NABORS INDUSTRIES LTD [NBRWF] Filings

10-Q 1 nbr-20230930x10q.htm 10-Q

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-32657

NABORS INDUSTRIES LTD.

(Exact name of registrant as specified in its charter)


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

Crown House

Second Floor

4 Par-la-Ville Road

Hamilton, HM08

Bermuda

(Address of principal executive office)

(441) 292-1510

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares, $.05 par value per share	NBR	NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ☒		Accelerated Filer ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of common shares, par value $.05 per share, outstanding as of October 24, 2023 was 9,465,106, excluding 1,161,283 common shares held by our subsidiaries, or 10,626,389 in the aggregate.

Table of Contents

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

Index


PART I FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	3

	Condensed Consolidated Statements of Income (Loss) for the Three and Nine Months Ended September 30, 2023 and 2022	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2023 and 2022	5

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022	6

	Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2023 and 2022	7

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35

Item 4.	Controls and Procedures	36

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3.	Defaults Upon Senior Securities	37

Item 4.	Mine Safety Disclosures	37

Item 5.	Other Information	37

Item 6.	Exhibits	37

Signatures		38

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NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	September 30,		December 31,
	2023		2022

	(In thousands, except per
	share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	387,483	$	451,025
Short-term investments		19,160		1,290
Accounts receivable, net of allowance of $52,427 and $52,895, respectively		324,970		327,397
Inventory, net		146,254		127,947
Other current assets		82,687		92,964
Total current assets		960,554		1,000,623
Property, plant and equipment, net		2,945,964		3,026,100
Restricted cash held in trust		418,125		284,841
Deferred income taxes		239,363		257,320
Other long-term assets		162,844		160,970
Total assets (1)	$	4,726,850	$	4,729,854
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable	$	287,228	$	314,041
Accrued liabilities		212,974		247,575
Income taxes payable		22,998		27,990
Current lease liabilities		5,503		6,784
Total current liabilities		528,703		596,390
Long-term debt		2,501,339		2,537,540
Other long-term liabilities		312,631		377,671
Deferred income taxes		1,810		2,858
Total liabilities (1)		3,344,483		3,514,459
Commitments and contingencies (Note 8)
Redeemable noncontrolling interest in subsidiary		834,195		678,604

Shareholders’ equity:
Common shares, par value $0.05 per share:
Authorized common shares 32,000; issued 10,634 and 10,505, respectively		527		525
Capital in excess of par value		3,535,728		3,536,373
Accumulated other comprehensive income (loss)		(10,422)		(11,038)
Retained earnings (accumulated deficit)		(1,861,848)		(1,841,153)
Less: treasury shares, at cost, 1,161 and 1,090 common shares, respectively		(1,315,751)		(1,315,751)
Total shareholders’ equity		348,234		368,956
Noncontrolling interest		199,938		167,835
Total equity		548,172		536,791
Total liabilities and equity	$	4,726,850	$	4,729,854

(1)	The condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022 include assets and liabilities of variable interest entities. See Note 3—Joint Ventures and Note 13—Special Purpose Acquisition Companies for additional information.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2023		2022		2023		2022

	(In thousands, except per share amounts)
Revenues and other income:
Operating revenues		$	733,974	$	694,136	$	2,280,180	$	1,893,618
Investment income (loss)			10,169		4,813		31,778		5,798
Total revenues and other income			744,143		698,949		2,311,958		1,899,416

Costs and other deductions:
Direct costs			447,751		432,311		1,365,611		1,208,820
General and administrative expenses			62,182		57,594		187,144		169,400
Research and engineering			14,016		13,409		42,371		36,028
Depreciation and amortization			161,337		169,857		484,066		496,231
Interest expense			44,042		43,841		135,347		133,650
Other, net			35,546		(25,954)		(8,604)		68,975
Total costs and other deductions			764,874		691,058		2,205,935		2,113,104
Income (loss) before income taxes			(20,731)		7,891		106,023		(213,688)
Income tax expense (benefit):
Current			6,241		11,414		43,569		30,662
Deferred			4,272		938		16,407		4,714
Total income tax expense (benefit)			10,513		12,352		59,976		35,376
Net income (loss)			(31,244)		(4,461)		46,047		(249,064)
Less: Net (income) loss attributable to noncontrolling interest			(17,672)		(9,322)		(41,128)		(32,132)
Net income (loss) attributable to Nabors			(48,916)		(13,783)	$	4,919	$	(281,196)

