NBR 10-Q

Nabors Industries Ltd (NBR)

10-Q 2021-04-29 For: 2021-03-31

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Added on April 08, 2026

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Bermuda		98-0363970
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares, $.05 par value per share	NBR	NYSE
Preferred shares, 6.00% Mandatory Convertible Preferred Shares, Series A, $.001 par value per share	NBR.PRA	NYSE


Large Accelerated Filer ☐		Accelerated Filer ☒

Non-accelerated Filer ☐		Smaller reporting company ☐
		Emerging growth company ☐


PART I FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	3

	Condensed Consolidated Statements of Income (Loss) for the Three Months Ended March 31, 2021 and 2020	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2021 and 2020	5

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020	6

	Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2021 and 2020	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	34

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	35

Signatures		37


	March 31,		December 31,
	2021		2020

	(In thousands, except per
	share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	417,544	$	472,246
Short-term investments		17		9,500
Accounts receivable, net of allowance of $67,467 and $69,807, respectively		331,453		362,977
Inventory, net		154,272		160,585
Assets held for sale		16,563		16,562
Other current assets		116,182		109,595
Total current assets		1,036,031		1,131,465
Property, plant and equipment, net		3,829,222		3,985,707
Deferred income taxes		248,863		247,171
Other long-term assets		140,790		139,085
Total assets (1)	$	5,254,906	$	5,503,428
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable	$	234,944	$	220,922
Accrued liabilities		222,361		276,085
Income taxes payable		26,233		10,157
Current lease liabilities		7,259		8,305
Total current liabilities		490,797		515,469
Long-term debt		2,898,879		2,968,701
Other long-term liabilities		338,607		318,034
Deferred income taxes		2,502		1,576
Total liabilities (1)		3,730,785		3,803,780
Commitments and contingencies (Note 8)
Redeemable noncontrolling interest in subsidiary (Note 3)		396,167		442,840

Shareholders’ equity:
Preferred shares, par value $0.001 per share:
Series A 6% Cumulative Mandatory Convertible; $50 per share liquidation preference; outstanding 4,870 and 4,870, respectively		5		5
Common shares, par value $0.05 per share:
Authorized common shares 32,000; issued 8,503 and 8,383, respectively		417		419
Capital in excess of par value		3,429,089		3,423,935
Accumulated other comprehensive income (loss)		(10,756)		(11,124)
Retained earnings (accumulated deficit)		(1,089,251)		(946,100)
Less: treasury shares, at cost, 1,090 and 1,090 common shares, respectively		(1,315,751)		(1,315,751)
Total shareholders’ equity		1,013,753		1,151,384
Noncontrolling interest		114,201		105,424
Total equity		1,127,954		1,256,808
Total liabilities and equity	$	5,254,906	$	5,503,428


		Three Months Ended
		March 31,
		2021		2020

	(In thousands, except per share amounts)
Revenues and other income:
Operating revenues		$	460,511	$	718,364
Investment income (loss)			1,263		(3,198)
Total revenues and other income			461,774		715,166

Costs and other deductions:
Direct costs			290,654		461,840
General and administrative expenses			54,660		57,384
Research and engineering			7,467		11,409
Depreciation and amortization			177,276		227,063
Interest expense			42,975		54,722
Impairments and other charges			2,483		276,434
Other, net			4,863		(17,110)
Total costs and other deductions			580,378		1,071,742
Income (loss) from continuing operations before income taxes			(118,604)		(356,576)
Income tax expense (benefit):
Current			10,903		(7,203)
Deferred			(1,178)		24,896
Total income tax expense (benefit)			9,725		17,693
Income (loss) from continuing operations, net of tax			(128,329)		(374,269)
Income (loss) from discontinued operations, net of tax			19		(93)
Net income (loss)			(128,310)		(374,362)
Less: Net (income) loss attributable to noncontrolling interest			(8,776)		(17,465)
Net income (loss) attributable to Nabors			(137,086)		(391,827)
Less: Preferred stock dividend			(3,653)		(3,652)
Net income (loss) attributable to Nabors common shareholders		$	(140,739)	$	(395,479)

Amounts attributable to Nabors common shareholders:
Net income (loss) from continuing operations		$	(140,758)	$	(395,386)
Net income (loss) from discontinued operations			19		(93)
Net income (loss) attributable to Nabors common shareholders		$	(140,739)	$	(395,479)

