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Nabors Announces Second Quarter 2023 Results

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HAMILTON, Bermuda, July 25, 2023 /PRNewswire/ -- Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported second quarter 2023 operating revenues of $767 million, compared to operating revenues of $779 million in the first quarter. The net income attributable to Nabors shareholders for the quarter was $5 million, compared to $49 million in the first quarter. This equates to a loss of $0.31 per diluted share, compared to earnings per diluted share of $4.11 in the first quarter. The second quarter results included a gain, related to mark-to-market treatment of Nabors warrants, of $18 million, or $1.95 per diluted share, as compared to a gain of $34 million, or $3.48 per diluted share in the first quarter. The first quarter also included a $25 million, or $2.06 per diluted share, gain on the redemption of debt. Second quarter adjusted EBITDA was $235 million, compared to $240 million in the previous quarter.

Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "Our global market activity was essentially in line with our expectations, with the exception of the Lower 48, where oil related drilling fell somewhat in addition to the already anticipated reduction in gas basins. Total adjusted EBITDA declined slightly, reflecting a decrease in U.S. rig count. Although leading edge pricing in the Lower 48 has peaked, daily revenue increased by $300 beyond the first quarter level.

"In our International segment, results benefitted from strong performance in the Middle East including the start of the third newbuild rig in Saudi Arabia. The remaining two rigs, of the initial five awards, are anticipated to commence operations over the balance of 2023. Construction of the second tranche of five units is progressing, with the first of those deployments expected to begin around the end of 2023. During the quarter we successfully deployed an additional rig in Argentina. We also were recently awarded four rigs in Algeria. Additionally, a unit in Colombia will restart operations in the third quarter.

"Revenue and adjusted EBITDA in our Drilling Solutions segment increased in the second quarter, despite the drilling activity headwinds in the Lower 48. On a global basis, third party revenue increased 18% sequentially, accelerating over the growth rate in the first quarter and validating our focus on this strategy. International revenue also increased as we expanded our footprint in Latin America and the Middle East.

"In the Rig Technologies segment, total revenue and adjusted EBITDA grew, driven by international sales of capital equipment and spare parts.

"On July 18, 2023, Nabors' affiliate Nabors Energy Transition Corporation II (NASDAQ: NETDU) completed the initial public offering of its common shares. NETDU represents another milestone in the implementation of Nabors' energy transition strategy."

Segment Results

The U.S. Drilling segment reported $141.4 million in adjusted EBITDA for the second quarter of 2023. Nabors' average Lower 48 rig count totaled 82. Daily adjusted gross margin in the Lower 48 market averaged $16,890, up $200 from the prior quarter.

International Drilling adjusted EBITDA totaled $98.3 million, up nearly $10 million. Improved EBITDA across multiple markets more than offset the forecast decline in Colombia. International rig count averaged 77, up slightly from the previous quarter. Daily adjusted gross margin for the second quarter averaged $16,276, up almost 7% from the prior quarter.

Drilling Solutions adjusted EBITDA increased sequentially by 3% to $32.8 million. Growth was led by the Performance Software and Digitalization product lines.

In Rig Technologies, adjusted EBITDA totaled $6.4 million, compared to $5.0 million in the first quarter. Increases in capital equipment, part sales, and energy transition accounted for the sequential improvement in adjusted EBITDA.

Adjusted Free Cash Flow

Adjusted free cash flow totaled $27 million in the second quarter. Capital expenditures totaled $152 million, including $66 million supporting the newbuilds in Saudi Arabia, compared to $119 million in the first quarter, including $37 million supporting the SANAD newbuilds.

At the end of the second quarter, net debt was $2.074 billion.

William Restrepo, Nabors CFO, stated, "Our results in the second quarter mirrored the performance of our markets. Our International segment was solid, while our technology businesses also delivered sequential growth. These results helped offset the softening rig markets we had forecast in the Lower 48 and Colombia. We expected lower drilling activity in gas basins but admittedly, the reductions in oil related drilling we experienced were not anticipated. Despite that pause in the Lower 48, our operation in that market continued to generate superior economics, with record margins and substantial cash flow generation.

