##### Table of Contents



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
 For the quarterly period ended March 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 1-31339
 WEATHERFORD INTERNATIONAL LTD.
  Bermuda
    
    98-0371344(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)515 Post Oak Boulevard 
Suite 600
Houston, Texas
    
    77027-3415(Address of principal executive offices)
    
    (Zip Code)
 
 
  þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o
  o þ
  Title of Class
    
    Outstanding at April 29, 2008Common Shares, par value $1.00
    
    339,791,807




---



TABLE OF CONTENTS  PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II. OTHER INFORMATIONITEM 1A. RISK FACTORSITEM 2. UNREGISTERED SALES OF EQUITY IN SECURITIES AND USE OF PROCEEDSITEM 6. EXHIBITSSIGNATURESEXHIBIT INDEXCertification of Chief Executive Officer Pursuant to Section 302Certification of Chief Financial Officer Pursuant to Section 302Certification of Chief Executive Officer Pursuant to Section 906Certification of Chief Financial Officer Pursuant to Section 906    Table of Contents  
 PART
I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
 March 31,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCurrent Assets:Cash and Cash Equivalents
    
    $
    626,438
    
    
    $
    170,714Accounts Receivable, Net of Allowance for Uncollectible
Accounts of $14,128 and $13,760, Respectively
    
    
    2,104,837
    
    
    
    1,961,854Inventories
    
    
    1,768,047
    
    
    
    1,607,684Other Current Assets
    
    
    602,103
    
    
    
    731,5175,101,425
    
    
    
    4,471,769Property, Plant and Equipment, Net of Accumulated
Depreciation of $2,511,530 and $2,400,062, Respectively
    
    
    4,582,620
    
    
    
    4,153,845Goodwill
    
    
    3,454,511
    
    
    
    3,358,490Other Intangible Assets, Net of Accumulated Amortization of
$236,814 and $227,307, Respectively
    
    
    583,882
    
    
    
    596,999Equity Investments
    
    
    463,221
    
    
    
    368,618Other Assets
    
    
    298,475
    
    
    
    241,236$
    14,484,134
    
    
    $
    13,190,957LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Short-term Borrowings and Current Portion of Long-term Debt
    
    $
    193,462
    
    
    $
    774,220Accounts Payable
    
    
    678,078
    
    
    
    612,775Other Current Liabilities
    
    
    789,720
    
    
    
    815,3701,661,260
    
    
    
    2,202,365Long-term Debt
    
    
    4,563,579
    
    
    
    3,066,335Other Liabilities
    
    
    567,845
    
    
    
    515,538Shareholders Equity:Common Shares, $1 Par Value, Authorized 1,000,000 Shares,
Issued 363,814 and 363,602 Shares, Respectively
    
    
    363,814
    
    
    
    363,602Capital in Excess of Par Value
    
    
    4,387,645
    
    
    
    4,359,349Treasury Shares, Net
    
    
    (929,157
    )
    
    
    (924,202
    )Retained Earnings
    
    
    3,434,383
    
    
    
    3,170,182Accumulated Other Comprehensive Income
    
    
    434,765
    
    
    
    437,7887,691,450
    
    
    
    7,406,719$
    14,484,134
    
    
    $
    13,190,957
  1




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts)
 Three MonthsEnded
March 31,2008
    
    
    2007Revenues:Products
    
    $
    829,183
    
    
    $
    682,252Services
    
    
    1,366,709
    
    
    
    1,170,0332,195,892
    
    
    
    1,852,285Costs and Expenses:Cost of Products
    
    
    598,790
    
    
    
    488,869Cost of Services
    
    
    850,888
    
    
    
    675,487Research and Development
    
    
    42,639
    
    
    
    40,514Selling, General and Administrative Attributable to Segments
    
    
    240,867
    
    
    
    201,641Corporate General and Administrative
    
    
    47,174
    
    
    
    30,060Operating Income
    
    
    415,534
    
    
    
    415,714Other Expense:Interest Expense, Net
    
    
    (52,803
    )
    
    
    (33,771
    )Other, Net
    
    
    499
    
    
    
    (2,372
    )Income from Continuing Operations Before Income Taxes and
Minority Interest
    
    
    363,230
    
    
    
    379,571Provision for Income Taxes
    
    
    (73,625
    )
    
    
    (91,378
    )Income from Continuing Operations Before Minority Interest
    
    
    289,605
    
    
    
    288,193Minority Interest, Net of Taxes
    
    
    (5,536
    )
    
    
    (4,374
    )Income from Continuing Operations
    
    
    284,069
    
    
    
    283,819Loss from Discontinued Operation, Net of Taxes
    
    
    (19,868
    )
    
    
    (2,247
    )Net Income
    
    $
    264,201
    
    
    $
    281,572Basic Earnings Per Share:Income from Continuing Operations
    
    $
    0.84
    
    
    $
    0.84Loss from Discontinued Operation
    
    
    (0.06
    )
    
    
    (0.01
    )Net Income
    
    $
    0.78
    
    
    $
    0.83Diluted Earnings Per Share:Income from Continuing Operations
    
    $
    0.82
    
    
    $
    0.82Loss from Discontinued Operation
    
    
    (0.06
    )
    
    
    (0.01
    )Net Income
    
    $
    0.76
    
    
    $
    0.81Weighted Average Shares Outstanding:Basic
    
    
    340,095
    
    
    
    339,010Diluted
    
    
    348,543
    
    
    
    346,308
  2




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
 Three MonthsEnded March 31,2008
    
    
    2007Cash Flows from Operating Activities:Net Income
    
    $
    264,201
    
    
    $
    281,572Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:Depreciation and Amortization
    
    
    169,288
    
    
    
    135,515Gain on Sales of Assets and Businesses, Net
    
    
    (2,221
    )
    
    
    (19,047
    )Loss from Discontinued Operations
    
    
    19,868
    
    
    
    2,247Employee Share-Based Compensation Expense
    
    
    23,474
    
    
    
    16,555Excess Tax Benefits from Share-Based Compensation
    
    
    (7,555
    )
    
    
    (2,829
    )Minority Interest
    
    
    5,536
    
    
    
    4,374Deferred Income Tax Benefit
    
    
    (10,514
    )
    
    
    (45
    )Other, Net
    
    
    (1,130
    )
    
    
    (1,054
    )Change in Operating Assets and Liabilities, Net of Effect
of Businesses AcquiredAccounts Receivable
    
    
    (131,985
    )
    
    
    (137,190
    )Inventories
    
    
    (151,666
    )
    
    
    (135,480
    )Accounts Payable
    
    
    59,341
    
    
    
    58,484Other
    
    
    (85,974
    )
    
    
    (43,951
    )Net Cash Provided by Operating Activities  Continuing Operations
    
    
    150,663
    
    
    
    159,151Net Cash Used by Operating Activities  Discontinued Operation
    
    
    (1,294
    )
    
