LOEWS CORPORATION HOUSTON, May 4, 2015 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported a net loss of $256 million, or $1.86 per share, in the first quarter of 2015, compared to net income of $146 million, or $1.05 per share, in the first quarter of 2014. Revenues in the first quarter of 2015 were $620 million, compared to revenues of $709 million in the first quarter of 2014.
Results for the quarter included a non-cash charge of $319 million after tax, or $2.33 per share, associated with the impairment of eight drilling units, three of which are to be retired and scrapped. The units to be retired are the mid-water semisubmersibles Ocean Saratoga, Ocean Worker and Ocean Yorktown, which are all cold stacked in the U.S. Gulf of Mexico. Other rigs included in the impairment group are the mid-water semisubmersibles Ocean Ambassador, Ocean General, Ocean Lexington, Ocean Nomad and the drillship Ocean Clipper.
The Company also recognized a charge during the quarter of $4 million after tax, or $0.03 per share, related to restructuring and employee separation-related costs.
"We have continued to implement cost savings measures while maintaining our focus on safe operations and delivering performance for our clients," said Marc Edwards, President and Chief Executive Officer. "Our first-quarter safety statistics were the best that we have recorded."
"During the second quarter, our next two newbuild drillships will begin working in the Gulf of Mexico, and the yard will complete our fourth drillship, which will also be headed to the U.S., where all four of drillships will work on term contracts extending into 2019 or beyond," added Mr. Edwards.
In addition, the Company announced that it has declared a regular quarterly dividend of $0.125 per share, payable on June 1, 2015 to shareholders of record as of May 15, 2015.
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 22913137. 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 35 offshore drilling rigs, including two rigs under construction. Diamond Offshore's fleet consists of 24 semisubmersibles, one of which is under construction, five dynamically positioned drillships, one of which is 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 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. Such statements include, but are not limited to, statements concerning drilling rig deliveries, operations and timing; contract effectiveness, effective dates and estimated duration; plans regarding retirement and scrapping of drilling rigs; future impairments; future dividends; expectations of future backlog, revenue, operating costs and performance; future liquidity, financial condition, market conditions, commodity prices and strategic opportunities; revenue expected to result from backlog; future credit ratings; future dayrates, future status, start and end dates and future contracts and availability; future contract opportunities and termination rights; contract noncompliance by customers and other third parties; utilization, surveys, downtime and other aspects of the Company's drilling rigs; statements concerning customer discussions and outcomes thereof and the impact of these and related events on the Company's operations and revenues; rigs being upgraded or to be upgraded and rigs under construction; and other statements that are not of historical fact. 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,
---------
2015 2014
---- ----
Revenues:
Contract
drilling $599,577 $685,308
Revenues
related to
reimbursable
expenses 20,479 24,116
Total revenues 620,056 709,424
Operating
expenses:
Contract
drilling,
excluding
depreciation 350,658 369,790
Reimbursable expenses 20,092 23,666
Depreciation 137,299 107,011
General and
administrative 17,452 22,827
Impairment of
assets 358,528 --
Restructuring
and separation
costs 6,168 --
Gain on
disposition of
assets (611) (147)
Total operating
expenses 889,586 523,147
Operating
(loss) income (269,530) 186,277
Other income
(expense):
Interest income 583 408
