UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

WEATHERFORD INTERNATIONAL LTD.

(Exact name of registrant as specified in its charter)

(Commission file number)

Switzerland		98-0606750
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
4-6 Rue Jean-Francois Bartholoni, 1204 Geneva, Switzerland		Not Applicable
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: +41-22.816.15.00
Alpenstrasse 15, 6300 Zug, Switzerland
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

     Yes þ      No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

     Yes o      No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer   o (Do not check if a smaller reporting company)		Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

     Yes o      No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

As of July 30, 2009, there were 727,702,595 shares of Weatherford registered shares, 1.16 Swiss francs par value per share, outstanding.

 

 

PART I.		FINANCIAL INFORMATION

ITEM 1.		FINANCIAL STATEMENTS

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)

		June 30,				December 31,
		2009				2008
		(unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents		$	205,272			$	238,398
Accounts Receivable, Net of Allowance for Uncollectible Accounts of $21,373 and $16,425, Respectively			2,189,769				2,442,848
Inventories			2,259,904				2,088,342
Current Deferred Tax Assets			250,579				270,252
Other Current Assets			728,704				530,442
Total Current Assets			5,634,228				5,570,282
Property, Plant and Equipment, Net of Accumulated Depreciation of $3,030,799 and $2,690,996, Respectively			6,533,003				5,922,172
Goodwill			3,643,511				3,530,915
Other Intangible Assets, Net of Accumulated Amortization of $311,144 and $268,857, Respectively			697,489				701,483
Equity Investments			488,820				515,770
Other Assets			368,608				235,891
Total Assets		$	17,365,659			$	16,476,513
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Short-term Borrowings and Current Portion of Long-term Debt		$	692,535			$	1,255,947
Accounts Payable			844,953				886,104
Other Current Liabilities			702,983				880,042
Total Current Liabilities			2,240,471				3,022,093
Long-term Debt			5,805,036				4,564,255
Other Liabilities			487,535				524,116
Total Liabilities			8,533,042				8,110,464
Shareholders’ Equity:
Shares, CHF 1.16 Par Value, Authorized 1,093,303 Shares, Conditionally Authorized 364,434 Shares, Issued 728,889 Shares at June 30, 2009, Common Shares, $1 Par Value, Authorized 1,000,000 Shares, Issued 728,689 Shares at December 31, 2008			728,889				728,689
Capital in Excess of Par Value			4,082,261				4,059,112
Treasury Shares, Net			(690,981	)			(759,477	)
Retained Earnings			4,730,868				4,524,085
Accumulated Other Comprehensive Loss			(101,587	)			(266,761	)
Weatherford Shareholders’ Equity			8,749,450				8,285,648
Noncontrolling Interests			83,167				80,401
Total Shareholders’ Equity			8,832,617				8,366,049
Total Liabilities and Shareholders’ Equity		$	17,365,659			$	16,476,513

The accompanying notes are an integral part of these condensed consolidated financial statements.

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

(In thousands, except per share amounts)

		Three Months								Six Months
		Ended June 30,								Ended June 30,
		2009				2008				2009				2008
Revenues:
Products		$	650,553			$	834,443			$	1,393,453			$	1,663,626
Services			1,344,279				1,394,807				2,857,520				2,761,516
			1,994,832				2,229,250				4,250,973				4,425,142
Costs and Expenses:
Cost of Products			525,180				621,836				1,094,236				1,220,626
Cost of Services			917,662				832,318				1,883,126				1,683,206
Research and Development			46,113				44,430				95,134				87,069
Selling, General and Administrative Attributable to Segments			296,625				268,798				605,369				509,665
Corporate General and Administrative			55,887				46,288				109,018				93,462
Gain on Sale of Subsidiary			—				(81,344	)			—				(81,344	)
Operating Income			153,365				496,924				464,090				912,458
Other Expense:
Interest Expense, Net			(93,498	)			(62,399	)			(184,561	)			(115,202	)
Other, Net			(3,871	)			(5,282	)			(17,410	)			(4,783	)
Income from Continuing Operations Before Income Taxes			55,996				429,243				262,119				792,473
Provision for Income Taxes			(5,441	)			(57,875	)			(37,904	)			(131,500	)
Income from Continuing Operations, Net of Taxes			50,555				371,368				224,215				660,973
Gain (Loss) from Discontinued Operation, Net of Taxes			—				6,940				—				(12,928	)
Net Income			50,555				378,308				224,215				648,045
Net Income Attributable to Noncontrolling Interests			(8,574	)			(7,324	)			(17,432	)			(12,860	)
Net Income Attributable to Weatherford		$	41,981			$	370,984			$	206,783			$	635,185
Basic Earnings Per Share Attributable to Weatherford:
Income from Continuing Operations		$	0.06			$	0.53			$	0.30			$	0.95
Gain (Loss) from Discontinued Operation			—				0.01				—				(0.02	)
Net Income		$	0.06			$	0.54			$	0.30			$	0.93
Diluted Earnings Per Share Attributable to Weatherford:
Income from Continuing Operations		$	0.06			$	0.52			$	0.29			$	0.93
Gain (Loss) from Discontinued Operation			—				0.01				—				(0.02	)
Net Income		$	0.06			$	0.53			$	0.29			$	0.91
Amounts Attributable to Weatherford Registered Shareholders:
Income from Continuing Operations, Net of Taxes		$	41,981			$	364,044			$	206,783			$	648,113
Gain (Loss) from Discontinued Operation, Net of taxes			—				6,940				—				(12,928	)
Net Income		$	41,981			$	370,984			$	206,783			$	635,185
Weighted Average Shares Outstanding:
Basic			700,424				681,870				699,375				681,030
Diluted			709,412				701,927				706,024				699,507

The accompanying notes are an integral part of these condensed consolidated financial statements.

