Notable items include:
- Fourth-quarter diluted EPS of $0.33, adjusted for impairments and other
charges
- U.S., Canada and
International drilling operations improved sequentially
- Three newbuild contracts awarded in U.S. Drilling segment in
the fourth quarter
- Deployed 36 new or substantially upgraded rigs during the
year
- Achieved the best annual safety performance in company
history
- Impaired asset values by $387
million in goodwill and $612
million in equipment
- Expanded available credit facilities and cash by $525 million in February
2015
HAMILTON, Bermuda, March 2, 2015 /PRNewswire/ -- Nabors
Industries Ltd. (NYSE:NBR) today reported fourth quarter
revenues and earnings from unconsolidated affiliates of
$1.78 billion, compared to
$1.81 billion in the third quarter of
2014 and $1.61 billion in the same
quarter of the prior year. Excluding a third quarter early
termination payment of $30 million,
fourth quarter revenue was essentially unchanged sequentially and
increased by 11% year-over-year. For the quarter, the combined
drilling segments improved by 2%, with U.S., Canada and International drilling operations
all growing as compared to the third quarter. These increases were
offset by a 2% reduction in the Completion & Production
Services business. Revenues and earnings from unconsolidated
affiliates for the full year 2014 was $6.80
billion compared to $6.15
billion in 2013, a 10% increase.
Income from continuing operations, net of taxes reported for the
fourth quarter was a loss of $886.4
million or ($3.06) per diluted
share, inclusive of $982.7 million in
after-tax charges or $3.39 per share
for asset impairments and transaction costs. For the full
year 2014, income from continuing operations, net of tax was a loss
of $669.3 million or ($2.28) per diluted share. Corresponding
2013 full-year results were $158.3
million or $0.51 per diluted
share. Adjusting for impairments and other charges, income
from continuing operations, net of taxes for the fourth quarter was
$96.3 million or $0.33 per fully diluted share. This
compares to adjusted net income from continuing operations, net of
taxes of $116.7 million or
$0.39 per share in the third quarter
and $128.5 million or $0.42 per share in the same quarter of last year.
The third quarter of 2014 included the $30.0
million pre-tax impact for an early termination payment.
Fourth quarter adjusted income derived from operating activities
("operating income") was $152.1
million, bringing the total for 2014 to $598.0 million. This compares to
$159.6 million for the corresponding
quarter of 2013 and $558.2 million
for all of 2013. Adjusted EBITDA was $445.7 million for the fourth quarter compared to
$437.2 million in the same quarter
last year and $490.0 million in the
third quarter of 2014. Full-year adjusted EBITDA for the year
was $1.74 billion, which compares
favorably to $1.64 billion in
2013.
Anthony Petrello, Nabors'
Chairman and CEO, commented, "Despite the initial effects of the
weakening environment, our drilling operations posted a sequential
improvement in operating income, primarily attributable to new rig
deployments and the seasonal ramp-up in Alaska. Our Canada drilling business also improved due to
the usual seasonal ramp-up. Our International drilling segment
benefitted from new rig deployments and recent contract renewals.
These were more than offset by lower results in our Rig Services
and Completion and Production Services operations as a result of
lower activity and increased pricing competitiveness.
"Thanks to our experienced executive management team, we are
confident in our ability to manage through this downturn. We
are taking the necessary steps to scale the company for the current
environment, while we continue investing in advanced drilling
technologies. We intend to emerge from this downturn
consolidating our position as the leading global land driller.
"We are taking numerous actions aimed at lowering our costs in
ways that do not inhibit our core capabilities and
flexibility. For example, we have significantly scaled back
our pace of new U.S. rig construction and will make further
adjustments based on the outcome of ongoing discussions regarding
additional rig awards. During the quarter, we continued to
demonstrate our ability to secure these rig awards, with three
additional U.S new-build contracts: two PACE®-X rigs and another
one of our proprietary coiled tubing drilling units under a
six-year contract for work on the North Slope of Alaska.
"The most notable achievement of 2014 was continued improvement
of our safety record. Both our U.S. Lower 48 and worldwide total
recordable incidence rate were the lowest ever at less than one
incident per 200,000 man-hours. As noteworthy as this record
is, no incident is acceptable to us and we remain focused on our
ultimate goal of zero incidents."
Drilling and Rig Services
Operating income in the Drilling & Rig Services business
line was essentially flat at $189.6
million from $218.3 million in
the third quarter, when included a $30
million final payment from a 2013 contract
termination. Adjusted EBITDA in this unit improved by
approximately $6 million exclusive of
the termination payment.
U.S. Drilling operating income of $90.5
million represents a decrease of $26.7 million sequentially, reflecting the
$30 million termination payment
received in the third quarter, modest improvement in the U.S. Lower
48 operations and seasonal improvement in Alaska, partially offset by slower activity in
the U.S. Gulf of Mexico. In the Lower 48 operation, exclusive
of the effect of the termination payment, the fourth quarter's
results include an increase in daily rig margins of approximately
$236, reflecting improved pricing and
mix, and four fewer average rigs working as customers began to
rationalize their capital spending budgets. Demand for
PACE®-X rigs continues as indicated by the award of two
additional rigs. The total number of contracted
PACE®-X rig awards is now 41, with 16 deployments for
the year and 36 deployed in aggregate to date. Utilization
for AC rigs was 89%, while SCR rig utilization was 44% overall and
65% for the pad-capable units. This operation deployed five
PACE®-X rigs in the fourth quarter and plans to complete
17 additional rigs during 2015, nine of which have contracts.
