OREANDA-NEWS. February 18, 2016. Nabors Industries Ltd. ("Nabors") (NYSE: NBR) today reported FY 2015 operating revenues of \\$3.86 billion, including \\$366 million which comprises first-quarter revenue from the Completion and Production Services segment (NCPS), a business line that merged with C&J Energy Services, Inc. (CJES) on March 24, 2015 and is no longer consolidated with Nabors. This compares to operating revenues of \\$6.80 billion in FY 2014, including \\$2.25 billion of revenue from NCPS.  The Company's equity ownership in C&J Energy Services Ltd. is accounted for in the Company's consolidated financial results as an unconsolidated affiliate on a quarter-lag basis.  Net income from continuing operations for the year was a loss of \\$329.5 million, or (\\$1.14) per diluted share, compared to a loss of \\$669.3 million, or (\\$2.28) per diluted share, in FY 2014.   Included in net loss from continuing operations for FY 2015 were total impairments and other charges related to the current downturn of net \\$1.31 per diluted share.  Also included in 2015 net income was a loss of net (\\$0.29) per diluted share on our proportional share of CJES earnings.

Revenue for the quarter of \\$739 million decreased by \\$109 million, or 13% sequentially.  Net loss from continuing operations for the fourth quarter totaled \\$161.1 million, or (\\$0.57) per diluted share.  The current results include \\$101.2 million in net after-tax charges, or \\$0.35 per diluted share, related to the impairment of certain assets.  The quarter also includes a net loss of \\$45.4 million, or (\\$0.16) per diluted share, attributable to Nabors' equity share of CJES's third quarter results.  These results compare to a loss of \\$250.9 million in the third quarter of 2015. The third quarter included after-tax charges of \\$206.0 million, or (\\$0.72) per diluted share.

Anthony Petrello, Nabors' Chairman and CEO, commented, "2015 has been a difficult year for the industry due to weak and volatile oil prices, as well as a declining rig count.  Our fourth-quarter results reflect the magnitude of progress we have made in scaling the business in line with the industry's lowest U.S. rig count in 17 years.  Quarter to quarter, we saw moderately lower revenues across our business units due to lower activity and increased exposure to depressed spot market pricing.  From the year-end level, we expect additional decreases in drilling activity and rig count in the Lower 48 and Canada, at least through the second quarter of this year with more rigs converting to spot pricing.  We remain resilient internationally; however, no region is immune to lower oil prices. Developing technological solutions to drive additional sales content through our rigs remains a core strategic focus and should be a key differentiator for Nabors in a future recovery. 

"With the timing of a recovery still uncertain, our focus is primarily on continuing to exercise stringent control over our operating, support and capital spending in order to meet our goals of breakeven free cash flow and preserving more than adequate liquidity. During the fourth quarter, we continued to generate positive free cash flow and we continued to reduce our net debt.  I am confident we will maintain a solid financial position, as we target positive free cash flow in 2016."

Segment Results

Quarterly adjusted operating income ("adjusted income") in Drilling and Rig Services decreased 34% to \\$29.9 million from \\$45.5 million in the third quarter of this year.  Quarterly adjusted EBITDA in this business line decreased by only 9% sequentially to \\$260.5 million, the majority of which was attributable to the International segment.  For the quarter, the Company averaged 223 rigs operating at an average gross margin of \\$14,229 per rig day, compared to 242 rigs at \\$14,567 per rig day in the third quarter.  Future quarters are expected to show additional declines as the weak commodity price environment persists and customer spending continues to slow.  

International adjusted income decreased by 30% sequentially to \\$51.9 million, primarily due to a modest reduction in rig years and some negative items, following several positive items which occurred in the third quarter.  Quarterly adjusted EBITDA in this segment decreased by only 14% sequentially to \\$160.7 million.  Compared to the fourth quarter, the Company foresees slightly decreasing quarterly income in the near term as margins should return to previous levels but activity moves lower.  Despite the weakening conditions throughout 2015, this segment managed to post a \\$64.3 million, or 26%, increase in annual adjusted income compared to 2014.

