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Nabors Announces Fourth Quarter 2019 Results

Nabors Announces Fourth Quarter 2019 Results

Feb 20, 2020

HAMILTON, Bermuda, Feb. 20, 2020 /PRNewswire/ --

Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported fourth quarter 2019 operating revenues of $714 million, compared to operating revenues of $758 million in the third quarter.  Net loss from continuing operations attributable to Nabors common shareholders for the quarter was $267 million, or $0.77 per share, compared to a loss of $123 million, or $0.37 per share, in the prior quarter. The fourth quarter's net loss included the impact of the Company's periodic review for potential asset impairments. In addition, the Company wrote down certain assets in geographic locations which have been shut down or where political risk has increased. After-tax charges totaled $186 million, or $0.53 per share, primarily related to these impairments of fixed assets, goodwill and intangibles, as well as other asset write-downs.  The third quarter's results included after-tax charges of $23.3 million, or $0.06 per share, related to a foreign tax settlement and currency losses.

For the fourth quarter, adjusted EBITDA was $203 million as compared to $207 million in the prior quarter. A 9.6% decline in the U.S. land rig count and a soft market for rig components were partially offset by improved drilling activity outside the U.S. and better results for Nabors Drilling Solutions.  

Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "I am pleased with our fourth-quarter results, particularly considering the decrease in industry activity in the U.S.  The strength of our financial results during the quarter allowed us to reduce net debt by $218 million, to $2.88 billion.  We also completed a series of transactions during and after the quarter that enhance our financial flexibility.

"Our operating performance further confirms that we are pursuing the correct strategic initiatives. We remain dedicated to providing our customers with a market-leading value proposition, combining the highest quality global rig fleet, crews and drilling technologies.   

"In the U.S. Lower 48, E&P operators continued to rationalize their activity levels through the fourth quarter. Although our rig count has fallen, our daily rig margins were essentially unchanged versus the third quarter. We remain disciplined in our pricing, and our excellent operating performance has reinforced our rate structure. The demand for high-specification rigs in the major oil basins in the Lower 48 remained resilient through the end of the year. For the full year, the Company's average Lower 48 rig count increased by 1%, in stark contrast to the industry's decline of 9%.

"Our Drilling Solutions segment continued its sequential growth trajectory in the fourth quarter. For the full year, a 1% increase in revenues yielded a 34% increase in adjusted EBITDA as a result of increasing adoption of our automation and integration technologies, which have allowed us to offset the softer market in the U.S., while increasing our margins.  We have a broad portfolio of advanced products and services, which enhance drilling performance and ultimately generate value for our customers, as well as Nabors. Our newest NavigatorTM automated directional guidance platform has drilled more than 1000 wells, including 370 wells drilled with our ROCKit® Pilot steering control system. Today 80 percent of our directional jobs running these technologies are de-manned or manless at the rig.  Our drilling automation offerings provide: consistency of drilling outcomes at the highest level; lower-cost remote operations; and fewer employees in harm's way. These solutions continue to gain traction with our customers."

Consolidated and Segment Results

The U.S. Drilling segment reported $113 million in adjusted EBITDA for the fourth quarter of 2019, a $7.8 million reduction from the prior quarter.  A decline in the Lower 48 was somewhat offset by a modest improvement in the U.S. Offshore. During the quarter, the Lower 48 rig count decreased by 10 rigs while average margins per rig day were stable at $10,218.  The Company expects competitive pressures to reduce daily margins to approximately $10,000 in the first quarter of 2020.  This segment's rig count currently stands at 98, with 90 rigs working in the Lower 48.  Based on the Company's current outlook, the first quarter Lower 48 rig count should range between 90 and 92, and begin to increase in the second quarter.    

International Drilling adjusted EBITDA increased sequentially by 1%, to $96 million. The quarterly average rig count declined by one to 87, while the average margin per day improved by more than $400 to $14,144.  This increase was a result of additional progress from previously-implemented initiatives to improve operating costs, as well as favorable operating performance.  The segment's cash flow generation improved materially quarter over quarter. The international working rig count currently stands at 88. The Company expects first quarter adjusted EBITDA to decline slightly, due mainly to certification-related rig downtime.

