The following discussion and analysis of our financial condition and results of
operations is based on, and should be read in conjunction with, our consolidated
financial statements and the related notes thereto included under
Part II, Item 8.-Financial Statements and Supplementary Data. This discussion
and analysis contains forward-looking statements that involve risks and
uncertainties. Actual results may differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including those
set forth under Part I, Item 1A.-Risk Factors and elsewhere in this annual
report. See "Forward-Looking Statements."



Management Overview



We own and operate one of the world's largest land-based drilling rig fleets and
provide offshore rigs in the United States and numerous international markets.
Our business is comprised of our global land-based and offshore drilling rig
operations and other rig related services and technologies. These services
include tubular services, wellbore placement solutions, directional drilling,
measurement-while-drilling, logging-while-drilling systems and services,
equipment manufacturing, rig instrumentation and optimization software.



Outlook



The demand for our services is a function of the level of spending by oil and
gas companies for exploration, development and production activities. The
primary driver of customer spending is their cash flow and earnings which are
largely driven by oil and natural gas prices and customers' production volumes.
The oil and natural gas markets have traditionally been volatile and tend to be
highly sensitive to supply and demand cycles.



During 2020, the oil markets experienced unprecedented volatility. The COVID-19
outbreak, and its development into a pandemic, along with policies and actions
taken by governments and companies and behaviors of customers around the world,
had a significant negative impact on demand for oil. Additionally, production
decisions by large oil and natural gas producing countries taken around the
start of the pandemic led to increased oil production and supply. These actions
drove oil prices down, leading many of our customers to make significant cuts in
their activity, which has negatively affected our operating results and cash
flow. The Lower-48 rig market began to stabilize during the second half of 2020.
We expect measured but steady increases in activity throughout 2021 for the
Lower-48 market. Our International markets have also experienced factors and
conditions that have led to similar reductions in activity throughout 2020, but
the impact has varied considerably from country to country. Activity declined
more rapidly in some jurisdictions than others throughout the year. We believe
that activity is going to increase modestly throughout 2021, and we have already
started to see a return to activity from some of the stricter governmental
restrictions in some countries already.



Recent Developments



In January 2020, Nabors completed a private offering of $600.0 million aggregate
principal amount of 7.25% senior guaranteed notes due 2026 (the "2026 Notes")
and $400.0 million aggregate principal amount of 7.50% senior guaranteed notes
due 2028 (the "2028 Notes" and, together with the 2026 Notes, the "2026/2028
Notes"). 2026/2028 Notes are fully and unconditionally guaranteed by certain of
Nabors' indirect wholly owned subsidiaries (the "2026/2028 Notes Guarantors").
The proceeds from the offering were used primarily to repurchase approximately
$952.9 million aggregate principal amount, for a net premium of $2.7 million
(excluding accrued interest), of certain of Nabors Delaware's senior notes in a
tender offer (the "January 2020 Tender Offers"). The aggregate principal amounts
repurchased in the January 2020 Tender Offers included approximately (i)$407.7
million of Nabors Delaware's 5.50% senior notes due 2023, (ii) $379.7 million of
Nabors Delaware's 4.625% senior notes due 2021 and (iii) $165.5 million of
Nabors Delaware's 5.10% senior notes due 2023. The remaining proceeds were
available for transaction expenses and for general corporate purposes, including
the repayment of certain other debt. See Note 10 - Debt to the consolidated
financial statements included in Item 8 of the report for additional information
regarding the issuance of the 2026/2028 Notes and the January 2020 Tender
Offers.



At a special meeting of shareholders held April 20, 2020, our shareholders
authorized a reverse stock split (the "Reverse Stock Split") at a ratio of not
less than 1-for-15 and not greater than 1-for-50, with the exact ratio to be set
within that range at the sole direction of our Board. On April 20, 2020, the
Board set the Reverse Stock Split ratio at 1-

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for-50. As a result of the Reverse Stock Split, 50 pre-reverse split common
shares were automatically combined into one new common share, without any action
on the part of the shareholders. Our authorized number of common shares were
also proportionally decreased from 800,000,000 to 16,000,000 common shares.
Subsequently, the par value of each common share was proportionally increased
from $0.001 to $0.05. In addition, at the special meeting, the shareholders
authorized an increase in our common share capital by 100% following the Reverse
Stock Split, to $1,600,000, resulting in an increase in the number of authorized
shares to 32,000,000. No fractional common shares were issued as a result of the
Reverse Stock Split. Any fractional common shares of registered holders
resulting from the Reverse Stock Split were rounded up to the nearest whole
share. Unless otherwise noted, all share and per share information included in
this annual report has been retrospectively adjusted to reflect this Reverse
Stock Split.




On May 5, 2020, our Board adopted a shareholder rights plan and declared a
dividend of one right (a "Right") for each outstanding common share to
shareholders of record on May 15, 2020. Each Right entitles the holder to
purchase from Nabors one one-thousandth of a Series B Junior Participating
Preferred Share, par value $0.001 per share (the "Series B Preferred Shares'),
of Nabors at a price of $58.08 per one one-thousandth of a Series B Preferred
Share, subject to adjustment. The description of the Rights are set forth in a
Rights Agreement, dated May 5, 2020 (the "Rights Agreement"), by and between
Nabors and Computershare Trust Company, N.A., as Rights Agent. See Note 12 -
Shareholders' Equity in Part II, Item 8.-Financial Statements and Supplementary
Data for additional information regarding the shareholder rights plan.



