiaries. On July 3, 2019, the Company repaid all outstanding amounts due under the secured Term Loan Agreement and 364-Day Credit Agreement totaling approximately $616 million with borrowings from our DIP Credit Agreement. In addition, the Company cash collateralized approximately $271 million of letters of credit and similar instruments with borrowings from the DIP Credit Agreement. We repaid our DIP Credit Agreement borrowings in full on the Effective Date. Amended RSA; Plan Confirmation On August 23, 2019, the Weatherford Parties entered into the second amendment of the RSA (the “Second RSA Amendment”) with certain of the noteholders, and certain equity holders who collectively held approximately 208 million shares of the Weatherford’s outstanding ordinary shares (the “Consenting Equity Holders”) which joined the Consenting Equity Holders as parties to the RSA. In addition, it provided for the payment of $250 thousand to the Consenting Equity Holders’ counsel and amended the terms of the new warrants to be issued under the Plan to the holders of the Company’s existing ordinary shares. The amended new warrant terms include extending the maturity date of the warrants to four years after the effective date of the Plan and reduced the exercise price. Pursuant to the terms of the Third RSA Amendment, the Weatherford Parties agreed to issue a single tranche of up to $2.1 billion aggregate principal amount of new unsecured notes (“Exit Notes”) upon emergence from bankruptcy, consisting of up to $1.6 billion of Exit Notes were issued for cash to holders of subscription rights issued in a rights offering (the “Exit Rights Offering Notes”) and to holders of Unsecured Notes Claims and $500 million of Exit Notes issued on a pro rata basis (the “Exit Takeback Notes”). The Exit Notes were issued in lieu of the two tranches of new unsecured notes in aggregate principal amount of $2.5 billion previously contemplated by the original RSA. On September 11, 2019, the Transaction was approved through the confirmation of the Plan filed in the Cases. The amended RSA and the confirmed Plan contemplated a comprehensive deleveraging of our balance sheet and provided, in pertinent part, and were executed as follows (as further described in later paragraphs): •Our existing unsecured notes were cancelled and exchanged for 99% of the ordinary shares of the reorganized Company (“New Common Stock”) and the Weatherford Parties issued a single tranche of up to $2.1 billion aggregate principal amount of new Exit Notes upon emergence from bankruptcy, consisting of up to $1.6 billion of Exit Rights Offering Notes (fully backstopped by Commitment Parties in the Backstop Commitment Agreement) issued for cash to holders of subscription rights issued in a rights offering and $500 million of Exit Takeback Notes issued on a pro rata basis with a five-year maturity. •All trade claims against the Company whether arising prior to or after the commencement of the Cases were paid in full in the ordinary course of business. •Our existing equity was cancelled and exchanged for 1% of the New Common Stock and four-year warrants to purchase 10% of the New Common Stock, both subject to dilution on account of the equity issued pursuant to the management incentive plan. The strike price of the warrants was set at an equity value at which the noteholders received a recovery equal to par as of the date of the commencement of the Cases in respect of the existing unsecured notes and all other general unsecured claims that were pari passu with the existing unsecured notes. Our affiliates entities that did not file voluntary petitions under the Bankruptcy Code continued operating their businesses and facilities without disruption to customers, vendors, partners or employees. Weatherford Bermuda commenced provisional liquidation proceedings (“Bermuda Proceedings”) pursuant to the Bermuda Companies Act 1981 by presenting a winding up petition to the Supreme Court of Bermuda (“Bermuda Court”). The Bermuda Court appointed a provisional liquidator who acted as an officer of the Bermuda Court. The appointment of the provisional liquidator provided an automatic statutory stay of proceedings in Bermuda against Weatherford Bermuda and its assets. On the return date of September 6, 2019 for the Bermuda petition - similar to a second day hearing in a Chapter 11 proceeding - Weatherford Bermuda postponed its petition for a specified period, while the Cases were administered. Before the Weatherford Parties emerged from Chapter 11, Weatherford Bermuda, along with the provisional liquidator and subject to the direction of the Bermuda Court, convened meetings of the impaired creditors in order to consider and approve, if appropriate, a scheme of arrangement pursuant to the Bermuda Companies Act 1981. The terms of the approved Bermuda scheme mirrored the terms of the Plan and was a mechanism for ensuring that all of the impaired creditors of Weatherford Bermuda were bound by the terms of the Bermuda scheme. The Bermuda Scheme was effective as of November 25, 2019. On September 23, 2019, Weatherford Ireland filed a petition under the Irish Companies Act 2014 in Ireland (“Irish Examinership Proceeding”) to seek approval for its scheme of arrangement following confirmation of the Plan in the U.S. The filing of the Irish Examinership Proceeding commenced a 100-calendar day protection period under Irish law, during which Weatherford Ireland had the benefit of protection against enforcement and other actions by its creditors. Weatherford Ireland continued operating its business in the ordinary course during the protection period. The approved terms of the Irish scheme mirrored the terms of the Plan. The Irish scheme was approved by the Irish High Court on December 12, 2019. Subject to certain exceptions, under the Bankruptcy Code, the filing of the Cases automatically enjoined, or stayed, the continuation of most judicial or administrative proceedings or filing of other actions against the Weatherford Parties or their property to recover, collect or secure a claim arising prior to the date of the Cases. In addition, all of the Weatherford Parties’ prepetition unsecured senior notes and related unpaid interest were liabilities subject to compromise, further discussed below. Since the commencement of the Cases until emergence, the Weatherford Parties continued to operate their businesses as debtors-in-possession under the jurisdiction of and in accordance with the applicable provisions of the Bankruptcy Code, orders of the Bankruptcy Court, the Irish Examinership Proceeding and the Bermuda Proceeding. Emergence On the Effective Date of December 13, 2019, except as noted below: (1)the Company amended and restated its certificate of incorporation and bylaws on December 10, 2019; (2)the Company appointed new members to the Successor’s board of directors to replace the directors of the Predecessor; (3)all outstanding obligations under our unsecured senior and exchangeable notes were cancelled and the applicable agreements governing such obligations were terminated; (4)the senior secured superpriority debtor-in-possession credit agreement (the “DIP Credit Agreement”) the Company previously entered into was paid in full and terminated; (5)the Company issued a $2.1 billion aggregate principal amount of unsecured 11.00% Exit Notes due 2024; for additional details see “Note 14 – Borrowings and Other Debt Obligations”; (6)the Company entered into a senior secured asset-based revolving credit agreement in an aggregate amount of $450 million (the “ABL Credit Agreement”) with the lenders party thereto and Wells Fargo Bank, N.A. as administrative agent; for additional details see Note 14 – Borrowings and Other Debt Obligations; (7)the Company entered into a senior secured letter of credit agreement in an aggregate amount of $195 million (the “LC Credit Agreement”) for issuance of bid and performance letters of credit; for additional details see Note 14 – Borrowings and Other Debt Obligations; (8)the Company issued 69,999,954 shares of Successor new ordinary shares (“New Ordinary Shares”) to the holders of the Company’s existing senior notes and holders of the existing ordinary shares (“Old Ordinary Shares”); for additional details see “Note 20 – Shareholders’ Equity (Deficiency)”; (9)the Company issued warrants (the “New Warrants”), to holders of the Company’s existing Old Ordinary Shares, to purchase up to an aggregate of 7,777,779 New Ordinary Shares in the Company at an exercise price of $99.96 per ordinary share. The New Warrants are exercisable until the earlier of December 13, 2023 and the date of consummation of any liquidity event as defined in the Warrant Agreement; for additional details see “Note 20 – Shareholders’ Equity (Deficiency)”. Prepetition Charges Expenses, gains and losses were realized or incurred before July 1, 2019 and in relation to the Cases are recorded under the caption “Prepetition Charges” on our 2019 Predecessor Consolidated Statements of Operations. The $86 million of prepetition charges primarily consisted of professional and other fees related to the Cases. Reorganization Items Any expenses, gains and losses that are realized or incurred as of or subsequent to the Petition Date and as a direct result of the Cases are recorded under “Reorganization Items” on our Consolidated Statements of Operations for the Predecessor and Successor Periods and consisted of the following:
Liabilities Subject to Compromise The Weatherford Parties’ prepetition principal balance on the Predecessor’s unsecured Senior and Exchangeable Senior Notes and related unpaid accrued interest as of the Petition Date were reclassified from “Long-term Debt” and “Other Current Liabilities”, respectively, to “Liabilities Subject to Compromise” on our Consolidated Balance Sheets on July 2, 2019 and during the bankruptcy proceedings at the amounts that were allowed as claims by the Bankruptcy Court. See also “Note 3 – Fresh Start Accounting” for further details. Upon emergence from bankruptcy, the liabilities subject to compromise of $7.6 billion were cancelled and the applicable agreements governing such obligations were terminated.
Fresh Start Accounting Upon emergence from bankruptcy, we qualified for and adopted Fresh Start Accounting in accordance with ASC 852, which resulted in the Company becoming a new entity for financial reporting purposes because (1) the holders of the then existing common shares of the Predecessor received less than 50 percent of the new common shares of the Successor outstanding upon emergence and (2) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims. The reorganization value derived from the range of enterprise values associated with the Plan was allocated to the Company’s identifiable tangible and intangible assets and liabilities based on their estimated fair values (except for deferred income taxes) with the remaining excess value allocated to goodwill in accordance with ASC 805 – Business Combinations. The amount of deferred income taxes recorded was determined in accordance with ASC 740 – Income Taxes. The Effective Date fair values of the Company’s assets and liabilities differ materially from their recorded values as reflected on the historical balance sheets. Reorganization Value Under ASC 852, the Successor determined a value to be assigned to the equity of the emerging entity as of the date of adoption of Fresh Start Accounting. Based on the Company’s revised projections filed with the SEC on a Form 8-K on October 7, 2019 and October 16, 2019, management and its investment bankers reassessed the value of the Company, resulting in an estimated range of enterprise value between $4.5 billion and $6.0 billion. The Company engaged third-party valuation advisors to assist in determining a point estimate of enterprise value within the range. Management concluded that the best point estimate of enterprise value was $4.5 billion. The Company engaged valuation experts to assist management in the allocation of such enterprise value to the assets and liabilities for financial reporting purposes based on management’s latest outlook as of the effective date. Based on this reassessment, the Company deemed it appropriate to use a final enterprise value of $4.5 billion for financial reporting purposes. The following table reconciles the enterprise value to the estimated fair value of our Successor common shares as of the Fresh Start Reporting Date:
The following table reconciles the enterprise value to the reorganization value of the Successor’s assets to be allocated to the Company’s individual assets as of the Fresh Start Reporting Date:
With the assistance of third-party valuation advisors, we determined the enterprise and corresponding equity value of the Successor using various valuation methods, including: (i) a calculation of the present value of future cash flows based on our financial projections, and (ii) a peer group trading analysis. The enterprise value and corresponding equity value were dependent upon achieving the future financial results set forth in our valuations, as well as the realization of certain other assumptions. All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the financial projections, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, upon emergence we could not assure that the estimates, assumptions, valuations or financial projections would be realized, and actual results could vary materially. Valuation Process The fair values of the Company’s principal assets, including inventory, rental and service equipment, real property, and intangible assets were estimated with the assistance of third-party valuation advisors. In addition, we also estimated the fair value of the Company’s lease liabilities, Exit Notes, and New Warrants. Inventory The fair value of the inventory was determined by using both a cost approach and income approach. Inventory was segregated into raw materials, spare parts, work in process (“WIP”), and finished goods. Fair value of raw materials and spare parts inventory were determined using the cost approach. Fair value of WIP and finished goods inventory were determined by estimating the net realizable value of the inventory, adjusted for holding period before an item is sold. Additional obsolescence assessment was performed on the estimated fair value of inventory to determine if further adjustments were necessary. Property, Plant and Equipment Land, Buildings and Leasehold Improvements The fair value of real property locations were estimated using the sales comparison (market) approach and cost approach. As part of the valuation process, the third-party advisors obtained information on the Company’s current usage, building type, year built, and history of major capital expenditures made by the Company. Certain site inspections were conducted and review of market information such as comparable sales and current listings were obtained for the Company’s largest sites. In addition, an obsolescence assessment for real property locations at the reporting unit level was reviewed to determine if adjustments to fair value estimates were needed. Rental and Service Equipment, Machinery and Other The fair values of rental and service equipment and machinery were estimated using a direct and indirect cost approach depending upon the asset type. The cost approach estimates fair value by considering the amount required to construct or purchase a new asset of equal utility at current prices, with adjustments for asset function, age, physical deterioration, and obsolescence. For certain assets, such as trucks, trailers and metalworking equipment, where an active secondary market exists, fair value was estimated using the market approach. Intangible Assets We applied the income approach methodology to estimate the value of developed and acquired technology and trade name (the “Intangible Assets”). The value of the Company’s trade name and developed and acquired technology were estimated through the relief from royalty method based on the present value of the cost savings realized due to the Company’s ownership of the assets. For acquired and developed technology, the present values of the hypothetical royalty savings were applied to revenue attributable to technologies after obsolescence. The hypothetical royalty savings percentage ranged from 1% to 7% of revenue depending on the segment, reporting unit and market differentiation the technologies. For the Company’s trade name, the present value of hypothetical royalty savings applied to revenue attributable to trade name ranged from 1.5% to 2% depending on the reporting unit. The present value of the after tax cash flows for all Intangible Assets were estimated based on a discount rate between 12.8% and 16%. Lease liabilities and right of use assets The fair value of lease liabilities was measured as the present value of the remaining lease payments, as if the lease were a new lease as of the Effective Date. The Company used its incremental borrowing rate (“IBR”) as the discount rate in determining the present value of the remaining lease payments, which is consistent with the market yield utilized in determining the fair value of the Company’s Exit Notes, discussed below. Based upon the corresponding lease term, the IBR ranged from 8.45% to 10.35%. Upon emergence from bankruptcy on December 13, 2019, the ROU assets were revalued based upon the present value of market-based rent. The remeasurement of our ROU assets was based on the real estate market discount rate as of December 13, 2019. Exit Notes The fair value of the Exit Notes was estimated to approximate par value based on third-party valuation advisors’ analysis of the Company’s collateral coverage, financial metrics, and interest rate for the Exit Notes relative to market rates. New Warrants The fair value of the new warrants was estimated by applying a Black-Scholes model. The Black-Scholes model is a pricing model used to estimate the theoretical price or fair value for a European-style call or put option/warrant based on current stock price, strike price, time to maturity, risk-free rate, volatility, and dividend yield. Consolidated Balance Sheet The adjustments included in the following fresh start consolidated balance sheet reflect the effects of the transactions contemplated by the Plan and executed by the Company on the Fresh Start Reporting Date (reflected in the column “Reorganization Adjustments”), and fair value and other required accounting adjustments resulting from the adoption of Fresh Start Accounting (reflected in the column “Fresh Start Accounting Adjustments”). The explanatory notes provide additional information and significant assumptions with regard to the adjustments recorded and the methods used to determine the fair values.
Reorganization Adjustments (Dollars in Millions) Reorganization adjustments required in connection with the application of Fresh Start Accounting and the allocation of the enterprise value to our individual assets and liabilities by reporting unit resulted in the following Reorganization Adjustments. (1)Represent amounts recorded as of the Effective Date for the implementation of the Plan, including, among other items, settlement of the Predecessor’s liabilities subject to compromise, repayment of certain of the Predecessor’s debt, issuances of the Successor’s common shares, proceeds received from the Successor’s debt offering and transfer of restricted cash for the issuance of the Successor’s debt. (2)Net change in Cash and Cash Equivalents:
(3)Net change in Restricted Cash:
(4)Represents the reclass of amounts to deferred financing fees on the Exit Credit Agreements. (5)Net change in Other Non-current Assets include the following:
(6)Represents the payment in full on the DIP Credit Agreement Principal. (7)Represents the payment in full on the A&R Credit Agreement Principal. (8)The decrease in Accounts Payable represents the payment on professional fees offset by the accrual of deferred financing fees. (9)Net change in Other Current Liabilities include the following:
(10)Changes in Long-term debt include the issuance of the unsecured 11.00% Exit Notes Due 2024 which is comprised of $1.6 billion of the Exit Rights Offering Notes and $500 million of the Exit Takeback Notes, offset by the accrual of deferred financing fees. (11)Liabilities Subject to Compromise to be settled in accordance with the Plan and the resulting gain were determined as follows:
(12)Represents the cancellation of Predecessor Ordinary Shares at Par Value. (13)Represents the issuance of New Ordinary Shares to Creditors and Prior Ordinary Share Holders at Par Value. (14)Net change in Predecessor Capital in Excess of Par Value include the following:
(15)Net change in Successor Capital in Excess of Par Value include the following:
(16)Net Change in Retained Deficit include the following:
Fresh Start Adjustments (Dollars in Millions) (17)Changes in Inventories, Net reflect the fair value adjustment of $84 million.
