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25.10.2022 22:15:00
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Nabors Announces Third Quarter 2022 Results
HAMILTON, Bermuda, Oct. 25, 2022 /PRNewswire/ -- Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported third quarter 2022 operating revenues of $694 million, an increase of approximately 10%, compared to operating revenues of $631 million in the second quarter of 2022. The net loss attributable to Nabors shareholders for the quarter was $14 million, or $1.80 per share. This compares to a loss of $83 million, or $9.41 per share, in the second quarter. The third quarter results included a non-cash gain of $34 million, or $3.74 per share, related to mark-to-market treatment of Nabors' warrants, while the second quarter results included a non-cash charge for the warrants of $22 million, or $2.42 per share. Third quarter adjusted EBITDA was $191 million, a 21% increase compared to $158 million in the previous quarter.
Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "We had an outstanding third quarter. All of our operating segments grew sequentially. Total adjusted EBITDA increased to pre-pandemic levels, and the U.S. Drilling segment once again delivered strong growth, largely driven by continued dayrate increases in the Lower 48 market. Daily margin and EBITDA also improved in our International segment. In Drilling Solutions, the annual EBITDA run rate exceeded $100 million, and gross margin set another all-time high.
"The Lower 48 remains robust. For some time, leading-edge daily revenue has been significantly higher than our quarterly average. This remains the case today. In the third quarter our average daily revenue increased by more than $3,600 sequentially, or 14%. Meanwhile, leading-edge daily revenue is nearly $10,000 higher than the third quarter's average.
"High utilization and strong demand in the Lower 48 for high-specification rigs reflect the constructive commodity price environment and our customers' strong appetite for technologies that deliver high-end drilling performance. We expect additional rig count growth from our largest customers through the end of 2022. The discussions underway for 2023 reinforce our confidence in our target to reach 100% utilization of our high-specification fleet in 2023.
"The growth outlook in our International segment has solidified. In Saudi Arabia, our customer has recently agreed to renew 24 rigs on four-year term contracts at current market rates. As a result, over the past several quarters, 33 of the 43 rigs in the existing SANAD fleet have been extended on four-year term contracts. SANAD expects to redeploy an existing rig and add one more newbuild rig in the current quarter. Early in 2023, the remaining three newbuilds from Saudi Aramco's initial award should start operations. In Latin America, over the next few quarters we expect to add several units across markets.
"Revenue in our Drilling Solutions segment accelerated in the third quarter, growing sequentially by 11%. This improvement was broad-based, as Nabors U.S. rigs, third-party U.S. rigs, and International all saw faster growth in the quarter.
"We are very encouraged by the progress we have made in our Energy Transition initiatives. On one of our rigs, we recently deployed our innovative energy storage solution using ultracapacitors, instead of lithium batteries. In addition, testing of our hydrogen injection module is now underway on another rig. Finally, we are in the process of installing another seven PowerTAP™ modules, which allows us to connect these rigs directly and quickly to the grid. We will have 15 units deployed by year end, and another 10 in 2023."
Segment Results
The U.S. Drilling segment reported $114.5 million in adjusted EBITDA for the third quarter of 2022, a 31% increase from the prior quarter. Nabors' average Lower 48 rig count, at 92.1, increased by three rigs. Daily adjusted gross margin in the Lower 48 market averaged $11,165, 28% higher than the prior quarter.
International Drilling adjusted EBITDA totaled $85.9 million, a 4% increase from the prior quarter. Improved performance in Saudi Arabia and Latin America led the growth. The International rig count averaged 74.6. Daily adjusted gross margin for the third quarter averaged $14,589, up slightly from the prior quarter.
Drilling Solutions adjusted EBITDA increased sequentially by 13% to $25.6 million. This improvement reflects increasing activity both in the U.S. and international markets, with higher installations across all product and service categories. Adjusted gross margin as a percentage of revenue in Drilling Solutions was 52%.
