HAMILTON, Bermuda, Aug. 4, 2015 /PRNewswire/ -- Nabors
Industries Ltd. ("Nabors")(NYSE: NBR)today reported
second-quarter revenue and earnings from unconsolidated affiliates
of $862 million, compared to
$1.42 billion in the first quarter of
2015, and $1.62 billion in the second
quarter of last year. The comparable quarters included $367 million and $535
million respectively, in revenue from Completion and
Production Services, a business line that merged with C&J
Energy Services on March 24,
2015. Beginning in the second quarter, Nabors' results
reflect equity-method accounting for this investment on a
quarter-lag basis.
Net income from continuing operations reported for the second
quarter was a loss of $41.9 million
or $0.14 per diluted share, which
includes $0.23 of tax expense.
This compares to first-quarter net income from continuing
operations of $124.4 million or
$0.43 per diluted share; or
$58.3 million, or $0.20 per share, after excluding $66.1 million attributable to the after-tax net
gain from the C&J Energy Services transaction, tax benefits and
after-tax severance charges from workforce reductions. The
first-quarter comparable results also include income from the
Completion and Production Services business.
Anthony Petrello, Nabors'
Chairman and CEO, commented, "Our second-quarter operating results,
while down significantly, were better than we had
anticipated. This was largely attributable to a resilient
international business and stringent cost control throughout the
organization. The sequential decrease was driven by: lower
drilling activity in the U.S. Lower 48, rate concessions and
slightly lower utilization internationally, seasonally lower
activity in Canada and
Alaska, and a depleting backlog in
Canrig, partially offset by the initial contribution from six new
rigs deployed during the quarter. We continued to bolster the
long-term future of the Company with a more streamlined cost
structure and the purchase of our partners' interest in our
Saudi Arabia entity. Our
ability to expand and extend our revolving credit facility in the
middle of an industry downturn with a group of 17 global banks, 3
of which are new to the facility, is a testament to our banking
group's confidence in our financial strength and future
prospects.
Segment Results
Adjusted income derived from operating activities ("operating
income") in Drilling and Rig Services decreased 48% to $104.9 million from $201.3
million in the first quarter of this year. Adjusted
EBITDA in this unit was $323.6
million, primarily attributable to the International
segment.
International operating income decreased by 21% sequentially to
$83.3 million, reflecting the impact
of negotiated rate reductions. Going forward, the Company
still foresees the potential for further declines in its
international rig count and average margins as the effects of weak
oil prices progressively influence the international market.
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 U.S. Drilling and Canada segments declined significantly
throughout the quarter, resulting in decreases in operating income
of $45.6 million and $14.6 million, respectively. In the Lower
48, activity declined throughout the quarter with 33 contracted
rigs expiring. Although the decline in U.S. activity appears
to be bottoming, oil price risk remains and lower income is
expected as contracts expire and reprice at lower rates.
Results in Canada and Alaska declined seasonally. In the U.S.
Gulf of Mexico the Company's new
deepwater platform rig received a reduced mobilization dayrate
throughout the quarter. However, the commencement of its full
operating rate has been delayed for an indefinite period of time
due to issues with the installation of the customer's
platform.
Rig Services, which consists of the Company's manufacturing and
directional drilling operations, reported negative operating income
of $1.6 million, as the industry's
newbuild activity and drilling activity has declined.
Financial Discussion
The second quarter included several items that impacted the
operational results of the Company. First, the results of the
Saudi Arabia joint venture will
now be reported on a consolidated basis due to the purchase of the
partner's interest by Nabors in May
2015. Second, the International segment results were
negatively impacted by $5 million
related to a customer bankruptcy in Latin
America. Finally, the Company is now recording its
proportionate share of C&J Energy Services earnings with a
one-quarter lag. Accordingly, second-quarter results included
a loss of $0.8 million related to the
Company's ownership stake in C&J Energy Services during the
first quarter of this year, beginning March
24, 2015.
Income tax expense in the second quarter exceeded the Company's
income before taxes due to the true-up of the Company's
year-to-date tax provision to the full-year expected tax rate.
Accordingly, the second quarter's tax rate is not representative of
the full year anticipated rate and the Company currently expects a
tax benefit for the third quarter and full year.
