Weatherford Reports Third Quarter Pre-Tax Results

              Weatherford Reports Third Quarter Pre-Tax Results

Company achieves record quarterly revenue

PR Newswire

GENEVA, Nov. 12, 2012

GENEVA, Nov. 12, 2012 /PRNewswire/ --Weatherford International Ltd. (NYSE and
SIX: WFT) today reported preliminary third quarter 2012 earnings before income
taxes of $191 million, or $264 million after excluding pre-tax losses of $73
million. The excluded items include:

  o$29 million for a lower of cost or market adjustment to the carrying value
    of our inventory,
  o$27 million in professional fees associated with our ongoing income tax
    remediation efforts,
  o$11 million in fees and expenses associated with our August 2012 consent
    solicitation that extends the financial statement filing deadline of our
    senior notes to March 31, 2013 and
  oSeverance, exit and other charges of $6 million.

The company also reports a revised preliminary second quarter 2012 loss before
income taxes of $753 million, or earnings of $146 million after excluding
pre-tax losses of $899 million. These results had been previously reported on
a preliminary basis, and the excluded items include:

  o$589 million for non-cash goodwill impairment charges in the Middle
    East/North Africa and Sub-Sahara Africa regions,
  o$204 million primarily for the non-cash write down of equity method
    investments,
  o$100 million charge representing management's best estimate of a potential
    settlement with the U.S. government related to its investigation of
    alleged improper sales in certain sanctioned countries, which was included
    in our previously reported second quarter results,
  o$28 million for the gain on sale of a business, which includes a $25
    million revision from the amount previously reported,
  o$11 million in professional fees associated with our ongoing income tax
    remediation efforts and
  o$23 million in severance, exit and other adjustments.

Other non-excluded items that are adjustments to the previously reported
results are $76 million related to changes in operating income amounts
previously reported on contracts accounted for on a percentage-of-completion
basis and $55 million related to charges for excess and obsolete inventory. 

Third quarter revenues of $3,818 million were a quarterly record, up two
percent sequentially from the revised second quarter revenues of $3,747.
Third quarter revenues also climbed 13 percent from the same quarter of 2011.
North America revenue was up four percent sequentially limited by the lower
than anticipated rig count in Canada and pressure pumping pricing declines in
the U.S. and up seven percent versus the same quarter of 2011. International
revenues were flat sequentially but up 20 percent versus the same quarter of
2011. Completion and Production led the sequential growth with strong
performance from Artificial Lift partially offset by declines in Stimulation
and Chemicals. Formation Evaluation and Well Construction also posted strong
sequential growth from Fishing and Re-Entry, Drilling Services and Well
Construction, partially offset by a decline in Integrated Drilling.

Segment operating income was $448 million on a GAAP basis. Adjusted for
excluded items segment operating income of $521 million was essentially flat
year-over-year but was up 30 percent sequentially. On an adjusted basis,
corporate expenses, research and development and other, net, were two percent
lower sequentially.

Subject to the risks regarding forward-looking statements highlighted by the
company in this press release and its public filings, the company expects
earnings per share of approximately $0.20 in the fourth quarter of 2012. With
respect to 2013, the company maintains a positive outlook for its North
American business and expects modest revenue and operating income growth
continuing the current trend. Internationally, the company anticipates
continued growth and expanding margins in its Latin America region,
underpinned by improvements in Mexico, Colombia, Venezuela and Argentina and
in line with E&P spending estimates. The Eastern Hemisphere also is expected
to improve in 2013, with upticks in Europe, Sub-Saharan Africa and Russia, as
well as continued recovery in the Middle East-North Africa / Asia Pacific
region with positive contributions in 2013. For the full year 2012, the
company currently estimates a book effective tax rate of approximately 45
percent and a cash tax rate in line with the prior year of approximately 33
percent. For 2013, the company currently estimates a book effective tax rate
of approximately 34 percent.

North America

Revenues for the quarter were $1,725 million, a seven percent increase over
the same quarter in the prior year and up $62 million or four percent
sequentially. In North America, the U.S. posted a modest sequential decline
driven by falling U.S. land rig count, continued oversupply of hydraulic
fracturing capacity, and the effects of Hurricane Isaac. This decline was
more than offset by sequential growth in Canada driven by seasonal recovery
despite a lower rig count compared to the prior year.

The current quarter's operating income was $297 million, down $55 million or
16% from the same quarter in the prior year but up $65 million, or 28 percent,
sequentially.

Middle East/North Africa/Asia

Third quarter revenues of $699 million were 22 percent higher than the third
quarter of 2011 and $50 million or eight percent higher sequentially. The
sequential and year-over-year increase in revenues was broad-based and
attributable to additional activity in Iraq, Saudi Arabia, Australia and
Oman.

The current quarter's operating income of $33 million increased $16 million
from the same quarter in the prior year and increased $65 million compared to
the operating loss in the second quarter of 2012.

Europe/SSA/Russia

Third quarter revenues of $626 million were seven percent higher than the
third quarter of 2011 and four percent lower than the prior quarter. The
revenue growth, year-over-year, came from each of the regions with Romania,
Kazakhstan, Kenya and Congo as strong performers. Sequential declines in
revenue and operating income were experienced in Russia, Tanzania, the UK, and
Caspian.

The current quarter's operating income of $94 million was up 16 percent
compared to the same quarter in the prior year and down $17 million or 15
percent from the prior quarter. The current quarter was impacted by a lower
level of operating activity in Azerbaijan and the UK as well as in Russia,
which was notably strong in the prior quarter.

Latin America

Third quarter revenues of $768 million were $176 million or 30 percent higher
than the third quarter of 2011 and down two percent compared to the second
quarter of 2012. The current quarter's operating income of $97 million
increased $27 million or 39 percent as compared to the same quarter in the
prior year and increased seven percent from the prior quarter. Mexico and
Colombia were the primary drivers of the sequential decrease in revenue and
operating income due to a decline in rig count. 

Liquidity and Net Debt

Net debt for the quarter increased $347 million sequentially, primarily as a
result of capital expenditures of approximately $540 million, net of
lost-in-hole, and an increase in working capital of $203 million offset by
positive contributions from operations. Sequentially, day's sales outstanding
increased to 92 days and day's sales in inventory increased to 89 days. 

