-----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, VkgIUPew7qygka4vY5grBm+IdXSSkTSU9bpLkAckPq/jIoIEiZSdPldApD6yIPjX BuDEOydA1zLszcR4MNeL0Q== 0000950129-03-000383.txt : 20030130 0000950129-03-000383.hdr.sgml : 20030130 20030130130456 ACCESSION NUMBER: 0000950129-03-000383 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030130 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030130 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NABORS INDUSTRIES LTD CENTRAL INDEX KEY: 0001163739 IRS NUMBER: 980363970 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-49887 FILM NUMBER: 03531514 BUSINESS ADDRESS: STREET 1: C/O NABORS INDUSTRIES INC STREET 2: 515 WEST GREENS ROAD CITY: HOUSTON STATE: TX ZIP: 77067 BUSINESS PHONE: 2818740035 MAIL ADDRESS: STREET 1: C/O NABORS INDUSTRIES INC STREET 2: 515 WEST GREENS ROAD CITY: HOUSTON STATE: TX ZIP: 77067 8-K 1 h02812e8vk.txt NABORS INDUSTRIES LTD - JANUARY 30, 2003 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): January 30, 2003 NABORS INDUSTRIES LTD. (Exact name of registrant as specified in its charter) Bermuda 000-49887 980363970 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 2nd Fl. International Trading Centre Warrens PO Box 905E St. Michael, Barbados N/A (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (246) 421-9471 N/A (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS. On January 30, 2003, Nabors Industries Ltd. issued a press release announcing the results of its fourth quarter and full year 2002. A copy of the press release is filed as an exhibit to this report and is incorporated in this report by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits Exhibit No. Description ----------- ----------- 99.1 Press Release of Nabors Industries Ltd. dated January 30, 2003 2 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: January 30, 2003 By: /s/ Bruce P. Koch -------------------------------- Bruce P. Koch Vice President--Finance 3 EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- 99.1 Press Release of Nabors Industries Ltd. dated January 30, 2003.
4 EX-99.1 3 h02812exv99w1.txt PRESS RELEASE DATED JANUARY 30, 2003 EXHIBIT 99.1 NABORS' EPS $0.15 PER DILUTED SHARE, $0.18 INCLUSIVE OF REINCORPORATION SAVINGS BRIDGETOWN, BARBADOS, JANUARY 30, 2003, NABORS INDUSTRIES LTD. (AMEX: NBR) today announced its financial results for the fourth quarter and full year 2002. Income derived from operating activities(1) was $39.3 million in the fourth quarter and $170.0 million for the full year 2002. This represents a sequential improvement over the third quarter amount of $32.1 million. The prior year income from operating activities was $85.3 million in the fourth quarter and $535.7 million for the full year 2001. Excluding the $0.03 tax benefit related to the Company's recent reorganization as a Bermuda company, net income was $22.6 million or $0.15 per diluted share for the fourth quarter and $108.5 million or $0.72 per diluted share for the full year 2002. This compares to net income of $18.6 million or $0.12 per diluted share (excluding reorganization benefits) reported in the third quarter of 2002 and $62.1 million or $0.41 per diluted share and $357.4 million or $2.24 per diluted share for the fourth quarter and full year 2001, respectively. Revenues and other income also showed sequential improvement at $392.9 million for the fourth quarter, versus $362.2 million in the third quarter. Full year 2002 revenues were $1.52 billion. The comparable 2001 revenues and other income were $475.3 million and $2.31 billion for the fourth quarter and full year, respectively. Net income in 2002 was $27.2 million or $0.18 per diluted share for the fourth quarter and $121.5 million or $0.81 per diluted share for the full year. Third quarter 2002 net income was $26.9 million or $0.18 per diluted share, which included a reorganization tax benefit of approximately $0.06 per diluted share. Gene Isenberg, Nabors' Chairman and Chief Executive Officer, made the following comments regarding the results. "I am pleased to report results that represent our first sequential quarterly improvement in five quarters along with my expectation of continued improvement in the first quarter. I am also satisfied with our full year results, particularly considering the protracted weakness that persisted throughout the year in all of our North American markets. A very encouraging aspect of the year was the numerous new international offshore contracts secured by our international business unit which has only been minimally reflected in our results-to-date. "Compared to the third quarter's results, the current quarter showed meaningful improvement in our Canadian and international units. Our US offshore