HAMILTON, Bermuda, July 25,
2023 /PRNewswire/ -- Nabors Industries Ltd. ("Nabors"
or the "Company") (NYSE: NBR) today reported second quarter 2023
operating revenues of $767 million,
compared to operating revenues of $779
million in the first quarter. The net income attributable to
Nabors shareholders for the quarter was $5
million, compared to $49
million in the first quarter. This equates to a loss of
$0.31 per diluted share, compared to
earnings per diluted share of $4.11
in the first quarter. The second quarter results included a gain,
related to mark-to-market treatment of Nabors warrants, of
$18 million, or $1.95 per diluted share, as compared to a gain of
$34 million, or $3.48 per diluted share in the first quarter. The
first quarter also included a $25
million, or $2.06 per diluted
share, gain on the redemption of debt. Second quarter adjusted
EBITDA was $235 million, compared to
$240 million in the previous
quarter.
Anthony G. Petrello, Nabors
Chairman, CEO and President, commented, "Our global market activity
was essentially in line with our expectations, with the exception
of the Lower 48, where oil related drilling fell somewhat in
addition to the already anticipated reduction in gas basins. Total
adjusted EBITDA declined slightly, reflecting a decrease in U.S.
rig count. Although leading edge pricing in the Lower 48 has
peaked, daily revenue increased by $300 beyond the first quarter level.
"In our International segment, results benefitted from strong
performance in the Middle East
including the start of the third newbuild rig in Saudi Arabia. The remaining two rigs, of the
initial five awards, are anticipated to commence operations over
the balance of 2023. Construction of the second tranche of five
units is progressing, with the first of those deployments expected
to begin around the end of 2023. During the quarter we successfully
deployed an additional rig in Argentina. We also were recently awarded four
rigs in Algeria. Additionally, a
unit in Colombia will restart
operations in the third quarter.
"Revenue and adjusted EBITDA in our Drilling Solutions segment
increased in the second quarter, despite the drilling activity
headwinds in the Lower 48. On a global basis, third party revenue
increased 18% sequentially, accelerating over the growth rate in
the first quarter and validating our focus on this strategy.
International revenue also increased as we expanded our footprint
in Latin America and the
Middle East.
"In the Rig Technologies segment, total revenue and adjusted
EBITDA grew, driven by international sales of capital equipment and
spare parts.
"On July 18, 2023, Nabors'
affiliate Nabors Energy Transition Corporation II (NASDAQ: NETDU)
completed the initial public offering of its common shares. NETDU
represents another milestone in the implementation of Nabors'
energy transition strategy."
Segment Results
The U.S. Drilling segment reported $141.4
million in adjusted EBITDA for the second quarter of 2023.
Nabors' average Lower 48 rig count totaled 82. Daily adjusted gross
margin in the Lower 48 market averaged $16,890, up $200
from the prior quarter.
International Drilling adjusted EBITDA totaled $98.3 million, up nearly $10 million. Improved EBITDA across multiple
markets more than offset the forecast decline in Colombia. International rig count averaged 77,
up slightly from the previous quarter. Daily adjusted gross margin
for the second quarter averaged $16,276, up almost 7% from the prior quarter.
Drilling Solutions adjusted EBITDA increased sequentially by 3%
to $32.8 million. Growth was led by
the Performance Software and Digitalization product lines.
In Rig Technologies, adjusted EBITDA totaled $6.4 million, compared to $5.0 million in the first quarter. Increases in
capital equipment, part sales, and energy transition accounted for
the sequential improvement in adjusted EBITDA.
Adjusted Free Cash Flow
Adjusted free cash flow totaled $27
million in the second quarter. Capital expenditures totaled
$152 million, including $66 million supporting the newbuilds in
Saudi Arabia, compared to
$119 million in the first quarter,
including $37 million supporting the
SANAD newbuilds.
At the end of the second quarter, net debt was $2.074 billion.
William Restrepo, Nabors CFO,
stated, "Our results in the second quarter mirrored the performance
of our markets. Our International segment was solid, while our
technology businesses also delivered sequential growth. These
results helped offset the softening rig markets we had forecast in
the Lower 48 and Colombia. We
expected lower drilling activity in gas basins but admittedly, the
reductions in oil related drilling we experienced were not
anticipated. Despite that pause in the Lower 48, our operation in
that market continued to generate superior economics, with record
margins and substantial cash flow generation.
