Diamond Offshore Announces Second Quarter 2013 Results

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Diamond Offshore Drilling, Inc.

Jul 25, 2013, 06:00 ET

HOUSTON, July 25, 2013 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income for the second quarter of 2013 of $185 million, or $1.33 per share on a diluted basis, compared with net income of $201 million, or $1.45 per share on a diluted basis, in the same period a year earlier.  Results for the prior-year second quarter included an after-tax gain of approximately $50.5 million, or $0.36 per share, related to the sale of five jack-up rigs. 

Revenues in the second quarter of 2013 were $758 million, compared with revenues of $738 million in the prior-year quarter. 

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"Our solid operating results for the quarter reflect our ongoing focus on cost and downtime management," said Larry Dickerson, President and Chief Executive Officer of Diamond Offshore. 

"During the quarter we announced an agreement to build a new harsh environment semisubmersible that will work offshore South Australia for BP beginning in 2016," said Dickerson.  "This represents a unique opportunity to construct a rig whose initial contract should return a substantial portion of our investment.  Additionally, our construction efforts include four ultra-deepwater drillships and two deepwater semis that should meaningfully contribute to earnings beginning next year based on the contracts covering the first three units."

CONFERENCE CALL

A conference call to discuss Diamond Offshore's second-quarter results has been scheduled for 9:00 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 14337370.  An online replay will also be available on www.diamondoffshore.com following the call.

ABOUT DIAMOND OFFSHORE

Diamond Offshore provides contract drilling services to the energy industry and is a leader in deepwater drilling.  Diamond Offshore's fleet of offshore drilling rigs consists of 30 semisubmersibles, seven jack-ups and one drillship, in addition to four ultra-deepwater drillships and three deepwater semisubmersibles currently under construction.  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).

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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 operating costs and expenses, future operations, future earnings and future return on investment.  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.

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)






Three Months Ended

Six Months Ended


June 30,

June 30,

2013

2012

2013

2012










Revenues:








   Contract drilling

$

744,898

$

726,261

$

1,444,871

$

1,481,416

   Revenues related to reimbursable expenses

13,120

11,927

42,888

25,414

      Total revenues

758,018

738,188

1,487,759

1,506,830










Operating expenses:








   Contract drilling, excluding depreciation

369,036

405,252

744,130

802,354

   Reimbursable expenses

12,805

11,637

42,094

24,788

   Depreciation

97,143

99,469

193,964

200,862

   General and administrative

16,435

18,741

33,250

36,327

   Bad debt recovery

--

(400)

--

(1,018)

   Gain on disposition of assets

(260)

(53,695)

(2,264)

(79,077)

      Total operating expenses

495,159

481,004

1,011,174

984,236










Operating income

262,859

257,184

476,585

522,594










Other income (expense):








   Interest income

271

1,496

888

3,279

   Interest expense

(7,951)

(12,731)

(16,020)

(28,060)

   Foreign currency transaction gain

448

1,083

607

979

   Other, net

674

(274)

420

(599)










Income before income tax expense

256,301

246,758

462,480

498,193










Income tax expense

(70,967)

(45,297)

(101,157)

(111,563)










Net Income

$

185,334

$

201,461

$

361,323

$

386,630










Income per share:








   Basic

$

1.33

$

1.45

$

2.60

$

2.78

   Diluted

$

1.33

$

1.45

$

2.60

$

2.78










Weighted average shares outstanding:








   Shares of common stock

139,035

139,029

139,034

139,028

   Dilutive potential shares of common stock

37

11

43

11

      Total weighted average shares outstanding

139,072

139,040

139,077

139,039

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)



Three Months Ended


Jun 30,

Mar 31,

Jun 30,


2013

2013

2012







REVENUES





 Floaters:





   Ultra-Deepwater

$

231,101

$

191,357

$

233,071

    Deepwater

184,105

164,420

142,565

    Mid-water

288,860

305,221

310,462

      Total Floaters

704,066

660,998

686,098

  Jack-ups

40,832

38,975

40,163

Total Contract Drilling Revenue

$

744,898

$

699,973

$

726,261







Revenues Related to Reimbursable
Expenses

 

$

13,120

$

29,768

$

11,927







CONTRACT DRILLING EXPENSE





 Floaters:





   Ultra-Deepwater

$

128,147

$

135,776

$

137,087

    Deepwater

60,126

56,436

68,653

    Mid-water

139,252

143,647

160,642

      Total Floaters

327,525

335,859

366,382

  Jack-ups

27,377

29,667

29,240

  Other

14,134

9,568

9,630

Total Contract Drilling Expense

$

369,036

$

375,094

$

405,252







Reimbursable Expenses

$

12,805

$

29,289

$

11,637







OPERATING INCOME





 Floaters:





   Ultra-Deepwater

$

102,954

$

55,581

$

95,984

    Deepwater

123,979

107,984

73,912

    Mid-water

149,608

161,574

149,820

      Total Floaters

376,541

325,139

319,716

  Jack-ups

13,455

9,308

10,923

  Other

(14,134)

(9,568)

(9,630)

  Reimbursable expenses, net

315

479

290

  Depreciation

(97,143)

(96,821)

(99,469)

  General and administrative expense

(16,435)

(16,815)

(18,741)

  Bad debt recovery

--

--

400

  Gain on disposition of assets

260

2,004

53,695

          Total Operating Income

$

262,859

$

213,726

$

257,184










DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)










June 30,

December 31,




2013

2012


(unaudited)

ASSETS








Current assets:




Cash and cash equivalents

$

369,972

$

335,432







Marketable securities

850,232

1,150,158







Accounts receivable, net of allowance for bad debts

485,878

499,660







Prepaid expenses and other current assets

145,111

136,099







Assets held for sale

11,594

11,594


Total current assets

1,862,787

2,132,943





Drilling and other property and equipment, net of



     accumulated depreciation

5,239,231

4,864,972






Other assets

210,484

237,371


Total assets 

$

7,312,502

$

7,235,286







LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities

$

432,584

$

485,546





Long-term debt

1,496,192

1,496,066





Deferred tax liability

511,492

490,946





Other liabilities

186,067

186,334







Stockholders' equity

4,686,167

4,576,394









Total liabilities and stockholders' equity

$

7,312,502

$

7,235,286
















DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
(Dayrate in thousands)



Second Quarter

First Quarter

Second Quarter


2013

2013

2012


Dayrate

Utilization

Dayrate

Utilization

Dayrate

Utilization

Ultra-Deepwater Floaters

$342

92%

$360

73%

$354

89%

Deepwater Floaters

$409

99%

$389

94%

$372

83%

Mid-Water Floaters

$271

65%

$262

64%

$262

66%

Jack-Ups

$88

74%

$85

71%

$94

49%




















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

SOURCE Diamond Offshore Drilling, Inc.

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