Nabors Announces Fourth Quarter 2022 Results

Rhea-AI Summary

Nabors Industries reported fourth quarter 2022 operating revenues of $760 million, marking a 10% increase from the third quarter. However, the net loss attributable to shareholders rose to $69 million or $7.87 per share, compared to a $14 million loss in the previous quarter. Excluding a $36 million non-cash charge related to warrants, the net loss improved by $15 million. The adjusted EBITDA reached $230 million, a 21% increase sequentially. The company anticipates generating over $400 million in adjusted free cash flow for 2023, indicating robust growth and operational efficiency.

Positive

• Fourth quarter adjusted EBITDA increased to $230 million, up 21% from the previous quarter.
• U.S. Drilling segment's adjusted EBITDA rose by 26% to $144.1 million.
• Daily adjusted gross margin in the Lower 48 averaged $14,600, a 31% increase from the prior quarter.
• Adjusted free cash flow totaled $101 million in Q4 2022, with an expectation to exceed $400 million in 2023.
• Net debt decreased by $75 million to $2.085 billion.

Negative

• Net loss attributable to Nabors shareholders increased to $69 million, up from $14 million in the previous quarter.
• Non-cash charges related to warrants were $36 million, impacting EPS negatively.

HAMILTON, Bermuda, Feb. 7, 2023 /PRNewswire/ -- Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported fourth quarter 2022 operating revenues of $760 million, an increase of approximately 10%, compared to operating revenues of $694 million in the third quarter of 2022. The net loss attributable to Nabors shareholders for the quarter was $69 million, or $7.87 per share. This compares to a loss of $14 million, or $1.80 per share, in the third quarter. The fourth quarter results included a non-cash charge of $36 million, or $3.98 per share, related to mark-to-market treatment of Nabors' warrants. The third quarter results included a non-cash gain for the warrants of $34 million, or $3.74 per share. Excluding the impact of the Nabors warrants on each quarter's results, the net loss improved sequentially by $15 million. Fourth quarter adjusted EBITDA was $230 million, a 21% increase compared to $191 million in the previous quarter.

Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "Our fourth quarter performance and financial results were impressive. Once again, all segments contributed to strong sequential growth. Total adjusted EBITDA was the highest quarterly level since 2015. The U.S. Drilling segment drove most of our growth, highlighted by unprecedented daily margins in the Lower 48 market. Daily margin and adjusted EBITDA also improved in our International segment. In Drilling Solutions, growth accelerated with the annual adjusted EBITDA run rate surpassing $120 million, as gross margin set another record at nearly 53%. Rig Technologies had its best quarter in seven years.

"In the Lower 48, we successfully repriced the majority of our rigs during the quarter. As a result, daily rig revenue increased by more than $3,500. Almost all of that increase flowed through to daily gross margin, which improved by nearly $3,500, to $14,600, an all-time high. Notwithstanding this growth, leading edge daily revenue in this market remains substantially higher than our fourth quarter average.

"In our International segment, SANAD deployed its second newbuild rig, of the initial five awards, late in the quarter. The remaining three units are expected to commence operations by the third quarter. In addition, SANAD has been awarded five more newbuild rigs, bringing the total awarded to date to 10. Deployment of this second tranche of five is expected to begin around the end of 2023 at the earliest. We also reactivated an existing rig in Saudi Arabia, and in Papua New Guinea our advanced rig contributed a full quarter at its operating rate.

"Revenue in our Drilling Solutions segment accelerated in the fourth quarter. Adjusted EBITDA increased by 18% sequentially, driven by growth across most product lines. NDS revenue on our U.S. rigs, third-party U.S. rigs, and International rigs all saw double-digit growth in the quarter.

"In our Rig Technologies segment, all product lines contributed to the increase in segment EBITDA. The most significant increases were in aftermarket parts, and rentals.

"Demonstrating our commitment and progress supporting the energy transition, Nabors was awarded the Energy Transition Award – Upstream at the 24^th Annual Platts Global Energy Awards in December. Our strategy has taken shape since we announced it a year ago. We have deployed multiple energy transition solutions on our rigs, as well as on third party units. Also, we are developing advanced technologies focused on responsible hydrocarbon production, hydrogen, and carbon."

Segment Results

The U.S. Drilling segment reported $144.1 million in adjusted EBITDA for the fourth quarter of 2022, a 26% increase from the prior quarter. Nabors' average Lower 48 rig count, at 95, increased by three rigs. Daily adjusted gross margin in the Lower 48 market averaged $14,600, 31% higher than the prior quarter.

