##### 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 1934For the quarterly period ended
September 30, 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
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)515 Post Oak BoulevardSuite 600Houston, Texas
    
    77027-3415(Address of principal executive offices)
    
    (Zip Code)
 (Registrants telephone number, include area code)
 
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ
  Title of Class
    
    Outstanding at October 29, 2008Common Shares, par value $1.00
    
    681,099,947




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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 1. LEGAL PROCEEDINGSITEM 1A. RISK FACTORSITEM 2. UNREGISTERED SALES OF EQUITY IN SECURITIES AND USE OF PROCEEDSITEM 6. EXHIBITSSIGNATURESEX-31.1EX-31.2EX-32.1EX-32.2    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)
 September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCurrent Assets:Cash and Cash Equivalents
    
    $
    336,546
    
    
    $
    170,714Accounts Receivable, Net of Allowance for Uncollectible
Accounts of $12,708 and $13,760, Respectively
    
    
    2,425,666
    
    
    
    1,961,854Inventories
    
    
    2,021,814
    
    
    
    1,607,684Other Current Assets
    
    
    723,112
    
    
    
    731,5175,507,138
    
    
    
    4,471,769Property, Plant and Equipment, Net of Accumulated
Depreciation of $2,737,610 and $2,400,062, Respectively
    
    
    5,515,079
    
    
    
    4,153,845Goodwill
    
    
    3,812,643
    
    
    
    3,358,490Other Intangible Assets, Net of Accumulated Amortization of
$260,442 and $227,307 Respectively
    
    
    572,433
    
    
    
    596,999Equity Investments
    
    
    485,331
    
    
    
    368,618Other Assets
    
    
    306,287
    
    
    
    241,236$
    16,198,911
    
    
    $
    13,190,957LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Short-term Borrowings and Current Portion of Long-term Debt
    
    $
    1,074,000
    
    
    $
    774,220Accounts Payable
    
    
    813,745
    
    
    
    612,775Other Current Liabilities
    
    
    752,246
    
    
    
    815,3702,639,991
    
    
    
    2,202,365Long-term Debt
    
    
    4,544,110
    
    
    
    3,066,335Other Liabilities
    
    
    553,951
    
    
    
    482,2117,738,052
    
    
    
    5,750,911Minority Interest in Consolidated Subsidiaries
    
    
    77,581
    
    
    
    33,327Shareholders Equity:Common Shares, $1 Par Value, Authorized 2,000,000 Shares,
Issued 728,266 and 727,204 Shares, Respectively
    
    
    728,266
    
    
    
    727,204Capital in Excess of Par Value
    
    
    4,107,603
    
    
    
    3,995,747Treasury Shares, Net
    
    
    (905,727
    )
    
    
    (924,202
    )Retained Earnings
    
    
    4,175,967
    
    
    
    3,170,182Accumulated Other Comprehensive Income
    
    
    277,169
    
    
    
    437,7888,383,278
    
    
    
    7,406,719$
    16,198,911
    
    
    $
    13,190,957
  1




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts)
 Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues:Products
    
    $
    953,084
    
    
    $
    777,243
    
    
    $
    2,616,710
    
    
    $
    2,136,346Services
    
    
    1,587,712
    
    
    
    1,194,748
    
    
    
    4,349,228
    
    
    
    3,503,8752,540,796
    
    
    
    1,971,991
    
    
    
    6,965,938
    
    
    
    5,640,221Costs and ExpensesCost of Products
    
    
    685,338
    
    
    
    544,295
    
    
    
    1,905,964
    
    
    
    1,647,318Cost of Services
    
    
    955,585
    
    
    
    728,952
    
    
    
    2,638,791
    
    
    
    1,982,753Research and Development
    
    
    52,026
    
    
    
    43,199
    
    
    
    139,095
    
    
    
    124,413Selling, General and Administrative
Attributable to Segments
    
    
    268,710
    
    
    
    207,383
    
    
    
    778,375
    
    
    
    628,799Corporate General and Administrative
    
    
    44,397
    
    
    
    28,573
    
    
    
    137,859
    
    
    
    94,194Gain on Sale of Subsidiary
    
    
    
    
    
    
    
    
    
    
    (81,344
    )
    
    
    Operating Income
    
    
    534,740
    
    
    
    419,589
    
    
    
    1,447,198
    
    
    
    1,162,744Other Expense:Interest Expense, Net
    
    
    (60,521
    )
    
    
    (50,194
    )
    
    
    (175,723
    )
    
    
    (119,258
    )Other, Net
    
    
    (8,243
    )
    
    
    1,282
    
    
    
    (13,026
    )
    
    
    (7,024
    )Income from Continuing Operations Before
Income Taxes and Minority Interest
    
    
    465,976
    
    
    
    370,677
    
    
    
    1,258,449
    
    
    
    1,036,462Provision for Income Taxes
    
    
    (82,990
    )
    
    
    (70,429
    )
    
    
    (214,490
    )
    
    
    (267,078
    )Income from Continuing Operations Before
Minority Interest
    
    
    382,986
    
    
    
    300,248
    
    
    
    1,043,959
    
    
    
    769,384Minority Interest, Net of Taxes
    
    
    (12,386
    )
    
    
    (5,324
    )
    
    
    (25,246
    )
    
    
    (14,161
    )Income from Continuing Operations
    
    
    370,600
    
    
    
    294,924
    
    
    
    1,018,713
    
    
    
    755,223Loss from Discontinued Operation, Net of
Taxes
    
    
    
    
    
    
    (2,211
    )
    
    
    (12,928
    )
    
    
    (15,628
    )Net Income
    
    $
    370,600
    
    
    $
    292,713
    
    
    $
    1,005,785
    
    
    $
    739,595Basic Earnings Per Share:Income from Continuing Operations
    
    $
    0.54
    
    
    $
    0.44
    
    
    $
    1.49
    
    
    $
    1.12Loss from Discontinued Operation
    
    
    
    
    
    
    (0.01
    )
    
    
    (0.01
    )
    
    
    (0.03
    )Net Income
    
    $
    0.54
    
    
    $
    0.43
    
    
    $
    1.48
    
    
    $
    1.09Diluted Earnings Per Share:Income from Continuing Operations
    
    $
    0.53
    
    
    $
    0.42
    
    
    $
    1.46
    
    
    $
    1.09Loss from Discontinued Operation
    
    
    
    
    
    
    
    
    
    
    (0.02
    )
    
    
    (0.03
    )Net Income
    
    $
    0.53
    
    
    $
    0.42
    
    
    $
    1.44
    
    
    $
    1.06Weighted Average Shares Outstanding:Basic
    
    
    682,532
    
    
    
    676,352
    
    
    
    681,531
    
    
    
    677,012Diluted
    
    
    701,284
    
    
    
    696,496
    
    
    
    700,099
    
    
    
    694,916
  2




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
 Nine MonthsEnded September 30,2008
    
    
    2007Cash Flows from Operating Activities:Net Income
    
    $
    1,005,785
    
    
    $
    739,595Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:Depreciation and Amortization
    
    
    528,129
    
    
    
    439,034Gain on Sales of Assets and Businesses, Net
    
    
    (111,043
    )
    
    
    (35,188
    )Loss from Discontinued Operation
    
    
    12,928
    
    
    
