10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2012

Commission File Number: 001-32657

NABORS INDUSTRIES LTD.

Bermuda	98-0363970
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Crown House

Second Floor

4 Par-la-Ville Road

Hamilton, HM08

Bermuda

(441) 292-1510

(Address of principal executive offices)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES x  NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES x  NO £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer x	Accelerated Filer £
Non-accelerated Filer £	Smaller Reporting Company £

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES £  NO x

The number of common shares, par value $.001 per share, outstanding as of October 31, 2012 was 290,383,841.

NABORS INDUSTRIES LTD.  AND SUBSIDIARIES

Index

	PART I FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011	3
	Consolidated Statements of Income (Loss) for the Three and Nine Months Ended September 30, 2012 and 2011	4
	Consolidated Statements of Other Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2012 and 2011	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011	6
	Consolidated Statements of Changes in Equity for the Nine Months Ended September 30, 2012 and 2011	7
	Notes to Consolidated Financial Statements	9
	Report of Independent Registered Public Accounting Firm	40
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	59
Item 4.	Controls and Procedures	59
	PART II OTHER INFORMATION
Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 3.	Defaults Upon Senior Securities	61
Item 4.	Mine Safety Disclosures	61
Item 5.	Other Information	61
Item 6.	Exhibits	62
Signatures		63

2

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)	September 30,2012			December 31, 2011
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	471,562		$	398,575
Short-term investments	148,001			140,914
Assets held for sale	404,234			401,500
Accounts receivable, net	1,529,232			1,576,555
Inventory	257,158			272,852
Deferred income taxes	111,673			127,874
Other current assets	211,789			170,044
Total current assets	3,133,649			3,088,314
Long-term investments and other receivables	5,301			11,124
Property, plant and equipment, net	8,894,084			8,629,946
Goodwill	472,462			501,258
Investment in unconsolidated affiliates	70,172			371,021
Other long-term assets	348,893			310,477
Total assets	$	12,924,561		$	12,912,140
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	389		$	275,326
Trade accounts payable	560,641			782,753
Accrued liabilities	573,636			744,483
Total current liabilities	1,134,666			1,802,562
Long-term debt	4,678,896			4,348,490
Other long-term liabilities	448,418			292,758
Deferred income taxes	737,269			797,925
Total liabilities	6,999,249			7,241,735
Commitments and contingencies (Note 12)
Subsidiary preferred stock	69,188			69,188
Equity:
Shareholders’ equity:
Common shares, par value $.001 per share:
Authorized common shares 800,000; issued 318,797 and 317,042, respectively	319			317
Capital in excess of par value	2,332,387			2,287,743
Accumulated other comprehensive income	362,480			321,264
Retained earnings	4,093,321			3,956,364
Less: treasury shares, at cost, 28,414 and 29,414 common shares, respectively	(944,627		)	(977,873		)
Total shareholders’ equity	5,843,880			5,587,815
Noncontrolling interest	12,244			13,402
Total equity	5,856,124			5,601,217
Total liabilities and equity	$	12,924,561		$	12,912,140

The accompanying notes are an integral part of these consolidated financial statements.

3

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2012			2011			2012			2011
Revenues and other income:
Operating revenues	$	1,766,419		$	1,608,504		$	5,393,959		$	4,325,714
Earnings (losses) from unconsolidated affiliates	(99,527		)	33,723			(302,513		)	59,305
Investment income (loss)	7,224			727			32,844			12,032
Total revenues and other income	1,674,116			1,642,954			5,124,290			4,397,051
Costs and other deductions:
Direct costs	1,136,198			1,019,412			3,444,270			2,687,970
General and administrative expenses	131,887			119,431			401,845			358,352
Depreciation and amortization	269,597			234,085			778,234			684,337
Interest expense	63,604			58,060			189,717			195,781
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	10,263			(11,607		)	21,837			(1,100		)
Impairments and other charges	—			98,072			147,503			98,072
Total costs and other deductions	1,611,549			1,517,453			4,983,406			4,023,412
Income (loss) from continuing operations before income taxes	62,567			125,501			140,884			373,639
Income tax expense (benefit):
Current	50,979			19,676			111,683			47,214
Deferred	(54,980		)	17,885			(82,832		)	71,546
Total income tax expense (benefit)	(4,001		)	37,561			28,851			118,760
Subsidiary preferred stock dividend	750			750			2,250			2,250
Income (loss) from continuing operations, net of tax	65,818			87,190			109,783			252,629
Income (loss) from discontinued operations, net of tax	10,826			(12,226		)	26,721			96,545
Net income (loss)	76,644			74,964			136,504			349,174
Less: Net (income) loss attributable to noncontrolling interest	(988		)	(708		)	453			355
Net income (loss) attributable to Nabors	$	75,656		$	74,256		$	136,957		$	349,529
Earnings (losses) per share:
Basic from continuing operations	$	.22		$	.30		$	.38		$	.88
Basic from discontinued operations	.04			(.04		)	.09			.34
Total Basic	$	.26		$	.26		$	.47		$	1.22
Diluted from continuing operations	$	.22		$	.30		$	.38		$	.86
Diluted from discontinued operations	.04			(.05		)	.09			.33
Total Diluted	$	.26		$	.25		$	.47		$	1.19
Weighted-average number of common shares outstanding:
Basic	290,367			287,487			289,822			286,971
Diluted	292,501			291,986			292,290			292,991

The accompanying notes are an integral part of these consolidated financial statements.

4

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2012			2011			2012			2011
Net income (loss) attributable to Nabors	$	75,656		$	74,256		$	136,957		$	349,529
Other comprehensive income (loss), before tax:
Translation adjustment attributable to Nabors	31,550			(86,856		)	29,157			(47,507		)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	13,667			(21,150		)	20,882			(26,034		)
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(1,523		)	(4		)	(14,007		)	(5		)
Unrealized gains/(losses) on marketable securities	12,144			(21,154		)	6,875			(26,039		)
Pension liability amortization	260			151			780			451
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	166			191			548			572
Other comprehensive income (loss), before tax	44,120			(107,668		)	37,360			(72,523		)
Income tax expense (benefit) related to items of other comprehensive income (loss)	(272		)	68			(3,856		)	374
Other comprehensive income (loss), net of tax	44,392			(107,736		)	41,216			(72,897		)
Comprehensive income (loss) attributable to Nabors	120,048			(33,480		)	178,173			276,632
Net income (loss) attributable to noncontrolling interest	988			708			(453		)	(355		)
Translation adjustment attributable to noncontrolling interest	390			(912		)	417			(460		)
Comprehensive income (loss) attributable to noncontrolling interest	1,378			(204		)	(36		)	(815		)
Comprehensive income (loss)	$	121,426		$	(33,684	)	$	178,137		$	275,817

The accompanying notes are an integral part of these consolidated financial statements.

5

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months EndedSeptember 30,
(In thousands)	2012			2011
Cash flows from operating activities:
Net income (loss) attributable to Nabors	$	136,957		$	349,529
Adjustments to net income (loss):
Depreciation and amortization	778,393			686,820
Depletion and other exploratory expenses	223			31,949
Deferred income tax expense (benefit)	(81,116		)	61,566
Deferred financing costs amortization	3,256			4,000
Pension liability amortization and adjustments	779			450
Discount amortization on long-term debt	1,467			26,546
Amortization of loss on hedges	602			695
Impairments and other charges	162,450			98,072
Losses (gains) on long-lived assets, net	7,016			(40,636		)
Losses (gains) on investments, net	(27,773		)	(8,567		)
Losses (gains) on debt retirement, net	—			58
Losses (gains) on derivative instruments	103			267
Gain on acquisition	—			(12,178		)
Share-based compensation	13,541			17,249
Foreign currency transaction losses (gains), net	5,054			743
Gain on sale of oil and gas operations	(48,486		)	—
Equity in (earnings) losses of unconsolidated affiliates, net of dividends	302,512			(135,844		)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	46,973			(283,082		)
Inventory	10,900			(76,913		)
Other current assets	(47,086		)	(2,623		)
Other long-term assets	(26,743		)	79,770
Trade accounts payable and accrued liabilities	(221,252		)	331,633
Income taxes payable	10,576			(466		)
Other long-term liabilities	65,699			(20,904		)
Net cash provided by operating activities	1,094,045			1,108,134
Cash flows from investing activities:
Purchases of investments	(949		)	(9,567		)
Sales and maturities of investments	30,111			24,580
Cash paid for acquisition of businesses, net	—			(55,459		)
Investment in unconsolidated affiliates	—			(54,762		)
Distribution of proceeds from asset sales from unconsolidated affiliates	—			142,984
Capital expenditures	(1,221,769		)	(1,532,597		)
Proceeds from sales of assets and insurance claims	128,432			110,535
Net cash used for investing activities	(1,064,175		)	(1,374,286		)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	(1,748		)	5,074
Proceeds from issuance of long-term debt	—			697,578
Proceeds from revolving credit facilities	710,000			1,300,000
Proceeds from issuance of common shares	(4,007		)	12,175
Debt issuance costs	—			(6,065		)
Reduction in long-term debt	(276,232		)	(1,404,271		)
Paydown of revolving credit facilities	(380,000		)	(700,000		)
Repurchase of equity component of convertible debt	—			(12		)
Purchase of restricted stock	(2,071		)	(2,579		)
Tax benefit related to share-based awards	(54		)	185
Net cash provided by (used for) financing activities	45,888			(97,915		)
Effect of exchange rate changes on cash and cash equivalents	(2,771		)	(2,174		)
Net increase (decrease) in cash and cash equivalents	72,987			(366,241		)
Cash and cash equivalents, beginning of period	398,575			641,702
Cash and cash equivalents, end of period	$	471,562		$	275,461

The accompanying notes are an integral part of these consolidated financial statements.

6

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

				Capital
				in			Accumulated
	Common Shares			Excess			Other							Non-
		Par		of Par			Comprehensive		Retained		Treasury			controlling			Total
(In thousands)	Shares	Value		Value			Income		Earnings		Shares			Interest			Equity
Balances, December 31, 2011	317,042	$	317	$	2,287,743		$	321,264	$	3,956,364	$	(977,873	)	$	13,402		$	5,601,217
Net income (loss)									136,957					(453		)	136,504
Comprehensive income (loss), net of tax							41,216							417			41,633
Issuance of common shares for stock options exercised, net of surrender of unexercised stock options	1,111	1		(4,008		)											(4,007		)
Capital contribution from forgiveness of liability, net of tax				62,734													62,734
Issuance of treasury shares, net of tax benefit				(25,496		)					33,246						7,750
Other				(2,126		)								(1,122		)	(3,248		)
Share-based compensation	644	1		13,540													13,541
Balances, September 30, 2012	318,797	$	319	$	2,332,387		$	362,480	$	4,093,321	$	(944,627	)	$	12,244		$	5,856,124

The accompanying notes are an integral part of these consolidated financial statements.

7

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

				Capital
				in			Accumulated
	Common Shares			Excess			Other								Non-
		Par		of Par			Comprehensive			Retained		Treasury			controlling			Total
(In thousands)	Shares	Value		Value			Income			Earnings		Shares			Interest			Equity
Balances, December 31, 2010	315,034	$	315	$	2,255,787		$	342,052		$	3,707,881	$	(977,873	)	$	14,701		$	5,342,863
Net income (loss)										349,529					(355		)	349,174
Comprehensive income, net of tax							(72,897		)						(460		)	(73,357		)
Issuance of common shares for stock options exercised, net of surrender of unexercised stock options	1,006	1		12,174														12,175
Other	882	1		(2,407		)									(2,159		)	(4,565		)
Share-based compensation				17,249														17,249
Balances, September 30, 2011	316,922	$	317	$	2,282,803		$	269,155		$	4,057,410	$	(977,873	)	$	11,727		$	5,643,539

The accompanying notes are an integral part of these consolidated financial statements.

8

Nabors Industries Ltd. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 Nature of Operations

Nabors is the largest land drilling contractor in the world and one of the largest land well-servicing and workover contractors in the United States and Canada:

·We actively market approximately 521 land drilling rigs for oil and gas land drilling operations in the U.S. Lower 48 states, Alaska, Canada, South and Central America, Mexico, the Middle East, the Far East, the South Pacific, Russia and Africa.

·We actively market approximately 431 rigs for land well-servicing and workover work in the United States and approximately 176 rigs for land well-servicing and workover work in Canada.

We are also a leading provider of offshore platform workover and drilling rigs, and actively market 40 platform, 12 jackup and four barge rigs in the United States, including the Gulf of Mexico, and multiple international markets.

In addition to the foregoing services:

·We provide completion and production services, including hydraulic fracturing, cementing, nitrogen and acid pressure pumping services with over 805,000 hydraulic horsepower in key basins throughout the United States and Canada.

·We offer a wide range of ancillary well-site services, including engineering, transportation and disposal, construction, maintenance, well logging, directional drilling, rig instrumentation, data collection and other support services in select U.S. and international markets.

·We manufacture and lease or sell top drives for a broad range of drilling applications, directional drilling systems, rig instrumentation and data collection equipment, pipeline handling equipment and rig reporting software.

·We have a 51% ownership interest in a joint venture in Saudi Arabia, which owns and actively markets nine rigs in addition to the rigs we lease to the joint venture.

·We have invested in oil and gas exploration, development and production activities through both our wholly owned subsidiaries and our oil and gas joint ventures in which we hold 49-50% ownership interests.

The majority of our business is conducted through two business lines:

·Our Drilling and Rig Services business line includes our drilling operations for oil and natural gas wells, on land and offshore, and companies engaged in drilling technology, top drive manufacturing, directional drilling, construction services, and rig instrumentation and software.

·Our Completion and Production Services business line includes our well-servicing, fluid logistics, workover operations and our pressure pumping services.

In addition to these two primary business lines, we have an Oil and Gas operating segment.  Our oil and gas exploration, development and production operations are included in our Oil and Gas operating segment, or in discontinued operations in some cases.

Unless the context requires otherwise, references in this report and in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations to “we,” “us,” “our,” the “Company” or “Nabors” mean Nabors Industries Ltd., together with our subsidiaries where the context requires, including Nabors Industries, Inc., a Delaware corporation (“Nabors Delaware”).

9

Note 2 Summary of Significant Accounting Policies

Interim Financial Information

The unaudited consolidated financial statements of Nabors are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”).  Certain reclassifications have been made to the prior periods to conform to the current-period presentation, with no effect on our consolidated financial position, results of operations or cash flows.  Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted.  Therefore, these financial statements should be read along with our annual report on Form 10-K for the year ended December 31, 2011 (“2011 Annual Report”).  In management’s opinion, the consolidated financial statements contain all adjustments necessary to present fairly our financial position as of September 30, 2012, the results of our operations and other comprehensive income for the three and nine months ended September 30, 2012 and 2011, and cash flows and changes in equity for the nine months ended September 30, 2012 and 2011, in accordance with GAAP.  Interim results for the three and nine months ended September 30, 2012 may not be indicative of results that will be realized for the full year ending December 31, 2012.

Our independent registered public accounting firm has reviewed and issued a report on these consolidated interim financial statements in accordance with standards established by the Public Company Accounting Oversight Board.  Pursuant to Rule 436(c) under the Securities Act of 1933, as amended (the “Securities Act”), this report should not be considered a part of any registration statement prepared or certified within the meanings of Sections 7 and 11 of such Act.

Principles of Consolidation

Our consolidated financial statements include the accounts of Nabors, as well as all majority-owned and nonmajority-owned subsidiaries required to be consolidated under GAAP.  All significant intercompany accounts and transactions are eliminated in consolidation.

Investments in operating entities where we have the ability to exert significant influence, but where we do not control operating and financial policies, are accounted for using the equity method.  Our share of the net income (loss) of these entities is recorded as earnings (losses) from unconsolidated affiliates in our consolidated statements of income (loss), and our investment in these entities is included in both investment in unconsolidated affiliates and assets held for sale in our consolidated balance sheets. The portion of such investments included in investments in unconsolidated affiliates totaled $70.2 million and $371.0 million as of September 30, 2012 and December 31, 2011, respectively.  At each of September 30, 2012 and December 31, 2011, the portion of such investments included in assets held for sale totaled $13.7 million.  See Note 4 — Discontinued Operations for additional information.

We have investments in offshore funds, which are classified as long-term investments and are accounted for using the equity method of accounting based on our ownership interest in each fund.

Inventory

Inventory is stated at the lower of cost or market. Cost is determined using the first-in, first-out method and includes the cost of materials, labor and manufacturing overhead.  Inventory included the following:

	September 30,		December 31,
	2012		2011
	(In thousands)
Raw materials	$	148,323	$	133,480
Work-in-progress	45,959		50,951
Finished goods	62,876		88,421
	$	257,158	$	272,852

10

Goodwill

We determined it was necessary to perform our annual goodwill impairment test, a Level 3 fair value measurement, during the second quarter of 2012.  The impairment test compares the estimated fair value of the reporting unit to its carrying amount.  If the carrying amount exceeds the fair value, a second step is required to measure the goodwill impairment loss.  This second step compares the implied fair value of the reporting unit’s goodwill to its carrying amount.  If the carrying amount exceeds the implied fair value, an impairment loss is recognized in an amount equal to the excess.  Our goodwill impairment test results required the second step measurement for two reporting units.

The fair values calculated in these impairment tests were determined using discounted cash flow models involving assumptions based on our utilization of rigs or other oil and gas service equipment, revenues and earnings from affiliates, as well as direct costs, general and administrative costs, depreciation, applicable income taxes, capital expenditures and working capital requirements.  Our discounted cash flow projections for each reporting unit were based on financial forecasts.  The future cash flows were discounted to present value using discount rates determined to be appropriate for each reporting unit.  Terminal values for each reporting unit were calculated using a Gordon Growth methodology with a long-term growth rate of 3%.

Our estimated fair values of our reporting units incorporate judgment and the use of estimates by management.  Potential factors requiring assessment include a further or sustained decline in our stock price, declines in natural gas and oil prices, a variance in results of operations from forecasts, and additional transactions in the oil and gas industry.  Another factor in determining whether impairment has occurred is the relationship between our market capitalization and our book value. As part of our annual review, we compared the sum of our reporting units’ estimated fair value, which included the estimated fair value of non-operating assets and liabilities, less debt, to our market capitalization and assessed the reasonableness of our estimated fair value. Any of the above-mentioned factors may cause us to re-evaluate goodwill during any quarter throughout the year.

The carrying amounts and change of goodwill for our operating segments as of and for the nine months ended September 30, 2012 were as follows:

	Balance as of December 31, 2011		Acquisitions and Purchase Price Adjustments		Disposals and Impairments			Cumulative Translation Adjustment		Balance as of September 30, 2012
	(In thousands)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	30,154	$	—	$	—		$	—	$	30,154
U.S. Offshore	7,296		—		7,296		(1)	—		—
Alaska	19,995		—		—			—		19,995
International	18,983		—		18,983		(1)	—		—
Other Rig Services	34,766		—		3,035		(2)	518		32,249
Subtotal Drilling and Rig Services	111,194		—		29,314			518		82,398
Completion and Production Services:
U.S. Land Well-servicing	55,072		—		—			—		55,072
Pressure Pumping	334,992		—		—			—		334,992
Subtotal Completion and Production Services	390,064		—		—			—		390,064
Total	$	501,258	$	—	$	29,314		$	518	$	472,462

(1)Represents the impairment of goodwill associated with our U.S. Offshore and International reporting units. As of June 30, 2012, these reporting units had no recorded goodwill. The impairments were deemed necessary due to the prolonged uncertainty of utilization of some of our rigs as a result of changes in our customers’ plans for future drilling operations in the Gulf of Mexico as well as our international markets. A significantly prolonged period of lower natural gas prices or changes in laws and regulations could continue to adversely affect the demand for and prices of our services, which could result in future goodwill impairment charges for other reporting units due to the potential impact on our estimate of our future operating results.

11

(2)Represents the removal of goodwill in connection with our sale of Peak USA to an unrelated third party for $13.5 million cash during the second quarter of 2012.  Peak USA, a subsidiary included in our Other Rig Services reporting unit, provided trucking and logistics services to the oilfield service market in the U.S. Lower 48 states.

Note 3 Impairments and Other Charges

Impairments and other charges included the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2012		2011		2012		2011
Goodwill impairment	$	—	$	—	$	26,279	$	—
Intangible asset impairment (1)	—		—		74,960		—
Provision for retirement of assets (2)	—		98,072		46,264		98,072
Total impairments and other charges	$	—	$	98,072	$	147,503	$	98,072

(1)Represents $75.0 million related to the impairment of the Superior trade name. The Superior trade name was initially classified as a ten-year intangible asset at the date of acquisition in September 2010. The impairment is a result of the decision to cease using the Superior trade name to reduce confusion in the marketplace and enhance the Nabors brand.

(2)During the second quarter of 2012, we recorded a provision for retirement of long-lived assets in multiple operating segments, including $26.5 million in Pressure Pumping, $15.1 million in Canada and $4.6 million in U.S. Land Well-servicing. The retirements in our Canada operations included functionally inoperable rigs and other drilling equipment. Our U.S. Land Well-servicing retirements included rigs and vehicles that would require significant repair to return to work. As we began the process of streamlining our operations and consolidating our Pressure Pumping and U.S. Land Well-servicing segments into one business line, Nabors Completion & Production Services, we decided to retire certain non-core assets. As we continue to streamline our lines of business, there could be future retirement or impairment charges, which could have a potential impact on our future operating results.

During the third quarter of 2011, we recorded a provision for retirement of long-lived assets in multiple operating segments including $63.2 million in U.S. Lower 48 Land Drilling, $26.1 million in International and $8.9 million in U.S. Land Well-servicing. The retirements related to the decommissioning and retirement of a jackup rig, 116 land rigs, and a number of trucks and rigs for well-servicing. These assets were deemed economically noncompetitive for the market and were dismantled for parts and scrap.

A prolonged period of lower natural gas and oil prices and its potential impact on our utilization and dayrates could result in the recognition of future impairment charges to additional assets if future cash flow estimates, based upon information then available to management, indicate that the carrying value of those assets may not be recoverable.

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Note 4 Discontinued Operations

Assets held for sale included the following:

(In thousands)	September 30,2012		December 31, 2011
Assets Held for Sale
Oil and Gas	$	394,710	$	385,414
Other Rig Services	9,524		16,086
Assets Held for Sale	$	404,234	$	401,500

Our condensed statements of income (loss) from discontinued operations for the three and nine months ended September 30, 2012 and 2011 were as follows:

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	2012			2011			2012			2011
	(In thousands)
Operating revenues and Earnings (losses) from unconsolidated affiliates
Oil and Gas (1)	$	12,859		$	10,630		$	19,079		$	116,046
Other Rig Services (2)	$	8,334		$	9,341		$	18,750		$	21,180
Income (loss) from Oil and Gas discontinued operations:
Income (loss) from discontinued operations	$	5,826		$	(20,167	)	$	(2,095	)	$	42,746
Gain (loss) on sale of wholly owned assets	3,662			—			39,772			39,944
Less: income tax expense (benefit)	(1,604		)	(6,189		)	2,623			(14,752		)
Income (loss) from Oil and Gas discontinued operations, net of tax	$	11,092		$	(13,978	)	$	35,054		$	97,442
Income (loss) from Other Rig Services discontinued operations: (2)
Income (loss) from discontinued operations	$	2,199		$	2,336		$	(3,320	)	$	(1,197	)
Gain (loss) on sale of assets	(2,554		)	—			(7,796		)	—
Less: income tax expense (benefit)	(89		)	584			(2,783		)	(300		)
Income (loss) from Other Rig Services discontinued operations, net of tax	$	(266	)	$	1,752		$	(8,333	)	$	(897	)

(1)Includes approximately $85 million of equity in earnings during the nine months ended September 30, 2011 for our proportionate share of Remora’s net income, inclusive of the gains recognized for asset sales during the first nine months of 2011.

(2)Represents our aircraft logistics operations in Canada included in our Other Rig Services operating segment.

In April 2012, we sold our remaining wholly owned oil and gas business in Colombia to an unrelated third party for a cash purchase price of $72.6 million, which resulted in a pre-tax gain of approximately $48.5 million. This business was included in our assets held for sale as part of our Oil and Gas operating segment.

In May 2012, we sold some of our U.S. wholly owned oil and gas assets in the Fayetteville Shale, Floyd Shale, and Barnett Shale areas to unrelated third parties for cumulative cash receipts of $5.7 million, which did not result in any gain or loss.  In September 2012, we sold additional assets from our U.S. wholly owned oil and gas business for $7.3 million, which resulted in a gain of approximately $3.7 million. These assets were included in our assets held for sale as part of our Oil and Gas operating segment. Based on current market conditions, we adjusted the carrying value of our U.S. wholly owned oil and gas business in the second quarter of 2012 to reflect our assessment of its current fair value.

Our contracts with pipeline companies include pipeline transmission commitments in the Horn River Basin.  During the year ended December 31, 2011, we evaluated current production levels, natural gas prices and the anticipated sales cycle related to the sale of properties corresponding to these commitments.  As a result, we recorded liabilities for excess pipeline

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capacity. At September 30, 2012, we recorded liabilities of $92.2 million, of which $68.5 million is included in accrued liabilities and $23.7 million is included in other long-term liabilities. At December 31, 2011, we recorded liabilities of $125.7 million, of which $54.3 million is included in accrued liabilities and $71.4 million is included in other long-term liabilities. These amounts represent our best estimate of the excess capacity of the pipeline, based upon the estimated sales date of the properties, as compared to the contractual commitments. Our commitments beyond December 31, 2013 could approximate $274.8 million if the related properties are not sold or developed. Decreases in actual production, natural gas prices or a change in the estimated sales date could result in future charges related to excess capacity of the pipeline that may materially impact our results of operations.

Based on current market conditions, we adjusted the carrying value of our aircraft logistics assets by $7.8 million in 2012 to reflect our assessment of its current fair value.

Note 5 Cash and Cash Equivalents and Short-term Investments

Our cash and cash equivalents and short-term investments consisted of the following:

	September 30,		December 31,
	2012		2011
	(In thousands)
Cash and cash equivalents	$	471,562	$	398,575
Short-term investments:
Trading equity securities	23,242		11,600
Available-for-sale equity securities	89,689		71,433
Available-for-sale debt securities	35,070		57,881
Total short-term investments	$	148,001	$	140,914

Certain information related to our cash and cash equivalents and short-term investments follows:

	September 30, 2012							December 31, 2011
	FairValue		GrossUnrealizedHoldingGains		GrossUnrealizedHoldingLosses			FairValue		GrossUnrealizedHoldingGains		GrossUnrealizedHoldingLosses
					(In thousands)
Cash and cash equivalents	$	471,562	$	—	$	—		$	398,575	$	—	$	—
Short-term investments:
Trading equity securities	23,242		17,517		—			11,600		5,876		—
Available-for-sale equity securities	89,689		53,798		(2,467		)	71,433		33,075		—
Available-for-sale debt securities:
Commercial paper and CDs	180		—		—			1,230		—		—
Corporate debt securities	31,680		10,826		(1,919		)	51,300		22,494		(2,095		)
Mortgage-backed debt securities	246		15		—			309		10		—
Mortgage-CMO debt securities	1,078		12		(4		)	2,547		13		(15		)
Asset-backed debt securities	1,886		—		(140		)	2,495		—		(238		)
Total available-for-sale debt securities	35,070		10,853		(2,063		)	57,881		22,517		(2,348		)
Total available-for-sale securities	124,759		64,651		(4,530		)	129,314		55,592		(2,348		)
Total short-term investments	148,001		82,168		(4,530		)	140,914		61,468		(2,348		)
Total cash, cash equivalents and short-term investments	$	619,563	$	82,168	$	(4,530	)	$	539,489	$	61,468	$	(2,348	)

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Certain information related to the gross unrealized losses of our cash and cash equivalents and short-term investments follows:

	As of September 30, 2012
	Less Than 12 Months				More Than 12 Months
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(In thousands)
Available-for-sale equity securities	$	16,428	$	2,467	$	—	$	—
Available-for-sale debt securities:
Corporate debt securities (1)	—		—		17,900		1,919
Mortgage-CMO debt securities (2)	842		3		45		1
Asset-backed debt securities (2)	—		—		1,886		140
Total available-for-sale debt securities	842		3		19,831		2,060
Total	$	17,270	$	2,470	$	19,831	$	2,060

(1)Our unrealized loss on corporate debt securities relates to our investment in NFR Energy LLC’s 9.75% senior notes. This investment is in addition to our equity interest in NFR Energy LLC. The senior notes mature in 2017 and interest is paid semi-annually on February 15 and August 15.  We do not intend to sell this investment, and it is less likely than not that we will be required to sell it to satisfy our own cash flow and working capital requirements.  We believe that we will continue to collect all amounts due according to the contractual terms of the investment and, therefore, do not consider the decline in value of the investment to be other-than-temporary at September 30, 2012. See Note 8 Investments in Unconsolidated Affiliates for additional discussion of our equity investment.

(2)Our unrealized losses on available-for-sale debt securities held for more than one year are comprised of various types of securities.  Each of these securities has a rating ranging from “A” to “AAA” from Standard & Poor’s and ranging from “A2” to “Aaa” from Moody’s Investors Service and is considered of high credit quality.  In each case, we do not intend to sell these investments, and it is less likely than not that we will be required to sell them to satisfy our own cash flow and working capital requirements.  We believe that we will be able to collect all amounts due according to the contractual terms of each investment and, therefore, do not consider the decline in value of these investments to be other-than-temporary at September 30, 2012.

The estimated fair values of our corporate, mortgage-backed, mortgage-CMO and asset-backed debt securities at September 30, 2012, classified by time to contractual maturity, are shown below. Expected maturities differ from contractual maturities because the issuers of the securities may have the right to repay obligations without prepayment penalties and we may elect to sell the securities prior to the contractual maturity date.

	EstimatedFair Value
	September 30, 2012
	(In thousands)
Debt securities:
Due in one year or less	$	180
Due after one year through five years	17,900
Due in more than five years	16,990
Total debt securities	$	35,070

Certain information regarding our debt and equity securities is presented below:

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2012		2011		2012		2011
	(In thousands)
Available-for-sale:
Proceeds from sales and maturities	$	3,953	$	342	$	23,186	$	1,124
Realized gains (losses), net	1,732		2		14,007		(5		)

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Note 6 Fair Value Measurements

The following table sets forth, by level within the fair value hierarchy, our financial assets that are accounted for at fair value on a recurring basis as of September 30, 2012.  Our debt securities could transfer into or out of a Level 1 or 2 measure depending on the availability of independent and current pricing at the end of each quarter.  During the three months ended September 30, 2012, there were no transfers of our financial assets between Level 1 and Level 2 measures. Our financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Recurring Fair Value Measurements

	Fair Value as of September 30, 2012
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Short-term investments:
Available-for-sale equity securities — energy industry	$	81,538	$	8,151	$	—	$	89,689
Available-for-sale debt securities
Commercial paper and CDs	180		—		—		180
Corporate debt securities	—		31,680		—		31,680
Mortgage-backed debt securities	—		246		—		246
Mortgage-CMO debt securities	—		1,078		—		1,078
Asset-backed debt securities	1,886		—		—		1,886
Trading securities — energy industry	23,242		—		—		23,242
Total short-term investments	$	106,846	$	41,155	$	—	$	148,001

Nonrecurring Fair Value Measurements

Fair value measurements were applied with respect to our nonfinancial assets and liabilities measured on a nonrecurring basis, which would primarily consist of goodwill, intangible assets and other long-lived assets, assets acquired and liabilities assumed in a business combination, and asset retirement obligations.

Fair Value of Financial Instruments

The fair value of our financial instruments has been estimated in accordance with GAAP.  We measure the estimated fair value of our long-term debt, subsidiary preferred stock and revolving credit facilities using significant other observable inputs, which represent Level 2 fair value measurements, including quoted market prices or prices quoted from third-party financial institutions as well as the terms and credit spreads for such instruments. The carrying and fair values of these liabilities were as follows:

	September 30, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In thousands)
5.375% senior notes due August 2012	$	—	$	—	$	274,604	$	281,188
6.15% senior notes due February 2018	968,403		1,155,180		967,490		1,113,986
9.25% senior notes due January 2019	1,125,000		1,470,139		1,125,000		1,419,514
5.00% senior notes due September 2020	697,572		769,146		697,343		734,475
4.625% senior notes due September 2021	697,847		726,285		697,667		708,176
Subsidiary preferred stock	69,188		68,625		69,188		68,625
Revolving credit facilities	1,190,000		1,190,000		860,000		860,000
Other	463		463		1,712		1,712
	$	4,748,473	$	5,379,838	$	4,693,004	$	5,187,676

The fair values of our cash equivalents, trade receivables and trade payables approximate their carrying values due to the short-term nature of these instruments.

As of September 30, 2012, our short-term investments were carried at fair market value and included $124.8 million and

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$23.2 million in securities classified as available-for-sale and trading, respectively.  As of December 31, 2011, our short-term investments were carried at fair market value and included $129.3 million and $11.6 million in securities classified as available-for-sale and trading, respectively.

Note 7 Share-Based Compensation

We have several share-based employee compensation plans, which are more fully described in Note 8 Share-Based Compensation in our 2011 Annual Report. Total share-based compensation expense, which includes both stock options and restricted stock, totaled $4.8 million and $9.0 million for the three months ended September 30, 2012 and 2011, respectively, and $13.5 million and $17.2 million for the nine months ended September 30, 2012 and 2011, respectively.  Total share-based compensation is included in direct costs and general and administrative expenses in our consolidated statements of income (loss). Share-based compensation expense has been allocated to our various operating segments.  See Note 15 — Segment Information.

During the nine months ended September 30, 2012 and 2011, we awarded 934,648 and 1,049,540 shares of restricted stock, respectively, vesting over periods of up to four years, to our employees and directors.  These awards had an aggregate value at their grant date of $19.4 million and $29.3 million, respectively.  The fair value of restricted stock that vested during the nine months ended September 30, 2012 and 2011 was $9.4 million and $18.6 million, respectively.

The total intrinsic value of stock options exercised during the nine months ended September 30, 2012 and 2011 was $5.7 million and $15.8 million, respectively.  Additionally, the intrinsic value of stock options surrendered during the nine months ended September 30, 2012 was $17.9 million.  The total fair value of stock options that vested during the nine months ended September 30, 2012 and 2011 was $7.6 million and $5.2 million, respectively.

Note 8 Investments in Unconsolidated Affiliates

We have several unconsolidated affiliates that are integral to our operations.  For a full description, refer to Note 10 — Investments in Unconsolidated Affiliates in our 2011 Annual Report.

At September 30, 2012 and December 31, 2011, our consolidated balance sheets reflect our investments in unconsolidated affiliates accounted for using the equity method totaling $70.2 million and $371.0 million, respectively.  In addition, assets held for sale include investments in unconsolidated affiliates accounted for using the equity method totaling $13.7 million at each of September 30, 2012 and December 31, 2011, respectively.

During each quarter of 2012 our unconsolidated U.S. oil and gas joint venture has recorded full-cost ceiling test writedowns of which we have recognized $310.0 million during the nine months ended September 30, 2012 representing our proportionate share.  The full-cost ceiling test writedowns during 2012 occurred as a result of the sustained low natural gas price environment when using the prior 12-month average natural gas price.  We recorded these writedowns against the carrying value of our investment and, as of September 30, 2012, our equity investment has been written down to a zero balance.

Presented below is summarized income statement (loss) information for our unconsolidated U.S. oil and gas joint venture:

	Three Months EndedSeptember 30,					Nine Months EndedSeptember 30,
	2012			2011		2012			2011
	(In thousands)
Gross revenues	$	91,445		$	65,985	$	216,914		$	169,738
Gross margin	$	63,462		$	51,640	$	146,519		$	133,858
Net income (loss)	$	(240,414	)	$	15,127	$	(649,926	)	$	53,918
Nabors’ earnings (losses) from our U.S. oil and gas joint venture (1)	$	(98,805	)	$	34,909	$	(301,800	)	$	56,285

(1)During the three and nine months ended September 30, 2012, our unconsolidated U.S. oil and gas joint venture recorded full-cost ceiling test writedowns, of which our proportionate share was $96.3 million and $310.0 million, respectively.  The writedowns are included in our Oil and Gas operating segment.

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Note 9 Debt

Long-term debt consisted of the following:

	September 30,		December 31,
	2012		2011
	(In thousands)
5.375% senior notes due August 2012	$	—	$	274,604
6.15% senior notes due February 2018	968,403		967,490
9.25% senior notes due January 2019	1,125,000		1,125,000
5.00% senior notes due September 2020	697,572		697,343
4.625% senior notes due September 2021	697,847		697,667
Revolving credit facilities	1,190,000		860,000
Other	463		1,712
	4,679,285		4,623,816
Less: current portion	389		275,326
	$	4,678,896	$	4,348,490

5.375% Senior Notes Due August 2012

During August 2012, we paid $282.4 million at maturity of our 5.375% senior notes, representing principal of $275.0 million and accrued interest of $7.4 million. We used cash on hand and $270 million from revolving credit facilities to pay this obligation.

Revolving Credit Facilities

At September 30, 2012, we had $310 million of remaining availability from a combined total of $1.5 billion under our existing revolving credit facilities. In September 2012, Nabors Delaware added a new lender to one of the facilities, which increased borrowing capacity to $1.5 billion. The existing revolving credit facilities mature in September 2014, and can be used for general corporate purposes, including capital expenditures and working capital. The weighted average interest rate on borrowings at September 30, 2012 was 2.08%.  We fully and unconditionally guarantee the obligations under all of these credit facilities.

The revolving credit facilities contain various covenants and restrictive provisions that limit our ability to incur additional indebtedness, make investments or loans and create liens and require us to maintain a net funded indebtedness to total capitalization ratio, as defined in each agreement. We were in compliance with all covenants under the agreements at September 30, 2012 and December 31, 2011. If we should fail to perform our obligations under the covenants, the revolving credit commitments could be terminated and any outstanding borrowings under the relevant facility could be declared immediately due and payable.

Note 10 Common Shares

During the nine months ended September 30, 2012, our employees exercised vested options and surrendered unexercised vested stock options to acquire 1.1 million of our common shares. We received $17.0 million relating to exercised vested options. We used approximately $21.0 million to repurchase surrendered unexercised vested options and to satisfy related tax withholding obligations pursuant to stock option share settlements and exercises by some of the employees. During the nine months ended September 30, 2011, our employees exercised vested options to acquire 1.0 million of our common shares, resulting in proceeds of $12.2 million.  For each of the nine months ended September 30, 2012 and 2011, we withheld .1 million of our common shares with a fair value of $2.1 million and $2.6 million, respectively, to satisfy tax withholding obligations in connection with the vesting of all stock awards.

At December 31, 2011, accrued liabilities included a provision of $100 million for a contingent liability related to the change of our Chief Executive Officer in October 2011. In February 2012, our former Chief Executive Officer elected to forego triggering that payment. In connection with that development, we announced plans to make charitable contributions to benefit the needs of our employees and other community-based causes.  During the first quarter of 2012, we contributed one million of our treasury shares to the Nabors Charitable Foundation, a 501(c)(3) organization, in support of this objective.  We consider our former Chief Executive Officer to be a significant shareholder of the Company and, therefore, have recorded these transactions as equity. We recorded the release of the contingent liability, net of tax, through capital in excess of par as

18

a forgiveness of liability from a beneficial owner.  We recorded the donation of the treasury shares at their weighted-average cost, net of tax, through capital in excess of par.

Shareholder Rights Plan

On July 16, 2012, the Board of Directors declared the issuance of one preferred share purchase right (a “Right”) for each Common Share issued and outstanding on July 27, 2012 (the “Record Date”) to the shareholders of record on that date.  Each Right entitles the registered holder to purchase from the Company one one-thousandth of a Series A Junior Participating Preferred Share, par value US$0.001 per share (the “Preferred Shares”), of the Company, at a price of $70.00 per one one-thousandth of a Preferred Share (the “Purchase Price”), subject to adjustment.

Until the Distribution Date, the Rights will be evidenced, with respect to any Common Share certificates issued and outstanding as of the Record Date, by such Common Share certificate together with a copy of a summary of rights. The Distribution Date is defined as the earlier to occur of:

(i)10 days following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired beneficial ownership (including derivative positions) of 10% or more of the issued and outstanding Common Shares (or, in the event an exchange is effected in accordance with Section 24 of the Rights Agreement and the Board of Directors determines that a later date is advisable, then such later date that is not more than 20 days after such public announcement); or

(ii)10 business days (or such later date as may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 10% or more of the issued and outstanding Common Shares.

The Rights are not exercisable until the Distribution Date. The Rights will expire on July 16, 2013 (the “Final Expiration Date”), unless the Final Expiration Date is extended or the Rights are earlier redeemed by the Company, in each case.

Note 11 Subsidiary Preferred Stock

During the three months ended September 30, 2012, dividends of $0.75 million on outstanding shares of preferred stock were declared and paid in full.

Note 12 Commitments and Contingencies

Commitments

Employment Contract

The employment agreement for our CEO, Mr. Anthony G. Petrello, provides for a term through March 30, 2015, with automatic one-year extensions each April 1, unless either party gives notice of nonrenewal.  In the event of Mr. Petrello’s termination without cause or constructive termination without cause, he would be entitled to receive three times the average of his base salary and annual bonus during the three fiscal years preceding the termination.  If, by way of example, Mr. Petrello were terminated without cause subsequent to September 30, 2012, his payment would be approximately $31.1 million.  The formula will be reduced to two times the average stated above after April 1, 2015.  In the event of his death or disability, either he or his estate would be entitled to receive within 30 days thereafter a payment of $50 million.

