Nabors 2Q2011 Operating Income Equals $175 Million
HAMILTON, Bermuda, July 26, 2011 /PRNewswire/ -- Nabors Industries Ltd. (NYSE: NBR) today announced its financial results for the second quarter and first six months of 2011. The Company posted adjusted income derived from operating activities of $174.8 million for the current quarter, which compares to $126.8 million in the second quarter of 2010 and $191.0 million in the first quarter of 2011. Net Income from continuing operations was $68.1 million ($0.23 per diluted share), compared to $44.0 million ($0.15 per diluted share) in the second quarter of 2010 and $84.3 million ($0.29 per diluted share) in the first quarter of 2011. Operating revenues and earnings from unconsolidated affiliates totaled $1.36 billion in the current quarter, compared to $904.9 million in the second quarter of last year and $1.40 billion in the first quarter of this year. For the six months ended June 30, 2011 adjusted income derived from operating activities was $365.9 million, compared to $268.6 million in the first six months of 2010. Net income from continuing operations for the first six months of 2011 was $152.5 million ($0.52 per diluted share), compared to $87.5 million ($0.31 per diluted share) in 2010. Operating revenues and earnings from unconsolidated affiliates for the first six months of 2011 totaled $2.76 billion, compared to $1.80 billion for the first six months of 2010. Net income from discontinued operations for the current quarter was $123.9 million ($0.42 per diluted share), reflecting gains realized on the sale of the Company’s Colombia E&P assets.
Gene Isenberg, Nabors’ Chairman and CEO, commented, “The quarter exceeded our previous indications with better than anticipated results in our US Lower 48, Alaskan and Canadian land drilling units. The solid June results in our Pressure Pumping business suggest a return to expected levels of performance. Our International, US Well-servicing and US Offshore units performed as expected, as did our Other Operating Segments.
“The largest sequential improvement came from our US Lower 48 land drilling business where operating income increased by $19.1 million to $99.2 million. This was the result of a 6.3 rig increase in activity and an $807 per day increase in average margins, which included $395 per day in early termination payments. This unit secured another seven term contracts for new rigs during the quarter, bringing the total new build backlog to 36, including eight that are not yet committed to term contracts. We have already deployed eight during the first two quarters and expect to deploy another 13 before the end of the year, with the remaining 23 rigs expected to deploy throughout 2012. The outlook for this segment remains very promising, with significant interest in additional new and upgraded existing rigs continuing.
“Our US Well Servicing operations posted operating income of $16.5 million in the second quarter, a sequential increase of $5.4 million. The primary drivers for this increase were improved trucking and 24-hour rig activity and an increase in contributions from the northeast region, partially offset by lingering weather issues in North Dakota and in Marcellus, both areas where this unit is increasing its presence significantly. Additionally, this unit incurred significant extra expense in labor and materials to reactivate assets for upcoming work. We expect Nabors Well Services to continue to improve in subsequent quarters on the strength of higher pricing and the deployment of incremental assets.
“As expected, results of $35.9 million in our International operations were flat with the first quarter, with a similar expectation for the third quarter. This slippage, in results compared to earlier forecasts stems from four primary issues: multiple delays in finalizing the execution of contracts, most of which require rig upgrades and/or recertifications; infrastructure and importation difficulties in Iraq; turmoil in Yemen which has caused us to eliminate any income expectations for the balance of 2011; and further deferrals of rig startups in Mexico and Colombia.
“We believe we are at the bottom of the downturn that has characterized the last 2-1/2 years internationally and we are embarking upon a significant transition into what we expect to be a long-term up cycle, although with much lower contributions from the offshore component of this business. We currently have 102 rigs operating internationally, and we expect to be at or above 120 by year-end, with at least 10 more expected to commence operations during the first half of 2012. In Saudi Arabia, we have nearly 20 rigs undergoing recertification, upgrade or modification, yielding reduced income due to the downtime incurred. Nonetheless, we expect that by the second quarter of 2012 the rig count in Saudi Arabia will climb to more than 30 from its current level of 21, and we have seven rigs in Iraq that will commence operations during the same period. Four large, high-capital/high-margin projects are also under construction for other venues and should begin contributing during the fourth quarter. All of this supports our improving outlook, although projecting the precise timing of international startups is always problematic.
