HAMILTON, Bermuda, Oct. 26 /PRNewswire-FirstCall/ -- Nabors Industries Ltd. (NYSE: NBR) today announced its results for the third quarter and nine months ended September 30, 2010. Adjusted income derived from operating activities was $164.4 million for the third quarter, compared to $117.2 million in the third quarter of 2009 and $126.8 million in the second quarter of this year. Excluding certain non-cash asset impairments and expenses related to the acquisition of Superior Well Services Inc., net income from continuing operations was $84.7 million ($0.29 per diluted share) for the third quarter, compared to $66.7 million ($0.23 per diluted share) in the third quarter of 2009 and $44.0 million ($0.15 per diluted share) in the second quarter of this year. Including these charges, income from continuing operations was a loss of $31.6 million ($0.11 per diluted share). For the nine months ended September 30, 2010, adjusted income derived from operating activities was $433.0 million, compared to $395.9 million in 2009. Net income from continuing operations, excluding the aforementioned items, was $172.2 million ($0.59 per diluted share) for the first nine months of 2010, compared to $349.3 million ($1.23 per diluted share) in the first nine months of 2009. The excluded items during the quarter amounted to $134 million, or $0.40 per share, the largest component of which was impairments to goodwill and various underutilized assets primarily in the Company’s US Offshore operations. The drilling slowdown following the Gulf of Mexico blowout is likely to restrict utilization of these assets for some time. The impairments also included the writedown of an E&P investment. Because most of the Company’s wholly owned and joint-venture interests in Canada and Colombia are being marketed for sale, their results have been classified as discontinued operations beginning this quarter.
Gene Isenberg, Nabors’ Chairman and CEO, commented, “The quarter represented solid operational performance by most of our North American businesses. This is particularly notable considering the flat results in our International operations, a slight loss in our US Offshore unit and only 20 days of contribution from our recently acquired pressure pumping operations. GAAP net income reflected pre-tax charges of $7 million in acquisition transaction expenses and $127 million in non-cash asset impairment charges.
“The most significant sequential increase occurred in our US Lower 48 operations which posted $70.5 million in operating income, compared to the $58.2 million this unit realized in the second quarter. The improvement was primarily due to an $841 increase in average margins, bringing the quarterly average to $8,629 per rig day, augmented by a ten-rig increase during the third quarter, bringing the average rig count to 182.2 rig years. Today’s rig count stands slightly higher at 187 rigs. An important achievement during the quarter was the entry into long-term contractual commitments for 11 more new-build rigs, bringing the total to 23 for the year, including three economically equivalent major refurbishments. Eleven of these rigs are destined for the Bakken Shale where we enjoy a dominant position. Three of the remaining rigs will deploy in the Eagle Ford Shale, one in the Haynesville, the other five rigs to the Marcellus Shale, where we have a small but growing presence. The performance of our PACE® rigs, especially the new B Series, continues to lead to more inquiries and is supporting modest improvement in leading edge rates. The gap between these rates and our current average rates is significant but they continue to converge as contracts renew. Nevertheless, cost pressure still remains in the most active markets.
“Recent increases in this unit’s rig count are the net result of higher activity in the oil and liquids-rich drilling plays, significantly offset by reduced dry gas drilling. We expect this trend to continue given the disparity between the forward strips for oil compared to natural gas. This is leading to a net modest improvement in our rig count through next year and keeps us cautiously optimistic regarding the 2011 outlook.
“International income was $64.4 million, essentially flat compared to the second quarter. The sequential rig count increased by five rigs, averaging 103 for the quarter. The incremental contribution from these rigs was largely offset by a $562 decrease in average rates. Along with most of the other larger oil service companies, we have further tempered our international outlook as the market continues to lag everyone’s expectations. We now anticipate a sequential decrease on the order of 15% in the fourth quarter and foresee 2011 as essentially flat compared to 2010. We have a significant number of incremental rig deployments scheduled over the next five quarters, but the associated $50 million in additional income will be mostly offset by a large number of expiring contracts renewing at market rates. The largest negative impact is expected from three jackup rig renewals in the Arabian Gulf during the fourth, first and second quarters.
“Income in our US Land Well Servicing unit was $9.0 million, a significant increase over the $3.2 million recorded in the second quarter. Rig hours in the quarter grew to 169,000, up 13,000 from second quarter, while average rig rates increased by $25 per hour. This increased activity was enabled by the extraordinary overtime and rig reactivation expenses incurred last quarter. Today’s level of activity represents a nearly 30% increase over last year, better than the industry average. The effective utilization of ready-to-run rigs and available crews combined with continuing strong oil prices augurs well for improved pricing industry wide. This pricing momentum, combined with further realization of synergistic opportunities through our newly acquired pressure pumping business, suggests solid results in the historically slow fourth quarter and a promising 2011, although still well below the peak levels this business achieved in 2006.
