Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | NABORS INDUSTRIES LTD | |
Entity Central Index Key | 1,163,739 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 285,864,361 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 190,556 | $ 264,093 |
Short-term investments | 29,770 | 31,109 |
Accounts receivable, net | 621,640 | 508,355 |
Inventory, net | 119,050 | 103,595 |
Assets held for sale | 37,275 | 76,668 |
Other current assets | 176,630 | 172,019 |
Total current assets | 1,174,921 | 1,155,839 |
Property, plant and equipment, net | 6,051,606 | 6,267,583 |
Goodwill | 173,321 | 166,917 |
Deferred tax assets | 444,796 | 366,586 |
Other long-term assets | 243,941 | 230,090 |
Total assets | 8,088,585 | 8,187,015 |
Current liabilities: | ||
Current portion of debt | 196 | 297 |
Trade accounts payable | 317,314 | 264,578 |
Accrued liabilities | 485,347 | 543,248 |
Income taxes payable | 27,817 | 13,811 |
Total current liabilities | 830,674 | 821,934 |
Long-term Debt, Excluding Current Maturities, Total | 3,958,615 | 3,578,335 |
Other long-term liabilities | 351,787 | 522,456 |
Deferred income taxes | 20,288 | 9,495 |
Total liabilities | 5,161,364 | 4,932,220 |
Commitments and contingencies (Note 8) | ||
Shareholders' equity: | ||
Authorized common shares 800,000; issued 335,550 and 333,598, respectively | 336 | 334 |
Capital in excess of par value | 2,624,711 | 2,521,332 |
Accumulated other comprehensive income (loss) | 15,657 | (12,119) |
Retained earnings | 1,556,650 | 2,033,427 |
Less: treasury shares, at cost, 49,673 and 49,673 common shares, respectively | (1,295,949) | (1,295,949) |
Total shareholders' equity | 2,901,405 | 3,247,025 |
Noncontrolling interest | 25,816 | 7,770 |
Total equity | 2,927,221 | 3,254,795 |
Total liabilities and equity | $ 8,088,585 | $ 8,187,015 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares, shares authorized | 800,000 | 800,000 |
Common shares, shares issued | 335,550 | 333,598 |
Treasury shares, at cost | 49,673 | 49,673 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues and other income: | ||||
Operating revenues | $ 662,103 | $ 519,729 | $ 1,856,008 | $ 1,688,891 |
Earnings (losses) from unconsolidated affiliates | 4 | 2 | 6 | (221,918) |
Investment income (loss) | 373 | 310 | 208 | 923 |
Total revenues and other income | 662,480 | 520,041 | 1,856,222 | 1,467,896 |
Costs and other deductions: | ||||
Direct costs | 441,263 | 306,436 | 1,246,428 | 1,012,738 |
General and administrative expenses | 65,010 | 56,078 | 192,114 | 175,036 |
Research and engineering | 12,960 | 8,476 | 36,060 | 24,818 |
Depreciation and amortization | 217,075 | 220,713 | 628,837 | 655,444 |
Interest expense | 54,607 | 46,836 | 165,813 | 137,803 |
Other, net | 5,559 | 10,392 | 29,173 | 267,403 |
Total costs and other deductions | 796,474 | 648,931 | 2,298,425 | 2,273,242 |
Income (loss) from continuing operations before income taxes | (133,994) | (128,890) | (442,203) | (805,346) |
Income tax expense (benefit): | ||||
Current | 8,644 | 8,600 | 45,646 | 39,323 |
Deferred | (23,353) | (39,651) | (105,460) | (163,621) |
Total income tax expense (benefit) | (14,709) | (31,051) | (59,814) | (124,298) |
Income (loss) from continuing operations, net of tax | (119,285) | (97,839) | (382,389) | (681,048) |
Income (loss) from discontinued operations, net of tax | (27,134) | (12,187) | (43,077) | (14,097) |
Net income (loss) | (146,419) | (110,026) | (425,466) | (695,145) |
Less: Net (income) loss attributable to noncontrolling interest | (2,113) | (1,185) | (5,001) | 990 |
Net income (loss) attributable to Nabors | (148,532) | (111,211) | (430,467) | (694,155) |
Amounts attributable to Nabors: | ||||
Net income (loss) from continuing operations | (121,398) | (99,024) | (387,390) | (680,058) |
Net income (loss) from discontinued operations | (27,134) | (12,187) | (43,077) | (14,097) |
Net income (loss) attributable to Nabors | $ (148,532) | $ (111,211) | $ (430,467) | $ (694,155) |
Earnings (losses) per share: | ||||
Basic from continuing operations (in dollars per share) | $ (0.42) | $ (0.35) | $ (1.35) | $ (2.41) |
Basic from discontinued operations (in dollars per share) | (0.10) | (0.04) | (0.16) | (0.05) |
Total Basic (in dollars per share) | (0.52) | (0.39) | (1.51) | (2.46) |
Diluted from continuing operations (in dollars per share) | (0.42) | (0.35) | (1.35) | (2.41) |
Diluted from discontinued operations (in dollars per share) | (0.10) | (0.04) | (0.16) | (0.05) |
Total Diluted (in dollars per share) | $ (0.52) | $ (0.39) | $ (1.51) | $ (2.46) |
Weighted-average number of common shares outstanding: | ||||
Basic (in shares) | 279,313 | 276,707 | 278,670 | 276,369 |
Diluted (in shares) | 279,313 | 276,707 | 278,670 | 276,369 |
Dividends declared per common share (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.18 | $ 0.18 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) attributable to Nabors | $ (148,532) | $ (111,211) | $ (430,467) | $ (694,155) |
Translation adjustment attributable to Nabors | ||||
Translation adjustment attributable to Nabors | 16,444 | (8,950) | 31,183 | 27,870 |
Unrealized gains (losses) on marketable securities: | ||||
Unrealized gains (losses) on marketable securities | (5,706) | 1,502 | (5,122) | 3,551 |
Less: reclassification adjustment for (gains) losses included in net income (loss) | 3,495 | 1,341 | 3,495 | |
Unrealized gains (losses) on marketable securities | (5,706) | 4,997 | (3,781) | 7,046 |
Pension liability amortization and adjustment | 50 | 297 | 150 | 765 |
Unrealized gains (losses) and amortization on cash flow hedges | 153 | 153 | 459 | 459 |
Other comprehensive income (loss), before tax | 10,941 | (3,503) | 28,011 | 36,140 |
Income tax expense (benefit) related to items of other comprehensive income (loss) | 78 | 172 | 235 | 472 |
Other comprehensive income (loss), net of tax | 10,863 | (3,675) | 27,776 | 35,668 |
Comprehensive income (loss) attributable to Nabors | (137,669) | (114,886) | (402,691) | (658,487) |
Net income (loss) attributable to noncontrolling interest | 2,113 | 1,185 | 5,001 | (990) |
Translation adjustment attributable to noncontrolling interest | 160 | (90) | 317 | 371 |
Comprehensive income (loss) attributable to noncontrolling interest | 2,273 | 1,095 | 5,318 | (619) |
Comprehensive income (loss) | $ (135,396) | $ (113,791) | $ (397,373) | $ (659,106) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (425,466) | $ (695,145) |
Adjustments to net income (loss): | ||
Depreciation and amortization | 630,773 | 657,541 |
Deferred income tax expense (benefit) | (114,973) | (168,413) |
Impairments and other charges | 35,293 | 45,809 |
Deferred financing costs amortization | 5,300 | 3,335 |
Discount amortization on long-term debt | 15,129 | 1,597 |
Losses (gains) on debt buyback | 16,005 | (6,707) |
Losses (gains) on long-lived assets, net | 10,180 | 13,608 |
Losses (gains) on investments, net | 1,342 | |
Impairments on equity method holdings | 216,242 | |
Share-based compensation | 25,057 | 24,070 |
Foreign currency transaction losses (gains), net | 1,728 | 5,916 |
Equity in (earnings) losses of unconsolidated affiliates, net of dividends | (6) | 221,918 |
Other | (4,596) | 2,025 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | (128,542) | 255,455 |
Inventory | (14,567) | 14,660 |
Other current assets | (6,967) | 30,192 |
Other long-term assets | 35,378 | (377) |
Trade accounts payable and accrued liabilities | 21,611 | (187,771) |
Income taxes payable | 19,790 | (22,496) |
Other long-term liabilities | (158,578) | (6,691) |
Net cash (used for) provided by operating activities | (36,109) | 404,768 |
Cash flows from investing activities: | ||
Purchases of investments | (6,722) | (24) |
Sales and maturities of investments | 12,533 | 643 |
Cash paid for acquisition of businesses, net | (50,764) | |
Capital expenditures | (448,864) | (284,950) |
Proceeds from sales of assets and insurance claims | 32,805 | 26,597 |
Other | (427) | (19) |
Net cash (used for) provided by investing activities | (461,439) | (257,753) |
Cash flows from financing activities: | ||
Increase (decrease) in cash overdrafts | (78) | 5 |
Proceeds from Issuance of Long-term Debt | 411,200 | |
Debt issuance costs | (11,039) | |
Proceeds from revolving credit facilities | 410,000 | 560,000 |
Reduction in revolving credit facilities | (260,000) | |
Proceeds from (payments for) issuance of common shares | 8,300 | 562 |
Repurchase of common shares | (1,687) | |
Distributions to noncontrolling interest | 7,272 | |
Noncontrolling interest contribution | 20,000 | |
Reduction in long term debt | (382,815) | (492,625) |
Dividends to shareholders | (51,346) | (33,927) |
Proceeds from (payment for) commercial paper, net | 78,000 | 15,000 |
Cash proceeds from equity component of exchangeable debt | 159,952 | |
Payments on term loan | (162,500) | |
Proceeds from (payments for) short-term borrowings | (528) | (6,388) |
Purchase of capped call hedge transactions | 40,250 | |
Other | (7,864) | (4,313) |
Net cash (used for) provided by financing activities | 423,760 | (223,373) |
Effect of exchange rate changes on cash and cash equivalents | 251 | (1,129) |
Net increase (decrease) in cash and cash equivalents | (73,537) | (77,487) |
Cash and cash equivalents, beginning of period | 264,093 | 254,530 |
Cash and cash equivalents, end of period | $ 190,556 | $ 177,043 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Shares | Capital in Excess of Par Value | Accumulated Other Comprehensive Income | Retained Earnings | Treasury Shares | Non-controlling Interest | Total |
Balance at the beginning of the period at Dec. 31, 2015 | $ 331 | $ 2,493,100 | $ (47,593) | $ 3,131,134 | $ (1,294,262) | $ 11,158 | $ 4,293,868 |
Balance (in shares) at Dec. 31, 2015 | 330,526 | ||||||
Increase (Decrease) in Equity | |||||||
Net income (loss) | (694,155) | (990) | (695,145) | ||||
Dividends to shareholders ($0.18 per share) | (50,926) | (50,926) | |||||
Repurchase of treasury shares | (1,687) | (1,687) | |||||
Other comprehensive income (loss), net of tax | 35,668 | 371 | 36,039 | ||||
Issuance of common shares for stock options exercised, net of surrender of unexercised stock options | 562 | 562 | |||||
Issuance of common shares for stock options exercised (in shares) | 57 | ||||||
Share-based compensation | 24,070 | 24,070 | |||||
Other | $ 2 | (4,315) | (3,774) | (8,087) | |||
Other (in shares) | 2,424 | ||||||
Balance at the end of the period at Sep. 30, 2016 | $ 333 | 2,513,417 | (11,925) | 2,386,053 | (1,295,949) | 6,765 | 3,598,694 |
Balance (in shares) at Sep. 30, 2016 | 333,007 | ||||||
Balance at the beginning of the period at Dec. 31, 2016 | $ 334 | 2,521,332 | (12,119) | 2,033,427 | (1,295,949) | 7,770 | 3,254,795 |
Balance (in shares) at Dec. 31, 2016 | 333,598 | ||||||
Increase (Decrease) in Equity | |||||||
Net income (loss) | (430,467) | 5,001 | (425,466) | ||||
Dividends to shareholders ($0.18 per share) | (51,460) | (51,460) | |||||
Other comprehensive income (loss), net of tax | 27,776 | 317 | 28,093 | ||||
Issuance of common shares for stock options exercised, net of surrender of unexercised stock options | $ 1 | 8,299 | 8,300 | ||||
Issuance of common shares for stock options exercised (in shares) | 843 | ||||||
Share-based compensation | 25,057 | 25,057 | |||||
Equity component of exchangeable debt | 116,195 | 116,195 | |||||
Capped call transactions | 40,250 | 40,250 | |||||
Adoption of ASU No. 2016-09 | 1,943 | 5,150 | 7,093 | ||||
Noncontrolling interest contributions (distributions) | 12,728 | 12,728 | |||||
Other | $ 1 | (7,865) | (7,864) | ||||
Other (in shares) | 1,109 | ||||||
Balance at the end of the period at Sep. 30, 2017 | $ 336 | $ 2,624,711 | $ 15,657 | $ 1,556,650 | $ (1,295,949) | $ 25,816 | $ 2,927,221 |
Balance (in shares) at Sep. 30, 2017 | 335,550 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | Jul. 28, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
CONSOLIDATED BALANCE SHEETS | |||||
Dividend declared (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.18 | $ 0.18 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2017 | |
Nature of Operations | |
Nature of Operations | Note 1 Nature of Operations 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. We own and operate the world’s largest land-based drilling rig fleet and are a leading provider of offshore platform drilling rigs in the United States and multiple international markets. We also provide advanced wellbore placement services, drilling software and performance tools, drilling equipment and innovative technologies throughout the world’s most significant oil and gas markets. As a global provider of drilling and drilling-related services for land-based and offshore oil and natural gas wells, our fleet of rigs and drilling-related equipment as of September 30, 2017 included: · 405 actively marketed rigs for land-based drilling operations in the United States, Canada and approximately 20 other countries throughout the world; and · 40 actively marketed rigs for offshore drilling operations in the United States and multiple international markets. Our business consists of four reportable operating segments: U.S., Canada, International and Rig Services. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
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 (“GAAP”). Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and footnote disclosures normally included in annual financial statements prepared in accordance with 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, 2016 (“2016 Annual Report”). In management’s opinion, the unaudited condensed consolidated financial statements contain all adjustments necessary to state fairly our financial position as of September 30, 2017 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, 2017 may not be indicative of results that will be realized for the full year ending December 31, 2017. Principles of Consolidation Our condensed consolidated financial statements include the accounts of Nabors, as well as all majority owned and non-majority owned subsidiaries required to be consolidated under GAAP. All significant intercompany accounts and transactions are eliminated in consolidation. During 2016, we entered into an agreement with Saudi Arabian Development Company, a wholly-owned subsidiary of Saudi Arabian Oil Company (“Saudi Aramco”), to form a new joint venture, Saudi Aramco Nabors Drilling (“SANAD”), to own, manage and operate onshore drilling rigs in The Kingdom of Saudi Arabia. SANAD, which is equally owned by Saudi Aramco and Nabors, is expected to commence operations during the fourth quarter of 2017. In May 2017, Nabors and Saudi Aramco each contributed $20 million in cash for formation of the joint venture. We have consolidated this joint venture which, as of September 30, 2017, is limited to the $40 million of cash mentioned above to be used exclusively by the joint venture to fund future operations. Investments in operating entities where we have the ability to exert significant influence, but where we do not control operating and financial policies, are accounted for using the equity method. Our share of the net income (loss) of these entities is recorded as earnings (losses) from unconsolidated affiliates in our condensed consolidated statements of income (loss). The investments in these entities are included in investment in other long-term assets in our condensed consolidated balance sheets. We historically recorded our share of the net income (loss) of our equity method investment in C&J Energy Services, Ltd. (“CJES”) on a one-quarter lag, as we were not able to obtain the financial information of CJES on a timely basis. During the third quarter of 2016, CJES filed for bankruptcy, at which time we ceased accounting for our investment in CJES as an equity method investment. See Note 4 — Investments in Unconsolidated Affiliates. Revenue Recognition We recognize revenues and costs on daywork contracts daily as the work progresses. For certain contracts, we receive lump-sum payments for the mobilization of rigs and other drilling equipment. We defer revenue related to mobilization periods and recognize the revenue over the term of the related drilling contract. We also defer recognition of revenue on amounts received from customers for prepayment of services until those services are provided. At September 30, 2017 and December 31, 2016, our deferred revenues classified as accrued liabilities were $241.8 million and $255.6 million, respectively. At September 30, 2017 and December 31, 2016, our deferred revenues classified as other long-term liabilities were $167.8 million and $321.0 million, respectively. Costs incurred related to a mobilization period for which a contract is secured are deferred and recognized over the term of the related drilling contract. Costs incurred to relocate rigs and other drilling equipment to areas in which a contract has not been secured are expensed as incurred. At September 30, 2017 and December 31, 2016, our deferred expenses classified as other current assets were $66.6 million and $63.4 million, respectively. At September 30, 2017 and December 31, 2016, our deferred expenses classified as other long-term assets were $41.7 million and $69.5 million, respectively. We recognize revenue for top drives and instrumentation systems we manufacture when the earnings process is complete. This generally occurs when products have been shipped, title and risk of loss have been transferred, collectability is probable, and pricing is fixed and determinable. We recognize, as operating revenue, proceeds from business interruption insurance claims in the period that the applicable proof of loss documentation is received. Proceeds from casualty insurance settlements in excess of the carrying value of damaged assets are recognized in other, net in the period that the applicable proof of loss documentation is received. Proceeds from casualty insurance settlements that are expected to be less than the carrying value of damaged assets are recognized at the time the loss is incurred and recorded in other, net. We recognize reimbursements received for out-of-pocket expenses incurred as revenues and account for out-of-pocket expenses as direct costs. Inventory, net 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, 2017 2016 (In thousands) Raw materials $ 89,127 $ 84,431 Work-in-progress 15,630 1,204 Finished goods 14,293 17,960 $ 119,050 $ 103,595 Property, Plant and Equipment We review our assets for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. If the estimated undiscounted future cash flows are not sufficient to support the asset’s recorded value, an impairment charge is recognized to the extent the carrying amount of the long-lived asset exceeds its estimated fair value. Management considers a number of factors such as estimated future cash flows from the assets, appraisals and current market value analysis in determining fair value. The determination of future cash flows requires the estimation of utilization, dayrates, operating margins, sustaining capital and remaining economic life. Such estimates can change based on market conditions, technological advances in the industry or changes in regulations governing the industry. For an asset classified as held for sale, we consider the asset impaired when its carrying amount exceeds fair value less its cost to sell. Fair value is determined in the same manner as an impaired long-lived asset that is held and used. Significant and unanticipated changes to the assumptions could result in future impairments. A significantly prolonged period of lower oil and natural gas prices could adversely affect the demand for and prices of our services. As such, we will continue to assess our asset fleet for triggering events, particularly our legacy and undersized rigs. Should we experience weakening in the market for a prolonged period for any specific rig class, this could result in future impairment charges or retirements of assets. As the determination of whether impairment charges should be recorded on our long-lived assets is subject to significant management judgment, and an impairment of these assets could result in a material charge on our condensed consolidated statements of income (loss), management believes that accounting estimates related to impairment of long-lived assets are critical. Goodwill We review goodwill for impairment annually during the second quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the carrying amount of such goodwill and intangible assets exceed their fair value. Due to the adoption of Accounting Standards Update (“ASU”) No. 2017-04, effective January 1, 2017, we no longer determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. We will continue to perform our qualitative analysis as well as step one of the impairment test which compares the estimated fair value of the reporting unit to its carrying amount. If the carrying amount exceeds the fair value, an impairment charge will be recognized in an amount equal to the excess; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. For our goodwill tests prior to adoption of the new standard, we initially assessed goodwill for impairment based on qualitative factors to determine whether to perform the two-step annual goodwill impairment test, a Level 3 fair value measurement. After our qualitative assessment, step one of the impairment test compared the estimated fair value of the reporting unit to its carrying amount. If the carrying amount exceeded the fair value, a second step was required to measure the goodwill impairment loss. The second step compared the implied fair value of the reporting unit’s goodwill to its carrying amount. If the carrying amount exceeded the implied fair value, an impairment loss was recognized in an amount equal to the excess. Our estimated fair values of our reporting units incorporate judgment and the use of estimates by management. Potential triggering events requiring assessment include a further or sustained decline in our stock price, declines in oil and natural gas prices, a variance in results of operations from forecasts, a change in operating strategy of assets and additional transactions in the oil and gas industry. Another factor in determining whether a triggering event has occurred is the relationship between our market capitalization and our book value. As part of our annual review, we compare the sum of our reporting units’ estimated fair value, which includes the estimated fair value of non-operating assets and liabilities, less debt, to our market capitalization and assess the reasonableness of our estimated fair value. Any of the above-mentioned factors may cause us to re-evaluate goodwill during any quarter throughout the year. Based on our annual review during the second quarter of 2017, we did not record a goodwill impairment. Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-07, Investments—Equity Method and Joint Ventures, to simplify the transition to the equity method of accounting. This standard eliminates the requirement to retroactively adopt the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. Instead, the equity method investor should add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment qualifies for the equity method of accounting. This guidance is effective for public companies for fiscal years beginning after December 15, 2016. The adoption of this guidance did not have an impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation, to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for public companies for fiscal years beginning after December 15, 2016. We adopted this guidance on a prospective basis effective January 1, 2017. The impact of adoption was a decrease in deferred tax liabilities of $7.1 million and an increase in retained earnings of $7.1 million related to excess tax benefits on prior awards. Additionally, we elected to account for forfeitures as they occur. The impact of this election resulted in an increase in capital in excess of par and a corresponding decrease in retained earnings of $1.9 million. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under this new standard, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and then recognize an impairment charge, as necessary, for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. This guidance is effective for fiscal years beginning after December 15, 2019. We have elected to early adopt this guidance on a prospective basis for our annual goodwill impairment test performed subsequent to January 1, 2017. The adoption of this standard did not have an impact on our consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, relating to the revenue recognition from contracts with customers that creates a common revenue standard for GAAP and IFRS. The core principle will require recognition of revenue to represent the transfer of promised goods or services to customers in an amount that reflects the consideration, including costs incurred, to which the entity expects to be entitled in exchange for those goods or services. The standard will also require significantly expanded disclosures containing qualitative and quantitative information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB approved a one year deferral of this standard, with a new effective date for fiscal years beginning after December 15, 2017. Throughout 2017 we have taken many steps towards quantifying the impact of the new standard on our contracts. We, along with our third party consultants, have identified and reviewed our revenue streams, identified a subset of contracts to represent these revenue streams and performed a detailed analysis of such contracts. As part of this analysis, we identified specific areas impacted under the new standard. We have finalized our bucketing of contracts and expanded our sample of contracts for review in order to evaluate, document and quantify the consolidated impact of adopting the standard. We expect to apply the modified retrospective approach during the first quarter of 2018. However, we continue to evaluate the impact of the standard on our accounting policies, internal controls and consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall, relating to the recognition and measurement of financial assets and liabilities. This standard enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. This guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early application is permitted. We are currently evaluating the impact this will have on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, relating to leases to increase transparency and comparability among companies. This standard requires that all leases with an initial term greater than one year be recorded on the balance sheet as an asset and a lease liability. Additionally, this standard will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. This guidance is effective for public companies for fiscal years beginning after December 15, 2018. Early application is permitted. This standard requires an entity to separate lease components from nonlease components within a contract. While the lease components would be accounted for under ASU No. 2016-02, nonlease components would be accounted for under ASU No. 2014-09. We have determined that under the new standard, our drilling contracts contain a lease component and therefore we will be required to separately recognize revenues associated with the lease and services components. Therefore, we are evaluating ASU No. 2016-02 concurrently with the provisions of ASU No. 2014-09 and the impact this will have on our consolidated financial statements. We expect to adopt this guidance as of the effective date. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows, to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early application is permitted. We are currently evaluating the impact this will have on our consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes, which improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early application is permitted. We are currently evaluating the impact this will have on our consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash, to provide guidance on the classification of restricted cash in the statement of cash flows. This guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early application is permitted. The amendments in the ASU should be adopted on a retrospective basis. We are currently evaluating the impact this will have on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, which clarifies the definition of a business and provides further guidance for evaluating whether a transaction will be accounted for as an acquisition of an asset or a business. The standard provides a test to determine whether a set of assets and activities acquired is a business. When substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. Under the updated guidance, an acquisition of a single property will likely be treated as an asset acquisition as opposed to a business combination and associated transaction costs will be capitalized rather than expensed as incurred. Additionally, assets acquired, liabilities assumed, and any noncontrolling interest will be measured at their relative fair values. We do not expect the adoption of this standard to have an impact on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation, to reduce diversity in practice and provide clarity regarding existing guidance in ASC 718, “Stock Compensation”. The standard provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early application is permitted. We are currently evaluating the impact that this will have on our consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Acquisitions | |
Acquisitions | Note 3 Acquisitions On September 5, 2017 we paid an initial amount of approximately $50.9 million in cash, subject to customary closing adjustments, to acquire Stavanger, Norway based Robotic Drilling Systems AS ("RDS"), a provider of automated tubular and tool handling equipment for the onshore and offshore drilling markets. This transaction will allow us to integrate RDS’s highly capable team and product offering with the technology portfolio of Canrig Drilling Technology (“Canrig”), Nabors rig equipment division, and strengthens the development of Canrig’s drilling automation solutions. As part of our purchase price allocation, we have initially recorded intangible assets of $53.3 million (developed technology and in process research and development), goodwill of approximately $5.7 million and other liabilities of $7.3 million (net of other working capital items). The proforma effect on revenue and net income (loss) have been determined to be immaterial to our financial statements. On August 13, 2017, Nabors signed an Arrangement Agreement to acquire all of the issued and outstanding common shares of Tesco Corporation ("Tesco"), with each outstanding common share of Tesco being exchanged for 0.68 common shares of Nabors. This transaction (the “Arrangement”) will create a leading rig equipment and drilling automation provider by combining Canrig, with Tesco's rig equipment manufacturing, rental and aftermarket service business. Additionally, Tesco operates a tubular services business in numerous key regions globally, which will immediately benefit Nabors Drilling Solutions' (“NDS”) operation. Nabors estimates that it will issue approximately 32 million of its common shares in connection with this transaction. The consummation of the Arrangement is subject to approval by Tesco security holders, receipt of required regulatory approvals, approval by the Court of Queens Bench of Alberta, and satisfaction or waiver of other customary closing conditions. It is currently anticipated that the closing of the Arrangement will occur in the fourth quarter of 2017. |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates | 9 Months Ended |
Sep. 30, 2017 | |
Investments in Unconsolidated Affiliates | |
Investments in Unconsolidated Affiliates | Note 4 Investments in Unconsolidated Affiliates On March 24, 2015, we completed the merger of our Completion & Production Services business with C&J Energy Services, Inc.. We received total consideration comprised of approximately $693.5 million in cash ($650.0 million after settlement of working capital requirements) and approximately 62.5 million common shares in the combined company, CJES, representing approximately 53% of the outstanding and issued common shares of CJES as of the closing date. We recognized our share of the net income (loss) of CJES, which was a loss of $221.9 million for the nine months ended September 30, 2016, and is reflected in earnings (losses) from unconsolidated affiliates in our condensed consolidated statement of income (loss). Additionally, we recognized an other-than-temporary impairment charge of $192.4 million during the nine months ended September 30, 2016, which is reflected in other, net in our condensed consolidated statement of income (loss). During the third quarter of 2016, CJES commenced voluntarily cases under chapter 11 of the U.S. Bankruptcy code. As such, we ceased accounting for our investment in CJES as an equity method investment. In January 2017, CJES emerged from bankruptcy and as part of the settlement we received warrants to acquire the common equity in the reorganized CJES. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | Note 5 Fair Value Measurements Our financial assets and liabilities that are accounted for at fair value on a recurring basis as of September 30, 2017 consist of available-for-sale equity and debt securities. Our debt securities could transfer into or out of a Level 1 or 2 measure depending on the availability of independent and current pricing at the end of each quarter. During the three and nine months ended September 30, 2017, there were no transfers of our financial assets between Level 1 and Level 2 measures. Our financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The majority of our short-term investments are categorized as Level 1 and had a fair value of $23.6 million as of September 30, 2017. Additionally, we report our investment in the CJES warrants at fair value based on quoted market prices or prices quoted from third-party financial institutions. This measure is categorized as Level 2 and had a fair value of $6.2 million as of September 30, 2017. 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 to assets held for sale, goodwill, equity method investments, intangible assets and other long-lived assets, assets acquired and liabilities assumed in a business combination and our pipeline contractual commitment. 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 Financial Instruments We estimate the fair value of our financial instruments in accordance with GAAP. The fair value of our long-term debt, revolving credit facility and commercial paper 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, 2017 December 31, 2016 Carrying Fair Carrying Fair Value Value Value Value (In thousands) (In thousands) 6.15% senior notes due February 2018 $ 460,537 $ 467,620 $ 827,539 $ 865,300 9.25% senior notes due January 2019 303,489 327,902 303,489 337,443 5.00% senior notes due September 2020 669,769 685,622 669,540 689,211 4.625% senior notes due September 2021 695,048 686,096 694,868 708,765 5.50% senior notes due January 2023 600,000 598,242 600,000 627,000 5.10% senior notes due September 2023 346,544 333,680 346,448 348,613 0.75% senior exchangeable notes due January 2024 425,010 469,258 — — Term loan facility — — 162,500 162,500 Revolving credit facility 410,000 410,000 — — Commercial paper 78,000 78,000 — — Other 196 196 297 297 3,988,593 $ 4,056,616 3,604,681 $ 3,739,129 Less: deferred financing costs 29,782 26,049 $ 3,958,811 $ 3,578,632 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. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt | |
Debt | Note 6 Debt Debt consisted of the following: September 30, December 31, 2017 2016 (In thousands) 6.15% senior notes due February 2018 (1) $ 460,537 $ 827,539 9.25% senior notes due January 2019 303,489 303,489 5.00% senior notes due September 2020 669,769 669,540 4.625% senior notes due September 2021 695,048 694,868 5.50% senior notes due January 2023 600,000 600,000 5.10% senior notes due September 2023 346,544 346,448 0.75% senior exchangeable notes due January 2024 425,010 — Term loan facility — 162,500 Revolving credit facility 410,000 — Commercial paper 78,000 — Other 196 297 3,988,593 3,604,681 Less: current portion 196 297 Less: deferred financing costs 29,782 26,049 $ 3,958,615 $ 3,578,335 (1) The 6.15% senior notes due February 2018 have been classified as long-term because we have the ability and intent to repay this obligation utilizing our revolving credit facility. During the nine months ended September 30, 2017, we repurchased or redeemed $367.9 million aggregate principal amount of our 6.15% senior notes due February 2018 for approximately $387.3 million in cash, reflecting principal and approximately $5.6 million of accrued and unpaid interest. The difference represents the premiums paid in connection with these repurchases or redemptions and is included in other, net in our condensed consolidated statement of income (loss) for the nine months ended September 30, 2017. 0.75% Senior Exchangeable Notes Due January 2024 In January 2017, Nabors Industries, Inc. (“Nabors Delaware”), a wholly owned subsidiary of Nabors, issued $575 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. The exchangeable notes are bifurcated for accounting purposes into debt and equity components of $411.2 million and $163.8 million, respectively, based on the relative fair value. Debt issuance costs of $9.6 million and equity issuance costs of $3.9 million were capitalized in connection with the issuance of these notes in long-term debt and netted against the proceeds allocated to the equity component, respectively, in our condensed consolidated balance sheet. The debt issuance costs are being amortized through January 2024. The exchangeable notes are exchangeable, under certain conditions, at an initial exchange rate of 39.75 common shares of Nabors per $1,000 principal amount of exchangeable notes (equivalent to an initial exchange price of approximately $25.16 per common share). Upon any exchange, Nabors Delaware will settle its exchange obligation in cash, common shares of Nabors, or a combination of cash and common shares, at our election. In connection with the pricing of the notes, we entered into privately negotiated capped call transactions which are expected to reduce potential dilution to common shares and/or offset potential cash payments required to be made in excess of the principal amount upon any exchange of notes. Such reduction and/or offset is subject to a cap representing a price per share of $31.45, an approximately 75.0% premium over our share price of $17.97 as of the date of the transaction. The capped call meets the definition of a derivative under ASC 815, Derivatives and Hedging, as it has an underlying (the Company’s share price), a notional amount (the number of underlying shares to be purchased per option), an initial net investment less (by more than a nominal amount) than the amount that would have to be paid to own the underlying and provides for a default net share settlement (but could also be settled in cash at the election of the Company). However, the capped call meets the derivative scope exception under ASC 815 for instruments indexed to the Company’s own stock and classified in shareholders’ equity and therefore was initially recorded in equity. Until such time as the Company elects a settlement method for the exchangeable notes, the capped call transaction will continue to be accounted for as equity. At conversion, if the Company elects to partially settle the notes in cash in excess of the principal amount, or fully in cash, the capped call will be subject to mark to market through earnings as a derivative until such settlement is paid. The net proceeds from the offering of the exchangeable notes were used to prepay the remaining balance of our unsecured term loan originally scheduled to mature in 2020, as well as to pay the cost of the capped call transactions. The remaining net proceeds from the offering were allocated for general corporate purposes, including to repurchase or repay other indebtedness. Commercial Paper Program As of September 30, 2017, we had approximately $78.0 million of commercial paper outstanding. The weighted average interest rate on borrowings at September 30, 2017 was 1.83%. Our commercial paper borrowings are classified as long-term debt because the borrowings are fully supported by availability under our revolving credit facility, which matures as currently structured in July 2020, more than one year from now. Revolving Credit Facility As of September 30, 2017, we had $410.0 million outstanding under our $2.25 billion revolving credit facility, which matures in July 2020. The weighted average interest rate on borrowings at September 30, 2017 was 2.59%. The revolving credit facility contains various covenants and restrictive provisions that limit our ability to incur additional indebtedness, make investments or loans and create liens and require us to maintain a net funded indebtedness to total capitalization ratio, as defined in the agreement. Availability under the revolving credit facility is subject to a covenant not to exceed a net debt to capital ratio of 0.60:1. We were in compliance with all covenants under the agreement at September 30, 2017. If we fail to perform our obligations under the covenants, the revolving credit commitment could be terminated, and any outstanding borrowings under the facility could be declared immediately due and payable. Term Loan Facility On September 29, 2015, Nabors Delaware entered into a new five-year unsecured term loan facility for $325.0 million, which was fully and unconditionally guaranteed by us. The term loan facility contained a mandatory prepayment of $162.5 million due in September 2018, which was repaid in December 2016 utilizing a portion of the proceeds received in connection with the 5.50% senior notes offering. In January 2017, we repaid the remaining $162.5 million term loan utilizing the proceeds received in connection with the 0.75% senior exchangeable notes and the facility was terminated. |
Common Shares
Common Shares | 9 Months Ended |
Sep. 30, 2017 | |
Common Shares. | |
Common Shares | Note 7 Common Shares During the nine months ended September 30, 2016, we repurchased 0.3 million of our common shares in the open market for $1.7 million, all of which are held in treasury. On July 28, 2017, a cash dividend of $0.06 per share was declared for shareholders of record on September 12, 2017. The dividend was paid on October 3, 2017 in the amount of $17.2 million and was charged to retained earnings in our condensed consolidated statement of changes in equity for the nine months ended September 30, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 8 Commitments and Contingencies Contingencies Income Tax We operate in a number of countries throughout the world 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. We have received an assessment from a tax authority in Latin America in connection with a 2007 income tax return. The assessment relates to the denial of depreciation expense deductions related to drilling rigs. Similar deductions were taken for tax year 2009. Although Nabors and its tax advisors believe these deductions are appropriate and intend to continue to defend our position, the contingency has been partially reserved. If we ultimately do not prevail, we estimate that we would be required to recognize additional tax expense for the entire contingency in the range of $3 million to $8 million. Self-Insurance We estimate the level of our liability related to insurance and record reserves for these amounts in our condensed consolidated financial statements. Our estimates are based on the facts and circumstances specific to existing claims and our past experience with similar claims. These loss estimates and accruals recorded in our financial statements for claims have historically been reasonable in light of the actual amount of claims paid and are actuarially supported. Although we believe our insurance coverage and reserve estimates are reasonable, a significant accident or other event that is not fully covered by insurance or contractual indemnity could occur and could materially affect our financial position and results of operations for a particular period. We self-insure for certain losses relating to workers’ compensation, employers’ liability, general liability, automobile liability and property damage. Some of our workers’ compensation, employers’ liability and marine employers’ liability claims are subject to a $3.0 million per-occurrence deductible; additionally, some of our automobile liability claims are subject to a $2.5 million deductible. General liability claims remain subject to a $5.0 million per-occurrence deductible. Our policies were renewed effective April 1, 2017 and remain subject to these same deductibles. In addition, we are subject to a $5.0 million deductible for land rigs and for offshore rigs. This applies to all kinds of risks of physical damage except for named windstorms in the U.S. Gulf of Mexico for which we are self-insured. 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 $25.0 million (at September 30, 2017 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 have appealed this decision again to the Supreme Court. 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 $17.0 million in excess of amounts accrued. In March 2012, Nabors Global Holdings II Limited (“NGH2L”) signed an agreement with ERG Resources, LLC (“ERG”) relating to the sale of all of the Class A shares of NGH2L’s wholly owned subsidiary, Ramshorn International Limited, an oil and gas exploration company (“Ramshorn”) (“the ERG Agreement”). When ERG failed to meet its closing obligations, NGH2L terminated the transaction on March 19, 2012 and, as contemplated in the agreement, retained ERG’s $3.0 million escrow deposit. ERG filed suit the following day in the 61st Judicial District Court of Harris County, Texas, in a case styled ERG Resources, LLC v. Nabors Global Holdings II Limited, Ramshorn International Limited, and Parex Resources, Inc.; Cause No. 2012 16446, seeking injunctive relief to halt any sale of the shares to a third party, specifically naming as defendant Parex Resources, Inc. (“Parex”). The lawsuit also sought monetary damages of up to $750.0 million based on an alleged breach of contract by NGH2L and alleged tortious interference with contractual relations by Parex. We successfully defeated ERG’s effort to obtain a temporary restraining order from the Texas court on March 20, 2012 and completed the sale of Ramshorn’s Class A shares to a Parex affiliate in April 2012, which mooted ERG’s application for a temporary injunction. The defendants made numerous jurisdictional challenges on appeal, and on April 30, 2015, ERG filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. Accordingly, the civil actions are currently subject to the bankruptcy stay and ERG’s claims in the lawsuit are assets of the estate. The lawsuit was stayed, pending further court actions, including appeals of the jurisdictional decisions. On June 17, 2016, the Texas Supreme Court issued its opinion on the jurisdictional appeal holding that jurisdiction exists in Texas for Ramshorn, but not for Parex Bermuda or Parex Canada. ERG retains its causes of action for monetary damages, but we believe the claims are foreclosed by the terms of the ERG Agreement and are without factual or legal merit. On December 28, 2016, the District Court granted Nabors’ Motion for Partial Summary Judgment to Enforce Exclusive Remedies Clause, holding that ERG’s potential recovery in the action may not exceed $4.5 million in accordance with the terms of the ERG Agreement. The plaintiffs challenged this ruling and Parex was poised to enter into a settlement agreement, over the objection of Nabors, whereby ERG would release Parex from all claims in exchange for a $15 million cash payment from Parex. The Parex settlement changed the dynamics of the ongoing litigation between Nabors and ERG, with all signs indicating that the bankrupt ERG intended to use the cash influx from Parex to pursue a low ‐ risk but potentially high ‐ reward strategy by continuing with its claim against Nabors. With this development Nabors re ‐ evaluated its options, noting that however remote, a negative outcome at trial had the potential for a significantly adverse financial impact. As a result, in order to mitigate expenses associated with what was proving to be lengthy and potentially costly litigation, Nabors has agreed to a settlement in which ERG will release NGH2L from all claims in exchange for a payment of $20 million by NGH2L. This settlement resulted in a pre-tax charge of $16.5 million, which is included in net income (loss) from discontinued operations within our condensed consolidated statement of income (loss) for the three and nine months ended September 30, 2017. This settlement, which did not include an admission of wrongdoing by NGH2L, has been funded and the matter is closed. On September 29, 2017, Nabors and Nabors Maple Acquisition Ltd. were sued, along with Tesco Corporation and its Board of Directors, in a putative shareholder class action filed in the United States District Court for the Southern District of Texas, Houston Division. The plaintiff alleges that the September 18, 2017 Preliminary Proxy Statement filed by Tesco with the United States Securities and Exchange Commission omitted material information with respect to the proposed transaction between Tesco and Nabors announced on August 14, 2017. The plaintiff claims that the omissions rendered the Proxy Statement false and misleading, constituting a violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, and alleges liability by Nabors as a control person of Tesco. Defendants are moving to consolidate this case, captioned The Vladimir Gusinsky Rev. Trust et al. v. Tesco Corporation et al., No. 4:17-cv-02918 (S.D. Tex.) (Miller, J.) with another matter recently filed against Tesco making the same or similar legal claims against Tesco, captioned Panella v. Tesco Corporation et al., No. 4:17-cv-02904 (S.D. Tex.) (Bennett, J.). 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 involve agreements and obligations under which we provide financial or performance assurance to third parties. Certain of these agreements 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 2017 2018 2019 Thereafter Total (In thousands) Financial standby letters of credit and other financial surety instruments $ 98,050 165,311 — — $ 263,361 |
