SEGMENT REPORTING
The following tables set forth certain information with respect to our reportable segments and rig activity:
| Three Months Ended · Nine Months Ended |
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| September 30, · June 30, · September 30, |
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| (In thousands, except rig activity) | 2026 | 2025 | 2026 | 2026 | 2025 |
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| Operating revenues: |
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| U.S. Drilling | $274,925 | $249,836 | $252,459 | $768,528 | $736,020 |
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| International Drilling | 458,544 | 407,235 | 432,497 | 1,310,537 | 1,173,923 |
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| Drilling Solutions | 116,065 | 141,942 | 110,640 | 332,927 | 405,404 |
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| Rig Technologies (1) | 41,747 | 35,597 | 37,485 | 106,454 | 116,289 |
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| Other reconciling items (2) | (19,087) | (16,420) | (18,286) | (47,909) | (44,472) |
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| Total operating revenues | $872,194 | $818,190 | $814,795 | $2,470,537 | $2,387,164 |
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| Adjusted EBITDA: (3) |
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| U.S. Drilling | $99,391 | $94,161 | $94,081 | $281,537 | $288,693 |
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| International Drilling | 145,718 | 127,551 | 130,533 | 397,532 | 360,695 |
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| Drilling Solutions | 43,913 | 60,666 | 40,013 | 122,588 | 178,020 |
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| Rig Technologies (1) | 4,987 | 3,770 | 3,180 | 8,672 | 14,507 |
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| Other reconciling items (4) | (48,466) | (49,840) | (46,147) | (138,313) | (150,803) |
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| Total adjusted EBITDA | $245,543 | $236,308 | $221,660 | $672,016 | $691,112 |
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| Adjusted operating income (loss): (5) |
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| U.S. Drilling | $33,385 | $31,429 | $30,961 | $88,970 | $102,816 |
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| International Drilling | 64,275 | 45,476 | 45,860 | 150,892 | 114,485 |
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| Drilling Solutions | 36,150 | 49,982 | 32,125 | 100,147 | 133,260 |
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| Rig Technologies (1) | 3,037 | 877 | 1,497 | 2,646 | 6,933 |
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| Other reconciling items (4) | (51,048) | (51,803) | (49,332) | (147,118) | (156,428) |
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| Total adjusted operating income (loss) | $85,799 | $75,961 | $61,111 | $195,537 | $201,066 |
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| Rig activity: |
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| Average Rigs Working: (7) |
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| Lower 48 | 72.8 | 59.2 | 67.8 | 68.7 | 60.7 |
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| Other US | 9.4 | 10.0 | 10.0 | 9.8 | 9.2 |
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| U.S. Drilling | 82.2 | 69.2 | 77.8 | 78.5 | 69.9 |
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| International Drilling | 94.9 | 89.2 | 93.4 | 93.6 | 86.7 |
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| Total average rigs working | 177.1 | 158.4 | 171.2 | 172.1 | 156.6 |
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| Daily Rig Revenue: (6),(8) |
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| Lower 48 | $34,764 | $34,017 | $33,555 | $33,704 | $34,002 |
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| Other US | 48,612 | 70,035 | 50,073 | 51,141 | 68,302 |
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| U.S. Drilling (10) | 36,343 | 39,219 | 35,680 | 35,880 | 38,527 |
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| International Drilling | 52,524 | 49,596 | 50,860 | 51,262 | 49,583 |
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| Daily Adjusted Gross Margin: (6),(9) |
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| Lower 48 | $14,016 | $13,151 | $13,784 | $13,677 | $13,778 |
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| Other US | 14,203 | 31,527 | 17,318 | 17,067 | 31,408 |
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| U.S. Drilling (10) | 14,037 | 15,805 | 14,238 | 14,100 | 16,104 |
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| International Drilling | 19,060 | 17,931 | 17,534 | 17,842 | 17,635 |
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| (1) | Includes our oilfield equipment manufacturing activities. |
| (2) | Represents the elimination of inter-segment transactions related to our Rig Technologies operating segment. |
| (3) | Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on disposition of Quail Tools, gain on bargain purchase, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company’s ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company’s performance. Other companies in this industry may compute these measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)". |