    
    (3,564
    )Net Cash Provided by Operating Activities
    
    
    149,369
    
    
    
    155,587Cash Flows from Investing Activities:Acquisitions of Businesses, Net of Cash Acquired
    
    
    (113,013
    )
    
    
    (51,006
    )Capital Expenditures for Property, Plant and Equipment
    
    
    (588,639
    )
    
    
    (346,756
    )Acquisition of Intellectual Property
    
    
    (2,787
    )
    
    
    (10,724
    )Proceeds from Sale of Assets and Businesses, Net
    
    
    112,260
    
    
    
    24,524Net Cash Used by Investing Activities  Continuing Operations
    
    
    (592,179
    )
    
    
    (383,962
    )Net Cash Used by Investing Activities  Discontinued Operation
    
    
    
    
    
    
    (11,420
    )Net Cash Used by Investing Activities
    
    
    (592,179
    )
    
    
    (395,382
    )Cash Flows from Financing Activities:Borrowings of (Repayments on) Short-term Debt, Net
    
    
    (585,075
    )
    
    
    338,845Borrowings of Long-term Debt, Net
    
    
    1,487,439
    
    
    
    1,839Purchase of Treasury Shares
    
    
    
    
    
    
    (123,808
    )Proceeds from Exercise of Stock Options
    
    
    2,840
    
    
    
    3,014Excess Tax Benefits from Share-Based Compensation
    
    
    7,555
    
    
    
    2,829Other Financing Activities, Net
    
    
    (14,225
    )
    
    
    Net Cash Provided by Financing Activities  Continuing Operations
    
    
    898,534
    
    
    
    222,719Net Cash Provided by Financing Activities  Discontinued
Operation
    
    
    
    
    
    
    Net Cash Provided by Financing Activities
    
    
    898,534
    
    
    
    222,719Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    455,724
    
    
    
    (17,076
    )Cash and Cash Equivalents at Beginning of Period
    
    
    170,714
    
    
    
    126,287Cash and Cash Equivalents at End of Period
    
    $
    626,438
    
    
    $
    109,211Supplemental Cash Flow Information:Interest Paid
    
    $
    42,776
    
    
    $
    40,403Income Taxes Paid, Net of Refunds
    
    
    62,418
    
    
    
    82,495
  3




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(In thousands)
 Three MonthsEnded March 31,2008
    
    
    2007Net Income
    
    $
    264,201
    
    
    $
    281,572Other Comprehensive Income:Deferred Loss on Derivative Instruments
    
    
    (12,576
    )
    
    
    Amortization of Pension Components
    
    
    4,636
    
    
    
    1,052Foreign Currency Translation Adjustment
    
    
    4,877
    
    
    
    3,922Other
    
    
    40
    
    
    
    36Comprehensive Income
    
    $
    261,178
    
    
    $
    286,582
  4




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 1. General
    2. Business Combinations
  Accounting for Contingencies
  5




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 3. Equity Investment Acquisition
  4. Discontinued Operations
   Three Months Ended March 31,2008
    
    
    2007(In thousands)Revenues
    
    $
    522
    
    
    $
    485Loss Before Income Taxes
    
    $
    30,566
    
    
    $
    3,326Benefit for Income taxes
    
    
    10,698
    
    
    
    1,079Loss from Discontinued Operation, Net of Taxes
    
    $
    19,868
    
    
    $
    2,247
   March 31,
    
    
    December 31,2008
    
    
    2007(In thousands)Other Current Assets
    
    $
    
    
    
    $
    4,563Property, Plant and Equipment, Net
    
    
    2,000
    
    
    
    21,639Other Assets
    
    
    
    
    
    
    Current Assets Held for Sale
    
    $
    2,000
    
    
    $
    26,202Accounts Payable
    
    $
    
    
    
    $
    85Other Current Liabilities
    
    
    
    
    
    
    169Other Liabilities
    
    
    
    
    
    
    383Current Liabilities Held for Sale
    
    $
    
    
    
    $
    637
 6




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 5. Inventories
  March 31,
    
    
    December 31,2008
    
    
    2007(In thousands)Raw materials, components and supplies
    
    $
    371,822
    
    
    $
    373,383Work in process
    
    
    138,571
    
    
    
    118,407Finished goods
    
    
    1,257,654
    
    
    
    1,115,894$
    1,768,047
    
    
    $
    1,607,684
  6. Goodwill
   MiddleEurope/
    
    
    East/ NorthNorth
    
    
    Latin
    
    
    West Africa
    
    
    AfricaAmerica
    
    
    America
    
    
    / CIS
    
    
    / Asia
    
    
    Total(In thousands)As of December 31, 2007
    
    $
    1,918,411
    
    
    $
    156,825
    
    
    $
    678,433
    
    
    $
    604,821
    
    
    $
    3,358,490Goodwill acquired during period
    
    
    1,790
    
    
    
    
    
    
    
    96,681
    
    
    
    3,552
    
    
    
    102,023Disposals
    
    
    (1,362
    )
    
    
    (27
    )
    
    
    
    
    
    
    
    
    
    
    (1,389
    )Purchase price and other adjustments
    
    
    440
    
    
    
    3,070
    
    
    
    (523
    )
    
    
    201
    
    
    
    3,188Impact of foreign currency translation
    
    
    (31,362
    )
    
    
    678
    
    
    
    20,082
    
    
    
    2,801
    
    
    
    (7,801
    )As of March 31, 2008
    
    $
    1,887,917
    
    
    $
    160,546
    
    
    $
    794,673
    
    
    $
    611,375
    
    
    $
    3,454,511
 7. Short-term Borrowings and Current Portion of Long-term Debt
  March 31,
    
    
    December 31,2008
    
    
    2007(In thousands)Revolving credit facility
    
    $
    159,000
    
    
    $
    491,000Commercial paper program
    
    
    
    
    
    
    191,621Other short-term bank loans
    
    
    23,102
    
    
    
    80,025Total Short-term Borrowings
    
    
    182,102
    
    
    
    762,646Current Portion of Long-term Debt
    
    
    11,360
    
    
    
    11,574Short-term Borrowings and Current Portion of Long-term Debt
    
    $
    193,462
    
    
    $
    774,220
  7




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
        8. Derivative Instruments
 Interest Rate Swaps
    Cash Flow Hedges
  8




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
  Other Derivative Instruments
   The Fair Value Option for
Financial Assets and Financial Liabilitiesincluding an amendment of FASB Statement No. 115 Accounting for Derivative Instruments and Hedging Activities
 Fair Value Measurements, Effective Date of FASB Statement No. 157,
   9




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
     March 31, 2008Level 1
    
    Level 2
    
    Level 3
    
    Total(In thousands)Assets:Derivative contracts
    
    $
    
    
    
    $
    1,931
    
    
    $
    
    
    
    $
    1,931Liabilities:Derivative contracts
    
    
    
    
    
    
    (64,917
    )
    
    
    
    
    