In Rig Technologies, adjusted EBITDA increased by 43% in the third quarter. Revenue increased by 12% sequentially, to $50 million, mainly due to higher capital equipment sales.
Adjusted Free Cash Flow
Adjusted free cash flow totaled $35 million in the third quarter. This result was primarily driven by higher financial results across all segments, strong collections, and disciplined capital spending. Capital expenditures for the third quarter totaled $96 million, including $14 million for the SANAD newbuilds.
In the third quarter, net debt was $2.16 billion, a $23 million reduction as compared to the second quarter. Free cash flow generated in the quarter drove the improvement in net debt.
William Restrepo, Nabors CFO, stated, "Third quarter results were significantly better than we anticipated. Across the company, we continued to experience strong pricing momentum coupled with higher activity levels, more than offsetting cost pressure in certain markets. Favorable pricing and activity trends continue to improve across the globe. We expect fourth quarter results for all segments to increase materially over those of the third quarter.
"The pace of dayrate increases has been particularly brisk in the Lower 48, where we have recently started to sign contracts with revenue per day approaching $40,000. This benchmark does not include additional revenue for Drilling Solutions. Utilization for our high-specification rigs now stands at 86% and as utilization for the industry continues to increase, we expect to see higher dayrates through the end of this year and into 2023. Clearly, our decision to keep most of our fleet on short term contracts has paid off. We are now adding some term onto our portfolio of contracts. At these leading edge dayrates, we believe it makes sense to contract a portion of our Lower 48 fleet on longer term.
"We have undertaken significant multi-year investments to enhance the quality of our Lower 48 fleet, expand our footprint in Saudi Arabia, develop our automation and robotics capabilities, grow our NDS offering, and launch our clean energy strategy. Even with these investments, we have achieved significant reductions in our net debt. We now expect to close the year with net debt just above $2 billion, which translates into Net Debt to Adjusted EBITDA of about 3x. We have accomplished this in a challenging environment. Reducing leverage remains one of our main strategic goals. Given the current environment and assuming favorable commodity prices persist, we are forecasting approximately $400 million in net debt reduction during 2023."
Outlook
Nabors expects the following quarterly metrics:
U.S. Drilling
- An increase in average Lower 48 rig count of four to five rigs vs. the third quarter average
- Lower 48 adjusted gross margin per day of approximately $13,400 - $13,600
- A $5 million decrease in EBITDA for Alaska and U.S. Offshore combined, mainly as our largest offshore rig goes down for maintenance
International
- Rig count up approximately one rig vs. the third quarter average
- Adjusted gross margin per day of approximately $14,900
Drilling Solutions
- Adjusted EBITDA up by approximately 15% over the third quarter level
Rig Technologies
- Adjusted EBITDA up by approximately $2 million over the third quarter level
Capital Expenditures
- Capital expenditures of $100 to $120 million, of which approximately $60 million supports SANAD newbuilds
- Capital expenditures for the full year 2022 of $380 to $400 million
Adjusted Free Cash Flow
- Free cash flow for the full year 2022 above $100 million
Mr. Petrello concluded, "We are proud of our third quarter results. As we look ahead, the commodity price environment remains positive, globally, for both oil and gas. Several of our strategic initiatives – building the drilling performance software portfolio, targeting the third-party rig market, and modularizing our technology – are gaining momentum. These set us in a unique position to capitalize on the favorable market. With that, we anticipate even stronger results in the fourth quarter."
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.