Earnings (losses) per share:
Basic		$	(6.26)	$	(1.80)	$	(2.79)	$	(32.72)
Diluted		$	(6.26)	$	(1.80)	$	(2.79)	$	(32.72)

Weighted-average number of common shares outstanding:
Basic			9,148		9,099		9,168		8,830
Diluted			9,148		9,099		9,168		8,830

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022

	(in thousands)
Net income (loss) attributable to Nabors	$	(48,916)	$	(13,783)	$	4,919	$	(281,196)
Other comprehensive income (loss), before tax:
Translation adjustment attributable to Nabors		(172)		(1,651)		496		(2,481)
Pension liability amortization and adjustment		52		52		156		1,584
Other comprehensive income (loss), before tax		(120)		(1,599)		652		(897)
Income tax expense (benefit) related to items of other comprehensive income (loss)		12		12		36		36
Other comprehensive income (loss), net of tax		(132)		(1,611)		616		(933)
Comprehensive income (loss) attributable to Nabors		(49,048)		(15,394)		5,535		(282,129)
Comprehensive income (loss) attributable to noncontrolling interest		17,672		9,322		41,128		32,132
Comprehensive income (loss)	$	(31,376)	$	(6,072)	$	46,663	$	(249,997)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30,
	2023		2022

	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	46,047	$	(249,064)
Adjustments to net income (loss):
Depreciation and amortization		484,066		496,231
Deferred income tax expense (benefit)		16,407		4,712
Impairments and other charges		5,318		—
Amortization of debt discount and deferred financing costs		6,393		8,012
Losses (gains) on debt buyback		(25,202)		(1,636)
Losses (gains) on long-lived assets, net		7,980		1,130
Losses (gains) on investments, net		(1,089)		544
Share-based compensation		12,671		11,854
Foreign currency transaction losses (gains), net		21,725		(4,054)
Mark-to-market (gain) loss on warrants		(44,314)		59,717
Noncontrolling interest		(41,128)		(32,132)
Other		144		176
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable		(1,890)		(29,828)
Inventory		(18,305)		(312)
Other current assets		12,140		(12,578)
Other long-term assets		(786)		(12,301)
Trade accounts payable and accrued liabilities		(63,389)		30,538
Income taxes payable		(5,892)		(66)
Other long-term liabilities		45,045		30,157
Net cash provided by (used for) operating activities		455,941		301,100
Cash flows from investing activities:
Purchases of investments		(28,083)		(19,000)
Capital expenditures		(406,695)		(272,080)
Proceeds from sales of assets		9,677		24,030
Other		(3,873)		48
Net cash (used for) provided by investing activities		(428,974)		(267,002)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		250,000		—
Reduction in long-term debt		(296,547)		(133,853)
Debt issuance costs		(8,036)		(3,864)
Proceeds from revolving credit facilities		220,000		250,000
Reduction in revolving credit facilities		(220,000)		(710,000)
Proceeds from issuance of common shares, net of issuance costs		—		3,767
Payments for employee taxes on net settlement of equity awards		(7,079)		(4,523)
Dividends to common and preferred shareholders		(194)		(65)
Distributions to noncontrolling interest		(2,269)		(3,489)
Distribution of trust account for special purpose acquisition company		(186,933)		—
Sale of non-controlling interest - special purpose acquisition company		305,000		—
Other		274		(445)
Net cash (used for) provided by financing activities		54,216		(602,472)
Effect of exchange rate changes on cash and cash equivalents		(10,773)		(863)
Net increase (decrease) in cash and cash equivalents and restricted cash		70,410		(569,237)
Cash and cash equivalents and restricted cash, beginning of period		737,140		1,273,510
Cash and cash equivalents and restricted cash, end of period	$	807,550	$	704,273

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents, beginning of period		451,025		991,471
Restricted cash, beginning of period		286,115		282,039
Cash and cash equivalents and restricted cash, beginning of period	$	737,140	$	1,273,510

Cash and cash equivalents, end of period		387,483		420,307
Restricted cash, end of period		420,067		283,966
Cash and cash equivalents and restricted cash, end of period	$	807,550	$	704,273

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)