    15,628Employee Share-Based Compensation Expense
    
    
    74,760
    
    
    
    57,109Excess Tax Benefits from Share-Based Compensation
    
    
    (15,746
    )
    
    
    (20,396
    )Minority Interest
    
    
    25,246
    
    
    
    14,161Deferred Income Tax (Benefit) Provision
    
    
    (14,940
    )
    
    
    140,884Other, Net
    
    
    (17,619
    )
    
    
    9,094Change in Operating Assets and Liabilities, Net of Effect of Businesses Acquired
Accounts Receivable
    
    
    (402,682
    )
    
    
    (292,581
    )Inventories
    
    
    (426,526
    )
    
    
    (404,821
    )Accounts Payable
    
    
    147,046
    
    
    
    37,759Other
    
    
    (214,763
    )
    
    
    (169,826
    )Net Cash Provided by Operating Activities  Continuing Operations
    
    
    590,575
    
    
    
    530,452Net Cash Used by Operating Activities  Discontinued Operation
    
    
    (6,219
    )
    
    
    (9,014
    )Net Cash Provided by Operating Activities
    
    
    584,356
    
    
    
    521,438Cash Flows from Investing Activities:Acquisitions of Businesses, Net of Cash Acquired
    
    
    (673,845
    )
    
    
    (224,878
    )Capital Expenditures for Property, Plant and Equipment
    
    
    (1,821,813
    )
    
    
    (1,097,470
    )Acquisition of Intellectual Property
    
    
    (14,377
    )
    
    
    (17,683
    )Purchase of Equity Investment in Unconsolidated Affiliates
    
    
    (3,422
    )
    
    
    (334,520
    )Proceeds from Sale of Assets and Businesses, Net
    
    
    290,974
    
    
    
    59,927Net Cash Used by Investing Activities  Continuing Operations
    
    
    (2,222,483
    )
    
    
    (1,614,624
    )Net Cash Provided (Used) by Investing Activities  Discontinued Operation
    
    
    11,000
    
    
    
    (22,361
    )Net Cash Used by Investing Activities
    
    
    (2,211,483
    )
    
    
    (1,636,985
    )Cash Flows from Financing Activities:Borrowings of (Repayments on) Short-term Debt, Net
    
    
    295,528
    
    
    
    (228,256
    )Borrowings of Long-term Debt, Net
    
    
    1,482,844
    
    
    
    1,474,773Purchase of Treasury Shares
    
    
    
    
    
    
    (179,262
    )Proceeds from Exercise of Stock Options
    
    
    9,969
    
    
    
    30,753Excess Tax Benefits from Share-Based Compensation
    
    
    15,746
    
    
    
    20,396Other Financing Activities, Net
    
    
    (11,128
    )
    
    
    (3,146
    )Net Cash Provided by Financing Activities  Continuing Operations
    
    
    1,792,959
    
    
    
    1,115,258Net Cash Provided by Financing Activities  Discontinued Operation
    
    
    
    
    
    
    Net Cash Provided by Financing Activities
    
    
    1,792,959
    
    
    
    1,115,258Net Increase (Decrease)in Cash and Cash Equivalents
    
    
    165,832
    
    
    
    (289
    )Cash and Cash Equivalents at Beginning of Period
    
    
    170,714
    
    
    
    126,287Cash and Cash Equivalents at End of Period
    
    $
    336,546
    
    
    $
    125,998Supplemental Cash Flow Information:Interest Paid
    
    $
    188,940
    
    
    $
    110,766Income Taxes Paid, Net of Refunds
    
    
    231,319
    
    
    
    241,887
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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(In thousands)
 Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net Income
    
    $
    370,600
    
    
    $
    292,713
    
    
    $
    1,005,785
    
    
    $
    739,595Other Comprehensive Income:Deferred Loss on Derivative Instruments
    
    
    
    
    
    
    
    
    
    
    (12,576
    )
    
    
    Amortization of Pension Components
    
    
    885
    
    
    
    1,026
    
    
    
    6,501
    
    
    
    5,608Pension Remeasurement Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,427
    )Foreign Currency Translation
Adjustment
    
    
    (192,205
    )
    
    
    127,370
    
    
    
    (154,879
    )
    
    
    255,745Other
    
    
    148
    
    
    
    39
    
    
    
    335
    
    
    
    114Comprehensive Income
    
    $
    179,428
    
    
    $
    421,148
    
    
    $
    845,166
    
    
    $
    985,635
  4




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##### Table of Contents



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




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
  3. Equity Investment Acquisition
  4. Discontinued Operations
  5. Inventories
  September 30,
    
    
    December 31,2008
    
    
    2007(In thousands)Raw materials, components and supplies
    
    $
    433,427
    
    
    $
    373,383Work in process
    
    
    166,272
    
    
    
    118,407Finished goods
    
    
    1,422,115
    
    
    
    1,115,894$
    2,021,814
    
    
    $
    1,607,684
  6. Goodwill
  6




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
  Europe/
    
    
    Middle East/North
    
    
    Latin
    
    
    West Africa/
    
    
    North Africa/America
    
    
    America
    
    
    CIS
    
    
    Asia
    
    
    Total(In thousands)December 31, 2007
    
    $
    1,918,411
    
    
    $
    156,825
    
    
    $
    678,433
    
    
    $
    604,821
    
    
    $
    3,358,490Acquisitions
    
    
    104,297
    
    
    
    77,560
    
    
    
    196,642
    
    
    
    152,200
    
    
    
    530,699Disposals
    
    
    (4,380
    )
    
    
    (27
    )
    
    
    
    
    
    
    
    
    
    
    (4,407
    )Purchase price and other
adjustments
    
    
    2,222
    
    
    
    7,161
    
    
    
    6,644
    
    
    
    (15,909
    )
    
    
    118Foreign currency
translation
    
    
    (49,034
    )
    
    
    (1,571
    )
    
    
    (18,020
    )
    
    
    (3,632
    )
    
    
    (72,257
    )As of September 30, 2008
    
    $
    1,971,516
    
    
    $
    239,948
    
    
    $
    863,699
    
    
    $
    737,480
    
    
    $
    3,812,643
 7. Short-term Borrowings and Current Portion of Long-term Debt
  September 30,
    
    

December 31,2008
    
    
    2007(In thousands)Revolving credit facilities
    
    $
    1,030,000
    
    
    $
    491,000Commercial paper program
    
    
    
    
    
    
    191,621Other short-term bank loans
    
    
    32,415
    
    
    
    80,025Total Short-term Borrowings
    
    
    1,062,415
    
    
    
    762,646Current Portion of Long-term Debt
    
    
    11,585
    
    
    
    11,574Short-term Borrowings and Current Portion of Long-term Debt
    
    $
    1,074,000
    
    
    $
    774,220
      7




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




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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Fair Value Measurements, Effective
Date of FASB Statement No. 157,
       September 30, 2008Level 1
    
    Level 2
    
    Level 3
    
    Total(In thousands)Assets:Derivative contracts
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Liabilities:Derivative contracts
    
    
    
    
    
    
    64,810
    
    
    
    
    
    
    
    64,810
 9




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 9. Income Taxes
   10. Earnings Per Share
    Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Basic weighted average shares outstanding
    
