Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") begins with an executive level overview, which provides a general description of our company today, a synopsis of industry market trends, insight into management's perspective of the opportunities and challenges we face and our outlook for the remainder of 2012. Next, we analyze the results of our operations for the three months ended March 31, 2012 and 2011, including the trends in our business and review our liquidity and capital resources. We conclude with a discussion of our critical accounting policies and estimates and a summary of recently issued accounting pronouncements. The "Company," "we," "us" and "our" refer to Weatherford International Ltd., a Swiss joint-stock corporation.

The following discussion should be read in conjunction with our financial statements included with this report and our financial statements and related MD&A for the year ended December 31, 2011 included in our Annual Report on Form 10-K. Our discussion includes various forward-looking statements about our markets, the demand for our products and services and our future results. These statements are based on certain assumptions we consider reasonable. For information about these assumptions, you should refer to the section entitled "Forward-Looking Statements."

Overview

General

Our principal business is to provide equipment and services to the oil and natural gas exploration and production industry both on land and offshore, through our product and service line groups 1) Formation Evaluation and Well Construction and 2) Completion and Production.

• Formation Evaluation and Well Construction includes: Drilling Services, Well Construction, Integrated Drilling, Wireline and Evaluation Services, Drilling Tools and Re-entry and Fishing

• Completion and Production includes: Artificial Lift Systems, Stimulation and Chemicals, Completion Systems and Pipeline and Specialty Services

We may sell our products and services separately or may bundle them together to provide integrated solutions, up to and including integrated well construction where we are responsible for the entire process of drilling, constructing and completing a well. Our customers include both exploration and production companies and other oilfield service companies. Depending on the service line, customer and location, our contracts vary in their terms, provisions and indemnities. We earn revenues under our contracts when products and services are delivered. Typically, we provide products and services at a well site where our personnel and equipment may be located together with personnel and equipment of our customer and third parties, such as other service providers.

We conduct operations in approximately 100 countries and have service and sales locations in nearly all of the oil and natural gas producing regions in the world. Our operational performance is segmented and reviewed on a geographic basis and we report the following regions as separate, distinct reporting segments: (1) North America; (2) Latin America; (3) Europe/SSA/FSU; and
(4) Middle East/North Africa/Asia.

Industry Trends

Changes in the current price and expected future prices of oil and natural gas influence the level of energy industry spending. Changes in expenditures result in an increased or decreased demand for our products and services. Rig count is an indicator of the level of spending for the exploration for and production of oil and natural gas reserves.

                                         Henry Hub       North American       International
                       WTI Oil (a)        Gas (b)        Rig Count (c)        Rig Count (c)
  March 31, 2012      $      103.02     $      2.13                2,574               1,189
  December 31, 2011           98.83            2.99                2,481               1,188
  March 31, 2011             106.72            4.39                2,282               1,166

(a) Price per barrel as of March 31 and December 31 - Source: Thomson Reuters

(b) Price per MM/BTU as of March 31 and December 31 - Source: Thomson Reuters

(c) Average rig count for the applicable quarter - Source: Baker Hughes Rig Count

Oil prices increased during the first three months of 2012, ranging from a low of $96.36 per barrel in early February to a high of $109.77 per barrel at the end of February. Natural gas prices decreased during the first three months of 2012 and ranged from a high of $3.10 MM/BTU in early January to a low of $2.13 MM/BTU at the end of March. Factors influencing oil and natural gas prices during the period include hydrocarbon inventory levels, realized and expected economic growth, realized and expected levels of hydrocarbon demand, levels of spare production capacity within the Organization of Petroleum Exporting Countries ("OPEC"), weather and geopolitical uncertainty.

Outlook

We believe the long-term outlook for our businesses is favorable. As decline rates accelerate and reservoir productivity complexities increase, our clients will face growing challenges securing desired rates of production growth. These challenges increase our customers' requirements for technologies that improve productivity and efficiency and increase demand for our products and services. These phenomena provide us with a positive outlook over the longer term.

The level of improvement in our businesses in 2012 will continue to depend heavily on pricing and volume increases, our control of costs and our ability to further penetrate existing markets with our younger technologies, as well as our ability to successfully introduce these technologies to new markets.

For 2012, we maintain a positive outlook with respect to increases in North American revenue and profitability. Assuming a flat rig count, we expect 2012 revenue and operating income to increase modestly compared to 2011. We believe the predominance of oil activity in Canada and the strength of oil-based activity in the United States will more than offset likely declines in natural gas related activity. As a result, our artificial lift, production optimization, formation evaluation, open hole completion and wireline product lines should show meaningful growth compared to 2011. However, in our stimulation and chemicals product lines, we anticipate comparative weakness and a correction due to low barriers to entry, rapid expansion of capacity, a migration from natural gas activity to oil activity and improvements in stimulation efficiency.