(18)Reflects the elimination of current deferred costs associated with contracts with customers of $10 million and the elimination of certain prepaid taxes of $4 million due to the adoption of Fresh Start Accounting. (19)Changes in Property, Plant and Equipment, Net reflect the fair value adjustment of $289 million.
(20)Reflects the recognition of Goodwill. (21)Changes in Intangible Assets reflect the fair value adjustment of $957 million.
(22)Reflects the fair value adjustment to the increase the Company’s Right of Use Assets by $13 million and Non-current Deferred Tax Asset by $14 million. (23)Reflects the fair value adjustment to the Company’s current portion of financed lease obligations. (24)Reflects the fair value adjustments to (i) increase the current portion of operating lease obligations by $5 million, (ii) decrease deferred revenues associated with contracts with customers by $29 million, and (iii) decrease intangible liability by $15 million. (25)Reflects the fair value adjustment to the Company’s long-term portion of financed lease obligations. (26)Reflects the fair value adjustment to (i) increase the long-term portion of operating lease obligations by $22 million, (ii) decrease the intangible liability by $7 million, and (iii) record a Non-current Deferred Tax Liability of $43 million. (27)Reflects the cumulative impact of Fresh Start Accounting adjustments discussed herein and the elimination of Predecessor accumulated other comprehensive loss and Predecessor accumulated deficit. (28)Reflects the fair value adjustment to noncontrolling ownership interests in certain subsidiaries.
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Impairments and Other Charges |
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Impairments and Other Charges | 4. Impairments and Other Charges We recorded the following in “Impairments and Other Charges” on the accompanying Consolidated Statements of Operations:
We recognized long-lived asset and goodwill impairments as further described in “Note 10 – Long-Lived Asset Impairments” and “Note 11 – Goodwill and Intangible Assets”, respectively and inventory charges as further described in “Note 7 – Inventories, Net”. See also “Note 8 – Business Combinations and Divestitures.”
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Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | 5. New Accounting Pronouncements Accounting Standards Adopted On January 1, 2020, we adopted Financial Accounting Standards Board Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss impairment methodology in previous U.S. GAAP with a methodology (Current Expected Credit Losses model, or CECL) that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. We estimate expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Our customer base has generally similar collectability risk characteristics, although risk profiles can vary between larger independent customers and state-owned customers, which may have a lower risk than smaller independent customers. The updated guidance applies to (i) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, and (ii) loan commitments and other off-balance sheet credit exposures. The adoption of this standard update did not have a material impact on our 2020 Consolidated Financial Statements. Accounting Standards Issued Not Yet Adopted Evaluations of all other new accounting pronouncements that have been issued, but not yet effective are on-going, and at this time are not expected to have a material impact on our Consolidated Financial Statements.
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Accounts Receivable Factoring |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable Factoring | 6. Accounts Receivable Factoring From time to time, we participate in factoring arrangements to sell accounts receivable to third-party financial institutions. Our factoring transactions were recognized as sales, and the proceeds are included as operating cash flows in our Consolidated Statements of Cash Flows. The loss on sale of accounts receivable was immaterial for all periods. The following table presents accounts receivable sold and the cash proceeds, net of discount and hold-back.
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Inventories, Net |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, Net | 7. Inventories, Net Inventories, net of reserves of $119 million and $0 as of December 31, 2020 and December 31, 2019, respectively, by category were as follows:
During the 2020 and 2019 Successor Periods and the 2019 and 2018 Predecessor Periods, inventory charges were $210 million, $0, $159 million and $80 million, respectively. Inventory charges recognized included write-downs for excess and obsolete inventory considered commercially unviable or technologically obsolete considering current and future demand, as a result of the volatility in oil and gas commodity demand, the downturn in the oil and gas industry and in 2020, the impact of the COVID-19 pandemic. These charges were recognized in the following captions on our Consolidated Statements of Operations:
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Business Combinations and Divestitures |
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Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combinations and Dispositions | 8. Business Combinations and Divestitures Acquisitions We did not have any acquisitions of businesses during the years ended December 31, 2020 or 2019. In the 2018 Predecessor Period we acquired the remaining 50% equity interest in our Qatari joint venture that we previously consolidated and accounted for as an equity method investment. The total consideration to purchase the remaining equity interest was $87 million, which is comprised of a cash consideration of $72 million ($48 million in the year of closing and $24 million deferred consideration to be paid two years from closing) and an estimated contingent consideration of $15 million related to services the Qatari entity will render under new contracts. As a result of this step acquisition transaction with a change in control, we remeasured our previously held equity investment to fair value and recognized a $12 million gain in the 2018 Predecessor Period. We paid the $24 million deferred consideration in the 2020 Successor Period. Divestitures We did not have any significant divestitures of businesses during the Successor year ended December 31, 2020. On April 30, 2019, we completed the sale of our Reservoir Solutions business, also known as our laboratory services business to Oil & Gas Labs, LLC, an affiliate of CSL Capital Management, L.P., for an aggregate purchase price of $206 million in cash, subject to escrow release and customary post-closing working capital adjustments. The business disposition included our laboratory and geological analysis business, including the transfer of substantially all personnel and associated contracts related to the business. We recognized a gain of $117 million and divested a carrying amount of $61 million in net assets. On April 30, 2019, we completed the sale of our surface data logging business to Excellence Logging for $50 million in total consideration, subject to customary post-closing working capital adjustments. The business disposition included our surface data logging equipment, technology and associated contracts related to the business. We recognized an insignificant loss and divested a carrying amount of $34 million in net assets. In the 2019 Predecessor Period, we completed the final closings in a series of closings pursuant to the purchase and sale agreements entered into with ADES International Holding Ltd. in July of 2018 to sell our land drilling rig operations in Algeria, Kuwait and Saudi Arabia, as well as two idle land rigs in Iraq, for an aggregate purchase price of $288 million. In the 2018 Predecessor Period, we received gross proceeds of $216 million and recognized a loss of $9 million after recognizing asset write-down charges of $58 million for deferred mobilization costs and other rigs related assets as such costs were no longer recoverable. The carrying amount of the assets and liabilities sold in 2018 totaled $253 million and $36 million, respectively, to include PP&E, inventory, accounts receivable and other assets and liabilities. In the 2019 Predecessor Period we received the remaining gross proceeds of $72 million and recognized a loss of $6 million. The carrying amounts of net assets divested during the 2019 Predecessor Period was $66 million. We divested several of our remaining rig assets through separate asset sale agreements throughout 2019. In the 2018 Predecessor Period, we completed the sale of our continuous sucker rod service business in Canada for a purchase price of $25 million and recognized a gain of $2 million. During 2018, we also completed the sale of an equity investment in a joint venture for $12.5 million and recognized a gain of $3 million. See “Note 10 – Long-Lived Asset Impairments” for further details related to impairments and those specific to our land drilling rigs assets.
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Property, Plant and Equipment (Notes) |
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Property, Plant and Equipment Disclosure [Text Block] | 9. Property, Plant and Equipment, Net Property, plant and equipment, net was composed of the following:
Depreciation expense was $340 million, $25 million, $386 million, and $493 million for the 2020 and 2019 Successor Periods and the 2019 and 2018 Predecessor Periods, respectively. See “Note 10 – Long-Lived Asset Impairments” for additional information on property, plant and equipment impairments.
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Property, Plant and Equipment [Table Text Block] | The estimated useful lives of our major classes of PP&E are as follows:
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Long-Lived Asset Impairments (Notes) |
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Long-lived and Other Asset Impairments | 10. Long-Lived Asset Impairments The unprecedented global economic and industry conditions attributable to the COVID-19 pandemic resulting in the significant volatility in the energy industry impacting the demand for our products and services were identified as long-lived asset impairment indicators. As a result, we performed impairment assessments quarterly in 2020 through analysis of the undiscounted cash flow of our asset groups, which include property, plant and equipment, definite-lived intangible assets, goodwill and right of use assets. As of March 31, 2020, and as of June 30, 2020, we identified that impairment occurred in certain asset groups and with the assistance of third-party valuation advisors we determined the fair value of those asset groups. Based on our impairment tests, we determined the carrying amount of certain long-lived asset groups exceeded their respective fair values and we recognized $814 million of long-lived asset impairments in “Impairments and Other Charges” on the accompanying Consolidated Statements of Operations. The fair values of certain of our long-lived asset groups were determined using discounted cash flow or Level 3 fair value analyses. The income approach required significant assumptions to determine the fair value of an asset or asset group including the estimated discounted future cash flows, specifically the forecasted revenue, forecasted operating margins and the discount rate. The table below details the Successor long-lived asset impairments by asset and segment recognized for the year ended December 31, 2020.
We recognized long-lived asset impairments of $20 million for the 2019 Predecessor Period to write-down our land drilling rigs in our Western Hemisphere segment totaling $13 million and Eastern Hemisphere totaling $7 million. During 2018, we recognized long-lived asset impairments of $151 million ($46 million in our Western Hemisphere and $105 million in our Eastern Hemisphere segments) to write-down our land drilling rigs assets. See “Note 8 – Business Combinations and Divestitures” and “Note 15 – Fair Value of Financial Instruments, Assets and Other Assets” for more details.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | 11. Goodwill and Intangible Assets Successor Goodwill Recognition and Impairment As a result of Fresh Start Accounting, we recognized $239 million of goodwill in our Middle East and North Africa (“MENA”) and Russia, Turkmenistan and Kazakhstan (“Russia”) reporting units. During the first half of 2020 we identified the impairment indicators as discussed in “Note 10 – Long-Lived Asset Impairments” that triggered interim quantitative goodwill assessments as of March 31, 2020 and June 30, 2020. The fair values of our reporting units were determined using a combination of the income approach and the market approach for comparable companies in our industry, a Level 3 fair value analysis. Determining the fair value of the reporting units requires management to develop significant judgments, including estimating discounted future cash flows by reporting unit, specifically forecasted revenue, forecasted operating margins and discount rates. We determined that the fair value of our reporting units were less than their carrying values and as a result of our impairment tests, we fully impaired our goodwill in the MENA and Russia reporting units as presented in “Impairments and Other Charges” on the accompanying Consolidated Statements of Operations. The changes in the carrying amount of goodwill by reporting segment for the years ended December 31, 2020 and 2019, are presented in the following table.
Predecessor Period Goodwill Impairments and Assessment Factors The Predecessor impairment indicators during 2019 and 2018 were a result of lower activity levels and lower exploration and production capital spending that resulted in a decline in drilling activity and forecasted growth in all our reporting units. Our lower than expected and forecasted financial results were due to the continued weakness within the energy market and consequently our inability to quickly and significantly reduce our cost structure under our restructuring plans savings. In the 2019 Predecessor Period, our goodwill impairment tests indicated that goodwill for all our reporting units in the Western Hemisphere and Eastern Hemisphere were impaired and as a result we incurred a goodwill impairment charge of $730 million. In 2018, our annual and interim goodwill impairment tests indicated that our goodwill was impaired and as a result we incurred a goodwill impairment charge of $1.9 billion, of which $1.4 billion was related to our Western Hemisphere segment and $537 million was related to our Eastern Hemisphere segment. The cumulative impairment loss for goodwill was $239 million for the Successor and $3.4 billion for Predecessor periods. Intangible Assets The components of intangible assets were as follows:
We recognized an impairment of $155 million of our developed and acquired technology in “Impairments and Other Charges” on the accompanying Consolidated Statements of Operations during the Successor year ended December 31, 2020. Amortization expense was $163 million in the Successor year ended December 31, 2020, $9 million in the 2019 Successor Period, $61 million in the 2019 Predecessor Period and $63 million in the Predecessor year ended December 31, 2018. Based on the carrying value of intangible assets at December 31, 2020, amortization expense for the subsequent five years is estimated as follows (dollars in millions):
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges | 12. Restructuring Charges In response to the impact of our business from the COVID-19 pandemic and the significant and sudden changes in oil and gas prices, we have continued to develop and execute on plans to rationalize and restructure our business and right-size our operations and personnel. Additional charges with respect to our ongoing cost reduction actions may be recognized in subsequent periods. The following table presents restructuring charges for the Successor and Predecessor Periods.
The following table presents total restructuring charges by reporting segment and Corporate for the Successor and Predecessor Periods.
The following table presents total restructuring accrual activity for the periods presented. Restructuring charges in the table below exclude restructuring related asset charges.
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Leases (Notes) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | We lease certain facilities, land, vehicles, and equipment. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet (including short-term sale leaseback transactions); we recognize lease expense for these leases on a straight-line basis over the lease term. We have data center lease agreements with lease and non-lease components which are accounted for separately, while for the remainder of our agreements we have elected the practical expedient to account for lease and non-lease components as a single lease component. For certain equipment leases, such as copiers and vehicles, we account for the leases under a portfolio method. Operating lease payments include related options to extend or terminate lease terms that are reasonably certain of being exercised. The unmanned equipment that we lease to customers under operating leases consists primarily of drilling rental tools and artificial lift pumping equipment. These equipment rental revenues are generally provided based on call-out work orders that include fixed per unit prices and are derived from short-term contracts. See “Note 1 – Summary of Significant Accounting Policies” and “Note 23 – Revenues” for additional details on our equipment rental revenues.
Lease expense incurred under operating leases was $187 million for the Predecessor year ended December 31, 2018. We are committed under various operating lease agreements primarily related to office space and equipment. Generally, these leases include renewal provisions and rental payments, which may be adjusted for taxes, insurance and maintenance related to the property. Future minimum commitments under operating and finance leases are as follows:
(a) Included in “Impairments and Other Charges” in our Consolidated Statements of Operations and “Other Assets and Liabilities, Net” in our Consolidated Statements of Cash Flows.
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Leases | We lease certain facilities, land, vehicles, and equipment. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet (including short-term sale leaseback transactions); we recognize lease expense for these leases on a straight-line basis over the lease term. We have data center lease agreements with lease and non-lease components which are accounted for separately, while for the remainder of our agreements we have elected the practical expedient to account for lease and non-lease components as a single lease component. For certain equipment leases, such as copiers and vehicles, we account for the leases under a portfolio method. Operating lease payments include related options to extend or terminate lease terms that are reasonably certain of being exercised. The unmanned equipment that we lease to customers under operating leases consists primarily of drilling rental tools and artificial lift pumping equipment. These equipment rental revenues are generally provided based on call-out work orders that include fixed per unit prices and are derived from short-term contracts. See “Note 1 – Summary of Significant Accounting Policies” and “Note 23 – Revenues” for additional details on our equipment rental revenues.
Lease expense incurred under operating leases was $187 million for the Predecessor year ended December 31, 2018. We are committed under various operating lease agreements primarily related to office space and equipment. Generally, these leases include renewal provisions and rental payments, which may be adjusted for taxes, insurance and maintenance related to the property. Future minimum commitments under operating and finance leases are as follows:
(a) Included in “Impairments and Other Charges” in our Consolidated Statements of Operations and “Other Assets and Liabilities, Net” in our Consolidated Statements of Cash Flows.
