Segment Information

12 Months Ended

Dec. 31, 2016

Segment Information

Segment Information

Note 21 Segment Information

At December 31, 2016, we conducted our Drilling & Rig Services business through four reportable operating segments: U.S., Canada, International and Rig Services. As a result of the Merger, the operating segments within the Completion & Production Services business reflect operating information through the closing date of the Merger. Our earnings (losses) from our equity method investment in CJES, subsequent to the closing date, are presented within the earnings (losses) from unconsolidated affiliates line in our consolidated statement of income (loss). Accordingly, our financial results of operations for the year ended December 31, 2014 is not directly comparable with our financial results of operations for the years ended December 31, 2016 and 2015.

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 operating income (loss).

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

	Year Ended December 31,
	2016		2015		2014
	(In thousands)
Operating revenues:
Drilling & Rig Services:
U.S.	$	554,072	$	1,256,989	$	2,159,968
Canada		51,472		137,494		335,192
International		1,508,890		1,862,393		1,624,259
Rig Services		215,710		391,066		692,908
Subtotal Drilling & Rig Services		2,330,144		3,647,942		4,812,327
Completion & Production Services:
Completion Services		—		207,860		1,217,899
Production Services		—		158,512		1,033,538
Subtotal Completion & Production Services		—		366,372		2,251,437
Other reconciling items (1)		(102,305)		(149,877)		(259,567)
Total	$	2,227,839	$	3,864,437	$	6,804,197

	Year Ended December 31,
	2016		2015		2014
	(In thousands)
Adjusted operating income (loss): (2)
Drilling & Rig Services:
U.S.	$	(197,710)	$	87,051	$	370,173
Canada		(36,818)		(7,029)		52,468
International		164,677		308,262		243,975
Rig Services		(48,484)		(12,641)		53,374
Subtotal Drilling & Rig Services		(118,335)		375,643		719,990
Completion & Production Services:
Completion Services		—		(55,243)		(15,540)
Production Services		—		(3,559)		93,414
Subtotal Completion & Production Services		—		(58,802)		77,874
Total segment adjusted operating income (loss)	$	(118,335)	$	316,841	$	797,864

	Year Ended December 31,
	2016		2015		2014
	(In thousands)
Reconciliation of adjusted operating income (loss) to net income (loss) from continuing operations before income taxes:
Total segment adjusted operating income (loss) (2)	$	(118,335)	$	316,841	$	797,864
Other reconciling items (3)		(130,976)		(159,880)		(193,565)
Earnings (losses) from unconsolidated affiliates		(221,914)		(75,081)		(6,301)
Investment income (loss)		1,183		2,308		11,831
Interest expense		(185,360)		(181,928)		(177,948)
Impairments and other charges		(505,164)		(368,967)		(1,005,110)
Other, net		(37,509)		39,172		(31,386)
Income (loss) from continuing operations before income taxes	$	(1,198,075)	$	(427,535)	$	(604,615)

	Year Ended December 31,
	2016		2015		2014
	(In thousands)
Depreciation and amortization
Drilling & Rig Services:
U.S.	$	388,367	$	425,952	$	465,506
Canada		42,143		46,786		55,986
International		411,372		411,004		367,345
Rig Services		33,150		33,619		33,559
Subtotal Drilling & Rig Services		875,032		917,361		922,396
Completion & Production Services:
Completion Services		—		27,133		109,917
Production Services		—		26,602		114,505
Subtotal Completion & Production Services		—		53,735		224,422
Other reconciling items (3)		(3,401)		(637)		(1,718)
Total	$	871,631	$	970,459	$	1,145,100

	Year Ended December 31,
	2016		2015		2014
	(In thousands)
Capital expenditures and acquisitions of businesses:
Drilling & Rig Services:
U.S.	$	183,146	$	224,819	$	839,536
Canada		4,546		24,167		49,317
International		169,640		578,896		788,748
Rig Services		23,609		12,791		103,491
Subtotal Drilling & Rig Services		380,941		840,673		1,781,092
Completion & Production Services		—		45,691		156,106
Other reconciling items (3)		33,438		36,872		(13,419)
Total	$	414,379	$	923,236	$	1,923,779

	Year Ended December 31,
	2016		2015
	(In thousands)
Total assets:
Drilling & Rig Services:
U.S.	$	3,172,767	$	3,654,216
Canada		329,620		371,151
International		3,600,057		4,108,416
Rig Services		359,435		430,319
Subtotal Drilling & Rig Services		7,461,879		8,564,102
Investment in unconsolidated affiliates		893		415,177
Other reconciling items (3)		724,243		558,561
Total	$	8,187,015	$	9,537,840

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

(2) Adjusted operating income (loss) is computed by subtracting the sum of direct costs, general and administrative expenses, research and engineering expenses and depreciation and amortization from operating revenues. Management evaluates the performance of our operating segments using adjusted operating income (loss), which is a segment performance measure, because it believes that this financial measure reflects our ongoing profitability and performance. In addition, securities analysts and investors use this measure as one of the metrics on which they analyze our performance. A reconciliation to income (loss) from continuing operations before income taxes is provided in the above table.

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

The following table sets forth financial information with respect to Nabors’ operations by geographic area based on the location of service provided:

	Year Ended December 31,
	2016		2015		2014
	(In thousands)
Operating revenues
U.S.	$	642,835	$	1,823,906	$	4,701,122
Outside the U.S.		1,585,004		2,040,531		2,103,075
	$	2,227,839	$	3,864,437	$	6,804,197
Property, plant and equipment, net:
U.S.	$	3,048,749	$	3,703,533	$	5,205,296
Outside the U.S.		3,218,834		3,324,269		3,393,829
	$	6,267,583	$	7,027,802	$	8,599,125
Goodwill:
U.S.	$	54,199	$	54,198	$	146,310
Outside the U.S.		112,718		112,461		27,618
	$	166,917	$	166,659	$	173,928

One customer accounted for approximately 33% and 12% of our consolidated operating revenues during the years ended December 31, 2016 and 2015, respectively, and is included in our International drilling operating segment.