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Diamond Offshore Announces Second Quarter 2014 Results

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HOUSTON, July 24, 2014 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income of $90 million, or $0.65 per share, for the second quarter of 2014, compared with net income of $185 million, or $1.33 per share, in the same period a year earlier.  Revenues in the second quarter of 2014 were $692 million, compared with revenues of $758 million in the prior-year quarter.

Net income for the quarter included $0.08 per share received from Niko Resources Ltd. related to a previously announced settlement agreement.  Results also included a gain of $0.05 per share from the sale of the jack-up rig Ocean Spartan during the second quarter.  Offsetting these items was a negative impact of $0.14 per share related to customer cancellation of the Ocean Vanguard contract.

"During the quarter, the first of our four newbuild drillships, the Ocean BlackHawk, commenced operations in the Gulf of Mexico," said Marc Edwards, President and Chief Executive Officer.  "During 2014, Diamond Offshore will have added five very capable assets to its fleet, three new drillships and two semi-submersibles, with a fourth drillship to be delivered in early 2015."

"We retain a strong credit rating and a healthy balance sheet," added Mr. Edwards.  "Diamond Offshore remains well positioned to navigate through the current market cycle."

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings results has been scheduled for 8:00 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 63586906.  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 44 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 six 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 drilling rig deliveries and timing, and future performance, financial condition 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

Six Months Ended


June 30,

June 30,


2014

2013

2014

2013












Revenues:










           Contract drilling

$

649,554

$

744,898

$

1,334,862

$

1,444,871

          Revenues related to reimbursable expenses

42,690

13,120

66,806

42,888

                     Total revenues

692,244

758,018

1,401,668

1,487,759












Operating expenses:










           Contract drilling, excluding depreciation

395,376

369,036

765,166

744,130

           Reimbursable expenses

42,290

12,805

65,956

42,094

           Depreciation

108,906

97,143

215,917

193,964

           General and administrative

20,478

16,435

43,305

33,250

           Gain on disposition of assets

(8,572)

(260)

(8,719)

(2,264)

                     Total operating expenses

558,478

495,159

1,081,625

1,011,174












Operating income

133,766

262,859

320,043

476,585












Other income (expense):










           Interest income

150

271

558

888

           Interest expense

(18,523)

(7,951)

(36,678)

(16,020)

Foreign currency transaction gain (loss)

(2,971)

448

(4,149)

607

           Other, net

181

674

508

420












Income before income tax expense

112,603

256,301

280,282

462,480












Income tax expense

(22,890)

(70,967)

(44,759)

(101,157)












Net Income                                                                                    

$

89,713

$

185,334

$

235,523

$

361,323












Income per share, Basic and Diluted

$

0.65

$

1.33

$

1.71

$

2.60












Weighted average shares outstanding:










Shares of common stock

137,145

139,035

137,803

139,034

Dilutive potential shares of common stock

4

37

5

43

      Total weighted average shares outstanding

137,149

139,072

137,808

139,077

 

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





Three Months Ended


Jun 30,

Mar 31,

Jun 30,


2014

2014

2013

REVENUES





 Floaters:





   Ultra-Deepwater 

$

182,656

$

205,794

$

231,101

    Deepwater 

120,539

146,559

184,105

    Mid-water 

300,902

285,979

288,860

      Total Floaters 

604,097

638,332

704,066

  Jack-ups 

45,457

46,976

40,832

Total Contract Drilling Revenue 

$

649,554

$

685,308

$

744,898







Revenues Related to Reimbursable Expenses 





$

42,690

$

24,116

$

13,120







CONTRACT DRILLING EXPENSE





 Floaters:





   Ultra-Deepwater 

$

122,327

$

123,530

$

128,147

    Deepwater 

81,641

71,949

60,126

    Mid-water 

148,931

134,046

139,252

      Total Floaters 

352,899

329,525

327,525

  Jack-ups 

29,851

28,029

27,377

  Other 

12,626

12,236

14,134

Total Contract Drilling Expense 

$

395,376

$

369,790

$

369,036







Reimbursable Expenses 

$

42,290

$

23,666

$

12,805







OPERATING INCOME





 Floaters:





   Ultra-Deepwater 

$

60,329

$

82,264

$

102,954

    Deepwater 

38,898

74,610

123,979

    Mid-water 

151,971

151,933

149,608

      Total Floaters 

251,198

308,807

376,541

  Jack-ups 

15,606

18,947

13,455

  Other 

(12,626)

(12,236)

(14,134)

  Reimbursable expenses, net 

400

450

315

  Depreciation 

(108,906)

(107,011)

(97,143)

  General and administrative expense 

(20,478)

(22,827)

(16,435)

  Gain on disposition of assets 

8,572

147

260

          Total Operating Income 

$

133,766

$

186,277

$

262,859



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

(In thousands)







June 30,

December 31,

2014

2013

ASSETS










Current assets:





Cash and cash equivalents

$

980,817

$

347,011








Marketable securities

350,156

1,750,053








Accounts receivable, net of allowance for bad debts

545,024

469,355








Prepaid expenses and other current assets


200,867

143,997








Asset held for sale


--

7,694




2,076,864

2,718,110






Drilling and other property and equipment, net of




     accumulated depreciation

6,055,990

5,467,227







Other assets

229,468

206,097

Total assets

$

8,362,322

$

8,391,434








LIABILITIES AND STOCKHOLDERS' EQUITY










Current portion of long-term debt

$

249,992

$

249,954






Other current liabilities

550,224

495,628






Long-term debt

2,244,336

2,244,189






Deferred tax liability

533,788

525,541






Other liabilities

237,034

238,864








Stockholders' equity

4,546,948

4,637,258









Total liabilities and stockholders' equity

$

8,362,322

$

8,391,434


 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATES AND UTILIZATION

(Dayrate in thousands)



Second Quarter (A)

First Quarter

Second Quarter


2014

2014

2013


Dayrate

Utilization

Dayrate

Utilization

Dayrate

Utilization

 

Ultra-Deepwater Floaters

$403

51%

$387

66%

$342

92%

Deepwater Floaters

$418

51%

$418

64%

$409

99%

Mid-Water Floaters

$266

68%

$276

64%

$271

65%

Jack-Ups

$97

74%

$93

79%

$88

74%

A)  Dayrate and utilization calculations for Mid-Water Floaters exclude 22 revenue earning days for which we did not recognize revenue pursuant to GAAP.

 

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

 

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SOURCE Diamond Offshore Drilling, Inc.