International Drilling adjusted EBITDA totaled $88.8 million, a 3% increase from the prior quarter. Improved performance across Latin America and in Saudi Arabia drove the growth. The International rig count averaged 75.7, up one rig sequentially. Daily adjusted gross margin for the fourth quarter averaged $14,902, up $313 from the prior quarter.

Drilling Solutions adjusted EBITDA increased sequentially by 18% to $30.3 million. Growth was strong across most product and service categories, notably Managed Pressure Drilling, Casing Running, and Performance Tools.

In Rig Technologies, adjusted EBITDA increased by 57% to $7.6 million in the fourth quarter. Revenue increased by 24% sequentially, to $62.8 million, mainly due to higher aftermarket sales, reflecting increased rig and equipment utilization across the industry.

Adjusted Free Cash Flow

Adjusted free cash flow totaled $101 million in the fourth quarter, primarily driven by higher financial results across all segments, strong collections, and disciplined capital spending. For the full year, adjusted free cash flow was $154 million. Capital expenditures for the fourth quarter totaled $103 million, including $16 million supporting the SANAD newbuilds. Full-year capital expenditures totaled $382 million, of which $91 million was for SANAD newbuilds.

At the end of the fourth quarter, net debt was $2.085 billion, a $75 million reduction compared to the third quarter.

William Restrepo, Nabors CFO, stated, "We benefitted from strong financial performance in the fourth quarter across all of our segments. U.S. Drilling delivered continued increases in pricing, as well as higher rig count. At the same time our International business continued its steady upward progression with more growth expected over the coming quarters, as activity across the globe expands from its current levels and dayrates have started to increase. Our low-capital-intensity businesses grew briskly during the quarter with both Drilling Solutions and Rig Technologies exceeding their quarterly targets.

"In the Lower 48, dayrate increases were significant as we repriced nearly two-thirds of the fleet. Our revenue per day average for the fleet reached $32,000. There's still plenty of room to run as we reprice our fleet to the current leading edge dayrates.

"We intend to capitalize on this environment to further improve our capital structure and reduce leverage. We are already seeing the impact our cash flow generation and debt reduction has had on the cost of our debt, with interest rate spreads compressing significantly over the last quarter. For 2023, we estimate we will generate adjusted free cash flow exceeding $400 million. We intend to allocate our cash flow primarily to debt reduction and we expect to close the year with net debt of approximately $1.7 billion."

Outlook

Nabors expects the following metrics for the first quarter 2023:

U.S. Drilling

• An increase in average Lower 48 rig count of one rig vs. the fourth quarter average
• Lower 48 adjusted gross margin per day of approximately $16,100 - $16,300
• A $2 to $3 million decrease in adjusted EBITDA for Alaska and U.S. Offshore combined, mainly due to two Alaska rigs going on standby rate

International

• Rig count up approximately one to two rigs vs. the fourth quarter average
• Adjusted gross margin per day approximately in line with the fourth quarter

Drilling Solutions

• Adjusted EBITDA up by approximately 6% above the fourth quarter level

Rig Technologies

• Adjusted EBITDA approximately in line with the fourth quarter

Capital Expenditures

• Capital expenditures of $150 million, of which approximately $45 million supports SANAD newbuilds
• Capital expenditures for the full year 2023 of $490 million, including $180 million for SANAD and an incremental $20 million for sustaining capex on the higher rig count

Adjusted Free Cash Flow

• Adjusted free cash flow for the full year 2023 to exceed $400 million

Mr. Petrello concluded, "Our fourth quarter results capped a year of significant achievement. We reached noteworthy milestones across the company. Looking into 2023, the momentum from higher dayrates, newbuild deployments in Saudi Arabia, greater penetration of our advanced performance solutions, the start of expanding activity in international markets, and broader recognition of our decarbonization initiatives sets us up for a strong 2023."

About Nabors Industries

Nabors Industries (NYSE: NBR) is a leading provider of advanced technology for the energy industry. With presence in more than 20 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and responsible energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower-carbon world. Learn more about Nabors and its energy technology leadership: www.nabors.com.

Forward-looking Statements

The information included in this press release includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to a number of risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors' actual results may differ materially from those indicated or implied by such forward-looking statements. The forward-looking statements contained in this press release reflect management's estimates and beliefs as of the date of this press release. Nabors does not undertake to update these forward-looking statements. 