Internationally, our outlook remains positive. Latin America has a solid backlog that should result in increases in revenue and profitability driven by continuous progress in several countries. Growth in our Europe/SSA/FSU region will be driven by revenue and profitability improvements expected in Russia and also in Europe and the Caspian. Our Middle East/ North Africa operation should show an improvement in the second half of the year due to the expected completion of certain lower margin contracts and the start of new contracts, primarily in Saudi Arabia and Kuwait; however, we expect the improvement in North Africa late in the year. We anticipate revenue and profitability growth in Asia will be driven by a strong backlog in China and Australia.

Results of Operations

The following charts contain selected financial data comparing our consolidated
and segment results from operations for the three months ended March 31, 2012
and 2011:



                                                                     Three Months
                                                                    Ended March 31,
                                                        2012                              2011
                                                       (In millions, except percentages and per
                                                                      share data)
Revenues:
North America                                    $             1,754               $             1,360
Middle East/North Africa/Asia                                    605                               576
Europe/SSA/FSU                                                   569                               510
Latin America                                                    671                               410

                                                               3,599                             2,856
Operating Income (Loss):
North America                                                    359                               283
Middle East/North Africa/Asia                                     48                                10
Europe/SSA/FSU                                                    60                                40
Latin America                                                     87                                21
Research and Development                                         (62 )                             (60 )
Corporate                                                        (64 )                             (56 )
Severance, Exit and Other Adjustments                            (32 )                             (21 )

                                                                 396                               217
Interest Expense, Net                                           (112 )                            (113 )
Other, Net                                                       (17 )                             (19 )
Effective Tax Rate                                              51.3 %                            53.7 %
Net Income per Diluted Share                     $              0.16               $              0.05
Depreciation and Amortization                                    301                               277

Revenues

The following chart contains consolidated revenues by product line for the three
months ended March 31, 2012 and 2011:



                                                         2012       2011
            Formation Evaluation and Well Construction      57 %       60 %
            Completion and Production                       43 %       40 %

                                                           100 %      100 %

Consolidated revenues increased $743 million, or 26%, in the first quarter of 2012 as compared to the first quarter of 2011. This increase outpaced the 9% increase in average rig count over the comparable period. North America revenue increased $394 million, or 29%, in the first quarter of 2012 compared to the same quarter of the prior year. International revenues increased $349 million, or 23%, in the first quarter of 2012 as compared to the first quarter of 2011. Our artificial lift systems, drilling services, and completions product lines were the strongest contributors to the increase over the year-ago period.

Operating Income

Consolidated operating income increased $179 million or 83%, in the first quarter of 2012 as compared to the first quarter of 2011. Our operating segments contributed $200 million of incremental operating income

Severance, exit and other adjustments during the three months ended March 31, 2012 include (1) $30 million for severance and exit costs as well as (2) $2 million in legal and professional fees incurred in connection with our on-going investigations.

Severance, exit and other adjustments during the three months ended March 31, 2011 include (1) $11 million for severance, (2) $9 million charge incurred in connection with the termination of corporate consulting contract and (3) $1 million in legal and professional fees incurred in connection with our on-going investigations.

Interest Expense, Net

Interest expense, net was flat in the first quarter of 2012 as compared to the same period of the prior year.

Income Taxes

For the three months ended March 31, 2012, we had a tax provision of $137 million on income before taxes of $267 million. Our tax provision for the three months ended March 31, 2012 includes discrete tax expense items of $40 million, primarily related to increases in reserves for unrecognized tax benefits and changes in prior year estimates, which increased our effective tax rate for the period to 51.3%. The discrete tax expense items for the three months ended March 31, 2012 include $36 million related to prior periods. A significant portion of this amount relates to management estimates regarding unrecognized tax benefits, which may be subject to change as the estimates are further developed. The impact of these amounts is not material to any individual prior period.

For the three months ended March 31, 2011, we had a tax provision of $46 million on income before taxes of $85 million. Our tax provision for the three months ended March 31, 2011 includes tax benefits of $6 million related to certain prior period expenses for which a benefit could not be recorded in the prior periods.

Segment Results

North America

North American revenues increased $394 million, or 29%, in the first quarter of 2012, as compared to the first quarter of 2011. This increase outpaced the 13% increase in average North American rig count over the comparable period. Revenues from our well construction, artificial lift, completions and drilling services product lines were the strongest contributors to the year-over-year increase.

Operating income increased $76 million, or 27%, in the first quarter of 2012, as compared to the first quarter of the prior year. Operating margins decreased 30 basis points to 20.5% for the first three months of 2012, compared to 20.8% for the first three months of 2011.