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)

		Six Months
		Ended June 30,
		2009				2008
Cash Flows from Operating Activities:
Net Income		$	224,215			$	648,045
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation and Amortization			415,087				340,998
Loss (Gain) on Sales of Assets and Businesses, Net			3,964				(85,815	)
Loss from Discontinued Operation			—				12,928
Employee Share-Based Compensation Expense			55,046				48,134
Excess Tax (Benefits) Deficits from Share-Based Compensation			4,897				(15,194	)
Deferred Income Tax Benefit			(61,770	)			(12,248	)
Other, Net			(3,673	)			(12,478	)
Change in Operating Assets and Liabilities, Net of Effect of Businesses Acquired
Accounts Receivable			285,915				(115,277	)
Inventories			(132,380	)			(288,328	)
Accounts Payable			(57,303	)			45,041
Other			(434,085	)			(178,370	)
Net Cash Provided by Operating Activities — Continuing Operations			299,913				387,436
Net Cash Used by Operating Activities — Discontinued Operation			—				(6,219	)
Net Cash Provided by Operating Activities			299,913				381,217
Cash Flows from Investing Activities:
Acquisitions of Businesses, Net of Cash Acquired			(22,049	)			(160,351	)
Capital Expenditures for Property, Plant and Equipment			(970,384	)			(1,144,530	)
Acquisition of Intellectual Property			(16,456	)			(6,436	)
Acquisition of Equity Investments in Unconsolidated Affiliates			(26,509	)			—
Proceeds from Sale of Assets and Businesses, Net			40,873				255,121
Net Cash Used by Investing Activities — Continuing Operations			(994,525	)			(1,056,196	)
Net Cash Provided by Investing Activities — Discontinued Operation			—				2,000
Net Cash Used by Investing Activities			(994,525	)			(1,054,196	)
Cash Flows from Financing Activities:
Repayments on Short-term Debt, Net			(564,808	)			(728,801	)
Borrowings of Long-term Debt, Net			1,230,214				1,486,207
Excess Tax Benefits from Share-Based Compensation			(4,897	)			15,194
Other Financing Activities, Net			977				(2,357	)
Net Cash Provided by Financing Activities — Continuing Operations			661,486				770,243
Net Cash Provided by Financing Activities — Discontinued Operation			—				—
Net Cash Provided by Financing Activities			661,486				770,243
Net Increase (Decrease) in Cash and Cash Equivalents			(33,126	)			97,264
Cash and Cash Equivalents at Beginning of Period			238,398				170,714
Cash and Cash Equivalents at End of Period		$	205,272			$	267,978
Supplemental Cash Flow Information:
Interest Paid		$	167,332			$	110,515
Income Taxes Paid, Net of Refunds			258,482				148,123

The accompanying notes are an integral part of these condensed consolidated financial statements.

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(In thousands)

		Three Months								Six Months
		Ended June 30,								Ended June 30,
		2009				2008				2009				2008
Net Income		$	50,555			$	378,308			$	224,215			$	648,045
Other Comprehensive Income:
Deferred Loss on Derivative Instruments			—				—				—				(12,576	)
Amortization of Pension Components			3,348				980				4,528				5,616
Foreign Currency Translation Adjustment			210,282				32,449				160,222				37,326
Other			152				147				303				187
Comprehensive Income			264,337				411,884				389,268				678,598
Comprehensive Income Attributable to Noncontrolling Interests			(8,574	)			(7,324	)			(17,311	)			(12,860	)
Comprehensive Income Attributable to Weatherford		$	255,763			$	404,560			$	371,957			$	665,738

The accompanying notes are an integral part of these condensed consolidated financial statements.

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. General

     The accompanying unaudited condensed consolidated financial statements of Weatherford International Ltd. and all majority-owned subsidiaries (the “Company”) include all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the Company’s Condensed Consolidated Balance Sheet at June 30, 2009, Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2009 and 2008. Although the Company believes the disclosures in these financial statements are adequate to make the interim information presented not misleading, certain information relating to the Company’s organization and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to U.S. Securities and Exchange Commission (“SEC”) rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2008 and the related notes included in the Company’s Annual Report on Form 10-K. The results of operations for the three and six months ended June 30, 2009 are not necessarily indicative of the results expected for the full year.

     The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and disclosure of contingent liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to uncollectible accounts receivable, lower of cost or market of inventories, equity investments, intangible assets and goodwill, property, plant and equipment, income taxes, percentage-of-completion accounting for long-term contracts, self-insurance, pension and post retirement benefit plans and contingent liabilities. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

     In February 2009, Weatherford International Ltd., a Bermuda exempted company (“Weatherford Bermuda”), and Weatherford International Ltd., a Swiss joint stock corporation (“Weatherford Switzerland”), completed a share exchange transaction under the terms of a share exchange agreement, dated as of December 10, 2008, effected by way of a scheme of arrangement under Bermuda law, for purposes of changing the Company’s place of incorporation from Bermuda to Switzerland (collectively, the “Transaction”). Pursuant to the Transaction, each common share, par value U.S. $1.00 per share, of Weatherford Bermuda was exchanged for one registered share, par value 1.16 Swiss francs (“CHF”) per share, of Weatherford Switzerland. As a result of the Transaction, Weatherford Bermuda became a direct, wholly-owned subsidiary of Weatherford Switzerland.

