UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the Quarterly Period Ended
Commission File Number:
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(
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Securities registered pursuant to Section 12(b) of the Act:
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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.
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Accelerated Filer ☐ | ||
Non-accelerated Filer ☐ | Smaller reporting company | |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of common shares, par value $.05 per share, outstanding as of October 24, 2022 was
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
Index
PART I FINANCIAL INFORMATION | ||
Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 | 3 | |
4 | ||
5 | ||
6 | ||
7 | ||
9 | ||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | |
37 | ||
37 | ||
37 | ||
37 | ||
38 | ||
38 | ||
39 | ||
39 | ||
39 | ||
39 | ||
2
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, | December 31, | ||||||
| 2022 |
| 2021 |
| |||
(In thousands, except per |
| ||||||
share amounts) |
| ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | | $ | | |||
Short-term investments |
| |
| | |||
Accounts receivable, net of allowance of $ |
| |
| | |||
Inventory, net |
| |
| | |||
Other current assets |
| |
| | |||
Total current assets |
| |
| | |||
Property, plant and equipment, net |
| |
| | |||
Restricted cash held in trust |
| |
| | |||
Deferred income taxes |
| |
| | |||
Other long-term assets |
| |
| | |||
Total assets (1) | $ | | $ | | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | | $ | | |||
Accrued liabilities | |
| | ||||
Income taxes payable |
| |
| | |||
Current lease liabilities |
| |
| | |||
Total current liabilities |
| |
| | |||
Long-term debt |
| |
| | |||
Other long-term liabilities |
| |
| | |||
Deferred income taxes |
| |
| | |||
Total liabilities (1) |
| |
| | |||
Commitments and contingencies (Note 8) | |||||||
Redeemable noncontrolling interest in subsidiary | |
| | ||||
Shareholders’ equity: | |||||||
Common shares, par value $ | |||||||
Authorized common shares |
| |
| | |||
Capital in excess of par value |
| |
| | |||
Accumulated other comprehensive income (loss) |
| ( |
| ( | |||
Retained earnings (accumulated deficit) |
| ( |
| ( | |||
Less: treasury shares, at cost, |
| ( |
| ( | |||
Total shareholders’ equity |
| |
| | |||
Noncontrolling interest |
| |
| | |||
Total equity |
| |
| | |||
Total liabilities and equity | $ | | $ | |
(1) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, |
| September 30, | |||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||
(In thousands, except per share amounts) | ||||||||||||||
Revenues and other income: | ||||||||||||||
Operating revenues | $ | | $ | | $ | | $ | | ||||||
Investment income (loss) |
| |
| |
| |
| | ||||||
Total revenues and other income | | | | | ||||||||||
Costs and other deductions: | ||||||||||||||
Direct costs | | | | | ||||||||||
General and administrative expenses | | | | | ||||||||||
Research and engineering |
| |
| |
| |
| | ||||||
Depreciation and amortization |
| |
| |
| |
| | ||||||
Interest expense | | | | | ||||||||||
Other, net | ( | | | | ||||||||||
Total costs and other deductions | | | | | ||||||||||
Income (loss) from continuing operations before income taxes |
| |
| ( |
| ( |
| ( | ||||||
Income tax expense (benefit): | ||||||||||||||
Current |
| |
| |
| |
| | ||||||
Deferred |
| |
| ( |
| |
| ( | ||||||
Total income tax expense (benefit) |
| |
| |
| |
| | ||||||
Income (loss) from continuing operations, net of tax |
| ( |
| ( |
| ( |
| ( | ||||||
Income (loss) from discontinued operations, net of tax |
| — |
| ( |
| — |
| | ||||||
Net income (loss) |
| ( |
| ( |
| ( |
| ( | ||||||
Less: Net (income) loss attributable to noncontrolling interest |
| ( |
| ( |
| ( |
| ( | ||||||
Net income (loss) attributable to Nabors | ( | ( | ( | ( | ||||||||||
Less: Preferred stock dividend |
| — |
| — |
| — |
| ( | ||||||
Net income (loss) attributable to Nabors common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Amounts attributable to Nabors common shareholders: | ||||||||||||||
Net income (loss) from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Net income (loss) from discontinued operations | — | ( | — | | ||||||||||
Net income (loss) attributable to Nabors common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Earnings (losses) per share: | ||||||||||||||
Basic from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Basic from discontinued operations |
| — |
| — |
| — |
| — | ||||||
Total Basic | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Diluted from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Diluted from discontinued operations |
| — |
| — |
| — |
| — | ||||||
Total Diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Weighted-average number of common shares outstanding: | ||||||||||||||
Basic |
| |
| |
| |
| | ||||||
Diluted |
| |
| |
| |
| |
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended | Nine Months Ended |
| |||||||||||||
| September 30, |
| September 30, |
| |||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
(In thousands) |
| ||||||||||||||
Net income (loss) attributable to Nabors | $ | ( | $ | ( | $ | ( | $ | ( | |||||||
Other comprehensive income (loss), before tax: | |||||||||||||||
Translation adjustment attributable to Nabors | ( | ( | ( | | |||||||||||
Pension liability amortization and adjustment |
| |
| |
| |
| ( | |||||||
Other comprehensive income (loss), before tax |
| ( |
| ( |
| ( |
| | |||||||
Income tax expense (benefit) related to items of other comprehensive income (loss) |
| |
| |
| |
| | |||||||
Other comprehensive income (loss), net of tax |
| ( |
| ( |
| ( |
| | |||||||
Comprehensive income (loss) attributable to Nabors |
| ( |
| ( |
| ( |
| ( | |||||||
Comprehensive income (loss) attributable to noncontrolling interest |
| |
| |
| |
| | |||||||
Comprehensive income (loss) | $ | ( | $ | ( | $ | ( | $ | ( |
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30, | |||||||
| 2022 |
| 2021 | ||||
(In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | ( | $ | ( | |||
Adjustments to net income (loss): | |||||||
Depreciation and amortization |
| |
| | |||
Deferred income tax expense (benefit) |
| |
| ( | |||
Impairments and other charges |
| — |
| | |||
Amortization of debt discount and deferred financing costs | |
| | ||||
Losses (gains) on debt buyback |
| ( |
| ( | |||
Losses (gains) on long-lived assets, net |
| |
| | |||
Losses (gains) on investments, net |
| |
| ( | |||
Provision (recovery) of bad debt | — |
| ( | ||||
Share-based compensation |
| |
| | |||
Foreign currency transaction losses (gains), net |
| ( |
| | |||
Mark-to-market loss on warrants | |
| — | ||||
Noncontrolling interest | ( |
| ( | ||||
Other |
| |
| | |||
Changes in operating assets and liabilities, net of effects from acquisitions: | |||||||
Accounts receivable |
| ( |
| | |||
Inventory |
| ( |
| | |||
Other current assets |
| ( |
| ( | |||
Other long-term assets |
| ( |
| | |||
Trade accounts payable and accrued liabilities |
| |
| | |||
Income taxes payable |
| ( |
| | |||
Other long-term liabilities |
| |
| | |||
Net cash provided by (used for) operating activities |
| |
| | |||
Cash flows from investing activities: | |||||||
Purchases of investments |
| ( |
| ( | |||
Sales and maturities of investments |
| |
| | |||
Purchase of intangible assets |
| — |
| ( | |||
Capital expenditures |
| ( |
| ( | |||
Proceeds from sales of assets |
| |
| | |||
Other |
| |
| ( | |||
Net cash (used for) provided by investing activities |
| ( |
| ( | |||
Cash flows from financing activities: | |||||||
Reduction in long-term debt | ( |
| ( | ||||
Debt issuance costs |
| ( |
| ( | |||
Proceeds from revolving credit facilities |
| |
| | |||
Reduction in revolving credit facilities | ( |
| ( | ||||
Proceeds from issuance of common shares, net of issuance costs |
| |
| — | |||
Repurchase of common and preferred shares | ( |
| — | ||||
Dividends to common and preferred shareholders |
| ( |
| ( | |||
Redeemable noncontrolling interest distribution | — |
| ( | ||||
Distributions to noncontrolling interest | ( |
| ( | ||||
Other | ( |
| ( | ||||
Net cash (used for) provided by financing activities |
| ( |
| | |||
Effect of exchange rate changes on cash and cash equivalents | ( |
| ( | ||||
Net increase (decrease) in cash and cash equivalents and restricted cash |
| ( | | ||||
Cash and cash equivalents and restricted cash, beginning of period | |
| | ||||
Cash and cash equivalents and restricted cash, end of period | $ | | $ | | |||
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |||||||
Cash and cash equivalents, beginning of period | |
| | ||||
Restricted cash, beginning of period | |
| | ||||
Cash and cash equivalents and restricted cash, beginning of period | $ | $ | | ||||
Cash and cash equivalents, end of period | |
| | ||||
|
| | |||||
Cash and cash equivalents and restricted cash, end of period | $ | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
Mandatory Convertible | Capital | Accumulated | Retained | ||||||||||||||||||||||||||
Preferred Shares | Common Shares | in Excess | Other | Earnings | Non- | ||||||||||||||||||||||||
|
| Par |
|
| Par |
| of Par |
| Comprehensive |
| (Accumulated |
| Treasury |
| controlling |
| Total | ||||||||||||
(In thousands, except per share amounts) | Shares | Value | Shares | Value | Value | Income (Loss) | Loss) | Shares | Interest | Equity | |||||||||||||||||||
As of June 30, 2021 | — | $ | — | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | | |||||||||||
Net income (loss) | — | — | — | — | — | — | ( | — | | ( | |||||||||||||||||||
PSU distribution equivalent rights | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | ( | — | — | — | ( | |||||||||||||||||||
Share-based compensation | — | — | — | — | | — | — | — | — | | |||||||||||||||||||
Share issuance | — | — | | | | — | — | — | — | | |||||||||||||||||||
Accrued distribution on redeemable noncontrolling interest in subsidiary |
| — | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||
Other |
| — | — | | — | ( | — | — | — | — | ( | ||||||||||||||||||
As of September 30, 2021 |
| — | $ | — | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | | ||||||||||
As of June 30, 2022 | — | $ | — | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | | |||||||||||
Net income (loss) | — | — | — | — | — | — | ( | — | | ( | |||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | ( | — | — | — | ( | |||||||||||||||||||
Share-based compensation | — | — | — | — | | — | — | — | — | | |||||||||||||||||||
Accrued distribution on redeemable noncontrolling interest in subsidiary | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||
Other | — | — | ( | — | ( | — | | — | — | | |||||||||||||||||||
As of September 30, 2022 | — | $ | — | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | |
7
Mandatory Convertible | Capital | Accumulated | Retained | |||||||||||||||||||||||||
Preferred Shares | Common Shares | in Excess | Other | Earnings | Non- | |||||||||||||||||||||||
|
| Par |
|
| Par |
| of Par |
| Comprehensive |
| (Accumulated |
| Treasury |
| controlling |
| Total | |||||||||||
(In thousands, except per share amounts) | Shares | Value | Shares | Value | Value | Income (Loss) | Loss) | Shares | Interest | Equity | ||||||||||||||||||
As of December 31, 2020 | | $ | | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | | ||||||||||
Net income (loss) | — | — | — | — | — | — | ( | — | | ( | ||||||||||||||||||
PSU distribution equivalent rights | — | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||
Dividends to preferred shareholders ($ | — | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||
Issuance of warrants on common shares | — | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | | — | — | — | | ||||||||||||||||||
Noncontrolling interest contributions (distributions) | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||
Share issuance | — | — | | | | — | — | — | — | | ||||||||||||||||||
Share-based compensation | — | — | — | — | | — | — | — | — | | ||||||||||||||||||
Conversion of preferred shares | ( | ( | | | ( | — | — | — | — | ( | ||||||||||||||||||
Accrued distribution on redeemable noncontrolling interest in subsidiary | — | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||
Other | — | — | | | ( | — | — | — | — | ( | ||||||||||||||||||
As of September 30, 2021 |
| | $ | | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | | |||||||||
As of December 31, 2021 | — | $ | — | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | | ||||||||||
Impact of adoption of ASU 2020-06 (Note 2) | — | — | — | — | ( | — | | — | — | ( | ||||||||||||||||||
As of January 1, 2022 | — | — | | | | ( | ( | ( | | | ||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | ( | — | | ( | ||||||||||||||||||
Warrant Exercise, net of tax | — | — | | | | — | — | — | — | | ||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||
Noncontrolling interest contributions (distributions) | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||
Share-based compensation | — | — | — | — | | — | — | — | — | | ||||||||||||||||||
Accrued distribution on redeemable noncontrolling interest in subsidiary | — | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||
Other | — | — | | | ( | — | ( | — | — | ( | ||||||||||||||||||
As of September 30, 2022 | — | $ | — | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
Nabors Industries Ltd. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 General
Unless the context requires otherwise, references in this report to “we,” “us,” “our,” “the Company,” or “Nabors” mean Nabors Industries Ltd., together with our subsidiaries where the context requires. References in this report to “Nabors Delaware” mean Nabors Industries, Inc., a wholly owned subsidiary of Nabors.
Our business is comprised of our global land-based and offshore drilling rig operations and other rig related services and technologies. These services and technologies include tubular running services, wellbore placement solutions, directional drilling, measurement-while-drilling (“MWD”), logging-while-drilling (“LWD”) systems and services, equipment manufacturing, rig instrumentation and drilling optimization software.
With operations in over
● |
● |
The short- and long-term implications of the military hostilities between Russia and Ukraine, which began in early 2022, are difficult to predict at this time. We continue to actively monitor this dynamic situation and will fulfill any existing obligations in full compliance with applicable international laws and sanctions. As of September 30, 2022,
Note 2 Summary of Significant Accounting Policies
Interim Financial Information
The accompanying unaudited condensed consolidated financial statements of Nabors have been prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”). Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC” or “Commission”), certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted. Therefore, these financial statements should be read together with our annual report on Form 10-K for the year ended December 31, 2021 (“2021 Annual Report”). In management’s opinion, the unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to state fairly our financial position as of September 30, 2022 and the results of operations, comprehensive income (loss), cash flows and changes in equity for the periods presented herein. Interim results for the nine months ended September 30, 2022 may not be indicative of results that will be realized for the full year ending December 31, 2022.
Principles of Consolidation
Our condensed consolidated financial statements include the accounts of Nabors, as well as all majority owned and non-majority owned subsidiaries consolidated in accordance with U.S. GAAP. All significant intercompany accounts and transactions are eliminated in consolidation.
In addition to the consolidation of our majority owned subsidiaries, we also consolidate variable interest entities (“VIE”) when we are determined to be the primary beneficiary of a VIE. Determination of the primary beneficiary of a VIE is based on whether an entity has (a) the power to direct activities that most significantly impact the economic performance of the VIE and (b) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our joint venture, SANAD, which is equally owned by Saudi Aramco and Nabors,
9
has been consolidated. As we have the power to direct activities that most significantly impact SANAD’s economic performance, including operations, maintenance and certain sourcing and procurement, we have determined Nabors to be the primary beneficiary. See Note 3—Joint Ventures.
Reclassification of Prior Year Presentation
Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.
Inventory
Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out or weighted-average cost methods and includes the cost of materials, labor and manufacturing overhead. Inventory included the following:
September 30, | December 31, | ||||||
| 2022 |
| 2021 |
| |||
(In thousands) |
| ||||||
Raw materials | $ | | $ | | |||
Work-in-progress |
| |
| | |||
Finished goods |
| |
| | |||
$ | | $ | |
Special Purpose Acquisition Company
Nabors Energy Transition Corp. (“NETC”) is a consolidated VIE that is included in the accompanying consolidated financial statements under the following captions:
Restricted cash held in trust
As part of the initial public offering of NETC and subsequent private placement warrant transactions, $
Redeemable noncontrolling interest in subsidiary
The company accounts for the non-controlling interest in NETC as subject to possible redemption in accordance with FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” NETC’s common stock features certain redemption rights, which are considered to be outside the company’s control and subject to occurrence of uncertain future events. Accordingly, the $
Nabors will recognize any future changes in redemption value immediately as they occur – i.e., adjust the carrying amount of the instrument to its current redemption amount at each reporting period.
Recently adopted accounting pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU (a) simplifies an issuer’s accounting for convertible instruments by eliminating two of the three models in ASC 470-20 that require separate accounting for embedded conversion features, (b) amends diluted EPS calculations for convertible instruments by requiring the use of the if-converted method and (c) simplifies the settlement assessment entities are required to perform on contracts that can potentially settle in an entity’s own equity by removing certain requirements. ASU 2020-06 was required to be adopted on January 1, 2022. The adoption of this ASU was determined not to be material to our condensed consolidated financial statements. Using the modified retrospective method, the adoption of this ASU
10
resulted in a pre-tax adjustment of $
Note 3 Joint Ventures
During 2016, we entered into an agreement with Saudi Aramco to form a joint venture known as SANAD to own, manage and operate onshore drilling rigs in the Kingdom of Saudi Arabia. SANAD is equally owned by Saudi Aramco and Nabors.
During 2017, Nabors and Saudi Aramco each contributed $
The condensed balance sheet of SANAD, as included in our condensed consolidated balance sheet, is presented below.
September 30, | December 31, | ||||||
| 2022 |
| 2021 |
| |||
(In thousands) |
| ||||||
Assets: | |||||||
Cash and cash equivalents | $ | | $ | | |||
Accounts receivable |
| |
| | |||
Other current assets |
| |
| | |||
Property, plant and equipment, net |
| |
| | |||
Other long-term assets |
| |
| | |||
Total assets | $ | | $ | | |||
Liabilities: | |||||||
Accounts payable | $ | | $ | | |||
Accrued liabilities |
| |
| | |||
Other liabilities | | | |||||
Total liabilities | $ | | $ | |
Note 4 Accounts Receivable Purchase and Sales Agreements
The Company has entered into an accounts receivable sales agreement (the “A/R Sales Agreement”) and an accounts receivable purchase agreement (the “A/R Purchase Agreement,” and, together with the A/R Sales Agreement, the “A/R Facility”). As part of the A/R Facility, the Company continuously sells designated pools of receivables as they are originated by it and certain U.S. subsidiaries to a separate, bankruptcy-remote, special purpose entity (“SPE”) pursuant to the A/R Sales Agreement. Pursuant to the A/R Purchase Agreement, the SPE in turn sells, transfers, conveys and assigns to unaffiliated third party financial institutions (the “Purchasers”) all the rights, title and interest in and to its pool of eligible
11
receivables (the “Eligible Receivables”). The sale of the Eligible Receivables qualifies for sale accounting treatment in accordance with ASC 860 – Transfers and Servicing. During the period of this program, cash receipts from the Purchasers at the time of the sale are classified as operating activities in our consolidated statement of cash flows and the associated receivables are derecognized from the Company’s consolidated balance sheet at the time of the sale. The remaining receivables held by the SPE were pledged to secure the collectability of the sold Eligible Receivables. Subsequent collections on the pledged receivables, which have not been sold, will be classified as operating cash flows in our consolidated statement of cash flows at the time of collection. The amount of receivables pledged as collateral as of September 30, 2022 and December 31, 2021 is approximately $
In July 2021, we entered into the First Amendment to the A/R Purchase Agreement (the “First Amendment”), which reduced the commitments of the third-party financial institutions (the “Purchasers”) from $
In June 2022, we entered into the Third Amendment to the A/R Purchase Agreement which extended the term of the A/R Purchase Agreement to August 13, 2024 and increased the commitments of the Purchasers under the A/R Purchase Agreement from $
The amount available for sale to the Purchasers under the A/R Purchase Agreement fluctuates over time based on the total amount of Eligible Receivables generated during the normal course of business after excluding excess concentrations and certain other ineligible receivables. As of September 30, 2022, approximately $
Note 5 Debt
Debt consisted of the following:
September 30, | December 31, | ||||||
| 2022 |
| 2021 |
| |||
(In thousands) |
| ||||||
$ | | $ | | ||||
| |
| | ||||
| |
| | ||||
|
| | |||||
| — | | |||||
| | ||||||
|
| | |||||
|
| | |||||
|
| | |||||
2018 revolving credit facility |
| — | | ||||
$ | | $ | | ||||
Less: deferred financing costs | | | |||||
Long-term debt | $ | | $ | |
(1) | The |
During the nine months ended September 30, 2022, we repurchased $
12
income (loss). Also, during the nine months ended September 30, 2022, $
Exchange Transactions
During the first quarter of 2021, we entered into
We recorded a minimal gain in connection with the exchange transactions, which was accounted for in accordance with ASC 470-60, Troubled Debt Restructuring by Debtors. Under ASC 470-60, a gain is recorded in an amount equal to the sum of the future undiscounted payments (principal and interest) related to the new Exchange Notes plus the costs incurred in connection with the transaction, less the carrying value of the notes that were exchanged. In relation to the transactions, we recorded $
The aggregate principal amounts and recognized gain for such transactions were as follows:
Nine months ended September 30, | |||
| 2021 | ||
Exchanged | (in thousands) | ||
$ | | ||
| | ||
Aggregate principal amount exchanged |
| | |
Aggregate principal amount of debt issued in exchanges | |
In January 2017, Nabors Delaware issued $
The exchangeable notes are currently exchangeable, under certain conditions, at an exchange rate of
2018 Revolving Credit Facility
In October 2018, Nabors Delaware and Nabors Drilling Canada Limited (“Nabors Canada” and together with Nabors Delaware, the “Borrowers”) entered into a credit agreement dated October 11, 2018 by and among the Borrowers, the guarantors identified therein, HSBC Bank Canada, as the Canadian lender, the issuing banks and other lenders party thereto (the “U.S. Lenders”) and Citibank, N.A., as administrative agent solely for the U.S. Lenders (as amended, restated, supplemented or otherwise modified from time to time, the “2018 Revolving Credit Facility”). As of January 21, 2022, we repaid all amounts outstanding under the 2018 Revolving Credit Facility and the 2018 Revolving Credit Facility was terminated.
