Note 23 Segment Information

At December 31, 2014, we conducted our operations through two business lines:

•	Drilling & Rig Services

The Drilling & Rig Services business line is comprised of our global land-based and offshore drilling rig operations and other rig services, consisting of equipment manufacturing, rig instrumentation, optimization software and directional drilling services. This business line consists of four operating segments: U.S., Canada, International and Rig Services.

•	Completion & Production Services

Our Completion & Production Services business line is comprised of our operations involved in the completion, life-of-well maintenance and plugging and abandonment of a well in the United States and Canada. These services include stimulation, coiled-tubing, cementing, wireline, workover, well-servicing and fluids management. In connection with the proposed Merger, this business line will be merged with CJES and we will own 53% of the combined company.

The accounting policies of the segments are the same as those described in Note 3—Summary of Significant Accounting Policies. Inter-segment sales are recorded at cost or cost plus a profit margin. We evaluate the performance of our segments based on several criteria, including adjusted income (loss) derived from operating activities.

The following table sets forth financial information with respect to our operating segments:

	Year Ended December 31,
	2014			2013			2012
	(In thousands)
Operating revenues and Earnings (losses) from unconsolidated affiliates:(1)
Drilling & Rig Services:
U.S.	$	2,159,968		$	1,914,786		$	2,276,808
Canada		335,192			361,676			429,411
International		1,623,102			1,464,264			1,265,060
Rig Services(2)		687,302			516,004			688,310

Subtotal drilling and rig services(3)		4,805,564			4,256,730			4,659,589
Completion & Production Services:
Completion Services		1,218,361			1,074,713			1,462,767
Production Services		1,033,538			1,009,214			1,000,873

Subtotal completion and production services(4)		2,251,899			2,083,927			2,463,640
Other reconciling items(5)		(259,567	)		(188,603	)		(568,896	)

Total	$	6,797,896		$	6,152,054		$	6,554,333

Adjusted income (loss) derived from operating activities:(1)(6)
Drilling & Rig Services:
U.S.		370,173			315,496			509,894
Canada		52,468			61,193			91,360
International		242,818			177,833			91,226
Rig Services(2)		47,768			(3,918	)		67,366

Subtotal drilling and rig services(3)		713,227			550,604			759,846
Completion & Production Services:
Completion Services		(15,078	)		51,722			188,518
Production Services		93,414			102,130			108,835

Subtotal completion and production services(4)		78,336			153,852			297,353
Other reconciling items(7)		(193,565	)		(146,237	)		(148,649	)

Total adjusted income (loss) derived from operating activities		597,998			558,219			908,550

U.S. oil and gas joint venture earnings (losses)		—			—			(289,199	)
Interest expense		(177,948	)		(223,418	)		(251,904	)
Investment income (loss)		11,831			96,577			63,137
Gains (losses) on sales and disposals of long-lived assets and other income (expense), net		(9,073	)		(37,977	)		136,636
Impairments and other charges		(1,027,423	)		(287,241	)		(290,260	)

Income (loss) from continuing operations before income taxes		(604,615	)		106,160			276,960
Income tax expense (benefit)		62,666			(55,181	)		40,986
Subsidiary preferred stock dividend		1,984			3,000			3,000

Income (loss) from continuing operations, net of tax		(669,265	)		158,341			232,974
Income (loss) from discontinued operations, net of tax		21			(11,179	)		(67,526	)

Net income (loss)		(669,244	)		147,162			165,448
Less: Net (income) loss attributable to noncontrolling interest		(1,415	)		(7,180	)		(621	)

Net income (loss) attributable to Nabors	$	(670,659	)	$	139,982		$	164,827

	Year Ended December 31,
	2014			2013			2012
	(In thousands)
Depreciation and amortization(1)
Drilling & Rig Services:
U.S.		465,506			440,210			406,740
Canada		55,986			57,796			59,191
International		367,345			346,659			330,388
Rig Services(2)		33,559			32,029			29,617

Subtotal drilling and rig services		922,396			876,694			825,936
Completion & Production Services:
Completion Services		109,917			109,242			112,401
Production Services		114,505			103,502			104,201

Subtotal completion and production services		224,422			212,744			216,602
Other reconciling items(7)		(1,718	)		(2,761	)		(2,615	)