unit's results include $6.4 million from insurance under our business interruption policy on our Dolphin 105 jack-up rig which was lost in a hurricane. Coincidently, this payment is approximately equal to the international income deferred from the fourth quarter to future periods, primarily from the delay in commencing four platform rigs and vessel contracts. "Our US Lower 48 drilling results were down significantly, but not as much as we expected, with higher than anticipated margins despite a lower rig count during the quarter. Our manufacturing and transportation businesses were down modestly along with US rig activity partially offset by a seasonal increase in Alaskan construction. Our - -------- (1) Income derived from operating activities is computed by: subtracting direct costs, general and administrative expenses and depreciation and amortization expense from operating revenues, then adding Earnings from unconsolidated affiliates. US well servicing business also posted lower results, with steady pricing but seasonally lower utilization attributable to shorter workdays and the holidays. "Going forward, we expect a much improved first quarter and full year 2003. Canada will be particularly strong reflecting our increased presence there at the beginning of what is a first quarter seasonal and a full year cyclical increase in activity and pricing. Our international unit's first quarter will begin to reflect significant increases in income as we deploy and commence operations on the first four of nine additional long-term, higher margin offshore rig contracts. The balance of these contracts should commence in the second and third quarters. There is even further potential in this unit emanating from a robust level of bidding. "We believe we are seeing multiple signs of an improving market environment in our US land drilling and well servicing units, although our expectations remain modest for the next two quarters. Alaska and Canada are likely to experience seasonal weakness in the second quarter as the spring thaw materializes. "Beginning with this quarter, we have implemented a new segment reporting format so as to provide investors with more transparency regarding revenue, cash flow derived from operating activities and utilization attributable to our key operating segments. This change will make more apparent the significance of the contribution and potential from our other business segments in addition to the obvious leverage of our US Lower 48 drilling unit. A historical summary of our last eight quarters' results, in this revised format, will be available for downloading from the Financial Information page contained in the Investor Information section of our website at www.nabors.com." The Nabors companies own and operate almost 600 land drilling and 933 land workover and well-servicing rigs worldwide. Offshore, Nabors operates 44 platforms, 17 jack-ups, and three barge rigs in the domestic and international markets. Nabors markets 30 marine transportation and support vessels, primarily in the US 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 Angela Ridgell at (281) 775-8063 or our corporate headquarters in Bridgetown, Barbados at (246) 421-9471 or via email at dan.maclachlin@mail.nabors.com. Nabors will conduct a conference call to discuss the quarter's results and the near-term outlook, today at 11:00 a.m. Eastern Standard Time. The call can be accessed on our website at www.nabors.com, or through First Call at www.firstcallevents.com. NABORS INDUSTRIES LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (In thousands, except per share amounts)
(Unaudited) ------------------------------------------------------------------ Three Months Ended December 31, Twelve Months Ended December 31, ------------------------------- -------------------------------- 2002 2001 2002 2001 ---------- ---------- ---------- ---------- Revenues and other income: Operating revenues(1)(2) $ 379,951 $ 448,479 $1,466,443 $2,201,736 Earnings from unconsolidated affiliates 2,834 4,527 14,775 26,334 Interest income 8,548 11,401 34,086 53,973 Other income, net(3) 1,556 10,926 3,708 28,650 ---------- ---------- ---------- ---------- Total revenues and other income 392,889 475,333 1,519,012 2,310,693 ---------- ---------- ---------- ---------- Costs and other deductions: Direct costs(1) 252,397 292,340 973,910 1,366,967 General and administrative expenses 39,437 34,348 141,895 135,496 Depreciation and amortization 51,616 41,007 195,365 189,896 Interest expense 20,263 18,350 67,068 60,722 ---------- ---------- ---------- ---------- Total costs and other deductions 363,713 386,045 1,378,238 1,753,081 ---------- ---------- ---------- ---------- Income before income taxes 