HAMILTON, Bermuda, Oct. 25,
2023 /PRNewswire/ -- Nabors Industries
Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported
third quarter 2023 operating revenues of $734 million, compared to operating revenues of
$767 million in the second quarter.
The net loss attributable to Nabors shareholders for the quarter
was $49 million, compared to net
income of $5 million in the second
quarter. This equates to a loss of $6.26 per diluted share, compared to a loss per
diluted share of $0.31 in the second
quarter. The third quarter results included a charge, related to
mark-to-market treatment of Nabors warrants, of $8 million, or $0.86 per diluted share, compared to a gain of
$18 million, or $1.95 per diluted share, in the second quarter.
Third quarter adjusted EBITDA was $210
million, compared to $235
million in the previous quarter.
Anthony G. Petrello, Nabors
Chairman, CEO and President, commented, "Drilling activity across
our markets generally met our expectations. As we had anticipated
in the Lower 48, rig count decreased in the third quarter but it
appears to have bottomed, while leading-edge pricing also seems to
have stabilized. The reduced drilling activity in the U.S. did
impact our Nabors Drilling Solutions and Rig Technologies results
somewhat more than we expected. In line with our forecasts,
international markets have continued to expand with higher
pricing.
"During the quarter we experienced challenges with our newbuild
rigs and some of their critical components in Saudi Arabia, which resulted in deployment
delays and significant downtime. We are currently addressing the
quality assurance issues on these assets delivered by our
third-party supplier. We expect our supplier's performance to
improve rapidly as its local manufacturing experience
increases.
"On the positive side, margins in our Lower 48 operation
remained at higher levels than in any prior upcycle. During the
third quarter we saw the early signs of the expected market upturn.
In preparation, we have 14 warm stacked rigs ready to return to
work immediately at minimum cost, as soon as drilling activity
turns around.
"In our International segment, multiple rigs commenced
operations, contributing to an increase in sequential revenue. We
are encouraged by the prospects for a significant number of
additional rigs in our international markets through 2024 and
beyond.
"Broad demand for our technology portfolio in Nabors Drilling
Solutions drove meaningful increases in U.S. third-party and
international revenue.
"In Rig Technologies, our Energy Transition initiatives
continued to gain momentum as we expanded our PowerTAP deployments,
and our customers increased their demand for our innovative
solutions."
Segment Results
The U.S. Drilling segment reported $117.4
million in adjusted EBITDA for the third quarter of 2023.
Nabors' average Lower 48 rig count totaled 74. Daily adjusted gross
margin in the Lower 48 market averaged $15,855.
International Drilling adjusted EBITDA totaled $96.2 million. Improved results across multiple
markets were offset by start-up expenses in Saudi Arabia and lower rig count in
Colombia and Kuwait. International rig count averaged 77,
in line with the previous quarter. Daily adjusted gross margin for
the third quarter averaged $15,778,
down approximately 3% from the prior quarter.
Drilling Solutions adjusted EBITDA declined sequentially by
approximately $2.3 million, to
$30.4 million. Growth of 8% in both
U.S. third-party revenue and international operations was more than
offset by decreased Lower 48 activity on the reductions in Nabors
rig count.
In Rig Technologies, adjusted EBITDA totaled $7.2 million, compared to $6.4 million in the second quarter. Increases in
aftermarket margins and growth from the Energy Transition products
accounted for the sequential improvement in adjusted EBITDA.
Adjusted Free Cash Flow
Adjusted free cash flow was negative $5
million in the third quarter. Capital expenditures totaled
$157 million, which included
$52 million for the newbuilds in
Saudi Arabia. This compares to
$152 million in the second quarter,
including $66 million supporting the
newbuilds in Saudi Arabia.
At the end of the third quarter, net debt was $2.1 billion.
William Restrepo, Nabors CFO,
stated, "The results delivered by our operating rigs were
encouraging. Our rig count in the Lower 48 held up well in the
third quarter despite total market rig count landing a bit below
expectations. In addition, our revenue per day and daily gross
margin remained near the record high levels set the prior quarter.
We remain well positioned to take advantage of any recovery in U.S.
drilling activity. Internationally we continued to deploy rigs at
attractive pricing, offsetting the contract expirations in
Colombia and Kuwait. In the fourth quarter we expect rig
count increases in the U.S. as well as in international markets, as
compared to the current levels. And we expect Nabors Drilling
Solutions to resume its growth trajectory.
"During the quarter, on top of the $5
million EBITDA shortfall on our new builds in Saudi Arabia, we faced several unexpected
items that negatively affected our adjusted free cash flow. Most of
these were one-offs or timing shifts across quarters. Capital
expenditures were the largest of these items as they exceeded our
forecast by $33 million. This
increase was driven by higher capital spending in Saudi Arabia and by the $9.5 million purchase of our operating base in
Vaca Muerta, Argentina. We had
been attempting without success to lock in this critical facility
over the last couple of years and had the opportunity to do so
during the third quarter. We expect capital spending to fall
materially in the fourth quarter as these items should not repeat.