    
    682,532
    
    
    
    676,352
    
    
    
    681,531
    
    
    
    677,012Dilutive effect of:Warrant
    
    
    7,553
    
    
    
    6,250
    
    
    
    7,626
    
    
    
    5,114Stock option and restricted share plans
    
    
    11,199
    
    
    
    13,894
    
    
    
    10,942
    
    
    
    12,790Diluted weighted average shares
outstanding
    
    
    701,284
    
    
    
    696,496
    
    
    
    700,099
    
    
    
    694,916
 11. Supplemental Cash Flow Information
   10




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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 12. Share-Based Compensation
  Three Months
    
    Nine MonthsEnded September 30,
    
    Ended September 30,2008
    
    2007
    
    2008
    
    2007(In thousands)Share-based compensation
    
    $
    26,626
    
    
    $
    19,896
    
    
    $
    74,760
    
    
    $
    57,109Related tax benefit
    
    
    9,319
    
    
    
    6,964
    
    
    
    26,166
    
    
    
    19,988
   13. Retirement and Employee Benefit Plans
  Three Months Ended September 30,2008
    
    
    2007United
    
    
    
    
    
    
    UnitedStates
    
    
    International
    
    
    States
    
    
    International(In thousands)Service cost
    
    $
    720
    
    
    $
    3,413
    
    
    $
    660
    
    
    $
    2,798Interest cost
    
    
    1,511
    
    
    
    2,551
    
    
    
    1,326
    
    
    
    2,060Expected return on plan assets
    
    
    (179
    )
    
    
    (2,233
    )
    
    
    (165
    )
    
    
    (2,001
    )Amortization of transition obligation
    
    
    
    
    
    
    (1
    )
    
    
    3⁄4
    
    
    
    (1
    )Amortization of prior service cost (credit)
    
    
    458
    
    
    
    (19
    )
    
    
    527
    
    
    
    (27
    )Amortization of loss
    
    
    964
    
    
    
    102
    
    
    
    1,043
    
    
    
    39Curtailment/settlement loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    3,474
    
    
    $
    3,813
    
    
    $
    3,391
    
    
    $
    2,868
 Nine Months Ended September 30,2008
    
    
    2007United
    
    
    
    
    
    
    UnitedStates
    
    
    International
    
    
    States
    
    
    International(In thousands)Service cost
    
    $
    2,160
    
    
    $
    10,456
    
    
    $
    1,981
    
    
    $
    8,216Interest cost
    
    
    4,533
    
    
    
    7,820
    
    
    
    3,979
    
    
    
    6,053Expected return on plan assets
    
    
    (537
    )
    
    
    (6,859
    )
    
    
    (495
    )
    
    
    (5,887
    )Amortization of transition obligation
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Amortization of prior service cost (credit)
    
    
    1,374
    
    
    
    (59
    )
    
    
    1,581
    
    
    
    (79
    )Amortization of loss
    
    
    2,892
    
    
    
    310
    
    
    
    3,127
    
    
    
    113Curtailment/settlement loss
    
    
    5,621
    
    
    
    
    
    
    
    1,881
    
    
    
    Net periodic benefit cost
    
    $
    16,043
    
    
    $
    11,665
    
    
    $
    12,054
    
    
    $
    8,413
 11




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
  14. Segment Information
  Three Months Ended September 30, 2008Net
    
    
    Income
    
    
    DepreciationOperating
    
    
    from
    
    
    andRevenues
    
    
    Operations
    
    
    Amortization(In thousands)North America
    
    $
    1,179,605
    
    
    $
    312,887
    
    
    $
    79,619Middle East/North Africa/Asia
    
    
    637,872
    
    
    
    146,450
    
    
    
    49,138Europe/West Africa/CIS
    
    
    408,993
    
    
    
    102,385
    
    
    
    31,911Latin America
    
    
    314,326
    
    
    
    69,521
    
    
    
    23,5612,540,796
    
    
    
    631,243
    
    
    
    184,229Research and Development
    
    
    
    
    
    
    (52,026
    )
    
    
    1,902Corporate
    
    
    
    
    
    
    (30,750
    )
    
    
    1,000Other (a)
    
    
    
    
    
    
    (13,727
    )
    
    
    Total
    
    $
    2,540,796
    
    
    $
    534,740
    
    
    $
    187,131
 Three Months Ended September 30, 2007Net
    
    
    Income
    
    
    DepreciationOperating
    
    
    from
    
    
    andRevenues
    
    
    Operations
    
    
    Amortization(In thousands)North America
    
    $
    993,828
    
    
    $
    264,183
    
    
    $
    74,047Middle East/North Africa/Asia
    
    
    455,932
    
    
    
    103,839
    
    
    
    40,983Europe/West Africa/CIS
    
    
    308,587
    
    
    
    77,886
    
    
    
    22,926Latin America
    
    
    213,644
    
    
    
    45,453
    
    
    
    18,8801,971,991
    
    
    
    491,361
    
    
    
    156,836Research and Development
    
    
    
    
    
    
    (43,199
    )
    
    
    1,678Corporate
    
    
    3⁄4
    
    
    
    (24,945
    )
    
    
    463Other (b)
    
    
    3⁄4
    
    
    
    (3,628
    )
    
    
    Total
    
    $
    1,971,991
    
    
    $
    419,589
    
    
    $
    158,977
 
 (a)
    
    The three months ended September 30, 2008 includes $14 million incurred in
connection with the Companys on-going investigations by the U. S. government.(b)
    
    The three months ended September 30, 2007 includes $4 million incurred in
connection with the Companys on-going investigations. 12




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Nine Months Ended September 30, 2008Net
    
    
    Income
    
    
    DepreciationOperating
    
    
    from
    
    
    andRevenues
    
    
    Operations
    
    
    Amortization(In thousands)North America
    
    $
    3,282,211
    
    
    $
    828,792
    
    
    $
    229,499Middle East/North Africa/Asia
    
    
    1,716,007
    
    
    
    397,774
    
    
    
    140,856Europe/West Africa/CIS
    
    
    1,146,185
    
    
    
    294,614
    
    
    
    86,132Latin America
    
    
    821,535
    
    
    
    188,374
    
    
    
    63,6116,965,938
    
    
    
    1,709,554
    
    
    
    520,098Research and Development
    
    
    
    
    
    
    (139,095
    )
    
    
    5,463Corporate
    
    
    
    
    
    
    (99,657
    )
    
    
    2,568Other (c)
    
    
    
    
    
    
    (23,604
    )
    
    
    Total
    
    $
    6,965,938
    
    
    $
    1,447,198
    
    
    $
    528,129
 Nine Months Ended September 30, 2007Net
    
    
    Income
    
    
    DepreciationOperating
    
    
    from
    
    
    andRevenues
    
    
    Operations
    
    
    Amortization(In thousands)North America
    
    $
    2,883,825
    
    
    $
    756,661
    
    
    $
    202,770Middle East/North Africa/Asia
    
    
    1,286,022
    
    
    
    284,310
    
    
    
    114,101Europe/West Africa/CIS
    
    
    844,184
    
    
    
    202,911
    
    
    
    62,097Latin America
    
    
    626,190
    
    
    
    139,784
    
    
    
