Nabors Industries Ltd 10-Q for FY2024 Q2

Nabors Industries Ltd (NBR)

10-Q 2024-07-26 For: 2024-06-30

Added on April 08, 2026

About this 10-Q

Nabors Industries Ltd filed this 10-Q on July 26, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $734.8M; down 4.2% from $767.07M a year earlier
Net loss: $32.26M; compared with net income of $4.61M a year earlier
Diluted EPS: -$4.29; compared with -$0.31 a year earlier

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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


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 June 30, 2024 and December 31, 2023	3

	Condensed Consolidated Statements of Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023	5

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	6

	Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2024 and 2023	7

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults Upon Senior Securities	34

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	35

Signatures		35


	June 30,		December 31,
	2024		2023

	(In thousands, except for
	share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	465,953	$	1,057,487
Short-term investments		7,655		12,691
Accounts receivable, net of allowance of $52,737 and $52,864, respectively		368,550		347,837
Inventory, net		147,751		147,798
Other current assets		87,881		79,865
Total current assets		1,077,790		1,645,678
Property, plant and equipment, net		2,813,148		2,898,728
Restricted cash held in trust		323,262		315,488
Deferred income taxes		227,025		238,871
Other long-term assets		174,468		179,200
Total assets (1)	$	4,615,693	$	5,277,965
LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt	$	—	$	629,621
Trade accounts payable		331,468		294,442
Accrued liabilities		211,400		230,240
Income taxes payable		42,306		54,255
Current lease liabilities		5,748		5,423
Total current liabilities		590,922		1,213,981
Long-term debt		2,514,169		2,511,519
Other long-term liabilities		246,031		270,014
Deferred income taxes		1,556		1,366
Total liabilities (1)		3,352,678		3,996,880
Commitments and contingencies (Note 8)
Redeemable noncontrolling interest in subsidiary		761,415		739,075

Shareholders’ equity:
Common shares, par value $0.05 per share:
Authorized common shares 32,000; issued 10,711 and 10,556, respectively		535		527
Capital in excess of par value		3,543,986		3,538,896
Accumulated other comprehensive income (loss)		(10,932)		(10,832)
Retained earnings (accumulated deficit)		(1,967,467)		(1,886,226)
Less: treasury shares, at cost, 1,161 and 1,161 common shares, respectively		(1,315,751)		(1,315,751)
Total shareholders’ equity		250,371		326,614
Noncontrolling interest		251,229		215,396
Total equity		501,600		542,010
Total liabilities and equity	$	4,615,693	$	5,277,965


		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2024		2023		2024		2023

	(In thousands, except per share amounts)
Revenues and other income:
Operating revenues		$	734,798	$	767,067	$	1,468,502	$	1,546,206
Investment income (loss)			8,181		11,743		18,382		21,609
Total revenues and other income			742,979		778,810		1,486,884		1,567,815

Costs and other deductions:
Direct costs			440,225		455,531		877,302		917,860
General and administrative expenses			62,154		63,232		123,905		124,962
Research and engineering			14,362		13,281		28,225		28,355
Depreciation and amortization			160,141		159,698		317,826		322,729
Interest expense			51,493		46,164		101,872		91,305
Other, net			12,079		(1,775)		28,187		(44,150)
Total costs and other deductions			740,454		736,131		1,477,317		1,441,061
Income (loss) before income taxes			2,525		42,679		9,567		126,754
Income tax expense (benefit):
Current			10,691		19,026		20,359		37,328
Deferred			4,863		7,422		11,239		12,135
Total income tax expense (benefit)			15,554		26,448		31,598		49,463
Net income (loss)			(13,029)		16,231		(22,031)		77,291
Less: Net (income) loss attributable to noncontrolling interest			(19,226)		(11,620)		(44,557)		(23,456)
Net income (loss) attributable to Nabors		$	(32,255)	$	4,611	$	(66,588)	$	53,835

Earnings (losses) per share:
Basic		$	(4.29)	$	(0.31)	$	(8.83)	$	4.05
Diluted		$	(4.29)	$	(0.31)	$	(8.83)	$	3.79

Weighted-average number of common shares outstanding:
Basic			9,207		9,195		9,191		9,178
Diluted			9,207		9,195		9,191		10,141


