-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ufw2Q47qr5WmLpLVzPaqlFd8l1IwMDhu6raXbZ7e7mlcfYP1iVI6wnw6nVrQ7NHC TtGmI1j0InKCMO6tmcQ+kg== 0000950129-05-010040.txt : 20051025 0000950129-05-010040.hdr.sgml : 20051025 20051024195529 ACCESSION NUMBER: 0000950129-05-010040 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051024 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051025 DATE AS OF CHANGE: 20051024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NABORS INDUSTRIES LTD CENTRAL INDEX KEY: 0001163739 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 980363970 STATE OF INCORPORATION: D0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-49887 FILM NUMBER: 051153062 BUSINESS ADDRESS: STREET 1: 2ND FLOOR INT'L TRADING CENTER STREET 2: WARRENS, P.O. BOX 905E CITY: ST. MICHAEL BARBADOS STATE: D0 ZIP: 0000 BUSINESS PHONE: 2464219471 MAIL ADDRESS: STREET 1: 2ND FLOOR INT'L TRADING CENTER STREET 2: WARRENS, P.O. BOX 905E CITY: ST. MICHAEL BARBADOS STATE: D0 ZIP: 0000 8-K 1 h29561e8vk.txt NABORS INDUSTRIES LTD. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) OCTOBER 24, 2005 NABORS INDUSTRIES LTD. (Exact name of registrant as specified in its charter) BERMUDA 000-49887 980363970 (State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer Incorporation or Organization) Identification No.) MINTFLOWER PLACE 8 PAR-LA-VILLE ROAD HAMILTON, HM08 BERMUDA N/A (Address of principal executive offices) (Zip Code) (441) 292-1510 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On October 24, 2005, Nabors Industries Ltd. (the "Company") issued a press release announcing its results of operations for the three and nine month periods ending September 30, 2005. A copy of that release is furnished herewith as Exhibit 99.1 in accordance with General Instruction B.2 to Form 8-K. The press release furnished as an exhibit to this report includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks and uncertainties, as disclosed by the Company from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, the Company's actual results may differ materially from those indicated or implied by such forward-looking statements. The Company also presented in the press release its adjusted income (loss) derived from operating activities for all periods presented in the release, which is a "non-GAAP" financial measure under Regulation G. The components of adjusted income (loss) derived from operating activities are computed by using amounts which are determined in accordance with accounting principles generally accepted in the United States of America (GAAP). Adjusted income (loss) derived from operating activities is computed by subtracting direct costs, general and administrative expenses, depreciation and amortization, and depletion expense from Operating revenues and then adding Earnings from unconsolidated affiliates. As part of our press release information we have provided a reconciliation of adjusted income (loss) derived from operating activities to income before income taxes, which is its nearest comparable GAAP financial measure. The Company included its adjusted income (loss) derived from operating activities in the release because management evaluates the performance of our business units and the consolidated company based on several criteria, including adjusted income (loss) derived from operating activities, and because it believes this financial measure is an accurate reflection of the ongoing profitability of our Company. ITEM 3.01. NOTICE OF DELISTING OR FAILURE TO SATISFY A CONTINUED LISTING RULE OR STANDARD; TRANSFER OF LISTING. On October 24, 2005, the Company announced that it had applied for listing of the Company's common shares on the New York Stock Exchange ("NYSE") under the ticker symbol "NBR". Consequently, subject to approval by the NYSE of the Company's listing application, the trading of the Company's common shares will be transferred to the NYSE from the American Stock Exchange ("AMEX"). The Company anticipates that trading in its common shares on the NYSE will begin on November 3, 2005, and that the last day of trading of the Company's common shares on AMEX will be November 2, 2005. A copy of the press release announcing the transfer of the Company's listing to the NYSE is attached hereto as Exhibit 99.1. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits
Exhibit No. Description - ----------- ----------- 99.1 Press Release issued by Nabors Industries Ltd. on October 24, 2005.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NABORS INDUSTRIES LTD. Date: October 24, 2005 By: /s/ Daniel McLachlin ----------------------------------------- Daniel McLachlin Vice President-Administration & Secretary EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- 99.1 Press Release issued by Nabors Industries Ltd. on October 24, 2005.
