HAMILTON, Bermuda, April 21, 2015 /PRNewswire/ --Nabors Industries
Ltd. ("Nabors") (NYSE: NBR) today reported first-quarter
revenue and earnings from unconsolidated affiliates of $1.42 billion, compared to $1.78 billion in the fourth quarter of 2014 and
$1.59 billion in the first quarter of
last year. Revenue in the International segment was up 3%
sequentially, while revenue for the U.S. and Canada drilling operations decreased by 17%
and 34%, respectively. Completion and Production Services revenue
fell by 39% partially reflecting the timing of the C&J Energy
Services transaction, which closed on March
24.
Net income from continuing operations reported for the first
quarter was $124.4 million or
$0.43 per diluted share.
Adjusted net income was $58.3
million, or $0.20 per share,
after excluding a $61.9 million
after-tax net gain from the C&J Energy Services transaction,
tax benefits of $10.5 million, and
$6.3 million in after-tax severance
charges from workforce reductions. This compares to adjusted net
income from continuing operations of $96.3
million ($0.33 per share) in
the fourth quarter and $49.0 million
($0.16 per share) in the same quarter
of last year. Adjusted net income for the fourth quarter of 2014
excludes the effect of asset impairments and other charges. The
Company's financial results for the first quarter of 2015 include
the Completion and Production Services business through
March 23, 2015. For the first quarter
up to the closing date, this business reported an operating loss of
$58.5 million, representing a
negative impact to earnings per share of approximately $0.15.
Anthony Petrello, Nabors'
Chairman and CEO, commented, "Solid improvements in our
International, Alaska and Rig
Services operations were insufficient to offset the combined
effects of the sharp drops in activity we experienced in Completion
and Production Services, as well as in our U.S. Lower 48 and
Canada rig operations. The
strength of our International operations this quarter was
attributable to the startup of a number of impactful new and
upgraded rigs, and favorable operating results in several venues. I
would also like to highlight the significant efforts made by our
North America operations in
aligning our structure to the new activity level. Since the end of
last year, we have reduced our global workforce by more than 18%,
including reductions of 41% and 26% in the U.S. Drilling and
Canada segments, respectively. In
addition, excluding the impact of the first-quarter severance
charges, we have reduced SG&A by approximately $20 million from fourth-quarter levels. It has
been a painful but necessary exercise given the expected duration
of this downturn.
"Despite the weakening environment, the first quarter included
several positive developments. First of all, we closed on the
merger transaction with C&J Energy Services. Our 53%
equity ownership in the combined entity allows us to maintain
exposure to these markets with a highly capable and efficient
operator while improving our financial flexibility. We remain
confident in the ability of the C&J team to materially improve
the results of our contributed business and to capture significant
synergies from this combination.
Second, our International unit secured awards for six new
PACE®-X rigs, validating the desirability and global
applicability of this rig.
Third, our remaining businesses, excluding Completion and
Production Services, delivered an incremental $22 million in operating income compared to the
fourth quarter of last year, excluding severance charges.
This improvement reflected the strength of our International
results and initial cost reduction efforts by our management team.
Although revenues for the remaining drilling businesses fell by
12%, our operating margins increased by 300 basis points to
14.4%."
Drilling & Rig Services
Adjusted income derived from operating activities ("operating
income") in the Drilling and Rig Services business line increased
6% to $201.3 million, up from
$189.6 million in the fourth
quarter. Adjusted EBITDA in this unit was $428.8 million, primarily attributable to the
International segment.
International operating income increased by 39% sequentially to
$105.0 million, demonstrating the
strength and earnings potential of Nabors' global operations. In
contrast to the U.S. Lower 48, this segment was minimally impacted
by lower oil prices and benefitted from a number of favorable
operating events. During the coming months, diminished pricing and
activity is expected to impact the profitability of this segment as
the effects of weakening oil prices progressively influence
international markets. Going forward, the Company anticipates a 10%
decline in the international rig count through the year, which
should only begin to impact results later in the year. Despite the
softening conditions, full-year results for the International
segment are still expected to increase compared to 2014.