Goodwill and Equity Method Investments Impairment

During the three months ended June 30, 2012, the sustained decline in the
market price of the company's registered shares caused management to assess
whether an event or change had occurred that, more likely than not, reduced
the fair value of any of the company's reporting units below their carrying
amount. After considering relevant factors, management prepared the analysis
necessary to identify potential impairment through the comparison of reporting
unit fair values and carrying amounts. As announced in July 2012 in
connection with our preliminary second quarter results, this analysis
indicated that the Middle East/North Africa, Russia and Sub-Sahara Africa
reporting units were potentially impaired. During the third quarter of 2012,
the company finalized its goodwill impairment analysis and concluded that the
carrying amount of goodwill in the Middle East/North Africa and Sub-Sahara
Africa reporting units exceeded the fair value of goodwill and recorded a
non-cash charge of $589 million in the second quarter to write-off all the
goodwill in these reporting units. There was no goodwill impairment in the
Russia reporting unit. During our goodwill impairment analysis, we also
identified impairment losses associated with our equity method investments and
have recorded a $204 million non-cash charge during the second quarter related
to those investments.

Material Weakness Related to Percentage of Completion Contract in Iraq

The company has restated previously reported results for the first quarter
2012 and revised its preliminary second quarter 2012 results to correct errors
in revenue and operating income amounts associated with a percentage of
completion contract. In connection with these corrections we identified a
material weakness in internal controls over financial reporting related to the
accounting for a percentage of completion contract in Iraq. The unfavorable
adjustments to the first and second quarters operating income total $24
million and $55 million, respectively. The company has implemented additional
controls and procedures over percentage of completion accounting during the
third quarter of 2012 to remediate the issues related to Iraq and these will
be taken into account in our internal control assessment at year end 2012.


Income Tax Matters and Remediation of Tax Material Weakness

The company is reporting results on a pre-tax basis due to the following
factors:

  oAs previously reported in the company's Quarterly Report on Form 10-Q for
    the quarter ended March 31, 2012, the company's Annual Reports on Form
    10-K for the years ended December 31, 2011 and 2010 and each of the
    company's Quarterly Reports on Form 10-Q during the year ended December
    31, 2011, the Company identified a material weakness in its internal
    control over financial reporting relating to current taxes payable,
    certain deferred tax assets and liabilities, reserves for uncertain tax
    positions, and current and deferred income tax expense. Errors relating to
    this material weakness resulted in the restatement of the company's
    consolidated financial statements included in its Annual Reports on Form
    10-K for both 2011 and 2010. To date, the material weakness in accounting
    for income taxes has not been remediated, and management has identified
    additional income tax related errors as described below.
  oAs previously reported, through the second quarter of 2012 and in
    connection with work completed during the first and second quarter close,
    management identified $92 million of additional income tax expense related
    to prior periods, a significant portion of which related to management's
    estimates regarding unrecognized tax benefits and adjustments for the
    difference between actual taxes paid and tax liabilities accrued for the
    prior period on over 200 tax returns filed during the second quarter.
  oAs a result of the foregoing adjustments, the Audit Committee of our Board
    of Directors concluded, on July 24, 2012, that investors should no longer
    rely upon our previously issued financial statements. As announced in the
    release of our preliminary second quarter results, the company intends to
    file restated financial statements for fiscal 2011, 2010 and 2009 in a
    Form 10-K/A for the year ended December 31, 2011 and restated financial
    statements for the first quarter of 2012 in a Form 10-Q/A as soon as
    practicable, but not before it has completed additional procedures and
    reviews of its accounting for income taxes. The company will also include
    restated selected financial data for fiscal 2007 through 2011 in its Form
    10-K/A. In addition, the company intends to include in the Form 10-K/A
    restated quarterly financial data for each of the quarters for fiscal 2011
    and 2010. Based on the information regarding prior years that the company
    intends to include in its Form 10-K/A, the company does not intend to file
    amendments to any of its previously filed Form 10-Qs for years prior to
    2012. The company also intends to file its Form 10-Q for the second and
    third quarter of 2012 concurrent with the filing of the restated financial
    information.
  oDuring the third quarter, we expanded our procedures and reviews of our
    accounting for income taxes to ensure that our restated consolidated
    financial statements will be prepared in accordance with generally
    accepted accounting principles. These expanded procedures, which were
    extraordinary in their scope, included an expanded validation of all our
    income tax accounts and primarily focused on reconciliations of our
    deferred tax balances with the tax bases of assets and liabilities in all
    jurisdictions, an extensive review of unrecognized tax benefits in all
    taxing jurisdictions with an additional focus on transfer pricing
    activities, and a further review of our accounting for withholding taxes.
    These additional procedures have included reviews of substantial volumes
    of data and analyses of our income tax accounts. The company believes it
    has made substantial progress toward completion of these procedures, and,
    based on the progress to date, has shortened the outer range of its
    estimated timing to complete all its financial statement filings to around
    the end of November, 2012.
  oAs a result of these additional procedures, we have identified through the
    date of this release cumulative income tax accounting errors totaling
    approximately $150 million related to prior periods. The errors
    identified are substantially related to net increases in income tax
    expense for reserves for unrecognized tax benefits. Management's analysis
    is not complete and amounts are subject to change. None of the
    adjustments are expected to affect the company's historically reported net
    debt balances.
  oUntil the company has concluded work on the above-mentioned adjustments,
    the company will not finalize its tax accounts for the nine months ended
    September 30, 2012.
  oThe company will publish in a filing with the SEC and has posted in the
    Investor Relations section and under Conference Call Details on its
    website (www.weatherford.com) a document that describes the remedial
    procedures completed in 2012 and related steps it is taking to implement
    additional controls and procedures designed to remediate the material
    weakness in accounting for income taxes.

Until the restatement is completed, the company's estimates of the expected
income tax accounting adjustments for 2011 through 2008 and prior years, and
the nine months ended September 30, 2012, are subject to change. There can be
no assurance that additional income tax accounting issues will not be
identified during the course of the review and audit process and, therefore,
these results should be considered preliminary until the company files its
Form 10-K/A for the year ended December 31, 2011, Form 10-Q/A for the quarter
ended March 31, 2012, and Form 10-Q for the quarters ended June 30 and
September 30, 2012. Any changes to the preliminary, unaudited estimated
results provided in this release, as well as additional items that may be
identified during the completion of the review and audit processes, could be
material to the company's financial condition and results of operations for
the prior periods identified.

Management continues to assess the effect of the restatement on the company's
internal control over financial reporting for income taxes and its related
disclosure controls and procedures. Management will report its final
conclusion on internal control over financial reporting for income taxes and
related disclosure controls and procedures upon completion of the restatement
process.

Non-GAAP Performance Measures

Non-GAAP performance measures and corresponding reconciliations to GAAP
financial measures have been provided for meaningful comparisons between
current results and results in prior operating periods.

Conference Call

The company will host a conference call with financial analysts to discuss the
preliminary second quarter results on November 13, 2012 at 7:00 a.m. (CST).
The company invites investors to listen to the call live via company's
website, www.weatherford.com in the Investor Relations section. A recording
of the conference call and transcript of the call will be available on that
section of the website shortly after the call ends.