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Borrowings and Other Debt Obligations |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Capital Leases Disclosures | 14. Borrowings and Other Debt Obligations Total debt carrying values consisted of the following:
Exit Notes On December 13, 2019, we issued unsecured 11.00% Exit Notes due in 2024 for an aggregate principal amount of $2.1 billion (of which $500 million was in the form of Exit Takeback Notes to existing creditors on the senior notes being cancelled). Interest on the Exit Notes accrues at the rate of 11.00% per annum and is payable semiannually in arrears on June 1 and December 1. We commenced interest payments thereunder on June 1, 2020. At any time prior to December 1, 2021, the Company may redeem the Exit Notes, in whole or in part, at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) the “make-whole” premium at the redemption date, plus (iii) accrued and unpaid interest, if any, to the redemption date (subject to the right of the noteholders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date). On and after December 1, 2021, the Company may redeem all or part of the 11.00% Exit Notes at redemption prices (expressed as percentages of the principal amount) equal to (i) 105.5% for the twelve-month period beginning on December 1, 2021; (ii) 102.75% for the twelve-month period beginning on December 1, 2022; and (iii) 100% for the twelve-month period beginning December 1, 2023 and at any time thereafter, plus accrued and unpaid interest at the redemption date. In addition, at any time prior to December 1, 2022, the Company may redeem up to $500 million in the aggregate principal amount of the 11.00% Exit Notes at a redemption price of 103% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date. If a change of control (as defined in the Indenture) occurs, holders of the Exit Notes will have the right to require the Company to repurchase all or any part of their Exit Notes at a purchase price equal to 101% of the aggregate principal amount of the 11.00% Exit Notes repurchased, plus accrued and unpaid interest, if any, to the repurchase date. The Exit Notes are guaranteed on a senior basis by the Company’s existing domestic subsidiaries and certain foreign subsidiaries that guarantee its obligations under the Exit Credit Agreements on a full and unconditional basis. Senior Secured Notes On August 28, 2020, Weatherford International Ltd., as issuer, Weatherford International plc and Weatherford International, LLC, as guarantors, and the other subsidiary guarantors party thereto, entered into an indenture with Wilmington Trust, National Association, as trustee and collateral agent, and issued the Senior Secured Notes in an aggregate principal amount of $500 million. Interest on the Senior Secured Notes accrues at the rate of 8.75% per annum and is payable semiannually in arrears on March 1 and September 1, commencing on March 1, 2021. Proceeds from the issuance were reduced by a purchase commitment discount of $25 million and a commitment fee of $15 million. These debt issuance costs along with legal and other direct costs are presented as a contra-liability of the carrying amount of the debt liability and will be recognized using the effective interest rate method over the term of the debt in “Interest Expense, Net” on our Consolidated Financial Statements. The Senior Secured Notes are fully and unconditionally guaranteed on a senior secured basis by the Company’s material domestic subsidiaries, certain material foreign subsidiaries, and in the future by other subsidiaries that guarantee its obligations under the LC Credit Agreement or other material indebtedness. The Senior Secured Notes are secured by substantially all of the assets of the Company and the guarantors (on an effectively first-priority basis with respect to the priority collateral for the Senior Secured Notes, and on an effectively second-priority basis with respect to the priority collateral for the LC Credit Agreement, in each case, subject to permitted liens). LC Credit Agreement On December 13, 2019, pursuant to the terms of the Plan, we entered into the LC Credit Agreement in an aggregate amount of $195 million maturing on June 13, 2024 with the lenders party thereto and Deutsche Bank Trust Company Americas as administrative agent. The LC Credit Agreement is used for the issuance of bid and performance letters of credit of the Company and certain of its subsidiaries. On August 28, 2020, we amended the LC Credit Agreement to, among other things, increase the aggregate commitments to $215 million, modify the maturity date to May 29, 2024 and reduce the minimum liquidity covenant from $200 million to $175 million. At December 31, 2020, we had approximately $167 million in outstanding letters of credit under the LC Credit Agreement and availability of $48 million. Our unamortized issuance costs at December 31, 2020 was $12 million and is recognized over the term of the agreement in “Other Expense, Net” on our Consolidated Financial Statements. As of December 31, 2020, we had $338 million of letters of credit outstanding, consisting of the $167 million mentioned above under the LC Credit Agreement and another $171 million under various uncommitted facilities (of which there was $164 million in cash collateral held and recorded in “Restricted Cash” on the Consolidated Balance Sheets). The outstanding amount of each letter of credit under the LC Credit Agreement bears interest at LIBOR plus an applicable margin of 350 basis points per annum. The LC Credit Agreement includes (i) a 12.5 basis point per annum fronting fee on the outstanding amount of each such letter of credit and (ii) an unused commitment fee in respect of the unutilized commitments at a rate of 50 basis point per annum on the average daily unused commitments under the LC Credit Agreement. The LC Credit Agreement is secured by substantially all the personal assets and properties of the Company and certain of its subsidiaries (including a first lien on the priority collateral for the LC Credit Agreement and a second lien on the priority collateral for Senior Secured Notes, in each case, subject to permitted liens). The LC Credit Agreement is also guaranteed on an unsecured basis by certain other subsidiaries of the Company. ABL Credit Agreement On the Effective Date pursuant to the terms of the Plan, the Company entered into the ABL credit agreement in an aggregate amount of $450 million with the lenders party thereto and Wells Fargo Bank, N.A. as administrative agent. On August 28, 2020, we issued $500 million of 8.75% Senior Secured Notes due 2024 (“Senior Secured Notes”) and terminated the ABL Credit Agreement. At the time of termination, there were no loan amounts outstanding under the ABL Credit Agreement, and all outstanding letters of credit thereunder were either cash collateralized or transferred to issuing banks under the LC Credit Agreement, described above. Upon termination of the ABL Credit Agreement, we recorded $15 million of unamortized deferred debt issuance costs in “Interest Expense, Net” on our Consolidated Financial Statements. At December 31, 2019, the Company did not have any borrowings under the ABL Credit Agreement. Covenants for the Exit and Senior Secured Notes and LC Credit Agreement The indentures governing the Exit Notes and Senior Secured Notes contain covenants that limit, among other things, our ability and the ability of certain of our subsidiaries, to: incur, assume or guarantee additional indebtedness; pay dividends or distributions on capital stock or redeem or repurchase capital stock; make investments; sell stock of our subsidiaries; transfer or sell assets; create liens; enter into transactions with affiliates; and enter into mergers or consolidations. The Company is subject to a $175 million minimum liquidity covenant under our amended LC Credit Agreement and Senior Secured notes and, as defined in the applicable documents, Weatherford had available liquidity of $928 million as of December 31, 2020. Under our amended LC Credit Agreement, the Company is also subject to a minimum secured liquidity (or cash in controlled accounts) covenant of $125 million. Our secured liquidity was $779 million at December 31, 2020. As of December 31, 2020, we were in compliance with the covenants of the indentures governing the Exit Notes and Senior Secured Notes and the LC Credit Agreement. At such time as (1) the Exit Notes have an investment grade rating from both of Moody’s Investors Service, Inc. and Standard and Poor’s Ratings Services and (2) no default has occurred and is continuing under the Indenture, certain of these and other covenants will be suspended and cease to be in effect so long as the rating assigned by either Moody’s or S&P has not subsequently declined to below Baa3 or BBB- (or equivalent). The Indentures also provides for certain customary events of default, including, among others, nonpayment of principal or interest, failure to pay final judgments in excess of a specified threshold, failure of a guarantee to remain in effect, bankruptcy and insolvency events, and cross acceleration, which would permit the principal, premium, if any, interest and other monetary obligations on all the then outstanding Senior Secured Notes and Exit Notes to be declared due and payable immediately. The following is a summary of scheduled debt maturities by year:
Predecessor Debt Prior Credit Agreements During our bankruptcy proceedings, we had an unsecured senior revolving credit agreement (the “A&R Credit Agreement”), a Secured Second Lien 364-Day Revolving Credit Agreement (the “364-Day Credit Agreement”) and a Term Loan Agreement, collectively referred to as the “Prior Credit Agreements.” See “Note 2 – Emergence from Chapter 11 Bankruptcy Proceedings” and “Note 3 – Fresh Start Accounting” for further details. Predecessor Senior and Exchangeable Senior Notes Prior to the Petition Date, we issued various senior notes and an exchangeable senior note, all of which ranked equally with our existing and future senior unsecured indebtedness, which had semi-annual interest payments and no sinking fund requirements. See “Note 2 – Emergence from Chapter 11 Bankruptcy Proceedings” and “Note 3 – Fresh Start Accounting” for further details. Predecessor Tender Offers Our February 2018 debt offering partially funded a concurrent tender offer to purchase for cash any and all of our 9.625% senior notes due 2019. We settled the tender offer in cash for the amount of $475 million, retiring an aggregate face value of $425 million and accrued interest of $20 million. In April 2018, we repaid the remaining principal outstanding on an early redemption of the bond. We recognized a cumulative bond tender loss of $34 million on these transactions in “Other Expense, Net” on the accompanying Consolidated Statements of Operations.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | 15. Fair Value of Financial Instruments, Assets and Other Assets Financial Instruments and Other Assets Measured and Recognized at Fair Value We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. Our valuation techniques require inputs that we categorize using a three level hierarchy, from highest to lowest level of observable inputs. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs are quoted prices or other market data for similar assets and liabilities in active markets, or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based upon our own judgment and assumptions used to measure assets and liabilities at fair value. Classification of a financial asset or liability within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. Other than the derivative instruments discussed in “Note 16 – Derivative Instruments” we had no other material assets or liabilities measured and recognized at fair value on a recurring basis at December 31, 2020 and December 31, 2019. Fair Value of Other Financial Instruments Our other financial instruments include cash and cash equivalents, accounts receivable, accounts payable, short-term borrowings and long-term debt. The carrying value of our cash and cash equivalents, accounts receivable, accounts payable, and short-term borrowings approximates their fair value due to their short maturities. These short-term borrowings are classified as Level 2 in the fair value hierarchy. As of December 31, 2019 we held $50 million of held-to-maturity Angolan government bonds which matured in 2020 and we collected the proceeds. The fair value of our long-term debt fluctuates with changes in applicable interest rates among other factors. Fair value will exceed carrying value when the current market interest rate is lower than the interest rate at which the debt was originally issued and will be less than the carrying value when the market rate is greater than the interest rate at which the debt was originally issued. The fair value of our long-term debt is classified as Level 2 in the fair value hierarchy and is established based on observable inputs in less active markets. The fair value and carrying value of our senior notes were as follows:
Non-recurring Fair Value Measurements In the 2019 Successor Period, our Fresh Start Accounting to determine the reorganization value derived from the enterprise value associated with the Plan was allocated to the Company’s identifiable tangible and intangible assets and liabilities based on their fair values (except for deferred income taxes), with the remaining excess value allocated to Goodwill. They were determined to be Level 3 fair values. See further discussion at Note 3 – Fresh Start Accounting. In the 2020 Successor Period and the 2019 Predecessor Period, our goodwill impairment tests indicated that our goodwill was impaired and as a result was written down to estimated fair value. The Level 3 fair values of our reporting units were determined using a combination of the income approach and the market approach. The unobservable inputs to the income approach requiring significant assumptions include each reporting unit’s estimated discounted future cash flows, specifically the forecasted revenue, forecasted operating margins, and the discount rate. The market approach considered market multiples of comparable publicly traded companies to estimate fair value as a multiple of each reporting unit’s actual and forecasted earnings. During the 2020 Successor Period, we recognized long-lived asset impairments to write-down our assets or asset groups to the lower of carrying amount or fair value less cost to sell, triggered by the current and forecasted impacts of the COVID-19 pandemic on our operations. The Level 3 fair values of the long-lived assets or asset groups were determined using a combination of the income approach and the market approach. The unobservable inputs to the income approach requiring significant assumptions include each asset groups estimated discounted future cash flows, specifically the forecasted revenue, forecasted operating margins, and the discount rate. During the 2019 Predecessor Period, we recognized long-lived asset impairments to write-down our assets to the lower of carrying amount or fair value less cost to sell. The change in our expectations of the market’s recovery, in addition to successive negative operating cash flows in certain disposal asset groups represented an indicator that those assets will no longer be recoverable over their remaining useful lives. The Level 3 fair values of the long-lived assets were determined using a combination of the income approach and the market approach. In 2018, our annual and interim goodwill impairment tests indicated that our goodwill was impaired and as a result three of our reporting units were written down to their estimated fair values. The Level 3 fair values of our reporting units were determined using a combination of the income approach and the market approach. The unobservable inputs to the income approach requiring significant assumptions include each reporting unit’s estimated discounted future cash flows, specifically the forecasted revenue, forecasted operating margins, and the discount rate. The market approach considered market multiples of comparable publicly traded companies to estimate fair value as a multiple of each reporting unit’s actual and forecasted earnings. During 2018, long-lived assets were impaired and written down to their estimated fair values due to the sustained downturn in the oil and gas industry that resulted in a reassessment of our disposal groups for our land drilling rigs that were included in assets held for sale at December 31, 2018. The Level 3 fair values of the long-lived assets were determined using a combination of the income approach and the market approach. The market approach considered market sales values for similar assets. The unobservable inputs to the income approach included the assets’ estimated future cash flows and estimates of discount rates commensurate with the assets’ risks. See further discussion at “Note 4 – Impairments and Other Charges,” “Note 10 – Long-Lived Asset Impairments”, and “Note 11 – Goodwill and Intangible Assets.”
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Derivative Instruments |
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Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | m time to time, we may enter into derivative financial instrument transactions to manage or reduce our market risk. We manage our debt portfolio to achieve an overall desired position of fixed and floating rates. We enter into foreign currency forward contracts and cross-currency swap contracts to economically hedge our exposure to fluctuations in various foreign currencies. The major risks from interest rate derivatives include changes in the interest rates affecting the fair value of such instruments, potential increases in interest expense due to market increases in floating interest rates, changes in foreign exchange rates and the creditworthiness of the counterparties in such transactions. We monitor the creditworthiness of our counterparties, which are multinational commercial banks. The fair values of all our outstanding derivative instruments are determined using a model with Level 2 inputs including quoted market prices for contracts with similar terms and maturity dates. Warrants – Predecessor During the fourth quarter of 2016, in conjunction with the issuance of 84.5 million ordinary shares, we issued one warrant (“Old Warrant”) that gave the holder the option to acquire an additional 84.5 million ordinary shares. The exercise price on the Old Warrant was $6.43 per share and was exercisable prior to May 21, 2019. The option period lapsed and the warrants expired unexercised with a fair value of zero. The Old Warrant was carried at fair value on the Consolidated Balance Sheets and changes in the fair value were reported through earnings. The Old Warrant fair value was a Level 2 valuation and was estimated using the Black Scholes valuation model. Inputs to the model included Weatherford’s share price, volatility of our share price, and the risk-free interest rate. We recognized an insignificant gain in May 2019 related to the Old Warrant expiration. In 2018, we recognized a gain of $70 million with changes in fair value of the Old Warrant recorded each period in “Other Expense, Net” on the accompanying Consolidated Statements of Operations. The change in fair value of the Old Warrant during 2018 was primarily driven by eliminating the warrant share value associated with any future equity issuance and a decrease in Weatherford’s stock price. Derivatives We enter into contracts to hedge our exposure to currency fluctuations in various foreign currencies. At December 31, 2020 and December 31, 2019, we had outstanding foreign currency forward contracts with notional amounts aggregating to $337 million and $389 million, respectively. These foreign currency forward contracts are not designated as hedges under ASU 2014-03, Derivatives and Hedging (Topic 815). The notional amounts of our foreign currency forward contracts do not generally represent amounts exchanged by the parties and thus are not a measure of the cash requirements related to these contracts or of any possible loss exposure. The amounts actually exchanged at maturity are calculated by reference to the notional amounts and by other terms of the derivative contracts, such as exchange rates. Our foreign currency derivatives are not designated as hedges under ASC 815, and the changes in fair value of the contracts were not material to our consolidated results and are recorded in each period in “Other Expense, Net” on the accompanying Consolidated Statements of Operations.
