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Diamond Offshore Announces First Quarter 2016 Results

HOUSTON, May 2, 2016 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income of $87 million, or $0.64 per share, in the first quarter of 2016 compared to a loss of $256 million, or a loss of $1.86 per share, in the first quarter of 2015.  Revenues in the first quarter of 2016 were $471 million, compared to revenues of $620 million in the first quarter of 2015.

"I am pleased with our solid first quarter results, which demonstrate Diamond Offshore's ongoing efforts to manage costs while remaining focused on safe operations and fleet reliability," said Marc Edwards, President and Chief Executive Officer.  "Fleet-wide, we achieved operational efficiency for the quarter of 98.2 percent, which is reflected in our earnings results and improved project economics for our clients."

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings results has been scheduled for 7:30 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 89517726.  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



March 31,



2016


2015






Revenues:





         Contract drilling

$

443,523

$

599,577

         Revenues related to reimbursable expenses


27,020


20,479

                Total revenues


470,543


620,056






Operating expenses:





         Contract drilling, excluding depreciation


212,841


350,658

         Reimbursable expenses


26,791


20,092

         Depreciation


104,240


137,299

         General and administrative


15,398


17,452

         Impairment of assets


--


358,528

         Restructuring and separation costs


--


6,168

         Gain on disposition of assets


(296)


(611)

                Total operating expenses


358,974


889,586






Operating income (loss)


111,569


(269,530)






Other income (expense):





         Interest income


173


583

         Interest expense


(25,516)


(23,982)

Foreign currency transaction gain (loss)


(3,608)


5,590

         Other, net


578


221






Income (loss) before income tax benefit


83,196


(287,118)






Income tax benefit


4,229


31,409






Net income (loss)

$

87,425

$

(255,709)






Earnings (loss) per share, Basic and Diluted

$

0.64

$

(1.86)






Weighted average shares outstanding:





 Shares of common stock


137,162


137,151

 Dilutive potential shares of common stock


44


--

       Total weighted average shares outstanding


137,206


137,151

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)

(In thousands)



Three Months Ended



March 31,


December 31,


March 31,



2016


2015


2015








REVENUES







 Floaters:







   Ultra-Deepwater

$

325,961

$

395,798

$

251,396

   Deepwater


59,117


92,125


138,770

   Mid-Water


47,672


44,766


176,357

      Total Floaters


432,750


532,689


566,523

  Jack-ups


10,773


11,440


33,054

Total Contract Drilling Revenue

$

443,523

$

544,129

$

599,577








Revenues Related to Reimbursable Expenses

 

$

 

27,020

 

$

 

11,434

 

$

 

20,479








CONTRACT DRILLING EXPENSE







 Floaters:







   Ultra-Deepwater

$

123,736

$

147,991

$

154,539

   Deepwater


47,509


60,010


63,675

   Mid-Water


23,884


28,767


99,320

      Total Floaters


195,129


236,768


317,534

  Jack-ups


6,055


10,749


21,570

  Other


11,657


8,876


11,554

Total Contract Drilling Expense

$

212,841

$

256,393

$

350,658








Reimbursable Expenses

$

26,791

$

11,146

$

20,092








OPERATING INCOME(LOSS)







 Floaters:







   Ultra-Deepwater

$

202,225

$

247,807

$

96,857

   Deepwater


11,608


32,115


75,095

   Mid-Water


23,788


15,999


77,037

      Total Floaters


237,621


295,921


248,989

  Jack-ups


4,718


691


11,484

  Other


(11,657)


(8,876)


(11,554)

  Reimbursable expenses, net


229


288


387

  Depreciation


(104,240)


(114,448)


(137,299)

  General and administrative expense


(15,398)


(15,574)


(17,452)

  Impairment of assets


--


(499,367)


(358,528)

  Restructuring and separation costs


--


(1,043)


(6,168)

  Gain on disposition of assets


296


2,309


611

          Total Operating Income (Loss)

$

111,569

$

(340,099)

$

(269,530)

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)












March 31,

December 31,





2016


2015






ASSETS










Current assets:






Cash and cash equivalents

$

128,928

$

119,028








Marketable securities


5,067


11,518








Accounts receivable, net of allowance for bad debts


363,597


405,370








Prepaid expenses and other current assets


110,842


119,479








Assets held for sale


6,600


14,200











615,034


669,595






Drilling and other property and equipment, net of





     accumulated depreciation


6,219,242


6,378,814







Other assets


110,323


101,485



Total assets

$

6,944,599

$

7,149,894








LIABILITIES AND STOCKHOLDERS' EQUITY










Short-term borrowings

$

--

$

286,589

 

Other current liabilities


 

380,987


 

339,134






Long-term debt


1,980,049


1,979,778






Deferred tax liability


230,332


276,529






Other liabilities


158,451


155,094








Stockholders' equity


4,194,780


4,112,770










Total liabilities and stockholders' equity

$

6,944,599

$

7,149,894

















 

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



First Quarter

2016

Fourth Quarter

2015

First Quarter

2015


 

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

$533

61%

98.4%

$531

70%

95.5%

$497

51%

81.5%











Deepwater Floaters

$334

28%

97.1%

$337

42%

97.7%

$486

45%

95.1%











Mid-Water Floaters

$263

25%

97.7%

$249

24%

97.8%

$266

49%

94.1%











Jack-ups

$118

18%

100%

$124

17%

100%

$92

66%

99.4%











Fleet Total



98.2%



96.6%



91.2%



(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 March 31, 2016, our cold-stacked rigs included three ultra-deepwater semisubmersibles, four deepwater semisubmersibles, five mid-water semisubmersibles and four 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.