    52,7375,640,221
    
    
    
    1,383,666
    
    
    
    431,705Research and Development
    
    
    
    
    
    
    (124,413
    )
    
    
    4,967Corporate
    
    
    
    
    
    
    (75,565
    )
    
    
    2,362Other (d)
    
    
    
    
    
    
    (20,944
    )
    
    
    Total
    
    $
    5,640,221
    
    
    $
    1,162,744
    
    
    $
    439,034
 
 (c)
    
    The nine months ended September 30, 2008 includes $57 million for costs
incurred in connection with the Companys withdrawal from sanctioned countries. These
costs were included in the Cost of Products line item in the Condensed Consolidated
Statements of Income. In addition, severance costs of $15 million were incurred
associated with reorganization activities and $33 million was expended in connection
with the Companys on-going investigations. These charges were partially offset by a
gain of $81 million recognized in connection with the sale of a 50% interest in a
subsidiary the Company controls to Qatar Petroleum for cash consideration of $113
million.(d)
    
    The nine months ended September 30, 2007 includes $17 million for severance
charges associated with reorganization activities and $4 million in investigation costs
incurred in connection with the Companys on-going investigations by the U. S.
government. 13




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 15. Disputes, Litigation and Contingencies
 U.S. Government and Internal Investigations
       14




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##### 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
 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
   15




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
   Condensed Consolidating Balance Sheet
September 30, 2008
(unaudited)
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationASSETSCurrent Assets:Cash and Cash Equivalents
    
    $
    399
    
    
    $
    27,096
    
    
    $
    309,051
    
    
    $
    
    
    
    $
    336,546Other Current Assets
    
    
    11,585
    
    
    
    23,243
    
    
    
    5,135,764
    
    
    
    
    
    
    
    5,170,59211,984
    
    
    
    50,339
    
    
    
    5,444,815
    
    
    
    
    
    
    
    5,507,138Equity Investments in Affiliates
    
    
    13,895,400
    
    
    
    5,864,556
    
    
    
    12,678,730
    
    
    
    (32,438,686
    )
    
    
    Shares Held in Parent
    
    
    
    
    
    
    135,112
    
    
    
    770,619
    
    
    
    (905,731
    )
    
    
    Intercompany Receivables, Net
    
    
    1,181,406
    
    
    
    964,157
    
    
    
    
    
    
    
    (2,145,563
    )
    
    
    Other Assets
    
    
    61,300
    
    
    
    175,313
    
    
    
    10,455,160
    
    
    
    
    
    
    
    10,691,773$
    15,150,090
    
    
    $
    7,189,477
    
    
    $
    29,349,324
    
    
    $
    (35,489,980
    )
    
    $
    16,198,911LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Short-term Borrowings and Current
Portion of Long-term Debt
    
    $
    615,795
    
    
    $
    1,731
    
    
    $
    456,474
    
    
    $
    
    
    
    $
    1,074,000Accounts Payable and Other Current
Liabilities
    
    
    35,265
    
    
    
    37,303
    
    
    
    1,493,423
    
    
    
    
    
    
    
    1,565,991651,060
    
    
    
    39,034
    
    
    
    1,949,897
    
    
    
    
    
    
    
    2,639,991Long-term Debt
    
    
    2,678,794
    
    
    
    1,849,726
    
    
    
    15,590
    
    
    
    
    
    
    
    4,544,110Intercompany Payables, Net
    
    
    
    
    
    
    
    
    
    
    2,145,563
    
    
    
    (2,145,563
    )
    
    
    Other Long-term Liabilities
    
    
    111,577
    
    
    
    12,425
    
    
    
    429,949
    
    
    
    
    
    
    
    553,9513,441,431
    
    
    
    1,901,185
    
    
    
    4,540,999
    
    
    
    (2,145,563
    )
    
    
    7,738,052Minority Interest in Consolidated
Subsidiaries
    
    
    
    
    
    
    
    
    
    
    77,581
    
    
    
    
    
    
    
    77,581Shareholders Equity
    
    
    11,708,659
    
    
    
    5,288,292
    
    
    
    24,730,744
    
    
    
    (33,344,417
    )
    
    
    8,383,278$
    15,150,090
    
    
    $
    7,189,477
    
    
    $
    29,349,324
    
    
    $
    (35,489,980
    )
    
    $
    16,198,911
 16




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##### 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
    
    
    3⁄4
    
    
    
    129,428
    
    
    
    794,774
    
    
    
    (924,202
    )
    
    
    Intercompany Receivables, Net
    
    
    (127,594
    )
    
    
    1,233,846
    
    
    
    3⁄4
    
    
    
    (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
    
    
    
    
    
    
    3⁄4
    
    
    
    1,106,252
    
    
    
    (1,106,252
    )
    
    
    Other Long-term Liabilities
    
    
    91,392
    
    
    
    22,556
    
    
    
    368,263
    
    
    
    
    
    
    
    482,2111,919,773
    
    
    
    1,905,963
    
    
    
    3,031,427
    
    
    
    (1,106,252
    )
    
    
    5,750,911Minority Interest In Consolidated
Subsidiaries
    
    
    
    
    
    
    
    
    
    
    33,327
    
    
    
    
    
    
    
    33,327Shareholders 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
 17




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Condensed Consolidating Statements of Income
Three Months Ended September 30, 2008
(unaudited)
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationRevenues
    
    $
    
    
    
    $
    
    
    
    $
    2,540,796
    
    
    $
    
    
    
    $
    2,540,796Costs and Expenses
    
    
    (8,211
    )
    
    
    (611
    )
    
    
    (1,997,234
    )
    
    
    
    
    
    
    (2,006,056
    )Operating Income (Loss)
    
    
    (8,211
    )
    
    
    (611
    )
    
    
    543,562
    
    
    
    
    
    
    
    534,740Other Income (Expense):Interest Expense, Net
    
    
    (30,446
    )
    
    
    (28,677
    )
    
    
    (1,398
    )
    
    
    
    
    
    
    (60,521
    )Intercompany Charges, Net
    
    
    26,353
    
    
    
    
    
    
    
    (26,353
    )
    
    
    
    
    
    
    Equity in Subsidiary Income
    
    
    393,503
    
    
    
    479,622
    
    
    
    
    
    
    
    (873,125
    )
    
    
    Other, Net
    
    
    (10,599
    )
    
    
    (342
    )
    
    
    2,698
    
    
    
    
    
    
    
    (8,243
    )Income (Loss) from Continuing Operations
Before Income Taxes and Minority Interest
    
    
    370,600
    
    
    
    449,992
    
    
    
    518,509
    
    
    
    (873,125
    )
    
    
    465,976Provision for Income Taxes
    
    
    
    
    
    
    (56,489
    )
    
    
    (26,501
    )
    
    
    
    
    
    
    (82,990
    )Income (Loss) from Continuing Operations
Before Minority Interest
    
    
    370,600
    
    
    
    393,503
    
    
    
    492,008
    
    
    
    (873,125
    )
    
    
    382,986Minority Interest, Net of Taxes
    
    
    
    
    
    
    
    
    
    
    (12,386
    )
    
    
    
    
    
    
    (12,386
    )Income (Loss) from Continuing Operations
    
    
    370,600
    
    
    
    393,503
    
    
    