We do not have insurance to cover, and we have not recorded an expense or accrued a liability relating to, this potential obligation.  See Note 18 Commitments and Contingencies to our 2011 Annual Report for additional discussion and description of Mr. Petrello’s employment agreement.

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Contingencies

Income Tax Contingencies

We are subject to income taxes in the United States and numerous other jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. We are regularly audited by tax authorities. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different than what is reflected in income tax provisions and accruals. An audit or litigation could materially affect our financial position, income tax provision, net income, or cash flows in the period or periods challenged.

It is possible that future changes to tax laws (including tax treaties) could impact our ability to realize the tax savings recorded to date as well as future tax savings, resulting from our 2002 corporate reorganization.  See Note 13 — Income Taxes to our 2011 Annual Report for additional discussion.

On September 14, 2006, Nabors Drilling International Limited, one of our wholly owned Bermuda subsidiaries (“NDIL”), received a Notice of Assessment from Mexico’s federal tax authorities in connection with the audit of NDIL’s Mexico branch for 2003. The notice proposes to deny depreciation expense deductions relating to drilling rigs operating in Mexico in 2003.  The notice also proposes to deny a deduction for payments made to an affiliated company for the procurement of labor services in Mexico. The amount assessed was approximately $19.8 million (including interest and penalties). Nabors and its tax advisors previously concluded that the deductions were appropriate.  NDIL’s Mexico branch took similar deductions for depreciation and labor expenses from 2004 to 2008.  On June 30, 2009, the government proposed similar assessments against the Mexico branch of another wholly owned Bermuda subsidiary, Nabors Drilling International II Ltd. (“NDIL II”) for 2006.  We anticipate that a similar assessment will eventually be proposed against NDIL for 2005 through 2008 and against NDIL II for 2007 to 2010.  We believe that the potential assessments will range from $6 million to $26 million per year for the period from 2005 to 2009, and in the aggregate, would be approximately $90 million to $95 million.  Although Nabors and its tax advisors previously concluded that the deductions were appropriate for each of these years, a reserve has been recorded in accordance with GAAP. The statute of limitations for NDIL’s 2004 tax year expired.  Accordingly, during the fourth quarter of 2010, we released $7.4 million from our tax reserves, which represented the reserve recorded for that tax year. If these additional assessments were made and we ultimately did not prevail, we would be required to recognize additional tax for the amount in excess of the current reserve.

Self-Insurance

We estimate the level of our liability related to insurance and record reserves for these amounts in our consolidated financial statements. Our estimates are based on the facts and circumstances specific to existing claims and our past experience with similar claims. These loss estimates and accruals recorded in our financial statements for claims have historically been reasonable in light of the actual amount of claims paid.  Although we believe our insurance coverage and reserve estimates are reasonable, a significant accident or other event that is not fully covered by insurance or contractual indemnity could occur and could materially affect our financial position and results of operations for a particular period.

Effective April 1, 2012, our workers’ compensation claims are subject to a $2.0 million per-occurrence deductible, and our automobile claims are subject to a $1.0 million per-occurrence deductible.

Litigation

Nabors and its subsidiaries are defendants or otherwise involved in a number of lawsuits in the ordinary course of business. We estimate the range of our liability related to pending litigation when we believe the amount and range of loss can be estimated. We record our best estimate of a loss when the loss is considered probable. When a liability is probable and there is a range of estimated loss with no best estimate in the range, we record the minimum estimated liability related to the lawsuits or claims. As additional information becomes available, we assess the potential liability related to our pending litigation and claims and revise our estimates. Due to uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ from our estimates. For matters where an unfavorable outcome is reasonably possible and significant, we disclose the nature of the matter and a range of potential exposure, unless an estimate cannot be made at the time of disclosure. In the opinion of management and based on liability accruals provided, our ultimate exposure with respect to these pending lawsuits and claims is not expected to have a material adverse effect on our consolidated financial position or cash flows, although they could have a material adverse effect on our results of operations for a particular reporting period.

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On July 5, 2007, we received an inquiry from the U.S. Department of Justice relating to its investigation of one of our vendors and compliance with the Foreign Corrupt Practices Act.  The inquiry relates to transactions with and involving Panalpina, which provided freight forwarding and customs clearance services to some of our affiliates.  The inquiry focused on transactions in Kazakhstan, Saudi Arabia, Algeria and Nigeria.  The Audit Committee of our Board of Directors engaged outside counsel to review some of our transactions with this vendor, received periodic updates at its regularly scheduled meetings, and the Chairman of the Audit Committee received updates between meetings as circumstances warranted.  The investigation included a review of certain amounts paid to and by Panalpina in connection with obtaining permits for the temporary importation of equipment and clearance of goods and materials through customs.  Both the SEC and the Department of Justice have been advised of the results of our investigation. The SEC has advised us in April 2012 that it concluded its review of this matter and does not intend to recommend any enforcement action against us. Although the Department of Justice has not concluded its inquiry, we do not anticipate that its final determination will have an adverse effect on the Company.

In 2009, the Court of Ouargla (in Algeria) entered a judgment of approximately $19.7 million against us related to alleged customs infractions in 2009.  We believe we did not receive proper notice of the judicial proceedings, and that the amount of the judgment was excessive in any case.  We asserted the lack of legally required notice as a basis for challenging the judgment on appeal to the Algeria Supreme Court.  On May 31, 2012, that court reversed the lower court and remanded the case to the Ouargla Court of Appeals for treatment consistent with the Supreme Court’s ruling. Based upon our understanding of applicable law and precedent, we continue to believe that we will prevail. We do not believe that a loss is probable and have not accrued any amounts related to this matter.  If we are ultimately required to pay a fine or judgment related to this matter, the amount of the loss could range from approximately $140,000 to $19.7 million.

In March 2011, the Court of Ouargla entered a judgment of approximately $39.1 million against us relating to alleged violations of Algeria’s foreign currency exchange controls, which require that goods and services provided locally be invoiced and paid in local currency. The case relates to certain foreign currency payments made to us by CEPSA, a Spanish operator, for wells drilled in 2006. Approximately $7.5 million of the total contract amount was paid offshore in foreign currency, and approximately $3.2 million was paid in local currency. The judgment includes fines and penalties of approximately four times the amount at issue, and is not payable pending appeal. We have appealed the ruling based on our understanding that the law in question applies only to resident entities incorporated under Algerian law. An intermediate court of appeals has upheld the lower court’s ruling, and we have appealed the matter to the Algeria Supreme Court.  While our payments were consistent with our historical operations in the country and, we believe, those of other multinational corporations there, as well as interpretations of the law by the Central Bank of Algeria, the ultimate resolution of this matter could result in a loss of up to $31.1 million in excess of amounts accrued.

On September 21, 2011, we received an informal inquiry from the SEC related to perquisites and personal benefits received by the officers and directors of Nabors, including their use of non-commercial aircraft.  Our Audit Committee and Board of Directors have been apprised of this inquiry and we are cooperating with the SEC.  The ultimate outcome of this process cannot be determined at this time.

The previously disclosed purported shareholder derivative lawsuits filed in 2011 and 2012 against Nabors Industries Ltd. and its Board of Directors relating to certain compensation arrangements have been dismissed.  The allegations of each lawsuit were substantially similar, alleging that the members of the Board breached their fiduciary duties, wasted corporate assets and committed oppressive conduct against shareholders by agreeing to certain compensation arrangements with two senior officers of the Company, Eugene M. Isenberg and Anthony G. Petrello.  The lawsuits sought an award of monetary damages in an unspecified amount, disgorgement by Messrs. Isenberg and Petrello of allegedly excessive compensation in an unspecified amount of at least $90 million, and reformation of Nabors’ compensation practices.  The cases were filed, respectively, before Judges Gray Miller and Ewing Werlein in the United States Southern District of Texas, Houston Division, and Judge Mike Miller of the 11th Judicial District Court of Harris County, Texas.  The case pending before Judge Gray Miller was voluntarily dismissed on January 31, 2012.  Judge Werlein entered a final judgment on July 30, 2012 dismissing the case pending in the United States Southern District of Texas, finding that plaintiffs lacked standing to sue and failed to state a claim for which relief could be

21

granted.  Plaintiffs initially appealed Judge Werlein’s ruling to the United States Fifth Circuit Court of Appeals, but voluntarily dismissed the appeal on October 22, 2012.  Plaintiffs in the remaining state court case filed an agreed motion to dismiss with prejudice on October 22, 2012.  The Company does not anticipate any further material activity in connection with these lawsuits.

On March 9, 2012, Nabors Global Holdings II Limited (“NGH2L”) signed a contract with ERG Resources, LLC (“ERG”) relating to the sale of all of the Class A shares of NGH2L’s wholly owned subsidiary, Ramshorn International Limited, an oil and gas exploration company.  When ERG failed to meet its closing obligations, NGH2L terminated the transaction on March 19, 2012 and, as contemplated in the agreement, retained ERG’s $3 million escrow deposit. ERG filed suit the following day in the 61st Judicial District Court of Harris County, Texas, in a case styled ERG Resources, LLC v. Nabors Global Holdings II Limited, Ramshorn International Limited, and Parex Resources, Inc.; Cause No. 2012-16446, seeking injunctive relief to halt any sale of the shares to a third party, specifically naming as defendant Parex Resources, Inc. (“Parex”).  The lawsuit also seeks monetary damages of up to $100 million based on an alleged breach of contract by NGH2L and alleged tortious interference with contractual relations by Parex. Nabors successfully defeated ERG’s effort to obtain a temporary restraining order from the Texas court on March 20, 2012.  On March 23, 2012, ERG filed and obtained an ex parte stay from the Supreme Court of Bermuda (Commercial Court), in a case styled as ERG Resources LLC v. Nabors Global Holdings II Limited, Case No. 2012: No. 110.  Nabors challenged the stay and, following a series of oral hearings on the matter, the Bermuda court discharged the stay by a ruling dated April 5, 2012.  Nabors completed the sale of Ramshorn’s Class A shares to a Parex affiliate on April 12, 2012, which mooted ERG’s application for a temporary injunction that was scheduled for hearing by the Texas court on April 13, 2012.  ERG retains its causes of action for monetary damages, but Nabors believes the claims are foreclosed by the terms of the agreement and are without factual or legal merit.  While Nabors intends to vigorously defend the lawsuit, the ultimate outcome of the lawsuit cannot be determined at this time.

Off-Balance Sheet Arrangements (Including Guarantees)

We are a party to some transactions, agreements or other contractual arrangements defined as “off-balance sheet arrangements” that could have a material future effect on our financial position, results of operations, liquidity and capital resources.  The most significant of these off-balance sheet arrangements involve agreements and obligations under which we provide financial or performance assurance to third parties. Certain of these agreements serve as guarantees, including standby letters of credit issued on behalf of insurance carriers in conjunction with our workers’ compensation insurance program and other financial surety instruments such as bonds. In addition, we have provided indemnifications, which serve as guarantees, to some third parties. These guarantees include indemnification provided by Nabors to our share transfer agent and our insurance carriers. We are not able to estimate the potential future maximum payments that might be due under our indemnification guarantees.

Management believes the likelihood that we would be required to perform or otherwise incur any material losses associated with any of these guarantees is remote. The following table summarizes the total maximum amount of financial guarantees issued by Nabors:

	Maximum Amount
	Remainder of2012		2013		2014		Thereafter		Total
			(In thousands)
Financial standby letters of credit and other financial surety instruments	$	31,469	$	56,657	$	105	$	—	$	88,231

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Note 13 Earnings (Losses) Per Share

A reconciliation of the numerators and denominators of the basic and diluted earnings (losses) per share computations is as follows:

	Three Months EndedSeptember 30,						Nine Months Ended September 30,
	2012			2011			2012		2011
	(In thousands, except per share amounts)
Net income (loss) (numerator):
Income (loss) from continuing operations, net of tax	$	65,818		$	87,190		$	109,783	$	252,629
Less: net (income) loss attributable to noncontrolling interest	(988		)	(708		)	453		355
Adjusted income (loss) from continuing operations, net of tax — basic	64,830			86,482			110,236		252,984
Add: interest expense on assumed conversion of our 0.94% senior exchangeable notes, net of tax (1)	—			—			—		—
Adjusted net income (loss) from continuing operations, net of tax — diluted	64,830			86,482			110,236		252,984
Income (loss) from discontinued operations, net of tax	10,826			(12,226		)	26,721		96,545
Adjusted net income (loss) attributable to Nabors	75,656			74,256			136,957		349,529
Earnings (losses) per share:
Basic from continuing operations	$	.22		$	.30		$	.38	$	.88
Basic from discontinued operations	.04			(.04		)	.09		.34
Total Basic	$	.26		$	.26		$	.47	$	1.22
Diluted from continuing operations	$	.22		$	.30		$	.38	$	.86
Diluted from discontinued operations	.04			(.05		)	.09		.33
Total Diluted	$	.26		$	.25		$	.47	$	1.19
Shares (denominator):
Weighted-average number of shares outstanding — basic	290,367			287,487			289,822		286,971
Net effect of dilutive stock options, warrants and restricted stock awards based on the if-converted method	2,134			4,499			2,468		6,020
Assumed conversion of our 0.94% senior exchangeable notes due 2011 (1)	—			—			—		—
Weighted-average number of shares outstanding — diluted	292,501			291,986			292,290		292,991

(1)At maturity in May 2011, we redeemed the remaining aggregate principal amount of $1.4 billion of our 0.94% senior exchangeable notes. Prior to maturity, we had purchased $1.4 billion par value of these notes in the open market for cash of $1.2 billion.

For all periods presented, the computation of diluted earnings (losses) per share excludes outstanding stock options and warrants with exercise prices greater than the average market price of Nabors’ common shares because their inclusion would be anti-dilutive and because they are not considered participating securities. The average number of options and warrants that were excluded from diluted earnings (losses) per share that would potentially dilute earnings per share in the future was 15,010,906 and 10,271,673 shares during the three months ended September 30, 2012 and 2011, respectively, and 13,934,259 and 7,678,536 shares during the nine months ended September 30, 2012 and 2011, respectively.  In any period during which the average market price of Nabors’ common shares exceeds the exercise prices of these stock options and warrants, such stock options and warrants will be included in our diluted earnings (losses) per share computation using the if-converted

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method of accounting. Restricted stock will be included in our basic and diluted earnings (losses) per share computation using the two-class method of accounting in all periods because such stock is considered a participating security.

Note 14 Supplemental Balance Sheet, Income Statement and Cash Flow Information

Accrued liabilities include the following:

	September 30,		December 31,
	2012		2011
	(In thousands)
Accrued compensation	$	164,883	$	173,732
Deferred revenue	146,051		172,578
Other taxes payable	56,574		44,652
Workers’ compensation liabilities	22,645		22,645
Interest payable	33,751		99,869
Warranty accrual	5,964		5,237
Litigation reserves	30,672		23,687
Provision for termination payment	—		100,000
Current liability to discontinued operations	68,545		54,287
Professional fees	3,892		6,413
Income taxes payable	35,551		27,710
Current deferred tax liability	—		269
Other accrued liabilities	5,108		13,404
	$	573,636	$	744,483

Investment income (loss) includes the following:

	Three Months EndedSeptember 30,					Nine Months EndedSeptember 30,
	2012		2011			2012			2011
			(In thousands)
Interest and dividend income	$	1,160	$	1,541		$	6,110		$	5,314
Gains (losses) on investments, net (1)	6,064		(814		)	26,734		(2)	6,718		(3)

(1)Includes net unrealized gains/(losses) of $4.2 million and $(1.4) million, during the three months ended September 30, 2012 and 2011, respectively, and $11.6 million and $(8.1) million during the nine months ended September 30, 2012 and 2011, respectively, from our trading securities.

(2)Includes $14.0 million of realized gain related to debt securities in addition to unrealized gains discussed above.

(3)Includes $12.9 million of realized gain related to one of our overseas fund investments classified as long-term investments, partially offset by unrealized losses discussed above.

Losses (gains) on sales and retirements of long-lived assets and other expense (income), net includes the following:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
				(In thousands)
Losses (gains) on sales, retirements and involuntary conversions of long-lived assets	$	2,621		$	(13,746	)	$	6,801		$	(13,612	)
Litigation expenses	3,255			2,295			8,791			12,221
Foreign currency transaction losses (gains)	2,766			79			5,021			525
Losses (gains) on derivative instruments	(268		)	(679		)	(1,281		)	(1,540		)
Losses (gains) on debt extinguishment	—			—			—			58
Other losses (gains)	1,889			444			2,505			1,248
	$	10,263		$	(11,607	)	$	21,837		$	(1,100	)

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Note 15 Segment Information

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

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	2012			2011			2012			2011
				(In thousands)
Operating revenues and earnings (losses) from unconsolidated affiliates from continuing operations: (1)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	461,860		$	430,895		$	1,451,928		$	1,214,447
U.S. Offshore	66,675			46,069			207,768			116,807
Alaska	27,249			27,027			121,958			100,678
Canada	135,786			145,587			420,469			406,004
International	329,245			281,686			940,332			809,394
Other Rig Services(2)	188,694			190,744			659,066			462,779
Subtotal Drilling and Rig Services (3)	1,209,509			1,122,008			3,801,521			3,110,109
Completion and Production Services:
U.S. Land Well-servicing	222,034			189,356			645,740			503,752
Pressure Pumping	381,241			343,723			1,166,940			867,512
Subtotal Completion and Production Services	603,275			533,079			1,812,680			1,371,264
Oil and Gas (4)	(98,805		)	34,909			(301,801		)	56,285
Other reconciling items (5)	(47,087		)	(47,769		)	(220,954		)	(152,639		)
Total	$	1,666,892		$	1,642,227		$	5,091,446		$	4,385,019
Adjusted income (loss) derived from operating activities from continuing operations: (1)(6)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	114,884		$	104,877		$	372,997		$	284,203
U.S. Offshore	(3,650		)	2,457			14,006			(2,579		)
Alaska	3,973			3,021			40,288			22,328
Canada	22,889			21,604			68,458			58,084
International	30,299			29,015			67,838			100,363
Other Rig Services(2)	16,207			20,175			74,232			42,465
Subtotal Drilling and Rig Services (3)	184,602			181,149			637,819			504,864
Completion and Production Services:
U.S. Land Well-servicing	32,766			22,839			83,253			50,488
Pressure Pumping	47,218			65,052			158,222			152,655
Subtotal Completion and Production Services	79,984			87,891			241,475			203,143
Oil and Gas (7)	(2,486		)	34,909			8,230			56,285
Other reconciling items (8)	(36,571		)	(34,650		)	(110,396		)	(109,932		)
Total adjusted income derived from operating activities	225,529			269,299			777,128			654,360
Full-cost ceiling test writedowns	(96,319		)	—			(310,031		)	—
Interest expense	(63,604		)	(58,060		)	(189,717		)	(195,781		)
Investment income (loss)	7,224			727			32,844			12,032
Gains (losses) on sales and retirements of long-lived assets and other income (expense), net	(10,263		)	11,607			(21,837		)	1,100
Impairments and other charges	—			(98,072		)	(147,503		)	(98,072		)
Income (loss) from continuing operations before income taxes	62,567			125,501			140,884			373,639
Income tax expense (benefit)	(4,001		)	37,561			28,851			118,760
Subsidiary preferred stock dividend	750			750			2,250			2,250
Income (loss) from continuing operations, net of tax	65,818			87,190			109,783			252,629
Income (loss) from discontinued operations, net of tax	10,826			(12,226		)	26,721			96,545
Net income (loss)	76,644			74,964			136,504			349,174
Less: Net income (loss) attributable to noncontrolling interest	(988		)	(708		)	453			355
Net income (loss) attributable to Nabors	$	75,656		$	74,256		$	136,957		$	349,529

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	September 30,2012		December 31, 2011
	(In thousands)
Total assets:
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	3,436,578	$	3,216,803
U.S. Offshore	484,100		402,506
Alaska	277,930		288,253
Canada	916,676		962,239
International	3,758,290		3,702,611
Other Rig Services (2)	683,120		720,775
Subtotal Drilling and Rig Services (9)	9,556,694		9,293,187
Completion and Production Services:
U.S. Land Well-servicing	842,312		812,049
Pressure Pumping	1,340,701		1,503,298
Subtotal Completion and Production Services	2,183,013		2,315,347
Oil and Gas(10)	513,666		796,327
Other reconciling items (8)	671,188		507,279
Total assets	$	12,924,561	$	12,912,140

(1)All periods present the operating activities of our wholly owned oil and gas businesses in the United States, Canada and Colombia, our equity interests in joint ventures in Canada and Colombia, and our aircraft logistics operations in Canada as discontinued operations.

(2)Includes our drilling technology and top drive manufacturing, directional drilling, rig instrumentation and software, and construction services. These services represent our other companies that are not aggregated into a reportable operating segment.

(3)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(.7) million and $(1.2) million for the three months ended September 30, 2012 and 2011, respectively, and $(.7) million and $3.0 million for the nine months ended September 30, 2012 and 2011, respectively.

(4)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(98.8) million and $34.9 million for the three months ended September 30, 2012 and 2011, respectively, and $(301.8) million and $56.3 million for the nine months ended September 30, 2012 and 2011, respectively.

(5)Represents the elimination of inter-segment transactions.

(6)Adjusted income (loss) derived from operating activities is computed by subtracting direct costs, general and administrative expenses, and depreciation and amortization from Operating revenues and then adding Earnings (losses) from unconsolidated affiliates (excluding our proportionate share of full-cost ceiling test writedowns recorded by our oil and gas joint venture). These amounts should not be used as a substitute for those 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

26

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)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(2.5) million (excluding $96.3 million, which represents our proportionate share of full-cost ceiling test writedowns by our oil and gas joint venture) and $34.9 million for the three months ended September 30, 2012 and 2011, respectively, and $8.2 million (excluding $310.0 million, which represents our proportionate share of full-cost ceiling test writedowns by our oil and gas joint venture)  and $56.3 million, for the nine months ended September 30, 2012 and 2011, respectively.

(8)Represents the elimination of inter-segment transactions and unallocated corporate expenses and assets.

(9)Includes $70.2 million and $76.9 million of investments in unconsolidated affiliates accounted for using the equity method as of September 30, 2012 and December 31, 2011, respectively.

(10)Includes $294.1 million of investments in unconsolidated affiliates accounted for using the equity method as of December 31, 2011.

Note 16 Condensed Consolidating Financial Information

Nabors has fully and unconditionally guaranteed all of the issued public debt securities of Nabors Delaware. The following condensed consolidating financial information is included so that separate financial statements of Nabors Delaware are not required to be filed with the SEC. The condensed consolidating financial statements present investments in both consolidated and unconsolidated affiliates using the equity method of accounting.

The following condensed consolidating financial information presents condensed consolidating balance sheets as of September 30, 2012 and December 31, 2011, statements of income (loss) and statements of other comprehensive income for the three and nine months ended September 30, 2012 and 2011, and statements of cash flows for the nine months ended September 30, 2012 and 2011, of (a) Nabors, parent/guarantor, (b) Nabors Delaware, issuer of public debt securities guaranteed by Nabors, (c) the non-guarantor subsidiaries, (d) consolidating adjustments necessary to consolidate Nabors and its subsidiaries and (e) Nabors on a consolidated basis.

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Condensed Consolidating Balance Sheets

	September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)		NaborsDelaware(Issuer/Guarantor)			OtherSubsidiaries(Non-Guarantors)		ConsolidatingAdjustments			ConsolidatedTotal
ASSETS
Current assets:
Cash and cash equivalents	$	698	$	7,061		$	463,803	$	—		$	471,562
Short-term investments	—		—			148,001		—			148,001
Assets held for sale	—		—			404,234		—			404,234
Accounts receivable, net	—		—			1,529,232		—			1,529,232
Inventory	—		—			257,158		—			257,158
Deferred income taxes	—		—			111,673		—			111,673
Other current assets	50		1,028			210,711		—			211,789
Total current assets	748		8,089			3,124,812		—			3,133,649
Long-term investments and other receivables	—		—			5,301		—			5,301
Property, plant and equipment, net	—		38,171			8,855,913		—			8,894,084
Goodwill	—		—			472,462		—			472,462
Intercompany receivables	173,984		—			537,881		(711,865		)	—
Investment in unconsolidated affiliates	5,671,621		5,104,716			416,904		(11,123,069		)	70,172
Other long-term assets	—		28,900			319,993		—			348,893
Total assets	$	5,846,353	$	5,179,876		$	13,733,266	$	(11,834,934	)	$	12,924,561
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	—		$	389	$	—		$	389
Trade accounts payable	62		23			560,556		—			560,641
Accrued liabilities	2,411		33,826			537,399		—			573,636
Total current liabilities	2,473		33,849			1,098,344		—			1,134,666
Long-term debt	—		4,678,822			74		—			4,678,896
Other long-term liabilities	—		31,885			416,533		—			448,418
Deferred income taxes	—		(7,468		)	744,737		—			737,269
Intercompany payable	—		444,034			267,831		(711,865		)	—
Total liabilities	2,473		5,181,122			2,527,519		(711,865		)	6,999,249
Subsidiary preferred stock	—		—			69,188		—			69,188
Shareholders’ equity	5,843,880		(1,246		)	11,124,315		(11,123,069		)	5,843,880
Noncontrolling interest	—		—			12,244		—			12,244
Total equity	5,843,880		(1,246		)	11,136,559		(11,123,069		)	5,856,124
Total liabilities and equity	$	5,846,353	$	5,179,876		$	13,733,266	$	(11,834,934	)	$	12,924,561

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	December 31, 2011
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)		Other Subsidiaries (Non- Guarantors)		Consolidating Adjustments			Consolidated Total
	ASSETS
Current assets:
Cash and cash equivalents	$	203	$	21	$	398,351	$	—		$	398,575
Short-term investments	—		—		140,914		—			140,914
Assets held for sale	—		—		401,500		—			401,500
Accounts receivable, net	—		—		1,576,555		—			1,576,555
Inventory	—		—		272,852		—			272,852
Deferred income taxes	—		—		127,874		—			127,874
Other current assets	50		671		169,323		—			170,044
Total current assets	253		692		3,087,369		—			3,088,314
Long-term investments and other receivables	—		—		11,124		—			11,124
Property, plant and equipment, net	—		40,792		8,589,154		—			8,629,946
Goodwill	—		—		501,258		—			501,258
Intercompany receivables	164,760		—		537,881		(702,641		)	—
Investment in unconsolidated affiliates	5,429,029		6,084,868		1,843,654		(12,986,530		)	371,021
Other long-term assets	—		32,037		278,440		—			310,477
Total assets	$	5,594,042	$	6,158,389	$	14,848,880	$	(13,689,171	)	$	12,912,140
	LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	274,604	$	722	$	—		$	275,326
Trade accounts payable	42		23		782,688		—			782,753
Accrued liabilities	6,185		100,101		638,197		—			744,483
Total current liabilities	6,227		374,728		1,421,607		—			1,802,562
Long-term debt	—		4,297,500		50,990		—			4,348,490
Other long-term liabilities	—		32,303		260,455		—			292,758
Deferred income taxes	—		11,221		786,704		—			797,925
Intercompany payable	—		379,400		323,241		(702,641		)	—
Total liabilities	6,227		5,095,152		2,842,997		(702,641		)	7,241,735
Subsidiary preferred stock	—		—		69,188		—			69,188
Shareholders’ equity	5,587,815		1,063,237		11,923,293		(12,986,530		)	5,587,815
Noncontrolling interest	—		—		13,402		—			13,402
Total equity	5,587,815		1,063,237		11,936,695		(12,986,530		)	5,601,217
Total liabilities and equity	$	5,594,042	$	6,158,389	$	14,848,880	$	(13,689,171	)	$	12,912,140

29

Condensed Consolidating Statements of Income (Loss)

	Three Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non—Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	1,766,419		$	—		$	1,766,419
Earnings (losses) from unconsolidated affiliates	—		—			(99,527		)	—			(99,527		)
Earnings (losses) from consolidated affiliates	77,976		(152,036		)	(178,917		)	252,977			—
Investment income (loss)	—		2			7,222			—			7,224
Intercompany interest income	—		17,423			—			(17,423		)	—
Total revenues and other income	77,976		(134,611		)	1,495,197			235,554			1,674,116
Costs and other deductions:
Direct costs	—		—			1,136,198			—			1,136,198
General and administrative expenses	1,900		159			130,248			(420		)	131,887
Depreciation and amortization	—		902			268,695			—			269,597
Interest expense	—		67,391			(3,787		)	—			63,604
Intercompany interest expense	—		—			17,423			(17,423		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	420		(250		)	9,673			420			10,263
Impairments and other charges	—		—			—			—			—
Total costs and other deductions	2,320		68,202			1,558,450			(17,423		)	1,611,549
Income (loss) from continuing operations before income taxes	75,656		(202,813		)	(63,253		)	252,977			62,567
Income tax expense (benefit)	—		(18,787		)	14,786			—			(4,001		)
Subsidiary preferred stock dividend	—		—			750			—			750
Income (loss) from continuing operations, net of tax	75,656		(184,026		)	(78,789		)	252,977			65,818
Income (loss) from discontinued operations, net of tax	—		—			10,826			—			10,826
Net income (loss)	75,656		(184,026		)	(67,963		)	252,977			76,644
Less: Net (income) loss attributable to noncontrolling interest	—		—			(988		)	—			(988		)
Net income (loss) attributable to Nabors	$	75,656	$	(184,026	)	$	(68,951	)	$	252,977		$	75,656

30

	Three Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non—Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	1,608,504		$	—		$	1,608,504
Earnings (losses) from unconsolidated affiliates	—		—			33,723			—			33,723
Earnings (losses) from consolidated affiliates	77,212		111,096			87,037			(275,345		)	—
Investment income (loss)	—		—			727			—			727
Intercompany interest income	—		16,615			—			(16,615		)	—
Total revenues and other income	77,212		127,711			1,729,991			(291,960		)	1,642,954
Costs and other deductions:
Direct costs	—		—			1,019,412			—			1,019,412
General and administrative expenses	2,809		154			116,616			(148		)	119,431
Depreciation and amortization	—		872			233,213			—			234,085
Interest expense	—		64,655			(6,595		)	—			58,060
Intercompany interest expense	—		—			16,615			(16,615		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	147		(574		)	(11,328		)	148			(11,607		)
Impairments and other charges	—		—			98,072			—			98,072
Total costs and other deductions	2,956		65,107			1,466,005			(16,615		)	1,517,453
Income (loss) from continuing operations before income taxes	74,256		62,604			263,986			(275,345		)	125,501
Income tax expense (benefit)	—		(17,942		)	55,503			—			37,561
Subsidiary preferred stock dividend	—		—			750			—			750
Income (loss) from continuing operations, net of tax	74,256		80,546			207,733			(275,345		)	87,190
Income (loss) from discontinued operations, net of tax	—		—			(12,226		)	—			(12,226		)
Net income (loss)	74,256		80,546			195,507			(275,345		)	74,964
Less: Net (income) loss attributable to noncontrolling interest	—		—			(708		)	—			(708		)
Net income (loss) attributable to Nabors	$	74,256	$	80,546		$	194,799		$	(275,345	)	$	74,256

31

	Nine Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non—Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	5,393,959		$	—		$	5,393,959
Earnings (losses) from unconsolidated affiliates	—		—			(302,513		)	—			(302,513		)
Earnings (losses) from consolidated affiliates	143,448		(132,659		)	(212,494		)	201,705			—
Investment income (loss)	—		18			32,826			—			32,844
Intercompany interest income	—		51,433			—			(51,433		)	—
Total revenues and other income	143,448		(81,208		)	4,911,778			150,272			5,124,290
Costs and other deductions:
Direct costs	—		—			3,444,270			—			3,444,270
General and administrative expenses	5,449		349			397,089			(1,042		)	401,845
Depreciation and amortization	—		2,707			775,527			—			778,234
Interest expense	—		203,826			(14,109		)	—			189,717
Intercompany interest expense	—		—			51,433			(51,433		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	1,042		(1,229		)	20,982			1,042			21,837
Impairments and other charges	—		—			147,503			—			147,503
Total costs and other deductions	6,491		205,653			4,822,695			(51,433		)	4,983,406
Income (loss) from continuing operations before income taxes	136,957		(286,861		)	89,083			201,705			140,884
Income tax expense (benefit)	—		(57,055		)	85,906			—			28,851
Subsidiary preferred stock dividend	—		—			2,250			—			2,250
Income (loss) from continuing operations, net of tax	136,957		(229,806		)	927			201,705			109,783
Income (loss) from discontinued operations, net of tax	—		—			26,721			—			26,721
Net income (loss)	136,957		(229,806		)	27,648			201,705			136,504
Less: Net (income) loss attributable to noncontrolling interest	—		—			453			—			453
Net income (loss) attributable to Nabors	$	136,957	$	(229,806	)	$	28,101		$	201,705		$	136,957

32

	Nine Months Ended September 30, 2011
(In thousands)	Nabors (Parent/ Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	4,325,714		$	—		$	4,325,714
Earnings (losses) from unconsolidated affiliates	—		—			59,305			—			59,305
Earnings (losses) from consolidated affiliates	358,778		189,960			109,212			(657,950		)	—
Investment income (loss)	4		68			11,960			—			12,032
Intercompany interest income	—		52,704			—			(52,704		)	—
Total revenues and other income	358,782		242,732			4,506,191			(710,654		)	4,397,051
Costs and other deductions:
Direct costs	—		—			2,687,970			—			2,687,970
General and administrative expenses	8,803		244			349,755			(450		)	358,352
Depreciation and amortization	—		2,614			681,723			—			684,337
Interest expense	—		211,063			(15,282		)	—			195,781
Intercompany interest expense	—		—			52,704			(52,704		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	450		(1,382		)	(618		)	450			(1,100		)
Impairments and other charges	—		—			98,072			—			98,072
Total costs and other deductions	9,253		212,539			3,854,324			(52,704		)	4,023,412
Income (loss) from continuing operations before income taxes	349,529		30,193			651,867			(657,950		)	373,639
Income tax expense (benefit)	—		(59,114		)	177,874			—			118,760
Subsidiary preferred stock dividend	—		—			2,250			—			2,250
Income (loss) from continuing operations, net of tax	349,529		89,307			471,743			(657,950		)	252,629
Income (loss) from discontinued operations, net of tax	—		—			96,545			—			96,545
Net income (loss)	349,529		89,307			568,288			(657,950		)	349,174
Less: Net (income) loss attributable to noncontrolling interest	—		—			355			—			355
Net income (loss) attributable to Nabors	$	349,529	$	89,307		$	568,643		$	(657,950	)	$	349,529

33

Condensed Consolidating Statements of Other Comprehensive Income

	Three Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	75,656		$	(184,026	)	$	(68,951	)	$	252,977		$	75,656
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	31,550			(99		)	31,451			(31,352		)	31,550
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	13,667			6			13,673			(13,679		)	13,667
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(1,523		)	(1,200		)	(2,723		)	3,923			(1,523		)
Unrealized gains (losses) on marketable securities	12,144			(1,194		)	10,950			(9,756		)	12,144
Pension liability amortization	260			260			520			(780		)	260
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	166			166			166			(332		)	166
Other comprehensive income, before tax	44,120			(867		)	43,087			(42,220		)	44,120
Income tax expense related to items of other comprehensive income	(272		)	(272		)	(604		)	876			(272		)
Other comprehensive income, net of tax	44,392			(595		)	43,691			(43,096		)	44,392
Comprehensive income attributable to Nabors	120,048			(184,621		)	(25,260		)	209,881			120,048
Net income (loss) attributable to noncontrolling interest	988			—			988			(988		)	988
Translation adjustment to noncontrolling interest	390			—			390			(390		)	390
Comprehensive income attributable to noncontrolling interest	1,378			—			1,378			(1,378		)	1,378
Comprehensive income	$	121,426		$	(184,621	)	$	(23,882	)	$	208,503		$	121,426

34

	Three Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	74,256		$	80,546		$	194,799		$	(275,345	)	$	74,256
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	(86,856		)	(498		)	(87,354		)	87,852			(86,856		)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	(21,150		)	(136		)	(21,286		)	21,422			(21,150		)
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(4		)	—			(4		)	4			(4		)
Unrealized gains (losses) on marketable securities	(21,154		)	(136		)	(21,290		)	21,426			(21,154		)
Pension liability amortization	151			151			302			(453		)	151
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	191			191			191			(382		)	191
Other comprehensive income, before tax	(107,668		)	(292		)	(108,151		)	108,443			(107,668		)
Income tax expense related to items of other comprehensive income	68			68			76			(144		)	68
Other comprehensive income, net of tax	(107,736		)	(360		)	(108,227		)	108,587			(107,736		)
Comprehensive income attributable to Nabors	(33,480		)	80,186			86,572			(166,758		)	(33,480		)
Net income (loss) attributable to noncontrolling interest	708			—			708			(708		)	708
Translation adjustment to noncontrolling interest	(912		)	—			(912		)	912			(912		)
Comprehensive income attributable to noncontrolling interest	(204		)	—			(204		)	204			(204		)
Comprehensive income	$	(33,684	)	$	80,186		$	86,368		$	(166,554	)	$	(33,684	)

35

	Nine Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	136,957		$	(229,806	)	$	28,101		$	201,705		$	136,957
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	29,157			(100		)	29,057			(28,957		)	29,157
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	20,882			17			20,899			(20,916		)	20,882
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(14,007		)	(11,488		)	(25,495		)	36,983			(14,007		)
Unrealized gains (losses) on marketable securities	6,875			(11,471		)	(4,596		)	16,067			6,875
Pension liability amortization	780			779			1,560			(2,339		)	780
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	548			548			548			(1,096		)	548
Other comprehensive income, before tax	37,360			(10,244		)	26,569			(16,325		)	37,360
Income tax expense related to items of other comprehensive income	(3,856		)	(3,856		)	(7,892		)	11,748			(3,856		)
Other comprehensive income, net of tax	41,216			(6,388		)	34,461			(28,073		)	41,216
Comprehensive income attributable to Nabors	178,173			(236,194		)	62,562			173,632			178,173
Net income (loss) attributable to noncontrolling interest	(453		)	—			(453		)	453			(453		)
Translation adjustment to noncontrolling interest	417			—			417			(417		)	417
Comprehensive income attributable to noncontrolling interest	(36		)	—			(36		)	36			(36		)
Comprehensive income	$	178,137		$	(236,194	)	$	62,526		$	173,668		$	178,137

36

	Nine Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	349,529		$	89,307		$	568,643		$	(657,950	)	$	349,529
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	(47,507		)	(422		)	(47,928		)	48,350			(47,507		)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	(26,034		)	49			(25,983		)	25,934			(26,034		)
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(5		)	—			(5		)	5			(5		)
Unrealized gains (losses) on marketable securities	(26,039		)	49			(25,988		)	25,939			(26,039		)
Pension liability amortization	451			451			900			(1,351		)	451
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	572			572			572			(1,144		)	572
Other comprehensive income, before tax	(72,523		)	650			(72,444		)	71,794			(72,523		)
Income tax expense related to items of other comprehensive income	374			374			569			(943		)	374
Other comprehensive income, net of tax	(72,897		)	276			(73,013		)	72,737			(72,897		)
Comprehensive income attributable to Nabors	276,632			89,583			495,630			(585,213		)	276,632
Net income (loss) attributable to noncontrolling interest	(355		)	—			(355		)	355			(355		)
Translation adjustment to noncontrolling interest	(460		)	—			(460		)	460			(460		)
Comprehensive income attributable to noncontrolling interest	(815		)	—			(815		)	815			(815		)
Comprehensive income	$	275,817		$	89,583		$	494,815		$	(584,398	)	$	275,817

37

Condensed Consolidating Statements of Cash Flows

	Nine Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net cash provided by (used for) operating activities	$	6,572		$	(88,960	)	$	1,206,939		$	(30,506	)	$	1,094,045
Cash flows from investing activities:
Purchases of investments	—			—			(949		)	—			(949		)
Sales and maturities of investments	—			—			30,111			—			30,111
Capital expenditures	—			—			(1,221,769		)	—			(1,221,769		)
Proceeds from sales of assets and insurance claims	—			—			128,432			—			128,432
Net cash provided by (used for) investing activities	—			—			(1,064,175		)	—			(1,064,175		)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	—			—			(1,748		)	—			(1,748		)
Proceeds from revolving credit facilities	—			710,000			—			—			710,000
Proceeds from issuance of common shares	(4,006		)	—			(1		)	—			(4,007		)
Reduction in long-term debt	—			(224,997		)	(51,235		)	—			(276,232		)
Paydown of revolving credit facilities	—			(380,000		)	—			—			(380,000		)
Purchase of restricted stock	(2,071		)	—			—			—			(2,071		)
Tax benefit related to share-based awards	—			—			(54		)	—			(54		)
Cash dividends paid	—			(9,003		)	(21,503		)	30,506			—
Net cash (used for) provided by financing activities	(6,077		)	96,000			(74,541		)	30,506			45,888
Effect of exchange rate changes on cash and cash equivalents	—			—			(2,771		)	—			(2,771		)
Net (decrease) increase in cash and cash equivalents	495			7,040			65,452			—			72,987
Cash and cash equivalents, beginning of period	203			21			398,351			—			398,575
Cash and cash equivalents, end of period	$	698		$	7,061		$	463,803		$	—		$	471,562

38

	Nine Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net cash provided by (used for) operating activities	$	6 ,163		$	227,747		$	874,224		$	—		$	1,108,134
Cash flows from investing activities:
Purchases of investments	—			—			(9,567		)	—			(9,567		)
Sales and maturities of investments	—			—			24,580			—			24,580
Cash paid for acquisition of businesses, net	—			—			(55,459		)	—			(55,459		)
Investment in unconsolidated affiliates	—			—			(54,762		)	—			(54,762		)
Distribution of proceeds from asset sales from unconsolidated affiliates	—			—			142,984			—			142,984
Capital expenditures	—			—			(1,532,597		)	—			(1,532,597		)
Proceeds from sales of assets and insurance claims	—			—			110,535			—			110,535
Cash paid for investments in consolidated affiliates	(25,450		)	(65,000		)	—			90,450			—
Net cash provided by (used for) investing activities	(25,450		)	(65,000		)	(1,374,286		)	90,450			(1,374,286		)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	—			—			5,074			—			5,074
Proceeds from issuance of long-term debt	—			697,578			—			—			697,578
Proceeds from revolving credit facilities	—			1,250,000			50,000			—			1,300,000
Proceeds from issuance of common shares	12,175			—			—			—			12,175
Debt issuance costs	—			(6,065		)	—			—			(6,065		)
Reduction in long-term debt	—			(1,404,245		)	(26		)	—			(1,404,271		)
Paydown of revolving credit facilities	—			(700,000		)	—			—			(700,000		)
Repurchase of equity component of convertible debt	—			(12		)	—			—			(12		)
Purchase of restricted stock	(2,579		)	—			—			—			(2,579		)
Tax benefit related to share-based awards	—			(1		)	186			—			185
Proceeds from parent contributions	—			—			90,450			(90,450		)	—
Net cash (used for) provided by financing activities	9,596			(162,745		)	145,684			(90,450		)	(97,915		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(2,174		)	—			(2,174		)
Net (decrease) increase in cash and cash equivalents	(9,691		)	2			(356,552		)	—			(366,241		)
Cash and cash equivalents, beginning of period	10,847			20			630,835			—			641,702
Cash and cash equivalents, end of period	$	1,156		$	22		$	274,283		$	—		$	275,461

39

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders
of Nabors Industries Ltd.:

We have reviewed the accompanying consolidated balance sheet of Nabors Industries Ltd. and its subsidiaries (the “Company”) as of September 30, 2012, and the related consolidated statements of income and other comprehensive income for the three-month and nine-month periods ended September 30, 2012 and September 30, 2011 and the consolidated statements of cash flows and of changes in equity for the nine-month periods ended September 30, 2012 and September 30, 2011.  This interim financial information is the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2011, and the related consolidated statements of income, changes in equity and of cash flows for the year then ended (not presented herein), and in our report dated February 29, 2012, we expressed an unqualified opinion on those consolidated financial statements.  In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2011, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

November 2, 2012

40

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

We often discuss expectations regarding our future markets, demand for our products and services, and our performance in our annual and quarterly reports, press releases, and other written and oral statements. Statements relating to matters that are not historical facts are “forward-looking statements” within the meaning of the safe harbor provisions of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These “forward-looking statements” are based on an analysis of currently available competitive, financial and economic data and our operating plans. They are inherently uncertain and investors should recognize that events and actual results could turn out to be significantly different from our expectations. By way of illustration, when used in this document, words such as “anticipate,” “believe,” “expect,” “plan,” “intend,” “estimate,” “project,” “will,” “should,” “could,” “may,” “predict” and similar expressions are intended to identify forward-looking statements.