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) | 2022 | 2021 | 2022 | 2022 | 2021 | |||||||
Revenues and other income: | ||||||||||||
Operating revenues | $ 694,136 | $ 524,165 | $ 630,943 | $ 1,893,618 | $ 1,474,009 | |||||||
Investment income (loss) | 4,813 | 200 | 822 | 5,798 | 1,401 | |||||||
Total revenues and other income | 698,949 | 524,365 | 631,765 | 1,899,416 | 1,475,410 | |||||||
Costs and other deductions: | ||||||||||||
Direct costs | 432,311 | 336,538 | 403,797 | 1,208,820 | 939,658 | |||||||
General and administrative expenses | 57,594 | 52,897 | 58,167 | 169,400 | 159,137 | |||||||
Research and engineering | 13,409 | 9,498 | 10,941 | 36,028 | 24,930 | |||||||
Depreciation and amortization | 169,857 | 173,375 | 162,015 | 496,231 | 525,426 | |||||||
Interest expense | 43,841 | 42,217 | 42,899 | 133,650 | 126,906 | |||||||
Other, net | (25,954) | 22,758 | 14,528 | 68,975 | 96,559 | |||||||
Total costs and other deductions | 691,058 | 637,283 | 692,347 | 2,113,104 | 1,872,616 | |||||||
Income (loss) from continuing operations before income taxes | 7,891 | (112,918) | (60,582) | (213,688) | (397,206) | |||||||
Income tax expense (benefit) | 12,352 | 2,784 | 9,353 | 35,376 | 37,228 | |||||||
Income (loss) from continuing operations, net of tax | (4,461) | (115,702) | (69,935) | (249,064) | (434,434) | |||||||
Income (loss) from discontinued operations, net of tax | - | (20) | - | - | 7 | |||||||
Net income (loss) | (4,461) | (115,722) | (69,935) | (249,064) | (434,427) | |||||||
Less: Net (income) loss attributable to noncontrolling interest | (9,322) | (6,778) | (12,982) | (32,132) | (21,168) | |||||||
Net income (loss) attributable to Nabors | (13,783) | (122,500) | (82,917) | (281,196) | (455,595) | |||||||
Less: Preferred stock dividend | - | - | - | - | (3,653) | |||||||
Net income (loss) attributable to Nabors common shareholders | $ (13,783) | $ (122,500) | $ (82,917) | $ (281,196) | $ (459,248) | |||||||
Amounts attributable to Nabors common shareholders: | ||||||||||||
Net income (loss) from continuing operations | $ (13,783) | $ (122,480) | $ (82,917) | $ (281,196) | $ (459,255) | |||||||
Net income (loss) from discontinued operations | - | (20) | - | - | 7 | |||||||
Net income (loss) attributable to Nabors common shareholders | $ (13,783) | $ (122,500) | $ (82,917) | $ (281,196) | $ (459,248) | |||||||
Earnings (losses) per share: | ||||||||||||
Basic from continuing operations | $ (1.80) | $ (15.79) | $ (9.41) | $ (32.72) | $ (62.26) | |||||||
Basic from discontinued operations | - | - | - | - | - | |||||||
Total Basic | $ (1.80) | $ (15.79) | $ (9.41) | $ (32.72) | $ (62.26) | |||||||
Diluted from continuing operations | $ (1.80) | $ (15.79) | $ (9.41) | $ (32.72) | $ (62.26) | |||||||
Diluted from discontinued operations | - | - | - | - | - | |||||||
Total Diluted | $ (1.80) | $ (15.79) | $ (9.41) | $ (32.72) | $ (62.26) | |||||||
Weighted-average number of common shares outstanding: | ||||||||||||
Basic | 9,099 | 7,907 | 9,081 | 8,830 | 7,490 | |||||||
Diluted | 9,099 | 7,907 | 9,081 | 8,830 | 7,490 | |||||||
