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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.11pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
+0.01pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.23pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adversely+4
harm+3
disruptions+2
expose+2
fail+2
Positive rising
effective+1
successfully+1
desired+1
attractive+1
profitability+1
Risk Factors (Item 1A)
8,678 words
Item 1A. Risk Factors.
An investment in our securities involves various risks. You should consider carefully all the risk factors described below, the matters discussed herein under “Forward-Looking Statements” and other information included and incorporated by reference in this Form 10-K, as well as in other reports and materials that we file with the SEC. If any of the risks described below, or elsewhere in this Form 10-K, were to materialize, our business, financial condition, results of operations, cash flows and or prospects could be materially adversely affected. In such case, the trading price of our ordinary shares could decline, and investors could lose part or all of their investment. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also materially adversely affect our financial condition, results of operations and cash flows.
Energy Services Industry Risks
Our business is dependent on capital spending by our customers which is greatly affected by fluctuations in oil and natural gas prices and the availability and cost of capital; reductions in capital spending by our customers has had, and could continue to have, an adverse effect on our business, financial condition and results of operations.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
decline+11
restructuring+4
loss+3
conflicts+2
declines+1
Positive rising
gain+4
leading+2
effective+1
efficiency+1
improve+1
MD&A (Item 7)
9,103 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
As used in this item, “Weatherford”, “the Company,” “we,” “us” and “our” refer to Weatherford International plc, a public limited company organized under the laws of Ireland, and its subsidiaries on a consolidated basis.
The following discussion should be read in conjunction with the earlier section “Item 1. Business” and our Consolidated Financial Statements and Notes thereto included later in “Item 8. Financial Statements and Supplementary Data.” Our discussion includes various forward-looking statements about our markets, the demand for our products and services and our future results. These statements include certain risks and uncertainties. For information about these risks and uncertainties, refer to the section entitled “Forward-Looking Statements” and the section entitled “Item 1A. Risk Factors.” The following section generally discusses our financial condition and results of operations for fiscal year ended December 31, 2025 compared to fiscal year ended December 31, 2024. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 6, 2025, for a discussion regarding our financial condition and results of operations for fiscal year ended December 31, 2024 as compared to fiscal year ended December 31, 2023.
Industry Trends
Demand for our industry’s products and services is driven by many factors, including commodity prices, the number of oil and gas rigs and wells drilled, depth and drilling conditions of wells, number of well completions, age of existing wells, reservoir , regulatory environment, and the level of workover activity worldwide.
Demand for our products and services is tied to the level of exploration, development and production activity and the corresponding capital and operating spending by oil and natural gas exploration and production companies, including national oil companies. The level of exploration, development and production activity is directly affected by fluctuations in oil and natural gas prices, which historically have been volatile and are likely to continue to be volatile in the future, especially given current geopolitical and economic conditions. Low oil and natural gas prices and decline in global demand for oil and natural gas, including reduced demand as a result of a pandemic, have previously led to our customers, including national oil companies and large oil and natural gas exploration and production companies, to greatly reduce planned future capital expenditures. Factors affecting the prices of oil and natural gas include, but are not limited to:
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• the level of supply and demand for oil and natural gas;
• the ability or willingness of the Organization of Petroleum Exporting Countries (“OPEC”) and the expanded alliance (“OPEC+”) and other high oil exporting non-OPEC+ nations to set and maintain oil production levels;
• the level of oil and natural gas production in the U.S. and by other non-OPEC+ countries;
• oil refining capacity;
• shifts in end-customer preferences toward sustainable energy sources, fuel efficiency and the use of natural gas;
• the cost of, and constraints associated with, producing and delivering oil and natural gas;
• governmental regulations, including the policies of governments regarding the exploration for and production and
development of their oil and natural gas reserves;
• weather conditions, unusual wildfires, natural disasters, and health or similar issues, such as pandemics or epidemics;
• worldwide political, military, and economic conditions; and
• increased demand for alternative energy and electric vehicles, including government initiatives to promote the use of
sustainable, renewable energy sources and public sentiment around alternatives to oil and natural gas.
Reductions in capital spending or reductions in the prices we receive for our products and services provided to our customers could have a material adverse effect on our business, financial condition and results of operations. Spending by exploration and production companies can also be impacted by conditions in the capital markets, which may be volatile at times. Limitations on the availability of capital or higher costs of capital may cause exploration and production companies to make additional reductions to their capital budgets even if oil and natural gas prices increase from current levels. In addition, the transition of the global energy sector from primarily a fossil fuel-based system to renewable energy sources could affect our customers' levels of expenditures on products and services related to fossil fuels. Any such reductions in spending could curtail drilling programs, as well as discretionary spending on well services, which may result in a reduction in the demand for certain of our products and services, the rates we can charge for and the utilization of our assets, any or all of which could have a material adverse effect on our business, financial condition and results of operations.
Our fulfillment system relies on a global network of external suppliers and service providers, which may be impacted by macroeconomic conditions, and geopolitical conflict and instability. Shortages, supplier capacity constraints, supplier production disruptions, supplier quality and sourcing issues or price increases could have a material adverse effect on our business, financial condition and results of operations.
We purchase a variety of raw materials, as well as parts and components made by other manufacturers and suppliers for use in our manufacturing facilities. Our global supply chain is also subject to macroeconomic conditions and political risks. Adverse macroeconomic conditions, including inflation, slower growth or recession and higher interest rates could create disruptions in our supply chain. Similarly, geopolitical risks, including instability resulting from civil unrest, political demonstrations, strikes and armed conflict or other crises in the oil and gas producing regions, and the resulting sanctions, could change the global supply chain dynamics and demand. A disruption in deliveries to or from suppliers, or decreased availability of materials at acceptable prices or at all, could have an adverse effect on our ability to meet our commitments to customers or increase our operating costs. Also, certain parts and equipment that we use in our operations may be available only from a small number of suppliers, manufacturers or service providers. A disruption in the deliveries from such third‑party suppliers, manufacturers or service providers, capacity constraints, production disruptions, price increases, quality control issues, recalls or other decreased availability of parts and equipment could adversely affect our ability to meet our commitments to customers and have a material adverse effect on our business, financial condition and results of operations.
Climate change, environmental, social and governance (“ESG”) and other sustainability initiatives may result in regulatory or structural industry changes that could require significant operational changes and expenditures, reduce demand for our products and services and adversely affect our business, financial condition, results of operations, stock price or access to capital markets.
Sustainability initiatives are a growing global movement. Continuing political and social attention to these issues has resulted in both existing and pending international agreements and national, regional and local legislation, regulatory measures, reporting obligations and policy changes, including to reduce the reliance upon oil and natural gas. Also, there is increasing societal pressure in some of the areas where we operate, to limit greenhouse gas emissions as well as other global initiatives. These agreements and measures, including the Paris Climate Accord, may require, or could result in future legislation, regulatory measures or policy changes that would require, significant equipment modifications, operational changes, taxes, or purchases of emission credits to reduce emission of greenhouse gases from our operations or those of our customers, which may result in substantial capital expenditures and compliance, operating, maintenance and remediation costs. As a result, demand for hydrocarbons may be reduced, which could have an adverse effect on our business, financial condition, and results of operations.
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The imposition and enforcement of stringent greenhouse gas emissions reduction requirements could severely and adversely impact the oil and natural gas industry and therefore significantly reduce the value of our business.
Certain financial institutions, institutional investors and other sources of capital may limit or eliminate their investment in financing of conventional energy-related activities due to concerns about climate change, which could make it more difficult for our customers and for us to finance our respective businesses. Increasing attention to climate change, ESG and sustainability may result in governmental investigations, and public and private litigation, which could increase our costs or otherwise adversely affect our business or results of operations.
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used by some investors to inform their investment and voting decisions. Unfavorable ESG ratings may lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other companies or industries, which could have a negative impact on the price of our securities and our access to and costs of capital.
Any or all of these ESG and sustainability initiatives may result in significant operational changes and expenditures, reduced demand for our products and services, and could materially adversely affect our business, financial condition, results of operations, stock price or access to capital markets.
Failure to effectively and timely address the need to operate more sustainably and with a lower carbon footprint and impact could adversely affect our business, results of operations and cash flows.
Our long-term success may depend on our ability to effectively lower the carbon impact of how we deliver our products and services to our customers as well as adapting our technology portfolio for potentially changing government requirements and customer preferences towards more sustainable competitors. We may also consider engaging with our customers to develop solutions to decarbonize our customers’ oil and natural gas operations. We could potentially lose engagement with customers, investors and/or certain financial institutions if we fail or are perceived to fail at effectively and timely addressing the need to conduct our operations and provision of services to our customers more sustainably and with a lower carbon footprint which could materially adversely affect our business, financial condition and results of operations.
Failure to effectively and timely address the energy transition could materially adversely affect our business, financial condition and results of operations.
Our long-term success depends on our ability to effectively participate in the energy transition, which will require adapting our technology portfolio to potentially changing market demand for products and services and to support the production of energy from sources other than hydrocarbons (e.g., geothermal, carbon capture, responsible abandonment, wind, solar and hydrogen). If the energy transition landscape changes faster than anticipated or in a manner that we do not anticipate, demand for our products and services could be adversely affected. Furthermore, if we fail or are perceived to not effectively implement an energy transition strategy, or if investors or financial institutions shift funding away from companies focused primarily or solely in fossil fuel-related industries, it could materially adversely affect our business, financial condition, results of operations and our access to capital or the market for our securities.
Severe weather, including extreme weather conditions and unusual wildfires, has in the past, and could in the future, adversely affect our business and results of operations.
Our business has been, and in the future will likely be, affected by severe weather and unusual wildfires in areas where we operate, which could materially adversely affect our operations. In addition, the frequency and severity of these events may also materially affect our operations and financial results. Any such events could have a material adverse effect on our business, financial condition and results of operations.
Liability claims resulting from catastrophicincidents could have a material adverse effect on our business, financial condition and results of operations.