The U.S. Drilling segment posted an adjusted operating loss of \\$7.4 million, reflecting further activity declines during the quarter. However, margin expansion resulted in \\$6.6 million higher adjusted income versus the prior quarter.  The Lower 48 saw 13% fewer rigs working versus the third quarter, for an average rig count of 78.  This was partially offset by higher margins from both a favorable mix of higher-spec PACE®-X and PACE®-B rigs working as well as lower compensation cost.  Going forward however, the Company anticipates lower margins in the Lower 48 given current market conditions.  Canada saw further utilization declines of 16% and remains a highly challenged market, though adjusted income did improve modestly, primarily due to seasonal factors. 

Rig Services, which consists of the Company's manufacturing and directional drilling operations, reported negative adjusted income of \\$13.5 million, as the industry's newbuild and drilling activity has declined.  The Company expects performance in this segment to modestly improve in coming quarters with further adjustments to its cost structure.

William Restrepo, Nabors' Chief Financial Officer, stated, "If oil prices persist at current levels we expect further decreases in the North American land rig count over the next couple of quarters.  Paramount in this kind of environment are cost and capital control, squeezing cash out of our operations, and maintaining a strong liquidity position. During the quarter, we were cash flow positive as we continued to reduce our overhead, with material reductions in our SG&A and field support costs. Our operations implemented healthy reductions in direct costs, as we contained the reduction in adjusted income to acceptable levels despite the reduced revenue. We also maintained the capital discipline we have implemented throughout the year. Capital expenditures were \\$132 million, with an annual drilling spend of \\$827 million, well within our annual target of \\$900 million. During the fourth quarter, we entered into a new \\$325 million term loan facility and were able to repay our outstanding commercial paper and repurchase \\$27.5 million of face value in our senior notes, while ending the year with full availability on our \\$2.25 billion revolving credit facility. 

Mr. Petrello concluded, "During 2016, we will remain vigilant by continuing to align all of our costs to the new market reality. Not only will we continue to rapidly scale our direct costs to our rig count, but we are also targeting additional reductions in overhead costs, cuts in annual capex to under \\$500 million and additional reductions to our debt level with any excess liquidity."

About Nabors

Nabors Industries (NYSE: NBR) owns and operates the world's largest land-based drilling rig fleet and is a leading provider of offshore platform rigs in the United States and multiple international markets. Nabors also provides directional drilling services, performance tools, and innovative technologies throughout the world's most significant oil and gas markets. 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 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.  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 EBITDA is computed by subtracting the sum of direct costs, general and administrative expenses and research and engineering expenses from operating revenues.  Adjusted operating income (loss) is computed similarly, but also subtracts depreciation and amortization expenses from operating revenues. A reconciliation of adjusted EBITDA and adjusted operating income (loss) to income (loss) from continuing operations before income taxes, which is its nearest comparable GAAP financial measure, are included elsewhere in this press release. 

Media Contact:

Dennis A. Smith, Vice President of Corporate Development & Investor Relations, +1 281-775-8038.  To request investor materials, contact Nabors' corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via e-mail at mark.andrews@nabors.com

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)













Three Months Ended

Year Ended


December 31,

September 30,

December 31,











(In thousands, except per share amounts)

2015

2014

2015

2015

2014











Revenues and other income:









Operating revenues 

\\$  738,872

\\$ 1,783,836

\\$         847,553

\\$ 3,864,437

\\$ 6,804,197

Earnings (losses) from unconsolidated affiliates

(45,367)

(429)

(35,100)

(75,081)

(6,301)

Investment income (loss)

180

1,596

(22)

2,308

11,831

  Total revenues and other income

693,685

1,785,003

812,431

3,791,664

6,809,727











Costs and other deductions:









Direct costs

445,130

1,194,844

518,174

2,371,436

4,505,064

General and administrative expenses

61,056

128,081

72,032

324,328

500,036

Research and engineering

9,354

14,790

9,716

41,253

49,698

Depreciation and amortization

231,137

293,572

240,107

970,459

1,145,100

Interest expense

46,410

43,697

44,448

181,928

177,948

Other, net

1,011

9,606

14,321

(39,172)

9,073

Impairments and other charges

123,557

1,010,423

245,410

368,967

1,027,423

      Total costs and other deductions

917,655

2,695,013

1,144,208

4,219,199

7,414,342











Income (loss) from continuing operations before income taxes

(223,970)

(910,010)