During the fourth quarter of 2020, we entered into a series of public and
private exchange transactions (the "2020 Exchanges") whereby Nabors Delaware
exchanged certain aggregate principal amounts of newly issued 6.5% Senior
Priority Guaranteed Notes due 2025 (the "6.5% Exchange Notes") and certain
aggregate principal amounts of newly issued 9.0% Senior Priority Guaranteed
Notes due 2025 (the "9.0% Exchange Notes," and collectively, the "Exchange
Notes") in exchange for various series and principal amounts of our and Nabors
Delaware's previously outstanding debt securities. Each series of Exchange Notes
was guaranteed by (i) the Company, (ii) each of the 2026/2028 Notes Guarantors
and (iii) certain lower tier subsidiaries of the Company that guarantee the
Company's 2018 Revolving Credit Facility but do not guarantee the 2026/2028
Notes (the "Lower Tier Guarantors," and together with the Company and the
2026/2028 Guarantors, the "Exchange Notes Guarantors"). Nabors Delaware did not
receive any cash proceeds from the issuance of the Exchange Notes. The
guarantees of the Exchange Notes by the Lower Tier Guarantors are contractually
subordinate in right of payment to such subsidiaries' guarantee of certain
senior guaranteed debt, including obligations under our 2018 Revolving Credit
Facility.




The 2020 Exchanges collectively resulted in the exchange of $526.8 million
aggregate principal amount of various series of existing debt for $50.5 million
aggregate principal amount of newly issued 6.5% Exchange Notes and $192.0
million aggregate principal amount of newly issued 9.0% Exchange Notes. See Note
10 - Debt in Part II, Item 8-Financial Statements and Supplementary Data,for
additional information regarding the exchange.

In January 2021, Nabors Delaware completed additional exchange transactions whereby (i) $35.0 million aggregate principal amount of its 0.75% Senior Exchangeable Notes due 2024 (the "0.75% Exchangeable Notes") and (ii) $5.0 million of its 5.75% Senior Notes due 2025 (the "5.75% Senior Notes") were exchanged for an additional issuance of $26.05 million of 9.0% Exchange Notes.





Financial Results

Comparison of the years ended December 31, 2020 and 2019


Operating revenues in 2020 totaled $2.1 billion, representing a decrease of
$909.3 million from 2019. The primary driver was a decrease in U.S. activity in
response to the rapid decline in global market conditions as previously
discussed. This is evidenced by the 41% decline in average rigs working within
our U.S. Drilling operating segment. This market decline led to a decrease in
operating revenue across virtually all our operating segments. Our segments
where the activity is predominately located in the U.S. experienced a 40% -50%
decline in revenue while our International and Canada segments experienced a
less dramatic decline in the range of 15%-20%. For a more detailed description
of operating results see -Segment Results of Operations, below.



Net loss from continuing operations attributable to Nabors common shareholders
totaled $820.3 million for 2020 ($118.69 per diluted share) compared to a net
loss from continuing operations attributable to Nabors common shareholders of
$720.1 million ($105.39 per diluted share) in 2019, or a $100.1 million increase
in the net loss. This

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increase in the net loss is primarily due to the previously discussed weakened
global market conditions, brought about in part by the outbreak of COVID-19, and
the resultant unprecedented volatility in the oil markets. These factors led to
a significant decline in oil prices resulting from oversupply and demand
weakness, which in turn has had a significant impact on our operating results.
Also contributing to the higher net loss was a $108.7 million increase in
Impairments and other charges taken in 2020 compared to 2019, due in large part
to the market conditions experienced during 2020. The $228.3 million of gains
realized from the exchange transactions and repurchases of debt, partially
offset these items.



General and administrative expenses in 2020 totaled $203.5 million, representing
a decrease of $55.2 million, or 21% from 2019. This is reflective of a reduction
in workforce and general cost-reduction efforts across our operating segments
and our corporate offices due to current industry market conditions.



Research and engineering expenses in 2020 totaled $33.6 million, representing a
decrease of $16.8 million, or 33%, from 2019. The decrease is attributable to
reductions in staffing levels and other cost control efforts across many of our
research and engineering projects and initiatives due to current industry market
conditions.



Depreciation and amortization expense in 2020 was $853.7 million, representing a
decrease of $22.4 million, or 3%, from 2019. The decrease is primarily due to
reduction in rig activity, limited capital expenditures over recent years and
the effect of recent impairments and retirements of long-lived assets.

Segment Results of Operations

Our business consists of five reportable segments: U.S. Drilling, Canada Drilling, International Drilling, Drilling Solutions and Rig Technologies.





Management evaluates the performance of our reportable segments using adjusted
operating income (loss), which is our segment performance measure, because it
believes that this financial measure reflects our ongoing profitability and
performance. In addition, securities analysts and investors use this measure as
one of the metrics on which they analyze our performance. Adjusted operating
income (loss) represents income (loss) from continuing operations before income
taxes, interest expense, earnings (losses) from unconsolidated affiliates,
investment income (loss), (gain)/loss on debt buybacks and exchanges,
impairments and other charges and other, net. A reconciliation of adjusted
operating income to net income (loss) from continuing operations before income
taxes can be found in Note 19-Segment Information in Part II, Item 8. -Financial
Statements and Supplementary Data.