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Drilling for and producing hydrocarbons, and the associated products and services that we provide, include inherent dangers that may lead to property damage, personal injury, death or the discharge of hazardous materials into the environment. Many of these events are outside our control. Typically, we provide products and services at a well site where our personnel and equipment are located together with personnel and equipment of our customer and third parties, such as other service providers. At many sites, we depend on other companies and personnel to conduct drilling and other operations in accordance with appropriate safety standards. From time to time, personnel are injured, or equipment or property is damaged or destroyed, as a result of accidents, equipment failures, faulty products or services, failure of safety measures, uncontained formation pressures or other dangers inherent in drilling for or producing oil and natural gas. Any of these events can be the result of human error. With increasing frequency, our products and services are deployed on more challenging prospects both onshore and offshore, where the occurrence of the types of events mentioned above can have an even more catastrophic impact on people, equipment or the environment. Such events may expose us to significant potential losses which could have a material adverse effect on our business, financial condition and results of operations.
Consolidation in our industry may impact our results of operations.
There have been significant business consolidations within the oil and gas industry in recent years. Continuing consolidation within the industry may result in reduced capital spending by some of our customers or the acquisition of one or more of our primary customers, which may lead to decreased demand for our products and services.
Business and Operational Risks
A significant portion of our revenue is derived from our operations outside the U.S., which exposes us to risks inherent in doing business in each of the approximately 75 countries in which we operate.
The U.S. accounted for 15%, 15% and 16% of revenues in 2025, 2024 and 2023, respectively. The rest of our revenues were from non-U.S. operations. Operations in countries other than the U.S. are subject to various risks, including:
• global political, economic and market conditions, political disturbances, war, terrorist attacks, changes in global trade policies and tariffs, weak local economic conditions and international currency fluctuations (including the Russia Ukraine Conflict, conflicts in the Middle East and instability in Latin America);
• failure to meet local standards and requirements from national oil companies;
• general global economic repercussions related to U.S. and global inflationary pressures and potential recessionaryconcerns;
• failure to ensure on-going compliance with current and future laws and government regulations, including but not limited to those related to the Russia Ukraine Conflict, and environmental and tax and accounting laws, rules and regulations;
• changes in, and the administration of, treaties, laws, and regulations, including in response to issues related to the Russia Ukraine Conflict or conflicts in the Middle East or Latin America and the potential for such issues to exacerbate other risks we face;
• exposure to expropriation of our assets, deprivation of contract rights or other governmental actions;
• social unrest, acts of terrorism, war or other armed conflict;
• fraud and political corruption;
• varying international laws and regulations;
• confiscatory taxation or other adverse tax policies;
• trade and economic sanctions or other restrictions imposed by the European Union, the United Kingdom, the U.S. or other countries, including in response to the Russia Ukraine Conflict;
• exposure under the U.S. Foreign Corrupt Practices Act or similar governmental legislation in other countries; and
• restrictions on the repatriation of income or capital.
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Changes in trade policy and uncertainties related to tariffs could adversely affect our business.
Tariffs imposed by the United States and retaliatory measures from other countries have and may continue to lead to higher prices for, or reduced availability of, raw materials and finished goods, making products less attractive to customers and potentially reducing demand. Further, these actions have and may continue to create uncertainty in financial markets, impact capital spending, and result in operational disruptions, inflation, and diminishedprofitability. The unpredictable nature of tariff changes and trade restrictions makes it difficult to anticipate and mitigate risks, which could materially affect our business operations, financial condition, and results of operations. While they created some degree of margin dilution, tariffs did not have a material impact on the Company during the year ended December 31, 2025.
A concentration of our accounts receivable was related to one customer and significant changes to the demand or health of the customer could adversely impact our consolidated results of operations, financial condition and statements of cashflows.
Approximately 24% of our December 31, 2025 accounts receivables were related to our largest customer in Mexico, which comprised 5% of our revenue during the twelve months ended December 31, 2025. Our largest customer in Mexico has a history of making late payments and, in more recent periods, has utilized third-party financial institutions to pay certain of our receivables. The balances due are not in dispute, however, additional or continued delays in customer payments in the future could differ from historical practice and management’s current expectations; and delays or failures to pay or defaults, if any, could negatively impact the future results of the Company. Additionally, business slowdowns or other items impacting the financial health of the customer could potentially have an adverse impact on our results of operations.
Our business could be negatively affected by cybersecurity incidents and other technology disruptions.
We rely heavily on information systems and other digital technology to conduct and protect our business. These information systems and other digital technology are subject to the risk of increasingly sophisticated cybersecurity attacks, incursions or other incidents such as unauthorized access to data and systems, loss or destruction of data (including confidential customer, supplier and employee information), computer viruses, or other malicious code, phishing and cyberattacks, and other similar events. These incidents could arise from numerous sources, including those outside our control, including fraud or malice on the part of third parties, governmental actors, accidental technological failure, electrical or telecommunication outages, failures of computer servers or other damage to our property or assets, human error, complications encountered as existing systems are maintained, repaired, replaced, or upgraded or outbreaks of hostilities or terrorist acts.
Given the rapidly evolving nature of cybersecurity incidents, there can be no assurance that the controls we have designed and implemented to prevent or limit the effects of cybersecurity incidents or attacks will be sufficient in preventing or limiting the effects of all such incidents or attacks or be able to avoid a material impact to our systems should such incidents or attacks occur. Recent widespread cybersecurity incidents and attacks in the U.S. and elsewhere have affected many companies. Cybersecurity incidents can result in the disclosure of confidential or proprietary customer, supplier or employee information; theft or loss of intellectual property; impairment in our ability to operate or conduct our business; damage to our reputation with our customers, suppliers, employees and the market; failure to meet customer requirements or result in customer dissatisfaction; legal and regulatory exposure, including fines or legal proceedings (including as a result of our failure to make adequate or timely disclosures to the public, government agencies or affected individuals); damage to equipment (which could cause environmental or safety issues) and other financial costs and losses, including as a result of any remediation efforts. While Weatherford imposes controls on third-party system connectivity to our systems, the risks from an attack via a third-party remain.
The occurrence of a cybersecurity incident can go unnoticed for a period of time despite efforts to detect and respond in a timely manner. Any investigation of a cybersecurity incident is inherently unpredictable, and it takes time before the completion of any investigation and before there is availability of full and reliable information. Even when an attack has been detected, it is not always immediately apparent what the full nature and scope of any potential harm may be, or how best to remediate it, and certain errors or actions could be repeated or compounded before they are discovered and remediated, all or any of which further increase the risks, costs and consequences of a cybersecurity event or other technology disruption. As cybersecurity incidents and attacks continue to evolve, we may be required to expend significant additional resources and incur significant expenses to continue to modify or enhance our protective measures or to investigate, respond to or remediate any information security vulnerabilities.
Depending on the nature and scope of the cybersecurity incident, it could have a material adverse effect on our business, reputation, financial condition and results of operations.
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A pandemic could significantly weaken demand for our products and services and have a substantial negative impact on our business, financial condition, results of operations and cash flows.
Pandemics have caused and could again cause volatile regional and global economic conditions that exacerbate the potential negative impact from many of the other risks we face. We believe that a future pandemic may result in significant reduction in the demand for oil and gas, instability in the global work force, increased cybersecurity vulnerability from remote work and the heightening of geopolitical tensions. Our insurance policies may not cover losses associated with pandemics or similar global health threats.
Our business is dependent upon our ability to efficiently and effectively deliver for our customers. As such, we are subject to risks associated with cost over-runs, operating cost inflation, supply chain disruptions, inventory management, labor availability, supplier and contractor pricing and performance, and our need to continually improve and invest in our people, processes and systems. Our inability to efficiently and effectively mitigate these risks, or our inability to make timely investments could have an adverse effect on our business, financial condition and results of operations.
Our customers rely on our ability to efficiently perform and execute on the delivery of our products and services, and a low success rate could adversely impact margins and our ability to obtain market share. Additionally, we continuously identify opportunities to invest in our people, processes and systems, however, we may not be able to adjust quickly enough to capitalize on market share during times of industry growth, or the returns on our investments may not outpace margin deterioration at times of slower activity.
We sometimes provide integrated project management services in the form of long-term, fixed price contracts where we are both the project manager and service provider. Accordingly, under these contracts, we assume additional risks associated with engaging with certain third-party subcontractors, operating cost inflation, labor availability and productivity, global supply chain disruptions, supplier pricing and performance, and potential claims for liquidateddamages. If we are unable to complete these contracts effectively and timely, it could potentially have an adverse impact on our results of operations.
Our operational and financial growth, in part, is dependent upon our ability to meet our liquidity requirements and the adequacy of our capital resources.
Our liquidity, including our ability to meet our ongoing operational obligations, as well as service our debt, is dependent upon, among other things: (i) our ability to maintain adequate cash on hand; (ii) our ability to generate cash flow from operations; (iii) our ability to access the capital markets; and (iv) changes in market conditions that would negatively impact our revenue or our profits.
Changes in economic and/or market conditions such as the condition of capital and equity markets may impact the price of our ordinary shares and our ability to borrow. Furthermore, if our credit rating is downgraded, it could increase our cost of borrowing.
At times, the energy industry has faced negative sentiment in the capital markets which has impacted the ability of participants to access appropriate amounts of capital upon suitable terms. This negative sentiment has not only impacted our customers in North America, it has also affected the availability and the pricing for most credit lines and other capital resources extended to participants in the industry, including us.
We may not be fully indemnified against financial losses in all circumstances where damage to or loss of property, personal injury, death or environmental harm occur.
As is customary in our industry, our contracts typically require that our customers indemnify us for claims arising from the injury or death of their employees (and those of their other contractors), the loss or damage of their equipment (and that of their other contractors), damage to the well or reservoir and environmental impacts originating from the customer’s equipment or from the reservoir (including uncontained oil flow from a reservoir), claims arising from catastrophic events, such as a well blowout, fire, explosion and from environmental impacts below the surface. Conversely, we typically indemnify our customers for claims arising from the injury or death of our employees, the loss or damage of our equipment (other than equipment lost in the hole) or environmental impacts originating from our equipment above the surface of the earth or water.