29,176 89,288 140,774 557,612 ---------- ---------- ---------- ---------- Income taxes (benefit): Current 1,454 29,892 10,185 83,718 Deferred 517 (2,660) 9,100 116,444 ---------- ---------- ---------- ---------- Total income tax expense (benefit) 1,971 27,232 19,285 200,162 ---------- ---------- ---------- ---------- Net income $ 27,205 $ 62,056 $ 121,489 $ 357,450 ========== ========== ========== ========== Earnings per share(4): Basic $ .19 $ .44 $ .85 $ 2.48 Diluted $ .18 $ .41 $ .81 $ 2.24 Weighted average number of common shares outstanding(4): Basic 145,385 140,874 143,655 144,430 ---------- ---------- ---------- ---------- Diluted 151,717 164,206 149,997 168,790 ---------- ---------- ---------- ---------- Income derived from operating activities(5) $ 39,335 $ 85,311 $ 170,048 $ 535,711 ========== ========== ========== ==========
Adjusted amounts to exclude tax benefits resulting from the reorganization(6):
(Unaudited) ------------------------------------------------------------------ Three Months Ended December 31, Twelve Months Ended December 31, ------------------------------- -------------------------------- 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Net income: US GAAP basis per above $ 27,205 $ 62,056 $ 121,489 $ 357,450 Tax benefits of reorganization (4,600) -- (12,953) -- ------------ ------------ ------------ ------------ Adjusted net income $ 22,605 $ 62,056 $ 108,536 $ 357,450 ============ ============ ============ ============ Earnings per share - Diluted: US GAAP basis per above $ .18 $ .41 $ .81 $ 2.24 Tax benefits of reorganization (.03) -- (.09) -- ------------ ------------ ------------ ------------ Adjusted earnings per share - Diluted $ .15 $ .41 $ .72 $ 2.24 ============ ============ ============ ============
(1) We adopted Emerging Issues Task Force (EITF) No. 01-14, "Income Statement Characterization of Reimbursements Received for Out-of-Pocket Expenses Incurred", in 2002. Previously, we recognized reimbursements received as a reduction to the related direct costs. EITF 01-14 requires that reimbursements received be included in operating revenues and "out-of-pocket" expenses be included in direct costs. Accordingly, reimbursements received from our customers have been reclassified to revenues for all periods presented. The effect of adopting EITF 01-14 resulted in the following reclassifications to the three months and twelve months ended December 31, 2001: operating revenues and direct costs were increased from previously reported amounts by $16.0 million and $70.0 million, respectively. These reclassifications had no impact on net income. (2) We have revised the classification of revenues for certain rigs that we own that are leased to our joint venture in Saudi Arabia, in which we have a 50% ownership interest. We now report 100% of these revenues as operating revenues. Previously, we had reported 50% of these lease revenues as earnings from unconsolidated affiliates and 50% as operating revenues. The effect of this change in classification resulted in an increase in operating revenues and offsetting decrease in earnings from unconsolidated affiliates of $17.5 million for the nine months ended September 30, 2002, and $3.7 million and $10.6 million for the three and twelve months ended December 31, 2001, respectively. These reclassifications had no impact on total revenues and other income, or net income. (3) We adopted SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections", effective April 1, 2002. Due to the nature of our business, Accounting Standards Board (FASB) 44, 64 and Amendment of FASB 13 are not applicable. SFAS 145 eliminates SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt". Accordingly, we no longer classify gains and losses from extinguishment of debt that are usual and frequent as extraordinary items and we reclassified to other income any similar debt extinguishment items that had been reported as extraordinary items in prior accounting periods. In conjunction with adopting SFAS 145 in 2002, we reclassified, for the three months and twelve months ended December 31, 2001, the following extraordinary gain to other income with the related income tax component reclassified to income tax expense respectively: $9.6 million, net of taxes of $5.7 million. These reclassifications had no impact on net income. (4) See "Computation of Per Share Earnings" included as a separate schedule. (5) Income derived from operating activities is computed by: subtracting direct costs, general and administrative expenses, and depreciation and amortization 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. However, management does evaluate the performance of its business units and the consolidated company based