Weatherford International plc

Revenues totaled $5.51 billion in 2024, an increase of $378 million, or 7% compared to 2023. Year-over-year in 2024, product revenues increased 8% and service revenues increased 7%. WCC and DRE contributed to 47% and 39% of the increase in revenues, respectively, with the remainder from higher activity in integrated services and projects. This was partially offset by a decrease from PRI. Geographically, growth in 2024 was led by improvements in the Middle East/North Africa/Asia, Europe/Sub-Sahara Africa/Russia and Latin America regions which contributed to 81%, 23% and 2% of the increase, respectively, partly offset by a revenue decline in North America. Approximately 90% of our revenue increase in 2024 was due to increased customer demand including as a result of business acquisitions during the year, with the remainder primarily from pricing and market share improvements.

Average oil prices in 2024 decreased 1% for West Texas Intermediate crude oil and decreased 2% for Brent North Sea crude oil compared to 2023. Henry Hub natural gas prices decreased 14% compared to 2023. Global rig counts decreased 4% compared to 2023 with North America rig count decreasing by 9% and international rig count remaining flat. The year-over-year decrease in average oil and natural gas prices and the decrease in the North America rig count reflects the lower market demand and oversupply of natural gas in the region.

Operating income of $938 million in the twelve months ended December 31, 2024, increased 14% compared to $820 million in the twelve months ended December 31, 2023, primarily driven by improved operational efficiencies from increased resource utilization, in addition to cost reduction initiatives implemented by the Company in the second half of 2024 and the impact of lower employee incentive compensation. Cost of products and services of $3.61 billion increased $210 million, or 6%, in 2024 compared to 2023, to support the increased overall activity across our segments. Our cost of products and services as a percentage of revenues was 65% in 2024, an improvement compared to 66% in 2023.

Selling, general, administrative and research and development costs of $914 million decreased $2 million driven by a decrease in the cost of employee incentive programs. This was offset by an increase in research and development investment in newer technologies and an increase in overhead to support organization growth. These costs as a percentage of revenues were 17% in 2024, an improvement compared to 18% in 2023.

Other charges of $56 million increased $52 million in 2024 compared to 2023, primarily due to an increase in severance and restructuring costs, and fees to third-party financial institutions related to collections of certain receivables from our largest customer in Mexico.

Interest Expense, Net

Interest expense, net primarily represented for each year, the interest on our outstanding long-term debt (see “Note 8 – Borrowings and Other Debt Obligations” to our Consolidated Financial Statements for additional details) offset by interest income. Interest expense, net, of $102 million in 2024, decreased $21 million, or 17%, compared to 2023 primarily after the early and full repayment of our 6.5% Senior Secured Notes maturing September 15, 2028 in 2024.

Loss on Blue Chip Swap Securities

An indirect foreign exchange mechanism known as the Blue Chip Swap (“BCS”) allows entities to remit U.S. dollars from operations in Argentina. During each of the years ended December 31, 2024 and 2023, we entered into a series of BCS securities transactions that resulted in a “Loss on Blue Chip Swap Securities” of $10 million and $57 million, respectively. See “Note 17 – Blue Chip Swap Securities - Argentina” to our Consolidated Financial Statements for additional details.

Other Expense, Net

Other expense, net, is primarily comprised of foreign exchange losses, letter of credit fees, other financing charges and bond redemption fees. Other expense, net, was $47 million lower in 2024 as compared to 2023, which was primarily attributable to lower foreign currency losses. Foreign currency losses totaled $56 million and $116 million in 2024 and 2023, respectively, and was primarily driven by losses on the Argentine Peso.

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

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 realizability of the deferred tax assets is dependent upon judgments and assumptions inherent in the determination of future taxable income, including factors such as future operating conditions (particularly as related to prevailing oil prices and market demand for our products and services). The Company concluded it was not able to realize the benefit of certain deferred tax assets and has established a valuation allowance. Continued performance improvement in certain jurisdictions could result in a change in our realization of deferred tax asset assessment in the near future, which would release valuation allowance.

