NABORS INDUSTRIES LTD

Nabors Industries Ltd. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 Nature of Operations

Unless the context requires otherwise, references in this annual report to “we,” “us,” “our,” “the Company,” or “Nabors” mean Nabors Industries Ltd., together with our subsidiaries. References in this annual 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 aportfolio of technologies designed to drive energy efficiency and emissions reductions for both ourselves and third-party customers.

With operations in over 20 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 December 31, 2025 included:

The short- and long-term implicationsof the military hostilities between Russia and Ukraine, which began in early 2022, are difficult to predict. We continue to actively monitor this dynamic situation and evaluate the potential impact to our operations from sanctions that have been imposed against Russia by the United States, United Kingdom, the European Union, and other governments. As of December 31, 2025 and 2024,0.0% and 0.7% of our property, plant and equipment, net was located in Russia, respectively. For the years ending December 31, 2025, 2024 and 2023,0.1%,0.9% and 1.1% of our operating revenues was from operations in Russia, respectively. During the year ended December 31, 2025, we recognized impairment charges of approximately$26.5 million related to the net carrying value of International Drilling and Rig Technologies assets located in Russia. The impairment charges are included in Other, net in our consolidated statements of income (loss). We currently haveno assets oroperations in Ukraine.

The consolidated financial statements and related footnotes are presented in accordance with U.S. GAAP.

Note 2 Summary of Significant Accounting Policies

Principles of Consolidation

Our consolidated financial statements include the accounts of Nabors, as well as all majority owned and non-majority owned subsidiaries required to be consolidated under 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 (1) the power to direct activities that most significantly impact the economic performance of the VIE and (2) 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 12—Joint Ventures. Also, as of December 31, 2025, we are the co-sponsor of a special purpose acquisition company (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 20—Special Purpose Acquisition Company.

On March 11, 2025, we completed our acquisition (the “Parker acquisition”) of Parker Drilling Company (“Parker”) resulting in Parker becoming a wholly owned subsidiary of Nabors. Parker provides drilling services across global energy markets. The consolidated financial statements include the results of Parker from March 12, 2025 to December 31, 2025. On August 20, 2025, we sold Quail Tools, LLC (“Quail Tools”), a subsidiary of Parker, to Superior Energy Services, Inc. Quail Tools was part of the Company’s acquisition of Parker. See Note 4—Acquisitions and Dispositions for additional details.

Cash and Cash Equivalents

Cash and cash equivalents include demand deposits, callable time deposits and various other short-term investments with original maturities of three months or less.

Short-term Investments

Short-term investments consist primarily of available-for-sale debt securities. These debt securities are held at fair market value. Also, equity securities are included and are stated at fair value with any changes in fair value recognized in investment income (loss) in our consolidated statements of income (loss).

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 costs methods and includes the cost of materials, labor and manufacturing overhead. Inventory, which is presented net of reserves of $30.6 million and $24.3 million as of December 31, 2025 and 2024, respectively, included the following:

Property, Plant and Equipment

Property, plant and equipment, including renewals and betterments, are stated at cost, while maintenance and repairs are expensed currently. Interest costs applicable to the construction of qualifying assets are capitalized as a component of the cost of such assets. We provide for the depreciation of our drilling rigs using the units-of-production method. For each day a rig is operating, we depreciate it over an approximate 4,927-day period, with the exception of our jackup rigs, which are depreciated over an 8,030-day period, after provision for salvage value. For each day a rig asset is not operating, it is depreciated over an assumed depreciable life of 20 years, with the exception of our jackup rigs, where a 30-year depreciable life is used, in each case after provision for salvage value.

Depreciation on our buildings, oilfield hauling and mobile equipment, and other machinery and equipment is computed using the straight-line method over the estimated useful life of the asset after provision for salvage value (buildings—10 to 30 years; oilfield hauling and mobile equipment and other machinery and equipment—3 to 10 years). Amortization of capitalized leases is included in depreciation and amortization expense. Upon retirement or other disposal of fixed assets, the cost and related accumulated depreciation are removed from the respective property, plant and equipment accounts and any gains or losses are included in our consolidated statements of income (loss).

We review our assets for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. If the estimated undiscounted future cash flows are not sufficient to support the asset’s recorded value, an impairment charge is recognized to the extent the carrying amount of the long-lived asset exceeds its estimated fair value. Management considers a number of factors such as estimated future cash flows from the assets, appraisals and current market value analysis in determining fair value. The determination of future cash flows requires the estimation of

utilization, dayrates, operating margins, sustaining capital and remaining economic life. Such estimates can change based on market conditions, technological advances in the industry or changes in regulations governing the industry. Significant and unanticipated changes to the assumptions could result in future impairments. A significantly prolonged period of lower oil and natural gas prices could adversely affect the demand for and prices of our services, which could result in future impairment charges. As the determination of whether impairment charges should be recorded on our long-lived assets is subject to significant management judgment, and an impairment of these assets could result in a material charge on our consolidated statements of income (loss), management believes that accounting estimates related to impairment of long-lived assets are critical.

Litigation and Insurance Reserves

We estimate our reserves related to litigation and insurance based on the facts and circumstances specific to the litigation and insurance claims and our past experience with similar claims. We maintain actuarially determined accruals in our consolidated balance sheets to cover self-insurance retentions. See Note 14—Commitments and Contingencies regarding self-insurance accruals. We estimate the range of our liability related to pending litigation when we believe the amount and range of loss can reasonably 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.

Revenue Recognition

We recognize revenues and costs on daywork contracts daily as the work progresses over the contract term. For certain contracts, we receive lump sum payments for the mobilization of rigs and other drilling equipment. We defer revenue related to mobilization periods and recognize the revenue over the term of the related drilling contract.