    
    (64,917
    )
 9. Income Taxes
   10. Earnings Per Share
   Three MonthsEnded March 31,2008
    
    
    2007(In thousands)Basic weighted average shares outstanding
    
    
    340,095
    
    
    
    339,010Dilutive effect of:Warrant
    
    
    3,473
    
    
    
    1,742Stock option and restricted share plans
    
    
    4,975
    
    
    
    5,556Diluted weighted average shares outstanding
    
    
    348,543
    
    
    
    346,308
 10




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 11. Supplemental Cash Flow Information
  12. Share-Based Compensation
    13. Retirement and Employee Benefit Plans
  Three Months Ended March 31,2008
    
    
    2007United
    
    
    
    
    
    
    UnitedStates
    
    
    International
    
    
    States
    
    
    International(In thousands)Service cost
    
    $
    720
    
    
    $
    3,488
    
    
    $
    650
    
    
    $
    2,682Interest cost
    
    
    1,511
    
    
    
    2,610
    
    
    
    1,223
    
    
    
    1,971Expected return on plan assets
    
    
    (179
    )
    
    
    (2,306
    )
    
    
    (165
    )
    
    
    (1,926
    )Amortization of transition obligation
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Amortization of prior service cost (credit)
    
    
    458
    
    
    
    (20
    )
    
    
    560
    
    
    
    (26
    )Amortization of loss
    
    
    964
    
    
    
    101
    
    
    
    651
    
    
    
    37Settlement/Curtailment
    
    
    5,621
    
    
    
    
    
    
    
    397
    
    
    
    Net periodic benefit cost
    
    $
    9,095
    
    
    $
    3,872
    
    
    $
    3,316
    
    
    $
    2,737
  11




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 14. Segment Information
  Three Months Ended March 31, 2008Net
    
    
    Income
    
    
    DepreciationOperating
    
    
    from
    
    
    andRevenues
    
    
    Operations
    
    
    Amortization(In thousands)North America
    
    $
    1,090,362
    
    
    $
    291,653
    
    
    $
    74,787Middle East/North Africa/Asia
    
    
    521,884
    
    
    
    120,674
    
    
    
    45,736Europe/West Africa/CIS
    
    
    347,629
    
    
    
    93,213
    
    
    
    26,621Latin America
    
    
    236,017
    
    
    
    60,498
    
    
    
    19,6822,195,892
    
    
    
    566,038
    
    
    
    166,826Corporate and Other (a)
    
    
    
    
    
    
    (150,504
    )
    
    
    2,462Total
    
    $
    2,195,892
    
    
    $
    415,534
    
    
    $
    169,288
 Three Months Ended March 31, 2007Net
    
    
    Income
    
    
    DepreciationOperating
    
    
    from
    
    
    andRevenues
    
    
    Operations
    
    
    Amortization(In thousands)North America
    
    $
    1,006,633
    
    
    $
    300,210
    
    
    $
    61,764Middle East/North Africa/Asia
    
    
    394,752
    
    
    
    83,473
    
    
    
    36,167Europe/West Africa/CIS
    
    
    244,958
    
    
    
    55,235
    
    
    
    18,235Latin America
    
    
    205,942
    
    
    
    48,589
    
    
    
    16,7391,852,285
    
    
    
    487,507
    
    
    
    132,905Corporate and Other (a)
    
    
    
    
    
    
    (71,793
    )
    
    
    2,610Total
    
    $
    1,852,285
    
    
    $
    415,714
    
    
    $
    135,515
 
 (a)
    
    Includes research and development expenses which are not allocated geographically. In
addition, the three months ended March 31, 2008 includes $51 million for costs incurred in
connection with the Companys exit from sanctioned countries, $15 million for severance charges
associated with reorganization activities and $8 million in costs incurred in connection with
on-going investigations by the U.S. government. The three months ended March 31, 2007 includes
$4 million for severance charges associated with reorganization activities. 15. Disputes, Litigation and Contingencies
 U.S. Government and Internal Investigations
   12




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
      Other Litigation and Disputes
  16. New Accounting Pronouncements
 Business Combinations
 13




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Disclosures about Derivative Instruments and
Hedging Activities
 17. Subsequent Event
  18. Condensed Consolidating Financial Statements
     14




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Condensed Consolidating Balance Sheet
March 31, 2008
(unaudited)
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationASSETSCurrent Assets:Cash and Cash Equivalents
    
    $
    465,964
    
    
    $
    801
    
    
    $
    159,673
    
    
    $
    
    
    
    $
    626,438Other Current Assets
    
    
    20,631
    
    
    
    6,594
    
    
    
    4,447,762
    
    
    
    
    
    
    
    4,474,987486,595
    
    
    
    7,395
    
    
    
    4,607,435
    
    
    
    
    
    
    
    5,101,425Equity Investments in Affiliates
    
    
    12,976,895
    
    
    
    5,051,615
    
    
    
    12,864,077
    
    
    
    (30,892,587
    )
    
    
    Shares Held in Parent
    
    
    
    
    
    
    134,381
    
    
    
    794,776
    
    
    
    (929,157
    )
    
    
    Intercompany Receivables, Net
    
    
    304,163
    
    
    
    1,079,579
    
    
    
    
    
    
    
    (1,383,742
    )
    
    
    Other Assets
    
    
    62,233
    
    
    
    164,241
    
    
    
    9,156,235
    
    
    
    
    
    
    
    9,382,709$
    13,829,886
    
    
    $
    6,437,211
    
    
    $
    27,422,523
    
    
    $
    (33,205,486
    )
    
    $
    14,484,134LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Short-term Borrowings and Current
Portion of Long-term Debt
    
    $
    100,776
    
    
    $
    1,679
    
    
    $
    91,007
    
    
    $
    
    
    
    $
    193,462Accounts Payable and Other Current
Liabilities
    
    
    21,016
    
    
    
    28,784
    
    
    
    1,417,998
    
    
    
    
    
    
    
    1,467,798121,792
    
    
    
    30,463
    
    
    
    1,509,005
    
    
    
    
    
    
    
    1,661,260Long-term Debt
    
    
    2,692,830
    
    
    
    1,850,308
    
    
    
    20,441
    
    
    
    
    
    
    
    4,563,579Intercompany Payables, Net
    
    
    
    
    
    
    
    
    
    
    1,383,742
    
    
    
    (1,383,742
    )
    
    
    Other Long-term Liabilities
    
    
    93,450
    
    
    
    69,867
    
    
    
    404,528
    
    
    
    
    
    
    
    567,845Shareholders Equity
    
    
    10,921,814
    
    
    
    4,486,573
    
    
    
    24,104,807
    
    
    
    (31,821,744
    )
    
    
    7,691,450$
    13,829,886
    
    
    $
    6,437,211
    
    
    $
    27,422,523
    
    
    $
    (33,205,486
    )
    
    $
    14,484,134
 15




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Condensed Consolidating Balance Sheet
December 31, 2007
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationASSETSCurrent Assets:Cash and Cash Equivalents
    