In addition, our accounts receivable and other working capital
items were approximately $40 million
higher than we had forecast at the end of last quarter. We expect
this impact to reverse in the fourth quarter.
"Mainly as a result of higher capital expenditures, an EBITDA
shortfall in Saudi Arabia of
$11 million in the second half, and
lower NDS and Rig Technologies EBITDA of about $13 million combined in the second half, our full
year free cash flow is now expected to total $225 to $250
million, as compared to our prior forecast at the end of the
second quarter of $300 to
$350 million. The impact from higher
capital expenditures during the second half, an increment of
approximately $40 million, comes from
the acceleration of deployments in Algeria, which will shift $20 million in capital expenditures from early
2024 into the fourth quarter of 2023, from capital spending in
Saudi Arabia which is expected to
be some $10 million higher than
forecast earlier, and from the acquisition of the Vaca Muerta base,
which was not part of our prior forecast.
"We are now beginning the forecasting process for 2024. Although
we are not yet ready to discuss these projections, we do expect
meaningful year over year increases in both EBITDA and free cash
flow."
Outlook
Nabors expects the following metrics for the fourth quarter
2023:
U.S. Drilling
- Lower 48 average rig count of 72 - 74 rigs
- Lower 48 adjusted gross margin per day of $15,000 - $15,200
- Alaska and Gulf of Mexico adjusted EBITDA up by
$1.5 million
International
- Rig count up by one to two rigs versus the third quarter
average
- Adjusted gross margin per day of approximately $16,200 - $16,300
Drilling Solutions
- Adjusted EBITDA up by approximately 10% vs the third
quarter
Rig Technologies
- Adjusted EBITDA up by approximately 20% vs the third
quarter
Capital Expenditures
- Capital expenditures of $95
million, with approximately $35
million for the newbuilds in Saudi
Arabia
Adjusted Free Cash Flow
- Adjusted free cash flow for the fourth quarter of $165 to $190
million and for the full year 2023 of $225 to $250
million
Mr. Petrello concluded, "As we look to the fourth quarter, we
expect improvements in our financial results, especially in free
cash flow. With the international expansion already in hand, and
the indications we have seen for growth in the U.S., we are
positioned for meaningful improvement in 2024. The momentum we are
now generating with our Energy Transition initiatives gives us
additional confidence in this positive outlook."
About Nabors Industries
Nabors Industries (NYSE: NBR) is a leading provider of advanced
technology for the energy industry. With presence in more than 20
countries, Nabors has established a global network of people,
technology and equipment to deploy solutions that deliver safe,
efficient and responsible energy production. By leveraging its core
competencies, particularly in drilling, engineering, automation,
data science and manufacturing, Nabors aims to innovate the future
of energy and enable the transition to a lower-carbon world. Learn
more about Nabors and its energy technology leadership:
www.nabors.com.
Forward-looking Statements
The information included in this press release 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 a number of 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 forward-looking statements contained in this
press release reflect management's estimates and beliefs as of the
date of this press release. Nabors does not undertake to
update these forward-looking statements.
Non-GAAP Disclaimer
This press release presents certain "non-GAAP" financial
measures. The components of these non-GAAP measures are
computed by using amounts that are determined in accordance with
accounting principles generally accepted in the United States of America
("GAAP"). Adjusted operating income (loss) represents income
(loss) from continuing operations before income taxes, interest
expense, investment income (loss), and other, net. Adjusted EBITDA
is computed similarly, but also excludes depreciation and
amortization expenses. In addition, adjusted EBITDA and adjusted
operating income (loss) exclude certain cash expenses that the
Company is obligated to make. Net debt is calculated as total debt
minus the sum of cash, cash equivalents and short-term
investments.
Adjusted free cash flow represents net cash provided by
operating activities less cash used for capital expenditures, net
of proceeds from sales of assets. Management believes that
adjusted free cash flow is an important liquidity measure for the
company and that it is useful to investors and management as a
measure of the company's ability to generate cash flow, after
reinvesting in the company for future growth, that could be
available for paying down debt or other financing cash flows, such
as dividends to shareholders. Management believes that this
non-GAAP measure is useful information to investors when comparing
our cash flows with the cash flows of other companies.