The income tax provision and respective effective tax rate was $189 million and 26% and $57 million and 11% for 2024 and 2023, respectively.

Our income tax provisions in 2024 and 2023 are primarily driven by income in certain jurisdictions, deemed profit countries and withholding taxes on intercompany and third-party transactions that do not directly correlate to ordinary income or loss. Impairments and other charges recognized do not result in significant tax benefit as a result of being attributed to a non-income tax jurisdiction or our inability to forecast realization of the tax benefit of such losses.

For the year ended December 31, 2024, income tax expense was higher than 2023, primarily driven by increased activity and operating profits, profit mix in various jurisdictions that we operate, and lower valuation allowance releases. During the year ended December 31, 2023, income tax expense was lower by $115 million, due to the release of valuation allowances and the recognition of benefits from previously uncertain tax positions. Those benefits were offset by the establishment of valuation allowance of approximately $50 million against the sale of Blue Chip Swap securities and currency devaluation in Argentina (see Note 17 – Blue Chip Swap Securities - Argentina).

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 consolidated financial statements. As of December 31, 2024, we anticipate that it is reasonably possible that the amount of our uncertain tax positions of $201 million may decrease by up to $31 million in the next twelve months due to expiration of statutes of limitations, settlements and/or conclusions of tax examinations.

Results of Operations by Segment

DRE Results

DRE revenues of $1.7 billion in 2024 increased by $146 million or 10% compared to 2023 with approximately 70% of the increase from wireline activity as a result of business acquisitions during the year and approximately 30% from drilling related services activity. Geographically, the Middle East/North Africa/Asia and Europe/Sub-Sahara Africa/Russia regions contributed approximately 50% and 30%, respectively, to the regions with revenue growth, offset by lower activity in the Latin America region.

DRE segment adjusted EBITDA of $467 million in 2024 increased by $45 million or 11% compared to 2023. DRE segment adjusted EBITDA margin was 27.8% in 2024 compared to 27.5% in 2023. The year-over-year improvement in segment adjusted EBITDA was primarily due to higher managed pressure drilling and wireline activity. This was partly offset by lower activity in Latin America. Both direct costs and other expense generally increased in line with the increase in activity. However, the rate of increase in direct costs and other expense was lower than the rate of increase in revenue, contributing to the slight increase in margin.

DRE revenues of $1.5 billion in 2023 increased by $208 million or 16% compared to 2022 due to higher demand and activity with approximately 70% of the increase from drilling-related services. Geographically, approximately 55% of the overall revenue growth came from Latin America and approximately 25% from the Middle East/North Africa/Asia regions.

DRE segment adjusted EBITDA of $422 million in 2023 increased by $98 million or 30% compared to 2022. DRE segment adjusted EBITDA margin was 27.5% in 2023 compared to 24.4% in 2022. The rate of increase in direct costs and other expense was lower than the rate of increase in revenue, contributing to the increase in margin.

WCC Results

WCC revenues of $2.0 billion in 2024 increased by $176 million or 10% compared to 2023 due to higher demand and activity with approximately 50% of the increase from completions and approximately 30% from liner hangers, partly offset by a decrease in cementation products activity. Geographically, international regions drove revenue growth with the Middle East/North Africa/Asia region contributing approximately 80% of the international revenue growth, partly offset by a decline in North America.

WCC segment adjusted EBITDA of $564 million in 2024 increased by $109 million or 24% compared to 2023. WCC segment adjusted EBITDA margin was 28.5% in 2024 compared to 25.3% in 2023. The year-over-year improvement in segment adjusted EBITDA was primarily due to an increase of overall activity in the Middle East/North Africa/Asia region and improved margin fall through in major product lines across all geographies. Direct costs generally increased in line with the increase in activity. However, the rate of increase in direct costs was lower than the rate of increase in revenue, contributing to the increase in margin. Other expense also contributed to the increase in margin as expenses declined year-over-year due to a reduction in selling, general and administrative costs.

