Good morning. My name is Kim and I'll be your conference operator today. At this time, I would like to welcome everyone to the Weatherford International fourth quarter 2016 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. As a reminder, ladies and gentlemen, today's call is being recorded. Thank you. I would now like to turn the conference over to Karen David-Green, Vice President-Investor Relations and Marketing and Communications. You may begin your conference.

Thank you, Kimberly. Good morning and welcome to the Weatherford International fourth quarter conference call. With me on today's call we have Krishna Shivram, Chief Executive Officer and Christoph Bausch, Executive Vice President and Chief Financial Officer. Today's call is being webcast and a replay will be available on Weatherford's website for ten days. Before we begin with our opening comments, I'd like to remind our audience that some of today's comments may include forward-looking statements and non-GAAP financial measures. These matters may involve risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements. Please refer to our Form 10-K for the period ended December 31, 2015; Form 10-Q for the quarter ended September 30th, 2016; and recent current reports on Form 8-K for risk factors and the customary caution on forward-looking statements. A reconciliation of GAAP to non-GAAP financial measures is included in our fourth quarter press release, which can be found on our website. We welcome your questions after the prepared comments. And now, I'd like to hand over the call to Krishna.

Thank you, Karen. Ladies and gentlemen, Weatherford is back. We have a new team, a fresh outlook, a new strategy which I will describe later, and a high level of energy within the company, not seen in recent years. We have just been through the most brutal down cycle in our industry's history, and we have not only survived, we have transformed the company internally and positioned it well for the multiyear upcycle that is just about beginning. Let me start by reflecting on several of our 2016 achievements. During the past year, we reduced costs by an annualized $601 million, exceeding the targets we set for ourselves at the beginning of the year. Our support ratio was rationalized down to 35% at year end, which signifies a much leaner fixed cost support structure, setting us up for strong incrementals. In addition, we upgraded our leadership team and now we have a talented, experienced group that can run seamless global operations, combined with strong regional customer relationships. We also successfully termed out our debt maturities to 2019 and beyond. This financial runway, including covenant management, is now clear for the next few years. And we did all of this with the best safety record in the company's history and a 24% reduction in non-productive time in our core businesses. We are proud of these achievements and I would like to thank our investors, employees and our customers for their unwavering support during this difficult period. During the fourth quarter, we launched a final cost reduction initiative named Project 300 to target an additional $300 million of annualized cost savings before we get into the upcycle. In addition, we appointed a new CFO, a new President of Regions, and a new Head of Quality and HSC, reporting directly to me. Employee…

Thank you, Krishna, and good morning, everyone. Fourth quarter revenue increased by 4% sequentially as a result of increased activity in North America, year-end product sales and market share gains in Middle East and Asia. This was partly offset by lower activity in offshore markets such as West Africa, Brazil and the Gulf of Mexico, as well as continued pricing pressure in international markets. Segment operating loss before R&D, corporate expenses and charges and credits improved by $35 million, with sequential operating income margins improving by 273 basis points to negative 5.4%. Incrementals were strong at 68% and 73%, excluding rigs. Excluding charges and credits, loss per share for the quarter was $0.32. During the fourth quarter, we recorded $246 million of charges and credits, net of tax. This included charges for an additional workforce reduction, the shutdown of our pressure pumping business in the U.S., litigation costs, as well as closure and impairment costs, as we continued to rationalize manufacturing and operational facilities. In addition, we took a charge of $10 million relating to the devaluation of the Egyptian pound and a $16 million credit related to the fair value adjustment of our outstanding warrants. North America revenue increased 8% sequentially, and operating income margins improved by 938 basis points, but remain negative at 11.9%. The decision to close our pressure pumping operations negatively impacted our revenue in North America, which would have grown 17%, had we continued our pressure pumping work for the full quarter. Both the U.S. and Canada grew strongly on land, while offshore Gulf of Mexico weakened. The incrementals in North America were 104%, as we continued to reduce cost throughout the fourth quarter. The operating loss in North America of $58 million includes a loss of $29 million related to the pressure pumping business…

Thank you, Christoph. I would like to close out our prepared comments by repeating the four pillars of the strategy for Weatherford. Number one, we will reduce the net debt to less than $3 billion by 2021. Number two, we will position Weatherford as the best well construction and production optimization company in the world. Number three, we will open new sales channels and pursue external integration opportunities with partners to enable automation mechanization and digitization. Number four, we will run Weatherford's operations with a strong back-to-basics approach revolving around customer engagement, flawless execution, talent management, cost control, and fostering a culture of accountability. We believe that with this strategy, Weatherford will reinvent itself and thrive. You will see a new revitalized Weatherford with disciplined growth and improved returns, with no surprises and better predictability. Being predictable is usually boring, but for Weatherford, being predictable and boring is a damn good thing. Thank you and now we will open it up for Q&A.

