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Table of Contents

​

​

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, 2024

☐ 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 31, 2024 was 9,547,933, excluding 1,161,283 common shares held by our subsidiaries, or 10,709,216 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, 2024 and December 31, 2023 | 3
​ | ​ | ​
​ | Condensed Consolidated Statements of Income (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023 | 4
​ | ​ | ​
​ | Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023 | 5
​ | ​ | ​
​ | Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 | 6
​ | ​ | ​
​ | Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2024 and 2023 | 7
​ | ​ | ​
​ | Notes to Condensed Consolidated Financial Statements | 9
​ | ​ | ​
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24
​ | ​ | ​
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 35
​ | ​ | ​
Item 4. | Controls and Procedures | 35
​ | ​ | ​
PART II OTHER INFORMATION
​ | ​ | ​
Item 1. | Legal Proceedings | 35
​ | ​ | ​
Item 1A. | Risk Factors | 35
​ | ​ | ​
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 38
​ | ​ | ​
Item 3. | Defaults Upon Senior Securities | 39
​ | ​ | ​
Item 4. | Mine Safety Disclosures | 39
​ | ​ | ​
Item 5. | Other Information | 39
​ | ​ | ​
Item 6. | Exhibits | 39
​ | ​ | ​
Signatures | 40
​ | ​ | ​

​

​

2

Table of Contents

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31, | ​
​ |  | 2024 |  | 2023 |
​ | ​ | (In thousands, except for |
​ | ​ | share amounts) |
ASSETS | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 451,649 | ​ | $ | 1,057,487 | ​
Short-term investments | ​ |  | 7,653 | ​ |  | 12,691 | ​
Accounts receivable, net of allowance of $54,247 and $52,864, respectively | ​ |  | 384,723 | ​ |  | 347,837 | ​
Inventory, net | ​ |  | 141,864 | ​ |  | 147,798 | ​
Other current assets | ​ |  | 86,436 | ​ |  | 79,865 | ​
Total current assets | ​ |  | 1,072,325 | ​ |  | 1,645,678 | ​
Property, plant and equipment, net | ​ |  | 2,766,411 | ​ |  | 2,898,728 | ​
Restricted cash held in trust | ​ |  | 328,009 | ​ |  | 315,488 | ​
Deferred income taxes | ​ |  | 227,658 | ​ |  | 238,871 | ​
Other long-term assets | ​ |  | 159,233 | ​ |  | 179,200 | ​
Total assets (1) | ​ | $ | 4,553,636 | ​ | $ | 5,277,965 | ​
LIABILITIES AND EQUITY | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current portion of debt | ​ | $ | — | ​ | $ | 629,621 | ​
Trade accounts payable | ​ | ​ | 316,694 | ​ | ​ | 294,442 | ​
Accrued liabilities | ​ | ​ | 218,472 | ​ |  | 230,240 | ​
Income taxes payable | ​ |  | 30,552 | ​ |  | 54,255 | ​
Current lease liabilities | ​ |  | 5,860 | ​ |  | 5,423 | ​
Total current liabilities | ​ |  | 571,578 | ​ |  | 1,213,981 | ​
Long-term debt | ​ |  | 2,503,270 | ​ |  | 2,511,519 | ​
Other long-term liabilities | ​ |  | 242,766 | ​ |  | 270,014 | ​
Deferred income taxes | ​ |  | 1,913 | ​ |  | 1,366 | ​
Total liabilities (1) | ​ |  | 3,319,527 | ​ |  | 3,996,880 | ​
Commitments and contingencies (Note 8) | ​ | ​ | ​ | ​ | ​ | ​ | ​
Redeemable noncontrolling interest in subsidiary | ​ | ​ | 773,525 | ​ |  | 739,075 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Shareholders’ equity: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Common shares, par value $0.05 per share: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Authorized common shares 32,000; issued 10,709 and 10,556, respectively | ​ |  | 535 | ​ |  | 527 | ​
Capital in excess of par value | ​ |  | 3,548,079 | ​ |  | 3,538,896 | ​
Accumulated other comprehensive income (loss) | ​ |  | (10,844) | ​ |  | (10,832) | ​
Retained earnings (accumulated deficit) | ​ |  | (2,030,656) | ​ |  | (1,886,226) | ​
Less: treasury shares, at cost, 1,161 and 1,161 common shares, respectively | ​ |  | (1,315,751) | ​ |  | (1,315,751) | ​
Total shareholders’ equity | ​ |  | 191,363 | ​ |  | 326,614 | ​
Noncontrolling interest | ​ |  | 269,221 | ​ |  | 215,396 | ​
Total equity | ​ |  | 460,584 | ​ |  | 542,010 | ​
Total liabilities and equity | ​ | $ | 4,553,636 | ​ | $ | 5,277,965 | ​

(1) | The condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023 include assets and liabilities of variable interest entities. See Note 3—Joint Ventures and Note 13—Special Purpose Acquisition Company for additional information.

​

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

​

3

Table of Contents

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Three Months Ended | ​ | Nine Months Ended | ​
​ | ​ |  | September 30, |  | September 30, | ​
​ | ​ | ​ | 2024 | ​ | 2023 | ​ | 2024 | ​ | 2023 | ​
​ | (In thousands, except per share amounts)
Revenues and other income: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating revenues | ​ | ​ | $ | 731,805 | ​ | $ | 733,974 | ​ | $ | 2,200,307 | ​ | $ | 2,280,180 | ​
Investment income (loss) | ​ | ​ |  | 11,503 | ​ |  | 10,169 | ​ |  | 29,885 | ​ |  | 31,778 | ​
Total revenues and other income | ​ | ​ | ​ | 743,308 | ​ | ​ | 744,143 | ​ | ​ | 2,230,192 | ​ | ​ | 2,311,958 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Costs and other deductions: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Direct costs | ​ | ​ | ​ | 431,705 | ​ | ​ | 447,751 | ​ | ​ | 1,309,007 | ​ | ​ | 1,365,611 | ​
General and administrative expenses | ​ | ​ | ​ | 63,976 | ​ | ​ | 62,182 | ​ | ​ | 187,881 | ​ | ​ | 187,144 | ​
Research and engineering | ​ | ​ |  | 14,404 | ​ |  | 14,016 | ​ |  | 42,629 | ​ |  | 42,371 | ​
Depreciation and amortization | ​ | ​ |  | 159,234 | ​ |  | 161,337 | ​ |  | 477,060 | ​ |  | 484,066 | ​
Interest expense | ​ | ​ | ​ | 55,350 | ​ | ​ | 44,042 | ​ | ​ | 157,222 | ​ | ​ | 135,347 | ​
Other, net | ​ | ​ | ​ | 41,608 | ​ | ​ | 35,546 | ​ | ​ | 69,795 | ​ | ​ | (8,604) | ​
Total costs and other deductions | ​ | ​ | ​ | 766,277 | ​ | ​ | 764,874 | ​ | ​ | 2,243,594 | ​ | ​ | 2,205,935 | ​
Income (loss) before income taxes | ​ | ​ |  | (22,969) | ​ |  | (20,731) | ​ |  | (13,402) | ​ |  | 106,023 | ​
Income tax expense (benefit): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current | ​ | ​ |  | 10,581 | ​ |  | 6,241 | ​ |  | 30,940 | ​ |  | 43,569 | ​
Deferred | ​ | ​ |  | (463) | ​ |  | 4,272 | ​ |  | 10,776 | ​ |  | 16,407 | ​
Total income tax expense (benefit) | ​ | ​ |  | 10,118 | ​ |  | 10,513 | ​ |  | 41,716 | ​ |  | 59,976 | ​
Net income (loss) | ​ | ​ |  | (33,087) | ​ |  | (31,244) | ​ |  | (55,118) | ​ |  | 46,047 | ​
Less: Net (income) loss attributable to noncontrolling interest | ​ | ​ |  | (22,738) | ​ |  | (17,672) | ​ |  | (67,295) | ​ |  | (41,128) | ​
Net income (loss) attributable to Nabors | ​ | ​ | $ | (55,825) | ​ | $ | (48,916) | ​ | $ | (122,413) | ​ | $ | 4,919 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Earnings (losses) per share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic | ​ | ​ | $ | (6.86) | ​ | $ | (6.26) | ​ | $ | (15.69) | ​ | $ | (2.79) | ​
Diluted | ​ | ​ | $ | (6.86) | ​ | $ | (6.26) | ​ | $ | (15.69) | ​ | $ | (2.79) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average number of common shares outstanding: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic | ​ | ​ |  | 9,213 | ​ |  | 9,148 | ​ |  | 9,199 | ​ |  | 9,168 | ​
Diluted | ​ | ​ |  | 9,213 | ​ |  | 9,148 | ​ |  | 9,199 | ​ |  | 9,168 | ​

​

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

​

4

Table of Contents

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Nine Months Ended |
​ |  | September 30, |  | September 30, |
​ | ​ | 2024 | ​ | 2023 | ​ | 2024 | ​ | 2023 | ​
​ | ​ | (in thousands) |
Net income (loss) attributable to Nabors | ​ | $ | (55,825) | ​ | $ | (48,916) | ​ | $ | (122,413) | ​ | $ | 4,919 | ​
Other comprehensive income (loss), before tax: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Translation adjustment attributable to Nabors | ​ | ​ | 48 | ​ | ​ | (172) | ​ | ​ | (133) | ​ | ​ | 496 | ​
Pension liability amortization and adjustment | ​ |  | 52 | ​ |  | 52 | ​ |  | 157 | ​ |  | 156 | ​
Other comprehensive income (loss), before tax | ​ |  | 100 | ​ |  | (120) | ​ |  | 24 | ​ |  | 652 | ​
Income tax expense (benefit) related to items of other comprehensive income (loss) | ​ |  | 12 | ​ |  | 12 | ​ |  | 36 | ​ |  | 36 | ​
Other comprehensive income (loss), net of tax | ​ |  | 88 | ​ |  | (132) | ​ |  | (12) | ​ |  | 616 | ​
Comprehensive income (loss) attributable to Nabors | ​ |  | (55,737) | ​ |  | (49,048) | ​ |  | (122,425) | ​ |  | 5,535 | ​
Comprehensive income (loss) attributable to noncontrolling interest | ​ |  | 22,738 | ​ |  | 17,672 | ​ |  | 67,295 | ​ |  | 41,128 | ​
Comprehensive income (loss) | ​ | $ | (32,999) | ​ | $ | (31,376) | ​ | $ | (55,130) | ​ | $ | 46,663 | ​

​

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

​

5

Table of Contents

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, | ​
​ |  | 2024 |  | 2023 | ​
​ | ​ | (In thousands) | ​
Cash flows from operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (loss) | ​ | $ | (55,118) | ​ | $ | 46,047 | ​
Adjustments to net income (loss): | ​ | ​ | ​ | ​ | ​ | ​ | ​
Depreciation and amortization | ​ |  | 477,060 | ​ |  | 484,066 | ​
Deferred income tax expense (benefit) | ​ |  | 10,776 | ​ |  | 16,407 | ​
Impairments and other charges | ​ |  | 15,379 | ​ |  | 5,318 | ​
Amortization of debt discount and deferred financing costs | ​ | ​ | 6,757 | ​ |  | 6,393 | ​
Losses (gains) on debt buyback | ​ |  | 14,857 | ​ |  | (25,202) | ​
Losses (gains) on sale of long-lived assets, net | ​ |  | 17,109 | ​ |  | 7,980 | ​
Losses (gains) on investments, net | ​ |  | 412 | ​ |  | (1,089) | ​
Share-based compensation | ​ |  | 11,825 | ​ |  | 12,671 | ​
Foreign currency transaction losses (gains), net | ​ |  | 21,317 | ​ |  | 21,725 | ​
Mark-to-market (gain) loss on warrants | ​ | ​ | (12,538) | ​ |  | (44,314) | ​
Other | ​ |  | 5,033 | ​ |  | 144 | ​
Changes in operating assets and liabilities, net of effects from acquisitions: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accounts receivable | ​ |  | (38,163) | ​ |  | (1,890) | ​
Inventory | ​ |  | 4,337 | ​ |  | (18,305) | ​
Other current assets | ​ |  | (6,900) | ​ |  | 12,140 | ​
Other long-term assets | ​ |  | (1,311) | ​ |  | (786) | ​
Trade accounts payable and accrued liabilities | ​ |  | 583 | ​ |  | (63,389) | ​
Income taxes payable | ​ |  | (24,912) | ​ |  | (5,892) | ​
Other long-term liabilities | ​ |  | (13,990) | ​ |  | 3,917 | ​
Net cash provided by (used for) operating activities | ​ |  | 432,513 | ​ |  | 455,941 | ​
Cash flows from investing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Purchase of investments | ​ |  | (7,681) | ​ |  | (28,083) | ​
Capital expenditures | ​ |  | (359,873) | ​ |  | (406,695) | ​
Proceeds from sales of assets | ​ |  | 9,667 | ​ |  | 9,677 | ​
Other | ​ |  | 4,671 | ​ |  | (3,873) | ​
Net cash (used for) provided by investing activities | ​ |  | (353,216) | ​ |  | (428,974) | ​
Cash flows from financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Proceeds from issuance of long-term debt | ​ |  | 550,000 | ​ |  | 250,000 | ​
Reduction in long-term debt | ​ | ​ | (1,197,024) | ​ |  | (296,547) | ​
Debt issuance costs | ​ |  | (11,045) | ​ |  | (8,036) | ​
Proceeds from revolving credit facilities | ​ |  | 225,000 | ​ |  | 220,000 | ​
Reduction in revolving credit facilities | ​ | ​ | (225,000) | ​ |  | (220,000) | ​
Payments for employee taxes on net settlement of equity awards | ​ | ​ | (2,634) | ​ |  | (7,079) | ​
Dividends to common and preferred shareholders | ​ |  | (87) | ​ |  | (194) | ​
Distributions to noncontrolling interest | ​ | ​ | (950) | ​ |  | (2,269) | ​
Special purpose acquisition company redemptions by non-controlling redeemable shareholders | ​ | ​ | — | ​ |  | (186,933) | ​
Sale of non-controlling interest - special purpose acquisition company | ​ | ​ | — | ​ |  | 305,000 | ​
Other | ​ | ​ | (282) | ​ |  | 274 | ​
Net cash (used for) provided by financing activities | ​ |  | (662,022) | ​ |  | 54,216 | ​
Effect of exchange rate changes on cash and cash equivalents | ​ | ​ | (10,446) | ​ |  | (10,773) | ​
Net increase (decrease) in cash and cash equivalents and restricted cash | ​ |  | (593,171) | ​ | ​ | 70,410 | ​
Cash and cash equivalents and restricted cash, beginning of period | ​ | ​ | 1,374,182 | ​ |  | 737,140 | ​
Cash and cash equivalents and restricted cash, end of period | ​ | $ | 781,011 | ​ | $ | 807,550 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents, beginning of period | ​ | ​ | 1,057,487 | ​ |  | 451,025 | ​
Restricted cash, beginning of period | ​ | ​ | 316,695 | ​ |  | 286,115 | ​
Cash and cash equivalents and restricted cash, beginning of period | ​ | $ | 1,374,182 | ​ | $ | 737,140 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents, end of period | ​ | ​ | 451,649 | ​ |  | 387,483 | ​
Restricted cash, end of period | ​ | ​ | 329,362 | ​ |  | 420,067 | ​
Cash and cash equivalents and restricted cash, end of period | ​ | $ | 781,011 | ​ | $ | 807,550 | ​