You should consider the following key factors when evaluating these forward-looking statements:

·fluctuations in worldwide prices of and demand for natural gas and oil;

·fluctuations in levels of natural gas and oil exploration and development activities;

·fluctuations in the demand for our services;

·the existence of competitors, technological changes and developments in the oilfield services industry;

·the existence of operating risks inherent in the oilfield services industry;

·the possibility of changes in tax and other laws and regulations;

·the possibility of political instability, war or acts of terrorism; and

·general economic conditions including the capital and credit markets.

Our businesses depend to a large degree on the level of spending by oil and gas companies for exploration, development and production activities. Therefore, a sustained increase or decrease in the price of natural gas or oil that has a material impact on exploration, development or production activities could also materially affect our financial position, results of operations and cash flows.

The above description of risks and uncertainties is by no means all-inclusive, but is designed to highlight what we believe are important factors to consider. For a more detailed description of risk factors, please refer to Part I, Item 1A. — Risk Factors in our 2011 Annual Report.

Management Overview

The following discussion and analysis is intended to help the reader understand the results of our operations and our financial condition. This information is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes thereto.

The majority of our business is conducted through two business lines:

·Our Drilling and Rig Services business line includes our drilling operations for oil and natural gas wells, on land and offshore, and companies engaged in drilling technology, top drive manufacturing, directional drilling, construction services, and rig instrumentation and software.

·Our Completion and Production Services business line includes our well-servicing, fluid logistics, workover operations and our pressure pumping services.

41

In addition to these two primary business lines, we have an Oil and Gas operating segment.  Our oil and gas exploration, development and production operations are included in our Oil and Gas operating segment, or in discontinued operations in some cases.

The magnitude of customer spending on new and existing wells is the primary driver of our business. Our customers’ spending is determined principally by their internally generated cash flow and to a lesser extent by joint venture arrangements and funding from the capital markets. In our Drilling and Rig Services business line, operations have traditionally been driven by natural gas prices, but the majority of current activity is being driven by the price of oil and natural gas liquids from unconventional reservoirs (shales). In our Completion and Production Services business line, operations are primarily driven by oil prices.  The Henry Hub natural gas spot price (per Bloomberg) averaged $2.74 per thousand cubic feet (mcf) during the 12-month period ended September 30, 2012, down from $4.11 per mcf average during the prior 12 months.  West Texas intermediate spot crude oil prices (per Bloomberg) averaged $95.59 per barrel for the 12 months ended September 30, 2012, up from $92.80 per barrel average during the preceding 12 months.

Operating revenues and Earnings (losses) from unconsolidated affiliates for the three months ended September 30, 2012 totaled $1.7 billion, representing an increase of $24.7 million, or 2%, as compared to the three months ended September 30, 2011, and $5.1 billion for the nine months ended September 30, 2012, representing an increase of $706.4 million, or 16%, as compared to the nine months ended September 30, 2011.  Adjusted income derived from operating activities and income from continuing operations for the three months ended September 30, 2012 totaled $225.5 million and $65.8 million, respectively, representing decreases of 16% and 25%, respectively, compared to the three months ended September 30, 2011.  Adjusted income derived from operating activities for the nine months ended September 30, 2012 totaled $777.1 million, representing an increase of 19%, compared to the nine months ended September 30, 2011.  Income from continuing operations for the nine months ended September 30, 2012 totaled $109.8 million ($.38 per diluted share), representing a decrease of 57%, compared to the corresponding prior year period.

During the three and nine months ended September 30, 2012, our income (loss) from continuing operations was negatively impacted as a result of charges arising from oil and gas full-cost ceiling test writedowns and other impairments. Earnings (losses) from unconsolidated affiliates includes full-cost ceiling test writedowns of $96.3 million and $310.0 million, respectively, for the three and nine months ended September 30, 2012, representing our proportionate share of the writedowns. Income (loss) from continuing operations for the nine months ended September 30, 2012 was further negatively impacted as a result of impairments and other charges, which included $75.0 million to impair an intangible asset related to the Superior trade name, a provision for the retirement of long-lived assets totaling $46.2 million in multiple operating segments and goodwill impairment totaling $26.3 million.

Excluding these charges, our operating results improved as a result of increased demand for our services and products due to increased drilling activity in oil- and liquids-rich shale plays and increased well-servicing activity in the U.S. and Canada. This has more than offset the drop in demand from gas-related plays.

The lower price environment for natural gas has reduced activity in our gas-driven markets and is adversely impacting our pressure pumping business as the reduced activity has created a sooner-than-anticipated oversupply of pumping equipment.  Directionally, similar forces are at work on land drilling in gas-driven markets, but to a lesser degree.  We anticipate a protracted weak spot market in pressure pumping operations and flat to slightly lower industry rig activity throughout 2012. While the U.S. Land Drilling and Pressure Pumping operating segments face these headwinds, we expect healthy operations in our remaining segments for the remainder of the year. The key factors supporting our views are:

·the current term contracts in both our Lower 48 Land Drilling and Pressure Pumping operating segments, combined with new and contracted rig deployments in 2012, will mitigate to a degree the continued reduction in gas drilling activity arising from weaker natural gas pricing;

·the increased activity expected in our International operations throughout the year as the result of new contracts for the deployments in international markets; and

·an expected gradual improvement in our U.S. Offshore results as the pace of permit issuance improves and contributions from a new platform construction project increase throughout 2012.

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The following tables set forth certain information with respect to our reportable segments and rig activity:

	Three Months											Nine Months
	Ended September 30,						Increase/					Ended September 30,						Increase/
	2012			2011			(Decrease)					2012			2011			(Decrease)
	(In thousands, except percentages and rig activity)
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations: (1)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	461,860		$	430,895		$	30,965		7	%	$	1,451,928		$	1,214,447		$	237,481		20	%
U.S. Offshore	66,675			46,069			20,606			45	%	207,768			116,807			90,961			78	%
Alaska	27,249			27,027			222			1	%	121,958			100,678			21,280			21	%
Canada	135,786			145,587			(9,801		)	(7	)%	420,469			406,004			14,465			4	%
International	329,245			281,686			47,559			17	%	940,332			809,394			130,938			16	%
Other Rig Services(2)	188,694			190,744			(2,050		)	(1	)%	659,066			462,779			196,287			42	%
Subtotal Drilling and Rig Services (3)	1,209,509			1,122,008			87,501			8	%	3,801,521			3,110,109			691,412			22	%
Completion and Production Services:
U.S. Land Well-servicing	222,034			189,356			32,678			17	%	645,740			503,752			141,988			28	%
Pressure Pumping	381,241			343,723			37,518			11	%	1,166,940			867,512			299,428			35	%
Subtotal Completion and Production Services	603,275			533,079			70,196			13	%	1,812,680			1,371,264			441,416			32	%
Oil and Gas (4)	(98,805		)	34,909			(133,714		)	(383	)%	(301,801		)	56,285			(358,086		)	(636	)%
Other reconciling items (6)	(47,087		)	(47,769		)	682			1	%	(220,954		)	(152,639		)	(68,315		)	(45	)%
Total	$	1,666,892		$	1,642,227		$	24,665		2	%	$	5,091,446		$	4,385,019		$	706,427		16	%

43

	Three Months											Nine Months
	Ended September 30,						Increase/					Ended September 30,						Increase/
	2012			2011			(Decrease)					2012			2011			(Decrease)
	(In thousands, except percentages and rig activity)
Adjusted income (loss) derived from operating activities from continuing operations: (1)(7)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	114,884		$	104,877		$	10,007		10	%	$	372,997		$	284,203		$	88,794		31	%
U.S. Offshore	(3,650		)	2,457			(6,107		)	(249	)%	14,006			(2,579		)	16,585			643	%
Alaska	3,973			3,021			952			32	%	40,288			22,328			17,960			80	%
Canada	22,889			21,604			1,285			6	%	68,458			58,084			10,374			18	%
International	30,299			29,015			1,284			4	%	67,838			100,363			(32,525		)	(32	)%
Other Rig Services(2)	16,207			20,175			(3,968		)	(20	)%	74,232			42,465			31,767			75	%
Subtotal Drilling and Rig Services (3)	184,602			181,149			3,453			2	%	637,819			504,864			132,955			26	%
Completion and Production Services:
U.S. Land Well-servicing	32,766			22,839			9,927			43	%	83,253			50,488			32,765			65	%
Pressure Pumping	47,218			65,052			(17,834		)	(27	)%	158,222			152,655			5,567			4	%
Subtotal Completion and Production Services	79,984			87,891			(7,907		)	(9	)%	241,475			203,143			38,332			19	%
Oil and Gas (8)	(2,486		)	34,909			(37,395		)	(107	)%	8,230			56,285			(48,055		)	(85	)%
Other reconciling items (9)	(36,571		)	(34,650		)	(1,921		)	(6	)%	(110,396		)	(109,932		)	(464		)	—
	$	225,529		$	269,299		$	(43,770	)	(16	)%	$	777,128		$	654,360		$	122,768		19	%
Full-cost ceiling test writedowns	(96,319		)	—			(96,319		)	(100	)%	(310,031		)	—			(310,031		)	(100	)%
Interest expense	(63,604		)	(58,060		)	(5,544		)	(10	)%	(189,717		)	(195,781		)	6,064			3	%
Investment income (loss)	7,224			727			6,497			894	%	32,844			12,032			20,812			173	%
Gains (losses) on sales and retirements of long-lived assets and other income (expense), net	(10,263		)	11,607			(21,870		)	(188	)%	(21,837		)	1,100			(22,937		)	n/m	(5)
Impairment and other charges	—			(98,072		)	98,072			100	%	(147,503		)	(98,072		)	(49,431		)	(50	)%
Income (loss) from continuing operations before income taxes	62,567			125,501			(62,934		)	(50	)%	140,884			373,639			(232,755		)	(62	)%
Income tax expense (benefit)	(4,001		)	37,561			(41,562		)	(111	)%	28,851			118,760			(89,909		)	(76	)%
Subsidiary preferred stock dividend	750			750			—			—		2,250			2,250			—			—
Income (loss) from continuing operations, net of tax	65,818			87,190			(21,372		)	(25	)%	109,783			252,629			(142,846		)	(57	)%
Income (loss) from discontinued operations, net of tax	10,826			(12,226		)	23,052			189	%	26,721			96,545			(69,824		)	(72	)%
Net income (loss)	76,644			74,964			1,680			2	%	136,504			349,174			(212,670		)	(61	)%
Less: Net (income) loss attributable to noncontrolling interest	(988		)	(708		)	(280		)	(40	)%	453			355			98			28	%
Net income (loss) attributable to Nabors	$	75,656		$	74,256		$	1,400		2	%	$	136,957		$	349,529		$	(212,572	)	(61	)%

44

	Three Months						Nine Months
	Ended September 30,		Increase/				Ended September 30,		Increase/
	2012	2011	(Decrease)				2012	2011	(Decrease)
	(In thousands, except percentages and rig activity)
Rig Activity:
Rig Years: (10)
U.S. Lower 48 Land Drilling	193.8	201.8	(8.0	)	(4	)%	210.2	194.7	15.5		8	%
U.S. Offshore	12.8	10.8	2.0		19	%	12.9	9.4	3.5		37	%
Alaska	4.6	4.7	(0.1	)	(2	)%	5.7	4.8	0.9		19	%
Canada	34.0	41.8	(7.8	)	(19	)%	34.3	38.0	(3.7	)	(10	)%
International (11)	119.2	105.3	13.9		13	%	119.3	102.6	16.7		16	%
Total rig years (3)	364.4	364.4	—		—		382.4	349.5	32.9		9	%
Rig Hours: (12)
U.S. Land Well-servicing	217,675	205,610	12,065		6	%	651,005	589,140	61,865		11	%
Canada Well-servicing	43,849	49,788	(5,939	)	(12	)%	136,603	132,196	4,407		3	%
Total rig hours	261,524	255,398	6,126		2	%	787,608	721,336	66,272		9	%

(1)All periods present the operating activities of our wholly owned oil and gas businesses in the United States, Canada and Colombia, our equity interests in joint ventures in Canada and Colombia, and our aircraft logistics operations in Canada as discontinued operations.

(2)Includes our drilling technology and top drive manufacturing, directional drilling, rig instrumentation and software, and construction services. These services represent our other companies that are not aggregated into a reportable operating segment.

(3)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(.7) million and $(1.2) million for the three months ended September 30, 2012 and 2011, respectively, and $(.7) million and $3.0 million for the nine months ended September 30, 2012 and 2011, respectively.

(4)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(98.8) million and $34.9 million for the three months ended September 30, 2012 and 2011, respectively, and $(301.8) million and $56.3 million for the nine months ended September 30, 2012 and 2011, respectively.

(5)This number is so large that it is not meaningful.

(6)Represents the elimination of inter-segment transactions.

(7)Adjusted income (loss) derived from operating activities is computed by subtracting direct costs, general and administrative expenses, and depreciation and amortization from Operating revenues and then adding Earnings (losses) from unconsolidated affiliates (excluding our proportionate share of full-cost ceiling test writedowns recorded by our oil and gas joint venture). These amounts should not be used as a substitute for those 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.

(8)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(2.5) million (excluding our proportionate share of the full-cost ceiling test writedowns totaling $96.3 million) and $34.9 million for the three months ended September 30, 2012 and 2011, respectively, and $8.2 million (excluding our proportionate share of the full-cost ceiling test writedowns totaling $310.0 million) and $56.3 million for the nine months ended September 30, 2012 and 2011, respectively.

(9)Represents the elimination of inter-segment transactions and unallocated corporate expenses.

(10)Excludes well-servicing rigs, which are measured in rig hours. Includes our equivalent percentage ownership of rigs owned by unconsolidated affiliates. Rig years represent a measure of the number of equivalent rigs operating during a given period. For example, one rig operating 182.5 days during a 365-day period represents 0.5 rig years.

45

(11)International rig years include our equivalent percentage ownership of rigs owned by unconsolidated affiliates, which totaled 2.5 years and 2.0 years during the three months ended September 30, 2012 and 2011, respectively, and 2.5 years and 2.0 years during the nine months ended September 30, 2012 and 2011, respectively.

(12)Rig hours represents the number of hours that our well-servicing rig fleet operated during the specified periods.

46

Segment Results of Operations

Drilling and Rig Services

Our Drilling and Rig Services business line includes drilling on land and offshore, drilling technology, top drive manufacturing, directional drilling, construction services, and rig instrumentation and software.

U.S. Lower 48 Land Drilling. The results of operations for this segment were as follows:

	Three Months									Nine Months
	Ended September 30,				Increase/					Ended September 30,				Increase/
	2012		2011		(Decrease)					2012		2011		(Decrease)
	(In thousands, except percentages and rig activity)
Operating revenues	$	461,860	$	430,895	$	30,965		7	%	$	1,451,928	$	1,214,447	$	237,481	20	%
Adjusted income derived from operating activities	$	114,884	$	104,877	$	10,007		10	%	$	372,997	$	284,203	$	88,794	31	%
Rig years	193.8		201.8		(8.0		)	(4	)%	210.2		194.7		15.5		8	%

Operating results increased during the three months ended September 30, 2012 compared to the corresponding 2011 period due to higher average dayrates, partially offset by a decrease in drilling activity.  Operating results increased during the nine months ended September 30, 2012 compared to the corresponding 2011 period primarily due to higher average dayrates and increased drilling activity, driven by deployment of rigs into oil-rich shale areas.  These increases were partially offset by increases in operating costs associated with drilling activity, as well as higher depreciation expense related to new rigs placed into service during the past year.

U.S. Offshore. The results of operations for this segment were as follows:

	Three Months Ended September 30,					Increase/					Nine Months  Ended September 30,				Increase/
	2012			2011		(Decrease)					2012		2011		(Decrease)
	(In thousands, except percentages and rig activity)
Operating revenues	$	66,675		$	46,069	$	20,606		45	%	$	207,768	$	116,807	$	90,961	78	%
Adjusted income (loss) derived from operating activities	$	(3,650	)	$	2,457	$	(6,107	)	(249	)%	$	14,006	$	(2,579)	$	16,585	643	%
Rig years	12.8			10.8		2.0			19	%	12.9		9.4		3.5		37	%

Operating revenues increased during the three and nine months ended September 30, 2012 compared to the corresponding 2011 periods resulting primarily from higher utilization for the MODS® rigs and SuperSundownerTM platform rigs, and profits related to a major construction project.  The increase was partially offset by declining activities for the Sundowner® platform rigs in our shallow water areas.

Adjusted income (loss) decreased during the three months ended September 30, 2012 compared to the corresponding 2011 period due to the lower utilization for the Sundowner® platform rigs and workover jackup rigs, which produce higher margins. Adjusted income (loss) increased during the nine months ended September 30, 2012 compared to the corresponding 2011 period due to the overall higher utilization for the MODS® rigs and SuperSundownerTM platform rigs, and profits related to a major construction project.

47

Alaska. The results of operations for this segment were as follows:

	Three Months Ended September 30,				Increase/					Nine Months Ended September 30,				Increase/
	2012		2011		(Decrease)					2012		2011		(Decrease)
	(In thousands, except percentages and rig activity)
Operating revenues	$	27,249	$	27,027	$	222		1	%	$	121,958	$	100,678	$	21,280	21	%
Adjusted income derived from operating activities	$	3,973	$	3,021	$	952		32	%	$	40,288	$	22,328	$	17,960	80	%
Rig years	4.6		4.7		(0.1		)	(2	)%	5.7		4.8		0.9		19	%

The increase in operating results during the three and nine months ended September 30, 2012 compared to the corresponding 2011 periods was due to higher average dayrates and increased drilling activity, driven primarily by an overall increase in winter exploration activity in the first and second quarters of 2012, as well as increased camp activity and margins.

Canada. The results of operations for this segment were as follows:

	Three Months Ended September 30,				Increase/					Nine Months Ended September 30,				Increase/
	2012		2011		(Decrease)					2012		2011		(Decrease)
	(In thousands, except percentages and rig activity)
Operating revenues	$	135,786	$	145,587	$	(9,801	)	(7	)%	$	420,469	$	406,004	$	14,465		4	%
Adjusted income derived from operating activities	$	22,889	$	21,604	$	1,285		6	%	$	68,458	$	58,084	$	10,374		18	%
Rig years	34.0		41.8		(7.8		)	(19	)%	34.3		38.0		(3.7		)	(10	)%
Rig hours	43,849		49,788		(5,939		)	(12	)%	136,603		132,196		4,407			3	%

Operating revenues decreased during the three months ended September 30, 2012 as compared to the corresponding 2011 period as a result of lower drilling and production services activity, driven by lower customer demand and poor weather.  Operating revenues increased during the nine months ended September 30, 2012 as compared to the corresponding 2011 period as a result of higher overall average dayrates in drilling and increased activity in production services, partially offset by the lower drilling activity.

Adjusted income derived from operating activities increased during the three and nine months ended September 30, 2012 as compared to the corresponding 2011 periods as a result of an overall increase in drilling average dayrates and production services activity, offsetting the decline in drilling activities. Average drilling dayrates in 2012 continue to be driven by oil exploration and supported by strong oil prices.

48

International. The results of operations for this segment were as follows:

	Three Months Ended September 30,				Increase/				Nine Months Ended September 30,				Increase/
	2012		2011		(Decrease)				2012		2011		(Decrease)
	(In thousands, except percentages and rig activity)
Operating revenues and Earnings from unconsolidated affiliates	$	329,245	$	281,686	$	47,559	17	%	$	940,332	$	809,394	$	130,938		16	%
Adjusted income derived from operating activities	$	30,299	$	29,015	$	1,284	4	%	$	67,838	$	100,363	$	(32,525	)	(32	)%
Rig years	119.2		105.3		13.9		13	%	119.3		102.6		16.7			16	%

Operating revenues and Earnings from unconsolidated affiliates increased during the three and nine months ended September 30, 2012 as compared to the corresponding 2011 periods as a result of an increase in the utilization of our overall rig fleet, partially offset by lower margins.  Adjusted income derived from operating activities decreased during the nine months ended September 30, 2012 as compared to the corresponding 2011 period primarily due to decreases in average dayrates and lower utilization of our jackup rigs in Saudi Arabia, lower offshore activity in Congo, and lower margins in Iraq.

Other Rig Services. The results of operations for this segment were as follows:

	Three Months Ended September 30,				Increase/					Nine Months Ended September 30,				Increase/
	2012		2011		(Decrease)					2012		2011		(Decrease)
	(In thousands, except percentages)
Operating revenues and Earnings from unconsolidated affiliates	$	188,694	$	190,744	$	(2,050	)	(1	)%	$	659,066	$	462,779	$	196,287	42	%
Adjusted income derived from operating activities	$	16,207	$	20,175	$	(3,968	)	(20	)%	$	74,232	$	42,465	$	31,767	75	%

Operating results for our Canrig business were higher in the corresponding 2011 period than during the three months ended September 30, 2012 primarily due to a significant project completed in 2011, which had generated revenues of approximately $18.2 million. Operating results during the three and nine months ended September 30, 2012 as compared to the corresponding 2011 periods reflect continued increases in demand in the United States and Canada drilling markets. Our operating results reflect higher third-party rental of capital equipment and higher sales of RIGWATCH® software and ROCKIT® directional drilling systems, as well as higher top-drive rental sales.

Partially offsetting the decreases during the three months ended September 30, 2012 as compared to the corresponding 2011 period were the positive operating results in Alaska, which had increased demand for our construction and rig-moving business due to an overall increase in the 2012 winter exploration activity. The increases were partially offset by decreased demand for our directional drilling business. Operating costs in the U.S. remained consistent with 2011 levels, while operating costs in Canada decreased during the first half of 2012.

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Completion and Production Services

Our Completion and Production Services business line includes well-servicing, fluid logistics, workover operations and pressure pumping services.

U.S. Land Well-servicing. The results of operations for this segment were as follows:

	Three Months Ended September 30,				Increase/				Nine Months Ended September 30,				Increase/
	2012		2011		(Decrease)				2012		2011		(Decrease)
	(In thousands, except percentages and rig activity)
Operating revenues	$	222,034	$	189,356	$	32,678	17	%	$	645,740	$	503,752	$	141,988	28	%
Adjusted income derived from operating activities	$	32,766	$	22,839	$	9,927	43	%	$	83,253	$	50,488	$	32,765	65	%
Rig hours	217,675		205,610		12,065		6	%	651,005		589,140		61,865		11	%

Operating results increased during the three and nine months ended September 30, 2012 compared to the corresponding 2011 periods primarily due to an increase in rig and truck utilization facilitated by capital invested over the past few years to increase our rig and truck fleets as well as frac tanks.  Higher equipment utilization and price improvements were driven primarily by sustained higher oil prices.

Pressure Pumping. The results of operations for this segment were as follows:

	Three Months Ended September 30,				Increase/					Nine Months Ended September 30,				Increase/
	2012		2011		(Decrease)					2012		2011		(Decrease)
	(In thousands, except percentages and rig activity)
Operating revenues	$	381,241	$	343,723	$	37,518		11	%	$	1,166,940	$	867,512	$	299,428	35	%
Adjusted income derived from operating activities	$	47,218	$	65,052	$	(17,834	)	(27	)%	$	158,222	$	152,655	$	5,567	4	%

Operating revenues increased during the three and nine months ended September 30, 2012 compared to the corresponding 2011 periods primarily due to the increased levels of fracturing activity and associated increase in our assets deployed in the major producing areas in the United States.

Adjusted income derived from operating activities decreased during the three months ended September 30, 2012 compared to the corresponding 2011 period primarily due to lower margins on product sales as a result of higher commodity prices.

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Oil and Gas. The results from our U.S. oil and gas unconsolidated affiliate were as follows:

	Three Months Ended September 30,					Increase/					Nine Months Ended September 30,					Increase/
	2012			2011		(Decrease)					2012			2011		(Decrease)
	(In thousands, except percentages)
Earnings (losses) from unconsolidated affiliate	$	(98,805	)	$	34,909	$	(133,714	)	(383	)%	$	(301,801	)	$	56,285	$	(358,086	)	(636	)%
Adjusted income derived from operating activities	$	(2,486	)	$	34,909	$	(37,395	)	(107	)%	$	8,230		$	56,285	$	(48,055	)	(85	)%

Earnings (losses) from unconsolidated affiliate decreased during the three and nine months ended September 30, 2012 compared to the corresponding 2011 periods primarily as a result of full-cost ceiling test writedowns recorded by our unconsolidated U.S. oil and gas joint venture during each of the quarters of 2012, of which our proportionate share totaled $96.3 million and $310.0 million, respectively, for the three and nine months ended September 30, 2012.  Excluding the writedowns, the operating results for this same joint venture decreased during the three and nine months of 2012 as compared to the corresponding 2011 periods due to sustained lower natural gas prices.  Adjusted income derived from operating activities excludes the impact of the full-cost ceiling test writedowns for the three and nine months ended September 30, 2012. There were no such writedowns during 2011.

Discontinued Operations

Our condensed statements of income (loss) from discontinued oil and gas operations for the three and nine months ended September 30, 2012 and 2011 were as follows:

	Three Months Ended September 30,						Increase/					Nine Months Ended September 30,						Increase/
	2012			2011			(Decrease)					2012			2011			(Decrease)
	(In thousands, except percentages)
Operating revenues and Earnings from unconsolidated affiliate
Oil and Gas	$	12,859		$	10,630		$	2,229		21	%	$	19,079		$	116,046		$	(96,967	)	(84	)%
Other Rig Services(1)	$	8,334		$	9,341		$	(1,007	)	(11	)%	$	18,750		$	21,180		$	(2,430	)	(11	)%
Income (loss) from discontinued operations, net of tax
Oil and Gas	$	11,092		$	(13,978	)	$	25,070		179	%	$	35,054		$	97,442		$	(62,388	)	(64	)%
Other Rig Services(1)	$	(266	)	$	1,752		$	(2,018	)	(115	)%	$	(8,333	)	$	(897	)	$	(7,436	)	(829	)%

(1)Represents our aircraft logistics operations in Canada included in our Other Rig Services operating segment.

In April 2012, we sold our remaining wholly owned oil and gas business in Colombia to an unrelated third party for a cash purchase price of $72.6 million, which resulted in a pre-tax gain of approximately $48.5 million.  This business was included in our assets held for sale as part of our Oil and Gas operating segment.

In May 2012, we sold some of our U.S. wholly owned oil and gas assets in the Fayetteville Shale, Floyd Shale, and Barnett Shale areas to unrelated third parties for cumulative cash receipts of $5.7 million, which did not result in any gain or loss.  In September 2012, we sold additional assets from our U.S. wholly owned oil and gas business for $7.3 million, which resulted in a gain of approximately $3.7 million. These assets were included in our assets held for sale as part of our Oil and

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Gas operating segment.  Based on current market conditions, we adjusted the carrying value of our U.S. wholly owned oil and gas business in the second quarter of 2012 to reflect our assessment of its current fair value.

Based on current market conditions, we adjusted the carrying value of our aircraft logistics assets by $7.8 million in 2012 to reflect our assessment of its current fair value.

OTHER FINANCIAL INFORMATION

General and administrative expenses

	Three Months Ended September 30,						Increase/					Nine Months Ended September 30,						Increase/
	2012			2011			(Decrease)					2012			2011			(Decrease)
	(In thousands, except percentages)
General and administrative expenses	$	131,887		$	119,431		$	12,456		10	%	$	401,845		$	358,352		$	43,493		12	%
General and administrative expenses as a percentage of operating revenues	7.5		%	7.4		%	0.1		%	1	%	7.4		%	8.3		%	(0.9		)%	(11	)%

General and administrative expenses increased during the three and nine months ended September 30, 2012 compared to the corresponding 2011 periods primarily as a result of increases in wages to support a higher headcount as a result of increased operations for a majority of our operating segments.  As a percentage of operating revenues, general and administrative expenses decreased during the nine months ended September 30, 2012 as compared to the corresponding prior year period.

Depreciation and amortization

	Three Months Ended September 30,				Increase/				Nine Months Ended September 30,				Increase/
	2012		2011		(Decrease)				2012		2011		(Decrease)
	(In thousands, except percentages)
Depreciation and amortization expense	$	269,597	$	234,085	$	35,512	15	%	$	778,234	$	684,337	$	93,897	14	%

Depreciation and amortization expense increased during the three and nine months ended September 30, 2012 compared to the corresponding 2011 periods primarily as a result of the incremental depreciation expense from (i) newly constructed rigs recently placed into service, (ii) additional completion and production services assets and (iii) rig upgrades and other capital expenditures made during 2011 and 2012.

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Interest expense

	Three Months Ended September 30,				Increase/				Nine Months  Ended September 30,				Increase/
	2012		2011		(Decrease)				2012		2011		(Decrease)
	(In thousands, except percentages)
Interest expense	$	63,604	$	58,060	$	5,544	9.5	%	$	189,717	$	195,781	$	(6,064	)	(3.1	)%

Interest expense increased during the three months ended September 30, 2012 compared to the corresponding 2011 period primarily as a result of the 2012 interest expense related to our August 2011 issuance of 4.625% senior notes due September 2021 and interest on larger amounts outstanding on our revolving credit facilities.

Interest expense decreased during the nine months ended September 30, 2012 compared to the corresponding 2011 period primarily as a result of the redemption in May 2011 of our remaining 0.94% senior exchangeable notes, aggregate principal amount $1.4 billion, and the redemption in August 2012 of our 5.375% senior notes, aggregate principal amount $275 million. The decrease was partially offset by interest expense increases discussed above.

Investment income (loss)

	Three Months Ended September 30,				Increase/				Nine Months Ended September 30,				Increase/
	2012		2011		(Decrease)				2012		2011		(Decrease)
	(In thousands, except percentages)
Investment income	$	7,224	$	727	$	6,497	894	%	$	32,844	$	12,032	$	20,812	173	%

Investment income for the three months ended September 30, 2012 included (i) net unrealized gains of $4.2 million from our trading securities, (ii) interest and dividend income of $1.2 million from our cash, other short-term and long-term investments, (iii) a gain of $1.5 million from a sale of debt securities and (iv) realized gains of $0.3 million from other long-term investments.

Investment income for the nine months ended September 30, 2012 included (i) a $14.0 million realized gain related to the sale of some of our debt securities, (ii) net unrealized gains of $11.6 million from our trading securities, (iii) interest and dividend income of $6.1 million from our cash, other short-term and long-term investments and (iv) realized gains of $1.1 million from other long-term investments.

Investment income for the three months ended September 30, 2011 included interest and dividend income of $1.5 million from our cash, other short-term and long-term investments and realized gains of $0.6 million from other long-term investments, partially offset by unrealized losses of $1.4 million from our trading securities.

Investment income for the nine months ended September 30, 2011 included (i) a $12.9 million realized gain recorded in the first quarter of 2011 relating to one of our overseas fund investments classified as long-term investments, (ii) $1.9 million realized gains from other long-term investments and (iii) $5.3 million interest and dividend income from our cash, other short-term and long-term investments.  Investment income was partially offset by net unrealized losses of $8.1 million from our trading securities.

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Gains (losses) on sales and retirements of long-lived assets and other income (expense), net

	Three Months Ended September 30,					Increase/					Nine Months Ended September 30,					Increase/
	2012			2011		(Decrease)					2012			2011		(Decrease)
	(In thousands, except percentages)
Gains (losses) on sales and retirements of long-lived assets and other income (expense), net	$	(10,263	)	$	11,607	$	(21,870	)	(188	)%	$	(21,837	)	$	1,100	$	(22,937	)	n/m	(1)

(1) The number is so large that it is not meaningful.

The amount of gains (losses) on sales and retirements of long-lived assets and other income (expense), net for the three and nine months ended September 30, 2012 was primarily comprised of (i) net losses on sales and retirements of long-lived assets of approximately $2.6 million and $6.8 million, respectively, (ii) foreign currency transaction losses of $2.8 million and $5.0 million, respectively, and (iii) net increases to our litigation reserves of $3.3 million and $8.8 million, respectively.

The amount of gains (losses) on sales and retirements of long-lived assets and other income (expense), net for the three and nine months ended September 30, 2011 was primarily comprised of the $12.2 million gain recognized in connection with our acquisition of the remaining 50 percent equity interest in Peak and net gains on sales and retirements of long-lived assets of approximately $1.6 million and $1.4 million, respectively, partially offset by net increases to our litigation reserves of $2.3 million and $12.2 million, respectively.

Impairments and other charges

	Three Months Ended September 30,				Increase/					Nine Months Ended September 30,				Increase/
	2012		2011		(Decrease)					2012		2011		(Decrease)
	(In thousands, except percentages)
Impairments and other charges	$	—	$	98,072	$	(98,072	)	(100	)%	$	147,503	$	98,072	$	49,431	50	%

The amount of impairments and other charges for the nine months ended September 30, 2012 included: (i) $26.3 million from goodwill impairment associated with our U.S. Offshore and International reporting units, (ii) $75.0 million related to the impairment of the Superior trade name, and (iii) $46.2 million for a provision for retirement of long-lived assets in our Canada, U.S. Land Well-servicing and Pressure Pumping operating segments. The impairment of goodwill related to our U.S. Offshore and International reporting units. As of June 30, 2012, these reporting units had no recorded goodwill. The impairments were deemed necessary due to the prolonged uncertainty of utilization of some of our rigs as a result of changes in our customers’ plans for future drilling operations in the Gulf of Mexico as well as our international markets.

The Superior trade name was initially classified as a ten-year intangible asset at the date of acquisition in September 2010. The impairment is a result of the decision to cease using the Superior trade name to reduce confusion in the marketplace and enhance the Nabors brand.

Our provision for retirement of long-lived assets included (i) $15.1 million to Canada operations for functionally obsolete or inoperable rigs, (ii) $4.6 million to our U.S. Land Well-servicing operations for assets that would require significant repair to return to work and (iii) $26.5 million to our Pressure Pumping operations for retirement of non-core assets as a result of the consolidation of our Pressure Pumping and U.S. Land Well-servicing segments into one business line, Nabors Completion & Production Services.  As we continue to streamline our lines of business, there could be future retirement or impairment charges, which could have a potential impact on our future operating results.  In addition, a prolonged period of lower natural gas and oil prices and its potential impact on our utilization and dayrates could result in the recognition of future impairment charges to additional assets if future cash

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flow estimates, based upon information then available to management, indicate that the carrying value of those assets may not be recoverable.

During the third quarter of 2011, we recorded a provision for retirement of long-lived assets to multiple operating segments including $63.2 million to U.S. Lower 48 Land Drilling, $26.1 million to International and $8.9 million to U.S. Land Well-servicing. The retirements related to the decommissioning and retirement of a jackup rig, 116 land rigs and a number of trucks and rigs for well-servicing. These assets were deemed economically non-competitive for the market and were dismantled for parts and scrap.

For additional information on the foregoing, see Note 2 — Summary of Significant Accounting Policies and Note 3 — Impairments and Other Charges.

Income tax rate

	Three Months Ended September 30,				Increase/				Nine Months Ended September 30,				Increase/
	2012		2011		(Decrease)				2012		2011		(Decrease)
Effective income tax rate from continuing operations	(6.4	)%	29.9	%	(36.3	)%	(121	)%	20.5	%	31.8	%	(11.3	)%	(36	)%

Our effective income tax rate during the three and nine months ended September 30, 2012 decreased substantially when compared to the corresponding 2011 periods primarily as a result of a lower proportion of income being generated in the United States during each of these periods. Income generated in the United States is generally taxed at a higher rate than that of other jurisdictions.

We are subject to income taxes in the United States and numerous other jurisdictions.  Significant judgment is required in determining our worldwide provision for income taxes.  One of the most volatile factors in this determination is the relative proportion of our income or loss being recognized in high- versus low-tax jurisdictions.  In the ordinary course of our business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We are regularly audited by tax authorities. Although we believe our tax estimates are reasonable, the final outcome of tax audits and any related litigation could be materially different than what is reflected in our income tax provisions and accruals. The results of an audit or litigation could materially affect our financial position, income tax provision, net income, or cash flows.

Various bills have been introduced in Congress that could reduce or eliminate the tax benefits associated with our reorganization as a Bermuda company.  Nabors’ reorganization was completed on June 24, 2002.  There has been and we expect that there may continue to be legislation proposed by Congress from time to time which, if enacted, could limit or eliminate the tax benefits associated with our reorganization.

Because we cannot predict whether any legislation will ultimately be adopted, no assurance can be given that the tax benefits associated with our reorganization will ultimately accrue to the benefit of the Company and its shareholders. It is possible that future changes to the tax laws (including tax treaties) could impact our ability to realize the tax savings recorded to date as well as future tax savings resulting from our reorganization.

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Liquidity and Capital Resources

Cash Flows

Our cash flows depend, to a large degree, on the level of spending by oil and gas companies for exploration, development and production activities. Sustained increases or decreases in the price of natural gas or oil could have a material impact on these activities, and could also materially affect our cash flows. Certain sources and uses of cash, such as the level of discretionary capital expenditures, purchases and sales of investments, issuances and repurchases of debt and of our common shares are within our control and are adjusted as necessary based on market conditions. The following is a discussion of our cash flows for the nine months ended September 30, 2012 and 2011.

Operating Activities. Net cash provided by operating activities totaled $1.1 billion during the nine months ended September 30, 2012 compared to net cash provided by operating activities of $1.1 billion during the corresponding 2011 period. Net cash provided by operating activities is our primary source of capital and liquidity. Factors affecting changes in operating cash flows are largely the same as those that affect net earnings, with the exception of non-cash expenses such as depreciation and amortization, impairments and other charges, share-based compensation, deferred income taxes and our proportionate share of earnings or losses from unconsolidated affiliates.  Net income (loss) adjusted for non-cash components was approximately $1.3 billion and $1.1 billion for the nine months ended September 30, 2012 and 2011, respectively.  Additionally, changes in working capital items such as increases or decreases in receivables or payables can be a significant factor in the determination of operating cash flows.  Changes in working capital items used $160.9  million and provided $27.4 million, respectively, in cash flows for the nine months ended September 30, 2012 and 2011.