“In our Pressure Pumping segment, operating income for the quarter was essentially flat at $43.9 million, reflecting lost income and costs associated with delayed equipment deliveries and adverse weather. A wet spring in the Marcellus Shale and the combination of late breakup and flooding in North Dakota impacted this business disproportionately given that these regions constitute nearly half of its current horsepower. We received the first spread of incremental frac equipment in mid-May and recently received two more as the pace of new frac equipment deliveries is back on track, although now approximately three months later than originally planned. We expect to have the remaining six spreads in service by the end of the first quarter of 2012, bringing our hydraulic fracturing fleet to a total of 854,000 horsepower. We now have 10 term contracts in place covering eight currently operating frac spreads and two that are yet to be delivered. We recently announced the establishment of Superior Canada Well Services and have numerous prospects for work in that area utilizing Nabors’ existing infrastructure. We remain confident in the outlook for this business and continue to seek further expansion opportunities. We anticipate third quarter income to return to expected levels as new equipment arrives and costs and startup issues abate. This was evidenced by results in the month of June which comprised approximately half of the quarter’s income.
“Our US Offshore operations improved slightly, but still posted a net loss of $1.1 million as they continue to be plagued by permitting and regulatory obstacles in the aftermath of the Macondo incident. We expect to see a modest profit in the third quarter followed by, gradual improvement in subsequent quarters as more rigs return to operations. Although the exact timing remains difficult to forecast, we currently expect activity to return to more normalized levels by mid 2012. Together with the deployment of two new deep-water platform rigs, this may result in a 2013 that exceeds previous highs.
“Our Canada operations produced a small loss of $2.5 million, much better than initially anticipated for the seasonally weak spring-thaw quarter. While rain in July has caused a slower than expected start to the third quarter, the balance of the quarter looks promising, leading to an improved outlook for the full year. Numerous opportunities for new rigs have emerged in this market which implies a more robust longer-term outlook than we previously thought.
“In Alaska seasonally low results of $8.3 million were modestly better than expected as some winter work extended into the second quarter. Subsequent quarters should show further decreases in quarterly income, but our full-year expectations are still intact. 2012 looks more promising, with several larger projects pending.
“Our Other Operating Segments posted a sizeable increase in income at $13.6 million, with strong results in Canrig offsetting seasonal slowdown in the Alaskan joint venture companies. Canrig’s first quarter supply chain delays have been resolved, while both customer shipments and order backlog remain at robust levels. During the quarter we agreed to purchase our partner’s interest in Peak Oilfield Services - our Alaska rig moving, logistics and oilfield construction joint venture. The transaction should, close later this week, at which time Peak will become a wholly owned subsidiary of Nabors. We are exploring expansion opportunities for this business both within Alaska and the Lower 48.
“Our Oil and Gas operations posted a profit of $5.0 million in the quarter. Income from discontinued operations reflected a gain of $129 million on proceeds of $250 million from the sale of our Colombian E&P assets.
“Financially we remain strong with over $700 million in cash and investments at the end of the quarter. During the quarter, we effected a net reduction in debt of approximately $200 million with the redemption of $1.4 billion in convertible notes. We also funded $660 million in capital expenditures, all accomplished through a combination of cash, proceeds from the E&P asset sales and $1.2 billion from our credit lines at an interest rate of approximately 1.75%. Cash generation from operations is accelerating and should continue to do so as many new projects deploy.
“In summary, while our first two quarters have seen a number of anticipated and unanticipated variances both internationally and in our pumping business, our North American rig operations and Canrig have been performing exceptionally well and should continue to see robust growth in coming quarters. As we saw in June, our pumping business is quickly getting on stride and the outlook for our International segment should turn in the fourth quarter. All of this leads us to believe that our second half results will demonstrate a solid upward trajectory in all of our units other than the Gulf of Mexico and Alaska, and we expect a similar trajectory for these units in 2012 and 2013.”
The Nabors companies own and operate approximately 551 land drilling rigs and approximately 748 land workover and well-servicing rigs in North America. Nabors’ actively marketed offshore fleet consists of 40 platform rigs, 13 jackup units and 4 barge rigs in the United States and multiple international markets. In addition, Nabors manufactures top drives and drilling instrumentation systems and provides comprehensive oilfield hauling, engineering, civil construction, logistics, and facilities maintenance and project management services. Nabors participates in most of the significant oil and gas markets in the world.
The information above includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors’ actual results may differ materially from those indicated or implied by such forward-looking statements. The projections contained in this release reflect management’s estimates as of the date of the release. Nabors does not undertake to update these forward-looking statements.