Canada Drilling adjusted EBITDA increased significantly to $5.3 million, as that market ramps toward its usual seasonal peak.  Both average daily gross margin and the average working rig count jumped during the quarter.  For the first quarter of 2020, the Company expects an improvement in daily margin and a further increase in rig count.

In Drilling Solutions, adjusted EBITDA of $24.8 million was $1.3 million higher than the third quarter, despite the decrease in the industry rig count in the Lower 48.  These results capped three consecutive increases in quarterly segment adjusted EBITDA, in the face of declining U.S. rig count over the same periods. In the fourth quarter, profitability was buoyed by an increase in higher-margin integrated tubular running services (TRS) work.  In the Lower 48, integrated TRS jobs comprised 51% of fourth-quarter jobs, up from less than 3% in the first quarter this year.

In the Rig Technologies segment, fourth-quarter adjusted EBITDA was a loss of $1.6 million, a decrease of $3.7 million from the third quarter. That decline was mainly due to lower sales of parts, and a decrease in repair activity. 

Capital Expenditures and Liquidity

Free cash flow, defined as cash provided by operating activities less cash used for investing activities, reached $232 million, as compared to $82 million in the prior quarter. The fourth quarter results included significant reductions in working capital and capital expenditures, while the third quarter results included approximately $70 million in semiannual cash interest payments.

William Restrepo, Nabors Chief Financial Officer, stated, "As the land drilling market in the U.S. gas basins weakened and many of our more U.S.-focused peers experienced significant drops in both EBITDA and free cash flow, Nabors delivered our strongest quarter of the year, with stable adjusted EBITDA and sharply increased free cash flow."

"Capital expenditures were $61 million in the fourth quarter, $26 million less than the preceding quarter. For the full year 2019, capital expenditures totaled $424 million. For 2020 we expect capital expenditures of approximately $350 million to $370 million.  With this expected reduction as well as initiatives for working capital and other items, we are targeting free cash flow of at least $300 million in 2020.

"In December, we amended our 2018 Credit Agreement. Notably, the amendment replaced the previous capitalization covenant with a more relevant covenant comparing net funded indebtedness to EBITDA, as those terms are defined in the 2018 Credit Agreement.  Following that, in January we issued $1 billion of new senior guaranteed notes, with $600 million due in 2026 and $400 million due in 2028. Those issuances were paired with a successful tender for approximately $950 million of our previously outstanding notes due in 2021 and 2023. Combined, these transactions extended the maturity of approximately $1 billion of debt by more than four years and significantly reduced nearer-term debt maturities."

Mr. Petrello concluded, "Our short-term expectations have grown more cautious in North America. The impacts of the coronavirus outbreak on global economic activity in general, and oil demand specifically, are uncertain. That has resulted in downward pressure on commodity prices, which adds additional friction to what was already a slow ramp in activity in the New Year. For our International operations, the view is more positive. Activity in those markets is less responsive to short-term declines in oil prices. Demand for high specification rigs remains strong, which should continue to support an increasing rig count and higher pricing, particularly as the availability of rigs tightens.

"We remain more confident across all of our segments over the longer-term.  Signals in the market suggest the current oil supply/demand situation will tighten. Notwithstanding the potential for near-term volatility, over time we expect improving consolidated results. 

"Our focus on improving free cash flow, generating returns on capital, and reducing debt are unwavering. Our fourth-quarter results demonstrate that we can reach these goals."