Investing Activities. Net cash used for investing activities totaled $1.1 billion during the nine months ended September 30, 2012 compared to net cash used for investing activities of $1.4 billion during the corresponding 2011 period. The primary use of cash for investing activities is for capital expenditures related to rig-related enhancements, new construction and equipment, as well as sustaining capital expenditures. During the nine months ended September 30, 2012 and 2011, we used cash for capital expenditures totaling $1.2 billion and $1.5 billion, respectively.

During the nine months ended September 30, 2012 and 2011, cash of $128.4 million and $110.5 million, respectively, was provided in proceeds from sales of assets and recoveries from insurance claims.  Additionally during the nine months ended September 30, 2011, we received a distribution of $143.0 million from an unconsolidated affiliate related to proceeds it received from the sale of some of its oil and gas assets.

Financing Activities. Net cash provided by financing activities totaled $45.9 million during the nine months ended September 30, 2012 and consisted primarily of increased amounts outstanding from our revolving credit facilities by $330 million, net, of which the majority was used in connection with the redemption of our $275 million 5.375% senior notes in August 2012.  Net cash used for financing activities was $97.9 million during the corresponding 2011 period. During the nine months ended September 30, 2011, we used $1.2 billion in proceeds from our revolving credit facilities to redeem the remaining amounts of our 0.94% senior exchangeable notes.  During the nine months ended September 30, 2012 and 2011, we repaid $380 million and $700 million, respectively, of borrowings from our revolving credit facilities.

Future Cash Requirements

We currently expect capital expenditures over the next 12 months to approximate $0.9 - $1.1 billion.  This amount could increase as a result of future projects that meet our risk and return criteria, but in any event our intention is for capital expenditures to stay at an amount less than operating cash flows. We had outstanding purchase commitments of approximately $0.6 billion at September 30, 2012, primarily for rig-related enhancements, new construction and equipment, as well as sustaining capital expenditures, other operating expenses and purchases of inventory. This amount could change significantly based on market conditions and new business opportunities.  The level of our outstanding purchase commitments and our expected level of capital expenditures over the next 12 months represent a number of capital programs that are currently underway or planned.  These programs will result in an expansion in the number of land drilling rigs, pressure pumping and well-servicing equipment that we own and operate.   We can reduce the planned expenditures if necessary, or increase them if market conditions and new business opportunities warrant it.

We have historically completed a number of acquisitions and will continue to evaluate opportunities to acquire assets or businesses to enhance our operations. Several of our previous acquisitions were funded through issuances of debt or our common shares. Future acquisitions may be paid for using existing cash or by issuing debt or additional shares of our stock. Such capital expenditures and acquisitions will depend on our view of market conditions and other factors.

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Our discontinued operations include our contract for pipeline transmission commitments in the Horn River Basin.  During the year ended December 31, 2011, we evaluated current production levels, natural gas prices and the anticipated sales cycle related to the sale of properties corresponding to these commitments.  As a result, we recorded liabilities for excess pipeline capacity. At September 30, 2012, we recorded liabilities of $92.2 million, of which $68.5 million is included in accrued liabilities and $23.7 million is included in other long-term liabilities. At December 31, 2011, we recorded liabilities of $125.7 million, of which $54.3 million is included in accrued liabilities and $71.4 million is included in other long-term liabilities. These amounts represent our best estimate of the excess capacity of the pipeline, based upon the estimated sales date of the properties, as compared to the contractual commitments. Our commitments beyond December 31, 2013 could approximate $274.8 million if the related properties are not sold or developed.  Decreases in actual production, natural gas prices or a change in the estimated sales date could result in future charges related to excess capacity of the pipeline that may materially impact our results of operations.

See our discussion of guarantees issued by Nabors that could have a potential impact on our financial position, results of operations or cash flows in future periods included below under Off-Balance Sheet Arrangements (Including Guarantees).

There have been no significant changes to our contractual cash obligations table which was included in our 2011 Annual Report.

We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, both in open-market purchases, privately negotiated transactions or otherwise.  Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.  The amounts involved may be material.

See Note 18 — Commitments and Contingencies in our 2011 Annual Report for discussion of commitments and contingencies relating to (i) our employment agreement with Mr. Petrello that could result in a cash payment of $50 million by the Company if his employment were terminated in the event of his death or disability or a cash payment of approximately $31.1 million if his employment were terminated without cause or in the event of a change in control and (ii) off-balance sheet arrangements (including guarantees).

Financial Condition and Sources of Liquidity

Our primary sources of liquidity are operating cash flows, cash and cash equivalents, short-term and long-term investments and availability under our various revolving credit facilities. As of September 30, 2012, we had cash and short-term investments of $619.6 million and working capital of $2.0 billion.  We also had $310 million of availability remaining from a combined total of $1.5 billion under revolving credit facilities.  As of December 31, 2011, we had cash and short-term investments of $539.5 million and working capital of $1.3 billion.

During the nine months ended September 30, 2012, we sold our remaining wholly owned oil and gas business in Colombia and some of our U.S. wholly owned oil and gas assets for cumulative cash receipts of $79.2 million.

We had nine letter-of-credit facilities with various banks as of September 30, 2012. Availability under these facilities as of September 30, 2012 was as follows:

	(In thousands)
Credit available	$	359,470
Less: Letters of credit outstanding, inclusive of financial and performance guarantees	58,841
Remaining availability	$	300,629

Our revolving credit facilities contain various covenants and restrictive provisions that limit our ability to incur additional indebtedness, make investments or loans and create liens and require us to maintain the net funded indebtedness to total capitalization ratio, as defined in each agreement, at certain levels. We were in compliance with all covenants under the agreement at September 30, 2012.

Our ability to access capital markets or to otherwise obtain sufficient financing is enhanced by our senior unsecured debt ratings as provided by Fitch Ratings, Moody’s Investors Service and Standard & Poor’s and our historical ability to access those markets as needed.  While there can be no assurances that we will be able to access these markets in the future, we

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believe that we will be able to access capital markets or otherwise obtain financing in order to satisfy any payment obligation that might arise upon purchase of our notes, payment of other debt and that any cash payment due, in addition to our other cash obligations, would not ultimately have a material adverse impact on our liquidity or financial position.  A credit downgrade may impact our ability to access credit markets.

Our current cash and investments, projected cash flows from operations, possible dispositions of non-core assets and our revolving credit facilities are expected to adequately finance our purchase commitments, capital expenditures, scheduled debt service requirements, and all other expected cash requirements for the next 12 months.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We may be exposed to market risk through changes in interest rates and foreign-currency risk arising from our operations in international markets as discussed in our 2011 Annual Report.

ITEM 4. CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures. We maintain a set of disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. We have investments in certain unconsolidated entities that we do not control or manage. Because we do not control or manage these entities, our disclosure controls and procedures with respect to these entities are necessarily more limited than those we maintain with respect to our consolidated subsidiaries.

The Company’s management, with the participation of the Company’s Chairman, President and Chief Executive Officer and its Principal Accounting and Financial Officer (the “reviewing officers”), has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, the reviewing officers have concluded that, as of the end of the period, the Company’s disclosure controls and procedures are effective, at the reasonable assurance level, in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in reports that it files or furnishes under the Exchange Act and are effective, at the reasonable assurance level, in ensuring that information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is accumulated and communicated to the Company’s management, including the reviewing officers, as appropriate to allow timely decisions regarding required disclosure.

(b)Changes in Internal Control Over Financial Reporting. There have not been any changes in our internal control over financial reporting (identified in connection with the evaluation required by paragraph (d) in Rules 13a-15 and 15d-15 under the Exchange Act) during the most recently completed quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II OTHER INFORMATION

Item 1.  Legal Proceedings

Nabors and its subsidiaries are defendants or otherwise involved in a number of lawsuits in the ordinary course of business. We estimate the range of our liability related to pending litigation when we believe the amount and range of loss can reasonably be estimated. We record our best estimate of a loss when the loss is considered probable. When a liability is probable and there is a range of estimated loss with no best estimate in the range, we record the minimum estimated liability related to the lawsuits or claims. As additional information becomes available, we assess the potential liability related to our pending litigation and claims and revise our estimates. Due to uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ from our estimates. In the opinion of management and based on liability accruals provided, our ultimate exposure with respect to these pending lawsuits and claims is not expected to have a material adverse effect on our consolidated financial position or cash flows, although they could have a material adverse effect on our results of operations for a particular reporting period.

The previously disclosed purported shareholder derivative lawsuits filed in 2011 and 2012 against Nabors Industries Ltd. and its Board of Directors relating to certain compensation arrangements have been dismissed. The allegations of each lawsuit were substantially similar, alleging that the members of the Board breached their fiduciary duties, wasted corporate assets and committed oppressive conduct against shareholders by agreeing to certain compensation arrangements with two senior officers of the Company, Eugene M. Isenberg and Anthony G. Petrello.  The lawsuits sought an award of monetary damages in an unspecified amount, disgorgement by Messrs. Isenberg and Petrello of allegedly excessive compensation in an unspecified amount of at least $90 million, and reformation of Nabors’ compensation practices.  The cases were filed, respectively, before Judges Gray Miller and Ewing Werlein in the United States Southern District of Texas, Houston Division, and Judge Mike Miller of the 11th Judicial District Court of Harris County, Texas. The case pending before Judge Gray Miller was voluntarily dismissed on January 31, 2012. Judge Werlein entered a final judgment on July 30, 2012 dismissing the case pending in the United States Southern District of Texas, finding that plaintiffs lacked standing to sue and failed to state a claim for which relief could be granted.  Plaintiffs initially appealed Judge Werlein’s ruling to the United States Fifth Circuit Court of Appeals, but voluntarily dismissed the appeal on October 22, 2012. Plaintiffs in the remaining state court case filed an agreed motion to dismiss with prejudice on October 22, 2012. The Company does not anticipate any further material activity in connection with these lawsuits.

Refer to Note 12 Commitments and Contingencies for discussion of previously disclosed litigation contingencies.

Item 1A. Risk Factors

There have been no material changes during the three months ended September 30, 2012 to the “Risk Factors” discussed in our 2011 Annual Report.

60

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

We withheld the following shares of our common stock to satisfy tax withholding obligations in connection with vesting of stock awards during the three months ended September 30, 2012 from the distributions described below.  These shares may be deemed to be “issuer purchases” of shares that are required to be disclosed pursuant to this Item, but were not purchased as part of a publicly announced program to purchase common shares:

(In thousands, except average price paid per share)

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (2)
July 1 – July 31, 2012	1	$	14.40	—	—
Aug 1 – Aug 31, 2012	<1	$	14.63	—	—
Sept 1 – Sept 30, 2012	<1	$	14.26	—	—

(1)Shares were withheld from employees to satisfy certain tax withholding obligations due in connection with grants of stock under our 1996, 1998 and 2003 Employee Stock Plans and our 1999 Stock Option Plan for Non-Employee Directors.  Each plan provides for the withholding of shares to satisfy tax obligations, but does not specify a maximum number of shares that can be withheld for this purpose.

(2)We currently do not intend to make further purchases of our common shares under the share repurchase program that was authorized by the Board of Directors in July 2006.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

61

Item 6. Exhibits

Exhibit No.	Description
3.1	Memorandum of Association of Nabors Industries Ltd. (incorporated by reference to Annex II to the proxy statement/prospectus included in Nabors Industries Ltd.’s Registration Statement on Form S-4 (Registration No. 333-76198) filed with the Commission on May 10, 2002, as amended).
3.2	Amended and Restated Bye-laws of Nabors Industries Ltd. (incorporated by reference to Exhibit 3.2 to Nabors Industries Ltd.’s Form 10-Q (File No. 001-32657) filed with the Commission on August 3, 2012).
4.1	Rights Agreement, dated July 16, 2012 between Nabors Industries Ltd. and Computershare Trust Company, N.A., as Rights Agent, including the Form of Certificate of Designations of Series A Junior Participating Preferred Shares, the Form of Right Certificate, and the Summary of Rights to Purchase Preferred Shares, respectively attached thereto as Exhibits A, B and C (incorporated by reference to Exhibit 4.1 to Nabors Industries Ltd.’s Form 8-K (File No. 001-32657) filed with the Commission on July 17, 2012).
15	Awareness Letter of Independent Accountants*
31.1	Rule 13a-14(a)/15d-14(a) Certification of Anthony G. Petrello, Chairman, President and Chief Executive Officer*
31.2	Rule 13a-14(a)/15d-14(a) Certification of R. Clark Wood, Principal Accounting and Financial Officer*
32.1	Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), executed by Anthony G. Petrello, Chairman, President and Chief Executive Officer and R. Clark Wood, Principal Accounting and Financial Officer (furnished herewith).
101.INS	XBRL Instance Document*
101.SCH	XBRL Schema Document*
101.CAL	XBRL Calculation Linkbase Document*
101.LAB	XBRL Label Linkbase Document*
101.PRE	XBRL Presentation Linkbase Document*
101.DEF	XBRL Definition Linkbase Document*

*       Filed herewith.

62

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NABORS INDUSTRIES LTD.
By:	/s/ Anthony G. Petrello
	Anthony G. Petrello
	Chairman, President and
	Chief Executive Officer
By:	/s/ R. Clark Wood
	R. Clark Wood
	Principal Accounting and
	Financial Officer
Date: November 2, 2012

63

EX-15

Exhibit 15

November 2, 2012

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Commissioners:

We are aware that our report dated November 2, 2012 on our review of interim financial information of Nabors Industries Ltd. and its subsidiaries (the “Company”) for the three- and nine-month periods ended September 30, 2012 and September 30, 2011 and included in the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2012 is incorporated by reference in its Registration Statement on Form S-8 (Registration Numbers 333-11313-99, 333-87069-99, 333-121908, 333-155291, 333-166598 and 333-184165) of Nabors Industries Ltd. and on Form S-3 (Registration Number 333-169013-01) of Nabors Industries Ltd. and Nabors Industries, Inc.

Very truly yours,

/s/ PricewaterhouseCoopers LLP

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer

Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a)

I, Anthony G. Petrello, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Nabors Industries Ltd.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2012	/s/ Anthony G. Petrello
	Anthony G. Petrello
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Controller of Nabors Industries, Inc.

Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a)

I, R. Clark Wood, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Nabors Industries Ltd.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2012	/s/ R. Clark Wood
	R. Clark Wood
	Principal Accounting and Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Nabors Industries Ltd. (the “Company”) for the quarter ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony G. Petrello, President and Chief Executive Officer of the Company, and I, R. Clark Wood, Principal Accounting and Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)  the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Anthony G. Petrello

Anthony G. Petrello

President and Chief Executive Officer

/s/ R. Clark Wood

R. Clark Wood

Principal Accounting and Financial Officer

Date: November 2, 2012

XML

Summary of Significant Accounting Policies (Details 2) (USD $)	9 Months Ended	3 Months Ended	9 Months Ended			9 Months Ended			9 Months Ended
	Sep. 30, 2012	Jun. 30, 2012 Peak USA	Sep. 30, 2012 Drilling and Rig Services	Sep. 30, 2012 U.S. Lower 48 Land Drilling	Dec. 31, 2011 U.S. Lower 48 Land Drilling	Sep. 30, 2012 U.S. Offshore	Sep. 30, 2012 Alaska	Dec. 31, 2011 Alaska	Sep. 30, 2012 International	Sep. 30, 2012 Other Rig Services	Sep. 30, 2012 Completion and Production Services	Dec. 31, 2011 Completion and Production Services	Sep. 30, 2012 U.S. Land Well-servicing	Dec. 31, 2011 U.S. Land Well-servicing	Sep. 30, 2012 Pressure Pumping	Dec. 31, 2011 Pressure Pumping
Assumptions used in goodwill impairment testing
Long-term growth rate used for measuring goodwill impairment (as a percent)	3.00%
Change in the carrying amount of goodwill for various contract drilling segments and other operating segments
Beginning Balance	$ 501,258,000		$ 111,194,000	$ 30,154,000	$ 30,154,000	$ 7,296,000	$ 19,995,000	$ 19,995,000	$ 18,983,000	$ 34,766,000	$ 390,064,000	$ 390,064,000	$ 55,072,000	$ 55,072,000	$ 334,992,000	$ 334,992,000
Disposals and Impairments	29,314,000		29,314,000			7,296,000			18,983,000	3,035,000
Cumulative Translation Adjustment	518,000		518,000							518,000
Ending Balance	472,462,000		82,398,000	30,154,000	30,154,000		19,995,000	19,995,000		32,249,000	390,064,000	390,064,000	55,072,000	55,072,000	334,992,000	334,992,000
Discontinued Operation, additional disclosures
Value of sale of Peak USA to an unrelated third party		$ 13,500,000

XML

Debt (Details) (USD $)	9 Months Ended			1 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Aug. 31, 2012 5.375% Senior Notes Due August 2012	Sep. 30, 2012 5.375% Senior Notes Due August 2012	Dec. 31, 2011 5.375% Senior Notes Due August 2012	Sep. 30, 2012 6.15% Senior Notes Due February 2018	Dec. 31, 2011 6.15% Senior Notes Due February 2018	Sep. 30, 2012 9.25% Senior Notes Due January 2019	Dec. 31, 2011 9.25% Senior Notes Due January 2019	Sep. 30, 2012 5.00% senior notes due September 2020	Dec. 31, 2011 5.00% senior notes due September 2020	Sep. 30, 2012 4.625% senior notes due September 2021	Dec. 31, 2011 4.625% senior notes due September 2021	Sep. 30, 2012 Revolving Credit Facility	Dec. 31, 2011 Revolving Credit Facility
Long-term debt
Senior Notes						$ 274,604,000	$ 968,403,000	$ 967,490,000	$ 1,125,000,000	$ 1,125,000,000	$ 697,572,000	$ 697,343,000	$ 697,847,000	$ 697,667,000
Revolving credit facilities															1,190,000,000	860,000,000
Other	463,000		1,712,000
Long-term Debt	4,679,285,000		4,623,816,000
Current portion of long-term debt	389,000		275,326,000
Long-term debt, Noncurrent	4,678,896,000		4,348,490,000
Interest rate on senior note due (as a percent)					5.375%		6.15%		9.25%		5.00%		4.625%
Payment of debt	276,232,000	1,404,271,000		282,400,000
Payment of debt principal				275,000,000
Payment of debt accrued interest				7,400,000
Payment of debt, portion financed through line of credit borrowings				$ 270,000,000

XML

Cash and Cash Equivalents and Short-term Investments (Details 5) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Debt securities:
Due in one year or less	$ 180
Due after one year through five years	17,900
Due in more than five years	16,990
Total debt securities	$ 35,070

XML

Segment Information (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Operating revenues and earnings losses from unconsolidated affiliates from continuing operations
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations	$ 1,666,892,000	$ 1,642,227,000	$ 5,091,446,000	$ 4,385,019,000
Adjusted income (loss) derived from operating activities from continuing operations:
Adjusted income (loss) derived from operating activities from continuing operations:	225,529,000	269,299,000	777,128,000	654,360,000
Full-cost ceiling test writedown	(96,319,000)		(310,031,000)
Interest expense	(63,604,000)	(58,060,000)	(189,717,000)	(195,781,000)
Investment income (loss)	7,224,000	727,000	32,844,000	12,032,000
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	(10,263,000)	11,607,000	(21,837,000)	1,100,000
Impairments and other charges		(98,072,000)	(147,503,000)	(98,072,000)
Income (loss) from continuing operations before income taxes	62,567,000	125,501,000	140,884,000	373,639,000
Income tax expense (benefit)	(4,001,000)	37,561,000	28,851,000	118,760,000
Subsidiary preferred stock dividend	750,000	750,000	2,250,000	2,250,000
Income (loss) from continuing operations, net of tax	65,818,000	87,190,000	109,783,000	252,629,000
Income (loss) from discontinued operations, net of tax	10,826,000	(12,226,000)	26,721,000	96,545,000
Net income (loss)	76,644,000	74,964,000	136,504,000	349,174,000
Less: Net (income) loss attributable to noncontrolling interest	(988,000)	(708,000)	453,000	355,000
Net income (loss) attributable to Nabors	75,656,000	74,256,000	136,957,000	349,529,000
ASSETS
Total assets	12,924,561,000		12,924,561,000		12,912,140,000
Equity in (earnings) losses of unconsolidated affiliates, net of dividends			(302,512,000)	135,844,000
Investments in unconsolidated affiliates accounted for using equity method	70,200,000		70,200,000		371,000,000
Segment information
Full-cost ceiling test writedown	(96,319,000)		(310,031,000)
Drilling and Rig Services
Operating revenues and earnings losses from unconsolidated affiliates from continuing operations
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations	1,209,509,000	1,122,008,000	3,801,521,000	3,110,109,000
Adjusted income (loss) derived from operating activities from continuing operations:
Adjusted income (loss) derived from operating activities from continuing operations:	184,602,000	181,149,000	637,819,000	504,864,000
ASSETS
Total assets	9,556,694,000		9,556,694,000		9,293,187,000
Equity in (earnings) losses of unconsolidated affiliates, net of dividends	(700,000)	(1,200,000)	(700,000)	3,000,000
Investments in unconsolidated affiliates accounted for using equity method	70,200,000		70,200,000		76,900,000
U.S. Lower 48 Land Drilling
Operating revenues and earnings losses from unconsolidated affiliates from continuing operations
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations	461,860,000	430,895,000	1,451,928,000	1,214,447,000
Adjusted income (loss) derived from operating activities from continuing operations:
Adjusted income (loss) derived from operating activities from continuing operations:	114,884,000	104,877,000	372,997,000	284,203,000
ASSETS
Total assets	3,436,578,000		3,436,578,000		3,216,803,000
U.S. Offshore
Operating revenues and earnings losses from unconsolidated affiliates from continuing operations
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations	66,675,000	46,069,000	207,768,000	116,807,000
Adjusted income (loss) derived from operating activities from continuing operations:
Adjusted income (loss) derived from operating activities from continuing operations:	(3,650,000)	2,457,000	14,006,000	(2,579,000)
ASSETS
Total assets	484,100,000		484,100,000		402,506,000
Alaska
Operating revenues and earnings losses from unconsolidated affiliates from continuing operations
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations	27,249,000	27,027,000	121,958,000	100,678,000
Adjusted income (loss) derived from operating activities from continuing operations:
Adjusted income (loss) derived from operating activities from continuing operations:	3,973,000	3,021,000	40,288,000	22,328,000
ASSETS
Total assets	277,930,000		277,930,000		288,253,000
Canada
Operating revenues and earnings losses from unconsolidated affiliates from continuing operations
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations	135,786,000	145,587,000	420,469,000	406,004,000
Adjusted income (loss) derived from operating activities from continuing operations:
Adjusted income (loss) derived from operating activities from continuing operations:	22,889,000	21,604,000	68,458,000	58,084,000
ASSETS
Total assets	916,676,000		916,676,000		962,239,000
International
Operating revenues and earnings losses from unconsolidated affiliates from continuing operations
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations	329,245,000	281,686,000	940,332,000	809,394,000
Adjusted income (loss) derived from operating activities from continuing operations:
Adjusted income (loss) derived from operating activities from continuing operations:	30,299,000	29,015,000	67,838,000	100,363,000
ASSETS
Total assets	3,758,290,000		3,758,290,000		3,702,611,000
Other Rig Services
Operating revenues and earnings losses from unconsolidated affiliates from continuing operations
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations	188,694,000	190,744,000	659,066,000	462,779,000
Adjusted income (loss) derived from operating activities from continuing operations:
Adjusted income (loss) derived from operating activities from continuing operations:	16,207,000	20,175,000	74,232,000	42,465,000
ASSETS
Total assets	683,120,000		683,120,000		720,775,000
Completion and Production Services
Operating revenues and earnings losses from unconsolidated affiliates from continuing operations
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations	603,275,000	533,079,000	1,812,680,000	1,371,264,000
Adjusted income (loss) derived from operating activities from continuing operations:
Adjusted income (loss) derived from operating activities from continuing operations:	79,984,000	87,891,000	241,475,000	203,143,000
ASSETS
Total assets	2,183,013,000		2,183,013,000		2,315,347,000
U.S. Land Well-servicing
Operating revenues and earnings losses from unconsolidated affiliates from continuing operations
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations	222,034,000	189,356,000	645,740,000	503,752,000
Adjusted income (loss) derived from operating activities from continuing operations:
Adjusted income (loss) derived from operating activities from continuing operations:	32,766,000	22,839,000	83,253,000	50,488,000
ASSETS
Total assets	842,312,000		842,312,000		812,049,000
Pressure Pumping
Operating revenues and earnings losses from unconsolidated affiliates from continuing operations
Operating revenues and Earnings (losses) from unconsolidated affiliates from continuing operations	381,241,000	343,723,000	1,166,940,000	867,512,000
Adjusted income (loss) derived from operating activities from continuing operations:
Adjusted income (loss) derived from operating activities from continuing operations:	47,218,000	65,052,000	158,222,000	152,655,000
ASSETS
Total assets	1,340,701,000		1,340,701,000		1,503,298,000
Oil and Gas
ASSETS
Total assets	513,666,000		513,666,000		796,327,000
Equity in (earnings) losses of unconsolidated affiliates, net of dividends	98,800,000	(34,900,000)	301,800,000	(56,300,000)
Investments in unconsolidated affiliates accounted for using equity method					294,100,000
Segment information
Investments in unconsolidated affiliates (oil and gas)	(2,500,000)		8,200,000
Intersegment Elimination
ASSETS
Total assets	$ 671,188,000		$ 671,188,000		$ 507,279,000

XML

Debt (Details 2) (Revolving Credit Facility, USD $)	Sep. 30, 2012
Revolving Credit Facility
Debt, Disclosure
Borrowing capacity under revolving credit facilities	$ 310,000,000
Unsecured revolving credit facility	$ 1,500,000,000
Weighted average interest rate on revolving credit facilities (as a percent)	2.08%

XML

Cash and Cash Equivalents and Short-term Investments (Details 3) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Gross unrealized losses of cash and cash equivalents and short-term investments
Available-for-sale securities, less than 12 months	$ 17,270
Available-for-sale securities, more than 12 months	19,831
Available-for-sale securities, continuous unrealized loss position, less than 12 Months, aggregate losses	2,470
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses	2,060
Equity Securities
Gross unrealized losses of cash and cash equivalents and short-term investments
Available-for-sale securities, less than 12 months	16,428
Available-for-sale securities, continuous unrealized loss position, less than 12 Months, aggregate losses	2,467
Debt Securities
Gross unrealized losses of cash and cash equivalents and short-term investments
Available-for-sale securities, less than 12 months	842
Available-for-sale securities, more than 12 months	19,831
Available-for-sale securities, continuous unrealized loss position, less than 12 Months, aggregate losses	3
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses	2,060
Corporate debt securities
Gross unrealized losses of cash and cash equivalents and short-term investments
Available-for-sale securities, more than 12 months	17,900
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses	1,919
Mortgage-CMO debt securities
Gross unrealized losses of cash and cash equivalents and short-term investments
Available-for-sale securities, less than 12 months	842
Available-for-sale securities, more than 12 months	45
Available-for-sale securities, continuous unrealized loss position, less than 12 Months, aggregate losses	3
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses	1
Asset-backed debt securities
Gross unrealized losses of cash and cash equivalents and short-term investments
Available-for-sale securities, more than 12 months	1,886
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses	$ 140

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Earnings (Losses) Per Share (Tables)

9 Months Ended

Sep. 30, 2012

Earnings (Losses) Per Share

Earnings (losses) per share computations

	Three Months EndedSeptember 30,						Nine Months Ended September 30,
	2012			2011			2012		2011
	(In thousands, except per share amounts)
Net income (loss) (numerator):
Income (loss) from continuing operations, net of tax	$	65,818		$	87,190		$	109,783	$	252,629
Less: net (income) loss attributable to noncontrolling interest	(988		)	(708		)	453		355
Adjusted income (loss) from continuing operations, net of tax — basic	64,830			86,482			110,236		252,984
Add: interest expense on assumed conversion of our 0.94% senior exchangeable notes, net of tax (1)	—			—			—		—
Adjusted net income (loss) from continuing operations, net of tax — diluted	64,830			86,482			110,236		252,984
Income (loss) from discontinued operations, net of tax	10,826			(12,226		)	26,721		96,545
Adjusted net income (loss) attributable to Nabors	75,656			74,256			136,957		349,529
Earnings (losses) per share:
Basic from continuing operations	$	.22		$	.30		$	.38	$	.88
Basic from discontinued operations	.04			(.04		)	.09		.34
Total Basic	$	.26		$	.26		$	.47	$	1.22
Diluted from continuing operations	$	.22		$	.30		$	.38	$	.86
Diluted from discontinued operations	.04			(.05		)	.09		.33
Total Diluted	$	.26		$	.25		$	.47	$	1.19
Shares (denominator):
Weighted-average number of shares outstanding — basic	290,367			287,487			289,822		286,971
Net effect of dilutive stock options, warrants and restricted stock awards based on the if-converted method	2,134			4,499			2,468		6,020
Assumed conversion of our 0.94% senior exchangeable notes due 2011 (1)	—			—			—		—
Weighted-average number of shares outstanding — diluted	292,501			291,986			292,290		292,991

(1)At maturity in May 2011, we redeemed the remaining aggregate principal amount of $1.4 billion of our 0.94% senior exchangeable notes. Prior to maturity, we had purchased $1.4 billion par value of these notes in the open market for cash of $1.2 billion.

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Condensed Consolidating Financial Information (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Statement of Income and Comprehensive Income
Net income (loss) attributable to Nabors	$ 75,656	$ 74,256	$ 136,957	$ 349,529
Other comprehensive income (loss), before tax:
Translation adjustment attributable to Nabors	31,550	(86,856)	29,157	(47,507)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	13,667	(21,150)	20,882	(26,034)
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(1,523)	(4)	(14,007)	(5)
Unrealized gains/(losses) on marketable securities	12,144	(21,154)	6,875	(26,039)
Pension liability amortization	260	151	780	451
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	166	191	548	572
Other comprehensive income (loss), before tax	44,120	(107,668)	37,360	(72,523)
Income tax expense (benefit) related to items of other comprehensive income (loss)	(272)	68	(3,856)	374
Other comprehensive income (loss), net of tax	44,392	(107,736)	41,216	(72,897)
Comprehensive income (loss) attributable to Nabors	120,048	(33,480)	178,173	276,632
Less: Net income (loss) attributable to noncontrolling interest	988	708	(453)	(355)
Translation adjustment attributable to noncontrolling interest	390	(912)	417	(460)
Comprehensive income attributable to noncontrolling interest	1,378	(204)	(36)	(815)
Comprehensive income (loss)	121,426	(33,684)	178,137	275,817
Nabors (Parent/Guarantor)
Statement of Income and Comprehensive Income
Net income (loss) attributable to Nabors	75,656	74,256	136,957	349,529
Other comprehensive income (loss), before tax:
Translation adjustment attributable to Nabors	31,550	(86,856)	29,157	(47,507)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	13,667	(21,150)	20,882	(26,034)
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(1,523)	(4)	(14,007)	(5)
Unrealized gains/(losses) on marketable securities	12,144	(21,154)	6,875	(26,039)
Pension liability amortization	260	151	780	451
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	166	191	548	572
Other comprehensive income (loss), before tax	44,120	(107,668)	37,360	(72,523)
Income tax expense (benefit) related to items of other comprehensive income (loss)	(272)	68	(3,856)	374
Other comprehensive income (loss), net of tax	44,392	(107,736)	41,216	(72,897)
Comprehensive income (loss) attributable to Nabors	120,048	(33,480)	178,173	276,632
Less: Net income (loss) attributable to noncontrolling interest	988	708	(453)	(355)
Translation adjustment attributable to noncontrolling interest	390	(912)	417	(460)
Comprehensive income attributable to noncontrolling interest	1,378	(204)	(36)	(815)
Comprehensive income (loss)	121,426	(33,684)	178,137	275,817
Nabors Delaware (Issuer/Guarantor)
Statement of Income and Comprehensive Income
Net income (loss) attributable to Nabors	(184,026)	80,546	(229,806)	89,307
Other comprehensive income (loss), before tax:
Translation adjustment attributable to Nabors	(99)	(498)	(100)	(422)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	6	(136)	17	49
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(1,200)		(11,488)
Unrealized gains/(losses) on marketable securities	(1,194)	(136)	(11,471)	49
Pension liability amortization	260	151	779	451
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	166	191	548	572
Other comprehensive income (loss), before tax	(867)	(292)	(10,244)	650
Income tax expense (benefit) related to items of other comprehensive income (loss)	(272)	68	(3,856)	374
Other comprehensive income (loss), net of tax	(595)	(360)	(6,388)	276
Comprehensive income (loss) attributable to Nabors	(184,621)	80,186	(236,194)	89,583
Comprehensive income (loss)	(184,621)	80,186	(236,194)	89,583
Other Subsidiaries (Non-Guarantors)
Statement of Income and Comprehensive Income
Net income (loss) attributable to Nabors	(68,951)	194,799	28,101	568,643
Other comprehensive income (loss), before tax:
Translation adjustment attributable to Nabors	31,451	(87,354)	29,057	(47,928)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	13,673	(21,286)	20,899	(25,983)
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(2,723)	(4)	(25,495)	(5)
Unrealized gains/(losses) on marketable securities	10,950	(21,290)	(4,596)	(25,988)
Pension liability amortization	520	302	1,560	900
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	166	191	548	572
Other comprehensive income (loss), before tax	43,087	(108,151)	26,569	(72,444)
Income tax expense (benefit) related to items of other comprehensive income (loss)	(604)	76	(7,892)	569
Other comprehensive income (loss), net of tax	43,691	(108,227)	34,461	(73,013)
Comprehensive income (loss) attributable to Nabors	(25,260)	86,572	62,562	495,630
Less: Net income (loss) attributable to noncontrolling interest	988	708	(453)	(355)
Translation adjustment attributable to noncontrolling interest	390	(912)	417	(460)
Comprehensive income attributable to noncontrolling interest	1,378	(204)	(36)	(815)
Comprehensive income (loss)	(23,882)	86,368	62,526	494,815
Consolidating Adjustments
Statement of Income and Comprehensive Income
Net income (loss) attributable to Nabors	252,977	(275,345)	201,705	(657,950)
Other comprehensive income (loss), before tax:
Translation adjustment attributable to Nabors	(31,352)	87,852	(28,957)	48,350
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	(13,679)	21,422	(20,916)	25,934
Less: reclassification adjustment for (gains)/losses included in net income (loss)	3,923	4	36,983	5
Unrealized gains/(losses) on marketable securities	(9,756)	21,426	16,067	25,939
Pension liability amortization	(780)	(453)	(2,339)	(1,351)
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	(332)	(382)	(1,096)	(1,144)
Other comprehensive income (loss), before tax	(42,220)	108,443	(16,325)	71,794
Income tax expense (benefit) related to items of other comprehensive income (loss)	876	(144)	11,748	(943)
Other comprehensive income (loss), net of tax	(43,096)	108,587	(28,073)	72,737
Comprehensive income (loss) attributable to Nabors	209,881	(166,758)	173,632	(585,213)
Less: Net income (loss) attributable to noncontrolling interest	(988)	(708)	453	355
Translation adjustment attributable to noncontrolling interest	(390)	912	(417)	460
Comprehensive income attributable to noncontrolling interest	(1,378)	204	36	815
Comprehensive income (loss)	$ 208,503	$ (166,554)	$ 173,668	$ (584,398)

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Common Shares (Details 2) (USD $)	0 Months Ended
	Jul. 16, 2012
Series A Preferred Stock
Shareholder Rights Plan
Par value	$ 0.001
Series A Preferred Stock Rights
Shareholder Rights Plan
Number of purchase rights issued per Common Share	$ 1
Number of shares each Right entitled to purchase	0.001
Exercise price	$ 70.00
Minimum percentage holding of common shares for exercising preferred share purchase rights	10.00%
Conditions of rights issuance, number of days following announcement	10 days
Series A Preferred Stock Rights | Maximum
Shareholder Rights Plan
Conditions of rights issuance, number of days following announcement	20 days

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Condensed Consolidating Financial Information (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 471,562	$ 398,575	$ 275,461	$ 641,702
Short-term investments	148,001	140,914
Assets held for sale	404,234	401,500
Accounts receivable, net	1,529,232	1,576,555
Inventory	257,158	272,852
Deferred income taxes	111,673	127,874
Other current assets	211,789	170,044
Total current assets	3,133,649	3,088,314
Long-term investments and other receivables	5,301	11,124
Property, plant and equipment, net	8,894,084	8,629,946
Goodwill	472,462	501,258
Investment in unconsolidated affiliates	70,172	371,021
Other long-term assets	348,893	310,477
Total assets	12,924,561	12,912,140
Current liabilities:
Current portion of long-term debt	389	275,326
Trade accounts payable	560,641	782,753
Accrued liabilities	573,636	744,483
Total current liabilities	1,134,666	1,802,562
Long-term debt	4,678,896	4,348,490
Other long-term liabilities	448,418	292,758
Deferred income taxes	737,269	797,925
Total liabilities	6,999,249	7,241,735
Subsidiary preferred stock	69,188	69,188
Shareholders' equity	5,843,880	5,587,815
Noncontrolling interest	12,244	13,402
Total equity	5,856,124	5,601,217	5,643,539	5,342,863
Total liabilities and equity	12,924,561	12,912,140
Nabors (Parent/Guarantor)
Current assets:
Cash and cash equivalents	698	203	1,156	10,847
Other current assets	50	50
Total current assets	748	253
Intercompany receivables	173,984	164,760
Investment in unconsolidated affiliates	5,671,621	5,429,029
Total assets	5,846,353	5,594,042
Current liabilities:
Trade accounts payable	62	42
Accrued liabilities	2,411	6,185
Total current liabilities	2,473	6,227
Total liabilities	2,473	6,227
Shareholders' equity	5,843,880	5,587,815
Total equity	5,843,880	5,587,815
Total liabilities and equity	5,846,353	5,594,042
Nabors Delaware (Issuer/Guarantor)
Current assets:
Cash and cash equivalents	7,061	21	22	20
Other current assets	1,028	671
Total current assets	8,089	692
Property, plant and equipment, net	38,171	40,792
Investment in unconsolidated affiliates	5,104,716	6,084,868
Other long-term assets	28,900	32,037
Total assets	5,179,876	6,158,389
Current liabilities:
Current portion of long-term debt		274,604
Trade accounts payable	23	23
Accrued liabilities	33,826	100,101
Total current liabilities	33,849	374,728
Long-term debt	4,678,822	4,297,500
Other long-term liabilities	31,885	32,303
Deferred income taxes	(7,468)	11,221
Intercompany payable	444,034	379,400
Total liabilities	5,181,122	5,095,152
Shareholders' equity	(1,246)	1,063,237
Total equity	(1,246)	1,063,237
Total liabilities and equity	5,179,876	6,158,389
Other Subsidiaries (Non-Guarantors)
Current assets:
Cash and cash equivalents	463,803	398,351	274,283	630,835
Short-term investments	148,001	140,914
Assets held for sale	404,234	401,500
Accounts receivable, net	1,529,232	1,576,555
Inventory	257,158	272,852
Deferred income taxes	111,673	127,874
Other current assets	210,711	169,323
Total current assets	3,124,812	3,087,369
Long-term investments and other receivables	5,301	11,124
Property, plant and equipment, net	8,855,913	8,589,154
Goodwill	472,462	501,258
Intercompany receivables	537,881	537,881
Investment in unconsolidated affiliates	416,904	1,843,654
Other long-term assets	319,993	278,440
Total assets	13,733,266	14,848,880
Current liabilities:
Current portion of long-term debt	389	722
Trade accounts payable	560,556	782,688
Accrued liabilities	537,399	638,197
Total current liabilities	1,098,344	1,421,607
Long-term debt	74	50,990
Other long-term liabilities	416,533	260,455
Deferred income taxes	744,737	786,704
Intercompany payable	267,831	323,241
Total liabilities	2,527,519	2,842,997
Subsidiary preferred stock	69,188	69,188
Shareholders' equity	11,124,315	11,923,293
Noncontrolling interest	12,244	13,402
Total equity	11,136,559	11,936,695
Total liabilities and equity	13,733,266	14,848,880
Consolidating Adjustments
Current assets:
Intercompany receivables	(711,865)	(702,641)
Investment in unconsolidated affiliates	(11,123,069)	(12,986,530)
Total assets	(11,834,934)	(13,689,171)
Current liabilities:
Intercompany payable	(711,865)	(702,641)
Total liabilities	(711,865)	(702,641)
Shareholders' equity	(11,123,069)	(12,986,530)
Total equity	(11,123,069)	(12,986,530)
Total liabilities and equity	$ (11,834,934)	$ (13,689,171)

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2012

Summary of Significant Accounting Policies

Inventory

	September 30,		December 31,
	2012		2011
	(In thousands)
Raw materials	$	148,323	$	133,480
Work-in-progress	45,959		50,951
Finished goods	62,876		88,421
	$	257,158	$	272,852

Change in the carrying amount of goodwill for various contract drilling segments and other operating segments

	Balance as of December 31, 2011		Acquisitions and Purchase Price Adjustments		Disposals and Impairments			Cumulative Translation Adjustment		Balance as of September 30, 2012
	(In thousands)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	30,154	$	—	$	—		$	—	$	30,154
U.S. Offshore	7,296		—		7,296		(1)	—		—
Alaska	19,995		—		—			—		19,995
International	18,983		—		18,983		(1)	—		—
Other Rig Services	34,766		—		3,035		(2)	518		32,249
Subtotal Drilling and Rig Services	111,194		—		29,314			518		82,398
Completion and Production Services:
U.S. Land Well-servicing	55,072		—		—			—		55,072
Pressure Pumping	334,992		—		—			—		334,992
Subtotal Completion and Production Services	390,064		—		—			—		390,064
Total	$	501,258	$	—	$	29,314		$	518	$	472,462

(1)Represents the impairment of goodwill associated with our U.S. Offshore and International reporting units. As of June 30, 2012, these reporting units had no recorded goodwill. The impairments were deemed necessary due to the prolonged uncertainty of utilization of some of our rigs as a result of changes in our customers’ plans for future drilling operations in the Gulf of Mexico as well as our international markets. A significantly prolonged period of lower natural gas prices or changes in laws and regulations could continue to adversely affect the demand for and prices of our services, which could result in future goodwill impairment charges for other reporting units due to the potential impact on our estimate of our future operating results.

