NABORS INDUSTRIES LTD. HAMILTON, Bermuda, Nov. 10, 2014 /PRNewswire/ -- Nabors Industries Ltd. (NYSE:NBR) today reported revised third-quarter 2014 diluted earnings per share from continuing operations of $0.34, versus the $0.19 previously announced in our earnings press release for the third quarter of 2014 that was issued on October 21, 2014. The revision is due to a change in the non-cash income tax provision for the third quarter. Upon review, it was determined that the previously reported $63.3 million non-cash tax charge related to the restructuring of the Company's completion and production entities in preparation for the pending transaction with C&J Energy Services should be reduced by approximately $45.0 million to $18.3 million.
As a result of the revision, the total income tax provision for the third quarter of 2014 is $61.5 million, compared to the $106.5 million previously announced, and net income for the period is $106.4 million, compared to the $61.4 million previously announced.
Attached to this press release are revised financial information tables that give effect to these adjustments. These tables replace in their entirety the financial information accompanying our earnings press release for the third quarter of 2014, dated October 21, 2014.
About Nabors
The Nabors companies own and operate approximately 501 land drilling rigs throughout the world and approximately 542 land workover and well servicing rigs in North America. Nabors' actively marketed offshore fleet consists of 37 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.
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)-REVISED
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, 2014 September 30, 2014
------------------ ------------------
(In thousands, except per share
amounts) As reported Adjustments Revised As reported Adjustments Revised
----------- ----------- ------- ----------- ----------- -------
Revenues and other income:
Operating revenues $1,813,762 $ - $1,813,762 $5,020,361 $ - $5,020,361
Earnings (losses) from
unconsolidated affiliates (2,851) - (2,851) (5,872) - (5,872)
Investment income (loss) 2,189 - 2,189 10,235 - 10,235
Total revenues and other income 1,813,100 - 1,813,100 5,024,724 - 5,024,724
--------- --- --------- --------- --- ---------
Costs and other deductions:
Direct costs 1,181,986 - 1,181,986 3,310,220 - 3,310,220
General and administrative
expenses 138,967 - 138,967 406,863 - 406,863
Depreciation and amortization 286,581 - 286,581 851,528 - 851,528
Interest expense 43,138 - 43,138 134,251 - 134,251
Losses (gains) on sales and
disposals of long-lived
assets and other expense
(income), net
(1,513) - (1,513) 16,467 - 16,467
Impairments and other charges - - - - - -
Total costs and other
deductions 1,649,159 - 1,649,159 4,719,329 - 4,719,329
--------- --- --------- --------- --- ---------
Income (loss) from continuing
operations before income taxes 163,941 - 163,941 305,395 - 305,395
------- --- ------- ------- --- -------
Income tax expense (benefit) 106,515 (45,004) 61,511 131,279 (45,004) 86,275
Subsidiary preferred stock
dividend - - - 1,984 - 1,984
--- --- --- ----- --- -----
Income (loss) from continuing
operations, net of tax 57,426 45,004 102,430 172,132 45,004 217,136
Income (loss) from discontinued
operations, net of tax 4,005 - 4,005 4,488 - 4,488
----- --- ----- ----- --- -----
Net income (loss) 61,431 45,004 106,435 176,620 45,004 221,624
Less: Net (income) loss
attributable to noncontrolling
interest (387) - (387) (1,213) - (1,213)
Net income (loss) attributable
to Nabors $61,044 $45,004 $106,048 $175,407 $45,004 $220,411
------- ------- -------- -------- ------- --------
Earnings (losses) per share:
(1)
Basic from continuing
operations $.19 $.15 $.34 $.57 $.15 $.72
Basic from discontinued
operations .02 - .02 .01 .01 .02
--- --- --- --- --- ---
Basic $.21 $.15 $.36 $.58 $.16 $.74
Diluted from continuing
operations $.19 $.15 $.34 $.56 $.15 $.71
Diluted from discontinued
operations .01 - .01 .02 - .02
--- --- --- --- --- ---
Diluted $.20 $.15 $.35 $.58 $.15 $.73
Weighted-average number of
common shares outstanding: (1)
Basic 292,621 - 292,621 292,613 - 292,613
------- --- ------- ------- --- -------
Diluted 295,005 - 295,005 295,353 - 295,353
------- --- ------- ------- --- -------
(1) See "Computation of Earnings
(Losses) Per Share-Revised"
included herein as a separate
schedule.