Each of these non-GAAP measures has limitations and therefore
should not be used in isolation or as a substitute for the amounts
reported in accordance with GAAP. However, management evaluates the
performance of its operating segments and the consolidated Company
based on several criteria, including Adjusted EBITDA, adjusted
operating income (loss), net debt, and adjusted free cash flow,
because it believes that these financial measures accurately
reflect the Company's ongoing profitability and
performance. Securities analysts and investors also use these
measures as some of the metrics on which they analyze the Company's
performance. Other companies in this industry may compute these
measures differently. Reconciliations of consolidated adjusted
EBITDA and adjusted operating income (loss) to income (loss) from
continuing operations before income taxes, net debt to total debt,
and adjusted free cash flow to net cash provided by operations,
which are their nearest comparable GAAP financial measures, are
included in the tables at the end of this press release. We do
not provide a forward-looking reconciliation of our outlook for
Segment Adjusted EBITDA, Segment Gross Margin or Adjusted Free Cash
Flow, as the amount and significance of items required to develop
meaningful comparable GAAP financial measures cannot be estimated
at this time without unreasonable efforts. These special items
could be meaningful.
Investor Contacts: William C. Conroy, CFA, Vice President
of Corporate Development & Investor Relations, +1 281-775-2423
or via e-mail william.conroy@nabors.com, or Kara Peak, Director of Corporate Development
& Investor Relations, +1 281-775-4954 or via
email kara.peak@nabors.com. To request investor materials,
contact Nabors' corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via
e-mail mark.andrews@nabors.com
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
(In thousands,
except per share amounts)
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
Revenues and other
income:
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$
733,974
|
|
$
694,136
|
|
$
767,067
|
|
$
2,280,180
|
|
$
1,893,618
|
Investment income
(loss)
|
|
10,169
|
|
4,813
|
|
11,743
|
|
31,778
|
|
5,798
|
Total revenues and
other income
|
|
744,143
|
|
698,949
|
|
778,810
|
|
2,311,958
|
|
1,899,416
|
|
|
|
|
|
|
|
|
|
|
|
Costs and other
deductions:
|
|
|
|
|
|
|
|
|
|
|
Direct costs
|
|
447,751
|
|
432,311
|
|
455,531
|
|
1,365,611
|
|
1,208,820
|
General and
administrative expenses
|
|
62,182
|
|
57,594
|
|
63,232
|
|
187,144
|
|
169,400
|
Research and
engineering
|
|
14,016
|
|
13,409
|
|
13,281
|
|
42,371
|
|
36,028
|
Depreciation and
amortization
|
|
161,337
|
|
169,857
|
|
159,698
|
|
484,066
|
|
496,231
|
Interest
expense
|
|
44,042
|
|
43,841
|
|
46,164
|
|
135,347
|
|
133,650
|
Other, net
|
|
35,546
|
|
(25,954)
|
|
(1,775)
|
|
(8,604)
|
|
68,975
|
Total costs and other
deductions
|
|
764,874
|
|
691,058
|
|
736,131
|
|
2,205,935
|
|
2,113,104
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
|
(20,731)
|
|
7,891
|
|
42,679
|
|
106,023
|
|
(213,688)
|
Income tax expense
(benefit)
|
|
10,513
|
|
12,352
|
|
26,448
|
|
59,976
|
|
35,376
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
(31,244)
|
|
(4,461)
|
|
16,231
|
|
46,047
|
|
(249,064)
|
Less: Net (income) loss
attributable to noncontrolling interest
|
|
(17,672)
|
|
(9,322)
|
|
(11,620)
|
|
(41,128)
|
|
(32,132)
|
Net income (loss)
attributable to Nabors
|
|
$
(48,916)
|
|
$
(13,783)
|
|
$
4,611
|
|
$
4,919
|
|
$
(281,196)
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses) per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ (6.26)
|
|
$ (1.80)
|
|
$ (0.31)
|
|
$
(2.79)
|
|
$
(32.72)
|
Diluted
|
|
$ (6.26)
|
|
$ (1.80)
|
|
$ (0.31)
|
|
$
(2.79)
|
|
$
(32.72)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