​

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 CHANGES IN EQUITY

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Capital | ​ | Accumulated | ​ | ​ | Retained | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Common Shares | ​ | in Excess | ​ | Other | ​ | Earnings | ​ | ​ | ​ | ​ | Non- | ​ | ​ | ​ | ​
​ |  | ​ |  | Par |  | of Par |  | Comprehensive |  | (Accumulated |  | Treasury |  | controlling |  | Total | ​
(In thousands) | ​ | Shares | ​ | Value | ​ | Value | ​ | Income (Loss) | ​ | Loss) | ​ | Shares | ​ | Interest | ​ | Equity | ​
As of 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) | ​
Share issuance adjustment, net of tax | ​ | — | ​ | ​ | (4) | ​ | ​ | (6,196) | ​ | ​ | — | ​ | ​ | 4,824 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (1,376) | ​
Other comprehensive income (loss), net of tax | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (132) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (132) | ​
IPO Warrants to SPAC public shareholders | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,426 | ​ | ​ | 3,426 | ​
Share-based compensation | ​ | — | ​ | ​ | — | ​ | ​ | 4,350 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,350 | ​
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 | ​ | (1) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (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 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
As of June 30, 2024 | ​ | 10,711 | ​ | $ | 535 | ​ | $ | 3,543,986 | ​ | $ | (10,932) | ​ | $ | (1,967,467) | ​ | $ | (1,315,751) | ​ | $ | 251,229 | ​ | $ | 501,600 | ​
Net income (loss) | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (55,825) | ​ | ​ | — | ​ | ​ | 22,738 | ​ | ​ | (33,087) | ​
Other comprehensive income (loss), net of tax | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 88 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 88 | ​
Share-based compensation | ​ | (2) | ​ | ​ | — | ​ | ​ | 4,093 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,093 | ​
Noncontrolling interest contributions (distributions) | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (4,746) | ​ | ​ | (4,746) | ​
Accrued distribution on redeemable noncontrolling interest in subsidiary | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (7,363) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (7,363) | ​
Other | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (1) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (1) | ​
As of September 30, 2024 | ​ | 10,709 | ​ | $ | 535 | ​ | $ | 3,548,079 | ​ | $ | (10,844) | ​ | $ | (2,030,656) | ​ | $ | (1,315,751) | ​ | $ | 269,221 | ​ | $ | 460,584 | ​

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​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Capital | ​ | Accumulated | ​ | ​ | Retained | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Common Shares | ​ | in Excess | ​ | Other | ​ | Earnings | ​ | ​ | ​ | ​ | Non- | ​ | ​ | ​
​ |  | ​ |  | Par |  | of Par |  | Comprehensive |  | (Accumulated |  | Treasury |  | controlling |  | Total
(In thousands) | ​ | Shares | ​ | Value | ​ | Value | ​ | Income (Loss) | ​ | Loss) | ​ | Shares | ​ | Interest | ​ | Equity
As of December 31, 2022 | ​ | 10,505 | ​ | $ | 525 | ​ | $ | 3,536,373 | ​ | $ | (11,038) | ​ | $ | (1,841,153) | ​ | $ | (1,315,751) | ​ | $ | 167,835 | ​ | $ | 536,791
Net income (loss) | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,919 | ​ | ​ | — | ​ | ​ | 41,128 | ​ | ​ | 46,047
Other comprehensive income (loss), net of tax | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 616 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 616
Deemed dividends to SPAC public shareholders | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (8,180) | ​ | ​ | — | ​ | ​ | (17,556) | ​ | ​ | (25,736)
Share-based compensation | ​ | 179 | ​ | ​ | 8 | ​ | ​ | 12,663 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 12,671
IPO Warrants to SPAC public shareholders | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,426 | ​ | ​ | 3,426
Share issuance adjustment, net of tax | ​ | — | ​ | ​ | (4) | ​ | ​ | (6,196) | ​ | ​ | — | ​ | ​ | 4,824 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (1,376)
Noncontrolling interest contributions (distributions) | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 5,105 | ​ | ​ | 5,105
Accrued distribution on redeemable noncontrolling interest in subsidiary | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (22,307) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (22,307)
Other | ​ | (50) | ​ | ​ | (2) | ​ | ​ | (7,112) | ​ | ​ | — | ​ | ​ | 49 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (7,065)
As of September 30, 2023 | ​ | 10,634 | ​ | $ | 527 | ​ | $ | 3,535,728 | ​ | $ | (10,422) | ​ | $ | (1,861,848) | ​ | $ | (1,315,751) | ​ | $ | 199,938 | ​ | $ | 548,172
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
As of December 31, 2023 | ​ | 10,556 | ​ | $ | 527 | ​ | $ | 3,538,896 | ​ | $ | (10,832) | ​ | $ | (1,886,226) | ​ | $ | (1,315,751) | ​ | $ | 215,396 | ​ | $ | 542,010
Net income (loss) | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (122,413) | ​ | ​ | — | ​ | ​ | 67,295 | ​ | ​ | (55,118)
Other comprehensive income (loss), net of tax | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (12) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (12)
Noncontrolling interest contributions (distributions) | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (13,470) | ​ | ​ | (13,470)
Share-based compensation | ​ | 185 | ​ | ​ | 9 | ​ | ​ | 11,825 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 11,834
Accrued distribution on redeemable noncontrolling interest in subsidiary | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (21,929) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (21,929)
Other | ​ | (32) | ​ | ​ | (1) | ​ | ​ | (2,642) | ​ | ​ | — | ​ | ​ | (88) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (2,731)
As of September 30, 2024 | ​ | 10,709 | ​ | $ | 535 | ​ | $ | 3,548,079 | ​ | $ | (10,844) | ​ | $ | (2,030,656) | ​ | $ | (1,315,751) | ​ | $ | 269,221 | ​ | $ | 460,584

​

​

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

​

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Nabors Industries Ltd. and Subsidiaries

​

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

​

Note 1 General

​

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. References in this report to “Nabors Delaware” mean Nabors Industries, Inc., a wholly owned subsidiary of Nabors.

​

Our business is comprised of our global land-based and offshore drilling rig operations and other rig related services and technologies. We provide performance tools, directional drilling services, tubular running services and innovative technologies for our own rig fleet and those operated by third parties. In addition, we manufacture advanced drilling equipment and provide drilling rig instrumentation. Also, we have a portfolio of technologies designed to drive energy efficiency and emissions reductions for both ourselves and our third-party customers.

​

With operations in over 15 countries, we are a global provider of drilling and drilling-related services for land-based and offshore oil and natural gas wells, with a fleet of rigs and drilling-related equipment which, as of September 30, 2024 included:

​

| ● | 289 actively marketed rigs for land-based drilling operations in the United States and various countries throughout the world; and

​

| ● | 26 actively marketed rigs for offshore platform drilling operations in the United States and multiple international markets.

​

The short- and long-term implications of the military hostilities between Russia and Ukraine, which began in early 2022, remain difficult to predict. We continue to actively monitor this dynamic situation. As of September 30, 2024 and December 31, 2023, 0.8% and 0.9% of our property, plant and equipment, net was located in Russia, respectively. For the nine months ending September 30, 2024 and 2023, 0.9% and 1.2% of our operating revenues were from operations in Russia, respectively. We currently have no assets or operations in Ukraine.

​

Note 2 Summary of Significant Accounting Policies

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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”) applicable to interim reporting. 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, 2023 (“2023 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 September 30, 2024 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, 2024 may not be indicative of results that will be realized for the full year ending December 31, 2024.

​

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

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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 determination of the primary beneficiary of a VIE considers all relationships between us and 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. Also, we are the co-sponsor of a special purpose acquisition company (the “SPAC”) and have determined it is a VIE. Nabors is the primary beneficiary of the SPAC as we have the power to direct activities, the right to receive benefits and the obligation to absorb losses. Therefore, the SPAC has been consolidated. See Note 13—Special Purpose Acquisition Company.

​

Reclassification of Prior Year Presentation

​

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.

​

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:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31, | ​
​ |  | 2024 |  | 2023 |
​ | ​ | (In thousands) |
Raw materials | ​ | $ | 132,018 | ​ | $ | 144,886 | ​
Work-in-progress | ​ |  | 7,309 | ​ |  | 2,912 | ​
Finished goods | ​ |  | 2,537 | ​ |  | — | ​
​ | ​ | $ | 141,864 | ​ | $ | 147,798 | ​

​

Recent accounting pronouncements

​

Not Yet Adopted

​

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), which enhances prior reportable segment disclosure requirements in part by requiring entities to disclose significant expenses related to their reportable segments that are regularly provided to the chief operation decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss. The guidance also requires disclosure of the CODM’s position for each segment and detail of how the CODM uses financial reporting to access their segment’s performance. The new guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively. The adoption of ASU 2023-07 requires us to provide additional disclosures related to our segments, but will otherwise not materially impact our financial statements.

​

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures. This provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. The new guidance is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the impact of this accounting standard update on our financial statements and related disclosures.

​

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.

​

Note 3 Joint Ventures

​

During 2016, we entered into an agreement with Saudi Aramco to form a joint venture known as SANAD to own, manage and operate onshore drilling rigs in the Kingdom of Saudi Arabia. SANAD is equally owned by Saudi Aramco and Nabors.

​

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During 2017, Nabors and Saudi Aramco each contributed $20 million in cash for the purpose of capitalizing the joint venture upon formation. In addition, since inception Nabors and Saudi Aramco have each contributed a combination of drilling rigs, drilling rig equipment and other assets, including cash, with each of the party’s contributions having a value of approximately $394 million to the joint venture. The contributions were received in exchange for redeemable ownership interests which accrue interest annually, have a twenty-five year maturity and are required to be converted to authorized capital should certain events occur, including the accumulation of specified losses. In the accompanying condensed consolidated balance sheet, Nabors has reported Saudi Aramco’s share of authorized capital as a component of noncontrolling interest in equity and Saudi Aramco’s share of the redeemable ownership interests as redeemable noncontrolling interest in subsidiary, classified as mezzanine equity. As of September 30, 2024 and December 31, 2023, the amount included in redeemable noncontrolling interest was $445.5 million and $423.6 million, respectively. The accrued interest on the redeemable ownership interest is a non-cash financing activity and is reported as an increase in the redeemable noncontrolling interest in subsidiary line in our condensed consolidated balance sheet. The assets and liabilities included in the condensed balance sheet below are (a) assets that can either be used to settle obligations of the VIE or be made available in the future to the equity owners through dividends, distributions or in exchange of the redeemable ownership interests (upon mutual agreement of the owners) or (b) liabilities for which creditors do not have recourse to other assets of Nabors.

​

The condensed balance sheet of SANAD, as included in our condensed consolidated balance sheet, is presented below.

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
​ |  | 2024 |  | 2023
​ | ​ | (In thousands)
Assets: | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 319,322 | ​ | $ | 281,329
Accounts receivable | ​ |  | 116,794 | ​ |  | 86,461
Other current assets | ​ |  | 14,100 | ​ |  | 12,461
Property, plant and equipment, net | ​ |  | 728,137 | ​ |  | 646,215
Other long-term assets | ​ |  | 19,764 | ​ |  | 25,099
Total assets | ​ | $ | 1,198,117 | ​ | $ | 1,051,565
Liabilities: | ​ | ​ | ​ | ​ | ​ | ​
Accounts payable | ​ | $ | 103,515 | ​ | $ | 88,432
Accrued liabilities | ​ |  | 20,895 | ​ |  | 10,301
Other liabilities | ​ | ​ | 49,231 | ​ | ​ | 38,524
Total liabilities | ​ | $ | 173,641 | ​ | $ | 137,257

​

​

​

​

Note 4 Accounts Receivable Purchase and Sales Agreements

​

The Company entered into an accounts receivable sales agreement (the “A/R Sales Agreement”) and an accounts receivable purchase agreement (the “A/R Purchase Agreement,” and, together with the A/R Sales Agreement, the “A/R Agreements”). As part of the A/R Agreements, the Company continuously sells designated eligible pools of receivables as they are originated by it and certain of its U.S. subsidiaries to a separate, bankruptcy-remote, special purpose entity (“SPE”) pursuant to the A/R Sales Agreement. Pursuant to the A/R Purchase Agreement, the SPE in turn sells, transfers, conveys and assigns to unaffiliated third-party financial institutions (the “Purchasers”) all the rights, title and interest in and to its pool of eligible receivables (the “Eligible Receivables”). The sale of the Eligible Receivables qualifies for sale accounting treatment in accordance with ASC 860 – Transfers and Servicing. During the period of this program, cash receipts from the Purchasers at the time of the sale are classified as operating activities in our consolidated statement of cash flows and the associated receivables are derecognized from the Company’s consolidated balance sheet at the time of the sale. The remaining receivables held by the SPE were pledged to secure the collectability of the sold Eligible Receivables. Subsequent collections on the pledged receivables, which have not been sold, will be classified as operating cash flows in our consolidated statement of cash flows at the time of collection. The amount of receivables pledged as collateral as of September 30, 2024 and December 31, 2023 is approximately $54.3 million and $67.0 million, respectively.

​

In June 2022, we entered into the Third Amendment to the A/R Purchase Agreement which extended the term of the A/R Purchase Agreement to August 13, 2024 and increased the commitments of the Purchasers under the A/R Purchase

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Agreement from $150 million to $250 million. Subject to Purchaser approval, the commitments of the Purchasers may be increased to $300 million.

​

In April 2024, we entered into the Fourth Amendment to the A/R Purchase Agreement which, among other things, extended the term of the A/R Purchase Agreement to the earliest of (i) April 1, 2027 and (ii) the date that is ninety (90) calendar days prior to the occurrence of the maturity date under and as defined in the 2024 Credit Agreement.

​

The amount available for sale to the Purchasers under the A/R Purchase Agreement fluctuates over time based on the total amount of Eligible Receivables generated during the normal course of business after excluding excess concentrations and certain other ineligible receivables. As of September 30, 2024, approximately $146.0 million had been sold to and as yet uncollected by the Purchasers. As of December 31, 2023, the corresponding number was approximately $145.0 million.