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






                                                           Year Ended December 31,            Increase/(Decrease)
                                                           2020                2019              2020 to 2019

                                                            (In thousands, except percentages and rig activity)
U.S. Drilling
Operating revenues                                    $       713,057     $    1,240,936    $ (527,879)     (43) %
Adjusted operating income (loss) (1)                  $      (96,176)     $

      64,313    $ (160,489)    (250) %
Average rigs working (2)                                         67.9              115.3         (47.4)     (41) %

Canada Drilling
Operating revenues                                    $        54,753     $       68,274    $  (13,521)     (20) %

Adjusted operating income (loss) (1)                  $      (11,766)     $

    (14,483)    $     2,717       19 %
Average rigs working (2)                                          9.0               10.9          (1.9)     (17) %

International Drilling
Operating revenues                                    $     1,131,673     $    1,324,142    $ (192,469)     (15) %

Adjusted operating income (loss) (1)                  $      (56,205)     $

     (8,903)    $  (47,302)    (531) %
Average rigs working (2)                                         75.7               88.3         (12.6)     (14) %

Drilling Solutions
Operating revenues                                    $       149,834     $      252,790    $ (102,956)     (41) %

Adjusted operating income (loss) (1)                  $         6,167     $

      59,465    $  (53,298)     (90) %

Rig Technologies
Operating revenues                                    $       131,555     $      260,226    $ (128,671)     (49) %

Adjusted operating income (loss) (1)                  $      (13,481)     $

(11,247) $ (2,234) (20) %

Adjusted operating income (loss) is our measure of segment profit and loss. (1) See Note 19 - Segment Information to the consolidated financial statements


    included in Item 8 of the report.

Represents a measure of the number of equivalent rigs operating during a (2) given period. For example, one rig operating 182.5 days during a 365-day


    period represents 0.5 average rigs working.




U.S. Drilling



Operating revenues decreased by $527.9 million or 43% in 2020 compared to 2019
primarily due to a significant decrease in activity brought about by the
weakened market conditions discussed above. This is reflected by a 41% decrease
in the average number of rigs working. The reduction in revenues was partially
offset by significant cost reductions, which are also related to the drop in
activity.



Canada Drilling



Operating revenues decreased by $13.5 million or 20% in 2020 compared to 2019
primarily due to a decline in activity as a result of the weakened global market
conditions. This is reflected by the 19% decline in average rigs working and
decreased day rates. However, cost reduction actions more than offset the drop
in revenue.



International Drilling



Operating revenues decreased by $192.5 million or 15% in 2020 compared to 2019
primarily due to reduced activity, as reflected by the 14% decrease in the
average number of rigs working, as certain countries implemented measures to
counter COVID-19. The reduction in revenues was partially offset by significant
cost reductions related to the drop in activity.



Drilling Solutions



Operating revenues decreased by $103.0 million or 41% in 2020 compared to 2019
primarily due to the reduced activity across the U.S. as the market softened in
response to reduced oil prices and market conditions discussed above. The
reduction in activity and operating revenues was partially offset by cost
management initiatives mainly focusing on labor and repair and maintenance costs
as well as an overall reduction in administrative expenses.



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Rig Technologies




Operating revenues decreased $128.7 million or 49% in 2020 compared to 2019 due
to the overall decline in activity in the U.S. as mentioned previously. Despite
the drop in revenues, this segment enacted significant cost reduction measures
to mitigate almost all the impact.



Other Financial Information



Interest expense



Interest expense for 2020 was $206.3 million, representing an increase of $2.0
million, or 1%, compared to 2019. The increase was primarily due to the higher
interest rates on the 2026 Notes and the 2028 Notes, which were issued in
January 2020, compared to the lower interest rate debt that was repurchased in
the January 2020 Tender Offers using the proceeds from that offering.

Gain on debt buybacks and exchanges





Gain on debt buybacks and exchanges was $228.3 million, representing an increase
of $216.8 million compared to 2019. Approximately $161.8 million of this amount
is due to the debt exchanges completed in the fourth quarter of 2020. The
remaining $66.5 million is primarily attributable to open market purchases

of
debt throughout the year.

Impairments and other charges


Impairments and other charges for 2020 was $410.6 million. The increase was due
to the outbreak of COVID-19 and the oil market experiencing unprecedented
volatility leading to a significant decline in oil prices resulting from
oversupply and demand weakness in early 2020. These charges included impairment
charges, and retirement provisions of long-lived assets of $260.5 million
comprised of underutilized rigs and drilling-related equipment across all our
operating segments. We also recognized $111.4 million in impairments to our
remaining goodwill and intangible asset balances in our Drilling Solutions and
Rig Technologies operating segments.



Impairments and other charges for 2019 were $301.9 million, which primarily
consisted of $203.7 million of impairments to goodwill and intangible assets
primarily as the result of a sustained decline in our market capitalization and
lower future cash flow projections due to expectations for future commodity
prices below previous projections and the resulting impact on the lower demand
projections for our products and services within these reporting units. We
recognized goodwill impairments for the remaining balances of $75.6 million
attributable to our International Drilling operating segment, $52.2 million
attributable to our U.S. Drilling operating segment and $28.1 million
attributable to the acquisition of 2TD reported within our Rig Technologies
operating segment. Additionally, we recognized an impairment of $47.7 million to
write off the intangible asset due to uncertainty in commercialization and
demand stemming from lower commodity prices and rig counts.



The balance of $98.3 million consisted of impairments and retirement provisions
for several tangible and other assets. These assets included some of our older
and smaller rigs in our Canada and International Drilling rig fleets of $17.8
million and $17.9 million, respectively, $11.4 reserve for inventory
obsolescence in our Rig Technologies segment and $43.2 million in various
receivables or other assets impacted by foreign sanctions or other political
risk issues, bankruptcies or other financial problems.