    479,622
    
    
    
    (873,125
    )
    
    
    370,600Loss from Discontinued Operation, Net of Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net Income (Loss)
    
    $
    370,600
    
    
    $
    393,503
    
    
    $
    479,622
    
    
    $
    (873,125
    )
    
    $
    370,600
 Condensed Consolidating Statements of Income
Three Months Ended September 30, 2007
(unaudited)
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationRevenues
    
    $
    3⁄4
    
    
    $
    3⁄4
    
    
    $
    1,971,991
    
    
    $
    3⁄4
    
    
    $
    1,971,991Costs and Expenses
    
    
    (3,027
    )
    
    
    (272
    )
    
    
    (1,549,103
    )
    
    
    3⁄4
    
    
    
    (1,552,402
    )Operating Income (Loss)
    
    
    (3,027
    )
    
    
    (272
    )
    
    
    422,888
    
    
    
    3⁄4
    
    
    
    419,589Other Income (Expense):Interest Expense, Net
    
    
    (19,087
    )
    
    
    (30,131
    )
    
    
    (976
    )
    
    
    3⁄4
    
    
    
    (50,194
    )Intercompany Charges, Net
    
    
    36,021
    
    
    
    26,700
    
    
    
    (62,721
    )
    
    
    3⁄4
    
    
    
    3⁄4Equity in Subsidiary Income
    
    
    269,206
    
    
    
    271,357
    
    
    
    3⁄4
    
    
    
    (540,563
    )
    
    
    3⁄4Other, Net
    
    
    9,600
    
    
    
    114
    
    
    
    (8,432
    )
    
    
    3⁄4
    
    
    
    1,282Income (Loss) from Continuing Operations
Before Income Taxes and Minority Interest
    
    
    292,713
    
    
    
    267,768
    
    
    
    350,759
    
    
    
    (540,563
    )
    
    
    370,677Benefit (Provision) for Income Taxes
    
    
    3⁄4
    
    
    
    1,438
    
    
    
    (71,867
    )
    
    
    3⁄4
    
    
    
    (70,429
    )Income (Loss) from Continuing Operations
Before Minority Interest
    
    
    292,713
    
    
    
    269,206
    
    
    
    278,892
    
    
    
    (540,563
    )
    
    
    300,248Minority Interest, Net of Taxes
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (5,324
    )
    
    
    3⁄4
    
    
    
    (5,324
    )Income (Loss) from Continuing Operations
    
    
    292,713
    
    
    
    269,206
    
    
    
    273,568
    
    
    
    (540,563
    )
    
    
    294,924Loss from Discontinued Operation, Net of Taxes
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (2,211
    )
    
    
    3⁄4
    
    
    
    (2,211
    )Net Income (Loss)
    
    $
    292,713
    
    
    $
    269,206
    
    
    $
    271,357
    
    
    $
    (540,563
    )
    
    $
    292,713
 18




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Condensed Consolidating Statements of Income
Nine Months Ended September 30, 2008
(unaudited)
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationRevenues
    
    $
    
    
    
    $
    
    
    
    $
    6,965,938
    
    
    $
    
    
    
    $
    6,965,938Costs and Expenses
    
    
    (25,632
    )
    
    
    (1,452
    )
    
    
    (5,491,656
    )
    
    
    
    
    
    
    (5,518,740
    )Operating Income (Loss)
    
    
    (25,632
    )
    
    
    (1,452
    )
    
    
    1,474,282
    
    
    
    
    
    
    
    1,447,198Other Income (Expense):Interest Income (Expense), Net
    
    
    (88,019
    )
    
    
    (87,006
    )
    
    
    (698
    )
    
    
    
    
    
    
    (175,723
    )Intercompany Charges, Net
    
    
    102,651
    
    
    
    
    
    
    
    (102,651
    )
    
    
    
    
    
    
    Equity in Subsidiary Income
    
    
    1,020,439
    
    
    
    1,112,038
    
    
    
    
    
    
    
    (2,132,477
    )
    
    
    Other, Net
    
    
    (5,625
    )
    
    
    (908
    )
    
    
    (6,493
    )
    
    
    
    
    
    
    (13,026
    )Income (Loss) from Continuing Operations
Before Income Taxes and Minority Interest
    
    
    1,003,814
    
    
    
    1,022,672
    
    
    
    1,364,440
    
    
    
    (2,132,477
    )
    
    
    1,258,449Provision for Income Taxes
    
    
    (29
    )
    
    
    (2,233
    )
    
    
    (212,228
    )
    
    
    
    
    
    
    (214,490
    )Income (Loss) from Continuing Operations
Before Minority Interest
    
    
    1,003,785
    
    
    
    1,020,439
    
    
    
    1,152,212
    
    
    
    (2,132,477
    )
    
    
    1,043,959Minority Interest, Net of Taxes
    
    
    
    
    
    
    
    
    
    
    (25,246
    )
    
    
    
    
    
    
    (25,246
    )Income (Loss) from Continuing Operations
    
    
    1,003,785
    
    
    
    1,020,439
    
    
    
    1,126,966
    
    
    
    (2,132,477
    )
    
    
    1,018,713Gain (Loss) from Discontinued Operation,
Net of Taxes
    
    
    2,000
    
    
    
    
    
    
    
    (14,928
    )
    
    
    
    
    
    
    (12,928
    )Net Income (Loss)
    
    $
    1,005,785
    
    
    $
    1,020,439
    
    
    $
    1,112,038
    
    
    $
    (2,132,477
    )
    
    $
    1,005,785
 Condensed Consolidating Statements of Income
Nine Months Ended September 30, 2007
(unaudited)
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationRevenues
    
    $
    3⁄4
    
    
    $
    3⁄4
    
    
    $
    5,640,221
    
    
    $
    3⁄4
    
    
    $
    5,640,221Costs and Expenses
    
    
    (10,313
    )
    
    
    (2,783
    )
    
    
    (4,464,381
    )
    
    
    3⁄4
    
    
    
    (4,477,477
    )Operating Income (Loss)
    
    
    (10,313
    )
    
    
    (2,783
    )
    
    
    1,175,840
    
    
    
    3⁄4
    
    
    
    1,162,744Other Income (Expense):Interest Expense, Net
    
    
    (73,906
    )
    
    
    (44,387
    )
    
    
    (965
    )
    
    
    3⁄4
    
    
    
    (119,258
    )Intercompany Charges, Net
    
    
    27,411
    
    
    
    120,302
    
    
    
    (147,713
    )
    
    
    3⁄4
    
    
    
    3⁄4Equity in Subsidiary Income
    
    
    786,917
    
    
    
    738,658
    
    
    
    3⁄4
    
    
    
    (1,525,575
    )
    
    
    3⁄4Other, Net
    
    
    9,486
    
    
    
    1,346
    
    
    
    (17,856
    )
    
    
    3⁄4
    
    
    
    (7,024
    )Income (Loss) from Continuing Operations
Before Income Taxes and Minority Interest
    
    
    739,595
    
    
    
    813,136
    
    
    
    1,009,306
    
    
    
    (1,525,575
    )
    
    
    1,036,462Provision for Income Taxes
    
    
    3⁄4
    
    
    
    (26,219
    )
    