William Restrepo, Nabors' Chief
Financial Officer, stated, "Nabors plans to emerge from the current
market in a stronger competitive position and has several
initiatives underway to achieve this objective. Our SG&A
and purchasing efforts are already yielding significant results.
Likewise, we remain focused on cost control and capital
expenditure discipline. We are committed to free cash flow
generation and intend to exit the downturn with a more modern and
capable fleet; a focused, streamlined, more effective organization;
and a stronger balance sheet with more financial flexibility."
Summary and Outlook
Petrello concluded, "Looking ahead, although we expect the third
quarter to reflect another decrease in our results, we also believe
it may represent the bottom in most areas outside of the U.S. Lower
48. New rig startups internationally combined with fourth
quarter seasonal upticks in Alaska
and Canada should serve to
mitigate some of the impact of further pricing erosion in the U.S.
Lower 48 as contracts continue to roll to lower spot-market
pricing. We believe it is likely that current market
conditions will prevail for an extended period, particularly in
North America. While our
international markets will be more resilient, especially in the
Middle East and North Africa, we will remain diligent in our
cost-containment efforts. For the full year, we still expect
to achieve substantially higher results in our International and
Alaska operations compared to
2014."
About Nabors
The Nabors companies own and operate approximately 469 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
|
|
Six Months
Ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands,
except per share amounts)
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Revenues and other
income:
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$ 863,305
|
|
$ 1,616,981
|
|
$ 1,414,707
|
|
$ 2,278,012
|
|
$ 3,206,599
|
Earnings
(losses) from unconsolidated affiliates
|
|
(1,116)
|
|
(576)
|
|
6,502
|
|
5,386
|
|
(3,021)
|
Investment income (loss)
|
|
1,181
|
|
7,066
|
|
969
|
|
2,150
|
|
8,046
|
Total revenues and
other income
|
|
863,370
|
|
1,623,471
|
|
1,422,178
|
|
2,285,548
|
|
3,211,624
|
|
|
|
|
|
|
|
|
|
|
|
Costs and other
deductions:
|
|
|
|
|
|
|
|
|
|
|
Direct
costs
|
|
488,522
|
|
1,066,495
|
|
919,610
|
|
1,408,132
|
|
2,128,234
|
General
and administrative expenses
|
|
86,290
|
|
133,630
|
|
127,133
|
|
213,423
|
|
267,896
|
Depreciation and amortization
|
|
218,196
|
|
282,820
|
|
281,019
|
|
499,215
|
|
564,947
|
Interest
expense
|
|
44,469
|
|
46,303
|
|
46,601
|
|
91,070
|
|
91,113
|
Losses
(gains) on sales and disposals of
|
|
|
|
|
|
|
|
|
|
|
long-lived assets and other
expense (income), net
|
|
1,338
|
|
16,504
|
|
(55,842)
|
|
(54,504)
|
|
17,980
|
Total costs and other
deductions
|
|
838,815
|
|
1,545,752
|
|
1,318,521
|
|
2,157,336
|
|
3,070,170
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
|
24,555
|
|
77,719
|
|
103,657
|
|
128,212
|
|
141,454
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
66,445
|
|
10,756
|
|
(20,705)
|
|
45,740
|
|
24,764
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary preferred
stock dividend
|
|
-
|
|
1,234
|
|
-
|
|
-
|
|
1,984
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax
|
|
(41,890)
|
|
65,729
|
|
124,362
|
|
82,472
|
|
114,706
|
Income (loss) from
discontinued operations, net of tax
|
|
5,025
|
|
(1,032)
|
|
(817)
|
|
4,208
|
|
483
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
(36,865)
|
|
64,697
|
|
123,545
|
|
86,680
|
|
115,189
|
Less: Net (income) loss
attributable to noncontrolling interest
|
|
44
|
|
(253)
|
|
89
|
|
133
|
|
(826)