Middle East/North Africa/Asia

Middle East/North Africa/Asia revenues increased $29 million, or 5%, in the first quarter of 2012, as compared to the first quarter of 2011. Our pipeline and specialty services product line was the strongest contributors to the increase in revenue.

Operating income increased $38 million, or 380%, during the first quarter of 2012, compared to the same quarter of the prior year. Operating margins were 7.9% in the first quarter of 2012 and 1.7% in the first quarter of 2011. In 2011, political disruptions in the Middle East and North Africa and challenging weather events in Australia and China were large drivers of a year-over-year decrease. The 2012 increase in operating income is in part due to a return of less severe seasonal storms in the Asia Pacific region.

Revenues in our Europe/SSA/FSU segment increased $59 million, or 12%, in the first quarter of 2012, compared to the same quarter of the prior year. The region realized strong performances from our completions, well construction and integrated drilling services lines in the current quarter as compared to the same period of the prior year.

Operating income increased $20 million, or 50%, in the first quarter of 2012, as compared to the same quarter of 2011. Operating margins were 10.5% in the first quarter of 2012 and 7.8% in the first quarter of 2011. The increase in operating income and margins was due to an abatement noted in the increased fuel and transportation costs in Russia, relative to the prior year quarter and the anticipated realization of our strong backlog in integrated drilling, wireline, completion and artificial lift.

Latin America

Revenues in our Latin America segment increased $261 million or 64%, in the first quarter of 2012, as compared to the same quarter of the prior year.

Operating income increased $66 million, or 314%, for the three months ended March 31, 2012, over the comparable period of the prior year. Operating margins increased from 5.1% for the first quarter of 2011 to 13.0% for the first quarter of 2012. The prior year quarter's operating income was negatively impacted by a $16 million charge due to an equity tax enacted in Colombia.

Liquidity and Capital Resources

Sources of Liquidity

Our sources of available liquidity include cash and cash equivalent balances, cash generated from operations, commercial paper and committed bank lines of credit. We also historically have accessed banks for short-term loans from uncommitted borrowing arrangements and the capital markets with debt, equity and convertible bond offerings. From time to time we may enter into transactions to factor accounts receivable or dispose of businesses or capital assets that are no longer core to our long-term growth strategy.

Committed Borrowing Facilities

We maintain a $2.25 billion unsecured, revolving credit agreement (the "Credit Agreement") with JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement has a scheduled maturity date of July 13, 2016 and can be used for a combination of borrowings, support for our commercial paper program and issuances of letters of credit. This agreement requires us to maintain a debt-to-capitalization ratio of less than 60%. We are in compliance with these covenants at March 31, 2012.

The following is a recap of our availability under our committed borrowing facility at March 31, 2012 (in millions):

                           Facilities          $  2,250
                           Less:
                           Amount drawn              -
                           Commercial paper       1,284
                           Letters of credit         82

                           Availability        $    884

On April 16, 2012, we increased the size of our commercial paper program to $2.25 billion from $1.5 billion. From time to time, we use the commercial paper program to issue short-term, unsecured notes. Our commercial paper issuances are supported by the Credit Agreement.

Cash Requirements

During 2012, we anticipate our cash requirements will include interest payments on our outstanding debt, the repayment of $273 million of senior notes due in the second quarter of 2012, working capital needs and capital expenditures. Our cash requirements may also include opportunistic business acquisitions and an indeterminate amount to settle the governmental investigations described in Note 14 to our condensed consolidated financial statements. Consistent with 2011, we anticipate funding these requirements from cash generated from operations, availability under our Credit Agreement, the issuance of commercial paper and potential proceeds from disposals of businesses or capital assets that are no longer core to our long-term growth strategy.

Capital expenditures for 2012 are projected to be between 10% and 15% of our revenues. The amounts ultimately spent will depend on a number of factors including the type of contracts we enter into, asset availability and our expectations with respect to industry activity levels in 2013. The expenditures are expected to be used primarily to support anticipated near-term growth. Capital expenditures during the three months ended March 31, 2012 were $514 million.

Accounts Receivable Factoring

During the three months ended March 31, 2012, we factored approximately $51 million of accounts receivables under the program we entered into in 2010. We received $47 million in proceeds and recognized a loss of less than one million on these sales. These transactions qualified for sale accounting under the accounting standards and the proceeds received through March 31, 2012 are included in operating cash flows in our Condensed Consolidated Statement of Cash Flows. We did not factor accounts receivables during the three months ended March 31, 2011.

