HOUSTON, Oct. 31, 2016 /PRNewswire/ -- Diamond
Offshore Drilling, Inc. (NYSE: DO) today reported results for the
third quarter of 2016.
|
Three Months
Ended
|
|
Thousands of
dollars, except per share data
|
September 30,
2016
|
June 30,
2016
|
Change
|
Total
revenues
|
$
349,178
|
$
388,747
|
(10)%
|
Operating income
(loss)
|
54,071
|
(626,669)
|
--
|
Adjusted operating
income
|
54,071
|
51,476
|
5%
|
Net income
(loss)
|
13,927
|
(589,937)
|
--
|
Adjusted net
income
|
13,927
|
22,295
|
(38)%
|
Earnings (loss) per
diluted share
|
$
0.10
|
$
(4.30)
|
--
|
Adjusted earnings per
diluted share
|
$
0.10
|
$
0.16
|
(38)%
|
"Despite continued market headwinds, Diamond Offshore achieved
earnings per share of $0.10," said
Marc Edwards, President and Chief
Executive Officer. "Overall, I am pleased with our third
quarter results and our ability to manage costs, while remaining
focused on maintaining our backlog position."
During the quarter, the Company announced new contracts for the
Ocean Valiant and Ocean Scepter with Maersk in
the UK and Fieldwood in Mexico,
respectively. The addition of these two contracts adds 20 months of
backlog.
As of September 30, 2016, the
Company's total contracted backlog was $4.1
billion, which represents 27 rig years of work.
Approximately 96% of the Company's available ultra-deepwater rig
days for the remainder of 2016 are contracted with top tier
customers.
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
800-247-9979 or 973-321-1100, for international callers. The
conference ID number is 89455433. 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 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, changes in tax laws and rates,
regulatory initiatives and compliance with governmental
regulations, construction of new builds, 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 CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited)
(In thousands, except per share data)
|
|
|
Three Months
Ended September
30,
|
|
Nine Months
Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Contract drilling
|
$
339,636
|
|
$
599,036
|
|
$ 1,140,568
|
|
$
1,816,055
|
Revenues
related to reimbursable expenses
|
9,542
|
|
10,706
|
|
67,900
|
|
47,775
|
Total revenues
|
349,178
|
|
609,742
|
|
1,208,468
|
|
1,863,830
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Contract drilling, excluding
depreciation
|
186,654
|
|
277,944
|
|
597,831
|
|
971,471
|
Reimbursable expenses
|
7,965
|
|
10,476
|
|
51,283
|
|
46,904
|
Depreciation
|
86,473
|
|
118,086
|
|
295,729
|
|
378,714
|
General and administrative
|
15,237
|
|
16,888
|
|
48,774
|
|
50,888
|
Impairment of assets
|
--
|
|
2,546
|
|
678,145
|
|
361,074
|
Restructuring and separation costs
|
--
|
|
1,574
|
|
--
|
|
8,735
|
(Gain) loss on disposition of assets
|
(1,222)
|
|
794
|
|
(2,265)
|
|
19
|
Total operating expenses
|
295,107
|
|
428,308
|
|
1,669,497
|
|
1,817,805
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
54,071
|
|
181,434
|
|
(461,029)
|
|
46,025
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest income
|
150
|
|
629
|
|
592
|
|
1,796
|
Interest expense
|
(19,032)
|
|
(21,350)
|
|
(68,704)
|
|
(70,800)
|
Foreign currency transaction (loss)
gain
|
(712)
|
|
(1,163)
|
|
(7,833)
|
|
954
|
Other, net
|
269
|
|
217
|
|
(11,199)
|
|
702
|
|
|
|
|
|
|
|
|
Income (loss)
before income tax (expense)
benefit
|
34,746
|
|
159,767
|
|
(548,173)
|
|
(21,323)
|
|
|
|
|
|
|
|
|
Income tax
(expense) benefit
|
