XML 24 R10.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Impairments and Other Charges | 12 Months Ended
--- | ---
Dec. 31, 2017
Impairments and Other Charges |
Impairments and Other Charges | Note 3 Impairments and Other Charges The components of impairments and other charges are provided below:
|  | Year Ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
|  | (In thousands) |
Tangible Assets & Equipment: |  |  |  |  |  |  |  |  |  |
Provision for retirement of assets |  | $ | — |  | $ | 69,072 |  | $ | 65,633 |
Impairment of long-lived assets |  |  | 6,895 |  |  | 216,355 |  |  | 74,464 |
Subtotal |  |  | 6,895 |  |  | 285,427 |  |  | 140,097 |
Other Charges: |  |  |  |  |  |  |  |  |  |
Other-than-temporary impairment |  |  | — |  |  | 219,737 |  |  | 180,591 |
Provision for International operations |  |  | — |  |  | — |  |  | 48,279 |
Transaction related costs |  |  | 21,628 |  |  | — |  |  | — |
Loss (gain) on early extinguishment of debt |  |  | 16,013 |  |  | (6,665) |  |  | — |
Total |  | $ | 44,536 |  | $ | 498,499 |  | $ | 368,967 |
For the year ended December 31, 2017 Tangible Assets and Equipment In 2017, we recorded impairments totaling $6.9 million primarily comprised of underutilized rigs in our International drilling reportable segment. These impairments were deemed necessary due to the lack of future contractual opportunities because the rigs were smaller and lower horsepower than our newer rigs and also rigs competing in an overcrowded offshore market. Transaction related costs During 2017, we incurred $21.6 million in transaction related costs, including professional fees, severances, facility closure costs and other cost rationalization items, primarily in connection with the acquisition of Tesco. Loss (gain) on early extinguishment of debt During 2017, we repurchased $367.9 million aggregate principal amount of our senior notes. We paid the holders an aggregate of approximately $381.7 million in cash, reflecting principal and accrued and unpaid interest and prepayment premium and recognized a loss of $16.0 million as part of the debt extinguishment. See Note 11—Debt for additional discussion. For the year ended December 31, 2016 Throughout the first half of 2016, we experienced decreased demand for our services as well as increased pricing pressure. Although there was a slight uptick in activity over the latter half of 2016, management evaluated our existing rig fleet and identified asset classes that may not fully participate in the next drilling cycle given the current requirements of many drilling programs and other factors. This resulted in both the provision for retirement of assets and tangible asset impairments. The majority of the remaining charges are attributable to our previous investment in CJES, which experienced severe financial and operational difficulties in their business, and ultimately commenced voluntarily cases under chapter 11 of the U.S. Bankruptcy code in July 2016. These charges are outlined below. Tangible Assets and Equipment The following table summarizes the 2016 retirement and impairment charges for tangible assets and equipment by reportable operating segment:
|  | Provision for |  | Tangible Asset |  |  |  |
|  | Retirements |  | Impairments |  | Total |
Drilling & Rig Technologies: |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 25,365 |  | $ | 163,182 |  | $ | 188,547 |
Canada |  |  | 19,573 |  |  | 1,125 |  |  | 20,698 |
International |  |  | 23,275 |  |  | 12,721 |  |  | 35,996 |
Drilling Solutions |  |  | 859 |  |  | — |  |  | 859 |
Rig Technologies |  |  | — |  |  | 15,343 |  |  | 15,343 |
Other |  |  | — |  |  | 23,984 |  |  | 23,984 |
Total |  | $ | 69,072 |  | $ | 216,355 |  | $ | 285,427 |
During 2016, we retired certain classes of rigs and rig components in our U.S., Canada and International drilling reportable segments and reduced their carrying value to their estimated salvage value. As a result of the sustained decline in oil and gas prices and the extended period of reduced demand for some of our legacy asset classes, we retired 24 of our remaining SCR rigs within the U.S. drilling reportable segment. We utilized some of the parts on these retired rigs to enhance and upgrade other existing rigs in our fleet. Additionally, we retired 7 older rigs in our Canada Drilling reportable segment. Within our International drilling reportable segment, we also retired various older, smaller and in some cases functionally obsolete rigs and yard assets. In 2016, we also recorded impairments totaling $216.4 million primarily comprised of $163.2 million for underutilized rigs in our U.S. Drilling reportable segment as well as $12.7 million in our International drilling reportable segment. These impairments were deemed necessary due to the lack of future contractual opportunities because the rigs were smaller and lower horsepower than our newer rigs, which limits the rigs functional capabilities of drilling many of the more complex wells in the current environment. Included in the other amount was an impairment of $22.4 million that we recognized related to our retained interest in the oil and gas properties located on the North Slope of Alaska to reduce the carrying value to fair value, as a result of the sustained decline in oil prices. The balance of the impairment charge primarily