13
2022 Credit Agreement
On January 21, 2022, Nabors Delaware entered into a revolving credit agreement between Nabors Delaware, the guarantors from time to time party thereto, the issuing banks (the “Issuing Banks”) and other lenders party thereto (the “Lenders”) and Citibank, N.A., as administrative agent (the “2022 Credit Agreement”). Under the 2022 Credit Agreement, the Lenders have committed to provide to Nabors Delaware up to an aggregate principal amount at any time outstanding not in excess of $
The 2022 Credit Agreement permits the incurrence of additional indebtedness secured by liens, which may include liens on the collateral securing the facility, in an amount up to $
Additionally, the Company is subject to certain covenants, which are subject to certain exceptions and include, among others, (a) a covenant restricting our ability to incur liens (subject to the additional liens basket of up to $
As of September 30, 2022, we had
As of the date of this report, we were in compliance with all covenants under the 2022 Credit Agreement. We expect to remain in compliance with all covenants under the 2022 Credit Agreement during the twelve month period following the date of this report based on our current operational and financial projections. However, we can make no assurance of continued compliance if our current projections or material underlying assumptions prove to be incorrect. If we fail to comply with the covenants, the revolving credit commitment could be terminated, and any outstanding borrowings under the facility could be declared immediately due and payable.
Note 6 Shareholders’ Equity
Common shares
On July 19, 2021, we issued
Common stock warrants
On May 27, 2021, the Board declared a distribution of warrants to purchase its common shares (the “Warrants”) to holders of the Company’s common shares. Holders of Nabors common shares received -fifths of a warrant per common share held as of the record date (rounded down for any fractional warrant). Nabors issued approximately
14
million Warrants on June 11, 2021 to shareholders of record as of June 4, 2021. As of September 30, 2022,
Each Warrant represents the right to purchase
The Warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the Warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. The fair value of the Warrants was initially measured at fair value using a Monte Carlo pricing model due to the level of market activity. As of September 30, 2022, the fair value of the Warrants was measured using their trading price. On September 30, 2022, the fair value of the Warrants was approximately $
Note 7 Fair Value Measurements
Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best information available. Accordingly, we employ valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.
The use of unobservable inputs is intended to allow for fair value determinations in situations where there is little, if any, market activity for the asset or liability at the measurement date. We are able to classify fair value balances utilizing a fair value hierarchy based on the observability of those inputs.
Under the fair value hierarchy:
● | Level 1 measurements include unadjusted quoted market prices for identical assets or liabilities in an active market; |
● | Level 2 measurements include quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets; and |
15
● | Level 3 measurements include those that are unobservable and of a subjective nature. |
Recurring Fair Value Measurements
Our financial liabilities that are accounted for at fair value on a recurring basis as of September 30, 2022 consisted of the Warrants and are included in other long-term liabilities in the accompanying consolidated financial statements. During the first quarter of 2022, the Warrants transferred from using Level 3 inputs to Level 1 measurements due to increased trading volume. As of September 30, 2022, the Warrants were carried at fair market value and totaled $
The fair value of the Warrants was initially measured at fair value using a Monte Carlo option pricing model. As of December 31, 2021, the estimated fair value of the Warrants was determined using Level 3 inputs. Inherent in the option pricing simulation are assumptions related to expected stock-price volatility, expected life and risk-free interest rate. The Company estimates the volatility of the Warrants based on implied and historical volatility of the company’s traded common stock. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the Warrants is based on the Company’s ability to initiate expiration, subject to a
Nonrecurring Fair Value Measurements
We applied fair value measurements to our nonfinancial assets and liabilities measured on a nonrecurring basis, which consist of measurements primarily related to assets held for sale, goodwill, intangible assets and other long-lived assets and assets acquired and liabilities assumed in a business combination. Based upon our review of the fair value hierarchy, the inputs used in these fair value measurements were considered Level 3 inputs.
Fair Value of Debt Instruments
We estimate the fair value of our financial instruments in accordance with U.S. GAAP. The fair value of our long-term debt and revolving credit facilities is estimated based on quoted market prices or prices quoted from third-party financial institutions. The fair value of our debt instruments is determined using Level 2 measurements. The carrying and fair values of these liabilities were as follows:
September 30, 2022 | December 31, 2021 | |||||||||||
Carrying | Fair | Carrying | Fair | |||||||||
Value | Value | Value | Value | |||||||||
(In thousands) | ||||||||||||
| $ | | $ | |
| $ | | $ | | |||
|
| |
| |
|
| |
| | |||
|
| |
| |
|
| |
| | |||
| |
| |
|
| |
| | ||||
| — |
| — |
|
| |
| | ||||
| | |
| | ||||||||
| |
| |
|
| |
| | ||||
| |
| |
|
| |
| | ||||
| |
| |
|
| |
| | ||||
2018 revolving credit facility |
|
| — |
| — |
|
| |
| | ||
$ | | $ | | $ | | $ | | |||||
Less: deferred financing costs | | | ||||||||||
$ | | $ | |
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.
16
Note 8 Commitments and Contingencies
Contingencies
Income Tax
We operate in a number of countries and our tax returns filed in those jurisdictions are subject to review and examination by tax authorities within those jurisdictions. We do not recognize the benefit of income tax positions we believe are more likely than not to be disallowed upon challenge by a tax authority. If any tax authority successfully challenges our operational structure, intercompany pricing policies or the taxable presence of our subsidiaries in certain countries, if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure, or if we lose a material tax dispute in any country, our effective tax rate on our worldwide earnings could change substantially.
In certain jurisdictions we have recognized deferred tax assets and liabilities. Judgment and assumptions are required in determining whether deferred tax assets will be fully or partially utilized. When we estimate that all or some portion of certain deferred tax assets such as net operating loss carryforwards will not be utilized, we establish a valuation allowance for the amount we determine to be more likely than not unrealizable. We continually evaluate strategies that could allow for future utilization of our deferred assets. Any change in the ability to utilize such deferred assets will be accounted for in the period of the event affecting the valuation allowance. If facts and circumstances cause us to change our expectations regarding future tax consequences, the resulting adjustments could have a material effect on our financial results or cash flow. At this time, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize the deferred tax assets that we have recognized. However, it is possible that some of our recognized deferred tax assets, relating to net operating loss carryforwards, could expire unused or could carryforward indefinitely without utilization. Therefore, unless we are able to generate sufficient taxable income from our component operations, a substantial valuation allowance to reduce our deferred tax assets may be required, which would materially increase our tax expense in the period the allowance is recognized and materially adversely affect our results of operations and statement of financial condition.
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.
In March 2011, the Court of Ouargla entered a judgment of approximately $
17
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 $
Following a routine audit conducted in May and June of 2018 by the Atyrau Oblast Ecology Department (the “AOED”), our joint venture in Kazakhstan, KMG Nabors Drilling Company (“KNDC”), was administratively fined for not having emissions permits for KNDC owned or leased equipment, due to a change in interpretation by the AOED that the owner/lessor of the equipment that emits the pollutants must have its own permits. Administrative fines of $
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 include the A/R Facility (see Note 4—Accounts Receivable Purchase and Sales Agreements) and certain agreements and obligations under which we provide financial or performance assurance to third parties. Certain of these financial or performance assurances 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 |
| ||||||||||||
| 2022 |
| 2023 |
| 2024 |
| Thereafter |
| Total |
| |||
(In thousands) |
| ||||||||||||
Financial standby letters of credit and other financial surety instruments | $ | |
| |
| |
| | $ | |
18
Note 9 Earnings (Losses) Per Share
ASC 260, Earnings per Share, requires companies to treat unvested share-based payment awards that have nonforfeitable rights to dividends or dividend equivalents as a separate class of securities in calculating earnings (losses) per share. We have granted and expect to continue to grant to employees restricted stock grants that contain nonforfeitable rights to dividends. Such grants are considered participating securities under ASC 260. As such, we are required to include these grants in the calculation of our basic earnings (losses) per share and calculate basic earnings (losses) per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The participating security holders are not contractually obligated to share in losses. Therefore, losses are not allocated to the participating security holders.
Basic earnings (losses) per share is computed utilizing the two-class method and is calculated based on the weighted-average number of common shares outstanding during the periods presented.
Diluted earnings (losses) per share is computed using the weighted-average number of common and common equivalent shares outstanding during the periods utilizing the two-class method for stock options and unvested restricted shares.
A reconciliation of the numerators and denominators of the basic and diluted earnings (losses) per share computations is as follows:
Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | ||||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| ||||||
(In thousands, except per share amounts) | ||||||||||||||
BASIC EPS: | ||||||||||||||
Net income (loss) (numerator): | ||||||||||||||
Income (loss) from continuing operations, net of tax | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Less: net (income) loss attributable to noncontrolling interest |
| ( |
| ( |
| ( |
| ( | ||||||
Less: preferred stock dividends |
| — |
| — |
| — |
| ( | ||||||
Less: accrued distribution on redeemable noncontrolling interest in subsidiary | ( | ( | ( | ( | ||||||||||
Numerator for basic earnings per share: | ||||||||||||||
Adjusted income (loss) from continuing operations, net of tax - basic | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Income (loss) from discontinued operations, net of tax | $ | — | $ | ( | $ | — | $ | | ||||||
Weighted-average number of shares outstanding - basic |
| |
| |
| |
| | ||||||
Earnings (losses) per share: | ||||||||||||||
Basic from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Basic from discontinued operations |
| — |
| — |
| — |
| — | ||||||
Total Basic | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
DILUTED EPS: | ||||||||||||||
Adjusted income (loss) from continuing operations, net of tax - diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Income (loss) from discontinued operations, net of tax | $ | — | $ | ( | $ | — | $ | | ||||||
Weighted-average number of shares outstanding - diluted | | | | | ||||||||||
Earnings (losses) per share: | ||||||||||||||
Diluted from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Diluted from discontinued operations |
| — |
| — |
| — |
| — | ||||||
Total Diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
For all periods presented, the computation of diluted earnings (losses) per share excludes outstanding stock options with exercise prices greater than the average market price of Nabors’ common shares and shares related to the outstanding Warrants, because their inclusion would be anti-dilutive and because they are not considered participating
19
securities. In any period during which the average market price of Nabors’ common shares exceeds the exercise prices of the stock options, such stock options will be included in our diluted earnings (losses) per share computation using the if-converted method of accounting. Restricted stock is 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 participating securities. For periods in which we experience a net loss from continuing operations, all potential common shares have been excluded from the calculation of weighted-average shares outstanding, because their inclusion would be anti-dilutive.
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2022 |
| 2021 |
| 2022 |
| 2021 |
| |||||||
Potentially dilutive securities excluded as anti-dilutive | | | | |
Note 10 Supplemental Balance Sheet and Income Statement Information
Accrued liabilities included the following:
September 30, | December 31, | ||||||
| 2022 |
| 2021 |
| |||
(In thousands) |
| ||||||
Accrued compensation | $ | | $ | | |||
Deferred revenue and proceeds on insurance and asset sales |
| | | ||||
Other taxes payable |
| | | ||||
Workers’ compensation liabilities |
| |
| | |||
Interest payable |
| |
| | |||
Litigation reserves |
| |
| | |||
Other accrued liabilities |
| |
| | |||
$ | | $ |
Investment income (loss) includes the following:
Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | |||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| |||||
(In thousands) | |||||||||||||
Interest and dividend income | $ | | $ | | $ | | $ | | |||||
Gains (losses) on marketable securities |
| ( |
| ( |
| ( |
| | |||||
$ | | $ | | $ | | $ | |
Other, net included the following:
Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | ||||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| ||||||
(In thousands) | ||||||||||||||
Losses (gains) on sales, disposals and involuntary conversions of long-lived assets | $ | | $ | ( | $ | | $ | | ||||||
Purchase of technology | — | | — | | ||||||||||
Warrant and derivative valuation | ( | — | | — | ||||||||||
Impairment of Canada Drilling assets | — | | — | | ||||||||||
Litigation expenses and reserves |
| | | | | |||||||||
Foreign currency transaction losses (gains) |
| ( | | ( | | |||||||||
(Gain) loss on debt buyback | ( | ( | ( | ( | ||||||||||
Other losses (gains) |
| | | | | |||||||||
$ | ( | $ | | $ | | $ | |
20
The changes in accumulated other comprehensive income (loss), by component, included the following:
|
|
|
|
| |||||||||
Gains | Defined |
| |||||||||||
(losses) on | benefit | Foreign |
| ||||||||||
cash flow | pension plan | currency |
| ||||||||||
| hedges |
| items |
| items |
| Total |
| |||||
(In thousands (1) ) |
| ||||||||||||
As of January 1, 2021 | $ | | $ | ( | $ | ( | $ | ( | |||||
Other comprehensive income (loss) before reclassifications |
| — | ( |
| | | |||||||
Amounts reclassified from accumulated other comprehensive income (loss) |
| — | | — | | ||||||||
Net other comprehensive income (loss) |
| — |
| ( |
| |
| | |||||
As of September 30, 2021 | $ | | $ | ( | $ | ( | $ | ( |
(1) | All amounts are net of tax. |
|
|
|
|
| |||||||||
Gains | Defined |
| |||||||||||
(losses) on | benefit | Foreign |
| ||||||||||
cash flow | pension plan | currency |
| ||||||||||
| hedges |
| items |
| items |
| Total |
| |||||
(In thousands (1) ) |
| ||||||||||||
As of January 1, 2022 | $ | | $ | ( | $ | ( | $ | ( | |||||
Other comprehensive income (loss) before reclassifications |
| — |
| |
| ( |
| ( | |||||
Amounts reclassified from accumulated other comprehensive income (loss) |
| — |
| |
| — |
| | |||||
Net other comprehensive income (loss) |
| — |
| |
| ( |
| ( | |||||
As of September 30, 2022 | $ | | $ | ( | $ | ( | $ | ( |
(1) | All amounts are net of tax. |
The line items that were reclassified to net income included the following:
Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | ||||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| ||||||
(In thousands) | ||||||||||||||
General and administrative expenses | $ | | $ | | $ | | $ | | ||||||
Total income (loss) from continuing operations before income tax |
| ( |
| ( |
| ( |
| ( | ||||||
Tax expense (benefit) | ( | ( | ( | ( | ||||||||||
Reclassification adjustment for (gains)/ losses included in net income (loss) | $ | ( | $ | ( | $ | ( | $ | ( |
Note 11 Segment Information
The following table sets forth financial information with respect to our reportable operating segments:
Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | ||||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| ||||||
(In thousands) | ||||||||||||||
Operating revenues: | ||||||||||||||
U.S. Drilling | $ | | $ | | $ | | $ | | ||||||
Canada Drilling |
| — |
| |
| — |
| | ||||||
International Drilling |
| |
| |
| |
| | ||||||
Drilling Solutions |
| |
| |
| |
| | ||||||
Rig Technologies |
| |
| |
| |
| | ||||||
Other reconciling items (1) |
| ( |
| ( |
| ( |
| ( | ||||||
Total | $ | | $ | | $ | | $ | |
21
Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | ||||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| ||||||
(In thousands) | ||||||||||||||
Adjusted operating income (loss): (2) | ||||||||||||||
U.S. Drilling | $ | | $ | ( | $ | | $ | ( | ||||||
Canada Drilling |
| ( |
| |
| ( |
| | ||||||
International Drilling |
| ( |
| ( |
| ( |
| ( | ||||||
Drilling Solutions |
| |
| |
| |
| | ||||||
Rig Technologies |
| |
| |
| |
| ( | ||||||
Total segment adjusted operating income (loss) | $ | | $ | ( | $ | | $ | ( | ||||||
Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | ||||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| ||||||
(In thousands) | ||||||||||||||
Reconciliation of segment adjusted operating income (loss) to net income (loss): | ||||||||||||||
Net income (loss) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Income (loss) from discontinued operations, net of tax | — | | — | ( | ||||||||||
Income (loss) from continuing operations, net of tax | ( | ( | ( | ( | ||||||||||
Income tax expense (benefit) | | | | | ||||||||||
Income (loss) from continuing operations before income taxes | $ | | $ | ( | ( | $ | ( | |||||||
Investment (income) loss |
| ( | ( |
| ( | ( | ||||||||
Interest expense | | | | | ||||||||||
Other, net | ( | | | | ||||||||||
Other reconciling items (3) |
| |
| |
| |
| | ||||||
Total segment adjusted operating income (loss) (2) | $ | | $ | ( | $ | | $ | ( |
September 30, | December 31, | ||||||
| 2022 |
| 2021 |
| |||
(In thousands) |
| ||||||
Total assets: | |||||||
U.S. Drilling | $ | | $ | | |||
Canada Drilling |
| |
| | |||
International Drilling |
| |
| | |||
Drilling Solutions |
| |
| | |||
Rig Technologies |
| |
| | |||
Other reconciling items (3) |
| |
| | |||
Total | $ | | $ | |
(1) | Represents the elimination of inter-segment transactions related to our Rig Technologies operating segment. |
(2) | Adjusted operating income (loss) represents income (loss) from continuing operations before income taxes, interest expense, investment income (loss), and other, net. 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 from net income (loss) is provided in the above table. |
(3) | Represents the elimination of inter-segment transactions and unallocated corporate expenses and assets. |
Note 12 Revenue Recognition
We recognize revenue when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. Contract drilling revenues are recorded over time utilizing the input method based on time elapsed. The measurement of progress considers the transfer of the service to the customer
22
as we provide daily drilling services. We receive payment after the services have been performed by billing customers periodically (typically monthly). However, a portion of our revenues are recognized at a point-in-time as control is transferred at a distinct point in time such as with the sale of our top drives and other capital equipment. Within our drilling contracts, we have identified one performance obligation in which the transaction price is allocated.
Disaggregation of revenue
In the following table, revenue is disaggregated by geographical region. The table also includes a reconciliation of the disaggregated revenue with the reportable segments:
Three Months Ended | ||||||||||||||||||||||
| September 30, 2022 | |||||||||||||||||||||
U.S. Drilling | Canada Drilling | International Drilling | Drilling Solutions | Rig Technologies | Other | Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||||
Lower 48 | $ | | $ | — | $ | — | $ | | $ | | $ | — | $ | | ||||||||
U.S. Offshore Gulf of Mexico |
| |
| — |
| — |
| |
| — |
| — | | |||||||||
Alaska |
| |
| — |
| — |
| |
| — |
| — | | |||||||||
Canada |
| — |
| — |
| — |
| |
| |
| — | | |||||||||
Middle East & Asia |
| — |
| — |
| |
| |
| |
| — | | |||||||||
Latin America |
| — |
| — |
| |
| |
| |
| — | | |||||||||
Europe, Africa & CIS |
| — |
| — |
| |
| |
| |
| — | | |||||||||
Eliminations & other |
| — | — | — | — | — | ( |
| ( | |||||||||||||
Total | $ | | $ | — | $ | | $ | | $ | | $ | ( | $ | |
Nine Months Ended | ||||||||||||||||||||||
| September 30, 2022 | |||||||||||||||||||||
U.S. Drilling | Canada Drilling | International Drilling | Drilling Solutions | Rig Technologies | Other | Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||||
Lower 48 | $ | | $ | — | $ | — | $ | | $ | | $ | — | $ | | ||||||||
U.S. Offshore Gulf of Mexico |
| |
| — |
| — |
| |
| — |
| — | | |||||||||
Alaska |
| |
| — |
| — |
| |
| — |
| — | | |||||||||
Canada |
| — |
| — |
| — |
| |
| |
| — | | |||||||||
Middle East & Asia |
| — |
| — |
| |
| |
| |
| — | | |||||||||
Latin America |
| — |
| — |
| |
| |
| |
| — | | |||||||||
Europe, Africa & CIS |
| — |
| — |
| |
| |
| |
| — | | |||||||||
Eliminations & other |
| — | — | — | — | — | ( |
| ( | |||||||||||||
Total | $ | | $ | — | $ | | $ | | $ | | $ | ( | $ | |
Three Months Ended | ||||||||||||||||||||||
| September 30, 2021 | |||||||||||||||||||||
U.S. Drilling | Canada Drilling | International Drilling | Drilling Solutions | Rig Technologies | Other | Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||||
Lower 48 | $ | | $ | — | $ | — | $ | | $ | | $ | — | $ | | ||||||||
U.S. Offshore Gulf of Mexico |
| |
| — |
| — |
| |
| — |
| — | | |||||||||
Alaska |
| |
| — |
| — |
| |
| |
| — | | |||||||||
Canada |
| — |
| |
| — |
| |
| |
| — | | |||||||||
Middle East & Asia |
| — |
| — |
| |
| |
| |
| — | | |||||||||
Latin America |
| — |
| — |
| |
| |
| — |
| — | | |||||||||
Europe, Africa & CIS |
| — |
| — |
| |
| |
| |
| — | | |||||||||
Eliminations & other |
| — | — | — | — | — | ( |
| ( | |||||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | |
23
Nine Months Ended | |||||||||||||||||||||
| September 30, 2021 | ||||||||||||||||||||
U.S. Drilling | Canada Drilling | International Drilling | Drilling Solutions | Rig Technologies | Other | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||||
Lower 48 | $ | | $ | — | $ | — | $ | | $ | | $ | — | $ | | |||||||
U.S. Offshore Gulf of Mexico |
| |
| — |
| — |
| |
| — |
| — | | ||||||||
Alaska |
| |
| — |
| — |
| |
| |
| — | | ||||||||
Canada |
| — |
| |
| — |
| |
| |
| — | | ||||||||
Middle East & Asia |
| — |
| — |
| |
| |
| |
| — | | ||||||||
Latin America |
| — |
| — |
| |
| |
| |
| — | | ||||||||
Europe, Africa & CIS |
| — |
| — |
| |
| |
| |
| — | | ||||||||
Eliminations & other |
| — | — | — | — | — | ( |
| ( | ||||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | ( | $ | |
Contract balances
We perform our obligations under a contract with a customer by transferring goods or services in exchange for consideration from the customer. We recognize a contract asset or liability when we transfer goods or services to a customer and bill an amount which differs from the revenue allocated to the related performance obligations.
The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in receivables, contract assets, or contract liabilities (deferred revenue) on our condensed consolidated balance sheet. In general, we receive payments from customers based on dayrates as stipulated in our contracts (e.g., operating rate, standby rate, etc.). The invoices billed to the customer are based on the varying rates applicable to the operating status on each rig. Accounts receivable are recorded when the right to consideration becomes unconditional.
Dayrate contracts also may contain fees charged to the customer for up-front rig modifications, mobilization and demobilization of equipment and personnel. These fees are associated with contract fulfillment activities, and the related revenue (subject to any constraint on estimates of variable consideration) is allocated to a single performance obligation and recognized ratably over the initial term of the contract. Mobilization fees are generally billable to the customer in the initial phase of a contract and generate contract liabilities until they are recognized as revenue. Demobilization fees are generally received at the end of the contract and generate contract assets when they are recognized as revenue prior to becoming receivables from the customer.
We receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request. Reimbursable revenues are variable and subject to uncertainty as the amounts received and timing thereof are dependent on factors outside of our influence. Accordingly, these revenues are constrained and not recognized until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of the customer. We are generally considered a principal in these transactions and record the associated revenues at the gross amounts billed to the customer.
The opening and closing balances of our receivables, contract assets and current and long-term contract liabilities are as follows:
Contract | Contract | Contract | Contract | ||||||||||||
Contract | Assets | Assets | Liabilities | Liabilities | |||||||||||
| Receivables |
| (Current) |
| (Long-term) |
| (Current) |
| (Long-term) | ||||||
(In millions) | |||||||||||||||
As of December 31, 2021 | $ | | $ | | $ | | $ | | $ | | |||||
As of September 30, 2022 | $ | | $ | | $ | | $ | | $ | |
Approximately
Additionally,
24
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We often discuss expectations regarding our future markets, demand for our products and services, and our performance in our annual, quarterly and current 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 of 1933, as amended (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:
● | actual and potential political or economic instability, civil disturbance, war or acts of terrorism involving any of the countries in which we do business; |
● | the novel coronavirus (“COVID-19”) pandemic and its impact on our operations as well as oil and gas markets and prices; |
● | fluctuations and volatility in worldwide prices of and demand for oil and natural gas; |
● | fluctuations in levels of oil and natural gas exploration and development activities; |
● | fluctuations in the demand for our services; |
● | competitive and technological changes and other developments in the oil and gas and oilfield services industries; |
● | our ability to renew customer contracts in order to maintain competitiveness; |
● | the existence of operating risks inherent in the oil and gas and oilfield services industries; |
● | the possibility of the loss of one or a number of our large customers; |
● | the impact of long-term indebtedness and other financial commitments on our financial and operating flexibility; |
● | our access to and the cost of capital, including the impact of a further downgrade in our credit rating, covenant restrictions, availability under our secured revolving credit facility, and future issuances of debt or equity securities; |
● | our dependence on our operating subsidiaries and investments to meet our financial obligations; |
● | our ability to retain skilled employees; |
● | our ability to complete, and realize the expected benefits of, strategic transactions; |
● | changes in tax laws and the possibility of changes in other laws and regulations; |
● | the possibility of changes to U.S. trade policies and regulations including the imposition of trade embargoes or sanctions; and |
● | general economic conditions, including the capital and credit markets. |
Our business depends, 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 oil or natural gas, that
25
has a material impact on exploration, development and 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 highlights certain factors that we believe are important for your consideration. For a more detailed description of risk factors that may affect us or our industry, please refer to Item 1A. — Risk Factors in our 2021 Annual Report.
Management Overview
This section is intended to help you understand our results of operations and our financial condition. This information is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the accompanying notes thereto.
We are a leading provider of advanced technology for the energy industry. With operations in over 15 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and sustainable energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower carbon world.
Outlook
The demand for our services and products is a function of the level of spending by oil and gas companies for exploration, development and production activities. The level of exploration, development and production activities is to a large extent tied to the prices of oil and natural gas, which can fluctuate significantly, are highly volatile and tend to be highly sensitive to supply and demand cycles. Additionally, some oil and gas companies may intentionally limit their capital spending to a percentage of their operating cash flows which may differ from how they have historically made capital allocation decisions.
During 2020, global oil markets experienced unprecedented volatility. As a result, we experienced a significant reduction in demand for our services throughout 2020 and into 2021, both in the US and in many international markets. The US drilling rig market began to stabilize during the second half of 2020 and has improved at a measured rate since 2020 through the first three quarters of 2022. We expect continued increases in activity throughout the remainder of 2022 and 2023 for the US market. In our International markets since 2020, we have seen a substantial resumption of overall activity to near pre-COVID-19 levels. In certain key markets, activity has been restored to pre-COVID levels.
We are becoming increasingly engaged with new energy solution opportunities, specifically focused around the reduction of carbon emissions, geothermal technologies and energy storage. Additionally, the Company continues to invest in technologies and solutions that will support the new energy transition. We expect to see continued growth in these areas as new energy solutions expand.
More recently, several global commodity markets, including oil and gas, have been impacted by the effects of the war in Ukraine. These consequences include severe economic sanctions against the Russian government as well as certain Russian businesses and individuals, in addition to a reorientation of the global sources of oil and gas supply and a significant increase in the related commodity prices. Government actions, as well as those by large producers, also continue to impact energy markets. Although higher commodity prices have historically led to an increase in oilfield activity, the ultimate outcome of these events and the impact on our business remains uncertain.
Recent Developments
2022 Credit Agreement
On January 21, 2022, we entered into a revolving credit agreement between Nabors Delaware, the guarantors from time to time party thereto, the issuing banks (the “Issuing Banks”) and other lenders party thereto (the “Lenders”) and Citibank, N.A., as administrative agent (the “2022 Credit Agreement”). The 2022 Credit Agreement replaced the 2018 Revolving Credit Facility. Under the 2022 Credit Agreement, the Lenders have committed to provide up to an aggregate principal amount at any time outstanding not in excess of $350.0 million (with an accordion feature for an additional $100.0 million) to Nabors Delaware under a secured revolving credit facility, including sub-facilities provided by certain
26
of the Lenders for letters of credit in an aggregate principal amount at any time outstanding not in excess of $100.0 million. The facility matures on the earlier of (a) January 21, 2026 and (b) (i) to the extent any principal amount of Nabors Delaware’s existing 5.1% senior notes due 2023 or 5.75% senior notes due 2025 remains outstanding on the date that is 90 days prior to the applicable maturity date for such indebtedness, then such 90th day or (ii) to the extent 50% or more of the outstanding (as of the closing date) aggregate principal amount of the 0.75% senior exchangeable notes due 2024 remains outstanding and not refinanced or defeased on the date that is 90 days prior to the maturity date for such indebtedness, then such 90th day.
Financial Results
Comparison of the three months ended September 30, 2022 and 2021
Operating revenues for the three months ended September 30, 2022 totaled $694.1 million, representing an increase of $170.0 million, or 32%, compared to the three months ended September 30, 2021. All of our operating segments, with the exception of Canada Drilling due to its sale, experienced an increase in operating revenues over this period. For a more detailed description of operating results see Segment Results of Operations below.
Net loss from continuing operations attributable to Nabors common shareholders totaled $13.8 million ($1.80 per diluted share) for the three months ended September 30, 2022 compared to a net loss from continuing operations attributable to Nabors common shareholders of $122.5 million ($15.79 per diluted share) for the three months ended September 30, 2021, or a $108.7 million decrease in the net loss. The majority of the decrease in net loss is attributable to improved market conditions, which has resulted in improved adjusted operating income in all our segments from the prior year, together with $34.0 million of mark-to-market gains from the common stock warrants during the third quarter of 2022.
General and administrative expenses for the three months ended September 30, 2022 totaled $57.6 million, representing an increase of $4.7 million, or 9%, compared to the three months ended September 30, 2021. This is reflective of increases in workforce costs and general operating costs as market conditions have improved and operating levels have increased.
Research and engineering expenses for the three months ended September 30, 2022 totaled $13.4 million, representing an increase of $3.9 million, or 41%, compared to the three months ended September 30, 2021. This is primarily reflective of an increase in research and development activities, along with increased engineering support costs for the higher general operating activity levels, as market conditions have improved.
Depreciation and amortization expense for the three months ended September 30, 2022 was $169.9 million, representing a decrease of $3.5 million, or 2%, compared to the three months ended September 30, 2021. The decrease is attributable to the combination of (a) a reduction in depreciation as a result of the many assets that have recently reached the end of their useful lives and (b) limited capital expenditures over recent years.
27
Segment Results of Operations
The following tables set forth certain information with respect to our reportable segments and rig activity:
Three Months Ended |
| ||||||||||||||
September 30, | |||||||||||||||
2022 | 2021 | Increase/(Decrease) |
| ||||||||||||
(In thousands, except percentages and rig activity) | |||||||||||||||
U.S. Drilling |
|
|
|
|
|
|
|
|
| ||||||
Operating revenues | $ | 297,178 | $ | 173,441 | $ | 123,737 | 71 | % | |||||||
Adjusted operating income (loss) (1) | $ | 37,776 | $ | (19,700) | $ | 57,476 | 292 | % | |||||||
Average rigs working (2) |
| 99.8 |
| 72.6 |
| 27.2 | 37 | % | |||||||
Canada Drilling | |||||||||||||||
Operating revenues | $ | — | $ | 6,034 | $ | (6,034) | (100) | % | |||||||
Adjusted operating income (loss) (1) | $ | (9) | $ | 1,371 | $ | (1,380) | (101) | % | |||||||
Average rigs working (2) |
| — |
| 4.1 |
| (4.1) | (100) | % | |||||||
International Drilling | |||||||||||||||
Operating revenues | $ | 306,355 | $ | 270,008 | $ | 36,347 | 13 | % | |||||||
Adjusted operating income (loss) (1) | $ | (907) | $ | (7,297) | $ | 6,390 | 88 | % | |||||||
Average rigs working (2) |
| 74.6 |
| 67.0 |
| 7.6 | 11 | % | |||||||
Drilling Solutions | |||||||||||||||
Operating revenues | $ | 61,981 | $ | 45,880 | $ | 16,101 | 35 | % | |||||||
Adjusted operating income (loss) (1) | $ | 20,099 | $ | 8,607 | $ | 11,492 |
| 134 | % | ||||||
Rig Technologies | |||||||||||||||
Operating revenues | $ | 50,496 | $ | 42,053 | $ | 8,443 | 20 | % | |||||||
Adjusted operating income (loss) (1) | $ | 3,412 | $ | 1,926 | $ | 1,486 |
| 77 | % |
(1) | Adjusted operating income (loss) is our measure of segment profit and loss. See Note 11—Segment Information to the consolidated financial statements included in Item 1 of the report. |
(2) | Represents a measure of the average number of rigs operating during a given period. For example, one rig operating 45 days during a quarter represents approximately 0.5 average rigs working for the quarter. On an annual period, one rig operating 182.5 days represents approximately 0.5 average rigs working for the year. |
U.S. Drilling
Operating revenues for our U.S. Drilling segment increased by $123.7 million or 71% during the three months ended September 30, 2022 compared to the corresponding period in 2021. This increase was due to a 37% increase in the average rigs working, reflecting increased drilling activity as market conditions and demand for our drilling services have rebounded and increased since the prior year. The increase is also attributable to an increase in overall average day rates, as pricing for our services has improved.
Canada Drilling
Operating revenues decreased during the three months ended September 30, 2022 compared to the corresponding prior year period due to the sale of the Canada Drilling assets in July 2021.
International Drilling
Operating revenues for our International Drilling segment increased by $36.3 million or 13% compared to the corresponding prior year period. This increase was due to an 11% increase in the average rigs working, reflecting increased drilling activity as market conditions and demand for our drilling services have rebounded and increased since the prior year.
28
Drilling Solutions
Operating revenues for this segment increased by $16.1 million or 35% during the three months ended September 30, 2022 compared to the corresponding period in 2021 as market conditions and demand for our services have rebounded and drilling activity has increased since the prior year.
Rig Technologies
Operating revenues for our Rig Technologies segment increased by $8.4 million or 20% during the three months ended September 30, 2022 compared to the corresponding period as market conditions and demand for our services have improved since the prior year.
Other Financial Information
Interest expense
Interest expense for the three months ended September 30, 2022 was $43.8 million, representing an increase of $1.6 million, or 4%, compared to the three months ended September 30, 2021. The increase was primarily due to the issuance in November 2021 of $700 million in 7.375% senior priority guaranteed notes due May 2027, partially offset by a reduction to our overall debt levels, outstanding notes and credit facilities.
Other, net
Other, net for the three months ended September 30, 2022 was a gain of $26.0 million. This consists of approximately $34.0 million related to mark-to-market gains from the common stock warrants and derivatives, partially offset by $4.7 million in losses on sales and disposals of long-lived assets and $4.3 million due to increases in litigation reserves.
Other, net for the three months ended September 30, 2021 was a loss of $22.8 million. Approximately $14.7 million of this amount related to costs incurred during the quarter on our energy transition initiatives, including the purchase of certain development stage technologies that were expensed. In addition, there was an increase in litigation reserves of $2.6 million, $1.5 million of loss on net derivative losses and $0.9 million in foreign currency loss.
Income tax
Our worldwide tax expense for the three months ended September 30, 2022 was $12.4 million compared to $2.8 million for the three months ended September 30, 2021. The increase in tax expense was primarily attributable to the change in amount and geographic mix of our pre-tax earnings (losses).
Comparison of the nine months ended September 30, 2022 and 2021
Operating revenues for the nine months ended September 30, 2022 totaled $1.9 billion, representing an increase of $419.6 million, or 28%, compared to the nine months ended September 30, 2021. All of our operating segments, with the exception of Canada Drilling due to its sale, experienced an increase in operating revenues over this period. For a more detailed description of operating results, see Segment Results of Operations below.
Net loss from continuing operations attributable to Nabors common shareholders totaled $281.2 million ($32.72 per diluted share) for the nine months ended September 30, 2022 compared to a net loss from continuing operations attributable to Nabors common shareholders of $459.3 million ($62.26 per diluted share) for the nine months ended September 30, 2021, or a $178.1 million decrease in the net loss. The majority of the decrease in net loss is attributable to improved market conditions, which has resulted in improved adjusted operating income in all our segments from the prior year, with the exception of Canada Drilling due to its sale, together with lower depreciation.
General and administrative expenses for the nine months ended September 30, 2022 totaled $169.4 million, representing an increase of $10.3 million, or 6%, compared to the nine months ended September 30, 2021. This is reflective of increases in workforce costs and general operating costs as market conditions have improved and operating levels have increased.
29
Research and engineering expenses for the nine months ended September 30, 2022 totaled $36.0 million, representing an increase of $11.1 million, or 45%, compared to the nine months ended September 30, 2021. This is primarily reflective of an increase in research and development activities, along with increased engineering support costs for the higher general operating activity levels, as market conditions have improved.
Depreciation and amortization expense for the nine months ended September 30, 2022 was $496.2 million, representing a decrease of $29.2 million, or 6%, compared to the nine months ended September 30, 2021. The decrease is attributable to the combination of (a) a reduction in depreciation as a result of the many assets that have recently reached the end of their useful lives, (b) limited capital expenditures over recent years, and (c) the sale of Canada Drilling assets in July 2021.
Segment Results of Operations
The following tables set forth certain information with respect to our reportable segments and rig activity:
Nine Months Ended |
| |||||||||||
September 30, | ||||||||||||
2022 | 2021 | Increase/(Decrease) |
| |||||||||
(In thousands, except percentages and rig activity) | ||||||||||||
U.S. Drilling |
|
|
|
|
|
|
|
| ||||
Operating revenues | $ | 767,769 | $ | 477,346 | $ | 290,423 | 61 | % | ||||
Adjusted operating income (loss) (1) | $ | 40,213 | $ | (63,905) | $ | 104,118 | 163 | % | ||||
Average rigs working (2) |
| 95.5 |
| 67.5 |
| 28.0 | 41 | % | ||||
Canada Drilling | ||||||||||||
Operating revenues | $ | — | $ | 39,336 | $ | (39,336) | (100) | % | ||||
Adjusted operating income (loss) (1) | $ | (43) | $ | 2,670 | $ | (2,713) | (102) | % | ||||
Average rigs working (2) |
| — |
| 8.6 |
| (8.6) | (100) | % | ||||
International Drilling | ||||||||||||
Operating revenues | $ | 881,705 | $ | 772,128 | $ | 109,577 | 14 | % | ||||
Adjusted operating income (loss) (1) | $ | (2,629) | $ | (34,368) | $ | 31,739 | 92 | % | ||||
Average rigs working (2) |
| 73.6 |
| 66.7 |
| 6.9 | 10 | % | ||||
Drilling Solutions | ||||||||||||
Operating revenues | $ | 172,042 | $ | 120,697 | $ | 51,345 | 43 | % | ||||
Adjusted operating income (loss) (1) | $ | 53,068 | $ | 19,841 | $ | 33,227 |
| 167 | % | |||
Rig Technologies | ||||||||||||
Operating revenues | $ | 132,326 | $ | 102,353 | $ | 29,973 | 29 | % | ||||
Adjusted operating income (loss) (1) | $ | 2,788 | $ | (1,335) | $ | 4,123 |
| 309 | % |
(1) | Adjusted operating income (loss) is our measure of segment profit and loss. See Note 11—Segment Information to the consolidated financial statements included in Item 1 of the report. |
(2) | Represents a measure of the average number of rigs operating during a given period. For example, one rig operating 45 days during a quarter represents approximately 0.5 average rigs working for the quarter. On an annual period, one rig operating 182.5 days represents approximately 0.5 average rigs working for the year. |
U.S. Drilling
Operating revenues for our U.S. Drilling segment increased by $290.4 million or 61% during the nine months ended September 30, 2022 compared to the corresponding period in 2021. This increase was due to a 41% increase in the average rigs working, reflecting increased drilling activity as market conditions and demand for our drilling services have rebounded and increased since the prior year. The increase is also attributable to an increase in day rates, as pricing for our services has improved.
30
Canada Drilling
Operating revenues decreased during the nine months ended September 30, 2022 compared to the corresponding prior year period due to the sale of the Canada Drilling assets in July 2021.
International Drilling
Operating revenues for our International Drilling segment during the nine months ended September 30, 2022 increased by $109.6 million or 14% compared to the corresponding prior year period. This increase was due to a 10% increase in the average rigs working, reflecting increased drilling activity as market conditions and demand for our drilling services have rebounded and increased since the prior year. The increase is also partially attributable to an increase in day rates, as pricing for our services has improved.
Drilling Solutions
Operating revenues for this segment increased by $51.3 million or 43% during the nine months ended September 30, 2022 compared to the corresponding period in 2021 as market conditions and demand for our services have rebounded and drilling activity has increased since the prior year.
Rig Technologies
Operating revenues for our Rig Technologies segment increased by $30.0 million or 29% during the nine months ended September 30, 2022 compared to the corresponding period as market conditions and demand for our services have improved since the prior year.
Other Financial Information
Interest expense
Interest expense for the nine months ended September 30, 2022 was $133.7 million, representing an increase of $6.7 million, or 5%, compared to the nine months ended September 30, 2021. The increase was primarily due to the issuance in November 2021 of $700 million in 7.375% senior priority guaranteed notes due May 2027, partially offset by a reduction to our overall debt levels, outstanding notes and credit facilities.
Other, net
Other, net for the nine months ended September 30, 2022 was a loss of $69.0 million. Approximately $59.7 million of this amount related to derivative mark-to-market losses from the common stock warrants and $12.5 million from increases in litigation reserves. In addition, there were $4.1 million in foreign currency gain and $3.2 million related to net gains on debt buybacks.
Other, net for the nine months ended September 30, 2021 was $96.6 million of loss, which included $58.5 million in impairments for the Canada Drilling assets sold in July 2021 and approximately $17.3 million related to net losses on sales and disposals of assets. Also, $14.7 million was related to costs incurred on our energy transition initiatives, including the purchase of certain development stage technologies that were expensed.
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Income tax
Our worldwide tax expense for the nine months ended September 30, 2022 was $35.4 million compared to $37.2 million for the nine months ended September 30, 2021. The decrease in tax expense was primarily attributable to the change in amount and geographic mix of our pre-tax earnings (losses).
Liquidity and Capital Resources
Financial Condition and Sources of Liquidity
Our primary sources of liquidity are cash and investments, availability under our revolving credit facility and cash generated from operations. As of September 30, 2022, we had cash and short-term investments of $425.1 million and working capital of $406.7 million. As of December 31, 2021, we had cash and short-term investments of $991.5 million and working capital of $1.0 billion.
At September 30, 2022, we had no borrowings outstanding under the 2022 Credit Agreement, which has a total borrowing capacity of $350.0 million.
The 2022 Credit Agreement requires us to maintain an interest coverage ratio (EBITDA/interest expense), which increases on a quarterly basis, and a minimum guarantor value, requiring the guarantors (other than the Company) and their subsidiaries to own at least 90% of the consolidated property, plant and equipment of the Company. Additionally, the Company is subject to certain covenants (which are subject to certain exceptions) and include, among others, (a) a covenant restricting our ability to incur liens (subject to the additional liens basket of up to $150.0 million), (b) a covenant restricting its ability to pay dividends or make other distributions with respect to its capital stock and to repurchase certain indebtedness, and (c) a covenant restricting the ability of the Company’s subsidiaries to incur debt (subject to the grower basket of up to $100.0 million). As of September 30, 2022, we were in compliance with both the interest coverage ratio and the minimum guarantor value requirements under the 2022 Credit Agreement. We also had $64.8 million of letters of credit outstanding under the 2022 Credit Agreement.
As of the date of this report, we are in compliance with all covenants under the 2022 Credit Agreement. If we fail to perform our obligations under the covenants, the revolving credit commitments under the 2022 Credit Agreement could be terminated, and any outstanding borrowings under the facilities could be declared immediately due and payable. If necessary, we have the ability to manage our covenant compliance by taking certain actions including reductions in discretionary capital or other types of controllable expenditures, monetization of assets, amending or renegotiating the revolving credit agreement, accessing capital markets through a variety of alternative methods, or any combination of these alternatives. We expect to remain in compliance with all covenants under the 2022 Credit Agreement during the twelve month period following the date of this report based on our current operational and financial projections. However, we can make no assurance of continued compliance if our current projections or material underlying assumptions prove to be incorrect. If we fail to comply with the covenants, the revolving credit commitment could be terminated, and any outstanding borrowings under the facility could be declared immediately due and payable.
Our ability to access capital markets or to otherwise obtain sufficient financing may be affected by our senior unsecured debt ratings as provided by the major credit rating agencies in the United States and our historical ability to access these markets as needed. While there can be no assurances that we will be able to access these markets in the future, we 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 maturity, exchange or purchase of our notes and our debt facilities, loss of availability of our revolving credit facilities and our A/R Facility (see—Accounts Receivable Purchase and Sales Agreements, below), 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. The major U.S. credit rating agencies have previously downgraded our senior unsecured debt rating to non-investment grade. These and any further ratings downgrades could adversely impact our ability to access debt markets in the future, increase the cost of future debt, and potentially require us to post letters of credit for certain obligations.