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS-REVISED
(Unaudited)
----------
September 30, 2014
------------------
(In thousands) As reported Adjustments Revised
----------- ----------- -------
ASSETS
Current assets:
Cash and short-term investments $464,818 $ - $464,818
Accounts receivable, net 1,624,441 - 1,624,441
Assets held for sale 158,327 - 158,327
Other current assets 540,828 4,057 544,885
------- ----- -------
Total current assets 2,788,414 4,057 2,792,471
Long-term investments and
other receivables 2,568 - 2,568
Property, plant and equipment,
net 9,016,508 - 9,016,508
Goodwill 512,203 - 512,203
Investment in unconsolidated
affiliates 60,451 - 60,451
Other long-term assets 235,139 - 235,139
Total assets $12,615,283 $4,057 $12,619,340
=========== ====== ===========
LIABILITIES AND EQUITY
Current liabilities:
Current debt $196 $ - $196
Other current liabilities 1,416,510 (1,125) 1,415,385
--------- ------ ---------
Total current liabilities 1,416,706 (1,125) 1,415,581
Long-term debt 4,255,136 - 4,255,136
Other long-term liabilities 1,115,211 (39,822) 1,075,389
--------- ------- ---------
Total liabilities 6,787,053 (40,947) 6,746,106
Equity:
Shareholders' equity 5,817,869 45,004 5,862,873
Noncontrolling interest 10,361 - 10,361
------ --- ------
Total equity 5,828,230 45,004 5,873,234
Total liabilities and equity $12,615,283 $4,057 $12,619,340
=========== ====== ===========
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
COMPUTATION OF EARNINGS (LOSSES) PER SHARE-REVISED
(Unaudited)
A reconciliation of the numerators and denominators of the basic and diluted earnings (losses) per share computations is as follows:
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, 2014 September 30, 2014
------------------ ------------------
(In thousands, except per share
amounts) As reported Adjustments Revised As reported Adjustments Revised
----------- ----------- ------- ----------- ----------- -------
BASIC EPS:
Income (loss) from continuing
operations, net of tax $57,426 $45,004 $102,430 $172,132 $45,004 $217,136
Less: Net (income) loss
attributable to noncontrolling
interest (387) - (387) (1,213) - (1,213)
Less: Redemption of preferred
shares - - - (1,688) - (1,688)
Less: Earnings allocated to
unvested shareholders (889) (690) (1,579) (2,596) (690) (3,286)
---- ---- ------ ------ ---- ------
Adjusted income (loss) from
continuing operations -basic and
diluted $56,150 $44,314 $100,464 $166,635 $44,314 $210,949
Income (loss) from discontinued
operations, net of tax $4,005 $ - $4,005 $4,488 $ - $4,488
Weighted-average number of shares
outstanding-basic 292,621 - 292,621 292,613 - 292,613
Earnings (losses) per share:
Basic from continuing operations $.19 $.15 $.34 $.57 $.15 $.72
Basic from discontinued operations .02 - .02 .01 .01 .02
Total Basic $.21 $.15 $.36 $.58 $.16 $.74
---- ---- ---- ---- ---- ----
DILUTED EPS:
Income (loss) from continuing
operations attributed to common
shareholders $56,150 $44,314 $100,464 $166,635 $44,314 $210,949
Add: Effect of reallocating
undistributed earnings of unvested
shareholders 5 6 11 19 6 25
--- --- --- --- --- ---
Adjusted income (loss) from
continuing operations attributed
to common shareholders $56,155 $44,320 $100,475 $166,654 $44,320 $210,974
Income (loss) from discontinued
operations $4,005 $ - $4,005 $4,488 $ - $4,488
Weighted-average number of shares
outstanding-basic 292,621 - 292,621 292,613 - 292,613
Add: dilutive effect of potential
common shares 2,384 - 2,384 2,740 - 2,740
--- ---
Weighted-average number of diluted
shares outstanding 295,005 - 295,005 295,353 - 295,353
------- --- ------- ------- --- -------
Diluted from continuing operations $.19 $.15 $.34 $.56 $.15 $.71
Diluted from discontinued
operations .01 - .01 .02 - .02
Total Diluted $.20 $.15 $.35 $.58 $.15 $.73
---- ---- ---- ---- ---- ----
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) ITEMS EXCLUDING CERTAIN NON-CASH CHARGES
AND OTHER NON-OPERATIONAL ITEMS (NON-GAAP)-REVISED
