HOUSTON, Nov. 5, 2018 /PRNewswire/ -- Diamond Offshore
Drilling, Inc. (NYSE: DO) today reported the following results for
the third quarter of 2018:
|
Three Months
Ended
|
Thousands of
dollars, except per share data
|
September 30,
2018
|
|
June 30,
2018
|
Total
revenues
|
$
286,322
|
|
$
268,861
|
Operating
loss
|
(23,043)
|
|
(52,375)
|
Adjusted operating
loss
|
(4,794)
|
|
(23,885)
|
Net loss
|
(51,112)
|
|
(69,274)
|
Adjusted net
loss
|
(35,257)
|
|
(44,900)
|
Loss per diluted
share
|
$
(0.37)
|
|
$
(0.50)
|
Adjusted loss per
diluted share
|
$
(0.26)
|
|
$
(0.33)
|
"We achieved another strong contracting quarter by securing
approximately 30 months of additional backlog," said Marc Edwards, President and Chief Executive
Officer. "The new fixtures were awarded for the Ocean
GreatWhite in the North Sea, the Ocean Apex in
Australia, and the Ocean
Monarch in Myanmar."
Edwards added, "Diamond Offshore continues to take the necessary
steps to position the Company for long-term success. As such, we
entered into a new $950 million
revolving credit facility maturing October
2023 and amended our existing credit facility. Combined,
this provides $1.275 billion of
availability and further enhances our liquidity runway."
As of October 1, 2018, the
Company's total contracted backlog was $2.0
billion, not including a $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 6584488. 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
|
|
Nine Months
Ended
|
September
30,
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Contract
drilling
|
$
280,691
|
|
$
357,683
|
|
$
833,970
|
|
$
1,113,410
|
Revenues related to
reimbursable expenses
|
5,631
|
|
8,340
|
|
16,723
|
|
26,128
|
Total
revenues
|
286,322
|
|
366,023
|
|
850,693
|
|
1,139,538
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Contract drilling,
excluding depreciation
|
188,456
|
|
198,072
|
|
562,466
|
|
597,812
|
Reimbursable
expenses
|
5,574
|
|
8,220
|
|
16,458
|
|
25,488
|
Depreciation
|
81,884
|
|
83,281
|
|
245,534
|
|
262,492
|
General and
administrative
|
33,308
|
|
17,806
|
|
70,057
|
|
54,299
|
Impairment of
assets
|
-
|
|
-
|
|
27,225
|
|
71,268
|
Restructuring and
separation costs
|
649
|
|
-
|
|
4,925
|
|
-
|
(Gain) loss on
disposition of assets
|
(506)
|
|
63
|
|
(1,066)
|
|
(2,085)
|
Total operating
expenses
|
309,365
|
|
307,442
|
|
925,599
|
|
1,009,274
|
|
|
|
|
|
|
|
|
Operating (loss)
income
|
(23,043)
|
|
58,581
|
|
(74,906)
|
|
130,264
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income
|
2,364
|
|
776
|
|
6,001
|
|
1,347
|
Interest
expense
|
(34,293)
|
|
(28,562)
|
|
(92,196)
|
|
(83,409)
|
Foreign currency
transaction gain (loss)
|
(743)
|
|
(677)
|
|
115
|
|
(517)
|
Loss on
extinguishment of senior notes
|
-
|
|
(35,366)
|
|
-
|
|
(35,366)
|
Other,
net
|
(179)
|
|
1,447
|
|
664
|
|
1,322
|
|
|
|
|
|
|
|
|
(Loss) income
before income tax benefit
|
(55,894)
|
|
(3,801)
|
|
(160,322)
|
|
13,641
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
4,782
|
|
14,600
|
|
59,257
|
|
36,646
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
(51,112)
|
|
$
10,799
|
|
$
(101,065)
|
|
$
50,287
|
|
|
|
|
|
|
|
|
(Loss) income per
share
|
$
(0.37)
|
|
$
0.08
|
|
$
(0.74)
|
|
$
0.37
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
Shares of common
stock
|
137,434
|
|
137,227
|
|
137,386
|
|
137,208
|
Dilutive potential
shares of common stock
|
-
|
|
14
|
|
-
|
|
29
|
Total
weighted-average shares outstanding
|
137,434
|
|
137,241
|
|
137,386
|
|
137,237
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
RESULTS OF