9,148
|
|
9,099
|
|
9,195
|
|
9,168
|
|
8,830
|
Diluted
|
|
9,148
|
|
9,099
|
|
9,195
|
|
9,168
|
|
8,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$ 210,025
|
|
$ 190,822
|
|
$ 235,023
|
|
$
685,054
|
|
$
479,370
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
48,688
|
|
$
20,965
|
|
$
75,325
|
|
$
200,988
|
|
$ (16,861)
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
December
31,
|
(In
thousands)
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and short-term
investments
|
|
$
406,643
|
|
$
429,059
|
|
$
452,315
|
Accounts receivable,
net
|
|
324,970
|
|
297,388
|
|
327,397
|
Other current
assets
|
|
228,941
|
|
251,687
|
|
220,911
|
Total current
assets
|
|
960,554
|
|
978,134
|
|
1,000,623
|
Property, plant and
equipment, net
|
|
2,945,964
|
|
2,963,898
|
|
3,026,100
|
Other long-term
assets
|
|
820,332
|
|
521,235
|
|
703,131
|
Total assets
|
|
$ 4,726,850
|
|
$ 4,463,267
|
|
$
4,729,854
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
287,228
|
|
$
301,751
|
|
$
314,041
|
Other current
liabilities
|
|
241,475
|
|
242,514
|
|
282,349
|
Total current
liabilities
|
|
528,703
|
|
544,265
|
|
596,390
|
Long-term
debt
|
|
2,501,339
|
|
2,503,250
|
|
2,537,540
|
Other long-term
liabilities
|
|
314,441
|
|
310,263
|
|
380,529
|
Total liabilities
|
|
3,344,483
|
|
3,357,778
|
|
3,514,459
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest in subsidiary
|
|
834,195
|
|
513,817
|
|
678,604
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Shareholders'
equity
|
|
348,234
|
|
402,650
|
|
368,956
|
Noncontrolling
interest
|
|
199,938
|
|
189,022
|
|
167,835
|
Total equity
|
|
548,172
|
|
591,672
|
|
536,791
|
Total liabilities and
equity
|
|
$ 4,726,850
|
|
$
4,463,267
|
|
$
4,729,854
|
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)
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Drilling
|
|
$ 276,385
|
|
$ 297,178
|
|
$ 314,830
|
|
$
941,867
|
|
$
767,769
|
|
International
Drilling
|
|
344,780
|
|
306,355
|
|
337,650
|
|
1,002,478
|
|
881,705
|
|
Drilling
Solutions
|
|
72,831
|
|
61,981
|
|
76,855
|
|
224,729
|
|
172,042
|
|
Rig Technologies
(1)
|
|
61,437
|
|
50,496
|
|
63,565
|
|
183,481
|
|
132,326
|
|
Other reconciling items
(2)
|
|
(21,459)
|
|
(21,874)
|
|
(25,833)
|
|
(72,375)
|
|
(60,224)
|
|
Total operating
revenues
|
|
$ 733,974
|
|
$ 694,136
|
|
$ 767,067
|
|
$ 2,280,180
|
|
$ 1,893,618
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
(3)
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Drilling
|
|
$ 117,357
|
|
$ 114,486
|
|
$ 141,446
|
|
$
415,292
|
|
$
276,122
|
|
International
Drilling
|
|
96,175
|
|
85,922
|
|
98,331
|
|
283,114
|
|
239,616
|
|
Drilling
Solutions
|
|
30,419
|
|
25,612
|
|
32,756
|
|
95,089
|
|
68,363
|
|
Rig Technologies
(1)
|
|
7,221
|
|
4,818
|
|
6,408
|
|
18,583
|
|
7,138
|
|
Other reconciling items
(4)
|
|
(41,147)
|
|
(40,016)
|
|
(43,918)
|
|
(127,024)
|
|
(111,869)
|
|
Total adjusted
EBITDA
|
|
$ 210,025
|
|
$ 190,822
|
|
$ 235,023
|
|
$
685,054
|
|
$
479,370
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Drilling
|
|
$
49,582
|
|
$
37,776
|
|
$
75,408
|
|
$
210,859
|
|
$ 40,213
|
|
International
Drilling
|
|
9,862
|
|
(907)
|
|
10,407
|
|
22,226
|
|
(2,629)
|
|
Drilling
Solutions
|
|
25,341
|
|
20,099
|
|
28,351
|
|
80,830
|
|
53,068
|
|
Rig Technologies
(1)
|
|
4,995
|
|
3,412
|
|
5,052
|
|
13,741
|
|
2,788
|
|
Other reconciling items
(4)
|
|
(41,092)
|
|
(39,415)
|
|
(43,893)
|
|
(126,668)
|
|
(110,301)
|
|
Total adjusted
operating income (loss)
|
|
$
48,688
|
|
$
20,965
|
|
$
75,325
|
|
$
200,988
|
|
$ (16,861)
|
|
|
|
|
|
|
|
|
|
|
|
|
Rig
activity:
|
|
|
|
|
|
|
|
|
|
|
Average Rigs Working:
(7)
|
|
|
|
|
|
|
|
|
|
|
|
Lower 48
|
|
73.7
|
|
92.1
|
|
81.6
|
|
82.8
|
|
88.3
|
|
Other US
|
|
6.7
|
|
7.7
|
|
7.0
|
|
6.9
|
|
7.2
|
|
U.S.