Costs incurred related to a mobilization period for which a contract is secured are deferred and recognized over the term of the related drilling contract. Costs incurred to relocate rigs and other drilling equipment to areas in which a contract has not been secured are expensed as incurred. We defer recognition of revenue on amounts received from customers for prepayment of services until those services are provided.

We recognize revenue for top drives and other capital equipment we manufacture upon transfer of control, which generally occurs when the product has been shipped to the customer.

We recognize, as operating revenue, proceeds from business interruption insurance claims in the period that the claim is realizable. Proceeds from casualty insurance settlements in excess of the carrying value of damaged assets are recognized in other, net in our consolidated statement of income (loss) in the period that the applicable proof of loss documentation is received. Proceeds from casualty insurance settlements that are expected to be less than the carrying value of damaged assets are recognized at the time the loss is incurred and recorded in other, net in our consolidated statement of income (loss).

We recognize reimbursements received for out of pocket expenses incurred as revenues and account for out of pocket expenses as direct costs.

Research and Engineering

Research and engineering expenses are expensed as incurred and include costs associated with the research and development of new products and services and costs associated with sustaining engineering of existing products and services.

Income Taxes

On December 18, 2023, Bermuda enacted a 15% corporate income tax regime (the “Bermuda CIT”) that applies to Bermuda businesses that are part of multinational enterprise groups with annual revenue of €750 million or more and is effective for tax years beginning on or after January 1, 2025. As a result of the Bermuda CIT, the Company’s exemption

from Bermuda corporate income taxes ceased in 2025. We have provided for income taxes based on the tax laws and rates in effect in the countries where we operate and earn income. The income taxes in these jurisdictions vary substantially. Our worldwide effective tax rate for financial statement purposes will continue to fluctuate from year to year due to changes in the geographic mix of pre-tax earnings.

We recognize increases to our tax reserves for uncertain tax positions along with interest and penalties as an increase to other long-term liabilities.

For U.S. and other jurisdictional income tax purposes, we have net operating loss carryforwards and other tax attributes that we are required to assess quarterly for potential valuation allowances. We consider the sufficiency of existing temporary differences and expected future earnings levels in determining the amount, if any, of valuation allowance required against such carryforwards and against deferred tax assets.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. Actual results could differ from such estimates. Areas where critical accounting estimates are made by management include:

Recent Accounting Pronouncements

Adopted

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 (“ASU 2023-09”). 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 adopted this ASU as required for the year ended December 31, 2025 on a prospective basis. The adoption requires us to provide additional disclosures related to our income taxes, but otherwise it does not materially impact our financial statements.

Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses including purchases of inventory, employee compensation, depreciation, intangible asset amortization and depreciation, deletion and amortization recognized as part of oil and gas producing activities. This ASU is effective for fiscal years beginning after December 15, 2026. The adoption of ASU 2024-03 requires us to provide additional disclosures but will otherwise not materially impact our financial statements.

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 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 December 31, 2025 and 2024 is approximately $46.3 million and $44.6 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 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.

In August 2025, we entered into the First Amendment to the A/R Sales Agreement and the Fifth Amendment to the A/R Purchase Agreement. The First Amendment to the A/R Sales Agreement amends the agreement to, among other things, add certain subsidiaries of Parker, an indirect wholly-owned subsidiary of the Company, as originators (the “Additional Originators”). The Fifth Amendment to the A/R Purchase Agreement amends the agreement to make changes to reflect the joinder of the Additional Originators.

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 December 31, 2025 and 2024, approximately $137.0 million and $130.0 million had been sold to and as yet uncollected by the Purchasers, respectively.

Note 4 Acquisitions and Dispositions

Parker Acquisition

As discussed in Note 2—Summary of Significant Accounting Policies, on March 11, 2025, we completed the Parker acquisition. Total consideration for the acquisition included cash consideration of$0.6 million and the issuance of 4.8 million shares of our common stock, which based on the closing price of our common stock of$37.50 on March 11, 2025, valued the purchase price consideration of the transaction at approximately$180.6 million.

The acquisition has been accounted for as a business combination using the acquisition method. Under the acquisition method of accounting, the fair value of the consideration transferred is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values as of the acquisition date. The fair value of the net assets acquired amounted to approximately $297.1 million at the date of acquisition, and as a result, we recorded a gain of $116.5 million related to the excess of the fair value of the net assets acquired over the acquisition price. The excess is referred to as a “bargain purchase gain.” This bargain purchase gain indicated that the fair value of the net assets acquired (which represents the price at which the assets would be exchanged between a willing buyer and seller) was in excess of the amount for which we acquired such net assets. Before recognizing the bargain purchase gain, we reassessed the methods used in the acquisition accounting and verified that we had identified all of the assets acquired and all of the liabilities assumed, and that there were no additional assets or liabilities to be considered. We

also reassessed the process used to measure amounts recognized on the closing date of the merger to ensure that the measurements reflected all consideration transferred based on available information.

The bargain purchase gain was due to the decrease in the share price of our stock from the date the merger agreement was signed, to the closing date while the agreed upon purchase price of 4.8 million of our common shares, as stipulated in the merger agreement, remained the same. On October 14, 2024, the date the merger agreement was signed, and on March 11, 2025, the closing date of the merger, the closing prices of our common stock were$77.52 and$37.50, respectively. Pursuant to the merger agreement, the precise number of shares to be issued to Parker stockholders was 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 was below$42.70, Parker stockholders would also receive a cash component as consideration for their shares of Parker stock. This resulted in a$0.6 million aggregate cash payment.