    
    (240,859
    )
    
    
    3⁄4
    
    
    
    (267,078
    )Income (Loss) from Continuing Operations
Before Minority Interest
    
    
    739,595
    
    
    
    786,917
    
    
    
    768,447
    
    
    
    (1,525,575
    )
    
    
    769,384Minority Interest, Net of Taxes
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (14,161
    )
    
    
    3⁄4
    
    
    
    (14,161
    )Income (Loss) from Continuing Operations
    
    
    739,595
    
    
    
    786,917
    
    
    
    754,286
    
    
    
    (1,525,575
    )
    
    
    755,223Loss from Discontinued Operation, Net of Taxes
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (15,628
    )
    
    
    3⁄4
    
    
    
    (15,628
    )Net Income (Loss)
    
    $
    739,595
    
    
    $
    786,917
    
    
    $
    738,658
    
    
    $
    (1,525,575
    )
    
    $
    739,595
 19




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2008
(unaudited)
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationCash Flows from Operating Activities:Net Income (Loss)
    
    $
    1,005,785
    
    
    $
    1,020,439
    
    
    $
    1,112,038
    
    
    $
    (2,132,477
    )
    
    $
    1,005,785Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided (Used) by Operating Activities:Charges from Parent or Subsidiary
    
    
    (102,651
    )
    
    
    
    
    
    
    102,651
    
    
    
    
    
    
    
    (Gain) Loss from Discontinued Operations
    
    
    (2,000
    )
    
    
    
    
    
    
    14,928
    
    
    
    
    
    
    
    12,928Equity in (Earnings) Loss of Affiliates
    
    
    (1,020,439
    )
    
    
    (1,112,038
    )
    
    
    
    
    
    
    2,132,477
    
    
    
    Deferred Income Tax Provision (Benefit)
    
    
    
    
    
    
    (35,517
    )
    
    
    20,577
    
    
    
    
    
    
    
    (14,940
    )Other Adjustments
    
    
    (17,648
    )
    
    
    (127,545
    )
    
    
    (268,005
    )
    
    
    
    
    
    
    (413,198
    )Net Cash Provided (Used) by Operating
Activities-Continuing Operations
    
    
    (136,953
    )
    
    
    (254,661
    )
    
    
    982,189
    
    
    
    
    
    
    
    590,575Net Cash Used by Operating Activities-
Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    (6,219
    )
    
    
    
    
    
    
    (6,219
    )Net Cash Provided (Used) by Operating
Activities
    
    
    (136,953
    )
    
    
    (254,661
    )
    
    
    975,970
    
    
    
    
    
    
    
    584,356Cash Flows from Investing Activities:Acquisitions of Businesses, Net of Cash Acquired
    
    
    
    
    
    
    
    
    
    
    (673,845
    )
    
    
    
    
    
    
    (673,845
    )Capital Expenditures for Property, Plant and
Equipment
    
    
    
    
    
    
    
    
    
    
    (1,821,813
    )
    
    
    
    
    
    
    (1,821,813
    )Acquisition of Intellectual Property
    
    
    
    
    
    
    
    
    
    
    (14,377
    )
    
    
    
    
    
    
    (14,377
    )Purchase of Equity Investment in Unconsolidated
Affiliate
    
    
    
    
    
    
    
    
    
    
    (3,422
    )
    
    
    
    
    
    
    (3,422
    )Proceeds from Sale of Assets and Businesses, Net
    
    
    
    
    
    
    
    
    
    
    290,974
    
    
    
    
    
    
    
    290,974Capital Contribution to Subsidiary
    
    
    (284,229
    )
    
    
    (5,000
    )
    
    
    
    
    
    
    289,229
    
    
    
    Net Cash Provided (Used) by Investing
Activities-Continuing Operations
    
    
    (284,229
    )
    
    
    (5,000
    )
    
    
    (2,222,483
    )
    
    
    289,229
    
    
    
    (2,222,483
    )Net Cash Provided by Investing Activities-
Discontinued Operations
    
    
    11,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,000Net Cash Provided (Used) by Investing
Activities
    
    
    (273,229
    )
    
    
    (5,000
    )
    
    
    (2,222,483
    )
    
    
    289,229
    
    
    
    (2,211,483
    )Cash Flows from Financing Activities:Borrowings of (Repayments on) Short-term
Debt, Net
    
    
    33,406
    
    
    
    (21,469
    )
    
    
    283,591
    
    
    
    
    
    
    
    295,528Borrowings of (Repayments on) Long-term
Debt, Net
    
    
    1,483,931
    
    
    
    (867
    )
    
    
    (220
    )
    
    
    
    
    
    
    1,482,844Proceeds from Exercise of Stock Options
    
    
    
    
    
    
    9,969
    
    
    
    
    
    
    
    
    
    
    
    9,969Borrowings (Repayments) Between
Subsidiaries, Net
    
    
    (1,094,513
    )
    
    
    280,546
    
    
    
    813,967
    
    
    
    
    
    
    
    Proceeds from Capital Contribution
    
    
    
    
    
    
    
    
    
    
    289,229
    
    
    
    (289,229
    )
    
    
    Other, Net
    
    
    (12,471
    )
    
    
    17,089
    
    
    
    
    
    
    
    
    
    
    
    4,618Net Cash Provided (Used) by Financing
Activities  Continuing Operations
    
    
    410,353
    
    
    
    285,268
    
    
    
    1,386,567
    
    
    
    (289,229
    )
    
    
    1,792,959Net Cash Provided (Used) by Financing
Activities  Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net Cash Provided (Used) by Financing
Activities
    
    
    410,353
    
    
    
    285,268
    
    
    
    1,386,567
    
    
    
    (289,229
    )
    
    
    1,792,959Net Decrease in Cash and Cash Equivalents
    
    
    171
    
    
    
    25,607
    
    
    
    140,054
    
    
    
    
    
    
    
    165,832Cash and Cash Equivalents at Beginning of Year
    
    
    228
    
    
    
    1,489
    
    
    
    168,997
    
    
    
    
    
    
    
    170,714Cash and Cash Equivalents at End of Year
    
    $
    399
    
    
    $
    27,096
    
    
    $
    309,051
    
    
    $
    
    
    
    $
    336,546
 20




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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(UNAUDITED)
 Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2007
(unaudited)
(In thousands)
 OtherParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidationCash Flows from Operating Activities:Net Income (Loss)
    
    $
    739,595
    
    
    $
    786,917
    
    
    $
    738,658
    
    
    $
    (1,525,575
    )
    
    $
    739,595Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided (Used) by Operating
Activities:Equity in (Earnings) Loss of Affiliates
    
    
    (786,917
    )
    
    
    (738,658
    )
    
    
    3⁄4
    
    
    
    1,525,575
    
    
    
    3⁄4Loss from Discontinued Operation
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    15,628
    
    
    
    3⁄4
    
    
    
    15,628Charges from Parent or Subsidiary
    
    
    (27,411
    )
    
    
    (120,302
    )
    
    
    147,713
    
    
    
    3⁄4
    
    
    
    3⁄4Deferred Income Tax Provision (Benefit)
    
    
    3⁄4
    
    
    
    (16,222
    )
    
    
    157,106
    
    
    
    3⁄4
    
    
    