     Effective January 1, 2009, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51 (“SFAS No. 160”). SFAS No. 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. The statement also establishes reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the interest of the parent and the interest of the noncontrolling owners. This standard changed the accounting for and reporting of minority interest (now called noncontrolling interest) in the consolidated financial statements. Upon adoption, certain prior period amounts have been reclassified to conform to the current period financial statement presentation.

     During the second quarter of 2009, the Company adopted SFAS No. 165, Subsequent Events, which establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events. The Company has evaluated subsequent events through August 3, 2009, the date of issuance of the condensed consolidated financial statements.

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

2. Business Combinations

     Effective January 1, 2009, the Company adopted SFAS No. 141(R), Business Combination, (“SFAS No. 141(R)”). SFAS No. 141(R) establishes principles and requirements for how a company recognizes assets acquired, liabilities assumed, contractual contingencies and contingent consideration measured at fair value at the acquisition date. The statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effect of the business combination. Due to the fact that SFAS No. 141(R) is applicable to acquisitions completed after January 1, 2009 and the Company did not have any material business combinations during the first six months of 2009, the adoption of SFAS No. 141(R) did not have a material impact on the Company’s condensed consolidated financial statements.

     The Company has acquired businesses critical to its long-term growth strategy. Results of operations for acquisitions are included in the accompanying Condensed Consolidated Statements of Income from the date of acquisition. The balances included in the Condensed Consolidated Balance Sheets related to recent acquisitions are based on preliminary information and are subject to change when final asset valuations are obtained and the potential for liabilities has been evaluated. Acquisitions are accounted for using the purchase method of accounting and the purchase price is allocated to the net assets acquired based upon their estimated fair values at the date of acquisition.

     During the six months ended June 30, 2009, the Company acquired businesses for cash consideration of $22 million and approximately three million common shares valued at $54 million.

3. Equity Investment Acquisition

     The Company acquired a 33% ownership interest in Premier Business Solutions (“PBS”) in June 2007 for approximately $330 million. PBS conducts business in Russia and is the world’s largest electric submersible pump manufacturer by volume. In January 2008, the Company sold its electrical submersible pumps (“ESP”) product line to PBS and received a combination of cash and an additional equity investment in PBS in consideration of the sale. This transaction increased the Company’s ownership percentage to approximately 40%. The Company’s investment in PBS is included in Equity Investments in the accompanying Condensed Consolidated Balance Sheets at June 30, 2009 and December 31, 2008.

4. Discontinued Operations

     In 2007, the Company’s management approved a plan to sell its oil and gas development and production business. The Company finalized the divestiture of the business in June 2008 and recorded an $11 million gain, net of taxes, during the three months ended June 30, 2008. This gain was partially offset by operating and legal expenses incurred during the period. Included in the loss for the six months ended June 30, 2008, is approximately $21 million, net of taxes, incurred in connection with the settlement of a legal dispute regarding the business.

5. Inventories

     The components of inventory were as follows:

		June 30,				December 31,
		2009				2008
		(In thousands)
Raw materials, components and supplies		$	358,045			$	430,352
Work in process			134,433				152,864
Finished goods			1,767,426				1,505,126
		$	2,259,904			$	2,088,342

     Work in process and finished goods inventories include the cost of materials, labor and plant overhead.

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

6. Goodwill

     Goodwill is evaluated for impairment on at least an annual basis. The Company performs its annual goodwill impairment test as of October 1. In addition, the Company updated its goodwill impairment test in December 2008 as a result of the decline in its common share price during the fourth quarter of 2008. The Company’s 2008 impairment tests indicated goodwill was not impaired. The Company will continue to test its goodwill annually as of October 1 unless events occur or circumstances change between annual tests that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

     The changes in the carrying amount of goodwill for the six months ended June 30, 2009 were as follows:

						Middle East/				Europe/
		North				North Africa/				West Africa/				Latin
		America				Asia				FSU				America				Total
						(In thousands)
As of December 31, 2008		$	1,813,710			$	675,558			$	734,930			$	306,717			$	3,530,915
Acquisitions			1,857				5,571				3,302				1,857				12,587
Disposals			(5,097	)			—				—				—				(5,097	)
Purchase price and other adjustments			5,711				9,232				6,234				(762	)			20,415
Foreign currency translation			45,019				8,624				27,424				3,624				84,691
As of June 30, 2009		$	1,861,200			$	698,985			$	771,890			$	311,436			$	3,643,511

7. Short-term Borrowings and Current Portion of Long-term Debt

     The components of short-term borrowings were as follows:

		June 30,				December 31,
		2009				2008
		(In thousands)
Revolving credit facilities		$	542,500			$	1,068,000
Commercial paper program			75,618				127,884
Other short-term bank loans			61,897				44,205
Total short-term borrowings			680,015				1,240,089
Current portion of long-term debt			12,520				15,858
Short-term borrowings and current portion of long-term debt		$	692,535			$	1,255,947

     In January 2009, the Company completed a $1.25 billion long-term debt offering comprised of (i) $1 billion of 9.625% senior notes due in 2019 (“9.625% Senior Notes”) and (ii) $250 million of 9.875% senior notes due in 2039 (“9.875% Senior Notes”). Net proceeds of $1.23 billion were used to repay short-term borrowings and for general corporate purposes. Interest on these notes is due semi-annually on March 1 and September 1 of each year.