    $
    228
    
    
    $
    1,489
    
    
    $
    168,997
    
    
    $
    
    
    
    $
    170,714Other Current Assets
    
    
    13,591
    
    
    
    2,537
    
    
    
    4,284,927
    
    
    
    
    
    
    
    4,301,05513,819
    
    
    
    4,026
    
    
    
    4,453,924
    
    
    
    
    
    
    
    4,471,769Equity Investments in Affiliates
    
    
    12,008,907
    
    
    
    4,696,938
    
    
    
    13,600,365
    
    
    
    (30,306,210
    )
    
    
    Shares Held in Parent
    
    
    
    
    
    
    129,428
    
    
    
    794,774
    
    
    
    (924,202
    )
    
    
    Intercompany Receivables, Net
    
    
    (127,594
    )
    
    
    1,233,846
    
    
    
    
    
    
    
    (1,106,252
    )
    
    
    Other Assets
    
    
    52,031
    
    
    
    34,186
    
    
    
    8,632,971
    
    
    
    
    
    
    
    8,719,188$
    11,947,163
    
    
    $
    6,098,424
    
    
    $
    27,482,034
    
    
    $
    (32,336,664
    )
    
    $
    13,190,957LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Short-term Borrowings and Current
Portion of Long-term Debt
    
    $
    582,389
    
    
    $
    24,854
    
    
    $
    166,977
    
    
    $
    
    
    
    $
    774,220Accounts Payable and Other Current
Liabilities
    
    
    47,574
    
    
    
    7,959
    
    
    
    1,372,612
    
    
    
    
    
    
    
    1,428,145629,963
    
    
    
    32,813
    
    
    
    1,539,589
    
    
    
    
    
    
    
    2,202,365Long-term Debt
    
    
    1,198,418
    
    
    
    1,850,594
    
    
    
    17,323
    
    
    
    
    
    
    
    3,066,335Intercompany Payables, Net
    
    
    
    
    
    
    
    
    
    
    1,106,252
    
    
    
    (1,106,252
    )
    
    
    Other Long-term Liabilities
    
    
    91,392
    
    
    
    22,556
    
    
    
    401,590
    
    
    
    
    
    
    
    515,538Shareholders Equity
    
    
    10,027,390
    
    
    
    4,192,461
    
    
    
    24,417,280
    
    
    
    (31,230,412
    )
    
    
    7,406,719$
    11,947,163
    
    
    $
    6,098,424
    
    
    $
    27,482,034
    
    
    $
    (32,336,664
    )
    
    $
    13,190,957
 16




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Condensed Consolidating Statements of Income
Three Months Ended March 31, 2008
(unaudited)
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationRevenues
    
    $
    
    
    
    $
    
    
    
    $
    2,195,892
    
    
    $
    
    
    
    $
    2,195,892Costs and Expenses
    
    
    (12,155
    )
    
    
    (690
    )
    
    
    (1,767,513
    )
    
    
    
    
    
    
    (1,780,358
    )Operating Income (Loss)
    
    
    (12,155
    )
    
    
    (690
    )
    
    
    428,379
    
    
    
    
    
    
    
    415,534Other Income (Expense):Interest Expense, Net
    
    
    (22,696
    )
    
    
    (29,645
    )
    
    
    (462
    )
    
    
    
    
    
    
    (52,803
    )Intercompany Charges, Net
    
    
    2,995
    
    
    
    
    
    
    
    (2,995
    )
    
    
    
    
    
    
    Equity in Subsidiary Income
    
    
    283,120
    
    
    
    303,252
    
    
    
    
    
    
    
    (586,372
    )
    
    
    Other, Net
    
    
    12,966
    
    
    
    (257
    )
    
    
    (12,210
    )
    
    
    
    
    
    
    499Income (Loss) from Continuing OperationsBefore Income Taxes and Minority Interest
    
    
    264,230
    
    
    
    272,660
    
    
    
    412,712
    
    
    
    (586,372
    )
    
    
    363,230Benefit (Provision) for Income Taxes
    
    
    (29
    )
    
    
    10,460
    
    
    
    (84,056
    )
    
    
    
    
    
    
    (73,625
    )Income (Loss) from Continuing OperationsBefore Minority Interest
    
    
    264,201
    
    
    
    283,120
    
    
    
    328,656
    
    
    
    (586,372
    )
    
    
    289,605Minority Interest, Net of Taxes
    
    
    
    
    
    
    
    
    
    
    (5,536
    )
    
    
    
    
    
    
    (5,536
    )Income (Loss) from Continuing Operations
    
    
    264,201
    
    
    
    283,120
    
    
    
    323,120
    
    
    
    (586,372
    )
    
    
    284,069Loss from Discontinued Operations, Net of Taxes
    
    
    
    
    
    
    
    
    
    
    (19,868
    )
    
    
    
    
    
    
    (19,868
    )Net Income (Loss)
    
    $
    264,201
    
    
    $
    283,120
    
    
    $
    303,252
    
    
    $
    (586,372
    )
    
    $
    264,201
 Condensed Consolidating Statements of Income
Three Months Ended March 31, 2007
(unaudited)
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationRevenues
    
    $
    
    
    
    $
    
    
    
    $
    1,852,285
    
    
    $
    
    
    
    $
    1,852,285Costs and Expenses
    
    
    (3,101
    )
    
    
    (268
    )
    
    
    (1,433,202
    )
    
    
    
    
    
    
    (1,436,571
    )Operating Income (Loss)
    
    
    (3,101
    )
    
    
    (268
    )
    
    
    419,083
    
    
    
    
    
    
    
    415,714Other Income (Expense):Interest Income (Expense), Net
    
    
    (27,181
    )
    
    
    (5,593
    )
    
    
    (997
    )
    
    
    
    
    
    
    (33,771
    )Intercompany Charges, Net
    
    
    116
    
    
    
    (10,164
    )
    
    
    10,048
    
    
    
    
    
    
    
    Equity in Subsidiary Income
    
    
    309,785
    
    
    
    320,533
    
    
    
    
    
    
    
    (630,318
    )
    
    
    Other, Net
    
    
    1,953
    
    
    
    (229
    )
    
    
    (4,096
    )
    
    
    
    
    
    
    (2,372
    )Income (Loss) from Continuing Operations
Before Income Taxes and Minority Interest
    
    
    281,572
    
    
    
    304,279
    
    
    
    424,038
    
    
    
    (630,318
    )
    
    
    379,571Benefit (Provision) for Income Taxes
    
    
    
    
    
    
    5,506
    
    
    
    (96,884
    )
    
    
    
    
    
    
    (91,378
    )Income (Loss) from Continuing Operations
Before Minority Interest
    
    
    281,572
    
    
    
    309,785
    
    
    
    327,154
    
    
    
    (630,318
    )
    
    
    288,193Minority Interest, Net of Taxes
    
    
    
    
    
    
    