Interest
expense (23,982) (18,155)
Foreign
currency
transaction
gain (loss) 5,590 (1,178)
Other, net 221 327
(Loss) income
before income
tax (benefit)
expense (287,118) 167,679
Income tax
benefit
(expense) 31,409 (21,869)
Net (loss)
income $(255,709) $145,810
(Loss) income
per share $(1.86) $1.05
Weighted
average shares
outstanding:
Shares of
common stock 137,151 138,469
Dilutive
potential
shares of
common stock -- 4
Total weighted
average shares
outstanding 137,151 138,473
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
Three Months Ended
Mar 31, Dec 31, Mar 31,
------- ------- -------
2015 2014 2014
---- ---- ----
REVENUES
Floaters:
Ultra-Deepwater $251,396 $285,991 $205,794
Deepwater 138,770 115,777 146,559
Mid-water 176,357 231,933 285,979
------- ------- -------
Total Floaters 566,523 633,701 638,332
Jack-ups 33,054 40,675 46,976
Total Contract
Drilling Revenue $599,577 $674,376 $685,308
=== ===
Revenues Related to Reimbursable
Expenses
$20,479 $945 $24,116
==== ====
CONTRACT DRILLING EXPENSE
Floaters:
Ultra-Deepwater $154,539 $133,103 $123,530
Deepwater 63,675 66,093 71,949
Mid-water 99,320 119,763 134,046
------ ------- -------
Total Floaters 317,534 318,959 329,525
Jack-ups 21,570 25,268 28,029
Other 11,554 14,428 12,236
------ ------ ------
Total Contract
Drilling Expense $350,658 $358,655 $369,790
=== ===
Reimbursable Expenses $20,092 $698 $23,666
=== ===
OPERATING INCOME
Floaters:
Ultra-Deepwater $96,857 $152,888 $82,264
Deepwater 75,095 49,684 74,610
Mid-water 77,037 112,170 151,933
------ ------- -------
Total Floaters 248,989 314,742 308,807
Jack-ups 11,484 15,407 18,947
Other (11,554) (14,428) (12,236)
Reimbursable expenses, net 387 247 450
Depreciation (137,299) (131,712) (107,011)
General and administrative
expense (17,452) (19,923) (22,827)
Bad debt recovery -- -- --
Gain (loss) on disposition of
assets 611 (2,230) 147
Impairment of assets (358,528) -- --
Restructuring and separation
costs (6,168) -- --
Total Operating (Loss)
Income $(269,530) $162,103 $186,277
=== ===
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
March 31, December 31,
--------- ------------
2015 2014
---- ----
ASSETS
Current assets:
Cash and cash equivalents $184,775 $233,623
Marketable securities 14,016 16,033
Accounts receivable, net of allowance
for bad debts 445,685 463,862
Prepaid expenses and other current
assets 199,321 185,541
843,797 899,059
Drilling and other property and equipment, net of
accumulated depreciation 6,574,142 6,945,953
Other assets 117,890 176,277
Total assets $7,535,829 $8,021,289
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $249,979 $249,962
Other current liabilities 521,079 606,684
Long-term debt 1,994,587 1,994,526
Deferred tax liability 413,009 530,394
Other liabilities 177,329 188,160
Stockholders' equity 4,179,846 4,451,563
---------
Total liabilities and
stockholders' equity $7,535,829 $8,021,289
========== ==========
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
(Dayrate in thousands)
First Quarter Fourth Quarter First Quarter
2015 2014 2014
---- ---- ----
Average Operational Average Operational Revised Operational
Efficiency Efficiency Average Efficiency
Dayrate Utilization Dayrate Utilization Utilization
(1) (2) (3) (1) (2) (3) Dayrate (2) (3)
(4)
--- ---
Ultra-Deepwater $497 51% 81.5% $493 66% 90.2% $401 66% 95.3%
Floaters
Deepwater $486 45% 95.1% $431 48% 97.3% $427 64% 96.0%
Floaters
Mid-Water floaters $266 49% 94.1% $270 55% 96.8% $278 64% 94.4%
Jack-ups $92 66% 99.4% $96 77% 99.5% $94 79% 99.9%
Fleet Total 91.2% 95.5% 95.9%
(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 May 4, 2015, one deepwater and four mid-water
semisubmersible rigs and three jack-up rigs were cold stacked.
(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.
(4) Average dayrate reported in prior periods has been revised to conform to current presentation.
Contact:
Darren Daugherty
Director, Investor Relations
(281) 492-5370
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SOURCE Diamond Offshore Drilling, Inc.