				Capital		Accumulated			Retained
	Common Shares			in Excess		Other		Earnings				Non-
		Par		of Par		Comprehensive		(Accumulated		Treasury		controlling		Total
(In thousands, except per share amounts)	Shares	Value		Value		Income (Loss)		Loss)		Shares		Interest		Equity
As of June 30, 2022	10,509	$	525	$	3,528,440	$	(9,956)	$	(1,750,058)	$	(1,315,751)	$	147,602	$	600,802
Net income (loss)	—		—		—		—		(13,783)		—		9,322		(4,461)
Other comprehensive income (loss), net of tax	—		—		—		(1,611)		—		—		—		(1,611)
Share-based compensation	—		—		4,024		—		—		—		—		4,024
Accrued distribution on redeemable noncontrolling interest in subsidiary	—		—		—		—		(2,601)		—		—		(2,601)
Other	(2)		—		(89)		—		101		—		—		12
As of September 30, 2022	10,507	$	525	$	3,532,375	$	(11,567)	$	(1,766,341)	$	(1,315,751)	$	156,924	$	596,165

As of June 30, 2023	10,635	$	531	$	3,537,574	$	(10,290)	$	(1,809,414)	$	(1,315,751)	$	189,022	$	591,672
Net income (loss)	—		—		—		—		(48,916)		—		17,672		(31,244)
Other comprehensive income (loss), net of tax	—		—		—		(132)		—		—		—		(132)
Share issuance adjustment, net of tax	—		(4)		(6,196)		—		4,824		—		—		(1,376)
Share-based compensation	—		—		4,350		—		—		—		—		4,350
Vesting of restricted stock awards, net of shares withheld for employee taxes	(1)		—		—		—		—		—		—		—
IPO Warrants to SPAC public shareholders	—		—		—		—		—		—		3,426		3,426
Deemed dividends to SPAC public shareholders	—		—		—		—		(823)		—		(17,556)		(18,379)
Noncontrolling interest contributions (distributions)	—		—		—		—		—		—		7,374		7,374
Accrued distribution on redeemable noncontrolling interest in subsidiary	—		—		—		—		(7,517)		—		—		(7,517)
Other	—		—		—		—		(2)		—		—		(2)
As of September 30, 2023	10,634	$	527	$	3,535,728	$	(10,422)	$	(1,861,848)	$	(1,315,751)	$	199,938	$	548,172

Table of Contents


				Capital		Accumulated			Retained
	Common Shares			in Excess		Other		Earnings				Non-
		Par		of Par		Comprehensive		(Accumulated		Treasury		controlling		Total
(In thousands, except per share amounts)	Shares	Value		Value		Income (Loss)		Loss)		Shares		Interest		Equity
As of December 31, 2021	9,295	$	466	$	3,454,563	$	(10,634)	$	(1,537,988)	$	(1,315,751)	$	128,282	$	718,938
Impact of adoption of ASU 2020-06 (Note 2)	—		—		(81,881)		—		60,701		—		—		(21,180)
As of January 1, 2022	9,295		466		3,372,682		(10,634)		(1,477,287)		(1,315,751)		128,282		697,758
Net income (loss)	—		—		—		—		(281,196)		—		32,132		(249,064)
Warrant Exercise, net of tax	1,051		52		152,451		—

NABORS INDUSTRIES LTD [NBRWF] Filings
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10-Q	[2022-08-04]
10-Q	[2022-05-02]
10-K	[2022-02-18]
10-Q	[2021-11-05]
10-Q	[2021-08-02]
10-Q	[2021-04-29]
10-K	[2021-02-24]
10-Q	[2020-11-04]
10-Q	[2020-08-04]
10-Q	[2020-05-08]
10-K	[2020-02-25]
10-Q	[2019-11-01]
10-Q	[2019-08-01]
10-Q	[2019-05-01]
10-K	[2019-02-28]
10-Q	[2018-11-07]
10-Q	[2018-08-01]
10-Q	[2018-05-03]
10-K	[2018-03-01]
10-Q	[2017-11-03]
10-Q	[2017-08-03]
10-Q	[2017-04-28]
10-K	[2017-02-28]
10-Q	[2016-11-02]
10-Q	[2016-08-03]
10-Q	[2016-05-03]
10-K	[2016-02-26]
10-Q	[2015-11-06]
10-Q	[2015-08-05]
10-Q	[2015-05-04]
10-K	[2015-03-02]
10-Q	[2014-11-10]
10-Q	[2014-08-06]
10-Q	[2014-05-09]
10-K	[2014-03-03]
10-Q	[2013-11-01]
10-Q	[2013-08-02]
10-Q	[2013-05-02]
10-K	[2013-03-01]
10-Q	[2012-11-02]
10-Q	[2012-08-03]
10-Q	[2012-05-04]
10-K	[2012-02-29]

NABORS INDUSTRIES LTD [NBRWF] Filings

NABORS INDUSTRIES LTD [NBR] Filings