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We had 18 letter-of-credit facilities with various banks as of September 30, 2022. Availability under these facilities as of September 30, 2022 was as follows:
| September 30, |
| ||
2022 |
| |||
(In thousands) |
| |||
Credit available | $ | 620,552 | ||
Less: Letters of credit outstanding, inclusive of financial and performance guarantees |
| 76,252 | ||
Remaining availability | $ | 544,300 |
Accounts Receivable Purchase and Sales Agreements
On September 13, 2019, we entered into an accounts receivables sales agreement (the “A/R Sales Agreement”) and an accounts receivables purchase agreement (the “A/R Purchase Agreement” and, together with the A/R Sales Agreement, the “A/R Facility”), whereby the originators sold or contributed, and will on an ongoing basis continue to sell or contribute, certain of their domestic trade accounts receivables to a wholly-owned, bankruptcy-remote special purpose entity (“SPE”). The SPE in turn, sells, transfers, conveys and assigns to third-party financial institutions (“Purchasers”), all the rights, title and interest in and to its pool of eligible receivables.
On July 13, 2021, we entered into the First Amendment to the A/R Purchase Agreement which reduced the commitments of the third-party financial institutions (the “Purchasers”) from $250 million to $150 million and extended the term of the A/R Facility by two years, to August 13, 2023.
On June 27, 2022, we entered into the Third Amendment to the A/R Purchase Agreement which extended the term of the Purchase Agreement to August 13, 2024 and increased the commitments of the Purchasers from $150 million to $250 million. Subject to Purchaser approval, the A/R Purchase Agreement contains the possibility of being increased up to $300 million. The expiration of the A/R Purchase Agreement can be accelerated to November 16, 2022, if any of the 5.5% Senior Notes due 2023 remain outstanding as of such date; to June 17, 2023 if any of the 5.1% Senior Notes remain outstanding as of such date; or, to October 17, 2023 if 50% or more of the outstanding aggregate principal amount of the 0.75% Senior Exchangeable Notes remain outstanding and not refinanced as of such date. On October 13, 2022, we issued a Notice of Optional Full Redemption for all of the 5.5% Senior Notes due 2023 effective November 15, 2022.
The amount available for purchase under the A/R Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after excluding excess concentrations and certain other ineligible receivables. The maximum purchase commitment of the Purchasers under the A/R Facility is approximately $250.0 million and the amount of receivables purchased by the third-party Purchasers as of September 30, 2022 was $167.0 million.
The originators, Nabors Delaware, the SPE, and the Company provide representations, warranties, covenants and indemnities under the A/R Facility and the Indemnification Guarantee. See further details at Note 4—Accounts Receivable Purchase and Sales Agreements.
Future Cash Requirements
Our current cash and investments, projected cash flows from operations, proceeds from equity or debt issuances and the facilities under our 2022 Credit Agreement are expected to adequately finance our purchase commitments, capital expenditures, acquisitions, scheduled debt service requirements, and all other expected cash requirements for at least the next 12 months. However, we can make no assurances that our current operational and financial projections will prove to be correct. A sustained period of highly depressed oil and natural gas prices could have a significant effect on our customers’ capital expenditure spending and therefore our operations, cash flows and liquidity.
Purchase commitments outstanding at September 30, 2022 totaled approximately $272.5 million, primarily for capital expenditures, other operating expenses and purchases of inventory. We can reduce planned expenditures if necessary or increase them if market conditions and new business opportunities warrant it. 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.
33
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 material changes to the contractual cash obligations that were included in our 2021 Annual Report.
On August 25, 2015, our Board authorized a share repurchase program (the “program”) under which we may repurchase, from time to time, up to $400.0 million of our common shares by various means, including in the open market or in privately negotiated transactions. Authorization for the program, which was renewed in February 2019, does not have an expiration date and does not obligate us to repurchase any of our common shares. Since establishing the program, we have repurchased 0.3 million of our common shares for an aggregate purchase price of approximately $121.1 million under this program. The repurchased shares, which are held by our subsidiaries, are registered and tradable subject to applicable securities law limitations and have the same voting and other rights as other outstanding shares. As of September 30, 2022, the remaining amount authorized under the program that may be used to purchase shares was $278.9 million. As of September 30, 2022, our subsidiaries held 1.1 million of our common shares.
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 and may involve material amounts.
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 decreases in the price of oil or natural gas 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 or acquisitions, purchases and sales of investments, dividends, loans, issuances and repurchases of debt and of our common shares are within our control and are adjusted as necessary based on market conditions. We discuss our cash flows for the nine months ended September 30, 2022 and 2021 below.
Operating Activities. Net cash provided by operating activities totaled $301.1 million during the nine months ended September 30, 2022, compared to net cash provided of $326.5 million during the corresponding 2021 period. Operating cash flows are our primary source of capital and liquidity. Cash from operating results (before working capital changes) was $295.5 million for the nine months ended September 30, 2022, an increase of $121.4 million when compared to $174.1 million in the corresponding 2021 period. This was due to the increase in activity across our business for the nine month period ended September 30, 2022 compared to the nine month period ended September 30, 2021. Changes in working capital items such as collection of receivables, other deferred revenue arrangements and payments of operating payables are also significant factors affecting operating cash flows and can be highly volatile in periods of increasing or decreasing activity levels. Changes in working capital items provided $5.6 million in cash flows during the nine months ended September 30, 2022, a $146.8 million unfavorable change as compared to the $152.4 million in cash flows provided from working capital in the corresponding 2021 period. This is reflective of the increased working capital requirements that resulted from activity level increases.
Investing Activities. Net cash used for investing activities totaled $267.0 million during the nine months ended September 30, 2022 compared to net cash used of $65.1 million during the corresponding 2021 period. Our primary use of cash for investing activities is capital expenditures for rig-related enhancements, new construction and equipment, and sustaining capital expenditures. During the nine months ended September 30, 2022 and 2021, we used cash for capital expenditures totaling $272.1 million and $179.9 million, respectively.
During the nine months ended September 30, 2022, we received $24.0 million in proceeds from asset sales. We also invested $19.0 million during the period in companies that focus on energy transition related technologies. During the nine months ended September 30, 2021, we received $121.7 million in proceeds from asset sales, primarily related to the sale of our Canada Drilling assets.
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Financing Activities. Net cash used for financing activities totaled $602.5 million during the nine months ended September 30, 2022. During the nine months ended September 30, 2022, we repaid $460.0 million in net amounts under our revolving credit facility and $133.9 million of long-term debt.
Net cash provided by financing activities totaled $37.8 million during the nine months ended September 30, 2021. During the nine months ended September 30, 2021, we used $49.1 million for a redeemable non-controlling interest distribution and we paid dividends totaling $7.3 million to our preferred shareholders. We received net proceeds of $98.6 million from our revolving credit facility and notes, including a draw on the revolving credit facility to pay off $82.5 million in maturing notes in September 2021.
Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries
Nabors Delaware is an indirect, wholly owned subsidiary of Nabors. Nabors fully and unconditionally guarantees the due and punctual payment of the principal of, premium, if any, and interest on Nabors Delaware’s registered notes, which are its (a) 5.10% Senior Notes due 2023 (the “5.10% 2023 Notes”), (b) 5.50% Senior Notes due 2023 (the “5.50% 2023 Notes”) and (c) 5.75% Senior Notes due 2025 (the “2025 Notes” and, together with the 5.10% 2023 Notes and the 5.50% 2023 Notes, the “Registered Notes”), and any other obligations of Nabors Delaware under the Registered Notes when and as they become due and payable, whether at maturity, upon redemption, by acceleration or otherwise, if Nabors Delaware is unable to satisfy these obligations. Nabors’ guarantee of Nabors Delaware’s obligations under the Registered Notes are its unsecured and unsubordinated obligation and have the same ranking with respect to Nabors’ indebtedness as the Registered Notes have with respect to Nabors Delaware’s indebtedness. In the event that Nabors is required to withhold or deduct on account of any Bermudian taxes due from any payment made under or with respect to its guarantees, subject to certain exceptions, Nabors will pay additional amounts so that the net amount received by each holder of Registered Notes will equal the amount that such holder would have received if the Bermudian taxes had not been required to be withheld or deducted.
The following summarized 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.
In lieu of providing separate financial statements for issuers and guarantors (the “Obligated Group”), we have presented the accompanying supplemental summarized combined balance sheet and income statement information for the Obligated Group based on Rule 13-01 of the SEC’s Regulation S-X that we early adopted effective April 1, 2020.
All significant intercompany items among the Obligated Group have been eliminated in the supplemental summarized combined financial information. The Obligated Group’s investment balances in Subsidiary Non-Guarantors have been excluded from the supplemental combined financial information. Significant intercompany balances and activity for the Obligated Group with other related parties, including Subsidiary Non-Guarantors (referred to as “affiliates”), are presented separately in the accompanying supplemental summarized financial information.
35
Summarized combined Balance Sheet and Income Statement information for the Obligated Group follows (in thousands):
September 30, | December 31, | |||||
Summarized Combined Balance Sheet Information |
| 2022 | 2021 | |||
Assets | ||||||
Current Assets | $ | 1,066 | $ | 462,872 | ||
Non-Current Assets |
| 453,233 |
| 431,651 | ||
Noncurrent assets - affiliates |
| 5,803,400 |
| 6,149,188 | ||
Total Assets |
| 6,257,699 |
| 7,043,711 | ||
| ||||||
Liabilities and Stockholders’ Equity |
| |||||
Current liabilities |
| 62,997 |
| 75,112 | ||
Noncurrent liabilities |
| 2,710,770 |
| 3,367,502 | ||
Noncurrent liabilities - affiliates |
| — |
| 4,471 | ||
Total Liabilities | 2,773,767 | 3,447,085 | ||||
Stockholders' Equity | 3,483,932 | 3,596,626 | ||||
Total Liabilities and Stockholders’ Equity | 6,257,699 | 7,043,711 |
Nine Months Ended September 30, | Year Ended December 31, | |||||
Summarized Combined Income Statement Information |
| 2022 | 2021 | |||
Total revenues, earnings (loss) from consolidated affiliates and other income | $ | (32,994) | $ | (277,147) | ||
Income from continuing operations, net of tax |
| (223,402) | (441,310) | |||
Dividends on preferred stock |
| — | (3,653) | |||
Net income (loss) attributable to Nabors common shareholders |
| (223,402) | (444,963) |
Other Matters
Recent Accounting Pronouncements
See Note 2—Summary of Significant Accounting Policies.
Off-Balance Sheet Arrangements (Including Guarantees)
We are a party to 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 include the A/R Facility (see —Accounts Receivable Purchase and Sales Agreements, above) and certain agreements and obligations under which we provide financial or performance assurance to third parties. Certain of these financial or performance assurances 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 us 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 |
| ||||||||||||
| 2022 |
| 2023 |
| 2024 |
| Thereafter |
| Total |
| |||
(In thousands) |
| ||||||||||||
Financial standby letters of credit and other financial surety instruments | $ | 14,076 |
| 39,034 |
| 8,442 |
| 34,270 | $ | 95,822 |
36
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We may be exposed to market risks arising from the use of financial instruments in the ordinary course of business as discussed in our 2021 Annual Report. Other than changes in the fair value of our warrants due to changes in trading values as discussed in “Note 6 Shareholders’ Equity” to our Condensed Consolidated Financial Statements, there were no material changes in our exposure to market risk during the nine months ended September 30, 2022 from those disclosed in our 2021 Annual Report.
ITEM 4. CONTROLS AND PROCEDURES
We maintain a set of disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) 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, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure. 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 Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 8 — Commitments and Contingencies — Litigation for information regarding our legal proceedings.
ITEM 1A. RISK FACTORS
Except as set forth below, there have been no material changes from the risk factors previously disclosed in Part 1, Item 1A, of our 2021 Annual Report on Form 10-K, which in addition to the information set forth elsewhere in this report and the 2021 Annual Report, should be carefully considered when evaluating us. These risks are not the only risks we face. Additional risks not presently known to us or that we currently deem immaterial may also impair our business.
Our business may be affected by changes in applicable sanctions or export controls laws and regulations, including those targeting Russia.
Our international operations expose us to compliance obligations and risks under applicable economic sanctions, export controls and trade embargoes, such as those imposed, administered and enforced by the United States and the United Kingdom and other relevant sanctions authorities (collectively, “Sanctions”). In response to ongoing military hostilities between Russia and Ukraine, the United States, the United Kingdom, the European Union, and other jurisdictions imposed new and additional economic sanctions, export controls and other trade restrictions (collectively, “Sanctions Measures”) targeting Russia, Belarus and certain regions of Ukraine, including Sanctions Measures that impose: (a) restrictions on engaging in specified activities or transactions, or any and all activities and transactions, with, involving or for the benefit of certain designated Russian and Belarusian entities or individuals (collectively, “Sanctions Targets”); (b) a specific prohibition on new investment in the Russian energy sector, broadly defined to include the procurement, exploration, extraction, drilling, mining, harvesting, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication or transport of petroleum, natural gas, liquified natural gas, natural gas liquids, or petroleum products or other products capable of producing energy; and (c) a broad prohibition on new investment in Russia.
37
Pursuant to applicable Sanctions, we may be obliged to limit our business activities, may incur costs in order to implement and maintain compliance programs, and may be subject to investigations, enforcement actions or penalties relating to actual or alleged instances of noncompliance with the Sanctions Measures. It may also be necessary for us to take certain actions, including suspending or winding down our operations in Russia, in order to maintain compliance with, or satisfy obligations under, applicable Sanctions.
We are committed to compliance with all applicable Sanctions and have implemented and maintain dedicated policies and procedures that we believe to be customary and appropriate to promote and maintain our compliance with applicable Sanctions. However, we can provide no assurances that these policies and procedures will always be effective in identifying Sanctions Targets and their property interests or in preventing violations of applicable Sanctions by us or employees, agents or other persons acting on our behalf.
The full scale of the impact of the Sanctions Measures and Russia’s responses to the Sanctions Measures (such as counter-sanctions and the potential nationalization of assets in Russia) is currently unclear but such developments could adversely affect our operations and the oil and gas sector generally, which could have a material adverse effect on our business, results of operations, financial condition and cash flow. In addition, U.S. and other governments have increased their oversight and enforcement activities with respect to Sanctions laws and regulations and it is expected that the relevant agencies will continue to increase these investigative and enforcement activities. A violation of Sanctions could result in severe criminal or civil penalties and reputational harm, which could separately adversely affect our business and results of operations.
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 grants of stock awards during the three months ended September 30, 2022 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:
|
|
|
|
|
| Approximated |
| |||
Total Number | Dollar Value of |
| ||||||||
of Shares | Shares that May |
| ||||||||
Total | Average | Purchased as | Yet Be |
| ||||||
Number of | Price | Part of Publicly | Purchased |
| ||||||
Period | Shares | Paid per | Announced | Under the |
| |||||
(In thousands, except per share amounts) |
| Repurchased |
| Share (1) |
| Program |
| Program (2) |
| |
July 1 - July 31 | — | $ | 118.24 | — | 278,914 | |||||
August 1 - August 31 | — | $ | 133.45 | — | 278,914 | |||||
September 1 - September 30 | — | $ | 103.22 | — | 278,914 |
(1) | Shares were withheld from employees and directors to satisfy certain tax withholding obligations due in connection with grants of shares under our 2013 Stock Plan and 2016 Stock Plan. Each of the 2016 Stock Plan, the 2013 Stock Plan, the 2003 Employee Stock Plan and the 1999 Stock Option Plan for Non-Employee Directors provide for the withholding of shares to satisfy tax obligations, but do not specify a maximum number of shares that can be withheld for this purpose. These shares were not purchased as part of a publicly announced program to purchase common shares. |
(2) | In August 2015, our Board authorized a share repurchase program under which we may repurchase up to $400.0 million of our common shares in the open market or in privately negotiated transactions. The program was renewed by the Board in February 2019. Through September 30, 2022, we repurchased 0.3 million of our common shares for an aggregate purchase price of approximately $121.1 million under this program. As of September 30, 2022, we had $278.9 million that remained authorized under the program that may be used to repurchase shares. The repurchased shares, which are held by our subsidiaries, are registered and tradable subject to applicable securities law limitations and have the same voting, dividend and other rights as other outstanding shares. As of September 30, 2022, our subsidiaries held 1.1 million of our common shares. |
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
38
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Exhibit No. |
| Description |
31.1 | ||
31.2 | Rule 13a-14(a)/15d-14(a) Certification of William Restrepo, Chief Financial Officer* | |
32.1 | ||
101.INS | Inline XBRL Instance Document* | |
101.SCH | Inline XBRL Schema Document* | |
101.CAL | Inline XBRL Calculation Linkbase Document* | |
101.LAB | Inline XBRL Label Linkbase Document* | |
101.PRE | Inline XBRL Presentation Linkbase Document* | |
101.DEF | Inline XBRL Definition Linkbase Document* | |
104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document) |
*Filed herewith.