	Six Months Ended June 30,
	2024		2023

	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	(22,031)	$	77,291
Adjustments to net income (loss):
Depreciation and amortization		317,826		322,729
Deferred income tax expense (benefit)		11,239		12,135
Impairments and other charges		—		5,318
Amortization of debt discount and deferred financing costs		4,527		4,239
Losses (gains) on debt buyback		2,576		(25,098)
Losses (gains) on long-lived assets, net		11,111		927
Losses (gains) on investments, net		414		(960)
Share-based compensation		7,732		8,321
Foreign currency transaction losses (gains), net		17,894		16,810
Mark-to-market (gain) loss on warrants		(9,594)		(52,466)
Other		2,576		98
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable		(20,044)		27,461
Inventory		(1,574)		(24,125)
Other current assets		(8,023)		(5,595)
Other long-term assets		57		(6,373)
Trade accounts payable and accrued liabilities		887		(44,506)
Income taxes payable		(12,893)		1,896
Other long-term liabilities		(13,782)		4,414
Net cash provided by (used for) operating activities		288,898		322,516
Cash flows from investing activities:
Purchase of investments		(7,625)		(24,551)
Capital expenditures		(231,995)		(263,485)
Proceeds from sales of assets		7,860		5,050
Other		4,662		12
Net cash (used for) provided by investing activities		(227,098)		(282,974)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		—		250,000
Reduction in long-term debt		(631,043)		(292,853)
Debt issuance costs		(1,343)		(8,036)
Proceeds from revolving credit facilities		130,000		125,000
Reduction in revolving credit facilities		(130,000)		(125,000)
Payments for employee taxes on net settlement of equity awards		(2,634)		(7,079)
Dividends to common and preferred shareholders		(87)		(194)
Distributions to noncontrolling interest		(950)		(2,269)
Special purpose acquisition company redemptions by non-controlling redeemable shareholders		—		(186,933)
Other		(282)		—
Net cash (used for) provided by financing activities		(636,339)		(247,364)
Effect of exchange rate changes on cash and cash equivalents		(9,197)		(8,641)
Net increase (decrease) in cash and cash equivalents and restricted cash		(583,736)		(216,463)
Cash and cash equivalents and restricted cash, beginning of period		1,374,182		737,140
Cash and cash equivalents and restricted cash, end of period	$	790,446	$	520,677

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents, beginning of period		1,057,487		451,025
Restricted cash, beginning of period		316,695		286,115
Cash and cash equivalents and restricted cash, beginning of period	$	1,374,182	$	737,140

Cash and cash equivalents, end of period		465,953		413,376
Restricted cash, end of period		324,493		107,301
Cash and cash equivalents and restricted cash, end of period	$	790,446	$	520,677


				Capital		Accumulated			Retained
	Common Shares			in Excess		Other		Earnings				Non-
		Par		of Par		Comprehensive		(Accumulated		Treasury		controlling		Total
(In thousands)	Shares	Value		Value		Income (Loss)		Loss)		Shares		Interest		Equity
As of March 31, 2023	10,630	$	531	$	3,533,240	$	(10,940)	$	(1,804,369)	$	(1,315,751)	$	179,671	$	582,382
Net income (loss)	—		—		—		—		4,611		—		11,620		16,231
Other comprehensive income (loss), net of tax	—		—		—		650		—		—		—		650
Share-based compensation	7		—		4,341		—		—		—		—		4,341
Deemed dividends to SPAC public shareholders	—		—		—		—		(2,220)		—		—		(2,220)
Noncontrolling interest contributions (distributions)	—		—		—		—		—		—		(2,269)		(2,269)
Accrued distribution on redeemable noncontrolling interest in subsidiary	—		—		—		—		(7,436)		—		—		(7,436)
Other	(2)		—		(7)		—		—		—		—		(7)
As of June 30, 2023	10,635	$	531	$	3,537,574	$	(10,290)	$	(1,809,414)	$	(1,315,751)	$	189,022	$	591,672

As of March 31, 2024	10,702	$	535	$	3,540,409	$	(10,925)	$	(1,927,930)	$	(1,315,751)	$	236,485	$	522,823
Net income (loss)	—		—		—		—		(32,255)		—		19,226		(13,029)
Other comprehensive income (loss), net of tax	—		—		—		(7)		—		—		—		(7)
Share-based compensation	9		—		3,577		—		—		—		—		3,577
Noncontrolling interest contributions (distributions)	—		—		—		—		—		—		(4,482)		(4,482)
Accrued distribution on redeemable noncontrolling interest in subsidiary	—		—		—		—		(7,283)		—		—		(7,283)
Other	—		—		—		—		1		—		—		1
As of June 30, 2024	10,711	$	535	$	3,543,986	$	(10,932)	$	(1,967,467)	$	(1,315,751)	$	251,229	$	501,600