​

Note 5 Debt

​

Debt consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31, | ​
​ |  | 2024 |  | 2023 |
​ | ​ | (In thousands) |
0.75% senior exchangeable notes due January 2024 | ​ | $ | — | ​ | $ | 155,529 | ​
5.75% senior notes due February 2025 | ​ | ​ | — | ​ |  | 474,092 | ​
7.25% senior guaranteed notes due January 2026 | ​ | ​ | — | ​ |  | 555,902 | ​
7.375% senior priority guaranteed notes due May 2027 | ​ | ​ | 700,000 | ​ |  | 700,000 | ​
7.50% senior guaranteed notes due January 2028 | ​ | ​ | 389,609 | ​ |  | 389,609 | ​
1.75% senior exchangeable notes due June 2029 | ​ |  | 250,000 | ​ | ​ | 250,000 | ​
9.125% senior priority guaranteed notes due January 2030 | ​ |  | 650,000 | ​ | ​ | 650,000 | ​
8.875% senior guaranteed notes due August 2031 | ​ |  | 550,000 | ​ | ​ | — | ​
​ | ​ | $ | 2,539,609 | ​ | $ | 3,175,132 | ​
Less: current portion | ​ |  | — | ​ |  | 629,621 | ​
Less: deferred financing costs | ​ | ​ | 36,339 | ​ | ​ | 33,992 | ​
Long-term debt | ​ | $ | 2,503,270 | ​ | $ | 2,511,519 | ​

​

During the nine months ended September 30, 2024, we fully redeemed the $474.1 million remaining balance of the 5.75% senior notes due February 2025 for approximately $487.0 million in cash, including principal, premium of $1.4 million and $11.5 million in accrued and unpaid interest. We also fully redeemed the $555.9 million remaining balance of the 7.25% senior guaranteed notes due January 2026 for approximately $568.3 million in cash, including principal, premium of $10.1 million and $2.4 million in accrued and unpaid interest. In connection with the redemptions, we recognized a $14.9 million loss for the nine months ended September 30, 2024 which is included in Other, net in our condensed consolidated statement of income (loss). In addition, during the nine months ended September 30, 2024, the remaining balance of the 0.75% senior exchangeable notes due January 2024 were fully redeemed.

​

Credit Agreement

​

On June 17, 2024, Nabors Delaware amended and restated its credit agreement (the “2024 Credit Agreement”). Under the 2024 Credit Agreement, the lenders have committed to provide to Nabors Delaware an aggregate principal amount of revolving loans at any time outstanding not in excess of $350.0 million, and the issuing banks have committed to provide a standalone letter of credit tranche that permits Nabors Delaware to issue reimbursement obligations under letters of credit in an aggregate principal amount at any time outstanding not in excess of $125.0 million. Letters of credit issued do not affect revolving loan capacity and vice versa. The 2024 Credit Agreement contains a $200.0 million uncommitted accordion feature that can be applied to increase the commitments under either the revolving loans or the letter of credit tranche, or both.

​

The Company is required to maintain an interest coverage ratio (EBITDA/interest expense) of 2.75:1.00, and a minimum guarantor value, requiring the guarantors (other than the Company) and their subsidiaries to own at least 90% of the consolidated property, plant and equipment of the Company. The facility matures on the earlier of (a) June 17, 2029 and (b) to the extent 10% or more of the respective principal amount of any of the 7.375% Senior Priority Guaranteed Notes due May 2027 or 7.50% Senior Guaranteed Notes due January 2028 or 50% or more of the principal

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amount of the 1.75% Senior Exchangeable Notes due June 2029 remains outstanding on the date that is 90 days prior to the applicable maturity date for such indebtedness, then such 90th day.

Additionally, the Company is subject to covenants, which are subject to certain exceptions and include, among others, (a) a covenant restricting our ability to incur liens (subject to the additional liens basket of up to $150.0 million), (b) a covenant restricting its ability to pay dividends or make other distributions with respect to its capital stock and to repurchase certain indebtedness and (c) a covenant restricting the ability of the Company’s subsidiaries to incur debt (subject to the grower debt basket of up to $100.0 million). The agreement also includes a collateral coverage requirement that the collateral rig fair value is to be no less than the collateral coverage threshold, as defined in the agreement. This requirement includes an independent appraisal report to be delivered every 6 months following the closing date.

As of September 30, 2024, we had no borrowings and $51.7 million of letters of credit outstanding under our 2024 Credit Agreement. The weighted average interest rate on borrowings under the 2024 Credit Agreement at September 30, 2024 was 8.17%. In order to make any future borrowings under the 2024 Credit Agreement, Nabors and certain of its wholly owned subsidiaries are subject to compliance with the conditions and covenants contained therein, including compliance with applicable financial ratios.

​

As of the date of this report, we were in compliance with all covenants under the 2024 Credit Agreement. We expect to remain in compliance with all covenants under the 2024 Credit Agreement during the twelve-month period following the date of this report based on our current operational and financial projections. However, we can make no assurance of continued compliance if our current projections or material underlying assumptions prove to be incorrect. If we fail to comply with the covenants, the revolving credit commitment could be terminated, and any outstanding borrowings under the facility could be declared immediately due and payable.

​

8.875% Senior Guaranteed Notes due August 2031

​

On July 22, 2024, Nabors issued $550.0 million in aggregate principal amount of 8.875% senior guaranteed notes, which are fully and unconditionally guaranteed by Nabors and certain of Nabors’ indirect wholly-owned subsidiaries. Interest on the notes is payable on February 15 and August 15 of each year. The notes have a maturity date of August 15, 2031.

​

Note 6 Shareholders’ Equity

​

Common share warrants

​

On May 27, 2021, the Board declared a distribution of warrants to purchase its common shares (the “Warrants”) to holders of the Company’s common shares. Holders of Nabors common shares received two-fifths of a warrant per common share held as of the record date (rounded down for any fractional warrant). Nabors issued approximately 3.2 million Warrants on June 11, 2021 to shareholders of record as of June 4, 2021. As of September 30, 2024, 2.5 million Warrants remain outstanding and 1.1 million common shares have been issued as a result of exercises of Warrants.

​

Each Warrant represents the right to purchase one common share at an initial exercise price of $166.66667 per Warrant, subject to certain adjustments (the “Exercise Price”). Payment of the exercise price may be in cash at this time. The Exercise Price and the number of common shares issuable upon exercise are subject to anti-dilution adjustments, including for share dividends, splits, subdivisions, spin-offs, consolidations, reclassifications, combinations, noncash distributions, cash dividends (other than regular quarterly cash dividends not exceeding a permitted threshold amount), certain pro rata shares repurchases, and similar transactions, including certain issuances of common shares (or securities exercisable or convertible into or exchangeable for common shares) at a price (or having a conversion price) that is less than 95% of the market price of the common shares. The Warrants expire on June 11, 2026, but the expiration date may be accelerated at any time by the Company upon 20-days’ prior notice. The Warrants are traded on the over-the-counter market.

​

The Warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the Warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. On September 30, 2024 and December 31, 2023, the fair

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value of the Warrants was approximately $13.4 million and $25.9 million, respectively. During the three and nine months ended September 30, 2024, approximately $2.9 million and $12.5 million of gain has been recognized for the change in the liability and included in Other, net in our consolidated statements of income (loss), respectively. During the three and nine months ended September 30, 2023, approximately $7.9 million of loss and $44.3 million of gain has been recognized for the change in the liability and included in Other, net in our consolidated statements of income (loss), respectively.

​

Note 7 Fair Value Measurements

​

Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best information available. Accordingly, we employ valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

​

The use of unobservable inputs is intended to allow for fair value determinations in situations where there is little, if any, market activity for the asset or liability at the measurement date. We are able to classify fair value balances utilizing a fair value hierarchy based on the observability of those inputs.

​

Under the fair value hierarchy:

​

| ● | Level 1 measurements include unadjusted quoted market prices for identical assets or liabilities in an active market;

​

| ● | Level 2 measurements include quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets; and

​

| ● | Level 3 measurements include those that are unobservable and of a subjective nature.

​

Recurring Fair Value Measurements

​

Our financial assets that are accounted for at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 consisted of short-term investments and restricted cash held in trust. During the nine months ended September 30, 2024, there were no transfers of our financial assets between Level 1 and Level 2 measures. Our financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As of September 30, 2024 and December 31, 2023, our restricted cash held in trust was carried at fair market value and totaled $328.0 million and $315.5 million, respectively, and consisted of Level 1 measurements. Our short-term investments were primarily held at fair market value and totaled $7.7 million and $12.7 million, respectively and primarily consisted of Level 2 measurements. No material Level 3 measurements existed for our financial assets for any of the periods presented.

​

Our financial liabilities that are accounted for at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 consisted of the Warrants and are included in other long-term liabilities in the accompanying consolidated financial statements. As of September 30, 2024 and December 31, 2023, the Warrants were carried at fair market value using their trading price and totaled $13.4 million and $25.9 million, respectively.

​

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 related to equity method investments, other long-lived assets and assets acquired and liabilities assumed in a business combination. Based upon our review of the fair value hierarchy, the inputs used in these fair value measurements generally include Level 3 inputs but could include Level 1 and 2 inputs.

​

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During the three months ended September 30, 2024, approximately $15.4 million was recognized as an other than temporary impairment related to our investment in Vast Renewables Limited (“Vast”). As Vast is a publicly traded company, the valuation assessment was based on the observable market trading price of Vast’s stock. During the third quarter, we determined that the fair value of our Vast investment was below carrying value for a prolonged period of time resulting in the impairment. This impairment has been included in Other, net in our consolidated statements of income (loss).

​

Fair Value of Debt Instruments

​

We estimate the fair value of our debt financial instruments in accordance with U.S. GAAP. The fair value of our long-term debt and revolving credit facilities 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, 2024 | ​ | December 31, 2023
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Carrying | ​ | Fair | ​ | Carrying | ​ | Fair
​ | ​ | Value | ​ | Value | ​ | Value | ​ | Value
​ | (In thousands)
0.75% senior exchangeable notes due January 2024 |  | $ | — | ​ | $ | — |  | $ | 155,529 | ​ | $ | 154,989
5.75% senior notes due February 2025 | ​ |  | — | ​ |  | — |  |  | 474,092 | ​ |  | 474,120
7.25% senior guaranteed notes due January 2026 | ​ |  | — | ​ |  | — |  |  | 555,902 | ​ |  | 535,328
7.375% senior priority guaranteed notes due May 2027 | ​ |  | 700,000 | ​ |  | 702,086 |  |  | 700,000 | ​ |  | 687,526
7.50% senior guaranteed notes due January 2028 | ​ |  | 389,609 | ​ |  | 366,642 |  |  | 389,609 | ​ |  | 334,090
1.75% senior exchangeable notes due June 2029 |  |  | 250,000 | ​ |  | 196,743 |  |  | 250,000 | ​ |  | 185,383
9.125% senior priority guaranteed notes due January 2030 |  |  | 650,000 | ​ |  | 671,268 |  |  | 650,000 | ​ |  | 656,871
8.875% senior guaranteed notes due August 2031 |  |  | 550,000 | ​ |  | 523,523 |  |  | — | ​ |  | —
​ | ​ | $ | 2,539,609 | ​ | $ | 2,460,261 | ​ | $ | 3,175,132 | ​ | $ | 3,028,307
Less: current portion | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 629,621 | ​ | ​ | ​
Less: deferred financing costs | ​ | ​ | 36,339 | ​ | ​ | ​ | ​ | ​ | 33,992 | ​ | ​ | ​
​ | ​ | $ | 2,503,270 | ​ | ​ | ​ | ​ | $ | 2,511,519 | ​ | ​ | ​

​

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.

​

​

Note 8 Commitments and Contingencies

​

Contingencies

​

Income Tax

​

We operate in a number of countries 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.

​

In certain jurisdictions we have recognized deferred tax assets and liabilities. Judgment and assumptions are required in determining whether deferred tax assets will be fully or partially utilized. When we estimate that all or some portion of certain deferred tax assets such as net operating loss carryforwards will not be utilized, we establish a valuation allowance for the amount we determine to be more likely than not unrealizable. We continually evaluate strategies that could allow for future utilization of our deferred assets. Any change in the ability to utilize such deferred assets will be accounted for in the period of the event affecting the valuation allowance. If facts and circumstances cause us to change our expectations regarding future tax consequences, the resulting adjustments could have a material effect on our financial results or cash flow. At this time, we consider it more likely than not that we will have sufficient taxable

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income in the future that will allow us to realize the deferred tax assets that we have recognized. However, it is possible that some of our recognized deferred tax assets, relating to net operating loss carryforwards and tax credits, could expire unused or could carryforward indefinitely without utilization. Therefore, unless we are able to generate sufficient taxable income from our component operations, a substantial valuation allowance to reduce our deferred tax assets may be required, which would materially increase our tax expense in the period the allowance is recognized and materially adversely affect our results of operations and statement of financial condition.

​

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 $21.4 million (at September 30, 2024 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 appealed this decision again to the Supreme Court, which again overturned the appeals court’s decision. The case was moved back to the court of appeals, which, once again, reinstated the verdict, failing to abide by the Supreme Court’s ruling. Accordingly, we are appealing once more to the Supreme Court to try to get a final ruling on the matter. 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 $13.4 million in excess of amounts accrued.

​

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 include the A/R Facility (see Note 4—Accounts Receivable Purchase and Sales Agreements) and certain agreements and obligations under which we provide financial or performance assurance to third parties. Certain of these financial or performance assurances 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.

​

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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 |
​ |  | 2024 |  | 2025 |  | 2026 |  | Thereafter |  | Total |
​ | ​ | (In thousands) |
Financial standby letters of credit and other financial surety instruments | ​ | $ | 27,791 |  | 18,295 |  | 3,763 |  | 12,547 | ​ | $ | 62,396 | ​

​

​

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. The participating security holders are not contractually obligated to share in losses. Therefore, losses are not allocated to the participating security holders.

​

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 shares and the if-converted method for the 1.75% senior exchangeable notes due June 2029 as the instrument contains a provision for share settlement.

​

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,
​ |  | 2024 |  | 2023 |  | 2024 |  | 2023
​ | ​ | (In thousands, except per share amounts)
BASIC EPS: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (loss) (numerator): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income (loss), net of tax | ​ | $ | (33,087) | ​ | $ | (31,244) | ​ | $ | (55,118) | ​ | $ | 46,047
Less: net (income) loss attributable to noncontrolling interest | ​ |  | (22,738) | ​ |  | (17,672) | ​ |  | (67,295) | ​ |  | (41,128)
Less: deemed dividends to SPAC public shareholders | ​ |  | — | ​ |  | (823) | ​ |  | — | ​ |  | (8,180)
Less: accrued distribution on redeemable noncontrolling interest in subsidiary | ​ | ​ | (7,363) | ​ | ​ | (7,517) | ​ | ​ | (21,929) | ​ | ​ | (22,307)
Numerator for basic earnings per share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted income (loss), net of tax - basic | ​ | $ | (63,188) | ​ | $ | (57,256) | ​ | $ | (144,342) | ​ | $ | (25,568)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average number of shares outstanding - basic | ​ |  | 9,213 | ​ |  | 9,148 | ​ |  | 9,199 | ​ |  | 9,168
Earnings (losses) per share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Basic | ​ | $ | (6.86) | ​ | $ | (6.26) | ​ | $ | (15.69) | ​ | $ | (2.79)
DILUTED EPS: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted income (loss), net of tax - diluted | ​ | $ | (63,188) | ​ | $ | (57,256) | ​ | $ | (144,342) | ​ | $ | (25,568)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average number of shares outstanding - diluted | ​ | ​ | 9,213 | ​ | ​ | 9,148 | ​ | ​ | 9,199 | ​ | ​ | 9,168
Earnings (losses) per share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Diluted | ​ | $ | (6.86) | ​ | $ | (6.26) | ​ | $ | (15.69) | ​ | $ | (2.79)

​

For all periods presented, the computation of diluted earnings (losses) per share excludes shares related to outstanding stock options with exercise prices greater than the average market price of Nabors’ common shares and shares related to the outstanding Warrants when their exercise price or exchange price is higher than the average market

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price of Nabors’ common shares, because their inclusion would be anti-dilutive and because they are not considered participating securities.