Activity in Alaska should improve
significantly in the seasonally high first quarter, with lower but
meaningful year-over-year improvement in the subsequent quarters of
2015. The Company expects lower results in the Gulf of Mexico until the fourth quarter, when
its new deepwater platform is scheduled to commence
operations.
International operating income increased by approximately 11%
sequentially to $75.7 million,
principally reflecting new rig startups, partially offset by rig
moves and rig releases in Mexico,
rig downtime, and lower operating results in Venezuela. For
2015, results should benefit from full-year contributions of the
recent rig deployments in Saudi
Arabia, plus partial years from the awards announced last
quarter. In Mexico, two
recently completed newbuild platform rigs are set to commence in
the second quarter. Partially offsetting these developments
is the wind-down in the first half of 2015 of a successful,
multi-year, two-rig project in Papua New
Guinea. The International customer base has not been immune
to the decline in oil prices since mid-year 2014. Demand for
newbuild rigs has softened and several customers have requested
price adjustments, a trend that could continue through
2015.
Canada operating income
increased sequentially to $14.6
million from $11.5 million in
the third quarter. Demand in this market has weakened and
warm weather is leading to lower than expected first quarter
results this year.
Rig Services operating income declined sequentially by 58% to
$8.8 million, due to declines at both
Canrig and Ryan. Canrig's capital equipment margins declined
for both third-party customers and Nabors. Ryan Directional
Services' business was the first among our operations to experience
lower utilization and aggressive competition as a result of the
recent reductions in U.S. drilling activity.
Completion & Production Services
The Completion & Production Services business line recorded
operating income of $16.7 million,
with adjusted EBITDA of $73.7
million. Seasonal declines, competitive pricing and
multiple large customer spending reductions led to sequential
declines in both businesses.
In Completion Services, operating income was $4.9 million, despite the second highest
quarterly stage count in this operation's history, with the return
of price competition and persistent higher logistics
costs.
Production Services saw a sequential decrease of $9.4 million in operating income, primarily
attributable to the aforementioned seasonality and continuing
budget constraints of key customers. Average rig pricing
improved slightly during the quarter.
Financial Discussion
The financial results for the fourth quarter included a number
of exceptional charges, totaling approximately $1.2 billion ($982.7
million tax effected), related to the current industry
downturn and to the pending transaction with C&J Energy
Services. Market conditions drove pre-tax impairments of both
underutilized assets and goodwill amounting to $612 million and $387
million, respectively. Approximately two-thirds of the asset
impairments relate to legacy rigs and associated equipment,
including the workover jackups in the U.S. Drilling segment. These
rigs have experienced a decline in utilization over the last
several years. The potential financial return does not justify
investment in necessary repair, recertification, or inspection of
this legacy rig equipment. Most of the balance of the
impaired assets consists of underutilized rigs and components in
International operations and Canrig component inventory, while a
majority of the goodwill impairments are associated with Completion
Services.
As previously disclosed, the C&J deal required the
restructuring of several of our legal entities in preparation for
the pending closing of the transaction. This internal
reorganization had a tax impact of approximately $180 million, essentially non-cash. The
financial results also included various transaction costs related
to the C&J transaction totaling $5
million before taxes.
William Restrepo, Nabors CFO,
stated, "While our liquidity and financial flexibility remain
strong, we are moving swiftly to reduce all aspects of our
operating, support and capital costs in the current
environment. In addition to curtailing our newbuild program,
we have reduced staffing levels and have begun consolidating our
operating footprint. We have also made progress working with
our vendors to reduce costs across our supply chain.
Our target remains to generate positive free cash flow during
2015."
In February, the Company expanded its revolving line of credit
by $225 million. In addition, the
Company announced the expansion of its financial capacity with the
establishment of an unsecured three-year $300 million bank loan. The proceeds are
being used to redeem outstanding short-term commercial paper as it
matures. The loan agreement dictates repayment of the
outstanding borrowings upon receipt of the $688 million cash proceeds it expects to receive
from the pending transaction with C&J Energy Services.
Outlook and Summary
The Company expects further improvement in International and
Alaska drilling operations, more
than offset by sharp decreases in the U.S. Lower 48 operations and
smaller, but significant, decreases in the U.S. Offshore,
Canada and Rig Services
operations. Similarly, the Company foresees smaller but still
meaningful decreases in its Completion & Production Services
businesses. While the International unit is still
expected to progressively improve this year, the improvement will
be less significant than previously anticipated and the potential
for geopolitical interruptions is higher.
Petrello concluded, "Our transaction with C&J Energy
Services is now awaiting the outcome of the C&J shareholder
vote, scheduled for March 20.
Assuming a favorable outcome, we anticipate closing the transaction
the following week."
