Diamond Offshore Announces First Quarter 2017 Results

Three Months Ended

March 31, 2017

December 31, 2016

Change

Total revenues

$            374,226

$           391,874

(5)%

Operating income

50,859

104,145

(51)%

Net income

23,539

116,082

(80)%

Earnings per diluted share

$                  0.17

$                 0.85

(80)%

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

Three Months Ended,

March 31,

2017

2016

Revenues:

      Contract drilling

$

363,557

$

443,523

      Revenues related to reimbursable expenses

10,669

27,020

         Total revenues

374,226

470,543

Operating expenses:

      Contract drilling, excluding depreciation

203,523

212,841

      Reimbursable expenses

10,478

26,791

      Depreciation

93,229

104,240

      General and administrative

17,483

15,398

      Gain on disposition of assets

(1,346)

(296)

         Total operating expenses

323,367

358,974

Operating income

50,859

111,569

Other income (expense):

      Interest income

175

173

      Interest expense

(27,596)

(25,516)

      Foreign currency transaction gain (loss)

1,087

(3,608)

      Other, net

(63)

578

Income before income tax (expense) benefit

24,462

83,196

Income tax (expense) benefit

(923)

4,229

Net income

$

23,539

$

87,425

Income per share

$

0.17

$

0.64

Weighted-average shares outstanding:

   Shares of common stock

137,173

137,162

   Dilutive potential shares of common stock

77

44

      Total weighted-average shares outstanding

137,250

137,206

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

March 31,

December 31,

2017

2016

ASSETS

Current assets:

      Cash and cash equivalents

$

123,316

$

156,233

      Marketable securities

24

35

      Accounts receivable, net of allowance for bad debts

286,408

247,028

      Prepaid expenses and other current assets

105,355

102,111

      Asset held for sale

400

400

            Total current assets

515,503

505,807

Drilling and other property and equipment, net of accumulated depreciation

5,616,367

5,726,935

Other assets

137,073

139,135

            Total assets

$

6,268,943

$

6,371,877

LIABILITIES AND STOCKHOLDERS' EQUITY

Short-term borrowings

$

--

$

104,200

Other current liabilities

201,583

236,299

Long-term debt

1,981,169

1,980,884

Deferred tax liability

191,594

197,011

Other liabilities

120,602

103,349

Stockholders' equity

3,773,995

3,750,134

            Total liabilities and stockholders' equity

$

6,268,943

$

6,371,877

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Three months ended

March 31,

2017

Operating activities:

Net income

$

23,539

$

87,425

Adjustments to reconcile net income to net cash

provided by operating activities

  Depreciation

93,229

104,240

  Deferred tax provision

(5,988)

(45,254)

Other

17,367

19,957

Net changes in operating working capital

(29,471)

74,962

  Net cash provided by operating activities

98,676

241,330

Investing activities:

Capital expenditures (including rig construction)

(29,487)

(58,114)

Proceeds from disposition of assets, net of disposal costs

2,097

113,295

Other

11

11

  Net cash (used in) provided by investing activities

(27,379)

55,192

Financing activities:

Repayment of short-term borrowings, net

(104,200)

(286,589)

Other

(14)

(33)

  Net cash used in financing activities

(104,214)

(286,622)

Net change in cash and cash equivalents

(32,917)

9,900

Cash and cash equivalents, beginning of period

156,233

119,028

Cash and cash equivalents, end of period

$

123,316

$

128,928

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATE, UTILIZATION AND OPERATIONAL EFFICIENCY

(Dayrate in thousands)

First Quarter

2017

Fourth Quarter

2016

First Quarter

2016

Average

Dayrate ⁽¹⁾

Utilization ⁽²⁾

Operational Efficiency

⁽³⁾

Average

Dayrate ⁽¹⁾

Utilization ⁽²⁾

Operational Efficiency

⁽³⁾

Average

Dayrate

⁽¹⁾

Utilization ⁽²⁾

Operational Efficiency

⁽³⁾

Ultra-Deepwater Floaters

$450

50%

91.1%

$456

49%

92.0%

$533

61%

98.4%

Deepwater Floaters

$260

48%

96.6%

$287

39%

92.1%

$334

28%

97.1%

Mid-Water floaters

$268

40%

100.0%

$478

35%

99.9%

$263

25%

97.7%

Jack-ups

$75

29%

99.9%

--

--

--

$118

18%

100.0%

Fleet Total

94.3%

93.5%

98.2%

(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).  Our current fleet includes four ultra-deepwater, three deepwater and three mid-water semisubmersible rigs that are 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.