OPERATIONS
|
(Unaudited)
|
(In
thousands)
|
|
Three Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
2018
|
|
2018
|
|
2017
|
|
|
|
|
|
|
REVENUES RELATED
TO CONTRACT DRILLING
|
$
280,691
|
|
$
265,353
|
|
$
357,683
|
REVENUES RELATED
TO REIMBURSABLE EXPENSES
|
5,631
|
|
3,508
|
|
8,340
|
TOTAL
REVENUES
|
$
286,322
|
|
$
268,861
|
|
$
366,023
|
|
|
|
|
|
|
CONTRACT DRILLING
EXPENSE, EXCLUDING DEPRECIATION
|
$
188,456
|
|
$
189,321
|
|
$
198,072
|
REIMBURSABLE
EXPENSES
|
$
5,574
|
|
$
3,414
|
|
$
8,220
|
|
|
|
|
|
|
OPERATING (LOSS)
INCOME
|
|
|
|
|
|
Contract drilling
services, net
|
$
92,235
|
|
$
76,032
|
|
$
159,611
|
Reimbursable
expenses, net
|
57
|
|
94
|
|
120
|
Depreciation
|
(81,884)
|
|
(81,825)
|
|
(83,281)
|
General and
administrative expense
|
(33,308)
|
|
(18,236)
|
|
(17,806)
|
Impairment of
assets
|
-
|
|
(27,225)
|
|
-
|
Restructuring and
separation costs
|
(649)
|
|
(1,265)
|
|
-
|
Gain (loss) on
disposition of assets
|
506
|
|
50
|
|
(63)
|
Total Operating (Loss)
Income
|
$
(23,043)
|
|
$
(52,375)
|
|
$
58,581
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
201,853
|
|
$
376,037
|
Marketable
securities
|
274,690
|
|
-
|
Accounts receivable,
net of allowance for bad debts
|
198,701
|
|
256,730
|
Prepaid expenses and
other current assets
|
139,191
|
|
157,625
|
Assets held for
sale
|
-
|
|
96,261
|
Total current
assets
|
814,435
|
|
886,653
|
|
|
|
|
Drilling and other
property and equipment, net of accumulated
|
|
|
|
depreciation
|
5,191,841
|
5,261,641
|
Other
assets
|
62,047
|
|
102,276
|
Total
assets
|
$
6,068,323
|
|
$
6,250,570
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
$
208,317
|
|
$
223,288
|
Long-term
debt
|
1,973,488
|
|
1,972,225
|
Deferred tax
liability
|
114,736
|
|
167,299
|
Other
liabilities
|
110,643
|
|
113,497
|
Stockholders'
equity
|
3,661,139
|
|
3,774,261
|
Total liabilities and
stockholders' equity
|
$
6,068,323
|
|
$
6,250,570
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
Nine Months
Ended
|
|
September
30,
|
|
2018
|
|
2017
|
Operating
activities:
|
|
|
|
Net (loss)
income
|
$
(101,065)
|
|
$
50,287
|
Adjustments to
reconcile net (loss) income to net cash
|
|
|
|
provided by operating
activities
|
|
|
|
Depreciation
|
245,534
|
|
262,492
|
Loss on impairments
of assets
|
27,225
|
|
71,268
|
Loss on
extinguishment of senior notes
|
-
|
|
35,366
|
Deferred contract
costs, net
|
34,901
|
|
32,701
|
Deferred tax
provision
|
(69,109)
|
|
(73,873)
|
Other
|
(7,520)
|
|
10,469
|
Net changes in
operating working capital
|
58,790
|
(22,075)
|
Net cash provided by
operating activities
|
188,756
|
|
366,635
|
|
|
|
|
Investing
activities:
|
|
|
|
Capital
expenditures
|
(159,751)
|
|
(100,613)
|
Proceeds from
maturities of marketable securities
|
775,000
|
|
31
|
Purchase of
marketable securities
|
(1,047,453)
|
|
-
|
Proceeds from
disposition of assets, net of disposal
costs
|
69,533
|
|
4,017
|
Net cash used in
investing activities
|
(362,671)
|
|
(96,565)
|
|
|
|
|
Financing
activities:
|
|
|
|
Redemption of senior
notes
|
-
|
|
(500,000)
|
Payment of debt
extinguishment costs
|
-
|
|
(34,395)
|
Proceeds from
issuance of senior costs
|
-
|
|
496,360
|
Net repayment of
short-term borrowings
|
-
|
|
(104,200)
|
Other
|
(269)
|
|
(7,382)
|
Net cash used in
financing activities
|
(269)
|
|
(149,617)
|
|
|
|
|
Net change in cash
and cash equivalents
|
(174,184)
|
|
120,453
|
Cash and cash
equivalents, beginning of period
|
376,037
|
|
156,233
|
Cash and cash
equivalents, end of period
|
$
201,853
|
|
$
276,686