(2)Represents the removal of goodwill in connection with our sale of Peak USA to an unrelated third party for $13.5 million cash during the second quarter of 2012.  Peak USA, a subsidiary included in our Other Rig Services reporting unit, provided trucking and logistics services to the oilfield service market in the U.S. Lower 48 states.

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Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Assets:
Short term investments:	$ 124,759	$ 129,314
Trading securities - energy industry	23,242	11,600
Equity Securities
Assets:
Short term investments:	89,689	71,433
Recurring
Assets:
Trading securities - energy industry	23,242
Total short-term investments	148,001
Recurring | Equity Securities
Assets:
Short term investments:	89,689
Recurring | Commercial paper and CDs
Assets:
Short term investments:	180
Recurring | Corporate debt securities
Assets:
Short term investments:	31,680
Recurring | Mortgage-backed debt securities
Assets:
Short term investments:	246
Recurring | Mortgage-CMO debt securities
Assets:
Short term investments:	1,078
Recurring | Asset-backed debt securities
Assets:
Short term investments:	1,886
Recurring | Level 1
Assets:
Trading securities - energy industry	23,242
Total short-term investments	106,846
Recurring | Level 1 | Equity Securities
Assets:
Short term investments:	81,538
Recurring | Level 1 | Commercial paper and CDs
Assets:
Short term investments:	180
Recurring | Level 1 | Asset-backed debt securities
Assets:
Short term investments:	1,886
Recurring | Level 2
Assets:
Total short-term investments	41,155
Recurring | Level 2 | Equity Securities
Assets:
Short term investments:	8,151
Recurring | Level 2 | Corporate debt securities
Assets:
Short term investments:	31,680
Recurring | Level 2 | Mortgage-backed debt securities
Assets:
Short term investments:	246
Recurring | Level 2 | Mortgage-CMO debt securities
Assets:
Short term investments:	$ 1,078

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Discontinued Operations (Details 2) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		1 Months Ended			3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Oil and Gas	Sep. 30, 2011 Oil and Gas	Sep. 30, 2012 Oil and Gas	Sep. 30, 2011 Oil and Gas	Apr. 30, 2012 Oil and Gas Columbia	Sep. 30, 2012 Oil and Gas United States	May 31, 2012 Oil and Gas United States	Sep. 30, 2012 Other Rig Services	Sep. 30, 2011 Other Rig Services	Sep. 30, 2012 Other Rig Services	Sep. 30, 2011 Other Rig Services	Sep. 30, 2012 Other Rig Services Aircraft logistics assets	Sep. 30, 2011 Other Rig Services Remora
Condensed Statements of Income
Operating revenues and Earnings (losses) from unconsolidated affiliates					$ 12,859,000	$ 10,630,000	$ 19,079,000	$ 116,046,000				$ 8,334,000	$ 9,341,000	$ 18,750,000	$ 21,180,000
Income (loss) from discontinued operations
Income (loss) from discontinued operations					5,826,000	(20,167,000)	(2,095,000)	42,746,000				2,199,000	2,336,000	(3,320,000)	(1,197,000)
Gain (loss) on sale or disposal of wholly owned assets					3,662,000		39,772,000	39,944,000	48,500,000	3,700,000		(2,554,000)		(7,796,000)
Less: income tax expense (benefit)					(1,604,000)	(6,189,000)	2,623,000	(14,752,000)				(89,000)	584,000	(2,783,000)	(300,000)
Income (loss) from discontinued operations, net of tax	10,826,000	(12,226,000)	26,721,000	96,545,000								(266,000)	1,752,000	(8,333,000)	(897,000)
Equity in earnings	(99,527,000)	33,723,000	(302,513,000)	59,305,000													85,000,000
Sale of business
Sale price									72,600,000	7,300,000	5,700,000
Gain on sale of oil and gas operations					3,662,000		39,772,000	39,944,000	48,500,000	3,700,000		(2,554,000)		(7,796,000)
Impairment of logistics assets																$ 7,800,000

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Nature of Operations (Details)	9 Months Ended
	Sep. 30, 2012 rig item
Nature of Operations
Number of platform rigs actively marketed	40
Number of jack-up rigs actively marketed	12
Number of barge rigs actively marketed	4
Number of hydraulic horsepower pressure pumping services in key basins throughout United States and Canada	805,000
Number of major business lines	2
Nature of operations
Number of actively marketed land drilling rigs	521
Number of states in which oil, gas and geothermal land drilling operations are conducted	48
Joint Venture in Saudi Arabia
Nature of Operations
Ownership percentage	51.00%
Number of rigs actively markets in joint venture	9
Other equity method investments | Minimum
Nature of Operations
Ownership percentage	49.00%
Other equity method investments | Maximum company's ownership interest in oil and gas joint venture
Nature of Operations
Ownership percentage	50.00%
U.S.
Nature of Operations
Number of rigs marketing for land well-servicing and workover work	431
Canada
Nature of Operations
Number of rigs marketing for land well-servicing and workover work	176

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Share-Based Compensation (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Share-based compensation disclosures
Share Based Compensation expense	$ 4.8	$ 9.0	$ 13.5	$ 17.2
Restricted Stock Award
Share-based compensation disclosures
Shares awarded during period			934,648	1,049,540
Vesting period of shares			4 years
Shares awarded during period, fair value			19.4	29.3
Fair value of Restricted Stock Awarded to Employees and Directors that vested			9.4	18.6
Stock options
Share-based compensation disclosures
Total intrinsic value of stock options exercised			5.7	15.8
Intrinsic value of stock options surrendered			17.9
Total fair value of options vested during the period	$ 7.6	$ 5.2	$ 7.6	$ 5.2

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Supplemental Balance Sheet, Income Statement and Cash Flow Information (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Investment income (loss)
Interest and dividend income	$ 1,160	$ 1,541	$ 6,110	$ 5,314
Gains (losses) on investments, net	$ 6,064	$ (814)	$ 26,734	$ 6,718

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Commitments and Contingencies (Details 3) (USD $)	12 Months Ended		1 Months Ended	9 Months Ended	12 Months Ended		9 Months Ended
	Dec. 31, 2009 Court of Ouargla Customs Infringement	Sep. 30, 2012 Court of Ouargla Customs Infringement	Mar. 31, 2011 Court of Ouargla Foreign Currency Controls	Sep. 30, 2012 Court of Ouargla Foreign Currency Controls	Dec. 31, 2006 Court of Ouargla Foreign Currency Controls	Mar. 19, 2012 NGH2L	Sep. 30, 2012 NGH2L Maximum
Commitments and Contingencies, Disclosure
Amount of loss range, minimum		$ 140,000
Amount of loss range, maximum		19,700,000
Judgment against Nabors	19,700,000		39,100,000
Payment of contract amount in foreign currency					7,500,000
Payment of contract amount in domestic currency					3,200,000
Approximate multiplier of the amount at issue for fines and penalties				2
Potential judgment in excess of accrual				31,100,000
Allegedly excessive compensation				90,000,000			100,000,000
Escrow Deposit						$ 3,000,000

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Cash and Cash Equivalents and Short-term Investments (Details 4) (9.75% Senior Notes)	Sep. 30, 2012
9.75% Senior Notes
Cash and Cash Equivalents and Short Term Investments
Interest rate on senior note due (as a percent)	9.75%

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2 Summary of Significant Accounting Policies

Interim Financial Information

The unaudited consolidated financial statements of Nabors are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”).  Certain reclassifications have been made to the prior periods to conform to the current-period presentation, with no effect on our consolidated financial position, results of operations or cash flows.  Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted.  Therefore, these financial statements should be read along with our annual report on Form 10-K for the year ended December 31, 2011 (“2011 Annual Report”).  In management’s opinion, the consolidated financial statements contain all adjustments necessary to present fairly our financial position as of September 30, 2012, the results of our operations and other comprehensive income for the three and nine months ended September 30, 2012 and 2011, and cash flows and changes in equity for the nine months ended September 30, 2012 and 2011, in accordance with GAAP.  Interim results for the three and nine months ended September 30, 2012 may not be indicative of results that will be realized for the full year ending December 31, 2012.

Our independent registered public accounting firm has reviewed and issued a report on these consolidated interim financial statements in accordance with standards established by the Public Company Accounting Oversight Board.  Pursuant to Rule 436(c) under the Securities Act of 1933, as amended (the “Securities Act”), this report should not be considered a part of any registration statement prepared or certified within the meanings of Sections 7 and 11 of such Act.

Principles of Consolidation

Our consolidated financial statements include the accounts of Nabors, as well as all majority-owned and nonmajority-owned subsidiaries required to be consolidated under GAAP.  All significant intercompany accounts and transactions are eliminated in consolidation.

Investments in operating entities where we have the ability to exert significant influence, but where we do not control operating and financial policies, are accounted for using the equity method.  Our share of the net income (loss) of these entities is recorded as earnings (losses) from unconsolidated affiliates in our consolidated statements of income (loss), and our investment in these entities is included in both investment in unconsolidated affiliates and assets held for sale in our consolidated balance sheets. The portion of such investments included in investments in unconsolidated affiliates totaled $70.2 million and $371.0 million as of September 30, 2012 and December 31, 2011, respectively.  At each of September 30, 2012 and December 31, 2011, the portion of such investments included in assets held for sale totaled $13.7 million.  See Note 4 — Discontinued Operations for additional information.

We have investments in offshore funds, which are classified as long-term investments and are accounted for using the equity method of accounting based on our ownership interest in each fund.

Inventory

Inventory is stated at the lower of cost or market. Cost is determined using the first-in, first-out method and includes the cost of materials, labor and manufacturing overhead.  Inventory included the following:

	September 30,		December 31,
	2012		2011
	(In thousands)
Raw materials	$	148,323	$	133,480
Work-in-progress	45,959		50,951
Finished goods	62,876		88,421
	$	257,158	$	272,852

Goodwill

We determined it was necessary to perform our annual goodwill impairment test, a Level 3 fair value measurement, during the second quarter of 2012.  The impairment test compares the estimated fair value of the reporting unit to its carrying amount.  If the carrying amount exceeds the fair value, a second step is required to measure the goodwill impairment loss.  This second step compares the implied fair value of the reporting unit’s goodwill to its carrying amount.  If the carrying amount exceeds the implied fair value, an impairment loss is recognized in an amount equal to the excess.  Our goodwill impairment test results required the second step measurement for two reporting units.

The fair values calculated in these impairment tests were determined using discounted cash flow models involving assumptions based on our utilization of rigs or other oil and gas service equipment, revenues and earnings from affiliates, as well as direct costs, general and administrative costs, depreciation, applicable income taxes, capital expenditures and working capital requirements.  Our discounted cash flow projections for each reporting unit were based on financial forecasts.  The future cash flows were discounted to present value using discount rates determined to be appropriate for each reporting unit.  Terminal values for each reporting unit were calculated using a Gordon Growth methodology with a long-term growth rate of 3%.

Our estimated fair values of our reporting units incorporate judgment and the use of estimates by management.  Potential factors requiring assessment include a further or sustained decline in our stock price, declines in natural gas and oil prices, a variance in results of operations from forecasts, and additional transactions in the oil and gas industry.  Another factor in determining whether impairment has occurred is the relationship between our market capitalization and our book value. As part of our annual review, we compared the sum of our reporting units’ estimated fair value, which included the estimated fair value of non-operating assets and liabilities, less debt, to our market capitalization and assessed the reasonableness of our estimated fair value. Any of the above-mentioned factors may cause us to re-evaluate goodwill during any quarter throughout the year.

The carrying amounts and change of goodwill for our operating segments as of and for the nine months ended September 30, 2012 were as follows:

	Balance as of December 31, 2011		Acquisitions and Purchase Price Adjustments		Disposals and Impairments			Cumulative Translation Adjustment		Balance as of September 30, 2012
	(In thousands)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	30,154	$	—	$	—		$	—	$	30,154
U.S. Offshore	7,296		—		7,296		(1)	—		—
Alaska	19,995		—		—			—		19,995
International	18,983		—		18,983		(1)	—		—
Other Rig Services	34,766		—		3,035		(2)	518		32,249
Subtotal Drilling and Rig Services	111,194		—		29,314			518		82,398
Completion and Production Services:
U.S. Land Well-servicing	55,072		—		—			—		55,072
Pressure Pumping	334,992		—		—			—		334,992
Subtotal Completion and Production Services	390,064		—		—			—		390,064
Total	$	501,258	$	—	$	29,314		$	518	$	472,462

(1)Represents the impairment of goodwill associated with our U.S. Offshore and International reporting units. As of June 30, 2012, these reporting units had no recorded goodwill. The impairments were deemed necessary due to the prolonged uncertainty of utilization of some of our rigs as a result of changes in our customers’ plans for future drilling operations in the Gulf of Mexico as well as our international markets. A significantly prolonged period of lower natural gas prices or changes in laws and regulations could continue to adversely affect the demand for and prices of our services, which could result in future goodwill impairment charges for other reporting units due to the potential impact on our estimate of our future operating results.

(2)Represents the removal of goodwill in connection with our sale of Peak USA to an unrelated third party for $13.5 million cash during the second quarter of 2012.  Peak USA, a subsidiary included in our Other Rig Services reporting unit, provided trucking and logistics services to the oilfield service market in the U.S. Lower 48 states.

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Commitments and Contingencies (Details 4) (Mexico, USD $) In Millions, unless otherwise specified	Sep. 30, 2012
Minimum
Income Tax Examination
Aggregate potential tax assessments range	$ 90
Income tax examination range of possible losses per year	6
Maximum
Income Tax Examination
Aggregate potential tax assessments range	95
Income tax examination range of possible losses per year	$ 26

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Discontinued Operations (Details 3) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Discontinued Operations
Liabilities of discontinued operations	$ 92.2	$ 125.7
Accrued liabilities related to discontinued operations	68.5	54.3
Other long-term liabilities related to discontinued operations	23.7	71.4
Approximate commitments beyond December 31, 2013 if the related properties are not sold	$ 274.8

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Measurements

Recurring Fair Value Measurements

	Fair Value as of September 30, 2012
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Short-term investments:
Available-for-sale equity securities — energy industry	$	81,538	$	8,151	$	—	$	89,689
Available-for-sale debt securities
Commercial paper and CDs	180		—		—		180
Corporate debt securities	—		31,680		—		31,680
Mortgage-backed debt securities	—		246		—		246
Mortgage-CMO debt securities	—		1,078		—		1,078
Asset-backed debt securities	1,886		—		—		1,886
Trading securities — energy industry	23,242		—		—		23,242
Total short-term investments	$	106,846	$	41,155	$	—	$	148,001

Fair Value of Financial Instruments

	September 30, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In thousands)
5.375% senior notes due August 2012	$	—	$	—	$	274,604	$	281,188
6.15% senior notes due February 2018	968,403		1,155,180		967,490		1,113,986
9.25% senior notes due January 2019	1,125,000		1,470,139		1,125,000		1,419,514
5.00% senior notes due September 2020	697,572		769,146		697,343		734,475
4.625% senior notes due September 2021	697,847		726,285		697,667		708,176
Subsidiary preferred stock	69,188		68,625		69,188		68,625
Revolving credit facilities	1,190,000		1,190,000		860,000		860,000
Other	463		463		1,712		1,712
	$	4,748,473	$	5,379,838	$	4,693,004	$	5,187,676

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Cash and Cash Equivalents and Short-term Investments (Tables)

9 Months Ended

Sep. 30, 2012

Cash and Cash Equivalents and Short-term Investments

Cash and cash equivalents, short-term and long-term investments and other receivables

	September 30,		December 31,
	2012		2011
	(In thousands)
Cash and cash equivalents	$	471,562	$	398,575
Short-term investments:
Trading equity securities	23,242		11,600
Available-for-sale equity securities	89,689		71,433
Available-for-sale debt securities	35,070		57,881
Total short-term investments	$	148,001	$	140,914

Cash and cash equivalents and short-term investments

	September 30, 2012							December 31, 2011
	FairValue		GrossUnrealizedHoldingGains		GrossUnrealizedHoldingLosses			FairValue		GrossUnrealizedHoldingGains		GrossUnrealizedHoldingLosses
					(In thousands)
Cash and cash equivalents	$	471,562	$	—	$	—		$	398,575	$	—	$	—
Short-term investments:
Trading equity securities	23,242		17,517		—			11,600		5,876		—
Available-for-sale equity securities	89,689		53,798		(2,467		)	71,433		33,075		—
Available-for-sale debt securities:
Commercial paper and CDs	180		—		—			1,230		—		—
Corporate debt securities	31,680		10,826		(1,919		)	51,300		22,494		(2,095		)
Mortgage-backed debt securities	246		15		—			309		10		—
Mortgage-CMO debt securities	1,078		12		(4		)	2,547		13		(15		)
Asset-backed debt securities	1,886		—		(140		)	2,495		—		(238		)
Total available-for-sale debt securities	35,070		10,853		(2,063		)	57,881		22,517		(2,348		)
Total available-for-sale securities	124,759		64,651		(4,530		)	129,314		55,592		(2,348		)
Total short-term investments	148,001		82,168		(4,530		)	140,914		61,468		(2,348		)
Total cash, cash equivalents and short-term investments	$	619,563	$	82,168	$	(4,530	)	$	539,489	$	61,468	$	(2,348	)

Gross unrealized losses of cash and cash equivalents and short-term investments

	As of September 30, 2012
	Less Than 12 Months				More Than 12 Months
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(In thousands)
Available-for-sale equity securities	$	16,428	$	2,467	$	—	$	—
Available-for-sale debt securities:
Corporate debt securities (1)	—		—		17,900		1,919
Mortgage-CMO debt securities (2)	842		3		45		1
Asset-backed debt securities (2)	—		—		1,886		140
Total available-for-sale debt securities	842		3		19,831		2,060
Total	$	17,270	$	2,470	$	19,831	$	2,060

(1)Our unrealized loss on corporate debt securities relates to our investment in NFR Energy LLC’s 9.75% senior notes. This investment is in addition to our equity interest in NFR Energy LLC. The senior notes mature in 2017 and interest is paid semi-annually on February 15 and August 15.  We do not intend to sell this investment, and it is less likely than not that we will be required to sell it to satisfy our own cash flow and working capital requirements.  We believe that we will continue to collect all amounts due according to the contractual terms of the investment and, therefore, do not consider the decline in value of the investment to be other-than-temporary at September 30, 2012. See Note 8 Investments in Unconsolidated Affiliates for additional discussion of our equity investment.

(2)Our unrealized losses on available-for-sale debt securities held for more than one year are comprised of various types of securities.  Each of these securities has a rating ranging from “A” to “AAA” from Standard & Poor’s and ranging from “A2” to “Aaa” from Moody’s Investors Service and is considered of high credit quality.  In each case, we do not intend to sell these investments, and it is less likely than not that we will be required to sell them to satisfy our own cash flow and working capital requirements.  We believe that we will be able to collect all amounts due according to the contractual terms of each investment and, therefore, do not consider the decline in value of these investments to be other-than-temporary at September 30, 2012.

Estimated fair values of corporate, mortgage-backed, mortgage-CMO and asset-backed debt securities

	EstimatedFair Value
	September 30, 2012
	(In thousands)
Debt securities:
Due in one year or less	$	180
Due after one year through five years	17,900
Due in more than five years	16,990
Total debt securities	$	35,070

Debt and equity securities

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2012		2011		2012		2011
	(In thousands)
Available-for-sale:
Proceeds from sales and maturities	$	3,953	$	342	$	23,186	$	1,124
Realized gains (losses), net	1,732		2		14,007		(5		)

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Common Shares (Details) (USD $)	9 Months Ended			3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Mar. 31, 2012 Contribution to Nabors Charitable Foundation Treasury Shares
Common shares
Vested options exercised by employees , shares	1,100,000	1,000,000
Proceeds from issuance of common shares	$ 17,000,000	$ 12,200,000
Repurchase surrendered unexercised vested options surrendered to satisfy exercise price and related tax withholding obligations	21,000,000
Common shares withheld by company	100,000	100,000
Common shares fair value	2,100,000	2,600,000
Accrued contingent liability, subsequently released			$ 100,000,000
Contributions
Number of treasury shares contributed				1,000,000

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Cash and Cash Equivalents and Short-term Investments (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Dec. 31, 2010
Cash and cash equivalents, short-term and long-term investments and other receivables
Cash and cash equivalents	$ 471,562	$ 398,575	$ 275,461	$ 641,702
Short-term investments:
Trading equity securities	23,242	11,600
Available-for-sale equity securities	89,689	71,433
Available-for-sale debt securities	35,070	57,881
Total short-term investments	$ 148,001	$ 140,914

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Investments in Unconsolidated Affiliates (Tables)

9 Months Ended

Sep. 30, 2012

Investments in Unconsolidated Affiliates

Investments in Unconsolidated Affiliates

	Three Months EndedSeptember 30,					Nine Months EndedSeptember 30,
	2012			2011		2012			2011
	(In thousands)
Gross revenues	$	91,445		$	65,985	$	216,914		$	169,738
Gross margin	$	63,462		$	51,640	$	146,519		$	133,858
Net income (loss)	$	(240,414	)	$	15,127	$	(649,926	)	$	53,918
Nabors’ earnings (losses) from our U.S. oil and gas joint venture (1)	$	(98,805	)	$	34,909	$	(301,800	)	$	56,285

(1)During the three and nine months ended September 30, 2012, our unconsolidated U.S. oil and gas joint venture recorded full-cost ceiling test writedowns, of which our proportionate share was $96.3 million and $310.0 million, respectively.  The writedowns are included in our Oil and Gas operating segment.

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Debt (Tables)

9 Months Ended

Sep. 30, 2012

Debt

Long-term debt

	September 30,		December 31,
	2012		2011
	(In thousands)
5.375% senior notes due August 2012	$	—	$	274,604
6.15% senior notes due February 2018	968,403		967,490
9.25% senior notes due January 2019	1,125,000		1,125,000
5.00% senior notes due September 2020	697,572		697,343
4.625% senior notes due September 2021	697,847		697,667
Revolving credit facilities	1,190,000		860,000
Other	463		1,712
	4,679,285		4,623,816
Less: current portion	389		275,326
	$	4,678,896	$	4,348,490

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Nature of Operations

9 Months Ended

Sep. 30, 2012

Nature of Operations

Nature of Operations

Note 1 Nature of Operations

Nabors is the largest land drilling contractor in the world and one of the largest land well-servicing and workover contractors in the United States and Canada:

·We actively market approximately 521 land drilling rigs for oil and gas land drilling operations in the U.S. Lower 48 states, Alaska, Canada, South and Central America, Mexico, the Middle East, the Far East, the South Pacific, Russia and Africa.

·We actively market approximately 431 rigs for land well-servicing and workover work in the United States and approximately 176 rigs for land well-servicing and workover work in Canada.

We are also a leading provider of offshore platform workover and drilling rigs, and actively market 40 platform, 12 jackup and four barge rigs in the United States, including the Gulf of Mexico, and multiple international markets.

In addition to the foregoing services:

·We provide completion and production services, including hydraulic fracturing, cementing, nitrogen and acid pressure pumping services with over 805,000 hydraulic horsepower in key basins throughout the United States and Canada.

·We offer a wide range of ancillary well-site services, including engineering, transportation and disposal, construction, maintenance, well logging, directional drilling, rig instrumentation, data collection and other support services in select U.S. and international markets.

·We manufacture and lease or sell top drives for a broad range of drilling applications, directional drilling systems, rig instrumentation and data collection equipment, pipeline handling equipment and rig reporting software.

·We have a 51% ownership interest in a joint venture in Saudi Arabia, which owns and actively markets nine rigs in addition to the rigs we lease to the joint venture.

·We have invested in oil and gas exploration, development and production activities through both our wholly owned subsidiaries and our oil and gas joint ventures in which we hold 49-50% ownership interests.

The majority of our business is conducted through two business lines:

·Our Drilling and Rig Services business line includes our drilling operations for oil and natural gas wells, on land and offshore, and companies engaged in drilling technology, top drive manufacturing, directional drilling, construction services, and rig instrumentation and software.

·Our Completion and Production Services business line includes our well-servicing, fluid logistics, workover operations and our pressure pumping services.

In addition to these two primary business lines, we have an Oil and Gas operating segment.  Our oil and gas exploration, development and production operations are included in our Oil and Gas operating segment, or in discontinued operations in some cases.

Unless the context requires otherwise, references in this report and in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations to “we,” “us,” “our,” the “Company” or “Nabors” mean Nabors Industries Ltd., together with our subsidiaries where the context requires, including Nabors Industries, Inc., a Delaware corporation (“Nabors Delaware”).

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies

Summary of total maximum amount of financial guarantees issued

	Maximum Amount
	Remainder of2012		2013		2014		Thereafter		Total
			(In thousands)
Financial standby letters of credit and other financial surety instruments	$	31,469	$	56,657	$	105	$	—	$	88,231

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Impairments and Other Charges (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended		3 Months Ended						9 Months Ended
	Sep. 30, 2011	Sep. 30, 2012 rig	Sep. 30, 2011	Jun. 30, 2012 Pressure Pumping	Jun. 30, 2012 Canada	Jun. 30, 2012 US Land Well-Servicing	Sep. 30, 2011 US Land Well-Servicing	Sep. 30, 2011 U.S. Lower 48 Land Drilling	Sep. 30, 2011 International	Sep. 30, 2012 Trade Names
Summary of Impairments and other charges
Goodwill impairment		$ 26,279
Intangible asset impairment		74,960								75,000
Provision for retirement of assets	98,072	46,264	98,072	26,500	15,100	4,600	8,900	63,200	26,100
Total impairments and other charges	$ 98,072	$ 147,503	$ 98,072
Lived intangible asset										10 years
Number of trucks and rigs retired		116

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Investments in Unconsolidated Affiliates (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Investments in unconsolidated affiliates
Investment in unconsolidated affiliates	$ 70,200,000		$ 70,200,000		$ 371,000,000
Summarized income statement information
Nabors' earnings (losses) from our U.S. oil and gas joint venture	(99,527,000)	33,723,000	(302,513,000)	59,305,000
U.S. unconsolidated joint oil and gas venture
Summarized income statement information
Gross revenues	91,445,000	65,985,000	216,914,000	169,738,000
Gross margin	63,462,000	51,640,000	146,519,000	133,858,000
Net income (loss)	(240,414,000)	15,127,000	(649,926,000)	53,918,000
Nabors' earnings (losses) from our U.S. oil and gas joint venture	(98,805,000)	34,909,000	(301,800,000)	56,285,000
Impairment charges for unconsolidated oil and gas joint ventures included in continuing operations	96,300,000		310,000,000
Assets held for sale
Investments in unconsolidated affiliates
Investment in unconsolidated affiliates	$ 13,700,000		$ 13,700,000		$ 13,700,000

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Condensed Consolidating Financial Information (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenues and other income:
Operating revenues	$ 1,766,419	$ 1,608,504	$ 5,393,959	$ 4,325,714
Earnings (losses) from unconsolidated affiliates	(99,527)	33,723	(302,513)	59,305
Investment income (loss)	7,224	727	32,844	12,032
Total revenues and other income	1,674,116	1,642,954	5,124,290	4,397,051
Costs and other deductions:
Direct costs	1,136,198	1,019,412	3,444,270	2,687,970
General and administrative expenses	131,887	119,431	401,845	358,352
Depreciation and amortization	269,597	234,085	778,234	684,337
Interest expense	63,604	58,060	189,717	195,781
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	10,263	(11,607)	21,837	(1,100)
Impairments and other charges		98,072	147,503	98,072
Total costs and other deductions	1,611,549	1,517,453	4,983,406	4,023,412
Income (loss) from continuing operations before income taxes	62,567	125,501	140,884	373,639
Income tax expense (benefit)	(4,001)	37,561	28,851	118,760
Subsidiary preferred stock dividend	750	750	2,250	2,250
Income (loss) from continuing operations, net of tax	65,818	87,190	109,783	252,629
Income (loss) from discontinued operations, net of tax	10,826	(12,226)	26,721	96,545
Net income (loss)	76,644	74,964	136,504	349,174
Less: Net (income) loss attributable to noncontrolling interest	(988)	(708)	453	355
Net income (loss) attributable to Nabors	75,656	74,256	136,957	349,529
Nabors (Parent/Guarantor)
Revenues and other income:
Earnings (losses) from consolidated affiliates	77,976	77,212	143,448	358,778
Investment income (loss)				4
Total revenues and other income	77,976	77,212	143,448	358,782
Costs and other deductions:
General and administrative expenses	1,900	2,809	5,449	8,803
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	420	147	1,042	450
Total costs and other deductions	2,320	2,956	6,491	9,253
Income (loss) from continuing operations before income taxes	75,656	74,256	136,957	349,529
Income (loss) from continuing operations, net of tax	75,656	74,256	136,957	349,529
Net income (loss)	75,656	74,256	136,957	349,529
Less: Net (income) loss attributable to noncontrolling interest	(988)	(708)	453	355
Net income (loss) attributable to Nabors	75,656	74,256	136,957	349,529
Nabors Delaware (Issuer/Guarantor)
Revenues and other income:
Earnings (losses) from consolidated affiliates	(152,036)	111,096	(132,659)	189,960
Investment income (loss)	2		18	68
Intercompany interest income	17,423	16,615	51,433	52,704
Total revenues and other income	(134,611)	127,711	(81,208)	242,732
Costs and other deductions:
General and administrative expenses	159	154	349	244
Depreciation and amortization	902	872	2,707	2,614
Interest expense	67,391	64,655	203,826	211,063
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	(250)	(574)	(1,229)	(1,382)
Total costs and other deductions	68,202	65,107	205,653	212,539
Income (loss) from continuing operations before income taxes	(202,813)	62,604	(286,861)	30,193
Income tax expense (benefit)	(18,787)	(17,942)	(57,055)	(59,114)
Income (loss) from continuing operations, net of tax	(184,026)	80,546	(229,806)	89,307
Net income (loss)	(184,026)	80,546	(229,806)	89,307
Net income (loss) attributable to Nabors	(184,026)	80,546	(229,806)	89,307
Other Subsidiaries (Non-Guarantors)
Revenues and other income:
Operating revenues	1,766,419	1,608,504	5,393,959	4,325,714
Earnings (losses) from unconsolidated affiliates	(99,527)	33,723	(302,513)	59,305
Earnings (losses) from consolidated affiliates	(178,917)	87,037	(212,494)	109,212
Investment income (loss)	7,222	727	32,826	11,960
Total revenues and other income	1,495,197	1,729,991	4,911,778	4,506,191
Costs and other deductions:
Direct costs	1,136,198	1,019,412	3,444,270	2,687,970
General and administrative expenses	130,248	116,616	397,089	349,755
Depreciation and amortization	268,695	233,213	775,527	681,723
Interest expense	(3,787)	(6,595)	(14,109)	(15,282)
Intercompany interest expense	17,423	16,615	51,433	52,704
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	9,673	(11,328)	20,982	(618)
Impairments and other charges		98,072	147,503	98,072
Total costs and other deductions	1,558,450	1,466,005	4,822,695	3,854,324
Income (loss) from continuing operations before income taxes	(63,253)	263,986	89,083	651,867
Income tax expense (benefit)	14,786	55,503	85,906	177,874
Subsidiary preferred stock dividend	750	750	2,250	2,250
Income (loss) from continuing operations, net of tax	(78,789)	207,733	927	471,743
Income (loss) from discontinued operations, net of tax	10,826	(12,226)	26,721	96,545
Net income (loss)	(67,963)	195,507	27,648	568,288
Less: Net (income) loss attributable to noncontrolling interest	(988)	(708)	453	355
Net income (loss) attributable to Nabors	(68,951)	194,799	28,101	568,643
Consolidating Adjustments
Revenues and other income:
Earnings (losses) from consolidated affiliates	252,977	(275,345)	201,705	(657,950)
Intercompany interest income	(17,423)	(16,615)	(51,433)	(52,704)
Total revenues and other income	235,554	(291,960)	150,272	(710,654)
Costs and other deductions:
General and administrative expenses	(420)	(148)	(1,042)	(450)
Intercompany interest expense	(17,423)	(16,615)	(51,433)	(52,704)
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	420	148	1,042	450
Total costs and other deductions	(17,423)	(16,615)	(51,433)	(52,704)
Income (loss) from continuing operations before income taxes	252,977	(275,345)	201,705	(657,950)
Income (loss) from continuing operations, net of tax	252,977	(275,345)	201,705	(657,950)
Net income (loss)	252,977	(275,345)	201,705	(657,950)
Less: Net (income) loss attributable to noncontrolling interest	988	708	(453)	(355)
Net income (loss) attributable to Nabors	$ 252,977	$ (275,345)	$ 201,705	$ (657,950)

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 471,562	$ 398,575
Short-term investments	148,001	140,914
Assets held for sale	404,234	401,500
Accounts receivable, net	1,529,232	1,576,555
Inventory	257,158	272,852
Deferred income taxes	111,673	127,874
Other current assets	211,789	170,044
Total current assets	3,133,649	3,088,314
Long-term investments and other receivables	5,301	11,124
Property, plant and equipment, net	8,894,084	8,629,946
Goodwill	472,462	501,258
Investment in unconsolidated affiliates	70,172	371,021
Other long-term assets	348,893	310,477
Total assets	12,924,561	12,912,140
Current liabilities:
Current portion of long-term debt	389	275,326
Trade accounts payable	560,641	782,753
Accrued liabilities	573,636	744,483
Total current liabilities	1,134,666	1,802,562
Long-term debt	4,678,896	4,348,490
Other long-term liabilities	448,418	292,758
Deferred income taxes	737,269	797,925
Total liabilities	6,999,249	7,241,735
Commitments and contingencies (Note 12)
Subsidiary preferred stock	69,188	69,188
Shareholders' equity:
Common shares, par value $.001 per share: Authorized common shares 800,000; issued 318,797 and 317,042, respectively	319	317
Capital in excess of par value	2,332,387	2,287,743
Accumulated other comprehensive income	362,480	321,264
Retained earnings	4,093,321	3,956,364
Less: treasury shares, at cost, 28,414 and 29,414 common shares, respectively	(944,627)	(977,873)
Total shareholders' equity	5,843,880	5,587,815
Noncontrolling interest	12,244	13,402
Total equity	5,856,124	5,601,217
Total liabilities and equity	$ 12,924,561	$ 12,912,140

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Cash and Cash Equivalents and Short-term Investments (Details 2) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Cash and cash equivalents and short-term investments
Cash and cash equivalents, fair value	$ 471,562	$ 398,575
Short-term investments:
Trading equity securities, fair value	23,242	11,600
Trading equity securities, gross unrealized holding gains	17,517	5,876
Available-for-sale debt securities:
Total available-for-sale debt securities, fair value	35,070	57,881
Available-for-sale equities securities
Available-for-sale equity securities - energy industry	124,759	129,314
Available-for-sale equity securities, gross unrealized holding gains	64,651	55,592
Available-for-sale equity securities, gross unrealized holding losses	(4,530)	(2,348)
Total short-term investments	148,001	140,914
Total cash, cash equivalents and short-term investments, fair value	619,563	539,489
Total cash, cash equivalents and short-term investments, gross unrealized gains	82,168	61,468
Total cash, cash equivalents and short-term investments, gross unrealized losses	(4,530)	(2,348)
Equity Securities
Available-for-sale equities securities
Available-for-sale equity securities - energy industry	89,689	71,433
Available-for-sale equity securities, gross unrealized holding gains	53,798	33,075
Available-for-sale equity securities, gross unrealized holding losses	(2,467)
Debt Securities
Available-for-sale debt securities:
Total available-for-sale debt securities, fair value	35,070	57,881
Available-for-sale equities securities
Available-for-sale equity securities, gross unrealized holding gains	10,853	22,517
Available-for-sale equity securities, gross unrealized holding losses	(2,063)	(2,348)
Commercial paper and CDs
Available-for-sale debt securities:
Total available-for-sale debt securities, fair value	180	1,230
Corporate debt securities
Available-for-sale debt securities:
Total available-for-sale debt securities, fair value	31,680	51,300
Available-for-sale equities securities
Available-for-sale equity securities, gross unrealized holding gains	10,826	22,494
Available-for-sale equity securities, gross unrealized holding losses	(1,919)	(2,095)
Mortgage-backed debt securities
Available-for-sale debt securities:
Total available-for-sale debt securities, fair value	246	309
Available-for-sale equities securities
Available-for-sale equity securities, gross unrealized holding gains	15	10
Mortgage-CMO debt securities
Available-for-sale debt securities:
Total available-for-sale debt securities, fair value	1,078	2,547
Available-for-sale equities securities
Available-for-sale equity securities, gross unrealized holding gains	12	13
Available-for-sale equity securities, gross unrealized holding losses	(4)	(15)
Asset-backed debt securities
Available-for-sale debt securities:
Total available-for-sale debt securities, fair value	1,886	2,495
Available-for-sale equities securities
Available-for-sale equity securities, gross unrealized holding losses	(140)	(238)
Short-term Investments
Available-for-sale equities securities
Total short-term investments	148,001	140,914
Total short-term investments, gross unrealized gains	82,168	61,468
Total short-term investments, gross unrealized holding losses	$ (4,530)	$ (2,348)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income (loss) attributable to Nabors	$ 136,957	$ 349,529
Adjustments to net income (loss):
Depreciation and amortization	778,393	686,820
Depletion and other exploratory expenses	223	31,949
Deferred income tax expense (benefit)	(81,116)	61,566
Deferred financing costs amortization	3,256	4,000
Pension liability amortization and adjustments	779	450
Discount amortization on long-term debt	1,467	26,546
Amortization of loss on hedges	602	695
Impairments and other charges	162,450	98,072
Losses (gains) on long-lived assets, net	7,016	(40,636)
Losses (gains) on investments, net	(27,773)	(8,567)
Losses (gains) on debt retirement, net		58
Losses (gains) on derivative instruments	103	267
Gain on acquisition		(12,178)
Share-based compensation	13,541	17,249
Foreign currency transaction losses (gains), net	5,054	743
Gain on sale of oil and gas operations	(48,486)
Equity in (earnings) losses of unconsolidated affiliates, net of dividends	302,512	(135,844)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	46,973	(283,082)
Inventory	10,900	(76,913)
Other current assets	(47,086)	(2,623)
Other long-term assets	(26,743)	79,770
Trade accounts payable and accrued liabilities	(221,252)	331,633
Income taxes payable	10,576	(466)
Other long-term liabilities	65,699	(20,904)
Net cash provided by operating activities	1,094,045	1,108,134
Cash flows from investing activities:
Purchases of investments	(949)	(9,567)
Sales and maturities of investments	30,111	24,580
Cash paid for acquisition of businesses, net		(55,459)
Investment in unconsolidated affiliates		(54,762)
Distribution of proceeds from asset sales from unconsolidated affiliates		142,984
Capital expenditures	(1,221,769)	(1,532,597)
Proceeds from sales of assets and insurance claims	128,432	110,535
Net cash used for investing activities	(1,064,175)	(1,374,286)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	(1,748)	5,074
Proceeds from issuance of long-term debt		697,578
Proceeds from revolving credit facilities	710,000	1,300,000
Proceeds from issuance of common shares	(4,007)	12,175
Debt issuance costs		(6,065)
Reduction in long-term debt	(276,232)	(1,404,271)
Paydown of revolving credit facilities	(380,000)	(700,000)
Repurchase of equity component of convertible debt		(12)
Purchase of restricted stock	(2,071)	(2,579)
Tax benefit related to share-based awards	(54)	185
Net cash provided by (used for) financing activities	45,888	(97,915)
Effect of exchange rate changes on cash and cash equivalents	(2,771)	(2,174)
Net increase (decrease) in cash and cash equivalents	72,987	(366,241)
Cash and cash equivalents, beginning of period	398,575	641,702
Cash and cash equivalents, end of period	$ 471,562	$ 275,461

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Commitments and Contingencies (Details) (Petrello, USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Petrello
Employment contracts
Automatic extension period	1 year
Employment agreement termination without cause, benefit as a ratio to 3 year average base salary and bonus through March 30, 2015	3
Employment agreement termination without cause, benefit as a ratio to 3 year average base salary and bonus after March 30, 2015	2
Employment agreement termination without cause, benefit base period	3 years
Amount of employment agreement benefit payable if terminated without cause	$ 31.1
Approximate amount of payment due to death, disability or termination	$ 50
Employment benefit due to death or disability, payment period	30 days

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2012

Segment Information

Financial information with respect to reportable segments

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	2012			2011			2012			2011
				(In thousands)
Operating revenues and earnings (losses) from unconsolidated affiliates from continuing operations: (1)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	461,860		$	430,895		$	1,451,928		$	1,214,447
U.S. Offshore	66,675			46,069			207,768			116,807
Alaska	27,249			27,027			121,958			100,678
Canada	135,786			145,587			420,469			406,004
International	329,245			281,686			940,332			809,394
Other Rig Services(2)	188,694			190,744			659,066			462,779
Subtotal Drilling and Rig Services (3)	1,209,509			1,122,008			3,801,521			3,110,109
Completion and Production Services:
U.S. Land Well-servicing	222,034			189,356			645,740			503,752
Pressure Pumping	381,241			343,723			1,166,940			867,512
Subtotal Completion and Production Services	603,275			533,079			1,812,680			1,371,264
Oil and Gas (4)	(98,805		)	34,909			(301,801		)	56,285
Other reconciling items (5)	(47,087		)	(47,769		)	(220,954		)	(152,639		)
Total	$	1,666,892		$	1,642,227		$	5,091,446		$	4,385,019
Adjusted income (loss) derived from operating activities from continuing operations: (1)(6)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	114,884		$	104,877		$	372,997		$	284,203
U.S. Offshore	(3,650		)	2,457			14,006			(2,579		)
Alaska	3,973			3,021			40,288			22,328
Canada	22,889			21,604			68,458			58,084
International	30,299			29,015			67,838			100,363
Other Rig Services(2)	16,207			20,175			74,232			42,465
Subtotal Drilling and Rig Services (3)	184,602			181,149			637,819			504,864
Completion and Production Services:
U.S. Land Well-servicing	32,766			22,839			83,253			50,488
Pressure Pumping	47,218			65,052			158,222			152,655
Subtotal Completion and Production Services	79,984			87,891			241,475			203,143
Oil and Gas (7)	(2,486		)	34,909			8,230			56,285
Other reconciling items (8)	(36,571		)	(34,650		)	(110,396		)	(109,932		)
Total adjusted income derived from operating activities	225,529			269,299			777,128			654,360
Full-cost ceiling test writedowns	(96,319		)	—			(310,031		)	—
Interest expense	(63,604		)	(58,060		)	(189,717		)	(195,781		)
Investment income (loss)	7,224			727			32,844			12,032
Gains (losses) on sales and retirements of long-lived assets and other income (expense), net	(10,263		)	11,607			(21,837		)	1,100
Impairments and other charges	—			(98,072		)	(147,503		)	(98,072		)
Income (loss) from continuing operations before income taxes	62,567			125,501			140,884			373,639
Income tax expense (benefit)	(4,001		)	37,561			28,851			118,760
Subsidiary preferred stock dividend	750			750			2,250			2,250
Income (loss) from continuing operations, net of tax	65,818			87,190			109,783			252,629
Income (loss) from discontinued operations, net of tax	10,826			(12,226		)	26,721			96,545
Net income (loss)	76,644			74,964			136,504			349,174
Less: Net income (loss) attributable to noncontrolling interest	(988		)	(708		)	453			355
Net income (loss) attributable to Nabors	$	75,656		$	74,256		$	136,957		$	349,529

	September 30,2012		December 31, 2011
	(In thousands)
Total assets:
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	3,436,578	$	3,216,803
U.S. Offshore	484,100		402,506
Alaska	277,930		288,253
Canada	916,676		962,239
International	3,758,290		3,702,611
Other Rig Services (2)	683,120		720,775
Subtotal Drilling and Rig Services (9)	9,556,694		9,293,187
Completion and Production Services:
U.S. Land Well-servicing	842,312		812,049
Pressure Pumping	1,340,701		1,503,298
Subtotal Completion and Production Services	2,183,013		2,315,347
Oil and Gas(10)	513,666		796,327
Other reconciling items (8)	671,188		507,279
Total assets	$	12,924,561	$	12,912,140

(1)All periods present the operating activities of our wholly owned oil and gas businesses in the United States, Canada and Colombia, our equity interests in joint ventures in Canada and Colombia, and our aircraft logistics operations in Canada as discontinued operations.