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 | ||
(Principal Executive Officer) | ||
By: | /s/ WILLIAM RESTREPO | |
William Restrepo | ||
Chief Financial Officer (Principal Financial Officer and Accounting Officer) | ||
Date: | October 27, 2022 |
39
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 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: October 27, 2022 | /s/ ANTHONY G. PETRELLO | |
| | Anthony G. Petrello |
| | Chairman, President and Chief Executive Officer |
Exhibit 31.2
Certification of Chief Financial Officer
Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a)
I, William Restrepo, 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: October 27, 2022 | /s/ WILLIAM RESTREPO | ||
| | | William Restrepo |
| | | Chief Financial Officer |
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, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony G. Petrello, Chairman, President and Chief Executive Officer of the Company, and I, William Restrepo, Chief 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 |
| Chairman, President and Chief Executive Officer |
| |
| |
| /s/ WILLIAM RESTREPO |
| William Restrepo |
| Chief Financial Officer |
| |
| |
| Date: October 27, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, net of allowance | $ 81,662 | $ 67,292 |
Common shares, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common shares, shares authorized | 32,000 | 32,000 |
Common shares, shares issued | 10,507 | 9,295 |
Treasury shares, common | 1,090 | 1,090 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Revenues and other income: | ||||
Operating revenues | $ 694,136 | $ 524,165 | $ 1,893,618 | $ 1,474,009 |
Investment income (loss) | 4,813 | 200 | 5,798 | 1,401 |
Total revenues and other income | 698,949 | 524,365 | 1,899,416 | 1,475,410 |
Costs and other deductions: | ||||
Direct costs | 432,311 | 336,538 | 1,208,820 | 939,658 |
General and administrative expenses | 57,594 | 52,897 | 169,400 | 159,137 |
Research and engineering | 13,409 | 9,498 | 36,028 | 24,930 |
Depreciation and amortization | 169,857 | 173,375 | 496,231 | 525,426 |
Interest expense | 43,841 | 42,217 | 133,650 | 126,906 |
Other, net | (25,954) | 22,758 | 68,975 | 96,559 |
Total costs and other deductions | 691,058 | 637,283 | 2,113,104 | 1,872,616 |
Income (loss) from continuing operations before income taxes | 7,891 | (112,918) | (213,688) | (397,206) |
Income tax expense (benefit): | ||||
Current | 11,414 | 8,440 | 30,662 | 46,538 |
Deferred | 938 | (5,656) | 4,714 | (9,310) |
Total income tax expense (benefit) | 12,352 | 2,784 | 35,376 | 37,228 |
Income (loss) from continuing operations, net of tax | (4,461) | (115,702) | (249,064) | (434,434) |
Income (loss) from discontinued operations, net of tax | (20) | 7 | ||
Net income (loss) | (4,461) | (115,722) | (249,064) | (434,427) |
Less: Net (income) loss attributable to noncontrolling interest | (9,322) | (6,778) | (32,132) | (21,168) |
Net income (loss) attributable to Nabors | (13,783) | (122,500) | (281,196) | (455,595) |
Less: Preferred stock dividend | (3,653) | |||
Net income (loss) attributable to Nabors common shareholders | (13,783) | (122,500) | (281,196) | (459,248) |
Amounts attributable to Nabors common shareholders: | ||||
Net income (loss) from continuing operations | (13,783) | (122,480) | (281,196) | (459,255) |
Net income (loss) from discontinued operations | (20) | 7 | ||
Net income (loss) attributable to Nabors common shareholders | $ (13,783) | $ (122,500) | $ (281,196) | $ (459,248) |
Earnings (losses) per share: | ||||
Basic from continuing operations (in dollars per share) | $ (1.80) | $ (15.79) | $ (32.72) | $ (62.26) |
Total Basic (in dollars per share) | (1.80) | (15.79) | (32.72) | (62.26) |
Diluted from continuing operations (in dollars per share) | (1.80) | (15.79) | (32.72) | (62.26) |
Total Diluted (in dollars per share) | $ (1.80) | $ (15.79) | $ (32.72) | $ (62.26) |
Weighted-average number of common shares outstanding: | ||||
Basic (in shares) | 9,099 | 7,907 | 8,830 | 7,490 |
Diluted (in shares) | 9,099 | 7,907 | 8,830 | 7,490 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) attributable to Nabors | $ (13,783) | $ (122,500) | $ (281,196) | $ (455,595) |
Other comprehensive income (loss), before tax: | ||||
Translation adjustment attributable to Nabors | (1,651) | (2,288) | (2,481) | 2,032 |
Pension liability amortization and adjustment | 52 | 52 | 1,584 | (1,744) |
Other comprehensive income (loss), before tax | (1,599) | (2,236) | (897) | 288 |
Income tax expense (benefit) related to items of other comprehensive income (loss) | 12 | 12 | 36 | 36 |
Other comprehensive income (loss), net of tax | (1,611) | (2,248) | (933) | 252 |
Comprehensive income (loss) attributable to Nabors | (15,394) | (124,748) | (282,129) | (455,343) |
Comprehensive income (loss) attributable to noncontrolling interest | 9,322 | 6,778 | 32,132 | 21,168 |
Comprehensive income (loss) | $ (6,072) | $ (117,970) | $ (249,997) | $ (434,175) |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Cash flows from operating activities: | ||
Net income (loss) | $ (249,064) | $ (434,427) |
Adjustments to net income (loss): | ||
Depreciation and amortization | 496,231 | 525,427 |
Deferred income tax expense (benefit) | 4,712 | (9,305) |
Impairments and other charges | 72,898 | |
Amortization of debt discount and deferred financing costs | 8,012 | 15,846 |
Losses (gains) on debt buyback | (1,636) | (10,706) |
Losses (gains) on long-lived assets, net | 1,130 | 17,299 |
Losses (gains) on investments, net | 544 | (767) |
Provision (recovery) of bad debt | (350) | |
Share-based compensation | 11,854 | 15,207 |
Foreign currency transaction losses (gains), net | (4,054) | 3,391 |
Mark-to-market loss on warrants | 59,717 | |
Noncontrolling interest | (32,132) | (21,168) |
Other | 176 | 737 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | (29,828) | 74,873 |
Inventory | (312) | 21,137 |
Other current assets | (12,578) | (6,060) |
Other long-term assets | (12,301) | 3,721 |
Trade accounts payable and accrued liabilities | 30,538 | 8,485 |
Income taxes payable | (66) | 12,622 |
Other long-term liabilities | 30,157 | 37,623 |
Net cash provided by (used for) operating activities | 301,100 | 326,483 |
Cash flows from investing activities: | ||
Purchases of investments | (19,000) | (14,041) |
Sales and maturities of investments | 21 | 11,371 |
Purchase of intangible assets | (3,600) | |
Capital expenditures | (272,080) | (179,902) |
Proceeds from sales of assets | 24,030 | 121,678 |
Other | 27 | (594) |
Net cash (used for) provided by investing activities | (267,002) | (65,088) |
Cash flows from financing activities: | ||
Reduction in long-term debt | (133,853) | (151,508) |
Debt issuance costs | (3,864) | (2,421) |
Proceeds from revolving credit facilities | 250,000 | 565,000 |
Reduction in revolving credit facilities | (710,000) | (312,500) |
Proceeds from issuance of common shares, net of issuance costs | 3,767 | |
Repurchase of common and preferred shares | (4,523) | |
Dividends to common and preferred shareholders | (65) | (7,380) |
Redeemable noncontrolling interest distribution | (49,077) | |
Distributions to noncontrolling interest | (3,489) | (1,790) |
Other | (445) | (2,496) |
Net cash (used for) provided by financing activities | (602,472) | 37,828 |
Effect of exchange rate changes on cash and cash equivalents | (863) | (720) |
Net increase (decrease) in cash and cash equivalents and restricted cash | (569,237) | 298,503 |
Cash and cash equivalents and restricted cash, beginning of period | 1,273,510 | 475,280 |
Cash and cash equivalents and restricted cash, end of period | 704,273 | 773,783 |
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | ||
Cash and cash equivalents, beginning of period | 991,471 | 472,246 |
Restricted cash, beginning of period | 282,039 | 3,034 |
Cash and cash equivalents and restricted cash, beginning of period | 1,273,510 | 475,280 |
Cash and cash equivalents, end of period | 420,307 | 771,878 |
Restricted cash, end of period | $ 283,966 | $ 1,905 |
Restricted cash, Balance Sheet location | Restricted cash held in trust | Restricted cash held in trust |
Cash and cash equivalents and restricted cash, end of period | $ 704,273 | $ 773,783 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Thousands |
Preferred Stock
Mandatory Convertible Preferred Shares
|
Common Stock
Cumulative Effect, Period of Adoption, Adjusted Balance
|
Common Stock |
Capital in Excess of Par
Cumulative effect period of adoption adjustment
|
Capital in Excess of Par
Cumulative Effect, Period of Adoption, Adjusted Balance
|
Capital in Excess of Par |
Accumulated Other Comprehensive Income (Loss)
Cumulative Effect, Period of Adoption, Adjusted Balance
|
Accumulated Other Comprehensive Income (Loss) |
Retained Earnings (Accumulated Loss)
Cumulative effect period of adoption adjustment
|
Retained Earnings (Accumulated Loss)
Cumulative Effect, Period of Adoption, Adjusted Balance
|
Retained Earnings (Accumulated Loss) |
Treasury Shares
Cumulative Effect, Period of Adoption, Adjusted Balance
|
Treasury Shares |
Non-controlling Interest
Cumulative Effect, Period of Adoption, Adjusted Balance
|
Non-controlling Interest |
Cumulative effect period of adoption adjustment |
Cumulative Effect, Period of Adoption, Adjusted Balance |
Total |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2020 | $ 5 | $ 419 | $ 3,423,935 | $ (11,124) | $ (946,100) | $ (1,315,751) | $ 105,424 | $ 1,256,808 | ||||||||||
Beginning Balance (in shares) at Dec. 31, 2020 | 4,870 | 8,383 | ||||||||||||||||
Increase (Decrease) in Equity | ||||||||||||||||||
Net income (loss) | (455,595) | 21,168 | (434,427) | |||||||||||||||
PSU distribution equivalent rights | (75) | (75) | ||||||||||||||||
Dividends declared to preferred shareholders | (3,653) | (3,653) | ||||||||||||||||
Issuance of warrants on common shares | (2,719) | (2,719) | ||||||||||||||||
Other comprehensive income (loss), net of tax | 252 | 252 | ||||||||||||||||
Share issuance | $ 7 | 12,865 | 12,872 | |||||||||||||||
Share issuance (in shares) | 148 | |||||||||||||||||
Share-based compensation | 15,205 | 15,205 | ||||||||||||||||
Conversion of preferred shares | $ (5) | |||||||||||||||||
Conversion of preferred shares (in shares) | (4,870) | |||||||||||||||||
Conversion of preferred shares | $ 34 | (34) | (5) | |||||||||||||||
Conversion of preferred shares (in shares) | 668 | |||||||||||||||||
Noncontrolling interest contributions (distributions) | (1,790) | (1,790) | ||||||||||||||||
Accrued distribution on redeemable noncontrolling interest in subsidiary | (7,088) | (7,088) | ||||||||||||||||
Other | $ 6 | (1,563) | (1,557) | |||||||||||||||
Other (in shares) | 132 | |||||||||||||||||
Ending Balance at Sep. 30, 2021 | $ 0 | $ 466 | 3,450,408 | (10,872) | (1,415,230) | (1,315,751) | 124,802 | 833,823 | ||||||||||
Ending Balance (in shares) at Sep. 30, 2021 | 0 | 9,331 | ||||||||||||||||
Beginning Balance at Jun. 30, 2021 | $ 459 | 3,433,144 | (8,624) | (1,290,309) | (1,315,751) | 118,024 | 936,943 | |||||||||||
Beginning Balance (in shares) at Jun. 30, 2021 | 9,181 | |||||||||||||||||
Increase (Decrease) in Equity | ||||||||||||||||||
Net income (loss) | (122,500) | 6,778 | (115,722) | |||||||||||||||
PSU distribution equivalent rights | (65) | (65) | ||||||||||||||||
Other comprehensive income (loss), net of tax | (2,248) | (2,248) | ||||||||||||||||
Share issuance | $ 7 | 12,865 | 12,872 | |||||||||||||||
Share issuance (in shares) | 148 | |||||||||||||||||
Share-based compensation | 4,465 | 4,465 | ||||||||||||||||
Accrued distribution on redeemable noncontrolling interest in subsidiary | (2,356) | (2,356) | ||||||||||||||||
Other | (66) | (66) | ||||||||||||||||
Other (in shares) | 2 | |||||||||||||||||
Ending Balance at Sep. 30, 2021 | $ 0 | $ 466 | 3,450,408 | (10,872) | (1,415,230) | (1,315,751) | 124,802 | 833,823 | ||||||||||
Ending Balance (in shares) at Sep. 30, 2021 | 0 | 9,331 | ||||||||||||||||
Beginning Balance (ASU 2020-06) at Dec. 31, 2021 | $ (81,881) | $ 60,701 | $ (21,180) | |||||||||||||||
Beginning Balance at Dec. 31, 2021 | $ 466 | $ 466 | $ 3,372,682 | 3,454,563 | $ (10,634) | (10,634) | $ (1,477,287) | (1,537,988) | $ (1,315,751) | (1,315,751) | $ 128,282 | 128,282 | $ 697,758 | 718,938 | ||||
Beginning Balance (in shares) at Dec. 31, 2021 | 9,295 | 9,295 | ||||||||||||||||
Increase (Decrease) in Equity | ||||||||||||||||||
Net income (loss) | (281,196) | 32,132 | (249,064) | |||||||||||||||
Warrant Exercise, net of tax | $ 52 | 152,451 | 152,503 | |||||||||||||||
Warrant Exercise, net of tax (in shares) | 1,051 | |||||||||||||||||
Other comprehensive income (loss), net of tax | (933) | (933) | ||||||||||||||||
Share-based compensation | 11,854 | 11,854 | ||||||||||||||||
Noncontrolling interest contributions (distributions) | (3,490) | (3,490) | ||||||||||||||||
Accrued distribution on redeemable noncontrolling interest in subsidiary | (7,720) | (7,720) | ||||||||||||||||
Other | $ 7 | (4,612) | (138) | (4,743) | ||||||||||||||
Other (in shares) | 161 | |||||||||||||||||
Ending Balance at Sep. 30, 2022 | $ 525 | 3,532,375 | (11,567) | (1,766,341) | (1,315,751) | 156,924 | 596,165 | |||||||||||
Ending Balance (in shares) at Sep. 30, 2022 | 10,507 | |||||||||||||||||
Beginning Balance at Jun. 30, 2022 | $ 525 | 3,528,440 | (9,956) | (1,750,058) | (1,315,751) | 147,602 | 600,802 | |||||||||||
Beginning Balance (in shares) at Jun. 30, 2022 | 10,509 | |||||||||||||||||
Increase (Decrease) in Equity | ||||||||||||||||||
Net income (loss) | (13,783) | 9,322 | (4,461) | |||||||||||||||
Other comprehensive income (loss), net of tax | (1,611) | (1,611) | ||||||||||||||||
Share-based compensation | 4,024 | 4,024 | ||||||||||||||||
Accrued distribution on redeemable noncontrolling interest in subsidiary | (2,601) | (2,601) | ||||||||||||||||
Other | (89) | 101 | 12 | |||||||||||||||
Other (in shares) | (2) | |||||||||||||||||
Ending Balance at Sep. 30, 2022 | $ 525 | $ 3,532,375 | $ (11,567) | $ (1,766,341) | $ (1,315,751) | $ 156,924 | $ 596,165 | |||||||||||
Ending Balance (in shares) at Sep. 30, 2022 | 10,507 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) |
9 Months Ended |
---|---|
Sep. 30, 2021
$ / shares
| |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |
Dividends declared to preferred shareholders (in dollars per share) | $ 0.75 |
General |
9 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Sep. 30, 2022 | |||||||
General | |||||||
General | Note 1 General Unless the context requires otherwise, references in this report to “we,” “us,” “our,” “the Company,” or “Nabors” mean Nabors Industries Ltd., together with our subsidiaries where the context requires. References in this report to “Nabors Delaware” mean Nabors Industries, Inc., a wholly owned subsidiary of Nabors. Our business is comprised of our global land-based and offshore drilling rig operations and other rig related services and technologies. These services and technologies include tubular running services, wellbore placement solutions, directional drilling, measurement-while-drilling (“MWD”), logging-while-drilling (“LWD”) systems and services, equipment manufacturing, rig instrumentation and drilling optimization software. With operations in over 15 countries, we are a global provider of drilling and drilling-related services for land-based and offshore oil and natural gas wells, with a fleet of rigs and drilling-related equipment which, as of September 30, 2022 included:
The short- and long-term implications of the military hostilities between Russia and Ukraine, which began in early 2022, are difficult to predict at this time. We continue to actively monitor this dynamic situation and will fulfill any existing obligations in full compliance with applicable international laws and sanctions. As of September 30, 2022, 1.1% of our property, plant and equipment, net was located in Russia. For the nine months ending September 30, 2022, 1.6% of our operating revenues was from operations in Russia.
|
Summary of Significant Accounting Policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Note 2 Summary of Significant Accounting Policies Interim Financial Information The accompanying unaudited condensed consolidated financial statements of Nabors have been prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”). Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC” or “Commission”), certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted. Therefore, these financial statements should be read together with our annual report on Form 10-K for the year ended December 31, 2021 (“2021 Annual Report”). In management’s opinion, the unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to state fairly our financial position as of September 30, 2022 and the results of operations, comprehensive income (loss), cash flows and changes in equity for the periods presented herein. Interim results for the nine months ended September 30, 2022 may not be indicative of results that will be realized for the full year ending December 31, 2022. Principles of Consolidation Our condensed consolidated financial statements include the accounts of Nabors, as well as all majority owned and non-majority owned subsidiaries consolidated in accordance with U.S. GAAP. All significant intercompany accounts and transactions are eliminated in consolidation. In addition to the consolidation of our majority owned subsidiaries, we also consolidate variable interest entities (“VIE”) when we are determined to be the primary beneficiary of a VIE. Determination of the primary beneficiary of a VIE is based on whether an entity has (a) the power to direct activities that most significantly impact the economic performance of the VIE and (b) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our joint venture, SANAD, which is equally owned by Saudi Aramco and Nabors, has been consolidated. As we have the power to direct activities that most significantly impact SANAD’s economic performance, including operations, maintenance and certain sourcing and procurement, we have determined Nabors to be the primary beneficiary. See Note 3—Joint Ventures. Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Inventory Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out or weighted-average cost methods and includes the cost of materials, labor and manufacturing overhead. Inventory included the following:
Special Purpose Acquisition Company Nabors Energy Transition Corp. (“NETC”) is a consolidated VIE that is included in the accompanying consolidated financial statements under the following captions: Restricted cash held in trust As part of the initial public offering of NETC and subsequent private placement warrant transactions, $281.5 million has been deposited in an interest-bearing U.S. based trust account (“Trust Account”). As of September 30, 2022 and December 31, 2021, the Trust Account balance was $283.0 million and $281.5 million, respectively. The funds held in the Trust Account are invested in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. Redeemable noncontrolling interest in subsidiary The company accounts for the non-controlling interest in NETC as subject to possible redemption in accordance with FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” NETC’s common stock features certain redemption rights, which are considered to be outside the company’s control and subject to occurrence of uncertain future events. Accordingly, the $281.5 million of non-controlling interest subject to possible redemption is presented at full redemption value as temporary equity, outside of the stockholders’ equity section in the accompanying consolidated financial statements as of September 30, 2022. Nabors will recognize any future changes in redemption value immediately as they occur – i.e., adjust the carrying amount of the instrument to its current redemption amount at each reporting period. Recently adopted accounting pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU (a) simplifies an issuer’s accounting for convertible instruments by eliminating two of the three models in ASC 470-20 that require separate accounting for embedded conversion features, (b) amends diluted EPS calculations for convertible instruments by requiring the use of the if-converted method and (c) simplifies the settlement assessment entities are required to perform on contracts that can potentially settle in an entity’s own equity by removing certain requirements. ASU 2020-06 was required to be adopted on January 1, 2022. The adoption of this ASU was determined not to be material to our condensed consolidated financial statements. Using the modified retrospective method, the adoption of this ASU resulted in a pre-tax adjustment of $27.5 million to eliminate the remaining unamortized debt discount within long-term debt on our condensed consolidated balance sheet. Also, we recognized the cumulative effect of this change as a $60.7 million adjustment to the opening balance of retained earnings (accumulated deficit) and an $81.9 million adjustment to capital in excess of par in our condensed consolidated statement of changes in equity for the nine months ended September 30, 2022. We will revise our condensed consolidated statement of changes in equity for the three months ended March 31, 2022, in future filings to correctly reflect the cumulative effect of this change as of January 1, 2022. |
Joint Ventures |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Joint Ventures | Note 3 Joint Ventures During 2016, we entered into an agreement with Saudi Aramco to form a joint venture known as SANAD to own, manage and operate onshore drilling rigs in the Kingdom of Saudi Arabia. SANAD is equally owned by Saudi Aramco and Nabors. During 2017, Nabors and Saudi Aramco each contributed $20 million in cash for the purpose of capitalizing the joint venture upon formation. In addition, since inception Nabors and Saudi Aramco have each contributed a combination of drilling rigs, drilling rig equipment and other assets, including cash, each with a value of approximately $394 million to the joint venture. The contributions were received in exchange for redeemable ownership interests which accrue interest annually, have a twenty-five year maturity and are required to be converted to authorized capital should certain events occur, including the accumulation of specified losses. In the accompanying condensed consolidated balance sheet, Nabors has reported Saudi Aramco’s share of authorized capital as a component of noncontrolling interest in equity and Saudi Aramco’s share of the redeemable ownership interests as redeemable noncontrolling interest in subsidiary, classified as mezzanine equity. As of September 30, 2022, the amount included in redeemable noncontrolling interest was $401.5 million. The accrued interest on the redeemable ownership interest is a non-cash financing activity and is reported as an increase in the redeemable noncontrolling interest in subsidiary line in our condensed consolidated balance sheet. In 2021, SANAD settled approximately $120 million of the accrued interest from inception to December 2021, by making cash payments to each partner for their respective amounts. The assets and liabilities included in the condensed balance sheet below are (a) assets that can either be used to settle obligations of the VIE or be made available in the future to the equity owners through dividends, distributions or in exchange of the redeemable ownership interests (upon mutual agreement of the owners) or (b) liabilities for which creditors do not have recourse to other assets of Nabors. The condensed balance sheet of SANAD, as included in our condensed consolidated balance sheet, is presented below.
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Accounts Receivable Purchase and Sales Agreement |
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Accounts Receivable Purchase and Sales Agreement | Note 4 Accounts Receivable Purchase and Sales Agreements The Company has entered into an accounts receivable sales agreement (the “A/R Sales Agreement”) and an accounts receivable purchase agreement (the “A/R Purchase Agreement,” and, together with the A/R Sales Agreement, the “A/R Facility”). As part of the A/R Facility, the Company continuously sells designated pools of receivables as they are originated by it and certain U.S. subsidiaries to a separate, bankruptcy-remote, special purpose entity (“SPE”) pursuant to the A/R Sales Agreement. Pursuant to the A/R Purchase Agreement, the SPE in turn sells, transfers, conveys and assigns to unaffiliated third party financial institutions (the “Purchasers”) all the rights, title and interest in and to its pool of eligible receivables (the “Eligible Receivables”). The sale of the Eligible Receivables qualifies for sale accounting treatment in accordance with ASC 860 – Transfers and Servicing. During the period of this program, cash receipts from the Purchasers at the time of the sale are classified as operating activities in our consolidated statement of cash flows and the associated receivables are derecognized from the Company’s consolidated balance sheet at the time of the sale. The remaining receivables held by the SPE were pledged to secure the collectability of the sold Eligible Receivables. Subsequent collections on the pledged receivables, which have not been sold, will be classified as operating cash flows in our consolidated statement of cash flows at the time of collection. The amount of receivables pledged as collateral as of September 30, 2022 and December 31, 2021 is approximately $58.5 million and $44.2 million, respectively. In July 2021, we entered into the First Amendment to the A/R Purchase Agreement (the “First Amendment”), which reduced the commitments of the third-party financial institutions (the “Purchasers”) from $250 million to $150 million and extended the term of the agreements by two years, to August 13, 2023. In June 2022, we entered into the Third Amendment to the A/R Purchase Agreement which extended the term of the A/R Purchase Agreement to August 13, 2024 and increased the commitments of the Purchasers under the A/R Purchase Agreement from $150 million to $250 million. Subject to Purchaser approval, the A/R Purchase Agreement has the possibility of being increased up to $300 million. The expiration of the agreement can be accelerated to November 16, 2022, if any of the 5.5% Senior Notes due 2023 remain outstanding as of such date; to June 17, 2023 if any of the 5.1% Senior Notes remain outstanding as of such date; or, to October 17, 2023 if $88.5 million or more of the outstanding aggregate principal amount of the 0.75% Senior Exchangeable Notes remain outstanding and not refinanced as of such date. On October 13, 2022, we issued a Notice of Optional Full Redemption for all of the 5.5% Senior Notes due 2023 effective November 15, 2022. The amount available for sale to the Purchasers under the A/R Purchase Agreement fluctuates over time based on the total amount of Eligible Receivables generated during the normal course of business after excluding excess concentrations and certain other ineligible receivables. As of September 30, 2022, approximately $167.0 million had been sold to and as yet uncollected by the Purchasers. As of December 31, 2021, the corresponding number was approximately $113.0 million.