Drilling
|
|
80.4
|
|
99.8
|
|
88.6
|
|
89.7
|
|
95.5
|
|
International
Drilling
|
|
77.2
|
|
74.6
|
|
77.1
|
|
76.9
|
|
73.6
|
|
Total average rigs
working
|
|
157.6
|
|
174.4
|
|
165.7
|
|
166.6
|
|
169.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Daily Rig Revenue:
(6),(8)
|
|
|
|
|
|
|
|
|
|
|
|
Lower 48
|
|
$
35,697
|
|
$
29,190
|
|
$
36,751
|
|
$ 36,324
|
|
$ 26,050
|
|
Other US
|
|
56,163
|
|
70,661
|
|
65,860
|
|
64,312
|
|
70,953
|
|
U.S. Drilling
(10)
|
|
37,397
|
|
32,380
|
|
39,049
|
|
38,474
|
|
29,449
|
|
International
Drilling
|
|
48,528
|
|
44,658
|
|
48,106
|
|
47,728
|
|
43,859
|
|
|
|
|
|
|
|
|
|
|
|
|
Daily Adjusted Gross
Margin: (6),(9)
|
|
|
|
|
|
|
|
|
|
|
|
Lower 48
|
|
$
15,855
|
|
$
11,165
|
|
$
16,890
|
|
$ 16,505
|
|
$
9,225
|
|
Other US
|
|
27,631
|
|
38,034
|
|
35,932
|
|
33,618
|
|
37,215
|
|
U.S. Drilling
(10)
|
|
16,833
|
|
13,232
|
|
18,394
|
|
17,820
|
|
11,371
|
|
International
Drilling
|
|
15,778
|
|
14,589
|
|
16,276
|
|
15,762
|
|
14,033
|
|
|
(1)
|
Includes our oilfield
equipment manufacturing activities.
|
|
|
|
|
|
|
|
|
(2)
|
Represents the
elimination of inter-segment transactions related to our Rig
Technologies operating segment.
|
|
|
|
|
|
|
|
|
(3)
|
Adjusted EBITDA
represents net income (loss) before income tax expense (benefit),
investment income (loss), interest expense, other, net and
depreciation and amortization. Adjusted EBITDA is a non-GAAP
financial measure and should not be used in isolation or as a
substitute for the amounts reported in accordance with GAAP. In
addition, adjusted EBITDA excludes certain cash expenses that the
Company is obligated to make. However, management evaluates the
performance of its operating segments and the consolidated Company
based on several criteria, including adjusted EBITDA and adjusted
operating income (loss), because it believes that these financial
measures accurately reflect the Company's ongoing profitability and
performance. Securities analysts and investors use this
measure as one of the metrics on which they analyze the Company's
performance. Other companies in this industry may compute
these measures differently. A reconciliation of this non-GAAP
measure to net income (loss), which is the most closely comparable
GAAP measure, is provided in the table set forth immediately
following the heading "Reconciliation of Non-GAAP Financial
Measures to Net Income (Loss)".
|
|
|
|
|
|
|
|
|
(4)
|
Represents the
elimination of inter-segment transactions and unallocated corporate
expenses.
|
|
|
|
|
|
|
|
|
(5)
|
Adjusted operating
income (loss) represents net income (loss) before income tax
expense (benefit), investment income (loss), interest expense
and other, net. Adjusted operating income (loss) is a non-GAAP
financial measure and should not be used in isolation or as a
substitute for the amounts reported in accordance with GAAP. In
addition, adjusted operating income (loss) excludes certain cash
expenses that the Company is obligated to make. However, management
evaluates the performance of its operating segments and the
consolidated Company based on several criteria, including adjusted
EBITDA and adjusted operating income (loss), because it believes
that these financial measures accurately reflect the Company's
ongoing profitability and performance. Securities analysts
and investors use this measure as one of the metrics on which they
analyze the Company's performance. Other companies in this
industry may compute these measures differently. A
reconciliation of this non-GAAP measure to net income (loss), which
is the most closely comparable GAAP measure, is provided in the
table set forth immediately following the heading "Reconciliation
of Non-GAAP Financial Measures to Net Income (Loss)".
|
|
|
|
|
|
|
|
|
(6)
|
Rig revenue days
represents the number of days the Company's rigs are contracted and
performing under a contract during the period. These would
typically include days in which operating, standby and move revenue
is earned.
|
|
|
|
|
|
|
|
|
(7)
|
Average rigs working
represents a measure of the average number of rigs operating during
a given period. For example, one rig operating 45 days during
a quarter represents approximately 0.5 average rigs working for the
quarter. On an annual period, one rig operating 182.5 days
represents approximately 0.5 average rigs working for the
year. Average rigs working can also be calculated as rig
revenue days during the period divided by the number of calendar
days in the period.
|
|
|
|
|
|
|
|
|
(8)
|
Daily rig revenue
represents operating revenue, divided by the total number of
revenue days during the quarter.
|
|
|
|
|
|
|
|
|
(9)
|
Daily adjusted gross
margin represents operating revenue less direct costs, divided by
the total number of rig revenue days during the
quarter.
|
|
|
|
|
|
|
|
|
(10)
|
The U.S. Drilling
segment includes the Lower 48, Alaska, and Gulf of Mexico operating
areas.
