Press Release
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Diamond Offshore Drilling Inc. Announces Third Quarter 2003 Results
HOUSTON--(BUSINESS WIRE)--Oct. 16, 2003--Diamond Offshore Drilling Inc. (NYSE:DO) today reported a net loss for the third quarter of 2003 of $11.5 million, or $0.09 per share on a diluted basis, compared with net income of $21.7 million, or $0.16 per share on a diluted basis in the same period a year earlier. Revenues for the third quarter of 2003 were $183.9 million, compared with revenues of $180.2 million for the third quarter of 2002.
For the first nine months of 2003, the Company reported a net loss of $49.7 million, or $0.38 per share on a diluted basis, compared with net income of $56.2 million, or $0.42 per share on a diluted basis for the same period in 2002. Revenues for the first nine months of 2003 were $493.3 million, compared with revenues of $569.5 million in the same period a year earlier.
Diamond Offshore President and Chief Operating Officer, Larry Dickerson, noted, "Results for the third quarter of 2003 were also impacted by non-operating factors. Lower interest rates yielded a decline in interest income in the quarter, while fixed income securities sales produced losses in the quarter versus gains in the third quarter of 2002.
"In addition, in order to help maintain the Company's strong liquidity position in light of recent earnings declines, the Board of Directors has decided to reduce the Company's quarterly cash dividend effective Dec. 1, 2003, for stockholders of record on Nov. 3, 2003. The new dividend rate will be $0.0625 per common share, compared with $0.125 per common share the previous quarter."
Mr. Dickerson also noted that, "Effective Sept. 30, 2003, the Company has retired two of its second generation semisubmersible drilling rigs, the Ocean Century and the Ocean Prospector. The rigs, which have been cold stacked in the Gulf of Mexico since July 1998 and October 1998, respectively, are being offered for sale and will not be returned to service as offshore drilling units. The Company has been successful over the past few years in modernizing its fleet, and we recognize that the Century and Prospector are not future upgrade candidates in any likely market scenario."
Diamond Offshore is a leader in deep water drilling. As a result of the retirement of the two drilling units, the Company has a fleet of 45 offshore drilling rigs consisting of 30 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 third 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 Oct. 16, 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 related to maintaining liquidity and regarding estimates of reductions in the carrying costs related to the Prospector and Century. 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 Nine Months Ended
Sept. 30, Sept. 30,
------------------ -------------------
2003 2002 2003 2002
-------- -------- --------- ---------
Revenues:
Contract drilling $174,923 $174,146 $471,820 $547,488
Revenues related to
reimbursable expenses 8,984 6,037 21,436 22,032
--------- --------- --------- ---------
Total revenues 183,907 180,183 493,256 569,520
--------- --------- --------- ---------
Operating expenses:
Contract drilling 126,934 112,963 365,210 354,163
Reimbursable expenses 8,208 5,457 19,471 20,012
Depreciation 43,256 45,187 132,086 132,469
General and
administrative 7,181 7,026 22,595 21,114
(Gain) loss on sale and
disposition of assets 1,509 23 1,451 (42)
--------- --------- --------- ---------
Total operating
expenses 187,088 170,656 540,813 527,716
--------- --------- --------- ---------
Operating income (loss) (3,181) 9,527 (47,557) 41,804
Other income (expense):
Interest income 2,742 6,660 10,235 23,892
Interest expense (6,432) (5,998) (17,385) (17,758)
Gain (loss) on sale of
marketable securities (6,179) 21,858 (7,310) 34,021
Other, net (140) (534) 2,891 627
--------- --------- --------- ---------
Income (loss) before income tax
expense (13,190) 31,513 (59,126) 82,586
Income tax benefit (expense) 1,727 (9,809) 9,410 (26,362)
--------- --------- --------- ---------
Net income (loss) $(11,463) $21,704 $(49,716) $56,224
========= ========= ========= =========
Earnings (loss) per share:
Basic $(0.09) $0.17 $(0.38) $0.43
========= ========= ========= =========
Diluted $(0.09) $0.16 $(0.38) $0.42
========= ========= ========= =========
Weighted average shares
outstanding:
Shares of common stock 130,366 131,450 130,336 131,595
Dilutive potential
shares of common stock - 9,383 - 9,425
--------- --------- --------- ---------
Total weighted
average shares
outstanding 130,366 140,833 130,336 141,020
========= ========= ========= =========
DIAMOND OFFSHORE DRILLING INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
Three Months Ended
Sept. 30,
-------------------------
2003 2002
-------------------------
CONTRACT DRILLING REVENUE
High Specification Floaters $79,688 $72,376
Other Semisubmersibles 72,588 80,745
Jack-ups 23,006 18,703
Integrated Services -- 3,017
Other (359) --
Eliminations -- (695)
-------------------------
Total Contract Drilling Revenue $174,923 $174,146
=========================
Revenues Related to Reimbursable Expenses $8,984 $6,037
=========================
CONTRACT DRILLING EXPENSE
High Specification Floaters $39,974 $38,301
Other Semisubmersibles 62,494 51,363
Jack-ups 23,677 20,714
Integrated Services (6) 3,038
Other 795 242
Eliminations -- (695)
-------------------------
Total Contract Drilling Expense $126,934 $112,963
=========================
Reimbursable Expenses $8,208 $5,457
=========================
OPERATING INCOME
High Specification Floaters $39,714 $34,075
Other Semisubmersibles 10,094 29,382
Jack-ups (671) (2,011)
Integrated Services 6 (21)
Other (1,154) (242)
Reimbursables, net 776 580
Depreciation Expense (43,256) (45,187)
General and Administrative Expense (7,181) (7,026)
Loss on Sale and Disposition of Assets (1,509) (23)
-------------------------
Total Operating Income (Loss) $(3,181) $9,527
=========================
DIAMOND OFFSHORE DRILLING INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Sept. 30, Dec. 31,
----------- -----------
2003 2002
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $175,674 $184,910
Marketable securities 405,447 627,614
Accounts receivable 168,499 146,957
Rig inventory and supplies 48,295 45,405
Prepaid expenses and other 22,304 28,870
----------- -----------
Total current assets 820,219 1,033,756
Drilling and other property and equipment, net
of accumulated depreciation 2,270,377 2,164,627
Goodwill, net of accumulated amortization 14,503 24,714
Other assets 32,194 35,668
----------- -----------
Total assets $3,137,293 $3,258,765
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $103,138 $118,402
Long-term debt 936,075 924,475
Deferred tax liability 351,501 375,309
Other liabilities 41,024 33,065
Stockholders' equity 1,705,555 1,807,514
----------- -----------
Total liabilities and stockholders'
equity $3,137,293 $3,258,765
=========== ===========
DIAMOND OFFSHORE DRILLING INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
Third Quarter Second Quarter Third Quarter
2003 2003 2002
---------------------------------------------------------------------
Utili- Utili- Utili-
Dayrate zation Dayrate zation Dayrate zation
---------------------------------------------------------------------
(Dayrate in thousands)
High
Specification
Floaters $97 90% $96 92% $109 80%
Other
Semisubmersibles $60 57% $58 52% $69 61%
Jack-ups $28 64% $27 68% $22 65%
CONTACT: Diamond Offshore Drilling, Houston
Les Van Dyke, 281-492-5370
SOURCE: Diamond Offshore Drilling