And your first question comes from the line of Jim Wicklund with Credit Suisse. Your line is open. James Wicklund - Credit Suisse Securities (USA) LLC: Good morning, guys and, Krishna, I agree, it is a damn good thing.

Thank you, Jim. Good morning to you. James Wicklund - Credit Suisse Securities (USA) LLC: With the comments about strategy going forward, and the fact that the word interim doesn't appear in the press release, are we to assume that you are the full-time, continuing CEO of Weatherford?

All right. So, Jim, you have to understand that for a company as large as Weatherford, having one CEO for over 25 years, the board has to run a professional process to pick a permanent CEO. That process is still ongoing, and it is the right way to do it. It's the professional way for boards to behave. So that process is still ongoing and we expect in the next several weeks, the selection committee and the board will reach a decision on who the permanent CEO is going to be. We have a board meeting scheduled for around March 10, which is just over a month away. And our expectation is that by that time they will reach a conclusion on who that permanent CEO's going to be. I have been informed by the board that I am one of the candidates in the running for that position. So, I think we just have to take it from there. James Wicklund - Credit Suisse Securities (USA) LLC: All right. With the strategy that you've laid out, I think that – I think that's very positive. So, I wish you, in the decision-making process, the best of luck.

Thank you, Jim. James Wicklund - Credit Suisse Securities (USA) LLC: If I could, on the divestiture program, and I think the debt reduction plan as a priority is clearly a positive. I think all investors think that. Looking at the land rig fleet, I know that you guys have had a scalp bid or two over the last some period of time and there's no reason to hit it at this point. You mentioned monetizing it, hopefully by the end of 2018. What is the CapEx that you're going to have to put into the rig business to upgrade 90% of the fleet over the next two years?

Well, that's the beauty of the whole strategy, you know? We're talking about upgrading it with stuff that Weatherford makes on a daily basis. We're talking about mechanized DRS, we're talking about MPD systems, land, land MPD systems, which are not that expensive, and we're talking about upgrading it with Weatherford software – with a new Weatherford software called OneSync that integrates all of these measurements in one platform and makes the rig operations much more effective and automated. And much of this CapEx that we talk about is already sitting in inventory in Weatherford product lines. So it will be largely going out of our inventory levels and going into the CapEx of the rigs business, so really from one pocket to another. In terms of cash flow, there's hardly a dent that can be made on our cash flow. It's just, like I said, different categories of – different lines on the cash flow statement. So, no, the CapEx is not significant at all. James Wicklund - Credit Suisse Securities (USA) LLC: Okay. And my follow-up, if I could, you mentioned just as a bookkeeping item, what is your exposure, in terms of North American revenues, what's your exposure, generally, to the offshore sector? How much is onshore land? How much is onshore land, onshore and how much is offshore? (37:54-37:59)

Well, we're largely onshore. We're largely onshore but let me just look at these numbers here. In Q4, for example, excluding pressure pumping, we are – well, I'll give you the exact number, 89.4% onshore, on land, and only 10.6% offshore, so largely land-focused company. James Wicklund - Credit Suisse Securities (USA) LLC: Okay. Perfect. Thanks very much.

And that is going to be the big market going forward, as you know. James Wicklund - Credit Suisse Securities (USA) LLC: Yep, it is.

Offshore is going to grow very gradually. Yeah. Thank you, Jim. James Wicklund - Credit Suisse Securities (USA) LLC: That's a much better mix than most of your peers have. Thank you very much.

Thank you.

And your next question comes from the line of Bill Herbert with Simmons & Company. Your line is open. William A. Herbert - Simmons & Company International: Thanks. Good morning. Great call, Krishna. Very compelling plan that you have put forth and also detailed. So, well done. With regard to examples of kind of additional external integration, let's talk about the Nabors alliance as a paradigm. It sounds compelling with regard to the marriage of your drilling services with their rig platform, and yet it's non-binding. So, can you talk about that one, and two, other sort of examples of external integration that we might expect, going forward?