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
Reconciliation of
Earnings per Share
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
|
|
June
30,
|
|
September 30,
|
(in thousands,
except per share amounts)
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
2022
|
|
|
BASIC
EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(numerator):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss), net of
tax
|
$
|
(31,244)
|
|
$
|
(4,461)
|
|
$
|
16,231
|
|
$
|
46,047
|
|
$
|
(249,064)
|
Less: net (income) loss
attributable to noncontrolling interest
|
|
(17,672)
|
|
|
(9,322)
|
|
|
(11,620)
|
|
|
(41,128)
|
|
|
(32,132)
|
Less: deemed dividends
to SPAC public shareholders
|
|
(823)
|
|
|
—
|
|
|
—
|
|
|
(8,180)
|
|
|
—
|
Less: accrued
distribution on redeemable noncontrolling interest in
subsidiary
|
|
(7,517)
|
|
|
(2,601)
|
|
|
(7,436)
|
|
|
(22,307)
|
|
|
(7,720)
|
Numerator for basic
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income (loss),
net of tax - basic
|
$
|
(57,256)
|
|
$
|
(16,384)
|
|
$
|
(2,825)
|
|
$
|
(25,568)
|
|
$
|
(288,916)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of shares outstanding - basic
|
|
9,148
|
|
|
9,099
|
|
|
9,195
|
|
|
9,168
|
|
|
8,830
|
Earnings (losses) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Basic
|
$
|
(6.26)
|
|
$
|
(1.80)
|
|
$
|
(0.31)
|
|
$
|
(2.79)
|
|
$
|
(32.72)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED
EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income (loss),
net of tax - diluted
|
$
|
(57,256)
|
|
$
|
(16,384)
|
|
$
|
(2,825)
|
|
$
|
(25,568)
|
|
$
|
(288,916)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of shares outstanding - diluted
|
|
9,148
|
|
|
9,099
|
|
|
9,195
|
|
|
9,168
|
|
|
8,830
|
Earnings (losses) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Diluted
|
$
|
(6.26)
|
|
$
|
(1.80)
|
|
$
|
(0.31)
|
|
$
|
(2.79)
|
|
$
|
(32.72)
|
NABORS INDUSTRIES LTD. AND
SUBSIDIARIES
|
NON-GAAP FINANCIAL MEASURES
|
RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO
ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
2023
|
|
|
U.S.
Drilling
|
|
International
Drilling
|
|
Drilling
Solutions
|
|
Rig
Technologies
|
|
Other
reconciling
items
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$ 49,582
|
|
$
9,862
|
|
$
25,341
|
|
$
4,995
|
|
$
(41,092)
|
|
$
48,688
|
Depreciation and
amortization
|
|
67,775
|
|
86,313
|
|
5,078
|
|
2,226
|
|
(55)
|
|
161,337
|
Adjusted
EBITDA
|
|
$
117,357
|
|
$
96,175
|
|
$
30,419
|
|
$
7,221
|
|
$
(41,147)
|
|
$
210,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
2022
|
|
|
U.S.
Drilling
|
|
International
Drilling
|
|
Drilling
Solutions
|
|
Rig
Technologies
|
|
Other
reconciling
items
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$ 37,776
|
|
$
(907)
|
|
$
20,099
|
|
$
3,412
|
|
$
(39,415)
|
|
$
20,965
|
Depreciation and
amortization
|
|
76,710
|
|
86,829
|
|
5,513
|
|
1,406
|
|
(601)
|
|
169,857
|
Adjusted
EBITDA
|
|
$
114,486
|
|
$
85,922
|
|
$
25,612
|
|
$
4,818
|
|
$
(40,016)
|
|
$
190,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
2023
|
|
|
U.S.
Drilling
|
|
International
Drilling
|
|
Drilling
Solutions
|
|
Rig
Technologies
|
|
Other
reconciling
items
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$ 75,408
|
|
$
10,407
|
|
$
28,351
|
|
$
5,052
|
|
$
(43,893)
|
|
$
75,325
|
Depreciation and
amortization
|
|
66,038
|
|
87,924
|
|
4,405
|
|
1,356
|
|
(25)
|
|
159,698
|
Adjusted
EBITDA
|
|
$
141,446
|
|
$
98,331
|
|
$
32,756
|
|
$
6,408
|
|
$
(43,918)
|
|
$
235,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
2023
|
|
|
U.S.
Drilling
|
|
International
Drilling
|
|
Drilling
Solutions
|
|
Rig
Technologies
|
|
Other
reconciling
items
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
210,859
|
|
$
22,226
|
|
$
80,830
|
|
$
13,741
|
|
$ (126,668)
|
|
$
200,988
|
Depreciation and
amortization
|
|
204,433
|
|
260,888
|
|
14,259
|
|
4,842
|
|
(356)
|
|
484,066
|
Adjusted
EBITDA
|
|
$
415,292
|
|
$
283,114
|
|
$
95,089
|
|
$
18,583
|
|
$ (127,024)
|
|
$
685,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
2022
|
|
|
U.S.