The aggregate purchase price noted above was allocated to the major categories of assets acquired and liabilities assumed based on preliminary estimated fair values as of the date of the business combination. We applied significant judgement in estimating the fair value of assets acquired and liabilities assumed. The carrying amounts of cash and cash equivalents, accounts receivable, other assets, accounts payable and accrued liabilities approximate their fair values due to their nature or the short-term maturity of instruments. The fair value of property and equipment was determined using the cost approach which includes assumptions related to replacement cost, physical deterioration, economic obsolescence, and floor value. Assessing the overall business enterprise value, which was compared to market multiples for market participants, involved the use of assumptions with respect to future rig counts, operation and capital cost estimates and a weighted average cost of capital reflecting the cost of capital for market participants. Certain data necessary to complete the purchase price allocation is not yet available, including final tax returns that provide the underlying tax basis of Parker’s assets and liabilities. We will complete the purchase price allocation during the 12-month period following the acquisition date.

We recorded the preliminary allocation of the purchase price consideration during the three months ended March 31, 2025. During the three months ended June 30, 2025, the Company recorded a measurement period adjustment which resulted in a decrease in property, plant and equipment, an increase in net lease assets and an increase in bargain purchase gain of$3.5 million. During the three months ended December 31, 2025, the Company recorded an adjustment related income taxes which resulted in a decrease in bargain purchase gain of $2.8 million. The adjustments primarily related to additional information obtained about facts and circumstances that existed as of the acquisition date.

The table below presents the allocation of the estimated fair value of identifiable assets acquired and liabilities assumed, and the resulting gain on bargain purchase as of the closing date:

Approximately $397.2 million of revenue and $404.2 million of net income attributable to Parker are included in the consolidated statements of operations for the year ended December 31, 2025. The net income attributable to Parker is primarily related to the sale of Quail Tools which is discussed below. During the year ended December 31, 2025, we incurred costs related to the Parker acquisition totaling$19.1 million, which are included in Other, net in our consolidated statements of income (loss), respectively.

Pro Forma

The following pro forma condensed combined financial information was derived from our and Parker’s historical financial statements and gives effect to the acquisition as if it had occurred on January 1, 2024. The below information reflects pro forma adjustments based on available information and certain assumptions we believe are reasonable, including the estimated tax impact of the pro forma adjustments.

The pro forma results of operations do not include any anticipated cost savings or other synergies that may result from the Parker acquisition nor do they include any estimated costs that will be incurred to integrate Parker operations. The pro forma results of operations include our merger and acquisition expenses of$25.9 million as if they had been incurred in the first quarter of 2024.

The pro forma condensed combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the Parker acquisition taken place on January 1, 2024. Furthermore, the financial information is not intended to be a projection of future results.

The following table summarizes our selected financial information on a pro forma basis:

Quail Tools Disposition

On August 20, 2025, Nabors entered into a definitive agreement to sell Quail Tools to Superior Energy Services, Inc. Quail Tools was part of the Company’s acquisition of Parker. Net consideration for the sale totaled $600.0 million plus adjustments for net working capital. Consideration comprised of cash of $375.0 million and a seller note of $250.0 million. On October 9, 2025, Nabors received prepayment in full of the $250.0 million seller note, including accrued and unpaid interest.

In connection with the sale, we recognized a gain of $414.0 million which is included in Gain on disposition of Quail Tools in our consolidated statements of income (loss). The gain on disposition of Quail Tools resulted in an increase of $96.9 million to the provision for income taxes during the year ended December 31, 2025.

This transaction did not represent a strategic shift in our operations and will not have a major effect on our operations and financial results going forward.

Note 5 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:

Recurring Fair Value Measurements

Our financial assets that are accounted for at fair value on a recurring basis as of December 31, 2025 and 2024 consisted of restricted cash held in trust and short-term investments. During 2025, 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 December 31, 2025 and 2024, our restricted cash held in trust was carried at fair market value and totaled $0 and $331.8 million, respectively, and consisted of Level 1 measurements. As of December 31, 2025 and 2024, our short-term investments were primarily held at fair value and totaled $31 thousand and $7.6 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 December 31, 2025 and 2024 consisted of warrants which are included in other short-term liabilities as of December 31, 2025 and other long-term liabilities as of December 31, 2024 in the accompanying consolidated financial statements. The warrants, as discussed in Note 11- Shareholders’ Equity, were carried at fair market value using their trading price and totaled $0.7 million and $9.0 million as of December 31, 2025 and 2024, 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.

During the years ended December 31, 2025 and 2024, approximately $7.5 million and $15.4 million was recognized as an other than temporary impairment related to our investment in Vast Renewables Limited (“Vast”), respectively. As Vast was a publicly traded company, the valuation assessment was based on the observable market trading price of Vast’s stock. The impairments have been included in Other, net in our consolidated statements of income (loss) for the years ended December 31, 2025 and 2024.

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:

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 6 Share-Based Compensation

Total share-based compensation expense, which includes stock options and restricted shares, was $23.4 million, $16.5 million and $15.8 million for 2025, 2024 and 2023, respectively. Compensation expense related to awards of restricted shares totaled $23.4 million, $16.5 million and $15.8 million 2025, 2024 and 2023, respectively, which is included in general and administrative and research and engineering expenses in our consolidated statements of income (loss). Share-based compensation expense has been allocated to our various reportable segments. See Note 17—Segment Information.

In addition to the time-based restricted stock share-based awards, we provide performance share awards based on market conditions measured against a predetermined peer group (“TSR Shares”). We also provide Performance-Based Restricted Stock Units (“PSUs”) which are granted at the beginning of theone-year performance period and are earned at the end of the same period, depending on performance.