| (4) | Represents the elimination of inter-segment transactions and unallocated corporate expenses. |
| (5) | Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on disposition of Quail Tools, gain on bargain purchase and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company’s ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company’s performance. Other companies in this industry may compute these measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)". |
| (6) | Rig revenue days represents the number of days the Company's rigs are contracted and performing under a contract during the period. These would typically include days in which operating, standby and move revenue is earned. |
| (7) | Average rigs working represents a measure of the average number of rigs operating during a given period. For example, one rig operating 45 days during a quarter represents approximately 0.5 average rigs working for the quarter. On an annual period, one rig operating 182.5 days represents approximately 0.5 average rigs working for the year. Average rigs working can also be calculated as rig revenue days during the period divided by the number of calendar days in the period. |
| (8) | Daily rig revenue represents operating revenue, divided by the total number of revenue days during the quarter. |
| (9) | Daily adjusted gross margin represents operating revenue less direct costs, divided by the total number of rig revenue days during the quarter. |
| (10) | The U.S. Drilling segment includes the Lower 48, Alaska, and Gulf of Mexico operating areas. |
| NABORS INDUSTRIES LTD. AND SUBSIDIARIES |
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| Reconciliation of Earnings per Share |
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| (Unaudited) |
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| Three Months Ended · Nine Months Ended |
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| September 30, · June 30, · September 30, |
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| (in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2026 | 2025 |
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| BASIC EPS: |
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| Net income (loss) (numerator): |
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| Income (loss), net of tax | $15,984 | $302,466 | $(1,523) | $18,723 | $357,440 |
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| Less: net (income) loss attributable to noncontrolling interest | (27,149) | (28,268) | (20,807) | (67,384) | (81,164) |
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| Less: deemed dividends to SPAC public shareholders | — | (750) | — | — | (750) |
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| Less: distributed and undistributed earnings allocated to unvested shareholders | — | (8,828) | — | — | (9,106) |
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| Less: accrued distribution on redeemable noncontrolling interest in subsidiary | (6,832) | (7,344) | (6,757) | (20,272) | (21,792) |
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| Numerator for basic earnings per share: |
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| Adjusted income (loss), net of tax - basic | $(17,997) | $257,276 | $(29,087) | $(68,933) | $244,628 |
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| Weighted-average number of shares outstanding - basic | 14,503 | 14,098 | 14,273 | 14,330 | 12,880 |
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| Earnings (losses) per share: |
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| Total Basic | $(1.24) | $18.25 | $(2.04) | $(4.81) | $18.99 |
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| DILUTED EPS: |
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| Adjusted income (loss), net of tax - basic | $(17,997) | $257,276 | $(29,087) | $(68,933) | $244,628 |
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| Add: after tax interest expense of convertible notes | — | 848 | — | — | 2,544 |
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| Add: effect of reallocating undistributed earnings of unvested shareholders | — | 28 | — | — | 24 |
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| Adjusted income (loss), net of tax - diluted | $(17,997) | $258,152 | $(29,087) | $(68,933) | $247,196 |
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| Weighted-average number of shares outstanding - basic | 14,503 | 14,098 | 14,273 | 14,330 | 12,880 |
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| Add: if converted dilutive effect of convertible notes | — | 1,176 | — | — | 1,176 |
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| Add: dilutive effect of potential common shares | — | 47 | — | — | 36 |
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| Weighted-average number of shares outstanding - diluted | 14,503 | 15,321 | 14,273 | 14,330 | 14,092 |
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| Earnings (losses) per share: |
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| Total Diluted | $(1.24) | $16.85 | $(2.04) | $(4.81) | $17.54 |
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NON-GAAP FINANCIAL MEASURES