Weatherford is a Swiss-based, multi-national oilfield service company. It is
one of the largest global providers of innovative mechanical solutions,
technology and services for the drilling and production sectors of the oil and
gas industry. Weatherford operates in over 100 countries and employs over
60,000 people worldwide.

Contacts: John H. Briscoe                                  +1.713.836.4610
              Senior Vice President and Chief Financial
              Officer
              Karen David-Green                               +1.713.836.7430
              Vice President – Investor Relations


Forward-Looking Statements

This press release and the documents referenced herein contain, and the
conference call announced in this release may include, forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. This includes statements related to future levels of earnings,
revenue, expenses, margins, capital expenditures, changes in working capital,
cash flows, tax expense, effective tax rates and net income, as well as the
prospects for the oilfield service business generally and our business in
particular, as well as statements regarding timing or content of the financial
information that will be filed with the SEC regarding the current period.
Forward-looking statements also include any statements about the resolution or
potential future resolution of our ongoing remediation of our material
weakness in internal control over financial reporting for income taxes and our
assessment of the degree to which historical remediation efforts have been
successful to date. It is inherently difficult to make projections or other
forward-looking statements in a cyclical industry and given the current
macroeconomic uncertainty. Such statements are based upon the current beliefs
of Weatherford's management, and are subject to significant risks, assumptions
and uncertainties. These include the company's ability to complete all
processes necessary to the issuance of revised financial statements, including
obtaining an audit opinion from its independent auditors, the company's
inability to design or improve internal controls to address identified
issues; the impact upon operations of legal compliance matters or internal
controls review, improvement and remediation, including the detection of
wrongdoing, improper activities or circumvention of internal controls;
difficulties in controlling expenses, including costs of legal compliance
matters or internal controls review, improvement and remediation; impact of
changes in management or staff levels, the effect of global political,
economic and market conditions on the company's projected results; the
possibility that the company may be unable to recognize expected revenues from
current and future contracts; the effect of currency fluctuations on the
company's business; the company's ability to manage its workforce to control
costs; the cost and availability of raw materials, the company's ability to
manage its supply chain and business processes; the company's ability to
commercialize new technology; whether the company can realize expected
benefits from its redomestication of its former Bermuda parent company; the
company's ability to realize expected benefits from its acquisitions and
dispositions; the effect of a downturn in its industry on the company's
carrying value of its goodwill; the effect of weather conditions on the
company's operations; the impact of oil and natural gas prices and worldwide
economic conditions on drilling activity; the effect of turmoil in the credit
markets on the company's ability to manage risk with interest rate and foreign
exchange swaps; the outcome of pending government investigations, including
the Securities and Exchange Commission's investigation of the circumstances
surrounding the company's material weakness in its internal control over
financial reporting of income taxes; the outcome of ongoing litigation,
including shareholder litigation related to the company's material weakness in
its internal control over financial reporting of income taxes and its
restatement of historical financial statements; the future level of crude oil
and natural gas prices; demand for our products and services; levels of
pricing for our products and services; utilization rates of our equipment; the
effectiveness of our supply chain; weather-related disruptions and other
operational and non-operational risks that are detailed in our most recent
Form 10-K and other filings with the U.S. Securities and Exchange Commission.
Should one or more of these risks or uncertainties materialize, or underlying
assumptions prove incorrect, actual results may vary materially from those
indicated in our forward-looking statements. Specifically, statements
regarding the current period assume that there will be no subsequent events or
other adverse developments after the date of this press release that cause our
financial statements for the current period, when filed with the SEC, to vary
materially from the amounts herein. We undertake no obligation to correct or
update any forward-looking statement, whether as a result of new information,
future events, or otherwise, except to the extent required under federal
securities laws.

(Logo: http://photos.prnewswire.com/prnh/19990308/WEATHERFORDLOGO)



Weatherford International Ltd.
Consolidated Condensed Statements of Operations
(Unaudited)
(In Millions)
                                Three Months Ended   Nine Months Ended
                                9/30/2012  9/30/2011   9/30/2012  9/30/2011
                                           (Restated)             (Restated)
Net Revenues:
 North America                  $  1,725  $  1,619  $  5,142  $  4,323
 Middle East/North Africa/Asia 699        573         1,943      1,766
 Europe/SSA/Russia              626        586         1,850      1,689
 Latin America                  768        592         2,221      1,500
                                3,818      3,370       11,156     9,278
Operating Income (Expense):
 North America                  297        352         887        878
 Middle East/North Africa/Asia 33         17          24         62
 Europe/SSA/Russia              94         81          271        207
 Latin America                  97         70          271        140
 Research and Development       (68)       (59)        (195)      (181)
 Corporate Expenses             (37)       (32)        (128)      (130)
 Goodwill and Equity Investment -          -           (793)      -
 Impairment
 Sanctioned Country Loss        -          -           (100)      -
 Contingency
 Other Items                    (73)       (18)        (126)      (58)
                                343        411         111        918
Other Income (Expense):
 Interest Expense, Net          (127)      (115)       (360)      (342)
 Other, Net                     (25)       (26)        (70)       (67)
Income (Loss) Before Income     191        270         (319)      509
Taxes
Weighted Average Shares
Outstanding:
 Basic                          767        754         764        751
 Diluted                       771        760         764        758







Weatherford International Ltd.
Consolidated Condensed Statement of Operations
(Unaudited)
(In Millions)
                                  Three Months Ended 6/30/2012
                                  Previously
                                  Reported      Adjustments          Restated
Net Revenues:
 North America                    $   1,676  $       (13)  $  1,663
 Middle East/North Africa/Asia   668           (19)                 649
 Europe/SSA/Russia                652           1                    653
 Latin America                    782           -                    782
                                  3,778         (31)                 3,747
Operating Income (Expense):
 North America                    271           (39)                 232
 Middle East/North Africa/Asia   44            (76)                 (32)
 Europe/SSA/Russia                120           (9)                  111
 Latin America                    104           (13)                 91
 Research and Development         (65)          -                    (65)
 Corporate Expenses               (53)          11                   (42)
 Goodwill and Equity Investment   -             (793)                (793)
 Impairment
 Sanctioned Country Loss          (100)         -                    (100)
 Contingency
 Other Items                      29            (35)                 (6)
                                  350           (954)                (604)
Other Income (Expense):
 Interest Expense, Net            (121)         -                    (121)
 Other, Net                       (24)          (4)                  (28)
Income (Loss) Before Income       205           (958)                (753)
Taxes

 The preliminary results for the three months ended June 30, 2012 have
been revised to (i) correct our accounting for certain long-term
construction-type contracts, (ii) recognize a previously disclosed goodwill
and an equity method investment impairment, (iii) recognize a charge for
excess and obsolete inventory, (iv) correct previously identified immaterial
errors affecting operating income that were recorded in improper periods and
(v) present separately the costs we attribute to our income tax accounting
remediation and restatement effort. As a result of these adjustments, income
from operations before income taxes decreased by $958 million.