"Free cash flow in the quarter, although still positive, was impacted by somewhat lower than expected adjusted EBITDA, and higher than planned capital spending. Capex for the newbuild rigs in Saudi Arabia accounted for this variance, as our supplier reached progress milestones earlier than we planned. It is worth highlighting that while our SANAD JV consumed cash during the quarter, free cash flow for the remainder of our business reached almost $60 million. This incremental cash flow supported the redemption in June of approximately $52 million of notes due in September of 2023. At the same time, our revolving credit facility remained undrawn at the end of the second quarter.

"The drilling market should continue to weaken in the Lower 48 during the third quarter. But after a tough first half in the U.S., we are now starting to see signs that this market is bottoming in the third quarter with encouraging data points of incremental activity for the fourth quarter.

"On another positive note, we anticipate further strength in International markets, with early signs of growth developing into awards for incremental rigs. Drilling Solutions and Rig Technologies are also expected to increase sequentially.   

"Despite the softness in the Lower 48 market and to a lesser extent in Colombia, we still expect to generate solid adjusted free cash flow for the full year and to continue reducing our net debt."

Outlook

Nabors expects the following metrics for the third quarter 2023:

U.S. Drilling             

  • Lower 48 average rig count of 74 - 76 rigs
  • Lower 48 adjusted gross margin per day approaching $16,000
  • Alaska and Gulf of Mexico adjusted EBITDA down by approximately $7 million due mainly to recertification-related work on the M400 offshore rig

International

  • Rig count up by one to two rigs versus the second quarter average
  • Adjusted gross margin per day of approximately $16,000 - $16,200

Drilling Solutions

  • Adjusted EBITDA up by approximately 3% above the second quarter

Rig Technologies

  • Adjusted EBITDA up by approximately $3 million vs the second quarter

Capital Expenditures

  • Capital expenditures of $125 million, with approximately $48 million supporting newbuilds in Saudi Arabia

Adjusted Free Cash Flow

  • Adjusted free cash flow for the third quarter of approximately $80 million and for the full year 2023 between $300 and $350 million

Mr. Petrello concluded, "Our second quarter results demonstrate the strength of our broad portfolio. With the current U.S. market trends, our International segment and technology businesses are even more impactful as we work to attain our free cash flow and leverage goals. As we look to the future, we believe that the worst should be behind us in the Lower 48 and we expect some recovery in the fourth quarter. Further, we anticipate International activity in all our segments to continue improving during the second half of this year. And we are pleased with the progress made in our energy transition businesses. We are excited about what's to come for Nabors in the second half and during 2024."

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


Six Months Ended



June 30,


March 31,


June 30,

(In thousands, except per share amounts)


2023


2022


2023


2023


2022












Revenues and other income:











Operating revenues


$            767,067


$            630,943


$            779,139


$         1,546,206


$         1,199,482

Investment income (loss)


11,743


822


9,866


21,609


985

Total revenues and other income


778,810


631,765


789,005


1,567,815


1,200,467












Costs and other deductions:











Direct costs


455,531


403,797


462,329


917,860


776,509

General and administrative expenses


63,232


58,167


61,730


124,962


111,806

Research and engineering


13,281


10,941


15,074


28,355


22,619

Depreciation and amortization


159,698


162,015


163,031


322,729


326,374

Interest expense


46,164


42,899


45,141


91,305


89,809

Other, net


(1,775)


14,528


(42,375)


(44,150)


94,929

Total costs and other deductions


736,131


692,347


704,930


1,441,061


1,422,046












Income (loss) before income taxes


42,679


(60,582)


84,075


126,754


(221,579)

Income tax expense (benefit)


26,448


9,353


23,015


49,463


23,024












Net income (loss)


16,231


(69,935)


61,060


77,291


(244,603)

Less: Net (income) loss attributable to noncontrolling interest


(11,620)


(12,982)


(11,836)


(23,456)


(22,810)

Net income (loss) attributable to Nabors


$                4,611


$             (82,917)


$              49,224


$              53,835


$           (267,413)












Earnings (losses) per share:











   Basic


$                 (0.31)


$                 (9.41)


$                  4.39


$                  4.05


$               (31.34)

   Diluted


$                 (0.31)


$                 (9.41)


$                  4.11


$                  3.79


$               (31.34)












Weighted-average number of common shares outstanding:











   Basic


9,195


9,081


9,160


9,178


8,696

   Diluted


9,195


9,081


9,867


10,141


8,696























Adjusted EBITDA


$            235,023


$            158,038


$            240,006


$            475,029


$            288,548












Adjusted operating income (loss)


$              75,325


$               (3,977)


$              76,975


$            152,300


$             (37,826)























 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)










June 30,


March 31,


December 31,

(In thousands)


2023


2023


2022








ASSETS







Current assets:







Cash and short-term investments


$             429,059


$             475,732


$             452,315

Accounts receivable, net


297,388


307,005


327,397

Other current assets


251,687


230,506


220,911

     Total current assets


978,134


1,013,243


1,000,623

Property, plant and equipment, net


2,963,898


2,976,831


3,026,100

Other long-term assets


521,235


709,902


703,131

     Total assets


$          4,463,267


$          4,699,976


$          4,729,854








LIABILITIES AND EQUITY







Current liabilities:







Trade accounts payable


$             301,751


$             306,543


$             314,041

Other current liabilities


242,514


233,935


282,349

     Total current liabilities


544,265


540,478


596,390

Long-term debt


2,503,250


2,562,327


2,537,540

Other long-term liabilities


310,263


323,694


380,529

     Total liabilities


3,357,778


3,426,499


3,514,459








Redeemable noncontrolling interest in subsidiary


513,817


691,095


678,604








Equity:







Shareholders' equity


402,650


402,711


368,956

Noncontrolling interest


189,022


179,671


167,835

     Total equity


591,672


582,382


536,791

     Total liabilities and equity


$          4,463,267


$          4,699,976


$          4,729,854








 

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)


2023


2022


2023


2023


2022













Operating revenues:












U.S. Drilling


$            314,830


$            253,008


$            350,652


$            665,482


$            470,591


International Drilling


337,650


296,320


320,048


657,698


575,350


Drilling Solutions


76,855


55,879


75,043


151,898


110,061


Rig Technologies (1)


63,565


45,094


58,479


122,044


81,830


Other reconciling items (2)


(25,833)


(19,358)


(25,083)


(50,916)


(38,350)


Total operating revenues


$            767,067


$            630,943


$            779,139


$         1,546,206


$         1,199,482













Adjusted EBITDA: (3)












U.S. Drilling


$            141,446


$              87,371


$            156,489


$            297,935


$            161,636


International Drilling


98,331


82,446


88,608


186,939


153,694


Drilling Solutions


32,756


22,751


31,914


64,670


42,751


Rig Technologies (1)


6,408


3,364


4,954


11,362


2,320


Other reconciling items (4)


(43,918)


(37,894)


(41,959)


(85,877)


(71,853)


Total adjusted EBITDA


$            235,023


$            158,038


$            240,006


$            475,029


$            288,548













Adjusted operating income (loss): (5)












U.S. Drilling


$              75,408


$                8,288


$              85,869


$            161,277


$                2,437


International Drilling


10,407


4,605


1,957


12,364


(1,722)


Drilling Solutions


28,351


18,260


27,138


55,489


32,969


Rig Technologies (1)


5,052


2,127


3,694


8,746


(624)


Other reconciling items (4)


(43,893)


(37,257)


(41,683)


(85,576)


(70,886)


Total adjusted operating income (loss)


$              75,325


$               (3,977)


$              76,975


$            152,300


$             (37,826)













Rig activity:











Average Rigs Working: (7)












     Lower 48


81.6


89.3


93.3


87.4


86.3


     Other US


7.0


7.1


7.0


7.0


7.0


U.S. Drilling


88.6


96.4


100.3


94.4


93.3


International Drilling


77.1


74.3


76.4


76.8


73.2


Total average rigs working


165.7


170.7


176.7


171.2


166.5













Daily Rig Revenue: (6),(8)












     Lower 48


$              36,751


$              25,566


$              36,453


$              36,593


$              24,348


     Other US


65,860


70,181


70,690


68,263


71,116


U.S. Drilling (10)


39,049


28,852


38,842


38,940


27,856


International Drilling


48,106


43,808


46,517


47,319


43,445













Daily Adjusted Gross Margin: (6),(9)












     Lower 48


$              16,890


$                8,706


$              16,690


$              16,784


$                8,220


     Other US


35,932


36,300


37,114


36,520


36,759


U.S. Drilling (10)


18,394


10,738


18,115


18,246


10,361


International Drilling


16,276


14,331


15,222


15,754


13,746





















(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 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 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 June 30, 2023




U.S. Drilling


International

 Drilling


Drilling

 Solutions


Rig

 Technologies


Other

 reconciling

 items


Total
















Adjusted operating income (loss)


$  75,408


$         10,407


$   28,351


$             5,052


$     (43,893)


$     75,325


Depreciation and amortization


66,038


87,924


4,405


1,356


(25)


159,698


Adjusted EBITDA


$141,446


$         98,331


$   32,756


$             6,408


$     (43,918)


$   235,023
































Three Months Ended June 30, 2022




U.S. Drilling


International

 Drilling


Drilling

 Solutions


Rig

 Technologies


Other

 reconciling

 items


Total
















Adjusted operating income (loss)


$    8,288


$           4,605


$   18,260


$             2,127


$     (37,257)


$      (3,977)


Depreciation and amortization


79,083


77,841


4,491


1,237


(637)


162,015


Adjusted EBITDA


$  87,371


$         82,446


$   22,751


$             3,364


$     (37,894)


$   158,038
































Three Months Ended March 31, 2023




U.S. Drilling


International

 Drilling


Drilling

 Solutions


Rig

 Technologies


Other

 reconciling

 items


Total
















Adjusted operating income (loss)


$  85,869


$           1,957


$   27,138


$             3,694


$     (41,683)


$     76,975


Depreciation and amortization


70,620


86,651


4,776


1,260


(276)


163,031


Adjusted EBITDA


$156,489


$         88,608


$   31,914


$             4,954


$     (41,959)


$   240,006
































Six Months Ended June 30, 2023




U.S. Drilling


International

 Drilling


Drilling

 Solutions


Rig

 Technologies


Other

 reconciling

 items


Total
















Adjusted operating income (loss)


$161,277


$         12,364


$   55,489


$             8,746


$     (85,576)


$   152,300


Depreciation and amortization


136,658


174,575


9,181


2,616


(301)


322,729


Adjusted EBITDA


$297,935


$       186,939


$   64,670


$           11,362


$     (85,877)


$   475,029
































Six Months Ended June 30, 2022




U.S. Drilling


International

 Drilling


Drilling

 Solutions


Rig

 Technologies


Other

 reconciling

 items


Total
















Adjusted operating income (loss)


$    2,437


$         (1,722)


$   32,969


$              (624)


$     (70,886)


$    (37,826)


Depreciation and amortization


159,199


155,416


9,782


2,944


(967)


326,374


Adjusted EBITDA


$161,636


$       153,694


$   42,751


$             2,320


$     (71,853)


$   288,548















 

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


Six Months Ended




June 30,


March 31,


June 30,

(In thousands)


2023


2022


2023


2023


2022













Lower 48 - U.S. Drilling












Adjusted operating income (loss)


$              60,496


$                  (937)


