ANNEX A
DEFINITIONS:
Definitions Regarding Reconciliation
“Adjusted EBITDA” is defined as net income (loss) adjusted for (1) (Income) loss from discontinued operations, net of tax (2) Income tax expense (benefit), (3) Investment income (loss), Interest expense, Impairments and other charges, Other, net and (4) Depreciation and amortization. Adjusted EBITDA is used in the calculation of CEO and CFO compensation.
“Adjusted EBITDA” by segment represents adjusted operating income (loss) plus depreciation and amortization.
“Adjusted free cash flow” represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets. Management believes that adjusted free cash flow is an important liquidity measure for the Company and that it is useful to investors and management as a measure of the Company’s ability to generate cash flow, after reinvesting in the Company’s future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures. Adjusted free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations reported in accordance with GAAP.
“Adjusted gross margin per day” represents Adjusted gross margin divided by the total number of rig revenue days during the period.
“Adjusted gross margin” by segment represents Adjusted operating income (loss) plus general and administrative costs, research and engineering costs, plus depreciation and amortization.
“Rig revenue days” represents the number of days the Company’s rigs are contracted and performing under a contract during the period. These would typically include days in which operating, standby and move revenue is earned. Daily rig revenue represents operating revenue, divided by the total number of rig revenue days during the quarter.
“Net debt” is calculated as total debt minus the sum of cash and cash equivalents and short-term investments.
Each of these terms is a non-GAAP measure and should not be used in isolation or as a substitute for amounts reported in accordance with GAAP. However, we evaluate the performance of the Company, operating segments and compensation based on several criteria, including these non-GAAP measures, because we believe that these financial measures accurately reflect, and provide additional insight to investors on, the Company’s ongoing profitability, performance and liquidity.
Other Definitions
“F”, means Field, and includes the cost of employees who are assigned to specific productive job (e.g., employees assigned to specific rig).
“Field” employees are assigned to a specific rig, whereas FS employees are assigned to a yard/warehouse. SGA employees are not assigned to any rig.
“GRI” means Global Reporting Initiative, an independent, international organization that provides a global common language to communicate business impacts.
“SASB” means Sustainability Accounting Standard Board, a non-profit organization, founded in 2011 to develop sustainability accounting standards with the intent of standardizing reporting of ESG data.
“SGA” and “FS” are employees in administrative job codes or field support job codes, i.e., all non-Field employees.
“TCFD” means Task Force on Climate-related Financial Disclosures, a global organization formed to develop a set of recommended climate-related disclosures that companies and financial institutions can use to better inform investors, shareholders and the public of climate-related financial risks.
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2023 Proxy Statement |
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A-1 |
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