LOEWS CORPORATION 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 Third Quarter Fourth Quarter
2015 2015 2014
---- ---- ----
Average Operational Efficiency Average Operational Efficiency Average Operational Efficiency
Dayrate (1) Utilization (2) (3) Dayrate Utilization (2) (3) Dayrate Utilization (2) (3)
(1) (1)
--- --- ---
Ultra-Deepwater $531 70% 95.5% $479 71% 96.8% $493 66% 90.2%
Floaters
Deepwater $337 42% 97.7% $361 59% 90.3% $431 48% 97.3%
Floaters
Mid-Water $249 24% 97.8% $289 31% 97.5% $270 55% 96.8%
Floaters
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.