$              74,071


$            134,567


$             (15,533)


Plus: General and administrative costs


5,209


4,740


5,056


10,264


9,185


Plus: Research and engineering


1,189


1,611


1,519


2,708


3,250


GAAP Gross Margin


66,894


5,414


80,646


147,539


(3,098)


Plus: Depreciation and amortization


58,533


65,312


59,507


118,041


131,556


Adjusted gross margin


$            125,427


$              70,726


$            140,153


$            265,580


$            128,458













Other - U.S. Drilling












Adjusted operating income (loss)


$              14,912


$                9,225


$              11,798


$              26,710


$              17,970


Plus: General and administrative costs


323


307


345


668


691


Plus: Research and engineering


132


139


128


259


270


GAAP Gross Margin


15,367


9,671


12,271


27,637


18,931


Plus: Depreciation and amortization


7,504


13,771


11,111


18,616


27,644


Adjusted gross margin


$              22,871


$              23,442


$              23,382


$              46,253


$              46,575













U.S. Drilling












Adjusted operating income (loss)


$              75,408


$                8,288


$              85,869


$            161,277


$                2,437


Plus: General and administrative costs


5,532


5,047


5,401


10,932


9,876


Plus: Research and engineering


1,321


1,750


1,647


2,967


3,520


GAAP Gross Margin


82,261


15,085


92,917


175,176


15,833


Plus: Depreciation and amortization


66,037


79,083


70,618


136,657


159,200


Adjusted gross margin


$            148,298


$              94,168


$            163,535


$            311,833


$            175,033













International Drilling












Adjusted operating income (loss)


$              10,407


$                4,605


$                1,957


$              12,364


$               (1,722)


Plus: General and administrative costs


14,089


13,056


14,336


28,424


25,539


Plus: Research and engineering


1,821


1,433


1,785


3,606


2,802


GAAP Gross Margin


26,317


19,094


18,078


44,394


26,619


Plus: Depreciation and amortization


87,924


77,842


86,651


174,576


155,416


Adjusted gross margin


$            114,241


$              96,936


$            104,729


$            218,970


$            182,035














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


Six Months Ended



June 30,


March 31,


June 30,

(In thousands)


2023


2022


2023


2023


2022












Net income (loss)


16,231


(69,935)


61,060


77,291


(244,603)

Income tax expense (benefit)


26,448


9,353


23,015


49,463


23,024

Income (loss) from continuing operations before income taxes


42,679


(60,582)


84,075


126,754


(221,579)

Investment (income) loss


(11,743)


(822)


(9,866)


(21,609)


(985)

Interest expense


46,164


42,899


45,141


91,305


89,809

Other, net


(1,775)


14,528


(42,375)


(44,150)


94,929

Adjusted operating income (loss) (1)


75,325


(3,977)


76,975


152,300


(37,826)

Depreciation and amortization


159,698


162,015


163,031


322,729


326,374

Adjusted EBITDA (2)


$            235,023


$            158,038


$            240,006


$            475,029


$            288,548








(1) Adjusted operating income (loss) represents net income (loss) before 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 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

(Unaudited)










June 30,


March 31,


December 31,

(In thousands)


2023


2023


2022















Long-term debt


$          2,503,250


$          2,562,327


$          2,537,540

Less: Cash and short-term investments


429,059


475,732


452,315

     Net Debt


$          2,074,191


$          2,086,595


$          2,085,225








 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED 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)


2023


2023


2023










Net cash provided by operating activities


$             168,466


$             154,050


$               322,516


Add: Capital expenditures, net of proceeds from sales of assets


(141,683)


(116,752)


(258,435)










Adjusted free cash flow


$               26,783


$               37,298


$                 64,081










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.

 

 

Cision View original content:https://www.prnewswire.com/news-releases/nabors-announces-second-quarter-2023-results-301885525.html

SOURCE Nabors Industries Ltd.

Nabors Energy Transition Corp. II Unit

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