In North America, drilling
activity within the Lower 48 and Canada significantly declined throughout the
quarter, resulting in a decrease in U.S. Drilling operating income
of $13.5 million and a decrease in
Canada operating income of
$8.2 million. In the Lower 48,
activity has particularly slowed in the Bakken and Mid-Continent
regions with utilization rates dropping 20% across all regions.
Although the decline in the U.S. has begun to moderate, further
weakening is expected in the Lower 48 and Canada during the second quarter. Meanwhile,
activity in Alaska continues to be
strong, with year-over-year increases anticipated as results from
recent new rig awards are realized. Finally, the Company expects
lower results in the Gulf of
Mexico until the fourth quarter, when its new deepwater
platform rig is scheduled to commence operations.
Rig Services' operating income was up sequentially with an
increase of $4.0 million, primarily
due to higher-margin mix and strict expense control in Canrig.
Although Ryan's revenue continued to deteriorate, operating income
was in line with the prior quarter.
Completion and Production Services
The Completion and Production Services business line recorded an
operating loss of $58.5 million,
primarily due to sharp declines in utilization and pricing in the
Completion Services business. Activity for the year started slowly
with clients generally delaying well completions and weather
affecting operations in West Texas
and in the Rockies. Revenue started to rebound late in the quarter.
Direct cost and overhead reductions lagged those achieved in the
drilling business, as the pending transaction delayed actions that
would have otherwise been completed during the first
quarter.
Financial Discussion
The Company's first-quarter results included several items whose
net impact obscured the otherwise positive performance in the
global drilling business. These items related to the C&J Energy
Services transaction, tax benefits, and severance costs incurred to
adjust the Company's structure to the new market situation. In
addition, the first-quarter results included the Completion and
Production Services business up to the closing date. Post-closing,
the Company's proportionate share of C&J Energy Services' net
income is reported using the equity method.
Operating income for the drilling business, including corporate
expenses, improved from $135.4
million in the fourth quarter of 2014 to $152.0 million, despite a $127.1 million reduction in revenue. The increase
in operating income was driven by improvements of $29.4 million in the International business and
$4.0 million in Rig Services.
North America operating income
held up relatively well in a tough environment, as the number of
working rigs fell sharply during the quarter with a commensurate
drop in revenue.
U.S. Drilling revenue declined 17%, while operating margins
(excluding severance) improved to 17.5%. This performance reflected
effective cost management in the Lower 48 operations and strong
revenue and operating income improvements in Alaska. Lower 48 operations experienced a 27%
revenue reduction, but held its operating margin (excluding
severance) at 12.7%. In the Lower 48, daily drilling margins per
rig increased by $676 to $11,134, including lump sum early termination
revenue equivalent to $105 per day.
Dayrate reductions were offset by mix effects, as our proportion of
older, lower-margin rigs decreased, and by proactive cost reduction
efforts.
Canada drilling revenue fell by
34%, with operating margins falling by 330 basis points to 13.2%.
This margin resiliency reflected early action on adjusting the cost
structure to anticipated revenue reductions and aligning the
overhead structure to the falling activity levels.
Income tax benefits during the quarter totaled $10.5 million from releases of tax provisions and
reserves in various jurisdictions. In addition, the tax expense for
the quarter included $9.3 million of
net tax benefits related to the C&J Energy Services
transaction. Excluding these benefits and other discrete items
mentioned above, the normalized effective tax rate for the quarter
was in the low single digits, as pre-tax income was more heavily
weighted to lower tax regimes.