(20,819)
|
|
(23,345)
|
|
59,588
|
|
(7,578)
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
13,927
|
|
$
136,422
|
|
$
(488,585)
|
|
$
(28,901)
|
|
|
|
|
|
|
|
|
Income (loss) per
share
|
$
0.10
|
|
$
0.99
|
|
$
(3.56)
|
|
$
(0.21)
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
Shares of common
stock
|
137,170
|
|
137,159
|
|
137,167
|
|
137,156
|
Dilutive potential shares
of common stock
|
84
|
|
44
|
|
--
|
|
--
|
Total weighted-average shares outstanding
|
137,254
|
|
137,203
|
|
137,167
|
|
137,156
|
|
|
|
|
|
|
|
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES RESULTS OF
OPERATIONS (Unaudited)
(In thousands)
|
|
|
Three Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
Floaters:
|
|
|
|
|
|
Ultra-Deepwater
|
$
217,275
|
|
$
214,102
|
|
$
376,195
|
Deepwater
|
66,011
|
|
67,191
|
|
136,668
|
Mid-water
|
56,350
|
|
56,694
|
|
69,500
|
Total
Floaters
|
339,636
|
|
337,987
|
|
582,363
|
Jack-ups
|
--
|
|
19,422
|
|
16,673
|
Total Contract
Drilling Revenue
|
339,636
|
|
$
357,409
|
|
$
599,036
|
|
|
|
|
|
|
Revenues Related
to Reimbursable Expenses
|
$
9,542
|
|
$
31,338
|
|
$
10,706
|
|
|
|
|
|
|
CONTRACT DRILLING
EXPENSE
|
|
|
|
|
|
Floaters:
|
|
|
|
|
|
Ultra-Deepwater
|
$
124,099
|
|
$
127,185
|
|
$
156,107
|
Deepwater
|
36,226
|
|
34,776
|
|
67,630
|
Mid-water
|
17,634
|
|
25,862
|
|
35,784
|
Total Floaters
|
177,959
|
|
187,823
|
|
259,521
|
Jack-ups
|
1,833
|
|
6,876
|
|
12,507
|
Other
|
6,862
|
|
3,637
|
|
5,916
|
Total Contract
Drilling Expense
|
$
186,654
|
|
$
198,336
|
|
$
277,944
|
|
|
|
|
|
|
Reimbursable
Expenses
|
$
7,965
|
|
$
16,527
|
|
$
10,476
|
|
|
|
|
|
|
OPERATING INCOME
(LOSS)
|
|
|
|
|
|
Floaters:
|
|
|
|
|
|
Ultra-Deepwater
|
$
93,176
|
|
$
86,917
|
|
$
220,088
|
Deepwater
|
29,785
|
|
32,415
|
|
69,038
|
Mid-water
|
38,716
|
|
30,832
|
|
33,716
|
Total Floaters
|
161,677
|
|
150,164
|
|
322,842
|
Jack-ups
|
(1,833)
|
|
12,546
|
|
4,166
|
Other
|
(6,862)
|
|
(3,637)
|
|
(5,916)
|
Reimbursable expenses, net
|
1,577
|
|
14,811
|
|
230
|
Depreciation
|
(86,473)
|
|
(105,016)
|
|
(118,086)
|
General
and administrative expense
|
(15,237)
|
|
(18,139)
|
|
(16,888)
|
Impairment of assets
|
--
|
|
(678,145)
|
|
(2,546)
|
Restructuring and separation costs
|
--
|
|
--
|
|
(1,574)
|
Gain
(loss) on disposition of assets
|
1,222
|
|
747
|
|
(794)
|
Total Operating Income
(Loss)
|
$
54,071
|
|
$
(626,669)
|
|
$
181,434
|
|
|
|
|
|
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
81,329
|
|
$
119,028
|
Marketable
securities
|
46
|
|
11,518
|
Accounts receivable,
net of allowance for bad debts
|
273,982
|
|
405,370
|
Prepaid expenses and
other current assets
|
114,166
|
|
119,479
|
Assets held for
sale
|
7,600
|
|
14,200
|
Total current assets
|
477,123
|
|
669,595
|
|
|
|
|
Drilling and other
property and equipment, net of accumulated
depreciation
|
5,819,309
|
|
6,378,814
|
Other
assets
|
112,743
|
|
101,485
|
Total assets
|
$
6,409,175
|
|
$
7,149,894
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Short-term
borrowings
|
$
182,100
|
|
$
286,589
|
Other current
liabilities
|
297,781
|
|
339,134
|
Long-term
debt
|
1,980,602
|
|
1,979,778
|
Deferred tax
liability
|
164,389
|
|
276,529
|
Other
liabilities
|
151,375
|
|
155,094
|
Stockholders'
equity
|
3,632,928
|
|
4,112,770
|
Total liabilities and stockholders' equity
|
$
6,409,175
|
|
$
7,149,894
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES AVERAGE DAYRATE,
UTILIZATION AND OPERATIONAL EFFICIENCY (Dayrate in