Non-GAAP Disclaimer

This press release presents certain "non-GAAP" financial measures.  The components of these non-GAAP measures are computed by using amounts that are determined in accordance with accounting principles generally accepted in the United States of America ("GAAP").  Adjusted operating income (loss) represents income (loss) from continuing operations before income taxes, interest expense, investment income (loss), and other, net. Adjusted EBITDA is computed similarly, but also excludes depreciation and amortization expenses. In addition, adjusted EBITDA and adjusted operating income (loss) exclude certain cash expenses that the Company is obligated to make. Net debt is calculated as total debt minus the sum of cash, cash equivalents and short-term investments.  

Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets.  Management believes that adjusted free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of the company's ability to generate cash flow, after reinvesting in the company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Management believes that this non-GAAP measure is useful information to investors when comparing our cash flows with the cash flows of other companies.

Each of these non-GAAP measures has limitations and therefore should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including Adjusted EBITDA, adjusted operating income (loss), net debt, and adjusted free cash flow, because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance.  Securities analysts and investors also use these measures as some of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently.  Reconciliations of consolidated adjusted EBITDA and adjusted operating income (loss) to income (loss) from continuing operations before income taxes, net debt to total debt, and adjusted free cash flow to net cash provided by operations, which are their nearest comparable GAAP financial measures, are included in the tables at the end of this press release. We do not provide a forward-looking reconciliation of our outlook for Segment Adjusted EBITDA, Segment Gross Margin or Adjusted Free Cash Flow, as the amount and significance of items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These special items could be meaningful.

Investor Contacts:  William C. Conroy, CFA, Vice President of Corporate Development & Investor Relations, +1 281-775-2423 or via e-mail william.conroy@nabors.com, or Kara Peak, Director of Corporate Development & Investor Relations, +1 281-775-4954 or via email kara.peak@nabors.com. To request investor materials, contact Nabors' corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via e-mail mark.andrews@nabors.com

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
		Three Months Ended						Year Ended
		December 31,				September 30,		December 31,
(In thousands, except per share amounts)		2022		2021		2022		2022		2021
Revenues and other income:
Operating revenues		$           760,148		$           543,539		$           694,136		$        2,653,766		$        2,017,548
Investment income (loss)		9,194		156		4,813		14,992		1,557
Total revenues and other income		769,342		543,695		698,949		2,668,758		2,019,105
Costs and other deductions:
Direct costs		457,184		347,238		432,311		1,666,004		1,286,896
General and administrative expenses		59,031		54,422		57,594		228,431		213,559
Research and engineering		13,911		10,223		13,409		49,939		35,153
Depreciation and amortization		168,841		167,955		169,857		665,072		693,381
Interest expense		44,245		44,570		43,841		177,895		171,476
Other, net		58,124		10,170		(25,954)		127,099		106,729
Total costs and other deductions		801,336		634,578		691,058		2,914,440		2,507,194
Income (loss) from continuing operations before income taxes		(31,994)		(90,883)		7,891		(245,682)		(488,089)
Income tax expense (benefit)		26,161		18,393		12,352		61,537		55,621
Income (loss) from continuing operations, net of tax		(58,155)		(109,276)		(4,461)		(307,219)		(543,710)
Income (loss) from discontinued operations, net of tax		-		13		-		-		20
Net income (loss)		(58,155)		(109,263)		(4,461)		(307,219)		(543,690)
Less: Net (income) loss attributable to noncontrolling interest		(10,911)		(4,414)		(9,322)		(43,043)		(25,582)
Net income (loss) attributable to Nabors		(69,066)		(113,677)		(13,783)		(350,262)		(569,272)
Less: Preferred stock dividend		-		-		-		-		(3,653)
Net income (loss) attributable to Nabors common shareholders		$            (69,066)		$         (113,677)		$            (13,783)		$         (350,262)		$         (572,925)
Amounts attributable to Nabors common shareholders:
Net income (loss) from continuing operations		$            (69,066)		$         (113,690)		$            (13,783)		$         (350,262)		$         (572,945)
Net income (loss) from discontinued operations		-		13		-		-		20
Net income (loss) attributable to Nabors common shareholders		$            (69,066)		$         (113,677)		$            (13,783)		$         (350,262)		$         (572,925)
Earnings (losses) per share:
Basic from continuing operations		$                (7.87)		$              (14.60)		$                (1.80)		$              (40.52)		$              (76.58)
Basic from discontinued operations		-		-		-		-		-
Total Basic		$                (7.87)		$              (14.60)		$                (1.80)		$              (40.52)		$              (76.58)
Diluted from continuing operations		$                (7.87)		$              (14.60)		$                (1.80)		$              (40.52)		$              (76.58)
Diluted from discontinued operations		-		-		-		-		-
Total Diluted		$                (7.87)		$              (14.60)		$                (1.80)		$              (40.52)		$              (76.58)
Weighted-average number of common shares outstanding:
Basic		9,101		7,950		9,099		8,898		7,605
Diluted		9,101		7,950		9,099		8,898		7,605
Adjusted EBITDA		$           230,022		$           131,656		$           190,822		$           709,392		$           481,940
Adjusted operating income (loss)		$             61,181		$            (36,299)		$             20,965		$             44,320		$         (211,441)

