Segment Information

12 Months Ended

Dec. 31, 2011

Segment Information [Abstract]

Segment Information

Note 22    Segment Information

As of December 31, 2011, we operated our business out of 10 operating segments. Our six Contract Drilling operating segments are engaged in drilling, workover and well-servicing operations, on land and offshore, and represent reportable segments. These operating segments consist of our Alaska, U.S. Lower 48 Land Drilling, U.S. Land Well-servicing, U.S. Offshore, Canada and International business units. Our hydraulic fracturing and downhole surveying services are included in our Pressure Pumping operating segment. Our oil and gas operating segment includes our unconsolidated U.S. oil and gas joint venture. This segment is engaged in the exploration for, and the development of and production of oil and natural gas. Our Other Operating Segments, consisting of Canrig Drilling Technology Ltd. and Ryan Directional Services, Inc., are engaged in the manufacturing of top drives, manufacturing of drilling instrumentation systems, construction services, trucking and logistics services, manufacturing and marketing of directional drilling and rig instrumentation systems, directional drilling, and rig instrumentation and data collection services. These Other Operating Segments do not meet the criteria for disclosure, individually or in the aggregate, as reportable segments.

The accounting policies of the segments are the same as those described in Note 2 — Summary of Significant Accounting Policies. Inter-segment sales are recorded at cost or cost plus a profit margin. We evaluate the performance of our segments based on several criteria, including adjusted income (loss) derived from operating activities.

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

	Year Ended December 31,
	2011			2010			2009
	(In thousands)
Operating revenues and earnings (losses) from unconsolidated affiliates from continuing operations:(1)
Contract Drilling:(2)
U.S. Lower 48 Land Drilling	$	1,698,620		$	1,294,853		$	1,082,531
U.S. Land Well-servicing		701,223			444,665			412,243
U.S. Offshore		170,727			123,761			157,305
Alaska		129,894			179,218			204,407
Canada		574,754			389,229			298,653
International		1,104,461			1,093,608			1,265,097
Subtotal Contract Drilling(3)		4,379,679			3,525,334			3,420,236
Pressure Pumping(4)		1,237,306			321,295			—
Oil and Gas(5)(6)		59,685			18,657			(182,654	)
Other Operating Segments(7)(8)		674,206			427,154			417,531
Other reconciling items(9)		(233,878	)		(124,690	)		(148,325	)
Total	$	6,116,998		$	4,167,750		$	3,506,788
Depreciation and amortization, and depletion:(1)
Contract Drilling:
U.S. Lower 48 Land Drilling	$	288,373		$	241,258		$	226,875
U.S. Land Well-servicing		78,314			65,561			69,557
U.S. Offshore		37,242			37,059			37,204
Alaska		34,989			37,195			29,946
Canada		75,919			74,735			65,883
International		273,315			247,134			208,949
Subtotal Contract Drilling		788,152			702,942			638,414
Pressure Pumping(4)		102,009			32,204			—
Oil and Gas		—			—			—
Other Operating Segments		34,162			28,452			27,441
Other reconciling items(9)		(229	)		(2,636	)		(1,897	)
Total depreciation and amortization, and depletion	$	924,094		$	760,962		$	663,958
Adjusted income (loss) derived from operating activities from continuing operations:(1)(10)
Contract Drilling:
U.S. Lower 48 Land Drilling	$	414,317		$	274,215		$	294,679
U.S. Land Well-servicing		74,725			31,597			28,950
U.S. Offshore		843			9,245			30,508
Alaska		27,671			51,896			62,742
Canada		94,637			22,970			(7,019	)
International		123,813			254,744			365,566
Subtotal Contract Drilling(3)		736,006			644,667			775,426
Pressure Pumping(4)		229,125			66,651			—
Oil and Gas(5)(6)		59,685			18,657			(182,654	)
Other Operating Segments(7)(8)		55,617			42,401			35,319
Other reconciling items(11)		(153,385	)		(104,827	)		(188,257	)
Total adjusted income derived from operating activities	$	927,048		$	667,549		$	439,834
Interest expense		(256,633	)		(272,712	)		(266,047	)
Investment income (loss)		19,940			7,263			25,522
Gains (losses) on sales and retirements of long-lived assets and other (income) expense, net		(4,514	)		(47,238	)		(11,982	)
Impairments and other charges(12)		(198,072	)		(61,292	)		(118,543	)
Income (loss) from continuing operations before income taxes		487,769			293,570			68,784
Income tax expense (benefit)		142,605			36,950			(63,937	)
Subsidiary preferred stock dividend		3,000			750			—
Income (loss) from continuing operations, net of tax		342,164			255,870			132,721
Income (loss) from discontinued operations, net of tax		(97,440	)		(161,090	)		(218,609	)
Net income (loss)		244,724			94,780			(85,888	)
Less: Net income (loss) attributable to noncontrolling interest		(1,045	)		(85	)		342
Net income (loss) attributable to Nabors	$	243,679		$	94,695		$	(85,546	)