Earnings (Losses) Per Share
Earnings (Losses) Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings (Losses) Per Share | |
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. 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 stock. Shares issuable upon exchange of the $575 million 0.75% exchangeable notes are not included in the calculation of diluted earnings (losses) per share unless the exchange value of the notes exceeds their principal amount at the end of the relevant reporting period, in which case the notes will be accounted for as if the number of common shares that would be necessary to settle the excess are issued. Such shares are only included in the calculation of the weighted-average number of shares outstanding in our diluted earnings (losses) per share calculation, when the price of our shares exceeds $25.16 on the last trading day of the quarter, which did not occur during the nine months ended September 30, 2017. 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, 2017 2016 2017 2016 (In thousands, except per share amounts) BASIC EPS: Net income (loss) (numerator): Income (loss) from continuing operations, net of tax $ (119,285) $ (97,839) $ (382,389) $ (681,048) Less: net (income) loss attributable to noncontrolling interest (2,113) (1,185) (5,001) 990 Less: (earnings) losses allocated to unvested shareholders 3,463 2,698 10,580 14,683 Numerator for basic earnings per share: Adjusted income (loss) from continuing operations, net of tax - basic $ (117,935) $ (96,326) $ (376,810) $ (665,375) Income (loss) from discontinued operations, net of tax $ (27,134) $ (12,187) $ (43,077) $ (14,097) Weighted-average number of shares outstanding - basic 279,313 276,707 278,670 276,369 Earnings (losses) per share: Basic from continuing operations $ (0.42) $ (0.35) $ (1.35) $ (2.41) Basic from discontinued operations (0.10) (0.04) (0.16) (0.05) Total Basic $ (0.52) $ (0.39) $ (1.51) $ (2.46) DILUTED EPS: Adjusted income (loss) from continuing operations, net of tax - basic $ (117,935) $ (96,326) $ (376,810) $ (665,375) Add: effect of reallocating undistributed earnings of unvested shareholders — — — — Adjusted income (loss) from continuing operations, net of tax - diluted $ (117,935) $ (96,326) $ (376,810) $ (665,375) Income (loss) from discontinued operations, net of tax $ (27,134) $ (12,187) $ (43,077) $ (14,097) Weighted-average number of shares outstanding - basic 279,313 276,707 278,670 276,369 Add: dilutive effect of potential common shares — — — — Weighted-average number of shares outstanding - diluted 279,313 276,707 278,670 276,369 Earnings (losses) per share: Diluted from continuing operations $ (0.42) $ (0.35) $ (1.35) $ (2.41) Diluted from discontinued operations (0.10) (0.04) (0.16) (0.05) Total Diluted $ (0.52) $ (0.39) $ (1.51) $ (2.46) 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, because their inclusion would be anti-dilutive and because they are not 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 options that were excluded from diluted earnings (losses) per share that would potentially dilute earnings per share in the future were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Potentially dilutive securities excluded as anti-dilutive 4,484 5,369 4,534 5,388 In any period during which the average market price of Nabors’ common shares exceeds the exercise prices of these 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. |
Supplemental Balance Sheet, Inc
Supplemental Balance Sheet, Income Statement and Cash Flow Information | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Balance Sheet, Income Statement and Cash Flow Information | |
Supplemental Balance Sheet, Income Statement and Cash Flow Information | Note 10 Supplemental Balance Sheet and Income Statement Information Accrued liabilities included the following: September 30, December 31, 2017 2016 (In thousands) Accrued compensation $ 112,277 $ 116,775 Deferred revenue 241,812 255,626 Other taxes payable 25,306 16,419 Workers’ compensation liabilities 18,255 18,255 Interest payable 21,187 57,233 Litigation reserves 19,675 24,896 Current liability to discontinued operations 6,063 5,462 Dividends declared and payable 17,153 17,039 Other accrued liabilities 23,619 31,543 $ 485,347 $ Other, net included the following: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Losses (gains) on sales, disposals and involuntary conversions of long-lived assets $ 10,009 $ 6,546 $ 10,142 $ 40,527 (1) Other-than-temporary impairment of equity security (2) — 3,495 — 3,495 Charges related to our CJES holdings (3) — — — 220,117 Provision for International operations (4) — 1,128 — 1,128 Litigation expenses and reserves (2,387) 2,327 (777) 2,651 Foreign currency transaction losses (gains) (763) (1,102) 1,727 5,916 (Gain) loss on debt buyback 69 (680) 16,013 (6,707) Other losses (gains) (1,369) (1,322) 2,068 276 $ 5,559 $ 10,392 $ 29,173 $ 267,403 (1) Includes charges of $22.4 million for the nine months ended September 30, 2016 related to a reserve for amounts associated with our retained interest in the oil and gas properties located on the North Slope of Alaska and a $3.8 million charge to reduce the carrying value of one of our jack-up rigs, which was re-classified as assets held for sale at June 30, 2016, to its estimated fair value based on expected sales price. (2) Represents an other-than-temporary impairment charge related to an equity security. Because the trading price of this security remained below our cost basis for an extended period, we determined the investment was other than temporarily impaired and it was appropriate to write down the investment’s carrying value to its current estimated fair value. (3) Represents impairment charges related to our CJES holdings. See Note 4 — Investments in Unconsolidated Affiliates. (4) Represents an obligation associated with the decision to exit a non-core business line in the region of $1.1 million for each of the three and nine months ended September 30, 2016. The changes in accumulated other comprehensive income (loss), by component, included the following: Unrealized Gains gains (losses) Defined (losses) on on available- benefit Foreign cash flow for-sale pension plan currency hedges securities items items Total (In thousands (1) ) As of January 1, 2016 $ (1,670) $ (314) $ (6,568) $ (39,041) $ (47,593) Other comprehensive income (loss) before reclassifications — 3,551 — 27,870 31,421 Amounts reclassified from accumulated other comprehensive income (loss) 472 3,495 280 — 4,247 Net other comprehensive income (loss) 472 7,046 280 27,870 35,668 As of September 30, 2016 $ (1,198) $ 6,732 $ (6,288) $ (11,171) $ (11,925) (1) All amounts are net of tax. Unrealized Gains gains (losses) Defined (losses) on on available- benefit Foreign cash flow for-sale pension plan currency hedges securities items items Total (In thousands (1) ) As of January 1, 2017 $ (1,296) $ 14,235 $ (3,760) $ (21,298) $ (12,119) Other comprehensive income (loss) before reclassifications — (5,122) — 31,183 26,061 Amounts reclassified from accumulated other comprehensive income (loss) 281 1,341 93 — 1,715 Net other comprehensive income (loss) 281 (3,781) 93 31,183 27,776 As of September 30, 2017 $ (1,015) $ 10,454 $ (3,667) $ 9,885 $ 15,657 (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, 2017 2016 2017 2016 (In thousands) Interest expense $ 153 $ 153 $ 459 $ 459 General and administrative expenses 50 297 150 765 Other expense (income), net — 3,495 1,341 3,495 Total income (loss) from continuing operations before income tax (203) (3,945) (1,950) (4,719) Tax expense (benefit) (78) (172) (235) (472) Reclassification adjustment for (gains)/ losses included in net income (loss) $ (125) $ (3,773) $ (1,715) $ (4,247) |
Assets Held for Sale and Discon
Assets Held for Sale and Discontinued Operations | 9 Months Ended |
Sep. 30, 2017 | |
Assets Held for Sale and Discontinued Operations | |
Assets Held for Sale and Discontinued Operations | Note 11 Assets Held for Sale and Discontinued Operations Assets Held for Sale Assets held for sale as of September 30, 2017 and December 31, 2016 was $37.3 million and $76.7 million, respectively. These assets consisted primarily of our oil and gas holdings which are mainly in the Horn River basin in western Canada of $26.1 million and $65.0 million, respectively, as of the periods noted above and the operating results have been reflected in discontinued operations. The remainder represents assets that meet the criteria to be classified as assets held for sale, but do not represent a disposal of a component of an entity or a group of components of an entity representing a strategic shift that has or will have a major effect on the entity's operations and financial results. The carrying value of our assets held for sale represents the lower of carrying value or fair value less costs to sell. We continue to market these properties at prices that are reasonable compared to current fair value. We have contracts with pipeline companies to pay specified fees based on committed volumes for gas transport and processing associated with these properties held for sale. At September 30, 2017, our undiscounted contractual commitments for these contracts approximated $13.0 million and we had liabilities of $9.9 million, $6.1 million of which were classified as current and were included in accrued liabilities. At December 31, 2016, our undiscounted contractual commitments for these contracts approximated $17.2 million and we had liabilities of $12.5 million, $5.5 million of which were classified as current and were included in accrued liabilities. The amounts at each balance sheet date represented our best estimate of the fair value of the excess capacity of the pipeline commitments calculated using a discounted cash flow model, when considering our disposal plan, current production levels, natural gas prices and expected utilization of the pipeline over the remaining contractual term. Decreases in actual production or natural gas prices could result in future charges related to excess pipeline commitments. Discontinued Operations Our condensed statements of income (loss) from discontinued operations were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Operating revenues (1) $ 1,077 $ 688 $ 5,171 $ 1,449 Income (loss) from Oil & Gas discontinued operations: Income (loss) from discontinued operations $ (991) $ (836) $ (1,561) $ (3,501) Less: Impairment charges or other (gains) and losses on sale of wholly owned assets (2) 34,469 15,392 51,028 15,388 Less: Income tax expense (benefit) (8,326) (4,041) (9,512) (4,792) Income (loss) from Oil and Gas discontinued operations, net of tax $ (27,134) $ (12,187) $ (43,077) $ (14,097) (1) Reflects operating revenues of our historical oil and gas operating segment. (2) Reflects impairment charges of $35.3 million and $15.4 million during each of the three and nine months ended September 30, 2017 and 2016, respectively, due to the deterioration of economic conditions in the dry gas market in western Canada. These assets are included in our assets held for sale balance as described above. Additionally, includes a charge of $16.5 million related to the settlement of litigation associated with our previously owned Ramshorn International properties during the nine months ended September 30, 2017. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Information | |
Segment Information | Note 12 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, 2017 2016 2017 2016 (In thousands) Operating revenues: Drilling & Rig Services: U.S. $ 222,747 $ 116,095 $ 572,025 $ 405,113 Canada 18,073 10,444 63,002 34,555 International 374,106 363,552 1,092,667 1,165,631 Rig Services 87,538 58,950 251,993 152,051 Subtotal Drilling & Rig Services 702,464 549,041 1,979,687 1,757,350 Other reconciling items (1) (40,361) (29,312) (123,679) (68,459) Total $ 662,103 $ 519,729 $ 1,856,008 $ 1,688,891 Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Adjusted operating income (loss): (2) Drilling & Rig Services: U.S. $ (53,536) $ (58,876) $ (172,797) $ (154,763) Canada (7,494) (10,156) (16,519) (28,265) International 32,316 43,595 80,464 144,326 Rig Services (4,671) (12,937) (15,048) (43,238) Total $ (33,385) $ (38,374) $ (123,900) $ (81,940) Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: Total segment adjusted operating income (loss) (2) $ (33,385) $ (38,374) $ (123,900) $ (81,940) Other reconciling items (3) (40,820) (33,600) (123,531) (97,205) Earnings (losses) from unconsolidated affiliates 4 2 6 (221,918) Investment income (loss) 373 310 208 923 Interest expense (54,607) (46,836) (165,813) (137,803) Other, net (5,559) (10,392) (29,173) (267,403) Income (loss) from continuing operations before income taxes $ (133,994) $ (128,890) $ (442,203) $ (805,346) September 30, December 31, 2017 2016 (In thousands) Total assets: Drilling & Rig Services: U.S. $ 3,288,663 $ 3,172,767 Canada 341,114 329,620 International 3,433,515 3,600,057 Rig Services 443,169 359,435 Subtotal Drilling & Rig Services 7,506,461 7,461,879 Other reconciling items (3) 582,124 725,136 Total $ 8,088,585 $ (1) Represents the elimination of inter-segment transactions. (2) Adjusted operating income (loss) is computed by subtracting the sum of direct costs, general and administrative expenses, research and engineering expenses and depreciation and amortization from operating revenues. Management evaluates the performance of our operating segments using adjusted operating income (loss), which is a segment performance measure, because it believes that this financial measure reflects our ongoing profitability and performance. In addition, securities analysts and investors use this measure as one of the metrics on which they analyze our performance. A reconciliation to income (loss) from continuing operations before income taxes is provided in the above table. (3) Represents the elimination of inter-segment transactions and unallocated corporate expenses, assets and capital expenditures. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 9 Months Ended |
Sep. 30, 2017 | |
Condensed Consolidating Financial Information | |
Condensed Consolidating Financial Information | Note 13 Condensed Consolidating Financial Information Nabors has fully and unconditionally guaranteed all of the issued public debt securities of Nabors Delaware, a wholly owned subsidiary. The following condensed consolidating 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. The following condensed consolidating financial information presents condensed consolidating balance sheets as of September 30, 2017 and December 31, 2016, statements of income (loss) and statements of other comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016, and statements of cash flows for the nine months ended September 30, 2017 and 2016 of (a) Nabors, parent/guarantor, (b) Nabors Delaware, issuer of public debt securities guaranteed by Nabors, (c) the non-guarantor subsidiaries, (d) consolidating adjustments necessary to consolidate Nabors and its subsidiaries and (e) Nabors on a consolidated basis. Condensed Consolidating Balance Sheets September 30, 2017 Other Nabors Nabors Subsidiaries (Parent/ Delaware (Non- Consolidating Guarantor) (Issuer) Guarantors) Adjustments Total (In thousands) ASSETS Current assets: Cash and cash equivalents $ 386 $ 47 $ 190,123 $ — $ 190,556 Short-term investments — — 29,770 — 29,770 Accounts receivable, net — — 621,640 — 621,640 Inventory, net — — 119,050 — 119,050 Assets held for sale — — 37,275 — 37,275 Other current assets 50 27,869 148,711 — 176,630 Total current assets 436 27,916 1,146,569 — 1,174,921 Property, plant and equipment, net — — 6,051,606 — 6,051,606 Goodwill — — 173,321 — 173,321 Intercompany receivables 134,757 417,432 — (552,189) — Investment in consolidated affiliates 2,789,805 5,411,796 3,875,639 (12,077,240) — Deferred tax assets — 514,579 444,796 (514,579) 444,796 Other long-term assets — 147 315,937 (72,143) 243,941 Total assets $ 2,924,998 $ 6,371,870 $ 12,007,868 $ (13,216,151) $ 8,088,585 LIABILITIES AND EQUITY Current liabilities: Current portion of debt $ — $ — $ 196 $ — $ 196 Trade accounts payable 426 171 316,717 — 317,314 Accrued liabilities 21,167 21,972 442,208 — 485,347 Income taxes payable — — 27,817 — 27,817 Total current liabilities 21,593 22,143 786,938 — 830,674 Long-term debt — 4,030,758 — (72,143) 3,958,615 Other long-term liabilities — 22,870 328,917 — 351,787 Deferred income taxes — — 534,867 (514,579) 20,288 Intercompany payable 2,000 — 550,189 (552,189) — Total liabilities 23,593 4,075,771 2,200,911 (1,138,911) 5,161,364 Shareholders’ equity 2,901,405 2,296,099 9,781,141 (12,077,240) 2,901,405 Noncontrolling interest — — 25,816 — 25,816 Total equity 2,901,405 2,296,099 9,806,957 (12,077,240) 2,927,221 Total liabilities and equity $ 2,924,998 $ 6,371,870 $ 12,007,868 $ (13,216,151) $ 8,088,585 Condensed Consolidating Balance Sheets December 31, 2016 Other Nabors Nabors Subsidiaries (Parent/ Delaware (Non- Consolidating Guarantor) (Issuer) Guarantors) Adjustments Total (In thousands) ASSETS Current assets: Cash and cash equivalents $ 1,148 $ 10,177 $ 252,768 $ — $ 264,093 Short-term investments — — 31,109 — 31,109 Accounts receivable, net — — 508,355 — 508,355 Inventory, net — — 103,595 — 103,595 Assets held for sale — — 76,668 — 76,668 Other current assets 50 22,209 149,760 — 172,019 Total current assets 1,198 32,386 1,122,255 — 1,155,839 Property, plant and equipment, net — — 6,267,583 — 6,267,583 Goodwill — — 166,917 — 166,917 Intercompany receivables 142,447 — 1,342,942 (1,485,389) — Investment in consolidated affiliates 3,170,254 4,830,572 1,083,948 (9,084,774) — Deferred tax assets — 443,049 366,586 (443,049) 366,586 Other long-term assets — 344 447,962 (218,216) 230,090 Total assets $ 3,313,899 $ 5,306,351 $ 10,798,193 $ (11,231,428) $ 8,187,015 LIABILITIES AND EQUITY Current liabilities: Current portion of debt $ — $ — $ 297 $ — $ 297 Trade accounts payable 205 8 264,365 — 264,578 Accrued liabilities 20,669 65,246 457,333 — 543,248 Income taxes payable — — 13,811 — 13,811 Total current liabilities 20,874 65,254 735,806 — 821,934 Long-term debt — 3,796,550 — (218,215) 3,578,335 Other long-term liabilities — 22,659 499,797 — 522,456 Deferred income taxes — — 452,544 (443,049) 9,495 Intercompany payable 46,000 1,439,390 — (1,485,390) — Total liabilities 66,874 5,323,853 1,688,147 (2,146,654) 4,932,220 Shareholders’ equity 3,247,025 (17,502) 9,102,276 (9,084,774) 3,247,025 Noncontrolling interest — — 7,770 — 7,770 Total equity 3,247,025 (17,502) 9,110,046 (9,084,774) 3,254,795 Total liabilities and equity $ 3,313,899 $ 5,306,351 $ 10,798,193 $ (11,231,428) $ 8,187,015 Condensed Consolidating Statements of Income (Loss) Three Months Ended September 30, 2017 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Revenues and other income: Operating revenues $ — $ — $ 662,103 $ — $ 662,103 Earnings (losses) from unconsolidated affiliates — — 4 — 4 Earnings (losses) from consolidated affiliates (144,837) (31,085) (66,846) 242,768 — Investment income (loss) 1 (1) 3,353 (2,980) 373 Total revenues and other income (144,836) (31,086) 598,614 239,788 662,480 Operating income (loss) Costs and other deductions: Direct costs — — 441,263 — 441,263 General and administrative expenses 3,705 243 61,552 (490) 65,010 Research and engineering — — 12,960 — 12,960 Depreciation and amortization — 31 217,044 — 217,075 Interest expense — 56,429 (1,822) — 54,607 Other, net (9) 60 5,018 490 5,559 Total costs and other deductions 3,696 56,763 736,015 — 796,474 Income (loss) from continuing operations before income taxes (148,532) (87,849) (137,401) 239,788 (133,994) Income tax expense (benefit) — (21,003) 6,294 — (14,709) Income (loss) from continuing operations, net of tax (148,532) (66,846) (143,695) 239,788 (119,285) Income (loss) from discontinued operations, net of tax — — (27,134) — (27,134) Net income (loss) (148,532) (66,846) (170,829) 239,788 (146,419) Less: Net (income) loss attributable to noncontrolling interest — — (2,113) — (2,113) Net income (loss) attributable to Nabors $ (148,532) $ (66,846) $ (172,942) $ 239,788 $ (148,532) Condensed Consolidating Statements of Income (Loss) Three Months Ended September 30, 2016 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Revenues and other income: Operating revenues $ — $ — $ 519,729 $ — $ 519,729 Earnings (losses) from unconsolidated affiliates — — 2 — 2 Earnings (losses) from consolidated affiliates (107,229) (45,527) (77,423) 230,179 — Investment income (loss) — — 3,291 (2,981) 310 Intercompany interest income (loss) (9) 162 — (153) — Total revenues and other income (107,238) (45,365) 445,599 227,045 520,041 Costs and other deductions: Direct costs — — 306,436 — 306,436 General and administrative expenses 3,053 182 53,010 (167) 56,078 Research and engineering — — 8,476 — 8,476 Depreciation and amortization — 31 220,682 — 220,713 Interest expense — 50,595 (3,759) — 46,836 Other, net 929 (18) 9,314 167 10,392 Intercompany interest expense (9) — 162 (153) — Total costs and other deductions 3,973 50,790 594,321 (153) 648,931 Income (loss) from continuing operations before income taxes (111,211) (96,155) (148,722) 227,198 (128,890) Income tax expense (benefit) — (18,732) (12,319) — (31,051) Income (loss) from continuing