“As expected, we incurred a $1.1 million loss in our US Offshore business due to the lower levels of activity in the Gulf of Mexico following the Macondo blowout. We expect a similar result in the fourth quarter, although we are cautiously optimistic the outlook will improve in 2011 in spite of ongoing permitting delays. However, we still expect activity in this market to be inhibited over the next few years given the more onerous regulatory environment, which led us to impair the carrying value of some of this unit’s goodwill and underutilized assets. On the positive side, we are proceeding with engineering and construction of two first-of-a-kind 4,500 horsepower deepwater platform rigs recently awarded by two major customers. Both projects are scheduled to deploy in late 2012 and entail five to ten-year drilling programs. It is also likely that regulatory authorities will require that some 3,500 wells in the Gulf of Mexico be plugged and abandoned. This holds significant promise for our Sundowner platform and workover jackup rigs.
“In Canada, we posted $1.0 million in operating income, a significant improvement over the $9.5 million loss in the seasonally low second quarter. We have significantly increased our income expectations for both this year and next as a result of higher activity and rigorous cost control. The higher activity is occurring in the British Columbia shale plays, the traditional oil areas of Alberta and Saskatchewan, and the emerging oil shale plays, particularly the Cardium Shale in south central Alberta. Another significant driver is drilling in support of potash development. This unit is building three new rigs, the first of which will deploy in our US Lower 48 operations. An award for the second rig is pending in Canada, and there is strong interest in the innovative design of the third rig, which is targeted at pad drilling applications and should deliver late next year.
“Quarterly results in our Alaskan unit were higher than expected at $14.3 million, with extra income derived from higher rig activity, demobilization fees and camp rentals in support of various maintenance and construction projects. The quarter also benefited from the acceleration of deferred revenues triggered by the impending end of the primary term of a long-term contract. The end of this contract, the recent wind up of another 12-year contract and spending cuts by the largest operator in this market have caused us to lower our 2011 expectations considerably. Over time, we expect strong crude prices will result in a return to more robust spending and Nabors should be the largest beneficiary given the quality of our operations and rigs and our patented coiled technology.
“Our Other Operating Segments posted an excellent quarter, primarily on the strength of strong results in Canrig which were driven by strong third-party equipment sales and increasing income from our Rockit™ directional drilling technology. Results in our Alaskan joint ventures also contributed significantly. We expect results to be sustainable given Canrig’s third-party backlog, the continuing success of the Rockit™ technology and the rollout of additional directional drilling technologies.
“Our Oil and Gas operations posted income of $1.0 million with the reclassification of our Colombian and Canadian entities as discontinued operations. The proposed sale of these two units is moving ahead expeditiously, with discussions underway with numerous interested parties regarding both regions. Two investment banks are marketing our Colombian properties, with one of them also representing us in Canada. Our expectations of realized value remain intact.
“The most notable development of the quarter was the acquisition of Superior Well Services in an all-cash transaction with an enterprise value of approximately $900 million. We were able to close and finance the transaction within five weeks of the announcement of a definitive agreement. Our consolidated results reflect only $12.0 million in operating income from the 20 days this unit was part of Nabors. In the short time we have owned Superior, the quality of their equipment and technology and the capability of their field personnel and management teams have exceeded our expectations. We have already realized significant economies in procurement, consolidated certain facilities, and integrated Superior’s fluids management business into Nabors Well Services. We still see further synergies and significant investment opportunities facilitated by Nabors’ ability to fund this previously capital-constrained business.
“Our financial position is strong with $810 million in cash and investments at the end of the quarter. This ending balance reflects the all-cash acquisition of Superior and the attendant issuance of $700 million in senior unsecured notes, due 2020, at an annual yield of 5%. In mid-September we also established a $700 million, four-year, committed revolving credit facility which allows us to borrow at LIBOR plus 1.50%. The availability of this credit facility, our expectation of significant free cash flow in subsequent quarters and the anticipated proceeds from the sale of certain E&P properties, leads us to conclude we can comfortably redeem the $1.4 billion in convertible notes due next May and fund anticipated capital expenditures. This should negate the need for issuance of equity in any form or additional borrowings, other than temporary draws on our revolver.
“In summary, we are quite optimistic regarding the direction of our business, notwithstanding a persistently low natural gas strip and the tempered outlook for our International segment.”
The Nabors companies own and operate approximately 554 land drilling and approximately 728 land workover and well-servicing rigs in North America. Nabors’ actively marketed offshore fleet consists of 38 platform rigs, 13 jackup units and 3 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.