William Restrepo, Nabors Chief
Financial Officer, stated, "Although we have started to demonstrate
the validity of our strategy based on global operations, highly
capable, advanced rigs, and development of innovations in drilling
technologies and solutions, we remain extremely focused on managing
through this severe downturn:
- We have expanded our commercial efforts in marketing our
drilling rigs, as well as cross-selling and seeking new
opportunities for additional drilling-related services;
- We have rapidly aligned our direct costs with the current
activity level;
- We have implemented reductions in SG&A overhead and expect
to deliver year-over-year reductions of at least $70 million dollars, while already reducing our
total workforce by almost 5,500;
- We target 2015 capital expenditures below $1 billion, half our initial expectation;
- We continue to work with our suppliers to reduce costs of
consumables, services and capital equipment; and
- We have reduced our debt materially while negotiating increased
credit facilities at favorable rates.
Although much remains to be done and we expect a challenging
market environment for the remainder of the year, we believe our
ongoing efforts will enable us to exit this downturn well prepared
to continue strengthening our position as the leading global land
driller."
Summary and Outlook
Looking ahead, results are expected to be lower in the second
quarter as activity and pricing weaken in the U.S. Lower 48 and
international markets soften. Second-quarter results will also be
impacted by the usual seasonal declines in Alaska and Canada.
Petrello concluded, "Nabors plans to emerge from the current
market in a stronger competitive position and has several
strategies underway to achieve this objective. At the same time, we
are committed to maintaining our technology development
initiatives, several of which are already deployed in the field. We
are well positioned financially, operationally and technically to
endure the effects of a protracted down cycle, and plan to take
advantage of attractive risk-adjusted newbuild and strategic
opportunities as they present themselves."
About Nabors
The Nabors companies own and operate approximately 468 land
drilling rigs throughout the world. Nabors' actively marketed
offshore fleet consists of six jackups and 36 platform rigs in
the United States and multiple
international markets. 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.
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
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
|
|
(In thousands,
except per share amounts)
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
Revenues and other
income:
|
|
|
|
|
|
|
|
Operating revenues
|
|
$ 1,414,707
|
|
$ 1,589,618
|
|
$ 1,783,836
|
|
Earnings
(losses) from unconsolidated affiliates
|
|
6,502
|
|
(2,445)
|
|
(429)
|
|
Investment income (loss)
|
|
969
|
|
980
|
|
1,596
|
|
Total revenues and
other income
|
|
1,422,178
|
|
1,588,153
|
|
1,785,003
|
|
|
|
|
|
|
|
|
Costs and other
deductions:
|
|
|
|
|
|
|
|
Direct
costs
|
|
919,610
|
|
1,061,739
|
|
1,194,844
|
|
General
and administrative expenses
|
|
127,133
|
|
134,266
|
|
142,871
|
|
Depreciation and amortization
|
|
281,019
|
|
282,127
|
|
293,572
|
|
Interest
expense
|
|
46,601
|
|
44,810
|
|
43,697
|
|
Losses
(gains) on sales and disposals of long-lived assets and other expense (income),
net
|
|
(55,842)
|
|
1,476
|
|
9,606
|
|
Impairments and other charges
|
|
-
|
|
-
|
|
1,010,423
|
|
Total costs and other
deductions
|
|
1,318,521
|
|
1,524,418
|
|
2,695,013
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
|
103,657
|
|
63,735
|
|
(910,010)