Drilling
|
|
International
Drilling
|
|
Drilling
Solutions
|
|
Rig
Technologies
|
|
Other
reconciling
items
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$ 40,213
|
|
$
(2,629)
|
|
$
53,068
|
|
$
2,788
|
|
$ (110,301)
|
|
$
(16,861)
|
Depreciation and
amortization
|
|
235,909
|
|
242,245
|
|
15,295
|
|
4,350
|
|
(1,568)
|
|
496,231
|
Adjusted
EBITDA
|
|
$
276,122
|
|
$
239,616
|
|
$
68,363
|
|
$
7,138
|
|
$ (111,869)
|
|
$
479,370
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
NON-GAAP FINANCIAL
MEASURES
|
RECONCILIATION OF
ADJUSTED GROSS MARGIN BY SEGMENT TO ADJUSTED OPERATING INCOME
(LOSS) BY SEGMENT
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
(In
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower 48 - U.S.
Drilling
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
40,366
|
|
$
25,551
|
|
$
60,496
|
|
$ 174,933
|
|
$
10,018
|
|
Plus: General and
administrative costs
|
|
5,239
|
|
4,798
|
|
5,209
|
|
15,503
|
|
13,983
|
|
Plus: Research and
engineering
|
|
1,389
|
|
1,652
|
|
1,189
|
|
4,098
|
|
4,902
|
|
GAAP Gross
Margin
|
|
46,994
|
|
32,001
|
|
66,894
|
|
194,534
|
|
28,903
|
|
Plus: Depreciation and
amortization
|
|
60,447
|
|
62,583
|
|
58,533
|
|
178,487
|
|
194,139
|
|
Adjusted gross
margin
|
|
$ 107,441
|
|
$
94,584
|
|
$ 125,427
|
|
$ 373,021
|
|
$ 223,042
|
|
|
|
|
|
|
|
|
|
|
|
|
Other - U.S.
Drilling
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$ 9,216
|
|
$
12,225
|
|
$
14,912
|
|
$
35,926
|
|
$
30,195
|
|
Plus: General and
administrative costs
|
|
331
|
|
343
|
|
323
|
|
999
|
|
1,034
|
|
Plus: Research and
engineering
|
|
90
|
|
157
|
|
132
|
|
349
|
|
428
|
|
GAAP Gross
Margin
|
|
9,637
|
|
12,725
|
|
15,367
|
|
37,274
|
|
31,657
|
|
Plus: Depreciation and
amortization
|
|
7,329
|
|
14,127
|
|
7,504
|
|
25,945
|
|
41,770
|
|
Adjusted gross
margin
|
|
$
16,966
|
|
$
26,852
|
|
$
22,871
|
|
$
63,219
|
|
$
73,427
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Drilling
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
49,582
|
|
$
37,776
|
|
$
75,408
|
|
$ 210,859
|
|
$
40,213
|
|
Plus: General and
administrative costs
|
|
5,570
|
|
5,141
|
|
5,532
|
|
16,502
|
|
15,017
|
|
Plus: Research and
engineering
|
|
1,479
|
|
1,809
|
|
1,321
|
|
4,447
|
|
5,330
|
|
GAAP Gross
Margin
|
|
56,631
|
|
44,726
|
|
82,261
|
|
231,808
|
|
60,560
|
|
Plus: Depreciation and
amortization
|
|
67,776
|
|
76,710
|
|
66,037
|
|
204,432
|
|
235,909
|
|
Adjusted gross
margin
|
|
$ 124,407
|
|
$ 121,436
|
|
$ 148,298
|
|
$ 436,240
|
|
$ 296,469
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Drilling
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$ 9,862
|
|
$
(907)
|
|
$
10,407
|
|
$
22,226
|
|
$
(2,629)
|
|
Plus: General and
administrative costs
|
|
14,300
|
|
12,599
|
|
14,089
|
|
42,725
|
|
38,137
|
|
Plus: Research and
engineering
|
|
1,622
|
|
1,558
|
|
1,821
|
|
5,229
|
|
4,360
|
|
GAAP Gross
Margin
|
|
25,784
|
|
13,250
|
|
26,317
|
|
70,180
|
|
39,868
|
|
Plus: Depreciation and
amortization
|
|
86,313
|
|
86,830
|
|
87,924
|
|
260,887
|
|
242,247
|
|
Adjusted gross
margin
|
|
$ 112,097
|
|
$ 100,080
|
|
$ 114,241
|
|
$ 331,067
|
|
$ 282,115
|
|
Adjusted gross margin
by segment represents adjusted operating income (loss) plus general
and administrative costs, research and engineering costs and
depreciation and amortization.