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 |
Nine Months Ended |
|||||||||
September 30, |
June 30, |
September 30, |
||||||||
(In thousands, except per share amounts) |
2010 |
2009 |
2010 |
2010 |
2009 |
|||||
Revenues and other income: |
||||||||||
Operating revenues |
$ 1,069,261 |
$ 789,200 |
$ 896,029 |
$ 2,856,636 |
$ 2,853,944 |
|||||
Earnings (losses) from unconsolidated affiliates (1) |
11,842 |
17,103 |
8,845 |
28,329 |
(53,132) |
|||||
Investment income (loss) |
(733) |
(1,806) |
2,314 |
(976) |
25,548 |
|||||
Total revenues and other income |
1,080,370 |
804,497 |
907,188 |
2,883,989 |
2,826,360 |
|||||
Costs and other deductions: |
||||||||||
Direct costs |
625,561 |
431,280 |
517,531 |
1,648,289 |
1,546,076 |
|||||
General and administrative expenses |
87,194 |
81,637 |
80,337 |
242,957 |
352,212 |
|||||
Depreciation and amortization |
198,151 |
173,701 |
175,397 |
545,084 |
498,830 |
|||||
Depletion |
5,778 |
2,494 |
4,841 |
15,646 |
7,837 |
|||||
Interest expense |
66,973 |
66,671 |
65,293 |
199,035 |
199,776 |
|||||
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net |
9,407 |
10,516 |
11,024 |
40,798 |
625 |
|||||
Impairments and other charges (2) |
123,099 |
- |
- |
123,099 |
227,083 |
|||||
Total costs and other deductions |
1,116,163 |
766,299 |
854,423 |
2,814,908 |
2,832,439 |
|||||
Income (loss) from continuing operations before income taxes |
(35,793) |
38,198 |
52,765 |
69,081 |
(6,079) |
|||||
Income tax expense (benefit): |
||||||||||
Current |
(71,276) |
37,901 |
17,652 |
(40,979) |
43,933 |
|||||
Deferred |
67,046 |
(53,378) |
(8,858) |
54,133 |
(43,205) |
|||||
Income tax expense (benefit) |
(4,230) |
(15,477) |
8,794 |
13,154 |
728 |
|||||
Income (loss) from continuing operations, net of tax |
(31,563) |
53,675 |
43,971 |
55,927 |
(6,807) |
|||||
Income (loss) from discontinued operations, net of tax |
(7,591) |
(23,250) |
(909) |
(12,921) |
(31,855) |
|||||
Net income (loss) |
(39,154) |
30,425 |
43,062 |
43,006 |
(38,662) |
|||||
Less: Net (income) loss attributable to noncontrolling interest |
(453) |
(895) |
559 |
1,208 |
376 |
|||||
Net income (loss) attributable to Nabors |
$ (39,607) |
$ 29,530 |
$ 43,621 |
$ 44,214 |
$ (38,286) |
|||||
Earnings (losses) per share: (3) |
||||||||||
Basic from continuing operations |
$ (.11) |
$ .18 |
$ .15 |
$ .21 |
$ (.03) |
|||||
Basic from discontinued operations |
$ (.03) |
$ (.08) |
$ - |
$ (.05) |
$ (.11) |
|||||
Basic |
$ (.14) |
$ .10 |
$ .15 |
$ .16 |
$ (.14) |
|||||
Diluted from continuing operations |
$ (.11) |
$ .18 |
$ .15 |
$ .19 |
$ (.03) |
|||||
Diluted from discontinued operations |
$ (.03) |
$ (.08) |
$ - |
$ (.04) |
$ (.11) |
|||||
Diluted |
$ (.14) |
$ .10 |
$ .15 |
$ .15 |
$ (.14) |
|||||
Weighted-average number of common shares outstanding: (3) |
||||||||||
Basic |
285,282 |
283,197 |
285,181 |
285,045 |
283,150 |
|||||
Diluted |
285,282 |
287,407 |
289,796 |
289,847 |
283,150 |
|||||
Adjusted income (loss) derived from operating activities (1) (4) |
$ 164,419 |
$ 117,191 |
$ 126,768 |
$ 432,989 |
$ 395,857 |
|||||
(1) Includes our proportionate share of writedowns recorded by our oil and gas joint ventures of $(83.3) million for the nine months ended September 30, 2009. |
||||||||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES |
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(Unaudited) |
||||||
September 30, |
June 30, |
December 31, |
||||
(In thousands, except ratios) |
2010 |
2010 |
2009 |
|||
ASSETS |
||||||
Current assets: |
||||||
Cash and short-term investments |
$ 772,469 |
$ 892,876 |
$ 1,090,851 |
|||
Accounts receivable, net |
1,002,974 |
762,589 |
724,040 |
|||
Assets held for sale |
345,138 |
- |
- |
|||
Other current assets |
445,343 |
369,943 |