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Debt |
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Debt | Note 5 Debt Debt consisted of the following:
During the nine months ended September 30, 2022, we repurchased $69.2 million aggregate principal amount of various outstanding Nabors Delaware’s notes for approximately $68.8 million in cash, including principal and $1.0 million in accrued and unpaid interest. In connection with these repurchases, we recognized a $3.2 million gain for the nine months ended September 30, 2022 which is included in Other, net in our condensed consolidated statement of income (loss). Also, during the nine months ended September 30, 2022, $131.7 million in maturity value of our notes were tendered by warrant holders, and retired, in connection with exercises of the common stock warrants. On October 13, 2022, we issued a Notice of Optional Full Redemption for all of the 5.5% Senior Notes due 2023 effective November 15, 2022. Exchange Transactions During the first quarter of 2021, we entered into two private exchange transactions in which Nabors Delaware exchanged 9.0% senior priority guaranteed notes due 2025 (the “9.0% Exchange Notes”) for various amounts of existing outstanding notes. Nabors Delaware did not receive any cash proceeds from the issuance of the Exchange Notes. Collectively from the series of exchanges, Nabors Delaware issued $26.1 million aggregate principal amount of the 9.0% Exchange Notes in exchange for $40.0 million aggregate principal amount of various Notes. We recorded a minimal gain in connection with the exchange transactions, which was accounted for in accordance with ASC 470-60, Troubled Debt Restructuring by Debtors. Under ASC 470-60, a gain is recorded in an amount equal to the sum of the future undiscounted payments (principal and interest) related to the new Exchange Notes plus the costs incurred in connection with the transaction, less the carrying value of the notes that were exchanged. In relation to the transactions, we recorded $9.4 million related to future contractual interest payments on the new Exchange Notes and have included this amount in accrued liabilities and other long-term liabilities. The aggregate principal amounts and recognized gain for such transactions were as follows:
0.75% Senior Exchangeable Notes Due January 2024 In January 2017, Nabors Delaware issued $575.0 million in aggregate principal amount of 0.75% exchangeable senior unsecured notes due 2024, which are fully and unconditionally guaranteed by Nabors. The notes bear interest at a rate of 0.75% per year payable semiannually on January 15 and July 15 of each year, beginning on July 15, 2017. As of September 30, 2022 and December 31, 2021, there was approximately $177.0 million and $287.3 million in aggregate principal amount that remained outstanding, respectively. The exchangeable notes are currently exchangeable, under certain conditions, at an exchange rate of .8018 common shares of Nabors per $1,000 principal amount of exchangeable notes (equivalent to an exchange price of approximately $1,247.19 per common share). Upon any exchange, as a result of an amendment to the notes, Nabors Delaware will settle its exchange obligation in cash. The exchangeable notes were originally bifurcated for accounting purposes into debt and equity components of $411.2 million and $163.8 million, respectively, based on the terms of the notes and the relative fair value at the issuance date. The adoption of ASU 2020-06 effective January 1, 2022 resulted in a pre-tax adjustment of $27.5 million to eliminate the remaining unamortized debt discount. 2018 Revolving Credit Facility In October 2018, Nabors Delaware and Nabors Drilling Canada Limited (“Nabors Canada” and together with Nabors Delaware, the “Borrowers”) entered into a credit agreement dated October 11, 2018 by and among the Borrowers, the guarantors identified therein, HSBC Bank Canada, as the Canadian lender, the issuing banks and other lenders party thereto (the “U.S. Lenders”) and Citibank, N.A., as administrative agent solely for the U.S. Lenders (as amended, restated, supplemented or otherwise modified from time to time, the “2018 Revolving Credit Facility”). As of January 21, 2022, we repaid all amounts outstanding under the 2018 Revolving Credit Facility and the 2018 Revolving Credit Facility was terminated. 2022 Credit Agreement On January 21, 2022, Nabors Delaware entered into a revolving credit agreement between Nabors Delaware, the guarantors from time to time party thereto, the issuing banks (the “Issuing Banks”) and other lenders party thereto (the “Lenders”) and Citibank, N.A., as administrative agent (the “2022 Credit Agreement”). Under the 2022 Credit Agreement, the Lenders have committed to provide to Nabors Delaware up to an aggregate principal amount at any time outstanding not in excess of $350.0 million (with an accordion feature for an additional $100.0 million, subject to lender approval) under a secured revolving credit facility, including sub-facilities provided by certain of the Lenders for letters of credit in an aggregate principal amount at any time outstanding not in excess of $100.0 million. The 2022 Credit Agreement permits the incurrence of additional indebtedness secured by liens, which may include liens on the collateral securing the facility, in an amount up to $150.0 million as well as a grower basket for term loans in an amount not to exceed $100.0 million secured by liens not on the collateral. The Company is required to maintain an interest coverage ratio (EBITDA/interest expense), which increases on a quarterly basis, and a minimum guarantor value, requiring the guarantors (other than the Company) and their subsidiaries to own at least 90% of the consolidated property, plant and equipment of the Company. The facility matures on the earlier of (a) January 21, 2026 and (b) (i) to the extent any principal amount of Nabors Delaware’s existing 5.1% senior notes due 2023 or 5.75% senior notes due 2025 remains outstanding on the date that is 90 days prior to the applicable maturity date for such indebtedness, then such 90th day or (ii) to the extent 50% or more of the outstanding (as of the closing date) aggregate principal amount of the 0.75% senior exchangeable notes due 2024 remains outstanding and not refinanced or defeased on the date that is 90 days prior to the maturity date for such indebtedness, then such 90th day. Additionally, the Company is subject to certain covenants, which are subject to certain exceptions and include, among others, (a) a covenant restricting our ability to incur liens (subject to the additional liens basket of up to $150.0 million), (b) a covenant restricting its ability to pay dividends or make other distributions with respect to its capital stock and to repurchase certain indebtedness and (c) a covenant restricting the ability of the Company’s subsidiaries to incur debt (subject to the grower basket of up to $100.0 million). The agreement also includes a collateral coverage requirement that the collateral rig fair value is to be no less than the collateral coverage threshold, as defined in the agreement. This requirement includes an independent appraisal report to be delivered every 6 months following the closing date. As of September 30, 2022, we had no borrowings outstanding under our 2022 Credit Agreement. The weighted average interest rate on borrowings under the 2022 Credit Agreement at September 30, 2022 was 4.48%. In order to make any future borrowings under the 2022 Credit Agreement, Nabors and certain of its wholly owned subsidiaries are subject to compliance with the conditions and covenants contained therein, including compliance with applicable financial ratios. As of the date of this report, we were in compliance with all covenants under the 2022 Credit Agreement. We expect to remain in compliance with all covenants under the 2022 Credit Agreement during the twelve month period following the date of this report based on our current operational and financial projections. However, we can make no assurance of continued compliance if our current projections or material underlying assumptions prove to be incorrect. If we fail to comply with the covenants, the revolving credit commitment could be terminated, and any outstanding borrowings under the facility could be declared immediately due and payable. |
Shareholders' Equity |
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Shareholders' Equity | Note 6 Shareholders’ Equity Common shares On July 19, 2021, we issued 147,974 shares, valued at approximately $12.9 million, in connection with the purchase of certain development stage technologies in the energy transition space. Of the shares issued, 71,280 shares are forfeitable if certain milestones are not achieved over the next two years. Common stock warrants On May 27, 2021, the Board declared a distribution of warrants to purchase its common shares (the “Warrants”) to holders of the Company’s common shares. Holders of Nabors common shares received -fifths of a warrant per common share held as of the record date (rounded down for any fractional warrant). Nabors issued approximately 3.2 million Warrants on June 11, 2021 to shareholders of record as of June 4, 2021. As of September 30, 2022, 2.5 million Warrants remain outstanding and 1.1 million common shares have been issued as a result of exercises of Warrants. Each Warrant represents the right to purchase one common share at an initial exercise price of $166.66667 per Warrant, subject to certain adjustments (the “Exercise Price”). In addition, Warrants submitted for exercise prior to April 25, 2022 may have been eligible to receive an additional higher than the sum of the volume weighted average prices of Nabors’ common shares on each of the second, third and fourth days before any Warrant holder exercised its Warrants. Effective as of April 25, 2022, Warrant holders were no longer entitled to receive any incentive shares when exercising the Warrants. Payment for common shares on exercise of Warrants may be in (a) cash or (b)“Designated Notes,” which the Company initially defined as (x) Nabors Delaware’s (i) 5.10% Notes due 2023, (ii) 0.75% Exchangeable Notes due 2024, (iii) 5.75% Notes due 2025 and (y) the Company’s 7.25% Notes due 2026, subject to compliance with applicable procedures with respect to the delivery of the Warrants and Designated Notes. Effective March 21, 2022, the 0.75% Exchangeable Notes due 2024 were removed from the list of Designated Notes. The Exercise Price and the number of common shares issuable upon exercise are subject to anti-dilution adjustments, including for share dividends, splits, subdivisions, spin-offs, consolidations, reclassifications, combinations, noncash distributions, cash dividends (other than regular quarterly cash dividends not exceeding a permitted threshold amount), certain pro rata shares repurchases, and similar transactions, including certain issuances of common shares (or securities exercisable or convertible into or exchangeable for common shares) at a price (or having a conversion price) that is less than 95% of the market price of the common shares. The Warrants expire on June 11, 2026, but the expiration date may be accelerated at any time by the Company upon 20-days’ prior notice. The Company has listed the Warrants on the over-the-counter market. -third common share due to the incentive share component. The incentive share was an extra amount of common shares that Nabors would award when the volume weighted average price of Nabors’ common shares on the day before any Warrant holder exercises its Warrants multiplied by three was at least 6%The Warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the Warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. The fair value of the Warrants was initially measured at fair value using a Monte Carlo pricing model due to the level of market activity. As of September 30, 2022, the fair value of the Warrants was measured using their trading price. On September 30, 2022, the fair value of the Warrants was approximately $44.7 million. During the three and nine months ended September 30, 2022, approximately $34.0 million of gain and $63.0 million of loss has been recognized for the change in liability and included in Other, net in our consolidated statements of income (loss), respectively. |
Fair Value Measurements |
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Fair Value Measurements | Note 7 Fair Value Measurements Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best information available. Accordingly, we employ valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The use of unobservable inputs is intended to allow for fair value determinations in situations where there is little, if any, market activity for the asset or liability at the measurement date. We are able to classify fair value balances utilizing a fair value hierarchy based on the observability of those inputs. Under the fair value hierarchy:
Recurring Fair Value Measurements Our financial liabilities that are accounted for at fair value on a recurring basis as of September 30, 2022 consisted of the Warrants and are included in other long-term liabilities in the accompanying consolidated financial statements. During the first quarter of 2022, the Warrants transferred from using Level 3 inputs to Level 1 measurements due to increased trading volume. As of September 30, 2022, the Warrants were carried at fair market value and totaled $44.7 million. The fair value of the Warrants was initially measured at fair value using a Monte Carlo option pricing model. As of December 31, 2021, the estimated fair value of the Warrants was determined using Level 3 inputs. Inherent in the option pricing simulation are assumptions related to expected stock-price volatility, expected life and risk-free interest rate. The Company estimates the volatility of the Warrants based on implied and historical volatility of the company’s traded common stock. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the Warrants is based on the Company’s ability to initiate expiration, subject to a 20 business day notice period. Nonrecurring Fair Value Measurements We applied fair value measurements to our nonfinancial assets and liabilities measured on a nonrecurring basis, which consist of measurements primarily related to assets held for sale, goodwill, intangible assets and other long-lived assets and assets acquired and liabilities assumed in a business combination. Based upon our review of the fair value hierarchy, the inputs used in these fair value measurements were considered Level 3 inputs. Fair Value of Debt Instruments We estimate the fair value of our financial instruments in accordance with U.S. GAAP. The fair value of our long-term debt and revolving credit facilities is estimated based on quoted market prices or prices quoted from third-party financial institutions. The fair value of our debt instruments is determined using Level 2 measurements. The carrying and fair values of these liabilities were as follows:
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. |
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Commitments and Contingencies | Note 8 Commitments and Contingencies Contingencies Income Tax We operate in a number of countries and our tax returns filed in those jurisdictions are subject to review and examination by tax authorities within those jurisdictions. We do not recognize the benefit of income tax positions we believe are more likely than not to be disallowed upon challenge by a tax authority. If any tax authority successfully challenges our operational structure, intercompany pricing policies or the taxable presence of our subsidiaries in certain countries, if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure, or if we lose a material tax dispute in any country, our effective tax rate on our worldwide earnings could change substantially. In certain jurisdictions we have recognized deferred tax assets and liabilities. Judgment and assumptions are required in determining whether deferred tax assets will be fully or partially utilized. When we estimate that all or some portion of certain deferred tax assets such as net operating loss carryforwards will not be utilized, we establish a valuation allowance for the amount we determine to be more likely than not unrealizable. We continually evaluate strategies that could allow for future utilization of our deferred assets. Any change in the ability to utilize such deferred assets will be accounted for in the period of the event affecting the valuation allowance. If facts and circumstances cause us to change our expectations regarding future tax consequences, the resulting adjustments could have a material effect on our financial results or cash flow. At this time, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize the deferred tax assets that we have recognized. However, it is possible that some of our recognized deferred tax assets, relating to net operating loss carryforwards, could expire unused or could carryforward indefinitely without utilization. Therefore, unless we are able to generate sufficient taxable income from our component operations, a substantial valuation allowance to reduce our deferred tax assets may be required, which would materially increase our tax expense in the period the allowance is recognized and materially adversely affect our results of operations and statement of financial condition. 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. In March 2011, the Court of Ouargla entered a judgment of approximately $19.8 million (at September 30, 2022 exchange rates) 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. 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 upheld the lower court’s ruling, and we appealed the matter to the Supreme Court. On September 25, 2014, the Supreme Court overturned the verdict against us, and the case was reheard by the Ouargla Court of Appeals on March 22, 2015 in light of the Supreme Court’s opinion. On March 29, 2015, the Ouargla Court of Appeals reinstated the initial judgment against us. We appealed this decision again to the Supreme Court, which again overturned the appeals court’s decision. The case was moved back to the court of appeals, which, once again, reinstated the verdict, failing to abide by the Supreme Court’s ruling. Accordingly, we are appealing once more to the Supreme Court to try to get a final ruling on the matter. 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 $11.8 million in excess of amounts accrued. Following a routine audit conducted in May and June of 2018 by the Atyrau Oblast Ecology Department (the “AOED”), our joint venture in Kazakhstan, KMG Nabors Drilling Company (“KNDC”), was administratively fined for not having emissions permits for KNDC owned or leased equipment, due to a change in interpretation by the AOED that the owner/lessor of the equipment that emits the pollutants must have its own permits. Administrative fines of $0.8 million were paid by KNDC for such violations. AOED also assessed additional “environmental damages” in the amount of $3.4 million for the period. KNDC appealed and, ultimately, the Kazakhstan Supreme Court ruled in KNDC’s favor on July 21, 2021, terminating the administrative case for lack of evidence. KNDC was reimbursed by the AOED for the environmental damages on December 27, 2021. With the potential for additional damages for later year audits, KNDC and the operator have executed an agreement formalizing the operator’s obligation to reimburse KNDC for many of the financial expenses related to this case as well as penalties and expenses related to future audit periods. Since 2019, KNDC has been in full compliance with such regulations. Another audit by AOED was performed for the second half of 2018, but KNDC continues to appeal this decision in the same manner as the prior audit. Meanwhile, KNDC received notice from government officials that certain of our employees may be held personally responsible, but considering the numerous court proceedings, the governmental officials temporarily suspended any criminal investigations. On December 10, 2021, the regional court in Atyrau Region upheld KNDC’s position and ruled in our favor. While the time for AOED to appeal has lapsed, it is possible that the General Prosecutor or the Supreme Court’s Chairman can attempt to begin a review, although that has not yet happened. The same legal status applies for AOED’s appeal related to damages arising out of emissions in June – December 2018. AOED also carried out a planned audit for the period January 2019 – February 2022 which had no material findings. We continue to be engaged and are monitoring the situation. 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 include the A/R Facility (see Note 4—Accounts Receivable Purchase and Sales Agreements) and certain agreements and obligations under which we provide financial or performance assurance to third parties. Certain of these financial or performance assurances 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:
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Earnings (Losses) Per Share |
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Earnings (Losses) Per Share | Note 9 Earnings (Losses) Per Share ASC 260, Earnings per Share, requires companies to treat unvested share-based payment awards that have nonforfeitable rights to dividends or dividend equivalents as a separate class of securities in calculating earnings (losses) per share. We have granted and expect to continue to grant to employees restricted stock grants that contain nonforfeitable rights to dividends. Such grants are considered participating securities under ASC 260. As such, we are required to include these grants in the calculation of our basic earnings (losses) per share and calculate basic earnings (losses) per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The participating security holders are not contractually obligated to share in losses. Therefore, losses are not allocated to the participating security holders. Basic earnings (losses) per share is computed utilizing the two-class method and is calculated based on the weighted-average number of common shares outstanding during the periods presented. Diluted earnings (losses) per share is computed using the weighted-average number of common and common equivalent shares outstanding during the periods utilizing the two-class method for stock options and unvested restricted shares. A reconciliation of the numerators and denominators of the basic and diluted earnings (losses) per share computations is as follows:
For all periods presented, the computation of diluted earnings (losses) per share excludes outstanding stock options with exercise prices greater than the average market price of Nabors’ common shares and shares related to the outstanding Warrants, because their inclusion would be anti-dilutive and because they are not considered participating securities. In any period during which the average market price of Nabors’ common shares exceeds the exercise prices of the stock options, such stock options will be included in our diluted earnings (losses) per share computation using the if-converted method of accounting. Restricted stock is 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 participating securities. For periods in which we experience a net loss from continuing operations, all potential common shares have been excluded from the calculation of weighted-average shares outstanding, because their inclusion would be anti-dilutive. The average number of shares from options and shares related to outstanding Warrants that were excluded from diluted earnings (losses) per share that would potentially dilute earnings per share in the future were as follows (in thousands):
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Supplemental Balance Sheet and Income Statement Information |
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Supplemental Balance Sheet and Income Statement Information | Note 10 Supplemental Balance Sheet and Income Statement Information Accrued liabilities included the following:
Investment income (loss) includes the following:
Other, net included the following:
The changes in accumulated other comprehensive income (loss), by component, included the following:
The line items that were reclassified to net income included the following:
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Segment Information |
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Segment Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Note 11 Segment Information The following table sets forth financial information with respect to our reportable operating segments:
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Revenue Recognition |
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Revenue Recognition | Note 12 Revenue Recognition We recognize revenue when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. Contract drilling revenues are recorded over time utilizing the input method based on time elapsed. The measurement of progress considers the transfer of the service to the customer as we provide daily drilling services. We receive payment after the services have been performed by billing customers periodically (typically monthly). However, a portion of our revenues are recognized at a point-in-time as control is transferred at a distinct point in time such as with the sale of our top drives and other capital equipment. Within our drilling contracts, we have identified one performance obligation in which the transaction price is allocated. Disaggregation of revenue In the following table, revenue is disaggregated by geographical region. The table also includes a reconciliation of the disaggregated revenue with the reportable segments:
Contract balances We perform our obligations under a contract with a customer by transferring goods or services in exchange for consideration from the customer. We recognize a contract asset or liability when we transfer goods or services to a customer and bill an amount which differs from the revenue allocated to the related performance obligations. The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in receivables, contract assets, or contract liabilities (deferred revenue) on our condensed consolidated balance sheet. In general, we receive payments from customers based on dayrates as stipulated in our contracts (e.g., operating rate, standby rate, etc.). The invoices billed to the customer are based on the varying rates applicable to the operating status on each rig. Accounts receivable are recorded when the right to consideration becomes unconditional. Dayrate contracts also may contain fees charged to the customer for up-front rig modifications, mobilization and demobilization of equipment and personnel. These fees are associated with contract fulfillment activities, and the related revenue (subject to any constraint on estimates of variable consideration) is allocated to a single performance obligation and recognized ratably over the initial term of the contract. Mobilization fees are generally billable to the customer in the initial phase of a contract and generate contract liabilities until they are recognized as revenue. Demobilization fees are generally received at the end of the contract and generate contract assets when they are recognized as revenue prior to becoming receivables from the customer. We receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request. Reimbursable revenues are variable and subject to uncertainty as the amounts received and timing thereof are dependent on factors outside of our influence. Accordingly, these revenues are constrained and not recognized until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of the customer. We are generally considered a principal in these transactions and record the associated revenues at the gross amounts billed to the customer. The opening and closing balances of our receivables, contract assets and current and long-term contract liabilities are as follows:
Approximately 57% of the contract liability balance at the beginning of the period is expected to be recognized as revenue during , of which 45% was recognized during the nine months ended September 30, 2022, and 28% is expected to be recognized during . The remaining 15% of the contract liability balance at the beginning of the period is expected to be recognized as revenue during or thereafter.Additionally, 87% of the contract asset balance at the beginning of the period is expected to be recognized as expense during 2022, of which 77% was recognized during the nine months ended September 30, 2022, and 13% is expected to be recognized during 2023. This disclosure does not include variable consideration allocated entirely to a wholly unsatisfied performance obligation or promise to transfer a distinct good or service that forms part of a single performance obligation. |
Summary of Significant Accounting Policies (Policies) |
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Interim Financial Information | Interim Financial Information The accompanying unaudited condensed consolidated financial statements of Nabors have been prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”). Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC” or “Commission”), certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted. Therefore, these financial statements should be read together with our annual report on Form 10-K for the year ended December 31, 2021 (“2021 Annual Report”). In management’s opinion, the unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to state fairly our financial position as of September 30, 2022 and the results of operations, comprehensive income (loss), cash flows and changes in equity for the periods presented herein. Interim results for the nine months ended September 30, 2022 may not be indicative of results that will be realized for the full year ending December 31, 2022.
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Principles of Consolidation | Principles of Consolidation Our condensed consolidated financial statements include the accounts of Nabors, as well as all majority owned and non-majority owned subsidiaries consolidated in accordance with U.S. GAAP. All significant intercompany accounts and transactions are eliminated in consolidation. In addition to the consolidation of our majority owned subsidiaries, we also consolidate variable interest entities (“VIE”) when we are determined to be the primary beneficiary of a VIE. Determination of the primary beneficiary of a VIE is based on whether an entity has (a) the power to direct activities that most significantly impact the economic performance of the VIE and (b) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our joint venture, SANAD, which is equally owned by Saudi Aramco and Nabors, has been consolidated. As we have the power to direct activities that most significantly impact SANAD’s economic performance, including operations, maintenance and certain sourcing and procurement, we have determined Nabors to be the primary beneficiary. See Note 3—Joint Ventures.
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Reclassification of Prior Year Presentation | Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.
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Inventory | Inventory Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out or weighted-average cost methods and includes the cost of materials, labor and manufacturing overhead. Inventory included the following:
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Special Purpose Acquisition Company | Special Purpose Acquisition Company Nabors Energy Transition Corp. (“NETC”) is a consolidated VIE that is included in the accompanying consolidated financial statements under the following captions: Restricted cash held in trust As part of the initial public offering of NETC and subsequent private placement warrant transactions, $281.5 million has been deposited in an interest-bearing U.S. based trust account (“Trust Account”). As of September 30, 2022 and December 31, 2021, the Trust Account balance was $283.0 million and $281.5 million, respectively. The funds held in the Trust Account are invested in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. Redeemable noncontrolling interest in subsidiary The company accounts for the non-controlling interest in NETC as subject to possible redemption in accordance with FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” NETC’s common stock features certain redemption rights, which are considered to be outside the company’s control and subject to occurrence of uncertain future events. Accordingly, the $281.5 million of non-controlling interest subject to possible redemption is presented at full redemption value as temporary equity, outside of the stockholders’ equity section in the accompanying consolidated financial statements as of September 30, 2022. Nabors will recognize any future changes in redemption value immediately as they occur – i.e., adjust the carrying amount of the instrument to its current redemption amount at each reporting period.