Other, net



Other, net for 2020 was $28.6 million of loss, which included foreign currency
exchange loss of $13.2 million, net losses on sales and disposals of assets of
approximately $12.4 million and an increase in litigation reserves of $4.2
million.



Other, net for 2019 was $33.2 million of expense, which included foreign
currency exchange losses of $20.9 million, net losses on sales and disposals of
assets of approximately $7.1 million and an increase in litigation reserves

of
$5.2 million.



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Income taxes



Our worldwide income tax expense for 2020 was $57.3 million compared to $91.6
million for 2019. The decrease in tax expense was primarily attributable to a
decrease in operating income in the jurisdictions in which we operate, as well
as the change in our geographic mix of our pre-tax earnings (losses) . The
decrease was partially offset by the gain related to our debt exchange
transaction and the resulting utilization of net operating losses.

Liquidity and Capital Resources

Financial Condition and Sources of Liquidity





Our primary sources of liquidity are cash and investments, availability under
our revolving credit facility and cash generated from operations. As of December
31, 2020, we had cash and short-term investments of $481.7 million and working
capital of $616.0 million. As of December 31, 2019, we had cash and short-term
investments of $452.5 million and working capital of $592.1 million.



At December 31, 2020, we had $672.5 million of borrowings outstanding under the
2018 Revolving Credit Facility, which has a total borrowing capacity of $1.014
billion. The 2018 Revolving Credit Facility requires us to maintain "minimum
liquidity" of no less than $160.0 million at all times, and an asset to debt
coverage ratio of at least 4.25:1 as of the end of each calendar quarter.
Minimum liquidity is defined to mean, generally, a consolidated cash balance
consisting of (a) the aggregate amount of unrestricted cash and cash equivalents
maintained in a deposit account U.S. or Canadian branch of a commercial bank,
plus (b) the lesser of $75 million or an amount equal to 75% of the aggregate
amount of unrestricted cash and cash equivalents held in deposit account of a
commercial bank outside of the U.S. or Canada, plus (c) available commitments
under the 2018 Revolving Credit Facility. The asset to debt coverage ratio
applies only during the period which Nabors Delaware fails to maintain an
investment grade rating from at least two rating agencies, which was the case as
of the date of this report. As of December 31, 2020, we were in compliance with
both the minimum liquidity and asset to debt coverage ratio requirements under
the 2018 Revolving Credit Facility. We also had $57.6 million of letters of
credit outstanding under the 2018 Revolving Credit Facility.



As of the date of this report, we were in compliance with all covenants under
the 2018 Revolving Credit Facility. If we fail to perform our obligations under
the covenants, the revolving credit commitments under the 2018 Revolving Credit
Facility could be terminated, and any outstanding borrowings under the
facilities could be declared immediately due and payable. If necessary, we have
the ability to manage our covenant compliance by taking certain actions
including reductions in discretionary capital or other types of controllable
expenditures, monetization of assets, amending or renegotiating the revolving
credit agreement, accessing capital markets through a variety of alternative
methods, or any combination of these alternatives. We expect to remain in
compliance with all covenants under the 2018 Revolving Credit Facility during
the twelve month period following the date of this report based on our current
operational and financial projections. However, we can make no assurance of
continued compliance if our current projections or material underlying
assumptions prove to be incorrect. If we fail to comply with the covenants, the
revolving credit commitment could be terminated, and any outstanding borrowings
under the facility could be declared immediately due and payable.



Our ability to access capital markets or to otherwise obtain sufficient
financing may be affected by our senior unsecured debt ratings as provided by
the major credit rating agencies in the United States and our historical ability
to access these markets as needed. While there can be no assurances that we will
be able to access these markets in the future, we believe that we will be able
to access capital markets or otherwise obtain financing in order to satisfy any
payment obligation that might arise upon maturity, exchange or purchase of our
notes and our debt facilities, loss of availability of our revolving credit
facilities and our A/R Agreement (see-Accounts Receivable Sales Agreement,
below), and that any cash payment due, in addition to our other cash
obligations, would not ultimately have a material adverse impact on our
liquidity or financial position. The major U.S. credit rating agencies have
previously downgraded our senior unsecured debt rating to non-investment grade.
These and any further ratings downgrades could adversely impact our ability to
access debt markets in the future, increase the cost of future debt, and
potentially require us to post letters of credit for certain obligations. See
Part I, Item 1A.-Risk Factors-A downgrade in our credit rating could negatively
impact our cost of and ability to access capital markets or other financing

sources.





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We had 18 letter-of-credit facilities with various banks outstanding as of December 31, 2020. Availability under these facilities was as follows:






                                                                        December 31,
                                                                            2020
                                                                       (In thousands)
Credit available                                                       $       630,552
Less: Letters of credit outstanding, inclusive of financial and
performance guarantees                                                         114,984
Remaining availability                                                 $       515,569






We are a holding company and therefore rely exclusively on repayments of
interest and principal on intercompany loans that we have made to our operating
subsidiaries and income from dividends and other cash flows from our operating
subsidiaries. There can be no assurance that our operating subsidiaries will
generate sufficient net income to pay us dividends or sufficient cash flows to
make payments of interest and principal to us. See Part I., Item 1A.-Risk
Factors-As a holding company, we depend on our operating subsidiaries and
investments to meet our financial obligations.