    
    
    
    (4,374
    )
    
    
    
    
    
    
    (4,374
    )Income (Loss) from Continuing Operations
    
    
    281,572
    
    
    
    309,785
    
    
    
    322,780
    
    
    
    (630,318
    )
    
    
    283,819Loss from Discontinued Operations, Net of Taxes
    
    
    
    
    
    
    
    
    
    
    (2,247
    )
    
    
    
    
    
    
    (2,247
    )Net Income (Loss)
    
    $
    281,572
    
    
    $
    309,785
    
    
    $
    320,533
    
    
    $
    (630,318
    )
    
    $
    281,572
 17




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2008
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationCash Flows from Operating Activities:Net Income (Loss)
    
    $
    264,201
    
    
    $
    283,120
    
    
    $
    303,252
    
    
    $
    (586,372
    )
    
    $
    264,201Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided (Used) by Operating Activities:Charges from Parent or Subsidiary
    
    
    (2,995
    )
    
    
    
    
    
    
    2,995
    
    
    
    
    
    
    
    Loss from Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    19,868
    
    
    
    
    
    
    
    19,868Equity in (Earnings) Loss of Affiliates
    
    
    (283,120
    )
    
    
    (303,252
    )
    
    
    
    
    
    
    586,372
    
    
    
    Deferred Income Tax Provision (Benefit)
    
    
    
    
    
    
    (251
    )
    
    
    (10,263
    )
    
    
    
    
    
    
    (10,514
    )Other Adjustments
    
    
    (23,138
    )
    
    
    19,152
    
    
    
    (118,906
    )
    
    
    
    
    
    
    (122,892
    )Net Cash Provided (Used) by Operating
Activities-Continuing Operations
    
    
    (45,052
    )
    
    
    (1,231
    )
    
    
    196,946
    
    
    
    
    
    
    
    150,663Net Cash Used by Operating Activities-
Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    (1,294
    )
    
    
    
    
    
    
    (1,294
    )Net Cash Provided (Used) by Operating
Activities
    
    
    (45,052
    )
    
    
    (1,231
    )
    
    
    195,652
    
    
    
    
    
    
    
    149,369Cash Flows from Investing Activities:Acquisitions of Businesses, Net of Cash Acquired
    
    
    
    
    
    
    
    
    
    
    (113,013
    )
    
    
    
    
    
    
    (113,013
    )Capital Expenditures for Property, Plant and
Equipment
    
    
    
    
    
    
    
    
    
    
    (588,639
    )
    
    
    
    
    
    
    (588,639
    )Acquisition of Intellectual Property
    
    
    
    
    
    
    
    
    
    
    (2,787
    )
    
    
    
    
    
    
    (2,787
    )Proceeds from Sale of Assets and Business, Net
    
    
    
    
    
    
    
    
    
    
    112,260
    
    
    
    
    
    
    
    112,260Capital Contribution to Subsidiary
    
    
    (103,043
    )
    
    
    (5,000
    )
    
    
    
    
    
    
    108,043
    
    
    
    Net Cash Provided (Used) by Investing
Activities-Continuing Operations
    
    
    (103,043
    )
    
    
    (5,000
    )
    
    
    (592,179
    )
    
    
    108,043
    
    
    
    (592,179
    )Net Cash Used by Investing Activities-
Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net Cash Provided (Used) by Investing
Activities
    
    
    (103,043
    )
    
    
    (5,000
    )
    
    
    (592,179
    )
    
    
    108,043
    
    
    
    (592,179
    )Cash Flows from Financing Activities:Borrowings of (Repayments on) Short-term
Debt, Net
    
    
    (481,612
    )
    
    
    (21,521
    )
    
    
    (81,942
    )
    
    
    
    
    
    
    (585,075
    )Borrowings of (Repayments on) Long-term
Debt, Net
    
    
    1,483,931
    
    
    
    (285
    )
    
    
    3,793
    
    
    
    
    
    
    
    1,487,439Proceeds from Exercise of Stock Options
    
    
    
    
    
    
    2,840
    
    
    
    
    
    
    
    
    
    
    
    2,840Borrowings (Repayments) Between
Subsidiaries, Net
    
    
    (375,912
    )
    
    
    18,603
    
    
    
    357,309
    
    
    
    
    
    
    
    Proceeds from Capital Contribution
    
    
    
    
    
    
    
    
    
    
    108,043
    
    
    
    (108,043
    )
    
    
    Excess Tax Benefits of Share-Based Compensation
    
    
    
    
    
    
    7,555
    
    
    
    
    
    
    
    
    
    
    
    7,555Other, Net
    
    
    (12,576
    )
    
    
    (1,649
    )
    
    
    
    
    
    
    
    
    
    
    (14,225
    )Net Cash Provided (Used) by Financing
Activities-Continuing Operations
    
    
    613,831
    
    
    
    5,543
    
    
    
    387,203
    
    
    
    (108,043
    )
    
    
    898,534Net Cash Provided by Financing Activities-
Discontinued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net Cash Provided (Used) by Financing
Activities
    
    
    613,831
    
    
    
    5,543
    
    
    
    387,203
    
    
    
    (108,043
    )
    
    
    898,534Net Decrease in Cash and Cash Equivalents
    
    
    465,736
    
    
    
    (688
    )
    
    
    (9,324
    )
    
    
    
    
    
    
    455,724Cash and Cash Equivalents at Beginning of Year
    
    
    228
    
    
    
    1,489
    
    
    
    168,997
    
    
    
    
    
    
    
    170,714Cash and Cash Equivalents at End of Year
    
    $
    465,964
    
    
    $
    801
    
    
    $
    159,673
    
    
    $
    
    
    
    $
    626,438
 18




---



##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2007
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationCash Flows from Operating Activities:Net Income (Loss)
    
    $
    281,572
    
    
    $
    309,785
    
    
    $
    320,533
    
    
    $
    (630,318
    )
    
    $
    281,572Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided (Used) by Operating Activities:Charges from Parent or Subsidiary
    
    
    (116
    )
    
    
    10,164
    
    
    
    (10,048
    )
    
    
    
    
    
    
    Loss from Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    2,247
    
    
    
    
    
    
    
    2,247Equity in (Earnings) Loss of Affiliates
    
    
    (309,785
    )
    
    
    (320,533
    )
    
    
    
    
    
    
    630,318
    
    
    
    Deferred Income Tax Provision (Benefit)
    
    
    
    
    
    
    1,747
    
    
    
    (1,792
    )
    
    
    
    
    
    
    (45
    )Other Adjustments
    
    
    (25,009
    )
    
    
    (66,446
    )
    
    
    (33,168
    )
    
    
    
    
    
    
    (124,623
    )Net Cash Provided (Used) by Operating
Activities-Continuing Operations
    
    
    (53,338
    )
    
    
    (65,283
    )
    
    
    277,772
    
    
    
    
    
    
    
    159,151Net Cash Used by Operating Activities-
Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    (3,564
    )
    