"Free cash flow in the quarter, although still positive, was
impacted by somewhat lower than expected adjusted EBITDA, and
higher than planned capital spending. Capex for the newbuild rigs
in Saudi Arabia accounted for this
variance, as our supplier reached progress milestones earlier than
we planned. It is worth highlighting that while our SANAD JV
consumed cash during the quarter, free cash flow for the remainder
of our business reached almost $60
million. This incremental cash flow supported the redemption
in June of approximately $52 million
of notes due in September of 2023. At the same time, our revolving
credit facility remained undrawn at the end of the second
quarter.
"The drilling market should continue to weaken in the Lower 48
during the third quarter. But after a tough first half in the U.S.,
we are now starting to see signs that this market is bottoming in
the third quarter with encouraging data points of incremental
activity for the fourth quarter.
"On another positive note, we anticipate further strength in
International markets, with early signs of growth developing into
awards for incremental rigs. Drilling Solutions and Rig
Technologies are also expected to increase sequentially.
"Despite the softness in the Lower 48 market and to a lesser
extent in Colombia, we still
expect to generate solid adjusted free cash flow for the full year
and to continue reducing our net debt."
Outlook
Nabors expects the following metrics for the third quarter
2023:
U.S.
Drilling
- Lower 48 average rig count of 74 - 76 rigs
- Lower 48 adjusted gross margin per day approaching $16,000
- Alaska and Gulf of Mexico adjusted EBITDA down by
approximately $7 million due mainly
to recertification-related work on the M400 offshore rig
International
- Rig count up by one to two rigs versus the second quarter
average
- Adjusted gross margin per day of approximately $16,000 - $16,200
Drilling Solutions
- Adjusted EBITDA up by approximately 3% above the second
quarter
Rig Technologies
- Adjusted EBITDA up by approximately $3
million vs the second quarter
Capital Expenditures
- Capital expenditures of $125
million, with approximately $48
million supporting newbuilds in Saudi Arabia
Adjusted Free Cash Flow
- Adjusted free cash flow for the third quarter of approximately
$80 million and for the full year
2023 between $300 and $350 million
Mr. Petrello concluded, "Our second quarter results demonstrate
the strength of our broad portfolio. With the current U.S. market
trends, our International segment and technology businesses are
even more impactful as we work to attain our free cash flow and
leverage goals. As we look to the future, we believe that the worst
should be behind us in the Lower 48 and we expect some recovery in
the fourth quarter. Further, we anticipate International activity
in all our segments to continue improving during the second half of
this year. And we are pleased with the progress made in our energy
transition businesses. We are excited about what's to come for
Nabors in the second half and during 2024."
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
|
|
Six Months Ended
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
(In thousands, except per share
amounts)