About Nabors
The Nabors companies own and operate approximately 466 land
drilling rigs throughout the world and approximately 543 land
workover and well servicing rigs in North
America. Nabors' actively marketed offshore fleet consists
of seven jackups and 36 platform rigs in the United States and multiple international
markets. In addition, Nabors is one of the largest providers of
hydraulic fracturing, cementing, nitrogen and acid pressure pumping
services with approximately 800,000 hydraulic horsepower currently
in service. Nabors also manufactures top drives and drilling
instrumentation systems. Nabors participates in most of the
significant oil and gas markets in the world.
The information above includes forward-looking statements within
the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934. Such forward-looking statements are subject
to certain risks and uncertainties, as disclosed by Nabors from
time to time in its filings with the Securities and Exchange
Commission. As a result of these factors, Nabors' actual results
may differ materially from those indicated or implied by such
forward-looking statements. The projections contained in this
release reflect management's estimates as of the date of the
release. Nabors does not undertake to update these
forward-looking statements.
Important Additional Information
In connection with the proposed transactions, Nabors Red Lion
Limited (which will be renamed C&J Energy Services Ltd. as of
the closing of the proposed transaction) ("Red Lion") has filed with the SEC a registration
statement on Form S-4 that includes a proxy statement of
C&J Energy Services, Inc. ("C&J") that also
constitutes a prospectus of Red
Lion. On February 13, 2015, the registration statement
was declared effective by the SEC, C&J filed a definitive proxy
statement with the SEC, and Red Lion
filed a definitive prospectus with the SEC. Each of
Red Lion and C&J also plans to
file other relevant documents with the SEC regarding the proposed
transactions. This material is not a substitute for the final
prospectus/proxy statement or any other documents the parties will
file with the SEC. Mailing of the definitive proxy
statement/prospectus to the stockholders of C&J commenced on
February 13, 2015. INVESTORS ARE URGED TO READ THE DEFINITIVE
PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND
SUPPLEMENTS THERETO) AND OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. You may obtain a free copy of the
registration statement, the definitive joint proxy
statement/prospectus and other relevant documents filed by
Red Lion and C&J with the SEC at
the SEC's website at www.sec.gov. You may also obtain copies
of the documents filed by Red Lion
with the SEC free of charge on Nabors Industries Ltd.'s ("Nabors")
website at www.nabors.com, and copies of the documents filed by
C&J with the SEC are available free of charge on C&J's
website at www.cjenergy.com.
Participants in the Solicitation
Red Lion, C&J and Nabors and
their respective directors and executive officers and other members
of management and employees may be deemed to be participants in the
solicitation of proxies in respect of the proposed
transactions. Information about C&J's directors and
executive officers is available in C&J's proxy statement dated
April 10, 2014, for its 2014 annual
meeting of shareholders. Information about Nabors' directors
and executive officers is available in Nabors' proxy statement
dated April 30, 2014, for its 2014
annual meeting of shareholders. Other information regarding
the participants in the proxy solicitations and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the proxy statement/prospectus and
other relevant materials to be filed with the SEC regarding the
proposed transactions when they become available. Investors should
read the proxy statement/prospectus carefully before making any
voting or investment decisions. You may obtain free copies of these
documents from C&J and Nabors using the sources indicated
above.
This document shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended.
MEDIA CONTACT:
Dennis A. Smith, Director of
Corporate Development & Investor Relations, +1
281-775-8038. To request investor materials, contact Nabors'
corporate headquarters in Hamilton,
Bermuda at +441-292-1510 or via e-mail at
mark.andrews@nabors.com
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME (LOSS)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands,
except per share amounts)
|
|
2014
|
|
2013
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues and other
income:
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$ 1,783,836
|
|
$ 1,606,978
|
|
$ 1,813,762
|
|
$ 6,804,197
|
|
$ 6,152,015
|
|
Earnings
(losses) from unconsolidated affiliates
|
|
(429)
|
|
(1,588)
|
|
(2,851)
|
|
(6,301)
|
|
39
|
|
Investment income (loss)
|
|
1,596
|
|
1,106
|
|
2,189
|
|
11,831
|
|
96,577
|
|
Total revenues and
other income
|
|
1,785,003
|
|
1,606,496
|
|
1,813,100
|
|
6,809,727
|
|
6,248,631
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and other
deductions:
|
|
|
|
|
|
|
|
|
|
|
|
Direct
costs
|
|
1,194,844
|
|
1,032,841
|
|
1,181,986
|
|
4,505,064
|
|
3,981,828
|
|
General
and administrative expenses
|
|