For further information, please contact Dennis A. Smith, Director of Corporate Development for Nabors Corporate Services, Inc., at 281-775-8038. To request investor materials, contact our corporate headquarters in Hamilton, Bermuda at 441-292-1510 or via email at [email protected].
NABORS INDUSTRIES LTD. AND SUBSIDIARIES |
|||||||||||
CONSOLIDATED STATEMENTS OF INCOME (LOSS) |
|||||||||||
(Unaudited) |
|||||||||||
Three Months Ended |
Six Months Ended |
||||||||||
June 30, |
March 31, |
June 30, |
|||||||||
(In thousands, except per share amounts) |
2011 |
2010 |
2011 |
2011 |
2010 |
||||||
Revenues and other income: |
|||||||||||
Operating revenues |
$ 1,354,905 |
$ 896,029 |
$ 1,381,279 |
$ 2,736,184 |
$ 1,787,375 |
||||||
Earnings (losses) from unconsolidated affiliates |
9,307 |
8,845 |
16,274 |
25,581 |
16,487 |
||||||
Investment income (loss) |
(969) |
2,314 |
12,287 |
11,318 |
(243) |
||||||
Total revenues and other income |
1,363,243 |
907,188 |
1,409,840 |
2,773,083 |
1,803,619 |
||||||
Costs and other deductions: |
|||||||||||
Direct costs |
835,112 |
517,531 |
858,371 |
1,693,483 |
1,022,728 |
||||||
General and administrative expenses |
125,648 |
80,337 |
118,458 |
244,106 |
155,763 |
||||||
Depreciation and amortization |
225,912 |
175,397 |
226,102 |
452,014 |
346,933 |
||||||
Depletion |
2,698 |
4,841 |
3,573 |
6,271 |
9,868 |
||||||
Interest expense |
63,739 |
65,293 |
73,924 |
137,663 |
132,062 |
||||||
Losses (gains) on sales and retirements of |
|||||||||||
long-lived assets and other expense (income), net |
5,572 |
11,024 |
6,029 |
11,601 |
31,391 |
||||||
Total costs and other deductions |
1,258,681 |
854,423 |
1,286,457 |
2,545,138 |
1,698,745 |
||||||
Income (loss) from continuing operations before income taxes |
104,562 |
52,765 |
123,383 |
227,945 |
104,874 |
||||||
Income tax expense (benefit): |
|||||||||||
Current |
7,791 |
17,652 |
16,653 |
24,444 |
30,297 |
||||||
Deferred |
27,873 |
(8,858) |
21,654 |
49,527 |
(12,913) |
||||||
Income tax expense (benefit) |
35,664 |
8,794 |
38,307 |
73,971 |
17,384 |
||||||
Subsidiary preferred stock dividend |
750 |
- |
750 |
1,500 |
- |
||||||
Income (loss) from continuing operations, net of tax |
68,148 |
43,971 |
84,326 |
152,474 |
87,490 |
||||||
Income (loss) from discontinued operations, net of tax |
123,906 |
(909) |
(2,170) |
121,736 |
(5,330) |
||||||
Net income (loss) |
192,054 |
43,062 |
82,156 |
274,210 |
82,160 |
||||||
Less: Net (income) loss attributable to noncontrolling interest |
394 |
559 |
669 |
1,063 |
1,661 |
||||||
Net income (loss) attributable to Nabors |
$ 192,448 |
$ 43,621 |
$ 82,825 |
$ 275,273 |
$ 83,821 |
||||||
Earnings (losses) per share: (1) |
|||||||||||
Basic from continuing operations |
$ .24 |
$ .15 |
$ .30 |
$ .54 |
$ .31 |
||||||
Basic from discontinued operations |
$ .43 |
$ - |
$ (.01) |
$ .42 |
$ (.02) |
||||||
Basic |
$ .67 |
$ .15 |
$ .29 |
$ .96 |
$ .29 |
||||||
Diluted from continuing operations |
$ .23 |
$ .15 |
$ .29 |
$ .52 |
$ .31 |
||||||
Diluted from discontinued operations |
$ .42 |
$ - |
$ (.01) |
$ .42 |
$ (.02) |
||||||
Diluted |
$ .65 |
$ .15 |
$ .28 |
$ .94 |
$ .29 |
||||||
Weighted-average number |
|||||||||||
of common shares outstanding: (1) |
|||||||||||
Basic |
287,311 |
285,181 |
286,114 |
286,712 |
284,927 |
||||||
Diluted |
294,298 |
289,796 |
292,689 |
293,493 |
290,266 |
||||||
Adjusted income (loss) derived from operating activities (2) |
$ 174,842 |
$ 126,768 |
$ 191,049 |
$ 365,891 |
$ 268,570 |
||||||
(1) |
See "Computation of Earnings (Losses) Per Share" included herein as a separate schedule. |
|
(2) |