    140,884Other Adjustments
    
    
    65,154
    
    
    
    (59,825
    )
    
    
    (370,984
    )
    
    
    3⁄4
    
    
    
    (365,655
    )Net Cash Provided (Used) by Operating
Activities- Continuing Operations
    
    
    (9,579
    )
    
    
    (148,090
    )
    
    
    688,121
    
    
    
    3⁄4
    
    
    
    530,452Net Cash Used by Operating Activities-
Discontinued Operation
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (9,014
    )
    
    
    3⁄4
    
    
    
    (9,014
    )Net Cash Provided (Used) by Operating
Activities
    
    
    (9,579
    )
    
    
    (148,090
    )
    
    
    679,107
    
    
    
    3⁄4
    
    
    
    521,438Cash Flows from Investing Activities:Acquisition of Businesses, Net of Cash
Acquired
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (224,878
    )
    
    
    3⁄4
    
    
    
    (224,878
    )Capital Expenditures for Property, Plant and
Equipment
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (1,097,470
    )
    
    
    3⁄4
    
    
    
    (1,097,470
    )Acquisition of Intellectual Property
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (17,683
    )
    
    
    3⁄4
    
    
    
    (17,683
    )Purchase of Equity Investment in
Unconsolidated Affiliates
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (334,520
    )
    
    
    3⁄4
    
    
    
    (334,520
    )Proceeds from Sale of Assets
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    59,927
    
    
    
    3⁄4
    
    
    
    59,927Capital Contribution to Subsidiary
    
    
    (595,651
    )
    
    
    (27,100
    )
    
    
    3⁄4
    
    
    
    622,751
    
    
    
    3⁄4Distribution of Earnings from Subsidiary
    
    
    3⁄4
    
    
    
    (1,486,365
    )
    
    
    1,486,365
    
    
    
    3⁄4
    
    
    
    3⁄4Net Cash Provided (Used) by Investing
Activities- Continuing Operations
    
    
    (595,651
    )
    
    
    (1,513,465
    )
    
    
    (128,259
    )
    
    
    622,751
    
    
    
    (1,614,624
    )Net Cash Used by Investing Activities-
Discontinued Operation
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (22,361
    )
    
    
    3⁄4
    
    
    
    (22,361
    )Net Cash Provided (Used) by Investing
Activities
    
    
    (595,651
    )
    
    
    (1,513,465
    )
    
    
    (150,620
    )
    
    
    622,751
    
    
    
    (1,636,985
    )Cash Flows from Financing Activities:Borrowings of (Repayments on) Short-term Debt,
Net
    
    
    (420,944
    )
    
    
    84,072
    
    
    
    108,616
    
    
    
    3⁄4
    
    
    
    (228,256
    )Borrowings of (Repayments on) Long-term Debt,
Net
    
    
    3⁄4
    
    
    
    1,485,497
    
    
    
    (10,724
    )
    
    
    3⁄4
    
    
    
    1,474,773Borrowings (Repayments) Between
Subsidiaries, Net
    
    
    1,026,164
    
    
    
    65,190
    
    
    
    (1,091,354
    )
    
    
    3⁄4
    
    
    
    3⁄4Purchase of Treasury Shares
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    (179,262
    )
    
    
    3⁄4
    
    
    
    (179,262
    )Proceeds from Exercise of Stock Options
    
    
    3⁄4
    
    
    
    30,753
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    30,753Proceeds from Capital Contribution
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    622,751
    
    
    
    (622,751
    )
    
    
    3⁄4Other, Net
    
    
    3⁄4
    
    
    
    17,250
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    17,250Net Cash Provided (Used) by Financing
Activities- Continuing Operations
    
    
    605,220
    
    
    
    1,682,762
    
    
    
    (549,973
    )
    
    
    (622,751
    )
    
    
    1,115,258Net Cash Provided by Financing Activities-
Discontinued Operation
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4Net Cash Provided (Used) by Financing
Activities
    
    
    605,220
    
    
    
    1,682,762
    
    
    
    (549,973
    )
    
    
    (622,751
    )
    
    
    1,115,258Net Decrease in Cash and Cash Equivalents
    
    
    (10
    )
    
    
    21,207
    
    
    
    (21,486
    )
    
    
    3⁄4
    
    
    
    (289
    )Cash and Cash Equivalents at Beginning of
Period
    
    
    35
    
    
    
    2,271
    
    
    
    123,981
    
    
    
    3⁄4
    
    
    
    126,287Cash and Cash Equivalents at End of Period
    
    $
    25
    
    
    $
    23,478
    
    
    $
    102,495
    
    
    $
    3⁄4
    
    
    $
    125,998
 21




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##### 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)September 30, 2008
    
    $
    100.64
    
    
    $
    7.44
    
    
    
    2,449
    
    
    
    1,209December 31, 2007
    
    
    95.98
    
    
    
    7.48
    
    
    
    2,171
    
    
    
    1,122September 30, 2007
    
    
    81.66
    
    
    
    6.87
    
    
    
    2,128
    
    
    
    1,114
 
 (1)
    
    Price per barrel as of September 30 and December 31  Source:Thomson Reuters(2)
    
    Price per MM/BTU as of September 30 and December 31  Source:Thomson Reuters(3)
    
    Average rig count for the applicable month  Source:Baker Hughes Rig Count and other
third-party data  22




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##### Table of Contents



Opportunities and Challenges
   2008 and 2009 Outlook
   Geographic Markets.
 23




---



##### Table of Contents



Pricing.
  24




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##### Table of Contents



Results of Operations
  Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands, except percentages and per share data)Revenues:North America
    
    $
    1,179,605
    
    
    $
    993,828
    
    
    $
    3,282,211
    
    
    $
    2,883,825Middle East/North Africa/Asia
    
    
    637,872
    
    
    
    455,932
    
    
    
    1,716,007
    
    
    
    1,286,022Europe/West Africa/CIS
    
    
    408,993
    
    
    
    308,587
    
    
    
    1,146,185
    
    
    
    844,184Latin America
    
    
    314,326
    
    
    
    213,644
    
    
    
    821,535
    
    
    
    626,1902,540,796
    
    
    
    1,971,991
    
    
    
    6,965,938
    
    
    
    5,640,221Operating Income:North America
    
    
    312,887
    
    
    
    264,183
    
    
    
    828,792
    
    
    
    756,661Middle East/North Africa/Asia
    
    
    146,450
    
    
    
    103,839
    
    
    
    397,774
    
    
    
    284,310Europe/West Africa/CIS
    
    
    102,385
    
    
    
    77,886
    
    
    
    294,614
    
    
    
    202,911Latin America
    
    
    69,521
    
    
    
    45,453
    
    
    
    188,374
    
    
    
    139,784Research and Development
    
    
    (52,026
    )
    
    
    (43,199
    )
    
    
    (139,095
    )
    
    
    (124,413
    )Corporate
    
    
    (30,750
    )
    
    
    (24,945
    )
    
    
    (99,657
    )
    
    
    (75,565
    )Exit and Restructuring
    
    
    (13,727
    )
    
    
    (3,628
    )
    
    
    (23,604
    )
    
    
    (20,944
    )534,740
    
    
    
    419,589
    
    
    
    1,447,198
    
    
    