142,871
|
|
135,307
|
|
138,967
|
|
549,734
|
|
525,330
|
|
Depreciation and amortization
|
|
293,572
|
|
277,658
|
|
286,581
|
|
1,145,100
|
|
1,086,677
|
|
Interest
expense
|
|
43,697
|
|
47,075
|
|
43,138
|
|
177,948
|
|
223,418
|
|
Losses
(gains) on sales and disposals of long-lived assets and other expense (income),
net
|
|
|
|
|
|
|
|
|
|
|
|
9,606
|
|
10,732
|
|
(18,513)
|
|
9,073
|
|
37,977
|
|
Impairments and other charges
|
|
1,010,423
|
|
-
|
|
17,000
|
|
1,027,423
|
|
287,241
|
|
Total costs and other
deductions
|
|
2,695,013
|
|
1,503,613
|
|
1,649,159
|
|
7,414,342
|
|
6,142,471
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
|
(910,010)
|
|
102,883
|
|
163,941
|
|
(604,615)
|
|
106,160
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
(23,609)
|
|
(26,383)
|
|
61,511
|
|
62,666
|
|
(55,181)
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary preferred
stock dividend
|
|
-
|
|
750
|
|
-
|
|
1,984
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax
|
|
(886,401)
|
|
128,516
|
|
102,430
|
|
(669,265)
|
|
158,341
|
|
Income (loss) from
discontinued operations, net of tax
|
|
(4,467)
|
|
23,113
|
|
4,005
|
|
21
|
|
(11,179)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
(890,868)
|
|
151,629
|
|
106,435
|
|
(669,244)
|
|
147,162
|
|
Less: Net (income) loss
attributable to noncontrolling interest
|
|
(202)
|
|
(1,026)
|
|
(387)
|
|
(1,415)
|
|
(7,180)
|
|
Net income (loss)
attributable to Nabors
|
|
$ (891,070)
|
|
$ 150,603
|
|
$
106,048
|
|
$ (670,659)
|
|
$ 139,982
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses) per
share: (1)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
from continuing operations
|
|
$
(3.06)
|
|
$
.43
|
|
$
.34
|
|
$
(2.28)
|
|
$
.51
|
|
Basic
from discontinued operations
|
|
(.02)
|
|
.07
|
|
.02
|
|
-
|
|
(.04)
|
|
Basic
|
|
$
(3.08)
|
|
$
.50
|
|
$
.36
|
|
$
(2.28)
|
|
$
.47
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
from continuing operations
|
|
$
(3.06)
|
|
$
.42
|
|
$
.34
|
|
$
(2.28)
|
|
$
.51
|
|
Diluted
from discontinued operations
|
|
(.02)
|
|
.08
|
|
.01
|
|
-
|
|
(.04)
|
|
Diluted
|
|
$
(3.08)
|
|
$
.50
|
|
$
.35
|
|
$
(2.28)
|
|
$
.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number
|
|
|
|
|
|
|
|
|
|
|
|
of
common shares outstanding: (1)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
284,938
|
|
295,218
|
|
292,621
|
|
290,694
|
|
294,182
|
|
Diluted
|
|
284,938
|
|
297,746
|
|
295,005
|
|
290,694
|
|
296,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(2)
|
|
$ 445,692
|
|
$ 437,242
|
|
$
489,958
|
|
$ 1,743,098
|
|
$ 1,644,896
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income
(loss) derived from operating activities (3)
|
|
$ 152,120
|
|
$ 159,584
|
|
$
203,377
|
|
$ 597,998
|
|
$ 558,219
|
|
|
|
(1)
|
See "Computation of
Earnings (Losses) Per Share" included herein as a separate
schedule.
|
|
|
|
(2)
|
Adjusted EBITDA is
computed by subtracting the sum of direct costs and general and
administrative expenses from the sum of Operating revenues and
Earnings (losses) from unconsolidated affiliates. There are
limitations inherent in using adjusted EBITDA as a measure of
overall profitability because it excludes significant expense
items. However, management evaluates the performance of our
business units and the consolidated company based on several
criteria, including adjusted EBITDA and adjusted income (loss)
derived from operating activities, because we believe that these
financial measures accurately reflect our ongoing profitability.
These amounts should not be used as a substitute for the amounts
reported in accordance with GAAP. To compensate for the limitations
in utilizing adjusted EBITDA as an operating measure, management
also uses GAAP measures of performance, including income from
continuing operations and net income, to evaluate performance, but
only with respect to the Company as a whole and not on a segment
basis. A reconciliation of this non-GAAP measure to income
(loss) from continuing operations before income taxes, which is a
GAAP measure, is provided in the table set forth immediately
following the heading "Reconciliation of Non-GAAP Financial
Measures to Income (loss) from Continuing Operations before Income
Taxes".
|
|
|
|
(3)
|
Adjusted income
(loss) derived from operating activities is computed by subtracting
the sum of direct costs, general and administrative expenses and
depreciation and amortization from the sum of Operating revenues
and Earnings (losses) from unconsolidated affiliates. These amounts
should not be used as a substitute for those amounts reported in
accordance with GAAP. However, management evaluates the performance
of our business units and the consolidated company based on several
criteria, including adjusted income (loss) derived from operating
activities, because it believes that these financial measures
accurately reflect our ongoing profitability. A
reconciliation of this non-GAAP measure to income (loss) from
continuing operations before income taxes, which is a GAAP measure,
is provided in the table set forth immediately following the
heading "Reconciliation of Non-GAAP Financial Measures to Income
(loss) from Continuing Operations before Income Taxes".