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
(20,705)
|
|
14,008
|
|
(23,609)
|
|
|
|
|
|
|
|
|
Subsidiary preferred
stock dividend
|
|
-
|
|
750
|
|
-
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax
|
|
124,362
|
|
48,977
|
|
(886,401)
|
|
Income (loss) from
discontinued operations, net of tax
|
|
(817)
|
|
1,515
|
|
(4,467)
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
123,545
|
|
50,492
|
|
(890,868)
|
|
Less: Net (income) loss
attributable to noncontrolling interest
|
|
89
|
|
(573)
|
|
(202)
|
|
Net income (loss)
attributable to Nabors
|
|
$ 123,634
|
|
$ 49,919
|
|
$ (891,070)
|
|
|
|
|
|
|
|
|
Earnings (losses) per
share: (1)
|
|
|
|
|
|
|
|
Basic
from continuing operations
|
|
$
.43
|
|
$
.16
|
|
$
(3.06)
|
|
Basic
from discontinued operations
|
|
-
|
|
.01
|
|
(.02)
|
|
Basic
|
|
$
.43
|
|
$
.17
|
|
$
(3.08)
|
|
|
|
|
|
|
|
|
Diluted
from continuing operations
|
|
$
.43
|
|
$
.16
|
|
$
(3.06)
|
|
Diluted
from discontinued operations
|
|
(.01)
|
|
-
|
|
(.02)
|
|
Diluted
|
|
$
.42
|
|
$
.16
|
|
$
(3.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares
outstanding: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
285,361
|
|
296,210
|
|
284,938
|
|
Diluted
|
|
286,173
|
|
299,050
|
|
284,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(2)
|
|
$ 374,466
|
|
$ 391,168
|
|
$ 445,692
|
|
|
|
|
|
|
|
|
Adjusted income
(loss) derived from operating activities (3)
|
|
$ 93,447
|
|
$ 109,041
|
|
$ 152,120
|
|
|
|
(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. 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 EBITDA and adjusted income (loss)
derived from operating activities, because we believe that these
financial measures accurately reflect our ongoing
profitability. There are limitations inherent in using
adjusted EBITDA as a measure of overall profitability because it
excludes significant expense items. 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)
|
|
|
|
|
|
|
|
|
|
March
31,
2015
|
|
December
31,
2014
|
|
(In thousands,
except ratios)
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and short-term
investments
|
|
$ 621,171
|
|
$
536,169
|
|
Accounts receivable,
net
|
|
971,601
|
|
1,517,503
|
|
Assets held for
sale
|
|
134,709
|
|
146,467
|
|
Other current
assets
|
|
442,851
|
|
541,735
|
|
Total current
assets
|
|
2,170,332
|
|
2,741,874
|
|
Long-term investments
and other receivables
|
|
2,627
|
|
2,806
|
|
Property, plant and
equipment, net
|
|
7,333,808
|
|
8,599,125
|
|
Goodwill
|
|
80,947
|
|
173,928
|
|
Investment in
unconsolidated affiliates
|
|
730,487
|
|
58,251
|
|
Other long-term
assets
|
|
286,397
|
|
303,958
|
|
Total assets
|
|
$ 10,604,598
|
|
$ 11,879,942
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Current
debt
|
|
$
8,739
|
|
$
6,190
|
|
Other current
liabilities
|
|
1,147,857
|
|
1,561,285
|
|
Total current
liabilities
|
|
1,156,596
|
|
1,567,475
|
|
Long-term
debt
|
|
3,816,717
|
|
4,348,859
|
|
Other long-term
liabilities
|
|
663,523
|
|
1,044,819
|
|
Total liabilities
|
|
5,636,836
|
|
6,961,153
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Shareholders'
equity
|
|
4,958,813
|
|
4,908,619
|
|
Noncontrolling
interest
|
|
8,949
|
|
10,170
|
|
Total equity
|
|
4,967,762
|
|
4,918,789
|
|
Total liabilities and
equity
|
|
$ 10,604,598
|
|
$ 11,879,942
|
|
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
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
|
|
(In thousands,
except rig activity)
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
Reportable
segments:
|
|
|
|
|
|
|
|
Operating revenues
and Earnings (losses) from unconsolidated affiliates:
|
|
|
|
|
|
|
|
Drilling and Rig Services:
|
|
|
|
|
|
|
|
U.S.