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
		December 31,		September 30,		December 31,
(In thousands)		2022		2022		2021
		(Unaudited)
ASSETS
Current assets:
Cash and short-term investments		$            452,315		$            425,070		$            991,488
Accounts receivable, net		327,397		302,963		287,572
Other current assets		220,911		237,873		222,749
Total current assets		1,000,623		965,906		1,501,809
Property, plant and equipment, net		3,026,100		3,100,293		3,348,498
Other long-term assets		703,131		702,356		675,057
Total assets		$         4,729,854		$         4,768,555		$         5,525,364
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable		$            314,041		$            290,167		$            253,748
Other current liabilities		282,349		268,999		271,480
Total current liabilities		596,390		559,166		525,228
Long-term debt		2,537,540		2,585,517		3,262,795
Other long-term liabilities		380,529		344,702		343,120
Total liabilities		3,514,459		3,489,385		4,131,143
Redeemable noncontrolling interest in subsidiary		678,604		683,005		675,283
Equity:
Shareholders' equity		368,956		439,241		590,656
Noncontrolling interest		167,835		156,924		128,282
Total equity		536,791		596,165		718,938
Total liabilities and equity		$         4,729,854		$         4,768,555		$         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						Year Ended
			December 31,				September 30,		December 31,
(In thousands, except rig activity)			2022		2021		2022		2022		2021
Operating revenues:
	U.S. Drilling		$           332,845		$           192,310		$           297,178		$        1,100,614		$           669,656
	Canada Drilling		-		-		-		-		39,336
	International Drilling		317,577		271,069		306,355		1,199,282		1,043,197
	Drilling Solutions		71,307		51,776		61,981		243,349		172,473
	Rig Technologies (1)		62,803		46,920		50,496		195,129		149,273
	Other reconciling items (2)		(24,384)		(18,536)		(21,874)		(84,608)		(56,387)
	Total operating revenues		$           760,148		$           543,539		$           694,136		$        2,653,766		$        2,017,548
Adjusted EBITDA: (3)
	U.S. Drilling		$           144,142		$             69,249		$           114,486		$           420,264		$           249,951
	Canada Drilling		56		223		(9)		13		14,497
	International Drilling		88,838		73,168		85,922		328,454		283,312
	Drilling Solutions		30,336		19,559		25,612		98,699		59,433
	Rig Technologies (1)		7,561		3,842		4,818		14,699		8,349
	Other reconciling items (4)		(40,911)		(34,385)		(40,007)		(152,737)		(133,601)
	Total adjusted EBITDA		$           230,022		$           131,656		$           190,822		$           709,392		$           481,940
Adjusted operating income (loss): (5)
	U.S. Drilling		$             68,293		$            (12,587)		$             37,776		$           108,506		$            (76,492)
	Canada Drilling		56		223		(9)		13		2,893
	International Drilling		1,750		(5,749)		(907)		(879)		(40,117)
	Drilling Solutions		24,800		12,930		20,099		77,868		32,771
	Rig Technologies (1)		6,118		1,493		3,412		8,906		158
	Other reconciling items (4)		(39,836)		(32,609)		(39,406)		(150,094)		(130,654)
	Total adjusted operating income (loss)		$             61,181		$            (36,299)		$             20,965		$             44,320		$         (211,441)
Rig activity:
Average Rigs Working: (7)
	Lower 48		95.1		74.7		92.1		90.0		65.6
	Other US		7.0		6.0		7.7		7.2		5.3
	U.S. Drilling		102.1		80.7		99.8		97.2		70.9
	Canada Drilling		-		-		-		-		6.5
	International Drilling		75.7		71.4		74.6		74.2		67.9
	Total average rigs working		177.8		152.1		174.4		171.4		145.3
Daily Rig Revenue: (6),(8)
	Lower 48		$             32,719		$             21,739		$             29,190		$             27,826		$             21,436
	Other US		72,497		77,833		70,661		71,333		81,641
	U.S. Drilling (10)		35,447		25,911		32,380		31,037		25,909
	Canada Drilling		-		-		-		-		16,693
	International Drilling		45,616		41,239		44,658		44,311		42,100
Daily Adjusted Gross Margin: (6),(9)
	Lower 48		$             14,599		$               7,161		$             11,165		$             10,678		$               7,367
	Other US		36,592		47,734		38,034		37,062		50,953
	U.S. Drilling (10)		16,107		10,179		13,232		12,625		10,605
	Canada Drilling		-		-		-		-		6,927
	International Drilling		14,902		13,172		14,589		14,257		13,474