(331,777)

(427,535)

(604,615)











Income tax expense (benefit)

(62,880)

(23,609)

(80,898)

(98,038)

62,666











Subsidiary preferred stock dividend

-

-

-

-

1,984











Income (loss) from continuing operations, net of tax

(161,090)

(886,401)

(250,879)

(329,497)

(669,265)

Income (loss) from discontinued operations, net of tax

(1,730)

(4,467)

(45,275)

(42,797)

21











Net income (loss)

(162,820)

(890,868)

(296,154)

(372,294)

(669,244)

     Less: Net (income) loss attributable to noncontrolling interest

(834)

(202)

320

(381)

(1,415)

Net income (loss) attributable to Nabors

\\$ (163,654)

\\$   (891,070)

\\$        (295,834)

\\$   (372,675)

\\$   (670,659)











Earnings (losses) per share: (1)









   Basic from continuing operations

\\$         (.57)

\\$         (3.06)

\\$                (.86)

\\$         (1.14)

\\$         (2.28)

   Basic from discontinued operations

(.01)

(.02)

(.16)

(.15)

-

    Basic

\\$         (.58)

\\$         (3.08)

\\$              (1.02)

\\$         (1.29)

\\$         (2.28)











   Diluted from continuing operations

\\$         (.57)

\\$         (3.06)

\\$                (.86)

\\$         (1.14)

\\$         (2.28)

   Diluted from discontinued operations

(.01)

(.02)

(.16)

(.15)

-

    Diluted

\\$         (.58)

\\$         (3.08)

\\$              (1.02)

\\$         (1.29)

\\$         (2.28)






















Weighted-average number   









   of common shares outstanding: (1)









   Basic 

276,371

284,938

284,112

282,982

290,694

   Diluted 

276,371

284,938

284,112

282,982

290,694






















Adjusted EBITDA (2)

\\$  223,332

\\$    446,121

\\$         247,631

\\$ 1,127,420

\\$ 1,749,399











Adjusted operating income (loss) (3)

\\$    (7,805)

\\$    152,549

\\$           7,524

\\$    156,961

\\$    604,299


(1)

See "Computation of Earnings (Losses) Per Share" included herein as a separate schedule. 



(2)

Adjusted EBITDA is computed by subtracting the sum of direct costs, general and administrative expenses and research and engineering expenses from operating revenues. Adjusted EBITDA is a non-GAAP measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of our operating segments and the consolidated company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because we believe that these financial measures accurately reflect our ongoing profitability.  In addition, securities analysts and investors use this measure of us as one of the metrics on which they analyze our performance.  A reconciliation of this non-GAAP measure to income (loss) from continuing operations before income taxes, which is a 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".


(3)

Adjusted operating income (loss) is computed by subtracting the sum of direct costs, general and administrative expenses, research and engineering expenses and depreciation and amortization from operating revenues. Adjusted operating income (loss) is a non-GAAP measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of our 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 our ongoing profitability.  In addition, securities analysts and investors use this measure of us as one of the metrics on which they analyze our performance.  A reconciliation of this non-GAAP measure to income (loss) from continuing operations before income taxes, which is a 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".

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

















December 31,

September 30,

December 31,

(In thousands)

2015

2015

2014




(Unaudited)

ASSETS





Current assets:





Cash and short-term investments

\\$        274,589

\\$          276,562

\\$        536,169

Accounts receivable, net

784,671

871,385

1,517,503

Assets held for sale

75,678

78,400

146,467

Other current assets

340,959

492,728

541,735

     Total current assets

1,475,897

1,719,075

2,741,874

Property, plant and equipment, net

7,027,802

7,287,531

8,599,125

Goodwill

166,659

150,032

173,928

Investment in unconsolidated affiliates

415,177

460,543

58,251

Other long-term assets

452,305

293,818

289,745

     Total assets

\\$     9,537,840

\\$      9,910,999

\\$   11,862,923







LIABILITIES AND EQUITY





Current liabilities:





Current debt

\\$            6,508

\\$             8,982

\\$            6,190

Other current liabilities

999,991

1,040,569

1,561,285

     Total current liabilities

1,006,499

1,049,551

1,567,475

Long-term debt

3,655,200

3,719,591

4,331,840

Other long-term liabilities

582,273

630,458

1,044,819

     Total liabilities

5,243,972

5,399,600

6,944,134







Equity:





Shareholders' equity

4,282,710

4,502,313

4,908,619

Noncontrolling interest

11,158

9,086

10,170

     Total equity

4,293,868

4,511,399

4,918,789

     Total liabilities and equity

\\$    9,537,840

\\$     9,910,999

\\$  11,862,923

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)

2015

2014

2015

2015

2014






















Operating revenues:









    Drilling & Rig Services: 









      U.S.