(Unaudited)
Charges and Non-Operational As adjusted
(In thousands, except
per share amounts) Actuals Items (Non-GAAP)
------- ----- ---------
As reported
-----------
Three Months Ended September 30, 2014
-------------------------------------
Income (loss) from
continuing operations,
net of tax $57,426 $(59,304) $116,730
Diluted earnings
(losses) per share
from continuing
operations $0.19 $(0.20) $0.39
Charges and Non-Operational As adjusted
(In thousands, except
per share amounts) Actuals Items (Non-GAAP)
------- ----- ---------
Adjustments
-----------
Three Months Ended September 30, 2014
-------------------------------------
Income (loss) from
continuing operations,
net of tax $45,004 $45,004 $ -
Diluted earnings
(losses) per share
from continuing
operations $0.15 $0.15 $ -
Charges and Non-Operational As adjusted
(In thousands, except
per share amounts) Actuals Items (Non-GAAP)
------- ----- ---------
Revised
-------
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)-REVISED
(Unaudited)
Three Months Ended September 30, 2014
-------------------------------------
As Reported Adjustments Revised
----------- ----------- -------
Per Diluted Per Diluted Per Diluted
(In thousands, except per
share amounts) 2014 Share 2014 Share 2014 Share
---- ----- ---- ----- ---- -----
Transaction expenses (1) $13,062 $.04 $ - $ - $13,062 .04
Sale of Alaska E&P business
(2) (17,023) (.06) - - (17,023) (.06)
Other non-operational
items (3) - - - - - -
Restructuring tax charge
(4) 63,265 .22 (45,004) (.15) 18,261 .07
Total Adjustments, net of
tax $59,304 $.20 $(45,004) (.15) $14,300 .05
------- ---- -------- ---- ------- ---
Weighted-average number of
shares outstanding -
diluted 295,005 295,005 295,005
(1) Represents expenses attributable to
pending transaction with C&J Services,
net of tax of $3.9 million.
(2) Represents the gain on the
divestiture of our Alaska E&P
business, net of tax of $5.1 million.
(3) Represents losses on the sale of
non-core assets or in unconsolidated
businesses in the process of being
divested, net of tax of $1.3 million.
(4) Represents a tax charge associated
with the restructuring of our
completion and production services
entities in preparation for the
transaction with C&J Services.
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
------------- -------- -------------
(In thousands, except per share
amounts) 2014 2013 2014 2014 2013
---- ---- ---- ---- ----
Revised
Revised
Revenues and other income:
Operating revenues $1,813,762 $1,551,593 $1,616,981 $5,020,361 $4,545,037
Earnings (losses) from
unconsolidated affiliates (2,851) (2,628) (576) (5,872) 1,627
Investment income (loss) 2,189 1,229 7,066 10,235 95,471
Total revenues and other income 1,813,100 1,550,194 1,623,471 5,024,724 4,642,135
--------- --------- --------- --------- ---------
Costs and other deductions:
Direct costs 1,181,986 981,685 1,066,495 3,310,220 2,948,987
General and administrative
expenses 138,967 127,943 133,630 406,863 390,023
Depreciation and amortization 286,581 273,444 282,820 851,528 809,019
Interest expense 43,138 56,059 46,303 134,251 176,343
Losses (gains) on sales and
disposals of long-lived
assets and other expense
(income), net
(1,513) 3,266 16,504 16,467 27,245
Impairments and other charges - 242,241 - - 287,241
Total costs and other
deductions 1,649,159 1,684,638 1,545,752 4,719,329 4,638,858
--------- --------- --------- --------- ---------
Income (loss) from continuing
operations before income taxes 163,941 (134,444) 77,719 305,395 3,277
------- -------- ------ ------- -----
Income tax expense (benefit) 61,511 (44,684) 10,756 86,275 (28,798)
Subsidiary preferred stock
dividend - 750 1,234 1,984 2,250
--- --- ----- ----- -----
Income (loss) from continuing
operations, net of tax 102,430 (90,510) 65,729 217,136 29,825
Income (loss) from discontinued
operations, net of tax 4,005 (14,430) (1,032) 4,488 (34,292)
----- ------- ------ ----- -------