Earnings (losses) per share:
Basic from continuing operations		$	(20.16)	$	(56.72)
Basic from discontinued operations			—		(0.01)
Total Basic		$	(20.16)	$	(56.73)
Diluted from continuing operations		$	(20.16)	$	(56.72)
Diluted from discontinued operations			—		(0.01)
Total Diluted		$	(20.16)	$	(56.73)
Weighted-average number of common shares outstanding:
Basic			7,102		7,051
Diluted			7,102		7,051


	Three Months Ended March 31,
	2021		2020

	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	(128,310)	$	(374,362)
Adjustments to net income (loss):
Depreciation and amortization		177,277		227,063
Deferred income tax expense (benefit)		(1,178)		24,903
Impairments and other charges		355		265,779
Amortization of debt discount and deferred financing costs		5,400		8,153
Losses (gains) on debt buyback		(8,062)		(15,742)
Losses (gains) on long-lived assets, net		8,524		1,391
Losses (gains) on investments, net		(315)		5,539
Provision (recovery) of bad debt		(2,339)		10,417
Share-based compensation		6,775		9,158
Foreign currency transaction losses (gains), net		2,365		(559)
Noncontrolling interest		(8,777)		(17,465)
Other		398		188
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable		32,017		(16,008)
Inventory		6,039		(1,421)
Other current assets		(6,476)		12,292
Other long-term assets		(4,949)		2,046
Trade accounts payable and accrued liabilities		(17,697)		(76,952)
Income taxes payable		15,766		4,475
Other long-term liabilities		2,677		(9,733)
Net cash provided by (used for) operating activities		79,490		59,162
Cash flows from investing activities:
Purchases of investments		(14)		—
Sales and maturities of investments		10,908		1,835
Capital expenditures		(40,852)		(59,430)
Proceeds from sales of assets and insurance claims		10,839		6,822
Net cash (used for) provided by investing activities		(19,119)		(50,773)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		—		1,000,000
Reduction in long-term debt		(16,838)		(1,068,405)
Debt issuance costs		(2,421)		(15,737)
Proceeds from revolving credit facilities		95,000		795,000
Reduction in revolving credit facilities		(135,000)		(650,000)
Repurchase of common and preferred shares		—		(13,858)
Dividends to common and preferred shareholders		(3,662)		(7,937)
Distributions to noncontrolling interest		(49,077)		—
Other		(1,923)		(1,491)
Net cash (used for) provided by financing activities		(113,921)		37,572
Effect of exchange rate changes on cash and cash equivalents		(1,111)		(2,219)
Net increase (decrease) in cash and cash equivalents and restricted cash		(54,661)		43,742
Cash and cash equivalents and restricted cash, beginning of period		475,280		442,038
Cash and cash equivalents and restricted cash, end of period	$	420,619	$	485,780

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents, beginning of period		472,246		435,990
Restricted cash, beginning of period		3,034		6,048
Cash and cash equivalents and restricted cash, beginning of period	$	475,280	$	442,038

Cash and cash equivalents, end of period		417,544		480,522
Restricted cash, end of period		3,075		5,258
Cash and cash equivalents and restricted cash, end of period	$	420,619	$	485,780


	Mandatory Convertible						Capital		Accumulated
	Preferred Shares			Common Shares			in Excess		Other						Non-
		Par			Par		of Par		Comprehensive		Retained		Treasury		controlling		Total
(In thousands, except per share amounts)	Shares	Value		Shares	Value		Value		Income		Earnings		Shares		Interest		Equity
As of December 31, 2019	5,613	$	6	416,198	$	416	$	3,412,972	$	(11,788)	$	(104,775)	$	(1,314,020)	$	67,354	$	2,050,165
Net income (loss)	—		—	—		—		—		—		(391,827)		—		17,465		(374,362)
Dividends to common shareholders ($0.50 per share)	—		—	—		—		—		—		(3,514)		—		—		(3,514)
Dividends to preferred shareholders ($0.75 per share)	—		—	—		—		—		—		(3,652)		—		—		(3,652)
Other comprehensive income (loss), net of tax	—		—	—		—		—		(17,218)		—		—		—		(17,218)
Repurchase of common and preferred shares	(724)		(1)	—		—		(12,126)		—		—		(1,731)		—		(13,858)
Share-based compensation	—		—	—		—		9,158		—		—		—		—		9,158
Accrued distribution on redeemable noncontrolling interest in subsidiary	—		—	—		—		—		—		(4,432)		—		—		(4,432)
Other	—		—	3,268		3		(1,550)		—		—		—		358		(1,189)
As of March 31, 2020	4,889	$	5	419,466	$	419	$	3,408,454	$	(29,006)	$	(508,200)	$	(1,315,751)	$	85,177	$	1,641,098