Accounts Receivable Sales Agreement


On September 13, 2019, we entered into a $250.0 million accounts receivable
sales agreement (the "A/R Agreement") whereby certain U.S. operating
subsidiaries of the Company (collectively, the "Originators") sold or
contributed, and will on an ongoing basis continue to sell or contribute,
certain of its domestic trade accounts receivables to a wholly owned,
bankruptcy-remote, special purpose entity (the "SPE"). The SPE would in turn,
sell, transfer, convey and assign to third-party financial institutions (the
"Purchasers"), all the rights, title and interest in and to its pool of eligible
receivables. The sale of these receivables qualified for sale accounting
treatment in accordance with ASC 860.



The amount available for purchase under the A/R 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. The maximum purchase commitment of the Purchasers under
the A/R Agreement is approximately $250.0 million, and the amount of receivables
purchased by the Purchasers as of December 31, 2020 was $54.0 million. As of
December 31, 2020, the total amount of eligible receivables available for
purchase by the Purchasers was $67.0 million. See further details at Note 4 -
Accounts Receivable Sale Agreement in Part II, Item 8. -Financial Statements and
Supplementary Data.



Future Cash Requirements



Our current cash and investments, projected cash flows from operations, proceeds
from equity or debt issuances and our 2018 Revolving Credit Facility are
expected to adequately finance our purchase commitments, capital expenditures,
acquisitions, scheduled debt service requirements, and all other expected cash
requirements for the next 12 months including the $86.5 million outstanding of
the 4.625% senior notes due September 2021. However, we can make no assurances
that our current operational and financial projections will prove to be correct,
especially in light of the effects the COVID-19 pandemic has on oil and natural
gas prices and, in turn, our business. A sustained period of highly depressed
oil and natural gas prices could have a significant effect on our customers'
capital expenditure spending and therefore our operations, cash flows and
liquidity.



Purchase commitments outstanding at December 31, 2020 totaled approximately
$110.1 million, primarily for rig-related enhancements, sustaining capital
expenditures, operating expenses and purchases of inventory. We can reduce
planned expenditures if necessary or increase them if market conditions and new
business opportunities warrant it. The level of our outstanding purchase
commitments and our expected level of capital expenditures over the next 12
months represent a number of capital programs that are currently underway or
planned.



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



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



The following table summarizes our contractual cash obligations as of December
31, 2020:




                                                              Payments due by Period
                                    Total       < 1 Year       1-3 Years        3-5 Years       More than 5 years

                                                                  (In thousands)
Contractual cash obligations:
Long-term debt: (1)
Principal                        $ 3,036,105    $  86,500 (2)  $  822,361 (3)  $ 1,177,657 (4) $           949,587 (5)
Interest                             794,309      163,434         313,141          224,383                  93,351
Operating leases (6)                  41,812       10,030          11,775            4,831                  15,176
Purchase commitments (7)             110,123      109,138             324                -                     661


The table above excludes liabilities for uncertain tax positions totaling
$26.7 million as of December 31, 2020 because we are unable to make reasonably
reliable estimates of the timing of cash settlements with the respective taxing
authorities. Further details on the uncertain tax positions can be found in
Note 11-Income Taxes in Part II, Item 8.-Financial Statements and Supplementary
Data.

(1) See Note 10-Debt in Part II, Item 8.-Financial Statements and Supplementary


    Data.

(2) Represents the aggregate principal amount of Nabors Delaware's 4.625% senior


    notes due September 2021.

Represents the aggregate principal amount of Nabors Delaware's 5.50% senior (3) notes due January 2023, our 5.10% senior notes due September 2023 and our


    2018 Revolving Credit Facility due October 2023.

Represents Nabors Delaware's 0.75% senior exchangeable notes due January (4) 2024, 5.75% senior notes due January 2025, 6.5% senior priority guaranteed


    notes due February 2025 and 9.0% senior priority guaranteed notes due
    February 2025.

(5) Represents our 7.25% senior guaranteed noted due January 2026 and our 7.50%


    senior guaranteed noted due January 2028.

(6) See Note 21-Leases in Part II, Item 8.-Financial Statements and Supplementary


    Data.

Purchase commitments include agreements to purchase goods or services that (7) are enforceable and legally binding and that specify all significant terms,

including fixed or minimum quantities to be purchased; fixed, minimum or

variable pricing provisions; and the approximate timing of the transaction.


During the three months ended December 31, 2020, our Board declared a cash
dividend of $0.75 per mandatory convertible preferred share, which was paid on
February 1, 2021 to shareholders of record at the close of business on January
15, 2021 in the amount of $3.7 million. During the year ended December 31, 2020,
we paid cash dividends totaling $49.6 million. On February 23, 2021, a cash
dividend of $0.75 per mandatory convertible preferred share was declared for
shareholders which will be paid on May 3, 2021, to holders presenting the
Preferred Shares for conversion. See Part II, Item 5.-Market Price of and
Dividends on the Registrant's Common Equity, Related Shareholder Matters and
Issuer Purchases of Equity-Dividends.



Cash Flows



Our cash flows depend, to a large degree, on the level of spending by oil and
gas companies for exploration, development and production activities. Sustained
decreases in the price of oil or natural gas could have a material impact on
these activities, and could also materially affect our cash flows. Certain
sources and uses of cash, such as the level of discretionary capital
expenditures or acquisitions, purchases and sales of investments, loans,
issuances and repurchases of debt and of our common shares are within our
control and are adjusted as necessary based on market conditions. We discuss our
2020 and 2019 cash flows below.