|
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
(In thousands,
except ratios)
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and short-term
investments
|
|
$ 536,169
|
|
$
464,818
|
|
$ 507,133
|
|
Accounts receivable,
net
|
|
1,517,503
|
|
1,624,441
|
|
1,399,543
|
|
Assets held for
sale
|
|
146,467
|
|
158,327
|
|
243,264
|
|
Other current
assets
|
|
541,735
|
|
544,885
|
|
603,890
|
|
Total current
assets
|
|
2,741,874
|
|
2,792,471
|
|
2,753,830
|
|
Long-term investments
and other receivables
|
|
2,806
|
|
2,568
|
|
3,236
|
|
Property, plant and
equipment, net
|
|
8,599,125
|
|
9,016,508
|
|
8,597,813
|
|
Goodwill
|
|
173,928
|
|
512,203
|
|
512,964
|
|
Investment in
unconsolidated affiliates
|
|
58,251
|
|
60,451
|
|
64,260
|
|
Other long-term
assets
|
|
303,958
|
|
235,139
|
|
227,708
|
|
Total assets
|
|
$ 11,879,942
|
|
$ 12,619,340
|
|
$ 12,159,811
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Current
debt
|
|
$
6,190
|
|
$
196
|
|
$
10,185
|
|
Other current
liabilities
|
|
1,561,285
|
|
1,415,385
|
|
1,301,239
|
|
Total current
liabilities
|
|
1,567,475
|
|
1,415,581
|
|
1,311,424
|
|
Long-term
debt
|
|
4,348,859
|
|
4,255,136
|
|
3,904,117
|
|
Other long-term
liabilities
|
|
1,044,819
|
|
1,075,389
|
|
893,905
|
|
Total liabilities
|
|
6,961,153
|
|
6,746,106
|
|
6,109,446
|
|
|
|
|
|
|
|
|
Subsidiary preferred
stock (1)
|
|
-
|
|
-
|
|
69,188
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
4,908,619
|
|
5,862,873
|
|
5,969,086
|
|
Noncontrolling
interest
|
|
10,170
|
|
10,361
|
|
12,091
|
|
Total equity
|
|
4,918,789
|
|
5,873,234
|
|
5,981,177
|
|
Total liabilities and
equity
|
|
$ 11,879,942
|
|
$ 12,619,340
|
|
$ 12,159,811
|
|
|
|
|
|
|
|
|
(1)
|
Represents subsidiary
preferred stock from acquisition in September 2010. All
75,000 outstanding shares were redeemed in June 2014.
|
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
|
SEGMENT
REPORTING
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables
set forth certain information with respect to our reportable
segments and rig activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands,
except rig activity)
|
|
2014
|
|
2013
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable
segments:
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
and Earnings (losses) from unconsolidated affiliates:
|
|
|
|
|
|
|
|
|
|
|
|
Drilling and Rig Services:
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$ 544,862
|
|
$ 471,027
|
|
$
571,736
|
|
$ 2,159,968
|
|
$ 1,914,786
|
|
Canada
|
|
88,219
|
|
88,623
|
|
80,491
|
|
335,192
|
|
361,676
|
|
International
|
|
432,084
|
|
407,615
|
|
424,698
|
|
1,623,102
|
|
1,464,264
|
|
Rig Services
(1)
|
|
190,399
|
|
132,502
|
|
191,437
|
|
687,302
|
|
516,004
|
|
Subtotal
Drilling and Rig Services (2)
|
|
1,255,564
|
|
1,099,767
|
|
1,268,362
|
|
4,805,564
|
|
4,256,730
|
|
|
|
|
|
|
|
|
|
|
|
|
Completion and Production Services:
|
|
|
|
|
|
|
|
|
|
|
|
Completion
Services
|
|
361,796
|
|
292,039
|
|
352,027
|
|
1,218,361
|
|
1,074,713
|
|
Production
Services
|
|
239,897
|
|
266,235
|
|
259,863
|
|
1,033,538
|
|
1,009,214
|
|
Subtotal
Completion and Production Services (3)
|
|
601,693
|
|
558,274
|
|
611,890
|
|
2,251,899
|
|
2,083,927
|
|
|
|
|
|
|
|
|
|
|
|
|
Other reconciling items (4)
|
|
(73,850)
|
|
(52,651)
|
|
(69,341)
|
|
(259,567)
|
|
(188,603)
|
|
Total operating
revenues and earnings (losses) from unconsolidated
affiliates
|
$ 1,783,407
|
|
$ 1,605,390
|
|
$ 1,810,911
|
|
$ 6,797,896
|
|
$ 6,152,054
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
(5)
|
|
|
|
|
|
|
|
|
|
|
|
Drilling and Rig Services:
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$ 207,001
|
|
$ 187,426
|
|
$
234,980
|
|
$ 835,679
|
|
$ 755,706
|
|
Canada
|
|
28,315
|
|
29,159
|
|
25,804
|
|
108,454
|
|
118,989
|
|
International
|
|
173,248
|
|
157,720
|
|
159,588
|
|
610,163
|
|
524,492
|
|
Rig Services
(1)
|
|
17,507
|
|
5,937
|
|
30,153
|
|
81,327
|
|
28,111
|
|
Subtotal
Drilling and Rig Services (2)
|
|
426,071
|
|
380,242
|
|
450,525
|
|
1,635,623
|
|
1,427,298
|
|
|
|
|
|
|
|
|
|
|
|
|
Completion and Production Services:
|
|
|
|
|
|
|
|
|
|
|
|
Completion
Services
|
|
33,372
|
|
40,851
|
|
40,507
|
|
94,839
|
|
160,964
|
|
Production
Services
|
|
40,284
|
|
55,574
|
|
49,312
|
|
207,919
|
|
205,632
|
|
Subtotal
Completion and Production Services (3)
|
|
73,656
|
|
96,425
|
|
89,819
|
|
302,758
|
|
366,596
|
|
|
|
|
|
|
|
|
|
|
|
|
Other reconciling items (6)
|
|
(54,035)
|
|
(39,425)
|
|
(50,386)
|
|
(195,283)
|
|
(148,998)
|
|
Total adjusted
EBITDA
|
|
$ 445,692
|
|
$ 437,242
|
|
$
489,958
|
|
$ 1,743,098
|
|
$ 1,644,896
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income
(loss) derived from operating activities: (7)
|
|
|
|
|
|
|
|
|
|
|
|
Drilling and Rig Services:
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$ 90,490
|
|
$ 75,378
|
|
$
117,212
|
|
$ 370,173
|
|
$ 315,496
|
|
Canada
|
|
14,566
|
|
14,536
|
|
11,517
|
|
52,468
|
|
61,193
|
|
International
|
|
75,664
|
|
69,612
|
|
68,452
|
|
242,818
|
|
177,833
|
|
Rig Services
(1)
|
|
8,845
|
|
(2,179)
|
|
21,136
|
|
47,768
|
|
(3,918)
|
|
Subtotal
Drilling and Rig Services (2)
|
|
189,565
|
|
157,347
|
|
218,317
|
|
713,227
|
|
550,604
|
|
|
|
|
|
|
|
|
|
|
|
|
Completion and Production Services:
|
|
|
|
|
|
|
|
|
|
|
|
Completion
Services
|
|
4,927
|
|
14,072
|
|
14,211
|
|
(15,078)
|
|
51,722
|
|
Production
Services
|
|
11,752
|
|
26,736
|
|
21,182
|
|
93,414
|
|
102,130
|
|
Subtotal
Completion and Production Services (3)
|
|
16,679
|
|
40,808
|
|
35,393
|
|
78,336
|
|
153,852
|
|
|
|
|
|
|
|
|
|
|
|
|
Other reconciling items (6)
|
|
(54,124)
|
|
(38,571)
|
|
(50,333)
|
|
(193,565)
|
|
(146,237)
|
|
Total
adjusted income (loss) derived from operating activities
|
|
$ 152,120
|
|
$ 159,584
|
|
$
203,377
|
|
$ 597,998
|
|
$ 558,219
|
|
|
|
|
|
|
|
|
|
|
|
|
Rig
activity:
|
|
|
|
|
|
|
|
|
|
|
|
Rig years:
(8)
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
212.2
|
|
198.4
|
|
216.0
|
|
212.5
|
|
195.0
|
|
Canada
|
|
36.9
|
|
32.5
|
|
34.3
|
|
34.1
|
|
29.9
|
|
International (9)
|
|
121.2
|
|
124.6
|
|
130.1
|
|
127.1
|
|
124.2
|
|
Total rig
years
|
|
370.3
|
|
355.5
|
|
380.4
|
|
373.7
|
|
349.1
|
|
Rig hours:
(10)
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Production Services
|
|
183,102
|
|
205,456
|
|
205,604
|
|
809,438
|
|
865,939
|
|
Canada
Production Services
|
|
33,218
|
|
36,455
|
|
36,509
|
|
139,938
|
|
152,747
|
|
Total rig
hours
|
|
216,320
|
|
241,911
|
|
242,113
|
|
949,376
|
|
1,018,686
|
|
|
|
(1)
|
Includes our drilling
technology and top drive manufacturing, directional drilling, rig
instrumentation and software services. These services represent our
other companies that are not aggregated into a reportable operating
segment.
|
|
|
|
(2)
|
Includes earnings
(losses), net from unconsolidated affiliates, accounted for using
the equity method, of ($.6) million, $(1.4) million and ($2.9)
million for the three months ended December 31, 2014 and 2013 and
September 30, 2014, respectively, and ($6.8) million and ($.4)
million for the years ended December 31, 2014 and 2013,
respectively.
|
|
|
|
(3)
|
Includes earnings
(losses), net from unconsolidated affiliates, accounted for using
the equity method, of $.2 million, $(.2) million and $0 million for
the three months ended December 31, 2014 and 2013 and September 30,
2014, respectively, and $.5 million and $.4 million for the years
ended December 31, 2014 and 2013, respectively.
|
|
|
|
(4)
|
Represents the
elimination of inter-segment transactions.
|
|
|
|
(5)
|
Adjusted EBITDA is
computed by subtracting the sum of direct costs and general and
administrative expenses from the sum of Operating revenues and
Earnings (losses) from unconsolidated affiliates. There are
limitations inherent in using adjusted EBITDA as a measure of
overall profitability because it excludes significant expense
items. However, management evaluates the performance of our
business units and the consolidated company based on several
criteria, including adjusted EBITDA and adjusted income (loss)
derived from operating activities, because we believe that these
financial measures accurately reflect our ongoing profitability.
