HOUSTON, Feb. 11, 2019 /PRNewswire/ -- Diamond
Offshore Drilling, Inc. (NYSE: DO) today reported the following
results for the fourth quarter of 2018:
|
Three Months
Ended
|
Thousands of
dollars, except per share data
|
December 31,
2018
|
|
September 30,
2018
|
Total
revenues
|
$
232,522
|
|
$
286,322
|
Operating
loss
|
(37,277)
|
|
(23,043)
|
Adjusted operating
loss
|
(37,161)
|
|
(4,794)
|
Net loss
|
(79,207)
|
|
(51,112)
|
Adjusted net
loss
|
(57,776)
|
|
(35,257)
|
Loss per diluted
share
|
$
(0.58)
|
|
$
(0.37)
|
Adjusted loss per
diluted share
|
$
(0.42)
|
|
$
(0.26)
|
"We continued to make strong progress with another active contracting
quarter resulting in approximately 33 months of additional backlog
secured," said Marc Edwards,
President and Chief Executive Officer. "Among the new fixtures is a
15-month contract for the Ocean Valiant and a one-year
contract for the Ocean Onyx, which we are upgrading and
reactivating for the new work. Additional awards were for the
Ocean Apex and Ocean Monarch in Australia."
As of January 1, 2019, the
Company's total contracted backlog was $2.0
billion, not including $135 million margin commitment
from one of the Company's customers.
CONFERENCE CALL
A conference call to discuss Diamond Offshore's earnings results
has been scheduled for 8:00 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
844-492-6043 or 478-219-0839 for international callers. The
conference ID number is 7757436. 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
innovation, thought leadership and contract drilling services to
solve complex deepwater challenges 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.
Contact:
Samir Ali
Vice President, Investor Relations & Corporate Development
(281) 647-4035
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
December
31,
|
|
September
30,
|
|
December
31,
|
December
31,
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Contract
drilling
|
$
226,003
|
|
$
280,691
|
|
$
337,809
|
|
$
1,059,973
|
|
$
1,451,219
|
Revenues related to
reimbursable expenses
|
6,519
|
|
5,631
|
|
8,399
|
|
23,242
|
|
34,527
|
Total
revenues
|
232,522
|
|
286,322
|
|
346,208
|
|
1,083,215
|
|
1,485,746
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Contract drilling,
excluding depreciation
|
160,368
|
|
188,456
|
|
204,152
|
|
722,834
|
|
801,964
|
Reimbursable
expenses
|
6,459
|
|
5,574
|
|
8,256
|
|
22,917
|
|
33,744
|
Depreciation
|
86,255
|
|
81,884
|
|
86,203
|
|
331,789
|
|
348,695
|
General and
administrative
|
15,294
|
|
33,308
|
|
20,206
|
|
85,351
|
|
74,505
|
Impairment of
assets
|
-
|
|
-
|
|
28,045
|
|
27,225
|
|
99,313
|
Restucturing and
separation costs
|
116
|
|
649
|
|
14,146
|
|
5,041
|
|
14,146
|
Loss (gain) on
disposition of assets
|
1,307
|
|
(506)
|
|
(8,415)
|
|
241
|
|
(10,500)
|
Total operating
expenses
|
269,799
|
|
309,365
|
|
352,593
|
|
1,195,398
|
|
1,361,867
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
income
|
(37,277)
|
|
(23,043)
|
|
(6,385)
|
|
(112,183)
|
|
123,879
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest
income
|
2,476
|
|
2,364
|
|
1,126
|
|
8,477
|
|
2,473
|
Interest expense, net
of amounts capitalized
|
(31,044)
|
|
(34,293)
|
|
(30,119)
|
|
(123,240)
|
|
(113,528)
|
Loss on