​

In any period during which the average market price of Nabors’ common shares exceeds the exercise prices of the stock options, such stock options or warrants 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. For periods in which we experience a net loss, 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 shares from options and shares related to outstanding Warrants that were excluded from diluted earnings (losses) per share that would potentially dilute earnings per share in the future were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Nine Months Ended
​ | ​ | September 30, | ​ | September 30,
​ | ​ | 2024 |  | 2023 |  | 2024 |  | 2023
Potentially dilutive securities excluded as anti-dilutive | ​ | ​ | 3,383 | ​ | ​ | 3,370 | ​ | ​ | 3,390 | ​ | ​ | 3,383

​

Additionally, for the three and nine months ended September 30, 2024, we excluded 1.2 million common shares from the computation of diluted shares related to the conversion of the 1.75% senior exchangeable notes due June 2029, because their effect would be anti-dilutive under the if-converted method, respectively.

​

​

Note 10 Supplemental Balance Sheet and Income Statement Information

​

Accrued liabilities included the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
​ |  | 2024 |  | 2023
​ | ​ | (In thousands)
Accrued compensation | ​ | $ | 75,110 | ​ | $ | 58,769
Deferred revenue | ​ |  | 32,627 | ​ | ​ | 29,233
Other taxes payable | ​ |  | 38,364 | ​ | ​ | 41,322
Workers’ compensation liabilities | ​ |  | 6,588 | ​ |  | 6,588
Interest payable | ​ |  | 46,026 | ​ |  | 57,607
Litigation reserves | ​ |  | 10,458 | ​ |  | 19,924
Other accrued liabilities | ​ |  | 9,299 | ​ |  | 16,797
​ | ​ | $ | 218,472 | ​ | $ | 230,240

​

Investment income (loss) includes the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Nine Months Ended
​ |  | September 30, | ​ | September 30,
​ |  | 2024 |  | 2023 |  | 2024 |  | 2023
​ | ​ | (In thousands)
Interest and dividend income | ​ | $ | 11,479 | ​ | $ | 10,041 | ​ | $ | 30,265 | ​ | $ | 30,573
Gains (losses) on marketable securities | ​ |  | 24 | ​ |  | 128 | ​ |  | (380) | ​ |  | 1,205
​ | ​ | $ | 11,503 | ​ | $ | 10,169 | ​ | $ | 29,885 | ​ | $ | 31,778

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​

Other, net included the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Three Months Ended | ​ | Nine Months Ended
​ | ​ |  | September 30, | ​ | September 30,
​ | ​ |  | 2024 |  | 2023 |  | 2024 |  | 2023
​ | ​ | ​ | (In thousands)
Losses on sales, disposals and involuntary conversions of long-lived assets | ​ | ​ | $ | 6,000 | ​ | $ | 7,054 | ​ | $ | 15,542 | ​ | $ | 7,982
Other than temporary impairment on securities | ​ | ​ | ​ | 15,380 | ​ | ​ | — | ​ | ​ | 15,380 | ​ | ​ | 5,293
Energy transition initiatives | ​ | ​ | ​ | 55 | ​ | ​ | 173 | ​ | ​ | 363 | ​ | ​ | 2,600
Warrant and derivative valuation | ​ | ​ | ​ | (2,944) | ​ | ​ | 7,637 | ​ | ​ | (12,538) | ​ | ​ | (44,578)
Litigation expenses and reserves | ​ | ​ |  | 879 | ​ | ​ | 13,660 | ​ | ​ | 5,197 | ​ | ​ | 20,815
Foreign currency transaction losses | ​ | ​ |  | 3,423 | ​ | ​ | 4,915 | ​ | ​ | 21,317 | ​ | ​ | 21,725
Loss (gain) on debt buyback | ​ | ​ | ​ | 12,281 | ​ | ​ | (103) | ​ | ​ | 14,857 | ​ | ​ | (25,202)
Other losses (gains) | ​ | ​ |  | 6,534 | ​ | ​ | 2,210 | ​ | ​ | 9,677 | ​ | ​ | 2,761
​ | ​ | ​ | $ | 41,608 | ​ | $ | 35,546 | ​ | $ | 69,795 | ​ | $ | (8,604)

​

The changes in accumulated other comprehensive income (loss), by component, included the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | Gains | ​ | Defined | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | (losses) on | ​ | benefit | ​ | Foreign | ​ | ​ | ​
​ | ​ | cash flow | ​ | pension plan | ​ | currency | ​ | ​ | ​
​ |  | hedges |  | items |  | items |  | Total
​ | ​ | (In thousands (1) )
As of January 1, 2023 | ​ | $ | 2 | ​ | $ | (3,767) | ​ | $ | (7,273) | ​ | $ | (11,038)
Other comprehensive income (loss) before reclassifications | ​ |  | — | ​ | ​ | — | ​ |  | 496 | ​ | ​ | 496
Amounts reclassified from accumulated other comprehensive income (loss) | ​ |  | — | ​ | ​ | 120 | ​ | ​ | — | ​ | ​ | 120
Net other comprehensive income (loss) | ​ |  | — | ​ |  | 120 | ​ |  | 496 | ​ |  | 616
As of September 30, 2023 | ​ | $ | 2 | ​ | $ | (3,647) | ​ | $ | (6,777) | ​ | $ | (10,422)

(1) | All amounts are net of tax.

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | Gains | ​ | Defined | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | (losses) on | ​ | benefit | ​ | Foreign | ​ | ​ | ​
​ | ​ | cash flow | ​ | pension plan | ​ | currency | ​ | ​ | ​
​ |  | hedges |  | items |  | items |  | Total
​ | ​ | (In thousands (1) )
As of January 1, 2024 | ​ | $ | 2 | ​ | $ | (3,606) | ​ | $ | (7,228) | ​ | $ | (10,832)
Other comprehensive income (loss) before reclassifications | ​ |  | — | ​ |  | — | ​ |  | (133) | ​ |  | (133)
Amounts reclassified from accumulated other comprehensive income (loss) | ​ |  | — | ​ |  | 121 | ​ |  | — | ​ |  | 121
Net other comprehensive income (loss) | ​ |  | — | ​ |  | 121 | ​ |  | (133) | ​ |  | (12)
As of September 30, 2024 | ​ | $ | 2 | ​ | $ | (3,485) | ​ | $ | (7,361) | ​ | $ | (10,844)

(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,
​ | ​ | 2024 |  | 2023 |  | 2024 |  | 2023
​ | (In thousands)
General and administrative expenses | ​ | $ | 52 | ​ | $ | 52 | ​ | $ | 157 | ​ | $ | 156
Total income (loss) before income tax | ​ |  | (52) | ​ |  | (52) | ​ |  | (157) | ​ |  | (156)
Tax expense (benefit) | ​ | ​ | (12) | ​ | ​ | (12) | ​ | ​ | (36) | ​ | ​ | (36)
Reclassification adjustment for (gains)/ losses included in net income (loss) | ​ | $ | (40) | ​ | $ | (40) | ​ | $ | (121) | ​ | $ | (120)

​

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​

Note 11 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,
​ | ​ |  | 2024 |  | 2023 |  | 2024 |  | 2023
​ | (In thousands)
Operating revenues: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. Drilling | ​ | ​ | $ | 254,773 | ​ | $ | 276,385 | ​ | $ | 786,485 | ​ | $ | 941,867
International Drilling | ​ | ​ |  | 368,594 | ​ |  | 344,780 | ​ |  | 1,074,686 | ​ |  | 1,002,478
Drilling Solutions | ​ | ​ |  | 79,544 | ​ |  | 72,831 | ​ |  | 238,079 | ​ |  | 224,729
Rig Technologies | ​ | ​ |  | 45,809 | ​ |  | 61,437 | ​ |  | 145,511 | ​ |  | 183,481
Other reconciling items (1) | ​ | ​ |  | (16,915) | ​ |  | (21,459) | ​ |  | (44,454) | ​ |  | (72,375)
Total | ​ | ​ | $ | 731,805 | ​ | $ | 733,974 | ​ | $ | 2,200,307 | ​ | $ | 2,280,180

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Three Months Ended | ​ | Nine Months Ended
​ | ​ |  | September 30, | ​ | September 30,
​ | ​ |  | 2024 |  | 2023 |  | 2024 |  | 2023
​ | (In thousands)
Adjusted operating income (loss): (2) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. Drilling | ​ | ​ | $ | 41,694 | ​ | $ | 49,582 | ​ | $ | 137,308 | ​ | $ | 210,859
International Drilling | ​ | ​ |  | 32,182 | ​ |  | 9,862 | ​ |  | 78,330 | ​ |  | 22,226
Drilling Solutions | ​ | ​ |  | 29,231 | ​ |  | 25,341 | ​ |  | 83,443 | ​ |  | 80,830
Rig Technologies | ​ | ​ |  | 2,761 | ​ |  | 4,995 | ​ |  | 11,830 | ​ |  | 13,741
Total segment adjusted operating income (loss) | ​ | ​ | $ | 105,868 | ​ | $ | 89,780 | ​ | $ | 310,911 | ​ | $ | 327,656

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Three Months Ended | ​ | Nine Months Ended
​ | ​ |  | September 30, | ​ | September 30,
​ | ​ |  | 2024 |  | 2023 |  | 2024 |  | 2023
​ | (In thousands)
Reconciliation of segment adjusted operating income (loss) to net income (loss): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (loss) | ​ | ​ | $ | (33,087) | ​ | $ | (31,244) | ​ | $ | (55,118) | ​ | $ | 46,047
Income tax expense (benefit) | ​ | ​ | ​ | 10,118 | ​ | ​ | 10,513 | ​ | ​ | 41,716 | ​ | ​ | 59,976
Income (loss) before income taxes | ​ | ​ | ​ | (22,969) | ​ | ​ | (20,731) | ​ | ​ | (13,402) | ​ | ​ | 106,023
Investment (income) loss | ​ | ​ |  | (11,503) | ​ | ​ | (10,169) | ​ |  | (29,885) | ​ | ​ | (31,778)
Interest expense | ​ | ​ | ​ | 55,350 | ​ | ​ | 44,042 | ​ | ​ | 157,222 | ​ | ​ | 135,347
Other, net | ​ | ​ | ​ | 41,608 | ​ | ​ | 35,546 | ​ | ​ | 69,795 | ​ | ​ | (8,604)
Other reconciling items (3) | ​ | ​ |  | 43,382 | ​ |  | 41,092 | ​ |  | 127,181 | ​ |  | 126,668
Total segment adjusted operating income (loss) (2) | ​ | ​ | $ | 105,868 | ​ | $ | 89,780 | ​ | $ | 310,911 | ​ | $ | 327,656

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
​ |  | 2024 |  | 2023
​ | ​ | (In thousands)
Total assets: | ​ | ​ | ​ | ​ | ​ | ​
U.S. Drilling | ​ | $ | 1,108,961 | ​ | $ | 1,239,765
International Drilling | ​ |  | 2,321,729 | ​ |  | 2,227,308
Drilling Solutions | ​ |  | 77,810 | ​ |  | 78,472
Rig Technologies | ​ |  | 213,507 | ​ |  | 239,167
Other reconciling items (3) | ​ |  | 831,629 | ​ |  | 1,493,253
Total | ​ | $ | 4,553,636 | ​ | $ | 5,277,965

(1) | Represents the elimination of inter-segment transactions related to our Rig Technologies operating segment.

​

(2) | Adjusted operating income (loss) represents income (loss) before income taxes, interest expense, investment income (loss), and other, net. 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

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| 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 from net income (loss) is provided in the above table.

​

(3) | Represents the elimination of inter-segment transactions and unallocated corporate expenses and assets.

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Note 12 Revenue Recognition

​

We recognize revenue when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. Contract drilling revenues are recorded over time utilizing the input method based on time elapsed. The measurement of progress considers the transfer of the service to the customer as we provide daily drilling services. We receive payment after the services have been performed by billing customers periodically (typically monthly). However, a portion of our revenues are recognized at a point-in-time as control is transferred at a distinct point in time such as with the sale of our top drives and other capital equipment. Within our drilling contracts, we have identified one performance obligation in which the transaction price is allocated.