thousands)
|
|
|
|
Third
Quarter
2016
|
Second
Quarter
2016
|
Third
Quarter
2015
|
|
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
|
$452
|
48%
|
87.1%
|
$452
|
47%
|
86.7%
|
$479
|
71%
|
96.8%
|
|
|
|
|
|
|
|
|
|
|
Deepwater
Floaters
|
$303
|
34%
|
94.5%
|
$301
|
35%
|
100%
|
$361
|
59%
|
90.3%
|
|
|
|
|
|
|
|
|
|
|
Mid-Water
floaters
|
$311
|
33%
|
98.4%
|
$313
|
30%
|
99.4%
|
$289
|
31%
|
97.5%
|
|
|
|
|
|
|
|
|
|
|
Jack-ups
|
--
|
--
|
--
|
$335
|
13%
|
100%
|
$97
|
31%
|
99.8%
|
|
|
|
|
|
|
|
|
|
|
Fleet
Total
|
|
|
91.0%
|
|
|
92.7%
|
|
|
95.5%
|
(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). As of September 30, 2016, our cold-stacked
rigs included four ultra-deepwater semisubmersibles, three
deepwater semisubmersibles, three mid-water semisubmersibles and
four marketed-for-sale jack-up rigs.
|
|
|
(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 the second quarter 2016 impairment of rigs and
associated inventory, as well as the related tax effect thereof and
other second quarter 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
|
|
September 30,
2016
|
|
June
30,
2016
|
|
Reconciliation of
As Reported Operating (Loss) Income to
Adjusted Operating
Income:
(In
thousands)
|
|
|
|
|
|
|
|
|
|
As reported
operating income (loss)
|
$
54,071
|
|
$
(626,669)
|
|
|
|
|
|
|
Impairments and other charges:
|
|
|
|
|
Impairment
of rigs and associated inventory (1)
|
--
|
|
678,145
|
|
|
|
|
|
|
Adjusted operating
income
|
$
54,071
|
|
$
51,476
|
|
|
|
|
|
|
Reconciliation of
As Reported Net Loss to Adjusted Net Income:
(In
thousands)
|
|
|
|
|
|
|
|
|
|
As reported net
income (loss)
|
$
13,927
|
|
$
(589,937)
|
|
|
|
|
|
|
Impairments and other charges:
|
|
|
|
|
Impairment
of rigs and associated inventory (1)
|
--
|
|
678,145
|
|
|
|
|
|
|
Tax effect of impairments and other charges:
|
|
|
|
|
Impairment
of rigs and associated inventory (2)
|
--
|
|
(143,165)
|
|
Discrete
tax items (3)
|
|
|
77,252
|
|
|
|
|
|
|
Adjusted net
income
|
$
13,927
|
|
$
22,295
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
September 30,
2016
|
|
June
30,
2016
|
Reconciliation of
As Reported Income (Loss) per Diluted Share
to Adjusted Earnings per Diluted
Share:
|
|
|
|
|
|
|
|
As reported income
(loss) per diluted share
|
$
0.10
|
|
$
(4.30)
|
Impairments and other charges:
|
|
|
|
Impairment
of rigs and associated inventory (1)
|
--
|
|
4.94
|
|
|
|
|
Tax effect of impairments and other charges:
|
|
|
|
Impairment
of rigs and associated inventory (2)
|
--
|
|
(1.04)
|
Other
discrete tax items (3)
|
--
|
|
0.56
|
|
|
|
|
Adjusted earnings per
diluted share
|
$
0.10
|
|
$
0.16
|
(1)
|
Represents the
aggregate amount of impairment losses recognized during the second
quarter of 2016 related to eight of our drilling rigs and
associated inventory.
|
(2)
|
Represents the income
tax effects of the aggregate impairment loss recognized in the
second quarter of 2016.
|
(3)
|
Represents the
aggregate of certain discrete income tax adjustments recognized
during the second quarter of 2016, primarily related to valuation
allowances for current and prior year tax assets associated with
foreign tax credits, which we no longer expect to be able to
utilize to offset income taxes in the U.S. tax
jurisdiction.
|
Contact:
Samir Ali
Sr. Director, Investor Relations & Corporate Development
(281) 647-4035
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SOURCE Diamond Offshore Drilling, Inc.