As of December 31, 2020	4,870	$	5	8,383	$	419	$	3,423,935	$	(11,124)	$	(946,100)	$	(1,315,751)	$	105,424	$	1,256,808
Net income (loss)	—		—	—		—		—		—		(137,086)		—		8,776		(128,310)
PSU distribution equivalent rights	—		—	—		—		—		—		(10)		—		—		(10)
Dividends to preferred shareholders ($0.75 per share)	—		—	—		—		—		—		(3,653)		—		—		(3,653)
Other comprehensive income (loss), net of tax	—		—	—		—		—		368		—		—		—		368
Share-based compensation	—		—	—		—		6,775		—		—		—		—		6,775
Accrued distribution on redeemable noncontrolling interest in subsidiary	—		—	—		—		—		—		(2,402)		—		—		(2,402)
Other	—		—	120		(2)		(1,621)		—		—		—		1		(1,622)
As of March 31, 2021	4,870	$	5	8,503	$	417	$	3,429,089	$	(10,756)	$	(1,089,251)	$	(1,315,751)	$	114,201	$	1,127,954


		March 31, 2021				December 31, 2020

		Carrying		Fair		Carrying		Fair
		Value		Value		Value		Value

	(In thousands)
4.625% senior notes due September 2021		$	86,389	$	85,470	$	86,329	$	78,862
5.50% senior notes due January 2023			25,425		23,830		28,443		18,768
5.10% senior notes due September 2023			120,109		108,324		121,077		78,435
0.75% senior exchangeable notes due January 2024			250,776		214,969		279,700		169,458
5.75% senior notes due February 2025			586,308		436,067		610,818		318,871
6.50% senior priority guaranteed notes due February 2025			50,485		47,772		50,485		44,059
9.00% senior priority guaranteed notes due February 2025			218,082		223,695		192,032		185,221
7.25% senior guaranteed notes due January 2026			559,978		467,318		559,978		396,106
7.50% senior guaranteed notes due January 2028			389,609		320,095		389,609		267,369
2018 revolving credit facility			632,500		632,500		672,500		672,500
			2,919,661	$	2,560,041		2,990,971	$	2,229,649
Less: deferred financing costs			20,782				22,270
		$	2,898,879			$	2,968,701


	Three months ended March 31,
	2021
Exchanged
0.75% senior exchangeable notes due January 2024	$	35,000
5.75% senior notes due February 2025		5,000
Aggregate principal amount exchanged		40,000
Aggregate principal amount of debt issued in exchanges		26,050
Aggregated net gain (loss)		22
Per share amount of the aggregate gain		$ 0.00


	Maximum Amount
	2021		2022	2023	Thereafter	Total

	(In thousands)
Financial standby letters of credit and other financial surety instruments	$	121,428	64,307	112	10	$	185,857



	Gains		Defined
	(losses) on		benefit		Foreign
	cash flow		pension plan		currency
	hedges		items		items		Total

	(In thousands (1) )
As of January 1, 2020	$	(65)	$	(3,778)	$	(7,945)	$	(11,788)
Other comprehensive income (loss) before reclassifications		—		—		(17,365)		(17,365)
Amounts reclassified from accumulated other comprehensive income (loss)		107		40		—		147
Net other comprehensive income (loss)		107		40		(17,365)		(17,218)
As of March 31, 2020	$	42	$	(3,738)	$	(25,310)	$	(29,006)


	Three Months Ended
	March 31, 2021
		U.S. Drilling		Canada Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other		Total

	(In thousands)
Lower 48	$	109,534	$	—	$	—	$	18,448	$	12,539	$	—	$	140,521
U.S. Offshore Gulf of Mexico		27,193		—		—		2,736		—		—		29,929
Alaska		5,572		—		—		136		—		—		5,708
Canada		—		20,989		—		454		900		—		22,343
Middle East & Asia		—		—		168,187		8,991		9,078		—		186,256
Latin America		—		—		55,908		4,567		12		—		60,487
Europe, Africa & CIS		—		—		22,743		374		3,219		—		26,336
Eliminations & other		—		—		—		—		—		(11,069)		(11,069)
Total	$	142,299	$	20,989	$	246,838	$	35,706	$	25,748	$	(11,069)	$	460,511