Total depreciation and amortization	$	1,145,100		$	1,086,677		$	1,039,923

	Year Ended December 31,
	2014			2013		2012
	(In thousands)
Capital expenditures and acquisitions of businesses:(9)
Drilling & Rig Services:
U.S.		839,536			644,792		758,555
Canada		49,317			59,386		78,729
International		788,748			248,980		265,249
Rig Services(2)		103,491			70,831		39,923

Subtotal drilling and rig services		1,781,092			1,023,989		1,142,456
Completion & Production Services(8)		156,106			325,449		238,300
Other reconciling items(7)		(13,419	)		16,556		52,830

Total capital expenditures and acquisitions of businesses	$	1,923,779		$	1,365,994	$	1,433,586

	Year Ended December 31,
	2014		2013
	(In thousands)
Total assets:
Drilling & Rig Services:
U.S.		4,184,854		4,248,630
Canada		615,269		608,018
International		3,815,051		3,584,339
Rig Services		549,622		474,275

Subtotal drilling and rig services(10)		9,164,796		8,915,262
Completion & Production Services(8)(11)		1,933,387		2,394,865
Other reconciling items(7)(12)		781,759		849,684

Total assets	$	11,879,942	$	12,159,811

(1)	All periods present the operating activities of most of our wholly owned oil and gas businesses, our previously held equity interests in oil and gas joint ventures in Canada and Colombia, aircraft logistics operations and construction services as discontinued operations.
(2)	Includes our other services comprised of our drilling technology and top drive manufacturing, directional drilling, rig instrumentation and software services.
(3)	Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of ($6.8) million and ($0.4) million for the years ended December 31, 2014 and 2013, respectively.
(4)	Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $0.5 million, $0.4 million and $0.5 million for the years ended December 31, 2014, 2013 and 2012, respectively.
(5)	Represents the elimination of inter-segment transactions and earnings (losses), net from the U.S. unconsolidated oil and gas joint venture, accounted for using the equity method until sold in December 2012, of ($289.2) million for the year ended December 31, 2012.
(6)	Adjusted income (loss) derived from operating activities is computed by subtracting the sum of direct costs, general and administrative expenses, depreciation and amortization from the sum of Operating revenues and Earnings (losses) from unconsolidated affiliates. Adjusted income is a non-GAAP measure and should not be used in isolation as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of our business units and the consolidated company based on several criteria, including adjusted income (loss) derived from operating activities, because it believes that these financial measures accurately reflect our ongoing profitability. A reconciliation of this non-GAAP measure to income (loss) from continuing operations before income taxes, which is a GAAP measure, is provided in the above table.
(7)	Represents the elimination of inter-segment transactions and unallocated corporate expenses, assets and capital expenditures.
(8)	Reflects assets allocated to the line of business to conduct its operations. Further allocation to individual operating segments of Completion & Production Services is not available.
(9)	Includes the total purchase price of acquisitions.
(10)	Includes $48.1 million and $57.0 million of investments in unconsolidated affiliates accounted for using the equity method as of December 31, 2014 and 2013, respectively.
(11)	Includes $10.2 million and $7.4 million of investments in unconsolidated affiliates accounted for using the equity method as of December 31, 2014 and 2013, respectively.
(12)	Includes assets of $146.5 million and $239.9 million from oil and gas businesses classified as assets held-for-sale as of December 31, 2014 and 2013, respectively.

The following table sets forth financial information with respect to Nabors' operations by geographic area:

	Year Ended December 31,
	2014		2013		2012
	(In thousands)
Operating revenues and Earnings (losses) from unconsolidated affiliates:
U.S.	$	4,695,977	$	4,146,125	$	4,625,614
Outside the U.S.		2,101,919		2,005,929		1,928,719

	$	6,797,896	$	6,152,054	$	6,554,333

Property, plant and equipment, net:
U.S.	$	5,205,296	$	5,474,746	$	5,179,578
Outside the U.S.		3,393,829		3,123,067		3,532,510

	$	8,599,125	$	8,597,813	$	8,712,088

Goodwill:
U.S.	$	146,310	$	498,149	$	456,463
Outside the U.S.		27,618		14,815		15,863

	$	173,928	$	512,964	$	472,326