These amounts should not be used as a substitute for the amounts
reported in accordance with GAAP. To compensate for the limitations
in utilizing adjusted EBITDA as an operating measure, management
also uses GAAP measures of performance, including income from
continuing operations and net income, to evaluate performance, but
only with respect to the Company as a whole and not on a segment
basis. A reconciliation of this non-GAAP measure to income
(loss) from continuing operations before income taxes, which is a
GAAP measure, is provided in the table set forth immediately
following the heading "Reconciliation of Non-GAAP Financial
Measures to Income (loss) from Continuing Operations before Income
Taxes".
|
|
|
|
(6)
|
Represents the
elimination of inter-segment transactions and unallocated corporate
expenses.
|
|
|
|
(7)
|
Adjusted income
(loss) derived from operating activities is computed by subtracting
the sum of direct costs, general and administrative expenses and
depreciation and amortization from the sum of Operating revenues
and Earnings (losses) from unconsolidated affiliates. These amounts
should not be used as a substitute for the amounts reported in
accordance with GAAP. However, management evaluates the performance
of our business units and the consolidated company based on several
criteria, including adjusted income (loss) derived from operating
activities, because it believes that these financial measures
accurately reflect our ongoing profitability. A reconciliation of
this non-GAAP measure to income (loss) from continuing operations
before income taxes, which is a GAAP measure, is provided in the
table set forth immediately following the heading "Reconciliation
of Non-GAAP Financial Measures to Income (loss) from Continuing
Operations before Income Taxes".
|
|
|
|
(8)
|
Excludes
well-servicing rigs, which are measured in rig hours.
Includes our equivalent percentage ownership of rigs owned by
unconsolidated affiliates. Rig years represent a measure of
the number of equivalent rigs operating during a given
period. For example, one rig operating 182.5 days during a
365-day period represents 0.5 rig years.
|
|
|
|
(9)
|
International rig
years includes our equivalent percentage ownership of rigs owned by
unconsolidated affiliates, which totaled 2.5 years during each of
the three months ended December 31, 2014 and 2013 and September 30,
2014 and 2.5 years for each of the years ended December 31, 2014
and 2013.
|
|
|
|
(10)
|
Rig hours represents
the number of hours that our well-servicing rig fleet operated
during the period.
|
|
|
|
|
|
|
|
|
|
|
|
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES TO
|
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$ 445,692
|
|
$ 437,242
|
|
$
489,958
|
|
$ 1,743,098
|
|
$ 1,644,896
|
|
Less: Depreciation
and amortization
|
|
293,572
|
|
277,658
|
|
286,581
|
|
1,145,100
|
|
1,086,677
|
|
Adjusted income
(loss) derived from operating activities
|
|
152,120
|
|
159,584
|
|
203,377
|
|
597,998
|
|
558,219
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(43,697)
|
|
(47,075)
|
|
(43,138)
|
|
(177,948)
|
|
(223,418)
|
|
Investment income
(loss)
|
|
1,596
|
|
1,106
|
|
2,189
|
|
11,831
|
|
96,577
|
|
Gains (losses) on
sales and disposals of long-lived assets and other income (expense),
net
|
|
|
|
|
|
|
|
|
|
|
|
(9,606)
|
|
(10,732)
|
|
18,513
|
|
(9,073)
|
|
(37,977)
|
|
Impairments and other
charges
|
|
(1,010,423)
|
|
-
|
|
(17,000)
|
|
(1,027,423)
|
|
(287,241)
|
|
Income (loss) from
continuing operations before income taxes
|
|
$ (910,010)
|
|
$ 102,883
|
|
$
163,941
|
|
$ (604,615)
|
|
$ 106,160
|
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
|
COMPUTATION OF
EARNINGS (LOSSES) PER SHARE
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of
the numerators and denominators of the basic and diluted earnings
(losses) per share computations is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands,
except per share amounts)
|
|
2014
|
|
2013
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
EPS:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax
|
|
$(886,401)
|
|
$ 128,516
|
|
$
102,430
|
|
$(669,265)
|
|
$ 158,341
|
|
Less:
Net (income) loss attributable to noncontrolling
interest
|
|
(202)
|
|
(1,026)
|
|
(387)
|
|
(1,415)
|
|
(7,180)
|
|
Less:
Redemption of preferred shares
|
|
-
|
|
-
|
|
-
|
|
(1,688)
|
|
-
|
|
Less:
Earnings allocated to unvested shareholders
|
|
13,881
|
|
(1,948)
|
|
(1,579)
|
|
10,595
|
|
(1,277)
|
|
Adjusted income
(loss) from continuing operations - basic and diluted
|
|
$(872,722)
|
|
$ 125,542
|
|
$
100,464
|
|
$(661,773)
|
|
$ 149,884
|
|
Income (loss) from
discontinued operations, net of tax
|
|
$ (4,467)
|
|
$ 23,113
|
|
$
4,005
|
|
$
21
|
|
$ (11,179)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding-basic
|
|
284,938
|
|
295,218
|
|
292,621
|
|
290,694
|
|
294,182
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic from continuing
operations
|
|
$ (3.06)
|
|
$ .43
|
|
$
.34
|
|
$ (2.28)
|
|
$ .51
|
|
Basic from discontinued
operations
|
|
(.02)
|
|
.07
|
|
.02
|
|
-
|
|
(.04)
|
|
Total
Basic
|