|
|
$ 453,821
|
|
$ 510,476
|
|
$ 544,862
|
|
Canada
|
|
57,840
|
|
111,621
|
|
88,219
|
|
International
|
|
445,400
|
|
375,069
|
|
432,084
|
|
Rig Services
(1)
|
|
144,084
|
|
143,726
|
|
190,399
|
|
Subtotal
Drilling and Rig Services (2)
|
|
1,101,145
|
|
1,140,892
|
|
1,255,564
|
|
|
|
|
|
|
|
|
Completion and Production Services:
|
|
|
|
|
|
|
|
Completion
Services
|
|
208,123
|
|
227,899
|
|
361,796
|
|
Production
Services
|
|
158,512
|
|
275,400
|
|
239,897
|
|
Subtotal
Completion and Production Services (3)
|
|
366,635
|
|
503,299
|
|
601,693
|
|
|
|
|
|
|
|
|
Other reconciling items (4)
|
|
(46,571)
|
|
(57,018)
|
|
(73,850)
|
|
Total operating
revenues and earnings (losses) from unconsolidated
affiliates
|
$ 1,421,209
|
|
$ 1,587,173
|
|
$ 1,783,407
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
(5)
|
|
|
|
|
|
|
|
Drilling and Rig Services:
|
|
|
|
|
|
|
|
U.S.
|
|
$ 187,745
|
|
$ 187,637
|
|
$ 207,001
|
|
Canada
|
|
18,468
|
|
40,119
|
|
28,315
|
|
International
|
|
201,028
|
|
137,991
|
|
173,248
|
|
Rig Services
(1)
|
|
21,583
|
|
16,491
|
|
17,507
|
|
Subtotal
Drilling and Rig Services (2)
|
|
428,824
|
|
382,238
|
|
426,071
|
|
|
|
|
|
|
|
|
Completion and Production Services:
|
|
|
|
|
|
|
|
Completion
Services
|
|
(27,847)
|
|
(6,654)
|
|
33,372
|
|
Production
Services
|
|
23,043
|
|
60,056
|
|
40,284
|
|
Subtotal
Completion and Production Services (3)
|
|
(4,804)
|
|
53,402
|
|
73,656
|
|
|
|
|
|
|
|
|
Other reconciling items (6)
|
|
(49,554)
|
|
(44,472)
|
|
(54,035)
|
|
Total adjusted
EBITDA
|
|
$ 374,466
|
|
$ 391,168
|
|
$ 445,692
|
|
|
|
|
|
|
|
|
Adjusted income
(loss) derived from operating activities: (7)
|
|
|
|
|
|
|
|
Drilling and Rig Services:
|
|
|
|
|
|
|
|
U.S.
|
|
$ 77,038
|
|
$ 72,494
|
|
$ 90,490
|
|
Canada
|
|
6,358
|
|
26,160
|
|
14,566
|
|
International
|
|
105,041
|
|
48,119
|
|
75,664
|
|
Rig Services
(1)
|
|
12,873
|
|
8,728
|
|
8,845
|
|
Subtotal
Drilling and Rig Services (2)
|
|
201,310
|
|
155,501
|
|
189,565
|
|
|
|
|
|
|
|
|
Completion and Production Services:
|
|
|
|
|
|
|
|
Completion
Services
|
|
(55,243)
|
|
(33,635)
|
|
4,927
|
|
Production
Services
|
|
(3,296)
|
|
30,591
|
|
11,752
|
|
Subtotal
Completion and Production Services (3)
|
|
(58,539)
|
|
(3,044)
|
|
16,679
|
|
|
|
|
|
|
|
|
Other reconciling items (6)
|
|
(49,324)
|
|
(43,416)
|
|
(54,124)
|
|
Total
adjusted income (loss) derived from operating activities
|
|
$ 93,447
|
|
$ 109,041
|
|
$ 152,120
|
|
|
|
|
|
|
|
|
Rig
activity:
|
|
|
|
|
|
|
|
Rig years:
(8)
|
|
|
|
|
|
|
|
U.S.
|
|
167.6
|
|
206.6
|
|
212.2
|
|
Canada
|
|
25.6
|
|
43.8
|
|
36.9
|
|
International (9)
|
|
130.1
|
|
129.8
|
|
121.2
|
|
Total rig
years
|
|
323.3
|
|
380.2
|
|
370.3
|
|
Rig hours:
(10)
|
|
|
|
|
|
|
|
U.S.