Our indemnification arrangements may not protect us in every case. For example, our indemnity arrangements may be held to be overly broad in some courts and/or contrary to public policy in some jurisdictions, and to that extent may be unenforceable. Additionally, some jurisdictions which permit indemnification nonetheless limit its scope by applicable law, rule, order or statute. We may be subject to claims brought by third parties or government agencies with respect to which we are not indemnified.
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Furthermore, the parties from which we seek indemnity may not be solvent, may become bankrupt, may lack resources or insurance to honor their indemnities or may not otherwise be able to satisfy their indemnity obligations to us. The lack of enforceable indemnification could expose us to significant potential losses.
Further, our assets generally are not insured againstloss from political violence such as war, terrorism or civil unrest. If any of our assets are damaged or destroyed as a result of an uninsured cause, we could recognize a loss of those assets.
Our indebtedness and liabilities could limit cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations.
As of December 31, 2025, we had $30 million of short-term and $1.5 billion of long-term debt, all accruing interest. If business activity declines, or otherwise does not increase, our level of indebtedness could have negative consequences for our business, financial condition and results of operations, including:
• limiting our ability to obtain additional financing, or refinance our existing debt, on terms that are commercially acceptable to us;
• requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, thereby reducing our free cash flow and the amount of our cash flow available for other purposes;
• limiting our flexibility in planning for, or reacting to, changes in our business;
• placing us at a possible competitive disadvantage with less leveraged competitors or competitors that may have better access to capital resources; and
• increasing our vulnerability to adverse economic and industry conditions.
Our ability to make scheduled payments on our debt obligations will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and certain financial, business and other factors beyond our control. In the past, lower commodity prices and in turn lower demand for our products and services have negatively impacted our revenues, earnings and cash flows, and as a result, could adversely impact our liquidity position. Any harm to our business and operations resulting from our current or future level of indebtedness could adversely affect our ability to pay amounts due to our lenders and noteholders.
Our business may be exposed to uninsuredclaims and, as a result, litigation might result in significant potential losses. The cost of our insured risk management program may increase.
In the ordinary course of business, we become the subject of various claims and litigation. We maintain liability insurance, which includes insurance againstdamage to people, property and the environment, in commercially reasonable amounts, subject to self-insured retentions and deductibles.
Our insurance policies are subject to exclusions, limitations and other conditions and may not apply in all cases, for example where willful wrongdoing on our part is alleged. It is possible an unexpected judgment could be rendered against us in cases in which we could be uninsured and beyond the amounts we currently have reserved or anticipate incurring, and in some cases those potential losses could be material.
Our insurance may not be sufficient to cover any particular loss, or our insurance may not cover all losses. For example, although we maintain product liability insurance, this type of insurance is limited in coverage, and it is possible an adverse claim could arise in excess of our coverage. Additionally, insurance rates have in the past been subject to wide fluctuation and may be unavailable on terms that we or our customers believe are economically acceptable. Reductions in coverage, changes in the insurance markets and accidents affecting our industry may result in further increases in our cost and higher deductibles and retentions in future years and may also result in reduced activity levels in certain markets. As a result, we may not be able to continue to obtain insurance on commercially reasonable terms. Any of these events could have an adverse impact on our business, financial condition and results of operations.
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The terms of our indebtedness may restrict our current and future operations, particularly our ability to respond to changes or to pursue our business strategies.
The Credit Agreement and the indentures governing our 6.75% Senior Notes maturing October 2033 (the “2033 Senior Notes”) and 8.625% Senior Notes maturing April 30, 2030 (the “2030 Senior Notes”), contain certain restrictive or limiting covenants that may impose significant operating and financial restrictions on us and may limit our ability to engage in acts that we may believe to be in our long-term best interest, including the following:
• restricting additional indebtedness;
• restricting or limiting payment of dividends and other distributions;
• limiting prepayment, redemption or repurchase certain debt;
• limiting making loans and assets; and
• limiting selling assets and incur liens
These covenants and other restrictions may limit our ability to effectively operate our business, and to execute our growth strategy or take advantage of new business opportunities. These covenants and restrictions include minimum liquidity covenants, minimum interest coverage ratio, maximum ratio of funded debt, and certain other financial ratios, which may apply in certain circumstances, and other restrictions. Our ability to meet the liquidity thresholds or those financial ratios could be affected by events beyond our control.
A breach of the covenants and other restrictions in any of our indebtedness could result in an event of default thereunder. Such a default may allow the lenders, holders or the trustee, as applicable, to accelerate the related indebtedness which may result in the acceleration of any other indebtedness or to foreclose on our assets, of which substantially all of our assets are secured by certain lenders. In addition, an event of default under the Credit Agreement would permit the lenders thereunder to terminate all commitments.
Failure to attract, retain and develop qualified personnel could impede our operations.
Our future success depends on our ability to attract, retain and develop qualified personnel to operate and to provide services and support for our business. In addition, we operate in jurisdictions with localization requirements where we rely on the local availability of skilled workers. We may experience employee turnover or labor shortages if our business requirements and/or expectations are inconsistent with the expectations of our employees or if our employees or potential employees decide to pursue employment in fields with less volatility than in the energy industry. Additionally, during periods of increased demand for products and services in our industry, competition for qualified personnel may increase and the availability of qualified personnel may be further constrained. Failure to attract, retain and develop qualified personnel could have an adverse effect on our results of operations, financial condition and cash flows.
Failure to make timely investments in technology and to utilize artificial intelligence appropriately and safely could adversely affect our ability to successfully compete with other companies in our industry, and challenges with properly managing such technologies could result in reputational harm and legal liability that could adversely affect our business, financial condition or results of operations.
The business in which we operate is highly competitive and rapidly evolving. Our business may be adversely affected if we fail to make timely investments in new technology, such as artificial intelligence (“AI”), or if we fail to manage such technologies appropriately.
We are integrating AI tools into our systems and certain products, and many of our third-party service providers, as well as our competitors, are also developing and using such tools. AI may become increasingly important to our operations or to our future growth over time. There can be no assurance that we will realize the desired or anticipated benefits, or any benefits, and we may fail to properly implement such technology.
In addition, our, and our third-party service providers’, AI tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection, compliance, and transparency, among others, which could inhibit our or our service providers’ ability to maintain an adequate level of functionality or service. AI tools used by us or by our service providers could produce inaccurate or unexpected results or behaviors that could harm our business, customers, or reputation. Furthermore, the deployment of AI systems could expose us to increased cybersecurity threats, such as data breaches and unauthorized access leading to financial losses, legal liabilities, and reputational damage.
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Our competitors may incorporate AI in their business operations and products more rapidly or more successfully than we do. Additionally, the complex and rapidly evolving legal and regulatory landscape around AI may expose us to claims, inquiries, demands and proceedings by private parties and global regulatory authorities or subject us to legal liability as well as reputational harm and compliance may impose significant operational costs and may limit our ability to develop, deploy or use AI tools.
There may be circumstances that adversely affect our ability to declare and pay dividends or repurchase shares.
In 2024, we announced our shareholder returns program under which we intend to pay regular quarterly cash dividends and have the authorization to repurchase up to $500 million shares over a three year period. Dividends and share repurchases are authorized and determined by our Board of Directors at its sole discretion and depend upon a number of factors, including our financial results, cash requirements, capital management plans, changes in applicable laws, contractual restrictions such as financial or operating covenants, and future prospects, as well as such other factors deemed relevant by our Board of Directors. We can provide no assurance that we will pay dividends or make share repurchases at current levels or at all. Any elimination of, or downward revision in, our dividend payout or share repurchase program could have an adverse effect on the market price of our ordinary shares.
Our acquisitions may not result in anticipated benefits and may present risks not originally contemplated, which may have an adverse affect on our business.
The acquisition of additional businesses and assets is part of our growth strategy. We may experience difficulties completing acquisitions or integrating new businesses and properties, and we may be unable to achieve the expected benefits from future acquisitions. Additionally, we cannot provide any assurance that we will be able to find complementary acquisition targets or complete such acquisitions, or achieve the desired results from such acquisitions. Any acquired businesses or assets will be subject to many of the same risks as our existing businesses and may not achieve the levels of performance that we anticipate.
We may not realize anticipated operating advantages and cost savings. Future acquisitions may require us to structure new financing arrangements, assume additional liabilities and expenses, as well as incur subsequent write-downs of acquired assets. In addition, the integration of acquired businesses or assets involves a number of risks, including (i) the loss of key customers of the acquired business; (ii) demands on management related to the increase in our size; (iii) the diversion of management’s attention from the management of daily operations; (iv) difficulties in implementing or unanticipated costs of accounting, budgeting, reporting, internal controls, cybersecurity and other information technology systems; and (v) difficulties in the retention and assimilation of necessary employees. Difficulties in integration may be magnified if we make multiple acquisitions over a relatively short period of time.
Because of difficulties in combining and expanding operations, we may not be able to achieve the cost savings and other benefits that we hoped to achieve after these acquisitions, which could negatively impact our financial condition and results of operations.
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Table of Contents Item 1 | Business
Legal, Tax and Regulatory Risks
Our operations are subject to numerous current and future social and governance related legislative and regulatory measures both globally and in the specific geographic regions in which we and our customers operate, including treaties and international agreements related to “sustainability” initiatives like greenhouse gases, climate change and renewable energy sources. Our ability to comply with, and respond to current and future changes may expose us to significant liabilities, result in additional compliance costs and could reduce our business opportunities and revenues.
