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Diamond Offshore Announces Fourth Quarter 2015 Results
- Reports loss of $1.79 per share
- Records after-tax impairment charge of $2.68 per share
- Discontinues quarterly cash dividend

HOUSTON, Feb. 8, 2016 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported a fourth quarter 2015 net loss of $245 million, a loss of $1.79 per diluted share, compared to net income of $99 million, or $0.72 per diluted share, in the fourth quarter of 2014. Results for the quarter included a non-cash charge of $499 million associated with the impairment of nine drilling units, which resulted in an after-tax charge of $2.68 per share.  Revenues in the fourth quarter of 2015 were $556 million, compared to revenues of $675 million in the fourth quarter of 2014.

For full year 2015, Diamond Offshore reported a net loss of $274 million or a loss of $2.00 per diluted share, compared to net income of $387 million, or $2.81 per diluted share, in 2014.  Results for the full year included non-cash charges of $860 million associated with the impairment of 17 drilling units, which resulted in an after-tax charge of $5.05 per share.  Revenues for full year 2015 were $2.419 billion, compared to $2.815 billion in 2014.

Diamond Offshore also announced that its Board of Directors has discontinued the quarterly cash dividend of $0.125 per share, which will preserve an additional $69 million on an annual basis.

"Given the severe and prolonged downturn in industry fundamentals, we believe it is prudent to bolster our already strong balance sheet," said Marc Edwards, President and Chief Executive Officer.  "By conserving additional cash, we will have increased flexibility to manage the company through difficult market conditions and position ourselves for the eventual recovery in offshore drilling."

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings results has been scheduled for 7:30 a.m. CST 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 26416613.  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.  Additional information and access to the Company's SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 53% by Loews Corporation (NYSE: L).

FORWARD-LOOKING STATEMENTS

Statements contained in this press release or made during the above conference call that are not historical facts are "forward-looking statements" within the meaning of the federal securities laws.  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 risk factors include, among others, risks associated with worldwide demand for drilling services, level of activity in the oil and gas industry, renewing or replacing expired or terminated contracts, contract cancellations and terminations, maintenance and realization of backlog, competition and industry fleet capacity, impairments and retirements, declaration of dividends, operating risks, changes in tax laws and rates, regulatory initiatives and compliance with governmental regulations, construction of new builds, casualty losses, and various other factors, 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


Twelve Months Ended



December 31,


December 31,



2015


2014


2015


2014










Revenues:









         Contract drilling

$

544,129

$

674,376

$

2,360,184

$

2,737,126

         Revenues related to reimbursable expenses


11,434


945


59,209


77,545

                Total revenues


555,563


675,321


2,419,393


2,814,671










Operating expenses:









         Contract drilling, excluding depreciation


256,393


358,655


1,227,864


1,523,623

         Reimbursable expenses


11,146


698


58,050


76,091

         Depreciation


114,448


131,712


493,162


456,483

         General and administrative


15,574


19,923


66,462


81,832

         Impairment of assets


499,367


--


860,441


109,462

         Restructuring and separation costs


1,043


--


9,778


--

         (Gain) loss on disposition of assets


(2,309)


2,230


(2,290)


(5,382)

                Total operating expenses


895,662


513,218


2,713,467


2,242,109










Operating (loss) income


(340,099)


162,103


(294,074)


572,562










Other income (expense):









         Interest income


1,526


157


3,322


801

         Interest expense


(23,134)


(15,997)


(93,934)


(62,053)

         Foreign currency transaction gain


1,511


6,923


2,465


3,199

         Other, net


171


84


873


682










(Loss) income before income tax (expense) benefit


(360,025)


153,270


(381,348)


515,191










Income tax benefit (expense)


114,641


(54,427)


107,063


(128,180)










Net (loss) income

$

(245,384)

$

98,843

$

(274,285)

$

387,011










(Loss) income per share:









Basic

$

(1.79)

$

0.72

$

(2.00)

$

2.82

Diluted

$

(1.79)

$

0.72

$

(2.00)

$

2.81



















Weighted average shares outstanding:









 Shares of common stock


137,159


137,148


137,157


137,473

 Dilutive potential shares of common stock


--


59


--


50

       Total weighted average shares outstanding


137,159


137,207


137,157


137,523

 

 


DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Unaudited)

(In thousands)




Three Months Ended



December 31,


September 30,


December 31,



2015


2015


2014








REVENUES







 Floaters:







