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Diamond Offshore Announces First Quarter 2013 Results

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