(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 December 31, 2022
		U.S. Drilling		Canada Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other reconciling items		Total
Adjusted operating income (loss)		$    68,293		$          56		$          1,750		$  24,800		$            6,118		$    (39,836)		$    61,181
Depreciation and amortization		75,849		-		87,088		5,536		1,443		(1,075)		168,841
Adjusted EBITDA		$  144,142		$          56		$        88,838		$  30,336		$            7,561		$    (40,911)		$  230,022
		Three Months Ended December 31, 2021
		U.S. Drilling		Canada Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other reconciling items		Total
Adjusted operating income (loss)		$   (12,587)		$       223		$        (5,749)		$  12,930		$            1,493		$    (32,609)		$   (36,299)
Depreciation and amortization		81,836		-		78,917		6,629		2,349		(1,776)		167,955
Adjusted EBITDA		$    69,249		$       223		$        73,168		$  19,559		$            3,842		$    (34,385)		$  131,656
		Three Months Ended September 30, 2022
		U.S. Drilling		Canada Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other reconciling items		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
		Year Ended December 31, 2022
		U.S. Drilling		Canada Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other reconciling items		Total
Adjusted operating income (loss)		$  108,506		$          13		$            (879)		$  77,868		$            8,906		$ (150,094)		$    44,320
Depreciation and amortization		311,758		-		329,333		20,831		5,793		(2,643)		665,072
Adjusted EBITDA		$  420,264		$          13		$     328,454		$  98,699		$          14,699		$ (152,737)		$  709,392
		Year Ended December 31, 2021
		U.S. Drilling		Canada Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other reconciling items		Total
Adjusted operating income (loss)		$   (76,492)		$    2,893		$      (40,117)		$  32,771		$               158		$ (130,654)		$ (211,441)
Depreciation and amortization		326,443		11,604		323,429		26,662		8,191		(2,947)		693,381
Adjusted EBITDA		$  249,951		$  14,497		$     283,312		$  59,433		$            8,349		$ (133,601)		$  481,940
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						Year Ended
			December 31,				September 30,		December 31,
(In thousands)			2022		2021		2022		2022		2021
Lower 48 - U.S. Drilling
	Adjusted operating income (loss)		$              58,299		$            (25,474)		$             25,551		$              68,317		$          (119,000)
	Plus: General and administrative costs		4,977		4,609		4,798		18,960		17,890
	Plus: Research and engineering		1,637		1,065		1,652		6,539		3,736
	GAAP Gross Margin		64,913		(19,800)		32,001		93,816		(97,374)
	Plus: Depreciation and amortization		62,768		68,994		62,583		256,907		273,638
	Adjusted gross margin		$            127,681		$             49,194		$             94,584		$            350,723		$           176,264
Other - U.S. Drilling
	Adjusted operating income (loss)		$                9,994		$             12,887		$             12,225		$              40,189		$             42,508
	Plus: General and administrative costs		324		513		343		1,357		2,122
	Plus: Research and engineering		166		105		157		594		408
	GAAP Gross Margin		10,484		13,505		12,725		42,140		45,038
	Plus: Depreciation and amortization		13,081		12,844		14,127		54,852		52,805
	Adjusted gross margin		$              23,565		$             26,349		$             26,852		$              96,992		$             97,843
U.S. Drilling
	Adjusted operating income (loss)		$              68,293		$            (12,587)		$             37,776		$            108,506		$            (76,492)
	Plus: General and administrative costs		5,301		5,122		5,141		20,317		20,012
	Plus: Research and engineering		1,803		1,170		1,809		7,133		4,144
	GAAP Gross Margin		75,397		(6,295)		44,726		135,956		(52,336)
	Plus: Depreciation and amortization		75,849		81,838		76,710		311,759		326,443
	Adjusted gross margin		$            151,246		$             75,543		$           121,436		$            447,715		$           274,107
Canada Drilling
	Adjusted operating income (loss)		$                     56		$                  223		$                     (9)		$                     13		$               2,893
	Plus: General and administrative costs		(17)		175		9		24		1,711
	Plus: Research and engineering		-		-		-		-		115
	GAAP Gross Margin		39		398		-		37		4,719
	Plus: Depreciation and amortization		(1)		(1)		-		2		11,604
	Adjusted gross margin		$                     38		$                  397		$                        -		$                     39		$             16,323
International Drilling
	Adjusted operating income (loss)		$                1,750		$              (5,749)		$                  (907)		$                 (879)		$            (40,117)
	Plus: General and administrative costs		13,368		12,058		12,599		51,505		44,993
	Plus: Research and engineering		1,542		1,357		1,558		5,903		5,560
	GAAP Gross Margin		16,660		7,666		13,250		56,529		10,436
	Plus: Depreciation and amortization		87,089		78,918		86,830		329,335		323,431
	Adjusted gross margin		$            103,749		$             86,584		$            100,080		$           385,864		$           333,867
	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						Year Ended
		December 31,				September 30,		December 31,
(In thousands)		2022		2021		2022		2022		2021
Net income (loss)		$            (58,155)		$         (109,263)		$              (4,461)		$         (307,219)		$         (543,690)
(Income) loss from discontinued operations, net of tax		-		(13)		-		-		(20)
Income (loss) from continuing operations, net of tax		(58,155)		(109,276)		(4,461)		(307,219)		(543,710)
Income tax expense (benefit)		26,161		18,393		12,352		61,537		55,621
Income (loss) from continuing operations before income taxes		(31,994)		(90,883)		7,891		(245,682)		(488,089)
Investment (income) loss		(9,194)		(156)		(4,813)		(14,992)		(1,557)
Interest expense		44,245		44,570		43,841		177,895		171,476
Other, net		58,124		10,170		(25,954)		127,099		106,729
Adjusted operating income (loss) (1)		61,181		(36,299)		20,965		44,320		(211,441)
Depreciation and amortization		168,841		167,955		169,857		665,072		693,381
Adjusted EBITDA (2)		$           230,022		$           131,656		$           190,822		$           709,392		$           481,940

(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
			December 31,		September 30,		December 31,
	(In thousands)		2022		2022		2021
			(Unaudited)
	Long-term debt		$         2,537,540		$         2,585,517		$         3,262,795
	Less: Cash and short-term investments		452,315		425,070		991,488
	Net Debt		$         2,085,225		$         2,160,447		$         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				Year Ended
		December 31,		September 30,		December 31,
(In thousands)		2022		2022		2022
Net cash provided by operating activities		199,989		138,950		$              501,089
Add: Capital expenditures, net of proceeds from sales of assets		(98,682)		(103,591)		(346,732)
Adjusted free cash flow		$            101,307		$              35,359		$              154,357

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-fourth-quarter-2022-results-301741207.html

SOURCE Nabors Industries Ltd.

FAQ

What were Nabors Industries' operating revenues in Q4 2022?

Nabors Industries reported operating revenues of $760 million in Q4 2022.

What was the net loss for Nabors Industries in the fourth quarter of 2022?

The net loss attributable to Nabors shareholders in Q4 2022 was $69 million, or $7.87 per share.

How much did Nabors' adjusted EBITDA increase in Q4 2022?

Nabors' adjusted EBITDA increased by 21% to $230 million in Q4 2022.

What is the forecast for Nabors' adjusted free cash flow in 2023?

Nabors expects to generate adjusted free cash flow exceeding $400 million in 2023.

How did the U.S. Drilling segment perform in Q4 2022?

The U.S. Drilling segment's adjusted EBITDA rose by 26% to $144.1 million in Q4 2022.