Stock Option Plans

As of December 31, 2025, we had several stock plans under which options to purchase our common shares could be granted to key officers, directors and managerial employees of Nabors and its subsidiaries. Options granted under the plans have fair market value on the date of the grant. Options granted under the plans generally are exercisable in varying cumulative periodic installments afterone year. In the case of certain key executives and directors, options granted may vest immediately on the grant date. Options granted under the plans expireten years from the date of grant. There are approximately 0.6 million common shares available for issuance in the form of either restricted shares or stock options, under these plans as of December 31, 2025.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model, which uses assumptions for the risk-free interest rate, volatility, dividend yield and the expected term of the options. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period equal to the expected term of the option. Expected volatilities are based on implied volatilities from traded options on Nabors’ common shares, historical volatility of Nabors’ common shares, and other factors. We use historical data to estimate the expected term of the options and employee terminations within the option-pricing model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of the options represents the period of time that the options granted are expected to be outstanding.

Stock option transactions under our various stock-based employee compensation plans are presented below:

No stock options were awarded or exercised during 2023, 2024 or 2025. There wereno unvested options outstanding at the end of 2023, 2024 or 2025.

Restricted Shares

Our stock plans allow grants of restricted shares. Restricted shares are issued on the grant date but cannot be sold or transferred. Restricted share values are based on stock value at grant date. Restricted shares vest in varying periodic installments ranging up tofour years.

A summary of our restricted shares as of December 31, 2025, and the changes during the year then ended, is presented below:

During 2025, 2024 and 2023, we awarded 234,832,96,368 and 103,465 restricted shares, respectively, to our employees and directors. These awards had an aggregate value at their date of grant of $10.1 million, $8.0 million and $16.6 million, respectively, and were scheduled to vest over a period of up tofour years. The fair value of restricted shares that vested during 2025, 2024 and 2023 was $9.4 million, $8.9 million and $8.4 million, respectively.

As of December 31, 2025, there was $13.0 million of total future compensation cost related to unvested restricted share awards that are expected to vest. That cost is expected to be recognized over a weighted-average period of 2.24 years.

Restricted Shares Based on Performance Conditions

During 2025, 2024 and 2023, we granted awards to certain of our executive officers covering a total of 143,213,92,761 and 60,633 PSUs, respectively. The number of earned PSUs that ultimately vest over three years, following conclusion of the performance period, is determined based upon on achievement of specific financial or operational goals. The number of PSUs that can be earned, range from a minimum of 30% of the PSU awards to a maximum of

200%, of the PSUs granted. In addition to these PSUs, we also granted 5,356 performance share awards in 2024. The vesting of these awards is based upon achievement of financial milestones over specified time periods.

The following table sets forth information regarding outstanding PSUs based on performance conditions as of December 31, 2025:

Restricted Shares Based on Market Conditions

During 2025, 2024 and 2023, we granted awards for 74,457,52,930 and 29,621 TSR Shares, respectively, which are equity classified awards and will vest on our performance compared to our peer group over athree-year period. These awards had an aggregate fair value at their date of grant of $4.2 million, $4.3 million and $2.5 million, respectively, after consideration of all assumptions.

The grant date fair value of these awards was based on a Monte Carlo model, using the following assumptions:

The following table sets forth information regarding outstanding restricted shares based on market conditions as of December 31, 2025:

As of December 31, 2025, there was $1.6 million of total future compensation cost related to unvested TSR Share awards. The TSR Shares will amortize over a weighted average remaining period of 1.65 years.

Note 7 Property, Plant and Equipment

The major components of our property, plant and equipment are as follows:

Depreciation expense included in depreciation and amortization expense in our consolidated statements of income (loss) totaled $648.8 million, $632.9 million and $644.9 million during 2025, 2024 and 2023, respectively.

Repair and maintenance expense included in direct costs in our consolidated statements of income (loss) totaled $207.7 million, $199.2 million and $228.2 million during 2025, 2024 and 2023, respectively.

Note 8 Financial Instruments and Risk Concentration

We may be exposed to certain market risks arising from the use of financial instruments in the ordinary course of business. These risks arise primarily as a result of potential changes in the fair market value of financial instruments that would result from adverse fluctuations in foreign currency exchange rates, credit risk, interest rates, and marketable and non-marketable security prices as discussed below.

Foreign Currency Risk

We operate in a number of international areas and are involved in transactions denominated in currencies other than U.S. dollars, which exposes us to foreign exchange rate risk or foreign currency devaluation risk. The most significant exposures arise in connection with our operations in Latin America, which usually are substantially unhedged.

We have experienced certain risks specific to our operations in Argentina. Argentina’s economy is currently considered highly inflationary under U.S. GAAP, which is defined as cumulative inflation rates exceeding 100% in the most recent three-year period based on inflation data published by the respective governments.

At various times, we utilize local currency borrowings (foreign-currency-denominated debt), the payment structure of customer contracts and foreign exchange contracts to selectively hedge our exposure to exchange rate fluctuations in connection with monetary assets, liabilities, cash flows and commitments denominated in certain foreign currencies. A foreign exchange contract is a foreign currency transaction, defined as an agreement to exchange different currencies at a given future date and at a specified rate.

Credit Risk

Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, short-term and long-term investments and accounts receivable. Cash equivalents such as deposits and temporary cash investments are held by major banks or investment firms. Our short-term and long-term investments are managed within established guidelines that limit the amounts that may be invested with any one issuer and provide guidance as to issuer credit quality. We believe that the credit risk in our cash and investment portfolio is minimized as a result of the mix of our investments. In addition, our trade receivables are with a variety of U.S., international and non-U.S. national oil and gas companies.

As of December 31, 2025, approximately 29%,15% and 13% of our net accounts receivable balance was related to our operations in Saudi Arabia, Mexico and U.S., respectively. Management considers this credit risk to be limited due

to the financial resources of our primary customer in each of these countries. Our largest customer in Mexico has a history of making late payments and, in more recent periods, has utilized third-party financial institutions to pay certain of our receivables. The balances due are not in dispute, however, additional or continued delays in customer payments in the future could differ from historical practice and management’s current expectations.