|
Net income (loss)
attributable to Nabors
|
|
$ (36,821)
|
|
$ 64,444
|
|
$ 123,634
|
|
$ 86,813
|
|
$ 114,363
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses) per
share: (1)
|
|
|
|
|
|
|
|
|
|
|
Basic
from continuing operations
|
|
$ (.14)
|
|
$
.21
|
|
$
.43
|
|
$
.28
|
|
$
.37
|
Basic
from discontinued operations
|
|
.01
|
|
-
|
|
-
|
|
.02
|
|
-
|
Basic
|
|
$ (.13)
|
|
$
.21
|
|
$
.43
|
|
$
.30
|
|
$
.37
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
from continuing operations
|
|
$ (.14)
|
|
$
.21
|
|
$
.43
|
|
$
.28
|
|
$
.37
|
Diluted
from discontinued operations
|
|
.01
|
|
-
|
|
(.01)
|
|
.02
|
|
-
|
Diluted
|
|
$ (.13)
|
|
$
.21
|
|
$
.42
|
|
$
.30
|
|
$
.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding:
(1)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
286,085
|
|
297,984
|
|
285,361
|
|
285,723
|
|
297,097
|
Diluted
|
|
286,085
|
|
300,981
|
|
286,173
|
|
286,701
|
|
300,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(2)
|
|
$ 288,177
|
|
$ 416,280
|
|
$ 374,466
|
|
$ 662,643
|
|
$ 807,448
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income
(loss) derived from operating activities (3)
|
|
$ 69,981
|
|
$ 133,460
|
|
$ 93,447
|
|
$ 163,428
|
|
$ 242,501
|
|
|
(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, general and
administrative expenses and earnings (losses) from our equity
method investment 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,
depreciation and amortization and earnings (losses) from our equity
method investment 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)
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
(In
thousands)
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and short-term
investments
|
|
$ 469,897
|
|
$ 621,171
|
|
$ 536,169
|
Accounts receivable,
net
|
|
908,563
|
|
971,601
|
|
1,517,503
|
Assets held for
sale
|
|
136,677
|
|
134,709
|
|
146,467
|
Other current
assets
|
|
454,018
|
|
442,851
|
|
541,735
|
Total current
assets
|
|
1,969,155
|
|
2,170,332
|
|
2,741,874
|
Long-term investments
and other receivables
|
|
2,617
|
|
2,627
|
|
2,806
|
Property, plant and
equipment, net
|
|
7,405,441
|
|
7,333,808
|
|
8,599,125
|
Goodwill
|
|
139,756
|
|
80,947
|
|
173,928
|
Investment in
unconsolidated affiliates
|
|
676,234
|
|
730,487
|
|
58,251
|
Other long-term
assets
|
|
324,080
|
|
286,397
|
|
303,958
|
Total assets
|
|
$ 10,517,283
|
|
$ 10,604,598
|
|
$ 11,879,942
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Current
debt
|
|
$ 66,359
|
|
$
8,739
|
|
$
6,190
|
Other current
liabilities
|
|
1,156,394
|
|
1,147,857
|
|
1,561,285
|
Total current
liabilities
|
|
1,222,753
|
|
1,156,596
|
|
1,567,475
|
Long-term
debt
|
|
3,691,357
|
|
3,816,717
|
|
4,348,859
|
Other long-term
liabilities
|
|
663,798
|
|
663,523
|
|
1,044,819
|
Total liabilities
|
|
5,577,908
|
|
5,636,836
|
|
6,961,153
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Shareholders'
equity
|
|
4,931,960
|
|
4,958,813
|
|
4,908,619
|
Noncontrolling
interest
|
|
7,415
|
|
8,949
|
|
10,170
|
Total equity
|
|
4,939,375
|
|
4,967,762
|
|
4,918,789
|
Total liabilities and
equity
|
|
$ 10,517,283
|
|
$ 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
|
|
Six Months
Ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands,
except rig activity)
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Reportable
segments:
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
and Earnings (losses) from unconsolidated affiliates:
|
|
|
|
|
|
|
|
|
|
|
Drilling and Rig Services:
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$ 321,169
|
|
$ 532,894
|
|
$ 453,821
|
|
$ 774,990
|
|
$ 1,043,370
|
Canada
|
|
21,413
|
|
54,861