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Recently Accounting Pronouncements Adopted | Recently adopted accounting pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU (a) simplifies an issuer’s accounting for convertible instruments by eliminating two of the three models in ASC 470-20 that require separate accounting for embedded conversion features, (b) amends diluted EPS calculations for convertible instruments by requiring the use of the if-converted method and (c) simplifies the settlement assessment entities are required to perform on contracts that can potentially settle in an entity’s own equity by removing certain requirements. ASU 2020-06 was required to be adopted on January 1, 2022. The adoption of this ASU was determined not to be material to our condensed consolidated financial statements. Using the modified retrospective method, the adoption of this ASU resulted in a pre-tax adjustment of $27.5 million to eliminate the remaining unamortized debt discount within long-term debt on our condensed consolidated balance sheet. Also, we recognized the cumulative effect of this change as a $60.7 million adjustment to the opening balance of retained earnings (accumulated deficit) and an $81.9 million adjustment to capital in excess of par in our condensed consolidated statement of changes in equity for the nine months ended September 30, 2022. We will revise our condensed consolidated statement of changes in equity for the three months ended March 31, 2022, in future filings to correctly reflect the cumulative effect of this change as of January 1, 2022. |
Summary of Significant Accounting Policies (Tables) |
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Inventory |
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Joint Ventures (Tables) |
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Schedule of condensed balance sheet of SANAD |
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Debt (Tables) |
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The aggregate principal amounts and recognized gain | The aggregate principal amounts and recognized gain for such transactions were as follows:
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Fair Value Measurements (Tables) |
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Fair Value Measurements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial instruments |
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Commitments and Contingencies (Tables) |
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Summary of financial guarantees maturity |
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Earnings (Losses) Per Share (Tables) |
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Earnings (losses) per share computations |
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Potentially dilutive securities excluded as anti-dilutive | The average number of shares from options and shares related to outstanding Warrants that were excluded from diluted earnings (losses) per share that would potentially dilute earnings per share in the future were as follows (in thousands):
|
Supplemental Balance Sheet and Income Statement Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet and Income Statement Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accrued liabilities |
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Schedule of investment income (loss) |
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Schedule of other, net |
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Schedule of changes in accumulated other comprehensive income (loss) |
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Schedule of line items that were reclassified to net income |
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial information with respect to operating segments |
|
Revenue Recognition (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue Recognition | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue, disaggregated by geographical region |
|
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Summary of receivables, contract assets, current and long-term contract liabilities |
|
General (Details) |
9 Months Ended |
---|---|
Sep. 30, 2022
item
country
| |
General | |
Actively marketed rigs for land based drilling operations | 299 |
Actively marketed rigs for offshore based drilling operations | 29 |
Minimum | |
General | |
Number of countries company has actively marketed rigs for land based drilling operations | country | 15 |
Geographic Concentration Risk | Sales Revenue | Russia | |
General | |
Concentration risk (as a percent) | 1.60% |
Geographic Concentration Risk | Property, Plant and Equipment, Net | Russia | |
General | |
Concentration risk (as a percent) | 1.10% |
Summary of Significant Accounting Policies - Inventory (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventory | ||
Raw materials | $ 117,167 | $ 105,638 |
Work-in-progress | 6,615 | 1,368 |
Finished goods | 5,334 | 19,442 |
Total inventory | $ 129,116 | $ 126,448 |
Summary of Significant Accounting Policies - Special Purpose Acquisition Company (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
Nov. 16, 2021 |
---|---|---|---|
Summary of Significant Accounting Policies | |||
Restricted cash held in trust | $ 282,962 | $ 281,523 | |
Redeemable noncontrolling interest | 683,005 | 675,283 | |
NETC | |||
Summary of Significant Accounting Policies | |||
Restricted cash held in trust | 283,000 | $ 281,500 | $ 281,500 |
Redeemable noncontrolling interest | $ 281,500 |
Summary of Significant Accounting Policies - Recently adopted accounting pronouncements (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Jan. 01, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Summary of Significant Accounting Policies | |||
Retained earnings (accumulated deficit) | $ (1,766,341) | $ (1,537,988) | |
ASU 2020-06 | Cumulative effect period of adoption adjustment | |||
Summary of Significant Accounting Policies | |||
Unamortized debt discount | $ (27,500) | ||
Retained earnings (accumulated deficit) | 60,700 | ||
Capital in excess of par value | $ (81,900) |
Joint Ventures (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2017 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|||
Joint Ventures | |||||||
Redeemable noncontrolling interest | $ 675,283 | $ 683,005 | |||||
Assets: | |||||||
Cash and cash equivalents | 991,471 | 420,307 | $ 771,878 | $ 472,246 | |||
Accounts receivable | 287,572 | 302,963 | |||||
Other current assets | 96,301 | 108,757 | |||||
Property, plant and equipment, net | 3,348,498 | 3,100,293 | |||||
Other long-term assets | 134,903 | 160,029 | |||||
Total assets | [1] | 5,525,364 | 4,768,555 | ||||
Liabilities: | |||||||
Accounts payable | 253,748 | 290,167 | |||||
Other liabilities | 340,347 | 342,423 | |||||
Total liabilities | [1] | 4,131,143 | 3,489,385 | ||||
SANAD | |||||||
Joint Ventures | |||||||
Cash contribution for capitalizing the joint venture upon formation | $ 20,000 | ||||||
Additional contribution amount | $ 394,000 | ||||||
Maturity period | 25 years | ||||||
Redeemable noncontrolling interest | 401,500 | ||||||
Assets: | |||||||
Cash and cash equivalents | 293,037 | 305,641 | |||||
Accounts receivable | 88,174 | 88,008 | |||||
Other current assets | 6,662 | 10,181 | |||||
Property, plant and equipment, net | 467,587 | 491,304 | |||||
Other long-term assets | 19,010 | 18,347 | |||||
Total assets | 874,470 | 913,481 | |||||
Liabilities: | |||||||
Accounts payable | 61,278 | 60,190 | |||||
Accrued liabilities | 6,021 | 11,517 | |||||
Other liabilities | 26,300 | 28,711 | |||||
Total liabilities | 93,599 | $ 100,418 | |||||
SANAD | |||||||
Joint Ventures | |||||||
Settled accrued interest | $ 120,000 | ||||||
|
Accounts Receivable Purchase and Sales Agreement (Details) - USD ($) $ in Millions |
1 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Jul. 31, 2021 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 21, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Jan. 31, 2017 |
|
5.50% senior notes due January 2023 | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Interest rate on senior notes (as a percent) | 5.50% | 5.50% | ||||||
5.10% senior notes due September 2023 | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Interest rate on senior notes (as a percent) | 5.10% | 5.10% | ||||||
0.75% senior exchangeable notes due January 2024 | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Interest rate on senior notes (as a percent) | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% | |||
Asset Pledged as Collateral | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Trade receivables | $ 58.5 | $ 44.2 | ||||||
Accounts Receivable Sales Agreement | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Agreement amount | $ 250.0 | |||||||
Receivables sold | 167.0 | $ 113.0 | ||||||
Accounts Receivable Sales Agreement, First Amendment | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Agreement amount | $ 150.0 | |||||||
Agreement expiration term extension (in years) | 2 years | |||||||
Accounts Receivable Sales Agreement, Third Amendment | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Agreement amount | $ 250.0 | |||||||
Accounts Receivable Sales Agreement, Third Amendment | Accelerated Expiration of Agreement, October 17, 2023 | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Threshold amount of remaining principal balance | $ 88.5 | |||||||
Accounts Receivable Sales Agreement, Third Amendment | 5.50% senior notes due January 2023 | Accelerated Expiration of Agreement, November 19, 2022 | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Interest rate on senior notes (as a percent) | 5.50% | |||||||
Accounts Receivable Sales Agreement, Third Amendment | 5.10% senior notes due September 2023 | Accelerated Expiration of Agreement, June 17, 2023 | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Interest rate on senior notes (as a percent) | 5.10% | |||||||
Accounts Receivable Sales Agreement, Third Amendment | 0.75% senior exchangeable notes due January 2024 | Accelerated Expiration of Agreement, October 17, 2023 | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Interest rate on senior notes (as a percent) | 0.75% | |||||||
Accounts Receivable Sales Agreement, Third Amendment | Maximum | ||||||||
Accounts Receivable Sales Agreement | ||||||||
Agreement amount | $ 300.0 |
Debt - Summary (Details) - USD ($) $ in Thousands |
9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2022 |
Mar. 21, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jan. 31, 2017 |
|
Debt | |||||
Long-term Debt, Gross | $ 2,609,815 | $ 3,293,600 | |||
Less: Deferred financing costs | (24,298) | (30,805) | |||
Long-term Debt | 2,585,517 | 3,262,795 | |||
Maturity value of notes tendered by warrant holders | 131,700 | ||||
5.50% senior notes due January 2023 | |||||
Debt | |||||
Long-term Debt, Gross | $ 19,733 | $ 24,446 | |||
Interest rate on senior notes (as a percent) | 5.50% | 5.50% | |||
5.10% senior notes due September 2023 | |||||
Debt | |||||
Long-term Debt, Gross | $ 52,853 | $ 82,703 | |||
Interest rate on senior notes (as a percent) | 5.10% | 5.10% | |||
0.75% senior exchangeable notes due January 2024 | |||||
Debt | |||||
Long-term Debt, Gross | $ 177,005 | $ 259,839 | |||
Interest rate on senior notes (as a percent) | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% |
Long-term Debt | $ 177,000 | $ 287,300 | |||
5.75% senior notes due February 2025 | |||||
Debt | |||||
Long-term Debt, Gross | $ 502,471 | $ 548,458 | |||
Interest rate on senior notes (as a percent) | 5.75% | 5.75% | 5.75% | ||
6.50% senior priority guaranteed notes due February 2025 | |||||
Debt | |||||
Long-term Debt, Gross | $ 50,485 | ||||
Interest rate on senior notes (as a percent) | 6.50% | ||||
9.00% senior priority guaranteed notes due February 2025 | |||||
Debt | |||||
Long-term Debt, Gross | $ 210,242 | $ 218,082 | |||
Interest rate on senior notes (as a percent) | 9.00% | 9.00% | |||
7.25% senior guaranteed notes due January 2026 | |||||
Debt | |||||
Long-term Debt, Gross | $ 557,902 | $ 559,978 | |||
Interest rate on senior notes (as a percent) | 7.25% | 7.25% | |||
7.375% senior priority guaranteed notes due May 2027 | |||||
Debt | |||||
Long-term Debt, Gross | $ 700,000 | $ 700,000 | |||
Interest rate on senior notes (as a percent) | 7.375% | 7.375% | |||
7.50% senior guaranteed notes due January 2028 | |||||
Debt | |||||
Long-term Debt, Gross | $ 389,609 | $ 389,609 | |||
Interest rate on senior notes (as a percent) | 7.50% | 7.50% | |||
2018 revolving credit facility | |||||
Debt | |||||
Long-term Debt, Gross | $ 460,000 | ||||
Senior Notes | |||||
Debt | |||||
Principal amount of notes repurchased | $ 69,200 | ||||
Repurchase amount | 68,800 | ||||
Accrued and unpaid interest | 1,000 | ||||
Senior Notes | Other, net | |||||
Debt | |||||
Gain on repurchase of debt | $ 3,200 |
Debt - Exchange Transactions (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2021
USD ($)
item
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2022 |
Mar. 21, 2022 |
Dec. 31, 2021 |
Jan. 31, 2017
USD ($)
|
|
Senior Notes | ||||||
Debt | ||||||
Number private exchange transactions entered into during the period | item | 2 | |||||
Aggregate principal amount exchanged | $ 40,000 | $ 40,000 | ||||
Aggregate principal amount of debt issued in exchanges | $ 26,050 | |||||
Senior Notes | Accrued liabilities and other long-term liabilities | ||||||
Debt | ||||||
Future contractual interest payments | $ 9,400 | |||||
9.0% Exchange Notes | ||||||
Debt | ||||||
Interest rate on senior notes (as a percent) | 9.00% | |||||
Aggregate principal amount of debt issued in exchanges | $ 26,100 | |||||
0.75% senior exchangeable notes due January 2024 | ||||||
Debt | ||||||
Interest rate on senior notes (as a percent) | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% | |
Aggregate principal amount exchanged | $ 35,000 | |||||
Aggregate principal amount of debt issued in exchanges | $ 575,000 | |||||
5.75% senior notes due February 2025 | ||||||
Debt | ||||||
Interest rate on senior notes (as a percent) | 5.75% | 5.75% | 5.75% | |||
Aggregate principal amount exchanged | $ 5,000 |
Debt - Senior Exchangeable Notes (Details) $ / shares in Units, $ in Thousands |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2022
USD ($)
$ / shares
|
Mar. 21, 2022 |
Jan. 01, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Sep. 30, 2021 |
Jan. 31, 2017
USD ($)
|
|
Debt | ||||||
Aggregate principal amount outstanding | $ 2,585,517 | $ 3,262,795 | ||||
Unamortized issuance costs | $ 24,298 | $ 30,805 | ||||
ASU 2020-06 | Cumulative effect period of adoption adjustment | ||||||
Debt | ||||||
Unamortized debt discount | $ (27,500) | |||||
0.75% senior exchangeable notes due January 2024 | ||||||
Debt | ||||||
Interest rate on senior notes (as a percent) | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% | |
Aggregate principal amount at issuance | $ 575,000 | |||||
Aggregate principal amount outstanding | $ 177,000 | $ 287,300 | ||||
Exchange rate of common shares per $1,000 principal amount | 0.8018 | |||||
Exchange price per common share | $ / shares | $ 1,247.19 | |||||
Debt component | 411,200 | |||||
Equity component | $ 163,800 | |||||
0.75% senior exchangeable notes due January 2024 | ASU 2020-06 | Cumulative effect period of adoption adjustment | ||||||
Debt | ||||||
Unamortized debt discount | $ (27,500) |
Debt - Credit Agreement (Details) - USD ($) $ in Millions |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Jan. 21, 2022 |
Sep. 30, 2022 |
Mar. 21, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jan. 31, 2017 |
|
5.10% senior notes due September 2023 | ||||||
Debt | ||||||
Interest rate on senior notes (as a percent) | 5.10% | 5.10% | ||||
5.50% senior notes due January 2023 | ||||||
Debt | ||||||
Interest rate on senior notes (as a percent) | 5.50% | 5.50% | ||||
5.75% senior notes due February 2025 | ||||||
Debt | ||||||
Interest rate on senior notes (as a percent) | 5.75% | 5.75% | 5.75% | |||
0.75% senior exchangeable notes due January 2024 | ||||||
Debt | ||||||
Interest rate on senior notes (as a percent) | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% | |
2022 Credit Agreement | ||||||
Debt | ||||||
Percentage of property, plant and equipment to be owned by the revolver guarantor and its subsidiaries | 90.00% | |||||
Threshold percentage of outstanding principal amount of relevant debt to remaining outstanding | 50.00% | |||||
Outstanding balance | $ 0.0 | |||||
Weighted average interest rate (as a percent) | 4.48% | |||||
2022 Credit Agreement | Debt covenant | ||||||
Debt | ||||||
Threshold amount beyond which the debt instrument covenant restricts the company's ability to incur liens | $ 150.0 | |||||
Threshold amount beyond which the debt instrument covenant restricts the company's subsidiaries to incur debt | 100.0 | |||||
Revolving credit facility | ||||||
Debt | ||||||
Maximum borrowing capacity | 350.0 | |||||
Additional borrowing capacity under terms of accordion feature | 100.0 | |||||
Letters of credit | ||||||
Debt | ||||||
Maximum borrowing capacity | 100.0 | |||||
Collateralized debt | ||||||
Debt | ||||||
Maximum borrowing capacity | 150.0 | |||||
Term loans | ||||||
Debt | ||||||
Maximum borrowing capacity | $ 100.0 |
Shareholders Equity (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jul. 19, 2021
USD ($)
shares
|
Jun. 11, 2021
shares
|
Sep. 30, 2022
USD ($)
$ / shares
shares
|
Sep. 30, 2022
USD ($)
D
$ / shares
shares
|
Apr. 24, 2022
item
shares
|
Mar. 21, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
May 27, 2021
shares
|
Jan. 31, 2017 |
|
Shareholders' Equity | ||||||||||
Multiplying factor for exercise of warrants | item | 3 | |||||||||
Percentage volume weighted average price of stock times factor must exceed sum of volume weighted average prices of second, third and fourth days before exercise | 6.00% | |||||||||
Conversion price percentage | 95.00% | 95.00% | ||||||||
Loss recognized from increase in liability | $ | $ 34,049 | $ (59,684) | ||||||||
Proceeds from issuance of common shares, net of issuance costs | $ | $ 3,767 | |||||||||
5.10% senior notes due September 2023 | ||||||||||
Shareholders' Equity | ||||||||||
Interest rate (as a percent) | 5.10% | 5.10% | 5.10% | |||||||
0.75% senior exchangeable notes due January 2024 | ||||||||||
Shareholders' Equity | ||||||||||
Interest rate (as a percent) | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% | ||||
5.75% senior notes due February 2025 | ||||||||||
Shareholders' Equity | ||||||||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | 5.75% | ||||||
7.25% senior notes due January 2026 | ||||||||||
Shareholders' Equity | ||||||||||
Interest rate (as a percent) | 7.25% | 7.25% | ||||||||
Common Stock Warrants | ||||||||||
Shareholders' Equity | ||||||||||
Number of warrants received per common share held | 0.40 | |||||||||
Number of warrants issued | 3,200,000 | |||||||||
Number of business day notice period | D | 20 | |||||||||
Fair value of outstanding warrants | $ | $ 44,700 | $ 44,700 | ||||||||
Loss recognized from increase in liability | $ | $ (34,000) | $ (63,000) | ||||||||
Warrants outstanding | 2,500,000 | 2,500,000 | ||||||||
Common Stock | ||||||||||
Shareholders' Equity | ||||||||||
Shares issued in connection with acquisition of certain development stage technologies in the energy transition space | 147,974 | |||||||||
Value of shares issued in connection with acquisition of certain development stage technologies in the energy transition space | $ | $ 12,900 | |||||||||
Number of shares which may be forfeited under certain conditions | 71,280 | |||||||||
Forfeiture period | 2 years | |||||||||
Aggregate number of shares issued from the exercise of warrants | 1,100,000 | 1,100,000 | ||||||||
Number of shares which may be purchased by each right | 1 | 1 | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 166.66667 | $ 166.66667 | ||||||||
Number of additional securities which may be issued due to the incentive share component | 0.333 |
Fair Value Measurements (Details) $ in Thousands |
9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022
USD ($)
D
|
Dec. 31, 2021
USD ($)
|
Mar. 21, 2022 |
Sep. 30, 2021 |
Jan. 31, 2017 |
|
Fair Value of Financial Instruments | |||||
Deferred finance costs | $ 24,298 | $ 30,805 | |||
5.50% senior notes due January 2023 | |||||
Fair Value of Financial Instruments | |||||
Interest rate on senior notes (as a percent) | 5.50% | 5.50% | |||
5.10% senior notes due September 2023 | |||||
Fair Value of Financial Instruments | |||||
Interest rate on senior notes (as a percent) | 5.10% | 5.10% | |||
0.75% senior exchangeable notes due January 2024 | |||||
Fair Value of Financial Instruments | |||||
Interest rate on senior notes (as a percent) | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% |
5.75% senior notes due February 2025 | |||||
Fair Value of Financial Instruments | |||||
Interest rate on senior notes (as a percent) | 5.75% | 5.75% | 5.75% | ||
6.50% senior priority guaranteed notes due February 2025 | |||||
Fair Value of Financial Instruments | |||||
Interest rate on senior notes (as a percent) | 6.50% | ||||
9.00% senior priority guaranteed notes due February 2025 | |||||
Fair Value of Financial Instruments | |||||
Interest rate on senior notes (as a percent) | 9.00% | 9.00% | |||
7.25% senior guaranteed notes due January 2026 | |||||
Fair Value of Financial Instruments | |||||
Interest rate on senior notes (as a percent) | 7.25% | 7.25% | |||
7.375% senior priority guaranteed notes due May 2027 | |||||
Fair Value of Financial Instruments | |||||
Interest rate on senior notes (as a percent) | 7.375% | 7.375% | |||
7.50% senior guaranteed notes due January 2028 | |||||
Fair Value of Financial Instruments | |||||
Interest rate on senior notes (as a percent) | 7.50% | 7.50% | |||
Fair Value | |||||
Fair Value of Financial Instruments | |||||
Debt | $ 2,355,824 | $ 3,206,746 | |||
Fair Value | 5.50% senior notes due January 2023 | |||||
Fair Value of Financial Instruments | |||||