Weatherford International Ltd.
Consolidated Condensed Statement of Operations
(Unaudited)
(In Millions)
                                Three Months Ended 3/31/2012
                                Previously
                                Reported      Adjustments           Restated
Net Revenues:
 North America                  $   1,754  $         -  $  1,754
 Middle East/North Africa/Asia 605           (10)                  595
 Europe/SSA/Russia              569           2                     571
 Latin America                  671           -                     671
                                3,599         (8)                   3,591
Operating Income (Expense):
 North America                  359           (1)                   358
 Middle East/North Africa/Asia 48            (25)                  23
 Europe/SSA/Russia              60            6                     66
 Latin America                  87            (4)                   83
 Research and Development       (62)          -                     (62)
 Corporate Expenses             (64)          15                    (49)
 Other Items                    (32)          (15)                  (47)
                                396           (24)                  372
Other Income (Expense):
 Interest Expense, Net          (112)         -                     (112)
 Other, Net                     (17)          -                     (17)
Income Before Income Taxes      267           (24)                  243

 The restated results for the three months ended March 31, 2012 have been
adjusted to (i) correct our accounting for certain long-term construction-type
contracts, (ii) to correct previously identified immaterial errors affecting
operating income that were recorded in improper periods and to (iii) present
separately the costs we attribute to our income tax accounting remediation and
restatement effort. As a result of these adjustments, income from operations
before income taxes decreased by $24 million.

Weatherford International Ltd.
Selected Statements of Operations Information
(Unaudited)
(In Millions)
                    Three Months Ended
                    9/30/2012   6/30/2012   3/31/2012   12/31/2011  9/30/2011
                                (Restated)  (Restated)              (Restated)
Net Revenues:
 North America      $  1,725   $  1,663   $  1,754   $  1,699   $  1,619
 Middle East/North  699         649         595         675         573
 Africa/Asia
 Europe/SSA/Russia  626         653         571         609         586
 Latin America      768         782         671         727         592
                    $  3,818   $  3,747   $  3,591   $  3,710   $  3,370
                    Three Months Ended
                    9/30/2012   6/30/2012   3/31/2012   12/31/2011  9/30/2011
                                (Restated)  (Restated)  (Restated)  (Restated)
Operating Income
(Expense):
 North America      $   297  $   232  $   358  $   381  $   352
 Middle East/North  33          (32)        23          35          17
 Africa/Asia
 Europe/SSA/Russia  94          111         66          80          81
 Latin America      97          91          83          114         70
 Research and       (68)        (65)        (62)        (64)        (59)
 Development
 Corporate          (37)        (42)        (49)        (45)        (32)
 Expenses
 Libya Reserve      -           -           -           (67)        -
 Goodwill and
 Equity Investment  -           (793)       -           -           -
 Impairment
 Sanctioned Country -           (100)       -           -           -
 Loss Contingency
 Other Items        (73)        (6)         (47)        (38)        (18)
                    $   343  $  (604)  $   372  $   396  $   411
                    Three Months Ended
                    9/30/2012   6/30/2012   3/31/2012   12/31/2011  9/30/2011
                                (Restated)  (Restated)              (Restated)
Product Line
Revenues:
 Formation
 Evaluation and     $  2,128   $  2,058   $  2,034   $  2,074   $  1,880
 Well
 Construction^(1)
 Completion and     1,690       1,689       1,557       1,636       1,490
 Production^(2)
                    $  3,818   $  3,747   $  3,591   $  3,710   $  3,370
                    Three Months Ended
                    9/30/2012   6/30/2012   3/31/2012   12/31/2011  9/30/2011
                                (Restated)  (Restated)
Depreciation and
Amortization:
 North America      $   108  $   101  $        $        $   
                                            95         91         91
 Middle East/North  90          85          83          82          81
 Africa/Asia
 Europe/SSA/Russia  63          60          61          59          59
 Latin America      61          59          55          52          51
 Research and       3           2           2           2           2
 Development
 Corporate          4           4           3           3           2
                    $   329  $   311  $   299  $   289  $   286

    Formation Evaluation and Well Construction includes Drilling Services,
(1) Well Construction, Integrated Drilling, Wireline and Evaluation Services,
    Drilling Tools and Re-entry and Fishing
(2) Completion and Production includes Artificial Lift Systems, Stimulation
    and Chemicals, Completion Systems and Pipeline and Specialty Services

We report our financial results in accordance with generally accepted
accounting principles (GAAP). However, Weatherford's management believes that
certain non-GAAP financial measures and ratios (as defined under the SEC's
Regulation G) may provide users of this financial information additional
meaningful comparisons between current results and results in prior periods.
The non-GAAP financial measures we may present from time to time include: 1)
operating income or income from continuing operations excluding certain
charges or amounts, 2) the provision for income taxes excluding discrete items
and 3) the resulting non-GAAP net income and per share amounts. These
adjusted amounts are not measures of financial performance under GAAP.
Accordingly, these amounts should not be considered as a substitute for
operating income, provision for income taxes, net income or other data
prepared and reported in accordance with GAAP. See the table below for
supplemental financial data and corresponding reconciliations to GAAP
financial measures for the three months ended September 30, 2012, June 30,
2012, and September 30, 2011 and for the nine months ended September 30, 2012
and September 30, 2011. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative to, the Company's reported results
prepared in accordance with GAAP.