Production Services
|
|
129,652
|
|
209,982
|
|
183,102
|
|
Canada
Production Services
|
|
23,947
|
|
41,540
|
|
33,218
|
|
Total rig
hours
|
|
153,599
|
|
251,522
|
|
216,320
|
|
|
|
(1)
|
Includes our other
services comprised of our drilling technology and top drive
manufacturing, directional drilling, rig instrumentation and
software services.
|
|
|
|
(2)
|
Includes earnings
(losses), net from unconsolidated affiliates, accounted for using
the equity method, of $6.2 million, $(2.5) million and $(.6)
million for the three months ended March 31, 2015 and 2014 and
December 31, 2014, respectively.
|
|
|
|
(3)
|
Includes earnings
(losses), net from unconsolidated affiliates, accounted for using
the equity method, of $.3 million, $.1 million and $.2 million for
the three months ended March 31, 2015 and 2014 and December 31,
2014, respectively.
|
|
|
|
(4)
|
Represents the
elimination of inter-segment transactions and earnings (losses),
net from unconsolidated affiliates related to our equity method
investment in C&J Energy Services, Ltd.
|
|
|
|
(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. 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 EBITDA and adjusted income (loss)
derived from operating activities, because we believe that these
financial measures accurately reflect our ongoing profitability.
There are limitations inherent in using adjusted EBITDA as a
measure of overall profitability because it excludes significant
expense items. 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, unallocated corporate
expenses and earnings (losses), net from unconsolidated affiliates
related to our equity method investment in C&J Energy Services,
Ltd.
|
|
|
|
(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 March 31, 2015 and 2014 and December 31,
2014.
|
|
|
|
(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
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$ 374,466
|
|
$ 391,168
|
|
$ 445,692
|
|
Less: Depreciation
and amortization
|
|
281,019
|
|
282,127
|
|
293,572
|
|
Adjusted income
(loss) derived from operating activities
|
|
93,447
|
|
109,041
|
|
152,120
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(46,601)
|
|
(44,810)
|
|
(43,697)
|
|
Investment income
(loss)
|
|
969
|
|
980
|
|
1,596
|
|
Gains (losses) on
sales and disposals of long-lived
assets and other income (expense), net
|
|
|
|
|
|
|
|
55,842
|
|
(1,476)
|
|
(9,606)
|
|
Impairments and other
charges
|
|
-
|
|
-
|
|
(1,010,423)
|
|
Income (loss) from
continuing operations before income taxes
|
|
$ 103,657
|
|
$ 63,735
|
|
$ (910,010)
|
|
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
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
|
|
(In thousands,
except per share amounts)
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
BASIC
EPS:
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax
|
|
$ 124,362
|
|
$ 48,977
|
|
$ (886,401)
|
|
Less:
Net (income) loss attributable to noncontrolling
interest
|
|
89
|
|
(573)
|
|
(202)
|
|
Less:
Earnings allocated to unvested shareholders
|
|
(2,031)
|
|
(733)
|
|
13,881
|
|
Adjusted income
(loss) from continuing operations - basic and diluted
|
|
$ 122,420
|
|
$ 47,671
|
|
$ (872,722)
|
|
Income (loss) from
discontinued operations, net of tax
|
|
$ (817)
|
|
$ 1,515
|
|
$
(4,467)
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding-basic
|
|
285,361
|
|
296,210
|
|
284,938
|
|
|
|
|
|
|
|
|
Earnings (losses) per
share:
|
|
|
|
|
|
|
|
Basic from continuing
operations
|
|
$
.43
|
|
$
.16
|
|
$
(3.06)
|
|
Basic from discontinued