We are subject to various laws and regulations applicable to the energy industry related to pollution, protection of the environment and natural resources, public and worker health and safety, and treaties and international agreements related to climate change and the regulation of greenhouse gasses. These laws and regulations sometimes provide for strict liability for remediation costs, damages to natural resources, or threats to public health and safety. Strict liability can render us liable for damages without regard to our degree of care or fault. Some environmental laws also provide for joint and several strict liability for remediation of spills and releases of hazardous substances, and, as a result, we could be liable for the actions of others. Thus, an environmental claim could arise with respect to one or more of our current or former businesses, operations, products or services, or a business or property that one of our predecessors owned or used, and such claims could involve material expenditures. Generally, environmental laws have in recent years become more stringent and have sought to impose greater liability on a larger number of potentially responsible parties and have required increased costs to comply with their requirements. The scope of regulation of our industry and our products and services may increase further, including possible increases in liabilities, financial assurance, or funding requirements imposed by governmental agencies. Additional regulations on deepwater drilling could be imposed, and those regulations could limit our business where they are imposed.
Our environmental, social and governance commitments and disclosures may expose us to reputational risks and legal liability.
Increasing focus on ESG factors has led to enhanced interest in, and review of performance results by investors and other stakeholders, and the potential for litigation and reputational risk. In 2022, we made certain public commitments to various corporate ESG initiatives, including our commitment to achieve net-zero emissions for Scope 1 and 2 by 2050 and signing on to the UN Global Compact. Any failure, or perceived failure, to achieve or accurately report on our commitments in our disclosures, including our annual Sustainability Report and our other disclosures on these matters, could harm our reputation and adversely affect our client relationships or our recruitment and retention efforts, as well as expose us to potential legal liability. In addition, positions we take or do not take on social issues may be unpopular with some of our employees, our clients or potential clients, shareholders, investors, governments or advocacy groups, which may impact our ability to attract or retain employees or the demand for our services.
Increasing focus on ESG matters has resulted in the adoption of legal and regulatory requirements designed to mitigate the effects of climate change on the environment, as well as legal and regulatory requirements requiring climate, human rights and supply chain-related disclosures. We expect these types of regulatory requirements related to ESG matters to continue to expand globally. If new laws or regulations are more stringent than current legal or regulatory requirements or involve reporting information according to differing standards and frameworks in the countries in which we operate, we may experience increased compliance burdens and costs to meet such obligations. In addition, our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or may not satisfy varying regulatory requirements or the expectations of investors or other stakeholders.
Our ability to achieve our ESG commitments, including our goals relating to sustainability and inclusion and diversity, is subject to numerous risks, many of which are outside of our control. Examples of such risks include: (1) our ability to operate more sustainably and with a lower carbon footprint; (2) the availability and cost of low- or non-carbon-based energy sources and technologies; (3) evolving and potentially conflicting global regulatory requirements affecting ESG standards or disclosures; (4) the availability of suppliers that can meet our sustainability, diversity and other standards; and (5) our ability to recruit, develop, and retain diverse talent.
In addition, standards for tracking and reporting on ESG matters, including climate change and human rights related matters, have not been harmonized and continue to evolve. Methodologies for reporting ESG data may be updated requiring that previously reported ESG data be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations and other changes in circumstances. Our processes and controls for reporting ESG matters across our operations and supply chain are evolving to address obtaining information that resides in multiple internal systems and responding to multiple disparate standards for identifying, measuring, and reporting ESG metrics, including ESG-related disclosures that may be required by the SEC, European and other regulators. Such standards are currently
Weatherford International plc – 2025 Form 10-K | 17
Table of Contents Item 1 | Business
not consistent and may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.
Adverse changes in tax laws both in the U.S. and abroad, changes in tax rates or exposure to additional income tax liabilities could have a material adverse effect on our results of operations.
Changes in tax laws could significantly increase our tax expense and require us to take actions, at potential significant expense, to seek to preserve our current level of tax expense.
In 2002, we reorganized from the U.S. to a foreign jurisdiction. There are frequent legislative proposals in the United States that attempt to treat companies that have undertaken similar transactions as U.S. corporations subject to U.S. taxes or to limit the tax deductions or tax credits available to United States subsidiaries of these corporations. Our tax expense could be impacted by changes in tax laws, tax treaties or tax regulations or the interpretation or enforcement thereof or differing interpretation or enforcement of applicable law by the U.S. Internal Revenue Service and other taxing jurisdictions, acting in unison or separately. The inability to reduce our tax expense could have a material impact on our consolidated financial statements.
In October 2021, the Organization of Economic Cooperation and Development (“OECD”), which represents a coalition of member countries, advanced reforms focused on global profit allocation and implementing a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as “Pillar Two.” The reform has been agreed upon by the majority of OECD members. The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two Global Minimum Tax. In December 2022, the European Council formally adopted a European Union directive on the implementation of the plan by January 1, 2024. Numerous countries, including Ireland, have enacted legislation implementing Pillar Two effective January 1, 2024. However, the OECD and countries are continuing to evaluate and adjust the Global Minimum Tax rules through administrative guidance, including legislative updates and adoption by additional countries, which could result in an increase in our effective tax rate.
Our effective tax rate has fluctuated in the past and may fluctuate in the future. Future effective tax rates could be affected by changes in the composition of earnings in countries in which we operate with differing tax rates, non-income-based taxes, changes in tax laws, or changes in deferred tax assets and liabilities. We assess our deferred tax assets on a quarterly basis to determine whether a valuation allowance may be required. We have recorded a valuation allowance on approximately 88% of our deferred tax assets.
The United States could treat Weatherford International plc (our parent corporation) as a United States taxpayer under IRC Section 7874.
Because Weatherford International plc is organized under the laws of Ireland, we would generally be classified as a foreign corporation for U.S. tax purposes under the general rule that a corporation is considered tax resident in the jurisdiction of its organization or incorporation for U.S. federal income tax purposes. However, the IRS may assert that we should be treated as a U.S. corporation (and therefore, a U.S. tax resident) for U.S. federal income tax purposes pursuant to Section 7874 of the U.S. Internal Revenue Code of 1986, as amended. In addition, a retroactive change to U.S. tax laws in this area could change this classification. If we are to be treated as a U.S. corporation for federal tax purposes, we could be subject to substantially greater U.S. tax liability than currently contemplated as a non-U.S. corporation.
The rights of our shareholders are governed by Irish law; Irish law differs from the laws in effect in the United States and may afford less protection and increased obligations to holders of our securities.
As an Irish company, we are governed by the Irish Companies Act, which differs in some material respects from laws generally applicable to U.S. corporations and shareholders, including, among others, provisions relating to interested directors, mergers and acquisitions, takeovers, shareholder lawsuits and indemnification of directors. Likewise, the duties of directors and officers of an Irish company generally are owed to the company only. Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances. Accordingly, holders of our securities may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in a jurisdiction of the United States. In addition, depending on the circumstances, the acquisition, ownership and/or disposition of our ordinary shares may subject shareholders to different or additional tax consequences under Irish law including, but not limited to, Irish stamp duty, dividend withholding taxes and capital acquisitions taxes.
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Table of Contents Item 1 | Business
We are incorporated in Ireland and a significant portion of our assets are located outside the United States. As a result, it might not be possible for shareholders to enforce civil liability provisions of the federal or state securities laws of the United States.
We are organized under the laws of Ireland, and a significant portion of our assets are located outside the United States. The United States currently does not have a treaty with Ireland providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. As such, a shareholder who obtains a court judgment based on the civil liability provisions of U.S. federal or state securities laws may be unable to enforce the judgment against us in Ireland. In addition, there is some doubt as to whether the courts of Ireland and other countries would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers based on the civil liabilities provisions of the federal or state securities laws of the United States or would hear actions against us or those persons based on those laws. The laws of Ireland do, however, as a general rule, provide that the judgments of the courts of the United States have the same validity in Ireland as if rendered by Irish Courts. Certain important requirements must be satisfied before the Irish Courts will recognize the U.S. judgment. The originating court must have been a court of competent jurisdiction, the judgment must be final and conclusive, and the judgment may not be recognized if it was obtained by fraud, or its recognition would be contrary to Irish public policy. Any judgment obtained in contravention of the rules of natural justice or that is irreconcilable with an earlier foreign judgment would not be enforced in Ireland.
Similarly, judgments might not be enforceable in countries other than the United States where we have assets.
General Risks
A failure of our information systems, including the implementation of our new enterprise resource planning system, or other issues with our systems could have a material adverse affect on our business, financial condition, results of operations and cash flows and could adversely impact the effectiveness of our internal control over financial reporting.
We rely extensively on our information systems to manage our business, data, communications, supply chain, ordering, pricing, billing, inventory replenishment, accounting functions, and other processes. Our information systems are subject to damage or interruption from various sources, including obsolescence, power outages, computer and telecommunications failures, computer viruses, cyber security breaches, vandalism, severe weather conditions, catastrophic events, terrorism, and human error, and our disaster recovery planning cannot account for all eventualities. Our disaster recovery measures may or may not address all potential contingencies. If our infrastructure becomes damaged, fails to function properly, or otherwise becomes compromised or unavailable, we may incur substantial costs to repair or replace them, and we may experience loss of critical data or interruptions or delays in our ability to perform critical functions, which could adversely affect our business, operating results, or financial condition.
We have begun a multi-year process of implementing a cloud-based enterprise resource planning (“ERP”) system that will assist with the collection, storage, management and interpretation of data from our business activities to support future growth and to integrate significant processes.
ERP system implementations are complex and time-consuming and involve substantial expenditures on system software and implementation activities, as well as changes to business processes and internal control over financial reporting. The implementation of the ERP system may prove to be more difficult, costly, or time consuming than expected, and there can be no assurance that this system will continue to be beneficial to the extent anticipated. Any disruptions, delays or deficiencies in the design and implementation of our new ERP system, particularly ones that impact our financial reporting and accounting systems or our ability to provide services, send invoices, track payments or fulfill contractual obligations, could adversely affect our business, financial condition, results of operations and cash flows. Additionally, if the ERP system does not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess it adequately could be impacted, which could cause us to fail to meet our reporting obligations.
Furthermore, certain of our existing information infrastructure is aged and may require periodic modifications, upgrades, and replacements which may subject us to risks, including operating disruptions, substantial capital expenditures, or additional cost to implement. Any of the aforementioned interruptions, as well as the failure to properly or efficiently modify, upgrade, replace or implement our infrastructure on a timely basis could materially disrupt our operations, and have a material adverse effect on our financial results.