​

Disaggregation of revenue

​

In the following table, revenue is disaggregated by geographical region. The table also includes a reconciliation of the disaggregated revenue with the reportable segments:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended
​ |  | September 30, 2024
​ | ​ | ​ | U.S. Drilling | ​ | ​ | International Drilling | ​ | ​ | Drilling Solutions | ​ | ​ | Rig Technologies | ​ | ​ | Other | ​ | ​ | Total
​ | ​ | (In thousands)
Lower 48 | ​ | $ | 217,138 | ​ | $ | — | ​ | $ | 42,161 | ​ | $ | 20,661 | ​ | $ | — | ​ | $ | 279,960
U.S. Offshore Gulf of Mexico | ​ |  | 25,510 | ​ |  | — | ​ |  | 1,969 | ​ |  | — | ​ |  | — | ​ | ​ | 27,479
Alaska | ​ |  | 12,125 | ​ |  | — | ​ |  | 501 | ​ |  | — | ​ |  | — | ​ | ​ | 12,626
Canada | ​ |  | — | ​ |  | — | ​ |  | 416 | ​ |  | 936 | ​ |  | — | ​ | ​ | 1,352
Middle East & Asia | ​ |  | — | ​ |  | 250,740 | ​ |  | 13,321 | ​ |  | 19,067 | ​ |  | — | ​ | ​ | 283,128
Latin America | ​ |  | — | ​ |  | 94,140 | ​ |  | 20,735 | ​ |  | 3,361 | ​ |  | — | ​ | ​ | 118,236
Europe, Africa & CIS | ​ |  | — | ​ |  | 23,714 | ​ |  | 441 | ​ |  | 1,784 | ​ |  | — | ​ | ​ | 25,939
Eliminations & other | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (16,915) | ​ |  | (16,915)
Total | ​ | $ | 254,773 | ​ | $ | 368,594 | ​ | $ | 79,544 | ​ | $ | 45,809 | ​ | $ | (16,915) | ​ | $ | 731,805

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended
​ |  | September 30, 2024
​ | ​ | ​ | U.S. Drilling | ​ | ​ | International Drilling | ​ | ​ | Drilling Solutions | ​ | ​ | Rig Technologies | ​ | ​ | Other | ​ | ​ | Total
​ | ​ | (In thousands)
Lower 48 | ​ | $ | 670,060 | ​ | $ | — | ​ | $ | 134,296 | ​ | $ | 66,735 | ​ | $ | — | ​ | $ | 871,091
U.S. Offshore Gulf of Mexico | ​ |  | 82,555 | ​ |  | — | ​ |  | 7,429 | ​ |  | — | ​ |  | — | ​ | ​ | 89,984
Alaska | ​ |  | 33,870 | ​ |  | — | ​ |  | 1,856 | ​ |  | — | ​ |  | — | ​ | ​ | 35,726
Canada | ​ |  | — | ​ |  | — | ​ |  | 1,282 | ​ |  | 4,051 | ​ |  | — | ​ | ​ | 5,333
Middle East & Asia | ​ |  | — | ​ |  | 751,271 | ​ |  | 37,363 | ​ |  | 57,748 | ​ |  | — | ​ | ​ | 846,382
Latin America | ​ |  | — | ​ |  | 266,416 | ​ |  | 54,789 | ​ |  | 12,064 | ​ |  | — | ​ | ​ | 333,269
Europe, Africa & CIS | ​ |  | — | ​ |  | 56,999 | ​ |  | 1,064 | ​ |  | 4,913 | ​ |  | — | ​ | ​ | 62,976
Eliminations & other | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (44,454) | ​ |  | (44,454)
Total | ​ | $ | 786,485 | ​ | $ | 1,074,686 | ​ | $ | 238,079 | ​ | $ | 145,511 | ​ | $ | (44,454) | ​ | $ | 2,200,307

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended
​ |  | September 30, 2023
​ | ​ | ​ | U.S. Drilling | ​ | ​ | International Drilling | ​ | ​ | Drilling Solutions | ​ | ​ | Rig Technologies | ​ | ​ | Other | ​ | ​ | Total
​ | ​ | (In thousands)
Lower 48 | ​ | $ | 241,900 | ​ | $ | — | ​ | $ | 45,646 | ​ | $ | 27,453 | ​ | $ | — | ​ | $ | 314,999
U.S. Offshore Gulf of Mexico | ​ |  | 25,768 | ​ |  | — | ​ |  | 2,974 | ​ |  | — | ​ |  | — | ​ | ​ | 28,742
Alaska | ​ |  | 8,717 | ​ |  | — | ​ |  | 469 | ​ |  | — | ​ |  | — | ​ | ​ | 9,186
Canada | ​ |  | — | ​ |  | — | ​ |  | 467 | ​ |  | 1,526 | ​ |  | — | ​ | ​ | 1,993
Middle East & Asia | ​ |  | — | ​ |  | 243,691 | ​ |  | 10,550 | ​ |  | 27,430 | ​ |  | — | ​ | ​ | 281,671
Latin America | ​ |  | — | ​ |  | 86,665 | ​ |  | 11,885 | ​ |  | 3,265 | ​ |  | — | ​ | ​ | 101,815
Europe, Africa & CIS | ​ |  | — | ​ |  | 14,424 | ​ |  | 840 | ​ |  | 1,763 | ​ |  | — | ​ | ​ | 17,027
Eliminations & other | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (21,459) | ​ |  | (21,459)
Total | ​ | $ | 276,385 | ​ | $ | 344,780 | ​ | $ | 72,831 | ​ | $ | 61,437 | ​ | $ | (21,459) | ​ | $ | 733,974

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended
​ |  | September 30, 2023
​ | ​ | ​ | U.S. Drilling | ​ | ​ | International Drilling | ​ | ​ | Drilling Solutions | ​ | ​ | Rig Technologies | ​ | ​ | Other | ​ | ​ | Total
​ | ​ | (In thousands)
Lower 48 | ​ | $ | 820,927 | ​ | $ | — | ​ | $ | 148,587 | ​ | $ | 92,069 | ​ | $ | — | ​ | $ | 1,061,583
U.S. Offshore Gulf of Mexico | ​ |  | 89,744 | ​ |  | — | ​ |  | 8,929 | ​ |  | — | ​ |  | — | ​ | ​ | 98,673
Alaska | ​ |  | 31,196 | ​ |  | — | ​ |  | 1,450 | ​ |  | — | ​ |  | — | ​ | ​ | 32,646
Canada | ​ |  | — | ​ |  | — | ​ |  | 1,137 | ​ |  | 5,539 | ​ |  | — | ​ | ​ | 6,676
Middle East & Asia | ​ |  | — | ​ |  | 704,918 | ​ |  | 32,587 | ​ |  | 70,190 | ​ |  | — | ​ | ​ | 807,695
Latin America | ​ |  | — | ​ |  | 251,300 | ​ |  | 30,446 | ​ |  | 7,776 | ​ |  | — | ​ | ​ | 289,522
Europe, Africa & CIS | ​ |  | — | ​ |  | 46,260 | ​ |  | 1,593 | ​ |  | 7,907 | ​ |  | — | ​ | ​ | 55,760
Eliminations & other | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (72,375) | ​ |  | (72,375)
Total | ​ | $ | 941,867 | ​ | $ | 1,002,478 | ​ | $ | 224,729 | ​ | $ | 183,481 | ​ | $ | (72,375) | ​ | $ | 2,280,180

​

Contract balances

​

We perform our obligations under a contract with a customer by transferring goods or services in exchange for consideration from the customer. We recognize a contract asset or liability when we transfer goods or services to a customer and bill an amount which differs from the revenue allocated to the related performance obligations.

​

The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in receivables, contract assets, or contract liabilities (deferred revenue) on our condensed consolidated balance sheet. In general, we receive payments from customers based on dayrates as stipulated in our contracts (e.g., operating rate, standby rate, etc.). The invoices billed to the customer are based on the varying rates applicable to the operating status on each rig. Accounts receivable are recorded when the right to consideration becomes unconditional.

​

Dayrate contracts also may contain fees charged to the customer for up-front rig modifications, mobilization and demobilization of equipment and personnel. These fees are associated with contract fulfillment activities, and the related revenue (subject to any constraint on estimates of variable consideration) is allocated to a single performance obligation and recognized ratably over the initial term of the contract. Mobilization fees are generally billable to the customer in the initial phase of a contract and generate contract liabilities until they are recognized as revenue. Demobilization fees are generally received at the end of the contract and generate contract assets when they are recognized as revenue prior to becoming receivables from the customer.

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We receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request. Reimbursable revenues are variable and subject to uncertainty as the amounts received and timing thereof are dependent on factors outside of our influence. Accordingly, these revenues are constrained and not recognized until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of the customer. We are generally considered a principal in these transactions and record the associated revenues at the gross amounts billed to the customer.

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The opening and closing balances of our receivables, contract assets and current and long-term contract liabilities are as follows:

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Contract | ​ | Contract | ​ | Contract | ​ | Contract
​ | ​ | Contract | ​ | Assets | ​ | Assets | ​ | Liabilities | ​ | Liabilities
​ |  | Receivables |  | (Current) |  | (Long-term) |  | (Current) |  | (Long-term)
​ | ​ | (In thousands)
As of December 31, 2023 | ​ | $ | 397,051 | ​ | $ | 8,434 | ​ | $ | 2,980 | ​ | $ | 20,295 | ​ | $ | 1,969
As of September 30, 2024 | ​ | $ | 431,925 | ​ | $ | 18,331 | ​ | $ | 6,057 | ​ | $ | 24,617 | ​ | $ | 1,918

​

Approximately 71% of the contract liability balance at the beginning of the period is expected to be recognized as revenue during 2024, of which 53% was recognized during the nine months ended September 30, 2024, and 14% is expected to be recognized during 2025. The remaining 15% of the contract liability balance at the beginning of the period is expected to be recognized as revenue during 2026 or thereafter.

​

Additionally, 69% of the contract asset balance at the beginning of the period is expected to be recognized as expense during 2024, of which 60% was recognized during the nine months ended September 30, 2024, and 21% is expected to be recognized during 2025. The remaining 10% of the contract asset balance at the beginning of the period is expected to be recognized as expense during 2026 or thereafter. This disclosure does not include variable consideration allocated entirely to a wholly unsatisfied performance obligation or promise to transfer a distinct good or service that forms part of a single performance obligation.

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Note 13 Special Purpose Acquisition Company

​

Nabors Energy Transition Corp. II (“NETC II”) is our SPAC co-sponsored by Nabors and Greens Road Energy II LLC. Greens Road Energy II LLC is owned by certain members of Nabors’ management team and board members. In July 2023, NETC II completed its initial public offering of 30,500,000 units at $10.00 per unit, generating gross proceeds of approximately $305.0 million. Simultaneously with the closing of the IPO, NETC II completed the private sale of an aggregate of 9,540,000 warrants for an aggregate value of $9.5 million and issued unsecured promissory notes for an aggregate amount of $3.1 million. As part of the initial public offering of NETC II and subsequent private placement warrant transactions, $308.1 million was deposited in an interest-bearing U.S. based trust account (“Trust Account”) on July 18, 2023.

​

The SPAC’s funds held in a 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 the SPAC 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 the SPAC’s taxes.

​

The company accounts for the non-controlling interest in the SPAC as subject to possible redemption in accordance with FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” The SPAC’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. Nabors will recognize any future changes in redemption value immediately as they occur – i.e., adjusting the carrying amount of the instrument to its current redemption amount at each reporting period.

​

The SPAC is a consolidated VIE included in the accompanying consolidated financial statements under Restricted cash held in trust and Redeemable noncontrolling interest in subsidiary. As of September 30, 2024 and December 31, 2023, the Trust Account balance and non-controlling interest subject to possible redemption was $328.0 million and $315.5 million, respectively. NETC II’s non-controlling interest subject to possible redemption is presented at full redemption value as mezzanine equity, outside of the stockholders’ equity section in the accompanying consolidated financial statements.

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The following table summarizes NETC II’s effects on changes in non-controlling interest subject to possible redemption.

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2024 |  | 2023
​ | ​ | (In thousands)
Balance, beginning of year | ​ | $ | 315,488 | ​ | $ | —
Initial public offering | ​ | ​ | — | ​ | ​ | 294,474
Net earnings | ​ |  | 12,521 | ​ | ​ | 3,214
Nabors deemed dividends to SPAC public shareholders | ​ |  | — | ​ | ​ | 5,583
Noncontrolling interest deemed dividends to SPAC public shareholders | ​ |  | — | ​ | ​ | 7,993
Balance as of September 30 | ​ | $ | 328,009 | ​ | $ | 311,264

​

​

​

Note 14 Subsequent Event

​

On October 14, 2024, we and certain subsidiaries of ours entered into a merger agreement (the “Merger Agreement”) to acquire Parker Drilling Company (“Parker”), pursuant to which, upon the terms and subject to the conditions set forth therein, we will acquire Parker for 4.8 million of our common shares, subject to a collar. The precise number of shares to be issued to Parker stockholders will be determined based upon the volume weighted average price of Nabors common shares on the NYSE for the 15 trading days ending the fifth day before the closing of the merger (“Closing Price”) and, if that Closing Price is below $42.70, Parker stockholders will also receive a cash component for their shares of Parker stock. If the volume weighted average price is above $99.62, the merger consideration will consist of the number of shares equal to $478,176,000 divided by the Closing Price.

Parker provides drilling services across global energy markets. Through its Quail Tools subsidiary, Parker is the leading rental provider of high-performance downhole tubulars in the U.S. market. Internationally, Parker provides tubular rentals and repair services, with state-of-the-art facilities located in key geographies. Parker offers differentiated, casing and tubular running services in the U.S., the Middle East, Latin America, and Asia. Its portfolio also includes a fleet of 17 drilling rigs in the U.S. and international markets, as well as Operations & Maintenance services primarily in Canada and Alaska.

The transaction is expected to close in the first quarter of 2025, subject to customary closing conditions and receipt of required regulatory approvals, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Act.

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​

​

​

​

​

​

​

​

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

​

We often discuss expectations regarding our future markets, demand for our products and services, and our performance in our annual, quarterly and current reports, press releases, and other written and oral statements. Statements relating to matters that are not historical facts are “forward-looking statements” within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These “forward-looking statements” are based on an analysis of currently available competitive, financial and economic data and our operating plans. They are inherently uncertain and investors should recognize that events and actual results could turn out to be significantly different from our expectations. By way of illustration, when used in this document, words such as “anticipate,” “believe,” “expect,” “plan,” “intend,” “estimate,” “project,” “will,” “should,” “could,” “may,” “predict” and similar expressions are intended to identify forward-looking statements.

​

You should consider the following key factors when evaluating these forward-looking statements:

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| ● | geopolitical events, pandemics and other macro-events and their respective and collective impact on our operations as well as oil and gas markets and prices;

​

| ● | fluctuations and volatility in worldwide prices of and demand for oil and natural gas;

​

| ● | fluctuations in levels of oil and natural gas exploration and development activities;

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| ● | fluctuations in the demand for our services;

​

| ● | competitive and technological changes and other developments in the oil and gas and oilfield services industries;

​

| ● | our ability to renew customer contracts in order to maintain competitiveness;

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| ● | the existence of operating risks inherent in the oil and gas and oilfield services industries;

​

| ● | the possibility of the loss of one or a number of our large customers;

​

| ● | the amount and nature of our future capital expenditures and how we expect to fund our capital expenditures;

​

| ● | the occurrence of cybersecurity incidents, attacks or other breaches to our information technology systems;

​

| ● | the impact of long-term indebtedness and other financial commitments on our financial and operating flexibility;

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| ● | our access to, and the cost of, capital, including the impact of a downgrade in our credit rating, covenant restrictions, availability under our secured revolving credit facility, future issuances of debt or equity securities and the global interest rate environment;

​

| ● | our dependence on our operating subsidiaries and investments to meet our financial obligations;

​

| ● | our ability to retain skilled employees;

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| ● | our ability to complete, and realize the expected benefits of, strategic transactions;

​

| ● | changes in tax laws and the possibility of changes in other laws and regulations;

​

| ● | the possibility of political or economic instability, civil disturbance, war or acts of terrorism in any of the countries in which we do business;

​

| ● | global views on and the regulatory environment related to energy transition and our ability to implement our energy transition initiatives;

​

| ● | potential long-lived asset impairments;

​

| ● | the possibility of changes to U.S. trade policies and regulations including the imposition of trade embargoes, sanctions or tariffs;

​

| ● | general economic conditions, including the capital and credit markets;

​

| ● | uncertainty as to whether the conditions to closing the merger will be satisfied;

​

| ● | whether litigation relating to the merger will occur and, if so, the results of any litigation, settlements and investigations;

​

| ● | potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger;

​

| ● | our ability to retain key personnel of Nabors and Parker;

​

| ● | the diversion of management time on merger-related issues;

​

| ● | the significant costs required to complete the merger and to integrate Parker’s operations with our own;

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| ● | our ability to successfully integrate Parker’s business with our own and to realize the expected benefits of the merger with Parker; and

​

| ● | the combined company’s ability to utilize NOLs.