We perform ongoing credit evaluations of all our customers, and we generally do not require material collateral. We do occasionally require prepayment of amounts from customers whose creditworthiness is in question prior to providing services to them. We maintain reserves for potential credit losses, and these losses historically have been within management’s expectations.

Interest Rate and Marketable and Non-marketable Security Price Risk

Our financial instruments that are potentially sensitive to changes in interest rates include our floating rate debt instruments comprised of the 2024 Credit Agreement and our fixed rate debt securities comprised of our 1.75% senior exchangeable notes,7.50% and 8.875% senior guaranteed notes and 7.625% and 9.125% senior priority guaranteed notes.

We may utilize derivative financial instruments that are intended to manage our exposure to interest rate risks. The use of derivative financial instruments could expose us to further credit risk and market risk. Credit risk in this context is the failure of a counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty would owe us, which can create credit risk for us. When the fair value of a derivative contract is negative, we would owe the counterparty, and therefore, we would not be exposed to credit risk. We attempt to minimize credit risk in derivative instruments by entering into transactions with major financial institutions that have a significant asset base. Market risk related to derivatives is the adverse effect on the value of a financial instrument that results from changes in interest rates. We try to manage market risk associated with interest-rate contracts by establishing and monitoring parameters that limit the type and degree of market risk that we undertake.

Note 9 Debt

Debt consisted of the following:

As of December 31, 2025, the principal amount and maturities of our primary debt for each of the five years following 2025 and thereafter are as follows:

During 2025, we fully redeemed the $546.1 million remaining balance of the 7.375% senior priority guaranteed notes due May 2027 for approximately $557.1 million in cash, including principal, premium of $10.1 million and $1.0 million in accrued and unpaid interest. We also redeemed $164.4 million aggregate principal amount of outstanding Nabors Delaware’s notes for approximately $169.7 million in cash, including $4.5 million in accrued and unpaid interest. In connection with the redemptions, we recognized a $15.5 million loss for the year ended December 31, 2025, which is included in Other, net in our condensed consolidated statement of income (loss).

7.625% Senior Priority Guaranteed Notes due November 2032

On November 10, 2025, Nabors issued $700.0 million in aggregate principal amount of 7.625% senior priority 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 May 15 and November 15 of each year. The notes have a maturity date of November 15, 2032. Nabors used the net proceeds to redeem all of its 7.375% senior priority guaranteed notes due May 2027.

1.75% Senior Exchangeable Notes Due June 2029

In February 2023, Nabors Delaware issued $250.0 million in aggregate principal amount of 1.75% senior exchangeable notes due 2029, which are fully and unconditionally guaranteed by Nabors. The notes bear interest at a rate of 1.75% per year payable semiannually on June 15 and December 15 of each year, beginning on December 15, 2023. As of December 31, 2025, there was $250.0 million in aggregate principal amount that remained outstanding.

The 1.75% exchangeable notes are exchangeable, only under certain conditions, at an exchange rate of 4.7056 common shares of Nabors per $1,000 principal amount of exchangeable notes (equivalent to an exchange price of approximately $212.51 per common share). Upon any exchange, Nabors will settle its exchange obligation in cash, common shares of Nabors, or a combination of cash and common shares, at our election. The 1.75% exchangeable notes are redeemable, in whole or in part, at our option at any time on or after June 15, 2026 only if the last reported sale price per common shares exceeds 130% of the exchange price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading days immediately before the date of the related redemption notice; and (2) the trading day immediately before we send such notice, at a cash redemption price equal to 100% of the principal amount to be redeemed plus accrued and unpaid interest. If a “fundamental change” (as defined in the Indenture) occurs, subject to certain conditions, holders may require us to repurchase for cash any or all of their 1.75% exchangeable notes at a repurchase price equal to 100% of the principal

amount of the 1.75% exchangeable notes to be repurchased, plus accrued and unpaid interest. Based on our assessment of the features of the 1.75% exchangeable notes, it was determined that there are features that need to be assessed for bifurcation as a derivative. As part of the assessment, the features were either not required to be bifurcated based on accounting guidance or would have no value if bifurcated.

Parker Term Loan

On March 11, 2025, the Parker acquisition was completed. Prior to the acquisition, Parker was a party to a Second Lien Term Loan Credit Agreement (“Parker Term Loan”), dated March 26, 2019 (as amended in March 2021 and January 2023). The Parker Term Loan bears interest at a rate of 13% per annum, payable quarterly and matures on September 26, 2025.

The Parker Term Loan carries a customary change of control provision, which was triggered by the closing of the Parker acquisition. The change of control, when triggered, required that the Parker Term Loan be repaid or refinanced within 30 days of the Closing Date or that Parker make a change of control repayment offer pursuant to which it will offer to repurchase the term loans outstanding under the facility at 101% of the principal amount of such term loans. On March 25, 2025, the outstanding balance of $177.8 million was repaid utilizing our credit agreement, which is discussed below.

Credit Agreement

On June 17, 2024, Nabors Delaware amended and restated its existing credit agreement (as amended and restated, 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.

On September 4, 2025, Nabors Delaware entered into the first amendment to the 2024 Credit Agreement to revise the restricted payments covenant to permit Nabors Delaware to repurchase up to$100.0 million of equity of either Nabors Delaware or any parent entity in any fiscal year. Usage of this provision will reduce Nabors Delaware’s ability to make dividends on a dollar-for-dollar basis; any dividends distributed by Nabors Delaware will likewise reduce Nabors Delaware’s ability to make buybacks of equity on a dollar-for-dollar basis.

