Note 15 Condensed Consolidating Financial Information

Nabors has fully and unconditionally guaranteed all of the issued public debt securities of Nabors Delaware, a 100% owned subsidiary. 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 March 31, 2015 and December 31, 2014 and statements of income (loss), statements of other comprehensive income (loss) and statements of cash flows for the three months ended March 31, 2015 and 2014 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

	March 31, 2015
						Other
	Nabors		Nabors			Subsidiaries
	(Parent/		Delaware			(Non-			Consolidating
	Guarantor)		(Issuer)			Guarantors)			Adjustments			Total
	(In thousands)
ASSETS

Current assets:
Cash and cash equivalents	$	4,370	$	18		$	581,613		$	—		$	586,001
Short-term investments	—		—			35,170			—			35,170
Assets held for sale	—		—			134,709			—			134,709
Accounts receivable, net	—		—			971,601			—			971,601
Inventory	—		—			190,423			—			190,423
Deferred income taxes	—		—			91,050			—			91,050
Other current assets	50		18,394			142,934			—			161,378
Total current assets	4,420		18,412			2,147,500			—			2,170,332
Long-term investments	—		—			2,627			—			2,627
Property, plant and equipment, net	—		—			7,333,808			—			7,333,808
Goodwill	—		—			80,947			—			80,947
Intercompany receivables	136,729		150,058			1,030,444			(1,317,231		)	—
Investment in consolidated affiliates	4,848,785		4,968,528			1,370,331			(11,187,644		)	—
Investment in unconsolidated affiliates	—		—			730,487			—			730,487
Other long-term assets	—		29,578			256,819			—			286,397
Total assets	$	4,989,934	$	5,166,576		$	12,952,963		$	(12,504,875	)	$	10,604,598

LIABILITIES AND EQUITY

Current liabilities:
Current debt	$	—	$	—		8,739			$	—		$	8,739
Trade accounts payable	117		5			402,916			—			403,038
Accrued liabilities	17,004		18,202			634,606			—			669,812
Income taxes payable	—		—			75,007			—			75,007
Total current liabilities	17,121		18,207			1,121,268			—			1,156,596
Long-term debt	—		3,857,176			(40,459		)	—			3,816,717
Other long-term liabilities	—		35,487			569,039			—			604,526
Deferred income taxes	—		(313,447		)	372,444			—			58,997
Intercompany payable	14,000		1,303,231			—			(1,317,231		)	—
Total liabilities	31,121		4,900,654			2,022,292			(1,317,231		)	5,636,836
Subsidiary preferred stock	—		—			—			—			—
Shareholders’ equity	4,958,813		265,922			10,921,722			(11,187,644		)	4,958,813
Noncontrolling interest	—		—			8,949			—			8,949
Total equity	4,958,813		265,922			10,930,671			(11,187,644		)	4,967,762
Total liabilities and equity	$	4,989,934	$	5,166,576		$	12,952,963		$	(12,504,875	)	$	10,604,598

Condensed Consolidating Balance Sheets

	December 31, 2014
						Other
	Nabors		Nabors			Subsidiaries
	(Parent/		Delaware			(Non-			Consolidating
	Guarantor)		(Issuer)			Guarantors)			Adjustments			Total
	(In thousands)
ASSETS

Current assets:
Cash and cash equivalents	$	1,170	$	7		$	499,972		$	—		$	501,149
Short-term investments	—		—			35,020			—			35,020
Assets held for sale	—		—			146,467			—			146,467
Accounts receivable, net	—		—			1,517,503			—			1,517,503
Inventory	—		—			230,067			—			230,067
Deferred income taxes	—		—			118,230			—			118,230
Other current assets	50		5,242			188,146			—			193,438
Short-term intercompany note	—		880,820			—			(880,820		)	—
Total current assets	1,220		886,069			2,735,405			(880,820		)	2,741,874
Long-term investments	—		—			2,806			—			2,806
Property, plant and equipment, net	—		30,330			8,568,795			—			8,599,125
Goodwill	—		—			173,928			—			173,928
Intercompany receivables	136,360		—			1,286,522			(1,422,882		)	—
Investment in unconsolidated affiliates	4,771,413		5,014,743			1,506,939			(11,234,844		)	58,251
Other long-term assets	—		30,298			273,660			—			303,958
Total assets	$	4,908,993	$	5,961,440		$	14,548,055		$	(13,538,546	)	$	11,879,942