\\$ 222,060

\\$    544,862

\\$         259,939

\\$ 1,256,989

\\$ 2,159,968

      Canada

28,312

88,219

29,929

137,494

335,192

      International

448,507

432,739

516,180

1,862,393

1,624,259

      Rig Services (1)

72,862

190,399

73,521

391,066

692,908

       Subtotal Drilling & Rig Services

771,741

1,256,219

879,569

3,647,942

4,812,327











    Completion & Production Services:









      Completion Services

-

361,570

-

207,860

1,217,899

      Production Services

-

239,897

-

158,512

1,033,538

       Subtotal Completion & Production Services

-

601,467

-

366,372

2,251,437











    Other reconciling items (2)

(32,869)

(73,850)

(32,016)

(149,877)

(259,567)

      Total operating revenues

\\$ 738,872

\\$ 1,783,836

\\$         847,553

\\$ 3,864,437

\\$ 6,804,197











Adjusted EBITDA: (3)









    Drilling & Rig Services: 









      U.S.

\\$   94,254

\\$    207,001

\\$           94,505

\\$    513,003

\\$    835,679

      Canada

10,041

28,315

7,516

39,757

108,454

      International

160,716

173,903

186,451

719,266

611,320

      Rig Services (1)

(4,491)

17,507

(2,455)

20,978

86,933

       Subtotal Drilling & Rig Services

260,520

426,726

286,017

1,293,004

1,642,386











    Completion & Production Services:









      Completion Services

-

33,146

-

(28,110)

94,377

      Production Services

-

40,284

-

23,043

207,919

       Subtotal Completion & Production Services

-

73,430

-

(5,067)

302,296











    Other reconciling items (4)

(37,188)

(54,035)

(38,386)

(160,517)

(195,283)

      Total adjusted EBITDA

\\$ 223,332

\\$    446,121

\\$         247,631

\\$ 1,127,420

\\$ 1,749,399











Adjusted operating income (loss): (5)









    Drilling & Rig Services: 









      U.S.

\\$    (7,398)

\\$      90,490

\\$         (14,034)

\\$      87,051

\\$    370,173

      Canada

(1,034)

14,566

(4,085)

(7,029)

52,468

      International

51,850

76,319

74,039

308,262

243,975

      Rig Services (1)

(13,505)

8,845

(10,434)

(12,641)

53,374

       Subtotal Drilling & Rig Services

29,913

190,220

45,486

375,643

719,990











    Completion & Production Services:









      Completion Services

-

4,701

-

(55,243)

(15,540)

      Production Services

-

11,752

-

(3,559)

93,414

       Subtotal Completion & Production Services

-

16,453

-

(58,802)

77,874











    Other reconciling items (4)

(37,718)

(54,124)

(37,962)

(159,880)

(193,565)

   Total adjusted operating income (loss)

\\$    (7,805)

\\$     152,549

\\$             7,524

\\$     156,961

\\$     604,299











Earnings (losses) from unconsolidated affiliates

\\$ (45,367)

\\$          (429)

\\$         (35,100)

\\$     (75,081)

\\$       (6,301)











Rig activity:









Rig years: (6)









   U.S.

91.0

212.2

103.0

120.0

212.5

   Canada

14.4

36.9

17.2

16.7

34.1

   International (7)

117.5

121.2

121.3

124.0

127.1

      Total rig years 

222.9

370.3

241.5

260.7

373.7

Rig hours: (8)









   U.S. Production Services

-

183,102

-

129,652

809,438

   Canada Production Services

-

33,218

-

23,947

139,938

      Total rig hours

-

216,320

-

153,599

949,376


(1)

Includes our other services comprised of our drilling technology and top drive manufacturing, directional drilling, rig instrumentation and software services.