extinguishment of senior notes
|
-
|
|
-
|
|
-
|
|
-
|
|
(35,366)
|
Foreign currency
transaction loss
|
(494)
|
|
(743)
|
|
(611)
|
|
(379)
|
|
(1,128)
|
Other,
net
|
36
|
|
(179)
|
|
908
|
|
700
|
|
2,230
|
|
|
|
|
|
|
|
|
|
|
Loss before income
tax benefit
|
(66,303)
|
|
(55,894)
|
|
(35,081)
|
|
(226,625)
|
|
(21,440)
|
|
|
|
|
|
|
|
|
|
|
Income tax
(expense) benefit
|
(12,904)
|
|
4,782
|
|
3,140
|
|
46,353
|
|
39,786
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
$
(79,207)
|
|
$
(51,112)
|
|
$
(31,941)
|
|
$
(180,272)
|
|
$
18,346
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings
per share
|
$
(0.58)
|
|
$
(0.37)
|
|
$
(0.23)
|
|
$
(1.31)
|
|
$
0.13
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Shares of common
stock
|
137,436
|
|
137,434
|
|
137,228
|
|
137,399
|
|
137,213
|
Dilutive potential
shares of common stock
|
-
|
|
-
|
|
-
|
|
-
|
|
52
|
Total
weighted-average shares outstanding
|
137,436
|
|
137,434
|
|
137,228
|
|
137,399
|
|
137,265
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
154,073
|
|
$
376,037
|
Marketable
securities
|
299,849
|
|
-
|
Accounts receivable,
net of allowance for bad debts
|
168,620
|
|
256,730
|
Prepaid expenses and
other current assets
|
163,396
|
|
157,625
|
Assets held for
sale
|
-
|
|
96,261
|
Total current
assets
|
785,938
|
|
886,653
|
|
|
|
|
Drilling and other
property and equipment, net of accumulated
|
|
|
|
depreciation
|
5,184,222
|
5,261,641
|
Other
assets
|
65,534
|
|
102,276
|
Total
assets
|
$
6,035,694
|
|
$
6,250,570
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
$
236,846
|
|
$
223,288
|
Long-term
debt
|
1,973,922
|
|
1,972,225
|
Deferred tax
liability
|
104,380
|
|
167,299
|
Other
liabilities
|
135,893
|
|
113,497
|
Stockholders'
equity
|
3,584,653
|
|
3,774,261
|
Total liabilities and
stockholders' equity
|
$
6,035,694
|
|
$
6,250,570
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
Years
Ended
|
|
December
31,
|
|
2018
|
|
2017
|
Operating
activities:
|
|
|
|
Net (loss)
income
|
$
(180,272)
|
|
$
18,346
|
Adjustments to
reconcile net (loss) income to net cash
|
|
|
|
provided by operating
activities
|
|
|
|
Depreciation
|
331,789
|
|
348,695
|
Loss on impairments
of assets
|
27,225
|
|
99,313
|
Loss on
extinguishment of senior notes
|
-
|
|
35,366
|
Deferred tax
provision
|
(75,993)
|
|
(72,127)
|
Deferred contract
costs, net
|
22,765
|
|
46,337
|
Other
|
(534)
|
|
24,991
|
Net changes in
operating working capital
|
107,078
|
(7,113)
|
Net cash provided by
operating activities
|
232,058
|
|
493,808
|
|
|
|
|
Investing
activities:
|
|
|
|
Capital
expenditures
|
(222,406)
|
|
(139,581)
|
Proceeds from
disposition of assets, net of disposal costs
|
70,067
|
|
15,196
|
Proceeds from
maturities of marketable securities
|
1,600,000
|
|
35
|
Purchase of
marketable securities
|
(1,895,997)
|
|
-
|
Net cash used in
investing activities
|
(448,336)
|
|
(124,350)
|
|
|
|
|
Financing
activities:
|
|
|
|
Redemption of senior
notes
|
-
|
|
(500,000)
|
Payment of debt
extinguishment costs
|
-
|
|
(34,395)
|
Proceeds from
issuance of senior costs
|
-
|
|
496,360
|
Repayment of
short-term borrowings, net
|
-
|
|
(104,200)
|
Other
|
(5,686)
|
|
(7,419)
|
Net cash used in
financing activities
|
(5,686)
|
|
(149,654)
