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Diamond Offshore Announces Third Quarter 2013 Results

HOUSTON, Oct. 24, 2013 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income of $95 million for the third quarter of 2013, or $0.68 per share on a diluted basis, compared with net income of $178 million, or $1.28 per share on a diluted basis, in the same period a year earlier. Revenues in the third quarter of 2013 totaled $691 million, compared with revenues of $714 million in the prior-year quarter.

Results for the quarter included the unfavorable pretax impact of $93 million, or an after tax impact of $0.54 per diluted share, related to customer non-payments, as follows:

  • Unrecognized revenue of $70 million, pretax, and
  • Bad debt expense of $23 million, pretax.

"Although our results were adversely affected this quarter by customers with cash flow issues, which is highly unusual, we are working hard to reposition these rigs," said Larry Dickerson, President and Chief Executive Officer.  "The overall market remains stable, supported by Brent oil prices above $100 per barrel and ongoing rig demand."

The Company has received the following letters of intent (LOI):

  • The Ocean Scepter received an LOI for a 1,136-day contract extension at a new rate of $158,000 per day; and
  • The Ocean Apex received an LOI to begin work for an international oil company in Southeast Asia during Q4 2014 at a dayrate comparable to that of our other new deepwater semisubmersible, the Ocean Onyx.

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings 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 75559431.  An online replay will also be available on www.diamondoffshore.com following the call.

ABOUT DIAMOND OFFSHORE

Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe with a total fleet of 45 offshore drilling rigs, including seven rigs under construction.  Diamond Offshore's fleet consists of 33 semisubmersibles, three of which are under construction, five dynamically positioned drillships, four of which are under construction, and seven jack-ups. Additional information about the Company and access to the Company's SEC filings is available on the Internet at www.diamondoffshore.com. Diamond Offshore is owned 50.4% by 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 customer non-payments, future opportunities for and repositioning of our drilling rigs, future work and dayrate for the Ocean Scepter as contemplated by its letter of intent, which is subject to customary conditions including execution of a definitive agreement, future work and dayrate for the Ocean Apex as contemplated by its letter of intent, which is subject to customary conditions including execution of a definitive agreement, 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, the risk that a letter of intent may not result in a binding contract, 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


Nine Months Ended


September 30,


September 30,


2013


2012


2013


2012

Revenues:












          Contract drilling

$

690,741


$

714,027


$

2,135,612


$

2,195,443

          Revenues related to reimbursable expenses


15,424



15,114



58,312



40,528

                    Total revenues


706,165



729,141



2,193,924



2,235,971













 

Operating expenses:












           Contract drilling, excluding depreciation


419,488



357,281



1,163,618



1,159,635

           Reimbursable expenses


14,904



14,563



56,998



39,351

           Depreciation


97,143



99,207



291,107



300,069

           General and administrative


15,240



13,476



48,490



49,803

           Bad debt expense (recovery)


22,563



--



22,563



(1,018)

           Gain on disposition of assets


(525)



(208)



(2,789)



(79,285)

                     Total operating expenses


568,813



484,319



1,579,987



1,468,555













Operating income


137,352



244,822



613,937



767,416













Other income (expense):












           Interest income


136



773



1,024



4,052

           Interest expense


(1,693)



(8,720)



(17,713)



(36,780)

           Foreign currency transaction loss


(4,556)



(1,860)



(3,949)



(881)

           Other, net


326



(168)



746



(767)













 

Income before income tax expense


131,565



234,847



594,045



733,040













Income tax expense


(36,817)



(56,661)



(137,974)



(168,224)













Net Income

$

94,748


$

178,186


$

456,071


$

564,816













 

Income per share:












           Basic

$

0.68


$

1.28


$

3.28


$

4.06

           Diluted

$

0.68


$

1.28


$

3.28


$

4.06













Weighted average shares outstanding:












           Shares of common stock


139,035



139,030



139,034



139,029

           Dilutive potential shares of common stock


30



23



38



17

                     Total weighted average shares outstanding


139,065



139,053



139,072



139,046

 