WCC revenues of $1.8 billion in 2023 increased by $279 million or 18% compared to 2022 due to higher demand and activity with approximately 75% of the increase from completions and cementation products. Geographically, international regions contributed to approximately all of the overall revenue growth with 50% from the Middle East/North Africa/Asia. Latin America along with Europe/Sub-Sahara Africa/Russia equally contributed to the remaining overall revenue growth.

WCC segment adjusted EBITDA of $455 million in 2023 increased by $156 million or 52% compared to 2022. WCC segment adjusted EBITDA margin was 25.3% in 2023 compared to 19.7% in 2022. Additionally, the rate of increase in direct costs and other expense was lower than the rate of increase in revenue, contributing to the increase in margin.

PRI Results

PRI revenues of $1.5 billion in 2024 decreased by $20 million or 1% compared to 2023 due to lower demand and activity. Of the product lines with year-over-year revenue decline, approximately 65% of the decrease was from pressure pumping. This was partly offset by a revenue increase in intervention services and drilling tools due to increased activity mainly after business acquisitions during 2024. Geographically, the North America and Latin America regions had approximately 50% and 30%, respectively, of the decrease for regions with a revenue decline. This was partly offset by a revenue increase in the Europe/Sub-Sahara Africa/Russia region.

PRI segment adjusted EBITDA of $319 million in 2024 decreased by $4 million or 1% compared to 2023. PRI segment adjusted EBITDA margin was 22.0% in 2024 compared to 21.9% in 2023. The year-over-year decline in segment adjusted EBITDA was primarily due to drop in international pressure pumping activity as well as lower digital solutions activity and margin fall through. This was partly offset by higher margin artificial lift activity. Direct costs were essentially flat year-over-year, while other expense declined year-over-year due to a reduction in selling, general and administrative costs. The decrease in costs partly offset the decrease in revenue, which contributed to the slight increase in margin.

PRI revenues of $1.5 billion in 2023 increased by $77 million or 6% compared to 2022 due to higher demand and activity with approximately 75% of the increase from pressure pumping and intervention services and drilling tools. Geographically, international regions contributed approximately all of the overall revenue growth with approximately half from Latin America and half from the Middle East/North Africa/Asia. The increase was offset by a revenue decline in North America.

PRI segment adjusted EBITDA of $323 million in 2023 increased by $62 million or 24% compared to 2022. PRI segment adjusted EBITDA margin was 21.9% in 2023 compared to 18.7% in 2022. Direct costs were essentially flat year-over-year, however revenue more than offset the slightly higher rate of increase in other expense, contributing to the increase in margin.

All Other Results

All other includes results from non-core business activities that do not individually meet the criteria for segment reporting, including integrated services and projects, which includes pass through services and project management services. All other revenues of $403 million, increased $76 million or 23%, in 2024 compared to 2023, primarily due to higher international integrated services and projects resulting in project efficiencies.

Corporate

Corporate was a net expense of $52 million in 2024, which was flat compared to 2023.

Depreciation and Amortization

Depreciation and amortization expense in 2024 was $343 million, an increase of $16 million compared to 2023 primarily due to a larger asset base from an increase in our capital expenditures and acquisitions. See “Note 2 – Segment Information”, “Note 5 – Property, Plant and Equipment, Net”, “Note 6 – Intangible Assets, Net” and “Note 18 – Acquisitions” for additional information.

Share-based Compensation

We record share-based compensation expense in “Selling, General and Administrative” on the accompanying Consolidated Statements of Operations. We recognized $45 million in 2024 and $35 million in 2023. The increase was primarily attributable to the cost of performance share units. See “Note 13 – Share-Based Compensation” for additional information.