Adjusted income (loss) derived from operating activities is computed by: subtracting direct costs, general and administrative expenses, depreciation and amortization, and depletion expense from Operating revenues and then adding Earnings (losses) from unconsolidated affiliates. These amounts should not be used as a substitute to those amounts reported under accounting principles generally accepted in the United States of America (“GAAP”). However, management evaluates the performance of our business units and the consolidated company based on several criteria, including adjusted income (loss) derived from operating activities, because it believes that these financial measures accurately reflect our ongoing profitability. A reconciliation of this non-GAAP measure to income (loss) from continuing operations before income taxes, which is a GAAP measure, is provided within the table set forth immediately following the heading "Segment Reporting". |
|
NABORS INDUSTRIES LTD. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(Unaudited) |
|||||||
June 30, |
March 31, |
December 31, |
|||||
(In thousands, except ratios) |
2011 |
2011 |
2010 |
||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and short-term investments |
$ 673,042 |
$ 730,307 |
$ 801,190 |
||||
Accounts receivable, net |
1,191,182 |
1,242,954 |
1,116,510 |
||||
Assets held for sale |
311,295 |
357,516 |
352,048 |
||||
Other current assets |
377,422 |
380,353 |
343,182 |
||||
Total current assets |
2,552,941 |
2,711,130 |
2,612,930 |
||||
Long-term investments and other receivables |
42,119 |
43,744 |
40,300 |
||||
Property, plant and equipment, net |
8,372,405 |
7,975,957 |
7,815,419 |
||||
Goodwill |
494,100 |
494,005 |
494,372 |
||||
Investment in unconsolidated affiliates |
303,970 |
300,425 |
267,723 |
||||
Other long-term assets |
350,117 |
365,147 |
415,825 |
||||
Total assets |
$ 12,115,652 |
$ 11,890,408 |
$ 11,646,569 |
||||
LIABILITIES AND EQUITY |
|||||||
Current liabilities: |
|||||||
Current portion of long-term debt |
$ 881 |
$ 1,391,224 |
$ 1,379,018 |
||||
Other current liabilities |
1,024,069 |
839,368 |
775,362 |
||||
Total current liabilities |
1,024,950 |
2,230,592 |
2,154,380 |
||||
Long-term debt |
4,264,586 |
3,064,035 |
3,064,126 |
||||
Other long-term liabilities |
1,088,453 |
1,052,299 |
1,016,012 |
||||
Total liabilities |
6,377,989 |
6,346,926 |
6,234,518 |
||||
Subsidiary preferred stock (1) |
69,188 |
69,188 |
69,188 |
||||
Equity: |
|||||||
Shareholders' equity |
5,655,504 |
5,459,905 |
5,328,162 |
||||
Noncontrolling interest |
12,971 |
14,389 |
14,701 |
||||
Total equity |
5,668,475 |
5,474,294 |
5,342,863 |
||||
Total liabilities and equity |
$ 12,115,652 |
$ 11,890,408 |
$ 11,646,569 |
||||
Cash, short-term and long-term investments (2) |
$ 715,161 |
$ 774,051 |
$ 841,490 |
||||
Funded debt to capital ratio: (3) |
|||||||
- Gross |
0.40 : 1 |
0.42 : 1 |
0.42 : 1 |
||||
- Net of cash and investments |
0.36 : 1 |
0.37 : 1 |
0.37 : 1 |
||||
Interest coverage ratio: (4) |
7.7 : 1 |
7.4 : 1 |
7.0 : 1 |
||||
(1) |
Represents preferred stock acquired in September 2010. 75,000 shares of such stock are outstanding and pay quarterly dividends at an annual rate of 4%. |
|
(2) |
The June 30, 2011, March 31, 2011 and December 31, 2010 amounts include $36.0 million, $36.4 million and $32.9 million, respectively, in oil and gas financing receivables that were included in long-term investments and other receivables. |
|
(3) |
The gross funded debt to capital ratio is calculated by dividing (x) funded debt by (y) funded debt plus deferred tax liabilities (net of deferred tax assets) plus capital. Funded debt is the sum of (1) short-term borrowings, (2) the current portion of long-term debt and (3) long-term debt. Capital is shareholders' equity. The net funded debt to capital ratio is calculated by dividing (x) net funded debt by (y) net funded debt plus deferred tax liabilities (net of deferred tax assets) plus capital. Net funded debt is funded debt minus the sum of cash and cash equivalents and short-term and long-term investments and other receivables. Both of these ratios are used to calculate a company’s leverage in relation to its capital. Neither ratio measures operating performance or liquidity as defined by GAAP and, therefore, may not be comparable to similarly titled measures presented by other companies. |