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
Revenues and other
income:
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$
767,067
|
|
$
630,943
|
|
$
779,139
|
|
$
1,546,206
|
|
$
1,199,482
|
Investment income
(loss)
|
|
11,743
|
|
822
|
|
9,866
|
|
21,609
|
|
985
|
Total revenues and
other income
|
|
778,810
|
|
631,765
|
|
789,005
|
|
1,567,815
|
|
1,200,467
|
|
|
|
|
|
|
|
|
|
|
|
Costs and other
deductions:
|
|
|
|
|
|
|
|
|
|
|
Direct
costs
|
|
455,531
|
|
403,797
|
|
462,329
|
|
917,860
|
|
776,509
|
General and
administrative expenses
|
|
63,232
|
|
58,167
|
|
61,730
|
|
124,962
|
|
111,806
|
Research and
engineering
|
|
13,281
|
|
10,941
|
|
15,074
|
|
28,355
|
|
22,619
|
Depreciation and
amortization
|
|
159,698
|
|
162,015
|
|
163,031
|
|
322,729
|
|
326,374
|
Interest
expense
|
|
46,164
|
|
42,899
|
|
45,141
|
|
91,305
|
|
89,809
|
Other, net
|
|
(1,775)
|
|
14,528
|
|
(42,375)
|
|
(44,150)
|
|
94,929
|
Total costs and other
deductions
|
|
736,131
|
|
692,347
|
|
704,930
|
|
1,441,061
|
|
1,422,046
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
|
42,679
|
|
(60,582)
|
|
84,075
|
|
126,754
|
|
(221,579)
|
Income tax expense
(benefit)
|
|
26,448
|
|
9,353
|
|
23,015
|
|
49,463
|
|
23,024
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
16,231
|
|
(69,935)
|
|
61,060
|
|
77,291
|
|
(244,603)
|
Less: Net (income)
loss attributable to noncontrolling interest
|
|
(11,620)
|
|
(12,982)
|
|
(11,836)
|
|
(23,456)
|
|
(22,810)
|
Net income (loss)
attributable to Nabors
|
|
$
4,611
|
|
$
(82,917)
|
|
$
49,224
|
|
$
53,835
|
|
$
(267,413)
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses) per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(0.31)
|
|
$
(9.41)
|
|
$
4.39
|
|
$
4.05
|
|
$
(31.34)
|
Diluted
|
|
$
(0.31)
|
|
$
(9.41)
|
|
$
4.11
|
|
$
3.79
|
|
$
(31.34)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
9,195
|
|
9,081
|
|
9,160
|
|
9,178
|
|
8,696
|
Diluted
|
|
9,195
|
|
9,081
|
|
9,867
|
|
10,141
|
|
8,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
235,023
|
|
$
158,038
|
|
$
240,006
|
|
$
475,029
|
|
$
288,548
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
75,325
|
|
$
(3,977)
|
|
$
76,975
|
|
$
152,300
|
|
$
(37,826)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NABORS INDUSTRIES LTD. AND
SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
(In thousands)
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and short-term
investments
|
|
$
429,059
|
|
$
475,732
|
|
$
452,315
|
Accounts receivable,
net
|
|
297,388
|
|
307,005
|
|
327,397
|
Other current
assets
|
|
251,687
|
|
230,506
|
|
220,911
|
Total current
assets
|
|
978,134
|
|
1,013,243
|
|
1,000,623
|
Property, plant and
equipment, net
|
|
2,963,898
|
|
2,976,831
|
|
3,026,100
|
Other long-term
assets
|
|
521,235
|
|
709,902
|
|
703,131
|
Total assets
|
|
$
4,463,267
|
|
$
4,699,976
|
|
$
4,729,854
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
301,751
|
|
$
306,543
|
|
$
314,041
|
Other current
liabilities
|
|
242,514
|
|
233,935
|
|
282,349
|
Total current
liabilities
|
|
544,265
|
|
540,478
|
|
596,390
|
Long-term
debt
|
|
2,503,250
|
|
2,562,327
|
|
2,537,540
|
Other long-term
liabilities
|
|
310,263
|
|
323,694
|
|
380,529
|
Total liabilities
|
|
3,357,778
|
|
3,426,499