EX-99.1 2 h29561exv99w1.txt PRESS RELEASE ISSUED ON OCTOBER 24, 2005 EXHIBIT 99.1 (NABORS INDUSTRIES LOGO) NEWS RELEASE NABORS POSTS RECORD EPS OF $1.11, NET OF HURRICANE CHARGES; ANNOUNCES PLANS TO MOVE TO THE NYSE HAMILTON, BERMUDA, OCTOBER 24, 2005, NABORS INDUSTRIES LTD. (AMEX: NBR), today announced its results for the third quarter and nine months ended September 30, 2005. Adjusted income derived from operating activities1 was $241.9 million for the third quarter compared to $84.1 million in the third quarter of 2004 and $173.8 million in the second quarter of this year. Net income was $178.9 million ($1.11 per diluted share) for the third quarter compared to $75.6 million ($0.48 per diluted share) in the third quarter of 2004 and $131.8 million ($0.82 per diluted share) in the second quarter of this year. For the nine months ended September 30, 2005, adjusted income derived from operating activities was $587.6 million, compared to $215.8 million in 2004. Net income for the first nine months of 2005 was $438.1 million ($2.73 per diluted share) compared to $193.7 million ($1.24 per diluted share) in the first nine months of 2004. The Company also made public its intention to move the listing of its shares to the New York Stock Exchange (NYSE) by way of its filing today of a listing application with the NYSE. Trading of the shares is expected to commence on November 3, 2005 under the existing ticker symbol NBR. Until then Nabors stock will continue to trade on the American Stock Exchange. Gene Isenberg, Nabors' Chairman and Chief Executive Officer commented on the results, "Our third quarter results were impressive particularly considering they include hurricane related net charges of approximately $0.03 per share. Nearly every one of our businesses contributed meaningfully to both the year-over-year and sequential quarterly improvement. Every sign, across all of our businesses, continues to reinforce our long-held conviction that this cycle will be more powerful and enduring than previous energy cycles. We are still seeing a surprisingly strong pricing environment across our North American land markets and the beginning of similar pricing momentum internationally as global rig demand substantially exceeds the industry's ability to add capacity. Our forward optimism is underpinned by our customer's powerful returns, as demonstrated by their willingness to commit to three-year term contracts for new rigs with deliveries as far away as 2007. The strength and breadth of demand for new higher specification rigs worldwide is warranting substantial capacity expansion. Nabors is utilizing its inherent cost and infrastructure advantages to capture a disproportionate share of this incremental demand with an increasing proportion of new built rigs and a significant but diminishing capacity for reactivating and upgrading existing rigs. - ---------- (1) Adjusted income derived from operating activities is computed by: subtracting direct costs, general and administrative expenses, depreciation and amortization, and depletion expense from Operating revenues and then adding Earnings from unconsolidated affiliates. Such amounts should not be used as a substitute to those amounts reported under accounting principles generally accepted in the United States of America (GAAP). However, management evaluates the performance of our business units and the consolidated company based on several criteria, including adjusted income derived from operating activities, because it believes that this financial measure is an accurate reflection of the ongoing profitability of our company. A reconciliation of this non-GAAP measure to income before income taxes, which is a GAAP measure, is provided within the table set forth immediately following the heading "Segment Reporting." "Over the last two years our various subsidiaries have completed and deployed 14 new built drilling rigs and secured term commitments underwriting an additional 47 new rigs for a total of 61 new rigs. This puts us well on our way to fulfilling our expectation of deploying 100 incremental newly constructed rigs by mid-2007, as stated in last quarter's earnings release. We have a large number of pending proposals and ongoing discussions regarding further new rig commitments in all of our North American and international units. The majority of the rig commitments-to-date will be deployed by our U.S. Lower 48 Land Drilling unit but the magnitude of new rigs internationally is likely to become much larger over the next