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Retirement and Employee Benefit Plans |
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement and Employee Benefit Plans | 17. Retirement and Employee Benefit Plans We have defined contribution plans covering certain employees. Contribution expenses related to these plans totaled $13 million, $31 million and $37 million for the Successor year ended December 31, 2020, the 2019 Predecessor Period and the year ended December 31, 2018, respectively. Contribution expense for the 2019 Successor Period was not material. The decrease in 2020 relates primarily to the suspension of employer matching contributions to our U.S. 401(k) savings plan and other contribution plans sponsored by the Company. We have defined benefit pension and other post-retirement benefit plans covering certain U.S. and international employees. Plan benefits are generally based on factors such as age, compensation levels and years of service. Net periodic benefit cost related to these plans totaled $2 million, $5 million, and $8 million for the Successor year ended December 31, 2020, the 2019 Predecessor Period and the Predecessor year ended December 31, 2018, respectively. Net periodic benefit cost for the 2019 Successor Period was not material. The decrease in net periodic benefit cost in 2020 is due to curtailment gains related to headcount reduction. The decrease in net periodic benefit cost in the 2019 Predecessor Period was due primarily to the conversion of our Netherlands plan from defined benefit to defined contribution which led to no defined benefit expense for the year and a curtailment gain for that plan. The projected benefit obligations on a consolidated basis were $231 million and $198 million as of December 31, 2020 and December 31, 2019, respectively. The increase year over year is due primarily to actuarial losses as a result of lower discount rates along with fluctuations in foreign currency. The fair values of plan assets on a consolidated basis (determined primarily using Level 2 inputs) were $164 million and $144 million as of December 31, 2020 and December 31, 2019, respectively. The increase in plan assets year over year is due primarily to positive asset returns as well as foreign currency fluctuations. As of December 31, 2020 and December 31, 2019, the net underfunded obligation was substantially all recorded within Other Non-current Liabilities. Additionally, the consolidated pre-tax amount in accumulated other comprehensive income (loss) as of December 31, 2020 and 2019, that has not yet been recognized as a component of net periodic benefit cost was a net loss of $12 million and net gain of $2 million, respectively. The weighted average assumption rates used for benefit obligations were as follows:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] | 18. 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. The relationship between our pre-tax income or loss and our income tax provision or benefit varies from period to period as a result of various factors which include changes in total pre-tax income or loss, the jurisdictions in which our income is earned, the tax laws in those jurisdictions and in our operating structure. 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. Our income tax provision from continuing operations consisted of the following:
The difference between the income tax provision at the Irish and/or Swiss income tax rate and the income tax (provision) benefit attributable to “Loss Before Income Taxes” for the 2020 Successor year, 2019 Successor and Predecessor Periods, and the Predecessor year ended December 31, 2018 is analyzed below:
Our income tax provisions generally do not correlate to our consolidated income (loss) before tax. Our income taxes provisions are primarily driven by profits in certain jurisdictions, deemed profit countries and withholding taxes on intercompany and third-party transactions that do not directly correlate to ordinary income or loss. Impairments and other charges recognized do not result in significant tax benefit as a result of our inability to forecast realization of the tax benefit of such losses. Tax expense for the year ended December 31, 2020 includes $10 million to recognize valuation allowance in jurisdictions where we are no longer able to forecast taxable income. Our results for the 2019 Predecessor period include $32 million of tax expense related to the Fresh Start accounting impacts and $14 million of tax benefit primarily related to goodwill and other asset impairments and write downs. We also recognized $4.3 billion gain on Settlement of Liabilities Subject to Compromise as a result of the bankruptcy (See “Note 3 – Fresh Start Accounting”) with no tax impact due to it being attributed to Bermuda, which has no income tax regime, and the U.S., which resulted in the reduction of our U.S. unbenefited net operating losses carryforward under the operative tax statute and applicable regulations offset by the release of the valuation allowance. Prepetition charges (charges prior to Petition Date) and reorganization items (charges after Petition Date) had no significant tax impact. Our results for the 2018 Predecessor period include charges with $70 million tax benefit principally related to the$1.9 billion goodwill impairment. Other significant 2018 charges did not result in significant tax benefit. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the tax basis of an asset or liability and its reported amount in the Consolidated Financial Statements. The measurement of deferred tax assets and liabilities is based on enacted tax laws and rates currently in effect in each of the jurisdictions in which we have operations. The components of the net deferred tax asset (liability) were as follows:
We record deferred tax assets for net operating losses and temporary differences between the book and tax basis of assets and liabilities that are expected to produce tax deductions in future periods. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those deferred tax assets would be deductible. The Company assesses the realizability of its deferred tax assets each period by considering whether it is more likely than not that all or a portion of the deferred tax assets will not be realized. The Company considers all available evidence (both positive and negative) when determining whether a valuation allowance is required. The Company evaluates possible sources of taxable income that may be available to realize the benefit of deferred tax assets, including projected future taxable income, the reversal of existing temporary differences, taxable income in carryback years and available tax planning strategies, and the impact of fresh start accounting in making this assessment. The realizability of the deferred tax assets is dependent upon judgments and assumptions inherent in the determination of future taxable income, including factors such as future operation conditions (particularly as related to prevailing oil prices and market demand for our products and services). The increase in the valuation allowance in 2020 is primarily attributable to an increase of un-benefited net operating loss carryforwards, primarily attributed to jurisdictions where those losses are not expected to be realized. Deferred income taxes generally have not been recognized on the cumulative undistributed earnings of our non-Irish subsidiaries because they are considered to be indefinitely reinvested. Distribution of these earnings in the form of dividends or otherwise may result in a combination of income and withholding taxes payable in various countries. As of December 31, 2020, the pool of positive undistributed earnings of our non-Irish subsidiaries that are considered indefinitely reinvested and may be subject to tax if distributed amounts to approximately $1.3 billion. Due to complexities in the tax laws and the manner of repatriation, it is not practicable to estimate the unrecognized amount of deferred income taxes and the related dividend withholding taxes associated with these undistributed earnings. At December 31, 2020, we had approximately $5.6 billion of NOLs in various jurisdictions, $2.0 billion of which were generated by certain U.S. subsidiaries. We estimate that the maximum U.S. NOLs available for utilization in the future is $639 million as a result of the tax consequences of our emergence from bankruptcy as described below. As a result of our emergence on December 13, 2019, in the U.S. approximately $480 million of cancellation of indebtedness (COD) income was realized for tax purposes. Under exceptions applying to COD income resulting from a bankruptcy reorganization, the U.S. subsidiaries were not required to recognize this COD income currently as taxable income. Instead, the company’s US net operating losses were reduced under the operative tax statute and applicable regulations, affecting the balance of deferred taxes. The Company also realized COD income attributable to Bermuda, which does not have an income tax regime. As a result, there was no impact from the COD Income. Additionally, upon emergence our U.S. subsidiaries experienced an ownership change as the Company’s emergence was considered an “ownership change” for purposes of Internal Revenue Code section 382. The Internal Revenue Code sections 382 and 383 impose limitations on the ability of a company to utilize tax attributes after experiencing an “ownership change.” As a result, we have estimated our annual limitation is approximately $23 million against the utilization of our U.S. loss carryforwards and other tax attributes, including unused recognized built-in losses and U.S. interest deferral. The annual limitation will result in approximately $1.2 billion of our U.S. loss carryforwards expiring unused. Upon emergence, we decreased our NOL deferred tax asset and also decreased our valuation allowance each by $257 million to remove these lost NOLs. Our non-indefinite loss carryforwards, if not utilized, will mostly expire for U.S. subsidiaries from 2030 through 2037 and at various dates from 2020 through 2039 for non-U.S. subsidiaries. At December 31, 2020, we had $11 million of tax credit carryovers, all of which are related to our non-U.S. subsidiaries. A tabular reconciliation of the total amounts of uncertain tax positions at the beginning and end of the period is as follows:
Substantially all of the uncertain tax positions, if recognized in future periods, would impact our effective tax rate. To the extent penalties and interest would be assessed on any underpayment of income tax, such amounts have been accrued and classified as a component of income tax expense and other non-current liabilities in the Consolidated Financial Statements in accordance with our accounting policy. We recorded an expense of $11 million, $1 million, $15 million, and $1 million in interest and penalty for Successor year ended December 31, 2020, the 2019 Successor and Predecessor Periods and the year ended December 31, 2018, respectively. The amounts in the table above exclude cumulative accrued interest and penalties of $89 million, $77 million and $60 million at December 31, 2020, 2019, and 2018, respectively, which are included in other liabilities. We are subject to income tax in many of the over 75 countries where we operate. As of December 31, 2020, the following table summarizes the tax years that remain subject to examination for the major jurisdictions in which we operate:
We are continuously under tax examination in various jurisdictions. We cannot predict the timing or outcome regarding resolution of these tax examinations or if they will have a material impact on our financial statements. As of December 31, 2020, we anticipate that it is reasonably possible that the amount of uncertain tax positions 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.
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Shareholders' Equity |
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Shareholders' Equity | 20. Shareholders’ Equity (Deficiency) Changes in our ordinary shares issued were as follows:
Upon the effectiveness of the Plan, all previously issued and outstanding equity interests in the Predecessor were cancelled and the Company issued 69,999,954 “New Ordinary Shares” to the holders of the Company’s existing senior notes and holders of “Old Ordinary Shares”. The amount in excess of par value of $2.9 billion is reported in “Capital in Excess of Par Value” on the accompanying Consolidated Balance Sheets. On the Effective Date, the Company issued New Warrants to holders of the Company’s Old Ordinary Shares, to purchase up to an aggregate of 7,777,779 New Ordinary Shares in the Company, par value $0.001, at an exercise price of $99.96 per ordinary share. The New Warrants are equity classified and, upon issuance, have a value of $31 million, which was recorded in “Capital in Excess of Par Value.” The warrant fair value was a Level 2 valuation and is estimated using the Black Scholes valuation model. Inputs to the model include Weatherford’s share price, volatility of our share price, and the risk-free interest rate. The New Warrants are exercisable until “Expiration Date” of which is the earlier of (i) December 13, 2023 and (ii) the date of consummation of any liquidity event resulting in the sale or exchange of all or substantially all of the equity interests of the Company to one or more third parties (whether by merger, sale, recapitalization, consolidation, combination or otherwise) or the sale, directly or indirectly, by the Company of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole; or a liquidation, dissolution or winding up of the Company. All unexercised New Warrants will expire, and the rights of the warrant holders to purchase New Ordinary Shares will terminate, on the Expiration Date. During 2020, an immaterial number of warrants were exercised. Accumulated Other Comprehensive Loss The following table presents the changes in our accumulated other comprehensive loss by component:
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Share-Based Compensation |
12 Months Ended |
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Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | 21. Share-Based Compensation As part of the emergence from bankruptcy, outstanding awards under all Predecessor equity incentive plans were cancelled, and the 2019 Plan was approved by the Successor. The 2019 Plan was amended and restated in 2020. The share-based compensation plan permits the grant of options, share appreciation rights, restricted share awards, restricted share units, and other share-based and performance-based awards to any employee, consultant or non-employee director. The provisions of each award vary based on the type of award granted and are determined by the Compensation and Human Resources Committee of our Board of Directors. Restricted share units and performance-based share units granted and vested during 2020 were immaterial. As of December 31, 2020, we had 8 million shares available for grant under our Successor share-based compensation plan. Share-based compensation expense was immaterial and zero in the 2020 and 2019 Successor Periods, respectively. During the 2019 and 2018 Predecessor periods, we recognized $46 million (which included the acceleration of share-based compensation described at “Note 3 – Fresh Start Accounting and recorded in “Impairments and Other Charges” on the accompanying Consolidated Statements of Operations) and $47 million, respectively, recorded in “Selling, General and Administrative” on the accompanying Consolidated Statements of Operations.
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Disputes, Litigation and Contingencies |
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Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Disputes, Litigation and Contingencies | 19. Disputes, Litigation and Legal Contingencies We are subject to lawsuits and claims arising out of the nature of our business. We have certain claims, disputes and pending litigation for which we do not believe a negative outcome is probable or for which we can only estimate a range of liability. It is possible, however, that an unexpected judgment could be rendered against us, or we could decide to resolve a case or cases, that would result in a liability that could be uninsured and beyond the amounts we currently have reserved and in some cases those losses could be material. If one or more negative outcomes were to occur relative to these cases, the aggregate impact to our financial condition could be material. Due to the COVID-19 pandemic, courts in many jurisdictions around the world have been temporarily closed for trials and hearings, which has resulted in delays in many of our litigation matters. Accrued litigation and settlements recorded in “Other Current Liabilities” on the accompanying Consolidated Balance Sheets as of December 31, 2020 and December 31, 2019 were $43 million and $44 million, respectively. Shareholder Litigation GAMCO Shareholder Litigation On September 6, 2019, GAMCO Asset Management, Inc. (“GAMCO”), purportedly on behalf of itself and other similarly situated shareholders, filed a lawsuit asserting violations of the federal securities laws against certain then-current and former officers and directors of the Company. GAMCO alleges violations of Sections 10(b) and 20(b) of the Securities Exchange Act of 1934, and violations of Sections 11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”) based on allegations that the Company and certain of its officers made false and/or misleading statements, and alleged non-disclosure of material facts, regarding our business, operations, prospects and performance. GAMCO seeks damages on behalf of purchasers of the Company’s ordinary shares from October 26, 2016 through May 10, 2019. GAMCO’s lawsuit was filed in the United States District Court for the Southern District of Texas, Houston Division, and it is captioned GAMCO Asset Management, Inc. v. McCollum, et al., Case No. 4:19-cv-03363. The District Court Judge appointed Utah Retirement Systems (“URS”) as Lead Plaintiff, and on March 16, 2020, URS filed its Amended Complaint. URS added the Company as a defendant but dropped the claims against non-officer board members and all the claims under the Securities Act. The defendants filed their motion to dismiss on May 18, 2020, and plaintiffs filed their response on July 3, 2020. The defendants filed a reply brief on August 3, 2020, and now the Court will rule on the motion to dismiss. We cannot reliably predict the outcome of the claims, including the amount of any possible loss. Prior Shareholder Litigation In 2010, three shareholder derivative actions were filed, and in 2014 a fourth shareholder derivative action was filed, purportedly on behalf of the Company, asserting breach of duty and other claims against certain then-current and former officers and directors of the Company related to the United Nations oil-for-food program governing sales of goods into Iraq, the Foreign Corrupt Practices Act of 1977 and trade sanctions related to the U.S. government investigations disclosed in our SEC filings since 2007. Those shareholder derivative cases were filed in Harris County, Texas state court and consolidated under the caption Neff v. Brady, et al., No. 2010040764 (collectively referred to as the “Neff Case”). Other shareholder demand letters covering the same subject matter were received by the Company in early 2014, and a fourth shareholder derivative action was filed, purportedly on behalf of the Company, also asserting breach of duty and other claims against certain then current and former officers and directors of the Company related to the same subject matter as the Neff Case. That case, captioned Erste-Sparinvest KAG v. Duroc-Danner, et al., No. 201420933 (Harris County, Texas) was consolidated into the Neff Case in September 2014. A motion to dismiss was granted May 15, 2015, and an appeal was filed on June 15, 2015. Following briefing and oral argument, on June 29, 2017, the Texas Court of Appeals denied in part and granted in part the shareholders’ appeal. The Court ruled that the shareholders lacked standing to bring claims that arose prior to the Company’s redomestication to Switzerland in 2009 and upheld the dismissal of those claims. The Court reversed as premature the trial court’s dismissal of claims arising after the redomestication and remanded to the trial court for further proceedings. On February 1, 2018, the individual defendants and nominal defendant Weatherford filed a motion for summary judgment on the remaining claims in the case. On February 13, 2018, the trial court dismissed with prejudice certain directors for lack of jurisdiction. Although the plaintiffs appealed the jurisdictional ruling, on June 19, 2020, the plaintiffs filed a motion to dismiss the appeal with prejudice. This litigation has concluded. Rapid Completions and Packers Plus Litigation Several subsidiaries of the Company are defendants in a patent infringement lawsuit filed by Rapid Completions LLC (“RC”) in U.S. District Court for the Eastern District of Texas on July 31, 2015. RC claims that we and other defendants are liable for infringement of seven U.S. patents related to specific downhole completion equipment and the methods of using such equipment. These patents have been assigned to Packers Plus Energy Services, Inc., a Canadian corporation (“Packers Plus”), and purportedly exclusively licensed to RC. RC is seeking a permanent injunction against further alleged infringement, unspecified damages for infringement, supplemental and enhanced damages, and additional relief such as attorneys’ fees. The Company has filed a counterclaim against Packers Plus, seeking declarations of non-infringement, invalidity, and unenforceability of the four patents that remain asserted against the Company on the grounds of inequitable conduct. The Company is seeking attorneys’ fees and costs incurred in the lawsuit. The litigation was stayed, pending resolution of inter partes reviews (“IPR”) of each of the four patents before the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent and Trademark Office (“USPTO”). The PTAB issued decisions during 2018 and 2019 finding that all the claims of the asserted patents challenged by the Company in the IPRs were invalid. RC appealed those decisions to the Federal Circuit, which issued a decision affirming the PTAB’s decision that the patents are invalid on January 21, 2020. The litigation in the U.S. has concluded. On October 14, 2015, Packers Plus and RC filed suit in Federal Court in Toronto, Canada against the Company and certain subsidiaries alleging infringement of a related Canadian patent and seeking unspecified damages and an accounting of the Company’s profits. Trial on the validity of the Canadian patent was completed in March 2017. On November 3, 2017, the Federal Court issued its decision, wherein it concluded that the defendants proved that the patent-in-suit was invalid and dismissed Packers Plus and RC’s claims of infringement. On January 5, 2018, Packers Plus and RC filed their Notice of Appeal. The appeal was dismissed in favor of Weatherford. Packers Plus and RC filed an Application for Leave to the Supreme Court of Canada requesting that the Supreme Court hear their appeal from the appellate court’s decision, but the Supreme Court dismissed the Application, thus concluding the litigation. Environmental Contingencies We have obligations and expect to incur capital, operating and maintenance, and remediation expenditures, as a result of compliance with environmental laws and regulations. Among those obligations, are the current requirements imposed by the Texas Commission on Environmental Quality (“TCEQ”) at the former Universal Compression facility in Midland, Texas. At this location we are performing a TCEQ-approved Remedial Action Plan (“RAP”) to address contaminated ground water. The performance of the RAP and related expenses are scheduled to be performed over a ten to twenty-year period and, may cost as much as $6 million, which is recorded as undiscounted obligation on the Consolidated Balance Sheets as of December 31, 2020. We continuously monitor and strive to maintain compliance with changes in laws and regulations that impact our business.