on income derived from operating activities because it believes that this financial measure is an accurate reflection of the ongoing profitability of our company. For a reconciliation of this non-GAAP measure to Income before income taxes, see the Segment Reporting table contained herein. (6) Effective June 24, 2002, Nabors Industries Ltd., a Bermuda exempted company (Nabors), became the successor to Nabors Industries, Inc., a Delaware corporation (Nabors Delaware), following a corporate reorganization. Upon consummation of the merger, all outstanding shares of Nabors Delaware common stock automatically converted into the right to receive Nabors common shares, with the result that the shareholders of Nabors Delaware on the date of the merger became the shareholders of Nabors. Nabors and its subsidiaries continue to conduct the businesses previously conducted by Nabors Delaware and its subsidiaries. The reorganization was accounted for as a reorganization of entities under common control and accordingly, it did not result in any changes to the consolidated amounts of assets, liabilities and stockholders' equity. The adjusted net income and earnings per share amounts should not be used as a substitute to those amounts reported under accounting principles generally accepted in the United States of America. CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2002 and 2001 (In thousands, except ratios)
(Unaudited) December 31, ----------------------- 2002 2001 ---------- ---------- ASSETS Cash and marketable securities $ 867,195 $ 541,612 Accounts receivable, net 277,735 361,086 Other current assets 202,197 128,248 ---------- ---------- Total current assets 1,347,127 1,030,946 Marketable securities 459,148 377,025 Property, plant and equipment, net 2,781,050 2,433,247 Goodwill, net 306,762 199,048 Other long-term assets 131,222 111,649 ---------- ---------- Total assets $5,025,309 $4,151,915 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt $ 492,985 $ 2,510 Other current liabilities 239,012 327,620 ---------- ---------- Total current liabilities 731,997 330,130 Long-term debt 1,614,656 1,567,616 Other long-term liabilities 517,995 396,303 ---------- ---------- Total liabilities 2,864,648 2,294,049 Stockholders' equity 2,160,661 1,857,866 ---------- ---------- Total liabilities and stockholders' equity $5,025,309 $4,151,915 ========== ========== Total cash and marketable securities $1,326,343 $ 918,637 Working capital $ 615,130 $ 700,816 Funded debt to capital ratio: - Gross 0.49:1 0.46:1 - Net of cash and marketable securities 0.27:1 0.26:1 Interest coverage ratio: 6.0:1 13.3:1
SEGMENT REPORTING THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (In thousands) The following table sets forth certain information with respect to our reportable segments, rig and well-servicing activity:
(Unaudited) --------------------------------------------------------------------- Three Months Ended December 31, Twelve Months Ended December 31, ------------------------------- -------------------------------- 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Operating revenues and Earnings from unconsolidated affiliates: Contract drilling(1)(2): U.S. Land drilling(3) $ 102,642 $ 196,528 $ 498,421 $ 1,147,400 Canada 51,158 22,697 141,497 86,310 U.S. Land well-servicing 70,307 80,172 294,428 345,785 U.S. Offshore 29,841 40,175 105,717 226,078 International 85,580 85,016 320,160 282,404 ------------ ------------ ------------ ------------ Subtotal contract drilling 339,528 424,588 1,360,223 2,087,977 Manufacturing and logistics(4)(5) 59,487 49,586 174,775 258,361 Other(6) (16,230) (21,168) (53,780) (118,268) ------------ ------------ ------------ ------------ Total $ 382,785 $ 453,006 $ 1,481,218 $ 2,228,070 ============ ============ ============ ============ Cash flow derived from operating activities(7): Contract drilling(1): U.S. Land drilling(3) $ 24,406 $ 53,602 $ 132,806 $ 409,760 Canada 13,917 10,355 38,127 34,065 U.S. Land well-servicing 13,185 19,314 58,231 82,402 U.S. Offshore 12,092 13,117 19,094 55,107 International 28,843 26,153 113,641 89,595 ------------ ------------ ------------ ------------ Subtotal contract drilling 92,443 122,541 361,899 670,929 Manufacturing and logistics(4) 7,713 16,621 42,704 105,770 Other(8) (9,205) (12,844) (39,190) (51,092) ------------ ------------ ------------ ------------ Total 90,951 126,318 365,413 725,607 Depreciation and amortization (51,616) (41,007) (195,365) (189,896) ------------ ------------ ------------ ------------ Income derived from operating activities 39,335 85,311 170,048 535,711 Interest expense (20,263) (18,350) (67,068) (60,722) Interest income 8,548 11,401 34,086 53,973 Other income, net 1,556 10,926 