Okay. So, let me talk about the opportunity with Nabors, first of all. As the rig count grows in North America and we listen to our customers, both organizations, we talk to our customers all the time here on U.S. land. We're talking about some customers thinking of going to super specced rigs with 30 pads around it, 30 well pads. I mean, you're talking about a completely different paradigm shift. It is going to be only some companies that can actually drill effectively in a cost-effective manner on U.S. land and make the economic cut at, let's say, a medium oil price environment. So, our customers are driving this. They want much more automated drilling. They want lower cost, much more efficiency, lower people on the well site, and drag the cost per barrel downwards, right? So, for Nabors, they have very strong super-spec rigs. They have a good position on U.S. land and, of course, it's a highly competitive market. But by adding Weatherford technologies on drilling services, MPD, TRS, all of these things, particularly MPD and drilling services, they cross the paradigm from being a very efficient driller to being a fully automated drilling services provider as a one compelling drilling package. They can offer the entire package to customers in one fell swoop, which is exactly meeting the customers' needs today. For Weatherford, Nabors, from what I gathered, they have about – between 70 and 80 rigs operating on U.S. land today and it's growing rapidly with increase in rig count. We operate on just a handful of those rigs. So it is a great, huge, new channel to the U.S. land market and this is one of the ways we're going to supplement the loss of the U.S. pressure pumping business with, let's say, more…

So, Bill, I mean, there is a huge amount of interest in our frac business. We have had numerous inbounds from every quarter that you can imagine. The market is very active now, as you know. And we are in discussions, actually, already with some interested parties, discussing all of the above. We're discussing combinations. We're discussing outright sales and we are, potential – we have not discussed IPOs so much, but the first two we have discussed. And we think, at the speed of the discussions that are ongoing right now, the monetization part is actually going to most likely be much quicker than what I set out in our prepared comments. I said 2017, 2018, because if we get into a partnership with an industry player, we might get some cash now and then a stake in the business going forward and that might take a little bit longer to monetize, as we let that stake go over time. But if we pursue the sale strategy, we might be able to monetize it much, much quicker. William A. Herbert - Simmons & Company International: Very good. Thank you, sir.

Thank you, Bill.

And your next question comes from the line of Ole Slorer of Morgan Stanley. Ole H. Slorer - Morgan Stanley & Co. LLC: Yeah, and thank you very much and, again, a very clear presentation, Krishna, and I couldn't understand why the board wouldn't endorse your plan here. And also, Christoph, congratulations with your CFO role.

Thank you, Ole. Ole H. Slorer - Morgan Stanley & Co. LLC: So if I could just ask a little bit about – there's many moving parts here and still (45:23) you have quite a ramp in the Middle East, based on contract awards and that was also something we heard when we were out there last, and I'm glad to see it come through – North America improving. But now without the pressure pumping and streamlined, could you give us a little bit of guiding on how your regional businesses are performing right now in the first quarter from a margin standpoint?

So, let me just take you quickly through that. In North America, clearly, you know, we will have the virtual absence of the drag on pressure pumping results. So Q1 will benefit from that. Canada is obviously much stronger in Q1 seasonally. And in fact, most of our other product lines are performing quite robustly right through Q1, with increased rig count, increased activity levels, right? So, you will probably see a reduction in revenue, because of the absence of pressure pumping, but an improvement in margins in North America. In Latin America, we're taking out cost as you see. Ole H. Slorer - Morgan Stanley & Co. LLC: Could you give us some kind of guiding on the magnitude of that improvement, and be willing to share where you are running right now?

