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Diamond Offshore Announces Fourth Quarter 2013 Results

HOUSTON, Feb. 6, 2014 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income for the fourth quarter of 2013 of $93 million, or $0.67 per share. Results for the fourth quarter were negatively impacted by $0.41 per share to reserve for an uncertain tax position related to Egyptian operations.  Partially offsetting this reserve was revenue recognized in connection with a settlement agreement with a customer, resulting in a gain of $0.12 per share, after tax.

In the fourth quarter of 2012, Diamond Offshore reported net income of $156 million, or $1.12 per share, which included an after-tax impairment charge of $40.6 million, or $0.29 per share, related to the reclassification of four cold-stacked rigs as held for sale.  Revenues in the fourth quarter of 2013 were $726 million, compared with revenues of $751 million in the prior year quarter.

For the full year 2013, the Company reported net income of $549 million, or $3.95 per share, compared with net income of $720 million, or $5.18 per share, in 2012.  Revenues for the full year 2013 were $2.920 billion, compared with $2.987 billion in 2012.

"We have taken delivery of the Ocean BlackHawk, the first of our four newbuild ultra-deepwater drillships," announced Larry Dickerson, President and Chief Executive Officer of Diamond Offshore.  "The rig will soon be on its way to the U.S. Gulf of Mexico, where it will begin a five year contract with Anadarko.  Additionally, our deepwater semi Ocean Onyx has been delivered by the shipyard and is currently on location in the U.S. Gulf working for Apache.  These rig deliveries represent important milestones for Diamond's ongoing fleet renewal program."

"Additionally, our operating results for the quarter and the full year reflect our ongoing focus on managing costs and reducing downtime," said Dickerson.

Capital expenditures for newbuilds, upgrades and maintenance, but excluding capitalized interest, totaled $1.0 billion in 2013, and are expected to total $2.1 billion in 2014.

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings results has been scheduled for 9:00 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 31346715.  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 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 future revenues and backlog, future performance under contract awards and extensions, future operating costs and expenses, future operations and dayrates, future financial condition, market outlook and future market conditions, future rig construction and upgrades and expected expenditures therefor, and future contracting opportunities.  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.

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

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



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,




2013


2012


2013


2012








Revenues:











          Contract drilling

$

707,972

$

740,623

$

2,843,584

$

2,936,066



          Revenues related to reimbursable expenses


18,525


9,914


76,837


50,442



                     Total revenues


726,497


750,537


2,920,421


2,986,508














Operating expenses:











           Contract drilling, excluding depreciation


408,907


377,589


1,572,525


1,537,224



           Reimbursable expenses


17,969


9,427


74,967


48,778



           Depreciation


96,985


92,844


388,092


392,913



           General and administrative


16,298


14,837


64,788


64,640



           Impairment of assets


--


62,437


--


62,437



           Bad debt expense (recovery)


(50)


--


22,513


(1,018)



           Gain on disposition of assets


(1,281)


(1,559)


(4,070)


(80,844)



                     Total operating expenses


538,828


555,575


2,118,815


2,024,130














Operating income


187,669


194,962


801,606


962,378














Other income (expense):











           Interest income


(323)


858


701


4,910



           Interest expense


(7,130)


(9,436)


(24,843)


(46,216)



Foreign currency transaction loss


(966)


(1,118)


(4,915)


(1,999)



           Other, net


945


(225)


1,691


(992)














Income before income tax expense


180,195


185,041


774,240


918,081














Income tax expense


(87,580)


(29,380)


(225,554)


(197,604)














Net Income

$

92,615

$

155,661

$

548,686

$

720,477














Income per share

$

0.67

$

1.12

$

3.95

$

5.18














Weighted average shares outstanding:










 Shares of common stock


139,035


139,031


139,035


139,029



 Dilutive potential shares of common stock


12


31


29


19



       Total weighted average shares outstanding


139,047


139,062


139,064


139,048





DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Unaudited)

 (In thousands)









Three Months Ended


Dec 31,

Sep 30,

Dec 31,


2013

2013

2012








REVENUES














 Floaters:







   Ultra-Deepwater

$

236,842

$

195,215

$

229,560

    Deepwater


121,222


147,333


145,310

    Mid-water


306,485


297,368


326,520

      Total Floaters


664,549


639,916


701,390

  Jack-ups


43,423


50,825


39,233

Total Contract Drilling Revenue

$

707,972

$

690,741

$

740,623








Revenues Related to Reimbursable Expenses

$

18,525

$

15,424

$

9,914








CONTRACT DRILLING EXPENSE







 Floaters:







   Ultra-Deepwater

$

135,153

$

139,689

$

135,837

    Deepwater


76,649


74,609


67,772

    Mid-water


156,075


165,518


143,124

      Total Floaters


367,877


379,816


346,733

  Jack-ups


29,349


28,685


21,582

  Other


11,681


10,987


9,274

Total Contract Drilling Expense

$

408,907

$

419,488

$

377,589








Reimbursable Expenses

$

17,969

$

14,904

$

9,427








OPERATING INCOME







 Floaters:







   Ultra-Deepwater

$

101,689

$

55,526

$

93,723

    Deepwater


44,573


72,724


77,538

    Mid-water


150,410


131,850


183,396

      Total Floaters


296,672


260,100


354,657

  Jack-ups


14,074


22,140


17,651

  Other


(11,681)


(10,987)


(9,274)

  Reimbursable expenses, net


556


520


487

  Depreciation


(96,985)


(97,143)


(92,844)

  General and administrative expense


(16,298)


(15,240)


(14,837)

  Impairment of assets


--


--


(62,437)

  Bad debt recovery (expense)


50


(22,563)


--

  Gain on disposition of assets


1,281


525


1,559

          Total Operating Income

$

187,669

$

137,352

$

194,962

 

 

 





DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)





December 31,

December 31,





2013


2012






ASSETS










Current assets:






Cash and cash equivalents

$

347,011

$

335,432








Marketable securities


1,750,053


1,150,158








Accounts receivable, net of allowance for bad debts


469,355


499,660








Prepaid expenses and other current assets


143,997


136,099








Assets held for sale


7,694


11,594



Total current assets


2,718,110


2,132,943






Drilling and other property and equipment, net of





     accumulated depreciation


5,467,227


4,864,972







Other assets


206,097


237,371



Total assets

$

8,391,434

$

7,235,286








LIABILITIES AND STOCKHOLDERS' EQUITY










Current portion of long-term debt

$

249,954

$

--






Other current liabilities


495,628


485,546






Long-term debt


2,244,189


1,496,066






Deferred tax liability


525,541


490,946






Other liabilities


238,864


186,334








Stockholders' equity


4,637,258


4,576,394










Total liabilities and stockholders' equity

$

8,391,434

$

7,235,286








DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATES AND UTILIZATION

(Dayrate in thousands)




Fourth Quarter (a)

Third Quarter (a)

Fourth Quarter



2013

2013

2012


Dayrate

Utilization

Dayrate

Utilization

Dayrate

Utilization

Ultra-Deepwater Floaters

$350

91%

$284

93%

$348

89%

Deepwater Floaters

$402

65%

$380

84%

$372

85%

Mid-Water Floaters

$277

66%

$258

68%

$268

70%

Jack-Ups

$87

76%

$93

84%

$85

71%

(a) Dayrate and utilization calculations include revenue earning days for which revenue was not recognized pursuant to GAAP.  These days by rig category are ultra-deepwater floaters: Q4-82 days, Q3-88 days; deepwater floaters: Q3-31 days; and mid-water floaters: Q4-42 days, Q3-94 days.

SOURCE Diamond Offshore Drilling, Inc.

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