Weatherford International Ltd.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In Millions)
                        Three Months Ended             Nine Months Ended
                        9/30  6/30        9/30         9/30        9/30
                        2012  2012 (b)    2011 (c)     2012 (d)    2011 (e)
                        (a)
                              (Restated)  (Restated)   (Restated)  (Restated)
Operating Income
(Loss):
 GAAP Operating Income  $    $ (604)    $  411      $  111     $  918
 (Loss)                 343
  Gain on Sale of       -     (28)        -            (28)        -
  Business
  Goodwill and Equity
  Investment            -     793         -            793         -
  Impairment
  Sanctioned Country    -     100         -            100         -
  Loss Contingency
  Tax Remediation and   27    11          9            52          9
  Restatement Expenses
  Inventory Lower of
  Cost or Market        29    -           -            29          -
  Adjustment
  Debt Waiver           11    -           -            11          -
  Solicitation Fees
  Severance, Exit and   6     23          9            62          49
  Other Adjustments
 Non-GAAP Operating     $    $  295     $  429      $ 1,130     $  976
 Income                 416
Income (Loss) Before
Income Taxes:
 GAAP Income (Loss)     $    $  (753)   $  270      $ (319)    $  509
 Before Income Taxes    191
  Gain on Sale of       -     (28)        -            (28)        -
  Business
  Goodwill and Equity
  Investment            -     793         -            793         -
  Impairment
  Sanctioned Country    -     100         -            100         -
  Loss Contingency
  Tax Remediation and   27    11          9            52          9
  Restatement Expenses
  Inventory Lower of
  Cost or Market        29    -           -            29          -
  Adjustment
  Debt Waiver           11    -           -            11          -
  Solicitation Fees
  Severance, Exit and   6     23          9            60          49
  Other Adjustments
 Non-GAAP Income (Loss) $    $  146     $  288      $  698    $  567
 Before Income Taxes    264

  Note (a): Non-GAAP adjustments are comprised of (i) tax restatement and
  remediation expenses of $27 million, (ii) $11 million in fees and expenses
  associated with our Q3 debt consent solicitation, (iii) a $29 million lower
  of cost or market adjustment to the carrying value of our inventory and
  (iv) severance, exit and other charges of $6 million.
  Note (b): Non-GAAP adjustments are comprised of (i) a $28 million gain
  related to the sale of our subsea controls business (ii) goodwill and equity
  method investment impairments of $793 million (iii) $100 million loss
  accrual related to sanctioned country matters, (iv) tax restatement and
  remediation expenses of $11 million and (v) severance, exit and other
  charges of $23 million.
  Note (c): Non-GAAP adjustments are comprised of (i) tax restatement and
  remediation expenses of $9 million and (iii) severance, exit and other
  charges of $9 million.
  Note (d): Non-GAAP adjustments are comprised of (i) a $28 million gain
  related to the sale of our subsea controls business (ii) goodwill and equity
  method investment impairments of $793 million (iii) $100 million loss
  accrual related to sanctioned country matters (iv) tax restatement and
  remediation expenses of $52 million, (v) a $29 million lower of cost or
  market adjustment to the carrying value of our inventory (vi) $11 million in
  fees and expenses associated with our Q3 debt consent solicitation and (vii)
  severance, exit and other charges of $62 million.
  Note (e): Non-GAAP adjustments are comprised of (i) tax restatement and
  remediation expenses of $9 million and (iii) severance, exit and other
  charges of $49 million.



Weatherford International Ltd.
Selected Balance Sheet Data
(Unaudited)
(In Millions)
                     9/30/2012  6/30/2012   3/31/2012   12/31/2011  9/30/2011
                                (Restated)  (Restated)  (Restated)  (Restated)
Assets:
 Cash and Cash       $   366  $   381   $   339   $   371   $   274
 Equivalents
 Accounts            3,911      3,608       3,358       3,234       3,178
 Receivable, Net
 Inventories         3,694      3,407       3,301       3,158       3,073
 Property, Plant and 8,131      7,742       7,591       7,287       7,145
 Equipment, Net
 Goodwill and        4,652      4,580       5,151       5,133       5,133
 Intangibles, Net
 Equity Investments  642        629         634         616         600
Liabilities:
 Accounts Payable    $ 2,021   $ 1,634    $ 1,684    $ 1,571    $ 1,569
 Short-term
 Borrowings and
 Current Portion of
    Long-term Debt   1,606      1,263       1,902       1,320       1,350
 Long-term Debt      7,300      7,311       5,989       6,286       6,266





 Weatherford International Ltd.
 Net Debt
 (Unaudited)
 (In Millions)
Change in Net Debt for the Three
Months Ended 9/30/2012:
 Net Debt at 6/30/2012                $   (8,193)
  Operating Income                    343
  Depreciation and Amortization       329
  Other Items                         73
  Capital Expenditures                (572)
  Increase in Working Capital        (203)
  Income Taxes Paid                   (25)
  Interest Paid                       (177)
  Acquisitions and Divestitures of    7
  Assets and Businesses, Net
  Foreign Currency Contract           24
  Settlements
  Other                               (146)
 Net Debt at 9/30/12                  $   (8,540)
Change in Net Debt for the Nine
Months Ended 9/30/2012:
 Net Debt at 12/31/2011               $   (7,235)
  Operating Income                    111
  Depreciation and Amortization       939
  Goodwill and Investment Impairment  793
  Sanctioned Country Loss Contingency 100
  Other Items                         126
  Capital Expenditures                (1,670)
  Increase in Working Capital        (763)
  Income Taxes Paid                   (269)
  Interest Paid                       (401)
  Acquisitions and Divestitures of    (147)
  Assets and Businesses, Net
  Foreign Currency Contract           8
  Settlements
  Other                               (132)
 Net Debt at 9/30/12                  $   (8,540)
 Components of Net Debt               9/30/2012      6/30/2012      12/31/2011
  Cash                                $     366  $     381  $   371
  Short-term Borrowings and Current   (1,606)        (1,263)        (1,320)
  Portion of Long-Term Debt
  Long-term Debt                      (7,300)        (7,311)        (6,286)
  Net Debt                            $   (8,540)  $   (8,193)  $ (7,235)

"Net Debt" is debt less cash. Management believes that Net Debt provides
useful information regarding the level ofWeatherford indebtedness by
reflecting cash that could be used to repay debt.
Working capital is defined as accounts receivable plus inventory less accounts
payable.





Weatherford International Ltd.
Selected Cash Flow Data
(Unaudited)
(In Millions)
                                                     Three Months  Nine Months
                                                     Ended         Ended
                                                     9/30/2012     9/30/2012
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Cash Provided by Continuing Operations      $    231   $    513
CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital Expenditures for Property, Plant and        (572)         (1,670)
 Equipment
 Acquisition of Businesses, Net of Cash Acquired    -             (156)
 Acquisition of Intangibles                          (10)          (16)
 Acquisition of Joint Ventures                       -             (8)
 Proceeds from Sale of Assets and businesses, Net    17            33
     Net Cash Used by Investing Activities           (565)         (1,817)
CASH FLOWS FROM FINANCING ACTIVITIES:
 Borrowings of Long-Term Debt                        -             1,302
 Repayments on Long-Term Debt                        (11)          (302)
 Borrowings of Short-Term Debt, Net                  343           257
 Proceeds from Exercise of Warrants                  -             65
 Other Financing Activities , Net                    (17)          (24)
     Net Cash Provided by Financing Activities       315           1,298
Effect of Exchange Rate on Cash and Cash             4             1
Equivalents
NET DECREASE IN CASH AND CASH EQUIVALENTS            (15)          (5)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     381           371
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $    366   $    366





ADDITIONAL FINANCIAL INFORMATION
REQUIRED BY THE SIX SWISS EXCHANGE
 The following supplemental information to our press release is furnished
under the reporting requirements of the SIX Swiss Exchange ("the SIX"). The
SIX has requested that we provide the following information to comply with a
half-year reporting requirement due to the postponement of our Form 10-Q for
the quarters ended June 30 and September 30, 2012. All amounts presented are
as of and for the three and nine month periods ended September 30, 2012.
Please note that the information provided below may be revised upon
finalization and filing of our Form 10-Q for the quarter ended September 30,
2012. 