Net income (loss) 106,435 (104,940) 64,697 221,624 (4,467)
Less: Net (income) loss
attributable to noncontrolling
interest (387) (441) (253) (1,213) (6,154)
Net income (loss) attributable
to Nabors $106,048 $(105,381) $64,444 $220,411 $(10,621)
-------- --------- ------- -------- --------
Earnings (losses) per share:
(1)
Basic from continuing
operations $.34 $(.30) $.21 $.72 $.08
Basic from discontinued
operations .02 (.05) - .02 (.11)
--- ---- --- --- ----
Basic $.36 $(.35) $.21 $.74 $(.03)
Diluted from continuing
operations $.34 $(.30) $.21 $.71 $.08
Diluted from discontinued
operations .01 (.05) - .02 (.11)
--- ---- --- --- ----
Diluted $.35 $(.35) $.21 $.73 $(.03)
Weighted-average number of
common shares outstanding: (1)
Basic 292,621 295,076 297,984 292,613 293,837
------- ------- ------- ------- -------
Diluted 295,005 295,076 300,981 295,353 296,208
------- ------- ------- ------- -------
Adjusted EBITDA (2) $489,958 $439,337 $416,280 $1,297,406 $1,207,654
======== ======== ======== ========== ==========
Adjusted income (loss) derived
from operating activities (3) $203,377 $165,893 $133,460 $445,878 $398,635
======== ======== ======== ======== ========
(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)
----------
September 30, June 30, December 31,
(In thousands, except ratios) 2014 2014 2013
---- ---- ----
Revised
ASSETS
Current assets:
Cash and short-term
investments $464,818 $486,344 $507,133
Accounts receivable, net 1,624,441 1,448,511 1,399,543
Assets held for sale 158,327 233,163 243,264
Other current assets 544,885 642,620 603,890
------- ------- -------
Total current assets 2,792,471 2,810,638 2,753,830
Long-term investments and
other receivables 2,568 2,724 3,236
Property, plant and equipment,
net 9,016,508 8,832,966 8,597,813
Goodwill 512,203 512,897 512,964
Investment in unconsolidated
affiliates 60,451 60,509 64,260
Other long-term assets 235,139 216,265 227,708
Total assets $12,619,340 $12,435,999 $12,159,811
=========== =========== ===========
LIABILITIES AND EQUITY
Current liabilities:
Current debt $196 $207 $10,185
Other current liabilities 1,415,385 1,319,379 1,301,239
--------- --------- ---------
Total current liabilities 1,415,581 1,319,586 1,311,424
Long-term debt 4,255,136 3,956,290 3,904,117
Other long-term liabilities 1,075,389 1,078,201 893,905
--------- --------- -------
Total liabilities 6,746,106 6,354,077 6,109,446
Subsidiary preferred stock (1) - - 69,188
Equity:
Shareholders' equity 5,862,873 6,071,426 5,969,086
Noncontrolling interest 10,361 10,496 12,091
------ ------ ------
Total equity 5,873,234 6,081,922 5,981,177
Total liabilities and equity $12,619,340 $12,435,999 $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 Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
------------- -------- -------------
(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. $571,736 $491,857 $532,894 $1,615,106 $1,443,759
Canada 80,491 81,397 54,861 246,973 273,053
International 424,698 383,712 391,251 1,191,018 1,056,649
Rig Services (1) 191,437 131,151 161,740 496,903 383,502
------- ------- ------- ------- -------
Subtotal Drilling and Rig
Services (2) 1,268,362 1,088,117 1,140,746 3,550,000 3,156,963
Completion and Production
Services:
Completion Services 352,027 266,520 276,639 856,565 782,674
Production Services 259,863 246,806 258,378 793,641 742,979
------- ------- ------- ------- -------
Subtotal Completion and
Production Services (3) 611,890 513,326 535,017 1,650,206 1,525,653
Other reconciling items (4) (69,341) (52,478) (59,358) (185,717) (135,952)
------- ------- ------- -------- --------
Total operating revenues and
earnings (losses) from
unconsolidated affiliates $1,810,911 $1,548,965 $1,616,405 $5,014,489 $4,546,664
========== ========== ========== ========== ==========
Adjusted EBITDA: (5)
Drilling and Rig Services:
U.S. $234,980 $204,622 $206,061 $628,678 $568,280
Canada 25,804 26,232 14,216 80,139 89,830
International 159,588 142,767 139,336 436,915 366,772