relates to obsolete inventory and various rig-related equipment within our Rig Technologies reportable segment. Other-than-temporary impairment During 2016, we recognized impairment charges associated with our CJES holdings in the amount of $216.2 million resulting from declines in the fair value of our investment including other than temporary impairment charges of $192.4 million. Additionally, we recorded a charge related to a reserve of certain other amounts associated with our CJES holdings, including affiliate receivables of $23.8 million. The balance of the charge was related to an impairment of an equity security during the third quarter of 2016. As the trading price of the 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. See Note 9—Investments in Unconsolidated Affiliates. Loss (gain) on early extinguishment of debt During 2016, we repurchased $152.7 million aggregate principal amount of our senior notes. We paid the holders an aggregate of approximately $157.5 million in cash, reflecting principal and accrued and unpaid interest and prepayment premium and recognized a gain as part of the debt extinguishment. See Note 11—Debt for additional discussion. For the year ended December 31, 2015 Throughout 2015, our industry continued to experience depressed oil prices, which led to considerable reductions in capital spending by some of our customers and diminished demand for our drilling services. The impact of the industry downturn on our business activity and future outlook resulted in impairments and retirement provisions of approximately $140.1 million, an other-than-temporary impairment on our investment in CJES of $180.6 million, and the provision for International operations of $48.3 million during 2015 as discussed below. Tangible Assets and Equipment The following table summarizes the 2015 retirement and impairment charges for tangible assets and equipment by reportable operating segment:
|  | Provision for |  | Tangible Asset |  |  |  |
|  | Retirements |  | Impairments |  | Total |
Drilling & Rig Technologies: |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 47,247 |  | $ | — |  | $ | 47,247 |
Canada |  |  | 7,547 |  |  | — |  |  | 7,547 |
International |  |  | 10,839 |  |  | 52,479 |  |  | 63,318 |
Rig Technologies |  |  | — |  |  | 3,879 |  |  | 3,879 |
Other |  |  | — |  |  | 18,106 |  |  | 18,106 |
Total |  | $ | 65,633 |  | $ | 74,464 |  | $ | 140,097 |
During 2015, we retired some rigs and rig components in our U.S., Canada and International drilling reportable segments and reduced their carrying value to their estimated salvage value. Due to market conditions and resulting competitive drilling market, we experienced a decline in utilization of our remaining legacy rigs. Accordingly, we retired roughly half of our fleet of SCR rigs within the U.S. Drilling reportable segment, continuing to market the remaining 47 of our most competitive assets within this group. Additionally, we retired various yard assets within our International reportable segment as well as rig-related equipment in our Canada reportable segment. In 2015, we also recorded impairments totaling $74.5 million primarily comprised of $52.5 million for an inactive jackup rig in our International reportable segment. We recognized an impairment of $15.1 million to our retained interest in the oil and gas properties located on the North Slope of Alaska to reduce the carrying value to fair value, as a result of the sustained decline in oil prices. The balance of the impairment charge primarily relates to obsolete inventory within our Rig Technologies reportable segment. Other-than-temporary impairment During the third quarter of 2015, we determined the carrying value of our investment in CJES was other than temporarily impaired which resulted in an impairment charge of $180.6 million. The charge directly resulted from reduced activity levels driven by lower customer demand stemming from lower oil prices coupled with the further pricing concessions required by the highly competitive environment. See Note 9—Investments in Unconsolidated Affiliates. Provision for International operations During 2015, we recognized $25.4 million related to assets and receivables impacted by the degradation of the overall country economy and financial situation in Venezuela, which has been adversely affected by the downturn in oil prices, primarily comprised of a loss of $10.0 million related to the remeasurement of our net monetary assets denominated in local currency from the official exchange rate of 6.3 Bolivares per US dollar to the SIMADI exchange rate which was 199 Bolivares per US dollar as of September 30, 2015 and $15.4 million related to the write-off of a receivable balance. The balance of this provision represents an obligation associated with the decision to exit a non-core business line in another country within the region of $22.9 million.

X
- References No definition available. + Details
Name: | nbr_ImpairmentsAndOtherChargesAbstract
Namespace Prefix: | nbr_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Entire disclosure of impairments and other charges of the reporting entity. + References No definition available. + Details
Name: | nbr_ImpairmentsAndOtherChargesTextBlock
Namespace Prefix: | nbr_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration