Nabors Announces Preliminary Second Quarter 2020 Results

Rhea-AI Summary

Nabors Industries Ltd. (NBR) reported second quarter 2020 operating revenues of $534 million, down from $718 million in Q1. The net loss attributable to common shareholders is expected to be $152 million or $22.13 per share, an improvement from a loss of $395 million in the previous quarter. Adjusted EBITDA fell to $154 million, affected by a 36% reduction in drilling rigs in the U.S. due to a 50% decline in industry rig count. Total debt declined by $112 million, reflecting improved free cash flow of $101 million despite challenging market conditions.

Positive

• Adjusted EBITDA of $154 million demonstrates resilience amid market challenges.
• Reduced total debt by $112 million, enhancing financial stability.
• Achieved overhead cost reductions of $30 million, a 25% decrease from Q1.

Negative

• Operating revenues fell 26% from Q1, indicating a significant downturn.
• Net loss from continuing operations expected at $152 million, despite previous quarter losses being higher.
• U.S. drilling rig count reduced by 36%, impacting revenue potential.

HAMILTON, Bermuda, July 28, 2020 /PRNewswire/ -- Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported second quarter 2020 operating revenues of $534 million compared to operating revenues of $718 million in the first quarter of 2020.  The net loss from continuing operations attributable to Nabors common shareholders for the quarter is expected to be $152 million, or $22.13 per share, compared to a loss of $395 million, or $56.72 per share in the prior quarter. After-tax charges in the second quarter are expected to be $54 million, or $7.68 per share, primarily related to asset impairments and severance costs. After-tax charges in the first quarter totaled $260 million, or $36.86 per share.

For the second quarter, adjusted EBITDA was $154 million compared to $188 million in the prior quarter. In the U.S., a 50% decline in Lower 48 rig count for the industry drove a 36% reduction in Nabors' drilling rigs, as well as a sharp decline in Nabors Drilling Solutions. International activity, especially in Latin America, was impacted by COVID-related disruptions, which resulted in significantly lower dayrates for our temporarily idled rigs. In addition, several contracts were not renewed or were terminated before their expiration. The Rig Technologies segment recorded its highest quarterly adjusted EBITDA level in five years, due to stronger sales in international markets and stringent expense control. Total overhead was reduced by $30 million, a 25% sequential decrease. Second-quarter results also benefitted from one-time net gains to adjusted EBITDA of approximately $8 million, primarily revenue from early terminations on drilling contracts for the International segment.

Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "As we adjusted to the steep activity decline, Nabors delivered strong results in the second quarter, driven by increased market share and strong margins in the Lower 48, resilience in our International business and improved results in our Rig Technologies segment. In addition, we slashed our overhead expenses and capital spending, while making notable progress on our priorities to generate free cash flow and reduce net debt. At the same time, our global team remains focused on minimizing the impact of the pandemic on our employees and on our operations.

"The second quarter operating performance reflected significant activity declines in North America, as operators completed the bulk of their plans to reduce drilling. In the U.S. Lower 48, we lowered our costs swiftly in response to customer actions. Our daily rig margins remained at high levels despite some weakening in our average dayrates for the fleet.

"In our International Drilling segment, rig count declined by 4.3 rigs, a 5% reduction. In addition to the situation in Venezuela, where our main customer exited the market, various customers responded to the global drop in demand by adjusting their drilling plans. As well, strict COVID lockdowns in Latin America resulted in reduced dayrates during the lockdown periods. Nonetheless, adjusted EBITDA held up well, as we benefitted from significant early termination revenue.

"Although activity in the Lower 48 seems close to a bottom, the full impact of pricing reductions on average fleet margins still lies ahead. In addition, as is usually the case, activity trends in most international markets lag the U.S. We expect international rig count and pricing to continue falling over the remainder of the year, though not as steeply as the industry has experienced in the Lower 48.

"In this environment, we will remain focused on cost and capital discipline. We will ensure our direct and overhead costs, as well as our capital expenditures, are as aligned as much as possible to our activity levels."

Consolidated and Segment Results

The U.S. Drilling segment reported $77.7 million in adjusted EBITDA for the second quarter of 2020, a $24.1 million, or 24%, reduction from the prior quarter, primarily due to the decline in activity in the Lower 48 market. During the quarter, Nabors' Lower 48 rig count decreased by 31.8 rigs or 36%. Average daily margins in the Lower 48 widened to $10,449 as favorable cost performance offset the erosion to average fleet dayrates. The U.S. segment's rig count currently stands at 55, with 49 rigs in the Lower 48. Based on the Company's current outlook, the third quarter average Lower 48 rig count should fall by two to three rigs from the second quarter exit rate of 49, while drilling margins should fall to between $9,000 and $9,500, reflecting more normal costs and the continued impact of lower pricing.

International Drilling adjusted EBITDA increased sequentially by $2.0 million, to $93.5 million. Activity declines across several markets and disruptions related to the COVID-19 virus impacted results. The second quarter included one-time net gains totaling approximately $8 million, primarily early termination revenue. The quarterly average rig count, at 82, declined by 5% from the prior quarter. Average margin per day increased to $14,091, including a net benefit of approximately $1,070 from the unusual items. The international rig count currently stands at 74. The Company's outlook includes a further reduction in average rig count in the third quarter, and a decline in adjusted EBITDA.

Canada Drilling reported an adjusted EBITDA loss of $0.6 million, as rig activity in that market reached its seasonal low point. Average daily gross margin and the average working rig count decreased significantly during the quarter. The second quarter rig count was two rigs, down from 17 in the prior quarter. The usual seasonal downturn was exacerbated by the current market environment. For the third quarter of 2020, the Company expects an improvement in this segment's adjusted EBITDA as seasonal activity picks up. The Company anticipates rig count to improve by four rigs in the third quarter.

In Drilling Solutions, adjusted EBITDA of $9.4 million declined sharply compared to the first quarter, due to reduced activity across service lines and heightened price competition. The industry rig count, which dropped significantly more than the Nabors rig count, hurt this segment's U.S. revenue as compared to the reduction in the Company's U.S. drilling rig activity. 

In the Rig Technologies segment, second quarter adjusted EBITDA was $3.2 million, reversing the prior quarter adjusted EBITDA loss of $3.2 million. Higher international sales and strict cost control contributed to the improved results. 

Cost Reductions and Capital Discipline

The second quarter results reflect several actions taken by the Company to improve its fixed cost structure. Primarily, these measures include a streamlined corporate organization, reduced compensation, and a field-support infrastructure optimized for the lower level of activity. Combined, the Company estimates that these actions should generate savings of $96 million beginning in the second quarter through the end of 2020. This reduction represents an additional $11 million in savings as compared to the amount communicated at the end of the first quarter. 

Capital expenditures were $49 million in the second quarter, and totaled $109 million for the first half of 2020. As previously disclosed, the Company expects capital expenditures   of approximately $240 million for the full year.

Free cash flow, defined as net cash provided by operating activities less net cash used by investing activities, as presented in our cash flow statement, reached $101 million in the second quarter. Total debt declined by $112 million and net debt, defined for financial reporting purposes as total debt less cash, cash equivalents and short-term investments, declined to $2.78 billion, a $117 million reduction. The improvement in free cash flow as compared to the first quarter was driven by the absence of semiannual interest payments on senior notes during the second quarter and lower capital expenditures. Working capital provided a headwind to the Company's cash flow. In Latin America, collections were affected by the COVID lockdowns and by negotiations on the dayrates for the lockdown periods. Collections globally were well below Nabors' expectations.

William Restrepo, Nabors CFO, stated, "Nabors' adjusted EBITDA and cash generation, despite the adverse environment, demonstrated the Company's resilience. Looking ahead, we expect further deterioration in the domestic and international markets. As such, we have increased our efforts to continue delivering our goals. We remain committed to meaningfully reduce our net debt in 2020.

"Our overhead costs were cut significantly below the first-quarter levels, exceeding our initial targets. G&A, R&E and field support expenses totaled $89.1 million in the second quarter as compared to $118.9 million in the prior quarter, a 25% reduction. We expect those costs to fall just below $80 million in the third quarter and remain at those levels in the fourth, a 33% reduction as compared to the first quarter. The full year 2020 should be $145 million dollars below the prior year, a 28% year-on-year reduction.

"During the second quarter, we purchased approximately $187 million of our shorter-term notes in the open market at a discount to par. The remaining balances of our 2020 and 2021 senior notes now stand at $139 million and $154 million, respectively. At June 30, our balances of cash and cash equivalents plus our undrawn credit facility totaled nearly $925 million."

Mr. Petrello concluded, "Our commitment to generate free cash flow and reduce net debt this year is unwavering. We continue to evaluate all aspects of the Company with the goal of streamlining our operating processes.

"We will continue to drive technology and performance in the drilling sector. We firmly believe that the future of our industry and the Company's success will be determined by our ability to continue automating the drilling process and integrating the relevant services onto our leading-edge rig platform. At the same time, we are positioning the Company to capitalize on several far-reaching transformations which are currently underway in our industry. The recent launch of our RigCloud^® digital platform, for streaming analytics and improving rig and operational performance, is a key element of our digitalization strategy. These initiatives will allow us to further improve performance, enhance placement and quality of the wellbore, reduce well cost and enable remote operations with fewer people at risk on the well site.

"We spent the last several years focusing our value proposition on the group of operators we thought most capable of sustaining scale in their markets. These operators demand industry-leading rig capabilities, performance, and advanced technology. Our track record across these dynamics has established Nabors as the leading provider of drilling services to these customers. This strong position will serve us well as we emerge from this downturn.

"I would again like to thank our employees for their hard work in this trying environment. I remain confident that their commitment and perseverance will be rewarded in the recovery."

About Nabors

Nabors (NYSE: NBR) owns and operates one of the world's largest land-based drilling rig fleets and provides offshore platform rigs in the United States and several international markets. Nabors also provides directional drilling services, tubular services, performance software, and innovative technologies for its own rig fleet and those of third parties. Leveraging advanced drilling automation capabilities, Nabors highly skilled workforce continues to set new standards for operational excellence and transform the industry.

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.  The results included in this press release are preliminary and unaudited and are subject to change and finalization based on the completion of the Company's normal quarter-end procedures, particularly as it relates to impairments and valuations or reserves around the carrying value of various assets on our balance sheet.  As a result, these preliminary results may be materially different than the actual results reflected on the Company's Form 10-Q, when it is filed.  We do not expect there to be any differences in revenues, adjusted EBITDA, adjusted operating income (loss), free cash flow or net debt, or any of the rig activity or daily rig financial information, but there could be material differences to net loss from continuing operations attributable to Nabors common shareholders and earning per share.

The preliminary results and 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 may present 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, earnings (losses) from unconsolidated affiliates, investment income (loss), impairments and other charges 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.  Free cash flow represents net cash provided by operating activities less cash used for investing activities. Free cash flow is an indicator of our ability to generate cash flow after required spending to maintain or expand our asset base. 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 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 free cash flow to cash flow provided by operations, which are their nearest comparable GAAP financial measures, are included in the tables at the end of this press release. 

Media Contact:  William C. Conroy, Vice President of Corporate Development & Investor Relations, +1 281-775-2423, or Kara Peak, Director of Corporate Development & Investor Relations, +1 281-775-4954.   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
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
	Three Months Ended						Six Months Ended
	June 30,				March 31,		June 30,
(In thousands, except per share amounts)	2020		2019		2020		2020		2019
Revenues and other income:
Operating revenues	$  533,931		$  771,406		$  718,364		$ 1,252,295		$ 1,571,046
Earnings (losses) from unconsolidated affiliates	-		-		-		-		(5)
Investment income (loss)	2,036		469		(3,198)		(1,162)		10,146
Total revenues and other income	535,967		771,875		715,166		1,251,133		1,581,187
Costs and other deductions:
Direct costs	326,557		496,664		461,840		788,397		1,017,621
General and administrative expenses	46,244		64,415		57,384		103,628		132,582
Research and engineering	7,305		11,920		11,409		18,714		25,440
Depreciation and amortization	211,120		218,319		227,063		438,183		428,710
Interest expense	51,206		51,491		54,722		105,928		103,843
Impairments and other charges	57,852		102,570		276,434		334,286		99,903
Other, net	(30,795)		7,899		(17,110)		(47,905)		28,068
Total costs and other deductions	669,489		953,278		1,071,742		1,741,231		1,836,167
Income (loss) from continuing operations before income taxes	(133,522)		(181,403)		(356,576)		(490,098)		(254,980)
Income tax expense (benefit)	4,446		11,398		17,693		22,139		41,197
Income (loss) from continuing operations, net of tax	(137,968)		(192,801)		(374,269)		(512,237)		(296,177)
Income (loss) from discontinued operations, net of tax	23		(34)		(93)		(70)		(191)
Net income (loss)	(137,945)		(192,835)		(374,362)		(512,307)		(296,368)
Less: Net (income) loss attributable to noncontrolling interest	(10,167)		(10,729)		(17,465)		(27,632)		(24,905)
Net income (loss) attributable to Nabors	$(148,112)		$(203,564)		$(391,827)		$  (539,939)		$  (321,273)
Less: Preferred stock dividend	$     (3,653)		$     (4,312)		$     (3,652)		$       (7,305)		$       (8,625)
Net income (loss) attributable to Nabors common shareholders	$(151,765)		$(207,876)		$(395,479)		$  (547,244)		$  (329,898)
Amounts attributable to Nabors common shareholders:
Net income (loss) from continuing operations	$(151,788)		$(207,842)		$(395,386)		$  (547,174)		$  (329,707)
Net income (loss) from discontinued operations	23		(34)		(93)		(70)		(191)
Net income (loss) attributable to Nabors common shareholders	$(151,765)		$(207,876)		$(395,479)		$  (547,244)		$  (329,898)
Earnings (losses) per share:
Basic from continuing operations	$     (22.13)		$     (30.31)		$     (56.72)		$       (78.85)		$       (48.43)
Basic from discontinued operations	-		-		(0.01)		(0.01)		(0.03)
Total Basic	$     (22.13)		$     (30.31)		$     (56.73)		$       (78.86)		$       (48.46)
Diluted from continuing operations	$     (22.13)		$     (30.31)		$     (56.72)		$       (78.85)		$       (48.43)
Diluted from discontinued operations	-		-		(0.01)		(0.01)		(0.03)
Total Diluted	$     (22.13)		$     (30.31)		$     (56.73)		$       (78.86)		$       (48.46)
Weighted-average number of common shares outstanding:
Basic	7,052		7,031		7,051		7,052		7,023
Diluted	7,052		7,031		7,051		7,052		7,023
Adjusted EBITDA	$  153,825		$  198,407		$  187,731		$    341,556		$    395,403
Adjusted operating income (loss)	$   (57,295)		$   (19,912)		$   (39,332)		$     (96,627)		$     (33,307)

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES
PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS
	June 30,		March 31,		December 31,
(In thousands)	2020		2020		2019
	(Unaudited)
ASSETS
Current assets:
Cash and short-term investments	$    494,278		$    489,658		$       452,496
Accounts receivable, net	349,005		454,718		453,042
Assets held for sale	562		1,936		2,530
Other current assets	309,077		324,524		340,598
Total current assets	1,152,922		1,270,836		1,248,666
Property, plant and equipment, net	4,395,725		4,597,308		4,930,549
Goodwill	-		-		28,380
Other long-term assets	433,768		440,404		553,063
Total assets	$ 5,982,415		$ 6,308,548		$    6,760,658
LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt	$                 -		$                 -		$                    -
Other current liabilities	523,690		584,870		656,548
Total current liabilities	523,690		584,870		656,548
Long-term debt	3,276,103		3,388,014		3,333,220
Other long-term liabilities	241,005		264,742		295,333
Total liabilities	4,040,798		4,237,626		4,285,101
Redeemable noncontrolling interest in subsidiary	434,131		429,824		425,392
Equity:
Shareholders' equity	1,413,147		1,555,921		1,982,811
Noncontrolling interest	94,339		85,177		67,354
Total equity	1,507,486		1,641,098		2,050,165
Total liabilities and equity	$ 5,982,415		$ 6,308,548		$    6,760,658

 

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)		2020		2019		2020		2020		2019
Operating revenues:
	U.S. Drilling	$ 173,784		$ 323,402		$ 274,901		$    448,685		$    643,611
	Canada Drilling	3,564		11,389		25,591		29,155		36,704
	International Drilling	301,078		326,905		337,110		638,188		664,161
	Drilling Solutions	33,129		64,583		55,384		88,513		130,005
	Rig Technologies (1)	33,582		72,751		42,150		75,732		144,504
	Other reconciling items (2)	(11,206)		(27,624)		(16,772)		(27,978)		(47,939)
	Total operating revenues	$ 533,931		$ 771,406		$ 718,364		$ 1,252,295		$ 1,571,046
Adjusted EBITDA: (3)
	U.S. Drilling	$   77,659		$ 124,924		$ 101,809		$    179,468		$    249,929
	Canada Drilling	(564)		1,069		7,931		7,367		8,515
	International Drilling	93,510		86,767		91,509		185,019		172,611
	Drilling Solutions	9,411		22,461		19,439		28,850		43,507
	Rig Technologies (1)	3,176		3,160		(3,178)		(2)		864
	Other reconciling items (4)	(29,367)		(39,974)		(29,779)		(59,146)		(80,023)
	Total adjusted EBITDA	$ 153,825		$ 198,407		$ 187,731		$    341,556		$    395,403
Adjusted operating income (loss): (5)
	U.S. Drilling	$ (23,395)		$   20,392		$    (7,404)		$     (30,799)		$      45,075
	Canada Drilling	(5,795)		(5,537)		37		(5,758)		(5,596)
	International Drilling	276		(6,884)		(4,147)		(3,871)		(12,521)
	Drilling Solutions	1,733		13,793		10,549		12,282		26,648
	Rig Technologies (1)	(1,492)		496		(8,151)		(9,643)		(4,652)
	Other reconciling items (4)	(28,622)		(42,172)		(30,216)		(58,838)		(82,261)
	Total adjusted operating income (loss)	$ (57,295)		$ (19,912)		$ (39,332)		$     (96,627)		$     (33,307)
Rig activity:
Average Rigs Working: (6)
	Lower 48	57.2		114.6		89.0		73.1		113.0
	Other US	6.6		7.6		7.4		7.0		8.5
	U.S. Drilling	63.8		122.2		96.4		80.1		121.5
	Canada Drilling	2.2		7.4		16.8		9.5		11.8
	International Drilling	82.4		88.6		86.7		84.6		89.1
	Total average rigs working	148.4		218.2		199.9		174.2		222.4
Daily Rig Revenue:
	Lower 48	24,744		25,783		27,199		26,238		25,794
	Other US	74,825		78,922		80,996		78,089		75,588
	U.S. Drilling (8)	29,927		29,091		31,339		30,776		29,267
	Canada Drilling	18,105		17,024		16,767		16,920		17,184
	International Drilling	40,129		40,529		42,717		41,456		41,160
Daily Rig Margin: (7)
	Lower 48	10,449		10,222		9,891		10,110		10,197
	Other US	46,032		39,760		43,756		44,828		38,965
	U.S. Drilling (8)	14,132		12,061		12,497		13,148		12,204
	Canada Drilling	899		3,764		5,694		5,146		5,338
	International Drilling	14,091		12,610		13,471		13,773		12,616

(1)	Includes our oilfield equipment manufacturing, automated systems, and downhole tools.
(2)	Represents the elimination of inter-segment transactions related to our Rig Technologies operating segment.
(3)	Adjusted EBITDA represents income (loss) from continuing operations before income taxes, interest expense, depreciation and amortization, earnings (losses) from unconsolidated affiliates, investment income (loss), impairments and other charges and other, net. 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 income (loss) from continuing operations before income taxes, 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 Income (loss) from Continuing Operations before Income Taxes".
(4)	Represents the elimination of inter-segment transactions and unallocated corporate expenses.
(5)	Adjusted operating income (loss) represents income (loss) from continuing operations before income taxes, interest expense, earnings (losses) from unconsolidated affiliates, investment income (loss), impairments and other charges 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 income (loss) from continuing operations before income taxes, 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 Income (loss) from Continuing Operations before Income Taxes".
(6)	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.
(7)	Daily rig margin represents operating revenue less operating expenses, divided by the total number of revenue days during the quarter.
(8)	The U.S. Drilling segment includes the Lower 48, Alaska, and Gulf of Mexico operating areas.

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO
PRELIMINARY INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
(Unaudited)
	Three Months Ended						Six Months Ended
	June 30,				March 31,		June 30,
(In thousands)	2020		2019		2020		2020		2019
Adjusted EBITDA	$  153,825		$  198,407		$  187,731		$  341,556		$  395,403
Depreciation and amortization	(211,120)		(218,319)		(227,063)		(438,183)		(428,710)
Adjusted operating income (loss)	(57,295)		(19,912)		(39,332)		(96,627)		(33,307)
Earnings (losses) from unconsolidated affiliates	-		-		-		-		(5)
Investment income (loss)	2,036		469		(3,198)		(1,162)		10,146
Interest expense	(51,206)		(51,491)		(54,722)		(105,928)		(103,843)
Impairments and other charges	(57,852)		(102,570)		(276,434)		(334,286)		(99,903)
Other, net	30,795		(7,899)		17,110		47,905		(28,068)
Preliminary Income (loss) from continuing operations before income taxes	$(133,522)		$(181,403)		$(356,576)		$(490,098)		$(254,980)

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES
RECONCILIATION OF NET DEBT TO TOTAL DEBT
	June 30,		March 31,		December 31,
(In thousands)	2020		2020		2019
	(Unaudited)
Current portion of debt	$                 -		$                 -		$                    -
Long-term debt	3,276,103		3,388,014		3,333,220
Total Debt	3,276,103		3,388,014		3,333,220
Less: Cash and short-term investments	494,278		489,658		452,496
Net Debt	$ 2,781,825		$ 2,898,356		$    2,880,724

NABORS INDUSTRIES LTD. AND SUBSIDIARIES
RECONCILIATION OF FREE CASH FLOW TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
(Unaudited)
	Three Months Ended				Six Months Ended
	June 30,		March 31,		June 30,
(In thousands)	2020		2020		2020
Net cash provided by operating activities	$ 142,610		$  59,162		$                201,772
Less: Net cash used for investing activities	(41,376)		(50,773)		(92,149)
Free cash flow	$ 101,234		$    8,389		$                109,623

Free cash flow represents net cash provided by operating activities less cash used for investing activities. Free cash flow is an indicator of our ability to generate cash flow after required spending to maintain or expand our asset base. Management believes that this non-GAAP measure is useful information to investors when comparing our cash flows with the cash flows of other companies. This non-GAAP measure 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 the consolidated Company based on several criteria, including free cash flow, because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance.

 

View original content:http://www.prnewswire.com/news-releases/nabors-announces-preliminary-second-quarter-2020-results-301101537.html

SOURCE Nabors Industries Ltd.

FAQ

What were Nabors Industries' (NBR) second quarter 2020 earnings results?

Nabors reported a net loss of $152 million or $22.13 per share with operating revenues of $534 million.

How did COVID-19 impact Nabors Industries (NBR) in Q2 2020?

COVID-19 disruptions led to a 50% decline in the U.S. Lower 48 rig count and significantly lower dayrates for idled rigs.

What was Nabors Industries' adjusted EBITDA in Q2 2020?

The adjusted EBITDA for Q2 2020 was $154 million, a decrease from $188 million in the previous quarter.

How much did Nabors Industries (NBR) reduce its overhead costs in Q2 2020?

Nabors reduced overhead costs by $30 million, representing a 25% sequential decrease.

What is the outlook for Nabors Industries (NBR) after Q2 2020 results?

Nabors expects further declines in international rig count and pricing, with a focus on cost and capital discipline.