NABORS INDUSTRIES LTD. HAMILTON, Bermuda, Oct. 21, 2014 /PRNewswire/ --
Third-Quarter Highlights Include:
-- EPS of $0.39, excluding net charges from strategic transactions
-- Operating revenues increased 12% sequentially
-- Secured 9 awards for additional rigs: 3 PACE®-X for U.S. and 6 for
International
-- Repurchased $250 million of common stock
-- Repurchased $22 million face value of 6.15% 2018 notes
Nabors Industries Ltd. (NYSE: NBR) today reported third-quarter 2014 operating revenues and earnings from unconsolidated affiliates of $1.81 billion, compared to $1.62 billion in the second quarter of 2014 and $1.55 billion in the same quarter of the prior year. Third-quarter revenue increased by 12% sequentially and 17% year-over-year. Drilling revenue grew 10% sequentially, Completion & Production revenue increased 14%, and Canrig delivered a 20% sequential revenue increase.
Net income from continuing operations was $57.4 million, or $0.19 per diluted share, compared to $65.7 million, or $0.21 per diluted share, in the second quarter. Net income from continuing operations, excluding net charges from strategic transactions, was $116.7 million, a sequential increase of 57%. Earnings per diluted share, excluding net charges, were $0.39, compared to $0.24 in the second quarter of this year. Net charges totaling $59 million after taxes, or $0.20 per diluted share, included $13 million in after-tax expenses attributable to the pending transaction with C&J Energy Services, a $63 million tax charge related to the restructuring of our completion and production entities in preparation for the transaction, and an offsetting post-tax gain of $17 million on the divestiture of our Alaska E&P business. The adjusted earnings of $0.39 per diluted share also include early termination proceeds ($0.08 per share) and other charges, comprised principally of tax adjustments ($0.06 per share), which net to $0.02 per share.
Tony Petrello, Nabors' Chairman, President & CEO, commented, "The third quarter presented solid operating results across all of our businesses except Production Services, where weather and ongoing spending constraints of a key customer led to lower sequential results. Our International operation realized the largest sequential improvement in operating income, followed by Completion Services, Canrig and the seasonal recovery in Canada. U.S. Drilling benefited from the receipt of a previously announced $30 million contract termination payment. Excluding this payment, a meaningful improvement in the U.S. lower 48 operation was offset by seasonally lower activity in Alaska. The International improvement reflects the initial contribution from new rig deployments and rate increases on contract renewals, despite idle time on a few higher-contribution rigs. The increase in Completion Services resulted from a record quarterly stage count and improving pricing, although higher proppant and logistics costs inhibited margin improvement. Canrig benefited from a high volume of shipments, particularly for third parties.
"While we are acutely aware of the potential ramifications of further downside in commodity prices, our nine new contract awards are indicative of today's strategic planning by several of our key customers. Internationally, these rigs are destined for long-term projects, while the PACE(®)-X rigs facilitate improved returns associated with the migration toward higher density pad drilling. Interest in our PACE(®)-X rigs remains high as these rigs consistently outperform, and our ramped up production capability provides us a more competitive delivery timeframe."
The Company's operating cash flow (adjusted EBITDA) increased to $490.0 million in the third quarter, compared to $439.3 million in the same quarter last year and $416.3 million in the second quarter of this year. Adjusted income from operating activities increased correspondingly to $203.4 million, compared to $133.5 million in the second quarter of 2014.
Drilling & Rig Services
Operating income in the Drilling & Rig Services business line improved sequentially to $218.3 million inclusive of a $30 million final payment from a 2013 contract termination. Excluding this amount, results still improved 26% compared to the second quarter. This unit also saw operating cash flow increase by $43.7 million exclusive of the termination payment.
In North America, U.S. Drilling operating results of $117.2 million reflect an increase of $27.2 million, with the sequential improvement reflecting the $30 million termination payment and continued improvement in the U.S. Lower 48 operations, partially offset by seasonally slower exploration activity in Alaska. The results reflect improvement in both utilization and pricing in the Lower 48 operation: an incremental four rigs working and an increase of $191 in daily rig margins. Pad-rig demand continues, particularly in the Permian and South Texas, as indicated by the award of three additional PACE(®)-X rigs. The total number of PACE(®)-X rig awards is now 43, with 28 deployed and the ramped-up build schedule committed into the second quarter. Utilization for AC rigs is currently 96%, while SCR rig utilization is 52% overall and 83% for the pad-capable units. This operation expects to deliver seven more PACE(®)-X rigs in the fourth quarter, increasing to twelve during the second quarter of 2015. Activity in Alaska and the Gulf of Mexico should improve modestly in the fourth quarter, with more meaningful increases throughout the first half of 2015.