Debt | 19,482 | 24,736 | |||
Fair Value | 5.10% senior notes due September 2023 | |||||
Fair Value of Financial Instruments | |||||
Debt | 52,666 | 84,044 | |||
Fair Value | 0.75% senior exchangeable notes due January 2024 | |||||
Fair Value of Financial Instruments | |||||
Debt | 161,282 | 257,730 | |||
Fair Value | 5.75% senior notes due February 2025 | |||||
Fair Value of Financial Instruments | |||||
Debt | 457,947 | 508,881 | |||
Fair Value | 6.50% senior priority guaranteed notes due February 2025 | |||||
Fair Value of Financial Instruments | |||||
Debt | 50,490 | ||||
Fair Value | 9.00% senior priority guaranteed notes due February 2025 | |||||
Fair Value of Financial Instruments | |||||
Debt | 210,585 | 226,914 | |||
Fair Value | 7.25% senior guaranteed notes due January 2026 | |||||
Fair Value of Financial Instruments | |||||
Debt | 483,735 | 522,079 | |||
Fair Value | 7.375% senior priority guaranteed notes due May 2027 | |||||
Fair Value of Financial Instruments | |||||
Debt | 647,500 | 724,906 | |||
Fair Value | 7.50% senior guaranteed notes due January 2028 | |||||
Fair Value of Financial Instruments | |||||
Debt | 322,627 | 346,966 | |||
Fair Value | 2018 revolving credit facility | |||||
Fair Value of Financial Instruments | |||||
Debt | 460,000 | ||||
Carrying Value | |||||
Fair Value of Financial Instruments | |||||
Debt | 2,609,815 | 3,293,600 | |||
Deferred finance costs | 24,298 | 30,805 | |||
Debt, net of financing costs | 2,585,517 | 3,262,795 | |||
Carrying Value | 5.50% senior notes due January 2023 | |||||
Fair Value of Financial Instruments | |||||
Debt | 19,733 | 24,446 | |||
Carrying Value | 5.10% senior notes due September 2023 | |||||
Fair Value of Financial Instruments | |||||
Debt | 52,853 | 82,703 | |||
Carrying Value | 0.75% senior exchangeable notes due January 2024 | |||||
Fair Value of Financial Instruments | |||||
Debt | 177,005 | 259,839 | |||
Carrying Value | 5.75% senior notes due February 2025 | |||||
Fair Value of Financial Instruments | |||||
Debt | 502,471 | 548,458 | |||
Carrying Value | 6.50% senior priority guaranteed notes due February 2025 | |||||
Fair Value of Financial Instruments | |||||
Debt | 50,485 | ||||
Carrying Value | 9.00% senior priority guaranteed notes due February 2025 | |||||
Fair Value of Financial Instruments | |||||
Debt | 210,242 | 218,082 | |||
Carrying Value | 7.25% senior guaranteed notes due January 2026 | |||||
Fair Value of Financial Instruments | |||||
Debt | 557,902 | 559,978 | |||
Carrying Value | 7.375% senior priority guaranteed notes due May 2027 | |||||
Fair Value of Financial Instruments | |||||
Debt | 700,000 | 700,000 | |||
Carrying Value | 7.50% senior guaranteed notes due January 2028 | |||||
Fair Value of Financial Instruments | |||||
Debt | 389,609 | 389,609 | |||
Carrying Value | 2018 revolving credit facility | |||||
Fair Value of Financial Instruments | |||||
Debt | $ 460,000 | ||||
Common Stock Warrants | |||||
Fair Value Measurements | |||||
Common stock warrants, fair value | $ 44,700 | ||||
Number of business day notice period | D | 20 |
Commitments and Contingencies - Litigation (Details) - USD ($) $ in Millions |
1 Months Ended | 9 Months Ended | 12 Months Ended |
---|---|---|---|
Mar. 31, 2011 |
Sep. 30, 2022 |
Dec. 31, 2018 |
|
Court of Ouargla Algeria Foreign Currency Controls | |||
Commitments and Contingencies | |||
Litigation amount as per judgment | $ 19.8 | ||
Payment of contract amount in foreign currency | 7.5 | ||
Payment of contract amount in domestic currency | $ 3.2 | ||
Court of Ouargla Algeria Foreign Currency Controls | Maximum | |||
Commitments and Contingencies | |||
Potential judgment in excess of accrual | $ 11.8 | ||
Regulatory audit | |||
Commitments and Contingencies | |||
Environmental damages | $ 3.4 | ||
KMG Nabors Drilling Company Joint Venture | Regulatory audit | |||
Commitments and Contingencies | |||
Administrative fines | $ 0.8 |
Commitments and Contingencies - Off-Balance Sheet Arrangements (Details) - Financial standby letters of credit and other financial surety instruments $ in Thousands |
Sep. 30, 2022
USD ($)
|
---|---|
Summary of total maximum amount of financial guarantees issued | |
2022 | $ 14,076 |
2023 | 39,034 |
2024 | 8,442 |
Thereafter | 34,270 |
Total | $ 95,822 |
Earnings (Losses) Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Net income (loss) (numerator): | ||||
Income (loss) from continuing operations, net of tax | $ (4,461) | $ (115,702) | $ (249,064) | $ (434,434) |
Less: net (income) loss attributable to noncontrolling interest | (9,322) | (6,778) | (32,132) | (21,168) |
Less: preferred stock dividends | (3,653) | |||
Less: accrued distribution on redeemable noncontrolling interest in subsidiary | (2,601) | (2,356) | (7,720) | (7,088) |
Adjusted income (loss) from continuing operations, net of tax - basic | $ (16,384) | (124,836) | $ (288,916) | (466,343) |
Income (loss) from discontinued operations, net of tax | $ (20) | $ 7 | ||
Weighted-average number of shares outstanding - basic | 9,099 | 7,907 | 8,830 | 7,490 |
Earnings (losses) Per Share: | ||||
Basic from continuing operations (in dollars per share) | $ (1.80) | $ (15.79) | $ (32.72) | $ (62.26) |
Total Basic (in dollars per share) | $ (1.80) | $ (15.79) | $ (32.72) | $ (62.26) |
DILUTED EPS: | ||||
Adjusted income (loss) from continuing operations, net of tax - basic | $ (16,384) | $ (124,836) | $ (288,916) | $ (466,343) |
Adjusted income (loss) from continuing operations, net of tax - diluted | $ (16,384) | (124,836) | $ (288,916) | (466,343) |
Income (loss) from discontinued operations, net of tax | $ (20) | $ 7 | ||
Weighted-average number of shares outstanding - basic | 9,099 | 7,907 | 8,830 | 7,490 |
Weighted-average number of shares outstanding - diluted | 9,099 | 7,907 | 8,830 | 7,490 |
Earnings (losses) per share: | ||||
Diluted from continuing operations (in dollars per share) | $ (1.80) | $ (15.79) | $ (32.72) | $ (62.26) |
Total Diluted (in dollars per share) | $ (1.80) | $ (15.79) | $ (32.72) | $ (62.26) |
Earnings (Losses) Per Share - Exclusions from Diluted Earnings (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Earnings (Losses) Per Share | ||||
Potentially dilutive securities excluded as anti-dilutive | 3,369 | 4,430 | 3,369 | 4,441 |
Supplemental Balance Sheet and Income Statement Information - Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Accrued liabilities | ||
Accrued compensation | $ 74,867 | $ 51,993 |
Deferred revenue and proceeds on insurance and asset sales | 39,977 | 59,816 |
Other taxes payable | 37,697 | 34,333 |
Workers' compensation liabilities | 6,588 | 6,588 |
Interest payable | 55,722 | 71,814 |
Litigation reserves | 17,676 | 14,939 |
Other accrued liabilities | 9,368 | 7,688 |
Total accrued liabilities | $ 241,895 | $ 247,171 |
Supplemental Balance Sheet and Income Statement Information - Investment income (loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Investment income (loss) | ||||
Interest and dividend income | $ 4,814 | $ 211 | $ 6,535 | $ 1,214 |
Gains (losses) on marketable securities | (1) | (11) | (737) | 187 |
Investment income (loss) | $ 4,813 | $ 200 | $ 5,798 | $ 1,401 |
Supplemental Balance Sheet and Income Statement Information - Other, net (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Other, net | ||||
Losses (gains) on sales, disposals and involuntary conversions of long-lived assets | $ 4,650 | $ (168) | $ 1,129 | $ 17,320 |
Purchase of technology | 14,733 | 14,733 | ||
Warrant and derivative valuation | (34,049) | 59,684 | ||
Impairment of Canada Drilling assets | 545 | 58,545 | ||
Litigation expenses and reserves | 4,335 | 2,603 | 12,463 | 5,944 |
Foreign currency transaction losses (gains) | (877) | 867 | (4,054) | 3,394 |
(Gain) loss on debt buyback | (1,259) | (2,521) | (3,236) | (10,706) |
Other losses (gains) | 1,246 | 6,699 | 2,989 | 7,329 |
Total other, net | $ 25,954 | $ (22,758) | $ (68,975) | $ (96,559) |
Supplemental Balance Sheet and Income Statement Information - Accumulated other comprehensive income (loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Changes in accumulated other comprehensive income (loss) | ||||
Beginning balance | $ 590,656 | |||
Other comprehensive income (loss), net of tax | $ (1,611) | $ (2,248) | (933) | $ 252 |
Ending balance | 439,241 | 439,241 | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Beginning balance | (10,634) | (11,124) | ||
Other comprehensive income (loss) before reclassifications | (1,053) | 132 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 120 | 120 | ||
Other comprehensive income (loss), net of tax | (933) | 252 | ||
Ending balance | (11,567) | (10,872) | (11,567) | (10,872) |
Gains (losses) on cash flow hedges | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Beginning balance | 2 | 2 | ||
Ending balance | 2 | 2 | 2 | 2 |
Defined benefit pension plan items | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Beginning balance | (5,356) | (3,616) | ||
Other comprehensive income (loss) before reclassifications | 1,428 | (1,900) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 120 | 120 | ||
Other comprehensive income (loss), net of tax | 1,548 | (1,780) | ||
Ending balance | (3,808) | (5,396) | (3,808) | (5,396) |
Foreign currency items | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Beginning balance | (5,280) | (7,510) | ||
Other comprehensive income (loss) before reclassifications | (2,481) | 2,032 | ||
Other comprehensive income (loss), net of tax | (2,481) | 2,032 | ||
Ending balance | $ (7,761) | $ (5,478) | $ (7,761) | $ (5,478) |
Supplemental Balance Sheet and Income Statement Information - Reclassified to net income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Supplemental Balance Sheet and Income Statement Information | ||||
General and administrative expenses | $ 57,594 | $ 52,897 | $ 169,400 | $ 159,137 |
Income (loss) from continuing operations before income taxes | 7,891 | (112,918) | (213,688) | (397,206) |
Tax expense (benefit) | 12,352 | 2,784 | 35,376 | 37,228 |
Net income (loss) | (4,461) | (115,722) | (249,064) | (434,427) |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Supplemental Balance Sheet and Income Statement Information | ||||
General and administrative expenses | 52 | 52 | 156 | 156 |
Income (loss) from continuing operations before income taxes | (52) | (52) | (156) | (156) |
Tax expense (benefit) | (12) | (12) | (36) | (36) |
Net income (loss) | $ (40) | $ (40) | $ (120) | $ (120) |
Segment Information - Operating revenues (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Segment Information | ||||
Operating revenues | $ 694,136 | $ 524,165 | $ 1,893,618 | $ 1,474,009 |
U.S. Drilling | ||||
Segment Information | ||||
Operating revenues | 297,178 | 173,441 | 767,769 | 477,346 |
Canada Drilling | ||||
Segment Information | ||||
Operating revenues | 6,034 | 39,336 | ||
International Drilling | ||||
Segment Information | ||||
Operating revenues | 306,355 | 270,008 | 881,705 | 772,128 |
Drilling Solutions | ||||
Segment Information | ||||
Operating revenues | 61,981 | 45,880 | 172,042 | 120,697 |
Rig Technologies | ||||
Segment Information | ||||
Operating revenues | 50,496 | 42,053 | 132,326 | 102,353 |
Operating segments | U.S. Drilling | ||||
Segment Information | ||||
Operating revenues | 297,178 | 173,441 | 767,769 | 477,346 |
Operating segments | Canada Drilling | ||||
Segment Information | ||||
Operating revenues | 6,034 | 39,336 | ||
Operating segments | International Drilling | ||||
Segment Information | ||||
Operating revenues | 306,355 | 270,008 | 881,705 | 772,128 |
Operating segments | Drilling Solutions | ||||
Segment Information | ||||
Operating revenues | 61,981 | 45,880 | 172,042 | 120,697 |
Operating segments | Rig Technologies | ||||
Segment Information | ||||
Operating revenues | 50,496 | 42,053 | 132,326 | 102,353 |
Other reconciling items | ||||
Segment Information | ||||
Operating revenues | $ (21,874) | $ (13,251) | $ (60,224) | $ (37,851) |
Segment Information - Adjusted operating income (loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Segment Information | ||||
Adjusted operating income (loss) | $ 60,371 | $ (15,093) | $ 93,397 | $ (77,097) |
Operating segments | ||||
Segment Information | ||||
Adjusted operating income (loss) | 60,371 | (15,093) | 93,397 | (77,097) |
Operating segments | U.S. Drilling | ||||
Segment Information | ||||
Adjusted operating income (loss) | 37,776 | (19,700) | 40,213 | (63,905) |
Operating segments | Canada Drilling | ||||
Segment Information | ||||
Adjusted operating income (loss) | (9) | 1,371 | (43) | 2,670 |
Operating segments | International Drilling | ||||
Segment Information | ||||
Adjusted operating income (loss) | (907) | (7,297) | (2,629) | (34,368) |
Operating segments | Drilling Solutions | ||||
Segment Information | ||||
Adjusted operating income (loss) | 20,099 | 8,607 | 53,068 | 19,841 |
Operating segments | Rig Technologies | ||||
Segment Information | ||||
Adjusted operating income (loss) | $ 3,412 | $ 1,926 | $ 2,788 | $ (1,335) |
Segment Information - Reconciliation of segment adjusted operating income (loss) to net income (loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: | ||||
Net income (loss) | $ (4,461) | $ (115,722) | $ (249,064) | $ (434,427) |
Income (loss) from discontinued operations, net of tax | (20) | 7 | ||
Income (loss) from continuing operations, net of tax | (4,461) | (115,702) | (249,064) | (434,434) |
Income tax expense (benefit) | 12,352 | 2,784 | 35,376 | 37,228 |
Income (loss) from continuing operations before income taxes | 7,891 | (112,918) | (213,688) | (397,206) |
Investment (income) loss | (4,813) | (200) | (5,798) | (1,401) |
Interest expense | 43,841 | 42,217 | 133,650 | 126,906 |
Other, net | (25,954) | 22,758 | 68,975 | 96,559 |
Total segment adjusted operating income (loss) | 60,371 | (15,093) | 93,397 | (77,097) |
Operating segments | ||||
Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: | ||||
Net income (loss) | (4,461) | (115,722) | (249,064) | (434,427) |
Income (loss) from discontinued operations, net of tax | 20 | (7) | ||
Income (loss) from continuing operations, net of tax | (4,461) | (115,702) | (249,064) | (434,434) |
Income tax expense (benefit) | 12,352 | 2,784 | 35,376 | 37,228 |
Income (loss) from continuing operations before income taxes | 7,891 | (112,918) | (213,688) | (397,206) |
Investment (income) loss | (4,813) | (200) | (5,798) | (1,401) |
Interest expense | 43,841 | 42,217 | 133,650 | 126,906 |
Other, net | (25,954) | 22,758 | 68,975 | 96,559 |
Total segment adjusted operating income (loss) | 60,371 | (15,093) | 93,397 | (77,097) |
Other reconciling items | ||||
Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: | ||||
Other reconciling items | $ 39,406 | $ 33,050 | $ 110,258 | $ 98,045 |
Segment Information - Total assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
||
---|---|---|---|---|
Segment Information | ||||
Total assets | [1] | $ 4,768,555 | $ 5,525,364 | |
Operating segments | U.S. Drilling | ||||
Segment Information | ||||
Total assets | 1,444,686 | 1,606,683 | ||
Operating segments | Canada Drilling | ||||
Segment Information | ||||
Total assets | 368 | 1,392 | ||
Operating segments | International Drilling | ||||
Segment Information | ||||
Total assets | 2,297,339 | 2,380,703 | ||
Operating segments | Drilling Solutions | ||||
Segment Information | ||||
Total assets | 59,261 | 65,899 | ||
Operating segments | Rig Technologies | ||||
Segment Information | ||||
Total assets | 189,878 | 190,489 | ||
Other reconciling items | ||||
Segment Information | ||||
Total assets | $ 777,023 | $ 1,280,198 | ||
|
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Revenue Recognition | ||||
Revenues | $ 694,136 | $ 524,165 | $ 1,893,618 | $ 1,474,009 |
U.S. Drilling | ||||
Revenue Recognition | ||||
Revenues | 297,178 | 173,441 | 767,769 | 477,346 |
Canada Drilling | ||||
Revenue Recognition | ||||
Revenues | 6,034 | 39,336 | ||
International Drilling | ||||
Revenue Recognition | ||||
Revenues | 306,355 | 270,008 | 881,705 | 772,128 |
Drilling Solutions | ||||
Revenue Recognition | ||||
Revenues | 61,981 | 45,880 | 172,042 | 120,697 |
Rig Technologies | ||||
Revenue Recognition | ||||
Revenues | 50,496 | 42,053 | 132,326 | 102,353 |
Operating segments | Lower 48 | ||||
Revenue Recognition | ||||
Revenues | 315,130 | 176,596 | 815,978 | 475,362 |
Operating segments | U.S. Offshore Gulf Of Mexico | ||||
Revenue Recognition | ||||
Revenues | 33,584 | 36,697 | 99,560 | 101,414 |
Operating segments | Alaska | ||||
Revenue Recognition | ||||
Revenues | 19,310 | 5,903 | 49,798 | 19,086 |
Operating segments | Canada | ||||
Revenue Recognition | ||||
Revenues | 1,722 | 7,420 | 4,719 | 43,663 |
Operating segments | Middle East & Asia | ||||
Revenue Recognition | ||||
Revenues | 233,912 | 211,167 | 663,326 | 594,796 |
Operating segments | Latin America | ||||
Revenue Recognition | ||||
Revenues | 87,304 | 76,256 | 247,795 | 200,495 |
Operating segments | Europe, Africa & CIS | ||||
Revenue Recognition | ||||
Revenues | 25,048 | 23,377 | 72,666 | 77,044 |
Operating segments | U.S. Drilling | ||||
Revenue Recognition | ||||
Revenues | 297,178 | 173,441 | 767,769 | 477,346 |
Operating segments | U.S. Drilling | Lower 48 | ||||
Revenue Recognition | ||||
Revenues | 247,290 | 132,639 | 627,774 | 363,536 |
Operating segments | U.S. Drilling | U.S. Offshore Gulf Of Mexico | ||||
Revenue Recognition | ||||
Revenues | 31,108 | 35,063 | 91,481 | 95,222 |
Operating segments | U.S. Drilling | Alaska | ||||
Revenue Recognition | ||||
Revenues | 18,780 | 5,739 | 48,514 | 18,588 |
Operating segments | Canada Drilling | ||||
Revenue Recognition | ||||
Revenues | 6,034 | 39,336 | ||
Operating segments | Canada Drilling | Canada | ||||
Revenue Recognition | ||||
Revenues | 6,034 | 39,336 | ||
Operating segments | International Drilling | ||||
Revenue Recognition | ||||
Revenues | 306,355 | 270,008 | 881,705 | 772,128 |
Operating segments | International Drilling | Middle East & Asia | ||||
Revenue Recognition | ||||
Revenues | 204,544 | 179,617 | 590,678 | 522,142 |
Operating segments | International Drilling | Latin America | ||||
Revenue Recognition | ||||
Revenues | 79,366 | 70,692 | 226,866 | 184,531 |
Operating segments | International Drilling | Europe, Africa & CIS | ||||
Revenue Recognition | ||||
Revenues | 22,445 | 19,699 | 64,161 | 65,455 |
Operating segments | Drilling Solutions | ||||
Revenue Recognition | ||||
Revenues | 61,981 | 45,880 | 172,042 | 120,697 |
Operating segments | Drilling Solutions | Lower 48 | ||||
Revenue Recognition | ||||
Revenues | 40,561 | 26,917 | 110,527 | 66,801 |
Operating segments | Drilling Solutions | U.S. Offshore Gulf Of Mexico | ||||
Revenue Recognition | ||||
Revenues | 2,476 | 1,634 | 8,079 | 6,192 |
Operating segments | Drilling Solutions | Alaska | ||||
Revenue Recognition | ||||
Revenues | 530 | 163 | 1,284 | 484 |
Operating segments | Drilling Solutions | Canada | ||||
Revenue Recognition | ||||
Revenues | 368 | 340 | 1,146 | 998 |
Operating segments | Drilling Solutions | Middle East & Asia | ||||
Revenue Recognition | ||||
Revenues | 10,044 | 10,872 | 29,520 | 29,320 |
Operating segments | Drilling Solutions | Latin America | ||||
Revenue Recognition | ||||
Revenues | 7,849 | 5,564 | 20,840 | 15,788 |
Operating segments | Drilling Solutions | Europe, Africa & CIS | ||||
Revenue Recognition | ||||
Revenues | 153 | 390 | 646 | 1,114 |
Operating segments | Rig Technologies | ||||
Revenue Recognition | ||||
Revenues | 50,496 | 42,053 | 132,326 | 102,353 |
Operating segments | Rig Technologies | Lower 48 | ||||
Revenue Recognition | ||||
Revenues | 27,279 | 17,040 | 77,677 | 45,025 |
Operating segments | Rig Technologies | Alaska | ||||
Revenue Recognition | ||||
Revenues | 1 | 14 | ||
Operating segments | Rig Technologies | Canada | ||||
Revenue Recognition | ||||
Revenues | 1,354 | 1,046 | 3,573 | 3,329 |
Operating segments | Rig Technologies | Middle East & Asia | ||||
Revenue Recognition | ||||
Revenues | 19,324 | 20,678 | 43,128 | 43,334 |
Operating segments | Rig Technologies | Latin America | ||||
Revenue Recognition | ||||
Revenues | 89 | 89 | 176 | |
Operating segments | Rig Technologies | Europe, Africa & CIS | ||||
Revenue Recognition | ||||
Revenues | 2,450 | 3,288 | 7,859 | 10,475 |
Eliminations & other | ||||
Revenue Recognition | ||||
Revenues | (21,874) | (13,251) | (60,224) | (37,851) |
Eliminations & other | Other | ||||
Revenue Recognition | ||||
Revenues | $ (21,874) | $ (13,251) | $ (60,224) | $ (37,851) |
Revenue Recognition - Receivables, Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Revenue Recognition | ||
Contract Receivables | $ 380.2 | $ 350.0 |
Contract Assets (Current) | 22.9 | 24.9 |
Contract Assets (Long-term) | 0.6 | 1.9 |
Contract Liabilities (Current) | 25.4 | 42.9 |
Contract Liabilities (Long-term) | $ 5.4 | $ 29.3 |
Contract Asset Balance | ||
2022 | 87.00% | |
Contract percentage recognized | 77.00% | |
2023 | 13.00% | |
Revenue recognized (as a percent) | 45.00% |
Revenue Recognition - Remaining Performance Obligation (Details) |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Remaining performance obligations | |
Revenue recognized (as a percent) | 45.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Remaining performance obligations | |
Percentage of remaining performance obligation expected to be recognized in period | 57.00% |
Revenue, Remaining performance obligation, expected timing of satisfaction period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Remaining performance obligations | |
Percentage of remaining performance obligation expected to be recognized in period | 28.00% |
Revenue, Remaining performance obligation, expected timing of satisfaction period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Remaining performance obligations | |
Percentage of remaining performance obligation expected to be recognized in period | 15.00% |
Revenue, Remaining performance obligation, expected timing of satisfaction period | 12 months |
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