|
(4) |
The interest-coverage ratio is a trailing 12-month quotient of the sum of (i) income from continuing operations, net of tax, (ii) net income (loss) attributable to noncontrolling interest, (iii) subsidiary preferred stock dividends, (iv) interest expense, (v) depreciation and amortization, (vi) depletion expense, (vii) income tax expense (benefit) less investment income (loss) divided by the sum of cash interest expense and subsidiary preferred stock dividends. This ratio is a method for calculating the amount of operating cash flows available to cover cash interest expense. The interest coverage ratio is not a measure of operating performance or liquidity defined by GAAP and may not be comparable to similarly titled measures presented by other companies. |
|
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) |
2011 |
2010 |
2011 |
2011 |
2010 |
||||||
Reportable segments: |
|||||||||||
Operating revenues and Earnings (losses) from |
|||||||||||
unconsolidated affiliates from continuing operations: |
|||||||||||
Contract Drilling: (1) |
|||||||||||
U.S. Lower 48 Land Drilling |
$ 404,984 |
$ 303,417 |
$ 378,568 |
$ 783,552 |
$ 574,914 |
||||||
U.S. Land Well-servicing |
164,140 |
104,860 |
150,256 |
314,396 |
202,851 |
||||||
U.S. Offshore |
40,284 |
38,978 |
30,454 |
70,738 |
77,176 |
||||||
Alaska |
32,336 |
43,385 |
41,315 |
73,651 |
93,179 |
||||||
Canada |
87,974 |
60,759 |
172,443 |
260,417 |
176,315 |
||||||
International |
265,231 |
267,007 |
262,477 |
527,708 |
512,351 |
||||||
Subtotal Contract Drilling (2) |
994,949 |
818,406 |
1,035,513 |
2,030,462 |
1,636,786 |
||||||
Pressure Pumping (3) |
265,930 |
- |
257,859 |
523,789 |
- |
||||||
Oil and Gas (4) |
11,755 |
9,800 |
20,128 |
31,883 |
20,402 |
||||||
Other Operating Segments (5) (6) |
162,491 |
107,749 |
121,383 |
283,874 |
203,262 |
||||||
Other reconciling items (7) |
(70,913) |
(31,081) |
(37,330) |
(108,243) |
(56,588) |
||||||
Total |
$ 1,364,212 |
$ 904,874 |
$ 1,397,553 |
$ 2,761,765 |
$ 1,803,862 |
||||||
Adjusted income (loss) derived from |
|||||||||||
operating activities from continuing operations: |
|||||||||||
Contract Drilling: (1) |
|||||||||||
U.S. Lower 48 Land Drilling |
$ 99,231 |
$ 58,169 |
$ 80,095 |
$ 179,326 |
$ 118,455 |
||||||
U.S. Land Well-servicing |
16,526 |
3,231 |
11,123 |
27,649 |
10,416 |
||||||
U.S. Offshore |
(1,059) |
8,104 |
(3,977) |
(5,036) |
15,477 |
||||||
Alaska |
8,288 |
12,388 |
11,019 |
19,307 |
26,345 |
||||||
Canada |
(2,512) |
(9,497) |
38,992 |
36,480 |
5,385 |
||||||
International |
35,851 |
64,972 |
35,497 |
71,348 |
118,551 |
||||||
Subtotal Contract Drilling (2) |
156,325 |
137,367 |
172,749 |
329,074 |
294,629 |
||||||
Pressure Pumping (3) |
43,888 |
- |
43,715 |
87,603 |
- |
||||||
Oil and Gas (4) |
4,959 |
1,998 |
(770) |
4,189 |
4,617 |
||||||
Other Operating Segments (5) (6) |
13,641 |
8,317 |
6,138 |
19,779 |
15,207 |
||||||
Other reconciling items (8) |
(43,971) |
(20,914) |
(30,783) |
(74,754) |
(45,883) |
||||||
Total |
174,842 |
126,768 |
191,049 |
365,891 |
268,570 |
||||||
Interest expense |
(63,739) |
(65,293) |
(73,924) |
(137,663) |
(132,062) |
||||||
Investment income (loss) |
(969) |
2,314 |
12,287 |
11,318 |
(243) |
||||||
Gains (losses) on sales and retirements of |
|||||||||||
long-lived assets and other income (expense), net |
(5,572) |
(11,024) |
(6,029) |
(11,601) |
(31,391) |
||||||
Income (loss) from continuing operations before income taxes |