operations, net of tax (111,211) (77,423) (136,403) 227,198 (97,839) Income (loss) from discontinued operations, net of tax — — (12,187) — (12,187) Net income (loss) (111,211) (77,423) (148,590) 227,198 (110,026) Less: Net (income) loss attributable to noncontrolling interest — — (1,185) — (1,185) Net income (loss) attributable to Nabors $ (111,211) $ (77,423) $ (149,775) $ 227,198 $ (111,211) Condensed Consolidating Statements of Income (Loss) Nine Months Ended September 30, 2017 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Revenues and other income: Operating revenues $ — $ — $ 1,856,008 $ — $ 1,856,008 Earnings (losses) from unconsolidated affiliates — — 6 — 6 Earnings (losses) from consolidated affiliates (420,300) (102,067) (223,862) 746,229 — Investment income (loss) 16 63 9,069 (8,940) 208 Total revenues and other income (420,284) (102,004) 1,641,221 737,289 1,856,222 Costs and other deductions: Direct costs — — 1,246,428 — 1,246,428 General and administrative expenses 10,362 573 182,173 (994) 192,114 Research and engineering — — 36,060 — 36,060 Depreciation and amortization — 93 628,744 — 628,837 Interest expense — 173,689 (7,876) — 165,813 Other, net (170) 19,033 9,316 994 29,173 Intercompany interest expense (9) — 9 — — Total costs and other deductions 10,183 193,388 2,094,854 — 2,298,425 Income (loss) from continuing operations before income taxes (430,467) (295,392) (453,633) 737,289 (442,203) Income tax expense (benefit) — (71,530) 11,716 — (59,814) Income (loss) from continuing operations, net of tax (430,467) (223,862) (465,349) 737,289 (382,389) Income (loss) from discontinued operations, net of tax — — (43,077) — (43,077) Net income (loss) (430,467) (223,862) (508,426) 737,289 (425,466) Less: Net (income) loss attributable to noncontrolling interest — — (5,001) — (5,001) Net income (loss) attributable to Nabors $ (430,467) $ (223,862) $ (513,427) $ 737,289 $ (430,467) Condensed Consolidating Statements of Income (Loss) Nine Months Ended September 30, 2016 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Revenues and other income: Operating revenues $ — $ — $ 1,688,891 $ — $ 1,688,891 Earnings (losses) from unconsolidated affiliates — — (221,918) — (221,918) Earnings (losses) from consolidated affiliates (685,148) (168,639) (264,583) 1,118,370 — Investment income (loss) 1 132 9,733 (8,943) 923 Intercompany interest income (loss) — 417 — (417) — Total revenues and other income (685,147) (168,090) 1,212,123 1,109,010 1,467,896 Costs and other deductions: Direct costs — — 1,012,738 — 1,012,738 General and administrative expenses 7,767 448 167,302 (481) 175,036 Research and engineering — — 24,818 — 24,818 Depreciation and amortization — 93 655,351 — 655,444 Interest expense — 152,318 (14,515) — 137,803 Other, net 1,245 (18) 265,695 481 267,403 Intercompany interest expense (4) — 421 (417) — Total costs and other deductions 9,008 152,841 2,111,810 (417) 2,273,242 Income (loss) from continuing operations before income taxes (694,155) (320,931) (899,687) 1,109,427 (805,346) Income tax expense (benefit) — (56,348) (67,950) — (124,298) Income (loss) from continuing operations, net of tax (694,155) (264,583) (831,737) 1,109,427 (681,048) Income (loss) from discontinued operations, net of tax — — (14,097) — (14,097) Net income (loss) (694,155) (264,583) (845,834) 1,109,427 (695,145) Less: Net (income) loss attributable to noncontrolling interest — — 990 — 990 Net income (loss) attributable to Nabors $ (694,155) $ (264,583) $ (844,844) $ 1,109,427 $ (694,155) Condensed Consolidating Statements of Comprehensive Income (Loss) Three Months Ended September 30, 2017 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net income (loss) attributable to Nabors $ (148,532) $ (66,846) $ (172,942) $ 239,788 $ (148,532) Other comprehensive income (loss) before tax: Translation adjustment attributable to Nabors 16,444 — 16,444 (16,444) 16,444 Unrealized gains (losses) on marketable securities: Unrealized gains (losses) on marketable securities (5,706) — (5,706) 5,706 (5,706) Less: reclassification adjustment for (gains) losses included in net income (loss) — — — — — Unrealized gains (losses) on marketable securities (5,706) — (5,706) 5,706 (5,706) Pension liability amortization and adjustment 50 50 100 (150) 50 Unrealized gains (losses) and amortization on cash flow hedges 153 153 153 (306) 153 Other comprehensive income (loss) before tax 10,941 203 10,991 (11,194) 10,941 Income tax expense (benefit) related to items of other comprehensive income (loss) 78 78 156 (234) 78 Other comprehensive income (loss), net of tax 10,863 125 10,835 (10,960) 10,863 Comprehensive income (loss) attributable to Nabors (137,669) (66,721) (162,107) 228,828 (137,669) Net income (loss) attributable to noncontrolling interest — — 2,113 — 2,113 Translation adjustment attributable to noncontrolling interest — — 160 — 160 Comprehensive income (loss) attributable to noncontrolling interest — — 2,273 — 2,273 Comprehensive income (loss) $ (137,669) $ (66,721) $ (159,834) $ 228,828 $ (135,396) Condensed Consolidating Statements of Comprehensive Income (Loss) Three Months Ended September 30, 2016 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net income (loss) attributable to Nabors $ (111,211) $ (77,423) $ (149,775) $ 227,198 $ (111,211) Other comprehensive income (loss) before tax: Translation adjustment attributable to Nabors (8,950) 12 (8,938) 8,926 (8,950) Unrealized gains (losses) on marketable securities: Unrealized gains (losses) on marketable securities 1,502 — 2,782 (2,782) 1,502 Less: reclassification adjustment for (gains) losses included in net income (loss) 3,495 — 3,495 (3,495) 3,495 Unrealized gains (losses) on marketable securities 4,997 — 6,277 (6,277) 4,997 Pension liability amortization and adjustment 297 297 594 (891) 297 Unrealized gains (losses) and amortization on cash flow hedges 153 153 153 (306) 153 Other comprehensive income (loss) before tax (3,503) 462 (1,914) 1,452 (3,503) Income tax expense (benefit) related to items of other comprehensive income (loss) 172 172 284 (456) 172 Other comprehensive income (loss), net of tax (3,675) 290 (2,198) 1,908 (3,675) Comprehensive income (loss) attributable to Nabors (114,886) (77,133) (151,973) 229,106 (114,886) Net income (loss) attributable to noncontrolling interest — — 1,185 — 1,185 Translation adjustment attributable to noncontrolling interest — — (90) — (90) Comprehensive income (loss) attributable to noncontrolling interest — — 1,095 — 1,095 Comprehensive income (loss) $ (114,886) $ (77,133) $ (150,878) $ 229,106 $ (113,791) Condensed Consolidating Statements of Comprehensive Income (Loss) Nine Months Ended September 30, 2017 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net income (loss) attributable to Nabors $ (430,467) $ (223,862) $ (513,427) $ 737,289 $ (430,467) Other comprehensive income (loss) before tax Translation adjustment attributable to Nabors 31,183 — 31,183 (31,183) 31,183 Unrealized gains (losses) on marketable securities: Unrealized gains (losses) on marketable securities (5,122) — (5,122) 5,122 (5,122) Less: reclassification adjustment for (gains) losses included in net income (loss) 1,341 — 1,341 (1,341) 1,341 Unrealized gains (losses) on marketable securities (3,781) — (3,781) 3,781 (3,781) Pension liability amortization and adjustment 150 150 300 (450) 150 Unrealized gains (losses) and amortization on cash flow hedges 459 459 459 (918) 459 Other comprehensive income (loss) before tax 28,011 609 28,161 (28,770) 28,011 Income tax expense (benefit) related to items of other comprehensive income (loss) 235 235 470 (705) 235 Other comprehensive income (loss), net of tax 27,776 374 27,691 (28,065) 27,776 Comprehensive income (loss) attributable to Nabors (402,691) (223,488) (485,736) 709,224 (402,691) Net income (loss) attributable to noncontrolling interest — — 5,001 — 5,001 Translation adjustment attributable to noncontrolling interest — — 317 — 317 Comprehensive income (loss) attributable to noncontrolling interest — — 5,318 — 5,318 Comprehensive income (loss) $ (402,691) $ (223,488) $ (480,418) $ 709,224 $ (397,373) Condensed Consolidating Statements of Comprehensive Income (Loss) Nine Months Ended September 30, 2016 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net income (loss) attributable to Nabors $ (694,155) $ (264,583) $ (844,844) $ 1,109,427 $ (694,155) Other comprehensive income (loss) before tax Translation adjustment attributable to Nabors 27,870 (39) 27,870 (27,831) 27,870 Unrealized gains (losses) on marketable securities: Unrealized gains (losses) on marketable securities 3,551 — 3,551 (3,551) 3,551 Less: reclassification adjustment for (gains) losses included in net income (loss) 3,495 — 3,495 (3,495) 3,495 Unrealized gains (losses) on marketable securities 7,046 — 7,046 (7,046) 7,046 Pension liability amortization and adjustment 765 765 1,530 (2,295) 765 Unrealized gains (losses) and amortization on cash flow hedges 459 459 459 (918) 459 Other comprehensive income (loss) before tax 36,140 1,185 36,905 (38,090) 36,140 Income tax expense (benefit) related to items of other comprehensive income (loss) 472 472 765 (1,237) 472 Other comprehensive income (loss), net of tax 35,668 713 36,140 (36,853) 35,668 Comprehensive income (loss) attributable to Nabors (658,487) (263,870) (808,704) 1,072,574 (658,487) Net income (loss) attributable to noncontrolling interest — — (990) — (990) Translation adjustment attributable to noncontrolling interest — — 371 — 371 Comprehensive income (loss) attributable to noncontrolling interest — — (619) — (619) Comprehensive income (loss) $ (658,487) $ (263,870) $ (809,323) $ 1,072,574 $ (659,106) Condensed Consolidating Statements Cash Flows Nine Months Ended September 30, 2017 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net cash provided by (used for) operating activities $ 103,187 $ (199,071) $ 148,714 $ (88,939) $ (36,109) Cash flows from investing activities: Purchases of investments — — (6,722) — (6,722) Sales and maturities of investments — — 12,533 — 12,533 Cash paid for acquisitions of businesses, net — — (50,764) — (50,764) Cash paid for investments in consolidated affiliates (100) — (75,960) 76,060 — Capital expenditures — — (448,864) — (448,864) Proceeds from sales of assets and insurance claims — — 32,805 — 32,805 Change in intercompany balances — (424,133) 424,133 — — Other changes in investing — — (427) — (427) Net cash provided by (used for) investing activities (100) (424,133) (113,266) 76,060 (461,439) Cash flows from financing activities: Increase (decrease) in cash overdrafts — — (78) — (78) Proceeds from issuance of long-term debt — 411,200 — — 411,200 Debt issuance costs — (11,039) — — (11,039) Proceeds from revolving credit facilities — 410,000 — — 410,000 Proceeds from parent contributions — 37,980 38,080 (76,060) — Proceeds from (payments for) issuance of common shares 8,300 — — — 8,300 Purchase of capped call hedge transactions — (40,250) — — (40,250) Reduction of long-term debt — (270,269) (112,546) — (382,815) Dividends to shareholders (60,285) — — 8,939 (51,346) Proceeds from (payment for) commercial paper, net — 78,000 — — 78,000 Payments on term loan — (162,500) — — (162,500) Proceeds from (payments for) short-term borrowings — — (528) — (528) Cash proceeds from equity component of exchangeable debt — 159,952 — — 159,952 Proceeds from issuance of intercompany debt 35,000 20,000 (55,000) — — Noncontrolling interest contribution — — 20,000 — 20,000 Paydown of intercompany debt (79,000) (20,000) 99,000 — — Distributions to Non-controlling interest — — (7,272) — (7,272) Distribution from subsidiary to parent — — (80,000) 80,000 — Other changes (7,864) — — — (7,864) Net cash (used for) provided by financing activities (103,849) 613,074 (98,344) 12,879 423,760 Effect of exchange rate changes on cash and cash equivalents — — 251 — 251 Net increase (decrease) in cash and cash equivalents (762) (10,130) (62,645) — (73,537) Cash and cash equivalents, beginning of period 1,148 10,177 252,768 — 264,093 Cash and cash equivalents, end of period $ 386 $ 47 $ 190,123 $ — $ 190,556 Condensed Consolidating Statements Cash Flows Nine Months Ended September 30, 2016 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net cash provided by (used for) operating activities $ 18,320 $ (276,655) $ 669,063 $ (5,960) $ 404,768 Cash flows from investing activities: Purchases of investments — — (24) — (24) Sales and maturities of investments — — 643 — 643 Proceeds from sales of assets and insurance claims — — 26,597 — 26,597 Cash paid for investments in consolidated affiliates — (86,459) (159,000) 245,459 — Capital expenditures — — (284,950) — (284,950) Change in intercompany balances — 239,112 (239,112) — — Other — — (19) — (19) Net cash provided by (used for) investing activities — 152,653 (655,865) 245,459 (257,753) Cash flows from financing activities: Increase (decrease) in cash overdrafts — — 5 — 5 Proceeds from (payments for) issuance of common shares 562 — — — 562 Reduction in long-term debt — (350,000) (142,625) — (492,625) Dividends to shareholders (39,887) — — 5,960 (33,927) Proceeds from (payments for) commercial paper, net — 15,000 — — 15,000 Proceeds from issuance of intercompany debt 25,500 — (25,500) — — Proceeds from revolving credit facilities — 560,000 — — 560,000 Reduction in revolving credit facilities — (260,000) — — (260,000) Repurchase of common shares — — (1,687) — (1,687) Proceeds from (payments for) short-term borrowings — — (6,388) — (6,388) Proceeds from parent contributions — 159,000 86,459 (245,459) — Other changes (4,313) — — — (4,313) Net cash (used for) provided by financing activities (18,138) 124,000 (89,736) (239,499) (223,373) Effect of exchange rate changes on cash and cash equivalents — — (1,129) — (1,129) Net increase (decrease) in cash and cash equivalents 182 (2) (77,667) — (77,487) Cash and cash equivalents, beginning of period 873 10 253,647 — 254,530 Cash and cash equivalents, end of period $ 1,055 $ 8 $ 175,980 $ — $ 177,043 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events | |
Subsequent Events | Note 14 Subsequent Events On October 28, 2017, our Board of Directors declared a cash dividend of $0.06 per common share, which will be paid on January 3, 2018 to shareholders of record at the close of business on December 13, 2017. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies | |
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 (“GAAP”). Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and footnote disclosures normally included in annual financial statements prepared in accordance with 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, 2016 (“2016 Annual Report”). In management’s opinion, the unaudited condensed consolidated financial statements contain all adjustments necessary to state fairly our financial position as of September 30, 2017 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, 2017 may not be indicative of results that will be realized for the full year ending December 31, 2017. |
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 required to be consolidated under GAAP. All significant intercompany accounts and transactions are eliminated in consolidation. During 2016, we entered into an agreement with Saudi Arabian Development Company, a wholly-owned subsidiary of Saudi Arabian Oil Company (“Saudi Aramco”), to form a new joint venture, Saudi Aramco Nabors Drilling (“SANAD”), to own, manage and operate onshore drilling rigs in The Kingdom of Saudi Arabia. SANAD, which is equally owned by Saudi Aramco and Nabors, is expected to commence operations during the fourth quarter of 2017. In May 2017, Nabors and Saudi Aramco each contributed $20 million in cash for formation of the joint venture. We have consolidated this joint venture which, as of September 30, 2017, is limited to the $40 million of cash mentioned above to be used exclusively by the joint venture to fund future operations. Investments in operating entities where we have the ability to exert significant influence, but where we do not control operating and financial policies, are accounted for using the equity method. Our share of the net income (loss) of these entities is recorded as earnings (losses) from unconsolidated affiliates in our condensed consolidated statements of income (loss). The investments in these entities are included in investment in other long-term assets in our condensed consolidated balance sheets. We historically recorded our share of the net income (loss) of our equity method investment in C&J Energy Services, Ltd. (“CJES”) on a one-quarter lag, as we were not able to obtain the financial information of CJES on a timely basis. During the third quarter of 2016, CJES filed for bankruptcy, at which time we ceased accounting for our investment in CJES as an equity method investment. See Note 4 — Investments in Unconsolidated Affiliates. |
Revenue Recognition | Revenue Recognition We recognize revenues and costs on daywork contracts daily as the work progresses. For certain contracts, we receive lump-sum payments for the mobilization of rigs and other drilling equipment. We defer revenue related to mobilization periods and recognize the revenue over the term of the related drilling contract. We also defer recognition of revenue on amounts received from customers for prepayment of services until those services are provided. At September 30, 2017 and December 31, 2016, our deferred revenues classified as accrued liabilities were $241.8 million and $255.6 million, respectively. At September 30, 2017 and December 31, 2016, our deferred revenues classified as other long-term liabilities were $167.8 million and $321.0 million, respectively. Costs incurred related to a mobilization period for which a contract is secured are deferred and recognized over the term of the related drilling contract. Costs incurred to relocate rigs and other drilling equipment to areas in which a contract has not been secured are expensed as incurred. At September 30, 2017 and December 31, 2016, our deferred expenses classified as other current assets were $66.6 million and $63.4 million, respectively. At September 30, 2017 and December 31, 2016, our deferred expenses classified as other long-term assets were $41.7 million and $69.5 million, respectively. We recognize revenue for top drives and instrumentation systems we manufacture when the earnings process is complete. This generally occurs when products have been shipped, title and risk of loss have been transferred, collectability is probable, and pricing is fixed and determinable. We recognize, as operating revenue, proceeds from business interruption insurance claims in the period that the applicable proof of loss documentation is received. Proceeds from casualty insurance settlements in excess of the carrying value of damaged assets are recognized in other, net in the period that the applicable proof of loss documentation is received. Proceeds from casualty insurance settlements that are expected to be less than the carrying value of damaged assets are recognized at the time the loss is incurred and recorded in other, net. We recognize reimbursements received for out-of-pocket expenses incurred as revenues and account for out-of-pocket expenses as direct costs. |
Inventory, net | Inventory, net 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, 2017 2016 (In thousands) Raw materials $ 89,127 $ 84,431 Work-in-progress 15,630 1,204 Finished goods 14,293 17,960 $ 119,050 $ 103,595 |
Property, Plant and Equipment | Property, Plant and Equipment We review our assets for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. If the estimated undiscounted future cash flows are not sufficient to support the asset’s recorded value, an impairment charge is recognized to the extent the carrying amount of the long-lived asset exceeds its estimated fair value. Management considers a number of factors such as estimated future cash flows from the assets, appraisals and current market value analysis in determining fair value. The determination of future cash flows requires the estimation of utilization, dayrates, operating margins, sustaining capital and remaining economic life. Such estimates can change based on market conditions, technological advances in the industry or changes in regulations governing the industry. For an asset classified as held for sale, we consider the asset impaired when its carrying amount exceeds fair value less its cost to sell. Fair value is determined in the same manner as an impaired long-lived asset that is held and used. Significant and unanticipated changes to the assumptions could result in future impairments. A significantly prolonged period of lower oil and natural gas prices could adversely affect the demand for and prices of our services. As such, we will continue to assess our asset fleet for triggering events, particularly our legacy and undersized rigs. Should we experience weakening in the market for a prolonged period for any specific rig class, this could result in future impairment charges or retirements of assets. As the determination of whether impairment charges should be recorded on our long-lived assets is subject to significant management judgment, and an impairment of these assets could result in a material charge on our condensed consolidated statements of income (loss), management believes that accounting estimates related to impairment of long-lived assets are critical. |