3,708 28,650 ------------ ------------ ------------ ------------ Income before income taxes $ 29,176 $ 89,288 $ 140,774 $ 557,612 ============ ============ ============ ============ Rig Years: U.S. Land drilling(3) 103.2 156.6 112.3 220.6 Canada 29.6 19.7 22.9 20.4 U.S. Offshore 14.0 21.1 14.5 28.8 International 59.9 55.7 55.1 54.5 ------------ ------------ ------------ ------------ Total rig years 206.7 253.1 204.8 324.3 ============ ============ ============ ============ Rig Hours: Canada well-services 71,704 -- 164,785 -- U.S. Land well-services 250,364 262,327 1,014,657 1,170,104 ------------ ------------ ------------ ------------ Total rig hours 322,068 262,327 1,179,442 1,170,104 ============ ============ ============ ============
(1) This segment includes our drilling, workover and well-servicing operations, on land and offshore. (2) Includes Earnings from unconsolidated affiliates, accounted for by the equity method, of $.8 million and $2.8 million for the three-month periods ended December 31, 2002 and 2001, and $3.9 million and $9.0 million for the twelve-month periods ended December 31, 2002 and 2001, respectively. (3) U.S. Land drilling is comprised of our Alaska and U.S. Lower 48 drilling operations. (4) This segment includes our marine transportation and supply services, top drive manufacturing, rig instrumentation and software, and construction and logistics operations. (5) Includes Earnings from unconsolidated affiliates, accounted for by the equity method, of $2.0 million and $1.7 million for the three-month periods ended December 31, 2002 and 2001, and $10.9 million and $17.3 million for the twelve-month periods ended December 31, 2002 and 2001, respectively. (6) Includes the elimination of inter-segment transactions. (7) Cash flow derived from operating activities is computed by: subtracting direct costs and general and administrative expenses 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. However, management does evaluate the performance of its business units based on cash flow derived from operating activities because it believes that this financial measure is an accurate reflection of the ongoing profitability of our business units. A reconciliation of this non-GAAP measure to consolidated Income before income taxes is provided herein. (8) Includes the elimination of inter-segment transactions and unallocated corporate expenses. COMPUTATION OF PER SHARE EARNINGS THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (In thousands, except per share amounts) A reconciliation of the numerators and denominators of the basic and diluted earnings per share computations is as follows:
(Unaudited) ------------------------------------------------------------------ Three Months Ended December 31, Twelve Months Ended December 31, ------------------------------- -------------------------------- 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Net Income (numerator): Net income - basic $ 27,205 $ 62,056 $ 121,489 $ 357,450 Add interest expense on assumed conversion of our zero coupon convertible senior debentures, net of tax(1): $825 million due 2020 -- 2,034 -- 8,060 $1.381 billion due 2021 -- 3,352 -- 11,995 ------------ ------------ ------------ ------------ Adjusted net income - diluted $ 27,205 $ 67,442 $ 121,489 $ 377,505 ------------ ------------ ------------ ------------ Earnings per share: Basic $ .19 $ .44 $ .85 $ 2.48 Diluted $ .18 $ .41 $ .81 $ 2.24 Shares (denominator): Weighted average number of shares outstanding - basic(2) 145,385 140,874 143,655 144,430 Net effect of dilutive stock options and warrants based on the treasury stock method 6,332 4,768 6,342 6,697 Assumed conversion of our zero coupon convertible senior debentures(1): $825 million due 2020 -- 8,834 -- 8,852 $1.381 billion due 2021 -- 9,730 -- 8,811 ------------ ------------ ------------ ------------ Weighted average number of shares outstanding - diluted 151,717 164,206 149,997 168,790 ------------ ------------ ------------ ------------
(1) Diluted earnings per share for the three months and twelve months ended December 31, 2001, reflects the assumed conversion of our $825 million and $1.381 billion zero coupon convertible senior debentures, as the conversion in those periods would have been dilutive. Diluted earnings per share for the three months and twelve months ended December 31, 2002, does not reflect the assumed conversion of our $825 million and $1.381 billion zero coupon convertible senior debentures, as the conversion in those periods would have been anti-dilutive. (2) Includes the weighted average number of common shares of Nabors and the weighted average number of exchangeable shares of Nabors Exchangeco. -----END PRIVACY-ENHANCED MESSAGE-----