    
    
    
    
    
    (3,564
    )Net Cash Provided (Used) by Operating
Activities
    
    
    (53,338
    )
    
    
    (65,283
    )
    
    
    274,208
    
    
    
    
    
    
    
    155,587Cash Flows from Investing Activities:Acquisitions of Businesses, Net of Cash Acquired
    
    
    
    
    
    
    
    
    
    
    (51,006
    )
    
    
    
    
    
    
    (51,006
    )Capital Expenditures for Property, Plant and
Equipment
    
    
    
    
    
    
    
    
    
    
    (346,756
    )
    
    
    
    
    
    
    (346,756
    )Acquisition of Intellectual Property
    
    
    
    
    
    
    
    
    
    
    (10,724
    )
    
    
    
    
    
    
    (10,724
    )Proceeds from Sale of Assets and Business, Net
    
    
    
    
    
    
    
    
    
    
    24,524
    
    
    
    
    
    
    
    24,524Capital Contribution to Subsidiary
    
    
    (144,219
    )
    
    
    (13,600
    )
    
    
    
    
    
    
    157,819
    
    
    
    Net Cash Provided (Used) by Investing
Activities-Continuing Operations
    
    
    (144,219
    )
    
    
    (13,600
    )
    
    
    (383,962
    )
    
    
    157,819
    
    
    
    (383,962
    )Net Cash Used by Investing Activities-
Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    (11,420
    )
    
    
    
    
    
    
    (11,420
    )Net Cash Provided (Used) by Investing
Activities
    
    
    (144,219
    )
    
    
    (13,600
    )
    
    
    (395,382
    )
    
    
    157,819
    
    
    
    (395,382
    )Cash Flows from Financing Activities:Borrowings of (Repayments on) Short-term
Debt, Net
    
    
    356,969
    
    
    
    8,250
    
    
    
    (26,374
    )
    
    
    
    
    
    
    338,845Borrowings of (Repayments on) Long-term
Debt, Net
    
    
    
    
    
    
    (877
    )
    
    
    2,716
    
    
    
    
    
    
    
    1,839Purchase of Treasury Shares
    
    
    
    
    
    
    
    
    
    
    (123,808
    )
    
    
    
    
    
    
    (123,808
    )Proceeds from Exercise of Stock Options
    
    
    
    
    
    
    3,014
    
    
    
    
    
    
    
    
    
    
    
    3,014Borrowings (Repayments) Between
Subsidiaries, Net
    
    
    (159,423
    )
    
    
    65,835
    
    
    
    93,588
    
    
    
    
    
    
    
    Proceeds from Capital Contribution
    
    
    
    
    
    
    
    
    
    
    157,819
    
    
    
    (157,819
    )
    
    
    Other, Net
    
    
    
    
    
    
    2,829
    
    
    
    
    
    
    
    
    
    
    
    2,829Net Cash Provided (Used) by Financing
Activities-Continuing Operations
    
    
    197,546
    
    
    
    79,051
    
    
    
    103,941
    
    
    
    (157,819
    )
    
    
    222,719Net Cash Provided by Financing Activities-
Discontinued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net Cash Provided (Used) by Financing
Activities
    
    
    197,546
    
    
    
    79,051
    
    
    
    103,941
    
    
    
    (157,819
    )
    
    
    222,719Net Decrease in Cash and Cash Equivalents
    
    
    (11
    )
    
    
    168
    
    
    
    (17,233
    )
    
    
    
    
    
    
    (17,076
    )Cash and Cash Equivalents at Beginning of Year
    
    
    35
    
    
    
    2,271
    
    
    
    123,981
    
    
    
    
    
    
    
    126,287Cash and Cash Equivalents at End of Year
    
    $
    24
    
    
    $
    2,439
    
    
    $
    106,748
    
    
    $
    
    
    
    $
    109,211
 19




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
  Overview
 General
    Industry Trends
   Henry Hub
    
    North American
    
    InternationalWTI Oil (1)
    
    Gas (2)
    
    Rig Count (3)
    
    Rig Count (3)March 31, 2008
    
    $
    101.58
    
    
    $
    10.10
    
    
    
    2,205
    
    
    
    1,146December 31, 2007
    
    
    95.98
    
    
    
    7.48
    
    
    
    2,171
    
    
    
    1,122March 31, 2007
    
    
    65.87
    
    
    
    7.73
    
    
    
    2,141
    
    
    
    1,075
 
 (1)
    
    Price per barrel as of March 31 and December 31  Source:Applied Reasoning, Inc.(2)
    
    Price per MM/BTU as of March 31 and December 31  Source:Oil World(3)
    
    Average rig count for the applicable month  Source:Baker Hughes Rig Count and other
third-party data  20




---



##### Table of Contents



Opportunities and Challenges
   2008 and 2009 Outlook
   Geographic Markets.
  21




---



##### Table of Contents



Pricing.
  Results of Operations
  Three Months Ended March 31,2008
    
    
    2007(In thousands, except percentages andper share data)Revenues:North America
    
    $
    1,090,362
    
    
    $
    1,006,633Middle East/North Africa/Asia
    
    
    521,884
    
    
    
    394,752Europe/West Africa/CIS
    
    
    347,629
    
    
    
    244,958Latin America
    
    
    236,017
    
    
    
    205,9422,195,892
    
    
    
    1,852,285Operating Income:North America
    
    
    291,653
    
    
    
    300,210Middle East/North Africa/Asia
    
    
    120,674
    
    
    
    83,473Europe/West Africa/CIS
    
    
    93,213
    
    
    
    55,235Latin America
    
    
    60,498
    
    
    
    48,589Research and Development:
    
    
    (42,639
    )
    
    
    (40,514
    )Corporate
    
    
    (33,632
    )
    
    
    (27,095
    )Exit Costs and Restructuring Charges
    
    
    (74,233
    )
    
    
    (4,184
    )415,534
    
    
    
    415,714Interest Expense, Net
    
    
    (52,803
    )
    
    
    (33,771
    )Other, Net
    
    
    499
    
    
    
    (2,372
    )Effective Tax Rate
    
    
    20.3
    %
    
    
    24.1
    %Net Income per Diluted Share from Continuing Operations
    
    $
    0.82
    
    
    $
    0.82Loss from Discontinued Operations, Net of Taxes
    
    
    (19,868
    )
    
    
    (2,247
    )Net Income per Diluted Share
    
    $
    0.76
    
    
    $
    0.81
 22




---



##### Table of Contents



Revenues
  Three Months Ended March 31,2008
    
    
    2007Artificial Lift Systems
    
    
    16
    %
    
    
    17
    %Well Construction
    
    
    16
    
    
    
    16Drilling Services
    
    
    15
    
    
    
    15Drilling Tools
    
    
    11
    
    
    
    12Completion Systems
    
    
    10
    
    
    
    10Wireline
    
    
    9
    
    
    
    10Re-entry & Fishing
    
    
    8
    
    
    