International operating income increased by approximately 35% sequentially to $68.5 million, reflecting the return to operations of Jackup rig 660, coupled with the initial impact of several rig startups and rate increases associated with contract renewals. This operation received awards for six additional rigs: four to be deployed in Saudi Arabia and two in Kazakhstan. The two 3,000-horsepower rigs for Kazakhstan will be newly constructed, with one to be sold to a joint-venture partner. Nabors will operate both rigs through this joint venture and hold a 50% interest. One of the four Saudi Arabia rigs will be an upgraded, currently idle rig in Iraq. The other three rigs will be essentially new rigs incorporating certain components from underutilized deep SCR rigs from the U.S. fleet. These rigs should commence gas drilling during the second half of 2015, expanding our fleet to 47 rigs in the Kingdom. Shipyard work on two jackups was recently completed, and rig 655 returned to operations in early October. Rig 240 is currently available and is being actively marketed. Three platform rigs and seven land rigs are scheduled to commence during the fourth quarter, while a fourth platform rig is set to deploy in late first quarter. Canada income increased to $11.5 million following the seasonally low second quarter and should continue to improve through the characteristically high first quarter.
Rig Services' operating income more than doubled sequentially to $21.1 million, primarily attributable to increased shipments of third-party capital equipment by Canrig. Canrig's backlog remains at near-record levels even with an uptick in deliveries. Ryan Directional Services recently completed the acquisition of a development-stage rotary steerable technology. This complements the earlier acquisition of an MWD manufacturer, now in the commercialization phase of a new suite of more robust tools. These moves are consistent with Nabors' long-term strategy to integrate additional drilling services capability.
Completion & Production Services
The Completion & Production Services business line recorded operating income of $35.4 million, with operating cash flow of $89.8 million. This consists of a significant improvement in Completion Services partially offset by significant weather-induced interruptions in Production Services, principally attributable to the remnants of two Pacific hurricanes crossing through Texas during the quarter.
In Completion Services, operating income improved significantly to $14.2 million on a record stage count and higher pricing. Margins increased during the quarter, but the extent was limited by higher logistics costs. The record pace of activity continues and additional price increases are being implemented; however, higher costs persist and interruptions are expected with the holiday season and the onset of winter in the northern regions. The Company's second dual-fuel frac spread is expected to commence operations in the fourth quarter, bringing its working horsepower to 750,000, which represents effective full utilization. This operation currently has 17 of its 19 active crews working on a 24-hour basis.
Production Services saw an $8.7 million sequential decrease in operating income, primarily attributable to the aforementioned storms and continuing budget constraints of a key customer. This operation expects the fourth quarter to be essentially flat, as the absence of the third-quarter weather effects offsets the customary seasonality arising from shorter daylight hours and the holidays. A recent increase in inquiries for 24-hour heavy workover rigs appears to indicate that the long-awaited inflection in rework associated with long horizontal completions is commencing. The rapidly expanding population of these long-length horizontal wells supports a strengthening market despite the near-term pockets of weakness.
Financial Discussion
Third-quarter financial results reflected a healthy progression in operating margins, which reached 11.2% for the quarter, a 297 basis point improvement over the second quarter. The $30 million early termination payment accounted for half of the total increase in operating margins. Most of the Company's segments continued to take advantage of the favorable market conditions to materially improve margins.
The effective tax rate during the quarter was 65%, reflecting the above-mentioned $63.3 million tax charge for the restructuring of entities in preparation for the C&J transaction, of which $58 million was non-cash. The tax provision for the quarter also included a $6.5 million return to provision charge resulting from the finalization of tax returns in various jurisdictions. The underlying effective tax rate excluding these charges has increased somewhat to approximately 20%, as our earnings mix has shifted towards higher tax regimes.
Capital expenditures for the third quarter were $488 million. Capital expenditures for the full year should be in the range of $1.9 billion. During the quarter, in addition to the share buyback, the Company retired $22 million face value of its 6.15% 2018 senior notes in line with our objective to reduce total debt.