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 7.50% 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 90 th 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 December 31, 2025, we hadno borrowings and $69.8 million of letters of credit outstanding under our 2024 Credit Agreement. The weighted average interest rate on borrowings under the 2024 Credit Agreement at December 31, 2025 was 7.21%. 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. 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.

Letters of Credit

We hadseven letter-of-credit facilities with various banks as of December 31, 2025. Availability and borrowings under our letter-of-credit facilities are as follows:

Note 10 Income Taxes

Income (loss) before income taxes consisted of the following:

The Company has elected to prospectively adopt the guidance in ASU 2023-09. Prior to the adoption of ASU 2023-09, the Company disaggregated income (loss) between the United States and other jurisdictions. For the years ending December 31, 2024 and 2023, Bermuda is presented in Other foreign jurisdictions.

Income tax expense (benefit) consisted of the following:

The Company has elected to prospectively adopt the guidance in ASU 2023-09. Prior to the adoption of ASU No. 2023-09, the Company disaggregated income tax expense (benefit) between the United States, U.S. states and other jurisdictions. For the 2024 and 2023 years, Bermuda is presented in Other foreign jurisdictions.

The following table is a reconciliation of the Bermuda national statutory tax rate of 15%, that became effective on January 1, 2025, to the Company’s effective rate for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09:

The following table is a reconciliation of the Bermuda national statutory tax rate of 0% to our worldwide effective tax rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09:

Our worldwide income tax expense for 2025 was $163.1 million compared to $56.9 million for 2024. The increase in tax expense was primarily attributable to the Parker acquisition and sale of Quail Tools, as well as the change in amount and geographic mix of our pre-tax earnings (losses).

The following table lists the components of the income taxes paid (net of refunds received):

The components of our net deferred taxes consisted of the following:

As of December 31, 2025, we had U.S. federal, U.S. state, and non-US net operating loss (“NOL”) carryforwards of approximately $355.4 million, $937.6 million and $16.9 billion, respectively. Of those amounts, $8.3 billion will expire between 2026 and 2046 if not utilized. We provide a valuation allowance against NOL carryforwards in various tax jurisdictions based on our consideration of existing temporary differences and expected future earning levels in those jurisdictions. A valuation allowance of approximately $3.8 billion as of December 31, 2025 has been recognized related to certain NOL carryforwards as we believe it is more likely than not that the benefit of these NOL carryforwards will not be realized.

The following is a reconciliation of our uncertain tax positions:

If the unrecognized tax positions of $17.3 million are realized, this would favorably impact the worldwide effective tax rate by $15.9 million. As of December 31, 2025, 2024 and 2023, we had approximately $9.5 million, $8.2 million and $11.1 million, respectively, of interest and penalties related to uncertain tax positions. During 2025, 2024 and 2023, we accrued and recognized estimated interest and penalties related to uncertain tax positions of approximately $1.3 million, $(2.9) million and $(6.0) million, respectively. During the fourth quarter of 2025, we settled tax audits for which we had accrued an uncertain tax position of $8.8 million withno interest and penalties. Upon settlement, we reversed the uncertain tax position accrual. We include potential interest and penalties related to uncertain tax positions within our global operations in the income tax expense (benefit) line item in our consolidated statements of income (loss).

We conduct business globally and, as a result, we file numerous income tax returns in the U.S. and non-U.S. jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world, including major jurisdictions such as Colombia, Mexico, Saudi Arabia, and the United States. We are no longer subject to U.S. Federal income tax examinations for years before 2022 and non-U.S. income tax examinations for years before 2007.

On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law in the United States. Among other provisions, the IRA includes a 15% corporate minimum tax rate applied to certain large corporations and a 1% excise tax on corporate stock repurchases made after December 31, 2022. We do not expect the IRA to have a material impact to the Company.

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%. Numerous countries, including European Union member states, have enacted or are expected to enact legislation. Pillar 2 did not have a material impact to our consolidated financial statements for the year ended December 31, 2025.

On December 18, 2023, Bermuda enacted a 15% corporate income tax regime (the “Bermuda CIT”) that applies to Bermuda businesses that are part of multinational enterprise groups with annual revenue of €750 million or more and is effective for tax years beginning on or after January 1, 2025. As a result of the Bermuda CIT, the Company’s exemption from Bermuda corporate income taxes ceased in 2025. With the enactment of the Bermuda CIT in 2023, the Company underwent an analysis to determine the tax impacts to its consolidated financial statements. Bermuda CIT allows for a beginning net operating loss balance related to the five years preceding the effective date of Bermuda CIT. As of December 31, 2025, we have recorded a deferred tax asset of$206.9 million for the Bermuda net operating losses generated from 2020 through 2024 with an offsetting valuation allowance of$206.9 million.

The One Big Beautiful Bill Act (“OBBBA”) was signed into law on July 4, 2025. OBBBA included many provisions such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modification to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions already in effect and others implemented through fiscal year 2027. We do not expect the legislation to have a material impact on our effective tax rate.

Note 11 Shareholders’ Equity

Common shares

Our authorized share capital consists of 57.0 million shares of which 32.0 million are common shares, par value $0.05 per share, and 25.0 million are preferred shares, par value $0.001 per share. The preferred shares are issuable in one or more classes or series, full, limited or no voting rights, designations, preferences, special rights, qualifications, limitations and restrictions, as may be determined by the Board.

On March 11, 2025, in connection with the completion of the Parker acquisition, we issued 4.8 million common shares to the former stockholders of Parker. See further discussion on the transaction in Note 4—Acquisitions and Dispositions.