(2)

Represents the elimination of inter-segment transactions.


(3)

Adjusted EBITDA is computed by subtracting the sum of direct costs, general and administrative expenses and research and engineering expenses from operating revenues. Adjusted EBITDA is a non-GAAP measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of our operating segments and the consolidated company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because we believe that these financial measures accurately reflect our ongoing profitability.  In addition, securities analysts and investors use this measure of us as one of the metrics on which they analyze our performance.  A reconciliation of this non-GAAP measure to income (loss) from continuing operations before income taxes, which is a 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) is computed by subtracting the sum of direct costs, general and administrative expenses, research and engineering expenses and depreciation and amortization from operating revenues. Adjusted operating income (loss) is a non-GAAP measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of our 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 our ongoing profitability.  In addition, securities analysts and investors use this measure of us as one of the metrics on which they analyze our performance.  A reconciliation of this non-GAAP measure to income (loss) from continuing operations before income taxes, which is a 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)

Excludes well-servicing rigs, which are measured in rig hours.  Includes our equivalent percentage ownership of rigs owned by unconsolidated affiliates.  Rig years represent 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.


(7)

International rig years includes our equivalent percentage ownership of rigs owned by unconsolidated affiliates, which totaled 2.5 years during the three months ended December 31, 2014 and 2.5 years for the year ended December 31, 2014.  As of May 24, 2015, this was no longer an unconsolidated affiliate.


(8)

Rig hours represents the number of hours that our well-servicing rig fleet operated during the period.  This fleet was included in the Completion & Production Services business that was merged with C&J Energy Services, Inc. in March 2015 and we will therefore no longer report this performance metric.

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)

2015

2014

2015

2015

2014











Adjusted EBITDA

\\$  223,332

\\$   446,121

\\$         247,631

\\$ 1,127,420

\\$ 1,749,399

Depreciation and amortization 

(231,137)

(293,572)

(240,107)

(970,459)

(1,145,100)

Adjusted operating income (loss)

(7,805)

152,549

7,524

156,961

604,299











Earnings (losses) from unconsolidated affiliates

(45,367)

(429)

(35,100)

(75,081)

(6,301)

Interest expense

(46,410)

(43,697)

(44,448)

(181,928)

(177,948)

Investment income (loss)

180

1,596

(22)

2,308

11,831

Other, net

(1,011)

(9,606)

(14,321)

39,172

(9,073)

Impairments and other charges

(123,557)

(1,010,423)

(245,410)

(368,967)

(1,027,423)

Income (loss) from continuing operations before income taxes

\\$(223,970)

\\$ (910,010)

\\$       (331,777)

\\$  (427,535)

\\$  (604,615)

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

COMPUTATION OF EARNINGS (LOSSES) PER SHARE

(Unaudited)











A reconciliation of the numerators and denominators of the basic and diluted earnings (losses) per share computations is as follows:
























Three Months Ended

Year Ended


December 31,

September 30,

December 31,











(In thousands, except per share amounts)

2015

2014

2015

2015

2014











BASIC EPS:

Net income (loss) (numerator):









Income (loss) from continuing operations, net of tax

\\$ (161,090)

\\$ (886,401)

\\$       (250,879)

\\$ (329,497)

\\$ (669,265)

   Less: net (income) loss attributable to noncontrolling interest

(834)

(202)

320

(381)

(1,415)

   Less: loss on redemption of subsidary preferred stock

-

-

-

-

(1,688)

   Less: (earnings) losses allocated to unvested shareholders

3,297

13,881

5,834

7,820

10,595

Numerator for basic earnings per share:









  Adjusted income (loss) from continuing operations, net of tax - basic:

\\$ (158,627)

\\$ (872,722)

\\$       (244,725)

\\$ (322,058)

\\$ (661,773)

  Income (loss) from discontinued operations, net of tax

\\$     (1,730)

\\$     (4,467)

\\$         (45,275)

\\$   (42,797)

\\$            21











Weighted-average number of shares outstanding-basic

276,371

284,938

284,112

282,982

290,694











Earnings (losses) per share:









     Basic from continuing operations

\\$         (.57)

\\$       (3.06)

\\$                (.86)

\\$       (1.14)