|
|
3,514,459
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest in subsidiary
|
|
513,817
|
|
691,095
|
|
678,604
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Shareholders'
equity
|
|
402,650
|
|
402,711
|
|
368,956
|
Noncontrolling
interest
|
|
189,022
|
|
179,671
|
|
167,835
|
Total equity
|
|
591,672
|
|
582,382
|
|
536,791
|
Total liabilities and
equity
|
|
$
4,463,267
|
|
$
4,699,976
|
|
$
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
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
(In thousands, except rig
activity)
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Drilling
|
|
$
314,830
|
|
$
253,008
|
|
$
350,652
|
|
$
665,482
|
|
$
470,591
|
|
International
Drilling
|
|
337,650
|
|
296,320
|
|
320,048
|
|
657,698
|
|
575,350
|
|
Drilling
Solutions
|
|
76,855
|
|
55,879
|
|
75,043
|
|
151,898
|
|
110,061
|
|
Rig Technologies
(1)
|
|
63,565
|
|
45,094
|
|
58,479
|
|
122,044
|
|
81,830
|
|
Other reconciling items
(2)
|
|
(25,833)
|
|
(19,358)
|
|
(25,083)
|
|
(50,916)
|
|
(38,350)
|
|
Total operating
revenues
|
|
$
767,067
|
|
$
630,943
|
|
$
779,139
|
|
$
1,546,206
|
|
$
1,199,482
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
(3)
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Drilling
|
|
$
141,446
|
|
$
87,371
|
|
$
156,489
|
|
$
297,935
|
|
$
161,636
|
|
International
Drilling
|
|
98,331
|
|
82,446
|
|
88,608
|
|
186,939
|
|
153,694
|
|
Drilling
Solutions
|
|
32,756
|
|
22,751
|
|
31,914
|
|
64,670
|
|
42,751
|
|
Rig Technologies
(1)
|
|
6,408
|
|
3,364
|
|
4,954
|
|
11,362
|
|
2,320
|
|
Other reconciling items
(4)
|
|
(43,918)
|
|
(37,894)
|
|
(41,959)
|
|
(85,877)
|
|
(71,853)
|
|
Total adjusted
EBITDA
|
|
$
235,023
|
|
$
158,038
|
|
$
240,006
|
|
$
475,029
|
|
$
288,548
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss): (5)
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Drilling
|
|
$
75,408
|
|
$
8,288
|
|
$
85,869
|
|
$
161,277
|
|
$
2,437
|
|
International
Drilling
|
|
10,407
|
|
4,605
|
|
1,957
|
|
12,364
|
|
(1,722)
|
|
Drilling
Solutions
|
|
28,351
|
|
18,260
|
|
27,138
|
|
55,489
|
|
32,969
|
|
Rig Technologies
(1)
|
|
5,052
|
|
2,127
|
|
3,694
|
|
8,746
|
|
(624)
|
|
Other reconciling items
(4)
|
|
(43,893)
|
|
(37,257)
|
|
(41,683)
|
|
(85,576)
|
|
(70,886)
|
|
Total adjusted
operating income (loss)
|
|
$
75,325
|
|
$
(3,977)
|
|
$
76,975
|
|
$
152,300
|
|
$
(37,826)
|
|
|
|
|
|
|
|
|
|
|
|
|
Rig
activity:
|
|
|
|
|
|
|
|
|
|
|
Average Rigs Working:
(7)
|
|
|
|
|
|
|
|
|
|
|
|
Lower 48
|
|
81.6
|
|
89.3
|
|
93.3
|
|
87.4
|
|
86.3
|
|
Other US
|
|
7.0
|
|
7.1
|
|
7.0
|
|
7.0
|
|
7.0
|
|
U.S.
Drilling
|
|
88.6
|
|
96.4
|
|
100.3
|
|
94.4
|
|
93.3
|
|
International
Drilling
|
|
77.1
|
|
74.3
|
|
76.4
|
|
76.8
|
|
73.2
|
|
Total average rigs
working
|
|
165.7
|
|
170.7
|
|
176.7
|
|
171.2
|
|
166.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Daily Rig Revenue:
(6),(8)
|
|
|
|
|
|
|
|
|
|
|
|
Lower 48
|
|
$
36,751
|
|
$
25,566
|
|
$
36,453
|
|
$
36,593
|
|
$
24,348
|
|
Other US
|
|
65,860
|
|
70,181
|
|
70,690
|
|
68,263
|
|
71,116
|
|
U.S. Drilling
(10)
|
|
39,049
|
|
28,852
|
|
38,842
|
|
38,940
|
|
27,856
|
|
International
Drilling
|
|
48,106
|
|
43,808
|
|
46,517
|
|
47,319
|
|
43,445
|
|
|
|
|
|
|
|
|
|
|
|