​

Our business depends, to a large degree, on the level of spending by oil and gas companies for exploration, development and production activities. Therefore, a sustained increase or decrease in the price of oil or natural gas, that has a material impact on exploration, development and production activities, could also materially affect our financial position, results of operations and cash flows.

​

The above description of risks and uncertainties is by no means all-inclusive but highlights certain factors that we believe are important for your consideration. For a more detailed description of risk factors that may affect us or our industry, please refer to Item 1A. — Risk Factors in our 2023 Annual Report.

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Management Overview

​

This section is intended to help you understand our results of operations and our financial condition. This information is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the accompanying notes thereto.

​

We are a leading provider of advanced technology for the energy industry. With operations in over 15 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and sustainable energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower carbon world.

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Outlook

​

The demand for our services and products is a function of the level of spending by oil and gas companies for exploration, development and production activities. The level of exploration, development and production activities is to a large extent tied to the prices of oil and natural gas, which can fluctuate significantly, are highly volatile and tend to be highly sensitive to factors including supply and demand cycles and geopolitical uncertainties particularly those impacting large hydrocarbon-producing countries. Certain oil and gas companies may also intentionally limit their capital spending as they focus on generating returns to shareholders as opposed to maximizing hydrocarbon production. Additionally, there has recently been an increasing number of customer consolidations within the industry especially in the United States. In some cases, these transactions may have an impact on overall rig demand, as the acquiring company may apply criteria that results in a different level of demand for drilling rigs than the previous two companies would have had on a stand-alone basis.

​

Since late 2022 and continuing through the third quarter of 2024, global energy commodity markets have experienced high levels of volatility. In the U.S., operators generally reacted to these market conditions by reducing their drilling activity. Recent production actions announced by certain large international oil producers have been supportive of both oil prices and oil-focused activity broadly, especially in international markets. Natural gas prices, particularly in the United States, declined significantly through 2023 and into 2024, to levels which largely persisted through the third quarter of 2024 and which have caused operators to reduce natural gas directed activity.

​

In early 2023 economic sentiment was overshadowed by a pervasive concern that a global recession would take hold. The U.S. Federal Reserve’s tightening of interest rates reduced capital availability in the U.S energy market. As these higher interest rates continued, rig counts in the U.S. Lower 48 continued to decline throughout the year. More recently, the U.S. Federal Reserve reduced interest rates. The impact of that decision should become evident in the coming quarters. Despite the reduction in rig count, rig pricing discipline remained intact, generally supportive of rig dayrates and daily rig margins.

​

U.S. oil and gas production has proved resilient thus far in 2024 in the face of reduced drilling activity. Internationally, we generally see an expansion of production capacity as well as the widespread development of unconventional resources driving an expected increase in oilfield activity broadly across those markets.

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Recent Developments

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2024 Credit Agreement

​

On June 17, 2024, Nabors Delaware amended and restated its’ credit agreement (the “2024 Credit Agreement”). Under the 2024 Credit Agreement, the lenders have committed to provide to Nabors Delaware up to $350.0 million in revolving loans, and the issuing banks have committed to provide a standalone letter of credit tranche that permits Nabors Delaware to issue reimbursement obligations under letters of credit in an aggregate principal amount not in excess of $125.0 million. Letters of credit issued will not affect revolving loan capacity and vice versa. The 2024 Credit Agreement contains a $200.0 million uncommitted accordion feature that can be applied to increase the commitments under either the revolving loans or the letter of credit tranche, or both. The facility matures on the earlier of (a) June 17, 2029 and (b) to the extent 10% or more of the respective principal amount of any of the 7.375% Senior Priority Guaranteed Notes due May 2027 or 7.50% Senior Guaranteed Notes due January 2028 or 50% or more of the principal amount of the 1.75% Senior Exchangeable Notes due June 2029 remains outstanding on the date that is 90 days prior to the applicable maturity date for such indebtedness, then such 90th day.

​

8.875% Senior Guaranteed Notes due August 2031

​

On July 22, 2024, Nabors issued $550.0 million in aggregate principal amount of 8.875% senior guaranteed notes, which are fully and unconditionally guaranteed by Nabors and certain of Nabors’ indirect wholly-owned subsidiaries. Interest on the notes is payable on February 15 and August 15 of each year. The notes have a maturity date of August 15, 2031. Nabors used the net proceeds, along with cash on hand, to redeem all of its 7.25% senior guaranteed notes due January 2026.

​

Acquisition of Parker Drilling Company

​

On October 14, 2024, we and certain subsidiaries of ours entered into a merger agreement (the “Merger Agreement”) to acquire Parker Drilling Company (“Parker”), pursuant to which, upon the terms and subject to the conditions set forth therein, we will acquire Parker for 4.8 million of our common shares, subject to a collar. The precise number of shares to be issued to Parker stockholders will be determined based upon the volume weighted average price of Nabors common shares on the NYSE for the 15 trading days ending the fifth day before the closing of the merger (“Closing Price”) and, if that Closing Price is below $42.70, Parker stockholders will also receive a cash component for their shares of Parker stock. If the volume weighted average price is above $99.62, the merger consideration will consist of the number of shares equal to $478,176,000 divided by the Closing Price.

Parker provides drilling services across global energy markets. Through its Quail Tools subsidiary, Parker is the leading rental provider of high-performance downhole tubulars in the U.S. market. Internationally, Parker provides tubular rentals and repair services, with state-of-the-art facilities located in key geographies. Parker offers differentiated, casing and tubular running services in the U.S., the Middle East, Latin America, and Asia. Its portfolio also includes a fleet of 17 drilling rigs in the U.S. and international markets, as well as Operations & Maintenance services primarily in Canada and Alaska.

The transaction is expected to close in the first quarter of 2025, subject to customary closing conditions and receipt of required regulatory approvals, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Act.

​

Comparison of the three months ended September 30, 2024 and 2023

​

Operating revenues for the three months ended September 30, 2024 totaled $731.8 million, representing a decrease of $2.2 million, or 0%, compared to the three months ended September 30, 2023. For a more detailed description of operating results, see Segment Results of Operations below.

​

Net loss attributable to Nabors totaled $55.8 million ($6.86 per diluted share) for the three months ended September 30, 2024 compared to a net loss attributable to Nabors of $48.9 million ($6.26 per diluted share) for the three months ended September 30, 2023, or a $6.9 million increase in net loss. The increase in net loss is primarily related to higher interest expense of $11.3 million and higher other, net of $6.1 million offset by an improvement in adjusted

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operating income of $16.1 million for our segments from the prior year. See below for further discussion on each of these income statement items.

​

General and administrative expenses for the three months ended September 30, 2024 totaled $64.0 million, representing an increase of $1.8 million, or 3%, compared to the three months ended September 30, 2023. This is reflective of increases in workforce costs, general operating costs and inflationary pressures as market conditions have improved.

​

Depreciation and amortization expense for the three months ended September 30, 2024 was $159.2 million, representing a decrease of $2.1 million compared to the three months ended September 30, 2023. The decrease is a result of lower capital expenditures over recent years coupled with a higher amount of older assets reaching the end of their useful lives.

​

Segment Results of Operations

​

The following tables set forth certain information with respect to our reportable segments and rig activity:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | ​ | ​ | ​ | ​ |  | ​
​ | ​ | September 30, | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2024 | ​ | 2023 | ​ | Increase/(Decrease) |  | ​
​ | (In thousands, except percentages and rig activity)
U.S. Drilling |  | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​
Operating revenues | ​ | $ | 254,773 | ​ | $ | 276,385 | ​ | $ | (21,612) | ​ | (8) | % | ​
Adjusted operating income (loss) (1) | ​ | $ | 41,694 | ​ | $ | 49,582 | ​ | $ | (7,888) | ​ | (16) | % | ​
Average rigs working (2) | ​ |  | 74.0 | ​ |  | 80.4 | ​ |  | (6.4) | ​ | (8) | % | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
International Drilling | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating revenues | ​ | $ | 368,594 | ​ | $ | 344,780 | ​ | $ | 23,814 | ​ | 7 | % | ​
Adjusted operating income (loss) (1) | ​ | $ | 32,182 | ​ | $ | 9,862 | ​ | $ | 22,320 | ​ | 226 | % | ​
Average rigs working (2) | ​ |  | 84.7 | ​ |  | 77.2 | ​ |  | 7.5 | ​ | 10 | % | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Drilling Solutions | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating revenues | ​ | $ | 79,544 | ​ | $ | 72,831 | ​ | $ | 6,713 | ​ | 9 | % | ​
Adjusted operating income (loss) (1) | ​ | $ | 29,231 | ​ | $ | 25,341 | ​ | $ | 3,890 |  | 15 | % | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Rig Technologies | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating revenues | ​ | $ | 45,809 | ​ | $ | 61,437 | ​ | $ | (15,628) | ​ | (25) | % | ​
Adjusted operating income (loss) (1) | ​ | $ | 2,761 | ​ | $ | 4,995 | ​ | $ | (2,234) |  | (45) | % | ​

​

(1) | Adjusted operating income (loss) is our measure of segment profit and loss. See Note 11—Segment Information to the consolidated financial statements included in Item 1 of the report.

​

(2) | Represents a measure of the average number of rigs operating during a given period. For example, one rig operating 45 days during a quarter represents approximately 0.5 average rigs working for the quarter. On an annual period, one rig operating 182.5 days represents approximately 0.5 average rigs working for the year.

​

U.S. Drilling

​

Operating revenues for our U.S. Drilling segment decreased by $21.6 million or 8% during the three months ended September 30, 2024 compared to the corresponding prior year period primarily due to a decrease in activity as reflected by an 8% decrease in the average number of rigs working, while pricing remained stable.

​

International Drilling

​

Operating revenues for our International Drilling segment during the three months ended September 30, 2024 increased by $23.8 million or 7% compared to the corresponding prior year period. The increase is primarily attributable to a 10% increase in the average rigs working, reflecting increased drilling activity as market conditions and demand for our international drilling services have increased since the prior year.

​

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Drilling Solutions

​

Operating revenues for this segment increased by $6.7 million or 9% during the three months ended September 30, 2024 compared to the corresponding prior year period as an increase in demand for our international and third-party services offset a decline in results in the U.S. markets, which was driven by the reduction in drilling activity.

​

Rig Technologies

​

Operating revenues for our Rig Technologies segment decreased by $15.6 million or 25% during the three months ended September 30, 2024 compared to the corresponding prior year period due to the overall decline in activity in the U.S. as mentioned previously. Adjusted operating income was relatively flat despite the 25% drop in operating revenues, due to a change in mix of business focusing more on the higher margin product lines.

​

Other Financial Information

​

Interest expense

​

Interest expense for the three months ended September 30, 2024 was $55.4 million, representing an increase of $11.3 million, or 26%, compared to three months ended September 30, 2023. The increase was primarily due to an increase in our effective interest rate levels on our outstanding debt throughout the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

​

Other, net

​

Other, net for the three months ended September 30, 2024 was a loss of $41.6 million compared to $35.5 million loss for the three months ended September 30, 2023 representing a $6.1 million decrease in income. During the three months ended September 30, 2024, the amount consisted of $3.4 million in foreign currency transaction losses, $6.0 million in loss on sales of assets, $15.4 million in other than temporary impairment on securities and $12.3 million of loss recognized for debt buybacks which was offset by $2.9 million of mark-to-market gains on the common share warrants. In comparison, the amount during the three months ended September 30, 2023 primarily consisted of $13.7 million from increases in litigation reserves, $7.6 million from mark-to-market losses on the common share warrants, $7.1 million in losses on sales and disposals of long-lived assets and $4.9 million in foreign currency transaction losses.

​

Income tax

​

Our worldwide tax expense for the three months ended September 30, 2024 was $10.1 million compared to $10.5 million for the three months ended September 30, 2023. The decrease in tax expense was primarily attributable to the change in amount and geographic mix of our pre-tax earnings (losses).

​

The Organization Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%. Several legal entities in the Nabors’ group have enacted Pillar 2 legislation effective January 1, 2024. The enactment of this legislation results in application of the global minimum tax to certain of our legal entities and their subsidiaries. The enactment of Pillar 2 did not have a material impact to our worldwide tax expense for the three months ended September 30, 2024.

​

Comparison of the nine months ended September 30, 2024 and 2023

​

Operating revenues for the nine months ended September 30, 2024 totaled $2.2 billion, representing a decrease of $79.9 million, or 4%, compared to the nine months ended September 30, 2023. For a more detailed description of operating results, see Segment Results of Operations below.

​

Net loss attributable to Nabors totaled $122.4 million ($15.69 per diluted share) for the nine months ended September 30, 2024 compared to a net income attributable to Nabors of $4.9 million ($2.79 loss per diluted share) for the nine months ended September 30, 2023, or a $127.3 million decrease in net income. The decrease in net income attributable to Nabors is partially due to a decline in U.S. activity which has resulted in a decrease of approximately $16.7 million in adjusted operating income for our segments from the prior year. In addition, interest expense increased

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by $21.9 million and other, net deteriorated by $78.4 million. See below for further discussion on each of these income statement items.

​

General and administrative expenses for the nine months ended September 30, 2024 totaled $187.9 million, representing an increase of $0.8 million compared to the nine months ended September 30, 2023. This is reflective of increases in workforce costs, general operating costs and inflationary pressures as market conditions have improved.

​

Depreciation and amortization expense for the nine months ended September 30, 2024 was $477.1 million, representing a decrease of $7.0 million, or 1%, compared to the nine months ended September 30, 2023. The decrease is a result of the limited capital expenditures over recent years coupled with a higher amount of older assets reaching the end of their useful lives.

​

Segment Results of Operations

​

The following tables set forth certain information with respect to our reportable segments and rig activity:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Nine Months Ended | ​ | ​ | ​ | ​ | ​ |  | ​
​ | ​ | ​ | September 30, | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | 2024 | ​ | 2023 | ​ | Increase/(Decrease) |  | ​
​ | (In thousands, except percentages and rig activity)
U.S. Drilling | ​ | ​ | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​
Operating revenues | ​ | ​ | $ | 786,485 | ​ | $ | 941,867 | ​ | $ | (155,382) | ​ | (16) | % | ​
Adjusted operating income (loss) (1) | ​ | ​ | $ | 137,308 | ​ | $ | 210,859 | ​ | $ | (73,551) | ​ | (35) | % | ​
Average rigs working (2) | ​ | ​ |  | 75.9 | ​ |  | 89.7 | ​ |  | (13.8) | ​ | (15) | % | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
International Drilling | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating revenues | ​ | ​ | $ | 1,074,686 | ​ | $ | 1,002,478 | ​ | $ | 72,208 | ​ | 7 | % | ​
Adjusted operating income (loss) (1) | ​ | ​ | $ | 78,330 | ​ | $ | 22,226 | ​ | $ | 56,104 | ​ | 252 | % | ​
Average rigs working (2) | ​ | ​ |  | 83.4 | ​ |  | 76.9 | ​ |  | 6.5 | ​ | 8 | % | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Drilling Solutions | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating revenues | ​ | ​ | $ | 238,079 | ​ | $ | 224,729 | ​ | $ | 13,350 | ​ | 6 | % | ​
Adjusted operating income (loss) (1) | ​ | ​ | $ | 83,443 | ​ | $ | 80,830 | ​ | $ | 2,613 |  | 3 | % | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Rig Technologies | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating revenues | ​ | ​ | $ | 145,511 | ​ | $ | 183,481 | ​ | $ | (37,970) | ​ | (21) | % | ​
Adjusted operating income (loss) (1) | ​ | ​ | $ | 11,830 | ​ | $ | 13,741 | ​ | $ | (1,911) |  | (14) | % | ​

​

(1) | Adjusted operating income (loss) is our measure of segment profit and loss. See Note 11—Segment Information to the consolidated financial statements included in Item 1 of the report.