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In millions)


                                                        Three Months                         Nine Months

                                                        Ended September 30,                  Ended September
                                                                                             30,
                                                        2012                     2011        2012    2011
                                                                                 (Restated)          (Restated)
Revenues:
                                                                                 $       $     $    
 Products                                           $     1,534          1,252               3,468
                                                                                             4,456
 Services                                           2,284                    2,118       6,700   5,810
                                                        3,818                    3,370       11,156  9,278
Costs and Expenses:
 Cost of Products                                   1,206                    952         3,405   2,618
 Cost of Services                                   1,743                    1,527       5,193   4,260
 Research and Development                           68                       59          195     181
Selling, General and Administrative                                                               

 Attributable to Segments                            381                      378         1,161   1,146
 Corporate, General and Administrative              77                       43          226     155
 Goodwill and Equity Investment
                                                          —           793     —
                                                ―
Impairment
 Estimated Settlement – Sanctioned                                                            

 Countries                                        —           100     —
                                                        ―
 Gain on Sale of Business                             —           (28)    —
                                                        ―
                                                        3,475                    2,959       11,045  8,360
Operating Income                                        343                      411         111     918
Other Expense:
 Interest Expense, Net                              (127)                    (115)       (360)   (342)
 Other, Net                                         (25)                     (26)        (70)    (67)
Income Before Income Taxes                              191                      270         (319)   509
Weighted Average Shares Outstanding:
 Basic                                              767                      754         764     751
 Diluted                                            771                      760         764     758





WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(In millions)


                         Three Months                  Nine Months

                         Ended September 30,           Ended September 30,
                         2012         2011             2012     2011
                                      (Restated)                (Restated)
Other Comprehensive
Income (Loss):
 Foreign Currency    $       $         $     $      
Translation Adjustment    (221)     (287)                  (91)
                                                        84
 Derivatives                                              
Designated as Cash Flow
                         —            (14)             —        (14)
 Hedges
 Amortization of     1            1                2        2
Pension Components
Other Comprehensive      $       $         $     $      
Income (Loss)             (220)     (300)                 (103)
                                                        86



Goodwill
We perform an impairment test for goodwill and indefinite-lived intangible
assets annually as of October1, or more frequently if indicators of potential
impairment exist. Our goodwill impairment test involves a comparison of the
fair value of each of our reporting units with its carrying amount. Our
reporting units are based on our regional structure and consist of the United
States, Canada, Latin America, Europe, Sub-Sahara Africa ("SSA"), Russia,
Middle East/North Africa ("MENA") and Asia Pacific ("AP"). During the course
of 2011, the market price of our registered shares declined significantly;
however, we concluded that the decline did not constitute an indicator of
potential impairment as there had not been a significant change in the
estimated future cash flows of our reporting units. Ultimately, our 2011
impairment test performed as of October 1 indicated goodwill was not impaired.



None of our reporting units failed the first step of our impairment test
during 2011, as theirfair values were in excess of their carrying value. At
October 1, 2011 the fair values of our MENA, Russia, SSA and Latin America
reporting units were closest to their carrying values; and were in excess of
their carrying values in a range from 15% to 23%. 


 During the three months ended June 30, 2012, we noted a sustained decline
in the market price of our registered shares. In response, we considered the
associated circumstances to assess whether an event or change occurred that,
more likely than not, reduced the fair value of any of our reporting units
below their carrying amount. After considering the relevant circumstances, we
were unable to conclude that the decline in our market capitalization was
other than a potential indicator of impairment and we prepared the analysis
necessary to identify potential impairment through the comparison of reporting
unit fair values and carrying amounts. This analysis, also known as step
one, indicated that our MENA and SSA reporting units were potentially
impaired. Consequently we performed the second step of our goodwill impairment
test, intended to measure the amount of impairment loss, comparing the implied
fair value of reporting unit goodwill with the carrying amount of that
goodwill. The second step indicated that carrying amount of reporting unit
goodwill exceeded the implied fair value of that goodwill. In accordance with
the goodwill impairment guidance, we recognized an impairment loss in an
amount equal to the excess carrying value over fair value. The impairment
loss, recognized in Selling, General and Administrative Attributable to
Segments line on the Condensed Consolidated Statement of Operations, totaled
$589 million of which $512 million was attributable to MENA and $77 million to
SSA. 



 The changes in the carrying amount of goodwill by segment for the nine months ended September
30, 2012, were as follows:
                                                     Europe/             Latin               
             North America
                                  MENA/AP             SSA/ Russia        America             Total
             (In millions)
As of                                                                                         $  
December 31, $     2,271      $      743    $     1,020     $      388     
2011                                                                                          4,422
Acquisitions 40                     32                    72
                                  ―                                       ―
Disposals    (2)                  (7)                 (65)                  (74)
                                                                          ―
Impairment     (512)               (77)                  (589)
Loss         ―                                                            ―
Purchase
price and                                                                                 
other
             (18)                     (21)                (39)
                               ―                   ―
adjustments
Foreign
currency     40                   3                   17                  (8)                 52
translation
As of                                                                                         $  
September    $     2,331     $      227     $      927     $      359     
30, 2012                                                                                      3,844



 Financial Instruments and Derivatives


 Financial Instruments 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 disclosed below under derivative instruments,
we had no assets or liabilities measured and recognized at fair value on a
recurring basis at September 30, 2012 and December 31, 2011.
 Fair Value of Other Financial Instruments
 Our other financial instruments include short-term borrowings and
long-term debt. The carrying value of our commercial paper and other
short-term borrowings approximates their fair value due to the short-term
duration of the associated interest rate periods. These short-term borrowings
are classified as Level 2 in the fair value hierarchy.


 The fair value of our long-term debt fluctuates with changes in
applicable interest rates.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.The fair value of our long-term debt is a measure of
its current value under present market conditions and is established based on
observable inputs in non-active markets. Our long-term debt is classified as
Level 2 in the fair value hierarchy.