LIABILITIES AND EQUITY

Current liabilities:
Current debt	$	—	$	—		$	6,190		$	—		$	6,190
Trade accounts payable	111		2			779,947			—			780,060
Accrued liabilities	263		64,390			663,351			—			728,004
Income taxes payable	—		—			53,221			—			53,221
Short-term intercompany note	—		—			880,820			(880,820		)	—
Total current liabilities	374		64,392			2,383,529			(880,820		)	1,567,475
Long-term debt	—		4,389,299			(40,440		)	—			4,348,859
Other long-term liabilities	—		35,480			566,336			—			601,816
Deferred income taxes	—		(294,655		)	737,658			—			443,003
Intercompany payable	—		1,422,882			—			(1,422,882		)	—
Total liabilities	374		5,617,398			3,647,083			(2,303,702		)	6,961,153
Subsidiary preferred stock	—		—			—			—			—
Shareholders’ equity	4,908,619		344,042			10,890,802			(11,234,844		)	4,908,619
Noncontrolling interest	—		—			10,170			—			10,170
Total equity	4,908,619		344,042			10,900,972			(11,234,844		)	4,918,789
Total liabilities and equity	$	4,908,993	$	5,961,440		$	14,548,055		$	(13,538,546	)	$	11,879,942

Condensed Consolidating Statements of Income (Loss)

	Three Months Ended March 31, 2015
						Other
	Nabors		Nabors			Subsidiaries
	(Parent/		Delaware			(Non-			Consolidating
	Guarantor)		(Issuer)			Guarantors)			Adjustments			Total
	(In thousands)
Revenues and other income:
Operating revenues	$	—	$	—		$	1,414,707		$	—		$	1,414,707
Earnings from unconsolidated affiliates	—		—			6,502			—			6,502
Earnings (losses) from consolidated affiliates	138,037		(46,440		)	(78,438		)	(13,159		)	—
Investment income (loss)	—		5			3,291			(2,327		)	969
Intercompany Interest income	—		2,439			—			(2,439		)	—
Total revenues and other income	138,037		(43,996		)	1,346,062			(17,925		)	1,422,178
Costs and other deductions:
Direct costs	—		—			919,610			—			919,610
General and administrative expenses	2,719		358			124,200			(144		)	127,133
Depreciation and amortization	—		612			280,407			—			281,019
Interest expense	—		52,264			(5,663		)	—			46,601
Intercompany interest expense	—		—			2,439			(2,439		)	—
Losses (gains) on sales and disposals of long-lived assets and other expense (income), net	11,684		—			(67,670		)	144			(55,842		)
Impairment and other charges	—		—			—			—			—
Other	—		—			—			—			—
Total costs and other deductions	14,403		53,234			1,253,323			(2,439		)	1,318,521
Income from continuing operations before income tax	123,634		(97,230		)	92,739			(15,486		)	103,657
Income tax expense (benefit)	—		(18,792		)	(1,913		)	—			(20,705		)
Income (loss) from continuing operations, net of tax	123,634		(78,438		)	94,652			(15,486		)	124,362
Income (loss) from discontinued operations, net of tax	—		—			(817		)	—			(817		)
Net income (loss)	123,634		(78,438		)	93,835			(15,486		)	123,545
Less: Net (income) loss attributable to noncontrolling interest	—		—			89			—			89
Net income (loss) attributable to Nabors	$	123,634	$	(78,438	)	$	93,924		$	(15,486	)	$	123,634

Condensed Consolidating Statements of Income (Loss)

	Three Months Ended March 31, 2014
						Other
	Nabors		Nabors			Subsidiaries
	(Parent/		Delaware			(Non-			Consolidating
	Guarantor)		(Issuer)			Guarantors)			Adjustments			Total
	(In thousands)
Revenues and other income:
Operating revenues	$	—	$	—		$	1,589,618		$	—		$	1,589,618
Earnings from unconsolidated affiliates	—		—			(2,445		)	—			(2,445		)
Earnings (losses) from consolidated affiliates	52,583		(8,760		)	(40,089		)	(3,734		)	—
Investment income (loss)	—		—			2,116			(1,136		)	980
Intercompany Interest income	—		—			—			—			—
Total revenues and other income	52,583		(8,760		)	1,549,200			(4,870		)	1,588,153
Costs and other deductions:
Direct costs	—		—			1,061,739			—			1,061,739
General and administrative expenses	2,453		(319		)	132,281			(149		)	134,266
Depreciation and amortization	—		902			281,225			—			282,127
Interest expense	—		49,369			(4,559		)	—			44,810
Intercompany interest expense	62		—			(62		)	—			—
Losses (gains) on sales and disposals of long-lived assets and other expense (income), net	149		(223		)	1,401			149			1,476
Impairment and other charges	—		—			—			—			—
Other	—		—			—			—			—
Total costs and other deductions	2,664		49,729			1,472,025			—			1,524,418
Income from continuing operations before income tax	49,919		(58,489		)	77,175			(4,870		)	63,735
Income tax expense (benefit)	—		(18,400		)	32,408			—			14,008
Subsidiary preferred stock dividend	—		—			750			—			750
Income (loss) from continuing operations, net of tax	49,919		(40,089		)	44,017			(4,870		)	48,977
Income (loss) from discontinued operations, net of tax	—		—			1,515			—			1,515
Net income (loss)	49,919		(40,089		)	45,532			(4,870		)	50,492
Less: Net (income) loss attributable to noncontrolling interest	—		—			(573		)	—			(573		)
Net income (loss) attributable to Nabors	$	49,919	$	(40,089	)	$	44,959		$	(4,870	)	$	49,919