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Table of Contents Item 1B through Item 4 | Unresolved Staff Comments through Mine Safety
depletion
Lower oil and natural gas prices and lower rig count generally correlate to lower exploration and production spending, and higher oil and natural gas prices and higher rig count generally correlate to higher exploration and production spending. Therefore, our financial results are significantly affected by oil and natural gas prices as well as rig counts. As shown in the following tables, as of December 31, 2025 oil prices and rig counts were notably lower than at December 31, 2024. The drop in oil prices and rig counts since December 31, 2024 has coincided with reduced activity levels across our industry. Henry Hub natural gas prices increased as of December 31, 2025 compared to December 31, 2024, driven by both U.S. domestic gas demand and investment decisions on adding new export liquified natural gas capacity. Gas production additions, largely driven by positive liquified natural gas sentiment ahead of actual capacity additions, were sourced from a backlog of drilled but uncompleted wells and deferred start-ups.
The table below shows the average oil and natural gas prices for West Texas Intermediate (“WTI”) and Brent North Sea (“Brent”) crude oil and Henry Hub (“HH”) natural gas.
Year Ended December 31,
Oil price - WTI (1)
Oil price - Brent (1)
Natural Gas price - HH (2)
(1) Oil price measured in dollars per barrel (rounded to the nearest $0.01)
(2) Natural gas price measured in dollars per million British thermal units (Btu), or MMBtu
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Table of Contents Item 7 | MD&A
The table below shows historical average rig counts based on the weekly Baker Hughes Company rig count information.
Year Ended December 31,
North America
International (1)
Worldwide
(1) Prior period international rig count figures were retroactively adjusted by Baker Hughes in the third quarter of 2025.
In addition, there may be future impacts and effects on our industry in areas relating to global trade policy and tariffs, global conflicts and resulting sanctions, environmental regulation and others. As tariffs and trade policies continue to develop, the Company actively monitors for changes and adjusts operations to mitigate impacts. While they created some degree of margin dilution, tariffs did not have a material impact on the Company during the year ended December 31, 2025.
Consolidated Statements of Operations - Operating Income Summary
Revenues totaled $4,918 million in 2025, a decrease of $595 million, or 11% compared to 2024. Year-over-year in 2025, product revenues decreased 9% and service revenues decreased 12%. DRE, PRI and WCC were responsible for 52%, 19% and 17% of the decrease in revenues, respectively, with the remaining decrease from lower activity in integrated services and projects. Geographically, each region saw a decrease in revenue, with Latin America responsible for 83% of the decline, North America 11%, Europe/Sub-Sahara Africa/Russia 5% and Middle East/North Africa/Asia 1%. Year-over-year revenue decreases were primarily caused by a softening of the overall market which drove a decline in activity across segments and geographies.
Operating income of $756 million in the twelve months ended December 31, 2025, decreased 19% compared to $938 million in the twelve months ended December 31, 2024, primarily due to the decline in revenue, with a partial offset from lower cost of products and services, lower selling general, administrative and research and development costs and a gain on the sale of our pressure pumping business in Argentina. Cost of products and services of $3.38 billion decreased $221 million, or 6%, in 2025 compared to 2024, primarily due to the decline in product sales and a reduction in headcount leading to lower personnel costs. Our cost of products and services as a percentage of revenues was 69% in 2025 compared to 65% in 2024. The higher cost ratio was primarily due to fixed costs decreasing at a slower rate than revenues.
Selling, general, administrative and research and development costs of $772 million decreased $142 million primarily due to a decline in amortization expense and a reduction in headcount leading to lower personnel costs. These costs as a percentage of revenues were 16% in 2025, an improvement compared to 17% in 2024.
Gain on sale of business was $70 million in 2025 due to the sale of our pressure pumping business in Argentina during the second quarter of 2025. No sale of business occurred in 2024.
Restructuring charges were $58 million in 2025 and $42 million in 2024. The increase was driven by reductions to facility footprint and headcount as part of optimization and efficiency initiatives implemented in light of softening market conditions. See “Note 4 – Restructuring Charges” for additional information.
Other charges, net were $18 million in 2025 and $14 million in 2024. Other charges, net primarily included fees to third-party financial institutions related to collections of certain receivables from our largest customer in Mexico and other miscellaneous items. Other charges, net increased primarily due to acquisition and divestiture related expenditures offset by lower fees related to collections of certain receivables from our largest customer in Mexico in 2025.
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Table of Contents Item 7 | MD&A
Consolidated Statements of Operations - Non-Operating Summary
Interest Expense, Net
Interest expense, net was primarily the result of the interest on our outstanding long-term debt (see “Note 9 – Borrowings and Other Debt Obligations” to our Consolidated Financial Statements for additional details) offset by interest income. Interest expense, net, of $91 million in 2025, decreased $11 million, or 11%, compared to 2024 primarily from lower interest expense due to a reduction in our outstanding long-term debt. This was partly offset by a decline in interest income due to a reduction in our cash holdings in Argentina upon the execution of multiple Blue Chip Swaps (defined below). See “Note 18 – Blue Chip Swap Securities - Argentina” to our Consolidated Financial Statements for additional details.
Extinguishment of Debt and Bond Redemption Premium
The loss on extinguishment of debt was for charges on unamortized debt issuance costs and bond redemption premiums, both upon the early redemption of debt. During 2025, we issued $1.2 billion in aggregate principal on our 2033 Senior Notes and we repaid $1.36 billion in principal of our 2030 Senior Notes. As such, we recognized a $39 million loss, comprised of an $8 million loss on extinguishment of debt and $31 million bond redemption premium. During 2024, we repaid in full our 6.5% Senior Secured Notes due 2028 (“2028 Senior Secured Notes”) and $4 million in principal of our 2030 Senior Notes, resulting in a bond redemption premium of $9 million. During 2023, we repaid the remaining $125 million in principal on our Exit Notes and made $243 million in repayments and repurchases of our 2028 Senior Secured Notes, and incurred a $5 million bond redemption premium.
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, 2025 and 2024, we entered into a series of BCS securities transactions that resulted in a “Loss on Blue Chip Swap Securities” of $2 million and $10 million, respectively. See “Note 18 – Blue Chip Swap Securities - Argentina” to our Consolidated Financial Statements for additional details.
Other Expense, Net
Other expense, net, was primarily comprised of foreign exchange losses, letter of credit fees and other financing charges. Other expense, net, of $70 million was $8 million lower in 2025 as compared to 2024, which was primarily attributable to lower foreign currency losses. Foreign currency losses totaled $45 million and $56 million in 2025 and 2024, respectively, with decrease in 2025 primarily due to lower foreign currency losses in the Mexican Peso.
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 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 $97 million and 18% and $189 million and 26% for 2025 and 2024, respectively.
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Table of Contents Item 7 | MD&A
Our income tax provisions in 2025 and 2024 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 did 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, 2025, income tax expense was lower than 2024, primarily driven by the release of $70 million in benefits from previously uncertain tax positions due audit settlements and lapses in the statute of limitations, partially offset by a decrease in the amount of valuation allowance releases as compared to 2024.
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.
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Results of Operations by Segment
Year Ended December 31, 2025
Reportable Segments
All
(Dollars in millions)
DRE
WCC
PRI
Other
Total
Revenue
Direct Costs (a)
Other Expense (b)
DRE Segment Adjusted EBITDA
WCC Segment Adjusted EBITDA
PRI Segment Adjusted EBITDA
All Other
Corporate
Depreciation and Amortization
Share-based Compensation Expense (c)
Gain on Sale of Business
Restructuring Charges
Other Charges, Net
Operating Income
(a) Segment cost of sales and direct operating costs.
(b) Segment selling, general and administrative and research and development costs.
(c) See “Note 14 – Share-Based Compensation” for additional information.
Year Ended December 31, 2024
Reportable Segments
All
(Dollars in millions)
DRE
WCC
PRI
Other
Total
Revenue
Direct Costs (a)
Other Expense (b)
DRE Segment Adjusted EBITDA
WCC Segment Adjusted EBITDA
PRI Segment Adjusted EBITDA
All Other
Corporate
Depreciation and Amortization
Share-based Compensation Expense (c)
Restructuring Charges
Other Charges, Net
Operating Income
(a) Segment cost of sales and direct operating costs.
(b) Segment selling, general and administrative and research and development costs.
(c) See “Note 14 – Share-Based Compensation” for additional information.
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Table of Contents Item 7 | MD&A
Year Ended December 31, 2023
Reportable Segments
All
(Dollars in millions)
DRE
WCC
PRI
Other
Total
Revenue
Direct Costs (a)
Other Expense (b)
DRE Segment Adjusted EBITDA
WCC Segment Adjusted EBITDA
PRI Segment Adjusted EBITDA
All Other
Corporate
Depreciation and Amortization
Share-based Compensation Expense (c)
Gain on Sale of Business
Restructuring Charges
Other Credits, Net
Operating Income
(a) Segment cost of sales and direct operating costs.
(b) Segment selling, general and administrative and research and development costs.
(c) See “Note 14 – Share-Based Compensation” for additional information.
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Table of Contents Item 7 | MD&A
DRE Results
Twelve Months Ended
Variance
($ in Millions)
Dec 31, 2025
Dec 31, 2024
% or bps
Revenue
Direct Costs
Other Expense
Segment Adjusted EBITDA
Segment Adj EBITDA Margin
bps
DRE revenues of $1.4 billion in 2025 decreased by $311 million or 18% compared to 2024 with approximately 50% of the decrease from lower activity in drilling-related services and approximately 25% of the decrease attributable to a decline in activity for managed pressure drilling. Geographically, approximately 85% of the revenue decrease was from the Latin America region primarily due to a decline in activity in Mexico.