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 our advanced drilling automation capabilities, Nabors highly skilled workforce continues to set new standards for operational excellence and transform our 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. 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, 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 ContactDennis A. Smith, Senior Vice President of Corporate Development & Investor Relations, +1 281-775-8038 or William C. Conroy, Senior Director of Corporate Development & Investor Relations, +1 281-775-2423.   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)

 

2019

 

2018

 

2019

 

2019

 

2018

           

Revenues and other income:

          

Operating revenues 

 

$  714,261

 

$  782,080

 

$         758,076

 

$ 3,043,383

 

$ 3,057,619

Earnings (losses) from unconsolidated affiliates

 

-

 

-

 

-

 

(5)

 

1

Investment income (loss)

 

1,509

 

(5,458)

 

(1,437)

 

10,218

 

(9,499)

Total revenues and other income

 

715,770

 

776,622

 

756,639

 

3,053,596

 

3,048,121

           

Costs and other deductions:

          

Direct costs

 

436,249

 

510,402

 

475,461

 

1,929,331

 

1,976,974

General and administrative expenses

 

62,572

 

56,615

 

63,577

 

258,731

 

265,822

Research and engineering

 

12,915

 

13,444

 

12,004

 

50,359

 

56,147

Depreciation and amortization

 

225,824

 

226,643

 

221,557

 

876,091

 

866,870

Interest expense

 

49,177

 

53,731

 

51,291

 

204,311

 

227,124

Impairments and other charges

 

186,201

 

54,012

 

3,939

 

290,471

 

144,446

Other, net

 

889

 

5,369

 

4,695

 

33,224

 

29,532

Total costs and other deductions

 

973,827

 

920,216

 

832,524

 

3,642,518

 

3,566,915

           

Income (loss) from continuing operations before income taxes

 

(258,057)

 

(143,594)

 

(75,885)

 

(588,922)

 

(518,794)

Income tax expense (benefit)

 

26,476

 

21,957

 

23,903

 

91,576

 

79,269

           

Income (loss) from continuing operations, net of tax

 

(284,533)

 

(165,551)

 

(99,788)

 

(680,498)

 

(598,063)

Income (loss) from discontinued operations, net of tax

 

22

 

(71)

 

157

 

(12)

 

(14,663)

           

Net income (loss)

 

(284,511)

 

(165,622)

 

(99,631)

 

(680,510)

 

(612,726)

     Less: Net (income) loss attributable to noncontrolling interest

 

21,827

 

(17,796)

 

(19,297)

 

(22,375)

 

(28,222)

Net income (loss) attributable to Nabors

 

$ (262,684)

 

$ (183,418)

 

$       (118,928)

 

$  (702,885)

 

$   (640,948)

Less: Preferred stock dividend

 

$     (4,309)

 

$     (4,312)

 

$           (4,310)

 

$    (17,244)

 

$     (12,305)

Net income (loss) attributable to Nabors common shareholders

 

$ (266,993)

 

$ (187,730)

 

$       (123,238)

 

$  (720,129)

 

$   (653,253)

           

Amounts attributable to Nabors common shareholders:

          

Net income (loss) from continuing operations

 

$ (267,015)

 

$ (187,659)

 

$       (123,395)

 

$  (720,117)

 

$   (638,590)

Net income (loss) from discontinued operations

 

22

 

(71)

 

157

 

(12)

 

(14,663)

Net income (loss) attributable to Nabors common shareholders

 

$ (266,993)

 

$ (187,730)

 

$       (123,238)

 

$  (720,129)

 

$   (653,253)

           

Earnings (losses) per share:

          

   Basic from continuing operations

 

$       (0.77)

 

$       (0.55)

 

$              (0.37)

 

$         (2.11)

 

$         (1.95)

   Basic from discontinued operations

 

-

 

-

 

-

 

-

 

(0.04)

Total Basic

 

$       (0.77)

 

$       (0.55)

 

$              (0.37)

 

$         (2.11)

 

$         (1.99)

           

   Diluted from continuing operations

 

$       (0.77)

 

$       (0.55)

 

$              (0.37)

 

$         (2.11)

 

$         (1.95)

   Diluted from discontinued operations

 

-

 

-

 

-

 

-

 

(0.04)

Total Diluted

 

$       (0.77)

 

$       (0.55)

 

$              (0.37)

 

$         (2.11)

 

$         (1.99)

           
           

Weighted-average number of common shares outstanding:

          

   Basic 

 

352,135

 

350,236

 

352,026

 

351,617

 

334,397

   Diluted 

 

352,135

 

350,236

 