Adjusted EBITDA | $ 190,822 | $ 125,232 | $ 158,038 | $ 479,370 | $ 350,284 | |||||||
Adjusted operating income (loss) | $ 20,965 | $ (48,143) | $ (3,977) | $ (16,861) | $ (175,142) | |||||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
September 30, | June 30, | December 31, | |||||
(In thousands) | 2022 | 2022 | 2021 | ||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and short-term investments | $ 425,070 | $ 417,978 | $ 991,488 | ||||
Accounts receivable, net | 302,963 | 278,112 | 287,572 | ||||
Other current assets | 237,873 | 227,290 | 222,749 | ||||
Total current assets | 965,906 | 923,380 | 1,501,809 | ||||
Property, plant and equipment, net | 3,100,293 | 3,186,849 | 3,348,498 | ||||
Other long-term assets | 702,356 | 690,754 | 675,057 | ||||
Total assets | $ 4,768,555 | $ 4,800,983 | $ 5,525,364 | ||||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Current portion of debt | $ - | $ - | $ - | ||||
Other current liabilities | 559,166 | 524,058 | 525,228 | ||||
Total current liabilities | 559,166 | 524,058 | 525,228 | ||||
Long-term debt | 2,585,517 | 2,601,510 | 3,262,795 | ||||
Other long-term liabilities | 344,702 | 394,210 | 343,120 | ||||
Total liabilities | 3,489,385 | 3,519,778 | 4,131,143 | ||||
Redeemable noncontrolling interest in subsidiary | 683,005 | 680,403 | 675,283 | ||||
Equity: | |||||||
Shareholders' equity | 439,241 | 453,200 | 590,656 | ||||
Noncontrolling interest | 156,924 | 147,602 | 128,282 | ||||
Total equity | 596,165 | 600,802 | 718,938 | ||||
Total liabilities and equity | $ 4,768,555 | $ 4,800,983 | $ 5,525,364 | ||||
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) | 2022 | 2021 | 2022 | 2022 | 2021 | |||||||
Operating revenues: | ||||||||||||
U.S. Drilling | $ 297,178 | $ 173,441 | $ 253,008 | $ 767,769 | $ 477,346 | |||||||
Canada Drilling | - | 6,034 | - | - | 39,336 | |||||||
International Drilling | 306,355 | 270,008 | 296,320 | 881,705 | 772,128 | |||||||
Drilling Solutions | 61,981 | 45,880 | 55,879 | 172,042 | 120,697 | |||||||
Rig Technologies (1) | 50,496 | 42,053 | 45,094 | 132,326 | 102,353 | |||||||
Other reconciling items (2) | (21,874) | (13,251) | (19,358) | (60,224) | (37,851) | |||||||
Total operating revenues | $ 694,136 | $ 524,165 | $ 630,943 | $ 1,893,618 | $ 1,474,009 | |||||||
Adjusted EBITDA: (3) | ||||||||||||
U.S. Drilling | $ 114,486 | $ 62,132 | $ 87,371 | $ 276,122 | $ 180,702 | |||||||
Canada Drilling | (9) | 1,607 | (15) | (43) | 14,274 | |||||||
International Drilling | 85,922 | 76,211 | 82,446 | 239,616 | 210,144 | |||||||
Drilling Solutions | 25,612 | 15,620 | 22,751 | 68,363 | 39,874 | |||||||
Rig Technologies (1) | 4,818 | 3,005 | 3,364 | 7,138 | 4,507 | |||||||
Other reconciling items (4) | (40,007) | (33,343) | (37,879) | (111,826) | (99,216) | |||||||
Total adjusted EBITDA | $ 190,822 | $ 125,232 | $ 158,038 | $ 479,370 | $ 350,284 | |||||||
Adjusted operating income (loss): (5) | ||||||||||||
U.S. Drilling | $ 37,776 | $ (19,700) | $ 8,288 | $ 40,213 | $ (63,905) | |||||||
Canada Drilling | (9) | 1,371 | (15) | (43) | 2,670 | |||||||