    8Stimulation & Chemicals Services
    
    
    7
    
    
    
    6Integrated Drilling
    
    
    5
    
    
    
    5Pipeline & Specialty Services
    
    
    3
    
    
    
    1Total
    
    
    100
    %
    
    
    100
    %
  Operating Income
  Interest Expense, Net
  Income Taxes
  Segment Results
 North America
  23




---



##### Table of Contents



Middle East/North Africa/Asia
   Europe/West Africa/CIS
   Latin America
   Discontinued operations
  Liquidity and Capital Resources
 Sources of Liquidity
  Committed Borrowing Facilities
  24




---



##### Table of Contents



Facilities
    
    $
    1,750Less:Amount drawn
    
    
    159Commercial paper
    
    
    Letters of credit
    
    
    34Availability
    
    $
    1,557
 Commercial Paper
  Debt Offering
  Cash Requirements
     25




---



##### Table of Contents



Derivative Instruments
 Interest Rate Swaps
   Cash Flow Hedges
  Other Derivative Instruments
   Off Balance Sheet Arrangements
 Guarantees
   Letters of Credit
  26




---



##### Table of Contents



New Accounting Pronouncements
  Critical Accounting Policies and Estimates
  Exposures
 Risk Factors
 Forward-Looking Statements
   
    
    A downturn in market conditions could affect projected results.Any material changes in
oil and natural gas supply and demand, oil and natural gas prices, rig count or other
market trends would affect our results and would likely affect the forward-looking
information we provide. The oil and natural gas industry is extremely volatile and subject
to change based on political and economic factors outside our control. Worldwide drilling
activity has increased in each of the last four years; however, if an extended regional
and/or worldwide recession were to occur, it would result in lower demand and lower prices
for oil and natural gas, which would adversely affect drilling and production activity and
therefore would affect our revenues and income. We have assumed increases in worldwide
demand will continue throughout 2008 and 2009.
    
    Availability of a skilled workforce could affect our projected results.Due to the high
activity in the exploration and production and oilfield service industries there is an
increasing shortage of available skilled labor, particularly in our high-growth regions.
Our forward-looking statements assume we will be able to recruit and maintain a sufficient
skilled workforce for activity levels.
    
    Increases in the prices and availability of our raw materials could affect our results
of operations.We use large amounts of raw materials for manufacturing our products. The
price of these raw materials has a significant impact on our cost of producing products for
sale or producing fixed assets used in our business. We have assumed that the prices of
our raw materials will remain within a manageable range and will be readily available. If
we are unable to obtain necessary raw materials or if we are unable to minimize the impact
of increased raw materials costs through our supply chain initiatives or by passing through
these increases to our customers, our margins and results of operations could be adversely
affected.
 27




---



##### Table of Contents




    
    Our long-term growth depends upon technological innovation and commercialization.Our
ability to deliver our long-term growth strategy depends in part on the commercialization
of new technology. A central aspect of our growth strategy is to innovate our products and
services, to obtain technologically advanced products through internal research and
development and/or acquisitions, to protect proprietary technology from unauthorized use
and to expand the markets for new technology through leverage of our worldwide
infrastructure. The key to our success will be our ability to commercialize the technology
that we have acquired and demonstrate the enhanced value our technology brings to our
customers operations. Our major technological advances include, but are not limited to,
those related to controlled pressure drilling and testing systems, expandable solid
tubulars, expandable sand screens and intelligent well completion. Our forward-looking
statements have assumed successful commercialization of, and above-average growth from,
these new products and services.
    
    Nonrealization of expected benefits from our 2002 corporate reincorporation could affect
our projected results.We are incorporated in Bermuda and we operate through our various
subsidiaries in numerous countries throughout the world including the United States.
Consequently, we are subject to changes in tax laws, treaties or regulations or the
interpretation or enforcement thereof in the U.S., Bermuda or jurisdictions in which we or
any of our subsidiaries operates or is resident. Our income tax expense is based upon our
interpretation of the tax laws in effect in various countries at the time that the expense
was incurred. If the U.S. Internal Revenue Service or other taxing authorities do not agree
with our assessment of the effects of such laws, treaties and regulations, this could have
a material adverse effect on us including the imposition of a higher effective tax rate on our worldwide earnings or a
reclassification of the tax impact of our significant corporate restructuring transactions.
    
    Nonrealization of expected benefits from our acquisitions could affect our projected
results.We expect to gain certain business, financial and strategic advantages as a
result of business acquisitions we undertake, including synergies and operating
efficiencies. Our forward-looking statements assume that we will successfully integrate
our business acquisitions and realize the benefits of that. An inability to realize
expected strategic advantages as a result of the acquisition would negatively affect the
anticipated benefits of the acquisition.
    
    The cyclical nature of or a prolonged downturn in our industry could affect the carrying
value of our goodwill.As of March 31, 2008, we had approximately $3.4 billion of
goodwill. Our estimates of the value of our goodwill could be reduced in the future as a
result of various factors, some of which are beyond our control. Any reduction in the
value of our goodwill may result in an impairment charge and therefore adversely affect our
results.
    
    Currency fluctuations could have a material adverse financial impact on our business.A
material change in currency rates in our markets could affect our future results as well as
affect the carrying values of our assets. World currencies have been subject to much
volatility. Our forward-looking statements assume no material impact from future changes
in currency exchange rates.
    
    Adverse weather conditions in certain regions could aversely affect our operations.In
the summer of 2005, the Gulf of Mexico suffered several significant hurricanes. These
hurricanes and associated hurricane threats reduced the number of days on which we and our
customers could operate, which resulted in lower revenues than we otherwise would have
achieved. In parts of 2006, and particularly in the second quarter of 2007, climatic
conditions in Canada were not as favorable to drilling as we anticipated, which limited our
potential results in that region. Similarly, unfavorable weather in Russia and in the
North Sea could reduce our operations and revenues from that area during the relevant
period. Our forward-looking statements assume weather patterns in our primary areas of
operations will be conducive to our operations.
    
    U.S. Government and internal investigations could affect our results of operations.We
are currently involved in government and internal investigations involving various of our
operations. These investigations are ongoing, and we cannot anticipate the timing, outcome
or possible impact of these investigations, financial or otherwise. The governmental
agencies involved in these investigations have a broad range of civil and criminal
penalties they may seek to impose against corporations and individuals for violations of
trading sanctions laws, the Foreign Corrupt Practices Act 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
multi-million dollar fines and other penalties and sanctions. Under trading sanctions laws,
the Department
 28




---



##### Table of Contents



of Justice (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.
Any injunctive relief, disgorgement, fines, penalties, sanctions or imposed modifications
to business practices resulting from these investigations could adversely affect our
results of operations. Additionally, during the three months ended
March 31, 2008, we incurred $51 million for costs
incurred in connection with our exit from sanctioned countries and $8 million in connection with
complying with these on-going investigations. We will have additional charges related to these
matters in future periods, which costs may include labor claims, contractual claims, penalties
assessed by customers, and costs, fines, taxes and penalties assessed by the local governments, but
we cannot quantify those charges or be certain of the timing of them.
 
