HOUSTON, April 30, 2018 /PRNewswire/ --
- Net income of $19 million, or
$0.14 per diluted share
-
- Includes a non-cash benefit of $43
million, or $0.32 per diluted
share, related to tax reform clarification
- Adjusted net loss of $(21)
million, or $(0.16) per
diluted share
Diamond Offshore Drilling, Inc. (NYSE: DO) today reported the
following results for the first quarter of 2018:
|
Three Months
Ended
|
Thousands of
dollars, except per share data
|
March 31,
2018
|
|
December 31,
2017
|
Total
revenues
|
$
295,510
|
|
$
346,208
|
Operating income
(loss)
|
512
|
|
(6,385)
|
Adjusted operating
income
|
3,294
|
|
27,389
|
Net income
(loss)
|
19,321
|
|
(31,941)
|
Adjusted net
loss
|
(21,345)
|
|
(7,343)
|
Earnings (loss) per
diluted share
|
$
0.14
|
|
$
(0.23)
|
Adjusted loss per
diluted share
|
$
(0.16)
|
|
$
(0.05)
|
"During the first quarter of 2018, Diamond recorded earnings per
share of 14 cents," said Marc Edwards, President and Chief Executive
Officer. "Despite the continuing challenges in the offshore
drilling market, we were able to secure additional work for the
Ocean Apex and the Ocean BlackRhino, and were awarded
new work for the Ocean Endeavor. We continue to have strong
interest from prospective clients for our industry leading fleet."
Diamond Offshore recently launched the industry's first
cybernetic BOP service, Sim-Stack™, which allows the
Company to further reduce subsea downtime and create additional
efficiencies for our clients. Edwards continued, "This is another
example of Diamond's thought leadership and innovation that enables
additional differentiation of our 6th generation
assets."
As of March 31, 2018, the
Company's total contracted backlog was $2.2
billion, which represents 19 rig years of work.
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
844-492-6043 or 478-219-0839 for international callers. The
conference ID number is 3058315. 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 certain 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, operating risks, litigation and disputes, changes in
tax laws and rates, regulatory initiatives and compliance with
governmental regulations, 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
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
Three Months
Ended
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
Contract
drilling
|
$
287,926
|
|
$
337,809
|
|
$
363,557
|
Revenues related to
reimbursable expenses
|
7,584
|
|
8,399
|
|
10,669
|
Total
revenues
|
295,510
|
|
346,208
|
|
374,226
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Contract drilling,
excluding depreciation
|
184,689
|
|
204,152
|
|
203,523
|
Reimbursable
expenses
|
7,470
|
|
8,256
|
|
10,478
|
Depreciation
|
81,825
|
|
86,203
|
|
93,229
|
General and
administrative
|
18,513
|
|
20,206
|
|
17,483
|
Impairment of
assets
|
-
|
|
28,045
|
|
-
|
Restructuring and separation
costs
|
3,011
|
|
14,146
|
|
-
|
Gain on disposition of
assets
|
(510)
|
|
(8,415)
|
|
(1,346)
|
Total operating
expenses
|
294,998
|
|
352,593
|
|
323,367
|
|
|
|
|
|
|
Operating income
(loss)
|
512
|
|
(6,385)
|
|
50,859
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
income
|
1,637
|
|
1,126
|
|
175
|
Interest expense, net
of amounts capitalized
|
(28,318)
|
|
(30,119)
|
|
(27,596)
|
Foreign currency
transaction loss
|
447
|
|
(611)
|
|
1,087
|
Other, net
|
580
|
|
908
|
|
(63)
|
|
|
|
|
|
|
(Loss) income
before income tax benefit (expense)
|
(25,142)
|
|
(35,081)
|
|
24,462
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
44,463
|
|
3,140
|
|
(923)
|
|
|
|
|
|
|
Net income
(loss)
|
$
19,321
|
|
$
(31,941)
|
|
$
23,539
|
|
|
|
|
|
|
Income (loss) per
share
|
$
0.14
|
|
$
(0.23)
|
|
$
0.17
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
Shares of common
stock
|
137,294
|
|
137,228
|
|
137,173
|
Dilutive potential
shares of common stock
|
201
|
|
-
|
|
77
|
Total weighted-average