year. We are also continuing to add rig capacity with reactivated rigs, having completed 90 since the beginning of last year, with another 6 currently in process. "The average gross margin per rig day in our U.S. Lower 48 Land Drilling unit increased more than expected to $7,603 in the quarter and are continuing to increase. We averaged 244 rigs operating during the quarter and expect to average over 250 in the fourth quarter. Canada posted better than expected results, despite a couple of weeks of adverse weather, illustrating that market's strong demand. Plans by our customers continue to show increased activity and longer duration contract commitments. Canada's Academy entity is constructing a total of 15 new drilling rigs and 20 coiled tubing / stem drilling rigs with most of the near-term drilling rig capacity dedicated to the U.S. Lower 48 Land Drilling operation. "Our International business is beginning to show its potential with large increases in drilling programs planned in virtually every market where we operate or are pursuing. The largest potential exists in our Middle East and North Africa markets but sizeable programs are also being planned in several Latin American and other countries. Long lead times and bureaucratic bid processes make precise timing of these projects difficult to predict but we can uniquely provide our customers the greatest number of rigs in the shortest time. Our international unit currently has 8 new rigs and one existing Jackup (Dolphin 111) in various stages of construction or deployment in fulfillment of term contract commitments. These rigs are committed for work in multiple venues including Saudi Arabia, Venezuela, Algeria, Australia, Gabon and Angola. Over the last twelve months this unit's working rig count has increased by nearly 20 rigs (30%) and average rig margins have increased by approximately $800 per day over the same period. We expect to report even more significant increases in both rigs working and pricing over the next four quarters as this market further materializes. "Our U.S. Offshore results were good considering the impact of two severe hurricanes during the quarter. This unit's fourth and first quarter results will reflect a small diminution of income as repairs to Barge Rig 300 and two jackups are completed. We did incur a total loss on one rig, SSD XII and are commencing construction on a replacement rig SSD XX as well as one additional rig SSD XXI, given the near 100% utilization this class of rig has achieved over the last several years. Likewise, given the strong demand for shallow water deep shelf drilling we are building another ultra-deep drilling Barge Rig 301. We are able to do so at a favorable capital costs by utilizing an existing posted barge hull and some components from our equipment inventory. The outlook for this unit is much improved and the net impact of the hurricanes is likely to be more than offset in future periods as we are seeing substantial increases in the demand and pricing for both our working and stacked Jackups and platform rigs in light of the reduced Jackup fleet and rapidly escalating rates. "Our U.S. Land Well-Servicing unit continues to see strong market conditions and anticipates further pricing increases for the next several quarters as demand for rigs continues unabated. During the quarter we received the first three of 41 new 500 HP PLC Millennium workover rigs which should continue at 4 per month increasing to six per month over the next few quarters. This unique rig has been so well received by current and prospective customers that we have exercised our option for an additional 40 rigs. We are also proposing a number of these rigs for international customers. This unit also has 20 new truck mounted 200 HP rigs on order with the first deliveries to commence before the end of 2005 as well as a large quantity of trucks and trailers for increased capacity in its fluid hauling and disposal business. During the quarter we renamed this unit, Nabors Well Servicing, replacing the previous Pool name style, in order to better align the identity and synergies between this unit and our other businesses. All of our other units were in-line with our expectations and anticipate improving results from both pricing and volume as we move into 2006. "While strong pricing improvement across all of our units will continue to be the largest component of our growth in the intermediate term, dramatic increases from new capacity should be the dominant factor in the longer-term. There