Note 3 Impairments and Other Charges

The components of impairments and other charges is provided below:

	Year Ended December 31,
	2012		2011		2010
	(In thousands)

Provision for retirement of long-lived assets	$	138,666	$	98,072	$	23,213
Intangible asset impairment	74,960		—		—
Goodwill impairments	26,279		—		10,707
Impairment of long-lived assets	50,355		—		27,372
Provision for termination payment	—		100,000		—
Total impairments and other charges	$	290,260	$	198,072	$	61,292

Provision for retirement of long-lived assets

During 2012, we recorded a provision for retirement of long-lived assets in multiple operating segments, including $34.0 million in U.S. Lower 48 Land Drilling, $3.1 million in U.S. Offshore, $33.7 million in Canada, $16.5 million in International and $2.0 million in Other Rig Services, all from our Drilling & Rig Services business line. The retirements from this business line included mechanical rigs, a jackup rig and other assets that have become inoperable or functionally obsolete and that we do not believe could be returned to service without significant cost to refurbish.

Additionally in 2012, we recorded similar provisions for retirement of long-lived asset of $49.4 million in our Completion & Production Services business line. During 2012, we streamlined our operations and consolidated our U.S. Production Services and Completion Services into this business line, and retired some 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 2011, we recorded a provision for retirement of long-lived assets totaling $98.1 million in multiple operating segments. This related to the decommissioning and retirement of one jackup rig, 116 land rigs, and a number of rigs and trucks. Our U.S. Lower 48 Land Drilling, International and U.S. Production Services operations recorded $63.2 million, $26.1 million and $8.9 million, respectively. These assets were deemed to be functionally or economically non-competitive for today’s market and are being dismantled for parts and scrap.

During 2010, we recorded a provision for retirement of long-lived assets totaling $23.2 million related to the abandonment of certain rig components, comprised of engines, top-drive units, building modules and other equipment that had become obsolete or inoperable in our U.S. Lower 48 Land Drilling, U.S. Production Services and U.S. Offshore Contract Drilling operating segments.

A prolonged period of lower oil and natural gas 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.

Intangible asset impairment

During 2012, we recorded impairment of the Superior trade name totaling $75.0 million. 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.

Goodwill impairments

During 2012, we impaired the remaining goodwill balances of $7.3 million and $19.0 million of our U.S. Offshore and International operating segments, respectively. The impairments were deemed necessary due to the prolonged uncertainty of utilization of some of our rigs in the Gulf of Mexico as well as our international markets. We did not record any goodwill impairment in 2011.

During 2010, we recognized an impairment of approximately $10.7 million relating to our goodwill balance of our U.S. Offshore operating segment. The impairment charge was deemed necessary due to the 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. Many of our customers suspended drilling operations in the Gulf of Mexico, largely as a result of their inability to obtain government permits. Although the U.S. deepwater drilling moratorium was lifted, our customers continued to encounter delays in obtaining government permits.

These goodwill impairment charges stemmed from our annual impairment test on goodwill. A significantly prolonged period of lower oil and natural gas prices or changes in laws and regulations could 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. See Note 2 — Summary of Significant Accounting Policies (included under the caption “Goodwill”) for amounts of goodwill related to each of our reporting units.

Impairments of Long-Lived Assets

During the fourth quarter of 2012, we determined that some of our coil-tubing rigs would not be fully utilized as forecasted, which resulted in a triggering event and required a year-end long-lived asset impairment test. Our year-end impairment test resulted in impairment charges of $17.4 million in our U.S. Lower 48 Land Drilling and $32.9 million in our Canada operations. We did not record any impairment of long-lived assets in 2011.

During 2010, we recognized $27.3 million in impairment charges related to some jackup rigs in our U.S. Offshore operating segment. These impairment charges stemmed from annual impairment tests on long-lived assets.

Provision for termination payment

During 2011, we recorded a provision for a contingent liability that existed on December 31, 2011 related to the change of our Chief Executive Officer that occurred in October 2011. This charge resulted from a potential termination payment to our former Chief Executive Officer, Eugene Isenberg, under the terms of his employment contract. Subsequent to December 31, 2011, Mr. Isenberg elected to forego triggering that payment and as a result, we did not owe or make the termination payment. During 2012, we made charitable contributions to benefit the needs of our employees and other community-based causes. We contributed one million Nabors’ common shares previously held by an affiliate 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, recorded these transactions as equity. During 2012, 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.