International Drilling | (907) | (7,297) | 4,605 | (2,629) | (34,368) | |||||||
Drilling Solutions | 20,099 | 8,607 | 18,260 | 53,068 | 19,841 | |||||||
Rig Technologies (1) | 3,412 | 1,926 | 2,127 | 2,788 | (1,335) | |||||||
Other reconciling items (4) | (39,406) | (33,050) | (37,242) | (110,258) | (98,045) | |||||||
Total adjusted operating income (loss) | $ 20,965 | $ (48,143) | $ (3,977) | $ (16,861) | $ (175,142) | |||||||
Rig activity: | ||||||||||||
Average Rigs Working: (7) | ||||||||||||
Lower 48 | 92.1 | 67.6 | 89.3 | 88.3 | 62.5 | |||||||
Other US | 7.7 | 5.0 | 7.1 | 7.2 | 5.0 | |||||||
U.S. Drilling | 99.8 | 72.6 | 96.4 | 95.5 | 67.5 | |||||||
Canada Drilling | - | 4.1 | - | - | 8.6 | |||||||
International Drilling | 74.6 | 67.0 | 74.3 | 73.6 | 66.7 | |||||||
Total average rigs working | 174.4 | 143.7 | 170.7 | 169.1 | 142.8 | |||||||
Daily Rig Revenue: (6),(8) | ||||||||||||
Lower 48 | $ 29,190 | $ 21,312 | $ 25,566 | $ 26,050 | $ 21,314 | |||||||
Other US | 70,661 | 88,175 | 70,181 | 70,953 | 83,177 | |||||||
U.S. Drilling (10) | 32,380 | 25,940 | 28,852 | 29,449 | 25,908 | |||||||
Canada Drilling | - | 16,056 | - | - | 16,693 | |||||||
International Drilling | 44,658 | 43,789 | 43,808 | 43,859 | 42,410 | |||||||
Daily Adjusted Gross Margin: (6),(9) | ||||||||||||
Lower 48 | $ 11,165 | $ 7,025 | $ 8,706 | $ 9,255 | $ 7,450 | |||||||
Other US | 38,034 | 53,947 | 36,300 | 37,215 | 52,251 | |||||||
U.S. Drilling (10) | 13,232 | 10,272 | 10,738 | 11,371 | 10,777 | |||||||
Canada Drilling | - | 5,654 | - | - | 6,758 | |||||||
International Drilling | 14,589 | 14,375 | 14,331 | 14,033 | 13,582 | |||||||
(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 (loss) from discontinued operations, net of tax, 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 (losses) from discontinued operations, net of tax, 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 September 30, 2022 | |||||||||||||||
U.S. | Canada | International | Drilling | Rig | Other | Total | |||||||||
Adjusted operating income (loss) | $ 37,776 | $ (9) | $ (907) | $ 20,099 | $ 3,412 | $ (39,406) | $ 20,965 | ||||||||
Depreciation and amortization | 76,710 | - | 86,829 | 5,513 | 1,406 | (601) | 169,857 | ||||||||
Adjusted EBITDA | $ 114,486 | $ (9) | $ 85,922 | $ 25,612 | $ 4,818 | $ (40,007) | $ 190,822 | ||||||||
Three Months Ended September 30, 2021 | |||||||||||||||
U.S. | Canada | International | Drilling | Rig | Other | Total | |||||||||
Adjusted operating income (loss) | $ (19,700) | $ 1,371 | $ (7,297) | $ 8,607 | $ 1,926 | $ (33,050) | $ (48,143) | ||||||||
Depreciation and amortization | 81,832 | 236 | 83,508 | 7,013 | 1,079 | (293) | 173,375 | ||||||||
Adjusted EBITDA | $ 62,132 | $ 1,607 | $ 76,211 | $ 15,620 | $ 3,005 | $ (33,343) | $ 125,232 | ||||||||
Three Months Ended June 30, 2022 | |||||||||||||||
U.S. | Canada | International | Drilling | Rig | Other | Total | |||||||||
Adjusted operating income (loss) | $ 8,288 | $ (15) | $ 4,605 | $ 18,260 | $ 2,127 | $ (37,242) | $ (3,977) | ||||||||
Depreciation and amortization | 79,083 | - | 77,841 | 4,491 | 1,237 | (637) | 162,015 | ||||||||