$ 104,562 |
$ 52,765 |
$ 123,383 |
$ 227,945 |
$ 104,874 |
||||||
Rig activity: |
|||||||||||
Rig years: (9) |
|||||||||||
U.S. Lower 48 Land Drilling |
194.2 |
172.3 |
187.9 |
191.0 |
165.5 |
||||||
U.S. Offshore |
9.4 |
11.0 |
8.0 |
8.7 |
11.5 |
||||||
Alaska |
4.5 |
8.0 |
5.3 |
4.9 |
8.5 |
||||||
Canada |
22.5 |
17.7 |
49.7 |
36.1 |
26.2 |
||||||
International (10) |
102.8 |
97.6 |
99.6 |
101.2 |
93.0 |
||||||
Total rig years |
333.4 |
306.6 |
350.5 |
341.9 |
304.7 |
||||||
Rig hours: (11) |
|||||||||||
U.S. Land Well-servicing |
195,949 |
157,199 |
187,581 |
383,530 |
305,546 |
||||||
Canada Well-servicing |
29,254 |
32,211 |
53,154 |
82,408 |
78,243 |
||||||
Total rig hours |
225,203 |
189,410 |
240,735 |
465,938 |
383,789 |
||||||
(1) |
These segments include our drilling, well-servicing and workover operations on land and offshore. |
|
(2) |
Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $3.7 million, $2.9 million and $.2 million for the three months ended June 30, 2011 and 2010 and March 31, 2011, respectively, and $3.9 million and $3.0 million for the six months ended June 30, 2011 and 2010, respectively. |
|
(3) |
Includes operating results of our Pressure Pumping operating segment, added to our lines of business during the third quarter of 2010, for the three and six months ended June 30, 2011 and the three months ended March 31, 2011. |
|
(4) |
Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $6.2 million, $3.2 million and $15.2 million for the three months ended June 30, 2011 and 2010 and March 31, 2011, respectively, and $21.4 million and $7.7 million for the six months ended June 30, 2011 and 2010, respectively. |
|
(5) |
Includes our drilling technology and top drive manufacturing, directional drilling, rig instrumentation and software, and construction and logistics operations. |
|
(6) |
Includes earnings (losses), net from unconsolidated affiliates, accounted for using the equity method, of $(.6) million, $2.7 million and $.9 million for the three months ended June 30, 2011 and 2010 and March 31, 2011, respectively, and $.3 million and $5.8 million for the six months ended June 30, 2011 and 2010, respectively. |
|
(7) |
Represents the elimination of inter-segment transactions. |
|
(8) |
Represents the elimination of inter-segment transactions and unallocated corporate expenses. |
|
(9) |
Excludes well-servicing rigs, which are measured in rig hours. Includes our equivalent percentage ownership of rigs owned by unconsolidated affiliates. Rig years represent a measure of the number of equivalent rigs operating during a given period. For example, one rig operating 182.5 days during a 365-day period represents 0.5 rig years. |
|
(10) |
International rig years included our equivalent percentage ownership of rigs owned by unconsolidated affiliates which totaled 2.0 years, 2.4 years and 2.0 years during the three months ended June 30, 2011 and 2010 and March 31, 2011, respectively, and 2.0 years and 2.5 years during the six months ended June 30, 2011 and 2010, respectively. |
|
(11) |
Rig hours represents the number of hours that our well-servicing rig fleet operated during the period. |
|
NABORS INDUSTRIES LTD. AND SUBSIDIARIES |
|||||||||||
COMPUTATION OF EARNINGS (LOSSES) PER SHARE |
|||||||||||
(Unaudited) |
|||||||||||
A reconciliation of the numerators and denominators of the basic and diluted earnings (losses) per share computations is as follows: |
|||||||||||
Three Months Ended |
Six Months Ended |
||||||||||
June 30, |
March 31, |
June 30, |
|||||||||
(In thousands, except per share amounts) |
2011 |
2010 |
2011 |
2011 |
2010 |
||||||
Net income (loss) attributable to Nabors (numerator): |
|||||||||||
Income (loss) from continuing operations, net of tax |
$ 68,148 |
$ 43,971 |
$ 84,326 |