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Earnings per Share | 22. Earnings per Share Basic earnings (loss) per share for all periods presented equals net income (loss) divided by our weighted average shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by our weighted average shares outstanding during the period including potential dilutive ordinary shares. The following table presents our basic and diluted weighted average shares outstanding and loss per share:
Our basic and diluted weighted average shares outstanding for the 2020 and 2019 Successor Periods are equivalent due to the net loss attributable to shareholders. Diluted weighted average shares for the 2020 and 2019 Successor Periods exclude 8 million potential ordinary shares. Our basic and diluted weighted average shares outstanding for the 2019 Predecessor Period are equivalent as we believe including the dilutive impact of our Predecessor potential shares would not be meaningful as the potential shares were cancelled pursuant to the terms of the Plan. Our basic and diluted weighted average shares outstanding for the 2018 Predecessor Period are equivalent due to the net loss attributable to shareholders. Diluted weighted average shares outstanding for the 2019 and 2018 Predecessor Periods exclude 197 million and 251 million potential ordinary shares, respectively, for restricted share units, performance units, exchangeable senior notes and warrants outstanding.
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Revenues | 23. Revenues Disaggregated Revenue by Product Line and Geographic Region Revenues are attributable to countries based on the ultimate destination of the sale of products or performance of services. During the second quarter of 2020, in order to support the streamlining and realignment of the business, we combined our prior reported four product lines into two product lines, and all prior periods have been retrospectively recast to conform to this new presentation. Our two product lines are as follows: (1) Completion and Production and (2) Drilling, Evaluation and Intervention. The unmanned equipment that we lease to customers as operating leases consists primarily of drilling rental tools (in the Drilling, Evaluation and Intervention product line) and artificial lift pumping equipment (in the Completion and Production product line). These equipment rental revenues are generally provided based on call-out work orders that include fixed per unit prices and are derived from short-term contracts. The following tables disaggregate our revenues from contracts with customers by major product line and geographic region and includes equipment rental revenues recognized under Accounting Standards Update No. 2016-02, Leases (Topic 842). Equipment revenues recognized was $150 million and $12 million in the 2020 and 2019 Successor Periods, respectively, and $284 million and $337 million in the 2019 and 2018 Predecessor Periods, respectively. Revenues in the U.S. were $720 million and $59 million in the 2020 and 2019 Successor Periods, respectively, and $1.3 billion and $1.6 billion in the 2019 and 2018 Predecessor Periods, respectively. We had no revenue in our country of domicile (Ireland) in the 2020 and 2019 Successor Periods, and the 2019 and 2018 Predecessor Periods.
Contract Balances The following table provides information about receivables for product and services included in “Accounts Receivable, Net,” “Contract Assets” and “Contract Liabilities” on our Consolidated Balance Sheets at December 31, 2020 and December 31, 2019.
Revenue recognized for the year ended December 31, 2020 and 2019 that were included in the contract liabilities balance at the beginning of each year was $10 million and $61 million, respectively. The increase in contract liabilities was due to advance payments on new or amended contract awards. Included in the activity for 2019 was a fresh start adjustment of $29 million, which reduced contract liabilities. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. In the following table, estimated revenue expected to be recognized in the future related to performance obligations that are either unsatisfied or partially unsatisfied as of December 31, 2020 primarily relate to subsea services contracts. All consideration from contracts with customers is included in the amounts presented below.
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Segment Information |
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Segment Information | 24. Segment Information Reporting Segments The Company’s chief operating decision maker (its chief executive officer) regularly reviews information by our two reportable segments, which are our Western Hemisphere and Eastern Hemisphere segments. These reportable segments are based on management’s organization and view of Weatherford’s business when making operating decisions, allocating resources and assessing performance. Research and development expenses are included in the results of our Western and Eastern Hemisphere segments. Our corporate and other expenses that do not individually meet the criteria for segment reporting are reported separately on the caption Corporate. Financial information by segment is summarized below. Revenues are attributable to countries based on the ultimate destination of the sale of products or performance of services and was further described in “Note 23 – Revenues.” The accounting policies of the segments are the same as those described in “Note 1 – Summary of Significant Accounting Policies.”
(a)See “Note 4 – Impairments and Other Charges”, “Note 10 – Long-Lived Asset Impairments” and “Note 11 – Goodwill and Intangible Assets” for additional information. (b)See “Note 12 – Restructuring Charges” for additional information. (c)See “Note 2 – Emergence from Chapter 11 Bankruptcy Proceedings” for additional information. (d)Primarily includes the gain on sale of our reservoir solutions business. See “Note 8 – Business Combinations and Divestitures” for additional information.
The following table presents total assets by segment:
Long-lived Assets by Geographic Areas Long-lived assets by geographic area within the segments are summarized below and exclude goodwill and intangible assets (see “Note 11 – Goodwill and Intangible Assets” for additional details) as well as deferred tax assets of $15 million and $39 million at December 31, 2020 and December 31, 2019, respectively. Long-lived assets were zero in our country of domicile (Ireland) and in the U.S. were $306 million and $532 million as of December 31, 2020 and December 31, 2019, respectively.
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Schedule II - Valuation and Qualifying Accounts and Allowances |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation and Qualifying Accounts and Allowances | SCHEDULE II - WEATHERFORD INTERNATIONAL PLC AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS AND ALLOWANCES FOR THE SUCCESSOR PERIOD ENDED DECEMBER 31, 2020 AND 2019 AND PREDECESSOR PERIOD ENDED DECEMBER 13, 2019, AND DECEMBER 31, 2018
(a)In 2017, we changed the accounting for revenue with substantially all of our customers in Venezuela due to the downgrade of the country’s bonds by certain credit agencies, continued economic turmoil and continued economic sanctions around certain financing transactions imposed by the U.S. government. The long-term allowance was related to our primary customer in Venezuela. Upon emergence from bankruptcy on December 13, 2019, the allowance for uncollectible accounts receivable related to our primary customer in Venezuela was nil. (b)Of the total recoveries in 2018, we collected $16 million on previously fully reserved Venezuelan accounts receivable. (c)Other in 2018 for valuation allowance on deferred taxes is primarily due to currency translation. Other in 2019 almost entirely represents our Fresh Start Accounting adjustments to record our reserves at fair value at December 31, 2019. Generally, other within the allowance for credit losses on accounts receivable includes reductions to allowance reserves for currency translation, reclassification to other accounts or the write-off of the related allowance. Other within the excess and obsolete inventory reserve also includes removal of scrapped inventory that had been previously reserved. All other schedules are omitted because they are not required or because the information is included in the financial statements or the related notes.
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Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||
Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the SEC for annual financial information. We consolidate all wholly owned subsidiaries and controlled joint ventures. All material intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation, including those related to the adoption of new accounting standards. Prior year net income (loss) and shareholders’ equity (deficiency) were not affected by these reclassifications.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting period, and disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and assumptions, including those related to allowance for credit losses, inventory valuation reserves, recoverability of long-lived assets, valuation of goodwill, useful lives used in depreciation and amortization, income taxes and related valuation allowance, accruals for contingencies, actuarial assumptions to determine costs and liabilities related to employee benefit plans, and share-based compensation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. For information about our use of estimates relating to Fresh Start Accounting, refer to Note 3 – Fresh Start Accounting for further details.
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Fresh Start Accounting Policy [Policy Text Block] | Bankruptcy and Fresh Start Accounting On July 1, 2019 (the “Petition Date”), Weatherford Ireland, Weatherford International Ltd. (“Weatherford Bermuda”), and Weatherford International, LLC (“Weatherford Delaware”) (collectively, “Weatherford Parties”), filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code (“Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Texas (“Bankruptcy Court”). On December 13, 2019 (“Effective Date” or “Fresh Start Reporting Date”) after all conditions to effectiveness were satisfied, we emerged from bankruptcy after successfully completing the reorganization pursuant to the Plan. During bankruptcy in 2019 we segregated liabilities and obligations whose treatment and satisfaction were dependent on the outcome of the Chapter 11 proceedings and classified these items as “Liabilities Subject to Compromise” with respect to the Predecessor (as defined below) as shown in “Note 3 – Fresh Start Accounting”. In addition, we classified all income, expenses, gains or losses that were incurred or realized as a result of the Chapter 11 proceedings as “Reorganization Items” in our 2019 Consolidated Statements of Operations through the Effective Date. In accordance with ASC 852, we qualified for and adopted fresh start accounting (“Fresh Start Accounting”) on the Fresh Start Reporting Date, at which point we became a new entity for financial reporting because (i) the holders of the then existing ordinary shares of the Predecessor company received less than 50% of the new ordinary shares of the Successor company outstanding upon emergence and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims. Upon adoption of Fresh Start Accounting as reflected in “Note 3 – Fresh Start Accounting,” the reorganization value derived from the enterprise value associated with the Plan was allocated to the Company’s identifiable tangible and intangible assets and liabilities based on their estimated fair values (except for deferred income taxes), with the remaining excess value allocated to Goodwill in accordance with ASC 805 – Business Combinations. Deferred income tax amounts were determined in accordance with ASC 740 – Income Taxes. The Effective Date fair values of the Company’s assets and liabilities differ materially from their recorded values as reflected on the Predecessor balance sheets. References to “Predecessor” relate to the Consolidated Statements of Operations for the period from January 1, 2019 through and including the adjustments from the application of Fresh Start Accounting on December 13, 2019 and for the year ended December 31, 2018 (“Predecessor Periods”). References to “Successor” relate to the Consolidated Balance Sheets of the reorganized Company as of December 31, 2020 and 2019 and Consolidated Statements of Operations for the year ended December 31, 2020 and for the period from December 14, 2019 through December 31, 2019 (“Successor Periods”) and are not comparable to the Consolidated Financial Statements of the Predecessor as indicated by the “black line” division in the financials and footnote tables, which emphasizes the lack of comparability between amounts presented. In addition, “Note 3 – Fresh Start Accounting” provides a summary of the Predecessor Consolidated Balance Sheet as of December 13, 2019 in the first column, and then presents adjustments to reflect the Plan and fresh start impacts to derive the opening Successor Consolidated Balance Sheet as of December 13, 2019. The Company’s financial results for periods following the application of Fresh Start Accounting will be different from historical trends and the differences may be material.
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Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Restricted Cash Our restricted cash balance of $167 million at December 31, 2020 and $182 million at December 31, 2019 primarily includes cash collateral for certain of our letters of credit facilities. At December 31, 2019, restricted cash also included cash escrowed for the payment of bankruptcy professional fees.
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Allowance for Doubtful Accounts | Allowance for Credit Losses on Accounts ReceivablesWe establish an allowance for credit losses based on various factors to include historical experience, current conditions and environments in which our customers operate, the aging status and reasonable and supportable forecasts. Our customer base has generally similar collectability risk characteristics, although risk profiles can vary between larger independent customers and state-owned customers, which may have a lower risk than smaller independent customers. Provisions for credit losses are recorded based on estimated losses that customer accounts are uncollectible. | ||||||||||||||||||||||||||||||
Major Customers and Credit Risk | Major Customers and Credit Risk Substantially all of our customers are engaged in the energy industry. This concentration of customers may impact our overall exposure to credit risk, either positively or negatively, in that customers may be similarly affected by changes in economic and industry conditions. We perform periodic credit evaluations of our customers and do not generally require collateral in support of our trade receivables. We maintain allowances for credit losses. International sales also present various risks, including risks of war, civil disturbances and governmental activities that may limit or disrupt markets, restrict the movement of funds, or result in the deprivation of contract rights or the taking of property without fair consideration. Most of our international sales are to large international or national oil companies and these sales may result in a concentration of receivables from such companies. As of December 31, 2020, the Eastern and Western Hemisphere accounted for 54% and 46%, respectively, of our total net outstanding accounts receivable on our Consolidated Balance Sheets. As of December 31, 2020, accounts receivable in Mexico and the U.S. accounted for 23% and 12%, respectively, of our total net outstanding account receivables. No other country accounted for more than 10% of our net outstanding accounts receivables balance. For the years ended December 31, 2020, 2019 and 2018, no individual customer accounted for more than 10% of our consolidated revenues.
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Inventories | Inventories We state our inventories at the lower of cost or net realizable value using either the first-in, first-out (“FIFO”) or average cost method. Cost represents third-party invoice or production cost. Production cost includes material, labor and manufacturing overhead. To maintain a carrying value that is the lower of cost or net realizable value, we regularly review inventory quantities on hand and compare to estimates of future product demand, market conditions, our production requirements, and technological developments. We maintain reserves for excess, slow moving and obsolete inventory and we may periodically recognize additional charges for inventory in which we determine there is no forecasted demand. Inventory held as of our 2019 emergence date was remeasured to fair value. Refer to Note 3 – Fresh Start Accounting for further details.
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Property, Plant and Equipment | Property, Plant and Equipment (“PP&E”) PP&E, both owned and under finance leases, is initially stated at cost and depreciated over its estimated life. Subsequently, PP&E is measured at cost less accumulated depreciation and impairment losses. The carrying values are based on our estimates and judgments relative to capitalized costs, useful lives and salvage value, where applicable. We expense maintenance and repairs as incurred. We capitalize expenditures for improvements as well as renewals and replacements that extend the useful life of the asset. We depreciate our fixed assets on a straight-line basis over their estimated useful lives, allowing for salvage value where applicable. The estimated useful lives of our major classes of PP&E are as follows:
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Goodwill and Indefinite Lived Intangibles Assets | Goodwill and Intangible Assets Goodwill represents the excess of consideration paid (or with respect to our 2019 Fresh Start Accounting, the excess of reorganization value) over the fair value of net tangible and identifiable intangible assets acquired. Goodwill is not amortized but is evaluated for impairment. When we have recognized goodwill on our consolidated balance sheet, we performed an impairment test for goodwill annually as of October 1 or more frequently whenever events and changes in the circumstances indicates that the carrying value of a reporting unit might exceed its fair value. The quantitative step of the goodwill impairment test involves a comparison of the fair value of each of our reporting units that have goodwill assigned with their carrying values. If the carrying value of a reporting unit’s goodwill were to exceed its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. With respect to the Successor and as a result of Fresh Start Accounting, our newly established identifiable intangible assets included developed technologies and our trade name. Successor identifiable intangible assets are being amortized on a straight-line basis over their estimated economic lives generally ranging from to 10 years. As many areas of our business rely on patents and proprietary technology, we seek patent protection both inside and outside the U.S. for products and methods that appear to have commercial significance. We capitalize patent defense costs when we determine that a successful defense is probable.