	Year Ended December 31,
	2011			2010			2009
	(In thousands)
Capital expenditures and acquisitions of businesses:(13)
Contract Drilling:
U.S. Lower 48 Land Drilling	$	650,342		$	294,239		$	327,269
U.S. Land Well-servicing		165,953			84,657			16,671
U.S. Offshore		63,817			23,625			48,694
Alaska		5,582			891			55,426
Canada		95,001			53,834			29,214
International		653,759			365,597			328,252
Subtotal Contract Drilling		1,634,454			822,843			805,526
Pressure Pumping(4)		285,304			924,693			—
Oil and Gas		208,995			113,361			184,185
Other Operating Segments		136,515			28,799			20,446
Other reconciling items(11)(17)		(17,533	)		(11,633	)		(19,870	)
Total capital expenditures and acquisitions of businesses	$	2,247,735		$	1,878,063		$	990,287

	December 31,
	2011		2010		2009
	(In thousands)
Total assets:
Contract Drilling:(14)
U.S. Lower 48 Land Drilling	$	3,216,803	$	2,762,362	$	2,609,101
U.S. Land Well-servicing		812,049		630,518		594,456
U.S. Offshore		402,506		379,292		440,556
Alaska		288,253		313,123		373,146
Canada		962,239		1,065,268		984,740
International		3,702,611		3,279,763		3,151,513
Subtotal Contract Drilling		9,384,461		8,430,326		8,153,512
Pressure Pumping(4)		1,503,298		1,163,236		—
Oil and Gas(15)		796,327		805,410		835,465
Other Operating Segments(16)		720,775		539,373		502,501
Other reconciling items(11)(17)		507,279		708,224		1,153,212
Total assets	$	12,912,140	$	11,646,569	$	10,644,690

(1) All periods present the operating activities of our wholly owned oil and gas assets in the United States, Canada and Colombia, including equity interests in Canada and Colombia, as well as the Nabors Blue Sky Ltd. business as discontinued operations.

(2) These segments include our drilling, workover and well-servicing and pressure pumping operations, on land and offshore.

(3) Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(1.2) million, $6.9 million and $9.7 million for the years ended December 31, 2011, 2010 and 2009, respectively.

(4) Includes operating results of the Superior acquisition beginning September 10, 2010.

(5) Includes our proportionate share of full-cost ceiling test writedowns recorded by our unconsolidated U.S. oil and gas joint venture of $(15.6) million and $(189.3) million for the years ended December 31, 2011 and 2009, respectively.

(6) Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $59.7 million, $18.7 million and $(182.6) million for the years ended December 31, 2011, 2010 and 2009, respectively. Additional information is provided in Note 24 — Supplemental Information on Oil and Gas Exploration and Production Activities.

(7) Includes our drilling technology and top drive manufacturing, directional drilling, rig instrumentation and software, and construction operations.

(8) Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(1.9) million, $7.7 million and $17.5 million for the years ended December 31, 2011, 2010 and 2009, respectively.

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

(10) Adjusted income (loss) derived from operating activities is computed by subtracting direct costs, general and administrative expenses, depreciation and amortization, and depletion expense from Operating revenues and then adding Earnings (losses) from unconsolidated affiliates. 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 of 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.

(11) Represents the elimination of inter-segment transactions and unallocated corporate expenses, assets and capital expenditures.

(12) Represents impairments and other charges recorded during the years ended December 31, 2011, 2010 and 2009, respectively.

(13) Includes the portion of the purchase price of acquisitions allocated to fixed assets and goodwill based on their fair market value.

(14) Includes $51.5 million, $54.8 million and $49.8 million of investments in unconsolidated affiliates accounted for using the equity method as of December 31, 2011, 2010 and 2009, respectively.

(15) Includes $294.1 million, $146.5 million and $190.1 million investments in unconsolidated affiliates accounted for using the equity method as of December 31, 2011, 2010 and 2009, respectively.

(16) Includes $25.4 million, $64.5 million and $65.8 million of investments in unconsolidated affiliates accounted for using the equity method as of December 31, 2011, 2010 and 2009, respectively.

(17) Includes $1.9 million and $.9 million of investments in unconsolidated affiliates accounted for using the cost method as of December 31, 2010 and 2009, respectively.

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

	Year Ended December 31,
	2011		2010		2009
	(In thousands)
Operating revenues and earnings (losses) from unconsolidated affiliates from continuing operations:
U.S.	$	4,329,079	$	2,612,954	$	1,817,374
Outside the U.S.		1,787,919		1,554,796		1,689,414
	$	6,116,998	$	4,167,750	$	3,506,788
Property, plant and equipment, net:
U.S.	$	4,974,239	$	4,447,388	$	4,107,250
Outside the U.S.		3,655,707		3,368,031		3,538,800
	$	8,629,946	$	7,815,419	$	7,646,050
Goodwill:
U.S.	$	466,794	$	459,560	$	130,275
Outside the U.S.		34,464		34,812		33,990
	$	501,258	$	494,372	$	164,265