361,773 |
|||
Total current assets |
2,565,924 |
2,025,408 |
2,176,664 |
|||
Long-term investments and other receivables |
37,448 |
93,965 |
100,882 |
|||
Property, plant and equipment, net |
7,884,874 |
7,641,563 |
7,646,050 |
|||
Goodwill |
463,427 |
164,078 |
164,265 |
|||
Investment in unconsolidated affiliates |
272,432 |
321,293 |
306,608 |
|||
Other long-term assets |
396,623 |
253,834 |
250,221 |
|||
Total assets |
$ 11,620,728 |
$ 10,500,141 |
$ 10,644,690 |
|||
LIABILITIES AND EQUITY |
||||||
Current liabilities: |
||||||
Current portion of long-term debt |
$ 1,442,714 |
$ 1,345,819 |
$ 163 |
|||
Other current liabilities |
818,806 |
642,263 |
608,459 |
|||
Total current liabilities |
2,261,520 |
1,988,082 |
608,622 |
|||
Long-term debt |
3,066,748 |
2,364,703 |
3,940,605 |
|||
Other long-term liabilities |
1,002,702 |
918,947 |
913,484 |
|||
Total liabilities |
6,330,970 |
5,271,732 |
5,462,711 |
|||
Preferred Stock (1) |
69,188 |
- |
- |
|||
Equity: |
||||||
Shareholders' equity |
5,207,632 |
5,216,308 |
5,167,656 |
|||
Noncontrolling interest |
12,938 |
12,101 |
14,323 |
|||
Total equity |
5,220,570 |
5,228,409 |
5,181,979 |
|||
Total liabilities and equity |
$ 11,620,728 |
$ 10,500,141 |
$ 10,644,690 |
|||
Cash, short-term and long-term investments (2) |
$ 809,917 |
$ 986,841 |
$ 1,191,733 |
|||
Funded debt to capital ratio: (3) |
||||||
- Gross |
0.43 : 1 |
0.39 : 1 |
0.41 : 1 |
|||
- Net of cash and investments |
0.38 : 1 |
0.32 : 1 |
0.33 : 1 |
|||
Interest coverage ratio: (4) |
6.3 : 1 |
5.9 : 1 |
6.3 : 1 |
|||
(1) Represents preferred stock outstanding at the time of our acquisition of Superior. Seventy-five thousand shares of such stock are outstanding and pay quarterly dividends at an annual rate of 4%. |
||||||
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) |
2010 |
2009 |
2010 |
2010 |
2009 |
|||||
Reportable segments: |
||||||||||
Operating revenues and Earnings (losses) from unconsolidated affiliates: |
||||||||||
Contract Drilling: (1) |
||||||||||
U.S. Lower 48 Land Drilling |
$ 350,348 |
$ 212,004 |
$ 303,417 |
$ 925,262 |
$ 851,742 |
|||||
U.S. Land Well-servicing |
119,127 |
89,459 |
104,860 |
321,978 |
323,901 |
|||||
U.S. Pressure Pumping (2) |
61,611 |
- |
- |
61,611 |
- |
|||||
U.S. Offshore |
26,504 |
25,708 |
38,978 |
103,680 |
128,047 |
|||||
Alaska |
45,920 |
45,210 |
43,385 |
139,099 |
161,199 |
|||||
Canada |
85,728 |
58,219 |
60,759 |
262,043 |
217,464 |
|||||
International |
288,535 |
307,660 |
267,007 |
800,886 |
977,867 |
|||||
Subtotal Contract Drilling (3) |
977,773 |
738,260 |
818,406 |
2,614,559 |
2,660,220 |
|||||
Oil and Gas (4) |
11,280 |
11,022 |
9,800 |
31,682 |
(53,874) |
|||||
Other Operating Segments (5) (6) |
130,392 |
89,774 |
107,749 |
333,654 |
350,173 |
|||||
Other reconciling items (7) |
(38,342) |
(32,753) |
(31,081) |
(94,930) |
(155,707) |
|||||
Total |
$ 1,081,103 |
$ 806,303 |
$ 904,874 |
$ 2,884,965 |
$ 2,800,812 |
|||||
Adjusted income (loss) derived from operating activities: |
||||||||||
Contract Drilling: (1) |
||||||||||
U.S. Lower 48 Land Drilling |
$ 70,452 |
$ 46,382 |
$ 58,169 |
$ 188,907 |
$ 245,699 |
|||||
U.S. Land Well-servicing |
9,049 |
342 |
3,231 |
19,465 |
20,192 |
|||||
U.S. Pressure Pumping (2) |
11,987 |
- |
- |
11,987 |
- |
|||||
U.S. Offshore |
(1,090) |
(163) |
8,104 |
14,387 |
23,391 |
|||||
Alaska |
14,299 |
11,145 |
12,388 |
40,644 |
48,344 |
|||||
Canada |
1,013 |
(10,448) |
(9,497) |
6,398 |
(7,651) |
|||||
International |
64,379 |
86,865 |
64,972 |
182,930 |
291,143 |
|||||
Subtotal Contract Drilling (3) |
170,089 |
134,123 |
137,367 |
464,718 |
621,118 |
|||||
Oil and Gas (4) |
1,037 |
4,322 |
1,998 |
5,654 |
(76,105) |
|||||
Other Operating Segments (5) (6) |
17,969 |
3,978 |