352,026

 

351,617

 

334,397

           
           

Adjusted EBITDA

 

$  202,525

 

$  201,619

 

$         207,034

 

$    804,962

 

$    758,676

           

Adjusted operating income (loss)

 

$   (23,299)

 

$   (25,024)

 

$         (14,523)

 

$     (71,129)

 

$  (108,194)

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

       
       
  

December 31,

 

September 30,

 

December 31,

(In thousands)

 

2019

 

2019

 

2018

  

(Unaudited)

  

ASSETS

      

Current assets:

      

Cash and short-term investments

 

$       452,496

 

$         418,937

 

$       481,802

Accounts receivable, net

 

453,042

 

613,527

 

756,320

Assets held for sale

 

2,530

 

8,037

 

12,250

Other current assets

 

340,598

 

339,847

 

343,191

     Total current assets

 

1,248,666

 

1,380,348

 

1,593,563

Property, plant and equipment, net

 

4,930,549

 

5,152,236

 

5,467,870

Goodwill

 

28,380

 

90,543

 

183,914

Other long-term assets

 

553,063

 

650,370

 

608,597

     Total assets

 

$    6,760,658

 

$     7,273,497

 

$    7,853,944

       

LIABILITIES AND EQUITY

      

Current liabilities:

      

Current portion of debt

 

$                    -

 

$             1,058

 

$               561

Other current liabilities

 

656,548

 

681,246

 

831,516

     Total current liabilities

 

656,548

 

682,304

 

832,077

Long-term debt

 

3,333,220

 

3,516,592

 

3,585,884

Other long-term liabilities

 

295,333

 

313,497

 

280,796

     Total liabilities

 

4,285,101

 

4,512,393

 

4,698,757

       

Redeemable noncontrolling interest in subsidiary

 

425,392

 

420,217

 

404,861

       

Equity:

      

Shareholders' equity

 

1,982,811

 

2,251,705

 

2,700,850

Noncontrolling interest

 

67,354

 

89,182

 

49,476

     Total equity

 

2,050,165

 

2,340,887

 

2,750,326

     Total liabilities and equity

 

$    6,760,658

 

$     7,273,497

 

$    7,853,944

 

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)

 

2019

 

2018

 

2019

 

2019

 

2018

           
           

Operating revenues:

          

U.S. Drilling

 

$ 289,517

 

$ 303,834

 

$         307,808

 

$ 1,240,936

 

$ 1,083,227

Canada Drilling

 

19,379

 

29,026

 

12,191

 

68,274

 

105,000

International Drilling

 

331,703

 

345,082

 

328,278

 

1,324,142

 

1,469,038

Drilling Solutions

 

60,499

 

66,812

 

62,286

 

252,790

 

250,242

Rig Technologies (1)

 

52,616

 

61,357

 

63,106

 

260,226

 

270,988

Other reconciling items (2)

 

(39,453)

 

(24,031)

 

(15,593)

 

(102,985)

 

(120,876)

      Total operating revenues

 

$ 714,261

 

$ 782,080

 

$         758,076

 

$ 3,043,383

 

$ 3,057,619

           

Adjusted EBITDA: (3)

          

U.S. Drilling

 

$ 113,128

 

$ 113,945

 

$         120,936

 

$    483,993

 

$    373,288

Canada Drilling

 

5,302

 

9,450

 

1,466

 

15,283

 

31,006

International Drilling

 

96,155

 

94,030

 

95,214

 

363,980

 

457,448

Drilling Solutions

 

24,776

 

23,025

 

23,471

 

91,754

 

68,663

Rig Technologies (1)

 

(1,569)

 

(1,274)

 

2,173

 

1,468

 

(9,375)

Other reconciling items (4)

 

(35,267)

 

(37,557)

 

(36,226)

 

(151,516)

 

(162,354)

      Total adjusted EBITDA

 

$ 202,525

 

$ 201,619

 

$         207,034

 

$    804,962

 

$    758,676

           

Adjusted operating income (loss): (5)

          

U.S. Drilling

 

$     6,811

 