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
AVERAGE DAYRATE,
UTILIZATION AND OPERATIONAL EFFICIENCY
|
(Dayrate in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
Second
Quarter
|
Third
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
|
$333
|
54%
|
97.0%
|
$317
|
53%
|
90.8%
|
$357
|
46%
|
94.2%
|
|
|
|
|
|
|
|
|
|
|
Jack-ups
|
--
|
--
|
--
|
--
|
--
|
--
|
$75
|
95%
|
95.3%
|
|
|
|
|
|
|
|
|
|
|
Fleet
Total
|
|
|
97.0%
|
|
|
90.8%
|
|
|
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,
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 and the third quarter 2017 loss on
extinguishment of debt, as well as the related tax effects thereof,
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
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
|
2018
|
|
2018
|
|
2017
|
Reconciliation of
As Reported Operating (Loss)
Income to Adjusted Operating (Loss) Income:
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
As reported
operating (loss) income
|
$
(23,043)
|
|
$
(52,375)
|
|
$
58,581
|
|
|
|
|
|
|
|
Impairments and other
charges:
|
|
|
|
|
|
Impairment of
rigs
|
-
|
|
27,225
|
|
-
|
Legal
settlement
|
17,500
|
|
-
|
|
-
|
Restructuring and
separation costs
|
649
|
|
1,265
|
|
-
|
Loss on sale of
rigs
|
100
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Adjusted operating
(loss) income
|
$
(4,794)
|
|
$
(23,885)
|
|
$
58,581
|
|
|
|
|
|
|
|
Reconciliation of
As Reported Net (Loss) Income to
Adjusted Net (Loss) Income:
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
As reported net
(loss) income
|
$
(51,112)
|
|
$
(69,274)
|
|
$
10,799
|
|
|
|
|
|
|
|
Impairments and other
charges:
|
|
|
|
|
|
Impairment of
rigs
|
-
|
|
27,225
|
|
-
|
Loss on early
extinguishment of senior notes
|
-
|
|
-
|
|
35,366
|
Legal
settlement
|
17,500
|
|
-
|
|
-
|
Restructuring and
separation costs
|
649
|
|
1,265
|
|
-
|
Loss on sale of
rigs
|
100
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Tax effect of
impairments and other charges:
|
|
|
|
|
|
Impairment of
rigs
|
-
|
|
(3,933)
|
|
-
|
Loss on early
extinguishment of senior notes
|
-
|
|
-
|
|
(12,378)
|
Legal
settlement
|
(2,296)
|
|
-
|
|
-
|
Restructuring and
separation costs
|
(85)
|
|
(183)
|
|
-
|
Loss on sale of
rigs
|
(13)
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Adjusted net (loss)
income
|
$
(35,257)
|
|
$
(44,900)
|
|
$
33,787
|
|
|
Three Months
Ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
|
2018
|
|
2018
|
|
2017
|
Reconciliation of
As Reported (Loss) Income per Diluted
Share to Adjusted (Loss) Earnings per Diluted Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported (loss)
income per diluted share
|
$
(0.37)
|
|
$
(0.50)
|
|
$
0.08
|
Impairments and other
charges:
|
|
|
|
|
|
Impairment of
rigs
|
-
|
|
0.19
|
|
-
|
Loss on early
extinguishment of senior notes
|
-
|
|
-
|
|
0.26
|
Legal
settlement
|
0.12
|
|
|
|
|
Restructuring and
separation costs
|
0.01
|
|
0.01
|
|
-
|
Loss on sale of
rigs
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Tax effect of
impairments and other charges:
|
|
|
|
|
|
Impairment of
rigs
|
-
|
|
(0.03)
|
|
-
|
Loss on early
extinguishment of senior notes
|
-
|
|
-
|
|
(0.09)
|
Legal
settlement
|
(0.02)
|
|
|
|
|
Restructuring and
separation costs
|
-
|
|
-
|
|
-
|
Loss on sale of
rigs
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Adjusted (loss)
income per diluted share
|
$
(0.26)
|
|
$
(0.33)
|
|
$
0.25
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/diamond-offshore-announces-third-quarter-2018-results-300743596.html
SOURCE Diamond Offshore Drilling, Inc.