|
|
|
|
|
Net change in cash
and cash equivalents
|
(221,964)
|
|
219,804
|
Cash and cash
equivalents, beginning of period
|
376,037
|
|
156,233
|
Cash and cash
equivalents, end of period
|
$
154,073
|
|
$
376,037
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
AVERAGE DAYRATE,
UTILIZATION AND OPERATIONAL EFFICIENCY
|
(Dayrate in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
2018
|
2018
|
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
|
$315
|
46%
|
95.4%
|
$333
|
54%
|
97.0%
|
$366
|
49%
|
98.7%
|
|
|
|
|
|
|
|
|
|
|
Jack-ups
|
--
|
--
|
--
|
--
|
--
|
--
|
$75
|
65%
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
Fleet
Total
|
|
|
95.4%
|
|
|
97.0%
|
|
|
98.8%
|
|
(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 three 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,
non-revenue earning 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 restructuring and separation costs incurred in
2018, costs incurred in the third quarter 2018 for settlement of a
previously pending legal claim, the loss on a rig sale recognized
in the third quarter 2018, 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
|
|
|
December
31,
|
|
September
30,
|
|
|
2018
|
|
2018
|
Reconciliation of
As Reported Operating Loss to
Adjusted Operating Loss:
|
|
|
|
(In
thousands)
|
|
|
|
|
|
As reported
operating loss
|
$
(37,277)
|
|
$
(23,043)
|
|
|
|
|
|
Impairments and other
charges:
|
|
|
|
Legal
settlement
|
-
|
|
17,500
|
Restructuring and
separation costs
|
116
|
|
649
|
Loss on sale of
rigs
|
-
|
|
100
|
|
|
|
|
|
Adjusted operating
loss
|
$
(37,161)
|
|
$
(4,794)
|
|
|
|
|
|
Reconciliation of
As Reported Net Loss to Adjusted Net
Loss:
|
|
|
|
(In
thousands)
|
|
|
|
|
|
As reported net
loss
|
$
(79,207)
|
|
$
(51,112)
|
|
|
|
|
|
Impairments and other
charges:
|
|
|
|
Legal
settlement
|
-
|
|
17,500
|
Restructuring and
separation costs
|
116
|
|
649
|
Loss on sale of
rigs
|
-
|
|
100
|
|
|
|
|
|
Tax effect of
impairments and other charges:
|
|
|
|
Legal
settlement
|
-
|
|
(2,296)
|
Restructuring and
separation costs
|
(26)
|
|
(85)
|
Loss on sale of
rigs
|
-
|
|
(13)
|
Other discrete items
(1)
|
21,341
|
|
-
|
|
|
|
|
|
Adjusted net
loss
|
$
(57,776)
|
|
$
(35,257)
|
|
|
Three Months
Ended
|
|
|
December
31,
|
|
September
30,
|
|
|
2018
|
|
2018
|
Reconciliation of
As Reported Loss per Diluted Share to
Adjusted Loss per Diluted Share:
|
|
|
|
|
|
|
|
|
As reported loss
per diluted share
|
$
(0.58)
|
|
$
(0.37)
|
Impairments and other
charges:
|
|
|
|
Legal
settlement
|
-
|
|
0.12
|
Restructuring and
separation costs
|
-
|
|
0.01
|
|
|
|
|
|
Tax effect of
impairments and other charges:
|
|
|
|
Legal
settlement
|
-
|
|
(0.02)
|
Restructuring and
separation costs
|
-
|
|
-
|
Other discrete items
(1)
|
0.16
|
|
-
|
|
|
|
|
|
Adjusted loss per
diluted share
|
$
(0.42)
|
|
$
(0.26)
|
|
(1)
|
Represents the
aggregate of certain discrete income tax adjustments recognized
during the fourth quarter of 2018, primarily related to limitations
of our foreign tax credit utilization as a result of recently
proposed regulations corresponding to the U.S. tax reform
legislation enacted in December of 2017.
|
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SOURCE Diamond Offshore Drilling, Inc.