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Operating Activities. Net cash provided by operating activities totaled $349.8
million during 2020, compared to net cash provided of $684.6 million during
2019. Operating cash flows are our primary source of capital and liquidity. The
decrease in cash flows from operations is primarily attributable to decreases in
activity and margins in our U.S. Drilling operating segment. Changes in working
capital items such as collection of receivables, other deferred revenue
arrangements and payments of operating payables are significant factors
affecting operating cash flows. Changes in working capital items used
$8.4 million in cash flows during 2020 and provided $136.7 million in cash

flows
during 2019.



Investing Activities. Net cash used for investing activities totaled
$165.5 million during 2020 compared to net cash used of $355.9 million in 2019.
Our primary use of cash for investing activities is for capital expenditures
related to rig-related enhancements, new construction and equipment, as well as
sustaining capital expenditures. During 2020 and 2019, we used cash for capital
expenditures totaling $195.5 million and $427.7 million, respectively.

We received $27.4 million in proceeds from insurance claims and sales of assets during 2020 compared to $60.3 million in 2019.





Financing Activities. Net cash used for financing activities totaled
$148.0 million during 2020. During 2020, we received net proceeds of $317.2
million in amounts borrowed under our revolving credit facilities, partially
offset by a $1.3 billion repayment on our senior notes. Additionally, we paid
dividends totaling $22.5 million to our common and preferred shareholders.

Net cash used for financing activities totaled $331.6 million during 2019. During 2019, we received net proceeds of $185.0 million in amounts borrowed under our revolving credit facilities, partially offset by a $455.4 million repayment on our senior notes. Additionally, we paid dividends totaling $49.6 million to our common and preferred shareholders.

Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries

Nabors Delaware is an indirect, wholly-owned subsidiary of Nabors. Nabors fully
and unconditionally guarantees the due and punctual payment of the principal of,
premium, if any, and interest on Nabors Delaware's registered notes, which are
its (i) 4.625% Senior Notes due 2021 (the "2021 Notes"), (ii) 5.10% Senior Notes
due 2023 (the "2023 Notes"), (iii) 5.50% Senior Notes due 2023 (the "5.50 2023
Notes") and (iv) 5.75% Senior Notes due 2025 (the "2025 Notes" and, together
with the 2021 Notes, the 2023 Notes, the 5.50% 2023 Notes and the 2025 Notes,
the "Registered Notes"), and any other obligations of Nabors Delaware under the
Registered Notes when and as they become due and payable, whether at maturity,
upon redemption, by acceleration or otherwise, if Nabors Delaware is unable to
satisfy these obligations. Nabors' guarantee of Nabors Delaware's obligations
under the Registered Notes are its unsecured and unsubordinated obligation and
have the same ranking with respect to Nabors' indebtedness as the Registered
Notes have with respect to Nabors Delaware's indebtedness. In the event that
Nabors is required to withhold or deduct on account of any Bermudian taxes due
from any payment made under or with respect to its guarantees, subject to
certain exceptions, Nabors will pay additional amounts so that the net amount
received by each holder of Registered Notes will equal the amount that such
holder would have received if the Bermudian taxes had not been required to

be
withheld or deducted.




The following summarized financial information is included so that separate
financial statements of Nabors Delaware are not required to be filed with the
SEC. The condensed consolidating financial statements present investments in
both consolidated and unconsolidated affiliates using the equity method of
accounting.



In lieu of providing separate financial statements for issuers and guarantors
(the "Obligated Group"), we have presented the accompanying supplemental
summarized combined balance sheet and income statement information for the
Obligated Group based on Rule 13-01 of the SEC's Regulation S-X that we early
adopted effective April 1, 2020.



All significant intercompany items among the Obligated Group have been
eliminated in the supplemental summarized combined financial information. The
Obligated Group's investment balances in Subsidiary Non-Guarantors have been
excluded from the supplemental combined financial information. Significant
intercompany balances and activity for the Obligated Group with other related
parties, including Subsidiary Non-Guarantors (referred to as "affiliates"), are
presented separately in the accompanying supplemental summarized financial

information.



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Summarized combined Balance Sheet and Income Statement information for the Obligated Group is as follows (in thousands):




                                                        December 31,
Summarized Combined Balance Sheet Information       2020           2019

Assets


Current Assets                                   $    27,432    $       407
Non-Current Assets                                   415,768        431,540
Noncurrent assets - affiliates                     7,226,211      7,782,314
Total Assets                                       7,669,411      8,214,261

Liabilities and Stockholders' Equity
Current liabilities                                   71,605         60,409
Noncurrent liabilities                             3,086,794      3,369,876
Noncurrent liabilities - affiliates                  494,589        242,267
Total Liabilities                                  3,652,988      3,672,552
Stockholders' Equity                               4,016,423      4,541,709
Total Liabilities and Stockholders' Equity         7,669,411      8,214,261






                                                                    Year Ended
                                                                   December 31,

Summarized Combined Income Statement Information                       2020
Total revenues, earnings (loss) from consolidated
affiliates and other income                                    $

(554,953)


Income from continuing operations, net of tax

(581,521)


Dividends on preferred stock

(14,611)


Net income (loss) attributable to Nabors common
shareholders                                                              (596,132)

Off-Balance Sheet Arrangements (Including Guarantees)





We are a party to transactions, agreements or other contractual arrangements
defined as "off-balance sheet arrangements" that could have a material future
effect on our financial position, results of operations, liquidity and capital
resources. The most significant of these off-balance sheet arrangements include
the A/R Agreement (see -Accounts Receivable Sale Agreement, above) and certain
agreements and obligations under which we provide financial or performance
assurance to third parties. Certain of these financial or performance assurances
serve as guarantees, including standby letters of credit issued on behalf of
insurance carriers in conjunction with our workers' compensation insurance
program and other financial surety instruments such as bonds. In addition, we
have provided indemnifications, which serve as guarantees, to some third
parties. These guarantees include indemnification provided by us to our share
transfer agent and our insurance carriers. We are not able to estimate the
potential future maximum payments that might be due under our indemnification
guarantees. Management believes the likelihood that we would be required to
perform or otherwise incur any material losses associated with any of these

guarantees is remote.