Summary and Outlook
Petrello concluded, "I am very pleased with the sequential progression of our results in both our drilling and completions operations. Despite the third quarter performance of our production services operation, I continue to believe we will see improvement in this business as 2015 progresses, assuming supportive oil prices. The recent new contract awards and the volume of ongoing discussions support our positive bias and appear to indicate a resiliency among most of our customers regarding temporary swings in oil prices. Nonetheless, we are acutely aware of the potential for further weakness in crude oil prices and the associated impact on our customers' spending plans, particularly in North and Latin America. Our business is much better positioned to weather and potentially capitalize upon any significant downturn in industry activity. This is a result of the actions we have taken over the last three years to improve our financial flexibility, streamline our operations and improve our cost structure. Additionally, the longer-term focus of our international customers, the large proportion of our U.S. fleet now comprised of higher capability AC rigs, and the enhanced economics associated with continued migration to higher density pad drilling should enable us to maintain a higher level of utilization for our fleet relative to the industry. Meanwhile, we will continue to execute our numerous initiatives to improve our service quality and cost structure, and to deploy our backlog of new rigs on schedule and within budget."
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)
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
------------- -------- -------------
(In thousands, except per
share amounts) 2014 2013 2014 2014 2013
---- ---- ---- ---- ----
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) 106,515 (44,684) 10,756 131,279 (28,798)
Subsidiary preferred stock
dividend - 750 1,234 1,984 2,250
--- --- ----- ----- -----
Income (loss) from continuing
operations, net of tax 57,426 (90,510) 65,729 172,132 29,825
Income (loss) from
discontinued operations, net
of tax 4,005 (14,430) (1,032) 4,488 (34,292)
----- ------- ------ ----- -------
Net income (loss) 61,431 (104,940) 64,697 176,620 (4,467)
Less: Net (income) loss
attributable to
noncontrolling interest (387) (441) (253) (1,213) (6,154)
Net income (loss) attributable
to Nabors $61,044 $(105,381) $64,444 $175,407 $(10,621)
------- --------- ------- -------- --------
Earnings (losses) per share:
(1)
Basic from continuing
operations $.19 $(.30) $.21 $.57 $.08
Basic from discontinued
operations .02 (.05) - .01 (.11)
--- ---- --- --- ----
Basic $.21 $(.35) $.21 $.58 $(.03)
Diluted from continuing
operations $.19 $(.30) $.21 $.56 $.08
Diluted from discontinued
operations .01 (.05) - .02 (.11)
--- ---- --- --- ----
Diluted $.20 $(.35) $.21 $.58 $(.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
---- ---- ----
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 540,828 642,620 603,890
------- ------- -------
Total current assets 2,788,414 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 $12,615,283 $12,435,999 $12,159,811
=========== =========== ===========
LIABILITIES AND EQUITY
Current liabilities:
Current debt $196 $207 $10,185
Other current liabilities 1,416,510 1,319,379 1,301,239
--------- --------- ---------
Total current liabilities 1,416,706 1,319,586 1,311,424
Long-term debt 4,255,136 3,956,290 3,904,117
Other long-term liabilities 1,115,211 1,078,201 893,905
--------- --------- -------
Total liabilities 6,787,053 6,354,077 6,109,446
Subsidiary preferred stock
(1) - - 69,188
Equity:
Shareholders' equity 5,817,869 6,071,426 5,969,086
Noncontrolling interest 10,361 10,496 12,091
------ ------ ------
Total equity 5,828,230 6,081,922 5,981,177
Total liabilities and equity $12,615,283 $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
---- ---- ---- ---- ----
BASIC EPS:
Income (loss) from continuing
operations, net of tax $57,426 $(90,510) $65,729 $172,132 $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 (889) 1,411 (974) (2,596) 671
---- ----- ---- ------ ---
Adjusted income (loss) from
continuing operations -basic and
diluted $56,150 $(89,540) $62,814 $166,635 $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 $.19 $(.30) $.21 $.57 $.08
Basic from discontinued operations .02 (.05) - .01 (.11)
Total Basic $.21 $(.35) $.21 $.58 $(.03)
---- ----- ---- ---- -----
DILUTED EPS:
Income (loss) from continuing
operations attributed to common
shareholders $56,150 $(89,540) $62,814 $166,635 $24,342
Add: Effect of reallocating
undistributed earnings of
unvested shareholders 5 - - 19 -
--- --- --- --- ---
Adjusted income (loss) from
continuing operations attributed
to common shareholders $56,155 $(89,540) $62,814 $166,654 $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 $.19 $(.30) $.21 $.56 $.08
Diluted from discontinued
operations .01 (.05) - .02 (.11)
Total Diluted $.20 $(.35) $.21 $.58 $(.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 Non-Operational As adjusted
(In thousands, except per
share amounts) Actuals Items (Non-GAAP)
------- ----- ---------
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
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
---- ----- ---- -----
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) 63,265 .22 - -
Total Adjustments, net of
tax $59,304 $.20 $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.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/nabors-announces-third-quarter-2014-results-622341508.html
SOURCE Nabors Industries Ltd.