8,317 |
33,176 |
28,253 |
|||||
Other reconciling items (8) |
(24,676) |
(25,232) |
(20,914) |
(70,559) |
(177,409) |
|||||
Total |
164,419 |
117,191 |
126,768 |
432,989 |
395,857 |
|||||
Interest expense |
(66,973) |
(66,671) |
(65,293) |
(199,035) |
(199,776) |
|||||
Investment income (loss) |
(733) |
(1,806) |
2,314 |
(976) |
25,548 |
|||||
(Losses) gains on sales and retirements of long-lived assets and other (expense) income, net |
(9,407) |
(10,516) |
(11,024) |
(40,798) |
(625) |
|||||
Impairments and other charges (9) |
(123,099) |
- |
- |
(123,099) |
(227,083) |
|||||
Income (loss) before income taxes from continuing operations |
$ (35,793) |
$ 38,198 |
$ 52,765 |
$ 69,081 |
$ (6,079) |
|||||
Rig activity: |
||||||||||
Rig years: (10) |
||||||||||
U.S. Lower 48 Land Drilling |
182.2 |
123.6 |
172.3 |
171.2 |
152.8 |
|||||
U.S. Offshore |
8.2 |
7.8 |
11.0 |
10.4 |
11.7 |
|||||
Alaska |
6.7 |
9.0 |
8.0 |
7.9 |
10.7 |
|||||
Canada |
27.5 |
12.3 |
17.7 |
26.6 |
19.2 |
|||||
International (11) |
103.0 |
97.1 |
97.6 |
96.3 |
105.0 |
|||||
Total rig years |
327.6 |
249.8 |
306.6 |
312.4 |
299.4 |
|||||
Rig hours: (12) |
||||||||||
U.S. Land Well-servicing |
168,949 |
135,040 |
157,199 |
474,495 |
457,404 |
|||||
Canada Well-servicing |
44,606 |
31,686 |
32,211 |
122,849 |
105,806 |
|||||
Total rig hours |
213,555 |
166,726 |
189,410 |
597,344 |
563,210 |
|||||
(1) These segments include our drilling, well-servicing, fluid logistics and workover operations, on land and offshore. |
||||||||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES |
||||||||||
COMPUTATION OF EARNINGS (LOSSES) PER SHARE |
||||||||||
(Unaudited) |
||||||||||
A reconciliation of the numerators and denominators of the basic and diluted earnings (losses) per share computations is as follows: |
||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||
September 30, |
June 30, |
September 30, |
||||||||
(In thousands, except per share amounts) |
2010 |
2009 |
2010 |
2010 |
2009 |
|||||
Net income (loss) attributable to Nabors (numerator): |
||||||||||
Income (loss) from continuing operations, net of tax |
$ (31,563) |
$ 53,675 |
$ 43,971 |
$ 55,927 |
$ (6,807) |
|||||
Less: net (income) loss attributable to noncontrolling interest |
(453) |
(895) |
559 |
1,208 |
376 |
|||||
Adjusted income (loss) from continuing operations, net of tax - basic |
$ (32,016) |
$ 52,780 |
$ 44,530 |
$ 57,135 |
$ (6,431) |
|||||
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 |
$ (32,016) |
$ 52,780 |
$ 44,530 |
$ 57,135 |
$ (6,431) |
|||||
Income (loss) from discontinued operations, net of tax |
(7,591) |
(23,250) |
(909) |
(12,921) |
(31,855) |
|||||
Total adjusted net income (loss) |
$ (39,607) |
$ 29,530 |
$ 43,621 |
$ 44,214 |
$ (38,286) |
|||||
Earnings (losses) per share: |
||||||||||
Basic from continuing operations |
$ (.11) |
$ .18 |
$ .15 |
$ .21 |
$ (.03) |
|||||
Basic from discontinued operations |
(.03) |
(.08) |
- |
(.05) |
(.11) |
|||||
Total Basic |
$ (.14) |
$ .10 |
$ .15 |
$ .16 |
$ (.14) |
|||||
Diluted from continuing operations |
$ (.11) |
$ .18 |
$ .15 |
$ .19 |
$ (.03) |
|||||
Diluted from discontinued operations |
(.03) |
(.08) |
- |
(.04) |
(.11) |
|||||
Total Diluted |
$ (.14) |
$ .10 |
$ .15 |
$ .15 |
$ (.14) |
|||||
Shares (denominator): |
||||||||||
Weighted-average number of shares outstanding-basic (2) |
285,282 |
283,197 |
285,181 |
285,045 |
283,150 |
|||||
Net effect of dilutive stock options, warrants and restricted stock awards based on the if-converted method |
- |
4,210 |
4,615 |
4,802 |
- |
|||||
Assumed conversion of our 0.94% senior exchangeable notes due 2011 (1) |
- |
- |
- |
|||||||
Weighted-average number of shares outstanding - diluted |
285,282 |
287,407 |
289,796 |
289,847 |
