Press Release

HOUSTON--(BUSINESS WIRE)--Apr. 25, 2013-- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income for the first quarter of 2013 of $176 million, or $1.27 per share on a diluted basis, compared with net income of $185 million, or $1.33 per share on a diluted basis, in the same period a year earlier. Revenues in the first quarter of 2013 were $730 million, compared with revenues of $769 million in the prior-year quarter. Results for the prior-year quarter included the sale of the jack-up rig Ocean Columbia, which yielded an after-tax gain of approximately $16 million, or $0.12 per share.

“We are pleased with the first-quarter results, which reflect our ongoing success at containing operating expenses,” said Larry Dickerson, President and Chief Executive Officer of Diamond Offshore.

“We have recently signed a new commitment for the Ocean Saratoga in Nicaragua at a rate of $320,000 per day, which we believe highlights the continuing demand for our mid-water semisubmersibles,” said Dickerson. “Along with our previously announced contract for the Ocean Nomad in Latvia, this commitment demonstrates how new markets can generate additional demand for this segment of our fleet.”

“Additionally, we are proud that Diamond Offshore was recently recognized by EnergyPoint Research in its 2012 customer satisfaction survey as No. 1 in two important categories: Deepwater Drilling and Latin America & Mexico.”

CONFERENCE CALL

A conference call to discuss Diamond Offshore’s first-quarter results has been scheduled for 9:00 a.m. CDT today. A live webcast of the call will be available online on the Company’s website, www.diamondoffshore.com. Those interested in participating in the question and answer session should dial 800-247-9979 or 973-321-1100, for international callers. The conference ID number is 32776586. An online replay will also be available on www.diamondoffshore.com following the call.

ABOUT DIAMOND OFFSHORE

Diamond Offshore provides contract drilling services to the energy industry and is a leader in deepwater drilling. Diamond Offshore’s fleet of offshore drilling rigs consists of 30 semisubmersibles, seven jack-ups and one drillship, in addition to four ultra-deepwater drillships and two deepwater semisubmersibles currently under construction. For additional information and access to SEC filings, please visit the Company’s website at www.diamondoffshore.com. Diamond Offshore is a 50.4% owned subsidiary of Loews Corporation (NYSE: L).

FORWARD-LOOKING STATEMENTS

Statements contained in this press release that are not historical facts are “forward-looking statements” within the meaning of the federal securities laws. Such statements include, but are not limited to, statements concerning future operating costs and expenses and future operations. Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by management of the Company. A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company’s overall business and financial performance can be found in the Company’s reports filed with the Securities and Exchange Commission and readers of this press release are urged to review those reports carefully when considering these forward-looking statements. Copies of these reports are available through the Company’s website at www.diamondoffshore.com. These factors include, among others, general economic and business conditions, contract cancellations, customer bankruptcy, operating risks, casualty losses, industry fleet capacity, changes in foreign and domestic oil and gas exploration and production activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, customer preferences and various other matters, many of which are beyond the Company’s control. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
					Three Months Ended
					March 31,
					2013					2012
Revenues:
Contract drilling				$	699,973				$	755,155
Revenues related to reimbursable expenses					29,768					13,487
Total revenues					729,741					768,642
Operating expenses:
Contract drilling, excluding depreciation					375,094					397,102
Reimbursable expenses					29,289					13,151
Depreciation					96,821					101,393
General and administrative					16,815					17,586
Bad debt recovery					--					(618	)
Gain on disposition of assets					(2,004	)				(25,382	)
Total operating expenses					516,015					503,232
Operating income					213,726					265,410
Other income (expense):
Interest income					617					1,783
Interest expense					(8,069	)				(15,329	)
Foreign currency transaction gain (loss)					159					(104	)
Other, net					(254	)				(325	)
Income before income tax expense					206,179					251,435
Income tax expense					(30,190	)				(66,266	)
Net income				$	175,989				$	185,169
Earnings per share:
Basic				$	1.27				$	1.33
Diluted				$	1.27				$	1.33
Weighted average shares outstanding:
Shares of common stock					139,032					139,028
Dilutive potential shares of common stock					49					12
Total weighted average shares outstanding					139,081					139,040

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
					Three Months Ended
					Mar 31,					Dec 31,					Mar 31,
					2013					2012					2012
REVENUES
Floaters:
Ultra-Deepwater				$	191,357				$	229,560				$	244,589
Deepwater					164,420					145,310					146,003
Mid-water					305,221					326,520					318,595
Total Floaters					660,998					701,390					709,187
Jack-ups					38,975					39,233					45,968
Total Contract Drilling Revenue				$	699,973				$	740,623				$	755,155
Revenues Related to Reimbursable Expenses				$	29,768				$	9,914				$	13,487
CONTRACT DRILLING EXPENSE
Floaters:
Ultra-Deepwater				$	135,776				$	135,837				$	139,961
Deepwater					56,436					67,772					58,594
Mid-water					143,647					143,124					162,779
Total Floaters					335,859					346,733					361,334
Jack-ups					29,667					21,582					31,443
Other					9,568					9,274					4,325
Total Contract Drilling Expense				$	375,094				$	377,589				$	397,102
Reimbursable Expenses				$	29,289				$	9,427				$	13,151
OPERATING INCOME
Floaters:
Ultra-Deepwater				$	55,581				$	93,723				$	104,628
Deepwater					107,984					77,538					87,409
Mid-water					161,574					183,396					155,816
Total Floaters					325,139					354,657					347,853
Jack-ups					9,308					17,651					14,525
Other					(9,568	)				(9,274	)				(4,325	)
Reimbursable expenses, net					479					487					336
Depreciation					(96,821	)				(92,844	)				(101,393	)
General and administrative expense					(16,815	)				(14,837	)				(17,586	)
Impairment of assets					--					(62,437	)				--
Bad debt recovery					--					--					618
Gain on disposition of assets					2,004					1,559					25,382
Total Operating Income				$	213,726				$	194,962				$	265,410

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
					March 31,				December 31,
					2013				2012
					(unaudited)
ASSETS
Current assets:
Cash and cash equivalents				$	308,109			$	335,432
Marketable securities					1,150,168				1,150,158
Accounts receivable, net of allowance for bad debts					485,900				499,660
Prepaid expenses and other current assets					117,804				136,099
Assets held for sale					11,594				11,594
Total current assets					2,073,575				2,132,943
Drilling and other property and equipment, net of accumulated depreciation					4,967,242				4,864,972
Other assets					226,042				237,371
Total assets				$	7,266,859			$	7,235,286
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities				$	458,132			$	485,546
Long-term debt					1,496,128				1,496,066
Deferred tax liability					500,292				490,946
Other liabilities					182,855				186,334
Stockholders’ equity					4,629,452				4,576,394
Total liabilities and stockholders’ equity				$	7,266,859			$	7,235,286

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
(Dayrate in thousands)
				First Quarter						Fourth Quarter						First Quarter
				2013						2012						2012
				Dayrate			Utilization			Dayrate			Utilization			Dayrate			Utilization
Ultra-Deepwater Floaters				$360			73%			$348			89%			$364			85%
Deepwater Floaters				$389			94%			$372			85%			$359			88%
Mid-Water Floaters				$262			64%			$268			70%			$266			65%
Jack-Ups				$85			71%			$85			71%			$87			44%

Source: Diamond Offshore Drilling, Inc.

Diamond Offshore Drilling, Inc.
Darren Daugherty, 281-492-5370
Director, Investor Relations