appears to be no end to the opportunities we have at hand and for the first time in my tenure we can exercise a high degree of selectivity in evaluating the projects we pursue based upon the risk adjusted returns." The Company will post a group of slides on its website (at approximately 11:30 a.m. Eastern Time) for interested investors to utilize in following the review of its business outlook during a conference call it will conduct, tomorrow Tuesday October 25, 2005, at 12:00 Noon Eastern Time (11:00 a.m. Central Time). The call can be accessed on our website at WWW.NABORS.COM, or through First Call at WWW.FIRSTCALLEVENTS.COM. The slides will be available on the Nabors website and can be viewed or downloaded by going to "Investor Information" and then to "Events Calendar". In addition, the customary format of the call regarding individual business unit margins and activity will be available in the slides on the website in that the call time will be more focused toward the outlook and the impact of the current capital spending opportunities. The Nabors companies own and operate almost 600 land drilling and approximately 875 land workover and well-servicing rigs worldwide. Offshore, Nabors operates 43 platform rigs, 19 jack-up units and three barge rigs in the United States and multiple international markets. Nabors markets 28 marine transportation and supply vessels, primarily in the U.S. Gulf of Mexico. In addition, Nabors manufactures top drives and drilling instrumentation systems and provides comprehensive oilfield hauling, engineering, civil construction, logistics and facilities maintenance, and project management services. Nabors participates in most of the significant oil, gas and geothermal markets in the world. The information above includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors actual results may differ materially from those indicated or implied by such forward-looking statements. FOR FURTHER INFORMATION, PLEASE CONTACT DENNIS A. SMITH, DIRECTOR OF CORPORATE DEVELOPMENT OF NABORS CORPORATE SERVICES, INC. AT (281) 775-8038. TO REQUEST INVESTOR MATERIALS, CALL OUR CORPORATE HEADQUARTERS IN HAMILTON, BERMUDA AT (441) 292-1510 OR VIA EMAIL AT DAN.MCLACHLIN@NABORS.COM. NABORS INDUSTRIES LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED ---------------------------------------- ------------------------- SEPTEMBER 30, JUNE 30, SEPTEMBER 30, ---------------------------------------- ------------------------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 2005 2004 2005 2005 2004 ----------- ----------- ----------- ----------- ----------- Revenues and other income: Operating revenues $ 893,254 $ 585,652 $ 765,337 $ 2,442,319 $ 1,709,348 Earnings (losses) from unconsolidated affiliates 91 (292) 5,204 7,298 4,683 Investment income 27,178 12,222 15,578 54,544 33,106 ----------- ----------- ----------- ----------- ----------- Total revenues and other income 920,523 597,582 786,119 2,504,161 1,747,137 ----------- ----------- ----------- ----------- ----------- Costs and other deductions: Direct costs 500,552 378,084 454,584 1,429,762 1,137,065 General and administrative expenses 65,879 49,548 59,805 184,325 140,588 Depreciation and amortization 73,673 64,229 70,982 212,843 185,560 Depletion 11,349 9,408 11,343 35,045 34,995 Interest expense 11,195 10,533 11,333 33,265 37,779 Losses (gains) on sales of long-lived assets, impairment charges and other expense (income), net 15,684 1,487 4,223 23,778 (3,339) ----------- ----------- ----------- ----------- ----------- Total costs and other deductions 678,332 513,289 612,270 1,919,018 1,532,648 ----------- ----------- ----------- ----------- ----------- Income before income taxes 242,191 84,293 173,849 585,143 214,489 Income tax expense 63,334 8,667 42,044 147,067 20,798 ----------- ----------- ----------- ----------- ----------- Net income $ 178,857 $ 75,626 $ 131,805 $ 438,076 $ 193,691 =========== =========== =========== =========== =========== Earnings per share (1): Basic $ 1.14 $ .51 $ .84 $ 2.82 $ 1.30 Diluted $ 1.11 $ .48 $ .82 $ 2.73 $ 1.24 Weighted-average number of common shares outstanding (1): Basic 157,209 149,089 157,440 155,605 148,646 ----------- ----------- ----------- ----------- ----------- Diluted 161,850 163,919 161,212 160,614 163,584 ----------- ----------- ----------- ----------- ----------- Adjusted income derived from operating activities (2) $ 241,892 $ 84,091 $ 173,827 $ 587,642 $ 215,823 =========== =========== =========== =========== ===========