|
Daily Adjusted Gross
Margin: (6),(9)
|
|
|
|
|
|
|
|
|
|
|
|
Lower 48
|
|
$
16,890
|
|
$
8,706
|
|
$
16,690
|
|
$
16,784
|
|
$
8,220
|
|
Other US
|
|
35,932
|
|
36,300
|
|
37,114
|
|
36,520
|
|
36,759
|
|
U.S. Drilling
(10)
|
|
18,394
|
|
10,738
|
|
18,115
|
|
18,246
|
|
10,361
|
|
International
Drilling
|
|
16,276
|
|
14,331
|
|
15,222
|
|
15,754
|
|
13,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
NON-GAAP FINANCIAL MEASURES
|
|
RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO
ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
2022
|
|
|
|
U.S. Drilling
|
|
International
Drilling
|
|
Drilling
Solutions
|
|
Rig
Technologies
|
|
Other
reconciling
items
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
8,288
|
|
$
4,605
|
|
$
18,260
|
|
$
2,127
|
|
$ (37,257)
|
|
$ (3,977)
|
|
Depreciation and
amortization
|
|
79,083
|
|
77,841
|
|
4,491
|
|
1,237
|
|
(637)
|
|
162,015
|
|
Adjusted
EBITDA
|
|
$
87,371
|
|
$
82,446
|
|
$
22,751
|
|
$
3,364
|
|
$ (37,894)
|
|
$
158,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
2023
|
|
|
|
U.S. Drilling
|
|
International
Drilling
|
|
Drilling
Solutions
|
|
Rig
Technologies
|
|
Other
reconciling
items
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
85,869
|
|
$
1,957
|
|
$
27,138
|
|
$
3,694
|
|
$ (41,683)
|
|
$ 76,975
|
|
Depreciation and
amortization
|
|
70,620
|
|
86,651
|
|
4,776
|
|
1,260
|
|
(276)
|
|
163,031
|
|
Adjusted
EBITDA
|
|
$156,489
|
|
$
88,608
|
|
$
31,914
|
|
$
4,954
|
|
$ (41,959)
|
|
$
240,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2023
|
|
|
|
U.S. Drilling
|
|
International
Drilling
|
|
Drilling
Solutions
|
|
Rig
Technologies
|
|
Other
reconciling
items
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$161,277
|
|
$
12,364
|
|
$
55,489
|
|
$
8,746
|
|
$ (85,576)
|
|
$
152,300
|
|
Depreciation and
amortization
|
|
136,658
|
|
174,575
|
|
9,181
|
|
2,616
|
|
(301)
|
|
322,729
|
|
Adjusted
EBITDA
|
|
$297,935
|
|
$
186,939
|
|
$
64,670
|
|
$
11,362
|
|
$ (85,877)
|
|
$
475,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2022
|
|
|
|
U.S. Drilling
|
|
International
Drilling
|
|
Drilling
Solutions
|
|
Rig
Technologies
|
|
Other
reconciling
items
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
2,437
|
|
$
(1,722)
|
|
$
32,969
|
|
$
(624)
|
|
$ (70,886)
|
|
$
(37,826)
|
|
Depreciation and
amortization
|
|
159,199
|
|
155,416
|
|
9,782
|
|
2,944
|
|
(967)
|
|
326,374
|
|
Adjusted
EBITDA
|
|
$161,636
|
|
$
153,694
|
|
$
42,751
|
|
$
2,320
|
|
$ (71,853)
|
|
$
288,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
(In thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower 48 - U.S.
Drilling
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
60,496
|
|
$
(937)
|
|
$
74,071
|
|
$
134,567
|
|
$
(15,533)
|
|
Plus: General and
administrative costs
|
|
5,209
|
|
4,740
|
|
5,056
|
|
10,264
|
|
9,185
|
|
Plus: Research and
engineering
|
|
1,189
|
|
1,611
|
|
1,519
|
|
2,708
|
|
3,250
|
|
GAAP Gross
Margin
|
|
66,894
|
|
5,414
|
|
80,646
|
|
147,539
|
|
(3,098)
|
|
Plus: Depreciation and
amortization
|
|
58,533
|
|
65,312
|
|
59,507
|
|
118,041
|
|
131,556
|
|
Adjusted gross
margin
|
|
$
125,427
|
|
$
70,726
|
|
$
140,153
|
|
$
265,580
|
|
$
128,458
|
|
|
|
|
|
|
|
|
|
|
|
|
Other - U.S.