Goodwill | Goodwill We review goodwill for impairment annually during the second quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the carrying amount of such goodwill and intangible assets exceed their fair value. Due to the adoption of Accounting Standards Update (“ASU”) No. 2017-04, effective January 1, 2017, we no longer determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. We will continue to perform our qualitative analysis as well as step one of the impairment test which compares the estimated fair value of the reporting unit to its carrying amount. If the carrying amount exceeds the fair value, an impairment charge will be recognized in an amount equal to the excess; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. For our goodwill tests prior to adoption of the new standard, we initially assessed goodwill for impairment based on qualitative factors to determine whether to perform the two-step annual goodwill impairment test, a Level 3 fair value measurement. After our qualitative assessment, step one of the impairment test compared the estimated fair value of the reporting unit to its carrying amount. If the carrying amount exceeded the fair value, a second step was required to measure the goodwill impairment loss. The second step compared the implied fair value of the reporting unit’s goodwill to its carrying amount. If the carrying amount exceeded the implied fair value, an impairment loss was recognized in an amount equal to the excess. Our estimated fair values of our reporting units incorporate judgment and the use of estimates by management. Potential triggering events requiring assessment include a further or sustained decline in our stock price, declines in oil and natural gas prices, a variance in results of operations from forecasts, a change in operating strategy of assets and additional transactions in the oil and gas industry. Another factor in determining whether a triggering event has occurred is the relationship between our market capitalization and our book value. As part of our annual review, we compare the sum of our reporting units’ estimated fair value, which includes the estimated fair value of non-operating assets and liabilities, less debt, to our market capitalization and assess the reasonableness of our estimated fair value. Any of the above-mentioned factors may cause us to re-evaluate goodwill during any quarter throughout the year. Based on our annual review during the second quarter of 2017, we did not record a goodwill impairment. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-07, Investments—Equity Method and Joint Ventures, to simplify the transition to the equity method of accounting. This standard eliminates the requirement to retroactively adopt the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. Instead, the equity method investor should add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment qualifies for the equity method of accounting. This guidance is effective for public companies for fiscal years beginning after December 15, 2016. The adoption of this guidance did not have an impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation, to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for public companies for fiscal years beginning after December 15, 2016. We adopted this guidance on a prospective basis effective January 1, 2017. The impact of adoption was a decrease in deferred tax liabilities of $7.1 million and an increase in retained earnings of $7.1 million related to excess tax benefits on prior awards. Additionally, we elected to account for forfeitures as they occur. The impact of this election resulted in an increase in capital in excess of par and a corresponding decrease in retained earnings of $1.9 million. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under this new standard, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and then recognize an impairment charge, as necessary, for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. This guidance is effective for fiscal years beginning after December 15, 2019. We have elected to early adopt this guidance on a prospective basis for our annual goodwill impairment test performed subsequent to January 1, 2017. The adoption of this standard did not have an impact on our consolidated financial statements. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, relating to the revenue recognition from contracts with customers that creates a common revenue standard for GAAP and IFRS. The core principle will require recognition of revenue to represent the transfer of promised goods or services to customers in an amount that reflects the consideration, including costs incurred, to which the entity expects to be entitled in exchange for those goods or services. The standard will also require significantly expanded disclosures containing qualitative and quantitative information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB approved a one year deferral of this standard, with a new effective date for fiscal years beginning after December 15, 2017. Throughout 2017 we have taken many steps towards quantifying the impact of the new standard on our contracts. We, along with our third party consultants, have identified and reviewed our revenue streams, identified a subset of contracts to represent these revenue streams and performed a detailed analysis of such contracts. As part of this analysis, we identified specific areas impacted under the new standard. We have finalized our bucketing of contracts and expanded our sample of contracts for review in order to evaluate, document and quantify the consolidated impact of adopting the standard. We expect to apply the modified retrospective approach during the first quarter of 2018. However, we continue to evaluate the impact of the standard on our accounting policies, internal controls and consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall, relating to the recognition and measurement of financial assets and liabilities. This standard enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. This guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early application is permitted. We are currently evaluating the impact this will have on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, relating to leases to increase transparency and comparability among companies. This standard requires that all leases with an initial term greater than one year be recorded on the balance sheet as an asset and a lease liability. Additionally, this standard will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. This guidance is effective for public companies for fiscal years beginning after December 15, 2018. Early application is permitted. This standard requires an entity to separate lease components from nonlease components within a contract. While the lease components would be accounted for under ASU No. 2016-02, nonlease components would be accounted for under ASU No. 2014-09. We have determined that under the new standard, our drilling contracts contain a lease component and therefore we will be required to separately recognize revenues associated with the lease and services components. Therefore, we are evaluating ASU No. 2016-02 concurrently with the provisions of ASU No. 2014-09 and the impact this will have on our consolidated financial statements. We expect to adopt this guidance as of the effective date. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows, to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early application is permitted. We are currently evaluating the impact this will have on our consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes, which improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early application is permitted. We are currently evaluating the impact this will have on our consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash, to provide guidance on the classification of restricted cash in the statement of cash flows. This guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early application is permitted. The amendments in the ASU should be adopted on a retrospective basis. We are currently evaluating the impact this will have on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, which clarifies the definition of a business and provides further guidance for evaluating whether a transaction will be accounted for as an acquisition of an asset or a business. The standard provides a test to determine whether a set of assets and activities acquired is a business. When substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. Under the updated guidance, an acquisition of a single property will likely be treated as an asset acquisition as opposed to a business combination and associated transaction costs will be capitalized rather than expensed as incurred. Additionally, assets acquired, liabilities assumed, and any noncontrolling interest will be measured at their relative fair values. We do not expect the adoption of this standard to have an impact on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation, to reduce diversity in practice and provide clarity regarding existing guidance in ASC 718, “Stock Compensation”. The standard provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early application is permitted. We are currently evaluating the impact that this will have on our consolidated financial statements. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies | |
Inventory, net | September 30, December 31, 2017 2016 (In thousands) Raw materials $ 89,127 $ 84,431 Work-in-progress 15,630 1,204 Finished goods 14,293 17,960 $ 119,050 $ 103,595 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Fair value of financial instruments | September 30, 2017 December 31, 2016 Carrying Fair Carrying Fair Value Value Value Value (In thousands) (In thousands) 6.15% senior notes due February 2018 $ 460,537 $ 467,620 $ 827,539 $ 865,300 9.25% senior notes due January 2019 303,489 327,902 303,489 337,443 5.00% senior notes due September 2020 669,769 685,622 669,540 689,211 4.625% senior notes due September 2021 695,048 686,096 694,868 708,765 5.50% senior notes due January 2023 600,000 598,242 600,000 627,000 5.10% senior notes due September 2023 346,544 333,680 346,448 348,613 0.75% senior exchangeable notes due January 2024 425,010 469,258 — — Term loan facility — — 162,500 162,500 Revolving credit facility 410,000 410,000 — — Commercial paper 78,000 78,000 — — Other 196 196 297 297 3,988,593 $ 4,056,616 3,604,681 $ 3,739,129 Less: deferred financing costs 29,782 26,049 $ 3,958,811 $ 3,578,632 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt | |
Long-term debt | September 30, December 31, 2017 2016 (In thousands) 6.15% senior notes due February 2018 (1) $ 460,537 $ 827,539 9.25% senior notes due January 2019 303,489 303,489 5.00% senior notes due September 2020 669,769 669,540 4.625% senior notes due September 2021 695,048 694,868 5.50% senior notes due January 2023 600,000 600,000 5.10% senior notes due September 2023 346,544 346,448 0.75% senior exchangeable notes due January 2024 425,010 — Term loan facility — 162,500 Revolving credit facility 410,000 — Commercial paper 78,000 — Other 196 297 3,988,593 3,604,681 Less: current portion 196 297 Less: deferred financing costs 29,782 26,049 $ 3,958,615 $ 3,578,335 (1) The 6.15% senior notes due February 2018 have been classified as long-term because we have the ability and intent to repay this obligation utilizing our revolving credit facility. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Summary of total maximum amount of financial guarantees issued | Maximum Amount 2017 2018 2019 Thereafter Total (In thousands) Financial standby letters of credit and other financial surety instruments $ 98,050 165,311 — — $ 263,361 |
Earnings (Losses) Per Share (Ta
Earnings (Losses) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings (Losses) Per Share | |
Earnings (losses) per share computations | Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands, except per share amounts) BASIC EPS: Net income (loss) (numerator): Income (loss) from continuing operations, net of tax $ (119,285) $ (97,839) $ (382,389) $ (681,048) Less: net (income) loss attributable to noncontrolling interest (2,113) (1,185) (5,001) 990 Less: (earnings) losses allocated to unvested shareholders 3,463 2,698 10,580 14,683 Numerator for basic earnings per share: Adjusted income (loss) from continuing operations, net of tax - basic $ (117,935) $ (96,326) $ (376,810) $ (665,375) Income (loss) from discontinued operations, net of tax $ (27,134) $ (12,187) $ (43,077) $ (14,097) Weighted-average number of shares outstanding - basic 279,313 276,707 278,670 276,369 Earnings (losses) per share: Basic from continuing operations $ (0.42) $ (0.35) $ (1.35) $ (2.41) Basic from discontinued operations (0.10) (0.04) (0.16) (0.05) Total Basic $ (0.52) $ (0.39) $ (1.51) $ (2.46) DILUTED EPS: Adjusted income (loss) from continuing operations, net of tax - basic $ (117,935) $ (96,326) $ (376,810) $ (665,375) Add: effect of reallocating undistributed earnings of unvested shareholders — — — — Adjusted income (loss) from continuing operations, net of tax - diluted $ (117,935) $ (96,326) $ (376,810) $ (665,375) Income (loss) from discontinued operations, net of tax $ (27,134) $ (12,187) $ (43,077) $ (14,097) Weighted-average number of shares outstanding - basic 279,313 276,707 278,670 276,369 Add: dilutive effect of potential common shares — — — — Weighted-average number of shares outstanding - diluted 279,313 276,707 278,670 276,369 Earnings (losses) per share: Diluted from continuing operations $ (0.42) $ (0.35) $ (1.35) $ (2.41) Diluted from discontinued operations (0.10) (0.04) (0.16) (0.05) Total Diluted $ (0.52) $ (0.39) $ (1.51) $ (2.46) |
Potentially dilutive securities excluded as anti-dilutive | Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Potentially dilutive securities excluded as anti-dilutive 4,484 5,369 4,534 5,388 |
Supplemental Balance Sheet, I29
Supplemental Balance Sheet, Income Statement and Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Balance Sheet, Income Statement and Cash Flow Information | |
Accrued liabilities | September 30, December 31, 2017 2016 (In thousands) Accrued compensation $ 112,277 $ 116,775 Deferred revenue 241,812 255,626 Other taxes payable 25,306 16,419 Workers’ compensation liabilities 18,255 18,255 Interest payable 21,187 57,233 Litigation reserves 19,675 24,896 Current liability to discontinued operations 6,063 5,462 Dividends declared and payable 17,153 17,039 Other accrued liabilities 23,619 31,543 $ 485,347 $ |
Other, net | Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Losses (gains) on sales, disposals and involuntary conversions of long-lived assets $ 10,009 $ 6,546 $ 10,142 $ 40,527 (1) Other-than-temporary impairment of equity security (2) — 3,495 — 3,495 Charges related to our CJES holdings (3) — — — 220,117 Provision for International operations (4) — 1,128 — 1,128 Litigation expenses and reserves (2,387) 2,327 (777) 2,651 Foreign currency transaction losses (gains) (763) (1,102) 1,727 5,916 (Gain) loss on debt buyback 69 (680) 16,013 (6,707) Other losses (gains) (1,369) (1,322) 2,068 276 $ 5,559 $ 10,392 $ 29,173 $ 267,403 (1) Includes charges of $22.4 million for the nine months ended September 30, 2016 related to a reserve for amounts associated with our retained interest in the oil and gas properties located on the North Slope of Alaska and a $3.8 million charge to reduce the carrying value of one of our jack-up rigs, which was re-classified as assets held for sale at June 30, 2016, to its estimated fair value based on expected sales price. (2) Represents an other-than-temporary impairment charge related to an equity security. Because the trading price of this security remained below our cost basis for an extended period, we determined the investment was other than temporarily impaired and it was appropriate to write down the investment’s carrying value to its current estimated fair value. (3) Represents impairment charges related to our CJES holdings. See Note 4 — Investments in Unconsolidated Affiliates. (4) Represents an obligation associated with the decision to exit a non-core business line in the region of $1.1 million for each of the three and nine months ended September 30, 2016. |
Schedule of changes in accumulated other comprehensive income (loss) | Unrealized Gains gains (losses) Defined (losses) on on available- benefit Foreign cash flow for-sale pension plan currency hedges securities items items Total (In thousands (1) ) As of January 1, 2016 $ (1,670) $ (314) $ (6,568) $ (39,041) $ (47,593) Other comprehensive income (loss) before reclassifications — 3,551 — 27,870 31,421 Amounts reclassified from accumulated other comprehensive income (loss) 472 3,495 280 — 4,247 Net other comprehensive income (loss) 472 7,046 280 27,870 35,668 As of September 30, 2016 $ (1,198) $ 6,732 $ (6,288) $ (11,171) $ (11,925) (1) All amounts are net of tax. Unrealized Gains gains (losses) Defined (losses) on on available- benefit Foreign cash flow for-sale pension plan currency hedges securities items items Total (In thousands (1) ) As of January 1, 2017 $ (1,296) $ 14,235 $ (3,760) $ (21,298) $ (12,119) Other comprehensive income (loss) before reclassifications — (5,122) — 31,183 26,061 Amounts reclassified from accumulated other comprehensive income (loss) 281 1,341 93 — 1,715 Net other comprehensive income (loss) 281 (3,781) 93 31,183 27,776 As of September 30, 2017 $ (1,015) $ 10,454 $ (3,667) $ 9,885 $ 15,657 (1) All amounts are net of tax. |
Schedule of line items that were reclassified from net income | Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Interest expense $ 153 $ 153 $ 459 $ 459 General and administrative expenses 50 297 150 765 Other expense (income), net — 3,495 1,341 3,495 Total income (loss) from continuing operations before income tax (203) (3,945) (1,950) (4,719) Tax expense (benefit) (78) (172) (235) (472) Reclassification adjustment for (gains)/ losses included in net income (loss) $ (125) $ (3,773) $ (1,715) $ (4,247) |
Assets Held for Sale and Disc30
Assets Held for Sale and Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Assets Held for Sale and Discontinued Operations | |
Schedule of condensed statements of income (loss) from discontinued operations | Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Operating revenues (1) $ 1,077 $ 688 $ 5,171 $ 1,449 Income (loss) from Oil & Gas discontinued operations: Income (loss) from discontinued operations $ (991) $ (836) $ (1,561) $ (3,501) Less: Impairment charges or other (gains) and losses on sale of wholly owned assets (2) 34,469 15,392 51,028 15,388 Less: Income tax expense (benefit) (8,326) (4,041) (9,512) (4,792) Income (loss) from Oil and Gas discontinued operations, net of tax $ (27,134) $ (12,187) $ (43,077) $ (14,097) (1) Reflects operating revenues of our historical oil and gas operating segment. (2) Reflects impairment charges of $35.3 million and $15.4 million during each of the three and nine months ended September 30, 2017 and 2016, respectively, due to the deterioration of economic conditions in the dry gas market in western Canada. These assets are included in our assets held for sale balance as described above. Additionally, includes a charge of $16.5 million related to the settlement of litigation associated with our previously owned Ramshorn International properties during the nine months ended September 30, 2017. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Information | |
Financial information with respect to operating segments | The following table sets forth financial information with respect to our reportable operating segments: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Operating revenues: Drilling & Rig Services: U.S. $ 222,747 $ 116,095 $ 572,025 $ 405,113 Canada 18,073 10,444 63,002 34,555 International 374,106 363,552 1,092,667 1,165,631 Rig Services 87,538 58,950 251,993 152,051 Subtotal Drilling & Rig Services 702,464 549,041 1,979,687 1,757,350 Other reconciling items (1) (40,361) (29,312) (123,679) (68,459) Total $ 662,103 $ 519,729 $ 1,856,008 $ 1,688,891 Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Adjusted operating income (loss): (2) Drilling & Rig Services: U.S. $ (53,536) $ (58,876) $ (172,797) $ (154,763) Canada (7,494) (10,156) (16,519) (28,265) International 32,316 43,595 80,464 144,326 Rig Services (4,671) (12,937) (15,048) (43,238) Total $ (33,385) $ (38,374) $ (123,900) $ (81,940) Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: Total segment adjusted operating income (loss) (2) $ (33,385) $ (38,374) $ (123,900) $ (81,940) Other reconciling items (3) (40,820) (33,600) (123,531) (97,205) Earnings (losses) from unconsolidated affiliates 4 2 6 (221,918) Investment income (loss) 373 310 208 923 Interest expense (54,607) (46,836) (165,813) (137,803) Other, net (5,559) (10,392) (29,173) (267,403) Income (loss) from continuing operations before income taxes $ (133,994) $ (128,890) $ (442,203) $ (805,346) September 30, December 31, 2017 2016 (In thousands) Total assets: Drilling & Rig Services: U.S. $ 3,288,663 $ 3,172,767 Canada 341,114 329,620 International 3,433,515 3,600,057 Rig Services 443,169 359,435 Subtotal Drilling & Rig Services 7,506,461 7,461,879 Other reconciling items (3) 582,124 725,136 Total $ 8,088,585 $ (1) Represents the elimination of inter-segment transactions. (2) Adjusted operating income (loss) is computed by subtracting the sum of direct costs, general and administrative expenses, research and engineering expenses and depreciation and amortization from operating revenues. Management evaluates the performance of our operating segments using adjusted operating income (loss), which is a segment performance measure, because it believes that this financial measure reflects our ongoing profitability and performance. In addition, securities analysts and investors use this measure as one of the metrics on which they analyze our performance. A reconciliation to income (loss) from continuing operations before income taxes is provided in the above table. (3) Represents the elimination of inter-segment transactions and unallocated corporate expenses, assets and capital expenditures. |
Condensed Consolidating Finan32
Condensed Consolidating Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Condensed Consolidating Financial Information | |
Condensed Consolidating Balance Sheets | Condensed Consolidating Balance Sheets September 30, 2017 Other Nabors Nabors Subsidiaries (Parent/ Delaware (Non- Consolidating Guarantor) (Issuer) Guarantors) Adjustments Total (In thousands) ASSETS Current assets: Cash and cash equivalents $ 386 $ 47 $ 190,123 $ — $ 190,556 Short-term investments — — 29,770 — 29,770 Accounts receivable, net — — 621,640 — 621,640 Inventory, net — — 119,050 — 119,050 Assets held for sale — — 37,275 — 37,275 Other current assets 50 27,869 148,711 — 176,630 Total current assets 436 27,916 1,146,569 — 1,174,921 Property, plant and equipment, net — — 6,051,606 — 6,051,606 Goodwill — — 173,321 — 173,321 Intercompany receivables 134,757 417,432 — (552,189) — Investment in consolidated affiliates 2,789,805 5,411,796 3,875,639 (12,077,240) — Deferred tax assets — 514,579 444,796 (514,579) 444,796 Other long-term assets — 147 315,937 (72,143) 243,941 Total assets $ 2,924,998 $ 6,371,870 $ 12,007,868 $ (13,216,151) $ 8,088,585 LIABILITIES AND EQUITY Current liabilities: Current portion of debt $ — $ — $ 196 $ — $ 196 Trade accounts payable 426 171 316,717 — 317,314 Accrued liabilities 21,167 21,972 442,208 — 485,347 Income taxes payable — — 27,817 — 27,817 Total current liabilities 21,593 22,143 786,938 — 830,674 Long-term debt — 4,030,758 — (72,143) 3,958,615 Other long-term liabilities — 22,870 328,917 — 351,787 Deferred income taxes — — 534,867 (514,579) 20,288 Intercompany payable 2,000 — 550,189 (552,189) — Total liabilities 23,593 4,075,771 2,200,911 (1,138,911) 5,161,364 Shareholders’ equity 2,901,405 2,296,099 9,781,141 (12,077,240) 2,901,405 Noncontrolling interest — — 25,816 — 25,816 Total equity 2,901,405 2,296,099 9,806,957 (12,077,240) 2,927,221 Total liabilities and equity $ 2,924,998 $ 6,371,870 $ 12,007,868 $ (13,216,151) $ 8,088,585 Condensed Consolidating Balance Sheets December 31, 2016 Other Nabors Nabors Subsidiaries (Parent/ Delaware (Non- Consolidating Guarantor) (Issuer) Guarantors) Adjustments Total (In thousands) ASSETS Current assets: Cash and cash equivalents $ 1,148 $ 10,177 $ 252,768 $ — $ 264,093 Short-term investments — — 31,109 — 31,109 Accounts receivable, net — — 508,355 — 508,355 Inventory, net — — 103,595 — 103,595 Assets held for sale — — 76,668 — 76,668 Other current assets 50 22,209 149,760 — 172,019 Total current assets 1,198 32,386 1,122,255 — 1,155,839 Property, plant and equipment, net — — 6,267,583 — 6,267,583 Goodwill — — 166,917 — 166,917 Intercompany receivables 142,447 — 1,342,942 (1,485,389) — Investment in consolidated affiliates 3,170,254 4,830,572 1,083,948 (9,084,774) — Deferred tax assets — 443,049 366,586 (443,049) 366,586 Other long-term assets — 344 447,962 (218,216) 230,090 Total assets $ 3,313,899 $ 5,306,351 $ 10,798,193 $ (11,231,428) $ 8,187,015 LIABILITIES AND EQUITY Current liabilities: Current portion of debt $ — $ — $ 297 $ — $ 297 Trade accounts payable 205 8 264,365 — 264,578 Accrued liabilities 20,669 65,246 457,333 — 543,248 Income taxes payable — — 13,811 — 13,811 Total current liabilities 20,874 65,254 735,806 — 821,934 Long-term debt — 3,796,550 — (218,215) 3,578,335 Other long-term liabilities — 22,659 499,797 — 522,456 Deferred income taxes — — 452,544 (443,049) 9,495 Intercompany payable 46,000 1,439,390 — (1,485,390) — Total liabilities 66,874 5,323,853 1,688,147 (2,146,654) 4,932,220 Shareholders’ equity 3,247,025 (17,502) 9,102,276 (9,084,774) 3,247,025 Noncontrolling interest — — 7,770 — 7,770 Total equity 3,247,025 (17,502) 9,110,046 (9,084,774) 3,254,795 Total liabilities and equity $ 3,313,899 $ 5,306,351 $ 10,798,193 $ (11,231,428) $ 8,187,015 |