It's going to be good, but we're not going to give specific numerical guidance on the call. We can only talk directionally, and I think directionally it will be pretty noticeable, the improvement in margin, because of the reasons I mentioned. In Latin America, Ole, we're going to take out more cost. As we speak, we are working on that and so you will see cost driven margin improvement. We don't expect, except for Colombia, a major shift in sentiment of our customers in the first quarter. Europe will remain subdued because of seasonality. So, you might see, again, there's a cost implication there, so maybe a slight improvement there. Russia will remain subdued because of seasonality. Middle East will actually – Middle East and Asia Pacific benefited the most from, let's say a higher level of product sales in Q4, which will then abate in Q1. So, the revenue and the margins associated with that higher level of product sales will reduce in the Middle East. Having said that, the service footprint in the Middle East is increasing day by day, because of all the contracts we won in the last six months, and we're gradually working ourselves with control into all of these contracts. So, for example, the large wireline contract we won in one of the countries there, we just put our first nine trucks on the ground in Q1, and the first jobs were performed last week; three jobs were performed last week. They were the first jobs under the contract. So, you're going to see a buildup of service revenue in the Middle East, which is quite remunerative and quite profitable, offsetting part of the product sales disappearing. So overall, I would say just from a percentage margin level, I think we will do fine. Ole H. Slorer - Morgan Stanley & Co. LLC: Very good. Helpful. Thanks for that, Krishna and, again, good luck. I'll hand it back.

Thank you, Ole.

And your next question comes from the line of Angie Sedita with UBS. Your line is open.

Thanks. I echo the sentiment of others on the very strong game plan, Krishna. Impressive here (48:50) and we appreciate the details.

Thank you.

So on the $300 million in cost cutting and savings that you think for 2017, you imply that some of it was completed in Q4. And could you talk about how much was completed in Q4? I assume modest, and the timing as we go into 2017 on the rest of that coming out of the system, and is that generally internationally weighted or both internationally and North America?

I'm going to ask Christoph to respond.

Yeah, Angie, I'll take that one. So, that Project 300, as we call it, a big portion of that was the shutdown of pressure pumping, which we'd already talked about. That will have significant cost savings in North America. In addition to that, as I've mentioned in my prepared remarks, we're reducing support call staff and we're consolidating our regions. That is internationally. So, we have already taken out 2,000 head count, as I've mentioned, at this point in time. So, that means that reduction is already in the Q1 results. There will be some going into – towards the end of Q1 and into Q2, but by the – I would say towards mid end Q2, we will have achieved the full reduction potential.

Okay. Okay. Very, very, helpful. And then Krishna, on the new sales channels that you're considering, does that include – maybe you could talk – a little more color there. Does that include looking at some of the local oil service companies internationally, or are you more focused on an integration approach?

No, we're not looking at local service companies internationally, not at all. I think what we're looking for is meaningful partners that we can work on a large scale. I don't want to waste my time on small countries with small channels here and there. The Nabors, for example, alliance is a very large market in the U.S. land, and that materially moves the needle for both Nabors and Weatherford. So those are the kind of channels that I'm interested in pursuing. Secondly, there are some discussions on technological, let's say, integration with other companies, which make eminent sense, which could open new markets. So, those we will pursue as well, but we will not pursue local companies to deliver our either combined technologies or individual technologies to different customers internationally.

Okay. Good. Good. Thanks. I'll turn it over.

And your next question comes from the line of Marc Bianchi with Cowen & Company. Your line is open. Marc Bianchi - Cowen & Co. LLC: Thank you. First question, as it relates to the 50% incrementals that you discussed, is that a company-wide comment and is that something we could expect to see here in the first quarter?

Well, it is a company-wide comment, and it is generally true for all quarters, going forward, right, depending on where the revenue moves. Now, first quarter is going to be a little bit peculiar because you're going to see a revenue reduction because of the absence of U.S. pressure pumping, in North America, that is. But you're going to see a pick-up in margins, because of the absence of the pressure pumping losses. So, it is going to be skewed positively because of that. So, I would not say from Q4 to Q1 is a regular transition because of these peculiar movements of revenue and bottom line, but on a more sustainable basis, yeah, that is the companywide number that we're targeting. Marc Bianchi - Cowen & Co. LLC: And Krishna, that would include the full benefit of the cost reductions you're talking about as well as perhaps some price increase? Or is the price increase adding some upside to that?