(2)Includes our drilling technology and top drive manufacturing, directional drilling, rig instrumentation and software, and construction services. These services represent our other companies that are not aggregated into a reportable operating segment.

(3)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(.7) million and $(1.2) million for the three months ended September 30, 2012 and 2011, respectively, and $(.7) million and $3.0 million for the nine months ended September 30, 2012 and 2011, respectively.

(4)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(98.8) million and $34.9 million for the three months ended September 30, 2012 and 2011, respectively, and $(301.8) million and $56.3 million for the nine months ended September 30, 2012 and 2011, respectively.

(5)Represents the elimination of inter-segment transactions.

(6)Adjusted income (loss) derived from operating activities is computed by subtracting direct costs, general and administrative expenses, and depreciation and amortization from Operating revenues and then adding Earnings (losses) from unconsolidated affiliates (excluding our proportionate share of full-cost ceiling test writedowns recorded by our oil and gas joint venture). These amounts should not be used as a substitute for those 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)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(2.5) million (excluding $96.3 million, which represents our proportionate share of full-cost ceiling test writedowns by our oil and gas joint venture) and $34.9 million for the three months ended September 30, 2012 and 2011, respectively, and $8.2 million (excluding $310.0 million, which represents our proportionate share of full-cost ceiling test writedowns by our oil and gas joint venture)  and $56.3 million, for the nine months ended September 30, 2012 and 2011, respectively.

(8)Represents the elimination of inter-segment transactions and unallocated corporate expenses and assets.

(9)Includes $70.2 million and $76.9 million of investments in unconsolidated affiliates accounted for using the equity method as of September 30, 2012 and December 31, 2011, respectively.

(10)Includes $294.1 million of investments in unconsolidated affiliates accounted for using the equity method as of December 31, 2011.

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Earnings (Losses) Per Share (Details 2) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Debt, Disclosure
0.94% senior exchangeable notes due 2011, par value outstanding	$ 389,000		$ 389,000		$ 275,326,000
Average number of options and warrants excluded from diluted earnings (losses) per share (in shares)	15,010,906	10,271,673	13,934,259	7,678,536
0.94% Senior Exchangeable Notes Due May 2011
Debt, Disclosure
Principal redeemed senior exchangeable notes			1,400,000,000
Interest rate on senior note due (as a percent)	0.94%		0.94%
0.94% senior exchangeable notes due 2011, par value outstanding	1,400,000,000		1,400,000,000
Purchase amount of 0.94% senior exchangeable notes due 2011			$ 1,200,000,000

XML

Segment Information

9 Months Ended

Sep. 30, 2012

Segment Information

Segment Information

Note 15 Segment Information

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

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	2012			2011			2012			2011
				(In thousands)
Operating revenues and earnings (losses) from unconsolidated affiliates from continuing operations: (1)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	461,860		$	430,895		$	1,451,928		$	1,214,447
U.S. Offshore	66,675			46,069			207,768			116,807
Alaska	27,249			27,027			121,958			100,678
Canada	135,786			145,587			420,469			406,004
International	329,245			281,686			940,332			809,394
Other Rig Services(2)	188,694			190,744			659,066			462,779
Subtotal Drilling and Rig Services (3)	1,209,509			1,122,008			3,801,521			3,110,109
Completion and Production Services:
U.S. Land Well-servicing	222,034			189,356			645,740			503,752
Pressure Pumping	381,241			343,723			1,166,940			867,512
Subtotal Completion and Production Services	603,275			533,079			1,812,680			1,371,264
Oil and Gas (4)	(98,805		)	34,909			(301,801		)	56,285
Other reconciling items (5)	(47,087		)	(47,769		)	(220,954		)	(152,639		)
Total	$	1,666,892		$	1,642,227		$	5,091,446		$	4,385,019
Adjusted income (loss) derived from operating activities from continuing operations: (1)(6)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	114,884		$	104,877		$	372,997		$	284,203
U.S. Offshore	(3,650		)	2,457			14,006			(2,579		)
Alaska	3,973			3,021			40,288			22,328
Canada	22,889			21,604			68,458			58,084
International	30,299			29,015			67,838			100,363
Other Rig Services(2)	16,207			20,175			74,232			42,465
Subtotal Drilling and Rig Services (3)	184,602			181,149			637,819			504,864
Completion and Production Services:
U.S. Land Well-servicing	32,766			22,839			83,253			50,488
Pressure Pumping	47,218			65,052			158,222			152,655
Subtotal Completion and Production Services	79,984			87,891			241,475			203,143
Oil and Gas (7)	(2,486		)	34,909			8,230			56,285
Other reconciling items (8)	(36,571		)	(34,650		)	(110,396		)	(109,932		)
Total adjusted income derived from operating activities	225,529			269,299			777,128			654,360
Full-cost ceiling test writedowns	(96,319		)	—			(310,031		)	—
Interest expense	(63,604		)	(58,060		)	(189,717		)	(195,781		)
Investment income (loss)	7,224			727			32,844			12,032
Gains (losses) on sales and retirements of long-lived assets and other income (expense), net	(10,263		)	11,607			(21,837		)	1,100
Impairments and other charges	—			(98,072		)	(147,503		)	(98,072		)
Income (loss) from continuing operations before income taxes	62,567			125,501			140,884			373,639
Income tax expense (benefit)	(4,001		)	37,561			28,851			118,760
Subsidiary preferred stock dividend	750			750			2,250			2,250
Income (loss) from continuing operations, net of tax	65,818			87,190			109,783			252,629
Income (loss) from discontinued operations, net of tax	10,826			(12,226		)	26,721			96,545
Net income (loss)	76,644			74,964			136,504			349,174
Less: Net income (loss) attributable to noncontrolling interest	(988		)	(708		)	453			355
Net income (loss) attributable to Nabors	$	75,656		$	74,256		$	136,957		$	349,529

	September 30,2012		December 31, 2011
	(In thousands)
Total assets:
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	3,436,578	$	3,216,803
U.S. Offshore	484,100		402,506
Alaska	277,930		288,253
Canada	916,676		962,239
International	3,758,290		3,702,611
Other Rig Services (2)	683,120		720,775
Subtotal Drilling and Rig Services (9)	9,556,694		9,293,187
Completion and Production Services:
U.S. Land Well-servicing	842,312		812,049
Pressure Pumping	1,340,701		1,503,298
Subtotal Completion and Production Services	2,183,013		2,315,347
Oil and Gas(10)	513,666		796,327
Other reconciling items (8)	671,188		507,279
Total assets	$	12,924,561	$	12,912,140

(1)All periods present the operating activities of our wholly owned oil and gas businesses in the United States, Canada and Colombia, our equity interests in joint ventures in Canada and Colombia, and our aircraft logistics operations in Canada as discontinued operations.

(2)Includes our drilling technology and top drive manufacturing, directional drilling, rig instrumentation and software, and construction services. These services represent our other companies that are not aggregated into a reportable operating segment.

(3)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(.7) million and $(1.2) million for the three months ended September 30, 2012 and 2011, respectively, and $(.7) million and $3.0 million for the nine months ended September 30, 2012 and 2011, respectively.

(4)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(98.8) million and $34.9 million for the three months ended September 30, 2012 and 2011, respectively, and $(301.8) million and $56.3 million for the nine months ended September 30, 2012 and 2011, respectively.

(5)Represents the elimination of inter-segment transactions.

(6)Adjusted income (loss) derived from operating activities is computed by subtracting direct costs, general and administrative expenses, and depreciation and amortization from Operating revenues and then adding Earnings (losses) from unconsolidated affiliates (excluding our proportionate share of full-cost ceiling test writedowns recorded by our oil and gas joint venture). These amounts should not be used as a substitute for those 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)Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(2.5) million (excluding $96.3 million, which represents our proportionate share of full-cost ceiling test writedowns by our oil and gas joint venture) and $34.9 million for the three months ended September 30, 2012 and 2011, respectively, and $8.2 million (excluding $310.0 million, which represents our proportionate share of full-cost ceiling test writedowns by our oil and gas joint venture)  and $56.3 million, for the nine months ended September 30, 2012 and 2011, respectively.

(8)Represents the elimination of inter-segment transactions and unallocated corporate expenses and assets.

(9)Includes $70.2 million and $76.9 million of investments in unconsolidated affiliates accounted for using the equity method as of September 30, 2012 and December 31, 2011, respectively.

(10)Includes $294.1 million of investments in unconsolidated affiliates accounted for using the equity method as of December 31, 2011.

XML

Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2012

Condensed Consolidating Financial Information

Condensed Consolidating Balance Sheets

	September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)		NaborsDelaware(Issuer/Guarantor)			OtherSubsidiaries(Non-Guarantors)		ConsolidatingAdjustments			ConsolidatedTotal
ASSETS
Current assets:
Cash and cash equivalents	$	698	$	7,061		$	463,803	$	—		$	471,562
Short-term investments	—		—			148,001		—			148,001
Assets held for sale	—		—			404,234		—			404,234
Accounts receivable, net	—		—			1,529,232		—			1,529,232
Inventory	—		—			257,158		—			257,158
Deferred income taxes	—		—			111,673		—			111,673
Other current assets	50		1,028			210,711		—			211,789
Total current assets	748		8,089			3,124,812		—			3,133,649
Long-term investments and other receivables	—		—			5,301		—			5,301
Property, plant and equipment, net	—		38,171			8,855,913		—			8,894,084
Goodwill	—		—			472,462		—			472,462
Intercompany receivables	173,984		—			537,881		(711,865		)	—
Investment in unconsolidated affiliates	5,671,621		5,104,716			416,904		(11,123,069		)	70,172
Other long-term assets	—		28,900			319,993		—			348,893
Total assets	$	5,846,353	$	5,179,876		$	13,733,266	$	(11,834,934	)	$	12,924,561
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	—		$	389	$	—		$	389
Trade accounts payable	62		23			560,556		—			560,641
Accrued liabilities	2,411		33,826			537,399		—			573,636
Total current liabilities	2,473		33,849			1,098,344		—			1,134,666
Long-term debt	—		4,678,822			74		—			4,678,896
Other long-term liabilities	—		31,885			416,533		—			448,418
Deferred income taxes	—		(7,468		)	744,737		—			737,269
Intercompany payable	—		444,034			267,831		(711,865		)	—
Total liabilities	2,473		5,181,122			2,527,519		(711,865		)	6,999,249
Subsidiary preferred stock	—		—			69,188		—			69,188
Shareholders’ equity	5,843,880		(1,246		)	11,124,315		(11,123,069		)	5,843,880
Noncontrolling interest	—		—			12,244		—			12,244
Total equity	5,843,880		(1,246		)	11,136,559		(11,123,069		)	5,856,124
Total liabilities and equity	$	5,846,353	$	5,179,876		$	13,733,266	$	(11,834,934	)	$	12,924,561

	December 31, 2011
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)		Other Subsidiaries (Non- Guarantors)		Consolidating Adjustments			Consolidated Total
	ASSETS
Current assets:
Cash and cash equivalents	$	203	$	21	$	398,351	$	—		$	398,575
Short-term investments	—		—		140,914		—			140,914
Assets held for sale	—		—		401,500		—			401,500
Accounts receivable, net	—		—		1,576,555		—			1,576,555
Inventory	—		—		272,852		—			272,852
Deferred income taxes	—		—		127,874		—			127,874
Other current assets	50		671		169,323		—			170,044
Total current assets	253		692		3,087,369		—			3,088,314
Long-term investments and other receivables	—		—		11,124		—			11,124
Property, plant and equipment, net	—		40,792		8,589,154		—			8,629,946
Goodwill	—		—		501,258		—			501,258
Intercompany receivables	164,760		—		537,881		(702,641		)	—
Investment in unconsolidated affiliates	5,429,029		6,084,868		1,843,654		(12,986,530		)	371,021
Other long-term assets	—		32,037		278,440		—			310,477
Total assets	$	5,594,042	$	6,158,389	$	14,848,880	$	(13,689,171	)	$	12,912,140
	LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	274,604	$	722	$	—		$	275,326
Trade accounts payable	42		23		782,688		—			782,753
Accrued liabilities	6,185		100,101		638,197		—			744,483
Total current liabilities	6,227		374,728		1,421,607		—			1,802,562
Long-term debt	—		4,297,500		50,990		—			4,348,490
Other long-term liabilities	—		32,303		260,455		—			292,758
Deferred income taxes	—		11,221		786,704		—			797,925
Intercompany payable	—		379,400		323,241		(702,641		)	—
Total liabilities	6,227		5,095,152		2,842,997		(702,641		)	7,241,735
Subsidiary preferred stock	—		—		69,188		—			69,188
Shareholders’ equity	5,587,815		1,063,237		11,923,293		(12,986,530		)	5,587,815
Noncontrolling interest	—		—		13,402		—			13,402
Total equity	5,587,815		1,063,237		11,936,695		(12,986,530		)	5,601,217
Total liabilities and equity	$	5,594,042	$	6,158,389	$	14,848,880	$	(13,689,171	)	$	12,912,140

Condensed Consolidating Statements of Income (Loss)

	Three Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non—Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	1,766,419		$	—		$	1,766,419
Earnings (losses) from unconsolidated affiliates	—		—			(99,527		)	—			(99,527		)
Earnings (losses) from consolidated affiliates	77,976		(152,036		)	(178,917		)	252,977			—
Investment income (loss)	—		2			7,222			—			7,224
Intercompany interest income	—		17,423			—			(17,423		)	—
Total revenues and other income	77,976		(134,611		)	1,495,197			235,554			1,674,116
Costs and other deductions:
Direct costs	—		—			1,136,198			—			1,136,198
General and administrative expenses	1,900		159			130,248			(420		)	131,887
Depreciation and amortization	—		902			268,695			—			269,597
Interest expense	—		67,391			(3,787		)	—			63,604
Intercompany interest expense	—		—			17,423			(17,423		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	420		(250		)	9,673			420			10,263
Impairments and other charges	—		—			—			—			—
Total costs and other deductions	2,320		68,202			1,558,450			(17,423		)	1,611,549
Income (loss) from continuing operations before income taxes	75,656		(202,813		)	(63,253		)	252,977			62,567
Income tax expense (benefit)	—		(18,787		)	14,786			—			(4,001		)
Subsidiary preferred stock dividend	—		—			750			—			750
Income (loss) from continuing operations, net of tax	75,656		(184,026		)	(78,789		)	252,977			65,818
Income (loss) from discontinued operations, net of tax	—		—			10,826			—			10,826
Net income (loss)	75,656		(184,026		)	(67,963		)	252,977			76,644
Less: Net (income) loss attributable to noncontrolling interest	—		—			(988		)	—			(988		)
Net income (loss) attributable to Nabors	$	75,656	$	(184,026	)	$	(68,951	)	$	252,977		$	75,656

	Three Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non—Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	1,608,504		$	—		$	1,608,504
Earnings (losses) from unconsolidated affiliates	—		—			33,723			—			33,723
Earnings (losses) from consolidated affiliates	77,212		111,096			87,037			(275,345		)	—
Investment income (loss)	—		—			727			—			727
Intercompany interest income	—		16,615			—			(16,615		)	—
Total revenues and other income	77,212		127,711			1,729,991			(291,960		)	1,642,954
Costs and other deductions:
Direct costs	—		—			1,019,412			—			1,019,412
General and administrative expenses	2,809		154			116,616			(148		)	119,431
Depreciation and amortization	—		872			233,213			—			234,085
Interest expense	—		64,655			(6,595		)	—			58,060
Intercompany interest expense	—		—			16,615			(16,615		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	147		(574		)	(11,328		)	148			(11,607		)
Impairments and other charges	—		—			98,072			—			98,072
Total costs and other deductions	2,956		65,107			1,466,005			(16,615		)	1,517,453
Income (loss) from continuing operations before income taxes	74,256		62,604			263,986			(275,345		)	125,501
Income tax expense (benefit)	—		(17,942		)	55,503			—			37,561
Subsidiary preferred stock dividend	—		—			750			—			750
Income (loss) from continuing operations, net of tax	74,256		80,546			207,733			(275,345		)	87,190
Income (loss) from discontinued operations, net of tax	—		—			(12,226		)	—			(12,226		)
Net income (loss)	74,256		80,546			195,507			(275,345		)	74,964
Less: Net (income) loss attributable to noncontrolling interest	—		—			(708		)	—			(708		)
Net income (loss) attributable to Nabors	$	74,256	$	80,546		$	194,799		$	(275,345	)	$	74,256

	Nine Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non—Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	5,393,959		$	—		$	5,393,959
Earnings (losses) from unconsolidated affiliates	—		—			(302,513		)	—			(302,513		)
Earnings (losses) from consolidated affiliates	143,448		(132,659		)	(212,494		)	201,705			—
Investment income (loss)	—		18			32,826			—			32,844
Intercompany interest income	—		51,433			—			(51,433		)	—
Total revenues and other income	143,448		(81,208		)	4,911,778			150,272			5,124,290
Costs and other deductions:
Direct costs	—		—			3,444,270			—			3,444,270
General and administrative expenses	5,449		349			397,089			(1,042		)	401,845
Depreciation and amortization	—		2,707			775,527			—			778,234
Interest expense	—		203,826			(14,109		)	—			189,717
Intercompany interest expense	—		—			51,433			(51,433		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	1,042		(1,229		)	20,982			1,042			21,837
Impairments and other charges	—		—			147,503			—			147,503
Total costs and other deductions	6,491		205,653			4,822,695			(51,433		)	4,983,406
Income (loss) from continuing operations before income taxes	136,957		(286,861		)	89,083			201,705			140,884
Income tax expense (benefit)	—		(57,055		)	85,906			—			28,851
Subsidiary preferred stock dividend	—		—			2,250			—			2,250
Income (loss) from continuing operations, net of tax	136,957		(229,806		)	927			201,705			109,783
Income (loss) from discontinued operations, net of tax	—		—			26,721			—			26,721
Net income (loss)	136,957		(229,806		)	27,648			201,705			136,504
Less: Net (income) loss attributable to noncontrolling interest	—		—			453			—			453
Net income (loss) attributable to Nabors	$	136,957	$	(229,806	)	$	28,101		$	201,705		$	136,957

	Nine Months Ended September 30, 2011
(In thousands)	Nabors (Parent/ Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	4,325,714		$	—		$	4,325,714
Earnings (losses) from unconsolidated affiliates	—		—			59,305			—			59,305
Earnings (losses) from consolidated affiliates	358,778		189,960			109,212			(657,950		)	—
Investment income (loss)	4		68			11,960			—			12,032
Intercompany interest income	—		52,704			—			(52,704		)	—
Total revenues and other income	358,782		242,732			4,506,191			(710,654		)	4,397,051
Costs and other deductions:
Direct costs	—		—			2,687,970			—			2,687,970
General and administrative expenses	8,803		244			349,755			(450		)	358,352
Depreciation and amortization	—		2,614			681,723			—			684,337
Interest expense	—		211,063			(15,282		)	—			195,781
Intercompany interest expense	—		—			52,704			(52,704		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	450		(1,382		)	(618		)	450			(1,100		)
Impairments and other charges	—		—			98,072			—			98,072
Total costs and other deductions	9,253		212,539			3,854,324			(52,704		)	4,023,412
Income (loss) from continuing operations before income taxes	349,529		30,193			651,867			(657,950		)	373,639
Income tax expense (benefit)	—		(59,114		)	177,874			—			118,760
Subsidiary preferred stock dividend	—		—			2,250			—			2,250
Income (loss) from continuing operations, net of tax	349,529		89,307			471,743			(657,950		)	252,629
Income (loss) from discontinued operations, net of tax	—		—			96,545			—			96,545
Net income (loss)	349,529		89,307			568,288			(657,950		)	349,174
Less: Net (income) loss attributable to noncontrolling interest	—		—			355			—			355
Net income (loss) attributable to Nabors	$	349,529	$	89,307		$	568,643		$	(657,950	)	$	349,529

Condensed consolidating statements of other comprehensive income

	Three Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	75,656		$	(184,026	)	$	(68,951	)	$	252,977		$	75,656
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	31,550			(99		)	31,451			(31,352		)	31,550
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	13,667			6			13,673			(13,679		)	13,667
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(1,523		)	(1,200		)	(2,723		)	3,923			(1,523		)
Unrealized gains (losses) on marketable securities	12,144			(1,194		)	10,950			(9,756		)	12,144
Pension liability amortization	260			260			520			(780		)	260
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	166			166			166			(332		)	166
Other comprehensive income, before tax	44,120			(867		)	43,087			(42,220		)	44,120
Income tax expense related to items of other comprehensive income	(272		)	(272		)	(604		)	876			(272		)
Other comprehensive income, net of tax	44,392			(595		)	43,691			(43,096		)	44,392
Comprehensive income attributable to Nabors	120,048			(184,621		)	(25,260		)	209,881			120,048
Net income (loss) attributable to noncontrolling interest	988			—			988			(988		)	988
Translation adjustment to noncontrolling interest	390			—			390			(390		)	390
Comprehensive income attributable to noncontrolling interest	1,378			—			1,378			(1,378		)	1,378
Comprehensive income	$	121,426		$	(184,621	)	$	(23,882	)	$	208,503		$	121,426

	Three Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	74,256		$	80,546		$	194,799		$	(275,345	)	$	74,256
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	(86,856		)	(498		)	(87,354		)	87,852			(86,856		)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	(21,150		)	(136		)	(21,286		)	21,422			(21,150		)
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(4		)	—			(4		)	4			(4		)
Unrealized gains (losses) on marketable securities	(21,154		)	(136		)	(21,290		)	21,426			(21,154		)
Pension liability amortization	151			151			302			(453		)	151
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	191			191			191			(382		)	191
Other comprehensive income, before tax	(107,668		)	(292		)	(108,151		)	108,443			(107,668		)
Income tax expense related to items of other comprehensive income	68			68			76			(144		)	68
Other comprehensive income, net of tax	(107,736		)	(360		)	(108,227		)	108,587			(107,736		)
Comprehensive income attributable to Nabors	(33,480		)	80,186			86,572			(166,758		)	(33,480		)
Net income (loss) attributable to noncontrolling interest	708			—			708			(708		)	708
Translation adjustment to noncontrolling interest	(912		)	—			(912		)	912			(912		)
Comprehensive income attributable to noncontrolling interest	(204		)	—			(204		)	204			(204		)
Comprehensive income	$	(33,684	)	$	80,186		$	86,368		$	(166,554	)	$	(33,684	)

	Nine Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	136,957		$	(229,806	)	$	28,101		$	201,705		$	136,957
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	29,157			(100		)	29,057			(28,957		)	29,157
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	20,882			17			20,899			(20,916		)	20,882
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(14,007		)	(11,488		)	(25,495		)	36,983			(14,007		)
Unrealized gains (losses) on marketable securities	6,875			(11,471		)	(4,596		)	16,067			6,875
Pension liability amortization	780			779			1,560			(2,339		)	780
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	548			548			548			(1,096		)	548
Other comprehensive income, before tax	37,360			(10,244		)	26,569			(16,325		)	37,360
Income tax expense related to items of other comprehensive income	(3,856		)	(3,856		)	(7,892		)	11,748			(3,856		)
Other comprehensive income, net of tax	41,216			(6,388		)	34,461			(28,073		)	41,216
Comprehensive income attributable to Nabors	178,173			(236,194		)	62,562			173,632			178,173
Net income (loss) attributable to noncontrolling interest	(453		)	—			(453		)	453			(453		)
Translation adjustment to noncontrolling interest	417			—			417			(417		)	417
Comprehensive income attributable to noncontrolling interest	(36		)	—			(36		)	36			(36		)
Comprehensive income	$	178,137		$	(236,194	)	$	62,526		$	173,668		$	178,137

	Nine Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	349,529		$	89,307		$	568,643		$	(657,950	)	$	349,529
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	(47,507		)	(422		)	(47,928		)	48,350			(47,507		)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	(26,034		)	49			(25,983		)	25,934			(26,034		)
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(5		)	—			(5		)	5			(5		)
Unrealized gains (losses) on marketable securities	(26,039		)	49			(25,988		)	25,939			(26,039		)
Pension liability amortization	451			451			900			(1,351		)	451
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	572			572			572			(1,144		)	572
Other comprehensive income, before tax	(72,523		)	650			(72,444		)	71,794			(72,523		)
Income tax expense related to items of other comprehensive income	374			374			569			(943		)	374
Other comprehensive income, net of tax	(72,897		)	276			(73,013		)	72,737			(72,897		)
Comprehensive income attributable to Nabors	276,632			89,583			495,630			(585,213		)	276,632
Net income (loss) attributable to noncontrolling interest	(355		)	—			(355		)	355			(355		)
Translation adjustment to noncontrolling interest	(460		)	—			(460		)	460			(460		)
Comprehensive income attributable to noncontrolling interest	(815		)	—			(815		)	815			(815		)
Comprehensive income	$	275,817		$	89,583		$	494,815		$	(584,398	)	$	275,817

Condensed Consolidating Statements of Cash Flows

	Nine Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net cash provided by (used for) operating activities	$	6,572		$	(88,960	)	$	1,206,939		$	(30,506	)	$	1,094,045
Cash flows from investing activities:
Purchases of investments	—			—			(949		)	—			(949		)
Sales and maturities of investments	—			—			30,111			—			30,111
Capital expenditures	—			—			(1,221,769		)	—			(1,221,769		)
Proceeds from sales of assets and insurance claims	—			—			128,432			—			128,432
Net cash provided by (used for) investing activities	—			—			(1,064,175		)	—			(1,064,175		)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	—			—			(1,748		)	—			(1,748		)
Proceeds from revolving credit facilities	—			710,000			—			—			710,000
Proceeds from issuance of common shares	(4,006		)	—			(1		)	—			(4,007		)
Reduction in long-term debt	—			(224,997		)	(51,235		)	—			(276,232		)
Paydown of revolving credit facilities	—			(380,000		)	—			—			(380,000		)
Purchase of restricted stock	(2,071		)	—			—			—			(2,071		)
Tax benefit related to share-based awards	—			—			(54		)	—			(54		)
Cash dividends paid	—			(9,003		)	(21,503		)	30,506			—
Net cash (used for) provided by financing activities	(6,077		)	96,000			(74,541		)	30,506			45,888
Effect of exchange rate changes on cash and cash equivalents	—			—			(2,771		)	—			(2,771		)
Net (decrease) increase in cash and cash equivalents	495			7,040			65,452			—			72,987
Cash and cash equivalents, beginning of period	203			21			398,351			—			398,575
Cash and cash equivalents, end of period	$	698		$	7,061		$	463,803		$	—		$	471,562

	Nine Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net cash provided by (used for) operating activities	$	6 ,163		$	227,747		$	874,224		$	—		$	1,108,134
Cash flows from investing activities:
Purchases of investments	—			—			(9,567		)	—			(9,567		)
Sales and maturities of investments	—			—			24,580			—			24,580
Cash paid for acquisition of businesses, net	—			—			(55,459		)	—			(55,459		)
Investment in unconsolidated affiliates	—			—			(54,762		)	—			(54,762		)
Distribution of proceeds from asset sales from unconsolidated affiliates	—			—			142,984			—			142,984
Capital expenditures	—			—			(1,532,597		)	—			(1,532,597		)
Proceeds from sales of assets and insurance claims	—			—			110,535			—			110,535
Cash paid for investments in consolidated affiliates	(25,450		)	(65,000		)	—			90,450			—
Net cash provided by (used for) investing activities	(25,450		)	(65,000		)	(1,374,286		)	90,450			(1,374,286		)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	—			—			5,074			—			5,074
Proceeds from issuance of long-term debt	—			697,578			—			—			697,578
Proceeds from revolving credit facilities	—			1,250,000			50,000			—			1,300,000
Proceeds from issuance of common shares	12,175			—			—			—			12,175
Debt issuance costs	—			(6,065		)	—			—			(6,065		)
Reduction in long-term debt	—			(1,404,245		)	(26		)	—			(1,404,271		)
Paydown of revolving credit facilities	—			(700,000		)	—			—			(700,000		)
Repurchase of equity component of convertible debt	—			(12		)	—			—			(12		)
Purchase of restricted stock	(2,579		)	—			—			—			(2,579		)
Tax benefit related to share-based awards	—			(1		)	186			—			185
Proceeds from parent contributions	—			—			90,450			(90,450		)	—
Net cash (used for) provided by financing activities	9,596			(162,745		)	145,684			(90,450		)	(97,915		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(2,174		)	—			(2,174		)
Net (decrease) increase in cash and cash equivalents	(9,691		)	2			(356,552		)	—			(366,241		)
Cash and cash equivalents, beginning of period	10,847			20			630,835			—			641,702
Cash and cash equivalents, end of period	$	1,156		$	22		$	274,283		$	—		$	275,461

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Summary of Significant Accounting Policies

Interim Financial Information

Interim Financial Information

The unaudited consolidated financial statements of Nabors are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”).  Certain reclassifications have been made to the prior periods to conform to the current-period presentation, with no effect on our consolidated financial position, results of operations or cash flows.  Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted.  Therefore, these financial statements should be read along with our annual report on Form 10-K for the year ended December 31, 2011 (“2011 Annual Report”).  In management’s opinion, the consolidated financial statements contain all adjustments necessary to present fairly our financial position as of September 30, 2012, the results of our operations and other comprehensive income for the three and nine months ended September 30, 2012 and 2011, and cash flows and changes in equity for the nine months ended September 30, 2012 and 2011, in accordance with GAAP.  Interim results for the three and nine months ended September 30, 2012 may not be indicative of results that will be realized for the full year ending December 31, 2012.

Our independent registered public accounting firm has reviewed and issued a report on these consolidated interim financial statements in accordance with standards established by the Public Company Accounting Oversight Board.  Pursuant to Rule 436(c) under the Securities Act of 1933, as amended (the “Securities Act”), this report should not be considered a part of any registration statement prepared or certified within the meanings of Sections 7 and 11 of such Act.

Principles of Consolidation

Principles of Consolidation

Our consolidated financial statements include the accounts of Nabors, as well as all majority-owned and nonmajority-owned subsidiaries required to be consolidated under GAAP.  All significant intercompany accounts and transactions are eliminated in consolidation.

Investments in operating entities where we have the ability to exert significant influence, but where we do not control operating and financial policies, are accounted for using the equity method.  Our share of the net income (loss) of these entities is recorded as earnings (losses) from unconsolidated affiliates in our consolidated statements of income (loss), and our investment in these entities is included in both investment in unconsolidated affiliates and assets held for sale in our consolidated balance sheets. The portion of such investments included in investments in unconsolidated affiliates totaled $70.2 million and $371.0 million as of September 30, 2012 and December 31, 2011, respectively.  At each of September 30, 2012 and December 31, 2011, the portion of such investments included in assets held for sale totaled $13.7 million.  See Note 4 — Discontinued Operations for additional information.

We have investments in offshore funds, which are classified as long-term investments and are accounted for using the equity method of accounting based on our ownership interest in each fund.

Inventory

Inventory

Inventory is stated at the lower of cost or market. Cost is determined using the first-in, first-out method and includes the cost of materials, labor and manufacturing overhead.  Inventory included the following:

	September 30,		December 31,
	2012		2011
	(In thousands)
Raw materials	$	148,323	$	133,480
Work-in-progress	45,959		50,951
Finished goods	62,876		88,421
	$	257,158	$	272,852

Goodwill

Goodwill

We determined it was necessary to perform our annual goodwill impairment test, a Level 3 fair value measurement, during the second quarter of 2012.  The impairment test compares the estimated fair value of the reporting unit to its carrying amount.  If the carrying amount exceeds the fair value, a second step is required to measure the goodwill impairment loss.  This second step compares the implied fair value of the reporting unit’s goodwill to its carrying amount.  If the carrying amount exceeds the implied fair value, an impairment loss is recognized in an amount equal to the excess.  Our goodwill impairment test results required the second step measurement for two reporting units.

The fair values calculated in these impairment tests were determined using discounted cash flow models involving assumptions based on our utilization of rigs or other oil and gas service equipment, revenues and earnings from affiliates, as well as direct costs, general and administrative costs, depreciation, applicable income taxes, capital expenditures and working capital requirements.  Our discounted cash flow projections for each reporting unit were based on financial forecasts.  The future cash flows were discounted to present value using discount rates determined to be appropriate for each reporting unit.  Terminal values for each reporting unit were calculated using a Gordon Growth methodology with a long-term growth rate of 3%.

Our estimated fair values of our reporting units incorporate judgment and the use of estimates by management.  Potential factors requiring assessment include a further or sustained decline in our stock price, declines in natural gas and oil prices, a variance in results of operations from forecasts, and additional transactions in the oil and gas industry.  Another factor in determining whether impairment has occurred is the relationship between our market capitalization and our book value. As part of our annual review, we compared the sum of our reporting units’ estimated fair value, which included the estimated fair value of non-operating assets and liabilities, less debt, to our market capitalization and assessed the reasonableness of our estimated fair value. Any of the above-mentioned factors may cause us to re-evaluate goodwill during any quarter throughout the year.

The carrying amounts and change of goodwill for our operating segments as of and for the nine months ended September 30, 2012 were as follows:

	Balance as of December 31, 2011		Acquisitions and Purchase Price Adjustments		Disposals and Impairments			Cumulative Translation Adjustment		Balance as of September 30, 2012
	(In thousands)
Drilling and Rig Services:
U.S. Lower 48 Land Drilling	$	30,154	$	—	$	—		$	—	$	30,154
U.S. Offshore	7,296		—		7,296		(1)	—		—
Alaska	19,995		—		—			—		19,995
International	18,983		—		18,983		(1)	—		—
Other Rig Services	34,766		—		3,035		(2)	518		32,249
Subtotal Drilling and Rig Services	111,194		—		29,314			518		82,398
Completion and Production Services:
U.S. Land Well-servicing	55,072		—		—			—		55,072
Pressure Pumping	334,992		—		—			—		334,992
Subtotal Completion and Production Services	390,064		—		—			—		390,064
Total	$	501,258	$	—	$	29,314		$	518	$	472,462

(1)Represents the impairment of goodwill associated with our U.S. Offshore and International reporting units. As of June 30, 2012, these reporting units had no recorded goodwill. The impairments were deemed necessary due to the prolonged uncertainty of utilization of some of our rigs as a result of changes in our customers’ plans for future drilling operations in the Gulf of Mexico as well as our international markets. A significantly prolonged period of lower natural gas prices or changes in laws and regulations could continue to adversely affect the demand for and prices of our services, which could result in future goodwill impairment charges for other reporting units due to the potential impact on our estimate of our future operating results.

(2)Represents the removal of goodwill in connection with our sale of Peak USA to an unrelated third party for $13.5 million cash during the second quarter of 2012.  Peak USA, a subsidiary included in our Other Rig Services reporting unit, provided trucking and logistics services to the oilfield service market in the U.S. Lower 48 states.

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Supplemental Balance Sheet, Income Statement and Cash Flow Information (Details 3) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Supplemental Balance Sheet, Income Statement and Cash Flow Information
Net unrealized gains (losses) from trading securities	$ 4.2	$ (1.4)	$ 11.6	$ (8.1)
Realized gain on debt securities			14.0
Realized gain on long term investments			$ 12.9

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) In Thousands, unless otherwise specified	Total	Common Shares	Capital in Excess of Par Value	Accumulated Other Comprehensive Income	Retained Earnings	Treasury Shares	Non-controlling Interest
Balances at Dec. 31, 2010	$ 5,342,863	$ 315	$ 2,255,787	$ 342,052	$ 3,707,881	$ (977,873)	$ 14,701
Balances (in shares) at Dec. 31, 2010		315,034
Increase (Decrease) in Stockholders' Equity
Net income (loss)	349,174				349,529		(355)
Comprehensive income (loss), net of tax	(73,357)			(72,897)			(460)
Issuance of common shares for stock options exercised, net of surrender of unexercised stock options	12,175	1	12,174
Issuance of common shares for stock options exercised, net of surrender of unexercised stock options (in shares)	1,000	1,006
Other	(4,565)	1	(2,407)				(2,159)
Other (in shares)		882
Share-based compensation	17,249		17,249
Balances at Sep. 30, 2011	5,643,539	317	2,282,803	269,155	4,057,410	(977,873)	11,727
Balances (in shares) at Sep. 30, 2011		316,922
Balances at Dec. 31, 2011	5,601,217	317	2,287,743	321,264	3,956,364	(977,873)	13,402
Balances (in shares) at Dec. 31, 2011		317,042
Increase (Decrease) in Stockholders' Equity
Net income (loss)	136,504				136,957		(453)
Comprehensive income (loss), net of tax	41,633			41,216			417
Issuance of common shares for stock options exercised, net of surrender of unexercised stock options	(4,007)	1	(4,008)
Issuance of common shares for stock options exercised, net of surrender of unexercised stock options (in shares)	1,100	1,111
Capital contribution from forgiveness of liability, net of tax	62,734		62,734
Issuance of treasury shares, net of tax benefit	7,750		(25,496)			33,246
Other	(3,248)		(2,126)				(1,122)
Share-based compensation	13,541	1	13,540
Share-based compensation (in shares)		644
Balances at Sep. 30, 2012	$ 5,856,124	$ 319	$ 2,332,387	$ 362,480	$ 4,093,321	$ (944,627)	$ 12,244
Balances (in shares) at Sep. 30, 2012		318,797

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
CONSOLIDATED BALANCE SHEETS
Common shares, par value (in dollars per share)	$ 0.001	$ 0.001
Common shares, shares authorized	800,000	800,000
Common shares, shares issued	318,797	317,042
Treasury shares, at cost	28,414	29,414

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Common Shares

9 Months Ended

Sep. 30, 2012

Common Shares

Common Shares

Note 10 Common Shares

During the nine months ended September 30, 2012, our employees exercised vested options and surrendered unexercised vested stock options to acquire 1.1 million of our common shares. We received $17.0 million relating to exercised vested options. We used approximately $21.0 million to repurchase surrendered unexercised vested options and to satisfy related tax withholding obligations pursuant to stock option share settlements and exercises by some of the employees. During the nine months ended September 30, 2011, our employees exercised vested options to acquire 1.0 million of our common shares, resulting in proceeds of $12.2 million.  For each of the nine months ended September 30, 2012 and 2011, we withheld .1 million of our common shares with a fair value of $2.1 million and $2.6 million, respectively, to satisfy tax withholding obligations in connection with the vesting of all stock awards.