Condensed Consolidating Statements of Income (Loss) | Condensed Consolidating Statements of Income (Loss) Three Months Ended September 30, 2017 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Revenues and other income: Operating revenues $ — $ — $ 662,103 $ — $ 662,103 Earnings (losses) from unconsolidated affiliates — — 4 — 4 Earnings (losses) from consolidated affiliates (144,837) (31,085) (66,846) 242,768 — Investment income (loss) 1 (1) 3,353 (2,980) 373 Total revenues and other income (144,836) (31,086) 598,614 239,788 662,480 Operating income (loss) Costs and other deductions: Direct costs — — 441,263 — 441,263 General and administrative expenses 3,705 243 61,552 (490) 65,010 Research and engineering — — 12,960 — 12,960 Depreciation and amortization — 31 217,044 — 217,075 Interest expense — 56,429 (1,822) — 54,607 Other, net (9) 60 5,018 490 5,559 Total costs and other deductions 3,696 56,763 736,015 — 796,474 Income (loss) from continuing operations before income taxes (148,532) (87,849) (137,401) 239,788 (133,994) Income tax expense (benefit) — (21,003) 6,294 — (14,709) Income (loss) from continuing operations, net of tax (148,532) (66,846) (143,695) 239,788 (119,285) Income (loss) from discontinued operations, net of tax — — (27,134) — (27,134) Net income (loss) (148,532) (66,846) (170,829) 239,788 (146,419) Less: Net (income) loss attributable to noncontrolling interest — — (2,113) — (2,113) Net income (loss) attributable to Nabors $ (148,532) $ (66,846) $ (172,942) $ 239,788 $ (148,532) Condensed Consolidating Statements of Income (Loss) Three Months Ended September 30, 2016 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Revenues and other income: Operating revenues $ — $ — $ 519,729 $ — $ 519,729 Earnings (losses) from unconsolidated affiliates — — 2 — 2 Earnings (losses) from consolidated affiliates (107,229) (45,527) (77,423) 230,179 — Investment income (loss) — — 3,291 (2,981) 310 Intercompany interest income (loss) (9) 162 — (153) — Total revenues and other income (107,238) (45,365) 445,599 227,045 520,041 Costs and other deductions: Direct costs — — 306,436 — 306,436 General and administrative expenses 3,053 182 53,010 (167) 56,078 Research and engineering — — 8,476 — 8,476 Depreciation and amortization — 31 220,682 — 220,713 Interest expense — 50,595 (3,759) — 46,836 Other, net 929 (18) 9,314 167 10,392 Intercompany interest expense (9) — 162 (153) — Total costs and other deductions 3,973 50,790 594,321 (153) 648,931 Income (loss) from continuing operations before income taxes (111,211) (96,155) (148,722) 227,198 (128,890) Income tax expense (benefit) — (18,732) (12,319) — (31,051) Income (loss) from continuing operations, net of tax (111,211) (77,423) (136,403) 227,198 (97,839) Income (loss) from discontinued operations, net of tax — — (12,187) — (12,187) Net income (loss) (111,211) (77,423) (148,590) 227,198 (110,026) Less: Net (income) loss attributable to noncontrolling interest — — (1,185) — (1,185) Net income (loss) attributable to Nabors $ (111,211) $ (77,423) $ (149,775) $ 227,198 $ (111,211) Condensed Consolidating Statements of Income (Loss) Nine Months Ended September 30, 2017 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Revenues and other income: Operating revenues $ — $ — $ 1,856,008 $ — $ 1,856,008 Earnings (losses) from unconsolidated affiliates — — 6 — 6 Earnings (losses) from consolidated affiliates (420,300) (102,067) (223,862) 746,229 — Investment income (loss) 16 63 9,069 (8,940) 208 Total revenues and other income (420,284) (102,004) 1,641,221 737,289 1,856,222 Costs and other deductions: Direct costs — — 1,246,428 — 1,246,428 General and administrative expenses 10,362 573 182,173 (994) 192,114 Research and engineering — — 36,060 — 36,060 Depreciation and amortization — 93 628,744 — 628,837 Interest expense — 173,689 (7,876) — 165,813 Other, net (170) 19,033 9,316 994 29,173 Intercompany interest expense (9) — 9 — — Total costs and other deductions 10,183 193,388 2,094,854 — 2,298,425 Income (loss) from continuing operations before income taxes (430,467) (295,392) (453,633) 737,289 (442,203) Income tax expense (benefit) — (71,530) 11,716 — (59,814) Income (loss) from continuing operations, net of tax (430,467) (223,862) (465,349) 737,289 (382,389) Income (loss) from discontinued operations, net of tax — — (43,077) — (43,077) Net income (loss) (430,467) (223,862) (508,426) 737,289 (425,466) Less: Net (income) loss attributable to noncontrolling interest — — (5,001) — (5,001) Net income (loss) attributable to Nabors $ (430,467) $ (223,862) $ (513,427) $ 737,289 $ (430,467) Condensed Consolidating Statements of Income (Loss) Nine Months Ended September 30, 2016 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Revenues and other income: Operating revenues $ — $ — $ 1,688,891 $ — $ 1,688,891 Earnings (losses) from unconsolidated affiliates — — (221,918) — (221,918) Earnings (losses) from consolidated affiliates (685,148) (168,639) (264,583) 1,118,370 — Investment income (loss) 1 132 9,733 (8,943) 923 Intercompany interest income (loss) — 417 — (417) — Total revenues and other income (685,147) (168,090) 1,212,123 1,109,010 1,467,896 Costs and other deductions: Direct costs — — 1,012,738 — 1,012,738 General and administrative expenses 7,767 448 167,302 (481) 175,036 Research and engineering — — 24,818 — 24,818 Depreciation and amortization — 93 655,351 — 655,444 Interest expense — 152,318 (14,515) — 137,803 Other, net 1,245 (18) 265,695 481 267,403 Intercompany interest expense (4) — 421 (417) — Total costs and other deductions 9,008 152,841 2,111,810 (417) 2,273,242 Income (loss) from continuing operations before income taxes (694,155) (320,931) (899,687) 1,109,427 (805,346) Income tax expense (benefit) — (56,348) (67,950) — (124,298) Income (loss) from continuing operations, net of tax (694,155) (264,583) (831,737) 1,109,427 (681,048) Income (loss) from discontinued operations, net of tax — — (14,097) — (14,097) Net income (loss) (694,155) (264,583) (845,834) 1,109,427 (695,145) Less: Net (income) loss attributable to noncontrolling interest — — 990 — 990 Net income (loss) attributable to Nabors $ (694,155) $ (264,583) $ (844,844) $ 1,109,427 $ (694,155) |
Condensed Consolidating Statements of Comprehensive Income (Loss) | Condensed Consolidating Statements of Comprehensive Income (Loss) Three Months Ended September 30, 2017 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net income (loss) attributable to Nabors $ (148,532) $ (66,846) $ (172,942) $ 239,788 $ (148,532) Other comprehensive income (loss) before tax: Translation adjustment attributable to Nabors 16,444 — 16,444 (16,444) 16,444 Unrealized gains (losses) on marketable securities: Unrealized gains (losses) on marketable securities (5,706) — (5,706) 5,706 (5,706) Less: reclassification adjustment for (gains) losses included in net income (loss) — — — — — Unrealized gains (losses) on marketable securities (5,706) — (5,706) 5,706 (5,706) Pension liability amortization and adjustment 50 50 100 (150) 50 Unrealized gains (losses) and amortization on cash flow hedges 153 153 153 (306) 153 Other comprehensive income (loss) before tax 10,941 203 10,991 (11,194) 10,941 Income tax expense (benefit) related to items of other comprehensive income (loss) 78 78 156 (234) 78 Other comprehensive income (loss), net of tax 10,863 125 10,835 (10,960) 10,863 Comprehensive income (loss) attributable to Nabors (137,669) (66,721) (162,107) 228,828 (137,669) Net income (loss) attributable to noncontrolling interest — — 2,113 — 2,113 Translation adjustment attributable to noncontrolling interest — — 160 — 160 Comprehensive income (loss) attributable to noncontrolling interest — — 2,273 — 2,273 Comprehensive income (loss) $ (137,669) $ (66,721) $ (159,834) $ 228,828 $ (135,396) Condensed Consolidating Statements of Comprehensive Income (Loss) Three Months Ended September 30, 2016 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net income (loss) attributable to Nabors $ (111,211) $ (77,423) $ (149,775) $ 227,198 $ (111,211) Other comprehensive income (loss) before tax: Translation adjustment attributable to Nabors (8,950) 12 (8,938) 8,926 (8,950) Unrealized gains (losses) on marketable securities: Unrealized gains (losses) on marketable securities 1,502 — 2,782 (2,782) 1,502 Less: reclassification adjustment for (gains) losses included in net income (loss) 3,495 — 3,495 (3,495) 3,495 Unrealized gains (losses) on marketable securities 4,997 — 6,277 (6,277) 4,997 Pension liability amortization and adjustment 297 297 594 (891) 297 Unrealized gains (losses) and amortization on cash flow hedges 153 153 153 (306) 153 Other comprehensive income (loss) before tax (3,503) 462 (1,914) 1,452 (3,503) Income tax expense (benefit) related to items of other comprehensive income (loss) 172 172 284 (456) 172 Other comprehensive income (loss), net of tax (3,675) 290 (2,198) 1,908 (3,675) Comprehensive income (loss) attributable to Nabors (114,886) (77,133) (151,973) 229,106 (114,886) Net income (loss) attributable to noncontrolling interest — — 1,185 — 1,185 Translation adjustment attributable to noncontrolling interest — — (90) — (90) Comprehensive income (loss) attributable to noncontrolling interest — — 1,095 — 1,095 Comprehensive income (loss) $ (114,886) $ (77,133) $ (150,878) $ 229,106 $ (113,791) Condensed Consolidating Statements of Comprehensive Income (Loss) Nine Months Ended September 30, 2017 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net income (loss) attributable to Nabors $ (430,467) $ (223,862) $ (513,427) $ 737,289 $ (430,467) Other comprehensive income (loss) before tax Translation adjustment attributable to Nabors 31,183 — 31,183 (31,183) 31,183 Unrealized gains (losses) on marketable securities: Unrealized gains (losses) on marketable securities (5,122) — (5,122) 5,122 (5,122) Less: reclassification adjustment for (gains) losses included in net income (loss) 1,341 — 1,341 (1,341) 1,341 Unrealized gains (losses) on marketable securities (3,781) — (3,781) 3,781 (3,781) Pension liability amortization and adjustment 150 150 300 (450) 150 Unrealized gains (losses) and amortization on cash flow hedges 459 459 459 (918) 459 Other comprehensive income (loss) before tax 28,011 609 28,161 (28,770) 28,011 Income tax expense (benefit) related to items of other comprehensive income (loss) 235 235 470 (705) 235 Other comprehensive income (loss), net of tax 27,776 374 27,691 (28,065) 27,776 Comprehensive income (loss) attributable to Nabors (402,691) (223,488) (485,736) 709,224 (402,691) Net income (loss) attributable to noncontrolling interest — — 5,001 — 5,001 Translation adjustment attributable to noncontrolling interest — — 317 — 317 Comprehensive income (loss) attributable to noncontrolling interest — — 5,318 — 5,318 Comprehensive income (loss) $ (402,691) $ (223,488) $ (480,418) $ 709,224 $ (397,373) Condensed Consolidating Statements of Comprehensive Income (Loss) Nine Months Ended September 30, 2016 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net income (loss) attributable to Nabors $ (694,155) $ (264,583) $ (844,844) $ 1,109,427 $ (694,155) Other comprehensive income (loss) before tax Translation adjustment attributable to Nabors 27,870 (39) 27,870 (27,831) 27,870 Unrealized gains (losses) on marketable securities: Unrealized gains (losses) on marketable securities 3,551 — 3,551 (3,551) 3,551 Less: reclassification adjustment for (gains) losses included in net income (loss) 3,495 — 3,495 (3,495) 3,495 Unrealized gains (losses) on marketable securities 7,046 — 7,046 (7,046) 7,046 Pension liability amortization and adjustment 765 765 1,530 (2,295) 765 Unrealized gains (losses) and amortization on cash flow hedges 459 459 459 (918) 459 Other comprehensive income (loss) before tax 36,140 1,185 36,905 (38,090) 36,140 Income tax expense (benefit) related to items of other comprehensive income (loss) 472 472 765 (1,237) 472 Other comprehensive income (loss), net of tax 35,668 713 36,140 (36,853) 35,668 Comprehensive income (loss) attributable to Nabors (658,487) (263,870) (808,704) 1,072,574 (658,487) Net income (loss) attributable to noncontrolling interest — — (990) — (990) Translation adjustment attributable to noncontrolling interest — — 371 — 371 Comprehensive income (loss) attributable to noncontrolling interest — — (619) — (619) Comprehensive income (loss) $ (658,487) $ (263,870) $ (809,323) $ 1,072,574 $ (659,106) |
Condensed Consolidating Statements of Cash Flows | Nine Months Ended September 30, 2016 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net income (loss) attributable to Nabors $ (694,155) $ (264,583) $ (844,844) $ 1,109,427 $ (694,155) Other comprehensive income (loss) before tax Translation adjustment attributable to Nabors 27,870 (39) 27,870 (27,831) 27,870 Unrealized gains (losses) on marketable securities: Unrealized gains (losses) on marketable securities 3,551 — 3,551 (3,551) 3,551 Less: reclassification adjustment for (gains) losses included in net income (loss) 3,495 — 3,495 (3,495) 3,495 Unrealized gains (losses) on marketable securities 7,046 — 7,046 (7,046) 7,046 Pension liability amortization and adjustment 765 765 1,530 (2,295) 765 Unrealized gains (losses) and amortization on cash flow hedges 459 459 459 (918) 459 Other comprehensive income (loss) before tax 36,140 1,185 36,905 (38,090) 36,140 Income tax expense (benefit) related to items of other comprehensive income (loss) 472 472 765 (1,237) 472 Other comprehensive income (loss), net of tax 35,668 713 36,140 (36,853) 35,668 Comprehensive income (loss) attributable to Nabors (658,487) (263,870) (808,704) 1,072,574 (658,487) Net income (loss) attributable to noncontrolling interest — — (990) — (990) Translation adjustment attributable to noncontrolling interest — — 371 — 371 Comprehensive income (loss) attributable to noncontrolling interest — — (619) — (619) Comprehensive income (loss) $ (658,487) $ (263,870) $ (809,323) $ 1,072,574 $ (659,106) Condensed Consolidating Statements Cash Flows Nine Months Ended September 30, 2017 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net cash provided by (used for) operating activities $ 103,187 $ (199,071) $ 148,714 $ (88,939) $ (36,109) Cash flows from investing activities: Purchases of investments — — (6,722) — (6,722) Sales and maturities of investments — — 12,533 — 12,533 Cash paid for acquisitions of businesses, net — — (50,764) — (50,764) Cash paid for investments in consolidated affiliates (100) — (75,960) 76,060 — Capital expenditures — — (448,864) — (448,864) Proceeds from sales of assets and insurance claims — — 32,805 — 32,805 Change in intercompany balances — (424,133) 424,133 — — Other changes in investing — — (427) — (427) Net cash provided by (used for) investing activities (100) (424,133) (113,266) 76,060 (461,439) Cash flows from financing activities: Increase (decrease) in cash overdrafts — — (78) — (78) Proceeds from issuance of long-term debt — 411,200 — — 411,200 Debt issuance costs — (11,039) — — (11,039) Proceeds from revolving credit facilities — 410,000 — — 410,000 Proceeds from parent contributions — 37,980 38,080 (76,060) — Proceeds from (payments for) issuance of common shares 8,300 — — — 8,300 Purchase of capped call hedge transactions — (40,250) — — (40,250) Reduction of long-term debt — (270,269) (112,546) — (382,815) Dividends to shareholders (60,285) — — 8,939 (51,346) Proceeds from (payment for) commercial paper, net — 78,000 — — 78,000 Payments on term loan — (162,500) — — (162,500) Proceeds from (payments for) short-term borrowings — — (528) — (528) Cash proceeds from equity component of exchangeable debt — 159,952 — — 159,952 Proceeds from issuance of intercompany debt 35,000 20,000 (55,000) — — Noncontrolling interest contribution — — 20,000 — 20,000 Paydown of intercompany debt (79,000) (20,000) 99,000 — — Distributions to Non-controlling interest — — (7,272) — (7,272) Distribution from subsidiary to parent — — (80,000) 80,000 — Other changes (7,864) — — — (7,864) Net cash (used for) provided by financing activities (103,849) 613,074 (98,344) 12,879 423,760 Effect of exchange rate changes on cash and cash equivalents — — 251 — 251 Net increase (decrease) in cash and cash equivalents (762) (10,130) (62,645) — (73,537) Cash and cash equivalents, beginning of period 1,148 10,177 252,768 — 264,093 Cash and cash equivalents, end of period $ 386 $ 47 $ 190,123 $ — $ 190,556 Condensed Consolidating Statements Cash Flows Nine Months Ended September 30, 2016 Nabors Other Nabors Delaware Subsidiaries (Parent/ (Issuer/ (Non- Consolidating Guarantor) Guarantor) Guarantors) Adjustments Total (In thousands) Net cash provided by (used for) operating activities $ 18,320 $ (276,655) $ 669,063 $ (5,960) $ 404,768 Cash flows from investing activities: Purchases of investments — — (24) — (24) Sales and maturities of investments — — 643 — 643 Proceeds from sales of assets and insurance claims — — 26,597 — 26,597 Cash paid for investments in consolidated affiliates — (86,459) (159,000) 245,459 — Capital expenditures — — (284,950) — (284,950) Change in intercompany balances — 239,112 (239,112) — — Other — — (19) — (19) Net cash provided by (used for) investing activities — 152,653 (655,865) 245,459 (257,753) Cash flows from financing activities: Increase (decrease) in cash overdrafts — — 5 — 5 Proceeds from (payments for) issuance of common shares 562 — — — 562 Reduction in long-term debt — (350,000) (142,625) — (492,625) Dividends to shareholders (39,887) — — 5,960 (33,927) Proceeds from (payments for) commercial paper, net — 15,000 — — 15,000 Proceeds from issuance of intercompany debt 25,500 — (25,500) — — Proceeds from revolving credit facilities — 560,000 — — 560,000 Reduction in revolving credit facilities — (260,000) — — (260,000) Repurchase of common shares — — (1,687) — (1,687) Proceeds from (payments for) short-term borrowings — — (6,388) — (6,388) Proceeds from parent contributions — 159,000 86,459 (245,459) — Other changes (4,313) — — — (4,313) Net cash (used for) provided by financing activities (18,138) 124,000 (89,736) (239,499) (223,373) Effect of exchange rate changes on cash and cash equivalents — — (1,129) — (1,129) Net increase (decrease) in cash and cash equivalents 182 (2) (77,667) — (77,487) Cash and cash equivalents, beginning of period 873 10 253,647 — 254,530 Cash and cash equivalents, end of period $ 1,055 $ 8 $ 175,980 $ — $ 177,043 |
Nature of Operations (Details)
Nature of Operations (Details) | 9 Months Ended |
Sep. 30, 2017segmentcountyitem | |
Nature of Operations | |
Actively marketed rigs for land based drilling operations | 405 |
Number of countries company has actively marketed rigs for land based drilling operations | county | 20 |
Actively marketed rigs for offshore based drilling operations | 40 |
Number of Operating Segments | segment | 4 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
May 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Inventory, net | |||
Raw materials | $ 89,127 | $ 84,431 | |
Work-in-progress | 15,630 | 1,204 | |
Finished goods | 14,293 | 17,960 | |
Total inventory | 119,050 | 103,595 | |
Cash contribution for joint venture | $ 20,000 | ||
Accounting Standards Update 2016-09 | |||
Inventory, net | |||
Decrease in deferred tax liabilities | 7,100 | ||
Decrease in capital in excess | 1,900 | ||
Accounting Standards Update 2016-09 | Reclassification | |||
Inventory, net | |||
Increase in retained earnings | 7,100 | ||
Accrued liabilities | |||
Inventory, net | |||
Deferred Revenue | 241,800 | 255,600 | |
Other long-term liabilities | |||
Inventory, net | |||
Deferred Revenue | 167,800 | 321,000 | |
Other current assets | |||
Inventory, net | |||
Deferred expenses | 66,600 | 63,400 | |
Other long term assets | |||
Inventory, net | |||
Deferred expenses | $ 41,700 | $ 69,500 | |
Saudi Aramco | |||
Inventory, net | |||
Cash contribution for joint venture | 20,000 | ||
Joint Venture in Saudi Arabia | |||
Inventory, net | |||
Cash contribution for joint venture | $ 40,000 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Sep. 05, 2017 | Aug. 13, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Acquisitions | ||||
Goodwill | $ 173,321 | $ 166,917 | ||
Stavanger Based Robotic Drilling Systems AS | ||||
Acquisitions | ||||
Cash paid for acquisitions of businesses | $ 50,900 | |||
Recorded intangible assets | 53,300 | |||
Goodwill | 5,700 | |||
Other liabilities | $ 7,300 | |||
Common Shares | Tesco Corporation | ||||
Acquisitions | ||||
Number of shares exchanged per common stock of acquiree | 0.68 | |||
Number of common shares to be issued | 32,000,000 |
Investments in Unconsolidated36
Investments in Unconsolidated Affiliates (Details) - USD ($) $ in Thousands, shares in Millions | Mar. 24, 2015 | Sep. 30, 2016 | Sep. 30, 2016 |
Investments in Unconsolidated Affiliates | |||
Other-than-temporary impairment of equity security (2) | $ 3,495 | $ 3,495 | |
C&J Energy Services, Ltd. | |||
Investments in Unconsolidated Affiliates | |||
Cash consideration in merger | $ 693,500 | ||
Cash proceeds from merger after working capital requirements | $ 650,000 | ||
Common shares held in merged entity | 62.5 | ||
Percentage of outstanding and issued common shares held | 53.00% | ||
Net income (loss) | 221,900 | ||
Other-than-temporary impairment of equity security (2) | $ 192,400 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Amount of transfers of financial assets between Level 1 and Level 2 measures | $ 0 |
Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Short term investments | 23,600 |
Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Short term investments | $ 6,200 |
Fair Value Measurements - Debt
Fair Value Measurements - Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value of Financial Instruments | ||
Less: deferred financing costs | $ 29,782 | $ 26,049 |
Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | 3,988,593 | 3,604,681 |
Less: deferred financing costs | 29,782 | 26,049 |
Debt, net of financing costs | 3,958,811 | 3,578,632 |
Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 4,056,616 | 3,739,129 |
6.15% senior notes due February 2018 | ||
Fair Value of Financial Instruments | ||
Interest rate on senior notes due (as a percent) | 6.15% | |
6.15% senior notes due February 2018 | Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 460,537 | 827,539 |
6.15% senior notes due February 2018 | Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 467,620 | 865,300 |
9.25% senior notes due January 2019 | ||
Fair Value of Financial Instruments | ||
Interest rate on senior notes due (as a percent) | 9.25% | |
9.25% senior notes due January 2019 | Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 303,489 | 303,489 |
9.25% senior notes due January 2019 | Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 327,902 | 337,443 |
5.00% senior notes due September 2020 | ||
Fair Value of Financial Instruments | ||
Interest rate on senior notes due (as a percent) | 5.00% | |
5.00% senior notes due September 2020 | Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 669,769 | 669,540 |
5.00% senior notes due September 2020 | Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 685,622 | 689,211 |
4.625% senior notes due September 2021 | ||
Fair Value of Financial Instruments | ||
Interest rate on senior notes due (as a percent) | 4.625% | |
4.625% senior notes due September 2021 | Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 695,048 | 694,868 |
4.625% senior notes due September 2021 | Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 686,096 | 708,765 |
5.50% senior notes due January 2023 | ||
Fair Value of Financial Instruments | ||
Interest rate on senior notes due (as a percent) | 5.50% | |
5.50% senior notes due January 2023 | Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 600,000 | 600,000 |
5.50% senior notes due January 2023 | Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 598,242 | 627,000 |
5.10% senior notes due September 2023 | ||
Fair Value of Financial Instruments | ||
Interest rate on senior notes due (as a percent) | 5.10% | |
5.10% senior notes due September 2023 | Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 346,544 | 346,448 |
5.10% senior notes due September 2023 | Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 333,680 | 348,613 |
0.75% senior exchangeable notes due January 2024 | ||
Fair Value of Financial Instruments | ||
Interest rate on senior notes due (as a percent) | 0.75% | |
0.75% senior exchangeable notes due January 2024 | Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 425,010 | |
0.75% senior exchangeable notes due January 2024 | Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | 469,258 | |