|
|
57,840
|
|
79,253
|
|
166,482
|
International
|
|
458,229
|
|
391,251
|
|
445,400
|
|
903,629
|
|
766,320
|
Rig Services
(1)
|
|
100,599
|
|
161,740
|
|
144,084
|
|
244,683
|
|
305,466
|
Subtotal
Drilling and Rig Services (2)
|
|
901,410
|
|
1,140,746
|
|
1,101,145
|
|
2,002,555
|
|
2,281,638
|
|
|
|
|
|
|
|
|
|
|
|
Completion and Production Services:
|
|
|
|
|
|
|
|
|
|
|
Completion
Services
|
|
-
|
|
276,639
|
|
208,123
|
|
208,123
|
|
504,538
|
Production
Services
|
|
-
|
|
258,378
|
|
158,512
|
|
158,512
|
|
533,778
|
Subtotal
Completion and Production Services (3)
|
|
-
|
|
535,017
|
|
366,635
|
|
366,635
|
|
1,038,316
|
|
|
|
|
|
|
|
|
|
|
|
All Other
(4)
|
|
(800)
|
|
-
|
|
-
|
|
(800)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Other reconciling items (5)
|
|
(38,421)
|
|
(59,358)
|
|
(46,571)
|
|
(84,992)
|
|
(116,376)
|
Total operating
revenues and earnings (losses) from unconsolidated
affiliates
|
$ 862,189
|
|
$ 1,616,405
|
|
$ 1,421,209
|
|
$ 2,283,398
|
|
$ 3,203,578
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
(6)
|
|
|
|
|
|
|
|
|
|
|
Drilling and Rig Services:
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$ 136,499
|
|
$ 206,061
|
|
$ 187,745
|
|
$ 324,244
|
|
$ 393,698
|
Canada
|
|
3,732
|
|
14,216
|
|
18,468
|
|
22,200
|
|
54,335
|
International
|
|
176,994
|
|
139,336
|
|
201,028
|
|
378,022
|
|
277,327
|
Rig Services
(1)
|
|
6,341
|
|
17,176
|
|
21,583
|
|
27,924
|
|
33,667
|
Subtotal
Drilling and Rig Services (2)
|
|
323,566
|
|
376,789
|
|
428,824
|
|
752,390
|
|
759,027
|
|
|
|
|
|
|
|
|
|
|
|
Completion and Production Services:
|
|
|
|
|
|
|
|
|
|
|
Completion
Services
|
|
-
|
|
27,614
|
|
(27,847)
|
|
(27,847)
|
|
20,960
|
Production
Services
|
|
-
|
|
58,267
|
|
23,043
|
|
23,043
|
|
118,323
|
Subtotal
Completion and Production Services (3)
|
|
-
|
|
85,881
|
|
(4,804)
|
|
(4,804)
|
|
139,283
|
|
|
|
|
|
|
|
|
|
|
|
Other reconciling items (7)
|
|
(35,389)
|
|
(46,390)
|
|
(49,554)
|
|
(84,943)
|
|
(90,862)
|
Total adjusted
EBITDA
|
|
$ 288,177
|
|
$ 416,280
|
|
$ 374,466
|
|
$ 662,643
|
|
$ 807,448
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income
(loss) derived from operating activities: (8)
|
|
|
|
|
|
|
|
|
|
|
Drilling and Rig Services:
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
$ 31,445
|
|
$ 89,977
|
|
$ 77,038
|
|
$ 108,483
|
|
$ 162,471
|
Canada
|
|
(8,268)
|
|
225
|
|
6,358
|
|
(1,910)
|
|
26,385
|
International
|
|
83,255
|
|
50,583
|
|
105,041
|
|
188,296
|
|
98,702
|
Rig Services
(1)
|
|
(1,575)
|
|
9,059
|
|
12,873
|
|
11,298
|
|
17,787
|
Subtotal
Drilling and Rig Services (2)
|
|
104,857
|
|
149,844
|
|
201,310
|
|
306,167
|
|
305,345
|
|
|
|
|
|
|
|
|
|
|
|
Completion and Production Services:
|
|
|
|
|
|
|
|
|
|
|
Completion
Services
|
|
-
|
|
(581)
|
|
(55,243)
|
|
(55,243)
|
|
(34,216)
|
Production
Services
|
|
-
|
|
29,889
|
|
(3,296)
|
|
(3,296)
|
|
60,480
|
Subtotal
Completion and Production Services (3)
|
|
-
|
|
29,308
|
|
(58,539)
|
|
(58,539)
|
|
26,264
|
|
|
|
|
|
|
|
|
|
|
|
Other reconciling items (7)
|
|
(34,876)
|
|
(45,692)
|
|
(49,324)
|
|
(84,200)
|
|
(89,108)
|
Total
adjusted income (loss) derived from operating activities
|
|
$ 69,981
|
|
$ 133,460
|
|
$ 93,447
|
|
$ 163,428
|
|
$ 242,501
|
|
|
|
|
|
|
|
|
|
|
|
Rig
activity:
|
|
|
|
|
|
|
|
|
|
|
Rig years:
(9)
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
119.5
|
|
215.3
|
|
167.6
|
|
143.4
|
|
211.0
|
Canada
|
|
9.7
|
|
21.6
|
|
25.6
|
|
17.6
|
|
32.6
|
International (10)
|
|
127.1
|
|
127.3
|
|
130.1
|
|
128.6
|
|
128.6
|
Total rig
years
|
|
256.3
|
|
364.2
|
|
323.3
|
|
289.6
|
|
372.2
|
Rig hours:
(11)
|
|
|
|
|
|
|
|
|
|
|
U.S.