shares outstanding
|
137,495
|
|
137,228
|
|
137,250
|
|
|
|
|
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
429,684
|
|
$
376,037
|
Accounts receivable,
net of allowance for bad debts
|
199,615
|
|
256,730
|
Prepaid expenses and
other current assets
|
155,630
|
|
157,625
|
Assets held for
sale
|
95,040
|
|
96,261
|
Total current
assets
|
879,969
|
|
886,653
|
|
|
|
|
Drilling and other
property and equipment, net of accumulated
|
|
|
|
depreciation
|
5,221,709
|
5,261,641
|
Other
assets
|
91,405
|
|
102,276
|
Total
assets
|
$
6,193,083
|
|
$
6,250,570
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Other current
liabilities
|
$
195,026
|
|
$
223,288
|
Long-term
debt
|
1,972,638
|
|
1,972,225
|
Deferred tax
liability
|
135,745
|
|
167,299
|
Other
liabilities
|
110,042
|
|
113,497
|
Stockholders'
equity
|
3,779,632
|
|
3,774,261
|
Total liabilities and
stockholders' equity
|
$
6,193,083
|
|
$
6,250,570
|
|
|
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
Three months
ended
|
|
March
31,
|
|
2018
|
|
2017
|
Operating
activities:
|
|
|
|
Net income
|
$
19,321
|
|
$
23,539
|
Adjustments to
reconcile net income to net cash
|
|
|
|
provided by operating
activities
|
|
|
|
Depreciation
|
81,825
|
|
93,229
|
Deferred tax
provision
|
(49,089)
|
|
(5,988)
|
Other
|
13,624
|
|
17,367
|
Net changes in
operating working capital
|
18,088
|
(29,471)
|
Net cash provided by
operating activities
|
83,769
|
|
98,676
|
|
|
|
|
Investing
activities:
|
|
|
|
Capital
expenditures
|
(31,483)
|
|
(29,487)
|
Proceeds from
disposition of assets, net of disposal costs
|
1,427
|
|
2,097
|
Other
|
-
|
|
11
|
Net cash used in
investing activities
|
(30,056)
|
|
(27,379)
|
|
|
|
|
Financing
activities:
|
|
|
|
Net repayment of
short-term borrowings
|
-
|
|
(104,200)
|
Other
|
(66)
|
|
(14)
|
Net cash used in
financing activities
|
(66)
|
|
(104,214)
|
|
|
|
|
Net change in cash
and cash equivalents
|
53,647
|
|
(32,917)
|
Cash and cash
equivalents, beginning of period
|
376,037
|
|
156,233
|
Cash and cash
equivalents, end of period
|
$
429,684
|
|
$
123,316
|
|
|
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
AVERAGE DAYRATE,
UTILIZATION AND OPERATIONAL EFFICIENCY
|
(Dayrate in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
Fourth
Quarter
|
First
Quarter
|
2018
|
2017
|
2017
|
|
Average
Dayrate
(1)
|
Utilization
(2)
|
Operational
Efficiency
(3)
|
Average
Dayrate
(1)
|
Utilization
(2)
|
Operational
Efficiency
(3)
|
Average
Dayrate
(1)
|
Utilization
(2)
|
Operational
Efficiency
(3)
|
|
|
|
|
|
|
|
|
|
|
Floaters
|
$351
|
52%
|
97.0%
|
$366
|
49%
|
98.7%
|
$366
|
47%
|
94.1%
|
|
|
|
|
|
|
|
|
|
|
Jack-ups
|
--
|
--
|
--
|
$75
|
65%
|
100.0%
|
$75
|
29%
|
99.9%
|
|
|
|
|
|
|
|
|
|
|
Fleet
Total
|
|
|
97.0%
|
|
|
98.8%
|
|
|
94.3%
|
|
|
|
|
|
|
|
|
|
|
(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). Our current fleet
includes four floaters 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.
|
Non-GAAP Financial Measures (Unaudited)
To supplement the Company's unaudited condensed consolidated
financial statements presented on a GAAP basis, this press release
provides investors with adjusted operating income, adjusted net
income and adjusted earnings per diluted share, which are non-GAAP
financial measures. Management believes that these measures
provide meaningful information about the Company's performance by
excluding certain charges that may not be indicative of the
Company's ongoing operating results. This allows investors
and others to better compare the company's financial results across
previous and subsequent accounting periods and to those of peer
companies and to better understand the long-term performance of the
Company. Non-GAAP financial measures should be considered to
be a supplement to, and not as a substitute for, or superior to,
financial measures prepared in accordance with GAAP.
