Diamond Offshore Announces Tax Expense Adjustment to Fourth Quarter and Full Year 2016 Earnings
HOUSTON, Feb. 13, 2017 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today announced it has revised its previously-announced earnings for the quarter and year ended December 31, 2016.
As it was completing its year-end financial reporting process, the Company discovered that its liability for uncertain tax positions in certain foreign jurisdictions did not appropriately reflect changes in foreign exchange rates. The majority of the impact was related to the devaluation of the Egyptian Pound, primarily in the fourth quarter of 2016. After the local tax liabilities were re-valued consistent with exchange rates at December 31, 2016:
- The Company's tax liability reflected in "Other liabilities" on its Consolidated Balance Sheet was reduced by approximately $43 million.
- The Company's provision for income taxes reflected in "Income tax benefit" on its Consolidated Statement of Operations was reduced by approximately $43 million for both the fourth quarter and full year 2016.
- The Company's net income for the fourth quarter of 2016 increased by approximately $43 million, or approximately $0.32 per diluted share. Net loss for the full year 2016 declined by approximately $43 million, or $0.31 per diluted share.
The adjustments did not affect any of the other previously-announced operating results. Copies of the fully-adjusted financial statements are enclosed in this press release.
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).
| DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES |
||||||||
| Three Months Ended |
Twelve Months Ended |
|||||||
| 2016 |
2015 |
2016 |
2015 |
|||||
| Revenues: |
||||||||
| Contract drilling |
$ 384,646 |
$ 544,129 |
$ 1,525,214 |
$ 2,360,184 |
||||
| Revenues related to reimbursable expenses |
7,228 |
11,434 |
75,128 |
59,209 |
||||
| Total revenues |
391,874 |
555,563 |
1,600,342 |
2,419,393 |
||||
| Operating expenses: |
||||||||
| Contract drilling, excluding depreciation |
174,342 |
256,393 |
772,173 |
1,227,864 |
||||
| Reimbursable expenses |
6,775 |
11,146 |
58,058 |
58,050 |
||||
| Depreciation |
86,031 |
114,448 |
381,760 |
493,162 |
||||
| General and administrative |
14,786 |
15,574 |
63,560 |
66,462 |
||||
| Impairment of assets |
-- |
499,367 |
678,145 |
860,441 |
||||
| Restructuring and separation costs |
-- |
1,043 |
-- |
9,778 |
||||
| Bad debt recovery |
(265) |
-- |
(265) |
-- |
||||
| Loss (gain) on disposition of assets |
6,060 |
(2,309) |
3,795 |
(2,290) |
||||
| Total operating expenses |
287,729 |
895,662 |
1,957,226 |
2,713,467 |
||||
| Operating income (loss) |
104,145 |
(340,099) |
(356,884) |
(294,074) |
||||
| Other income (expense): |
||||||||
| Interest income |
176 |
1,526 |
768 |
3,322 |
||||
| Interest expense |
(21,230) |
(23,134) |
(89,934) |
(93,934) |
||||
| Foreign currency transaction (loss) gain |
(3,689) |
1,511 |
(11,522) |
2,465 |
||||
| Other, net |
472 |
171 |
(10,727) |
873 |
||||
| Income (loss) before income tax benefit |
79,874 |
(360,025) |
(468,299) |
(381,348) |
||||
| Income tax benefit |
36,208 |
114,641 |
95,796 |
107,063 |
||||
| Net income (loss) |
$ 116,082 |
$ (245,384) |
$ (372,503) |
$ (274,285) |
||||
| Income (loss) per share |
$ 0.85 |
$ (1.79) |
$ (2.72) |
$ (2.00) |
||||
| Weighted-average shares outstanding: |
||||||||
| Shares of common stock |
137,170 |
137,159 |
137,168 |
137,157 |
||||
| Dilutive potential shares of common stock |
93 |
-- |
-- |
-- |
||||
| Total weighted-average shares outstanding |
137,263 |
137,159 |
137,168 |
137,157 |
||||
| DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS (Unaudited) (In thousands) |
||||||
| Three Months Ended |
||||||
| December 31, |
September 30, |
December 31, |
||||
| 2016 |
2016 |
2015 |
||||
| REVENUES |
||||||
| Floaters: |
||||||
| Ultra-Deepwater |
$ 231,820 |
$ 217,275 |
$ 395,798 |
|||
| Deepwater |
64,678 |
66,011 |
92,125 |
|||
| Mid-water |
88,130 |
56,350 |
44,766 |
|||
| Total Floaters |
384,628 |
339,636 |
532,689 |
|||
| Jack-ups |
18 |
-- |
11,440 |
|||
| Total Contract Drilling Revenue |
$ 384,646 |
$ 339,636 |
$ 544,129 |
|||
| Revenues Related to Reimbursable Expenses |
$ 7,228 |