     The Company maintains various revolving credit facilities with syndicates of banks. These facilities allow for an aggregate availability of $2.3 billion, and can be used for a combination of borrowings, support of the Company’s commercial paper program and issuances of letters of credit. Facilities with $550 million in availability will mature in October 2009 and the remaining facilities mature in May 2011. There were $74 million in outstanding letters of credit under these facilities at June 30, 2009.

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

     These borrowing facilities require the Company to maintain a debt-to-capitalization ratio of less than 60% and contain other covenants and representations customary for an investment-grade commercial credit. The Company was in compliance with these covenants at June 30, 2009.

     The Company has a $1.5 billion commercial paper program under which it may from time to time issue short-term unsecured notes. The commercial paper program is supported by the Company’s revolving credit facilities. The weighted average interest rate related to outstanding commercial paper issuances at June 30, 2009 was 0.5%.

     The Company has short-term borrowings with various domestic and international institutions pursuant to uncommitted facilities. At June 30, 2009, the Company had $62 million in short-term borrowings outstanding under these arrangements with a weighted average interest rate of 4.9%. In addition, the Company had $192 million of letters of credit and bid and performance bonds outstanding under these uncommitted facilities.

     The Company’s short-term borrowings approximate their fair value at June 30, 2009 and December 31, 2008.

8. Financial Instruments and Fair Value Measures

     Effective January 1, 2009, the Company adopted SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS No. 161”). SFAS No. 161 requires enhanced disclosures about an entity’s derivative and hedging activity. Entities are required to provide enhanced disclosures about how and why they use derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS No. 133 and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows.

     The Company is exposed to market risk from changes in foreign currency and changes in interest rates. From time to time, the Company may enter into derivative financial instrument transactions to manage or reduce its market risk, but does not enter into derivative transactions for speculative purposes. The Company manages its debt portfolio to achieve an overall desired position of fixed and floating rates and may employ interest rate swaps as a tool to achieve that goal. The major risks from interest rate derivatives include changes in the interest rates affecting the fair value of such instruments, potential increases in interest expense due to market increases in floating interest rates and the creditworthiness of the counterparties in such transactions. The counterparties to the Company’s interest rate swaps are multinational commercial banks.

     Interest Rate Swaps

     In December 2008, the Company entered into an interest rate swap agreement on an aggregate notional amount of $150 million against one of its revolving credit facilities. This agreement matured in June 2009.

     Upon completion of the long-term debt offering in March 2008, the Company entered into interest rate swap agreements on an aggregate notional amount of $500 million against its 5.15% senior notes due in 2013 (“5.15% Senior Notes”). These agreements were terminated in December 2008. As a result of these terminations, the Company received cash proceeds, net of accrued interest, of $12 million. The gain associated with this interest rate swap termination has been deferred and will be amortized to interest expense over the remaining term of the 5.15% Senior Notes.

     Cash Flow Hedges

     In March 2008, the Company entered into interest rate derivative instruments for a notional amount of $500 million to hedge projected exposures to interest rates in anticipation of the issuance of the 7.00% senior notes due in 2038 (“7.00% Senior Notes”). Those hedges were terminated in March 2008 at the time of the issuance. The Company paid a cash settlement of $13 million at termination, and the loss on these hedges is being amortized to interest expense over the life of the 7.00% Senior Notes.

     Other Derivative Instruments

     As of June 30, 2009, the Company had several foreign currency forward and option contracts with notional amounts aggregating $843 million, which were entered into to hedge exposure to currency fluctuations in various

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

foreign currencies, including, but not limited to, the British pound sterling, the Canadian dollar, the euro and the Norwegian kroner. The total estimated fair value of these contracts at June 30, 2009 resulted in a net liability of $17 million. These derivative instruments were not designated as hedges and the changes in fair value of the contracts are recorded each period in Other, net in the accompanying Condensed Consolidated Statements of Income.

     In addition, after the closing of the acquisition of Precision Energy Services and Precision Drilling International, the Company entered into a series of cross-currency swaps between the U.S. dollar and Canadian dollar to hedge certain exposures to the Canadian dollar created as a result of the acquisition. At June 30, 2009, the Company had notional amounts outstanding of $168 million. The total estimated fair value of these contracts at June 30, 2009 resulted in a liability of $6 million. These derivative instruments were not designated as hedges and the changes in fair value of the contracts are recorded each period in the accompanying Condensed Consolidated Statements of Income.

     Effective January 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements, (“SFAS No. 157”) as it relates to financial assets and financial liabilities. In February 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position No. FAS 157-2, Effective Date of FASB Statement No. 157, which delayed the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on at least an annual basis, until January 1, 2009 for calendar year-end entities.

     On January 1, 2009, the Company adopted without material impact on its condensed consolidated financial statements the provisions of SFAS No. 157 related to nonfinancial assets and nonfinancial liabilities not recognized or disclosed at fair value in the financial statements on a recurring basis, which include those measured at fair value in goodwill impairment testing, indefinite-lived intangible assets measured at fair value for impairment assessment, nonfinancial long-lived assets measured at fair value for impairment assessment and those initially measured at fair value in a business combination.

     SFAS No. 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principals and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements. The adoption of SFAS No. 157 had no impact on the Company’s consolidated financial position, results of operations and cash flows.

     SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 establishes a fair value hierarchy that distinguishes between market participant assumptions developed based on market data obtained from independent sources (observable inputs) and an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

     In accordance with SFAS No. 157 and SFAS No. 161, the following table presents the Company’s assets and liabilities (along with their balance sheet classification) that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of June 30, 2009:

		June 30, 2009
		Level 1				Level 2				Level 3				Total
		(In thousands)
Other Current Assets:
Foreign exchange contracts		$	—			$	19,624			$	—			$	19,624
Other Assets:
Other investments			—				34,486				—				34,486
Other Current Liabilities:
Foreign exchange contracts			—				36,598				—				36,598
Other Liabilities:
Foreign exchange contracts			—				5,549				—				5,549

9. Income Taxes

     The Company’s effective tax rates were 9.7% and 14.5% for the three and six months ended June 30, 2009, respectively, and were 13.5% and 16.6% for the three and six months ended June 30, 2008, respectively. The decrease in the effective tax rate is due to the decrease in earnings in certain jurisdictions, largely in North America, and benefits realized from the refinement of the Company’s international tax structure.

10. Shareholders’ Equity

     The following summarizes the Company’s shareholders’ equity activity for the period presented:

										Noncontrolling
		Total				Company				Interests in
		Shareholders’				Shareholders’				Consolidated
		Equity				Equity				Subsidiaries
						(In thousands)
Balance at December 31, 2008		$	8,366,049			$	8,285,648			$	80,401
Comprehensive Income:
Net Income			224,215				206,783				17,432
Amortization of Pension Components			4,528				4,528				—
Foreign Currency Translation Adjustments			160,222				160,343				(121	)
Other			303				303				—
Comprehensive Income			389,268				371,957				17,311
Transactions with Shareholders			91,845				91,845				—
Dividends paid to Noncontrolling Interests			(16,047	)			—				(16,047	)
Other			1,502				—				1,502
Balance at June 30, 2009		$	8,832,617			$	8,749,450			$	83,167

11. Earnings Per Share

     Basic earnings per share for all periods presented equals net income divided by the weighted average number of the Company’s registered shares, par value CHF 1.16 (“Registered Shares”) outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of Registered Shares outstanding during the period, as adjusted for the dilutive effect of the Company’s stock option and restricted share plans and warrant.

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

     Effective January 1, 2009, the Company implemented FASB Staff Position (“FSP”) EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, (“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities. Under the guidance of FSP EITF 03-6-1, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities and shall be included in the computation of earnings-per-share pursuant to the two-class method. Accordingly, the Company now includes its restricted share awards that contain the right to vote and receive dividends in the computation of both basic and diluted earnings per share. FSP EITF 03-6-1 has not been applied to prior periods as the impact is immaterial.

     The Company’s Board of Directors approved a two-for-one share split of its common shares effected through a share dividend. Shareholders of record on May 9, 2008 were entitled to the dividend, which was distributed on May 23, 2008. All share and option amounts included in the accompanying consolidated financial statements and related notes reflect the effect of the share split.

     The following reconciles basic and diluted weighted average shares outstanding:

		Three Months								Six Months
		Ended June 30,								Ended June 30,
		2009				2008				2009				2008
						(In thousands)
Basic weighted average shares outstanding			700,424				681,870				699,375				681,030
Dilutive effect of:
Warrant			2,105				8,380				1,053				7,663
Stock option and restricted share plans			6,883				11,677				5,596				10,814
Diluted weighted average shares outstanding			709,412				701,927				706,024				699,507

     The diluted earning per share calculation excludes four million potential shares for the three months ended June 30, 2009 and 11 million potential shares for the six months ended June 30, 2009, due to their antidilutive effect. Antidilutive potential shares were not significant for the three and six months ended June 30, 2008.

12. Share-Based Compensation

     The Company recognized the following employee share-based compensation expense during the three and six months ended June 30, 2009 and 2008:

		Three Months								Six Months
		Ended June 30,								Ended June 30,
		2009				2008				2009				2008
						(In thousands)
Share-based compensation		$	28,617			$	24,660			$	55,046			$	48,134
Related tax benefit			10,016				8,631				19,266				16,847

     During the six months ended June 30, 2009, the Company granted six million restricted share awards and units at a weighted average grant date fair value of $13.17 per share.

     As of June 30, 2009, there was $268 million of total unrecognized compensation cost related to the Company’s unvested stock options and restricted share grants. This cost is expected to be recognized over a weighted-average period of two years.

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

13. Retirement and Employee Benefit Plans

     The Company has defined benefit pension and other post-retirement benefit plans covering certain employees. The components of net periodic benefit cost for the three and six months ended June 30, 2009 and 2008 were as follows:

		Three Months Ended June 30,
		2009								2008
		United								United
		States				International				States				International
						(In thousands)
Service cost		$	906			$	1,681			$	720			$	3,555
Interest cost			2,079				1,654				1,511				2,659
Expected return on plan assets			(166	)			(979	)			(179	)			(2,320	)
Amortization of transition obligation			—				—				—				(1	)
Amortization of prior service cost (credit)			1,535				(12	)			458				(20	)
Amortization of loss			2,209				235				964				107
Curtailment/settlement loss			1,063				—				—				—
Net periodic benefit cost		$	7,626			$	2,579			$	3,474			$	3,980

		Six Months Ended June 30,
		2009								2008
		United								United
		States				International				States				International
						(In thousands)
Service cost		$	1,781			$	3,285			$	1,440			$	7,043
Interest cost			3,785				3,250				3,022				5,269
Expected return on plan assets			(331	)			(1,933	)			(358	)			(4,626	)
Amortization of transition obligation			—				(1	)			—				(2	)
Amortization of prior service cost (credit)			1,993				(23	)			916				(40	)
Amortization of loss			3,234				463				1,928				208
Curtailment/settlement loss			1,063				—				5,621				—
Net periodic benefit cost		$	11,525			$	5,041			$	12,569			$	7,852

     The Company previously disclosed in its financial statements for the year ended December 31, 2008, that it expected to contribute approximately $10 million to its pension and other postretirement benefit plans during 2009. Due to the amendment of one of our foreign plans, the Company currently anticipates total 2009 contributions for the defined benefit plans to approximate $7 million. As of June 30, 2009, the Company has contributed approximately $4 million to these plans.