operations
|
|
-
|
|
.01
|
|
(.02)
|
|
Total
Basic
|
|
$
.43
|
|
$
.17
|
|
$
(3.08)
|
|
|
|
|
|
|
|
|
DILUTED
EPS:
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributed to common shareholders
|
|
$ 122,420
|
|
$ 47,671
|
|
$ (872,722)
|
|
Add: Effect of
reallocating undistributed earnings of unvested
shareholders
|
|
5
|
|
-
|
|
-
|
|
Adjusted income
(loss) from continuing operations attributed to common
shareholders
|
$ 122,425
|
|
$ 47,671
|
|
$ (872,722)
|
|
Income (loss) from
discontinued operations
|
|
$
(817)
|
|
$ 1,515
|
|
$
(4,467)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding-basic
|
|
285,361
|
|
296,210
|
|
284,938
|
|
Add: dilutive effect
of potential common shares
|
|
812
|
|
2,840
|
|
-
|
|
Weighted-average number of diluted shares outstanding
|
|
286,173
|
|
299,050
|
|
284,938
|
|
|
|
|
|
|
|
|
Diluted from continuing
operations
|
|
$
.43
|
|
$
.16
|
|
$
(3.06)
|
|
Diluted from discontinued
operations
|
|
(.01)
|
|
-
|
|
(.02)
|
|
Total
Diluted
|
|
$
.42
|
|
$
.16
|
|
$
(3.08)
|
|
|
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 6,621,688, 7,853,509 and 11,485,314 shares during the
three months ended March 31, 2015 and 2014 and December 31, 2014,
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)
|
|
|
|
|
|
|
|
|
|
|
|
Charges and
Non-Operational
|
|
As
adjusted
|
|
(In thousands,
except per share amounts)
|
|
Actuals
|
|
Items
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2015
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax
|
|
$ 124,362
|
|
$
66,115
|
|
$ 58,247
|
|
Diluted earnings
(losses) per share from continuing operations
|
|
$
0.43
|
|
$
0.23
|
|
$
0.20
|
|
|
|
|
|
|
|
|
|
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
|
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
|
SCHEDULE OF
NON-CASH CHARGES AND OTHER NON-OPERATIONAL ITEMS
(NON-GAAP)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
Per
Diluted
|
|
|
|
Per
Diluted
|
|
(In thousands,
except per share amounts)
|
|
2015
|
|
Share
|
|
2014
|
|
Share
|
|
|
|
|
|
|
|
|
|
|
Net gain from the
C&J Energy Services transaction (1)
|
|
$
(61,885)
|
|
$
(.22)
|
|
$
-
|
|
$
-
|
|
Prior year tax
benefits (2)
|
|
(10,499)
|
|
(.03)
|
|
-
|
|
-
|
|
Severance charges
(3)
|
|
6,269
|
|
.02
|
|
-
|
|
-
|
|
Retirements &
impairments to underutilized assets (4)
|
|
-
|
|
-
|
|
431,242
|
|
1.49
|
|
Goodwill and
intangible asset impairments (5)
|
|
-
|
|
-
|
|
359,611
|
|
1.24
|
|
Other
non-operational items (6)
|
|
-
|
|
-
|
|
11,759
|
|
.03
|
|
Restructuring tax
effect (7)
|
|
-
|
|
-
|
|
180,073
|
|
.63
|
|
|
|
|
|
|
|
|
|
|
Total Adjustments,
net of tax
|
|
$
(66,115)
|
|
(.23)
|
|
$ 982,685
|
|
3.39
|
|
(1)
|
Represents the net
gain from the C&J Energy Services transaction, net of tax of
($9.3) million.
|
|
|
|
(2)
|
Represents tax
benefits related to releases of tax provisions and reserves in
various jurisdictions.
|
|
|
|
(3)
|
Represents severance
charges from workforce reductions, net of tax of $1.6
million.
|
|
|
|
(4)
|
Represents
retirements and impairments related to underutilized assets, net of
tax of $180.4 million.
|
|
|
|
(5)
|
Represents
impairments to goodwill and intangible assets, net of tax of $26.9
million.
|
|
|
|
(6)
|
Represents losses
related to the impairment of an equity investment, debt buybacks
and transaction costs, net of tax of $2.9 million.
|
|
|
|
(7)
|
Represents the tax
effect of internal restructuring.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nabors-announces-first-quarter-results-300069800.html
SOURCE Nabors Industries Ltd.