Condensed Consolidating Statements of Other Comprehensive Income (Loss)

	Three Months Ended March 31, 2015
							Other
	Nabors			Nabors			Subsidiaries
	(Parent/			Delaware			(Non-			Consolidating
	Guarantor)			(Issuer)			Guarantors)			Adjustments			Total
	(In thousands)
Net income (loss) attributable to Nabors	$	123,634		$	(78,438	)	$	93,924		$	(15,486	)	$	123,634
Other comprehensive income (loss) before tax:
Translation adjustment attributable to Nabors:
Unrealized loss on translation adjustment	(68,539		)	51			(68,488		)	68,437			(68,539		)
Less: reclassification adjustment for realized loss on translation adjustment	5,365			—			5,365			(5,365		)	5,365
Translation adjustment attributable to Nabors	(63,174		)	51			(63,123		)	63,072			(63,174		)
Unrealized gains/(losses) on marketable securities	153			—			153			(153		)	153
Pension liability amortization and adjustment	276			276			552			(828		)	276
Unrealized gains/(losses) and amortization of cash flow hedges	153			153			153			(306		)	153
Other comprehensive income (loss) before tax	(62,592		)	480			(62,265		)	61,785			(62,592		)
Income tax expense (benefit) related to items of other comprehensive income (loss)	162			162			264			(426		)	162
Other comprehensive income (loss), net of tax	(62,754		)	318			(62,529		)	62,211			(62,754		)
Comprehensive income (loss) attributable to Nabors	60,880			(78,120		)	31,395			46,725			60,880
Net income (loss) attributable to noncontrolling interest	—			—			(89		)	—			(89		)
Translation adjustment to noncontrolling interest	—			—			(880		)	—			(880		)
Comprehensive income (loss) attributable to noncontrolling interest	—			—			(969		)	—			(969		)
Comprehensive income (loss)	$	60,880		$	(78,120	)	$	30,426		$	46,725		$	59,911

Condensed Consolidating Statements of Other Comprehensive Income (Loss)

	Three Months Ended March 31, 2014
							Other
	Nabors			Nabors			Subsidiaries
	(Parent/			Delaware			(Non-			Consolidating
	Guarantor)			(Issuer)			Guarantors)			Adjustments			Total
	(In thousands)
Net income (loss) attributable to Nabors	$	49,919		$	(40,089	)	$	44,959		$	(4,870	)	$	49,919
Other comprehensive income (loss) before tax:
Translation adjustment attributable to Nabors	(36,594		)	(216		)	(36,813		)	37,029			(36,594		)
Unrealized gains/(losses) on marketable securities:
Unrealized gains/(losses) on marketable securities	(19,208		)	—			(19,208		)	19,208			(19,208		)
Less: reclassification adjustment for (gains) losses on marketable securities	—			—			—			—			—
Unrealized gains/(losses) on marketable securities	(19,208		)	—			(19,208		)	19,208			(19,208		)
Pension liability amortization and adjustment	123			123			246			(369		)	123
Unrealized gains/(losses) and amortization of cash flow hedges	153			153			153			(306		)	153
Other comprehensive income (loss) before tax	(55,526		)	60			(55,622		)	55,562			(55,526		)
Income tax expense (benefit) related to items of other comprehensive income (loss)	148			148			236			(384		)	148
Other comprehensive income (loss), net of tax	(55,674		)	(88		)	(55,858		)	55,946			(55,674		)
Comprehensive income (loss) attributable to Nabors	(5,755		)	(40,177		)	(10,899		)	51,076			(5,755		)
Net income (loss) attributable to noncontrolling interest	—			—			573			—			573
Translation adjustment to noncontrolling interest	—			—			(481		)	—			(481		)
Comprehensive income (loss) attributable to noncontrolling interest	—			—			92			—			92
Comprehensive income (loss)	$	(5,755	)	$	(40,177	)	$	(10,807	)	$	51,076		$	(5,663	)