283,150 |
|||||
(1) Diluted earnings (losses) per share for the three and nine months ended September 30, 2010 and 2009 and the three months ended June 30, 2010 excluded any incremental shares issuable upon exchange of the 0.94% senior exchangeable notes due 2011. Between 2008 and September 30, 2010, we purchased approximately $1.3 billion par value of these notes in the open market, leaving approximately $1.4 billion par value outstanding. The number of shares that we would be required to issue upon exchange consists of only the incremental shares that would be issued above the principal amount of the notes, as we are required to pay cash up to the principal amount of the notes exchanged. We would issue an incremental number of shares only upon exchange of these notes. These shares are included in the calculation of the weighted-average number of shares outstanding in our diluted earnings per share calculation only when our stock price exceeds $45.83 as of the last trading day of the quarter and the average price of our shares for the ten consecutive trading days beginning on the third business day after the last trading day of the quarter exceeds $45.83, which did not occur during the three and nine months ended September 30, 2010 and 2009 or the three months ended June 30, 2010. |
||||||||||
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 32,543,395 and 16,595,790 shares during the three months ended September 30, 2010 and 2009, respectively; and 14,894,841 shares during the three months ended June 30, 2010; and 14,108,644 and 34,085,988 shares during the nine months ended September 30, 2010 and 2009, 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 is included in our basic and diluted earnings (losses) per share computation using the two-class method of accounting in all periods because it is considered a participating security. |
||||||||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES |
||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (LOSS) EXCLUDING CERTAIN NON-CASH CHARGES (NON-GAAP) |
||||||||||||||||||
(Unaudited) |
||||||||||||||||||
Three Months Ended |
Three Months Ended |
Nine Months Ended |
||||||||||||||||
September 30, 2010 |
June 30, 2010 |
September 30, 2010 |
||||||||||||||||
(In thousands, except per share amounts) |
Actuals (GAAP) |
Charges |
As adjusted to Exclude Charges (Non-GAAP)(1) |
Actuals (GAAP) |
Charges |
As adjusted to Exclude Charges (Non- GAAP)(1) |
Actuals (GAAP) |
Charges |
As adjusted to Exclude Charges (Non-GAAP)(1) |
|||||||||
Revenues and other income: |
||||||||||||||||||
Operating revenues |
$ 1,069,261 |
$ - |
$ 1,069,261 |
$ 896,029 |
$ - |
$ 896,029 |
$ 2,856,636 |
$ - |
$ 2,856,636 |
|||||||||
Earnings (losses) from unconsolidated affiliates |
11,842 |
- |
11,842 |
8,845 |
- |
8,845 |
28,329 |
- |
28,329 |
|||||||||
Investment income |
(733) |
3,656 |
2,923 |
2,314 |
- |
2,314 |
(976) |
3,656 |
2,680 |
|||||||||
Total revenues and other income |
1,080,370 |
3,656 |
1,084,026 |
907,188 |
- |
907,188 |
2,883,989 |
3,656 |
2,887,645 |
|||||||||
Costs and other deductions: |
||||||||||||||||||
Direct costs |
625,561 |
- |
625,561 |
517,531 |
- |
517,531 |
1,648,289 |
- |
1,648,289 |
|||||||||
General and administrative expenses |
87,194 |
- |
87,194 |
80,337 |
- |
80,337 |
242,957 |
- |
242,957 |
|||||||||
Depreciation and amortization |
198,151 |
- |
198,151 |
175,397 |
- |
175,397 |
545,084 |
- |
545,084 |
|||||||||
Depletion |
5,778 |
- |
5,778 |
4,841 |
- |
4,841 |
15,646 |
- |
15,646 |
|||||||||
Interest expense |
66,973 |
- |
66,973 |
65,293 |
- |
65,293 |
199,035 |
- |
199,035 |
|||||||||
Losses (gains) on sales and retirements of |
||||||||||||||||||
long-lived assets and other expense (income), net |
9,407 |