(1) See "Computation of Earnings Per Share" included herein as a separate schedule. (2) Adjusted income derived from operating activities is computed by: subtracting direct costs, general and administrative expenses, depreciation and amortization, and depletion expense from Operating revenues and then adding Earnings from unconsolidated affiliates. Such amounts should not be used as a substitute to those amounts reported under accounting principles generally accepted in the United States of America (GAAP). However, management evaluates the performance of our business units and the consolidated company based on several criteria, including adjusted income derived from operating activities, because it believes that this financial measure is an accurate reflection of the ongoing profitability of our company. A reconciliation of this non-GAAP measure to income before income taxes, which is a GAAP measure, is provided within the table set forth immediately following the heading "Segment Reporting". 1-1 NABORS INDUSTRIES LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, JUNE 30, DECEMBER 31, (IN THOUSANDS, EXCEPT RATIOS) 2005 2005 2004 ------------- ---------- ------------ ASSETS Current assets: Cash and short-term investments $1,431,589 $1,061,288 $ 900,551 Accounts receivable, net 734,982 619,330 540,103 Other current assets 201,522 152,597 140,320 ---------- ---------- ---------- Total current assets 2,368,093 1,833,215 1,580,974 Long-term investments 208,269 518,070 510,496 Property, plant and equipment, net 3,622,732 3,460,599 3,275,495 Goodwill, net 342,116 331,635 327,225 Other long-term assets 161,124 165,073 168,419 ---------- ---------- ---------- Total assets $6,702,334 $6,308,592 $5,862,609 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 819,682 $ 814,607 $ 804,550 Other current liabilities 483,068 426,923 394,766 ---------- ---------- ---------- Total current liabilities 1,302,750 1,241,530 1,199,316 Long-term debt 1,197,810 1,203,409 1,201,686 Other long-term liabilities 635,622 573,044 532,214 ---------- ---------- ---------- Total liabilities 3,136,182 3,017,983 2,933,216 Shareholders' equity 3,566,152 3,290,609 2,929,393 ---------- ---------- ---------- Total liabilities and shareholders' equity $6,702,334 $6,308,592 $5,862,609 ========== ========== ========== Cash, short-term and long-term investments $1,639,858 $1,579,358 $1,411,047 Funded debt to capital ratio: - Gross 0.36 : 1 0.38 : 1 0.41 : 1 - Net of cash and investments 0.1 : 1 0.12 : 1 0.17 : 1 Interest coverage ratio: 24.5 21.1 14.1
1-2 NABORS INDUSTRIES LTD. AND SUBSIDIARIES SEGMENT REPORTING (UNAUDITED) The following tables set forth certain information with respect to our reportable segments and rig activity:
THREE MONTHS ENDED NINE MONTHS ENDED ---------------------------------------- --------------------------- SEPTEMBER 30, JUNE 30, SEPTEMBER 30, ------------------------- ---------- --------------------------- (IN THOUSANDS, EXCEPT RIG ACTIVITY) 2005 2004 2005 2005 2004 ----------- ----------- ----------- ----------- ------------ Reportable segments: Operating revenues and Earnings from unconsolidated affiliates: Contract Drilling: (1) U.S. Lower 48 Land Drilling $ 355,172 $ 202,283 $ 300,700 914,862 527,700 U.S. Land Well-servicing 130,265 95,377 118,776 355,154 263,018 U.S. Offshore 42,115 33,929 45,130 125,312 96,806 Alaska 18,159 16,982 21,955 64,882 66,020 Canada 131,348 89,293 76,720 381,470 289,964 International 143,355 111,618 135,168 402,553 321,790 ----------- ----------- ----------- ----------- ------------ Subtotal Contract Drilling (2) 820,414 549,482 698,449 2,244,233 1,565,298 Oil and Gas (3) 16,354 14,216 15,218 46,871 49,515 Other Operating Segments (4)(5) 81,753 41,408 78,729 229,398 150,086 Other reconciling items (6) (25,176) (19,746) (21,855) (70,885) (50,868) ----------- ----------- ----------- ----------- ------------ Total $ 893,345 $ 585,360 $ 770,541 $ 2,449,617 $ 1,714,031 =========== =========== =========== =========== ============ Adjusted income (loss) derived from operating activities: Contract Drilling: (1) U.S. Lower 48 Land Drilling $ 135,295 $ 30,221 $ 101,813 $ 310,567 $ 51,760 U.S. Land Well-servicing 29,297 18,511 26,401 75,126 42,638 U.S. Offshore 12,883 4,507 12,498 32,392 14,120 Alaska 3,612 2,522 4,159 13,743 13,488 Canada 28,106 13,888 57 75,443 60,011 International 38,630 24,713 32,558 100,955 62,057 ----------- ----------- ----------- ----------- ------------ Subtotal Contract Drilling (2) 247,823 94,362 177,486 608,226 244,074 Oil and Gas (3) 3,998 4,018 2,869 7,741 9,420 Other Operating Segments (4)(5) 7,465 (3,094) 7,982 18,997 (5,631) Other reconciling items (7) (17,394) (11,195) (14,510) (47,322) (32,040) ----------- ----------- ----------- ----------- ------------ Total 241,892 84,091 173,827 587,642 215,823 Interest expense (11,195) (10,533) (11,333) (33,265) (37,779) Investment income 27,178 12,222 15,578 54,544 33,106 Gains (losses) on sales of long-lived assets, impairment charges and other income (expense), net (15,684) (1,487) (4,223) (23,778) 3,339 ----------- ----------- ----------- ----------- ------------ Income before income taxes $ 242,191 $ 84,293 $ 173,849 $ 585,143 $ 214,489 =========== =========== =========== =========== ============ Rig activity: Rig years: (8) U.S. Lower 48 Land Drilling 244.2 207.9 229.3 232.0 192.2 U.S. Offshore 15.7 14.0 17.2 16.2 14.4 Alaska 6.5 6.4 6.8 6.7 6.9 Canada 54.7 41.9 26.2 49.0 43.6 International (9) 84.8 66.3 83.4 81.1 65.6 ----------- ----------- ----------- ----------- ------------ Total rig years 405.9 336.5 362.9 385.0 322.7 =========== =========== =========== =========== ============ Rig hours: (10) U.S. Land Well-servicing 313,677 289,312 308,718 919,006 851,810 Canada Well-servicing 89,329 86,676 60,297 263,962 272,145 ----------- ----------- ----------- ----------- ------------ Total rig hours 403,006 375,988 369,015 1,182,968 1,123,955 =========== =========== =========== =========== ============
(1) These segments include our drilling, workover and well-servicing operations, on land and offshore. (2) Includes Earnings (losses) from unconsolidated affiliates, accounted for by the equity method, of $(1.1) million, $(0.26) million and $1.2 million for the three months ended September 30, 2005 and 2004 and June 30, 2005, respectively, and $0.7 million and $1.9 million for the nine months ended September 30, 2005 and 2004, respectively. (3) Represents our oil and gas exploration, development and production operations. (4) Includes our marine transportation and supply services, drilling technology and top drive manufacturing, directional drilling, rig instrumentation and software, and construction and logistics operations. (5) Includes Earnings (losses) from unconsolidated affiliates, accounted for by the equity method, of $1.2 million, $(.03) million and $4.0 million for the three months ended September 30, 2005 and 2004 and June 30, 2005, respectively, and $6.6 million and $2.8 million for the nine months ended September 30, 2005 and 2004, respectively. (6) Represents the elimination of inter-segment transactions. 1-3 (7) Represents the elimination of inter-segment transactions and unallocated corporate expenses. (8) Excludes well-servicing rigs, which are measured in rig hours. Includes our equivalent percentage ownership of rigs owned by unconsolidated affiliates. Rig years represents a measure of the number of equivalent rigs operating during a given period. For example, one rig operating 182.5 days during a 365-day period represents 0.5 rig years. (9) International rig years include our equivalent percentage ownership of rigs owned by unconsolidated affiliates which totaled 4.0 years during the three months ended September 30, 2005 and 2004 and three months ended June 30, 2005, and 3.9 years and 4.0 years during the nine months ended September 30, 2005 and 2004, respectively. (10) Rig hours represents the number of hours that our well-servicing rig fleet operated during the period. NABORS INDUSTRIES LTD. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (UNAUDITED) A reconciliation of the numerators and denominators of the basic and diluted earnings per share computations is as follows:
THREE MONTHS ENDED NINE MONTHS ENDED ----------------------------------- ---------------------- SEPTEMBER 30, JUNE 30, SEPTEMBER 30, ----------------------------------- ---------------------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 2005 2004 2005 2005 2004 -------- -------- -------- -------- -------- Net income (numerator): Net income - basic $178,857 $ 75,626 $131,805 $438,076 $193,691 Add interest expense on assumed conversion of our zero coupon convertible/exchangeable senior debentures/notes, net of tax: $1.381 billion due 2021 (1) -- 3,119 -- -- 9,299 $700 million due 2023 (2) -- -- -- -- -- -------- -------- -------- -------- -------- Adjusted net income - diluted $178,857 $ 78,745 $131,805 $438,076 $202,990 -------- -------- -------- -------- -------- Earnings per share: Basic $ 1.14 $ .51 $ .84 $ 2.82 $ 1.30 Diluted $ 1.11 $ .48 $ .82 $ 2.73 $ 1.24 Shares (denominator): Weighted-average number of shares outstanding - basic (3) 157,209 149,089 157,440 155,605 148,646 Net effect of dilutive stock options, warrants and restricted stock awards based on the treasury stock method 4,641 6,339 3,772 5,009 6,447 Assumed conversion of our zero coupon convertible/exchangeable senior debentures/notes: $1.381 billion due 2021 (1) -- 8,491 -- -- 8,491 $700 million due 2023 (2) -- -- -- -- -- -------- -------- -------- -------- -------- Weighted-average number of shares outstanding - diluted 161,850 163,919 161,212 160,614 163,584 -------- -------- -------- -------- --------