 The fair value and carrying value of our long-term debt and current
portion of long-term debt is as follows:



                    September 30,            December 31,

                    2012                     2011
                     (In millions)
  Fair value     $         8,342  $        7,270
  Carrying value 7,639                    6,595

 Derivative Instruments


 We are exposed to market risk from changes in foreign currency and changes
in interest rates. From 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 and we may employ interest rate swaps as a tool to achieve that goal.
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 and the
creditworthiness of the counterparties in such transactions. In light of
events in the global credit markets and the potential impact of these events
on the liquidity of the banking industry, we continue to 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.


 Fair Value Hedges


 We may use interest rate swaps to help mitigate exposures related to
changes in the fair values of the associated debt. Amounts paid or received
upon termination of interest rate swaps accounted for as fair value hedges
represent the fair value of the agreements at the time of termination and are
recorded as an adjustment to the carrying value of the related debt. These
amounts are amortized as a reduction, in the case of gains, or as an increase,
in the case of losses, of interest expense over the remaining term of the
debt.


In July 2011, we entered into interest rate swap agreements to pay a
variable interest rate and receive a fixed interest rate with an aggregate
notional amount of $300 million. These swaps were designated as fair value
hedges of our 6.35% Senior Notes. In June 2012 these swaps were terminated.
As a result of these terminations, we received a cash settlement of
$18million. The gain associated with these interest rate swap terminations
was deferred and is being amortized over the remaining term of our 6.35%
Senior Notes.


As of September 30, 2012, we had net unamortized gains of $56 million
associated with interest rate swap terminations.


 Cash Flow Hedges


 In 2008, we entered into interest rate derivative instruments to hedge
projected exposures to interest rates in anticipation of a debt offering.
Those hedges were terminated at the time of the issuance of the debt, and the
loss on these hedges is being amortized from Accumulated Other Comprehensive
Income (Loss) into interest expense over the remaining term of the debt. As
of September 30, 2012, we had net unamortized losses of $12 million associated
with our cash flow hedge terminations.


 Other Derivative Instruments
 As of September 30, 2012, we had foreign currency forward contracts with
notional amounts aggregating to $951 million. These contracts were entered
into to hedge exposure to currency fluctuations in various foreign
currencies. The total estimated fair value of these contracts and amounts
receivable or owed associated with closed contracts resulted in a net
liability of approximately $3 million. These derivative instruments were not
designated as hedges and the changes in fair value of the contracts are
recorded each period in Other, Net in the accompanying Condensed Consolidated
Statements of Operations.


 We have cross-currency swaps between the U.S. dollar and Canadian dollar
to hedge certain exposures to the Canadian dollar. At September 30, 2012, we
had notional amounts outstanding of $168 million. The total estimated fair
value of these contracts at September 30, 2012, resulted in a liability of $36
million.  These derivative instruments were not designated as hedges and the
changes in fair value of the contracts are recorded each period in Other, Net
in the accompanying Condensed Consolidated Statements of Operations. 


 The fair values of outstanding derivative instruments are summarized as
follows:



                          September 30,  December 31,
                                                          Classifications
                          2012          2011
                          (In millions)
Derivative assets
designated as hedges:
 Interest rate swaps   $        $         Other Assets
                           —            13
Derivative assets not
designated as hedges:
                          8              20               Other Current Assets
 Foreign currency
forward contracts
Derivative liabilities
not designated as hedges:                                 Other Current
                          11             8                Liabilities
 Foreign currency
forward contracts
 Interest rate locks   —              9                Other Current
                                                          Liabilities
 Cross-currency swap   36             27               Other Liabilities
contracts

Segment Information


 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.



                      Three Months Ended September 30, 2012
                      Net                 Income       Depreciation

                      Operating           from         and

                      Revenues            Operations   Amortization
                      (In millions)
North America         $     1,725     $        $     108
                                          297
MENA/AP               699                 33           90
Europe/SSA/Russia     626                 94           63
Latin America         768                 97           61
                      3,818               521          322
Corporate and
Research and           ―  (105)        7

 Development
Other (a)              ―  (73)          ―
Total                 $     3,818     $       $    329
                                          343
                      Three Months Ended September 30, 2011
                      Net                 Income       Depreciation

                      Operating           from         and

                      Revenues            Operations   Amortization
                      (In millions)
North America         $     1,619     $        $     91
                                          352
MENA/AP               573                 17           81
Europe/SSA/Russia     586                 81           59
Latin America         592                 70           51
                      3,370               520          282
Corporate and
Research and          —                   (91)         4

 Development
Other (b)             —                   (18)         —
Total                 $     3,370     $       $        286
                                          411



     The three months ended September 30, 2012 includes tax restatement and
     remediation expenses of $27 million, $11 million in fees and expenses
(a) associated with our third quarter 2012 debt consent solicitation and
     severance, a $29 million lower of cost or market adjustment to the
     carrying value of our inventory, exit and other charges of $6 million.
     The three months ended September 30, 2011 includes $9 million for tax
(b)  restatement and remediation expenses, and $9 million for severance, exit
     costs and other charges.



                    Nine Months Ended September 30, 2012
                    Net                   Income       Depreciation

                    Operating             From         and

                    Revenues              Operations   Amortization
                    (In millions)
North America       $     5,142      $        $     304
                                          887
MENA/AP             1,943                 24           258
Europe/West         1,850                 271          184
Africa/Russia
Latin America       2,221                 271          175
                    11,156                1,453        921
Corporate and
Research and         ―  (323)        18

 Development
Goodwill and
Equity Investment    ―  (793)         ―

 Impairment
Other (a)            ―  (226)         ―
Total               $    11,156       $       $        939
                                            111
                    Nine Months Ended September 30, 2011
                    Net                   Income       Depreciation

                    Operating             From         and

                    Revenues              Operations   Amortization
                    (In millions)
                                          (Restated)
North America       $     4,323      $        $     267
                                          878
MENA/AP             1,766                 62           246
Europe/West         1,689                 207          173
Africa/Russia
Latin America       1,500                 140          146
                    9,278                 1,287        832
Corporate and
Research and        —                     (311)        14

 Development
Other (b)           —                     (58)         —
Total               $     9,278      $        $     846
                                          918



     The nine months ended September 30, 2012 includes a $28 million gain
     related to the sale of our subsea controls business, $100 million loss
     accrual related to sanctioned country matters, tax restatement and
(a)  remediation expenses of $52 million, a $29 million lower of cost or
     market adjustment to the carrying value of our inventory, $11 million in
     fees and expenses associated with our third quarter 2012 debt consent
     solicitationand severance, exit and other charges of $62 million.
     The nine months ended September 30, 2011 includes tax restatement and
(b) remediation expenses of $9 millionand severance, exit and other charges
     of $49 million.