(7,000) |
2,407 |
11,024 |
- |
11,024 |
40,798 |
(7,000) |
33,798 |
|||||||||
Impairments and other charges |
123,099 |
(123,099) |
- |
- |
- |
- |
123,099 |
(123,099) |
- |
|||||||||
Total costs and other deductions |
1,116,163 |
(130,099) |
986,064 |
854,423 |
- |
854,423 |
2,814,908 |
(130,099) |
2,684,809 |
|||||||||
Income (loss) from continuing operations before income taxes |
(35,793) |
133,755 |
97,962 |
52,765 |
- |
52,765 |
69,081 |
133,755 |
202,836 |
|||||||||
Income tax expense (benefit) |
(4,230) |
17,475 |
13,245 |
8,794 |
- |
8,794 |
13,154 |
17,475 |
30,629 |
|||||||||
Income (loss) from continuing operations, net of tax |
(31,563) |
116,280 |
84,717 |
43,971 |
- |
43,971 |
55,927 |
116,280 |
172,207 |
|||||||||
Income (loss) from discontinued operations, net of tax |
(7,591) |
- |
(7,591) |
(909) |
- |
(909) |
(12,921) |
- |
(12,921) |
|||||||||
Net income (loss) |
(39,154) |
116,280 |
77,126 |
43,062 |
- |
43,062 |
43,006 |
116,280 |
159,286 |
|||||||||
Less: Net (income) loss attributable to noncontrolling interest |
(453) |
- |
(453) |
559 |
- |
559 |
1,208 |
- |
1,208 |
|||||||||
Net income (loss) attributable to Nabors |
$ (39,607) |
$ 116,280 |
$ 76,673 |
$ 43,621 |
$ - |
$ 43,621 |
$ 44,214 |
$ 116,280 |
$ 160,494 |
|||||||||
Earnings (losses) per share: |
||||||||||||||||||
Diluted from continuing operations |
$ (.11) |
$ .40 |
$ .29 |
$ .15 |
$ - |
$ .15 |
$ .19 |
$ .40 |
$ .59 |
|||||||||
Diluted from discontinued operations |
(.03) |
- |
(.02) |
- |
- |
- |
(.04) |
- |
(.04) |
|||||||||
Earnings (losses) per share - diluted |
$ (.14) |
$ .40 |
$ .27 |
$ .15 |
$ - |
$ .15 |
$ .15 |
$ .40 |
$ .55 |
|||||||||
Weighted-average number of common shares outstanding - diluted |
285,282 |
289,008 |
289,796 |
289,796 |
289,847 |
289,847 |
||||||||||||
Adjusted income (loss) derived from operating activities (2) |
$ 164,419 |
$ - |
$ 164,419 |
$ 126,768 |
$ - |
$ 126,768 |
$ 432,989 |
$ - |
$ 432,989 |
|||||||||
(1) As-adjusted amounts include Non-GAAP financial measures. These measures are presented to provide management and investors an opportunity to make meaningful assessments and comparisons of results from operations, exclusive of certain charges detailed below. The presentation of Non-GAAP information is not intended to suggest that such information is superior to the presentation of GAAP information, but only to clarify some information and assist the reader. |
||||||||||||||||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES |
||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (LOSS) EXCLUDING CERTAIN NON-CASH CHARGES (NON-GAAP) |
||||||||||||
(Unaudited) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, 2009 |
September 30, 2009 |
|||||||||||
(In thousands, except per share amounts) |
Actuals (GAAP) |
Charges |
As adjusted to Exclude Charges (Non-GAAP)(1) |
Actuals (GAAP) |
Charges |
As adjusted to Exclude Charges (Non-GAAP)(1) |
||||||
Revenues and other income: |
||||||||||||
Operating revenues |
$ 789,200 |
$ - |
$ 789,200 |
$ 2,853,944 |
$ - |
$ 2,853,944 |
||||||
Earnings (losses) from unconsolidated affiliates |
17,103 |
- |
17,103 |
(53,132) |
83,295 |
30,163 |
||||||
Investment income (loss) |
(1,806) |
- |
(1,806) |
25,548 |
- |
25,548 |
||||||
Total revenues and other income |
804,497 |
- |
804,497 |
2,826,360 |
83,295 |
2,909,655 |
||||||
Costs and other deductions: |
||||||||||||
Direct costs |
431,280 |
- |
431,280 |
1,546,076 |
(62,114) |
1,483,962 |
||||||
General and administrative expenses |
81,637 |
- |
81,637 |
352,212 |
- |
352,212 |
||||||
Depreciation and amortization |
173,701 |
- |
173,701 |
498,830 |
- |
498,830 |
||||||
Depletion |
2,494 |
- |
2,494 |
7,837 |
- |
7,837 |
||||||
Interest expense |
66,671 |
- |
66,671 |