Rig Services (1) 30,153 10,567 17,176 63,820 22,174
------ ------ ------ ------ ------
Subtotal Drilling and Rig
Services (2) 450,525 384,188 376,789 1,209,552 1,047,056
Completion and Production
Services:
Completion Services 40,507 39,910 27,614 61,467 120,113
Production Services 49,312 50,904 58,267 167,635 150,058
------ ------ ------ ------- -------
Subtotal Completion and
Production Services (3) 89,819 90,814 85,881 229,102 270,171
Other reconciling items (6) (50,386) (35,665) (46,390) (141,248) (109,573)
------- ------- ------- -------- --------
Total adjusted EBITDA $489,958 $439,337 $416,280 $1,297,406 $1,207,654
======== ======== ======== ========== ==========
Adjusted income (loss) derived
from operating activities: (7)
Drilling and Rig Services:
U.S. $117,212 $92,710 $89,977 $279,683 $240,118
Canada 11,517 12,244 225 37,902 46,657
International 68,452 54,271 50,583 167,154 108,221
Rig Services (1) 21,136 2,357 9,059 38,923 (1,739)
------ ----- ----- ------ ------
Subtotal Drilling and Rig
Services (2) 218,317 161,582 149,844 523,662 393,257
Completion and Production
Services:
Completion Services 14,211 13,024 (581) (20,005) 37,650
Production Services 21,182 25,909 29,889 81,662 75,394
------ ------ ------ ------ ------
Subtotal Completion and
Production Services (3) 35,393 38,933 29,308 61,657 113,044
Other reconciling items (6) (50,333) (34,622) (45,692) (139,441) (107,666)
------- ------- ------- -------- --------
Total adjusted income (loss)
derived from operating
activities $203,377 $165,893 $133,460 $445,878 $398,635
======== ======== ======== ======== ========
Rig activity:
Rig years: (8)
U.S. 216.0 195.5 215.3 212.7 193.7
Canada 34.3 30.0 21.6 33.2 29.1
International (9) 130.1 124.2 127.3 129.1 124.0
Total rig years 380.4 349.7 364.2 375.0 346.8
===== ===== ===== ===== =====
Rig hours: (10)
U.S. Production Services 205,604 223,504 210,750 626,336 660,483
Canada Production Services 36,509 39,463 28,671 106,720 116,292
Total rig hours 242,113 262,967 239,421 733,056 776,775
======= ======= ======= ======= =======
(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 ($2.9)
million, $(2.9) million and ($.8)
million for the three months ended
September 30, 2014 and 2013 and June
30, 2014, respectively and ($6.1)
million and $1.0 million for the nine
months ended September 30, 2014 and
2013, respectively.
(3) Includes earnings (losses), net from
unconsolidated affiliates, accounted
for using the equity method, of $0
million, $.3 million and $.2 million
for the three months ended September
30, 2014 and 2013 and June 30, 2014,
respectively and $.2 million and $.6
million for the nine months ended
September 30, 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
September 30, 2014 and 2013 and June
30, 2014 and 2.5 years for each of the
nine months ended September 30, 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 Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
------------- -------- -------------
(In thousands) 2014 2013 2014 2014 2013
---- ---- ---- ---- ----
Adjusted EBITDA $489,958 $439,337 $416,280 $1,297,406 $1,207,654
Less: Depreciation and
amortization 286,581 273,444 282,820 851,528 809,019
Adjusted income (loss)
derived from operating
activities 203,377 165,893 133,460 445,878 398,635
------- ------- ------- ------- -------
Interest expense (43,138) (56,059) (46,303) (134,251) (176,343)
Investment income (loss) 2,189 1,229 7,066 10,235 95,471
Gains (losses) on sales
and disposals of long-
lived assets and other
income (expense), net
1,513 (3,266) (16,504) (16,467) (27,245)
Impairments and other
charges - (242,241) - - (287,241)
Income (loss) from
continuing operations
before income taxes $163,941 $(134,444) $77,719 $305,395 $3,277
======== ========= ======= ======== ======
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 Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
------------- -------- -------------
(In thousands, except per share