​

(2) | Represents a measure of the average number of rigs operating during a given period. For example, one rig operating 45 days during a quarter represents approximately 0.5 average rigs working for the quarter. On an annual period, one rig operating 182.5 days represents approximately 0.5 average rigs working for the year.

​

U.S. Drilling

​

Operating revenues for our U.S. Drilling segment decreased by $155.4 million or 16% during the nine months ended September 30, 2024 compared to the corresponding prior year period primarily due to a decrease in activity as reflected by a 15% decrease in the average number of rigs working, while pricing remained stable.

​

International Drilling

​

Operating revenues for our International Drilling segment during the nine months ended September 30, 2024 increased by $72.2 million or 7% compared to the corresponding prior year period. The increase is primarily attributable to an 8% increase in the average rigs working, reflecting increased drilling activity as market conditions and demand for our international drilling services have increased since the prior year.

​

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Drilling Solutions

​

Operating revenues for this segment increased by $13.3 million or 6% during the nine months ended September 30, 2024 compared to the corresponding prior year period in 2023 as an increase in demand for our international and third-party services offset a decline in results in the U.S. markets, which was driven by the reduction in drilling activity.

​

Rig Technologies

​

Operating revenues for our Rig Technologies segment decreased by $38.0 million or 21% during the nine months ended September 30, 2024 compared to the corresponding prior year period due to the overall decline in activity in the U.S. as mentioned previously. Adjusted operating income was relatively flat despite the 21% drop in operating revenues, due to a change in mix of business focusing more on the higher margin product lines.

​

Other Financial Information

​

Interest expense

​

Interest expense for the nine months ended September 30, 2024 was $157.2 million, representing an increase of $21.9 million, or 16%, compared to nine months ended September 30, 2023. The increase was primarily due to an increase in our effective interest rate levels on our outstanding debt throughout the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

​

Other, net

​

Other, net for the nine months ended September 30, 2024 was a loss of $69.8 million compared to $8.6 million gain for the nine months ended September 30, 2023 representing a $78.4 million decrease in income. During the nine months ended September 30, 2024, the amount consisted of $21.3 million in foreign currency transaction losses, $15.5 million in loss on sales of assets, $5.2 million from increases in litigation reserves, $15.4 million in other than temporary impairment on securities and $14.9 million of loss recognized for debt buybacks which was offset by $12.5 million of mark-to-market gains on the common share warrants. In comparison, the amount during the nine months ended September 30, 2023 primarily consisted of $44.3 million mark-to-market gains for the common share warrants and $25.2 million related to net gains on debt buybacks offset by $21.7 million in foreign currency transaction losses, $5.3 million in other than temporary impairments on securities and $20.8 million from increases in litigation reserves.

​

Income tax

​

Our worldwide tax expense for the nine months ended September 30, 2024 was $41.7 million compared to $60.0 million for the nine months ended September 30, 2023. The decrease in tax expense was primarily attributable to the change in amount and geographic mix of our pre-tax earnings (losses).

​

The Organization Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%. Several legal entities in the Nabors’ group have enacted Pillar 2 legislation effective January 1, 2024. The enactment of this legislation results in application of the global minimum tax to certain of our legal entities and their subsidiaries. The enactment of Pillar 2 did not have a material impact to our worldwide tax expense for the nine months ended September 30, 2024.

​

Liquidity and Capital Resources

​

Financial Condition and Sources of Liquidity

​

Our primary sources of liquidity are cash and investments, availability under the 2024 Credit Agreement and cash generated from operations. As of September 30, 2024, we had cash and short-term investments of $459.3 million and working capital of $500.7 million. As of December 31, 2023, we had cash and short-term investments of $1.1 billion, which included proceeds from our offering of $650.0 million in aggregate principal of 9.125% senior priority guaranteed notes due 2030 that were used primarily to retire certain outstanding indebtedness during the first quarter of 2024 and working capital of $431.7 million.

​

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On September 30, 2024, we had no borrowings and $51.7 million of letters of credit outstanding under the 2024 Credit Agreement, which has a total borrowing capacity of $350.0 million and a separate letter of credit tranche that permits us to issue letters of credit with total reimbursement obligations not to exceed $125 million. Letters of credit issued do not affect revolving loan capacity and vice versa.

​

The 2024 Credit Agreement requires us to maintain an interest coverage ratio (EBITDA/interest expense of 2.75:1.00) and a minimum guarantor value, requiring the guarantors (other than the Company) and their subsidiaries to own at least 90% of the consolidated property, plant and equipment of the Company. Additionally, the Company is subject to certain covenants (which are subject to certain exceptions) and include, among others, (a) a covenant restricting our ability to incur liens (subject to the additional liens basket of up to $150.0 million, among other exceptions), (b) a covenant restricting its ability to pay dividends or make other distributions with respect to its capital stock and to repurchase certain indebtedness, and (c) a covenant restricting the ability of the Company’s subsidiaries to incur debt (subject to the grower debt basket of up to $100.0 million). The facility matures on the earlier of (a) June 17, 2029 and (b) to the extent 10% or more of the respective principal amount of any of the 7.375% Senior Priority Guaranteed Notes due May 2027 or 7.50% Senior Guaranteed Notes due January 2028 or 50% or more of the principal amount of the 1.75% Senior Exchangeable Notes due June 2029 remains outstanding on the date that is 90 days prior to the applicable maturity date for such indebtedness, then such 90th day.

​

As of the date of this report, we were in compliance with all covenants under the 2024 Credit Agreement, including those regarding the required interest coverage ratio and minimum guarantor value, which were 4.65:1.00 and 99.77%, respectively, as of September 30, 2024. If we fail to perform our obligations under the covenants, the revolving credit commitments under the 2024 Credit Agreement could be terminated, and any outstanding borrowings under the facilities could be declared immediately due and payable. If necessary, we have the ability to manage our covenant compliance by taking certain actions including reductions in discretionary capital or other types of controllable expenditures, monetization of assets, amending or renegotiating the revolving credit agreement, accessing capital markets through a variety of alternative methods, or any combination of these alternatives. We expect to remain in compliance with all covenants under the 2024 Credit Agreement during the twelve-month period following the date of this report based on our current operational and financial projections, including after giving effect to the Merger. However, we can make no assurance of continued compliance if our current projections or material underlying assumptions prove to be incorrect. If we fail to comply with the covenants, the revolving credit commitment could be terminated, and any outstanding borrowings under the facility could be declared immediately due and payable.

​

Our ability to access capital markets or to otherwise obtain sufficient financing may be affected by our senior unsecured debt ratings as provided by the major credit rating agencies in the United States and our historical ability to access these markets as needed. While there can be no assurances that we will be able to access these markets in the future, we believe that we will be able to access capital markets or otherwise obtain financing in order to satisfy any payment obligation that might arise upon maturity, exchange or purchase of our notes and our debt facilities, loss of availability of our revolving credit facilities and our A/R Agreements (see—Accounts Receivable Purchase and Sales Agreements, below), and that any cash payment due, in addition to our other cash obligations, would not ultimately have a material adverse impact on our liquidity or financial position. The major U.S. credit rating agencies have previously downgraded our senior unsecured debt rating to non-investment grade. These and any further ratings downgrades could adversely impact our ability to access debt markets in the future, increase the cost of future debt, and potentially require us to post letters of credit for certain obligations.

​

We had 9 letter-of-credit facilities with various banks as of September 30, 2024. Availability under these facilities as of September 30, 2024 was as follows:

​ | ​ | ​ | ​
​ |  | September 30,
​ | ​ | 2024
​ | ​ | (In thousands)
Credit available | ​ | $ | 353,667
Less: Letters of credit outstanding, inclusive of financial and performance guarantees | ​ |  | 125,670
Remaining availability | ​ | $ | 227,997

​

Accounts Receivable Purchase and Sales Agreements

​

On September 13, 2019, we entered into an accounts receivables sales agreement (the “A/R Sales Agreement”) and an accounts receivables purchase agreement (the “A/R Purchase Agreement” and, together with the A/R Sales Agreement, the “A/R Agreements”), whereby the originators, all of whom are our subsidiaries, sold or contributed, and

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will on an ongoing basis continue to sell or contribute, certain of their domestic trade accounts receivables to a wholly-owned, bankruptcy-remote special purpose entity (“SPE”). The SPE in turn, sells, transfers, conveys and assigns to third-party financial institutions (“Purchasers”), all the rights, title and interest in and to its pool of eligible receivables.

​

Over the term of the facility, we entered into a number of amendments. Most recently, on April 1, 2024, we entered into the Fourth Amendment to the A/R Purchase Agreement, which among other things, extended the term of the A/R Purchase Agreement to the earliest of (i) April 1, 2027 and (ii) the date that is ninety (90) calendar days prior to the occurrence of the maturity date under and as defined in the 2024 Credit Agreement.

​

The amount available for purchase under the A/R Agreements fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after excluding excess concentrations and certain other ineligible receivables. The maximum purchase commitment of the Purchasers under the A/R Agreements is $250.0 million and the amount of receivables purchased by the third-party Purchasers as of September 30, 2024 was $146.0 million.

​

The originators, Nabors Delaware, the SPE, and the Company provide representations, warranties, covenants and indemnities under the A/R Agreements and the Indemnification Guarantee. See further details at Note 4—Accounts Receivable Purchase and Sales Agreements.

​

Other Indebtedness

​

See Note 5—Debt, for further details about our financing arrangements, including our debt securities.

​

Future Cash Requirements

​

Our current cash and investments, projected cash flows from operations, proceeds from equity or debt issuances, the A/R Agreements and the facilities under our 2024 Credit Agreement are expected to adequately finance our purchase commitments, capital expenditures, acquisitions, scheduled debt service requirements, and all other expected cash requirements for at least the next 12 months. However, we can make no assurances that our current operational and financial projections will prove to be correct. A sustained period of highly depressed oil and natural gas prices could have a significant effect on our customers’ capital expenditure spending and therefore our operations, cash flows and liquidity.

​

Purchase commitments outstanding at September 30, 2024 totaled approximately $269.3 million, primarily for capital expenditures, other operating expenses and purchases of inventory. We can reduce planned expenditures if necessary or increase them if market conditions and new business opportunities warrant it. The level of our outstanding purchase commitments and our expected level of capital expenditures over the next 12 months represent a number of capital programs that are currently underway or planned.

​

See our discussion of guarantees issued by Nabors that could have a potential impact on our financial position, results of operations or cash flows in future periods included below under “Off-Balance Sheet Arrangements (Including Guarantees).”

​

There have been no material changes to the contractual cash obligations that were included in our 2023 Annual Report.

​

We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, both in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors and may involve material amounts.

​

Cash Flows

​

Our cash flows depend, to a large degree, on the level of spending by oil and gas companies for exploration, development and production activities. Sustained decreases in the price of oil or natural gas could have a material impact on these activities and could also materially affect our cash flows. Certain sources and uses of cash, such as the level of discretionary capital expenditures or acquisitions, purchases and sales of investments, dividends, loans, issuances and

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repurchases of debt and of our common shares are within our control and are adjusted as necessary based on market conditions. We discuss our cash flows for the nine months ended September 30, 2024 and 2023 below.

​

Operating Activities. Net cash provided by operating activities totaled $432.5 million during the nine months ended September 30, 2024, compared to net cash provided of $455.9 million during the corresponding 2023 period. Operating cash flows are our primary source of capital and liquidity. Cash from operating results (before working capital changes) was $512.9 million for the nine months ended September 30, 2024, a decrease of $17.3 million when compared to $530.1 million in the corresponding 2023 period. This was due to the decrease in activity across our business for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Changes in working capital items such as collection of receivables, other deferred revenue arrangements and payments of operating payables are also significant factors affecting operating cash flows and can be highly volatile in periods of increasing or decreasing activity levels. Changes in working capital items used $80.4 million in cash flows during the nine months ended September 30, 2024, a $6.2 million unfavorable change as compared to the $74.2 million in cash flows used by working capital in the corresponding 2023 period.

​

Investing Activities. Net cash used for investing activities totaled $353.2 million during the nine months ended September 30, 2024 compared to net cash used of $429.0 million during the corresponding 2023 period. Our primary use of cash for investing activities is capital expenditures for rig-related enhancements, new construction and equipment, and sustaining capital expenditures. During the nine months ended September 30, 2024 and 2023, we used cash for capital expenditures totaling $359.9 million and $406.7 million, respectively.

​

Financing Activities. Net cash used by financing activities totaled $662.0 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2024, we repaid $1.2 billion of outstanding long-term debt and received proceeds of $550.0 million from the issuance of the 8.875% Senior Guaranteed Notes due August 2031.

​

Net cash provided by financing activities totaled $54.2 million during the nine months ended September 30, 2023. During the nine months ended September 30, 2023, we received proceeds of $250.0 million from issuance of the 1.75% Exchangeable Notes, repaid $296.5 million of outstanding long-term debt. We received proceeds of $305.0 million from the public offering of NETC II and made a distribution of $186.9 million from the Trust Account to NETC stockholders who exercised their right to redemption of their shares.

​

​

Other Matters

​

Recent Accounting Pronouncements

​

See Note 2—Summary of Significant Accounting Policies.

​

Off-Balance Sheet Arrangements (Including Guarantees)

​

We are a party to 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 include the A/R Agreements (see —Accounts Receivable Purchase and Sales Agreements, above) and certain agreements and obligations under which we provide financial or performance assurance to third parties. Certain of these financial or performance assurances 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 us 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.

​

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The following table summarizes the total maximum amount of financial guarantees issued by Nabors:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Maximum Amount |
​ |  | 2024 |  | 2025 |  | 2026 |  | Thereafter |  | Total |
​ | ​ | (In thousands) |
Financial standby letters of credit and other financial surety instruments | ​ | $ | 27,791 |  | 18,295 |  | 3,763 |  | 12,547 | ​ | $ | 62,396 | ​

​

​

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

​

We may be exposed to market risks arising from the use of financial instruments in the ordinary course of business as discussed in our 2023 Annual Report. There were no material changes in our exposure to market risk during the nine months ended September 30, 2024 from those disclosed in our 2023 Annual Report.

​

ITEM 4. CONTROLS AND PROCEDURES

​

We maintain a set of disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to provide reasonable assurance that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

​

The Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

​

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

​

PART II OTHER INFORMATION

​

ITEM 1. LEGAL PROCEEDINGS

​

See Note 8 — Commitments and Contingencies — Litigation for information regarding our legal proceedings.