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

14. Segment Information

     Financial information by segment is summarized below. Revenues are attributable to countries based on the ultimate destination of the sale of products or performance of services. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

		Three Months Ended June 30, 2009
		Net				Income (Loss)				Depreciation
		Operating				from				and
		Revenues				Operations				Amortization
						(In thousands)
North America		$	571,415			$	(709	)		$	77,253
Middle East/North Africa/Asia			592,908				123,553				60,921
Europe/West Africa/FSU			364,968				62,614				35,190
Latin America			465,541				85,759				35,971
			1,994,832				271,217				209,335
Corporate and Research and Development			—				(86,947	)			4,358
Other (a)			—				(30,905	)			—
Total		$	1,994,832			$	153,365			$	213,693

		Three Months Ended June 30, 2008
		Net				Income				Depreciation
		Operating				from				and
		Revenues				Operations				Amortization
						(In thousands)
North America		$	1,012,244			$	224,252			$	75,093
Middle East/North Africa/Asia			556,251				130,650				45,982
Europe/West Africa/FSU			389,563				99,016				27,600
Latin America			271,192				58,355				20,368
			2,229,250				512,273				169,043
Corporate and Research and Development			¾				(79,705	)			2,667
Other (b)			¾				64,356				¾
Total		$	2,229,250			$	496,924			$	171,710

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

		Six Months Ended June 30, 2009
		Net				Income				Depreciation
		Operating				from				and
		Revenues				Operations				Amortization
						(In thousands)
North America		$	1,408,768			$	122,327			$	152,351
Middle East/North Africa/Asia			1,174,854				257,579				118,555
Europe/West Africa/FSU			733,811				137,557				69,868
Latin America			933,540				177,976				66,413
			4,250,973				695,439				407,187
Corporate and Research and Development			—				(175,567	)			7,900
Other (c)			—				(55,782	)			—
Total		$	4,250,973			$	464,090			$	415,087

		Six Months Ended June 30, 2008
		Net				Income				Depreciation
		Operating				from				and
		Revenues				Operations				Amortization
			(In thousands)
North America		$	2,102,606			$	515,905			$	149,880
Middle East/North Africa/Asia			1,078,135				251,324				91,718
Europe/West Africa/FSU			737,192				192,229				54,221
Latin America			507,209				118,853				40,050
			4,425,142				1,078,311				335,869
Corporate and Research and Development			—				(155,976	)			5,129
Other (d)			—				(9,877	)			—
Total		$	4,425,142			$	912,458			$	340,998

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

15. Disputes and Litigation

     U.S. Government and Internal Investigations

     The Company is currently involved in government and internal investigations involving various areas of its operations.

     The Company participated in the United Nations oil-for-food program governing sales of goods and services into Iraq. The U.S. Department of Justice (“DOJ”) and the SEC are conducting investigations of the Company’s participation in the oil-for-food program and have subpoenaed certain documents in connection with these investigations. The Company is cooperating fully with these investigations. The Company has retained legal counsel, reporting to its audit committee, to investigate this matter. These investigations are ongoing, and the Company cannot anticipate the timing, outcome or possible impact of these investigations, financial or otherwise.

     The U.S. Department of Commerce, Bureau of Industry & Security, Office of Foreign Assets Control, DOJ and SEC are investigating allegations of improper sales of products and services by the Company and its subsidiaries in certain sanctioned countries. The Company is cooperating fully with this investigation. The Company has retained legal counsel, reporting to its audit committee, to investigate these matters and to cooperate fully with these agencies. This investigation is ongoing, and the Company cannot anticipate the timing, outcome or possible impact of the investigation, financial or otherwise.

     In light of this investigation and of the current U.S. and foreign policy environment and the inherent uncertainties surrounding these countries, the Company decided in September 2007 to direct its foreign subsidiaries to discontinue doing business in countries that are subject to comprehensive U.S. economic and trade sanctions, specifically Cuba, Iran, and Sudan, as well as Syria. Effective September 2007, the Company ceased entering into any new contracts relating to these countries and began an orderly discontinuation and winding down of its existing business in these sanctioned countries. Effective March 31, 2008, the Company substantially completed its withdrawal from these countries. The Company’s remaining activities in these countries consist primarily of attempts to collect accounts receivable and recover or liquidate assets, including funds. Certain of the Company’s subsidiaries continue to conduct business in countries such as Myanmar that are subject to more limited U.S. trading sanctions.

     The DOJ and SEC are investigating the embezzlement of approximately $175,000 at a European subsidiary and the possible improper use of these funds, including possible payments to government officials in Europe, during the period from 2000 to 2004, and the Company’s compliance with the Foreign Corrupt Practices Act (“FCPA”) and other laws worldwide. The Company has retained legal counsel, reporting to its audit committee, to investigate these matters and to cooperate fully with the DOJ and SEC. As part of its investigations, the Company has uncovered potential violations of U.S. law in connection with activities in West Africa. These investigations are ongoing, and the Company cannot anticipate the timing, outcome or possible impact, if any, of the investigations, financial or otherwise.

     The DOJ, SEC and other agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against corporations and individuals for violations of trade sanctions laws, the FCPA and other federal statutes including, but not limited to, injunctive relief, disgorgement, fines, penalties and modifications to business practices and compliance programs. In recent years, these agencies and authorities have entered into agreements with, and obtained a range of penalties against, several public corporations and individuals in similar investigations, under which civil and criminal penalties were imposed, including in some cases fines and other penalties and sanctions in the tens and hundreds of millions of dollars. Under trade sanctions laws, the DOJ may also seek to impose modifications to business practices, including immediate cessation of all business activities in sanctioned countries, and modifications to compliance programs, which may increase compliance costs. In addition, the Company’s activities in sanctioned countries, such as Sudan and Iran, could result in certain investors, such as government sponsored pension funds, divesting or not investing in its registered shares. Based on available information, the Company cannot predict what, if any, actions the DOJ, SEC or other authorities will take in its situation or the effect any such actions will have on its consolidated financial position or results of operations. To the extent the Company violated trade sanctions laws, the FCPA, or other laws or regulations, fines and other

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

penalties may be imposed. Because these matters are now pending before the indicated agencies, there can be no assurance that actual fines or penalties, if any, will not have a material adverse affect on its business, financial condition, liquidity or results of operations.

     During the six months ended June 30, 2009 and 2008, the Company incurred $27 million and $19 million, respectively, in connection with these on-going investigations. In addition, the Company incurred $57 million for costs incurred in connection with our exit from certain sanctioned countries during the six months ended June 30, 2008.

     Other Litigation and Disputes

     The Company is aware of various disputes and potential claims and is a party in various litigation involving claims against the Company, some of which are covered by insurance. Based on facts currently known, the Company believes that the ultimate liability, if any, which is probable to result from known claims, disputes and pending litigation, would not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

16. New Accounting Pronouncements

     In December 2008, the FASB issued FSP SFAS 132(R)-1, Employers’ Disclosures about Postretirement Benefit Plan Assets (“FSP SFAS No. 132(R)-1”). This FSP amends the disclosure requirements for employer’s disclosure of plan assets for defined benefit pensions and other postretirement plans. The objective of this FSP is to provide users of financial statements with an understanding of how investment allocation decisions are made, the major categories of plan assets held by the plans, the inputs and valuation techniques used to measure the fair value of plan assets, significant concentration of risk within the Company’s plan assets, and for fair value measurements determined using significant unobservable inputs, a reconciliation of changes between the beginning and ending balances. FSP SFAS No. 132(R)-1 is effective for fiscal years ending after December 15, 2009. The Company will adopt the new disclosure requirements in the 2009 annual reporting period.

     In June 2009, the FASB issued SFAS 167, Amendments to FASB Interpretation No. 46(R) (“SFAS No. 167”). SFAS No. 167 is a revision to FASB Interpretation No. 46 (Revised December 2003), Consolidation of Variable Interest Entities, and changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The objective of this SFAS is to improve financial reporting by enterprises involved with variable interest entities. SFAS No. 167 is effective for fiscal years beginning after November 15, 2009. The Company will adopt the new disclosure requirements beginning January 1, 2010.

17. Commitments and Contingencies

     In association with a prior acquisition, the Company identified pre-acquisition contingencies related to duties and taxes associated with the importation of certain equipment assets to foreign jurisdictions. At June 30, 2009, the Company has a liability in the amount of $9 million for this matter. If the Company used the high end of the range, the aggregate potential liability would be approximately $10 million higher.

     The Company’s former Senior Vice President and General Counsel (the “Executive”) left the Company in June 2009. The Executive had employment agreements with the Company that terminated on his departure. There is currently a dispute between the Executive and the Company as to the amount of compensation the Company is obligated to pay under these employment agreements based on the Executive’s separation. It is the Company’s belief that an unfavorable outcome regarding this dispute is not probable, and as such, the Company has not accrued for $9 million of the Executive’s claimed severance and other benefits.

18. Subsequent Event

     On July 27, 2009, the Company completed its acquisition of the Oilfield Services Division of TNK-BP (“TNK-BP”) for 24.3 million shares valued at approximately $450 million. In addition, if TNK-BP sells its shares in the

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Company for a price less than $18.50 per share prior to June 29, 2010, the Company is obligated to pay TNK-BP additional consideration in an amount equal to the difference between the price at which the shares were sold and $18.50. The Company will pay any additional consideration in cash or, at the Company’s option in certain instances, in additional shares following such date.

19. Condensed Consolidating Financial Statements

     During the first quarter of 2009, the Company completed a transaction that changed its place of incorporation from Bermuda to Switzerland. A new Swiss corporation named Weatherford International Ltd. was formed and is now the ultimate parent (“Weatherford Switzerland”) of the Weatherford group. It guarantees the obligations of Weatherford International Ltd. incorporated in Bermuda (“Weatherford Bermuda”) and Weatherford International, Inc. incorporated in Delaware (“Weatherford Delaware”) noted below.

     The following obligations of Weatherford Delaware were guaranteed by Weatherford Bermuda at June 30, 2009 and December 31, 2008: (i) the 6.625% Senior Notes, (ii) the 5.95% Senior Notes, (iii) the 6.35% Senior Notes and (iv) the 6.80% Senior Notes.

