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Diamond Offshore Announces First Quarter 2014 Results

HOUSTON, April 24, 2014 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income for the first quarter of 2014 of $146 million, or $1.05 per share, compared with net income of $176 million, or $1.27 per share, in the same period a year earlier.  Results for the quarter benefited from a $17 million, or $0.12 per share, credit to tax expense related to a settlement of certain disputes with Egyptian tax authorities.  Revenues in the first quarter of 2014 were $709 million, compared with revenues of $730 million in the prior-year quarter.

Diamond Offshore Drilling, Inc. Logo.

"I am pleased to begin my tenure at Diamond Offshore with very solid first quarter results," said Marc Edwards, President and Chief Executive Officer. "Diamond Offshore has added new capacity and upgraded its fleet while maintaining the highest credit rating and strongest balance sheet amongst its peers. This places us in a strong position to navigate through any downturn, and take advantage of strategic opportunities that may materialize.  We remain focused on delivering superior financial performance and providing sector-leading shareholder returns."

At March 31, 2014, Diamond Offshore had 137,170,137 shares of common stock outstanding.  During the three months ended March 31, 2014, the Company purchased 1,865,311 shares of its common stock at an aggregate cost of $86.4 million.  From April 1, 2014 to April 23, 2014 the Company repurchased an additional 30,250 shares of its common stock at an aggregate cost of $1.4 million.

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 25367618.  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 five rigs under construction.  Diamond Offshore's fleet consists of 33 semisubmersibles, two of which are under construction, five dynamically positioned drillships, three of which are under construction, and seven jack-ups. Additional information about the Company and access to the Company's SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 51% 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 strategic opportunities and future performance, shareholder returns, financial performance and market conditions.  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,


2014

2013






Revenues:





           Contract drilling

$

685,308

$

699,973

           Revenues related to reimbursable expenses


24,116


29,768

                     Total revenues


709,424


729,741






Operating expenses:





           Contract drilling, excluding depreciation


369,790


375,094

           Reimbursable expenses


23,666


29,289

           Depreciation


107,011


96,821

           General and administrative


22,827


16,815

           Gain on disposition of assets


(147)


(2,004)

                     Total operating expenses


523,147


516,015






Operating income


186,277


213,726






Other income (expense):





           Interest income


408


617

           Interest expense


(18,155)


(8,069)

           Foreign currency transaction gain (loss)


(1,178)


159

           Other, net          


327


(254)






Income before income tax expense


167,679


206,179






Income tax expense


(21,869)


(30,190)






Net income

$

145,810

$

175,989






Income per share

$

1.05

$

1.27






Weighted average shares outstanding:





           Shares of common stock


138,469


139,032

           Dilutive potential shares of common stock


4


49

                     Total weighted average shares outstanding


138,473


139,081






 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Unaudited)

(In thousands)




Three Months Ended



Mar 31,


Dec 31,


Mar 31,



2014


2013


2013








REVENUES







 Floaters:







   Ultra-Deepwater

$

205,794

$

236,842

$

191,357

    Deepwater


146,559


121,222


164,420

    Mid-Water


285,979


306,485


305,221

      Total Floaters


638,332


664,549


660,998

  Jack-ups


46,976


43,423


38,975

Total Contract Drilling Revenue

$

685,308

$

707,972

$

699,973








Revenues Related to Reimbursable Expenses

$

24,116

$

18,525

$

29,768








CONTRACT DRILLING EXPENSE







 Floaters:







   Ultra-Deepwater

$

123,530

$

135,153

$

135,776

    Deepwater


71,949


76,649


56,436

    Mid-Water


134,046


156,075


143,647

      Total Floaters


329,525


367,877


335,859

  Jack-ups


28,029


29,349


29,667

  Other


12,236


11,681


9,568

Total Contract Drilling Expense

$

369,790

$

408,907

$

375,094








Reimbursable Expenses

$

23,666

$

17,969

$

29,289








OPERATING INCOME







 Floaters:







   Ultra-Deepwater

$

82,264

$

101,689

$

55,581

    Deepwater


74,610


44,573


107,984

    Mid-Water


151,933


150,410


161,574

      Total Floaters


308,807


296,672


325,139

  Jack-ups


18,947


14,074


9,308

  Other


(12,236)


(11,681)


(9,568)

  Reimbursable expenses, net


450


556


479

  Depreciation


(107,011)


(96,985)


(96,821)

  General and administrative expense


(22,827)


(16,298)


(16,815)

  Bad debt recovery


--


50


--

  Gain on disposition of assets


147


1,281


2,004

          Total Operating Income

$

186,277

$

187,669

$

213,726

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)








March 31,


December 31,



2014


2013






ASSETS










Current assets:






Cash and cash equivalents

$

420,140

$

347,011








Marketable securities


1,175,135


1,750,053








Accounts receivable, net of allowance for bad debts 


416,177


469,355








Prepaid expenses and other current assets 


146,510


143,997








Assets held for sale


7,694


7,694










Total current assets 


2,165,656


2,718,110






Drilling and other property and equipment, net of





     accumulated depreciation


5,954,496


5,467,227






Other assets


207,835


206,097



Total assets 

$

8,327,987

$

8,391,434








LIABILITIES AND STOCKHOLDERS' EQUITY










Current portion of long-term debt

$

249,973

$

249,954






Other current liabilities


504,487


495,628






Long-term debt


2,244,262


2,244,189






Deferred tax liability


531,988


525,541






Other liabilities


219,186


238,864






Stockholders' equity


4,578,091


4,637,258










Total liabilities and stockholders' equity

$

8,327,987

$

8,391,434






 

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



First Quarter

Fourth Quarter (a)

First Quarter


2014

2013

2013


Dayrate

Utilization

Dayrate

Utilization

Dayrate

Utilization

Ultra-Deepwater Floaters

$387

66%

$350

91%

$360

73%

Deepwater Floaters

$418

64%

$402

65%

$389

94%

Mid-Water Floaters

$276

64%

$277

66%

$262

64%

Jack-Ups

$93

79%

$87

76%

$85

71%








(a) Dayrate and utilization calculations include revenue earning days for which revenue was not recognized pursuant to GAAP.  By rig category, these are 82 days in Q4 for ultra-deepwater floaters and 42 days in Q4 for mid-water floaters.

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

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SOURCE Diamond Offshore Drilling, Inc.