$ 9,542 |
$ 11,434 |
|||
| CONTRACT DRILLING EXPENSE |
||||||
| Floaters: |
||||||
| Ultra-Deepwater |
$ 119,490 |
$ 124,099 |
$ 147,991 |
|||
| Deepwater |
30,481 |
36,226 |
60,010 |
|||
| Mid-water |
16,814 |
17,634 |
28,767 |
|||
| Total Floaters |
166,785 |
177,959 |
236,768 |
|||
| Jack-ups |
3,090 |
1,833 |
10,749 |
|||
| Other |
4,467 |
6,862 |
8,876 |
|||
| Total Contract Drilling Expense |
$ 174,342 |
$ 186,654 |
$ 256,393 |
|||
| Reimbursable Expenses |
$ 6,775 |
$ 7,965 |
$ 11,146 |
|||
| OPERATING INCOME (LOSS) |
||||||
| Floaters: |
||||||
| Ultra-Deepwater |
$ 112,330 |
$ 93,176 |
$ 247,807 |
|||
| Deepwater |
34,197 |
29,785 |
32,115 |
|||
| Mid-water |
71,316 |
38,716 |
15,999 |
|||
| Total Floaters |
217,843 |
161,677 |
295,921 |
|||
| Jack-ups |
(3,072) |
(1,833) |
691 |
|||
| Other |
(4,467) |
(6,862) |
(8,876) |
|||
| Reimbursable expenses, net |
453 |
1,577 |
288 |
|||
| Depreciation |
(86,031) |
(86,473) |
(114,448) |
|||
| General and administrative expense |
(14,786) |
(15,237) |
(15,574) |
|||
| Impairment of assets |
-- |
-- |
(499,367) |
|||
| Restructuring and separation costs |
-- |
-- |
(1,043) |
|||
| Bad debt recovery |
265 |
-- |
-- |
|||
| (Loss) gain on disposition of assets |
(6,060) |
1,222 |
2,309 |
|||
| Total Operating Income (Loss) |
$ 104,145 |
$ 54,071 |
$ (340,099) |
|||
|
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES |
|||
| CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
| (Unaudited) |
|||
| (In thousands) |
|||
| December 31, |
December 31, |
||
| 2016 |
2015 |
||
| ASSETS |
|||
| Current assets: |
|||
| Cash and cash equivalents |
$ 156,233 |
$ 119,028 |
|
| Marketable securities |
35 |
11,518 |
|
| Accounts receivable, net of allowance for bad debts |
247,028 |
405,370 |
|
| Prepaid expenses and other current assets |
102,111 |
119,479 |
|
| Assets held for sale |
400 |
14,200 |
|
| Total current assets |
505,807 |
669,595 |
|
| Drilling and other property and equipment, net of accumulated depreciation |
5,726,935 |
6,378,814 |
|
| Other assets |
139,135 |
101,485 |
|
| Total assets |
$ 6,371,877 |
$ 7,149,894 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
| Short-term borrowings |
$ 104,200 |
$ 286,589 |
|
| Other current liabilities |
236,299 |
339,134 |
|
| Long-term debt |
1,980,884 |
1,979,778 |
|
| Deferred tax liability |
197,011 |
276,529 |
|
| Other liabilities |
103,349 |
155,094 |
|
| Stockholders' equity |
3,750,134 |
4,112,770 |
|
| Total liabilities and stockholders' equity |
$ 6,371,877 |
$ 7,149,894 |
|
| DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands, except per share data) |
|||
| Year ended December 31, |
|||
| 2016 |
2015 |
||
| Operating activities: |
|||
| Net loss |
$ (372,503) |
$ (274,285) |
|
| Adjustments to reconcile net loss to net cash provided by |
|||
| operating activities: |
|||
| Depreciation |
381,760 |
493,162 |
|
| Loss on impairment of assets |
678,145 |
860,441 |
|
| Deferred tax provision |
(106,263) |
(242,034) |
|
| Other |
(27,696) |
(69,771) |
|
| Net changes in operating working capital |
93,111 |
(31,086) |
|
| Net cash provided by operating activities |
646,554 |
736,427 |
|
| Investing activities: |
|||
| Capital expenditures (including rig construction) |
(652,673) |
(830,655) |
|
| Proceeds from disposition of assets, net of disposal costs |
221,722 |
13,049 |
|
| Proceeds from sale of marketable securities |
4,614 |
51 |
|
| Net cash used in investing activities |
(426,337) |
(817,555) |
|
| Financing activities: |
|||
| Repayment of long-term debt |
-- |
(250,000) |
|
| (Repayment of) proceeds from short-term borrowings, net |
(182,389) |
286,589 |
|
| Debt issuance costs and arrangement fees |
(215) |
(624) |
|
| Payment of dividends and anti-dilution payments |
(408) |
(69,432) |
|
| Net cash used in financing activities |
(183,012) |
(33,467) |
|
| Net change in cash and cash equivalents |
37,205 |
(114,595) |
|
| Cash and cash equivalents, beginning of year |
119,028 |
233,623 |
|
| Cash and cash equivalents, end of year |
$ 156,233 |
$ 119,028 |
|
Contact:
Samir Ali
Sr. Director, Investor Relations & Corporate Development
(281) 647-4035
SOURCE Diamond Offshore Drilling, Inc.
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