\\$       (2.28)

     Basic from discontinued operations

(.01)

(.02)

(.16)

(.15)

-

Total Basic

\\$         (.58)

\\$       (3.08)

\\$              (1.02)

\\$       (1.29)

\\$       (2.28)











DILUTED EPS:









Income (loss) from continuing operations, net of tax - basic

\\$ (158,627)

\\$ (872,722)

\\$       (244,725)

\\$ (322,058)

\\$ (661,773)

Add: effect of reallocating undistributed earnings of unvested shareholders

-

-

-

-

25

Adjusted income (loss) from continuing operations, net of tax - diluted

\\$ (158,627)

\\$ (872,722)

\\$       (244,725)

\\$ (322,058)

\\$ (661,748)

Income (loss) from discontinued operations, net of tax

\\$     (1,730)

\\$     (4,467)

\\$         (45,275)

\\$   (42,797)

\\$            21






















   Weighted-average number of shares outstanding-basic

276,371

284,938

284,112

282,982

290,694

    Add: dilutive effect of potential common shares

-

-

-

-

-

   Weighted-average number of shares outstanding - diluted

276,371

284,938

284,112

282,982

290,694











     Diluted from continuing operations

\\$         (.57)

\\$       (3.06)

\\$                (.86)

\\$       (1.14)

\\$       (2.28)

     Diluted from discontinued operations

(.01)

(.02)

(.16)

(.15)

-

Total Diluted

\\$         (.58)

\\$       (3.08)

\\$              (1.02)

\\$       (1.29)

\\$       (2.28)

Restricted stock grants that contain non-forfeitable rights to dividends are considered participating securities.  As such, these grants are included in our basic and diluted earnings (losses) per share computation using the two-class method of accounting.  For all periods presented, the computation of diluted earnings (losses) per share excludes outstanding stock options with exercise prices greater than the average market price of Nabors' common shares, because their inclusion would have been anti-dilutive and because they are not considered participating securities. For periods in which we experience a net loss from continuing operations, all potential common shares have been excluded from the calculation of weighted-average shares outstanding, because their inclusion would be anti-dilutive.  The average number of options that were excluded from diluted earnings (losses) per share that would potentially dilute earnings (losses) per share was 8,105,161, 11,485,314 and 9,416,647 shares during the three months ended December 31, 2015 and 2014 and September 30, 2015, respectively, and 9,459,147 and 12,950,249 shares during the years ended December 31, 2015 and 2014, respectively. In any period during which the average market price of Nabors' common shares exceeds the exercise prices of these stock options, such stock options will be included in our diluted earnings (losses) per share computation using the if-converted method of accounting.

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS) ITEMS EXCLUDING CERTAIN NON-CASH CHARGES
AND OTHER NON-OPERATIONAL ITEMS (NON-GAAP)

(Unaudited)











Charges and
Non-Operational

As adjusted

(In thousands, except per share amounts)

Actuals

Items

(Non-GAAP)









Three Months Ended December 31, 2015







Income (loss) from continuing operations, net of tax

\\$  (161,090)

\\$    (101,152)

\\$     (59,938)

Diluted earnings (losses) per share from continuing operations

\\$        (0.57)

\\$          (0.35)

\\$         (0.22)
















Three Months Ended September 30, 2015







Income (loss) from continuing operations, net of tax

\\$  (250,879)

\\$    (206,005)

\\$     (44,874)

Diluted earnings (losses) per share from continuing operations

\\$        (0.86)

\\$          (0.72)

\\$         (0.14)

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

SCHEDULE OF NON-CASH CHARGES AND OTHER NON-OPERATIONAL ITEMS (NON-GAAP)

(Unaudited)











Three Months Ended


December 31,

September 30,




Per Diluted


Per Diluted

(In thousands, except per share amounts)

2015

Share

2015

Share









           Impairments and other charges (1)

\\$ 101,152

\\$               .35

\\$ 206,005

\\$                .72









Total Adjustments, net of tax

\\$ 101,152

\\$               .35

\\$ 206,005

\\$                .72

(1) Represents retirements and impairments to various assets related to the current industry downturn, net of tax of \\$22.4 million and \\$44.9 million, respectively, for the three months ended December 31, 2015 and September 30, 2015.