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Impairment or Disposal of Long-Lived Assets | Long-Lived Assets Long-lived assets consisting of PP&E, intangible assets, and operating lease right-of-use assets are initially recorded at cost and reviewed whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. Factors that might indicate a potential impairment may include, but are not limited to, significant decreases in the market value of the long-lived asset or asset group, a significant change in the long-lived asset’s physical condition, the introduction of competing technologies, legal challenges, a reduction in the utilization rate of the assets, a change in industry conditions or a reduction in cash flows associated with the use of the long-lived asset. If these or other factors are present, the Company performs an undiscounted cash flow analysis to identify if the asset or asset group may not be recoverable. A fair value assessment is performed on assets or asset groups identified as not being recoverable using a discounted cash flow analysis to determine if an impairment has occurred. If an impairment has occurred, we recognize a loss for the difference between the carrying amount and the fair value of the asset or asset group. We estimate the fair value of the asset or asset group using market prices when available or, in the absence of market prices, based on an estimate of discounted cash flows or replacement cost. Cash flows are generally discounted using an interest rate commensurate with a weighted average cost of capital for a similar asset. Long-lived assets held as of our 2019 emergence date were remeasured to fair value. Refer to Note 3 – Fresh Start Accounting for further details.
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Research and Development Expenditures | Research and Development Expenditures Research and development expenditures are expensed as incurred.
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Derivatives Financial Instruments | Derivative Financial InstrumentsWe record derivative instruments on the balance sheet at their fair value as either assets or liabilities. Changes in the fair value of derivatives are recorded each period in current earnings. | ||||||||||||||||||||||||||||||
Foreign Currency | Foreign Currency Results of operations for our foreign subsidiaries with functional currencies other than the U.S. dollar are translated using average exchange rates during the period. Assets and liabilities of these foreign subsidiaries are translated using the exchange rates in effect at the balance sheet dates, and the resulting translation adjustments are included in “Accumulated Other Comprehensive Income (Loss)”, a component of Shareholders’ Equity (Deficiency). For our subsidiaries that have a functional currency that differs from the currency of their balances and transactions, inventories, PP&E and other non-monetary assets and liabilities, together with their related elements of expense or income, are remeasured into the functional currency using historical exchange rates. All monetary assets and liabilities are remeasured into the functional currency at current exchange rates. All revenues and expenses are translated into the functional currency at average exchange rates. Remeasurement gains and losses for these subsidiaries are recognized in our results of operations during the period incurred. We record net foreign currency gains and losses on foreign currency derivatives (see “Note 16 – Derivative Instruments”) and currency devaluation charges, when incurred, in “Other Income (Expense), Net” on the accompanying Consolidated Statements of Operations.
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Share-Based Compensation | Share-Based Compensation We account for all share-based payment awards, including shares issued under restricted shares, restricted share units and performance units by measuring these awards at the date of grant and recognizing the grant date fair value as an expense, net of expected forfeitures, over the service period, which is usually the vesting period.
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Income Taxes | Income Taxes We account for taxes under the asset and liability method. Income taxes have been provided based upon the tax laws and rates in the countries in which our operations are conducted and income is earned. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. The impact of an uncertain tax position taken or expected to be taken on an income tax return is recognized in the financial statements at the largest amount that is more likely than not to be sustained upon examination by the relevant taxing authority.
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Lessee, Leases [Policy Text Block] | Leases We lease certain facilities, land, vehicles, and equipment. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Effective January 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842). Upon adoption, operating right of use (“ROU”) assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Operating leases in effect prior to January 1, 2019 were recognized at the present value of the remaining payments on the remaining lease term as of January 1, 2019. We determine if an arrangement is classified as a lease at inception of the arrangement. As most of our leases do not provide an implicit rate of return, we use our incremental borrowing rate, together with the lease term information available at commencement date of the lease, in determining the present value of lease payments, which is updated on a quarterly basis. For certain equipment leases, such as copiers and vehicles, we account for the leases under a portfolio method. Operating lease payments include related options to extend or terminate lease terms that are reasonably certain of being exercised. Upon emergence from bankruptcy on December 13, 2019, our lease liabilities were remeasured to fair value using the present value of the remaining lease payments as if we acquired new leases. The remeasurement was based on our incremental borrowing rate as of December 13, 2019. Additionally, the ROU assets were revalued based upon the present value of market-based rent. The remeasurement of our ROU assets was based on the market discount rate as of December 13, 2019. We lease certain facilities, land, vehicles, and equipment. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet (including short-term sale leaseback transactions); we recognize lease expense for these leases on a straight-line basis over the lease term. We have data center lease agreements with lease and non-lease components which are accounted for separately, while for the remainder of our agreements we have elected the practical expedient to account for lease and non-lease components as a single lease component. For certain equipment leases, such as copiers and vehicles, we account for the leases under a portfolio method. Operating lease payments include related options to extend or terminate lease terms that are reasonably certain of being exercised. The unmanned equipment that we lease to customers under operating leases consists primarily of drilling rental tools and artificial lift pumping equipment. These equipment rental revenues are generally provided based on call-out work orders that include fixed per unit prices and are derived from short-term contracts. See “Note 1 – Summary of Significant Accounting Policies” and “Note 23 – Revenues” for additional details on our equipment rental revenues.
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Disputes, Litigation and Contingencies | Disputes, Litigation and Contingencies We accrue an estimate of costs to resolve certain disputes, legal matters and contingencies when a loss on these matters is deemed probable and reasonably estimable. For matters not deemed probable or not reasonably estimable, we have not accrued any amounts. Our contingent loss estimates are based upon an analysis of potential results, assuming a combination of possible litigation and settlement strategies. The accuracy of these estimates is impacted by the complexity of the associated issues.
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Revenue [Policy Text Block] | Revenue Recognition We account for revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and all of the related amendments, collectively referred to as “Topic 606”. Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The majority of our revenue is derived from short term contracts. Our services and products are generally sold based upon purchase orders, contracts or other legally enforceable arrangements with our customers that included fixed or determinable prices but do not generally include right of return provisions or other significant post-delivery obligations. The unmanned equipment that we lease to customers under operating leases consist primarily of drilling rental tools and artificial lift pumping equipment. These equipment rental revenues are generally provided based on call-out work orders that include fixed per unit prices and are derived from short-term contracts. We include revenue from these leases within “Services Revenue” on our Consolidated Statement of Operations. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets (including unbilled receivables), and customer advances and deposits (contract liabilities classified as deferred revenues). Receivables for products and services with customers are included in “Accounts Receivable, Net,” contract assets are included in “Other Current Assets” and contract liabilities are included in “Other Current Liabilities” on our Consolidated Balance Sheets. Consideration under certain contracts such as turnkey or lump sum contracts may be classified as contract assets as the invoicing occurs once the performance obligations have been satisfied while the customer simultaneously receives and consumes the benefits provided. We also have receivables for work completed on service contracts but not billed in which the rights to consideration are conditional and would be classified as contract assets. We may also have contract liabilities and defer revenues for certain product sales that are not distinct from their installation. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Generally, our revenue is recognized for services over time as the services are rendered and we primarily utilize an output method such as time elapsed or footage drilled which coincides with how customers receive the benefit. Both contract drilling and pipeline service revenue is contractual by nature and generally governed by day-rate based contracts. Revenue is recognized on product sales at a point in time when control passes and is generally upon delivery but is dependent on the terms of the contract. Our services and products are generally sold based upon purchase orders, contracts or call-out work orders that include fixed per unit prices or variable consideration but do not generally include right of return provisions or other significant post-delivery obligations. We generally bill our sales of services and products upon completion of the performance obligation. Product sales are billed and recognized when control passes to the customer. Our products are produced in a standard manufacturing operation, even if produced to our customer’s specifications. Revenues are recognized at the amount to which we have the right to invoice for services performed. Our payment terms vary by the type and location of our customer and the products or services offered. For certain products or services and customer types, we require payment before the products or services are delivered to the customer and record as a contract liability. We defer revenue recognition on such payments until the products or services are delivered to the customer. From time to time, we may enter into bill and hold arrangements. When we enter into these arrangements, we determine if the customer has obtained control of the product by determining (a) the reason for the bill-and-hold arrangement; (b) whether the product is identified separately as belonging to the customer; (c) whether the product is ready for physical transfer to the customer; and (d) whether we are unable to utilize the product or direct it to another customer. We account for individual products and services separately if they are distinct and the product or service is separately identifiable from other items in the contract and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The consideration, including any discounts, is allocated between separate products and services based on their standalone selling prices. The standalone selling prices are determined based on the prices at which we separately sell our products and services. For items not sold separately (e.g. term software licenses in our Completion and Production product line), we estimate standalone selling prices using the adjusted market assessment approach. Costs of relocating equipment without contracts are expensed as incurred. The nature of our contracts gives rise to several types of variable consideration, including claims and lost-in-hole charges. Our claims are not significant and lost-in-hole charges are constrained variable consideration. We do not estimate revenue associated with these types of variable consideration. Under certain contracts, we may incur rebillable expenses including shipping and handling, third-party inspection and repairs, and customs costs and duties. If reimbursable by customers we recognize the revenue associated with these rebillable expenses as “Product Revenues” and all related costs as “Cost of Products” in the accompanying Consolidated Statements of Operations. We provide certain assurance warranties on product sales which range from to five years but do not offer extended warranties on any of our products or services. These assurance warranties are not separate performance obligations thus no portion of the transaction price is allocated to our obligations under these warranties.
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Earnings per Share | Earnings (Loss) per Share Basic earnings (loss) per share for all periods presented equals net income (loss) divided by the weighted average shares outstanding during the period including participating securities. Diluted earnings (loss) per share is computed by dividing net income (loss) by our weighted average shares outstanding during the period including participating securities and any potential dilutive shares, when applicable. Unvested share-based payment awards and other instruments issued by the Company that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and are included in the computation of earnings per share following the two-class method.
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Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of consideration paid (or with respect to our 2019 Fresh Start Accounting, the excess of reorganization value) over the fair value of net tangible and identifiable intangible assets acquired. Goodwill is not amortized but is evaluated for impairment. When we have recognized goodwill on our consolidated balance sheet, we performed an impairment test for goodwill annually as of October 1 or more frequently whenever events and changes in the circumstances indicates that the carrying value of a reporting unit might exceed its fair value. The quantitative step of the goodwill impairment test involves a comparison of the fair value of each of our reporting units that have goodwill assigned with their carrying values. If the carrying value of a reporting unit’s goodwill were to exceed its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. With respect to the Successor and as a result of Fresh Start Accounting, our newly established identifiable intangible assets included developed technologies and our trade name. Successor identifiable intangible assets are being amortized on a straight-line basis over their estimated economic lives generally ranging from to 10 years. As many areas of our business rely on patents and proprietary technology, we seek patent protection both inside and outside the U.S. for products and methods that appear to have commercial significance. We capitalize patent defense costs when we determine that a successful defense is probable.
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New Accounting Pronouncements New Accounting Pronouncements (Policies) |
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Dec. 31, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | 5. New Accounting Pronouncements Accounting Standards Adopted On January 1, 2020, we adopted Financial Accounting Standards Board Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss impairment methodology in previous U.S. GAAP with a methodology (Current Expected Credit Losses model, or CECL) that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. We estimate expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Our customer base has generally similar collectability risk characteristics, although risk profiles can vary between larger independent customers and state-owned customers, which may have a lower risk than smaller independent customers. The updated guidance applies to (i) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, and (ii) loan commitments and other off-balance sheet credit exposures. The adoption of this standard update did not have a material impact on our 2020 Consolidated Financial Statements. Accounting Standards Issued Not Yet Adopted Evaluations of all other new accounting pronouncements that have been issued, but not yet effective are on-going, and at this time are not expected to have a material impact on our Consolidated Financial Statements.
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Leases (Policies) |
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Dec. 31, 2020 | |
Leases [Abstract] | |
Lessee, Leases [Policy Text Block] | Leases We lease certain facilities, land, vehicles, and equipment. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Effective January 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842). Upon adoption, operating right of use (“ROU”) assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Operating leases in effect prior to January 1, 2019 were recognized at the present value of the remaining payments on the remaining lease term as of January 1, 2019. We determine if an arrangement is classified as a lease at inception of the arrangement. As most of our leases do not provide an implicit rate of return, we use our incremental borrowing rate, together with the lease term information available at commencement date of the lease, in determining the present value of lease payments, which is updated on a quarterly basis. For certain equipment leases, such as copiers and vehicles, we account for the leases under a portfolio method. Operating lease payments include related options to extend or terminate lease terms that are reasonably certain of being exercised. Upon emergence from bankruptcy on December 13, 2019, our lease liabilities were remeasured to fair value using the present value of the remaining lease payments as if we acquired new leases. The remeasurement was based on our incremental borrowing rate as of December 13, 2019. Additionally, the ROU assets were revalued based upon the present value of market-based rent. The remeasurement of our ROU assets was based on the market discount rate as of December 13, 2019. We lease certain facilities, land, vehicles, and equipment. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet (including short-term sale leaseback transactions); we recognize lease expense for these leases on a straight-line basis over the lease term. We have data center lease agreements with lease and non-lease components which are accounted for separately, while for the remainder of our agreements we have elected the practical expedient to account for lease and non-lease components as a single lease component. For certain equipment leases, such as copiers and vehicles, we account for the leases under a portfolio method. Operating lease payments include related options to extend or terminate lease terms that are reasonably certain of being exercised. The unmanned equipment that we lease to customers under operating leases consists primarily of drilling rental tools and artificial lift pumping equipment. These equipment rental revenues are generally provided based on call-out work orders that include fixed per unit prices and are derived from short-term contracts. See “Note 1 – Summary of Significant Accounting Policies” and “Note 23 – Revenues” for additional details on our equipment rental revenues.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] | The estimated useful lives of our major classes of PP&E are as follows:
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Chapter 11 Proceedings and Ability to continue as a Going Concern (Tables) |
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Schedule of Reorganization Items | Reorganization Items Any expenses, gains and losses that are realized or incurred as of or subsequent to the Petition Date and as a direct result of the Cases are recorded under “Reorganization Items” on our Consolidated Statements of Operations for the Predecessor and Successor Periods and consisted of the following:
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Liabilities Subject To Compromise | were cancelled and the applicable agreements governing such obligations were terminated.
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Fresh Start Accounting (Tables) |
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Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Enterprise Value to Estimated Fair Value of Successor Common Stock | The following table reconciles the enterprise value to the estimated fair value of our Successor common shares as of the Fresh Start Reporting Date:
The following table reconciles the enterprise value to the reorganization value of the Successor’s assets to be allocated to the Company’s individual assets as of the Fresh Start Reporting Date:
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Schedule of Fresh-Start Adjustments |
Reorganization Adjustments (Dollars in Millions) Reorganization adjustments required in connection with the application of Fresh Start Accounting and the allocation of the enterprise value to our individual assets and liabilities by reporting unit resulted in the following Reorganization Adjustments. (1)Represent amounts recorded as of the Effective Date for the implementation of the Plan, including, among other items, settlement of the Predecessor’s liabilities subject to compromise, repayment of certain of the Predecessor’s debt, issuances of the Successor’s common shares, proceeds received from the Successor’s debt offering and transfer of restricted cash for the issuance of the Successor’s debt. (2)Net change in Cash and Cash Equivalents:
(3)Net change in Restricted Cash:
(4)Represents the reclass of amounts to deferred financing fees on the Exit Credit Agreements. (5)Net change in Other Non-current Assets include the following:
(6)Represents the payment in full on the DIP Credit Agreement Principal. (7)Represents the payment in full on the A&R Credit Agreement Principal. (8)The decrease in Accounts Payable represents the payment on professional fees offset by the accrual of deferred financing fees. (9)Net change in Other Current Liabilities include the following:
(10)Changes in Long-term debt include the issuance of the unsecured 11.00% Exit Notes Due 2024 which is comprised of $1.6 billion of the Exit Rights Offering Notes and $500 million of the Exit Takeback Notes, offset by the accrual of deferred financing fees. (11)Liabilities Subject to Compromise to be settled in accordance with the Plan and the resulting gain were determined as follows:
(12)Represents the cancellation of Predecessor Ordinary Shares at Par Value. (13)Represents the issuance of New Ordinary Shares to Creditors and Prior Ordinary Share Holders at Par Value. (14)Net change in Predecessor Capital in Excess of Par Value include the following:
(15)Net change in Successor Capital in Excess of Par Value include the following:
(16)Net Change in Retained Deficit include the following:
Fresh Start Adjustments (Dollars in Millions) (17)Changes in Inventories, Net reflect the fair value adjustment of $84 million.
(18)Reflects the elimination of current deferred costs associated with contracts with customers of $10 million and the elimination of certain prepaid taxes of $4 million due to the adoption of Fresh Start Accounting. (19)Changes in Property, Plant and Equipment, Net reflect the fair value adjustment of $289 million.