amounts) 2014 2013 2014 2014 2013
---- ---- ---- ---- ----
Revised Revised
BASIC EPS:
Income (loss) from continuing
operations, net of tax $102,430 $(90,510) $65,729 $217,136 $29,825
Less: Net (income) loss
attributable to noncontrolling
interest (387) (441) (253) (1,213) (6,154)
Less: Redemption of preferred
shares - - (1,688) (1,688) -
Less: Earnings allocated to
unvested shareholders (1,579) 1,411 (974) (3,286) 671
------ ----- ---- ------ ---
Adjusted income (loss) from
continuing operations -basic and
diluted $100,464 $(89,540) $62,814 $210,949 $24,342
Income (loss) from discontinued
operations, net of tax $4,005 $(14,430) $(1,032) $4,488 $(34,292)
Weighted-average number of shares
outstanding-basic 292,621 295,076 297,984 292,613 293,837
Earnings (losses) per share:
Basic from continuing operations $.34 $(.30) $.21 $.72 $.08
Basic from discontinued operations .02 (.05) - .02 (.11)
Total Basic $.36 $(.35) $.21 $.74 $(.03)
---- ----- ---- ---- -----
DILUTED EPS:
Income (loss) from continuing
operations attributed to common
shareholders $100,464 $(89,540) $62,814 $210,949 $24,342
Add: Effect of reallocating
undistributed earnings of
unvested shareholders 11 - - 25 -
--- --- --- --- ---
Adjusted income (loss) from
continuing operations attributed
to common shareholders $100,475 $(89,540) $62,814 $210,974 $24,342
Income (loss) from discontinued
operations $4,005 $(14,430) $(1,032) $4,488 $(34,292)
Weighted-average number of shares
outstanding-basic 292,621 295,076 297,984 292,613 293,837
Add: dilutive effect of potential
common shares 2,384 - 2,997 2,740 2,371
Weighted-average number of
diluted shares outstanding 295,005 295,076 300,981 295,353 296,208
------- ------- ------- ------- -------
Diluted from continuing operations $.34 $(.30) $.21 $.71 $.08
Diluted from discontinued
operations .01 (.05) - .02 (.11)
Total Diluted $.35 $(.35) $.21 $.73 $(.03)
---- ----- ---- ---- -----
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 5,389,090 and
18,786,837 shares during the
three months ended September
30, 2014 and 2013,
respectively; 5,782,273 shares
during the three months ended
June 30, 2014; and 6,341,624
and 11,887,169 shares during
the nine months ended September
30, 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)
Charges and As adjusted
Non-Operational
(In thousands, except per
share amounts) Actuals Items (Non-GAAP)
------- ----- ---------
Three Months Ended September 30, 2014
-------------------------------------
Revised
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
Three Months Ended June 30, 2014
--------------------------------
Income (loss) from
continuing operations,
net of tax $65,729 $(8,284) $74,013
Diluted earnings (losses)
per share from
continuing operations $0.21 $(0.03) $0.24
NABORS INDUSTRIES LTD. AND SUBSIDIARIES
SCHEDULE OF NON-CASH CHARGES AND OTHER NON-OPERATIONAL ITEMS (NON-GAAP)
(Unaudited)
Three Months Ended
------------------
September 30, June 30,
------------- --------
Per Diluted Per Diluted
(In thousands, except per
share amounts) 2014 Share 2014 Share
---- ----- ---- -----
Revised
Transaction expenses (1) $13,062 $.04 $ - $ -
Sale of Alaska E&P business
(2) (17,023) (.06) - -
Other non-operational items
(3) - - 8,284 .03
Restructuring tax charge (4) 18,261 .07 - -
Total Adjustments, net of tax $14,300 $.05 $8,284 .03
------- ---- ------ ---
Weighted-average number of
shares outstanding -
diluted 295,005 300,981
(1) Represents expenses attributable to
pending transaction with C&J Services,
net of tax of $3.9 million.
(2) Represents the gain on the
divestiture of our Alaska E&P
business, net of tax of $5.1 million.
(3) Represents losses on the sale of
non-core assets or in unconsolidated
businesses in the process of being
divested, net of tax of $1.3 million.
(4) Represents a tax charge associated
with the restructuring of our
completion and production services
entities in preparation for the
transaction with C&J Services.
SOURCE Nabors Industries Ltd.