|
$ (3.08)
|
|
$ .50
|
|
$
.36
|
|
$ (2.28)
|
|
$ .47
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED
EPS:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributed to common shareholders
|
|
$(872,722)
|
|
$ 125,542
|
|
$
100,464
|
|
$(661,773)
|
|
$ 149,884
|
|
Add: Effect of
reallocating undistributed earnings of unvested
shareholders
|
|
-
|
|
15
|
|
11
|
|
-
|
|
20
|
|
Adjusted income
(loss) from continuing operations attributed to common
shareholders
|
$(872,722)
|
|
$ 125,557
|
|
$
100,475
|
|
$(661,773)
|
|
$ 149,904
|
|
Income (loss) from
discontinued operations
|
|
$ (4,467)
|
|
$ 23,113
|
|
$
4,005
|
|
$
21
|
|
$ (11,179)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding-basic
|
|
284,938
|
|
295,218
|
|
292,621
|
|
290,694
|
|
294,182
|
|
Add: dilutive effect
of potential common shares
|
|
-
|
|
2,528
|
|
2,384
|
|
-
|
|
2,410
|
|
Weighted-average number of diluted shares outstanding
|
|
284,938
|
|
297,746
|
|
295,005
|
|
290,694
|
|
296,592
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted from continuing
operations
|
|
$ (3.06)
|
|
$ .42
|
|
$
.34
|
|
$ (2.28)
|
|
$ .51
|
|
Diluted from discontinued
operations
|
|
(.02)
|
|
.08
|
|
.01
|
|
-
|
|
(.04)
|
|
Total
Diluted
|
|
$ (3.08)
|
|
$ .50
|
|
$
.35
|
|
$ (2.28)
|
|
$ .47
|
|
|
Restricted stock
grants that contain non-forfeitable rights to dividends are
considered participating securities. As such, these grants
are included in our basic and diluted earnings (losses) per share
computation using the two-class method of accounting. For all
periods presented, the computation of diluted earnings (losses) per
share excluded outstanding stock options with exercise prices
greater than the average market price of Nabors' common shares
because their inclusion would have been anti-dilutive and because
they were not considered participating securities. The average
number of options that were excluded from diluted earnings (losses)
per share that would have potentially diluted earnings (losses) per
share were 11,485,314 and 10,908,160 shares during the three
months ended December 31, 2014 and 2013, respectively; 5,389,090
shares during the three months ended September 30, 2014;
and 12,950,249 and 11,642,417 shares during the years ended
December 31, 2014 and 2013, respectively. In any period during
which the average market price of Nabors' common shares exceeds the
exercise prices of these stock options, such stock options are
included in our diluted earnings (losses) per share computation
using the if-converted method of accounting.
|
|
|
|
|
|
|
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME (LOSS) ITEMS EXCLUDING CERTAIN NON-CASH
CHARGES
AND OTHER NON-OPERATIONAL ITEMS (NON-GAAP)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Non-Cash Charges
and Non-
Operational
|
|
As
adjusted
|
|
(In thousands,
except per share amounts)
|
Actuals
|
|
Items
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2014
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax
|
$ (886,401)
|
|
$
(982,685)
|
|
$ 96,284
|
|
Diluted earnings
(losses) per share from continuing operations
|
$
(3.06)
|
|
$
(3.39)
|
|
$
0.33
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2014
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax
|
$ 102,430
|
|
$
(14,300)
|
|
$ 116,730
|
|
Diluted earnings
(losses) per share from continuing operations
|
$
0.34
|
|
$
(0.05)
|
|
$
0.39
|
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
|
SCHEDULE OF
NON-CASH CHARGES AND OTHER NON-OPERATIONAL ITEMS
(NON-GAAP)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2014
|
|
September 30,
2014
|
|
|
|
|
Per
Diluted
|
|
|
|
Per
Diluted
|
|
(In thousands,
except per share amounts)
|
|
2014
|
|
Share
|
|
2014
|
|
Share
|
|
|
|
|
|
|
|
|
|
|
Retirements & impairments to underutilized assets
(1)
|
|
$ 431,242
|
|
$ 1.49
|
|
$
-
|
|
$
-
|
|
Goodwill and intangible asset impairments (2)
|
|
359,611
|
|
1.24
|
|
-
|
|
-
|
|
Other non-operational items (3)
|
|
11,759
|
|
.03
|
|
13,062
|
|
.04
|
|
Restructuring tax effect (4)
|
|
180,073
|
|
.63
|
|
18,261
|
|
.07
|
|
Sale of Alaska E&P business (5)
|
|
-
|
|
-
|
|
(17,023)
|
|
(.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjustments,
net of tax
|
|
$ 982,685
|
|
$ 3.39
|
|
$ 14,300
|
|
$
.05
|
|
|
|
(1)
|
Represents
retirements and impairments related to underutilized assets, net of
tax of $180.4 million.
|
|
|
|
(2)
|
Represents
impairments to goodwill and intangible assets, net of tax of $26.9
million.
|
|
|
|
(3)
|
Represents losses
related to the impairment of an equity investment, debt buybacks
and transaction costs, net of tax of $2.9 million for the three
months ended December 31, 2014 and transaction costs, net of tax of
$3.9 million for the three months ended September 30,
2014.
|
|
|
|
(4)
|
Represents the tax
effect of internal restructuring.
|
|
|
|
(5)
|
Represents the gain
on the divestiture of our Alaska E&P business, net of tax of
$5.1 million.
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nabors-announces-fourth-quarter-and-full-year-financial-results-300043958.html
SOURCE Nabors Industries Ltd.