​

ITEM 1A. RISK FACTORS

​

In addition to the information set forth elsewhere in this report, the risk factors set forth in Part 1, Item 1A, of our 2023 Annual Report on Form 10-K should be carefully considered when evaluating us. These risks are not the only risks we face. Additional risks not presently known to us or that we currently deem immaterial may also impair our business. There have been no material changes to the risk factors set forth in Part 1, Item 1A, of our 2023 Annual Report on Form 10-K other than those listed in this section.

​

Risk Factors Relating to the Merger

Risk Factors Relating to Changes in the Price of Nabors Common Shares

The market value of Nabors common shares could be negatively affected by risks and conditions that apply to the combined company, which may be different from the risks and conditions applicable to Nabors, and sales of Nabors’ shares in connection with merger would impact the price of our common shares.

Following the merger, shareholders of Nabors and former stockholders of Parker will own interests in a combined company operating an expanded business with more assets and a different mix of liabilities. Current shareholders of Nabors and current stockholders of Parker may not wish to continue to invest in the combined company or may wish to reduce their investment in the combined company. In addition, if, following the merger, large amounts of Nabors common shares are sold, the price of Nabors common shares could decline.

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Failure to complete the merger could negatively impact the future business and financial results of Nabors.

The merger is subject to a number of conditions beyond Nabors’ and Parker’s control that may prevent, delay or otherwise materially adversely affect its completion. Such conditions include, but are not limited to, regulatory approval from the Federal Trade Commission and Department of Justice as required under the Hart-Scott-Rodino Act and certain foreign antitrust and foreign direct investment regulatory approvals. We cannot make any assurances that we will be able to satisfy all of the conditions to the merger or succeed in any litigation brought in connection with the merger. If the merger is not completed, our financial results may be adversely affected and we will be subject to several risks, including but not limited to:

| ● | Nabors being required to pay Parker a termination fee of $10,000,000 under certain circumstances provided in the merger agreement;

| ● | payment of costs relating to the merger, such as legal, accounting, financial advisor and printing fees, regardless of whether the merger is completed;

| ● | the focus of Nabors’ management team on the merger instead of the pursuit of other opportunities that could have been beneficial to Nabors; and

| ● | the potential occurrence of litigation related to any failure to complete the merger.

In addition, if the merger is not completed, Nabors may experience negative reactions from the financial markets and from its customers and employees. If the merger is not completed, Nabors cannot assure its stockholders that these risks will not materialize and will not materially and adversely affect the business, financial results and stock price of Nabors.

Completion of the merger may trigger change in control or other provisions in certain agreements to which Parker is a party.

The completion of the merger may trigger change in control or other provisions in certain agreements to which Parker is a party. If Nabors and Parker are unable to negotiate waivers of those provisions, the counterparties may exercise their rights and remedies under the agreements, potentially terminating the agreements or seeking monetary damages. Even if Nabors and Parker are able to negotiate waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to Parker or the combined company. The failure to negotiate a waiver, or to obtain amendments to these agreements on favorable terms, could have an adverse effect on the combined company.

Litigation relating to the merger could result in an injunction preventing the completion of the applicable transaction and/or substantial costs to us.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger, or other business combination agreements. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition.

Lawsuits that may be brought against us or our directors could also seek, among other things, injunctive relief or other equitable relief, including a request to rescind parts of the Merger Agreement already implemented and to otherwise enjoin the parties from consummating the applicable transaction. If a plaintiff is successful in obtaining an injunction prohibiting completion of the applicable transaction, that injunction may delay or prevent such transaction from being completed within the expected timeframe or at all, which may adversely affect our business, financial position and results of operations.

There can be no assurance that any of the defendants will be successful in the outcome of any potential future lawsuits. The defense or settlement of any lawsuit or claim that remains unresolved at the time the merger is completed may adversely affect the combined company’s business, financial condition, results of operations and cash flows.

​

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Risk Factors Relating to the Combined Company Following the Merger

The failure to integrate successfully the businesses of Nabors and Parker or to effectively managed the consolidated company post-merger could adversely affect the combined company’s future results.

The merger involves the integration of two companies that currently operate independently. The success of the merger will depend—in large part—on the ability of the combined company to realize the anticipated benefits, including expected synergies, cost savings, increased innovation and operational efficiencies, from combining the businesses of Nabors and Parker. To realize these anticipated benefits, the businesses of Nabors and Parker must be successfully integrated. This integration will be complex and time-consuming. The failure to integrate successfully and to manage successfully the challenges presented by the integration process may result in the combined company not achieving the anticipated benefits of the merger.

Potential difficulties that may be encountered in the integration process include the following:

| ● | preserving our and Parker’s relationships with our existing customers and vendors;

| ● | complexities associated with managing the larger, more complex combined business;

| ● | complexities associated with integrating the workforces of the two companies, including issues retaining key management personnel at both companies;

| ● | potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with the merger;

| ● | difficulty or inability to refinance the debt of the combined company or comply with the covenants thereof;

| ● | performance shortfalls at one or both of the companies as a result of the diversion of management’s attention caused by completing the merger and integrating the companies’ operations; and

| ● | the disruption of, or the loss of momentum in, each company’s ongoing business or inconsistencies in standards, controls, systems, procedures and policies.

Any of these difficulties in successfully integrating the businesses of Nabors and Parker, or any delays in the integration process, could adversely affect the combined company’s ability to achieve the anticipated benefits of the merger and could adversely affect the combined company’s business, financial results, financial condition and stock price. Even if the combined company is able to integrate the business operations of Nabors and Parker successfully, there can be no assurance that this integration will result in the realization of the full benefits of synergies, cost savings, increased innovation and operational efficiencies that Nabors and Parker currently expect from this integration, that these benefits will be achieved within the anticipated time frame or that these benefits will match our current expectations. Following integration, the combined company’s future success will depend on its ability to manage its operations, which will be significantly larger than the size of either our or Parker’s existing businesses. The failure to successfully integrate the two companies, to realize the expected benefits of the merger, or to manage the consolidated company’s operations, could have an adverse effect on the consolidated company.

The combined company is expected to incur substantial expenses related to the integration of Nabors and Parker following the merger.

The combined company is expected to incur substantial expenses in connection with the integration of Nabors and Parker following the merger. There are many processes, policies, procedures, operations, technologies and systems that must be integrated, including accounting and finance, asset management, benefits, billing, drilling data solutions, health, safety and environment, human resources, maintenance, marketing, payroll and purchasing. Although Nabors and Parker have assumed that a certain level of expenses will be incurred, there are many factors beyond their control that could affect the total amount or the timing of the integration expenses. Moreover, many of the expenses that will be incurred are, by their nature, difficult to estimate accurately. These expenses could, particularly in the near term, exceed the

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savings that the combined company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings. These integration expenses could result in the combined company’s taking charges against earnings following the completion of the merger, and the amount and timing of any such charges are uncertain at present.

The combined company may not be able to utilize a portion of Nabors’ or Parker’s net operating loss carry forwards (“NOLs”) to offset future taxable income for U.S. federal tax purposes, which could adversely affect the combined company’s net income and cash flows.

​

As of June 30, 2024, Parker had federal income tax NOLs of approximately $347.8 million, of which $243.5 million will expire between 2035 and 2037, and $104.3 million have an indefinite life. As of September 30, 2024, Nabors had federal income tax NOLs of approximately $559.3 million, all of which have an indefinite life. Utilization of these NOLs depends on many factors, including the combined company’s future taxable income, which cannot be predicted with any accuracy. In addition, Section 382 of the Code generally imposes an annual limitation on the amount of an NOL that may be used to offset taxable income when a corporation has undergone an “ownership change” (as determined under Section 382). Determining the limitations under Section 382 is technical and highly complex. An ownership change generally occurs if one or more shareholders (or groups of shareholders) who are each deemed to own at least 5% of the corporation’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. For these reasons, the combined company may not be able to realize a material portion of Parker’s NOLs, which could result in the combined company facing increased future tax liability.

​

The due diligence process that we undertook before entering into the Merger Agreement with Parker may not have revealed all facts that may be relevant in connection with merger.

In deciding whether to enter into the Merger Agreement, we conducted the due diligence investigation that we deemed reasonable and appropriate based on the facts and circumstances applicable to the merger with Parker. When conducting due diligence, we were required to evaluate important and complex business, financial, tax, accounting, technological, governance, legal and regulatory issues. In addition to our employees, outside consultants, legal advisors and accountants were involved in the due diligence process in varying degrees. Despite our efforts, the results of our due diligence may have not been complete and accurate or, even if complete and accurate, may have not been sufficient to identify all relevant facts, which could prevent us from realizing the anticipated benefits we expect to achieve as a result of the merger with Parker and the business and results of operations of the combined company could be adversely affected.

​

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

​

We withheld the following shares of our common shares to satisfy tax withholding obligations in connection with grants of share awards during the three months ended September 30, 2024 from the distributions described below. These shares may be deemed to be “issuer purchases” of shares that are required to be disclosed pursuant to this Item, but were not purchased as part of a publicly announced program to purchase common shares:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  |  | ​ |  |  |  | Approximated |
​ | ​ | ​ | ​ | ​ | ​ | ​ | Total Number | ​ | Dollar Value of |
​ | ​ | ​ | ​ | ​ | ​ | ​ | of Shares | ​ | Shares that May |
​ | ​ | Total | ​ | Average | ​ | Purchased as | ​ | Yet Be |
​ | ​ | Number of | ​ | Price | ​ | Part of Publicly | ​ | Purchased |
Period | ​ | Shares | ​ | Paid per | ​ | Announced | ​ | Under the |
(In thousands, except per share amounts) |  | Repurchased |  | Share (1) |  | Program |  | Program (2) |
July 1 - July 31 | ​ | 1 | ​ | $ | 82.08 | ​ | — | ​ | 278,914 | ​
August 1 - August 31 | ​ | — | ​ | $ | — | ​ | — | ​ | 278,914 | ​
September 1 - September 30 | ​ | — | ​ | $ | — | ​ | — | ​ | 278,914 | ​

​

(1) | Shares were withheld from employees and directors to satisfy certain tax withholding obligations due in connection with grants of shares under our 2016 Stock Plan. Each of the 2016 Stock Plan and the 1999 Stock Option Plan for Non-Employee Directors provide for the withholding of shares to satisfy tax obligations, but do not specify a maximum number of shares that can be withheld for this purpose. These shares were not purchased as part of a publicly announced program to purchase common shares.

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​

(2) | In August 2015, our Board authorized a share repurchase program under which we may repurchase up to $400.0 million of our common shares in the open market or in privately negotiated transactions. The program was renewed by the Board in February 2019. Through September 30, 2024, we repurchased 0.3 million of our common shares for an aggregate purchase price of approximately $121.1 million under this program. As of September 30, 2024, we had $278.9 million that remained authorized under the program that may be used to repurchase shares. The repurchased shares, which are held by our subsidiaries, are registered and tradable subject to applicable securities law limitations and have the same voting, dividend and other rights as other outstanding shares. As of September 30, 2024, our subsidiaries held 1.2 million of our common shares.

​

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

​

None.

​

ITEM 4. MINE SAFETY DISCLOSURES

​

Not applicable.

​

ITEM 5. OTHER INFORMATION

​

| (a) | None.

​

| (b) | None.

​

(c) During the quarter ended September 30, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

​

ITEM 6. EXHIBITS

| ​ |
​ | ​ | ​
Exhibit No. |  | Description
2.1 | ​ | Agreement and Plan of Merger, dated as of October 14, 2024, by and among Nabors Industries Ltd., Nabors SubA Corporation, Parker Drilling Company and Värde Partners, Inc., solely in its capacity as the Stockholder Representative. (Incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by the Registrant on October 15, 2024).†
2.2 | ​ | Voting and Support Agreement, dated as of October 14, 2024, by and among the Supporting Stockholders and Nabors. (Incorporated by reference to Exhibit 2.2 of the Current Report on Form 8-K filed by the Registrant on October 15, 2024).
2.3 | ​ | Form of Voting and Lock-Up Agreement, dated as of October 14, 2024, by and among certain Supporting Stockholders and Nabors. (Incorporated by reference to Exhibit 2.3 of the Current Report on Form 8-K filed by the Registrant on October 15, 2024).
2.4 | ​ | Form of Voting and Lock-Up Agreement, dated as of October 14, 2024, by and among certain Supporting Stockholders and Nabors. (Incorporated by reference to Exhibit 2.4 of the Current Report on Form 8-K filed by the Registrant on October 15, 2024).
2.5 | ​ | Form of Voting and Lock-Up Agreement, dated as of October 14, 2024, by and among certain Supporting Stockholders and Nabors. (Incorporated by reference to Exhibit 2.5 of the Current Report on Form 8-K filed by the Registrant on October 15, 2024).
2.6 | ​ | Form of Voting and Lock-Up Agreement, dated as of October 14, 2024, by and among certain Supporting Stockholders and Nabors. (Incorporated by reference to Exhibit 2.6 of the Current Report on Form 8-K filed by the Registrant on October 15, 2024).
10.1 | ​ | Amended & Restated Credit Agreement, dated as of June 17, 2024, among Nabors Industries, Inc., as Borrower, Nabors Industries Ltd., as Holdings, the other Guarantors from time to time party thereto, the Issuing Banks and other Lenders party thereto and Citibank, N.A., as Administrative Agent. (Incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by the Registrant on June 17, 2024).
31.1 | ​ | Rule 13a-14(a)/15d-14(a) Certification of Anthony G. Petrello, Chairman, President and Chief Executive Officer*
31.2 | ​ | Rule 13a-14(a)/15d-14(a) Certification of William Restrepo, Chief Financial Officer*

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32.1 | ​ | Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), executed by Anthony G. Petrello, Chairman, President and Chief Executive Officer and William Restrepo, Chief Financial Officer.*
101.INS | ​ | Inline XBRL Instance Document*
101.SCH | ​ | Inline XBRL Schema Document*
101.CAL | ​ | Inline XBRL Calculation Linkbase Document*
101.LAB | ​ | Inline XBRL Label Linkbase Document*
101.PRE | ​ | Inline XBRL Presentation Linkbase Document*
101.DEF | ​ | Inline XBRL Definition Linkbase Document*
104 | ​ | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document)

*Filed herewith.

†The schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Nabors agrees to furnish supplementally a copy of such schedules and exhibits, or any section thereof, to the SEC upon request.

​

​

SIGNATURES

​

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

​

​ |  |
​ | NABORS INDUSTRIES LTD.
​ | ​
​ | By: | /s/ ANTHONY G. PETRELLO
​ | ​ | Anthony G. Petrello
​ | ​ | Chairman, President and
​ | ​ | Chief Executive Officer
​ | ​ | (Principal Executive Officer)
​ | ​ | ​
​ | By: | /s/ WILLIAM RESTREPO
​ | ​ | William Restrepo
​ | ​ | Chief Financial Officer (Principal Financial Officer and Accounting Officer)
​ | ​ | ​
​ | Date: | November 1, 2024

​

​

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