Derivative Instruments

Fair Value Hedges

We may use interest rate swaps to help mitigate exposures related to changes in the fair values of the associated debt. Amounts paid or received upon termination of interest rate swaps accounted for as fair value hedges represent the fair value of the agreements at the time of termination and are recorded as an adjustment to the carrying value of the related debt. These amounts are amortized as a reduction, in the case of gains, or as an increase, in the case of losses, of interest expense over the remaining term of the debt. As of March 31, 2012, we had net unamortized gains of $44 million associated with interest rate swap terminations.

In July 2011, we entered into interest rate swap agreements to pay a variable interest rate and receive a fixed interest rate with an aggregate notional amount of $300 million. These swaps were designated as fair value hedges of our 6.35% Senior Notes. These agreements are determined to be highly effective. The effects of any ineffectiveness were not material to the Condensed Consolidated Statements of Operations as the changes in the fair values of the interest rate swaps offset changes in the fair value of the underlying debt. The aggregate fair value of the interest rate swaps at March 31, 2012 resulted in an asset of $14 million with a corresponding increase to Long-term Debt on the accompanying Condensed Consolidated Balance Sheets.

Cash Flow Hedges

In 2008, we entered into interest rate derivative instruments to hedge projected exposures to interest rates in anticipation of a debt offering. Those hedges were terminated at the time of the issuance of the debt, and the loss

Other Derivative Instruments

As of March 31, 2012, we had foreign currency forward contracts with notional amounts aggregating to $756 million. These contracts were entered into to hedge exposure to currency fluctuations in various foreign currencies. The total estimated fair value of these contracts and amounts receivable or owed associated with closed contracts resulted in a net liability of approximately $5 million. These derivative instruments were not designated as hedges and the changes in fair value of the contracts are recorded each period in Other, Net in the accompanying Condensed Consolidated Statements of Operations.

We have cross-currency swaps between the U.S. dollar and Canadian dollar to hedge certain exposures to the Canadian dollar. At March 31, 2012, we had notional amounts outstanding of $168 million. The total estimated fair value of these contracts at March 31, 2012, resulted in a liability of $33 million. These derivative instruments were not designated as hedges and the changes in fair value of the contracts are recorded each period in Other, Net in the accompanying Condensed Consolidated Statements of Operations.

Off Balance Sheet Arrangements

A Swiss joint-stock company named Weatherford International Ltd. is the ultimate parent ("Weatherford Switzerland") of the Weatherford group and guarantees the obligations of Weatherford International Ltd., which is incorporated in Bermuda ("Weatherford Bermuda") and Weatherford International, Inc., which is incorporated in Delaware ("Weatherford Delaware") noted below.

The following obligations of Weatherford Delaware were guaranteed by Weatherford Bermuda at March 31, 2012: (1) the 5.95% Senior Notes, (2) the 6.35% Senior Notes and (3) the 6.80% Senior Notes.

The following obligations of Weatherford Bermuda were guaranteed by Weatherford Delaware at March 31, 2012: (1) the revolving credit facility, (2) the 4.95% Senior Notes, (3) the 5.50% Senior Notes, (4) the 6.50% Senior Notes, (5) the 5.15% Senior Notes, (6) the 6.00% Senior Notes, (7) the 7.00% Senior Notes,
(8) the 9.625% Senior Notes, (9) the 9.875% Senior Notes, (10) the 5.125% Senior Notes and (11) the 6.75% Senior Notes.

Letters of Credit

We execute letters of credit and bid and performance bonds in the normal course of business. As of March 31, 2012, we had $692 million of letters of credit and bid and performance bonds outstanding, consisting of $415 million outstanding under various uncommitted credit facilities, $82 million letters of credit outstanding under our committed facilities and $195 million of performance bonds issued by financial sureties against an indemnification from us. These obligations could be called by the beneficiaries should we breach certain contractual or performance obligations. If the beneficiaries were to call the letters of credit under our committed facilities, our available liquidity would be reduced by the amount called.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements. We prepare these financial statements in conformity with U.S. generally accepted accounting principles. As such, we are required to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience,

New Accounting Pronouncements

See Note 15 to our condensed consolidated financial statements included elsewhere in this report.

Risk Factors

An investment in our registered shares involves various risks. When considering an investment in our Company, you should consider carefully all of the risk factors described in our most recent Annual Report on Form 10-K, under the heading "Item 1A. Risk Factors" as well as the information below and other information included and incorporated by reference in this report.

Forward-Looking Statements

This report, as well as other filings made by us with the Securities and Exchange Commission ("SEC"), and our releases issued to the public contain various statements relating to future financial performance and results, including certain projections and business trends and other statements that are not historical facts. We believe these statements constitute "Forward-Looking . . .