 

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Unaudited)

(In thousands)



Three Months Ended



Sep 30,


Jun 30,


Sep 30,



2013


2013


2012








REVENUES







 Floaters:







   Ultra-Deepwater

$

195,215

$

231,101

$

195,574

    Deepwater


147,333


184,105


163,816

    Mid-water


297,368


288,860


319,491

      Total Floaters


639,916


704,066


678,881

  Jack-ups


50,825


40,832


35,146

Total Contract Drilling Revenue

$

690,741

$

744,898

$

714,027








Revenues Related to Reimbursable Expenses

 

$

 

15,424

 

$

 

13,120

 

$

 

15,114








 Floaters:







   Ultra-Deepwater

$

139,689

$

128,147

$

132,705

    Deepwater


74,609


60,126


58,029

    Mid-water


165,518


139,252


135,935

      Total Floaters


379,816


327,525


326,669

  Jack-ups


28,685


27,377


24,245

  Other


10,987


14,134


6,367

Total Contract Drilling Expense

$

419,488

$

369,036

$

357,281








Reimbursable Expenses

$

14,904

$

12,805

$

14,563








OPERATING INCOME







 Floaters:







   Ultra-Deepwater

$

55,526

$

102,954

$

62,869

    Deepwater


72,724


123,979


105,787

    Mid-water


131,850


149,608


183,556

      Total Floaters


260,100


376,541


352,212

  Jack-ups


22,140


13,455


10,901

  Other


(10,987)


(14,134)


(6,367)

  Reimbursable expenses, net


520


315


551

  Depreciation


(97,143)


(97,143)


(99,207)

  General and administrative expense


(15,240)


(16,435)


(13,476)

  Bad debt expense


(22,563)


--


--

  Gain on disposition of assets


525


260


208

          Total Operating Income

$

137,352

$

262,859

$

244,822

 

 


DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)




September 30,


December 31,



2013


2012



(unaudited)



ASSETS










Current assets:










          Cash and cash equivalents

$

438,794

$

335,432






          Marketable securities


800,204


1,150,158






          Accounts receivable, net of allowance for bad debts


424,808


499,660






          Prepaid expenses and other current assets  


142,152


136,099






          Assets held for sale  


11,594


11,594






                    Total current assets  


1,817,552


2,132,943






Drilling and other property and equipment, net of





          accumulated depreciation


5,331,470


4,864,972






Other assets


193,586


237,371

                    Total assets  

$

7,342,608

$

7,235,286






LIABILITIES AND STOCKHOLDERS' EQUITY










Current portion of long-term debt

$

249,935

$

--






Other current liabilities


466,940


485,546






Long-term debt


1,246,321


1,496,066






Deferred tax liability


532,729


490,946






Other liabilities


182,347


186,334






Stockholders' equity


4,664,336


4,576,394






                    Total liabilities and stockholders' equity

$

7,342,608

$

7,235,286






 


 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
(Dayrate in thousands)






Third Quarter (a)

Second Quarter

Third Quarter


2013

2013

2012


Dayrate

Utilization

Dayrate

Utilization

Dayrate

Utilization

Ultra-Deepwater Floaters

$284

93%

$342

92%

$354

75%

Deepwater Floaters

$380

84%

$409

99%

$373

95%

Mid-Water Floaters

$258

68%

$271

65%

$258

71%

Jack-Ups

$93

84%

$88

74%

$98

56%


(a) Dayrate and utilization calculations include revenue earning days for which revenue was not recognized pursuant to GAAP. For the rig categories Ultra-Deepwater, Deepwater, and Mid-water Floaters, these include 88, 31 and 94 days, respectively.

 

Contact:
Darren Daugherty
Director, Investor Relations
(281) 492-5370

(Logo: http://photos.prnewswire.com/prnh/20130725/NY53104LOGO-b )

SOURCE Diamond Offshore Drilling, Inc.