DRE segment adjusted EBITDA of $309 million in 2025 decreased by $158 million or 34% compared to 2024. DRE segment adjusted EBITDA margin was 22.5% in 2025 compared to 27.8% in 2024. The year-over-year decrease in segment adjusted EBITDA was primarily due to a decline in activity in Latin America. Both direct costs and other expense generally decreased in line with the decrease in activity. However, the rate of decrease in direct costs and other expense was lower than the rate of decrease in revenue, contributing to the decrease in margin.
WCC Results
Twelve Months Ended
Variance
($ in Millions)
Dec 31, 2025
Dec 31, 2024
% or bps
Revenue
Direct Costs
Other Expense
Segment Adjusted EBITDA
Segment Adj EBITDA Margin
bps
WCC revenues of $1.9 billion in 2025 decreased by $101 million or 5% compared to 2024 with approximately 70% of the decrease from lower activity in cementation products and approximately 30% of the decrease attributable to a decline in activity for completions. Geographically, approximately 65% of the decrease was from Latin America due to a decline in activity in Mexico and approximately 30% of the decrease was from the Europe/Sub-Sahara Africa/Russia region. The remainder of the decrease was driven by North America, but mostly offset by a revenue increase of $18 million in the Middle East/North Africa/Asia region.
WCC segment adjusted EBITDA of $515 million in 2025 decreased by $49 million or 9% compared to 2024. WCC segment adjusted EBITDA margin was 27.5% in 2025 compared to 28.5% in 2024. The year-over-year decrease in segment adjusted EBITDA was primarily due to a decline in activity in cementation products across geographies and a decline in completions in the Latin America and Europe/Sub-Sahara Africa/Russia regions. The declines were partly offset by liner hanger activity in the Middle East/North Africa/Asia region. Both direct costs and other expense generally decreased in line with the decrease in activity. However, the rate of decrease in direct costs and other expense was lower than the rate of decrease in revenue, contributing to the decrease in margin.
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PRI Results
Twelve Months Ended
Variance
($ in Millions)
Dec 31, 2025
Dec 31, 2024
% or bps
Revenue
Direct Costs
Other Expense
Segment Adjusted EBITDA
Segment Adj EBITDA Margin
bps
PRI revenues of $1.3 billion in 2025 decreased by $112 million or 8% compared to 2024 with approximately 65% of the decrease from lower activity in intervention services and drilling tools and approximately 45% of the decrease attributable to a decline in activity for pressure pumping. The sale of our pressure pumping business in Argentina in the second quarter was the primary contributor to the decline in pressure pumping activity. The decrease in revenue was partly offset by a revenue increase of $15 million from sub-sea intervention activity. Geographically, approximately 80% of the revenue decrease was from the Latin America region.
PRI segment adjusted EBITDA of $257 million in 2025 decreased by $62 million or 19% compared to 2024. PRI segment adjusted EBITDA margin was 19.2% in 2025 compared to 22.0% in 2024. The year-over-year decrease in segment adjusted EBITDA was primarily due to a decline in activity in intervention services and drilling tools across all geographies and a decline in pressure pumping, primarily in the Latin America region. Both direct costs and other expense generally decreased in line with the decrease in activity. However, the rate of decrease in direct costs and other expense was lower than the rate of decrease in revenue, contributing to the decrease 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 $332 million, decreased $71 million or 18%, in 2025 compared to 2024 due to a decline in international activity for integrated services and projects.
Corporate
Corporate was a net expense of $56 million in 2025, which was slightly up compared to the net expense of $52 million in 2024.
Depreciation and Amortization
Depreciation and amortization expense in 2025 was $267 million, a decrease of $76 million compared to 2024 primarily due to certain intangible assets reaching full amortization in the fourth quarter of 2024. See “Note 2 – Segment Information”, “Note 6 – Property, Plant and Equipment, Net” and “Note 7 – Intangible Assets, Net” 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 $38 million in 2025 and $45 million in 2024. The year-over-year decrease was primarily due to the vesting of previously granted equity awards, resulting in a lower number of unvested awards subject to expense recognition. See “Note 14 – Share-Based Compensation” for additional information.
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Outlook
Growth and spending in the energy services industry is highly dependent on many external factors. These include but are not limited to; the impact from geopolitical conflicts; our customers’ capital expenditures; environmental, social and governance and other sustainability policies and initiatives; world economic, political, trade, and weather conditions; the price of oil, natural gas, and alternatives; member-country quota compliance within the Organization of Petroleum Exporting Countries and the expanded alliance (OPEC+); non-OPEC+ investments and project timing. Imbalance across geographies driven by geopolitical conflicts, investment variances and demand growth alignment with supply stability are driving a greater focus on energy markets balance. In the short term, we see continued focus on capital discipline and efficiencies across all geographies, which we expect to result in muted activity for our services and products, particularly in the first half of 2026, as our customers regulate activity timing and services spending, relative to macro-driven factors listed above. We expect activity to improve in the second half of 2026, resulting in a full year that is slightly lower to in line with 2025.
We remain constructive on our activity profile over the next several years, as we expect positive macroeconomic conditions coupled with our focus on technology adoption and market penetration, to provide a pathway to multi-year energy demand expansion. The mix of customer spending related to regional and operating environment factors (short-cycle vs. long-cycle projects, offshore vs onshore, reservoir and well development cycles) may also influence the timing, type, and intensity of demand for products and services within our portfolio. We continue to closely monitor macroeconomic conditions, potential supply chain disruptions, inflationary factors, and other labor and logistical constraints that could impact our operations and results. Unpredictable developments—such as the potential opening of Venezuela to foreign oil companies—may increase activity levels in the mid to long term.
Our customers continue to face challenges in balancing the cost of extraction activities with securing desired rates of production while achieving acceptable rates of return on investment. These challenges increase our customers’ requirements for technologies that improve productivity and efficiency and pressure us to deliver our products and services at competitive rates. Over the long-term, we expect demand for oil and natural gas exploration and production as well as new energy platforms to continue to require more advanced technology from the energy service industry. Weatherford delivers innovative energy services that integrate proven technologies with advanced digitization to create sustainable offerings for maximized value and return on investment. We continue to expand our product and services offerings across the well cycle, including well construction and completions remote monitoring, and predictive analytics. We believe we are well positioned to satisfy our customers’ needs, but the level of improvement in our businesses in the future will continue to depend heavily on pricing, volume of work, our ability to offer cost efficient, innovative and effective technology solutions, and our success in gaining market share in new and existing markets.
We continue to follow our long-term strategy, aimed at achieving sustainable profitability and cash flow generation in our businesses, servicing our customers and creating value for our shareholders. Our long-term success will be determined by our ability to effectively manage the cyclicality of our industry, including growth during up-cycles and potential prolonged industry downturns, our ability to respond to industry changes and demands, while managing through risks we may be exposed to, and ultimately our ability to generate consistent positive cash flow and positive returns on invested capital.
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Table of Contents Item 7 | MD&A
Liquidity and Capital Resources
At December 31, 2025, we had cash and cash equivalents of $987 million and $55 million in restricted cash, compared to $916 million of cash and cash equivalents and $59 million of restricted cash at December 31, 2024. The following table summarizes cash provided by (used in) each type of business activity in the periods presented:
Year Ended December 31,
(Dollars in millions)
Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Used in Financing Activities
Operating Activities
Cash provided by operating activities was $676 million in 2025 and $792 million in 2024. The primary operating source of cash in each year was collections related to our sales of products and services, partly offset by operating spend. The year-over-year decrease was primarily due to a decrease in collections as a result of decreased revenue, partially offset by lower employee costs and an increase in cash proceeds from factoring arrangements (see “Liquidity and Capital Resources - Accounts Receivable Factoring” below).
Investing Activities
Cash used in investing activities in 2025 was $145 million. The primary uses of cash in investing activities were for capital expenditures of $226 million and the purchase of Blue Chip Swap securities in Argentina for $117 million (see “Note 18 – Blue Chip Swap Securities - Argentina”). The uses of cash were partially offset by Blue Chip Swap proceeds of $115 million and $97 million of proceeds received from the sale of our pressure pumping business in Argentina (see “Note 2 – Segment Information”).
Cash used in investing activities in 2024 was $293 million. The uses of cash in investing activities were for capital expenditures of $299 million, business acquisitions net of cash acquired of $51 million and the purchase of Blue Chip Swap securities in Argentina for $50 million (see “Note 18 – Blue Chip Swap Securities - Argentina”). The uses of cash were offset by proceeds from sale of investments of $41 million from our marketable securities in Argentina, Blue Chip Swap proceeds of $40 million and $31 million in proceeds from the disposition of assets.
Financing Activities
Cash used in financing activities in 2025 was $474 million. The primary uses of cash in financing activities were for repayments and repurchases of long-term debt of $1.4 billion (see “Note 9 – Borrowings and Other Debt Obligations”), $101 million for share repurchases (see “Note 15 – Shareholders’ Equity”), $72 million for dividend payments (see “Note 15 – Shareholders’ Equity”), bond redemption premium of $31 million resulting from early redemptions, distributions to noncontrolling interests of $29 million, $21 million in tax remittances on equity awards and $18 million in debt issuance costs. The uses of cash were offset by $1.2 billion in proceeds from the issuance of our 2033 Senior Notes.
Cash used in financing activities in 2024 was $511 million. The primary uses of cash in financing activities were for repayments and repurchases of long-term debt of $287 million (see “Note 9 – Borrowings and Other Debt Obligations”), $99 million for share repurchases (see “Note 15 – Shareholders’ Equity”), $36 million for dividend payments (see “Note 15 – Shareholders’ Equity”) and distributions to noncontrolling interests of $39 million. In addition, we paid $31 million in tax remittances on equity awards. The remaining financing cash uses were primarily for bond redemption premiums and contingent considerations.
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Table of Contents Item 7 | MD&A
Sources of Liquidity
Our sources of available liquidity include cash generated by our operations, cash and cash equivalent balances, and periodic accounts receivable factoring. From time to time, we may enter into transactions to dispose of businesses or capital assets that no longer fit our long-term strategy. We historically have accessed banks for short-term loans and the capital markets for debt and equity offerings. Based upon current and anticipated levels of operations and collections, we expect to have sufficient cash from operations and cash on hand to fund our cash requirements (discussed below) and financial obligations, both in the short-term and long-term.