199,776 |
- |
199,776 |
||||||
Losses (gains) on sales and retirements of long-lived assets and other expense (income), net |
10,516 |
- |
10,516 |
625 |
- |
625 |
||||||
Impairments and other charges |
- |
- |
- |
227,083 |
(227,083) |
- |
||||||
Total costs and other deductions |
766,299 |
- |
766,299 |
2,832,439 |
(289,197) |
2,543,242 |
||||||
Income (loss) from continuing operations before income taxes |
38,198 |
- |
38,198 |
(6,079) |
372,492 |
366,413 |
||||||
Income tax expense (benefit) |
(15,477) |
(12,997) |
(28,474) |
728 |
16,351 |
17,079 |
||||||
Income (loss) from continuing operations, net of tax |
53,675 |
12,997 |
66,672 |
(6,807) |
356,141 |
349,334 |
||||||
Income (loss) from discontinued operations, net of tax |
(23,250) |
- |
(23,250) |
(31,855) |
- |
(31,855) |
||||||
Net income (loss) |
30,425 |
12,997 |
43,422 |
(38,662) |
356,141 |
317,479 |
||||||
Less: Net (income) loss attributable to noncontrolling interest |
(895) |
- |
(895) |
376 |
- |
376 |
||||||
Net income (loss) attributable to Nabors |
$ 29,530 |
$ 12,997 |
$ 42,527 |
$ (38,286) |
$ 356,141 |
$ 317,855 |
||||||
Earnings (losses) per share: |
||||||||||||
Diluted from continuing operations |
$ .18 |
$ .05 |
$ .23 |
$ (.03) |
$ 1.26 |
$ 1.23 |
||||||
Diluted from discontinued operations |
(.08) |
- |
(.08) |
(.11) |
- |
(.11) |
||||||
Earnings (losses) per share - diluted |
$ .10 |
$ .05 |
$ .15 |
$ (.14) |
$ 1.26 |
$ 1.12 |
||||||
Weighted-average number of common shares outstanding - diluted |
287,407 |
287,407 |
283,150 |
283,150 |
||||||||
Adjusted income (loss) derived from operating activities (2) |
$ 117,191 |
$ - |
$ 117,191 |
$ 395,857 |
$ 145,409 |
$ 541,266 |
||||||
(1) As-adjusted amounts include Non-GAAP financial measures. These measures are presented to provide management and investors an opportunity to make meaningful assessments and comparisons of results from operations, exclusive of certain charges detailed below. The presentation of Non-GAAP information is not intended to suggest that such information is superior to the presentation of GAAP information, but only to clarify some information and assist the reader. |
||||||||||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES |
||||||||||
SUMMARY OF NON-CASH CHARGES (NON-GAAP) |
||||||||||
(Unaudited) |
||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||
September 30, |
June 30, |
September 30, |
||||||||
(In thousands) |
2010 |
2009 |
2010 |
2010 |
2009 |
|||||
Equity method oil and gas joint venture impairments |
$ - |
$ - |
$ - |
$ - |
$ (83,295) |
|||||
Goodwill impairment |
(10,707) |
- |
- |
(10,707) |
(14,689) |
|||||
Rig asset retirements and impairments |
(58,045) |
- |
- |
(58,045) |
(64,229) |
|||||
Stock compensation charge |
- |
- |
- |
- |
(62,114) |
|||||
Impairments of oil and gas financing receivable |
(54,347) |
- |
- |
(54,347) |
(112,516) |
|||||
Other-than-temporary impairments on securities |
- |
- |
- |
- |
(35,649) |
|||||
Acquisition related expenses |
(7,000) |
- |
- |
(7,000) |
- |
|||||
Other non-operational items |
(3,656) |
- |
- |
(3,656) |
- |
|||||
Total charges before income taxes |
(133,755) |
- |
- |
(133,755) |
(372,492) |
|||||
Tax benefit (expense) |
17,475 |
(12,997) |
(1) |
- |
17,475 |
16,351 |
||||
Total charges after income taxes |
$ (116,280) |
$ (12,997) |
$ - |
$ (116,280) |
$ (356,141) |
|||||
(1) This represents the difference between the tax (expense) benefit recorded during the period in accordance with the interim period tax allocation rules and the amount of tax (expense) benefit that would have resulted from the application of the interim period tax allocation rules if the non-cash charges were excluded. |
||||||||||
SOURCE Nabors Industries Ltd.
Share this article