At December 31, 2011, accrued liabilities included a provision of $100 million for a contingent liability related to the change of our Chief Executive Officer in October 2011. In February 2012, our former Chief Executive Officer elected to forego triggering that payment. In connection with that development, we announced plans to make charitable contributions to benefit the needs of our employees and other community-based causes.  During the first quarter of 2012, we contributed one million of our treasury shares to the Nabors Charitable Foundation, a 501(c)(3) organization, in support of this objective.  We consider our former Chief Executive Officer to be a significant shareholder of the Company and, therefore, have recorded these transactions as equity. We recorded the release of the contingent liability, net of tax, through capital in excess of par as a forgiveness of liability from a beneficial owner.  We recorded the donation of the treasury shares at their weighted-average cost, net of tax, through capital in excess of par.

Shareholder Rights Plan

On July 16, 2012, the Board of Directors declared the issuance of one preferred share purchase right (a “Right”) for each Common Share issued and outstanding on July 27, 2012 (the “Record Date”) to the shareholders of record on that date.  Each Right entitles the registered holder to purchase from the Company one one-thousandth of a Series A Junior Participating Preferred Share, par value US$0.001 per share (the “Preferred Shares”), of the Company, at a price of $70.00 per one one-thousandth of a Preferred Share (the “Purchase Price”), subject to adjustment.

Until the Distribution Date, the Rights will be evidenced, with respect to any Common Share certificates issued and outstanding as of the Record Date, by such Common Share certificate together with a copy of a summary of rights. The Distribution Date is defined as the earlier to occur of:

(i)10 days following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired beneficial ownership (including derivative positions) of 10% or more of the issued and outstanding Common Shares (or, in the event an exchange is effected in accordance with Section 24 of the Rights Agreement and the Board of Directors determines that a later date is advisable, then such later date that is not more than 20 days after such public announcement); or

(ii)10 business days (or such later date as may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 10% or more of the issued and outstanding Common Shares.

The Rights are not exercisable until the Distribution Date. The Rights will expire on July 16, 2013 (the “Final Expiration Date”), unless the Final Expiration Date is extended or the Rights are earlier redeemed by the Company, in each case.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Document and Entity Information
Entity Registrant Name	NABORS INDUSTRIES LTD
Entity Central Index Key	0001163739
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		290,383,841
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

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Subsidiary Preferred Stock

9 Months Ended

Sep. 30, 2012

Subsidiary Preferred Stock

Subsidiary Preferred Stock

Note 11 Subsidiary Preferred Stock

During the three months ended September 30, 2012, dividends of $0.75 million on outstanding shares of preferred stock were declared and paid in full.

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CONSOLIDATED STATEMENTS OF INCOME (LOSS) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenues and other income:
Operating revenues	$ 1,766,419	$ 1,608,504	$ 5,393,959	$ 4,325,714
Earnings (losses) from unconsolidated affiliates	(99,527)	33,723	(302,513)	59,305
Investment income (loss)	7,224	727	32,844	12,032
Total revenues and other income	1,674,116	1,642,954	5,124,290	4,397,051
Costs and other deductions:
Direct costs	1,136,198	1,019,412	3,444,270	2,687,970
General and administrative expenses	131,887	119,431	401,845	358,352
Depreciation and amortization	269,597	234,085	778,234	684,337
Interest expense	63,604	58,060	189,717	195,781
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	10,263	(11,607)	21,837	(1,100)
Impairments and other charges		98,072	147,503	98,072
Total costs and other deductions	1,611,549	1,517,453	4,983,406	4,023,412
Income (loss) from continuing operations before income taxes	62,567	125,501	140,884	373,639
Income tax expense (benefit):
Current	50,979	19,676	111,683	47,214
Deferred	(54,980)	17,885	(82,832)	71,546
Total income tax expense (benefit)	(4,001)	37,561	28,851	118,760
Subsidiary preferred stock dividend	750	750	2,250	2,250
Income (loss) from continuing operations, net of tax	65,818	87,190	109,783	252,629
Income (loss) from discontinued operations, net of tax	10,826	(12,226)	26,721	96,545
Net income (loss)	76,644	74,964	136,504	349,174
Less: Net (income) loss attributable to noncontrolling interest	(988)	(708)	453	355
Net income (loss) attributable to Nabors	$ 75,656	$ 74,256	$ 136,957	$ 349,529
Earnings (losses) per share:
Basic from continuing operations (in dollars per share)	$ 0.22	$ 0.30	$ 0.38	$ 0.88
Basic from discontinued operations (in dollars per share)	$ 0.04	$ (0.04)	$ 0.09	$ 0.34
Total Basic (in dollars per share)	$ 0.26	$ 0.26	$ 0.47	$ 1.22
Diluted from continuing operations (in dollars per share)	$ 0.22	$ 0.30	$ 0.38	$ 0.86
Diluted from discontinued operations (in dollars per share)	$ 0.04	$ (0.05)	$ 0.09	$ 0.33
Total Diluted (in dollars per share)	$ 0.26	$ 0.25	$ 0.47	$ 1.19
Weighted-average number of common shares outstanding:
Basic (in shares)	290,367	287,487	289,822	286,971
Diluted (in shares)	292,501	291,986	292,290	292,991

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Cash and Cash Equivalents and Short-term Investments

9 Months Ended

Sep. 30, 2012

Cash and Cash Equivalents and Short-term Investments

Cash and Cash Equivalents and Short-term Investments

Note 5 Cash and Cash Equivalents and Short-term Investments

Our cash and cash equivalents and short-term investments consisted of the following:

	September 30,		December 31,
	2012		2011
	(In thousands)
Cash and cash equivalents	$	471,562	$	398,575
Short-term investments:
Trading equity securities	23,242		11,600
Available-for-sale equity securities	89,689		71,433
Available-for-sale debt securities	35,070		57,881
Total short-term investments	$	148,001	$	140,914

Certain information related to our cash and cash equivalents and short-term investments follows:

	September 30, 2012							December 31, 2011
	FairValue		GrossUnrealizedHoldingGains		GrossUnrealizedHoldingLosses			FairValue		GrossUnrealizedHoldingGains		GrossUnrealizedHoldingLosses
					(In thousands)
Cash and cash equivalents	$	471,562	$	—	$	—		$	398,575	$	—	$	—
Short-term investments:
Trading equity securities	23,242		17,517		—			11,600		5,876		—
Available-for-sale equity securities	89,689		53,798		(2,467		)	71,433		33,075		—
Available-for-sale debt securities:
Commercial paper and CDs	180		—		—			1,230		—		—
Corporate debt securities	31,680		10,826		(1,919		)	51,300		22,494		(2,095		)
Mortgage-backed debt securities	246		15		—			309		10		—
Mortgage-CMO debt securities	1,078		12		(4		)	2,547		13		(15		)
Asset-backed debt securities	1,886		—		(140		)	2,495		—		(238		)
Total available-for-sale debt securities	35,070		10,853		(2,063		)	57,881		22,517		(2,348		)
Total available-for-sale securities	124,759		64,651		(4,530		)	129,314		55,592		(2,348		)
Total short-term investments	148,001		82,168		(4,530		)	140,914		61,468		(2,348		)
Total cash, cash equivalents and short-term investments	$	619,563	$	82,168	$	(4,530	)	$	539,489	$	61,468	$	(2,348	)

Certain information related to the gross unrealized losses of our cash and cash equivalents and short-term investments follows:

	As of September 30, 2012
	Less Than 12 Months				More Than 12 Months
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(In thousands)
Available-for-sale equity securities	$	16,428	$	2,467	$	—	$	—
Available-for-sale debt securities:
Corporate debt securities (1)	—		—		17,900		1,919
Mortgage-CMO debt securities (2)	842		3		45		1
Asset-backed debt securities (2)	—		—		1,886		140
Total available-for-sale debt securities	842		3		19,831		2,060
Total	$	17,270	$	2,470	$	19,831	$	2,060

(1)Our unrealized loss on corporate debt securities relates to our investment in NFR Energy LLC’s 9.75% senior notes. This investment is in addition to our equity interest in NFR Energy LLC. The senior notes mature in 2017 and interest is paid semi-annually on February 15 and August 15.  We do not intend to sell this investment, and it is less likely than not that we will be required to sell it to satisfy our own cash flow and working capital requirements.  We believe that we will continue to collect all amounts due according to the contractual terms of the investment and, therefore, do not consider the decline in value of the investment to be other-than-temporary at September 30, 2012. See Note 8 Investments in Unconsolidated Affiliates for additional discussion of our equity investment.

(2)Our unrealized losses on available-for-sale debt securities held for more than one year are comprised of various types of securities.  Each of these securities has a rating ranging from “A” to “AAA” from Standard & Poor’s and ranging from “A2” to “Aaa” from Moody’s Investors Service and is considered of high credit quality.  In each case, we do not intend to sell these investments, and it is less likely than not that we will be required to sell them to satisfy our own cash flow and working capital requirements.  We believe that we will be able to collect all amounts due according to the contractual terms of each investment and, therefore, do not consider the decline in value of these investments to be other-than-temporary at September 30, 2012.

The estimated fair values of our corporate, mortgage-backed, mortgage-CMO and asset-backed debt securities at September 30, 2012, classified by time to contractual maturity, are shown below. Expected maturities differ from contractual maturities because the issuers of the securities may have the right to repay obligations without prepayment penalties and we may elect to sell the securities prior to the contractual maturity date.

	EstimatedFair Value
	September 30, 2012
	(In thousands)
Debt securities:
Due in one year or less	$	180
Due after one year through five years	17,900
Due in more than five years	16,990
Total debt securities	$	35,070

Certain information regarding our debt and equity securities is presented below:

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2012		2011		2012		2011
	(In thousands)
Available-for-sale:
Proceeds from sales and maturities	$	3,953	$	342	$	23,186	$	1,124
Realized gains (losses), net	1,732		2		14,007		(5		)

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Discontinued Operations

9 Months Ended

Sep. 30, 2012

Discontinued Operations

Discontinued Operations

Note 4 Discontinued Operations

Assets held for sale included the following:

(In thousands)	September 30,2012		December 31, 2011
Assets Held for Sale
Oil and Gas	$	394,710	$	385,414
Other Rig Services	9,524		16,086
Assets Held for Sale	$	404,234	$	401,500

Our condensed statements of income (loss) from discontinued operations for the three and nine months ended September 30, 2012 and 2011 were as follows:

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	2012			2011			2012			2011
	(In thousands)
Operating revenues and Earnings (losses) from unconsolidated affiliates
Oil and Gas (1)	$	12,859		$	10,630		$	19,079		$	116,046
Other Rig Services (2)	$	8,334		$	9,341		$	18,750		$	21,180
Income (loss) from Oil and Gas discontinued operations:
Income (loss) from discontinued operations	$	5,826		$	(20,167	)	$	(2,095	)	$	42,746
Gain (loss) on sale of wholly owned assets	3,662			—			39,772			39,944
Less: income tax expense (benefit)	(1,604		)	(6,189		)	2,623			(14,752		)
Income (loss) from Oil and Gas discontinued operations, net of tax	$	11,092		$	(13,978	)	$	35,054		$	97,442
Income (loss) from Other Rig Services discontinued operations: (2)
Income (loss) from discontinued operations	$	2,199		$	2,336		$	(3,320	)	$	(1,197	)
Gain (loss) on sale of assets	(2,554		)	—			(7,796		)	—
Less: income tax expense (benefit)	(89		)	584			(2,783		)	(300		)
Income (loss) from Other Rig Services discontinued operations, net of tax	$	(266	)	$	1,752		$	(8,333	)	$	(897	)

(1)Includes approximately $85 million of equity in earnings during the nine months ended September 30, 2011 for our proportionate share of Remora’s net income, inclusive of the gains recognized for asset sales during the first nine months of 2011.

(2)Represents our aircraft logistics operations in Canada included in our Other Rig Services operating segment.

In April 2012, we sold our remaining wholly owned oil and gas business in Colombia to an unrelated third party for a cash purchase price of $72.6 million, which resulted in a pre-tax gain of approximately $48.5 million. This business was included in our assets held for sale as part of our Oil and Gas operating segment.

In May 2012, we sold some of our U.S. wholly owned oil and gas assets in the Fayetteville Shale, Floyd Shale, and Barnett Shale areas to unrelated third parties for cumulative cash receipts of $5.7 million, which did not result in any gain or loss.  In September 2012, we sold additional assets from our U.S. wholly owned oil and gas business for $7.3 million, which resulted in a gain of approximately $3.7 million. These assets were included in our assets held for sale as part of our Oil and Gas operating segment. Based on current market conditions, we adjusted the carrying value of our U.S. wholly owned oil and gas business in the second quarter of 2012 to reflect our assessment of its current fair value.

Our contracts with pipeline companies include pipeline transmission commitments in the Horn River Basin.  During the year ended December 31, 2011, we evaluated current production levels, natural gas prices and the anticipated sales cycle related to the sale of properties corresponding to these commitments.  As a result, we recorded liabilities for excess pipeline capacity. At September 30, 2012, we recorded liabilities of $92.2 million, of which $68.5 million is included in accrued liabilities and $23.7 million is included in other long-term liabilities. At December 31, 2011, we recorded liabilities of $125.7 million, of which $54.3 million is included in accrued liabilities and $71.4 million is included in other long-term liabilities. These amounts represent our best estimate of the excess capacity of the pipeline, based upon the estimated sales date of the properties, as compared to the contractual commitments. Our commitments beyond December 31, 2013 could approximate $274.8 million if the related properties are not sold or developed. Decreases in actual production, natural gas prices or a change in the estimated sales date could result in future charges related to excess capacity of the pipeline that may materially impact our results of operations.

Based on current market conditions, we adjusted the carrying value of our aircraft logistics assets by $7.8 million in 2012 to reflect our assessment of its current fair value.

XML

Condensed Consolidating Financial Information

9 Months Ended

Sep. 30, 2012

Condensed Consolidating Financial Information

Condensed Consolidating Financial Information

Note 16 Condensed Consolidating Financial Information

Nabors has fully and unconditionally guaranteed all of the issued public debt securities of Nabors Delaware. The following condensed consolidating financial information is included so that separate financial statements of Nabors Delaware are not required to be filed with the SEC. The condensed consolidating financial statements present investments in both consolidated and unconsolidated affiliates using the equity method of accounting.

The following condensed consolidating financial information presents condensed consolidating balance sheets as of September 30, 2012 and December 31, 2011, statements of income (loss) and statements of other comprehensive income for the three and nine months ended September 30, 2012 and 2011, and statements of cash flows for the nine months ended September 30, 2012 and 2011, of (a) Nabors, parent/guarantor, (b) Nabors Delaware, issuer of public debt securities guaranteed by Nabors, (c) the non-guarantor subsidiaries, (d) consolidating adjustments necessary to consolidate Nabors and its subsidiaries and (e) Nabors on a consolidated basis.

Condensed Consolidating Balance Sheets

	September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)		NaborsDelaware(Issuer/Guarantor)			OtherSubsidiaries(Non-Guarantors)		ConsolidatingAdjustments			ConsolidatedTotal
ASSETS
Current assets:
Cash and cash equivalents	$	698	$	7,061		$	463,803	$	—		$	471,562
Short-term investments	—		—			148,001		—			148,001
Assets held for sale	—		—			404,234		—			404,234
Accounts receivable, net	—		—			1,529,232		—			1,529,232
Inventory	—		—			257,158		—			257,158
Deferred income taxes	—		—			111,673		—			111,673
Other current assets	50		1,028			210,711		—			211,789
Total current assets	748		8,089			3,124,812		—			3,133,649
Long-term investments and other receivables	—		—			5,301		—			5,301
Property, plant and equipment, net	—		38,171			8,855,913		—			8,894,084
Goodwill	—		—			472,462		—			472,462
Intercompany receivables	173,984		—			537,881		(711,865		)	—
Investment in unconsolidated affiliates	5,671,621		5,104,716			416,904		(11,123,069		)	70,172
Other long-term assets	—		28,900			319,993		—			348,893
Total assets	$	5,846,353	$	5,179,876		$	13,733,266	$	(11,834,934	)	$	12,924,561
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	—		$	389	$	—		$	389
Trade accounts payable	62		23			560,556		—			560,641
Accrued liabilities	2,411		33,826			537,399		—			573,636
Total current liabilities	2,473		33,849			1,098,344		—			1,134,666
Long-term debt	—		4,678,822			74		—			4,678,896
Other long-term liabilities	—		31,885			416,533		—			448,418
Deferred income taxes	—		(7,468		)	744,737		—			737,269
Intercompany payable	—		444,034			267,831		(711,865		)	—
Total liabilities	2,473		5,181,122			2,527,519		(711,865		)	6,999,249
Subsidiary preferred stock	—		—			69,188		—			69,188
Shareholders’ equity	5,843,880		(1,246		)	11,124,315		(11,123,069		)	5,843,880
Noncontrolling interest	—		—			12,244		—			12,244
Total equity	5,843,880		(1,246		)	11,136,559		(11,123,069		)	5,856,124
Total liabilities and equity	$	5,846,353	$	5,179,876		$	13,733,266	$	(11,834,934	)	$	12,924,561

	December 31, 2011
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)		Other Subsidiaries (Non- Guarantors)		Consolidating Adjustments			Consolidated Total
	ASSETS
Current assets:
Cash and cash equivalents	$	203	$	21	$	398,351	$	—		$	398,575
Short-term investments	—		—		140,914		—			140,914
Assets held for sale	—		—		401,500		—			401,500
Accounts receivable, net	—		—		1,576,555		—			1,576,555
Inventory	—		—		272,852		—			272,852
Deferred income taxes	—		—		127,874		—			127,874
Other current assets	50		671		169,323		—			170,044
Total current assets	253		692		3,087,369		—			3,088,314
Long-term investments and other receivables	—		—		11,124		—			11,124
Property, plant and equipment, net	—		40,792		8,589,154		—			8,629,946
Goodwill	—		—		501,258		—			501,258
Intercompany receivables	164,760		—		537,881		(702,641		)	—
Investment in unconsolidated affiliates	5,429,029		6,084,868		1,843,654		(12,986,530		)	371,021
Other long-term assets	—		32,037		278,440		—			310,477
Total assets	$	5,594,042	$	6,158,389	$	14,848,880	$	(13,689,171	)	$	12,912,140
	LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	274,604	$	722	$	—		$	275,326
Trade accounts payable	42		23		782,688		—			782,753
Accrued liabilities	6,185		100,101		638,197		—			744,483
Total current liabilities	6,227		374,728		1,421,607		—			1,802,562
Long-term debt	—		4,297,500		50,990		—			4,348,490
Other long-term liabilities	—		32,303		260,455		—			292,758
Deferred income taxes	—		11,221		786,704		—			797,925
Intercompany payable	—		379,400		323,241		(702,641		)	—
Total liabilities	6,227		5,095,152		2,842,997		(702,641		)	7,241,735
Subsidiary preferred stock	—		—		69,188		—			69,188
Shareholders’ equity	5,587,815		1,063,237		11,923,293		(12,986,530		)	5,587,815
Noncontrolling interest	—		—		13,402		—			13,402
Total equity	5,587,815		1,063,237		11,936,695		(12,986,530		)	5,601,217
Total liabilities and equity	$	5,594,042	$	6,158,389	$	14,848,880	$	(13,689,171	)	$	12,912,140

Condensed Consolidating Statements of Income (Loss)

	Three Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non—Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	1,766,419		$	—		$	1,766,419
Earnings (losses) from unconsolidated affiliates	—		—			(99,527		)	—			(99,527		)
Earnings (losses) from consolidated affiliates	77,976		(152,036		)	(178,917		)	252,977			—
Investment income (loss)	—		2			7,222			—			7,224
Intercompany interest income	—		17,423			—			(17,423		)	—
Total revenues and other income	77,976		(134,611		)	1,495,197			235,554			1,674,116
Costs and other deductions:
Direct costs	—		—			1,136,198			—			1,136,198
General and administrative expenses	1,900		159			130,248			(420		)	131,887
Depreciation and amortization	—		902			268,695			—			269,597
Interest expense	—		67,391			(3,787		)	—			63,604
Intercompany interest expense	—		—			17,423			(17,423		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	420		(250		)	9,673			420			10,263
Impairments and other charges	—		—			—			—			—
Total costs and other deductions	2,320		68,202			1,558,450			(17,423		)	1,611,549
Income (loss) from continuing operations before income taxes	75,656		(202,813		)	(63,253		)	252,977			62,567
Income tax expense (benefit)	—		(18,787		)	14,786			—			(4,001		)
Subsidiary preferred stock dividend	—		—			750			—			750
Income (loss) from continuing operations, net of tax	75,656		(184,026		)	(78,789		)	252,977			65,818
Income (loss) from discontinued operations, net of tax	—		—			10,826			—			10,826
Net income (loss)	75,656		(184,026		)	(67,963		)	252,977			76,644
Less: Net (income) loss attributable to noncontrolling interest	—		—			(988		)	—			(988		)
Net income (loss) attributable to Nabors	$	75,656	$	(184,026	)	$	(68,951	)	$	252,977		$	75,656

	Three Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non—Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	1,608,504		$	—		$	1,608,504
Earnings (losses) from unconsolidated affiliates	—		—			33,723			—			33,723
Earnings (losses) from consolidated affiliates	77,212		111,096			87,037			(275,345		)	—
Investment income (loss)	—		—			727			—			727
Intercompany interest income	—		16,615			—			(16,615		)	—
Total revenues and other income	77,212		127,711			1,729,991			(291,960		)	1,642,954
Costs and other deductions:
Direct costs	—		—			1,019,412			—			1,019,412
General and administrative expenses	2,809		154			116,616			(148		)	119,431
Depreciation and amortization	—		872			233,213			—			234,085
Interest expense	—		64,655			(6,595		)	—			58,060
Intercompany interest expense	—		—			16,615			(16,615		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	147		(574		)	(11,328		)	148			(11,607		)
Impairments and other charges	—		—			98,072			—			98,072
Total costs and other deductions	2,956		65,107			1,466,005			(16,615		)	1,517,453
Income (loss) from continuing operations before income taxes	74,256		62,604			263,986			(275,345		)	125,501
Income tax expense (benefit)	—		(17,942		)	55,503			—			37,561
Subsidiary preferred stock dividend	—		—			750			—			750
Income (loss) from continuing operations, net of tax	74,256		80,546			207,733			(275,345		)	87,190
Income (loss) from discontinued operations, net of tax	—		—			(12,226		)	—			(12,226		)
Net income (loss)	74,256		80,546			195,507			(275,345		)	74,964
Less: Net (income) loss attributable to noncontrolling interest	—		—			(708		)	—			(708		)
Net income (loss) attributable to Nabors	$	74,256	$	80,546		$	194,799		$	(275,345	)	$	74,256

	Nine Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non—Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	5,393,959		$	—		$	5,393,959
Earnings (losses) from unconsolidated affiliates	—		—			(302,513		)	—			(302,513		)
Earnings (losses) from consolidated affiliates	143,448		(132,659		)	(212,494		)	201,705			—
Investment income (loss)	—		18			32,826			—			32,844
Intercompany interest income	—		51,433			—			(51,433		)	—
Total revenues and other income	143,448		(81,208		)	4,911,778			150,272			5,124,290
Costs and other deductions:
Direct costs	—		—			3,444,270			—			3,444,270
General and administrative expenses	5,449		349			397,089			(1,042		)	401,845
Depreciation and amortization	—		2,707			775,527			—			778,234
Interest expense	—		203,826			(14,109		)	—			189,717
Intercompany interest expense	—		—			51,433			(51,433		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	1,042		(1,229		)	20,982			1,042			21,837
Impairments and other charges	—		—			147,503			—			147,503
Total costs and other deductions	6,491		205,653			4,822,695			(51,433		)	4,983,406
Income (loss) from continuing operations before income taxes	136,957		(286,861		)	89,083			201,705			140,884
Income tax expense (benefit)	—		(57,055		)	85,906			—			28,851
Subsidiary preferred stock dividend	—		—			2,250			—			2,250
Income (loss) from continuing operations, net of tax	136,957		(229,806		)	927			201,705			109,783
Income (loss) from discontinued operations, net of tax	—		—			26,721			—			26,721
Net income (loss)	136,957		(229,806		)	27,648			201,705			136,504
Less: Net (income) loss attributable to noncontrolling interest	—		—			453			—			453
Net income (loss) attributable to Nabors	$	136,957	$	(229,806	)	$	28,101		$	201,705		$	136,957

	Nine Months Ended September 30, 2011
(In thousands)	Nabors (Parent/ Guarantor)		Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Revenues and other income:
Operating revenues	$	—	$	—		$	4,325,714		$	—		$	4,325,714
Earnings (losses) from unconsolidated affiliates	—		—			59,305			—			59,305
Earnings (losses) from consolidated affiliates	358,778		189,960			109,212			(657,950		)	—
Investment income (loss)	4		68			11,960			—			12,032
Intercompany interest income	—		52,704			—			(52,704		)	—
Total revenues and other income	358,782		242,732			4,506,191			(710,654		)	4,397,051
Costs and other deductions:
Direct costs	—		—			2,687,970			—			2,687,970
General and administrative expenses	8,803		244			349,755			(450		)	358,352
Depreciation and amortization	—		2,614			681,723			—			684,337
Interest expense	—		211,063			(15,282		)	—			195,781
Intercompany interest expense	—		—			52,704			(52,704		)	—
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	450		(1,382		)	(618		)	450			(1,100		)
Impairments and other charges	—		—			98,072			—			98,072
Total costs and other deductions	9,253		212,539			3,854,324			(52,704		)	4,023,412
Income (loss) from continuing operations before income taxes	349,529		30,193			651,867			(657,950		)	373,639
Income tax expense (benefit)	—		(59,114		)	177,874			—			118,760
Subsidiary preferred stock dividend	—		—			2,250			—			2,250
Income (loss) from continuing operations, net of tax	349,529		89,307			471,743			(657,950		)	252,629
Income (loss) from discontinued operations, net of tax	—		—			96,545			—			96,545
Net income (loss)	349,529		89,307			568,288			(657,950		)	349,174
Less: Net (income) loss attributable to noncontrolling interest	—		—			355			—			355
Net income (loss) attributable to Nabors	$	349,529	$	89,307		$	568,643		$	(657,950	)	$	349,529

Condensed Consolidating Statements of Other Comprehensive Income

	Three Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	75,656		$	(184,026	)	$	(68,951	)	$	252,977		$	75,656
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	31,550			(99		)	31,451			(31,352		)	31,550
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	13,667			6			13,673			(13,679		)	13,667
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(1,523		)	(1,200		)	(2,723		)	3,923			(1,523		)
Unrealized gains (losses) on marketable securities	12,144			(1,194		)	10,950			(9,756		)	12,144
Pension liability amortization	260			260			520			(780		)	260
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	166			166			166			(332		)	166
Other comprehensive income, before tax	44,120			(867		)	43,087			(42,220		)	44,120
Income tax expense related to items of other comprehensive income	(272		)	(272		)	(604		)	876			(272		)
Other comprehensive income, net of tax	44,392			(595		)	43,691			(43,096		)	44,392
Comprehensive income attributable to Nabors	120,048			(184,621		)	(25,260		)	209,881			120,048
Net income (loss) attributable to noncontrolling interest	988			—			988			(988		)	988
Translation adjustment to noncontrolling interest	390			—			390			(390		)	390
Comprehensive income attributable to noncontrolling interest	1,378			—			1,378			(1,378		)	1,378
Comprehensive income	$	121,426		$	(184,621	)	$	(23,882	)	$	208,503		$	121,426

	Three Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	74,256		$	80,546		$	194,799		$	(275,345	)	$	74,256
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	(86,856		)	(498		)	(87,354		)	87,852			(86,856		)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	(21,150		)	(136		)	(21,286		)	21,422			(21,150		)
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(4		)	—			(4		)	4			(4		)
Unrealized gains (losses) on marketable securities	(21,154		)	(136		)	(21,290		)	21,426			(21,154		)
Pension liability amortization	151			151			302			(453		)	151
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	191			191			191			(382		)	191
Other comprehensive income, before tax	(107,668		)	(292		)	(108,151		)	108,443			(107,668		)
Income tax expense related to items of other comprehensive income	68			68			76			(144		)	68
Other comprehensive income, net of tax	(107,736		)	(360		)	(108,227		)	108,587			(107,736		)
Comprehensive income attributable to Nabors	(33,480		)	80,186			86,572			(166,758		)	(33,480		)
Net income (loss) attributable to noncontrolling interest	708			—			708			(708		)	708
Translation adjustment to noncontrolling interest	(912		)	—			(912		)	912			(912		)
Comprehensive income attributable to noncontrolling interest	(204		)	—			(204		)	204			(204		)
Comprehensive income	$	(33,684	)	$	80,186		$	86,368		$	(166,554	)	$	(33,684	)

	Nine Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	136,957		$	(229,806	)	$	28,101		$	201,705		$	136,957
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	29,157			(100		)	29,057			(28,957		)	29,157
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	20,882			17			20,899			(20,916		)	20,882
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(14,007		)	(11,488		)	(25,495		)	36,983			(14,007		)
Unrealized gains (losses) on marketable securities	6,875			(11,471		)	(4,596		)	16,067			6,875
Pension liability amortization	780			779			1,560			(2,339		)	780
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	548			548			548			(1,096		)	548
Other comprehensive income, before tax	37,360			(10,244		)	26,569			(16,325		)	37,360
Income tax expense related to items of other comprehensive income	(3,856		)	(3,856		)	(7,892		)	11,748			(3,856		)
Other comprehensive income, net of tax	41,216			(6,388		)	34,461			(28,073		)	41,216
Comprehensive income attributable to Nabors	178,173			(236,194		)	62,562			173,632			178,173
Net income (loss) attributable to noncontrolling interest	(453		)	—			(453		)	453			(453		)
Translation adjustment to noncontrolling interest	417			—			417			(417		)	417
Comprehensive income attributable to noncontrolling interest	(36		)	—			(36		)	36			(36		)
Comprehensive income	$	178,137		$	(236,194	)	$	62,526		$	173,668		$	178,137

	Nine Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net income (loss) attributable to Nabors	$	349,529		$	89,307		$	568,643		$	(657,950	)	$	349,529
Other comprehensive income, before tax
Translation adjustment attributable to Nabors	(47,507		)	(422		)	(47,928		)	48,350			(47,507		)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	(26,034		)	49			(25,983		)	25,934			(26,034		)
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(5		)	—			(5		)	5			(5		)
Unrealized gains (losses) on marketable securities	(26,039		)	49			(25,988		)	25,939			(26,039		)
Pension liability amortization	451			451			900			(1,351		)	451
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	572			572			572			(1,144		)	572
Other comprehensive income, before tax	(72,523		)	650			(72,444		)	71,794			(72,523		)
Income tax expense related to items of other comprehensive income	374			374			569			(943		)	374
Other comprehensive income, net of tax	(72,897		)	276			(73,013		)	72,737			(72,897		)
Comprehensive income attributable to Nabors	276,632			89,583			495,630			(585,213		)	276,632
Net income (loss) attributable to noncontrolling interest	(355		)	—			(355		)	355			(355		)
Translation adjustment to noncontrolling interest	(460		)	—			(460		)	460			(460		)
Comprehensive income attributable to noncontrolling interest	(815		)	—			(815		)	815			(815		)
Comprehensive income	$	275,817		$	89,583		$	494,815		$	(584,398	)	$	275,817

Condensed Consolidating Statements of Cash Flows

	Nine Months Ended September 30, 2012
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net cash provided by (used for) operating activities	$	6,572		$	(88,960	)	$	1,206,939		$	(30,506	)	$	1,094,045
Cash flows from investing activities:
Purchases of investments	—			—			(949		)	—			(949		)
Sales and maturities of investments	—			—			30,111			—			30,111
Capital expenditures	—			—			(1,221,769		)	—			(1,221,769		)
Proceeds from sales of assets and insurance claims	—			—			128,432			—			128,432
Net cash provided by (used for) investing activities	—			—			(1,064,175		)	—			(1,064,175		)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	—			—			(1,748		)	—			(1,748		)
Proceeds from revolving credit facilities	—			710,000			—			—			710,000
Proceeds from issuance of common shares	(4,006		)	—			(1		)	—			(4,007		)
Reduction in long-term debt	—			(224,997		)	(51,235		)	—			(276,232		)
Paydown of revolving credit facilities	—			(380,000		)	—			—			(380,000		)
Purchase of restricted stock	(2,071		)	—			—			—			(2,071		)
Tax benefit related to share-based awards	—			—			(54		)	—			(54		)
Cash dividends paid	—			(9,003		)	(21,503		)	30,506			—
Net cash (used for) provided by financing activities	(6,077		)	96,000			(74,541		)	30,506			45,888
Effect of exchange rate changes on cash and cash equivalents	—			—			(2,771		)	—			(2,771		)
Net (decrease) increase in cash and cash equivalents	495			7,040			65,452			—			72,987
Cash and cash equivalents, beginning of period	203			21			398,351			—			398,575
Cash and cash equivalents, end of period	$	698		$	7,061		$	463,803		$	—		$	471,562

	Nine Months Ended September 30, 2011
(In thousands)	Nabors(Parent/Guarantor)			Nabors Delaware (Issuer/ Guarantor)			Other Subsidiaries (Non— Guarantors)			Consolidating Adjustments			Consolidated Total
Net cash provided by (used for) operating activities	$	6 ,163		$	227,747		$	874,224		$	—		$	1,108,134
Cash flows from investing activities:
Purchases of investments	—			—			(9,567		)	—			(9,567		)
Sales and maturities of investments	—			—			24,580			—			24,580
Cash paid for acquisition of businesses, net	—			—			(55,459		)	—			(55,459		)
Investment in unconsolidated affiliates	—			—			(54,762		)	—			(54,762		)
Distribution of proceeds from asset sales from unconsolidated affiliates	—			—			142,984			—			142,984
Capital expenditures	—			—			(1,532,597		)	—			(1,532,597		)
Proceeds from sales of assets and insurance claims	—			—			110,535			—			110,535
Cash paid for investments in consolidated affiliates	(25,450		)	(65,000		)	—			90,450			—
Net cash provided by (used for) investing activities	(25,450		)	(65,000		)	(1,374,286		)	90,450			(1,374,286		)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	—			—			5,074			—			5,074
Proceeds from issuance of long-term debt	—			697,578			—			—			697,578
Proceeds from revolving credit facilities	—			1,250,000			50,000			—			1,300,000
Proceeds from issuance of common shares	12,175			—			—			—			12,175
Debt issuance costs	—			(6,065		)	—			—			(6,065		)
Reduction in long-term debt	—			(1,404,245		)	(26		)	—			(1,404,271		)
Paydown of revolving credit facilities	—			(700,000		)	—			—			(700,000		)
Repurchase of equity component of convertible debt	—			(12		)	—			—			(12		)
Purchase of restricted stock	(2,579		)	—			—			—			(2,579		)
Tax benefit related to share-based awards	—			(1		)	186			—			185
Proceeds from parent contributions	—			—			90,450			(90,450		)	—
Net cash (used for) provided by financing activities	9,596			(162,745		)	145,684			(90,450		)	(97,915		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(2,174		)	—			(2,174		)
Net (decrease) increase in cash and cash equivalents	(9,691		)	2			(356,552		)	—			(366,241		)
Cash and cash equivalents, beginning of period	10,847			20			630,835			—			641,702
Cash and cash equivalents, end of period	$	1,156		$	22		$	274,283		$	—		$	275,461

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies

Commitments and Contingencies

Note 12 Commitments and Contingencies

Commitments

Employment Contract

The employment agreement for our CEO, Mr. Anthony G. Petrello, provides for a term through March 30, 2015, with automatic one-year extensions each April 1, unless either party gives notice of nonrenewal.  In the event of Mr. Petrello’s termination without cause or constructive termination without cause, he would be entitled to receive three times the average of his base salary and annual bonus during the three fiscal years preceding the termination.  If, by way of example, Mr. Petrello were terminated without cause subsequent to September 30, 2012, his payment would be approximately $31.1 million.  The formula will be reduced to two times the average stated above after April 1, 2015.  In the event of his death or disability, either he or his estate would be entitled to receive within 30 days thereafter a payment of $50 million.

We do not have insurance to cover, and we have not recorded an expense or accrued a liability relating to, this potential obligation.  See Note 18 Commitments and Contingencies to our 2011 Annual Report for additional discussion and description of Mr. Petrello’s employment agreement.

Contingencies

Income Tax Contingencies

We are subject to income taxes in the United States and numerous other jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. We are regularly audited by tax authorities. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different than what is reflected in income tax provisions and accruals. An audit or litigation could materially affect our financial position, income tax provision, net income, or cash flows in the period or periods challenged.

It is possible that future changes to tax laws (including tax treaties) could impact our ability to realize the tax savings recorded to date as well as future tax savings, resulting from our 2002 corporate reorganization.  See Note 13 — Income Taxes to our 2011 Annual Report for additional discussion.

On September 14, 2006, Nabors Drilling International Limited, one of our wholly owned Bermuda subsidiaries (“NDIL”), received a Notice of Assessment from Mexico’s federal tax authorities in connection with the audit of NDIL’s Mexico branch for 2003. The notice proposes to deny depreciation expense deductions relating to drilling rigs operating in Mexico in 2003.  The notice also proposes to deny a deduction for payments made to an affiliated company for the procurement of labor services in Mexico. The amount assessed was approximately $19.8 million (including interest and penalties). Nabors and its tax advisors previously concluded that the deductions were appropriate.  NDIL’s Mexico branch took similar deductions for depreciation and labor expenses from 2004 to 2008.  On June 30, 2009, the government proposed similar assessments against the Mexico branch of another wholly owned Bermuda subsidiary, Nabors Drilling International II Ltd. (“NDIL II”) for 2006.  We anticipate that a similar assessment will eventually be proposed against NDIL for 2005 through 2008 and against NDIL II for 2007 to 2010.  We believe that the potential assessments will range from $6 million to $26 million per year for the period from 2005 to 2009, and in the aggregate, would be approximately $90 million to $95 million.  Although Nabors and its tax advisors previously concluded that the deductions were appropriate for each of these years, a reserve has been recorded in accordance with GAAP. The statute of limitations for NDIL’s 2004 tax year expired.  Accordingly, during the fourth quarter of 2010, we released $7.4 million from our tax reserves, which represented the reserve recorded for that tax year. If these additional assessments were made and we ultimately did not prevail, we would be required to recognize additional tax for the amount in excess of the current reserve.

Self-Insurance

We estimate the level of our liability related to insurance and record reserves for these amounts in our consolidated financial statements. Our estimates are based on the facts and circumstances specific to existing claims and our past experience with similar claims. These loss estimates and accruals recorded in our financial statements for claims have historically been reasonable in light of the actual amount of claims paid.  Although we believe our insurance coverage and reserve estimates are reasonable, a significant accident or other event that is not fully covered by insurance or contractual indemnity could occur and could materially affect our financial position and results of operations for a particular period.

Effective April 1, 2012, our workers’ compensation claims are subject to a $2.0 million per-occurrence deductible, and our automobile claims are subject to a $1.0 million per-occurrence deductible.

Litigation

Nabors and its subsidiaries are defendants or otherwise involved in a number of lawsuits in the ordinary course of business. We estimate the range of our liability related to pending litigation when we believe the amount and range of loss can be estimated. We record our best estimate of a loss when the loss is considered probable. When a liability is probable and there is a range of estimated loss with no best estimate in the range, we record the minimum estimated liability related to the lawsuits or claims. As additional information becomes available, we assess the potential liability related to our pending litigation and claims and revise our estimates. Due to uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ from our estimates. For matters where an unfavorable outcome is reasonably possible and significant, we disclose the nature of the matter and a range of potential exposure, unless an estimate cannot be made at the time of disclosure. In the opinion of management and based on liability accruals provided, our ultimate exposure with respect to these pending lawsuits and claims is not expected to have a material adverse effect on our consolidated financial position or cash flows, although they could have a material adverse effect on our results of operations for a particular reporting period.