 Disputes, Litigation and Contingencies
 U.S. Government and Internal Investigations
 We are currently involved in government and internal investigations.


 The U.S. Department of Commerce, Bureau of Industry & Security, Office of
Foreign Assets Control ("OFAC"), DOJ and SEC have undertaken investigations
of allegations of improper sales of products and services by the Company and
its subsidiaries in certain sanctioned countries. We have cooperated fully
with this investigation and have retained legal counsel, reporting to our
audit committee, to investigate these matters.


 In light of these investigations, the U.S. and foreign policy environment
and the inherent uncertainties surrounding these countries, we decided in
September2007 to direct our foreign subsidiaries to discontinue doing
business in countries that are subject to comprehensive U.S. economic and
trade sanctions, specifically Cuba, Iran, and Sudan, as well as Syria.
Effective September2007, we ceased entering into any new contracts in these
countries and began an orderly discontinuation and winding down of our
existing business in these sanctioned countries. Effective March 31, 2008,
we substantially completed our winding down of business in these countries
and have conducted further withdrawal activities, pursuant to the licenses
issued by OFAC, which have now ceased. Certain of our subsidiaries continue
to conduct business in countries such as Myanmar that are subject to more
limited U.S. trading sanctions. In 2011, the country of South Sudan came
into formal existence without the same sanction restrictions as those imposed
upon Sudan; the Company may operate in South Sudan.


We have been in negotiations with the government agencies to resolve the
investigation into alleged violations of the trade sanctions laws for more
than a year, and these negotiations have advanced significantly. During the
quarter ended June 30, 2012, the negotiations progressed to a point where we
recognized a liability for loss contingencies that we believe are probable
and for which a reasonable estimate can be made. The Company estimates that
the most likely amount of this loss is $100 million, although the actual
amount could be greater or less, and the timing of the payment cannot yet be
determined. The Company has therefore recognized a $100 million loss
contingency in the nine months ended September 30, 2012 for the potential
settlement of the sanctioned country matters. However, uncertainties remain
and therefore an exposure to loss may exist in excess of the amount accrued,
pending the ultimate resolution of the investigation and we may not
ultimately reach a final settlement with the government and may proceed to
litigation. As part of any potential resolution with the government, the DOJ
may seek to impose modifications to business practices, that decrease our
business, and modifications to the Company's compliance programs, which may
increase compliance costs.


Until 2003, we participated in the United Nations oil-for-food program
governing sales of goods and services into Iraq. The U.S. Department of
Justice ("DOJ") and the SEC have undertaken investigations of our
participation in the oil-for-food program and have subpoenaed certain
documents in connection with these investigations. We have cooperated fully
with these investigations. We have retained legal counsel, reporting to our
audit committee, to investigate this matter. We are in negotiations with the
government agencies to resolve these matters, but we cannot yet anticipate
the timing, outcome or possible impact of the ultimate resolution of the
investigations, financial or otherwise.


 The DOJ and SEC are also investigating our compliance with the Foreign
Corrupt Practices Act ("FCPA") and other laws worldwide. We have retained
legal counsel, reporting to our audit committee, to investigate these matters
and we are cooperating fully with the DOJ and SEC. As part of our internal
investigations, we have uncovered potential violations of U.S. law in
connection with activities in several jurisdictions. We have been in
negotiations with the government agencies to resolve these matters for more
than a year, but we cannot yet anticipate the timing, outcome or possible
impact of the ultimate resolution of the investigations, financial or
otherwise.


 The DOJ, SEC and other agencies and authorities have a broad range of
civil and criminal penalties they may seek to impose against corporations and
individuals for violations of trade sanctions laws, the FCPA and other
federal statutes including, but not limited to, injunctive relief,
disgorgement, fines, penalties and modifications to business practices and
compliance programs. In recent years, these agencies and authorities have
entered into agreements with, and obtained a range of penalties against,
several corporations and individuals in similar investigations, under which
civil and criminal penalties were imposed, including in some cases fines and
other penalties and sanctions in the tens and hundreds of millions of
dollars. Any injunctive relief, disgorgement, fines, penalties, sanctions or
imposed modifications to business practices resulting from these
investigations could adversely affect our results of operations, and the cost
of our investigations have been significant.


To the extent we violated trade sanctions laws, the FCPA, or other laws
or regulations, fines and other penalties may be imposed. Because these
matters are now pending before the indicated agencies, there is some
uncertainty as to the ultimate amount of any penalties we may pay and, with
regard to the FCPA matters we currently cannot reasonably estimate the
ultimate amount of any penalties we may pay. We have not yet recognized a
loss contingency related to these matters, as we have not concluded that
there are related losses that we believe are probable and for which a
reasonable estimate can be made. However, there can be no assurance that
actual fines or penalties, if any, will not have a material adverse effect on
our business, financial condition, liquidity or results of operations.


 Through September 30, 2012, we have incurred $125 million for legal and
professional fees in connection with complying with and conducting these
on-going investigations. We also incurred $44 million from 2007 through 2009
for costs in connection with our exit from sanctioned countries.


In addition, the SEC and the DOJ are investigating the circumstances
surrounding the material weakness in the Company's internal controls over
financial reporting for income taxes that was disclosed on Forms 12b-25 and
8-K on March 1, 2011 and February 21, 2012, respectively, and the related
restatements of our historical financial statements. We are cooperating
fully with the government investigation.


 Shareholder Litigation


In 2010, shareholders filed suit in Weatherford's name against those
directors in place before June 2010 and certain current and former members of
management relating to the U.S. government and internal investigations
disclosed above and in our SEC filings since 2007. Separately, in 2011 and
2012, shareholders filed suit relating to the material weakness in the
Company's internal controls over financial reporting for income taxes that
was disclosed on Forms 12b-25 and 8-K filed on March 1, 2011 and February 21,
2012, respectively, and the related restatement of historical financial
statements. These suits name the Company as well as current and former
members of management and our directors. We cannot predict the ultimate
outcome of these claims.


 Other Disputes


 Additionally, we are aware of various disputes and potential claims and
are a party in various litigation involving claims against us, some of which
are covered by insurance. For claims, disputes and pending litigation in
which we believe a negative outcome is probable and a loss can be reasonably
estimated, we have recorded a liability for the expected loss. These
liabilities are immaterial to our financial condition and results of
operations. In addition we have certain claims, disputes and pending
litigation in which we do not believe a negative outcome is probable or for
which we can only estimate a range of liability. If one or more negative
outcomes were to occur, the impact to our financial condition could be as
high as $20 million. 



SOURCE Weatherford International Ltd.

Website: http://www.weatherford.com