In order to fully assess the financial operating results of the
Company, management believes that the results of operations
adjusted to exclude gains on the sale of rigs, restructuring and
separation costs, the impairment charge recorded in the fourth
quarter of 2017, as well as the related tax effects thereof and
other discrete tax items, are appropriate measures of the
continuing and normal operations of the Company. However,
these measures should be considered in addition to, and not as a
substitute for, or superior to, contract drilling revenue, contract
drilling expense, operating income, cash flows from operations or
other measures of financial performance prepared in accordance with
GAAP.
|
|
Three Months
Ended
|
|
|
March
31,
|
|
December
31,
|
|
|
2018
|
|
2017
|
Reconciliation of
As Reported Operating Income (Loss) to
Adjusted Operating Income:
|
|
|
|
(In
thousands)
|
|
|
|
|
|
As reported
operating income (loss)
|
$
512
|
|
$
(6,385)
|
|
|
|
|
|
Impairments and other
charges:
|
|
|
|
Impairment of
rigs(1)
|
-
|
|
28,045
|
Restructuring and
separation costs (2)
|
3,011
|
|
14,146
|
Gain on sale of rigs
(3)
|
(229)
|
|
(8,417)
|
|
|
|
|
|
Adjusted operating
income
|
$
3,294
|
|
$
27,389
|
|
|
|
|
|
Reconciliation of
As Reported Net Income (Loss) to Adjusted Net Loss:
|
|
|
|
(In
thousands)
|
|
|
|
|
|
As reported net
income (loss)
|
$
19,321
|
|
$
(31,941)
|
|
|
|
|
|
Impairments and other
charges:
|
|
|
|
Impairment of
rigs(1)
|
-
|
|
28,045
|
Restructuring and
separation costs (2)
|
3,011
|
|
14,146
|
(Gain) loss on sale of
rigs (3)
|
(229)
|
|
(8,417)
|
|
|
|
|
|
Tax effect of
impairments and other charges:
|
|
|
|
Impairment of rigs
(4)
|
-
|
|
(9,816)
|
Restructuring and
separation costs (4)
|
(274)
|
|
(1,070)
|
Gain on sale of rigs
(4)
|
146
|
|
556
|
Other discrete items
(5)
|
(43,320)
|
|
1,154
|
|
|
|
|
|
Adjusted net
loss
|
$
(21,345)
|
|
$
(7,343)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
December
31,
|
|
|
2018
|
|
2017
|
Reconciliation of
As Reported Income (Loss) per Diluted
Share to Adjusted Earnings per Diluted Share:
|
|
|
|
|
|
|
|
|
As reported income
(loss) per diluted share
|
$
0.14
|
|
$
(0.23)
|
Impairments and other
charges:
|
|
|
|
Impairment of
rigs(1)
|
-
|
|
0.21
|
Restructuring and
separation costs (2)
|
0.02
|
|
0.10
|
Gain on sale of rigs
(3)
|
-
|
|
(0.06)
|
|
|
|
|
|
Tax effect of
impairments and other charges:
|
|
|
|
Impairment of rigs
(4)
|
-
|
|
(0.07)
|
Restructuring and
separation costs (4)
|
-
|
|
(0.01)
|
Gain on sale of rigs
(4)
|
-
|
|
-
|
Other discrete items
(5)
|
(0.32)
|
|
0.01
|
|
|
|
|
|
Adjusted loss per
diluted share
|
$
(0.16)
|
|
$
(0.05)
|
|
|
|
|
|
(1)
|
Represents the
impairment loss recognized during the fourth quarter of 2017
related to the write down of our jack-up rig.
|
(2)
|
Represents
restructuring and separation costs recognized associated with a
plan to restructure our world-wide operations, including a
reduction in workforce at our corporate facilities and onshore
bases, and costs associated with the termination of our Brazilian
agency agreement.
|
(3)
|
Represents the
aggregate gain recognized during fourth quarter of 2017 related to
the sale of five floaters and the gain recognized in first quarter
of 2018 related to the sale of one floater.
|
(4)
|
Represents the income
tax effects of the aggregate restructuring and separation costs and
gains on the sale of rigs recognized during fourth quarter of 2017
and first quarter of 2018 and the impairment loss recognized in the
fourth quarter of 2017. The income tax effects have been
calculated on a discrete tax basis, utilizing the statutory tax
rates for the applicable tax jurisdictions. We believe that this
approach provides investors and others with useful information
regarding the actual tax impact of these transactions when the
appropriate tax returns are filed with the taxing
authorities.
|
(5)
|
Represents the
aggregate of certain discrete income tax adjustments recognized
during the fourth quarter of 2017 and first quarter of 2018,
related to the recently enacted U.S. tax reform legislation,
including the reversal of a $43.3 million liability in the first
quarter of 2018 for an uncertain tax position related to the toll
charge recognized in the fourth quarter of 2017.
|
Contact:
Samir Ali
Vice President, Investor Relations & Corporate Development
(281) 647-4035
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SOURCE Diamond Offshore Drilling, Inc.