On July 5, 2007, we received an inquiry from the U.S. Department of Justice relating to its investigation of one of our vendors and compliance with the Foreign Corrupt Practices Act.  The inquiry relates to transactions with and involving Panalpina, which provided freight forwarding and customs clearance services to some of our affiliates.  The inquiry focused on transactions in Kazakhstan, Saudi Arabia, Algeria and Nigeria.  The Audit Committee of our Board of Directors engaged outside counsel to review some of our transactions with this vendor, received periodic updates at its regularly scheduled meetings, and the Chairman of the Audit Committee received updates between meetings as circumstances warranted.  The investigation included a review of certain amounts paid to and by Panalpina in connection with obtaining permits for the temporary importation of equipment and clearance of goods and materials through customs.  Both the SEC and the Department of Justice have been advised of the results of our investigation. The SEC has advised us in April 2012 that it concluded its review of this matter and does not intend to recommend any enforcement action against us. Although the Department of Justice has not concluded its inquiry, we do not anticipate that its final determination will have an adverse effect on the Company.

In 2009, the Court of Ouargla (in Algeria) entered a judgment of approximately $19.7 million against us related to alleged customs infractions in 2009.  We believe we did not receive proper notice of the judicial proceedings, and that the amount of the judgment was excessive in any case.  We asserted the lack of legally required notice as a basis for challenging the judgment on appeal to the Algeria Supreme Court.  On May 31, 2012, that court reversed the lower court and remanded the case to the Ouargla Court of Appeals for treatment consistent with the Supreme Court’s ruling. Based upon our understanding of applicable law and precedent, we continue to believe that we will prevail. We do not believe that a loss is probable and have not accrued any amounts related to this matter.  If we are ultimately required to pay a fine or judgment related to this matter, the amount of the loss could range from approximately $140,000 to $19.7 million.

In March 2011, the Court of Ouargla entered a judgment of approximately $39.1 million against us relating to alleged violations of Algeria’s foreign currency exchange controls, which require that goods and services provided locally be invoiced and paid in local currency. The case relates to certain foreign currency payments made to us by CEPSA, a Spanish operator, for wells drilled in 2006. Approximately $7.5 million of the total contract amount was paid offshore in foreign currency, and approximately $3.2 million was paid in local currency. The judgment includes fines and penalties of approximately four times the amount at issue, and is not payable pending appeal. We have appealed the ruling based on our understanding that the law in question applies only to resident entities incorporated under Algerian law. An intermediate court of appeals has upheld the lower court’s ruling, and we have appealed the matter to the Algeria Supreme Court.  While our payments were consistent with our historical operations in the country and, we believe, those of other multinational corporations there, as well as interpretations of the law by the Central Bank of Algeria, the ultimate resolution of this matter could result in a loss of up to $31.1 million in excess of amounts accrued.

On September 21, 2011, we received an informal inquiry from the SEC related to perquisites and personal benefits received by the officers and directors of Nabors, including their use of non-commercial aircraft.  Our Audit Committee and Board of Directors have been apprised of this inquiry and we are cooperating with the SEC.  The ultimate outcome of this process cannot be determined at this time.

The previously disclosed purported shareholder derivative lawsuits filed in 2011 and 2012 against Nabors Industries Ltd. and its Board of Directors relating to certain compensation arrangements have been dismissed.  The allegations of each lawsuit were substantially similar, alleging that the members of the Board breached their fiduciary duties, wasted corporate assets and committed oppressive conduct against shareholders by agreeing to certain compensation arrangements with two senior officers of the Company, Eugene M. Isenberg and Anthony G. Petrello.  The lawsuits sought an award of monetary damages in an unspecified amount, disgorgement by Messrs. Isenberg and Petrello of allegedly excessive compensation in an unspecified amount of at least $90 million, and reformation of Nabors’ compensation practices.  The cases were filed, respectively, before Judges Gray Miller and Ewing Werlein in the United States Southern District of Texas, Houston Division, and Judge Mike Miller of the 11th Judicial District Court of Harris County, Texas.  The case pending before Judge Gray Miller was voluntarily dismissed on January 31, 2012.  Judge Werlein entered a final judgment on July 30, 2012 dismissing the case pending in the United States Southern District of Texas, finding that plaintiffs lacked standing to sue and failed to state a claim for which relief could be granted.  Plaintiffs initially appealed Judge Werlein’s ruling to the United States Fifth Circuit Court of Appeals, but voluntarily dismissed the appeal on October 22, 2012.  Plaintiffs in the remaining state court case filed an agreed motion to dismiss with prejudice on October 22, 2012.  The Company does not anticipate any further material activity in connection with these lawsuits.

On March 9, 2012, Nabors Global Holdings II Limited (“NGH2L”) signed a contract with ERG Resources, LLC (“ERG”) relating to the sale of all of the Class A shares of NGH2L’s wholly owned subsidiary, Ramshorn International Limited, an oil and gas exploration company.  When ERG failed to meet its closing obligations, NGH2L terminated the transaction on March 19, 2012 and, as contemplated in the agreement, retained ERG’s $3 million escrow deposit. ERG filed suit the following day in the 61st Judicial District Court of Harris County, Texas, in a case styled ERG Resources, LLC v. Nabors Global Holdings II Limited, Ramshorn International Limited, and Parex Resources, Inc.; Cause No. 2012-16446, seeking injunctive relief to halt any sale of the shares to a third party, specifically naming as defendant Parex Resources, Inc. (“Parex”).  The lawsuit also seeks monetary damages of up to $100 million based on an alleged breach of contract by NGH2L and alleged tortious interference with contractual relations by Parex. Nabors successfully defeated ERG’s effort to obtain a temporary restraining order from the Texas court on March 20, 2012.  On March 23, 2012, ERG filed and obtained an ex parte stay from the Supreme Court of Bermuda (Commercial Court), in a case styled as ERG Resources LLC v. Nabors Global Holdings II Limited, Case No. 2012: No. 110.  Nabors challenged the stay and, following a series of oral hearings on the matter, the Bermuda court discharged the stay by a ruling dated April 5, 2012.  Nabors completed the sale of Ramshorn’s Class A shares to a Parex affiliate on April 12, 2012, which mooted ERG’s application for a temporary injunction that was scheduled for hearing by the Texas court on April 13, 2012.  ERG retains its causes of action for monetary damages, but Nabors believes the claims are foreclosed by the terms of the agreement and are without factual or legal merit.  While Nabors intends to vigorously defend the lawsuit, the ultimate outcome of the lawsuit cannot be determined at this time.

Off-Balance Sheet Arrangements (Including Guarantees)

We are a party to some transactions, agreements or other contractual arrangements defined as “off-balance sheet arrangements” that could have a material future effect on our financial position, results of operations, liquidity and capital resources.  The most significant of these off-balance sheet arrangements involve agreements and obligations under which we provide financial or performance assurance to third parties. Certain of these agreements serve as guarantees, including standby letters of credit issued on behalf of insurance carriers in conjunction with our workers’ compensation insurance program and other financial surety instruments such as bonds. In addition, we have provided indemnifications, which serve as guarantees, to some third parties. These guarantees include indemnification provided by Nabors to our share transfer agent and our insurance carriers. We are not able to estimate the potential future maximum payments that might be due under our indemnification guarantees.

Management believes the likelihood that we would be required to perform or otherwise incur any material losses associated with any of these guarantees is remote. The following table summarizes the total maximum amount of financial guarantees issued by Nabors:

	Maximum Amount
	Remainder of2012		2013		2014		Thereafter		Total
			(In thousands)
Financial standby letters of credit and other financial surety instruments	$	31,469	$	56,657	$	105	$	—	$	88,231

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Investments in Unconsolidated Affiliates

9 Months Ended

Sep. 30, 2012

Investments in Unconsolidated Affiliates

Investments in Unconsolidated Affiliates

Note 8 Investments in Unconsolidated Affiliates

We have several unconsolidated affiliates that are integral to our operations.  For a full description, refer to Note 10 — Investments in Unconsolidated Affiliates in our 2011 Annual Report.

At September 30, 2012 and December 31, 2011, our consolidated balance sheets reflect our investments in unconsolidated affiliates accounted for using the equity method totaling $70.2 million and $371.0 million, respectively.  In addition, assets held for sale include investments in unconsolidated affiliates accounted for using the equity method totaling $13.7 million at each of September 30, 2012 and December 31, 2011, respectively.

During each quarter of 2012 our unconsolidated U.S. oil and gas joint venture has recorded full-cost ceiling test writedowns of which we have recognized $310.0 million during the nine months ended September 30, 2012 representing our proportionate share.  The full-cost ceiling test writedowns during 2012 occurred as a result of the sustained low natural gas price environment when using the prior 12-month average natural gas price.  We recorded these writedowns against the carrying value of our investment and, as of September 30, 2012, our equity investment has been written down to a zero balance.

Presented below is summarized income statement (loss) information for our unconsolidated U.S. oil and gas joint venture:

	Three Months EndedSeptember 30,					Nine Months EndedSeptember 30,
	2012			2011		2012			2011
	(In thousands)
Gross revenues	$	91,445		$	65,985	$	216,914		$	169,738
Gross margin	$	63,462		$	51,640	$	146,519		$	133,858
Net income (loss)	$	(240,414	)	$	15,127	$	(649,926	)	$	53,918
Nabors’ earnings (losses) from our U.S. oil and gas joint venture (1)	$	(98,805	)	$	34,909	$	(301,800	)	$	56,285

(1)During the three and nine months ended September 30, 2012, our unconsolidated U.S. oil and gas joint venture recorded full-cost ceiling test writedowns, of which our proportionate share was $96.3 million and $310.0 million, respectively.  The writedowns are included in our Oil and Gas operating segment.

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Commitments and Contingencies (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Dec. 31, 2010	Sep. 30, 2012
Self-Insurance disclosures
Workers compensation claims		$ 2.0
Workers automobile claims		1.0
Mexico
Income tax contingencies
Assessed income tax amount of NDIL's Mexico branch		19.8
Unrecognized tax benefits reductions resulting from lapse of applicable statute of limitations	$ 7.4

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Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Measurements

Fair Value Measurements

Note 6 Fair Value Measurements

The following table sets forth, by level within the fair value hierarchy, our financial assets that are accounted for at fair value on a recurring basis as of September 30, 2012.  Our debt securities could transfer into or out of a Level 1 or 2 measure depending on the availability of independent and current pricing at the end of each quarter.  During the three months ended September 30, 2012, there were no transfers of our financial assets between Level 1 and Level 2 measures. Our financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Recurring Fair Value Measurements

	Fair Value as of September 30, 2012
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Short-term investments:
Available-for-sale equity securities — energy industry	$	81,538	$	8,151	$	—	$	89,689
Available-for-sale debt securities
Commercial paper and CDs	180		—		—		180
Corporate debt securities	—		31,680		—		31,680
Mortgage-backed debt securities	—		246		—		246
Mortgage-CMO debt securities	—		1,078		—		1,078
Asset-backed debt securities	1,886		—		—		1,886
Trading securities — energy industry	23,242		—		—		23,242
Total short-term investments	$	106,846	$	41,155	$	—	$	148,001

Nonrecurring Fair Value Measurements

Fair value measurements were applied with respect to our nonfinancial assets and liabilities measured on a nonrecurring basis, which would primarily consist of goodwill, intangible assets and other long-lived assets, assets acquired and liabilities assumed in a business combination, and asset retirement obligations.

Fair Value of Financial Instruments

The fair value of our financial instruments has been estimated in accordance with GAAP.  We measure the estimated fair value of our long-term debt, subsidiary preferred stock and revolving credit facilities using significant other observable inputs, which represent Level 2 fair value measurements, including quoted market prices or prices quoted from third-party financial institutions as well as the terms and credit spreads for such instruments. The carrying and fair values of these liabilities were as follows:

	September 30, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In thousands)
5.375% senior notes due August 2012	$	—	$	—	$	274,604	$	281,188
6.15% senior notes due February 2018	968,403		1,155,180		967,490		1,113,986
9.25% senior notes due January 2019	1,125,000		1,470,139		1,125,000		1,419,514
5.00% senior notes due September 2020	697,572		769,146		697,343		734,475
4.625% senior notes due September 2021	697,847		726,285		697,667		708,176
Subsidiary preferred stock	69,188		68,625		69,188		68,625
Revolving credit facilities	1,190,000		1,190,000		860,000		860,000
Other	463		463		1,712		1,712
	$	4,748,473	$	5,379,838	$	4,693,004	$	5,187,676

The fair values of our cash equivalents, trade receivables and trade payables approximate their carrying values due to the short-term nature of these instruments.

As of September 30, 2012, our short-term investments were carried at fair market value and included $124.8 million and $23.2 million in securities classified as available-for-sale and trading, respectively.  As of December 31, 2011, our short-term investments were carried at fair market value and included $129.3 million and $11.6 million in securities classified as available-for-sale and trading, respectively.

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Share-Based Compensation

9 Months Ended

Sep. 30, 2012

Share-Based Compensation

Share-Based Compensation

Note 7 Share-Based Compensation

We have several share-based employee compensation plans, which are more fully described in Note 8 Share-Based Compensation in our 2011 Annual Report. Total share-based compensation expense, which includes both stock options and restricted stock, totaled $4.8 million and $9.0 million for the three months ended September 30, 2012 and 2011, respectively, and $13.5 million and $17.2 million for the nine months ended September 30, 2012 and 2011, respectively.  Total share-based compensation is included in direct costs and general and administrative expenses in our consolidated statements of income (loss). Share-based compensation expense has been allocated to our various operating segments.  See Note 15 — Segment Information.

During the nine months ended September 30, 2012 and 2011, we awarded 934,648 and 1,049,540 shares of restricted stock, respectively, vesting over periods of up to four years, to our employees and directors.  These awards had an aggregate value at their grant date of $19.4 million and $29.3 million, respectively.  The fair value of restricted stock that vested during the nine months ended September 30, 2012 and 2011 was $9.4 million and $18.6 million, respectively.

The total intrinsic value of stock options exercised during the nine months ended September 30, 2012 and 2011 was $5.7 million and $15.8 million, respectively.  Additionally, the intrinsic value of stock options surrendered during the nine months ended September 30, 2012 was $17.9 million.  The total fair value of stock options that vested during the nine months ended September 30, 2012 and 2011 was $7.6 million and $5.2 million, respectively.

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Debt

9 Months Ended

Sep. 30, 2012

Debt

Debt

Note 9 Debt

Long-term debt consisted of the following:

	September 30,		December 31,
	2012		2011
	(In thousands)
5.375% senior notes due August 2012	$	—	$	274,604
6.15% senior notes due February 2018	968,403		967,490
9.25% senior notes due January 2019	1,125,000		1,125,000
5.00% senior notes due September 2020	697,572		697,343
4.625% senior notes due September 2021	697,847		697,667
Revolving credit facilities	1,190,000		860,000
Other	463		1,712
	4,679,285		4,623,816
Less: current portion	389		275,326
	$	4,678,896	$	4,348,490

5.375% Senior Notes Due August 2012

During August 2012, we paid $282.4 million at maturity of our 5.375% senior notes, representing principal of $275.0 million and accrued interest of $7.4 million. We used cash on hand and $270 million from revolving credit facilities to pay this obligation.

Revolving Credit Facilities

At September 30, 2012, we had $310 million of remaining availability from a combined total of $1.5 billion under our existing revolving credit facilities. In September 2012, Nabors Delaware added a new lender to one of the facilities, which increased borrowing capacity to $1.5 billion. The existing revolving credit facilities mature in September 2014, and can be used for general corporate purposes, including capital expenditures and working capital. The weighted average interest rate on borrowings at September 30, 2012 was 2.08%.  We fully and unconditionally guarantee the obligations under all of these credit facilities.

The revolving credit facilities contain various covenants and restrictive provisions that limit our ability to incur additional indebtedness, make investments or loans and create liens and require us to maintain a net funded indebtedness to total capitalization ratio, as defined in each agreement. We were in compliance with all covenants under the agreements at September 30, 2012 and December 31, 2011. If we should fail to perform our obligations under the covenants, the revolving credit commitments could be terminated and any outstanding borrowings under the relevant facility could be declared immediately due and payable.

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Earnings (Losses) Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Earnings (losses) per share computations
Income (loss) from continuing operations, net of tax	$ 65,818	$ 87,190	$ 109,783	$ 252,629
Less: Net (income) loss attributable to noncontrolling interest	(988)	(708)	453	355
Adjusted income (loss) from continuing operations, net of tax - basic	64,830	86,482	110,236	252,984
Adjusted income (loss) from continuing operations, net of tax diluted	64,830	86,482	110,236	252,984
Income (loss) from discontinued operations, net of tax	10,826	(12,226)	26,721	96,545
Net income (loss) attributable to Nabors	$ 75,656	$ 74,256	$ 136,957	$ 349,529
Earnings (losses) per share:
Basic from continuing operations (in dollars per share)	$ 0.22	$ 0.30	$ 0.38	$ 0.88
Basic from discontinued operations (in dollars per share)	$ 0.04	$ (0.04)	$ 0.09	$ 0.34
Total Basic (in dollars per share)	$ 0.26	$ 0.26	$ 0.47	$ 1.22
Diluted from continuing operations (in dollars per share)	$ 0.22	$ 0.30	$ 0.38	$ 0.86
Diluted from discontinued operations (in dollars per share)	$ 0.04	$ (0.05)	$ 0.09	$ 0.33
Total Diluted (in dollars per share)	$ 0.26	$ 0.25	$ 0.47	$ 1.19
Shares (denominator):
Weighted-average number of shares outstanding - basic	290,367	287,487	289,822	286,971
Net effect of dilutive stock options, warrants and restricted stock awards based on the if-converted method (in shares)	2,134	4,499	2,468	6,020
Weighted-average number of shares outstanding - diluted	292,501	291,986	292,290	292,991

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Supplemental Balance Sheet, Income Statement and Cash Flow Information (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Accrued liabilities
Accrued compensation	$ 164,883	$ 173,732
Deferred revenue	146,051	172,578
Other taxes payable	56,574	44,652
Workers' compensation liabilities	22,645	22,645
Interest payable	33,751	99,869
Warranty accrual	5,964	5,237
Litigation reserves	30,672	23,687
Provision for termination payment		100,000
Current liability to discontinued operations	68,545	54,287
Professional fees	3,892	6,413
Income taxes payable	35,551	27,710
Current deferred tax liability		269
Other accrued liabilities	5,108	13,404
Accrued liabilities	$ 573,636	$ 744,483

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Commitments and Contingencies (Details 5) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Summary of total maximum amount of financial guarantees issued
Remainder of 2012	$ 31,469
2013	56,657
2014	105
Total	$ 88,231

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Supplemental Balance Sheet, Income Statement and Cash Flow Information (Tables)

9 Months Ended

Sep. 30, 2012

Supplemental Balance Sheet, Income Statement and Cash Flow Information

Accrued liabilities

	September 30,		December 31,
	2012		2011
	(In thousands)
Accrued compensation	$	164,883	$	173,732
Deferred revenue	146,051		172,578
Other taxes payable	56,574		44,652
Workers’ compensation liabilities	22,645		22,645
Interest payable	33,751		99,869
Warranty accrual	5,964		5,237
Litigation reserves	30,672		23,687
Provision for termination payment	—		100,000
Current liability to discontinued operations	68,545		54,287
Professional fees	3,892		6,413
Income taxes payable	35,551		27,710
Current deferred tax liability	—		269
Other accrued liabilities	5,108		13,404
	$	573,636	$	744,483

Investment income (loss)

	Three Months EndedSeptember 30,					Nine Months EndedSeptember 30,
	2012		2011			2012			2011
			(In thousands)
Interest and dividend income	$	1,160	$	1,541		$	6,110		$	5,314
Gains (losses) on investments, net (1)	6,064		(814		)	26,734		(2)	6,718		(3)

(1)Includes net unrealized gains/(losses) of $4.2 million and $(1.4) million, during the three months ended September 30, 2012 and 2011, respectively, and $11.6 million and $(8.1) million during the nine months ended September 30, 2012 and 2011, respectively, from our trading securities.

(2)Includes $14.0 million of realized gain related to debt securities in addition to unrealized gains discussed above.

(3)Includes $12.9 million of realized gain related to one of our overseas fund investments classified as long-term investments, partially offset by unrealized losses discussed above.

Losses (gains) on sales and retirements of long-lived assets and other expense (income), net

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
				(In thousands)
Losses (gains) on sales, retirements and involuntary conversions of long-lived assets	$	2,621		$	(13,746	)	$	6,801		$	(13,612	)
Litigation expenses	3,255			2,295			8,791			12,221
Foreign currency transaction losses (gains)	2,766			79			5,021			525
Losses (gains) on derivative instruments	(268		)	(679		)	(1,281		)	(1,540		)
Losses (gains) on debt extinguishment	—			—			—			58
Other losses (gains)	1,889			444			2,505			1,248
	$	10,263		$	(11,607	)	$	21,837		$	(1,100	)

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Fair Value Measurements (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair Value of Financial Instruments
Carrying Value	$ 4,748,473	$ 4,693,004
Fair Value	5,379,838	5,187,676
Carrying Value	69,188	69,188
Fair Value	68,625	68,625
5.375% Senior Notes Due August 2012
Fair Value of Financial Instruments
Carrying Value		274,604
Fair Value		281,188
Interest rate on senior note due (as a percent)	5.375%
6.15% Senior Notes Due February 2018
Fair Value of Financial Instruments
Carrying Value	968,403	967,490
Fair Value	1,155,180	1,113,986
Interest rate on senior note due (as a percent)	6.15%
9.25% Senior Notes Due January 2019
Fair Value of Financial Instruments
Carrying Value	1,125,000	1,125,000
Fair Value	1,470,139	1,419,514
Interest rate on senior note due (as a percent)	9.25%
5.00% senior notes due September 2020
Fair Value of Financial Instruments
Carrying Value	697,572	697,343
Fair Value	769,146	734,475
Interest rate on senior note due (as a percent)	5.00%
4.625% senior notes due September 2021
Fair Value of Financial Instruments
Carrying Value	697,847	697,667
Fair Value	726,285	708,176
Interest rate on senior note due (as a percent)	4.625%
Revolving Credit Facility
Fair Value of Financial Instruments
Carrying Value	1,190,000	860,000
Fair Value	1,190,000	860,000
Other
Fair Value of Financial Instruments
Carrying Value	463	1,712
Fair Value	$ 463	$ 1,712

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Supplemental Balance Sheet, Income Statement and Cash Flow Information

9 Months Ended

Sep. 30, 2012

Supplemental Balance Sheet, Income Statement and Cash Flow Information

Supplemental Balance Sheet, Income Statement and Cash Flow Information

Note 14 Supplemental Balance Sheet, Income Statement and Cash Flow Information

Accrued liabilities include the following:

	September 30,		December 31,
	2012		2011
	(In thousands)
Accrued compensation	$	164,883	$	173,732
Deferred revenue	146,051		172,578
Other taxes payable	56,574		44,652
Workers’ compensation liabilities	22,645		22,645
Interest payable	33,751		99,869
Warranty accrual	5,964		5,237
Litigation reserves	30,672		23,687
Provision for termination payment	—		100,000
Current liability to discontinued operations	68,545		54,287
Professional fees	3,892		6,413
Income taxes payable	35,551		27,710
Current deferred tax liability	—		269
Other accrued liabilities	5,108		13,404
	$	573,636	$	744,483

Investment income (loss) includes the following:

	Three Months EndedSeptember 30,					Nine Months EndedSeptember 30,
	2012		2011			2012			2011
			(In thousands)
Interest and dividend income	$	1,160	$	1,541		$	6,110		$	5,314
Gains (losses) on investments, net (1)	6,064		(814		)	26,734		(2)	6,718		(3)

(1)Includes net unrealized gains/(losses) of $4.2 million and $(1.4) million, during the three months ended September 30, 2012 and 2011, respectively, and $11.6 million and $(8.1) million during the nine months ended September 30, 2012 and 2011, respectively, from our trading securities.

(2)Includes $14.0 million of realized gain related to debt securities in addition to unrealized gains discussed above.

(3)Includes $12.9 million of realized gain related to one of our overseas fund investments classified as long-term investments, partially offset by unrealized losses discussed above.

Losses (gains) on sales and retirements of long-lived assets and other expense (income), net includes the following:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
				(In thousands)
Losses (gains) on sales, retirements and involuntary conversions of long-lived assets	$	2,621		$	(13,746	)	$	6,801		$	(13,612	)
Litigation expenses	3,255			2,295			8,791			12,221
Foreign currency transaction losses (gains)	2,766			79			5,021			525
Losses (gains) on derivative instruments	(268		)	(679		)	(1,281		)	(1,540		)
Losses (gains) on debt extinguishment	—			—			—			58
Other losses (gains)	1,889			444			2,505			1,248
	$	10,263		$	(11,607	)	$	21,837		$	(1,100	)

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Impairments and Other Charges (Tables)

9 Months Ended

Sep. 30, 2012

Impairments and Other Charges

Summary of Impairments and other charges

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2012		2011		2012		2011
Goodwill impairment	$	—	$	—	$	26,279	$	—
Intangible asset impairment (1)	—		—		74,960		—
Provision for retirement of assets (2)	—		98,072		46,264		98,072
Total impairments and other charges	$	—	$	98,072	$	147,503	$	98,072

(1)Represents $75.0 million related to the impairment of the Superior trade name. The Superior trade name was initially classified as a ten-year intangible asset at the date of acquisition in September 2010. The impairment is a result of the decision to cease using the Superior trade name to reduce confusion in the marketplace and enhance the Nabors brand.

(2)During the second quarter of 2012, we recorded a provision for retirement of long-lived assets in multiple operating segments, including $26.5 million in Pressure Pumping, $15.1 million in Canada and $4.6 million in U.S. Land Well-servicing. The retirements in our Canada operations included functionally inoperable rigs and other drilling equipment. Our U.S. Land Well-servicing retirements included rigs and vehicles that would require significant repair to return to work. As we began the process of streamlining our operations and consolidating our Pressure Pumping and U.S. Land Well-servicing segments into one business line, Nabors Completion & Production Services, we decided to retire certain non-core assets. As we continue to streamline our lines of business, there could be future retirement or impairment charges, which could have a potential impact on our future operating results.

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Cash and Cash Equivalents and Short-term Investments (Details 6) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Available-for-sale:
Proceeds from sales and maturities	$ 3,959	$ 342	$ 23,186	$ 1,124
Realized gains (losses), net	$ 1,732	$ 2	$ 14,007	$ (5)

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Discontinued Operations (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Assets held for sale
Assets held for sale	$ 404,234	$ 401,500
Oil and Gas
Assets held for sale
Assets held for sale	394,710	385,414
Other Rig Services
Assets held for sale
Assets held for sale	$ 9,524	$ 16,086

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CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net income (loss) attributable to Nabors	$ 75,656	$ 74,256	$ 136,957	$ 349,529
Other comprehensive income (loss), before tax:
Translation adjustment attributable to Nabors	31,550	(86,856)	29,157	(47,507)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	13,667	(21,150)	20,882	(26,034)
Less: reclassification adjustment for (gains)/losses included in net income (loss)	(1,523)	(4)	(14,007)	(5)
Unrealized gains/(losses) on marketable securities	12,144	(21,154)	6,875	(26,039)
Pension liability amortization	260	151	780	451
Unrealized gains/(losses) and amortization of (gains)/losses on cash flow hedges	166	191	548	572
Other comprehensive income (loss), before tax	44,120	(107,668)	37,360	(72,523)
Income tax expense (benefit) related to items of other comprehensive income (loss)	(272)	68	(3,856)	374
Other comprehensive income (loss), net of tax	44,392	(107,736)	41,216	(72,897)
Comprehensive income (loss) attributable to Nabors	120,048	(33,480)	178,173	276,632
Net income (loss) attributable to noncontrolling interest	988	708	(453)	(355)
Translation adjustment attributable to noncontrolling interest	390	(912)	417	(460)
Comprehensive income (loss) attributable to noncontrolling interest	1,378	(204)	(36)	(815)
Comprehensive income (loss)	$ 121,426	$ (33,684)	$ 178,137	$ 275,817

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Impairments and Other Charges

9 Months Ended

Sep. 30, 2012

Impairments and Other Charges

Impairments and Other Charges

Note 3 Impairments and Other Charges

Impairments and other charges included the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2012		2011		2012		2011
Goodwill impairment	$	—	$	—	$	26,279	$	—
Intangible asset impairment (1)	—		—		74,960		—
Provision for retirement of assets (2)	—		98,072		46,264		98,072
Total impairments and other charges	$	—	$	98,072	$	147,503	$	98,072

(1)Represents $75.0 million related to the impairment of the Superior trade name. The Superior trade name was initially classified as a ten-year intangible asset at the date of acquisition in September 2010. The impairment is a result of the decision to cease using the Superior trade name to reduce confusion in the marketplace and enhance the Nabors brand.

(2)During the second quarter of 2012, we recorded a provision for retirement of long-lived assets in multiple operating segments, including $26.5 million in Pressure Pumping, $15.1 million in Canada and $4.6 million in U.S. Land Well-servicing. The retirements in our Canada operations included functionally inoperable rigs and other drilling equipment. Our U.S. Land Well-servicing retirements included rigs and vehicles that would require significant repair to return to work. As we began the process of streamlining our operations and consolidating our Pressure Pumping and U.S. Land Well-servicing segments into one business line, Nabors Completion & Production Services, we decided to retire certain non-core assets. As we continue to streamline our lines of business, there could be future retirement or impairment charges, which could have a potential impact on our future operating results.

During the third quarter of 2011, we recorded a provision for retirement of long-lived assets in multiple operating segments including $63.2 million in U.S. Lower 48 Land Drilling, $26.1 million in International and $8.9 million in U.S. Land Well-servicing. The retirements related to the decommissioning and retirement of a jackup rig, 116 land rigs, and a number of trucks and rigs for well-servicing. These assets were deemed economically noncompetitive for the market and were dismantled for parts and scrap.

A prolonged period of lower natural gas and oil prices and its potential impact on our utilization and dayrates could result in the recognition of future impairment charges to additional assets if future cash flow estimates, based upon information then available to management, indicate that the carrying value of those assets may not be recoverable.

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Subsidiary Preferred Stock (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Subsidiary Preferred Stock
Subsidiary preferred stock dividend	$ 750	$ 750	$ 2,250	$ 2,250

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Supplemental Balance Sheet, Income Statement and Cash Flow Information (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Supplemental Balance Sheet, Income Statement and Cash Flow Information
Losses (gains) on sales, retirements and involuntary conversions of long-lived assets	$ 2,621	$ (13,746)	$ 6,801	$ (13,612)
Litigation expenses	3,255	2,295	8,791	12,221
Foreign currency transaction losses (gains)	2,766	79	5,021	525
Losses (gains) on derivative instruments	(268)	(679)	(1,281)	(1,540)
Losses (gains) on debt extinguishment				58
Other losses (gains)	1,889	444	2,505	1,248
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net	$ 10,263	$ (11,607)	$ 21,837	$ (1,100)

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Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2012

Discontinued Operations

Assets held for sale

(In thousands)	September 30,2012		December 31, 2011
Assets Held for Sale
Oil and Gas	$	394,710	$	385,414
Other Rig Services	9,524		16,086
Assets Held for Sale	$	404,234	$	401,500

Condensed Statements of Income

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	2012			2011			2012			2011
	(In thousands)
Operating revenues and Earnings (losses) from unconsolidated affiliates
Oil and Gas (1)	$	12,859		$	10,630		$	19,079		$	116,046
Other Rig Services (2)	$	8,334		$	9,341		$	18,750		$	21,180
Income (loss) from Oil and Gas discontinued operations:
Income (loss) from discontinued operations	$	5,826		$	(20,167	)	$	(2,095	)	$	42,746
Gain (loss) on sale of wholly owned assets	3,662			—			39,772			39,944
Less: income tax expense (benefit)	(1,604		)	(6,189		)	2,623			(14,752		)
Income (loss) from Oil and Gas discontinued operations, net of tax	$	11,092		$	(13,978	)	$	35,054		$	97,442
Income (loss) from Other Rig Services discontinued operations: (2)
Income (loss) from discontinued operations	$	2,199		$	2,336		$	(3,320	)	$	(1,197	)
Gain (loss) on sale of assets	(2,554		)	—			(7,796		)	—
Less: income tax expense (benefit)	(89		)	584			(2,783		)	(300		)
Income (loss) from Other Rig Services discontinued operations, net of tax	$	(266	)	$	1,752		$	(8,333	)	$	(897	)

(1)Includes approximately $85 million of equity in earnings during the nine months ended September 30, 2011 for our proportionate share of Remora’s net income, inclusive of the gains recognized for asset sales during the first nine months of 2011.

(2)Represents our aircraft logistics operations in Canada included in our Other Rig Services operating segment.

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Condensed Consolidating Financial Information (Details 4) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Condensed Consolidating Statements Of Cash Flows
Net cash provided by (used for) operating activities	$ 1,094,045	$ 1,108,134
Cash flows from investing activities:
Purchases of investments	(949)	(9,567)
Sales and maturities of investments	30,111	24,580
Cash paid for acquisition of businesses, net		(55,459)
Investment in unconsolidated affiliates		(54,762)
Distribution of proceeds from asset sales from unconsolidated affiliates		142,984
Capital expenditures	(1,221,769)	(1,532,597)
Proceeds from sales of assets and insurance claims	128,432	110,535
Net cash used for investing activities	(1,064,175)	(1,374,286)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	(1,748)	5,074
Proceeds from issuance of long-term debt		697,578
Proceeds from revolving credit facilities	710,000	1,300,000
Proceeds from issuance of common shares	(4,007)	12,175
Debt issuance costs		(6,065)
Reduction in long-term debt	(276,232)	(1,404,271)
Paydown of revolving credit facilities	(380,000)	(700,000)
Repurchase of equity component of convertible debt		(12)
Purchase of restricted stock	(2,071)	(2,579)
Tax benefit related to share-based awards	(54)	185
Net cash provided by (used for) financing activities	45,888	(97,915)
Effect of exchange rate changes on cash and cash equivalents	(2,771)	(2,174)
Net increase (decrease) in cash and cash equivalents	72,987	(366,241)
Cash and cash equivalents, beginning of period	398,575	641,702
Cash and cash equivalents, end of period	471,562	275,461
Nabors (Parent/Guarantor)
Condensed Consolidating Statements Of Cash Flows
Net cash provided by (used for) operating activities	6,572	6,163
Cash flows from investing activities:
Cash paid for investments in consolidated affiliates		(25,450)
Net cash used for investing activities		(25,450)
Cash flows from financing activities:
Proceeds from issuance of common shares	(4,006)	12,175
Purchase of restricted stock	(2,071)	(2,579)
Net cash provided by (used for) financing activities	(6,077)	9,596
Net increase (decrease) in cash and cash equivalents	495	(9,691)
Cash and cash equivalents, beginning of period	203	10,847
Cash and cash equivalents, end of period	698	1,156
Nabors Delaware (Issuer/Guarantor)
Condensed Consolidating Statements Of Cash Flows
Net cash provided by (used for) operating activities	(88,960)	227,747
Cash flows from investing activities:
Cash paid for investments in consolidated affiliates		(65,000)
Net cash used for investing activities		(65,000)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		697,578
Proceeds from revolving credit facilities	710,000	1,250,000
Debt issuance costs		(6,065)
Reduction in long-term debt	(224,997)	(1,404,245)
Paydown of revolving credit facilities	(380,000)	(700,000)
Repurchase of equity component of convertible debt		(12)
Tax benefit related to share-based awards		(1)
Cash dividends paid	(9,003)
Net cash provided by (used for) financing activities	96,000	(162,745)
Net increase (decrease) in cash and cash equivalents	7,040	2
Cash and cash equivalents, beginning of period	21	20
Cash and cash equivalents, end of period	7,061	22
Other Subsidiaries (Non-Guarantors)
Condensed Consolidating Statements Of Cash Flows
Net cash provided by (used for) operating activities	1,206,939	874,224
Cash flows from investing activities:
Purchases of investments	(949)	(9,567)
Sales and maturities of investments	30,111	24,580
Cash paid for acquisition of businesses, net		(55,459)
Investment in unconsolidated affiliates		(54,762)
Distribution of proceeds from asset sales from unconsolidated affiliates		142,984
Capital expenditures	(1,221,769)	(1,532,597)
Proceeds from sales of assets and insurance claims	128,432	110,535
Net cash used for investing activities	(1,064,175)	(1,374,286)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	(1,748)	5,074
Proceeds from revolving credit facilities		50,000
Proceeds from issuance of common shares	(1)
Reduction in long-term debt	(51,235)	(26)
Tax benefit related to share-based awards	(54)	186
Proceeds from parent contributions		90,450
Cash dividends paid	(21,503)
Net cash provided by (used for) financing activities	(74,541)	145,684
Effect of exchange rate changes on cash and cash equivalents	(2,771)	(2,174)
Net increase (decrease) in cash and cash equivalents	65,452	(356,552)
Cash and cash equivalents, beginning of period	398,351	630,835
Cash and cash equivalents, end of period	463,803	274,283
Consolidating Adjustments
Condensed Consolidating Statements Of Cash Flows
Net cash provided by (used for) operating activities	(30,506)
Cash flows from investing activities:
Cash paid for investments in consolidated affiliates		90,450
Net cash used for investing activities		90,450
Cash flows from financing activities:
Proceeds from parent contributions		(90,450)
Cash dividends paid	30,506
Net cash provided by (used for) financing activities	$ 30,506	$ (90,450)

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Summary of Significant Accounting Policies (Details) (USD $)	Sep. 30, 2012 item	Dec. 31, 2011
Investments in unconsolidated affiliates
Investment in unconsolidated affiliates	$ 70,200,000	$ 371,000,000
Goodwill
Number of reporting units which impairment test results required the second step measurement	2
Inventory
Raw materials	148,323,000	133,480,000
Work-in-progress	45,959,000	50,951,000
Finished goods	62,876,000	88,421,000
Total inventory	257,158,000	272,852,000
Assets held for sale
Investments in unconsolidated affiliates
Investment in unconsolidated affiliates	$ 13,700,000	$ 13,700,000

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Earnings (Losses) Per Share

9 Months Ended

Sep. 30, 2012

Earnings (Losses) Per Share

Earnings (Losses) Per Share

Note 13 Earnings (Losses) Per Share

A reconciliation of the numerators and denominators of the basic and diluted earnings (losses) per share computations is as follows:

	Three Months EndedSeptember 30,						Nine Months Ended September 30,
	2012			2011			2012		2011
	(In thousands, except per share amounts)
Net income (loss) (numerator):
Income (loss) from continuing operations, net of tax	$	65,818		$	87,190		$	109,783	$	252,629
Less: net (income) loss attributable to noncontrolling interest	(988		)	(708		)	453		355
Adjusted income (loss) from continuing operations, net of tax — basic	64,830			86,482			110,236		252,984
Add: interest expense on assumed conversion of our 0.94% senior exchangeable notes, net of tax (1)	—			—			—		—
Adjusted net income (loss) from continuing operations, net of tax — diluted	64,830			86,482			110,236		252,984
Income (loss) from discontinued operations, net of tax	10,826			(12,226		)	26,721		96,545
Adjusted net income (loss) attributable to Nabors	75,656			74,256			136,957		349,529
Earnings (losses) per share:
Basic from continuing operations	$	.22		$	.30		$	.38	$	.88
Basic from discontinued operations	.04			(.04		)	.09		.34
Total Basic	$	.26		$	.26		$	.47	$	1.22
Diluted from continuing operations	$	.22		$	.30		$	.38	$	.86
Diluted from discontinued operations	.04			(.05		)	.09		.33
Total Diluted	$	.26		$	.25		$	.47	$	1.19
Shares (denominator):
Weighted-average number of shares outstanding — basic	290,367			287,487			289,822		286,971
Net effect of dilutive stock options, warrants and restricted stock awards based on the if-converted method	2,134			4,499			2,468		6,020
Assumed conversion of our 0.94% senior exchangeable notes due 2011 (1)	—			—			—		—
Weighted-average number of shares outstanding — diluted	292,501			291,986			292,290		292,991

(1)At maturity in May 2011, we redeemed the remaining aggregate principal amount of $1.4 billion of our 0.94% senior exchangeable notes. Prior to maturity, we had purchased $1.4 billion par value of these notes in the open market for cash of $1.2 billion.

For all periods presented, the computation of diluted earnings (losses) per share excludes outstanding stock options and warrants with exercise prices greater than the average market price of Nabors’ common shares because their inclusion would be anti-dilutive and because they are not considered participating securities. The average number of options and warrants that were excluded from diluted earnings (losses) per share that would potentially dilute earnings per share in the future was 15,010,906 and 10,271,673 shares during the three months ended September 30, 2012 and 2011, respectively, and 13,934,259 and 7,678,536 shares during the nine months ended September 30, 2012 and 2011, respectively.  In any period during which the average market price of Nabors’ common shares exceeds the exercise prices of these stock options and warrants, such stock options and warrants will be included in our diluted earnings (losses) per share computation using the if-converted method of accounting. Restricted stock will be included in our basic and diluted earnings (losses) per share computation using the two-class method of accounting in all periods because such stock is considered a participating security.