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Summary of Significant Accounting Policies | 3 Months Ended
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Mar. 31, 2023
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 (“U.S. GAAP”). Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC” or “Commission”), certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. 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, 2022 (“2022 Annual Report”). In management’s opinion, the unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to state fairly our financial position as of March 31, 2023 and the results of operations, comprehensive income (loss), cash flows and changes in equity for the periods presented herein. Interim results for the three months ended March 31, 2023 may not be indicative of results that will be realized for the full year ending December 31, 2023. ​ Principles of Consolidation ​ Our condensed consolidated financial statements include the accounts of Nabors, as well as all majority-owned and non-majority owned subsidiaries consolidated in accordance with U.S. GAAP. All significant intercompany accounts and transactions are eliminated in consolidation. ​ In addition to the consolidation of our majority owned subsidiaries, we also consolidate variable interest entities (“VIE”) when we are determined to be the primary beneficiary of a VIE. Determination of the primary beneficiary of a VIE is based on whether an entity has (a) the power to direct activities that most significantly impact the economic performance of the VIE and (b) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our joint venture, SANAD, which is equally owned by Saudi Aramco and Nabors, has been consolidated. As we have the power to direct activities that most significantly impact SANAD’s economic performance, including operations, maintenance and certain sourcing and procurement, we have determined Nabors to be the primary beneficiary. See Note 3—Joint Ventures. ​ Inventory ​ 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: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, | ​ | December 31, | ​
​ |  | 2023 |  | 2022 |
​ | ​ | (In thousands) |
Raw materials | ​ | $ | 130,544 | ​ | $ | 118,351 | ​
Work-in-progress | ​ |  | 13,287 | ​ |  | 6,121 | ​
Finished goods | ​ |  | 392 | ​ |  | 3,475 | ​
​ | ​ | $ | 144,223 | ​ | $ | 127,947 | ​
​ Special Purpose Acquisition Company ​ Nabors Energy Transition Corp. (“NETC”) is a consolidated VIE that is included in the accompanying consolidated financial statements under the following captions: ​ Restricted cash held in trust ​ As part of the initial public offering of NETC and subsequent private placement warrant transactions, $281.5 million was deposited in an interest-bearing U.S. based trust account (“Trust Account”). As of March 31, 2023 and December 31, 2022, the Trust Account balance was $290.5 million and $284.8 million, respectively. The funds held in the Trust Account are invested in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invests only in direct U.S. government treasury obligations. The funds in the trust account will only be released to NETC upon completion of a business combination or in connection with redemptions of any of the redeemable common shares, except with respect to interest earned on the funds which may be withdrawn to pay NETC taxes. ​ Redeemable noncontrolling interest in subsidiary ​ The company accounts for the non-controlling interest in NETC as subject to possible redemption in accordance with FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” NETC’s common stock features certain redemption rights, which are considered to be outside the company’s control and subject to occurrence of uncertain future events. Accordingly, the $290.0 million and $284.8 million of non-controlling interest subject to possible redemption is presented at full redemption value as temporary equity, outside of the stockholders’ equity section in the accompanying consolidated financial statements as of March 31, 2023 and December 31, 2022, respectively. ​ Nabors will recognize any future changes in redemption value immediately as they occur – i.e., adjust the carrying amount of the instrument to its current redemption amount at each reporting period. ​ Business combination agreement ​ In February 2023, NETC entered into a definitive agreement for a business combination with Vast Solar Pty Ltd (“Vast”), a development-stage company specializing in the design and manufacturing of concentrated solar thermal power (CSP) systems. The agreement is subject to certain customary closing conditions, including that Vast meet a minimum cash requirement mandating that it hold at least $50 million at closing, after giving effect to transaction-related expenses and any redemptions by NETC’s public stockholders, of the non-controlling interest redeemable shares. Depending on the levels of redemption by public shareholders, it may be necessary to secure third-party private investment in public equity (“PIPE”) financing in order to meet the minimum cash requirement for closing. The company continues to evaluate what the accounting treatment for its investment in NETC will be after the business combination is complete. ​ ​ ​ Recently adopted accounting pronouncements ​ In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging —Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU (a) simplifies an issuer’s accounting for convertible instruments by eliminating two of the three models in ASC 470-20 that require separate accounting for embedded conversion features, (b) amends diluted EPS calculations for convertible instruments by requiring the use of the if-converted method and (c) simplifies the settlement assessment entities are required to perform on contracts that can potentially settle in an entity’s own equity by removing certain requirements. ASU 2020-06 was required to be adopted on January 1, 2022. The adoption of this ASU was determined not to be material to our condensed consolidated financial statements. Using the modified retrospective method, the adoption of this ASU resulted in a pre-tax adjustment of $27.5 million to eliminate the remaining unamortized debt discount within long-term debt on our condensed consolidated balance sheet. Also, we recognized the cumulative effect of this change as a $60.7 million adjustment to the opening balance of retained earnings (accumulated deficit) and an $81.9 million adjustment to capital in excess of par in our condensed consolidated statement of changes in equity for year ended December 31, 2022. We revised our condensed consolidated statement of changes in equity for the three months ended March 31, 2022 to correctly reflect the cumulative effect of this change as of January 1, 2022. ​ We consider the applicability and impact of all ASUs. We assessed ASUs not listed above and determined that they either were not applicable or do not have a material impact on our financial statements.

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