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES TO NET INCOME (LOSS)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
(In
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
(31,244)
|
|
(4,461)
|
|
16,231
|
|
46,047
|
|
(249,064)
|
Income tax expense
(benefit)
|
|
10,513
|
|
12,352
|
|
26,448
|
|
59,976
|
|
35,376
|
Income (loss) from
continuing operations before income taxes
|
|
(20,731)
|
|
7,891
|
|
42,679
|
|
106,023
|
|
(213,688)
|
Investment (income)
loss
|
|
(10,169)
|
|
(4,813)
|
|
(11,743)
|
|
(31,778)
|
|
(5,798)
|
Interest
expense
|
|
44,042
|
|
43,841
|
|
46,164
|
|
135,347
|
|
133,650
|
Other, net
|
|
35,546
|
|
(25,954)
|
|
(1,775)
|
|
(8,604)
|
|
68,975
|
Adjusted operating
income (loss) (1)
|
|
48,688
|
|
20,965
|
|
75,325
|
|
200,988
|
|
(16,861)
|
Depreciation and
amortization
|
|
161,337
|
|
169,857
|
|
159,698
|
|
484,066
|
|
496,231
|
Adjusted EBITDA
(2)
|
|
$ 210,025
|
|
$ 190,822
|
|
$ 235,023
|
|
$ 685,054
|
|
$ 479,370
|
|
(1) Adjusted operating
income (loss) represents net income (loss) before income tax
expense (benefit), investment income (loss), interest expense, and
other, net. Adjusted operating income (loss) is a non-GAAP
financial measure and should not be used in isolation or as a
substitute for the amounts reported in accordance with GAAP. In
addition, adjusted operating income (loss) excludes certain cash
expenses that the Company is obligated to make. However, management
evaluates the performance of its operating segments and the
consolidated Company based on several criteria, including adjusted
EBITDA and adjusted operating income (loss), because it believes
that these financial measures accurately reflect the Company's
ongoing profitability and performance. Securities analysts
and investors use this measure as one of the metrics on which they
analyze the Company's performance. Other companies in this
industry may compute these measures differently.
|
|
(2) Adjusted EBITDA
represents net income (loss) before income tax expense (benefit),
investment income (loss), interest expense, other, net and
depreciation and amortization. Adjusted EBITDA is a non-GAAP
financial measure and should not be used in isolation or as a
substitute for the amounts reported in accordance with GAAP. In
addition, adjusted EBITDA excludes certain cash expenses that the
Company is obligated to make. However, management evaluates the
performance of its operating segments and the consolidated Company
based on several criteria, including adjusted EBITDA and adjusted
operating income (loss), because it believes that these financial
measures accurately reflect the Company's ongoing profitability and
performance. Securities analysts and investors use this
measure as one of the metrics on which they analyze the Company's
performance. Other companies in this industry may compute
these measures differently.
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
RECONCILIATION OF
NET DEBT TO TOTAL DEBT
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
December
31,
|
(In
thousands)
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
$
2,501,339
|
|
$
2,503,250
|
|
$
2,537,540
|
Less: Cash and
short-term investments
|
|
406,643
|
|
429,059
|
|
452,315
|
Net Debt
|
|
$
2,094,696
|
|
$
2,074,191
|
|
$
2,085,225
|
NABORS INDUSTRIES
LTD. AND SUBSIDIARIES
|
RECONCILIATION OF
ADJUSTED FREE CASH FLOW TO
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
(In
thousands)
|
|
2023
|
|
2023
|
|
2023
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
133,425
|
|
$
168,466
|
|
$
455,941
|
Add: Capital
expenditures, net of proceeds from sales of assets
|
|
(138,583)
|
|
(141,683)
|
|
(397,018)
|
|
|
|
|
|
|
|
Adjusted free cash
flow
|
|
$
(5,158)
|
|
$
26,783
|
|
$
58,923
|
|
Adjusted free cash flow
represents net cash provided by operating activities less cash used
for capital expenditures, net of proceeds from sales of
assets. Management believes that adjusted free cash flow is
an important liquidity measure for the company and that it is
useful to investors and management as a measure of the company's
ability to generate cash flow, after reinvesting in the company for
future growth, that could be available for paying down debt or
other financing cash flows, such as dividends to shareholders.
Adjusted free cash flow does not represent the residual cash
flow available for discretionary expenditures. Adjusted free
cash flow is a non-GAAP financial measure that should be considered
in addition to, not as a substitute for or superior to, cash flow
from operations reported in accordance with GAAP.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/nabors-announces-third-quarter-2023-results-301967931.html
SOURCE Nabors Industries Ltd.