$     8,977

 

$           12,427

 

$      64,313

 

$     (21,298)

Canada Drilling

 

(3,186)

 

929

 

(5,701)

 

(14,483)

 

(6,166)

International Drilling

 

1,152

 

(481)

 

2,466

 

(8,903)

 

74,221

Drilling Solutions

 

16,672

 

11,853

 

16,145

 

59,465

 

37,626

Rig Technologies (1)

 

(5,954)

 

(5,212)

 

(641)

 

(11,247)

 

(25,762)

Other reconciling items (4)

 

(38,794)

 

(41,090)

 

(39,219)

 

(160,274)

 

(166,815)

      Total adjusted operating income (loss)

 

$ (23,299)

 

$ (25,024)

 

$         (14,523)

 

$     (71,129)

 

$  (108,194)

           

Rig activity:

          

Average Rigs Working: (6)

          

U.S. Drilling

 

104.2

 

117.3

 

114.1

 

115.3

 

113.2

Canada Drilling

 

12.3

 

18.3

 

7.7

 

10.9

 

16.9

International Drilling

 

87.1

 

88.0

 

87.7

 

88.3

 

92.9

      Total average rigs working

 

203.6

 

223.6

 

209.5

 

214.5

 

223.0

 

(1) Includes our oilfield equipment manufacturing, automated systems, and downhole tools.

           

(2) Represents the elimination of inter-segment transactions.

           

(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.

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

(Unaudited)

           
           
  

Three Months Ended

 

Year Ended

  

December 31,

 

September 30,

 

December 31,

           

(In thousands)

 

2019

 

2018

 

2019

 

2019

 

2018

           

Adjusted EBITDA

 

$  202,525

 

$  201,619

 

$         207,034

 

$  804,962

 

$  758,676

Depreciation and amortization 

 

(225,824)

 

(226,643)

 

(221,557)

 

(876,091)

 

(866,870)

Adjusted operating income (loss)

 

(23,299)

 

(25,024)

 

(14,523)

 

(71,129)

 

(108,194)

           

Earnings (losses) from unconsolidated affiliates

 

-

 

-

 

-

 

(5)

 

1

Investment income (loss)

 

1,509

 

(5,458)

 

(1,437)

 

10,218

 

(9,499)

Interest expense

 

(49,177)

 

(53,731)

 

(51,291)

 

(204,311)

 

(227,124)

Impairments and other charges

 

(186,201)

 

(54,012)

 

(3,939)

 

(290,471)

 

(144,446)

Other, net

 

(889)

 

(5,369)

 

(4,695)

 

(33,224)

 

(29,532)

Income (loss) from continuing operations before income taxes

 

$(258,057)

 

$(143,594)

 

$         (75,885)

 

$(588,922)

 

$(518,794)

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

RECONCILIATION OF NET DEBT TO TOTAL DEBT

 
       
  

December 31,

 

September 30,

 

December 31,

(In thousands)

 

2019

 

2019

 

2018

  

(Unaudited)

  
       
       
       

Current portion of debt

 

$                    -

 

$             1,058

 

$               561

Long-term debt

 

3,333,220

 

3,516,592

 

3,585,884

     Total Debt

 

3,333,220

 

3,517,650

 

3,586,445

Less: Cash and short-term investments

 

452,496

 

418,937

 

481,802

     Net Debt

 

$    2,880,724

 

$     3,098,713

 

$    3,104,643

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

RECONCILIATION OF FREE CASH FLOW TO

NET CASH PROVIDED BY OPERATING ACTIVITIES

(Unaudited)

 
       
  

Three Months Ended

 

Year Ended

  

December 31,

 

September 30,

 

December 31,

       

(In thousands)

 

2019

 

2019

 

2019

       
       
       

Net cash provided by operating activities

 

$       253,730

 

$         157,743

 

$       684,558

Less: Net cash used for investing activities

 

(22,156)

 

(75,496)

 

(355,856)

Free cash flow

 

$       231,574

 

$           82,247

 

$       328,702

 

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.

 

SOURCE Nabors Industries Ltd.