	Three Months Ended
	March 31, 2020
		U.S. Drilling		Canada Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other		Total

	(In thousands)
Lower 48	$	220,229	$	—	$	—	$	35,715	$	20,531	$	—	$	276,475
U.S. Offshore Gulf of Mexico		39,056		—		—		3,165		—		—		42,221
Alaska		15,616		—		—		986		(9)		—		16,593
Canada		—		25,591		—		729		1,612		—		27,932
Middle East & Asia		—		—		201,177		11,037		15,554		—		227,768
Latin America		—		—		84,219		2,827		152		—		87,198
Europe, Africa & CIS		—		—		51,714		925		4,310		—		56,949
Eliminations & other		—		—		—		—		—		(16,772)		(16,772)
Total	$	274,901	$	25,591	$	337,110	$	55,384	$	42,150	$	(16,772)	$	718,364


			Contract		Contract		Contract		Contract
	Contract		Assets		Assets		Liabilities		Liabilities
	Receivables		(Current)		(Long-term)		(Current)		(Long-term)

	(In millions)
As of December 31, 2020	$	427.2	$	23.5	$	6.8	$	42.8	$	44.2
As of March 31, 2021	$	393.5	$	29.9	$	8.0	$	59.9	$	40.0


	March 31,		December 31,
	2021		2020

	(In thousands)
Raw materials	$	123,594	$	133,424
Work-in-progress		5,672		3,452
Finished goods		25,006		23,709
	$	154,272	$	160,585


	Three Months Ended
	March 31,
	2021		2020

	(in thousands)
Goodwill impairments	$	—	$	27,798
Intangible asset impairment		—		83,624
US Drilling		—		82,372
International Drilling		—		30,485
Drilling Solutions		—		19,809
Rig Technologies		418		2,798
Oil and gas related assets		—		12,286
Severance and transaction related costs		1,079		659
Other assets		986		16,603
Total	$	2,483		276,434


		Three Months Ended
		March 31,
		2021		2020

	(In thousands)
Adjusted operating income (loss): (2)
U.S. Drilling		$	(23,336)	$	(7,404)
Canada Drilling			3,907		37
International Drilling			(18,632)		(4,147)
Drilling Solutions			4,710		10,549
Rig Technologies			(2,569)		(8,151)
Total segment adjusted operating income (loss)		$	(35,920)	$	(9,116)


	March 31,		December 31,
	2021		2020

	(In thousands)
Total assets:
U.S. Drilling	$	1,804,430	$	1,871,008
Canada Drilling		179,981		174,123
International Drilling		2,537,288		2,688,912
Drilling Solutions		90,971		100,278
Rig Technologies		206,446		225,954
Other reconciling items (3)		435,790		443,153
Total	$	5,254,906	$	5,503,428


	March 31,		December 31,
Summarized Combined Balance Sheet Information	2021		2020

Assets
Current Assets	$	1,541	$	27,432
Non-Current Assets		419,211		415,768
Noncurrent assets - affiliates		7,091,820		7,226,211
Total Assets		7,512,572		7,669,411

Liabilities and Stockholders' Equity
Current liabilities		38,674		71,605
Noncurrent liabilities		2,998,260		3,086,794
Noncurrent liabilities - affiliates		594,514		494,589
Total Liabilities		3,631,448		3,652,988
Stockholders' Equity		3,881,124		4,016,423
Total Liabilities and Stockholders' Equity		7,512,572		7,669,411


	Three Months Ended		Year Ended
	March 31,		December 31,
Summarized Combined Income Statement Information	2021		2020
Total revenues, earnings (loss) from consolidated affiliates and other income	$	(95,949)	$	(554,953)
Income from continuing operations, net of tax		(132,890)		(581,521)
Dividends on preferred stock		(3,653)		(14,611)
Net income (loss) attributable to Nabors common shareholders		(136,543)		(596,132)


					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)
January 1 - January 31	14	$	58.23	—	278,914
February 1 - February 28	8	$	87.72	—	278,914
March 1 - March 31	4	$	113.43	—	278,914



Exhibit No.		Description
31.1		Rule 13a-14(a)/15d-14(a) Certification of Anthony G. Petrello, Chairman, President and Chief Executive Officer*
31.2		Rule 13a-14(a)/15d-14(a) Certification of William Restrepo, Chief Financial Officer*

32.1		Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), executed by Anthony G. Petrello, Chairman, President and Chief Executive Officer and William Restrepo, Chief Financial Officer.*
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)


	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:	April 29, 2021