     The following obligations of Weatherford Bermuda were guaranteed by Weatherford Delaware at June 30, 2009: (i) the revolving credit facilities, (ii) the 4.95% Senior Notes, (iii) the 5.50% Senior Notes, (iv) the 6.50% Senior Notes, (v) the 5.15% Senior Notes, (vi) the 6.00% Senior Notes, (vii) the 7.00% Senior Notes, (viii) the 9.625% Senior Notes, (ix) the 9.875% Senior Notes and (x) issuances of notes under the commercial paper program.

     The following obligations of Weatherford Bermuda were guaranteed by Weatherford Delaware at December 31, 2008: (i) the revolving credit facilities, (ii) the 4.95% Senior Notes, (iii) the 5.50% Senior Notes, (iv) the 6.50% Senior Notes, (v) the 5.15% Senior Notes, (vi) the 6.00% Senior Notes, (vii) the 7.00% Senior Notes and (viii) issuances of notes under the commercial paper program.

     As a result of these guarantee arrangements, the Company is required to present the following condensed consolidating financial information. The accompanying guarantor financial information is presented on the equity method of accounting for all periods presented. Under this method, investments in subsidiaries are recorded at cost and adjusted for the Company’s share in the subsidiaries’ cumulative results of operations, capital contributions and distributions and other changes in equity. Elimination entries relate primarily to the elimination of investments in subsidiaries and associated intercompany balances and transactions. Certain prior year amounts have been reclassified to conform to the current year presentation.

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Condensed Consolidating Balance Sheet
June 30, 2009
(unaudited)
(In thousands)

														Other
		Parent					Bermuda				Delaware				Subsidiaries				Eliminations				Consolidation
ASSETS
Current Assets:
Cash and Cash Equivalents		$	132			$	26			$	21			$	205,093			$	—			$	205,272
Other Current Assets			1,209				19,422				78,967				5,329,358				—				5,428,956
Total Current Assets			1,341				19,448				78,988				5,534,451				—				5,634,228
Equity Investments in Affiliates			8,493,192				14,920,933				6,563,691				12,275,120				(42,252,936	)			—
Shares Held in Parent			—				—				125,234				565,747				(690,981	)			—
Intercompany Receivables, Net			—				1,645,391				1,040,358				—				(2,685,749	)			—
Other Assets			747				67,801				183,731				11,479,152				—				11,731,431
Total Assets		$	8,495,280			$	16,653,573			$	7,992,002			$	29,854,470			$	(45,629,666	)		$	17,365,659
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Short-term Borrowings and Current Portion of Long-term Debt		$	—			$	229,196			$	1,812			$	461,527			$	—			$	692,535
Accounts Payable and Other Current Liabilities			—				110,066				76,054				1,361,816				—				1,547,936
Total Current Liabilities			—				339,262				77,866				1,823,343				—				2,240,471
Long-term Debt			—				3,942,545				1,848,819				13,672				—				5,805,036
Intercompany Payables, Net			7,741				—				—				2,678,008				(2,685,749	)			—
Other Long-term Liabilities			—				116,476				2,405				368,654				—				487,535
Total Liabilities			7,741				4,398,283				1,929,090				4,883,677				(2,685,749	)			8,533,042
Weatherford Shareholders’ Equity			8,487,539				12,255,290				6,062,912				24,887,626				(42,943,917	)			8,749,450
Noncontrolling Interests			—				—				—				83,167				—				83,167
Total Liabilities and Shareholder’s Equity		$	8,495,280			$	16,653,573			$	7,992,002			$	29,854,470			$	(45,629,666	)		$	17,365,659

WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Condensed Consolidating Balance Sheet
December 31, 2008
(In thousands)

										Other
		Bermuda				Delaware				Subsidiaries				Eliminations				Consolidation
ASSETS
Current Assets:
Cash and Cash Equivalents		$	24			$	50			$	238,324			$	—			$	238,398
Other Current Assets			11,547				90,626				5,229,711				—				5,331,884
Total Current Assets			11,571				90,676				5,468,035				—				5,570,282
Equity Investments in Affiliates			14,335,661				6,231,144				12,611,943				(33,178,748	)			—
Shares Held in Parent			¾				133,519				625,958				(759,477	)			—
Intercompany Receivables, Net			1,289,507				906,534				¾				(2,196,041	)			—
Other Assets			59,325				184,869				10,662,037				—				10,906,231
Total Assets		$	15,696,064			$	7,546,742			$	29,367,973			$	(36,134,266	)		$	16,476,513
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Short-term Borrowings and Current Portion of Long-term Debt		$	781,443			$	1,758			$	472,746			$	—			$	1,255,947
Accounts Payable and Other Current Liabilities			59,534				39,764				1,666,848				—				1,766,146
Total Current Liabilities			840,977				41,522				2,139,594				—				3,022,093
Long-term Debt			2,701,747				1,849,428				13,080				—				4,564,255
Intercompany Payables, Net			—				¾				2,196,041				(2,196,041	)			—
Other Long-term Liabilities			110,627				2,502				410,987				—				524,116
Total Liabilities			3,653,351				1,893,452				4,759,702				(2,196,041	)			8,110,464
Weatherford Shareholders’ Equity			12,042,713				5,653,290				24,527,870				(33,938,225	)			8,285,648
Noncontrolling Interests			—				—				80,401				—				80,401
Total Liabilities and Shareholders’ Equity		$	15,696,064			$	7,546,742			$	29,367,973			$	(36,134,266	)		$	16,476,513