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




                                                                   Maximum Amount
                                                  2021       2022     2023    Thereafter      Total

                                                                   (In thousands)
Financial standby letters of credit and
other financial surety instruments              $ 184,675        -     112 

       1,140    $ 185,927




Other Matters

Recent Accounting Pronouncements

See Note 2-Summary of Significant Accounting Policies in Part II, Item 8.-Financial Statements and



Supplementary Data.



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Critical Accounting Estimates



The preparation of our 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. We
analyze our estimates based on our historical experience and various other
assumptions that we believe to be reasonable under the circumstances. However,
actual results could differ from our estimates. The following is a discussion of
our critical accounting estimates. Management considers an accounting estimate
to be critical if:

? it requires assumptions to be made that were uncertain at the time the estimate


   was made; and

changes in the estimate or different estimates that could have been selected

? could have a material impact on our consolidated financial position or results


   of operations.




For a summary of all our significant accounting policies, see Note 2-Summary of
Significant Accounting Policies in Part II, Item 8.-Financial Statements and
Supplementary Data.



Depreciation of Property, Plant and Equipment. The drilling and drilling
services industries are very capital intensive. Property, plant and equipment
represented 72% of our total assets as of December 31, 2020, and depreciation
and amortization constituted 30% of our total costs and other deductions in
2020.



Depreciation for our primary operating assets, drilling rigs, is calculated
based on 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 typically used, after provision for salvage
value.



Depreciation on our buildings, oilfield hauling and mobile equipment, aircraft
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; aircraft equipment-5 to 20 years; oilfield
hauling and mobile equipment and other machinery and equipment-3 to 10 years).



These depreciation periods and the salvage values of our property, plant and
equipment were determined through an analysis of the useful lives of our assets
and based on our experience with the salvage values of these assets.
Periodically, we review our depreciation periods and salvage values for
reasonableness given current conditions. Depreciation of property, plant and
equipment is therefore based upon estimates of the useful lives and salvage
value of those assets. Estimation of these items requires significant management
judgment. Accordingly, management believes that accounting estimates related to
depreciation expense recorded on property, plant and equipment are critical.



There have been no factors related to the performance of our portfolio of
assets, changes in technology or other factors indicating that these estimates
do not continue to be appropriate. Accordingly, for the years ended December 31,
2020, 2019 and 2018, no significant changes have been made to the depreciation
rates applied to property, plant and equipment, the underlying assumptions
related to estimates of depreciation, or the methodology applied. However,
certain events could occur that would materially affect our estimates and
assumptions related to depreciation. Unforeseen changes in operations or
technology could substantially alter management's assumptions regarding our
ability to realize the return on our investment in operating assets and
therefore affect the useful lives and salvage values of our assets.



Impairment of Long-Lived Assets. As discussed above, the drilling and drilling
services industries are very capital intensive. 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 determined utilizing either a discounted cash flows or
market approach model. 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

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based on market conditions, technological advances in the industry or changes in
regulations governing the industry. The appraisals require estimation based on
location, working status, asset condition and market conditions. Significant and
unanticipated changes to the assumptions could result in future impairments. A
significantly prolonged period of lower oil and natural gas prices could
continue to 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.



Assumptions in the determination of future cash flows are made with the
involvement of management personnel at the operational level where the most
specific knowledge of market conditions and other operating factors exists. For
2020, 2019 and 2018, no significant changes have been made to the methodology
utilized to determine future cash flows.

For an asset classified as held for sale, we consider the asset impaired when its carrying amount exceeds fair value less its cost to sell. Fair value is determined by calculating the expected sales price less any costs to sell.





Impairment of Goodwill and Intangible Assets. We review goodwill and intangible
assets with indefinite lives for impairment annually during the second quarter
of each fiscal year or more frequently if events or changes in circumstances
indicate that the carrying amount of such goodwill and intangible assets may
exceed their fair value. We perform our impairment tests for goodwill for all
our reporting units within our reportable segments. Our business consists of
U.S. Drilling, Canada Drilling, International Drilling, Drilling Solutions and
Rig Technologies reportable segments. Our Rig Technologies reportable segment
includes our Canrig, RDS and 2TD reporting units. We initially assess goodwill
for impairment based on qualitative factors to determine whether the existence
of events or circumstances leads to a determination that it is more likely than
not that the fair value of one of our reporting units is greater than its
carrying amount. If the carrying amount exceeds the fair value, an impairment
charge will be recognized in an amount equal to the excess; however, the loss
recognized should not exceed the total amount of goodwill allocated to that
reporting unit.



Due to industry conditions and the corresponding impact on future expectations
of demand for our products and services, including the effect on our stock
price, we determined a triggering event had occurred and performed a
quantitative impairment assessment of our goodwill as of March 31, 2020. Based
on the results of our goodwill test performed in the first quarter of 2020, we
recognized additional impairment charges to write off the remaining goodwill
balances attributable to our Drilling Solutions and Rig Technologies operating
segments of $11.4 million and $16.4 million, respectively in the quarter ended
March 31, 2020.