(20)Reflects the recognition of Goodwill. (21)Changes in Intangible Assets reflect the fair value adjustment of $957 million.
(22)Reflects the fair value adjustment to the increase the Company’s Right of Use Assets by $13 million and Non-current Deferred Tax Asset by $14 million. (23)Reflects the fair value adjustment to the Company’s current portion of financed lease obligations. (24)Reflects the fair value adjustments to (i) increase the current portion of operating lease obligations by $5 million, (ii) decrease deferred revenues associated with contracts with customers by $29 million, and (iii) decrease intangible liability by $15 million. (25)Reflects the fair value adjustment to the Company’s long-term portion of financed lease obligations. (26)Reflects the fair value adjustment to (i) increase the long-term portion of operating lease obligations by $22 million, (ii) decrease the intangible liability by $7 million, and (iii) record a Non-current Deferred Tax Liability of $43 million. (27)Reflects the cumulative impact of Fresh Start Accounting adjustments discussed herein and the elimination of Predecessor accumulated other comprehensive loss and Predecessor accumulated deficit. (28)Reflects the fair value adjustment to noncontrolling ownership interests in certain subsidiaries.
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Impairments and Other Charges (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Impairments and Other Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Impairment Charges | We recorded the following in “Impairments and Other Charges” on the accompanying Consolidated Statements of Operations:
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Receivables, Loans, Notes Receivable, and Others (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AR Factoring | The following table presents accounts receivable sold and the cash proceeds, net of discount and hold-back.
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Inventories, Net (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Inventory |
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Property, Plant and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] | The estimated useful lives of our major classes of PP&E are as follows:
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Property, Plant, and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of Impairment of Long-Lived Assets Held and Used by Asset | The table below details the Successor long-lived asset impairments by asset and segment recognized for the year ended December 31, 2020.
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The changes in the carrying amount of goodwill by reporting segment for the years ended December 31, 2020 and 2019, are presented in the following table.
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Schedule of Finite-Lived Intangible Assets [Table Text Block] | The components of intangible assets were as follows:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | amortization expense for the subsequent five years is estimated as follows (dollars in millions):
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Restructuring Charges (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Charges | The following table presents restructuring charges for the Successor and Predecessor Periods.
The following table presents total restructuring charges by reporting segment and Corporate for the Successor and Predecessor Periods.
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Schedule of Restructuring Reserve by Type of Cost | The following table presents total restructuring accrual activity for the periods presented. Restructuring charges in the table below exclude restructuring related asset charges.
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost [Table Text Block] |
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Operating and Finance Lease Maturities [Table Text Block] |
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Supplemental Lease Disclosures [Table Text Block] |
(a) Included in “Impairments and Other Charges” in our Consolidated Statements of Operations and “Other Assets and Liabilities, Net” in our Consolidated Statements of Cash Flows.
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Borrowings and Other Debt Obligations (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | consisted of the following:
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Schedule of maturities of long-term debt | The following is a summary of scheduled debt maturities by year:
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Fair Value of Financial Instruments, Assets and Equity Investements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value and carrying value of Long-term Debt | The fair value and carrying value of our senior notes were as follows:
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Derivative Instruments (Tables) |
12 Months Ended |
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Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Values of Outstanding Derivative Instruments |
Retirement and Employee Benefit Plans (Tables) |
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of weighted average assumption rates | The weighted average assumption rates used for benefit obligations were as follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation Allowance [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] |
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] |
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The components of the net deferred tax asset (liability) were as follows:
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Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | A tabular reconciliation of the total amounts of uncertain tax positions at the beginning and end of the period is as follows:
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Summary of Income Tax Contingencies [Table Text Block] | We are subject to income tax in many of the over 75 countries where we operate. As of December 31, 2020, the following table summarizes the tax years that remain subject to examination for the major jurisdictions in which we operate:
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Shareholders' Equity (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Issued and Treasury shares | Changes in our ordinary shares issued were as follows:
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Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in our accumulated other comprehensive loss by component:
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Earnings per Share (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares | :
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Revenues (Tables) |
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Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | Revenues are attributable to countries based on the ultimate destination of the sale of products or performance of services. During the second quarter of 2020, in order to support the streamlining and realignment of the business, we combined our prior reported four product lines into two product lines, and all prior periods have been retrospectively recast to conform to this new presentation. Our two product lines are as follows: (1) Completion and Production and (2) Drilling, Evaluation and Intervention. The unmanned equipment that we lease to customers as operating leases consists primarily of drilling rental tools (in the Drilling, Evaluation and Intervention product line) and artificial lift pumping equipment (in the Completion and Production product line). These equipment rental revenues are generally provided based on call-out work orders that include fixed per unit prices and are derived from short-term contracts. The following tables disaggregate our revenues from contracts with customers by major product line and geographic region and includes equipment rental revenues recognized under Accounting Standards Update No. 2016-02, Leases (Topic 842). Equipment revenues recognized was $150 million and $12 million in the 2020 and 2019 Successor Periods, respectively, and $284 million and $337 million in the 2019 and 2018 Predecessor Periods, respectively. Revenues in the U.S. were $720 million and $59 million in the 2020 and 2019 Successor Periods, respectively, and $1.3 billion and $1.6 billion in the 2019 and 2018 Predecessor Periods, respectively. We had no revenue in our country of domicile (Ireland) in the 2020 and 2019 Successor Periods, and the 2019 and 2018 Predecessor Periods.
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Schedule of Contract with Customer, Asset and Liability | Contract Balances The following table provides information about receivables for product and services included in “Accounts Receivable, Net,” “Contract Assets” and “Contract Liabilities” on our Consolidated Balance Sheets at December 31, 2020 and December 31, 2019.
Revenue recognized for the year ended December 31, 2020 and 2019 that were included in the contract liabilities balance at the beginning of each year was $10 million and $61 million, respectively. The increase in contract liabilities was due to advance payments on new or amended contract awards. Included in the activity for 2019 was a fresh start adjustment of $29 million, which reduced contract liabilities.
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Schedule of Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | In the following table, estimated revenue expected to be recognized in the future related to performance obligations that are either unsatisfied or partially unsatisfied as of December 31, 2020 primarily relate to subsea services contracts. All consideration from contracts with customers is included in the amounts presented below.
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial information by segment | Financial information by segment is summarized below. Revenues are attributable to countries based on the ultimate destination of the sale of products or performance of services and was further described in “Note 23 – Revenues.” The accounting policies of the segments are the same as those described in “Note 1 – Summary of Significant Accounting Policies.”
(a)See “Note 4 – Impairments and Other Charges”, “Note 10 – Long-Lived Asset Impairments” and “Note 11 – Goodwill and Intangible Assets” for additional information. (b)See “Note 12 – Restructuring Charges” for additional information. (c)See “Note 2 – Emergence from Chapter 11 Bankruptcy Proceedings” for additional information. (d)Primarily includes the gain on sale of our reservoir solutions business. See “Note 8 – Business Combinations and Divestitures” for additional information.
The following table presents total assets by segment:
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Long-lived Assets by Geographic Areas | Long-lived Assets by Geographic Areas Long-lived assets by geographic area within the segments are summarized below and exclude goodwill and intangible assets (see “Note 11 – Goodwill and Intangible Assets” for additional details) as well as deferred tax assets of $15 million and $39 million at December 31, 2020 and December 31, 2019, respectively. Long-lived assets were zero in our country of domicile (Ireland) and in the U.S. were $306 million and $532 million as of December 31, 2020 and December 31, 2019, respectively.
|
Summary of Significant Accounting Policies Organization and Nature of Operations (Details) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020
USD ($)
country
$ / shares
shares
|
Dec. 31, 2019
USD ($)
$ / shares
shares
|
|
Accounting Policies [Abstract] | ||
Number of Countries in which Entity Operates | country | 75 | |
Years in operation | 50 years | |
Common Stock, Shares Authorized | shares | 1,356 | 1,356 |
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 |
Restricted Cash, Current | $ | $ 167 | $ 182 |
Summary of Significant Accounting Policies Major Customers and Credit Risk (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Concentration Risk [Line Items] | |||
Concentration Risk, Customer | no | no | no |
Accounts Receivable [Member] | Eastern Hemisphere [Member] | Geographic Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 54.00% | ||
Accounts Receivable [Member] | Western Hemisphere [Member] | Geographic Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 46.00% | ||
Accounts Receivable [Member] | UNITED STATES | Geographic Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 12.00% | ||
Accounts Receivable [Member] | MEXICO | Geographic Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 23.00% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 10.00% | 10.00% | 10.00% |
Summary of Significant Accounting Policies Intangible Assets (Details) |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset useful life | 5 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset useful life | 10 years |
Summary of Significant Accounting Policies Revenue Recognition (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Restricted Cash, Current | $ 167 | $ 182 |
Other Assets, Noncurrent | 73 | 109 |
Accounts Receivable, after Allowance for Credit Loss, Current | 792 | 1,156 |
Receivables, Net, Current | $ 826 | $ 1,241 |
Minimum | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Product warranty period | 1 year | |
Maximum | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Product warranty period | 5 years |
Summary of Significant Accounting Policies New Accounting Pronouncements (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net Cash Provided by (Used in) Operating Activities | $ 61 | $ (747) | $ 210 | $ (242) |
Chapter 11 Proceedings and Ability to continue as a Going Concern - Restructuring Support Agreement (Details) - Restructuring Support Agreement - USD ($) shares in Thousands, $ in Millions |
Sep. 11, 2019 |
Sep. 09, 2019 |
Aug. 23, 2019 |
May 10, 2019 |
---|---|---|---|---|
Class of Stock [Line Items] | ||||
Percent of common stock exchanged for existing equity | 1.00% | |||
Percent of ordinary shares exchanged for cancelled notes | 99.00% | |||
Percent of common stock exchanged for warrants | 10.00% | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Shares held under amendment two of RSA (in shares) | 208,000 | |||
Warrants | 250 | |||
Senior Notes [Member] | ||||
Class of Stock [Line Items] | ||||
Face amount of debt | $ 500 | $ 2,500 | ||
Senior Notes [Member] | Exit Notes | ||||
Class of Stock [Line Items] | ||||
Face amount of debt | 2,100 | $ 2,100 | ||
Senior Notes [Member] | Exit Notes, Takeback Notes | ||||
Class of Stock [Line Items] | ||||
Face amount of debt | 500 | |||
Senior Notes [Member] | Exit Notes, Rights Offering Notes | ||||
Class of Stock [Line Items] | ||||
Face amount of debt | $ 1,600 | $ 1,600 |
Chapter 11 Proceedings and Ability to continue as a Going Concern - Payments due on Certain Indebtedness and Forbearance Agreements (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 15, 2019 |
---|---|---|
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Interest payment on debt | $ 69.0 | |
Senior Notes [Member] | Senior Notes, 7.75 Percent due 2021 | ||
Debt Instrument [Line Items] | ||
Stated interest rate on debt | 7.75% | |
Senior Notes [Member] | Senior Notes, 8.25 Percent due 2023 | ||
Debt Instrument [Line Items] | ||
Stated interest rate on debt | 8.25% | |
Senior Notes [Member] | Senior Notes, 6.80% due 2037 | ||
Debt Instrument [Line Items] | ||
Stated interest rate on debt | 6.80% | |
Term Loan Agreement | ||
Debt Instrument [Line Items] | ||
Quarterly payment on debt | $ 12.5 |
Chapter 11 Proceedings and Ability to continue as a Going Concern - Backstop Commitment Agreement (Details) - Backstop Commitment Agreement - USD ($) $ in Millions |
Sep. 09, 2019 |
Jul. 01, 2019 |
---|---|---|
Line of Credit Facility [Line Items] | ||
Subscription rights to purchase exit notes | $ 1,600.0 | $ 1,250.0 |
Increase in subscription rights to purchase exit notes | 350.0 | |
Cash paid to Commitment Parties | $ 18.7 | $ 62.5 |
Chapter 11 Proceedings and Ability to continue as a Going Concern - Debtor in Possession Credit Agreement (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jul. 03, 2019 |
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Debt Instrument [Line Items] | ||||||
Prepetition Charges | $ 0 | $ 86 | $ 0 | $ 86 | $ 0 | |
DIP Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from borrowings | $ 1,400 | |||||
Outstanding letters of credit | 271 | |||||
Debtor in Possession Revolving Credit Agreement | DIP Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Amount arranged under DIP Agreement | 750 | |||||
Term Loan Agreement | DIP Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Amount arranged under DIP Agreement | 1,000 | |||||
Term Loan Agreement | 364-day credit agreement | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of long-term debt | $ 616 |
Chapter 11 Proceedings and Ability to continue as a Going Concern - Reorganziation Items (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Reorganizations [Abstract] | ||||
Debtor Reorganization Items, Discharge of Claims and Liabilities | $ 0 | $ 4,297 | $ 0 | |
Debtor Reorganization Items, Revaluation of Assets and Liabilities | 0 | 1,434 | 0 | |
Debtor Reorganization Items subtotal for Gain on Settlement of LSTC and Fair Value Adjustment | 0 | 5,731 | 0 | |
Unamortized Debt Issuance and Discount Expensed | 0 | (128) | 0 | |
Unamortized Interest Rate Derivative Loss Expensed | 0 | (8) | 0 | |
Reorganization Items | 0 | (136) | 0 | |
Backstop Commitment Fees | 0 | (81) | 0 | |
DIP Financing Fees | 0 | (56) | 0 | |
Professional Fees | (4) | (69) | (9) | |
Reorganization Items (Fees) | (4) | (206) | (9) | |
Total Reorganization Items | (4) | 5,389 | (9) | $ 0 |
Reorganization Items (Fees) Unpaid | 30 | 30 | 0 | |
Reorganization Items (Fees) Paid | $ 4 | $ 176 | $ 39 |
Chapter 11 Proceedings and Ability to continue as a Going Concern - Emergence From Bankruptcy Plan Effects (Details) - USD ($) |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 13, 2019 |
Dec. 31, 2019 |
Dec. 31, 2020 |
Jun. 30, 2020 |
Dec. 12, 2019 |
|
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 7,777,779 | 84,500,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 99.96 | $ 99.96 | $ 6.43 | ||
Common Stock | |||||
Stock Issued During Period, Shares, New Issues | 69,999,954 | 0 | 0 | ||
Senior Notes [Member] | Letter of Credit [Member] | |||||
Face amount of debt | $ 195,000,000 | ||||
Exit Notes, 11.00 Percent Due 2024 [Member] | Senior Notes [Member] | |||||
Debt and Lease Obligation | $ 2,100,000,000 | ||||
Stated interest rate on debt | 11.00% | 11.00% | |||
Face amount of debt | $ 2,100,000,000 | ||||
ABL Credit Agreement [Member] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 450,000,000 |