Cash Requirements
Our cash requirements will continue to include payments for principal and interest on our long-term debt, capital expenditures, payments on our finance and operating leases, payments for short-term working capital needs, operating costs, shareholder returns and restructuring payments. We expect to utilize cash in our capital allocation framework, which includes investments in technology and infrastructure upgrades, and in strategic mergers and acquisitions. Our cash requirements also include personnel costs including awards under our employee incentive programs and other amounts to settle litigation related matters. In addition, we have derivative financial instruments where we have notional amounts that do not generally represent cash amounts exchanged by the parties and are calculated based on the terms of the derivative instrument, however, in the event of a related default, we could potentially be required to pay. See further discussion below under “Derivative Financial Instruments” and in “Note 11 – Derivative Financial Instruments.”
As of December 31, 2025, we had outstanding debt of $236 million in aggregate principal amount for our 2030 Senior Notes and $1.2 billion in aggregate principal amount for our 2033 Senior Notes. We expect $103 million in interest payments annually in 2026 and $101 million each year thereafter until the maturity of our 2030 and 2033 Senior Notes. See “Note 9 – Borrowings and Other Debt Obligations” for additional information.
Our capital spend is expected to be 3-5% of revenue over a 12 to 18 months rolling period and our 2026 capital spend is projected to fall within the same framework. Our payments on our operating and finance leases in 2026 are expected to be approximately $91 million, and $232 million in the years thereafter. See “Note 8 – Leases” for additional information.
Cash and cash equivalents and restricted cash are held by subsidiaries outside of Ireland. At December 31, 2025 we had approximately $31 million of our cash and cash equivalents that cannot be immediately repatriated from various countries due to country central bank controls or other regulations. Repatriation of those cash balances might result in incremental taxes or losses similar to the Argentine Blue Chip Swap “BCS” transactions executed (see “Note 18 – Blue Chip Swap Securities - Argentina”), which may contribute to a decrease in cash and cash equivalents. As we continue to conduct business in countries with cash that cannot be immediately repatriated, we may consider infrequent transactions like the BCS transaction in the future to safeguard our cash from exposure to the effects of inflation and currency devaluation.
Ratings Services’ Credit Ratings
Our credit ratings at December 31, 2025 were upgraded since December 31, 2024 as follows:
• Moody's Investors Service upgraded our Corporate Family Rating from ‘Ba3’ to ‘Ba2;’ with a positive outlook
• Standard and Poor upgraded our issuer credit ratings from ‘BB-’ to ‘BB;’ with a stable outlook
• Fitch Ratings upgraded our issuer credit ratings from ‘BB-’ to ‘BB;’ with a stable outlook
Customer Receivables
We may experience delays or defaults in customer payments due to, among other reasons, a weaker economic environment, reductions in our customers’ cash flow from operations, our customers’ inability to access credit markets or reach acceptable financing terms, as well as unsettled political and/or social conditions. Allowances have been recorded for receivables believed to be uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices. Adjustments to the allowance are made depending on how potential issues are resolved and the financial condition of our customers. In addition, our customers are primarily in fossil fuel-related industries and broad declines in demand for or pricing of oil or natural gas might impact the collections of our customer receivables.
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Table of Contents Item 7 | MD&A
As of December 31, 2025, and December 31, 2024, Mexico accounted for 27% and 31% of our total net accounts receivables, respectively, of which our largest customer in the country accounted for 24% and 26% of our total net outstanding accounts receivables, respectively. Our largest customer in Mexico has a history of making late payments and, in more recent periods, has utilized third-party financial institutions to pay certain of our receivables. The balances due are not in dispute, however, additional or continued delays in customer payments in the future could differ from historical practice and management’s current expectations; and delays or failures to pay or defaults, if any, could negatively impact the future results of the Company.
During the twelve months ended December 31, 2025 and December 31, 2024 we paid an immaterial amount of fees to third-party financial institutions related to collections of certain receivables from our largest customer in Mexico. Pursuant to such arrangements, we received $93 million during the twelve months ended December 31, 2025 and $484 million during the twelve months ended December 31, 2024.
Accounts Receivable Factoring
From time to time, we participate in factoring arrangements to sell accounts receivable to third-party financial institutions for cash proceeds net of discounts and hold-back. During 2025 and 2024, we sold accounts receivable balances of $250 million and $111 million, respectively, and received cash proceeds of $247 million and $110 million, respectively, at the time of factoring. These proceeds are included as operating cash flows in our Consolidated Statements of Cash Flows.
Derivative Financial Instruments
We enter into foreign currency forward contracts to mitigate the risk of fluctuating exchange rates on future cash flows denominated in a foreign currency. The amounts will fluctuate, depending on exchange rate volatility, the volume of our foreign currency transactions, and our decisions to hedge. During the fourth quarters of 2024 and 2023, we entered into credit default swaps (“CDS”), further described below. The notional amounts of our foreign currency forward contracts and the CDS do not generally represent cash amounts exchanged by the parties and are calculated based on the terms of the derivative instrument. See also “Note 11 – Derivative Financial Instruments” for additional information.
Credit Default Swap
During the fourth quarter of 2024, we entered into a CDS with a third-party financial institution terminating in September of 2026 related to a secured loan between that third-party financial institution and our largest customer in Mexico. The secured loan was utilized by this customer to pay certain of our outstanding receivables and accordingly, in the fourth quarter of 2024, we received $25 million. The fair value of the derivative was not material as of December 31, 2025 and December 31, 2024. Under the CDS terms, within five business days upon notification of default, we could be required to pay the then outstanding notional balance net of recoveries. As of December 31, 2025, we had a notional balance of $14 million outstanding under the CDS and as of December 31, 2024 we had a notional balance of $25 million outstanding. Management expects the total notional balance under the CDS to be nil by December 31, 2026.
A CDS was entered into during the fourth quarter of 2023 with the same parties for similar reasons as in the fourth quarter of 2024, and accordingly, in the first quarter of 2024, we received $142 million. The agreement was terminated in the third quarter of 2024, extinguishing the remaining notional balance.
Guarantees
Our 2030 Senior Notes were issued by Weatherford International Ltd., a Bermuda exempted company (“Weatherford Bermuda”), and guaranteed by the Company and other subsidiary guarantors party thereto. On December 1, 2022, the indenture related to our 2030 Senior Notes was amended and supplemented to add Weatherford International, LLC, a Delaware limited liability company (“Weatherford Delaware”) as co-issuer and co-obligor, and concurrently released the guarantee of Weatherford Delaware.
Our 2033 Senior Notes were issued by Weatherford Bermuda and guaranteed by the Company and other subsidiary guarantors party thereto. On October 24, 2025, the indenture related to our 2033 Senior Notes was amended and supplemented to add Weatherford Delaware as co-issuer and co-obligor, and concurrently released the guarantee of Weatherford Delaware. See “Note 9 – Borrowings and Other Debt Obligations” for additional information.
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Table of Contents Item 7 | MD&A
Credit Agreement, Letters of Credit and Surety Bonds
Weatherford Bermuda, Weatherford Delaware, Weatherford Canada Ltd. (“Weatherford Canada”) and WOFS International Finance GmbH (“Weatherford Switzerland”), together as borrowers, and the Company as parent, have an amended and restated credit agreement (the “Credit Agreement”). The Credit Agreement is guaranteed by the Company and certain of our subsidiaries and secured by substantially all of the personal property of the Company and those subsidiaries. At December 31, 2025, the Credit Agreement allowed for a total commitment amount of $1 billion, maturing on the earlier of (a) September 18, 2030 and (b) to the extent that more than $200 million of 2030 Senior Notes or Permitted Refinancing Indebtedness in respect thereof is outstanding on such date, the date that is 91 days prior to the stated maturity date of the Senior Notes or any Permitted Refinancing Indebtedness in respect thereof. Financial covenants in the Credit Agreement include a $250 million minimum liquidity covenant (which may increase up to $400 million dependent on the nature of transactions we may decide to enter into), a minimum interest coverage ratio of 2.50 to 1.00, a maximum total net leverage ratio of 3.50 to 1.00, and a maximum secured net leverage ratio of 1.50 to 1.00.
On September 18, 2025, we amended the Credit Agreement to (i) allow for an increase in total commitment amount from $720 million to $1 billion comprised of $600 million to be used either for revolving loans or financial letters of credit and $400 million to be used for performance letters of credit, (ii) extend the maturity date to the earlier of September 18, 2030 or January 29, 2030 if more than $200 million of 2030 Senior Notes or Permitted Refinancing Indebtedness are outstanding on that date and (iii) include an accordion feature that will allow for further increases of commitments up to $1.15 billion.
As of December 31, 2025, under the Credit Agreement we had zero borrowings, $7 million in financial letters of credit and $245 million in performance letters of credit outstanding. Additionally as of December 31, 2025, we had $207 million letters of credit under various uncommitted bi-lateral facilities ($47 million of which was cash collateral held and recorded in “Restricted Cash” on the Consolidated Balance Sheets).
As of December 31, 2024, under the Credit Agreement we had zero borrowings, $12 million in financial letters of credit and $279 million in performance letters of credit outstanding. Additionally as of December 31, 2024, we had $91 million of letters of credit under various uncommitted bi-lateral facilities ($49 million of which was cash collateral held and recorded in “Restricted Cash” on the Consolidated Balance Sheets).