Adjusted EBITDA | $ 87,371 | $ (15) | $ 82,446 | $ 22,751 | $ 3,364 | $ (37,879) | $ 158,038 | ||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||
U.S. | Canada | International | Drilling | Rig | Other | Total | |||||||||
Adjusted operating income (loss) | $ 40,213 | $ (43) | $ (2,629) | $ 53,068 | $ 2,788 | $ (110,258) | $ (16,861) | ||||||||
Depreciation and amortization | 235,909 | - | 242,245 | 15,295 | 4,350 | (1,568) | 496,231 | ||||||||
Adjusted EBITDA | $ 276,122 | $ (43) | $ 239,616 | $ 68,363 | $ 7,138 | $ (111,826) | $ 479,370 | ||||||||
Nine Months Ended September 30, 2021 | |||||||||||||||
U.S. | Canada | International | Drilling | Rig | Other | Total | |||||||||
Adjusted operating income (loss) | $ (63,905) | $ 2,670 | $ (34,368) | $ 19,841 | $ (1,335) | $ (98,045) | $(175,142) | ||||||||
Depreciation and amortization | 244,607 | 11,604 | 244,512 | 20,033 | 5,842 | (1,171) | 525,426 | ||||||||
Adjusted EBITDA | $ 180,702 | $14,274 | $ 210,144 | $ 39,874 | $ 4,507 | $ (99,216) | $ 350,284 | ||||||||
Adjusted EBITDA by segment represents adjusted income (loss) plus depreciation and amortization. | |||||||||||||||
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) | 2022 | 2021 | 2022 | 2022 | 2021 | ||||||
Lower 48 - U.S. Drilling | |||||||||||
Adjusted operating income (loss) | $ 25,551 | $ (30,783) | $ (937) | $ 10,018 | $ (93,526) | ||||||
Plus: General and administrative costs | 4,798 | 4,606 | 4,740 | 13,983 | 13,281 | ||||||
Plus: Research and engineering | 1,652 | 1,296 | 1,611 | 4,902 | 2,671 | ||||||
GAAP Gross Margin | 32,001 | (24,881) | 5,414 | 28,903 | (77,574) | ||||||
Plus: Depreciation and amortization | 62,583 | 68,603 | 65,312 | 194,139 | 204,644 | ||||||
Adjusted gross margin | $ 94,584 | $ 43,722 | $ 70,726 | $ 223,042 | $ 127,070 | ||||||
Other - U.S. Drilling | |||||||||||
Adjusted operating income (loss) | $ 12,225 | $ 11,083 | $ 9,225 | $ 30,195 | $ 29,621 | ||||||
Plus: General and administrative costs | 343 | 531 | 307 | 1,034 | 1,608 | ||||||
Plus: Research and engineering | 157 | 120 | 139 | 428 | 303 | ||||||
GAAP Gross Margin | 12,725 | 11,734 | 9,671 | 31,657 | 31,532 | ||||||
Plus: Depreciation and amortization | 14,127 | 13,229 | 13,771 | 41,770 | 39,962 | ||||||
Adjusted gross margin | $ 26,852 | $ 24,963 | $ 23,442 | $ 73,427 | $ 71,494 | ||||||
U.S. Drilling | |||||||||||
Adjusted operating income (loss) | $ 37,776 | $ (19,700) | $ 8,288 | $ 40,213 | $ (63,905) | ||||||
Plus: General and administrative costs | 5,141 | 5,137 | 5,047 | 15,017 | 14,889 | ||||||
Plus: Research and engineering | 1,809 | 1,416 | 1,750 | 5,330 | 2,974 | ||||||
GAAP Gross Margin | 44,726 | (13,147) | 15,085 | 60,560 | (46,042) | ||||||
Plus: Depreciation and amortization | 76,710 | 81,832 | 79,083 | 235,909 | 244,606 | ||||||
Adjusted gross margin | $ 121,436 | $ 68,685 | $ 94,168 | $ 296,469 | $ 198,564 | ||||||
Canada Drilling | |||||||||||
Adjusted operating income (loss) | $ (9) | $ 1,371 | $ (15) | $ (43) | $ 2,670 | ||||||
Plus: General and administrative costs | 9 | 488 | 15 | 41 | 1,536 | ||||||
Plus: Research and engineering | - | 30 | - | - | 115 | ||||||
GAAP Gross Margin | - | 1,889 | - | (2) | 4,321 | ||||||
Plus: Depreciation and amortization | - | 236 | - | 3 | 11,605 | ||||||
Adjusted gross margin | $ - | $ 2,125 | $ - | $ 1 | $ 15,926 | ||||||
International Drilling | |||||||||||
Adjusted operating income (loss) | $ (907) | $ (7,297) | $ 4,605 | $ (2,629) | $ (34,368) | ||||||
Plus: General and administrative costs | 12,599 | 10,908 | 13,056 | 38,137 | 32,935 | ||||||
Plus: Research and engineering | 1,558 | 1,520 | 1,433 | 4,360 | 4,202 | ||||||
GAAP Gross Margin | 13,250 | 5,131 | 19,094 | 39,868 | 2,769 | ||||||
Plus: Depreciation and amortization | 86,830 | 83,509 | 77,842 | 242,247 | 244,514 | ||||||
Adjusted gross margin | $ 100,080 | $ 88,640 | $ 96,936 | $ 282,115 | $ 247,283 | ||||||
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) | 2022 | 2021 | 2022 | 2022 | 2021 | |||||||
Net income (loss) | $ (4,461) | $ (115,722) | $ (69,935) | $ (249,064) | $ (434,427) | |||||||
(Income) loss from discontinued operations, net of tax | - | 20 | - | - | (7) | |||||||
Income (loss) from continuing operations, net of tax | (4,461) | (115,702) | (69,935) | (249,064) | (434,434) | |||||||
Income tax expense (benefit) | 12,352 | 2,784 | 9,353 | 35,376 | 37,228 | |||||||
Income (loss) from continuing operations before income taxes | 7,891 | (112,918) | (60,582) | (213,688) | (397,206) | |||||||
Investment (income) loss | (4,813) | (200) | (822) | (5,798) | (1,401) | |||||||
Interest expense | 43,841 | 42,217 | 42,899 | 133,650 | 126,906 | |||||||
Other, net | (25,954) | 22,758 | 14,528 | 68,975 | 96,559 | |||||||
Adjusted operating income (loss) (1) | 20,965 | (48,143) | (3,977) | (16,861) | (175,142) | |||||||
Depreciation and amortization | 169,857 | 173,375 | 162,015 | 496,231 | 525,426 | |||||||
Adjusted EBITDA (2) | $ 190,822 | $ 125,232 | $ 158,038 | $ 479,370 | $ 350,284 | |||||||
(1) Adjusted operating income (loss) represents net income (loss) before income (losses) from discontinued operations, net of tax, 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 (loss) from discontinued operations, net of tax, 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 | ||||||||
September 30, | June 30, | December 31, | ||||||
(In thousands) | 2022 | 2022 | 2021 | |||||
(Unaudited) | ||||||||
Long-term debt | $ 2,585,517 | $ 2,601,510 | $ 3,262,795 | |||||
Less: Cash and short-term investments | 425,070 | 417,978 | 991,488 | |||||
Net Debt | $ 2,160,447 | $ 2,183,532 | $ 2,271,307 | |||||
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) | 2022 | 2022 | 2022 | ||||
Net cash provided by operating activities | 138,950 | $ 120,796 | $ 301,100 | ||||
Add: Capital expenditures, net of proceeds from sales of assets | (103,591) | (63,872) | (248,050) | ||||
Adjusted free cash flow | $ 35,359 | $ 56,924 | $ 53,050 | ||||
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-third-quarter-2022-results-301659097.html
SOURCE Nabors Industries Ltd.
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