$ 152,474 |
$ 87,490 |
||||||
Less: net (income) loss attributable to noncontrolling interest |
394 |
559 |
669 |
1,063 |
1,661 |
||||||
Adjusted income (loss) from continuing operations, net of tax - basic |
$ 68,542 |
$ 44,530 |
$ 84,995 |
$ 153,537 |
$ 89,151 |
||||||
Add interest expense on assumed conversion of our 0.94% senior |
|||||||||||
exchangeable notes due 2011, net of tax (1) |
- |
- |
- |
- |
- |
||||||
Adjusted income (loss) from continuing operations, net of tax - diluted |
$ 68,542 |
$ 44,530 |
$ 84,995 |
$ 153,537 |
$ 89,151 |
||||||
Income (loss) from discontinued operations, net of tax |
123,906 |
(909) |
(2,170) |
121,736 |
(5,330) |
||||||
Adjusted net income (loss) attributable to Nabors |
$ 192,448 |
$ 43,621 |
$ 82,825 |
$ 275,273 |
$ 83,821 |
||||||
Earnings (losses) per share: |
|||||||||||
Basic from continuing operations |
$ .24 |
$ .15 |
$ .30 |
$ .54 |
$ .31 |
||||||
Basic from discontinued operations |
.43 |
- |
(.01) |
.42 |
(.02) |
||||||
Total Basic |
$ .67 |
$ .15 |
$ .29 |
$ .96 |
$ .29 |
||||||
Diluted from continuing operations |
$ .23 |
$ .15 |
$ .29 |
$ .52 |
$ .31 |
||||||
Diluted from discontinued operations |
.42 |
- |
(.01) |
.42 |
(.02) |
||||||
Total Diluted |
$ .65 |
$ .15 |
$ .28 |
$ .94 |
$ .29 |
||||||
Shares (denominator): |
|||||||||||
Weighted-average number of shares outstanding-basic |
287,311 |
285,181 |
286,114 |
286,712 |
284,927 |
||||||
Net effect of dilutive stock options, warrants and restricted |
|||||||||||
stock awards based on the if-converted method |
6,987 |
4,615 |
6,575 |
6,781 |
5,339 |
||||||
Assumed conversion of our 0.94% senior exchangeable notes due 2011 (1) |
- |
- |
- |
- |
- |
||||||
Weighted-average number of shares outstanding - diluted |
294,298 |
289,796 |
292,689 |
293,493 |
290,266 |
||||||
(1) |
In May 2011, the remaining aggregate principal amount of our 0.94% senior exchangeable notes matured and we redeemed them with $1.2 billion of borrowings under our revolving credit facilities and available cash. Diluted earnings (losses) per share for the three and six months ended June 30, 2010 and three months ended March 31, 2011 exclude any incremental shares that would have been issuable upon exchange of these notes based on a calculation using our stock price. Our stock price did not exceed the threshold during the periods ending June 30, 2010 and March 31, 2011. |
|
For all periods presented, the computation of diluted earnings (losses) per share excluded outstanding stock options and warrants with exercise prices greater than the average market price of Nabors’ common shares, because their inclusion would have been anti-dilutive and because they were not considered participating securities. The average number of options and warrants that were excluded from diluted earnings (losses) per share that would have potentially diluted earnings (losses) per share in the future were 5,494,895 and 14,894,841 shares during the three months ended June 30, 2011 and 2010, respectively; and 7,269,039 shares during the three months ended March 31, 2011; and 6,381,967 and 12,475,355 shares during the six months ended June 30, 2011 and 2010, respectively. In any period during which the average market price of Nabors’ common shares exceeds the exercise prices of these stock options and warrants, such stock options and warrants are included in our diluted earnings (losses) per share computation using the if-converted method of accounting. Restricted stock will be included in our basic and diluted earnings (losses) per share computation using the two-class method of accounting in all periods because such stock is considered participating securities. |
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SOURCE Nabors Industries
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