		June 30, 2024				December 31, 2023

		Carrying		Fair		Carrying		Fair
		Value		Value		Value		Value

	(In thousands)
0.75% senior exchangeable notes due January 2024		$	—	$	—	$	155,529	$	154,989
5.75% senior notes due February 2025			—		—		474,092		474,120
7.25% senior guaranteed notes due January 2026			555,902		564,157		555,902		535,328
7.375% senior priority guaranteed notes due May 2027			700,000		711,592		700,000		687,526
7.50% senior guaranteed notes due January 2028			389,609		371,449		389,609		334,090
1.75% senior exchangeable notes due June 2029			250,000		183,385		250,000		185,383
9.125% senior priority guaranteed notes due January 2030			650,000		674,044		650,000		656,871
		$	2,545,511	$	2,504,627	$	3,175,132	$	3,028,307
Less: current portion			—				629,621
Less: deferred financing costs			31,342				33,992
		$	2,514,169			$	2,511,519


	Maximum Amount
	2024		2025	2026	Thereafter	Total

	(In thousands)
Financial standby letters of credit and other financial surety instruments	$	12,594	16,259	9,732	4,300	$	42,885



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

	(In thousands (1) )
As of January 1, 2023	$	2	$	(3,767)	$	(7,273)	$	(11,038)
Other comprehensive income (loss) before reclassifications		—		—		668		668
Amounts reclassified from accumulated other comprehensive income (loss)		—		80		—		80
Net other comprehensive income (loss)		—		80		668		748
As of June 30, 2023	$	2	$	(3,687)	$	(6,605)	$	(10,290)


	Three Months Ended
	June 30, 2024
		U.S. Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other		Total

	(In thousands)
Lower 48	$	220,797	$	—	$	47,434	$	22,012	$	—	$	290,243
U.S. Offshore Gulf of Mexico		28,351		—		2,602		—		—		30,953
Alaska		10,575		—		674		—		—		11,249
Canada		—		—		432		1,393		—		1,825
Middle East & Asia		—		249,291		13,086		19,508		—		281,885
Latin America		—		87,975		18,339		4,933		—		111,247
Europe, Africa & CIS		—		19,467		394		1,700		—		21,561
Eliminations & other		—		—		—		—		(14,165)		(14,165)
Total	$	259,723	$	356,733	$	82,961	$	49,546	$	(14,165)	$	734,798


	Three Months Ended
	June 30, 2023
		U.S. Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other		Total

	(In thousands)
Lower 48	$	272,909	$	—	$	51,157	$	31,654	$	—	$	355,720
U.S. Offshore Gulf of Mexico		32,316		—		3,123		—		—		35,439
Alaska		9,605		—		531		—		—		10,136
Canada		—		—		312		2,144		—		2,456
Middle East & Asia		—		238,276		11,770		25,032		—		275,078
Latin America		—		83,583		9,490		2,199		—		95,272
Europe, Africa & CIS		—		15,791		472		2,536		—		18,799
Eliminations & other		—		—		—		—		(25,833)		(25,833)
Total	$	314,830	$	337,650	$	76,855	$	63,565	$	(25,833)	$	767,067


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

	(In thousands)
As of December 31, 2023	$	397,051	$	8,434	$	2,980	$	20,295	$	1,969
As of June 30, 2024	$	417,937	$	20,149	$	3,980	$	17,973	$	2,112


	2024
	(In thousands)
Balance, beginning of year	$	315,488
Net earnings		7,774
Balance as of June 30	$	323,262


		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2024		2023		2024		2023

	(In thousands)
Adjusted operating income (loss): (2)
U.S. Drilling		$	45,085	$	75,408	$	95,614	$	161,277
International Drilling			23,672		10,407		46,148		12,364
Drilling Solutions			27,319		28,351		54,212		55,489
Rig Technologies			4,860		5,052		9,069		8,746
Total segment adjusted operating income (loss)		$	100,936	$	119,218	$	205,043	$	237,876


	June 30,		December 31,
	2024		2023

	(In thousands)
Total assets:
U.S. Drilling	$	1,157,427	$	1,239,765
International Drilling		2,299,431		2,227,308
Drilling Solutions		78,696		78,472
Rig Technologies		225,384		239,167
Other reconciling items (3)		854,755		1,493,253
Total	$	4,615,693	$	5,277,965


					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)
April 1 - April 30	—	$	86.13	—	278,914
May 1 - May 31	—	$	74.26	—	278,914
June 1 - June 30	—	$	67.23	—	278,914



Exhibit No.		Description
10.1		Amended & Restated Credit Agreement, dated as of June 17, 2024, among Nabors Industries, Inc., as Borrower, Nabors Industries Ltd., as Holdings, the other Guarantors from time to time party thereto, the Issuing Banks and other Lenders party thereto and Citibank, N.A., as Administrative Agent. (Incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by the Registrant on June 17, 2024).
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:	July 26, 2024


Date: July 26, 2024		/s/ ANTHONY G. PETRELLO
		Anthony G. Petrello
		Chairman, President and Chief Executive Officer