(1) Diluted earnings per share for the three months ended September 30, 2005 and June 30, 2005 and for the nine months ended September 30, 2005 excludes approximately 8.5 million potentially dilutive shares initially issuable upon the conversion of these debentures. Such shares did not impact our calculation of diluted earnings per share for the three months ended September 30, 2005 and June 30, 2005, and for the nine months ended September 30, 2005 as we are required to pay cash up to the principal amount of any debentures converted resulting from the issuance of a supplemental indenture relating to the debentures in October 2004. We would only issue an incremental number of shares upon conversion of these debentures, and such shares would only be included in the calculation of the weighted-average number of shares outstanding in our diluted earnings per share calculation, if the price of our shares exceeded approximately $97. Diluted earnings per share for the three and nine months ended September 30, 2004 reflects the assumed conversion of our $1.381 billion zero coupon convertible senior debentures due 2021, as the conversion in those periods would have been dilutive. (2) Diluted earnings per share for the three months ended September 30, 2005, June 30, 2005 and September 30, 2004, and for the nine months ended September 30, 2005 and 2004 excludes approximately 10.0 million potentially dilutive shares initially issuable upon the exchange of our $700 million zero coupon senior exchangeable notes due 2023. Such shares did not impact our calculation of diluted earnings per share for the three months ended September 30, 2005, and June 30, 2005, and for the nine months ended September 30, 2005 as we are required to pay cash up to the principal amount of any notes exchanged as a result of the supplemental indenture issued for these notes during the fourth quarter of 2004. We would only issue an incremental number of shares upon exchange of these notes, and such shares would only be included in the calculation of the weighted-average number of shares outstanding in our diluted earnings per share calculation, if the price of our shares exceeded $70.10. Such shares did not impact our calculation of diluted earnings per share for the three and nine months ended September 30, 2004 as the notes are contingently exchangeable under certain circumstances and would only be included in the calculation of the weighted-average number of shares outstanding-diluted if any of those criteria were met. Such criteria were not 1-4 met during the three and nine months ended September 30, 2004. Based on the initial exchange price per share, these notes would have been exchangeable for our common shares during those periods if the closing sale price per share of Nabors' common shares for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the previous calendar quarter was greater than or equal to $84.12. (3) Includes the following weighted-average number of common shares of Nabors and weighted-average number of exchangeable shares of Nabors Exchangeco (Canada) Inc., an indirect wholly-owned Canadian subsidiary of Nabors, respectively: 157.0 million and .2 million shares for the three months ended September 30, 2005; 148.8 million and .3 million shares for the three months ended September 30, 2004; 157.2 million and .2 million shares for the three months ended June 30, 2005; 155.4 million and .2 million shares for the nine months ended September 30, 2005; and 148.3 million and .3 million shares for the nine months ended September 30, 2004. The exchangeable shares of Nabors Exchangeco are exchangeable for Nabors common shares on a one-for-one basis, and have essentially identical rights as Nabors Industries Ltd. common shares, including but not limited to voting rights and the right to receive dividends, if any. 1-5 -----END PRIVACY-ENHANCED MESSAGE-----