Production Services
|
|
-
|
|
210,750
|
|
129,652
|
|
129,652
|
|
420,732
|
Canada
Production Services
|
|
-
|
|
28,671
|
|
23,947
|
|
23,947
|
|
70,211
|
Total rig
hours
|
|
-
|
|
239,421
|
|
153,599
|
|
153,599
|
|
490,943
|
|
|
|
|
(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 $(.3) million, $(.8) million and $6.2 million
for the three months ended June 30, 2015 and 2014 and March 31,
2015, respectively and $5.9 million and $(3.3) million for the six
months ended June 30, 2015 and 2014, respectively.
|
|
|
(3)
|
Includes earnings
(losses), net from unconsolidated affiliates, accounted for using
the equity method, of $.2 million and $.3 million for the three
months ended June 30, 2014 and March 31, 2015, respectively and $.3
million for the six months ended June 30, 2015 and 2014.
|
|
|
(4)
|
Represents our share
of the net income (loss) of C&J Energy Services Ltd. for the
eight-day period from the closing of the merger until March 31,
2015.
|
|
|
(5)
|
Represents the
elimination of inter-segment transactions.
|
|
|
(6)
|
Adjusted EBITDA is
computed by subtracting the sum of direct costs, general and
administrative expenses and earnings (losses) from our equity
method investment 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".
|
|
|
(7)
|
Represents the
elimination of inter-segment transactions and unallocated corporate
expenses.
|
|
|
(8)
|
Adjusted income
(loss) derived from operating activities is computed by subtracting
the sum of direct costs, general and administrative expenses,
depreciation and amortization and earnings (losses) from our equity
method investment 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".
|
|
|
(9)
|
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.
|
|
|
(10)
|
International rig
years includes our equivalent percentage ownership of rigs owned by
unconsolidated affiliates, which totaled 2.5 years during the three
months ended June 30, 2014 and March 31, 2015 and 2.5 years for the
six months ended June 30, 2014. As of May 24, 2015, this was
no longer an unconsolidated affiliate.
|
|
|
(11)
|
Rig hours represents
the number of hours that our well-servicing rig fleet operated
during the period. This fleet was included in the
Completion and Production Services business line that was
merged with C&J Energy Services, Inc. in March 2015, therefore
we will no longer report this performance metric.