    1,162,744Interest Expense, Net
    
    
    (60,521
    )
    
    
    (50,194
    )
    
    
    (175,723
    )
    
    
    (119,258
    )Other, Net
    
    
    (8,243
    )
    
    
    1,282
    
    
    
    (13,026
    )
    
    
    (7,024
    )Effective Tax Rate
    
    
    17.8
    %
    
    
    19.0
    %
    
    
    17.0
    %
    
    
    25.8
    %Net Income per Diluted Share from
Continuing Operations
    
    $
    0.53
    
    
    $
    0.42
    
    
    $
    1.46
    
    
    $
    1.09Loss from Discontinued Operation,
Net of Taxes
    
    
    
    
    
    
    (2,211
    )
    
    
    (12,928
    )
    
    
    (15,628
    )Net Income per Diluted Share
    
    $
    0.53
    
    
    $
    0.42
    
    
    $
    1.44
    
    
    $
    1.06Depreciation and Amortization
    
    
    187,131
    
    
    
    158,977
    
    
    
    528,129
    
    
    
    439,034
 25




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##### Table of Contents



Revenues
  Three Months
    
    Nine MonthsEnded September 30,
    
    Ended September 30,2008
    
    2007
    
    2008
    
    2007Artificial Lift Systems
    
    
    17
    %
    
    
    18
    %
    
    
    17
    %
    
    
    17
    %Well Construction
    
    
    15
    
    
    
    16
    
    
    
    16
    
    
    
    16Drilling Services
    
    
    17
    
    
    
    16
    
    
    
    16
    
    
    
    15Drilling Tools
    
    
    11
    
    
    
    11
    
    
    
    11
    
    
    
    12Completion Systems
    
    
    9
    
    
    
    10
    
    
    
    10
    
    
    
    10Re-entry & Fishing
    
    
    9
    
    
    
    8
    
    
    
    8
    
    
    
    8Wireline
    
    
    7
    
    
    
    7
    
    
    
    7
    
    
    
    8Stimulation & Chemicals Services
    
    
    6
    
    
    
    6
    
    
    
    5
    
    
    
    7Integrated Drilling
    
    
    6
    
    
    
    5
    
    
    
    7
    
    
    
    5Pipeline & Specialty Services
    
    
    3
    
    
    
    3
    
    
    
    3
    
    
    
    2100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
   Operating Income
    26




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##### Table of Contents



Interest Expense, Net
  Income Taxes
  Segment Results
 North America
    Middle East/North Africa/Asia
   Europe/West Africa/CIS
   27




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##### Table of Contents



Latin America
   Discontinued Operations
  Liquidity and Capital Resources
 Sources of Liquidity
  Committed Borrowing Facilities
     Facilities
    
    $
    1,750Less:Amount drawn
    
    
    1,030Commercial paper
    
    
    Letters of credit
    
    
    28Availability
    
    $
    692
 28




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##### Table of Contents



Commercial Paper
  Debt Offering
  Cash Requirements
     Derivative Instruments
 Interest Rate Swaps
  Cash Flow Hedges
  29




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##### Table of Contents



Other Derivative Instruments
   Off Balance Sheet Arrangements
 Guarantees
   Letters of Credit
  New Accounting Pronouncements
  Critical Accounting Policies and Estimates
  Exposures
 Risk Factors
 30




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##### Table of Contents



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 year from 2002 to 2008 (through September); 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
worldwide demand growth will slow through the remainder of 2008 and that 2009 demand will
be up modestly compared to 2008. In 2009, worldwide demand may be weaker than we have
assumed.
    
    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.
    
    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 improve our products and
services through innovation, 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, as well as legal protection of our
intellectual property rights.
    
    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
 31




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##### Table of Contents



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 September 30, 2008, we had approximately $3.8 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. Our forward-looking
statements do not assume any future goodwill impairment. 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
adversely affect our operations.In
the summers of 2005 and 2008, 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 and 2008,
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 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 nine months ended September 30, 2008, we
incurred $57 million for costs in connection with our exit from sanctioned countries and
$33 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.
    
    Current turmoil in the credit markets may reduce our access to capital or reduce the
availability of financial risk-mitigation tools. In recent months, the worldwide credit
markets have experienced almost
 32




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##### Table of Contents



www.sec.gov
 Available Information
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  Foreign Currency Exchange Rates
     33




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##### Table of Contents



Interest Rates
   September 30, 2008
    
    December 31, 2007Carrying
    
    Fair
    
    Carrying
    
    FairAmount
    
    Value
    
    Amount
    
    Value(In millions)6.625% Senior Notes due 2011
    
    $
    355
    
    
    $
    356
    
    
    $
    356
    
    
    $
    3695.95% Senior Notes due 2012
    
    
    599
    
    
    
    592
    
    
    
    599
    
    
    
    6185.15% Senior Notes due 2013
    
    
    485
    
    
    
    479
    
    
    
    
    
    
    
    4.95% Senior Notes due 2013
    
    
    254
    
    
    
    231
    
    
    
    255
    
    
    
    2455.50% Senior Notes due 2016
    
    
    349
    
    
    
    316
    
    
    
    349
    
    
    
    3386.00% Senior Notes due 2018
    
    
    497
    
    
    
    467
    
    
    
    
    
    
    
    6.35% Senior Notes due 2017
    
    
    600
    
    
    
    550
    
    
    
    600
    
    
    
    6246.50% Senior Notes due 2036
    
    
    596
    
    
    
    494
    
    
    
    596
    
    
    
    5986.80% Senior Notes due 2037
    
    
    298
    
    
    
    277
    
    
    
    298
    
    
    
    3137.00% Senior Notes due 2038
    
    
    498
    
    
    
    406
    
    
    
    
    
    
    
    
   Interest Rate Swaps and Derivatives
    34




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
    
 ITEM 2. UNREGISTERED SALES OF EQUITY IN SECURITIES AND USE OF PROCEEDS
  35




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##### Table of Contents



Period
    
    No. of Shares
    
    Average PriceJuly 1 - July 31, 2008
    
    
    3,112
    
    
    $
    39.76August 1 - August 31, 2008
    
    
    
    
    
    
    September 1 - September 30, 2008
    
    
    10,482
    
    
    
    33.44
 36




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##### Table of Contents



ITEM 6. EXHIBITS
  ExhibitNumber
    
    Description4.1
    
    Credit Agreement, dated October 20, 2008 among Weatherford
International Ltd. as borrower, Weatherford International Inc. as
guarantor, and UBS AG as administrative agent, and other lenders
party thereto (incorporated by reference to Exhibit 4.1 to the
Registrants Current Report on Form 8-K (File No. 1-31339) dated
October 24, 2008).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.
 
 
    
    Filed herewith 37




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##### Table of Contents



SIGNATURES
  Weatherford International Ltd.By:
    
    /s/ Bernard J. Duroc-Danner

Bernard J. Duroc-DannerChief Executive Officer(Principal Executive Officer)/s/ Andrew P. Becnel

Andrew P. BecnelSenior Vice President and Chief
Financial Officer(Principal Financial Officer)/s/ Jessica Abarca

Jessica AbarcaVice President  Accounting and Chief
 Accounting Officer(Principal Accounting Officer)Date: November 3, 2008
 38