Certainly, the full benefit of the cost will be there and pricing is going to be gradual, Marc. It's depending on the market. Internationally, for example, as we said in our prepared comments, many operators internationally, many NOCs have issued a slew of tenders in the last six months, eight months and have tried to lock in current pricing levels for multiyear – for many years going forward, between one and three years typically. And so, international pricing is going to be recovered more gradually. North America pricing is going to recover in a more robust fashion. In the product lines that we will remain, which is well construction, related product lines, MPD, completions, et cetera, the pricing trajectory is quite nice and we will continue to enjoy that. But, I'd like to basically say that for Weatherford, even internationally, because of the cost actions we have taken and the very large fixed cost infrastructure and equipment infrastructure that we have, we're increasing our market share. And as we work into that market share increase, the incrementals are going to be very strong, even if we don't get that much of a measured price increase, because we will just recover and grow into that infrastructure without any additional cost. So, for us, it's a little bit of a different play. We were vastly underrepresented in market share internationally, and that's what we're trying to get back, and we're getting it back now. So, you will see, despite not a measurable price increase, you'll still see reasonable, very good incrementals internationally Marc Bianchi - Cowen & Co. LLC: Certainly, lot of spare capacity to fill up. Thank you for that. I'll turn it back.

Thanks, Marc.

And your next question comes from the line of Ken Sill with SunTrust Robinson Humphrey. Your line is open.

Yeah, good morning. Congratulations again, like everybody else.

Ken.

Wanted to clarify something you just said, Krishna. You talked about North America revenue being down sequentially. I guess pressure pumping is going to be down, but the rig count in the U.S. is already up 15%, 16% and still rising. Canada up huge seasonally. So, was that just kind of reference to pressure pumping or do you expect North American revenues to be down sequentially in Q1?

It was a reference mainly to pressure pumping. You're absolutely right. We're expecting growth in the other product lines, not only with the U.S. rig count, but with Canada being stronger in Q1. So that will be an offsetting. But, if you just look at North America as a whole for Weatherford, the two will offset each other. And, we could likely end up maybe flat, potentially.

Yeah, that seems a little bit low, but I'm not going to push guidance at this stage. And I wanted to kind of dig in a little bit, get ahead of the game here. So, you guys have historically been pretty big in Canada and it was stronger in Q4; it's starting out strong here, and it's a little bit ahead of game. But in terms of how you see that progressing with the spring break-up, how big is Canada now that pressure pumping's gone? And what kind of impact is spring break-up going to have on the sequentially improvement for Q2?

You know, the spring break-up is still in the future. I mean, it's kind of hard to predict when it's going to start, right? I don't want to predict weather here. So far, so good. We are experiencing a very strong quarter in Canada. So, in the short term, Canada is – a proportion of North America obviously increase because we have an absence of the pressure pumping business in the U.S., right? But over time, the other product lines in the U.S. will pick it up, and offset the last of the year's pressure pumping revenue. So we will probably end up with roughly the same kind of proportion we used to enjoy in North America. But I want to come back to when you said the flatness of North America from Q4 to Q1, it seems to be low. I just want to put a number to it, you know. We're going to lose $70 million of revenue. Pressure pumping revenue in Q4 was $70 million, seven zero. That is going to go away. Which means what I'm saying is we're going to grow everything else by $70 million. That's not insignificant.

No. Thank you for clarifying that. I had the impression that revenues in pressure pumping were less than that in the fourth quarter. My bad. Could you give us an idea of how big Canada is proportionally to North America right now?

No, I think we would prefer not to divulge that level of detail on the call, Ken. Sorry.

Okay, that's fine. And then one final question. Go ahead. Never mind, I'll turn it over.

And your next question comes from the line of Byron Pope with Tudor, Pickering, Holt. Your line is open. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Good morning.

Morning. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Just one question from me as I try to calibrate North America in the context of the disposition strategy with the road to the U.S. pressure pumping. I'm obviously not looking for numbers here, but just framing ex the pressure pumping business. You guys have always been strong in artificial lift in North America, but strong in completions and well construction as well. So, as we think about North America in 2017, just trying to size those relative businesses to make sure we don't get out over our skis in terms of how we think about topline growth for North America for you guys.

Well, pressure pumping in North America in 2016, the revenue was – for us was about, oh, just under $300 million, and that will disappear effectively in 2017. And like I said in my prepared comments, we absolutely expect to at least make that up in the growth of the other product lines. So, we will not only offset it. We probably will more than offset it with the growth in rig count and activity in North America. Now, all of the growth there is going to favor our well construction and production portfolios, which will benefit disproportionately from the North American activity, the type of North American activity increase we're going to see. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Thanks. That's helpful. Appreciate it.

Thank you, Byron.

And I'll now turn the call back over to the presenters for closing remarks.

Well, thank you for participating in today's call and we'll turn it back to the operator for closing the call.