Term Loan Facility | Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | 162,500 | |
Term Loan Facility | Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | 162,500 | |
Revolving Credit Facility | ||
Fair Value of Financial Instruments | ||
Carrying Value | 410,000 | |
Revolving Credit Facility | Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | 410,000 | |
Revolving Credit Facility | Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | 410,000 | |
Commercial paper | ||
Fair Value of Financial Instruments | ||
Carrying Value | 78,000 | |
Commercial paper | Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | 78,000 | |
Commercial paper | Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | 78,000 | |
Other | Carrying Value | ||
Fair Value of Financial Instruments | ||
Debt | 196 | 297 |
Other | Fair Value | ||
Fair Value of Financial Instruments | ||
Debt | $ 196 | $ 297 |
Debt (Details)
Debt (Details) | Sep. 29, 2015USD ($) | Jan. 31, 2017USD ($)$ / shares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Long-term debt | ||||||
Other | $ 196,000 | $ 196,000 | $ 297,000 | |||
Long-term Debt | 3,988,593,000 | 3,988,593,000 | 3,604,681,000 | |||
Less: current portion | 196,000 | 196,000 | 297,000 | |||
Less: deferred financing costs | 29,782,000 | 29,782,000 | 26,049,000 | |||
Long-term Debt, Excluding Current Maturities, Total | 3,958,615,000 | 3,958,615,000 | 3,578,335,000 | |||
Reduction in long-term debt | 382,815,000 | $ 492,625,000 | ||||
Senior Notes. | ||||||
Long-term debt | ||||||
Reduction in long-term debt | 387,300,000 | |||||
Payment of debt accrued interest | 5,600,000 | 5,600,000 | ||||
Consolidated affiliate | Senior Notes. | ||||||
Long-term debt | ||||||
Principal amount redeemed | 367,900,000 | 367,900,000 | ||||
6.15% senior notes due February 2018 | ||||||
Long-term debt | ||||||
Senior Notes | $ 460,537,000 | $ 460,537,000 | 827,539,000 | |||
Interest rate on senior notes due (as a percent) | 6.15% | 6.15% | ||||
9.25% senior notes due January 2019 | ||||||
Long-term debt | ||||||
Senior Notes | $ 303,489,000 | $ 303,489,000 | 303,489,000 | |||
Interest rate on senior notes due (as a percent) | 9.25% | 9.25% | ||||
5.00% senior notes due September 2020 | ||||||
Long-term debt | ||||||
Senior Notes | $ 669,769,000 | $ 669,769,000 | 669,540,000 | |||
Interest rate on senior notes due (as a percent) | 5.00% | 5.00% | ||||
4.625% senior notes due September 2021 | ||||||
Long-term debt | ||||||
Senior Notes | $ 695,048,000 | $ 695,048,000 | 694,868,000 | |||
Interest rate on senior notes due (as a percent) | 4.625% | 4.625% | ||||
5.50% senior notes due January 2023 | ||||||
Long-term debt | ||||||
Senior Notes | $ 600,000,000 | $ 600,000,000 | 600,000,000 | |||
Interest rate on senior notes due (as a percent) | 5.50% | 5.50% | ||||
5.10% senior notes due September 2023 | ||||||
Long-term debt | ||||||
Senior Notes | $ 346,544,000 | $ 346,544,000 | 346,448,000 | |||
Interest rate on senior notes due (as a percent) | 5.10% | 5.10% | ||||
0.75% senior exchangeable notes due January 2024 | ||||||
Long-term debt | ||||||
Senior Notes | $ 425,010,000 | $ 425,010,000 | ||||
Less: deferred financing costs | $ 9,600,000 | |||||
Interest rate on senior notes due (as a percent) | 0.75% | 0.75% | ||||
Aggregate amount of senior notes | 575,000,000 | $ 575,000,000 | $ 575,000,000 | |||
Debt exchangeable notes | $ 411,200,000 | |||||
Equity component | $ 163,800,000 | |||||
Equity issuance costs | $ 3,900,000 | |||||
Exchange rate of common shares | 39.75 | |||||
Principal amount of notes | $ 1,000,000 | |||||
Exchange price per common share (in dollars per share) | $ / shares | $ 25.16 | |||||
Share price of shares purchased (in dollars per share) | $ / shares | $ 17.97 | |||||
Premium over share price (as a percent) | 75.00% | |||||
Prepayment of loan upon closing the merger | $ 162,500,000 | |||||
0.75% senior exchangeable notes due January 2024 | Minimum | ||||||
Long-term debt | ||||||
Share issued price (in dollars per share) | $ / shares | $ 25.16 | $ 25.16 | ||||
0.75% senior exchangeable notes due January 2024 | Maximum | ||||||
Long-term debt | ||||||
Exchange price per common share (in dollars per share) | $ / shares | $ 31.45 | $ 31.45 | ||||
Term Loan Facility | ||||||
Long-term debt | ||||||
Senior Notes | $ 162,500,000 | |||||
Five-year term loan facility | ||||||
Long-term debt | ||||||
Maximum borrowing capacity | $ 325,000,000 | |||||
Unsecured debt maturity period | 5 years | |||||
Prepayment of loan upon closing the merger | $ 162,500,000 | |||||
Revolving Credit Facility | ||||||
Long-term debt | ||||||
Revolving credit facility | $ 410,000,000 | $ 410,000,000 | ||||
Amount outstanding | $ 410,000,000 | $ 410,000,000 | ||||
Weighted average interest rate (as a percent) | 2.59% | 2.59% | ||||
Maximum borrowing capacity | $ 2,250,000,000 | $ 2,250,000,000 | ||||
Debt to capital ratio | 0.60 | 0.60 | ||||
Commercial paper | ||||||
Long-term debt | ||||||
Long-term Debt | $ 78,000,000 | $ 78,000,000 | ||||
Amount outstanding | $ 78,000,000 | $ 78,000,000 | ||||
Weighted average interest rate (as a percent) | 1.83% | 1.83% | ||||
Commercial paper | Minimum | ||||||
Long-term debt | ||||||
Remaining period to maturity | 1 year |
Common Shares (Details)
Common Shares (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Oct. 03, 2017 | Jul. 28, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Common Shares | ||||||
Shares repurchased | 0.3 | |||||
Repurchase of treasury shares | $ 1,687 | |||||
Dividends paid | $ 51,460 | $ 50,926 | ||||
Common shares | ||||||
Common stock dividend declared (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.18 | $ 0.18 | |
Cash dividends paid | $ 17,200 | $ 51,346 | $ 33,927 |
Commitments and Contingencies -
Commitments and Contingencies - Self Insurance Disclosures (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Self-Insurance disclosures | |
Employer's liability claims subject to per-occurrence deductible | $ 3 |
Workers automobile claims | 2.5 |
General liability claims subject to per-occurrence deductible | 5 |
Deductions in land rigs and for offshore rigs | 5 |
Latin American tax authority | Minimum | |
Income tax | |
Aggregate remaining amounts assessed or expected to assessed range | 3 |
Latin American tax authority | Maximum | |
Income tax | |
Aggregate remaining amounts assessed or expected to assessed range | $ 8 |
Commitments and Contingencies42
Commitments and Contingencies - Litigation (Details) $ in Thousands | Dec. 28, 2016USD ($) | Dec. 31, 2006USD ($) | Mar. 31, 2011USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Mar. 19, 2012USD ($) |
Commitments and Contingencies, Disclosure | |||||||||
Litigation amount as per judgment | $ 16,500 | ||||||||
Pretax settlement charge | $ (2,387) | $ 2,327 | $ (777) | $ 2,651 | |||||
Court of Ouargla Foreign Currency Controls | |||||||||
Commitments and Contingencies, Disclosure | |||||||||
Litigation amount as per judgment | $ 25,000 | ||||||||
Payment of contract amount in foreign currency | $ 7,500 | ||||||||
Payment of contract amount in domestic currency | $ 3,200 | ||||||||
Approximate multiplier of the amount at issue for fines and penalties | 4 | ||||||||
Court of Ouargla Foreign Currency Controls | Maximum | |||||||||
Commitments and Contingencies, Disclosure | |||||||||
Potential judgment in excess of accrual | $ 17,000 | ||||||||
NGH2L | |||||||||
Commitments and Contingencies, Disclosure | |||||||||
Pretax settlement charge | $ 16,500 | 16,500 | |||||||
Escrow Deposit | $ 3,000 | ||||||||
NGH2L | ERG Member | |||||||||
Commitments and Contingencies, Disclosure | |||||||||
Payments for settlement | $ 20,000 | ||||||||
NGH2L | ERG Member | Parax | |||||||||
Commitments and Contingencies, Disclosure | |||||||||
Monetary damages sought based on alleged breach of contract by NGH2L and alleged tortious interference with contractual relations by Parex | $ 15,000 | ||||||||
NGH2L | ERG Member | Maximum | |||||||||
Commitments and Contingencies, Disclosure | |||||||||
Potential recovery | $ 4,500 | ||||||||
Monetary damages sought based on alleged breach of contract by NGH2L and alleged tortious interference with contractual relations by Parex | $ 750,000 |
Commitments and Contingencies43
Commitments and Contingencies - Financial Guarantees (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Summary of total maximum amount of financial guarantees issued | |
2,017 | $ 98,050 |
2,018 | 165,311 |
Total | $ 263,361 |
Earnings (Losses) Per Share (De
Earnings (Losses) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jan. 31, 2017 | |
Net income (loss) (numerator): | |||||
Income (loss) from continuing operations, net of tax | $ (119,285) | $ (97,839) | $ (382,389) | $ (681,048) | |
Less: net (income) loss attributable to noncontrolling interest | (2,113) | (1,185) | (5,001) | 990 | |
Less: (earnings) losses allocated to unvested shareholders | 3,463 | 2,698 | 10,580 | 14,683 | |
Adjusted income (loss) from continuing operations, net of tax - basic | (117,935) | (96,326) | (376,810) | (665,375) | |
Income (loss) from discontinued operations, net of tax | $ (27,134) | $ (12,187) | $ (43,077) | $ (14,097) | |
Weighted-average number of shares outstanding - basic | 279,313 | 276,707 | 278,670 | 276,369 | |
Earnings (losses) Per Share - Basic | |||||
Basic from continuing operations (in dollars per share) | $ (0.42) | $ (0.35) | $ (1.35) | $ (2.41) | |
Basic from discontinued operations (in dollars per share) | (0.10) | (0.04) | (0.16) | (0.05) | |
Total Basic (in dollars per share) | $ (0.52) | $ (0.39) | $ (1.51) | $ (2.46) | |
DILUTED EPS: | |||||
Adjusted income (loss) from continuing operations, net of tax - basic | $ (117,935) | $ (96,326) | $ (376,810) | $ (665,375) | |
Adjusted income (loss) from continuing operations, net of tax - diluted | (117,935) | (96,326) | (376,810) | (665,375) | |
Income (loss) from discontinued operations, net of tax | $ (27,134) | $ (12,187) | $ (43,077) | $ (14,097) | |
Weighted-average number of shares outstanding - basic | 279,313 | 276,707 | 278,670 | 276,369 | |
Weighted-average number of shares outstanding - diluted | 279,313 | 276,707 | 278,670 | 276,369 | |
Earnings (losses) per share: | |||||
Diluted from continuing operations (in dollars per share) | $ (0.42) | $ (0.35) | $ (1.35) | $ (2.41) | |
Diluted from discontinued operations (in dollars per share) | (0.10) | (0.04) | (0.16) | (0.05) | |
Total Diluted (in dollars per share) | $ (0.52) | $ (0.39) | $ (1.51) | $ (2.46) | |
0.75% senior exchangeable notes due January 2024 | |||||
Earnings (losses) per share: | |||||
Aggregate amount of senior notes | $ 575,000 | $ 575,000 | $ 575,000 | ||
Interest rate on senior notes due (as a percent) | 0.75% | 0.75% | |||
0.75% senior exchangeable notes due January 2024 | Minimum | |||||
Earnings (losses) per share: | |||||
Share issued price (in dollars per share) | $ 25.16 | $ 25.16 |
Earnings (Losses) Per Share - E
Earnings (Losses) Per Share - Exclusions from Diluted Earnings (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings (Losses) Per Share | ||||
Potentially dilutive securities excluded as anti-dilutive | 4,484 | 5,369 | 4,534 | 5,388 |
Supplemental Balance Sheet, I46
Supplemental Balance Sheet, Income Statement and Cash Flow Information - Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accrued liabilities | ||
Accrued compensation | $ 112,277 | $ 116,775 |
Deferred revenue | 241,812 | 255,626 |
Other taxes payable | 25,306 | 16,419 |
Workers' compensation liabilities | 18,255 | 18,255 |
Interest payable | 21,187 | 57,233 |
Litigation reserves | 19,675 | 24,896 |
Current liability to discontinued operations | 6,063 | 5,462 |
Dividends declared and payable | 17,153 | 17,039 |
Other accrued liabilities | 23,619 | 31,543 |
Accrued liabilities | $ 485,347 | $ 543,248 |
Supplemental Balance Sheet, I47
Supplemental Balance Sheet, Income Statement and Cash Flow Information - Other Expense (Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other expense (income) | ||||
Losses (gains) on sales, disposals and involuntary conversions of long-lived assets | $ 10,009 | $ 6,546 | $ 10,142 | $ 40,527 |
Other-than-temporary impairment of equity security (2) | 3,495 | 3,495 | ||
Provision for International operations (4) | 1,128 | 1,128 | ||
Litigation expenses | (2,387) | 2,327 | (777) | 2,651 |
Foreign currency transaction losses (gains) | (763) | (1,102) | 1,727 | 5,916 |
(Gain) loss on debt buyback | 69 | (680) | 16,013 | (6,707) |
Other losses (gains) | (1,369) | (1,322) | 2,068 | 276 |
Other expense (income) | $ 5,559 | $ 10,392 | $ 29,173 | 267,403 |
Charges to reserve for amounts associated with retained interest in properties | 22,400 | |||
Jack Up Rigs | ||||
Other expense (income) | ||||
Impairment of long-lived assets | 3,800 | |||
C&J Energy Services, Ltd. | ||||
Other expense (income) | ||||
Other-than-temporary impairment of equity security (2) | 192,400 | |||
Charges related to our CJES holdings (3) | $ (220,117) |
Supplemental Balance Sheet, I48
Supplemental Balance Sheet, Income Statement and Cash Flow Information - Accumulated Other Comp Inc (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Changes in accumulated other comprehensive income (loss) | ||||
Balance at the beginning of the period | $ 3,247,025 | |||
Other comprehensive income (loss), net of tax | $ 10,863 | $ (3,675) | 27,776 | $ 35,668 |
Balance at the end of the period | 2,901,405 | 2,901,405 | ||
Accumulated Other Comprehensive Income | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Balance at the beginning of the period | (12,119) | (47,593) | ||
Other comprehensive income (loss) before reclassifications, net of tax | 26,061 | 31,421 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 1,715 | 4,247 | ||
Other comprehensive income (loss), net of tax | 27,776 | 35,668 | ||
Balance at the end of the period | 15,657 | (11,925) | 15,657 | (11,925) |
Gains (losses) on cash flow hedges | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Balance at the beginning of the period | (1,296) | (1,670) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 281 | 472 | ||
Other comprehensive income (loss), net of tax | 281 | 472 | ||
Balance at the end of the period | (1,015) | (1,198) | (1,015) | (1,198) |
Unrealized gains (losses) on available-for-sale securities. | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Balance at the beginning of the period | 14,235 | (314) | ||
Other comprehensive income (loss) before reclassifications, net of tax | (5,122) | 3,551 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 1,341 | 3,495 | ||
Other comprehensive income (loss), net of tax | (3,781) | 7,046 | ||
Balance at the end of the period | 10,454 | 6,732 | 10,454 | 6,732 |
Defined benefit pension plan items | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Balance at the beginning of the period | (3,760) | (6,568) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 93 | 280 | ||
Other comprehensive income (loss), net of tax | 93 | 280 | ||
Balance at the end of the period | (3,667) | (6,288) | (3,667) | (6,288) |
Foreign currency items | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Balance at the beginning of the period | (21,298) | (39,041) | ||
Other comprehensive income (loss) before reclassifications, net of tax | 31,183 | 27,870 | ||
Other comprehensive income (loss), net of tax | 31,183 | 27,870 | ||
Balance at the end of the period | $ 9,885 | $ (11,171) | $ 9,885 | $ (11,171) |
Supplemental Balance Sheet, I49
Supplemental Balance Sheet, Income Statement and Cash Flow Information - Reclass Accumulated Other (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Unrealized (gains) losses on available-for-sale securities that were reclassified from net income | ||||
Interest expense | $ 54,607 | $ 46,836 | $ 165,813 | $ 137,803 |
General and administrative expenses | 65,010 | 56,078 | 192,114 | 175,036 |
Other expense (income), net | 5,559 | 10,392 | 29,173 | 267,403 |
Income (loss) from continuing operations before income taxes | (133,994) | (128,890) | (442,203) | (805,346) |
Tax expense (benefit) | 14,709 | 31,051 | 59,814 | 124,298 |
Net income (loss) | (146,419) | (110,026) | (425,466) | (695,145) |
Reclassification adjustment for (gains)/losses included in net income (loss) | ||||
Unrealized (gains) losses on available-for-sale securities that were reclassified from net income | ||||
Interest expense | 153 | 153 | 459 | 459 |
General and administrative expenses | 50 | 297 | 150 | 765 |
Other expense (income), net | 3,495 | 1,341 | 3,495 | |
Income (loss) from continuing operations before income taxes | (203) | (3,945) | (1,950) | (4,719) |
Tax expense (benefit) | 78 | 172 | 235 | 472 |
Net income (loss) | $ (125) | $ (3,773) | $ (1,715) | $ (4,247) |
Assets Held-for-Sale and Discon
Assets Held-for-Sale and Discontinued Operations (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets held-for-sale | ||
Assets held for sale | $ 37,275 | $ 76,668 |
Oil and Gas | Assets Held-for-sale | ||
Assets held-for-sale | ||
Assets held for sale | $ 26,100 | $ 65,000 |
Assets Held-for-Sale and Disc51
Assets Held-for-Sale and Discontinued Operations Disc Ops (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Income (loss) from discontinued operations | |||||
Income (loss) from Oil and Gas discontinued operations, net of tax | $ (27,134) | $ (12,187) | $ (43,077) | $ (14,097) | |
Litigation amount as per judgment | 16,500 | ||||
Gas transport and processing | |||||
Contracts for gas transport and processing | |||||
Contractual Obligation | 13,000 | 13,000 | $ 17,200 | ||
Gas transport and processing | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Contracts for gas transport and processing | |||||
Recorded contractual commitments | 9,900 | 12,500 | |||
Gas transport and processing | Disposal Group, Held-for-sale, Not Discontinued Operations | Accrued liabilities | |||||
Contracts for gas transport and processing | |||||
Recorded contractual commitments | 6,100 | $ 5,500 | |||
Oil and Gas | |||||
Income (loss) from discontinued operations | |||||
Impairment charge | 35,300 | 15,400 | 35,300 | 15,400 | |
Oil and Gas | Discontinued Operations, Held-for-sale or Disposed of by Sale | |||||
Income (loss) from discontinued operations | |||||
Operating revenues | 1,077 | 688 | 5,171 | 1,449 | |
Income (loss) from discontinued operations | (991) | (836) | (1,561) | (3,501) | |
Less: Impairment charges or other (gains) and losses on sale of wholly owned assets (2) | 34,469 | 15,392 | 51,028 | 15,388 | |
Less: Income tax expense (benefit) | (8,326) | (4,041) | (9,512) | (4,792) | |
Income (loss) from Oil and Gas discontinued operations, net of tax | $ (27,134) | $ (12,187) | $ (43,077) | $ (14,097) |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Operating revenues and earnings (losses) from unconsolidated affiliates: | |||||
Operating revenues | $ 662,103 | $ 519,729 | $ 1,856,008 | $ 1,688,891 | |
Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: | |||||
Adjusted income (loss) derived from operating activities | (33,385) | (38,374) | (123,900) | (81,940) | |
Earnings (losses) from unconsolidated affiliates | 4 | 2 | 6 | (221,918) | |
Investment income (loss) | 373 | 310 | 208 | 923 | |
Interest expense | (54,607) | (46,836) | (165,813) | (137,803) | |
Other, net | (5,559) | (10,392) | (29,173) | (267,403) | |
Income (loss) from continuing operations before income taxes | (133,994) | (128,890) | (442,203) | (805,346) | |
ASSETS | |||||
Total assets | 8,088,585 | 8,088,585 | $ 8,187,015 | ||
Operating segment | Drilling and Rig Services | |||||
Operating revenues and earnings (losses) from unconsolidated affiliates: | |||||
Operating revenues | 702,464 | 549,041 | 1,979,687 | 1,757,350 | |
Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: | |||||
Adjusted income (loss) derived from operating activities | (33,385) | (38,374) | (123,900) | (81,940) | |
ASSETS | |||||
Total assets | 7,506,461 | 7,506,461 | 7,461,879 | ||
Operating segment | Drilling and Rig Services | Reportable subsegments | U.S. | |||||
Operating revenues and earnings (losses) from unconsolidated affiliates: | |||||
Operating revenues | 222,747 | 116,095 | 572,025 | 405,113 | |
Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: | |||||
Adjusted income (loss) derived from operating activities | (53,536) | (58,876) | (172,797) | (154,763) | |
ASSETS | |||||
Total assets | 3,288,663 | 3,288,663 | 3,172,767 | ||
Operating segment | Drilling and Rig Services | Reportable subsegments | Canada | |||||
Operating revenues and earnings (losses) from unconsolidated affiliates: | |||||
Operating revenues | 18,073 | 10,444 | 63,002 | 34,555 | |
Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: | |||||
Adjusted income (loss) derived from operating activities | (7,494) | (10,156) | (16,519) | (28,265) | |
ASSETS | |||||
Total assets | 341,114 | 341,114 | 329,620 | ||
Operating segment | Drilling and Rig Services | Reportable subsegments | International | |||||
Operating revenues and earnings (losses) from unconsolidated affiliates: | |||||
Operating revenues | 374,106 | 363,552 | 1,092,667 | 1,165,631 | |
Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: | |||||
Adjusted income (loss) derived from operating activities | 32,316 | 43,595 | 80,464 | 144,326 | |
ASSETS | |||||
Total assets | 3,433,515 | 3,433,515 | 3,600,057 | ||
Operating segment | Drilling and Rig Services | Reportable subsegments | Rig Services | |||||
Operating revenues and earnings (losses) from unconsolidated affiliates: | |||||
Operating revenues | 87,538 | 58,950 | 251,993 | 152,051 | |
Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: | |||||
Adjusted income (loss) derived from operating activities | (4,671) | (12,937) | (15,048) | (43,238) | |
ASSETS | |||||
Total assets | 443,169 | 443,169 | 359,435 | ||
Other reconciling items (1) | |||||
Operating revenues and earnings (losses) from unconsolidated affiliates: | |||||
Operating revenues | (40,361) | (29,312) | (123,679) | (68,459) | |
Other reconciling items (3) | |||||
Reconciliation of segment adjusted operating income (loss) to net income (loss) from continuing operations before income taxes: | |||||
Adjusted income (loss) derived from operating activities | (40,820) | $ (33,600) | (123,531) | $ (97,205) | |
ASSETS | |||||
Total assets | $ 582,124 | $ 582,124 | $ 725,136 |
Condensed Consolidating Finan53
Condensed Consolidating Financial Information - Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 190,556 | $ 264,093 | $ 177,043 | $ 254,530 |
Short-term investments | 29,770 | 31,109 | ||
Accounts receivable, net | 621,640 | 508,355 | ||
Inventory, net | 119,050 | 103,595 | ||
Assets held for sale | 37,275 | 76,668 | ||
Other current assets | 176,630 | 172,019 | ||
Total current assets | 1,174,921 | 1,155,839 | ||
Property, plant and equipment, net | 6,051,606 | 6,267,583 | ||
Goodwill | 173,321 | 166,917 | ||
Deferred tax assets | 444,796 | 366,586 | ||
Other long-term assets | 243,941 | 230,090 | ||
Total assets | 8,088,585 | 8,187,015 | ||
Current liabilities: | ||||
Less: current portion | 196 | 297 | ||
Trade accounts payable | 317,314 | 264,578 | ||
Accrued liabilities | 485,347 | 543,248 | ||
Income taxes payable | 27,817 | 13,811 | ||
Total current liabilities | 830,674 | 821,934 | ||
Long-term Debt, Excluding Current Maturities, Total | 3,958,615 | 3,578,335 | ||
Other long-term liabilities | 351,787 | 522,456 | ||
Deferred Tax Liabilities, Net, Noncurrent3 | 20,288 | 9,495 | ||
Total liabilities | 5,161,364 | 4,932,220 | ||
Shareholders' equity | 2,901,405 | 3,247,025 | ||
Noncontrolling interest | 25,816 | 7,770 | ||
Total equity | 2,927,221 | 3,254,795 | 3,598,694 | 4,293,868 |
Total liabilities and equity | 8,088,585 | 8,187,015 | ||
Reportable Legal Entities | Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 386 | 1,148 | 1,055 | 873 |
Other current assets | 50 | 50 | ||
Total current assets | 436 | 1,198 | ||
Intercompany receivables | 134,757 | 142,447 | ||
Investment in consolidated affiliates | 2,789,805 | 3,170,254 | ||
Total assets | 2,924,998 | 3,313,899 | ||