Impairments and Other Charges (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Indefinite-lived Intangible Assets [Line Items] | ||||
Long-lived Asset Impairments | $ 0 | $ 20 | $ 814 | $ 151 |
Goodwill Impairment | 0 | 730 | 239 | 1,917 |
Inventory charges | 0 | 117 | 138 | 0 |
Asset Write-downs and Rigs Related Charges | 0 | 132 | 11 | 58 |
Other Charges, Net | 0 | 105 | 34 | 29 |
Total Impairment and Other Charges | $ 0 | $ 1,104 | $ 1,236 | $ 2,155 |
Accounts Receivable Factoring and Other Receivables (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable sold, carrying value | $ 7 | $ 199 | $ 90 | $ 382 |
Proceeds from Sale of Accounts Receivable | $ 7 | $ 186 | $ 79 | $ 373 |
Inventories, Net Schedule of Inventory (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 655 | $ 830 |
Raw Materials, Components and Supplies | 62 | 142 |
Total Inventory | $ 717 | $ 972 |
Inventories, Net Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Inventory Disclosure [Abstract] | ||||||
Inventory Charges | $ 0 | $ 159 | $ 210 | $ 159 | $ 80 | |
Inventory [Line Items] | ||||||
Inventory Valuation Reserves | 0 | 0 | 119 | 0 | 305 | $ 635 |
Inventory Charges | $ 0 | $ 159 | $ 210 | $ 159 | $ 80 |
Inventories, Net - Inventory Charges (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Inventory [Line Items] | |||||
Inventory Charges | $ 0 | $ 159 | $ 210 | $ 159 | $ 80 |
Impairments and Other Charges | |||||
Inventory [Line Items] | |||||
Inventory Charges | 0 | 138 | 117 | 0 | |
Cost of Sales | |||||
Inventory [Line Items] | |||||
Inventory Charges | 0 | 57 | 18 | 80 | |
Restructuring Charges | |||||
Inventory [Line Items] | |||||
Inventory Charges | $ 0 | $ 15 | $ 24 | $ 0 |
Business Combinations and Divestitures Carrying amount of Held-for-Sale (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
Sep. 30, 2019 |
|
Asset Impairment Charges | $ 0 | $ 1,104 | $ 1,236 | $ 2,155 | ||
Land Drilling Rig [Member] | ||||||
Asset Impairment Charges | $ 58 | |||||
Discontinued Operations, Held-for-sale [Member] | Laboratory Service Business [Member] | ||||||
Disposal Group, Including Discontinued Operation, Consideration | $ 206 |
Property, Plant and Equipment (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 25 | $ 386 | $ 340 | $ 493 |
Buildings and Improvements, Gross | 571 | 515 | ||
Rental and Service Equipment, Gross | 1,296 | 869 | ||
Machinery and Equipment, Gross | 280 | 219 | ||
Property, Plant and Equipment, Gross | 2,147 | 1,603 | ||
Less: Accumulated Depreciation | 25 | 367 | ||
Property, Plant and Equipment, Net | $ 2,122 | $ 1,236 |
Goodwill and Intangible Assets Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
Dec. 12, 2019 |
|
Goodwill [Line Items] | |||||
Goodwill, Period Increase (Decrease) | $ 239 | ||||
Goodwill, Impaired, Accumulated Impairment Loss | $ 3,400 | ||||
Goodwill Impairment | 0 | $ 730 | $ 239 | $ 1,917 | |
Eastern Hemisphere [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill, Period Increase (Decrease) | 239 | ||||
Goodwill Impairment | 222 | 239 | 537 | ||
Western Hemisphere [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill, Period Increase (Decrease) | $ 0 | ||||
Goodwill Impairment | $ 508 | $ 0 | $ 1,400 |
Goodwill and Intangible Assets Schedule of Goodwill (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Goodwill [Line Items] | ||||
Goodwill, Period Increase (Decrease) | $ 239 | |||
Goodwill [Roll Forward] | ||||
Beginning Balance | 0 | $ 713 | $ 239 | |
Foreign currency translation | 13 | |||
Ending Balance | 239 | 0 | 0 | $ 713 |
Goodwill, Impairment Loss | 0 | (730) | (239) | (1,917) |
Goodwill, Transfers | 4 | |||
Western Hemisphere [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill, Period Increase (Decrease) | 0 | |||
Goodwill [Roll Forward] | ||||
Beginning Balance | 0 | 494 | 0 | |
Foreign currency translation | 10 | |||
Ending Balance | 0 | 0 | 0 | 494 |
Goodwill, Impairment Loss | (508) | 0 | (1,400) | |
Goodwill, Transfers | 4 | |||
Eastern Hemisphere [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill, Period Increase (Decrease) | 239 | |||
Goodwill [Roll Forward] | ||||
Beginning Balance | 0 | 219 | 239 | |
Foreign currency translation | 3 | |||
Ending Balance | $ 239 | 0 | 0 | 219 |
Goodwill, Impairment Loss | (222) | $ (239) | $ (537) | |
Goodwill, Transfers | $ 0 |
Goodwill and Intangible Assets Intangible Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Intangible Assets, Net of Accumulated Amortization of $173 at December 31, 2020 and $9 at December 31, 2019 | $ 1,114 | $ 810 | ||
Impairment of Intangible Assets (Excluding Goodwill) | 155 | |||
Amortization of Intangible Assets | 9 | $ 61 | 163 | $ 63 |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of Intangible Assets | $ 9 | $ 61 | $ 163 | $ 63 |
Goodwill and Intangible Assets Schedule of Intangible Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 983 | $ 1,123 |
Accumulated amortization | (173) | (9) |
Net intangible assets | 810 | 1,114 |
Developed and Acquired Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 588 | 728 |
Accumulated amortization | (132) | (7) |
Net intangible assets | 456 | 721 |
Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 395 | 395 |
Accumulated amortization | (41) | (2) |
Net intangible assets | $ 354 | $ 393 |
Goodwill and Intangible Assets Amortization of Intangible Assets (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 157 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 157 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 157 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 144 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 40 | |||
Amortization of Intangible Assets | $ 9 | $ 61 | $ 163 | $ 63 |
Restructuring Charges (Narrative) (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | $ 0 | $ 189 | $ 206 | $ 126 |
Severance and Other Restructuring Liabilities [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve, Translation and Other Adjustment | 0 | (25) | 18 | (13) |
Restructuring and Related Cost, Incurred Cost | 0 | 152 | 142 | 120 |
Payments for Restructuring | 0 | 120 | 137 | 109 |
Employee Severance [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | 0 | 53 | 132 | 61 |
Impaired Assets to be Disposed of by Method Other than Sale, Asset Name [Domain] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other Restructuring Costs | $ 0 | $ 13 | $ 40 | $ 2 |
Restructuring Charges (Restructuring Liability) (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | $ 0 | $ 189 | $ 206 | $ 126 |
Western Hemisphere [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 0 | 84 | 101 | 27 |
Eastern Hemisphere [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 0 | 50 | 52 | 45 |
Severance and Other Restructuring Liabilities [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Incurred Cost | 0 | 152 | 142 | 120 |
Restructuring Reserve [Roll Forward] | ||||
Accrued balance at beginning of period | 59 | 66 | 61 | |
Cash Payments | 0 | (120) | (137) | (109) |
Other | 0 | $ 25 | (18) | 13 |
Accrued balance at end of period | $ 66 | $ 53 | $ 59 |
Leases (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Operating Leases, Rent Expense | $ 10 | $ 200 | $ 139 | $ 187 |
Leases Lease Cost (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Leases [Abstract] | ||||
Operating Lease, Expense | $ 5 | $ 109 | $ 76 | |
Short-term Lease, Cost | 5 | 91 | 63 | |
Operating Leases, Rent Expense | 10 | 200 | 139 | $ 187 |
Finance Lease, Right-of-Use Asset, Amortization | 1 | 11 | 15 | |
Sublease Income | (1) | (6) | (6) | |
Lease, Cost | $ 10 | $ 205 | $ 148 |
Leases Supplemental Lease Disclosures (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended |
---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
|
Leases [Abstract] | |||
Operating Lease, Payments | $ 5 | $ 131 | $ 101 |
Finance Lease, Interest Payment on Liability | 0 | 4 | 5 |
Finance Lease, Principal Payments | 1 | 8 | 9 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 2 | 59 | 37 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 0 | 6 | 4 |
Sale and Leaseback Transaction, Gain (Loss), Net | $ 0 | $ 34 | $ 0 |
Operating Lease, Weighted Average Remaining Lease Term | 7 years 9 months 18 days | 8 years 1 month 6 days | |
Finance Lease, Weighted Average Remaining Lease Term | 6 years 8 months 12 days | 5 years 10 months 24 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 9.20% | 9.60% | |
Finance Lease, Weighted Average Discount Rate, Percent | 9.10% | 9.10% |
Long-term Debt Schedule of Long-term Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Aug. 04, 2020 |
Dec. 31, 2019 |
Dec. 12, 2019 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Short-term Borrowings and Current Portion of Long-term Debt | $ 13 | $ 13 | ||
Long-term Debt and Lease Obligation | 2,601 | 2,151 | ||
Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 2,098 | $ 2,097 | ||
Senior Notes [Member] | Exit Notes, 11.00 Percent Due 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 11.00% | 11.00% | ||
Senior Notes [Member] | Senior Notes 8.75 Percent Due 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 8.75% | |||
Secured Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 455 | $ 0 | ||
Other short-term bank loans [Member] | ||||
Debt Instrument [Line Items] | ||||
Finance Lease, Liability, Noncurrent | 48 | 54 | ||
Other short-term bank loans [Member] | ||||
Debt Instrument [Line Items] | ||||
Finance Lease, Liability, Current | 9 | 10 | ||
Short-term Debt | $ 4 | $ 3 |
Long-term Debt Schedule of Debt Maturity (Details) $ in Millions |
Dec. 31, 2020
USD ($)
|
---|---|
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2021 | $ 13 |
2022 | 8 |
2023 | 8 |
2024 | 2,608 |
2025 | 8 |
Thereafter | 16 |
Debt Instrument [Line Items] | |
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | (47) |
Debt, Long-term and Short-term, Combined Amount | 2,614 |
Sum of Total Debt Maturities | $ 2,661 |
Fair Value of Financial Instruments, Assets and Equity Investements (Details) - Level 2 [Member] - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Securities, Held-to-maturity | $ 50 | $ 50 | |
Senior Notes [Member] | Carrying Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value of Long-term debt | $ 2,553 | 2,097 | |
Senior Notes [Member] | Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value of Long-term debt | 2,135 | 2,252 | |
Secured Debt [Member] | Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value of Long-term debt | 507 | 0 | |
Exit Notes, 11.00 Percent Due 2024 [Member] | Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value of Long-term debt | $ 1,628 | $ 2,252 |
Derivative Instruments Schedule of Derivatives (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Derivatives, Fair Value [Line Items] | |
Warrant Fair Value Adjustment | $ 70 |
Retirement and Employee Benefit Plans Narrative (Details) - USD ($) $ in Millions |
11 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 13, 2019 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Net periodic benefit cost | $ 2 | $ 5 | $ 8 | ||
Projected benefit obligation | $ 231 | 198 | |||
Accumulated benefit obligation for defined benefit pension plans | 12 | 2 | |||
Employer contributions | 5 | 5 | |||
Level 2 [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Fair value of plan assets | $ 164 | 144 | |||
Pension Plan [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Contribution expenses related to the defined contribution plans which cover certain employees | $ 13 | $ 31 | $ 37 | ||
Forecast [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Estimated future employer contributions in next fiscal year, cash | $ 5 |
Retirement and Employee Benefit Plans Assumptions (Details) |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
United States plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Rate of compensation increase | 0.00% | 0.00% |
United States plans | Minimum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 1.50% | 2.50% |
United States plans | Maximum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 2.50% | 3.25% |
International plans | Minimum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 0.40% | 0.80% |
Rate of compensation increase | 2.00% | 2.00% |
International plans | Maximum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 5.85% | 6.25% |
Rate of compensation increase | 3.48% | 3.50% |
Income Taxes Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||||
Total Current Provision | $ (9) | $ (110) | $ (90) | $ (113) |
Total Deferred (Provision) Benefit | 0 | (25) | 5 | 79 |
Provision for Income Taxes | $ (9) | $ (135) | $ (85) | $ (34) |
Income Taxes Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||||
Irish or Swiss Income Tax rate at 25.0% and 7.83%, respectively | $ 2 | $ (299) | $ 454 | $ 216 |
Tax on Operating Earnings/Losses Subject to Rates Different than the Irish or Swiss Federal Income Tax Rate | (65) | 197 | (182) | (387) |
Change in Valuation Allowance | 56 | 17 | (330) | 166 |
Change in Uncertain Tax Positions | (2) | (18) | (27) | (29) |
Effective Income Tax Rate Reconciliation, Tax Contingency, Other, Amount | 0 | (495) | 0 | 0 |
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 0 | 463 | 0 | 0 |
Provision for Income Taxes | $ (9) | $ (135) | $ (85) | $ (34) |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 7.83% | 25.00% | 7.83% |
Income Taxes Schedule of Unrecognized Tax Benefits Roll Forward (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
Dec. 12, 2019 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | ||||||
Unrecognized Tax Benefits | $ 214 | $ 222 | $ 195 | $ 213 | $ 217 | |
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions | 0 | $ 34 | 9 | 31 | ||
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | 0 | (1) | (4) | (9) | ||
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions | 2 | 17 | 21 | 14 | ||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | (1) | (20) | (2) | (18) | ||
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | 0 | (5) | (7) | (23) | ||
Unrecognized Tax Benefits, Increase (Decrease) Resulting from Foreign Currency Translation | $ 0 | $ (7) | $ (9) | $ (17) |
Shareholders' Equity Schedule of Shares Issued and Treasury Stock (Details) - shares |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 13, 2019 |
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (1,009,000,000) | |||
Issued | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 0 | (70,000,000) | (1,002,000,000) | (70,000,000) |
Equity Awards Granted, Vested and Exercised | 7,000,000 | |||
Stock Issued During Period, Shares, Other | 70,000,000 | |||
Stock Issued During Period, Shares, New Issues | 69,999,954 | 0 | 0 | |
Ending Balance | (70,000,000) | (70,000,000) | (70,000,000) | (70,000,000) |
Share-Based Compensation Narrative (Details) - USD ($) shares in Millions, $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant under Incentive Plans | 8 | |||
Share-based compensation | $ 0 | $ 46 | $ 0 | $ 47 |
Disputes, Litigation and Contingencies (Details) $ in Millions |
Jul. 31, 2015
patent
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2010
claim
|
---|---|---|---|---|
Loss Contingencies [Line Items] | ||||
Shareholder derivative actions filed | claim | 3 | |||
Loss Contingency, Patents Allegedly Infringed, Number | patent | 7 | |||
Estimated litigation liability | $ 43 | $ 44 | ||
Accrual for Environmental Loss Contingencies, Gross | $ 6 |
Earnings per Share (Weighted Average Shares Outstanding) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Earnings Per Share [Abstract] | ||||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 70 | 1,004 | 70 | 997 |
Earnings Per Share, Basic and Diluted | $ (0.37) | $ 3.65 | $ (27.44) | $ (2.82) |
Net Income (Loss) Attributable to Weatherford | $ (26) | $ 3,661 | $ (1,921) | $ (2,811) |
Earnings per Share (Antidilutive Shares) (Details) - shares shares in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2018 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8 | 197 | 8 | 251 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8 | 197 | 8 | 251 |
Revenues - Receivables (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Receivables for Product and Services in Accounts Receivable, Net | $ 792 | $ 1,156 |
Accounts Receivable, after Allowance for Credit Loss, Current | 792 | 1,156 |
Equipment Receivables | 34 | 85 |
Contract with Customer, Asset, after Allowance for Credit Loss | 7 | 3 |
Contract with Customer, Liability | $ 37 | $ 12 |
Revenues - Contract Assets and Liabilities (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Contract Assets | ||
Balance at January 1, 2018 | $ 3 | |
Balance at September 30, 2018 | 7 | $ 3 |
Contract with Customer, Liability, Cumulative Catch-up Adjustment to Revenue, Modification of Contract | 29 | |
Contract with Customer, Liability, Revenue Recognized | 10 | 61 |
Contract Liabilities | ||
Balance at January 1, 2018 | 12 | |
Revenue recognized that was included in the deferred revenue balance at the beginning of the period | (10) | (61) |
Contract with Customer, Liability, Cumulative Catch-up Adjustment to Revenue, Modification of Contract | 29 | |
Balance at September 30, 2018 | $ 37 | $ 12 |
Revenues Revenues - Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 11 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Including Assessed Tax | $ 261 | $ 4,954 | $ 3,685 | $ 5,744 | |
Revenues | 261 | $ 4,954 | 3,685 | 5,744 | |
UNITED STATES | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Including Assessed Tax | $ 59 | $ 720 | $ 1,300 | ||
Revenues | $ 1,600 | ||||
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Product warranty period | 1 year | ||||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Product warranty period | 5 years |
Segment Information Narrative (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020
USD ($)
unit
|
Dec. 31, 2019
USD ($)
|
|
Segment Reporting Information [Line Items] | ||
Number of Reportable Segments | unit | 2 | |
Long-lived Assets | $ 1,435 | $ 2,448 |
North America [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived Assets | 435 | 753 |
UNITED STATES | ||
Segment Reporting Information [Line Items] | ||
Long-lived Assets | $ 306 | $ 532 |
Schedule II - Valuation and Qualifying Accounts and Allowances Footnote to table explanation (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 13, 2019 |
Dec. 31, 2017 |
|
Receivables, Net, Current | $ 826 | $ 1,241 | |||
Other Assets, Noncurrent | $ 73 | $ 109 | |||
Accounts Receivable, Allowance for Credit Loss, Recovery | $ 16 | ||||
SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||||
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount | 294 | $ 0 | $ 329 | ||
Long [Member] | SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||||
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount | $ 171 | $ 0 | $ 173 |
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