Drilling
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
14,912
|
|
$
9,225
|
|
$
11,798
|
|
$
26,710
|
|
$
17,970
|
|
Plus: General and
administrative costs
|
|
323
|
|
307
|
|
345
|
|
668
|
|
691
|
|
Plus: Research and
engineering
|
|
132
|
|
139
|
|
128
|
|
259
|
|
270
|
|
GAAP Gross
Margin
|
|
15,367
|
|
9,671
|
|
12,271
|
|
27,637
|
|
18,931
|
|
Plus: Depreciation and
amortization
|
|
7,504
|
|
13,771
|
|
11,111
|
|
18,616
|
|
27,644
|
|
Adjusted gross
margin
|
|
$
22,871
|
|
$
23,442
|
|
$
23,382
|
|
$
46,253
|
|
$
46,575
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Drilling
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
75,408
|
|
$
8,288
|
|
$
85,869
|
|
$
161,277
|
|
$
2,437
|
|
Plus: General and
administrative costs
|
|
5,532
|
|
5,047
|
|
5,401
|
|
10,932
|
|
9,876
|
|
Plus: Research and
engineering
|
|
1,321
|
|
1,750
|
|
1,647
|
|
2,967
|
|
3,520
|
|
GAAP Gross
Margin
|
|
82,261
|
|
15,085
|
|
92,917
|
|
175,176
|
|
15,833
|
|
Plus: Depreciation and
amortization
|
|
66,037
|
|
79,083
|
|
70,618
|
|
136,657
|
|
159,200
|
|
Adjusted gross
margin
|
|
$
148,298
|
|
$
94,168
|
|
$
163,535
|
|
$
311,833
|
|
$
175,033
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Drilling
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss)
|
|
$
10,407
|
|
$
4,605
|
|
$
1,957
|
|
$
12,364
|
|
$
(1,722)
|
|
Plus: General and
administrative costs
|
|
14,089
|
|
13,056
|
|
14,336
|
|
28,424
|
|
25,539
|
|
Plus: Research and
engineering
|
|
1,821
|
|
1,433
|
|
1,785
|
|
3,606
|
|
2,802
|
|
GAAP Gross
Margin
|
|
26,317
|
|
19,094
|
|
18,078
|
|
44,394
|
|
26,619
|
|
Plus: Depreciation and
amortization
|
|
87,924
|
|
77,842
|
|
86,651
|
|
174,576
|
|
155,416
|
|
Adjusted gross
margin
|
|
$
114,241
|
|
$
96,936
|
|
$
104,729
|
|
$
218,970
|
|
$
182,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Six Months Ended
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
(In thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
16,231
|
|
(69,935)
|
|
61,060
|
|
77,291
|
|
(244,603)
|
Income tax expense
(benefit)
|
|
26,448
|
|
9,353
|
|
23,015
|
|
49,463
|
|
23,024
|
Income (loss) from
continuing operations before income taxes
|
|
42,679
|
|
(60,582)
|
|
84,075
|
|
126,754
|
|
(221,579)
|
Investment (income)
loss
|
|
(11,743)
|
|
(822)
|
|
(9,866)
|
|
(21,609)
|
|
(985)
|
Interest
expense
|
|
46,164
|
|
42,899
|
|
45,141
|
|
91,305
|
|
89,809
|
Other, net
|
|
(1,775)
|
|
14,528
|
|
(42,375)
|
|
(44,150)
|
|
94,929
|
Adjusted operating
income (loss) (1)
|
|
75,325
|
|
(3,977)
|
|
76,975
|
|
152,300
|
|
(37,826)
|
Depreciation and
amortization
|
|
159,698
|
|
162,015
|
|
163,031
|
|
322,729
|
|
326,374
|
Adjusted EBITDA
(2)
|
|
$
235,023
|
|
$
158,038
|
|
$
240,006
|
|
$
475,029
|
|
$
288,548
|
|
|
|
|
|
|
|
(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)
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
(In thousands)
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
$
2,503,250
|
|
$
2,562,327
|
|
$
2,537,540
|
Less: Cash and
short-term investments
|
|
429,059
|
|
475,732
|
|
452,315
|
Net Debt
|
|
$
2,074,191
|
|
$
2,086,595
|
|
$
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
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
(In thousands)
|
|
2023
|
|
2023
|
|
2023
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
168,466
|
|
$
154,050
|
|
$
322,516
|
|
Add: Capital
expenditures, net of proceeds from sales of assets
|
|
(141,683)
|
|
(116,752)
|
|
(258,435)
|
|
|
|
|
|
|
|
|
|
Adjusted free cash
flow
|
|
$
26,783
|
|
$
37,298
|
|
$
64,081
|
|
|
|
|
|
|
|
|
|
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:https://www.prnewswire.com/news-releases/nabors-announces-second-quarter-2023-results-301885525.html
SOURCE Nabors Industries Ltd.