Current liabilities: | ||||
Trade accounts payable | 426 | 205 | ||
Accrued liabilities | 21,167 | 20,669 | ||
Total current liabilities | 21,593 | 20,874 | ||
Intercompany payable | 2,000 | 46,000 | ||
Total liabilities | 23,593 | 66,874 | ||
Shareholders' equity | 2,901,405 | 3,247,025 | ||
Total equity | 2,901,405 | 3,247,025 | ||
Total liabilities and equity | 2,924,998 | 3,313,899 | ||
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 47 | 10,177 | 8 | 10 |
Other current assets | 27,869 | 22,209 | ||
Total current assets | 27,916 | 32,386 | ||
Intercompany receivables | 417,432 | |||
Investment in consolidated affiliates | 5,411,796 | 4,830,572 | ||
Deferred tax assets | 514,579 | 443,049 | ||
Other long-term assets | 147 | 344 | ||
Total assets | 6,371,870 | 5,306,351 | ||
Current liabilities: | ||||
Trade accounts payable | 171 | 8 | ||
Accrued liabilities | 21,972 | 65,246 | ||
Total current liabilities | 22,143 | 65,254 | ||
Long-term Debt, Excluding Current Maturities, Total | 4,030,758 | 3,796,550 | ||
Other long-term liabilities | 22,870 | 22,659 | ||
Intercompany payable | 1,439,390 | |||
Total liabilities | 4,075,771 | 5,323,853 | ||
Shareholders' equity | 2,296,099 | (17,502) | ||
Total equity | 2,296,099 | (17,502) | ||
Total liabilities and equity | 6,371,870 | 5,306,351 | ||
Reportable Legal Entities | Other Subsidiaries (Non-Guarantors) | ||||
Current assets: | ||||
Cash and cash equivalents | 190,123 | 252,768 | $ 175,980 | $ 253,647 |
Short-term investments | 29,770 | 31,109 | ||
Accounts receivable, net | 621,640 | 508,355 | ||
Inventory, net | 119,050 | 103,595 | ||
Assets held for sale | 37,275 | 76,668 | ||
Other current assets | 148,711 | 149,760 | ||
Total current assets | 1,146,569 | 1,122,255 | ||
Property, plant and equipment, net | 6,051,606 | 6,267,583 | ||
Goodwill | 173,321 | 166,917 | ||
Intercompany receivables | 1,342,942 | |||
Investment in consolidated affiliates | 3,875,639 | 1,083,948 | ||
Deferred tax assets | 444,796 | 366,586 | ||
Other long-term assets | 315,937 | 447,962 | ||
Total assets | 12,007,868 | 10,798,193 | ||
Current liabilities: | ||||
Less: current portion | 196 | 297 | ||
Trade accounts payable | 316,717 | 264,365 | ||
Accrued liabilities | 442,208 | 457,333 | ||
Income taxes payable | 27,817 | 13,811 | ||
Total current liabilities | 786,938 | 735,806 | ||
Other long-term liabilities | 328,917 | 499,797 | ||
Deferred Tax Liabilities, Net, Noncurrent3 | 534,867 | 452,544 | ||
Intercompany payable | 550,189 | |||
Total liabilities | 2,200,911 | 1,688,147 | ||
Shareholders' equity | 9,781,141 | 9,102,276 | ||
Noncontrolling interest | 25,816 | 7,770 | ||
Total equity | 9,806,957 | 9,110,046 | ||
Total liabilities and equity | 12,007,868 | 10,798,193 | ||
Consolidating Adjustments | ||||
Current assets: | ||||
Intercompany receivables | (552,189) | (1,485,389) | ||
Investment in consolidated affiliates | (12,077,240) | (9,084,774) | ||
Deferred tax assets | (514,579) | (443,049) | ||
Other long-term assets | (72,143) | (218,216) | ||
Total assets | (13,216,151) | (11,231,428) | ||
Current liabilities: | ||||
Long-term Debt, Excluding Current Maturities, Total | (72,143) | (218,215) | ||
Deferred Tax Liabilities, Net, Noncurrent3 | (514,579) | (443,049) | ||
Intercompany payable | (552,189) | (1,485,390) | ||
Total liabilities | (1,138,911) | (2,146,654) | ||
Shareholders' equity | (12,077,240) | (9,084,774) | ||
Total equity | (12,077,240) | (9,084,774) | ||
Total liabilities and equity | $ (13,216,151) | $ (11,231,428) |
Condensed Consolidating Finan54
Condensed Consolidating Financial Information - Statements of Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues and other income: | ||||
Operating revenues | $ 662,103 | $ 519,729 | $ 1,856,008 | $ 1,688,891 |
Earnings (losses) from unconsolidated affiliates | 4 | 2 | 6 | (221,918) |
Investment income (loss) | 373 | 310 | 208 | 923 |
Total revenues and other income | 662,480 | 520,041 | 1,856,222 | 1,467,896 |
Costs and other deductions: | ||||
Direct costs | 441,263 | 306,436 | 1,246,428 | 1,012,738 |
General and administrative expenses | 65,010 | 56,078 | 192,114 | 175,036 |
Research and engineering | 12,960 | 8,476 | 36,060 | 24,818 |
Depreciation and amortization | 217,075 | 220,713 | 628,837 | 655,444 |
Interest expense | 54,607 | 46,836 | 165,813 | 137,803 |
Other, net | 5,559 | 10,392 | 29,173 | 267,403 |
Total costs and other deductions | 796,474 | 648,931 | 2,298,425 | 2,273,242 |
Income (loss) from continuing operations before income taxes | (133,994) | (128,890) | (442,203) | (805,346) |
Income tax expense (benefit) | (14,709) | (31,051) | (59,814) | (124,298) |
Income (loss) from continuing operations, net of tax | (119,285) | (97,839) | (382,389) | (681,048) |
Income (loss) from discontinued operations, net of tax | (27,134) | (12,187) | (43,077) | (14,097) |
Net income (loss) | (146,419) | (110,026) | (425,466) | (695,145) |
Less: Net (income) loss attributable to noncontrolling interest | (2,113) | (1,185) | (5,001) | 990 |
Net income (loss) attributable to Nabors | (148,532) | (111,211) | (430,467) | (694,155) |
Consolidating Adjustments | ||||
Revenues and other income: | ||||
Earnings (losses) from consolidated affiliates | 242,768 | 230,179 | 746,229 | 1,118,370 |
Investment income (loss) | (2,980) | (2,981) | (8,940) | (8,943) |
Intercompany interest income | (153) | (417) | ||
Total revenues and other income | 239,788 | 227,045 | 737,289 | 1,109,010 |
Costs and other deductions: | ||||
General and administrative expenses | (490) | (167) | (994) | (481) |
Other, net | 490 | 167 | 994 | 481 |
Intercompany interest expense | (153) | (417) | ||
Total costs and other deductions | (153) | (417) | ||
Income (loss) from continuing operations before income taxes | 239,788 | 227,198 | 737,289 | 1,109,427 |
Income (loss) from continuing operations, net of tax | 239,788 | 227,198 | 737,289 | 1,109,427 |
Net income (loss) | 239,788 | 227,198 | 737,289 | 1,109,427 |
Net income (loss) attributable to Nabors | 239,788 | 227,198 | 737,289 | 1,109,427 |
Parent Company | Reportable Legal Entities | ||||
Revenues and other income: | ||||
Earnings (losses) from consolidated affiliates | (144,837) | (107,229) | (420,300) | (685,148) |
Investment income (loss) | 1 | 16 | 1 | |
Intercompany interest income | (9) | |||
Total revenues and other income | (144,836) | (107,238) | (420,284) | (685,147) |
Costs and other deductions: | ||||
General and administrative expenses | 3,705 | 3,053 | 10,362 | 7,767 |
Other, net | (9) | 929 | (170) | 1,245 |
Intercompany interest expense | (9) | (9) | (4) | |
Total costs and other deductions | 3,696 | 3,973 | 10,183 | 9,008 |
Income (loss) from continuing operations before income taxes | (148,532) | (111,211) | (430,467) | (694,155) |
Income (loss) from continuing operations, net of tax | (148,532) | (111,211) | (430,467) | (694,155) |
Net income (loss) | (148,532) | (111,211) | (430,467) | (694,155) |
Net income (loss) attributable to Nabors | (148,532) | (111,211) | (430,467) | (694,155) |
Guarantor Subsidiaries | Reportable Legal Entities | ||||
Revenues and other income: | ||||
Earnings (losses) from consolidated affiliates | (31,085) | (45,527) | (102,067) | (168,639) |
Investment income (loss) | (1) | 63 | 132 | |
Intercompany interest income | 162 | 417 | ||
Total revenues and other income | (31,086) | (45,365) | (102,004) | (168,090) |
Costs and other deductions: | ||||
General and administrative expenses | 243 | 182 | 573 | 448 |
Depreciation and amortization | 31 | 31 | 93 | 93 |
Interest expense | 56,429 | 50,595 | 173,689 | 152,318 |
Other, net | 60 | (18) | 19,033 | (18) |
Total costs and other deductions | 56,763 | 50,790 | 193,388 | 152,841 |
Income (loss) from continuing operations before income taxes | (87,849) | (96,155) | (295,392) | (320,931) |
Income tax expense (benefit) | (21,003) | (18,732) | (71,530) | (56,348) |
Income (loss) from continuing operations, net of tax | (66,846) | (77,423) | (223,862) | (264,583) |
Net income (loss) | (66,846) | (77,423) | (223,862) | (264,583) |
Net income (loss) attributable to Nabors | (66,846) | (77,423) | (223,862) | (264,583) |
Other Subsidiaries (Non-Guarantors) | Reportable Legal Entities | ||||
Revenues and other income: | ||||
Operating revenues | 662,103 | 519,729 | 1,856,008 | 1,688,891 |
Earnings (losses) from unconsolidated affiliates | 4 | 2 | 6 | (221,918) |
Earnings (losses) from consolidated affiliates | (66,846) | (77,423) | (223,862) | (264,583) |
Investment income (loss) | 3,353 | 3,291 | 9,069 | 9,733 |
Total revenues and other income | 598,614 | 445,599 | 1,641,221 | 1,212,123 |
Costs and other deductions: | ||||
Direct costs | 441,263 | 306,436 | 1,246,428 | 1,012,738 |
General and administrative expenses | 61,552 | 53,010 | 182,173 | 167,302 |
Research and engineering | 12,960 | 8,476 | 36,060 | 24,818 |
Depreciation and amortization | 217,044 | 220,682 | 628,744 | 655,351 |
Interest expense | (1,822) | (3,759) | (7,876) | (14,515) |
Other, net | 5,018 | 9,314 | 9,316 | 265,695 |
Intercompany interest expense | 162 | 9 | 421 | |
Total costs and other deductions | 736,015 | 594,321 | 2,094,854 | 2,111,810 |
Income (loss) from continuing operations before income taxes | (137,401) | (148,722) | (453,633) | (899,687) |
Income tax expense (benefit) | 6,294 | (12,319) | 11,716 | (67,950) |
Income (loss) from continuing operations, net of tax | (143,695) | (136,403) | (465,349) | (831,737) |
Income (loss) from discontinued operations, net of tax | (27,134) | (12,187) | (43,077) | (14,097) |
Net income (loss) | (170,829) | (148,590) | (508,426) | (845,834) |
Less: Net (income) loss attributable to noncontrolling interest | (2,113) | (1,185) | (5,001) | 990 |
Net income (loss) attributable to Nabors | $ (172,942) | $ (149,775) | $ (513,427) | $ (844,844) |
Condensed Consolidating Finan55
Condensed Consolidating Financial Information - Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidating Statements of Comprehensive Income (Loss) | ||||
Net income (loss) attributable to Nabors | $ (148,532) | $ (111,211) | $ (430,467) | $ (694,155) |
Translation adjustment attributable to Nabors | ||||
Translation adjustment attributable to Nabors | 16,444 | (8,950) | 31,183 | 27,870 |
Unrealized gains (losses) on marketable securities: | ||||
Unrealized gains (losses) on marketable securities | (5,706) | 1,502 | (5,122) | 3,551 |
Less: reclassification adjustment for (gains) losses included in net income (loss) | 3,495 | 1,341 | 3,495 | |
Unrealized gains (losses) on marketable securities | (5,706) | 4,997 | (3,781) | 7,046 |
Pension liability amortization and adjustment | 50 | 297 | 150 | 765 |
Unrealized gains (losses) and amortization on cash flow hedges | 153 | 153 | 459 | 459 |
Other comprehensive income (loss), before tax | 10,941 | (3,503) | 28,011 | 36,140 |
Income tax expense (benefit) related to items of other comprehensive income (loss) | 78 | 172 | 235 | 472 |
Other comprehensive income (loss), net of tax | 10,863 | (3,675) | 27,776 | 35,668 |
Comprehensive income (loss) attributable to Nabors | (137,669) | (114,886) | (402,691) | (658,487) |
Net income (loss) attributable to noncontrolling interest | 2,113 | 1,185 | 5,001 | (990) |
Translation adjustment attributable to noncontrolling interest | 160 | (90) | 317 | 371 |
Comprehensive income (loss) attributable to noncontrolling interest | 2,273 | 1,095 | 5,318 | (619) |
Comprehensive income (loss) | (135,396) | (113,791) | (397,373) | (659,106) |
Reportable Legal Entities | Parent Company | ||||
Condensed Consolidating Statements of Comprehensive Income (Loss) | ||||
Net income (loss) attributable to Nabors | (148,532) | (111,211) | (430,467) | (694,155) |
Translation adjustment attributable to Nabors | ||||
Translation adjustment attributable to Nabors | 16,444 | (8,950) | 31,183 | 27,870 |
Unrealized gains (losses) on marketable securities: | ||||
Unrealized gains (losses) on marketable securities | (5,706) | 1,502 | (5,122) | 3,551 |
Less: reclassification adjustment for (gains) losses included in net income (loss) | 3,495 | 1,341 | 3,495 | |
Unrealized gains (losses) on marketable securities | (5,706) | 4,997 | (3,781) | 7,046 |
Pension liability amortization and adjustment | 50 | 297 | 150 | 765 |
Unrealized gains (losses) and amortization on cash flow hedges | 153 | 153 | 459 | 459 |
Other comprehensive income (loss), before tax | 10,941 | (3,503) | 28,011 | 36,140 |
Income tax expense (benefit) related to items of other comprehensive income (loss) | 78 | 172 | 235 | 472 |
Other comprehensive income (loss), net of tax | 10,863 | (3,675) | 27,776 | 35,668 |
Comprehensive income (loss) attributable to Nabors | (137,669) | (114,886) | (402,691) | (658,487) |
Comprehensive income (loss) | (137,669) | (114,886) | (402,691) | (658,487) |
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Condensed Consolidating Statements of Comprehensive Income (Loss) | ||||
Net income (loss) attributable to Nabors | (66,846) | (77,423) | (223,862) | (264,583) |
Translation adjustment attributable to Nabors | ||||
Translation adjustment attributable to Nabors | 12 | (39) | ||
Unrealized gains (losses) on marketable securities: | ||||
Pension liability amortization and adjustment | 50 | 297 | 150 | 765 |
Unrealized gains (losses) and amortization on cash flow hedges | 153 | 153 | 459 | 459 |
Other comprehensive income (loss), before tax | 203 | 462 | 609 | 1,185 |
Income tax expense (benefit) related to items of other comprehensive income (loss) | 78 | 172 | 235 | 472 |
Other comprehensive income (loss), net of tax | 125 | 290 | 374 | 713 |
Comprehensive income (loss) attributable to Nabors | (66,721) | (77,133) | (223,488) | (263,870) |
Comprehensive income (loss) | (66,721) | (77,133) | (223,488) | (263,870) |
Reportable Legal Entities | Other Subsidiaries (Non-Guarantors) | ||||
Condensed Consolidating Statements of Comprehensive Income (Loss) | ||||
Net income (loss) attributable to Nabors | (172,942) | (149,775) | (513,427) | (844,844) |
Translation adjustment attributable to Nabors | ||||
Translation adjustment attributable to Nabors | 16,444 | (8,938) | 31,183 | 27,870 |
Unrealized gains (losses) on marketable securities: | ||||
Unrealized gains (losses) on marketable securities | (5,706) | 2,782 | (5,122) | 3,551 |
Less: reclassification adjustment for (gains) losses included in net income (loss) | 3,495 | 1,341 | 3,495 | |
Unrealized gains (losses) on marketable securities | (5,706) | 6,277 | (3,781) | 7,046 |
Pension liability amortization and adjustment | 100 | 594 | 300 | 1,530 |
Unrealized gains (losses) and amortization on cash flow hedges | 153 | 153 | 459 | 459 |
Other comprehensive income (loss), before tax | 10,991 | (1,914) | 28,161 | 36,905 |
Income tax expense (benefit) related to items of other comprehensive income (loss) | 156 | 284 | 470 | 765 |
Other comprehensive income (loss), net of tax | 10,835 | (2,198) | 27,691 | 36,140 |
Comprehensive income (loss) attributable to Nabors | (162,107) | (151,973) | (485,736) | (808,704) |
Net income (loss) attributable to noncontrolling interest | 2,113 | 1,185 | 5,001 | (990) |
Translation adjustment attributable to noncontrolling interest | 160 | (90) | 317 | 371 |
Comprehensive income (loss) attributable to noncontrolling interest | 2,273 | 1,095 | 5,318 | (619) |
Comprehensive income (loss) | (159,834) | (150,878) | (480,418) | (809,323) |
Consolidating Adjustments | ||||
Condensed Consolidating Statements of Comprehensive Income (Loss) | ||||
Net income (loss) attributable to Nabors | 239,788 | 227,198 | 737,289 | 1,109,427 |
Translation adjustment attributable to Nabors | ||||
Translation adjustment attributable to Nabors | (16,444) | 8,926 | (31,183) | (27,831) |
Unrealized gains (losses) on marketable securities: | ||||
Unrealized gains (losses) on marketable securities | 5,706 | (2,782) | 5,122 | (3,551) |
Less: reclassification adjustment for (gains) losses included in net income (loss) | (3,495) | (1,341) | (3,495) | |
Unrealized gains (losses) on marketable securities | 5,706 | (6,277) | 3,781 | (7,046) |
Pension liability amortization and adjustment | (150) | (891) | (450) | (2,295) |
Unrealized gains (losses) and amortization on cash flow hedges | (306) | (306) | (918) | (918) |
Other comprehensive income (loss), before tax | (11,194) | 1,452 | (28,770) | (38,090) |
Income tax expense (benefit) related to items of other comprehensive income (loss) | (234) | (456) | (705) | (1,237) |
Other comprehensive income (loss), net of tax | (10,960) | 1,908 | (28,065) | (36,853) |
Comprehensive income (loss) attributable to Nabors | 228,828 | 229,106 | 709,224 | 1,072,574 |
Comprehensive income (loss) | $ 228,828 | $ 229,106 | $ 709,224 | $ 1,072,574 |
Condensed Consolidating Finan56
Condensed Consolidating Financial Information - Cash Flows (Details) - USD ($) $ in Thousands | Oct. 03, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Condensed Consolidating Statements Of Cash Flows | ||||
Net cash provided by (used for) operating activities | $ (36,109) | $ 404,768 | ||
Cash flows from investing activities: | ||||
Purchases of investments | (6,722) | (24) | ||
Sales and maturities of investments | 12,533 | 643 | ||
Proceeds from sales of assets and insurance claims | 32,805 | 26,597 | ||
Cash paid for acquisition of businesses, net | (50,764) | |||
Capital expenditures | (448,864) | (284,950) | ||
Other | (427) | (19) | ||
Net cash (used for) provided by investing activities | (461,439) | (257,753) | ||
Cash flows from financing activities: | ||||
Increase (decrease) in cash overdrafts | (78) | 5 | ||
Proceeds from issuance of long-term debt | 411,200 | |||
Debt issuance costs | (11,039) | |||
Proceeds from revolving credit facilities | 410,000 | 560,000 | ||
Proceeds from (payments for) issuance of common shares | 8,300 | 562 | ||
Purchase of capped call hedge transactions | (40,250) | |||
Reduction of long-term debt | (382,815) | (492,625) | ||
Dividends to shareholders | $ (17,200) | (51,346) | (33,927) | |
Proceeds from (payments for) commercial paper, net | 78,000 | 15,000 | ||
Payments on term loan | (162,500) | |||
Proceeds from (payments for) short-term borrowings | (528) | (6,388) | ||
Cash proceeds from equity component of exchangeable debt | 159,952 | |||
Noncontrolling interest contribution | 20,000 | |||
Distributions to noncontrolling interest | 7,272 | |||
Other changes | (7,864) | (4,313) | ||
Reduction in revolving credit facilities | (260,000) | |||
Repurchase of common shares | (1,687) | |||
Net cash (used for) provided by financing activities | 423,760 | (223,373) | ||
Effect of exchange rate changes on cash and cash equivalents | 251 | (1,129) | ||
Net increase (decrease) in cash and cash equivalents | (73,537) | (77,487) | $ (73,537) | |
Cash and cash equivalents, beginning of period | 264,093 | 254,530 | 254,530 | |
Cash and cash equivalents, end of period | 190,556 | 177,043 | 264,093 | |
Reportable Legal Entities | Parent Company | ||||
Condensed Consolidating Statements Of Cash Flows | ||||
Net cash provided by (used for) operating activities | 103,187 | 18,320 | ||
Cash flows from investing activities: | ||||
Cash paid for investments in consolidated affiliates | 100 | |||
Net cash (used for) provided by investing activities | (100) | |||
Cash flows from financing activities: | ||||
Proceeds from (payments for) issuance of common shares | 8,300 | 562 | ||
Dividends to shareholders | (60,285) | (39,887) | ||
Proceeds from issuance of intercompany debt | 35,000 | 25,500 | ||
Paydown of intercompany debt | (79,000) | |||
Other changes | (7,864) | (4,313) | ||
Net cash (used for) provided by financing activities | (103,849) | (18,138) | ||
Net increase (decrease) in cash and cash equivalents | 182 | (762) | ||
Cash and cash equivalents, beginning of period | 1,148 | 873 | 873 | |
Cash and cash equivalents, end of period | 386 | 1,055 | 1,148 | |
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Condensed Consolidating Statements Of Cash Flows | ||||
Net cash provided by (used for) operating activities | (199,071) | (276,655) | ||
Cash flows from investing activities: | ||||
Cash paid for investments in consolidated affiliates | 86,459 | |||
Change in intercompany balances | (424,133) | 239,112 | ||
Net cash (used for) provided by investing activities | (424,133) | 152,653 | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of long-term debt | 411,200 | |||
Debt issuance costs | (11,039) | |||
Proceeds from revolving credit facilities | 410,000 | 560,000 | ||
Proceeds from parent contributions | 37,980 | 159,000 | ||
Purchase of capped call hedge transactions | (40,250) | |||
Reduction of long-term debt | (270,269) | (350,000) | ||
Proceeds from (payments for) commercial paper, net | 78,000 | 15,000 | ||
Payments on term loan | (162,500) | |||
Cash proceeds from equity component of exchangeable debt | 159,952 | |||
Proceeds from issuance of intercompany debt | 20,000 | |||
Paydown of intercompany debt | (20,000) | |||
Reduction in revolving credit facilities | (260,000) | |||
Net cash (used for) provided by financing activities | 613,074 | 124,000 | ||
Net increase (decrease) in cash and cash equivalents | (2) | (10,130) | ||
Cash and cash equivalents, beginning of period | 10,177 | 10 | 10 | |
Cash and cash equivalents, end of period | 47 | 8 | 10,177 | |
Reportable Legal Entities | Other Subsidiaries (Non-Guarantors) | ||||
Condensed Consolidating Statements Of Cash Flows | ||||
Net cash provided by (used for) operating activities | 148,714 | 669,063 | ||
Cash flows from investing activities: | ||||
Purchases of investments | (6,722) | (24) | ||
Sales and maturities of investments | 12,533 | 643 | ||
Proceeds from sales of assets and insurance claims | 32,805 | 26,597 | ||
Cash paid for acquisition of businesses, net | (50,764) | |||
Cash paid for investments in consolidated affiliates | 75,960 | 159,000 | ||
Capital expenditures | (448,864) | (284,950) | ||
Change in intercompany balances | 424,133 | (239,112) | ||
Other | (427) | (19) | ||
Net cash (used for) provided by investing activities | (113,266) | (655,865) | ||
Cash flows from financing activities: | ||||
Increase (decrease) in cash overdrafts | (78) | 5 | ||
Proceeds from parent contributions | 38,080 | 86,459 | ||
Reduction of long-term debt | (112,546) | (142,625) | ||
Proceeds from (payments for) short-term borrowings | (528) | (6,388) | ||
Proceeds from issuance of intercompany debt | (55,000) | (25,500) | ||
Noncontrolling interest contribution | 20,000 | |||
Paydown of intercompany debt | 99,000 | |||
Distributions to noncontrolling interest | 7,272 | |||
Distribution from subsidiary to parent | (80,000) | |||
Repurchase of common shares | (1,687) | |||
Net cash (used for) provided by financing activities | (98,344) | (89,736) | ||
Effect of exchange rate changes on cash and cash equivalents | 251 | (1,129) | ||
Net increase (decrease) in cash and cash equivalents | (77,667) | (62,645) | ||
Cash and cash equivalents, beginning of period | 252,768 | 253,647 | 253,647 | |
Cash and cash equivalents, end of period | 190,123 | 175,980 | $ 252,768 | |
Consolidating Adjustments | ||||
Condensed Consolidating Statements Of Cash Flows | ||||
Net cash provided by (used for) operating activities | (88,939) | (5,960) | ||
Cash flows from investing activities: | ||||
Cash paid for investments in consolidated affiliates | (76,060) | (245,459) | ||
Net cash (used for) provided by investing activities | 76,060 | 245,459 | ||
Cash flows from financing activities: | ||||
Proceeds from parent contributions | (76,060) | (245,459) | ||
Dividends to shareholders | 8,939 | 5,960 | ||
Distribution from subsidiary to parent | 80,000 | |||
Net cash (used for) provided by financing activities | $ 12,879 | $ (239,499) |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Jul. 28, 2017 | Oct. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Subsequent event | ||||||
Dividend declared (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.18 | $ 0.18 | |
Subsequent Event | ||||||
Subsequent event | ||||||
Dividend declared (in dollars per share) | $ 0.06 |