From time to time, treasury shares may be reissued subject to applicable securities law limitations. When shares are reissued, we use the weighted-average-cost method for determining cost. The difference between the cost of the shares and the issuance price is added to or deducted from our capital in excess of par value account. No shares have been reissued during 2025, 2024 or 2023.

Common stock 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 receivedtwo-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 December 31, 2025,2.5 million Warrants remain outstanding and 1.1 million common shares have been issued in settlement of exercises of Warrants.

Each Warrant represents the right to purchaseone 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 December 31, 2025 and 2024, the fair value of the Warrants was approximately $0.7 million and $9.0 million, respectively. During the years ended December 31, 2025, 2024 and 2023, approximately $8.4 million of gain, $16.9 million of gain and $54.7 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 12 Joint Ventures

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

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, each with a value of approximately $394 million to the joint venture. The contributions were received in exchange for redeemable ownership interests that accrue interest annually, have atwenty-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 December 31, 2025 and December 31, 2024, the amount included in redeemable noncontrolling interest was $482.4 million and $453.3 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 consolidated balance sheet, is presented below.

Note 13 Related-Party Transactions

Nabors and certain current and former key employees, including Mr. Petrello, entered into split-dollar life insurance agreements, pursuant to which we pay a portion of the premiums under life insurance policies with respect to these individuals and, in some instances, members of their families. These agreements provide that we are reimbursed for the premium payments upon the occurrence of specified events, including the death of an insured individual. Any recovery of premiums paid by Nabors could be limited to the cash surrender value of the policies under certain circumstances. As such, the values of these policies are recorded at their respective cash surrender values in our consolidated balance sheets. We have made premium payments to date totaling $6.6 million related to these policies. The cash surrender value of these policies of approximately $4.2 million and $4.7 million is included in other long-term assets in our consolidated balance sheets as of December 31, 2025 and 2024, respectively.

Under the Sarbanes-Oxley Act of 2002, the payment of premiums by Nabors under the agreements could be deemed to be prohibited loans by us to these individuals. Consequently, we have paidno premiums related to our agreements with these individuals since the adoption of the Sarbanes-Oxley Act.

In July 2023, Nabors Energy Transition Corporation II (“NETC II”) co-sponsored by Nabors and Greens Road Energy II LLC, completed its initial public offering of 30,500,000 units. Greens Road Energy II LLC is owned by certain members of Nabors’ management team and board members. Simultaneously with the closing of the IPO, NETC II completed the private sale of an aggregate of 9,540,000 warrants with a fair value of $1 per warrant, of which 4,348,000 warrants were purchased by related parties including certain Nabors officers, directors and employees, with the remainder being purchased by a subsidiary of Nabors. See Note 20—Special Purpose Acquisition Company for additional information.

Effective May 3, 2024, Nabors Energy Transition Solutions LLC, a Texas limited liability company and wholly owned subsidiary of Nabors transferred certain non-revenue producing energy transition assets to Hexegen LLC, a Delaware limited liability company. Remington Energy I, LLC, a Texas limited liability company owned and managed by Mr. Petrello (“Remington”) is also a member of and invested in Hexegen with seed capital and industry expertise. Hexegen plans to grow and scale an energy transition business using its members’ contributions. The arrangement provides for profit sharing among its members Nabors and Remington if certain hurdles are overcome and milestones are met and, at the highest level, would provide for a 90:10 split of profits above a defined threshold.

In the ordinary course of business, we enter into various rig leases, rig transportation and related oilfield services agreements with our related parties, including our joint venture partner Saudi Aramco. Revenues from business transactions with these related parties totaled $1.1 billion, $0.9 billion and $0.8 billion for the years ended December 31, 2025, 2024 and 2023, respectively. Additionally, we had accounts receivable from these related parties of $121.0 million and $122.8 million as of December 31, 2025 and 2024.

In addition, Mr. Crane, one of our independent directors, is Chairman and Chief Executive Officer of Crane Capital Group Inc. (“CCG”), an investment company that indirectly owns a majority interest in several operating companies, some of which have provided services to us in the ordinary course of business, including international logistics and electricity. During the years ended December 31, 2025, 2024 and 2023, we incurred costs for these services of $14.8 million, $7.9 million and $13.2 million, respectively. We had accounts payable to these CCG-related companies of $0.5 million and $1.8 million as of December 31, 2025 and 2024.

Note 14 Commitments and Contingencies

Commitments

Under the joint venture agreement with Saudi Aramco, the agreement requires us to backstop our share of the joint venture’s obligations to purchase the first 25 drilling rigs in the event that there is insufficient cash in the joint venture or third-party financing available. Although we currently anticipate that the future rig purchase needs will be met by cash flows from the joint venture and/or third-party financing, no assurance can be given that the joint venture will not require us to fund our backstop.

Leases

Nabors and its subsidiaries occupy various facilities and lease certain equipment under various lease agreements. Rental expense relating to operating leases with terms greater than 30 days amounted to $19.5 million, $15.7 million and $17.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. See Note 19—Leases for more information on the minimum rental commitments under non-cancelable operating leases.

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 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 $21.8 million (at December 31, 2025 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 appealed once more to the Supreme Court to try to get a final ruling on the matter. On April 10, 2025, the Supreme Court cancelled the judgment of the Ouargla Court of Appeals, ruled in our favor and sent the case back to a different court, the Algiers Court of Appeals. In January 2026, we received the final judgment from the Algiers Court of Appeals that was in our favor and cancelled the fine issued against us.

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 Agreements (see Note 3—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.