We utilize surety bonds as part of our customary business practice in certain regions, primarily Latin America. As of December 31, 2025, we had $629 million of surety bonds outstanding. A breach of certain contractual or performance obligations under our outstanding letters of credit or surety bonds could result in beneficiaries calling such instruments, which could reduce our available liquidity if we are unable to mitigate the issue.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operation is based upon our Consolidated Financial Statements. We prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As such, we are required to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience and available information and various other assumptions we believe to be reasonable under the circumstances. On an on-going basis, we evaluate our estimates, however, actual results may differ from these estimates under different assumptions or conditions. The accounting policies we believe require management’s most difficult, subjective or complex judgments and are the most critical to our reporting of results of operations and financial position are as follows:
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Table of Contents Critical Accounting Policies and Estimates
Long-Lived Assets
Long-lived assets, which include property, plant and equipment (“PP&E”), definite-lived intangibles and operating lease assets, comprise a significant amount of our assets. The carrying value of our long-lived assets at December 31, 2025 and December 31, 2024 was approximately $1.5 billion. The cost of the long-lived assets is then amortized over their expected useful life or their respective lease terms, if applicable. A change in the estimated useful lives of our long-lived assets would have an impact on our results of operations. We estimate the useful lives of our long-lived assets over their respective lease terms, if applicable, or as follows:
Assets
Estimated Useful Lives
Buildings and Leasehold I mprovements
10 – 40 years
Rental and Service Equipment
3 – 10 years
Machinery and Other
2 – 12 years
Intangible Assets
5 – 10 years
In estimating the useful lives of our PP&E, we rely primarily on our actual experience with the same or similar assets. The useful lives of our intangible assets are determined by the years over which we expect the assets to generate a benefit based on legal, contractual or regulatory terms.
Long-lived assets to be held and used by us are reviewed to determine whether any events or changes in circumstances, known as triggering events, indicate that we may not be able to recover the carrying amount of the asset group. Triggering events include, but are not limited to, reduced or expected sustained decreases in cash flows generated by an asset group, negative changes in industry conditions (such as global rig count, commodity prices, and the global economy), a significant change in the long-lived assets’ use or physical condition, the introduction of competing technologies, and legal and regulatory challenges. The Company groups individual assets at the lowest level of identifiable cash flows and, if impairment triggers are present, performs an undiscounted cash flow analysis to identify asset groups that may not be recoverable. If the undiscounted cash flows do not exceed the carrying value of the long-lived asset group, the asset group is not recoverable, and impairment is recognized to the extent the carrying amount exceeds the estimated fair value of the asset group. A fair value assessment is performed on asset groups identified as not being recoverable using a discounted cash flow analysis or Level 3 fair value analysis, to determine if an impairment has occurred. The discounted cash flow analysis consists of estimating the future cash flows that are directly associated with, and are expected to arise from, the use and eventual disposition of the asset group over its remaining useful life. These estimated discounted cash flows are inherently subjective and include significant assumptions, specifically the forecasted revenue, forecasted operating margins, and the discount rate assumptions and require estimates based upon historical experience and future expectations. The fair value of the asset group is measured using market prices, or in the absence of market prices, is based on an estimate of discounted cash flows. Cash flows are discounted at an interest rate commensurate with our weighted average cost of capital for a similar asset.
If an impairment has occurred, the Company recognizes a loss for the difference between the carrying amount and the fair value of the asset group.
We group long-lived assets by product line. We have long-lived assets, such as facilities, utilized by multiple operating divisions that do not have identifiable cash flows and impairment testing for these long-lived assets is based on the consolidated entity. We did not recognize long-lived assets impairments during 2025, 2024 and 2023.
Management cannot predict the occurrence of future impairment-triggering events, so we continue to assess whether indicators of impairment to long-lived assets exist due to the current business conditions in the energy services industry.
Income Taxes
We take into account the differences between the financial statement treatment and tax treatment of certain transactions. 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. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates is recognized as income or expense in the period that includes the enactment date. See “Note 17 – Income Taxes” for detailed discussion of results.
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Table of Contents Critical Accounting Policies and Estimates
We recognize the impact of an uncertain tax position taken or expected to be taken on an income tax return in the financial statements at the largest amount that is more likely than not to be sustained upon examination by the relevant taxing authority.
We operate in approximately 75 countries through hundreds of legal entities. As a result, we are subject to numerous tax laws in the jurisdictions, and tax agreements and treaties among the various taxing authorities. Our operations in these jurisdictions in which we operate are taxed on various bases: income before taxes, deemed profits (which is generally determined using a percentage of revenues rather than profits), withholding taxes based on revenue, and other alternative minimum taxes. The calculation of our tax liabilities involves consideration of uncertainties in the application and interpretation of complex tax regulations in a multitude of jurisdictions across our global operations. We recognize potential liabilities and record tax liabilities for anticipated tax audit issues in the tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. The tax liabilities are reflected net of realized tax loss carryforwards. We adjust these reserves upon specific events; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is different from our current estimate of the tax liabilities.
If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If payment of these amounts ultimately proves to be less than the recorded amounts, the reversal of the liabilities would result in tax benefits being recognized in the period when the contingency has been resolved and the liabilities are no longer necessary. Changes in tax laws, regulations, agreements and treaties, foreign currency exchange restrictions or our level of operations or profitability in each taxing jurisdiction could have an impact upon the amount of income taxes that we provide during any given year.
Effective January 1, 2024, Ireland enacted tax legislation that models the Organization of Economic Cooperation and Development (“OECD”) reform plans focused on global profit allocation and implementing a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as “Pillar Two.” This did not materially increase taxes in 2025 and 2024 and is not expected to materially increase future taxes.
Valuation Allowance for Deferred Tax Assets
We record a valuation allowance to reduce the carrying value of our deferred tax assets when it is more likely than not that a portion or all of the deferred tax assets will expire before realization of the benefit. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character and in the related jurisdiction in the future. In evaluating our ability to recover our deferred tax assets, we consider the available positive and negative evidence, including our past operating results, the existence of cumulative losses in the most recent years and our forecast of near-term future taxable income and various tax planning strategies.
When the likelihood of the realization of existing deferred tax assets changes, adjustments to the valuation allowance are charged to our income tax provision in the period in which the determination is made. The Company concluded it was not able to realize the benefits of certain of its deferred tax assets and has established a valuation allowance. Our valuation allowance on our deferred tax assets was $1.1 billion as of December 31, 2025 and December 31, 2024.
Forward-Looking Statements
This report contains various statements relating to future financial performance and results, business strategy, plans, goals and objectives, including certain projections, business trends, our shareholder returns program and other statements that are not historical facts. These statements constitute forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “budget,” “strategy,” “plan,” “guidance,” “outlook,” “may,” “should,” “could,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions, although not all forward-looking statements contain these identifying words.
Forward-looking statements reflect our beliefs and expectations based on current estimates and projections. While we believe these expectations, and the estimates and projections on which they are based, are reasonable and were made in good faith, these statements are subject to numerous risks and uncertainties. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. The forward-looking statements included herein are only made as of the date of this report, or if earlier, as of the date they were made, and we undertake no obligation to correct, update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except to the extent required under federal securities laws. The following, together with disclosures under “Part I – Item 1A. Risk Factors”, sets
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Table of Contents Forward-Looking Statements
forth certain risks and uncertainties relating to our forward-looking statements that may cause actual results to be materially different from our present expectations or projections:
• global political, economic and market conditions, political disturbances, war or other global conflicts, terrorist attacks, changes in global trade policies, tariffs and sanctions, weak local economic conditions and international currency fluctuations (including the Russia Ukraine Conflict, conflicts in the Middle East and instability in Latin America);
• general global economic repercussions related to U.S. and global inflationary pressures and potential recessionaryconcerns;
• failure to ensure on-going compliance with current and future laws and government regulations, including but not limited to those related to the Russia Ukraine Conflict, and environmental and tax and accounting laws, rules and regulations;
• changes in, and the administration of, treaties, laws, and regulations, including in response to issues related to the Russia Ukraine Conflict and conflicts in the Middle East or Latin America, such as nationalization of assets, and the potential for such issues to exacerbate other risks and uncertainties listed or referenced;
• increases in the prices and lead times, and the lack of availability of our procured products and services, including due to macroeconomic and geopolitical conditions such as tariffs and changes in trade policies;
• our ability to timely collect from customers;
• cybersecurity incidents, as our reliance on digital technologies increases, those digital technologies may become more vulnerable and/or experience a higher rate of cybersecurity attacks, intrusions or incidents in the current environment of remote connectivity, as well as increased geopolitical conflicts and tensions, including as a result of the Russia Ukraine Conflict;
• our ability to comply with, and respond to, climate change, environmental, social and governance and other “sustainability” initiatives and future legislative and regulatory measures both globally and in the specific geographic regions in which we and our customers operate;
• our ability to effectively and timely address the need to conduct our operations and provide services to our customers more sustainably and with a lower carbon footprint;
• the price and price volatility of, and demand for, oil, natural gas and natural gas liquids;
• member-country quota compliance within the Organization of Petroleum Exporting Countries;
• our ability to realize expected revenues and profitability levels from current and future contracts;
• our ability to generate cash flow from operations to fund our operations;
• our ability to effectively and timely adapt our technology portfolio, products and services to remain competitive, and to address and participate in changes to the market demands, including for the transition to alternate sources of energy such as geothermal, carbon capture and responsible abandonment, and including our digitalization efforts and our incorporation of artificial intelligence tools;
• our ability to realize cost savings and business enhancements from our revenue and cost improvement efforts;
• our ability to effectively execute our capital allocation framework;
• our ability to attract, motivate and retain employees, including key personnel;
• our ability to access the capital markets on terms that are commercially acceptable to the Company;
• our ability to manage our workforce, supply chain challenges and disruptions, business processes, information technology systems and technological innovation and commercialization, including the impact of our enterprise resource planning system implementation, organization restructure, business enhancements, improvement efforts and the cost and support reduction plans;
• our ability to return capital to shareholders, including those related to the timing and amounts (including any plans or commitments in respect thereof) of any dividends and share repurchases;
• our ability to service our debt obligations;
• potential non-cash asset impairment charges for long-lived assets, intangible assets or other assets;
• adverse weather conditions in certain regions of our operations; and
• public health issues such as pandemics.
Many of these factors are macro-economic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, affect us in ways or to an extent that we currently do not expect or consider to be significant, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this report as anticipated, believed, estimated, expected, intended, planned or projected.
Finally, our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in our current and past filings with the SEC under the Exchange Act and the Securities Act of 1933, as amended.
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