    
    Political disturbances, war, or terrorist attacks and changes in global trade policies
could adversely impact our operations.We have assumed there will be no material political
disturbances or terrorist attacks and there will be no material changes in global trade
policies. Any further military action undertaken by the U.S. or other countries could
adversely affect our results of operations.
 www.sec.gov
 Available Information
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  Foreign Currency Exchange Rates
     29




---



##### Table of Contents



Interest Rates
   March 31, 2008
    
    December 31, 2007Carrying
    
    Fair
    
    Carrying
    
    FairAmount
    
    Value
    
    Amount
    
    Value(In millions)6.625% Senior Notes due 2011
    
    $
    355
    
    
    $
    373
    
    
    $
    356
    
    
    $
    3695.95% Senior Notes due 2012
    
    
    599
    
    
    
    621
    
    
    
    599
    
    
    
    6185.15% Senior Notes due 2013
    
    
    499
    
    
    
    503
    
    
    
    
    
    
    
    4.95% Senior Notes due 2013
    
    
    254
    
    
    
    257
    
    
    
    255
    
    
    
    2455.50% Senior Notes due 2016
    
    
    349
    
    
    
    345
    
    
    
    349
    
    
    
    3386.00% Senior Notes due 2018
    
    
    497
    
    
    
    512
    
    
    
    
    
    
    
    6.35% Senior Notes due 2017
    
    
    600
    
    
    
    621
    
    
    
    600
    
    
    
    6246.50% Senior Notes due 2036
    
    
    596
    
    
    
    561
    
    
    
    596
    
    
    
    5986.80% Senior Notes due 2037
    
    
    298
    
    
    
    294
    
    
    
    298
    
    
    
    3137.00% Senior Notes due 2038
    
    
    498
    
    
    
    513
    
    
    
    
    
    
    
    
   Interest Rate Swaps and Derivatives
    30




---



##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
  
 PART II. OTHER INFORMATION
 
 ITEM 1A. RISK FACTORS
    
 ITEM 2. UNREGISTERED SALES OF EQUITY IN SECURITIES AND USE OF PROCEEDS
   Period
    
    No. of Shares
    
    Average PriceJanuary 1  January 31, 2008
    
    
    110,715
    
    
    $
    68.72February 1  February 29, 2008
    
    
    21,207
    
    
    
    63.56March 1  March 31, 2008
    
    
    1,399
    
    
    
    71.13
 31




---



##### Table of Contents



ITEM
6. EXHIBITS
  ExhibitNumber
    
    Description31.1
    
    Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.1.1
    
    Underwriting Agreement, dated March 19, 2008, among Weatherford
International Ltd., Weatherford International, Inc., and Goldman,
Sachs & Co., Deutsche Bank Securities Inc., and Merrill Lynch,
Pierce, Fenner & Smith Incorporated (incorporated by reference to
Exhibit 1.1 to the Registrants Current Report on Form 8-K (File
No. 1-31339) filed March 25, 2008).4.1
    
    First Supplemental Indenture, dated March 25, 2008 among
Weatherford International Ltd., Weatherford International, Inc.,
and Deutsche Bank Trust Company Americas (incorporated by
reference to Exhibit 4.1 to the Registrants Current Report on
Form 8-K (File No. 1-31339) filed March 25, 2008).4.2
    
    Form of global note for 5.15% Senior Notes due 2013 (incorporated
by reference to Exhibit 4.2 to the Registrants Current Report on
Form 8-K (File No. 1-31339) filed March 25, 2008).4.3
    
    Form of global note for 6.00% Senior Notes due 2018 (incorporated
by reference to Exhibit 4.3 to the Registrants Current Report on
Form 8-K (File No. 1-31339) filed March 25, 2008).4.4
    
    Form of global note for 7.00% Senior Notes due 2038 (incorporated
by reference to Exhibit 4.4 to the Registrants Current Report on
Form 8-K (File No. 1-31339) filed March 25, 2008).4.5
    
    Credit Agreement, dated March 19, 2008, among Weatherford
International Ltd. as borrower, Weatherford International, Inc. as
guarantor, and Deutsche Bank AG Cayman Islands Branch as
administrative agent, and the other lenders party thereto
(incorporated by reference to Exhibit 4.6 to the Registrants
Current Report on Form 8-K (File No. 1-31339) filed March 25,
2008).
 
 
    
    Filed herewith 32




---



##### Table of Contents



SIGNATURES
  Weatherford International Ltd.By:
    /s/ Bernard J. Duroc-DannerBernard J. Duroc-DannerChief Executive Officer
(Principal Executive Officer)/s/ Andrew P. BecnelAndrew P. BecnelSenior Vice President and Chief
Financial Officer
(Principal Financial Officer)/s/ Jessica AbarcaJessica AbarcaVice President  Accounting and Chief Accounting Officer
(Principal Accounting Officer)Date: May 6, 2008 33




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber
    
    Description31.1
    
    Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.1.1
    
    Underwriting Agreement, dated March 19, 2008, among Weatherford
International Ltd., Weatherford International, Inc., and Goldman,
Sachs & Co., Deutsche Bank Securities Inc., and Merrill Lynch,
Pierce, Fenner & Smith Incorporated (incorporated by reference to
Exhibit 1.1 to the Registrants Current Report on Form 8-K (File
No. 1-31339) filed March 25, 2008).4.1
    
    First Supplemental Indenture, dated March 25, 2008 among
Weatherford International Ltd., Weatherford International, Inc.,
and Deutsche Bank Trust Company Americas (incorporated by
reference to Exhibit 4.1 to the Registrants Current Report on
Form 8-K (File No. 1-31339) filed March 25, 2008).4.2
    
    Form of global note for 5.15% Senior Notes due 2013 (incorporated
by reference to Exhibit 4.2 to the Registrants Current Report on
Form 8-K (File No. 1-31339) filed March 25, 2008).4.3
    
    Form of global note for 6.00% Senior Notes due 2018 (incorporated
by reference to Exhibit 4.3 to the Registrants Current Report on
Form 8-K (File No. 1-31339) filed March 25, 2008).4.4
    
    Form of global note for 7.00% Senior Notes due 2038 (incorporated
by reference to Exhibit 4.4 to the Registrants Current Report on
Form 8-K (File No. 1-31339) filed March 25, 2008).4.5
    
    Credit Agreement, dated March 19, 2008, among Weatherford
International Ltd. as borrower, Weatherford International, Inc. as
guarantor, and Deutsche Bank AG Cayman Islands Branch as
administrative agent, and the other lenders party thereto
(incorporated by reference to Exhibit 4.6 to the Registrants
Current Report on Form 8-K (File No. 1-31339) filed March 25,
2008).
 
 
    
    Filed herewith