Nabors to Record Tax Charge in Q2 Results
Nabors Industries Ltd. said that its second-results will be adversely impacted by a charge to income tax expense amounting to approximately $15.7 million, or $0.05 per diluted share, reflecting the net effect of a U.S. tax payment, partially offset by a reduction in its Canadian deferred tax liability.
The charge to U.S. current income tax expense arises from a one-time dividend withholding tax in the amount of $36 million, or $0.12 per diluted share, relating to the redemption of common shares held by the foreign parent of a U.S.-based Nabors subsidiary. The offsetting tax benefit is the result of a recent change in Canadian tax laws that incrementally reduce statutory tax rates for both federal and provincial taxes over the next 4 years. Not only will this reduce Nabors' future Canadian taxes, but it has had the immediate impact of reducing Nabors' Canadian deferred tax liability by approximately $20.5 million ($0.07 per share).
The Nabors companies own and operate approximately 600 land drilling and approximately 790 land workover and well-servicing rigs in North America. Offshore, Nabors operates 43 platform rigs, 20 jack-up units, and three barge rigs in the United States and multiple international markets. Nabors markets 29 marine transportation and supply vessels, primarily in the U.S. Gulf of Mexico. In addition, Nabors manufactures top drives and drilling instrumentation systems and provides comprehensive oilfield hauling, engineering, civil construction, logistics and facilities maintenance, and project management services. Nabors participates in most of the significant oil, gas, and geothermal markets in the world.
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