   Ultra-Deepwater

$

395,798

$

376,195

$

285,991

   Deepwater


92,125


136,668


115,777

   Mid-Water


44,766


69,500


231,933

      Total Floaters


532,689


582,363


633,701

  Jack-ups


11,440


16,673


40,675

Total Contract Drilling Revenue

$

544,129

$

599,036

$

674,376








Revenues Related to Reimbursable
Expenses

 

$

 

11,434

 

$

 

10,706

 

$

 

945








CONTRACT DRILLING EXPENSE







 Floaters:







   Ultra-Deepwater

$

147,991

$

156,107

$

133,103

   Deepwater


60,010


67,630


66,093

   Mid-Water


28,767


35,784


119,763

      Total Floaters


236,768


259,521


318,959

  Jack-ups


10,749


12,507


25,268

  Other


8,876


5,916


14,428

Total Contract Drilling Expense

$

256,393

$

277,944

$

358,655








Reimbursable Expenses

$

11,146

$

10,476

$

698








OPERATING (LOSS) INCOME







 Floaters:







   Ultra-Deepwater

$

247,807

$

220,088

$

152,888

   Deepwater


32,115


69,038


49,684

   Mid-Water


15,999


33,716


112,170

      Total Floaters


295,921


322,842


314,742

  Jack-ups


691


4,166


15,407

  Other


(8,876)


(5,916)


(14,428)

  Reimbursable expenses, net


288


230


247

  Depreciation


(114,448)


(118,086)


(131,712)

  General and administrative expense


(15,574)


(16,888)


(19,923)

  Impairment of assets


(499,367)


(2,546)


--

  Restructuring and separation costs


(1,043)


(1,574)


--

  Gain (loss) on disposition of assets


2,309


(794)


(2,230)

          Total Operating (Loss) Income

$

(340,099)

$

181,434

$

162,103

 

 


DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)












December 31,

December 31,





2015


2014






ASSETS










Current assets:






Cash and cash equivalents

$

119,028

$

233,623








Marketable securities


11,518


16,033








Accounts receivable, net of allowance for bad debts  


405,370


463,862








Prepaid expenses and other current assets 


119,479


185,541








Assets held for sale


14,200


--











669,595


899,059






Drilling and other property and equipment, net of





     accumulated depreciation


6,378,814


6,945,953







Other assets


116,480


176,277



Total assets

$

7,164,889

$

8,021,289








LIABILITIES AND STOCKHOLDERS' EQUITY










Current portion of long-term debt

$

--

$

249,962






Short-term borrowings


286,589


--

 

Other current liabilities


 

339,134


 

606,684






Long-term debt


1,994,773


1,994,526






Deferred tax liability


276,529


530,394






Other liabilities


155,094


188,160








Stockholders' equity


4,112,770


4,451,563










Total liabilities and stockholders' equity

$

7,164,889

$

8,021,289

















 

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATES AND UTILIZATION

(Dayrate in thousands)



Fourth Quarter

2015

Third Quarter

2015

Fourth Quarter

2014


Average

Dayrate (1)

Utilization (2)

Operational Efficiency

(3)

Average

Dayrate
(1)

Utilization (2)

Operational Efficiency

(3)

Average

Dayrate
(1)

Utilization (2)

Operational Efficiency

(3)































Ultra-Deepwater
Floaters

$531

70%

95.5%

$479

71%

96.8%

$493

66%

90.2%











Deepwater
Floaters

$337

42%

97.7%

$361

59%

90.3%

$431

48%

97.3%











Mid-Water
Floaters

$249

24%

97.8%

$289

31%

97.5%

$270

55%

96.8%











Jack-ups

$124

17%

100%

$97

31%

99.8%

$96

77%

99.5%











Fleet Total



96.6%



95.5%



95.5%


(1) Average dayrate is defined as contract drilling revenue for all of the specified rigs in our fleet per revenue earning day.  A revenue earning day is defined as a 24-hour period during which a rig earns a dayrate after commencement of operations and excludes mobilization, demobilization and contract preparation days.


(2) Utilization is calculated as the ratio of total revenue-earning days divided by the total calendar days in the period for all specified rigs in our fleet (including cold-stacked rigs, but excluding rigs under construction).  As of December 31, 2015, our cold-stacked rigs included one ultra-deepwater semisubmersible, two deepwater semisubmersibles, four mid-water semisubmersibles and five jack-up rigs.


(3) Operational efficiency is calculated as the ratio of total revenue-earning days divided by the sum of total revenue-earning days plus the number of days (or portions thereof) associated with unanticipated equipment downtime.

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

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SOURCE Diamond Offshore Drilling, Inc.