Press Release
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Diamond Offshore Drilling Inc. Announces Second Quarter 2003 Results
HOUSTON--(BUSINESS WIRE)--July 17, 2003--Diamond Offshore Drilling Inc. (NYSE:DO) today reported a net loss for the second quarter of 2003 of $16.7 million, or $0.13 per share on a diluted basis, compared with net income of $12.0 million, or $0.09 per share on a diluted basis in the same period a year earlier. Revenues for the second quarter of 2003 were $163.2 million, compared with revenues of $187.8 million for the second quarter of 2002.
The second quarter results reflect an increase in the estimated asset lives and salvage values of the Company's drilling rigs to better reflect their remaining economic lives. The effect of these changes in accounting estimates was an increase in pre-tax income for the quarter of approximately $6.9 million, or $0.04 per diluted share. The change is expected to increase pre-tax income for the year 2003 by approximately $21.7 million, or $0.14 per share. The Company made this determination by comparing its asset life and salvage value assumptions with its own and industry operating experience and making appropriate adjustments. Diamond Offshore last revised the asset life and salvage value assumptions of its fleet in 1995.
Diamond Offshore is a leader in deep water drilling. The Company's fleet of 47 offshore drilling rigs consists of 32 semisubmersibles, 14 jack-ups and one drillship. The fleet operates in the waters of six of the world's seven continents.
As previously announced, Diamond Offshore will provide an online, real-time simulcast and rebroadcast of its 2003 second quarter earnings release conference call. The live broadcast of the Diamond Offshore Drilling Inc. quarterly conference call will be available online at www.diamondoffshore.com on July 17, 2003, beginning at 9:00 a.m. Central Daylight Time. The online replay will follow immediately and continue for 5 days after the original call. Please go to the Web site at least 15 minutes before the broadcast to register, download and install any necessary audio software.
Statements in this press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, but are not limited to, statements concerning the effects of the change in accounting estimates. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated or projected. A discussion of the risk factors that could impact these areas and the Company's overall business and financial performance can be found in the Company's reports and other filings with the Securities and Exchange Commission. These factors include, among others, general economic and business conditions, 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 concerns, 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 Six Months Ended
June 30, June 30,
----------------------------------------
2003 2002 2003 2002
--------- --------- -------- ----------
Revenues:
Contract drilling $157,038 $179,674 $296,897 $373,342
Revenues related to
reimbursable expenses 6,162 8,113 12,452 15,995
--------- --------- --------- ---------
Total revenues 163,200 187,787 309,349 389,337
--------- --------- --------- ---------
Operating expenses:
Contract drilling 124,606 120,254 238,276 241,200
Reimbursable expenses 5,525 7,343 11,263 14,555
Depreciation(1) 41,553 44,585 88,830 87,282
General and administrative 8,214 7,440 15,414 14,088
Gain on sale of assets (57) (33) (58) (65)
--------- --------- --------- ---------
Total operating expenses 179,841 179,589 353,725 357,060
--------- --------- --------- ---------
Operating income (loss) (16,641) 8,198 (44,376) 32,277
Other income (expense):
Interest income 3,337 7,651 7,493 17,232
Interest expense (5,378) (6,290) (10,953) (11,760)
Gain (loss) on sale of
marketable securities (1,071) 8,671 (1,132) 12,163
Other, net 1,290 341 3,032 1,161
--------- --------- --------- ---------
Income (loss) before income tax
expense (18,463) 18,571 (45,936) 51,073
Income tax benefit (expense) 1,776 (6,609) 7,683 (16,553)
--------- --------- --------- ---------
Net income (loss) $(16,687) $11,962 $(38,253) $34,520
========= ========= ========= =========
Earnings (loss) per share:
Basic $(0.13) $0.09 $(0.29) $0.26
========= ========= ========= =========
Diluted $(0.13) $0.09 $(0.29) $0.26
========= ========= ========= =========
Weighted average shares
outstanding:
Shares of common stock 130,366 131,553 130,336 131,669
Dilutive potential shares of
common stock - 8 - 9,426
--------- --------- --------- ---------
Total weighted average
shares outstanding 130,366 131,561 130,336 141,095
========= ========= ========= =========
(1) Depreciation for the three and six months ended June 30, 2003,
includes a $6.9 million reduction due to a change in accounting
estimates that increased the estimated asset lives and salvage
values of the Company's drilling rigs.
DIAMOND OFFSHORE DRILLING INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
Three Months Ended
June 30,
------------------------
2003 2002
------------------------
CONTRACT DRILLING REVENUE
High Specification Floaters $72,660 $75,748
Other Semisubmersibles 61,265 73,977
Jack-ups 23,116 26,839
Integrated Services -- 4,406
Other (3) (436)
Eliminations -- (860)
------------------------
Total Contract Drilling Revenue $157,038 $179,674
========================
Revenues Related to Reimbursable Expenses $6,162 $8,113
========================
CONTRACT DRILLING EXPENSE
High Specification Floaters $38,555 $39,545
Other Semisubmersibles 57,810 53,445
Jack-ups 27,012 22,735
Integrated Services 841 4,689
Other 388 700
Eliminations -- (860)
------------------------
Total Contract Drilling Expense $124,606 $120,254
========================
Reimbursable Expenses $5,525 $7,343
========================
OPERATING INCOME
High Specification Floaters $34,105 $36,203
Other Semisubmersibles 3,455 20,532
Jack-ups (3,896) 4,104
Integrated Services (841) (283)
Other (391) (1,136)
Reimbursables, net 637 770
Depreciation Expense (41,553) (44,585)
General and Administrative Expense (8,214) (7,440)
Gain on Sale of Assets 57 33
------------------------
Total Operating Income (Loss) $(16,641) $8,198
========================
DIAMOND OFFSHORE DRILLING INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
---------- -----------
2003 2002
---------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $221,761 $184,910
Marketable securities 393,124 627,614
Accounts receivable 151,015 146,957
Rig inventory and supplies 46,581 45,405
Prepaid expenses and other 25,727 28,870
----------- -----------
Total current assets 838,208 1,033,756
Drilling and other property and equipment,
net of accumulated depreciation 2,273,081 2,164,627
Goodwill, net of accumulated amortization 17,908 24,714
Other assets 32,130 35,668
----------- -----------
Total assets $3,161,327 $3,258,765
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $104,916 $118,402
Long-term debt 932,170 924,475
Deferred tax liability 356,482 375,309
Other liabilities 35,454 33,065
Stockholders' equity 1,732,305 1,807,514
----------- -----------
Total liabilities and stockholders' equity $3,161,327 $3,258,765
=========== ===========
DIAMOND OFFSHORE DRILLING INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
Second Quarter First Quarter Second Quarter
2003 2003 2002
-----------------------------------------------
Dayrate Utili- Dayrate Utili- Dayrate Utili-
zation zation zation
-----------------------------------------------
(Dayrate in thousands)
High Specification
Floaters $96 92% $94 83% $115 80%
Other Semisubmersibles $58 52% $62 43% $72 54%
Jack-ups $27 68% $28 68% $29 74%
CONTACT: Diamond Offshore Drilling Inc., Houston Les Van Dyke, 281-492-5370
SOURCE: Diamond Offshore Drilling Inc.