Condensed Consolidating Statements of Cash Flows

	Three Months Ended March 31, 2015
							Other
	Nabors			Nabors			Subsidiaries
	(Parent/			Delaware			(Non-			Consolidating
	Guarantor)			(Issuer)			Guarantors)			Adjustments			Total
	(In thousands)
Net cash provided by (used for) operating activities	$	10,404		$	(101,784	)	$	386,877		$	11,673		$	307,170
Cash flows from investing activities:
Purchase of investments	—			—			1,710			—			1,710
Sales and maturities of investments	—			—			623			—			623
Cash paid for acquisition of businesses, net	—			—			—			—			—
Investment in unconsolidated affiliates	—			—			(445		)	—			(445		)
Proceeds from merger transaction	5,500			646,078			41,872			—			693,450
Capital expenditures	—			—			(364,234		)	—			(364,234		)
Proceeds from sales of assets and insurance claims	—			—			8,997			—			8,997
Other	—			—			—			—			—
Changes in intercompany balances	—			(11,668		)	11,668			—			—
Net cash provided by (used for) investing activities	5,500			634,410			(299,809		)	—			340,101
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	—			—			(1,017		)	—			(1,017		)
Proceeds from (payments for) issuance of common shares	182			—			—			—			182
Dividends to shareholders	(19,797		)	—			—			2,327			(17,470		)
Proceeds from (payments for) commercial paper, net	—			(282,615		)	—			—			(282,615		)
Proceeds from issuance of intercompany debt	14,000			—			—			(14,000		)	—
Reduction in revolving credit facilities	—			(250,000		)	—			—			(250,000		)
Proceeds from term loan	—			300,000			—			—			300,000
Payments on term loan	—			(300,000		)	—			—			(300,000		)
Other	(7,089		)	—			2,540			—			(4,549		)
Net cash (used for) provided by financing activities	(12,704		)	(532,615		)	1,523			(11,673		)	(555,469		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(6,950		)	—			(6,950		)
Net increase (decrease) in cash and cash equivalents	3,200			11			81,641			—			84,852
Cash and cash equivalents, beginning of period	1,170			7			499,972			—			501,149
Cash and cash equivalents, end of period	$	4,370		$	18		$	581,613		$	—		$	586,001

Condensed Consolidating Statements of Cash Flows

	Three Months Ended March 31, 2014
							Other
	Nabors			Nabors			Subsidiaries
	(Parent/			Delaware			(Non-			Consolidating
	Guarantor)			(Issuer)			Guarantors)			Adjustments			Total
	(In thousands)
Net cash provided by (used for) operating activities	$	(1,579	)	$	(83,877	)	$	514,731		$	15,288		$	444,563
Cash flows from investing activities:
Purchase of investments	—			—			(286		)	—			(286		)
Sales and maturities of investments	—			—			733			—			733
Cash paid for acquisition of businesses, net	—			—			(10,200		)	—			(10,200		)
Investment in unconsolidated affiliates	—			—			(1,255		)	—			(1,255		)
Capital expenditures	—			—			(396,465		)	—			(396,465		)
Proceeds from sales of assets and insurance claims	—			—			21,605			—			21,605
Changes in intercompany balances	—			176,446			(176,446		)	—			—
Net cash provided by (used for) investing activities	—			176,446			(562,314		)	—			(385,868		)
Cash flows from financing activities:
Increase (decrease) in cash overdrafts	—			—			(1,822		)	—			(1,822		)
Proceeds from (payments for) issuance of common shares	4,931			—			—			—			4,931
Dividends to shareholders	(13,029		)	—			—			1,136			(11,893		)
Proceeds from (payments for) commercial paper, net	—			(39,594		)	—			—			(39,594		)
Proceeds from revolving credit facilities	—			—			15,000			—			15,000
Reduction in revolving credit facilities	—			(60,000		)	(7,500		)	—			(67,500		)
Proceeds from (payments for) issuance of parent common shares to affiliates	16,424			—			—			(16,424		)	—
Other	(6,585		)	—			(5,000		)	—			(11,585		)
Net cash (used for) provided by financing activities	1,741			(99,594		)	678			(15,288		)	(112,463		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(9,266		)	—			(9,266		)
Net increase (decrease) in cash and cash equivalents	162			(7,025		)	(56,171		)	—			(63,034		)
Cash and cash equivalents, beginning of period	730			7,029			382,156			—			389,915
Cash and cash equivalents, end of period	$	892		$	4		$	325,985		$	—		$	326,881