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:

Note 15 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:

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 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):

Additionally for the years ended December 31, 2024 and 2023, 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 16 Supplemental Balance Sheet, Income Statement and Cash Flow Information

Accrued liabilities include the following:

Investment income (loss) includes the following:

Other, net includes the following:

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

The line items that were reclassified to net income include the following:

Line item in consolidated statement of income (loss)

Supplemental cash flow information includes the following:

(1)

Note 17 Segment Information

Our business consists offour reportable segments: U.S. Drilling, International Drilling, Drilling Solutions and Rig Technologies. Our reportable segments include operating segments that have been aggregated based on the nature of the products and services provided. Results of Parker’s operations have been included within U.S. Drilling, International

Drilling and Drilling Solutions segments. Prior to its sale, Quail Tools’ operations were included within the Drilling Solutions segment. The accounting policies of the segments are the same as those described in Note 2—Summary of Significant Accounting Policies. Inter-segment sales are recorded at cost or cost plus a profit margin. Management’s determination of our reporting segments was made on the basis of our strategic priorities within each segment and the differences in the products and services we provide. The reportable segments results are reviewed regularly by the chief operating decision maker (“CODM”), who is our Chairman and Chief Executive Officer, in deciding how to allocate resources and assess performance. Our CODM evaluates the segments’ operating performance based on adjusted operating income (loss), defined as net income (loss) before income taxes, interest expense, earnings (losses) from unconsolidated affiliates, investment income (loss), gain on disposition of Quail Tools, gain on bargain purchase and other, net.

The following tables sets forth financial information with respect to our reportable operating segments:

The following table sets forth financial information with respect to Nabors’ operations by geographic area based on the location of service provided:

During the years ended December 31, 2025, 2024 and 2023, $1.0 billion, $927.7 million and $821.1 million of our consolidated operating revenue was from Saudi Arabia. No other individual country outside of the U.S. was material to our consolidated operating revenue during any of the three periods presented.

One customer accounted for approximately 30%,31% and 26% of our consolidated operating revenues during the years ended December 31, 2025, 2024 and 2023, respectively, and is included primarily in our International Drilling reportable segment.

Note 18 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 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:

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 consolidated balance sheet. In general, we receive payments from customers based on dayrates as stipulated in our contracts (i.e. operating rate, standby rate). 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.

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.

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

Approximately 41% of the contract liability balance at the beginning of the period was recognized as revenue during 2025 and 17% is expected to be recognized in 2026. The remaining 42% of the contract liability balance at the beginning of the period is expected to be recognized as revenue during 2027 or thereafter.

Additionally,42% of the contract asset balance at the beginning of the period was recognized as expense during 2025 and 25% is expected to be recognized in 2026. The remaining 33% of the contract asset balance at the beginning of the period is expected to be recognized as expense during 2027 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.

Note 19 Leases

We have evaluated the provisions of ASC 842, including certain practical expedients allowed. The significant practical expedients we adopted include the following:

Our leases primarily consist of office space and equipment used globally within our operations. We determine whether a contract is or contains a lease at inception of the contract based on answers to a series of questions that address whether an identified asset exists and whether we have the right to obtain substantially all the benefit of the assets and to control its use over the full term of the agreement. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate using a credit notching approach to discount the lease payments based on information available at lease commencement. Certain of our lease agreements include options to extend and options to terminate the lease, which we do not include in our minimum lease terms unless management is reasonably certain to exercise. We do not separate lease and non-lease components of contracts. There are no material residual value guarantees nor any restrictions or covenants included in our lease agreements. Certain of our leases include provisions for variable payments. These variable payments are typically determined based on a measure of throughput or actual days or another measure of usage and are not included in the calculation of lease liabilities and right-of-use assets.

Lease Position

The table below presents the lease related assets and liabilities recorded on our condensed consolidated balance sheet:

Lease Costs

The table below presents certain information related to the lease costs for our operating leases:

The table below presents supplemental cash flow information related to leases:

Lease Terms and Discount Rates

The table below presents certain information related to the weighted average remaining lease terms and weighted average discount rates for our operating leases:

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and the total remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet:

Note 20 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 were 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 company accounted 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.

In February 2025, NETC II entered into a definitive agreement for a business combination with e2Companies LLC, a leading provider of integrated solutions for on-site power generation, distribution and energy cost-optimization. Completion of the proposed transaction is subject to closing conditions.

On July 11, 2025, NETC II and Merger Sub, LLC (“Merger Sub”), a wholly owned subsidiary of Nabors Energy Transition Sponsor II LLC (the “Sponsor”), filed a complaint against e2 in the Delaware Court of Chancery (the “Complaint”) alleging that e2 breached the business combination agreement by, among other things, delaying in completing its obligations to assist with required regulatory filings and otherwise delaying in completing the business combination, engaging in non-ordinary course transactions without NETC II’s consent, and failing to provide required financials to NETC II.

In July 2025, NETC II held an extraordinary general meeting which approved, among other things, a proposal to extend the date NETC II has to consummate an initial business combination to July 18, 2026. In connection with the meeting, $186.7 million of the holdings held in the Trust Account were redeemed.

On October 14, 2025, NETC II, e2, the Sponsor and Merger Sub entered into the Settlement Agreement and Release pursuant to which (i) e2 issued a secured promissory note to NETC II in an aggregate principal amount of $29.23 million and (ii) the parties agreed to dismiss the Complaint with prejudice.

In November 2025, NETC II held an extraordinary general meeting. In connection with the meeting, $101.1 million of the holdings held in the Trust Account were redeemed. Also, NETC II announced that it would redeem the remaining holdings held in the Trust Account as an initial business combination would not be consummated within the time period

required. On November 25, 2025, Form 25 was filed with the SEC to delist NETC II’s securities and the remaining holdings in the Trust Account were distributed on December 3, 2025.

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 December 31, 2025 and December 31, 2024, the Trust Account balance and non-controlling interest subject to possible redemption was$0 and $331.8 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.

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