We also reviewed our intangible assets for impairment in the first quarter of
2020. The fair value of our intangible assets are determined using discounted
cash flow models. Based on our updated projections of future cash flows, the
fair value of our intangible assets did not support the carrying value. As such,
we recognized an impairment of $83.6 million to write off all remaining
intangible assets in the quarter ended March 31, 2020.



Our estimated fair values of our reporting units incorporate judgment and the
use of estimates by management. The fair values calculated in these impairment
tests were determined using discounted cash flow models, which require the use
of significant unobservable inputs, representative of a Level 3 fair value
measurement. Our cash flow models involve assumptions based on our utilization
of rigs or other oil and gas service equipment, revenues and earnings from
affiliates, as well as direct costs, general and administrative costs,
depreciation, applicable income taxes, capital expenditures and working capital
requirements. Our fair value estimates of these reporting units are sensitive to
varying dayrates, utilization and costs. A significantly prolonged period of
lower oil and natural gas prices, other than those assumed in developing our
forecasts, or changes in laws and regulations could adversely affect the demand
for and prices of our services, which could in turn result in future goodwill
and other intangible asset impairment charges for these reporting units due to
the potential impact on our estimate of our future operating results. Our
discounted cash flow projections for each reporting unit were based on financial
forecasts. The future cash flows were discounted to present value using discount
rates determined to be appropriate for each reporting unit. Terminal values for
each reporting unit were calculated using a Gordon Growth methodology with a
long-term growth rate of approximately 2%.



Another factor in determining whether impairment has occurred is the
relationship between our market capitalization and our book value. As part of
our annual review, we compared the sum of our reporting units' estimated fair
value, which included the estimated fair value of non-operating assets and
liabilities, less debt, to our market

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capitalization and assessed the reasonableness of our estimated fair value. Any
of the above-mentioned factors may cause us to re-evaluate goodwill during any
quarter throughout the year.



Income Taxes. 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 are currently contesting tax assessments in a
number of countries and may contest future assessments. We believe the ultimate
resolution of the outstanding assessments, for which we have not made any
accrual, will not have a material adverse effect on our consolidated financial
statements. We recognize uncertain tax positions that we believe have a greater
than 50 percent likelihood of being sustained. We cannot predict or provide
assurance as to the ultimate outcome of any existing or future assessments.



Audit claims of approximately $20.4 million attributable to income tax have been
assessed against us. We have contested, or intend to contest, these assessments,
including through litigation if necessary, and we believe the ultimate
resolution, for which we have not made any accrual, will not have a material
adverse effect on our consolidated financial statements. Tax authorities may
issue additional assessments or pursue legal actions as a result of tax audits
and we cannot predict or provide assurance as to the ultimate outcome of such
assessments and legal actions.



Applicable income and withholding taxes have not been provided on undistributed
earnings of our subsidiaries. We do not intend to repatriate such undistributed
earnings except for distributions upon which incremental income and withholding
taxes would not be material.



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 ascertained to be
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.



Litigation and Self-Insurance Reserves. Our operations are subject to many
hazards inherent in the drilling and drilling services industries, including
blowouts, cratering, explosions, fires, loss of well control, loss of or damage
to the wellbore or underground reservoir, damaged or lost drilling equipment and
damage or loss from inclement weather or natural disasters. Any of these and
other hazards could result in personal injury or death, damage to or destruction
of equipment and facilities, suspension of operations, environmental and natural
resources damage and damage to the property of others. Our offshore operations
are also subject to the hazards of marine operations including capsizing,
grounding, collision and other damage from hurricanes and heavy weather or sea
conditions and unsound ocean bottom conditions. Our operations are subject to
risks of war or acts of terrorism, civil disturbances and other political
events.



Accidents may occur, we may be unable to obtain desired contractual indemnities,
and our insurance may prove inadequate in certain cases. There is no assurance
that our insurance or indemnification agreements will adequately protect us
against liability from all the consequences of the hazards described above.
Moreover, our insurance coverage generally provides that we assume a portion of
the risk in the form of a deductible or self-insured retention.



Based on the risks discussed above, it is necessary for us to estimate the level
of our liability related to insurance and record reserves for these amounts in
our consolidated financial statements. Reserves related to self-insurance are
based on the facts and circumstances specific to the claims and our past
experience with similar claims. The actual outcome of self-insured claims could
differ significantly from estimated amounts. We maintain actuarially determined
accruals in our consolidated balance sheets to cover self-insurance retentions
for workers' compensation, employers' liability, general liability and
automobile liability claims. These accruals are based on certain assumptions
developed utilizing historical data to project future losses. Loss estimates in
the calculation of these accruals are adjusted based upon actual claim
settlements and reported claims. These loss estimates and accruals recorded in
our financial statements for claims have historically been reasonable in light
of the actual amount of claims paid.



Because the determination of our liability for self-insured claims is subject to
significant management judgment and in certain instances is based on actuarially
estimated and calculated amounts, and because such liabilities could be material
in nature, management believes that accounting estimates related to
self-insurance reserves are critical.



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During 2020, 2019 and 2018, no significant changes were made to the methodology
used to estimate insurance reserves. For purposes of earnings sensitivity
analysis, if the December 31, 2020 reserves were adjusted by 10%, total costs
and other deductions would change by $12.3 million, or .44%.

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