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES TO
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$ 288,177
|
|
$ 416,280
|
|
$ 374,466
|
|
$ 662,643
|
|
$ 807,448
|
Less: Depreciation
and amortization
|
|
218,196
|
|
282,820
|
|
281,019
|
|
499,215
|
|
564,947
|
Adjusted income
(loss) derived from operating activities
|
|
69,981
|
|
133,460
|
|
93,447
|
|
163,428
|
|
242,501
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses)
from equity method investment
|
|
(800)
|
|
-
|
|
-
|
|
(800)
|
|
-
|
Interest
expense
|
|
(44,469)
|
|
(46,303)
|
|
(46,601)
|
|
(91,070)
|
|
(91,113)
|
Investment income
(loss)
|
|
1,181
|
|
7,066
|
|
969
|
|
2,150
|
|
8,046
|
Gains (losses) on
sales and disposals of long-lived assets and other income
(expense), net
|
|
(1,338)
|
|
(16,504)
|
|
55,842
|
|
54,504
|
|
(17,980)
|
Income (loss) from
continuing operations before income taxes
|
|
$ 24,555
|
|
$ 77,719
|
|
$ 103,657
|
|
$ 128,212
|
|
$ 141,454
|
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
|
|
Six Months
Ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands,
except per share amounts)
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
EPS:
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax
|
|
$(41,890)
|
|
$65,729
|
|
$ 124,362
|
|
$82,472
|
|
$ 114,706
|
Less:
Net (income) loss attributable to noncontrolling
interest
|
|
44
|
|
(253)
|
|
89
|
|
133
|
|
(826)
|
Less:
Redemption of preferred shares
|
|
-
|
|
(1,688)
|
|
-
|
|
-
|
|
(1,688)
|
Less:
Earnings allocated to unvested shareholders
|
|
720
|
|
(974)
|
|
(2,031)
|
|
(1,311)
|
|
(1,707)
|
Adjusted income
(loss) from continuing operations - basic and diluted
|
|
$(41,126)
|
|
$62,814
|
|
$ 122,420
|
|
$81,294
|
|
$ 110,485
|
Income (loss) from
discontinued operations, net of tax
|
|
$ 5,025
|
|
$ (1,032)
|
|
$ (817)
|
|
$ 4,208
|
|
$ 483
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding-basic
|
|
286,085
|
|
297,984
|
|
285,361
|
|
285,723
|
|
297,097
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses) per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic from continuing
operations
|
|
$ (.14)
|
|
$ .21
|
|
$ .43
|
|
$ .28
|
|
$ .37
|
Basic from discontinued
operations
|
|
.01
|
|
-
|
|
-
|
|
.02
|
|
-
|
Total
Basic
|
|
$ (.13)
|
|
$ .21
|
|
$ .43
|
|
$ .30
|
|
$ .37
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED
EPS:
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributed to common shareholders
|
|
$(41,126)
|
|
$62,814
|
|
$ 122,420
|
|
$81,294
|
|
$ 110,485
|
Add: Effect of
reallocating undistributed earnings of unvested
shareholders
|
|
-
|
|
-
|
|
5
|
|
5
|
|
-
|
Adjusted income
(loss) from continuing operations attributed to common
shareholders
|
$(41,126)
|
|
$62,814
|
|
$ 122,425
|
|
$81,299
|
|
$ 110,485
|
Income (loss) from
discontinued operations
|
|
$ 5,025
|
|
$ (1,032)
|
|
$ (817)
|
|
$ 4,208
|
|
$ 483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding-basic
|
|
286,085
|
|
297,984
|
|
285,361
|
|
285,723
|
|
297,097
|
Add: dilutive effect
of potential common shares
|
|
-
|
|
2,997
|
|
812
|
|
978
|
|
2,919
|
Weighted-average number of diluted shares outstanding
|
|
286,085
|
|
300,981
|
|
286,173
|
|
286,701
|
|
300,016
|
|
|
|
|
|
|
|
|
|
|
|
Diluted from continuing
operations
|
|
$ (.14)
|
|
$ .21
|
|
$ .43
|
|
$ .28
|
|
$ .37
|
Diluted from discontinued
operations
|
|
.01
|
|
-
|
|
(.01)
|
|
.02
|
|
-
|
Total
Diluted
|
|
$ (.13)
|
|
$ .21
|
|
$ .42
|
|
$ .30
|
|
$ .37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 9,860,422, 5,782,273 and 6,621,688 shares during the
three months ended June 30, 2015 and 2014 and March 31, 2015,
respectively and 6,325,598 and 6,817,891 shares during the six
months ended June 30, 2015 and 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
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
|
|
|
|
|
|
SCHEDULE OF
NON-CASH CHARGES AND OTHER NON-OPERATIONAL ITEMS
(NON-GAAP)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
|
|
Per
Diluted
|
|
(In thousands,
except per share amounts)
|
|
2015
|
|
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
|
|
|
|
|
|
|
|
Total Adjustments,
net of tax
|
|
$(66,115)
|
|
(.23)
|
|
|
(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.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nabors-announces-second-quarter-results-300123562.html
SOURCE Nabors Industries Ltd.