Nabors Posts 4Q2012 EPS Of $0.44 Per Diluted Share Nabors Posts 4Q2012 EPS Of $0.44 Per Diluted Share From Continuing Operations, Including Net Gains From Asset Dispositions, Higher Investment Income & Favorable Tax Rate
- Company Makes Significant Progress Against Strategic Initiatives in 2012
- Strong Fourth Quarter Cash Flow Yields $458 Million Additional Net Debt Reduction for Total Net Debt Reduction of $678 Million Over Last Three Quarters
- Nine New Multi-Year Contracts Signed for Innovative PACE®-X Rigs
HAMILTON, Bermuda, Feb. 19, 2013 /PRNewswire/ -- Nabors Industries Ltd. (NYSE:NBR) today announced its results for the fourth quarter and full year 2012. The Company's net income from continuing operations was $129.3 million ($0.44 per diluted share) in the fourth quarter and $239.1 million ($0.82 per diluted share) for the full year. For the comparable periods of the prior year, the Company reported net income from continuing operations of $89.5 million ($0.30 per diluted share) for the fourth quarter and $342.2 million ($1.17 per diluted share) for the full year. The current quarter's adjusted income derived from operating activities was $149.8 million, bringing the total for 2012 to $918.6 million. This compares to $269.3 million for the corresponding quarter of 2011 and $867.4 million for all of 2011. Revenues for 2012 were $1.6 billion for the quarter and $7.0 billion for the full year. Income from discontinued operations for the fourth quarter was a net loss of $101.1 million ($0.35 per diluted share), reflecting further impairments and reserves with respect to the Company's oil and gas operations in British Columbia.
Tony Petrello, Nabors' Chairman and CEO, commented, "As we anticipated, the fourth quarter reflected weaker market conditions, including a near suspension of pressure pumping work in late December that continued into early January. Nonetheless, we made significant progress toward our strategic objectives, namely streamlining our business, achieving a higher level of operational excellence and enhancing the flexibility of our financial position. Although it contained formidable challenges, 2012 represented the highest levels of revenue, gross margin and EBITDA in the Company's history, while more judicious capital deployment yielded strong free cash flow.
"The consolidation of our U.S. Well Servicing and Pressure Pumping operations continues and is beginning to show meaningful cost and performance improvements, although obscured by the weaker market environment. A combination of strong operating cash flow, lower capital expenditures, additional asset sales and improvements in working capital management enabled a $458 million reduction in net debt in the fourth quarter, adding to the $160 million reduction we achieved in the third quarter. This enhanced financial flexibility facilitates our ability to make capital investments in new rigs and technologies and pursue other strategic opportunities. For example, the innovative features of our new PACE®–X rig continue to gain market traction, as evidenced by the nine additional long-term contracts we secured in the quarter with an average duration of 2.7 years and average revenues in excess of $29,000 per day. We now have 21 long-term contract awards in the last four quarters in our U.S. land operations alone, 17 of which are for our new generation PACE®-X rigs. We are pleased with the customer reaction to the innovative features of this new rig design and are engaged in discussions regarding more awards."
Fourth quarter income per share of $0.44 benefited from net gains on asset dispositions, higher investment income and a favorable tax rate. Results also included an operating income charge of $17.7 million due to the establishment of reserves with respect to a customer bankruptcy and lower expected margins on a construction project in our U.S. Offshore operations. Those charges were essentially offset by $16.3 million in early contract termination payments during the quarter that are attributable to future periods. Net gains on asset dispositions were $17.2 million (or $0.04 per share) and resulted from $160 million in gains on asset sales and $143 million in asset retirements and impairments. The higher than usual investment income reflected non-cash mark-to-market increases in certain securities, principally a portion of the Company's interest in Honghua Group, a Chinese rig manufacturer. The quarter's results also reflect a tax adjustment to bring the full year normalized tax rate to 25%, resulting in a fourth quarter effective tax rate of 3%, for an EPS impact of approximately $0.10 per diluted share in the quarter.
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