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Press release from PR Newswire

Diamond Offshore Announces Fourth Quarter 2013 Results

Thursday, February 06, 2014

Diamond Offshore Announces Fourth Quarter 2013 Results

06:00 EST Thursday, February 06, 2014

HOUSTON, Feb. 6, 2014 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income for the fourth quarter of 2013 of $93 million, or $0.67 per share. Results for the fourth quarter were negatively impacted by $0.41 per share to reserve for an uncertain tax position related to Egyptian operations.  Partially offsetting this reserve was revenue recognized in connection with a settlement agreement with a customer, resulting in a gain of $0.12 per share, after tax.

In the fourth quarter of 2012, Diamond Offshore reported net income of $156 million, or $1.12 per share, which included an after-tax impairment charge of $40.6 million, or $0.29 per share, related to the reclassification of four cold-stacked rigs as held for sale.  Revenues in the fourth quarter of 2013 were $726 million, compared with revenues of $751 million in the prior year quarter.

For the full year 2013, the Company reported net income of $549 million, or $3.95 per share, compared with net income of $720 million, or $5.18 per share, in 2012.  Revenues for the full year 2013 were $2.920 billion, compared with $2.987 billion in 2012.

"We have taken delivery of the Ocean BlackHawk, the first of our four newbuild ultra-deepwater drillships," announced Larry Dickerson, President and Chief Executive Officer of Diamond Offshore.  "The rig will soon be on its way to the U.S. Gulf of Mexico, where it will begin a five year contract with Anadarko.  Additionally, our deepwater semi Ocean Onyx has been delivered by the shipyard and is currently on location in the U.S. Gulf working for Apache.  These rig deliveries represent important milestones for Diamond's ongoing fleet renewal program."

"Additionally, our operating results for the quarter and the full year reflect our ongoing focus on managing costs and reducing downtime," said Dickerson.

Capital expenditures for newbuilds, upgrades and maintenance, but excluding capitalized interest, totaled $1.0 billion in 2013, and are expected to total $2.1 billion in 2014.

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings results has been scheduled for 9:00 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 800-247-9979 or 973-321-1100, for international callers. The conference ID number is 31346715.  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 with a total fleet of 45 offshore drilling rigs, including five rigs under construction.  Diamond Offshore's fleet consists of 33 semisubmersibles, two of which are under construction, five dynamically positioned drillships, three of which are under construction, and seven jack-ups. Additional 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).

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 revenues and backlog, future performance under contract awards and extensions, future operating costs and expenses, future operations and dayrates, future financial condition, market outlook and future market conditions, future rig construction and upgrades and expected expenditures therefor, and future contracting opportunities.  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.

(Logo: http://photos.prnewswire.com/prnh/20130725/NY53104LOGO-b )

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

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2013

2012

2013

2012

Revenues:

          Contract drilling

$

707,972

$

740,623

$

2,843,584

$

2,936,066

          Revenues related to reimbursable expenses

18,525

9,914

76,837

50,442

                     Total revenues

726,497

750,537

2,920,421

2,986,508

Operating expenses:

           Contract drilling, excluding depreciation

408,907

377,589

1,572,525

1,537,224

           Reimbursable expenses

17,969

9,427

74,967

48,778

           Depreciation

96,985

92,844

388,092

392,913

           General and administrative

16,298

14,837

64,788

64,640

           Impairment of assets

--

62,437

--

62,437

           Bad debt expense (recovery)

(50)

--

22,513

(1,018)

           Gain on disposition of assets

(1,281)

(1,559)

(4,070)

(80,844)

                     Total operating expenses

538,828

555,575

2,118,815

2,024,130

Operating income

187,669

194,962

801,606

962,378

Other income (expense):

           Interest income

(323)

858

701

4,910

           Interest expense

(7,130)

(9,436)

(24,843)

(46,216)

Foreign currency transaction loss

(966)

(1,118)

(4,915)

(1,999)

           Other, net

945

(225)

1,691

(992)

Income before income tax expense

180,195

185,041

774,240

918,081

Income tax expense

(87,580)

(29,380)

(225,554)

(197,604)

Net Income

$

92,615

$

155,661

$

548,686

$

720,477

Income per share

$

0.67

$

1.12

$

3.95

$

5.18

Weighted average shares outstanding:

 Shares of common stock

139,035

139,031

139,035

139,029

 Dilutive potential shares of common stock

12

31

29

19

       Total weighted average shares outstanding

139,047

139,062

139,064

139,048

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Unaudited)

 (In thousands)

Three Months Ended

Dec 31,

Sep 30,

Dec 31,

2013

2013

2012

REVENUES

 Floaters:

   Ultra-Deepwater

$

236,842

$

195,215

$

229,560

    Deepwater

121,222

147,333

145,310

    Mid-water

306,485

297,368

326,520

      Total Floaters

664,549

639,916

701,390

  Jack-ups

43,423

50,825

39,233

Total Contract Drilling Revenue

$

707,972

$

690,741

$

740,623

Revenues Related to Reimbursable Expenses

$

18,525

$

15,424

$

9,914

CONTRACT DRILLING EXPENSE

 Floaters:

   Ultra-Deepwater

$

135,153

$

139,689

$

135,837

    Deepwater

76,649

74,609

67,772

    Mid-water

156,075

165,518

143,124

      Total Floaters

367,877

379,816

346,733

  Jack-ups

29,349

28,685

21,582

  Other

11,681

10,987

9,274

Total Contract Drilling Expense

$

408,907

$

419,488

$

377,589

Reimbursable Expenses

$

17,969

$

14,904

$

9,427

OPERATING INCOME

 Floaters:

   Ultra-Deepwater

$

101,689

$

55,526

$

93,723

    Deepwater

44,573

72,724

77,538

    Mid-water

150,410

131,850

183,396

      Total Floaters

296,672

260,100

354,657

  Jack-ups

14,074

22,140

17,651

  Other

(11,681)

(10,987)

(9,274)

  Reimbursable expenses, net

556

520

487

  Depreciation

(96,985)

(97,143)

(92,844)

  General and administrative expense

(16,298)

(15,240)

(14,837)

  Impairment of assets

--

--

(62,437)

  Bad debt recovery (expense)

50

(22,563)

--

  Gain on disposition of assets

1,281

525

1,559

          Total Operating Income

$

187,669

$

137,352

$

194,962

 

 

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

December 31,

December 31,

2013

2012

ASSETS

Current assets:

Cash and cash equivalents

$

347,011

$

335,432

Marketable securities

1,750,053

1,150,158

Accounts receivable, net of allowance for bad debts

469,355

499,660

Prepaid expenses and other current assets

143,997

136,099

Assets held for sale

7,694

11,594

Total current assets

2,718,110

2,132,943

Drilling and other property and equipment, net of

     accumulated depreciation

5,467,227

4,864,972

Other assets

206,097

237,371

Total assets

$

8,391,434

$

7,235,286

LIABILITIES AND STOCKHOLDERS' EQUITY

Current portion of long-term debt

$

249,954

$

--

Other current liabilities

495,628

485,546

Long-term debt

2,244,189

1,496,066

Deferred tax liability

525,541

490,946

Other liabilities

238,864

186,334

Stockholders' equity

4,637,258

4,576,394

Total liabilities and stockholders' equity

$

8,391,434

$

7,235,286

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATES AND UTILIZATION

(Dayrate in thousands)

Fourth Quarter (a)

Third Quarter (a)

Fourth Quarter

2013

2013

2012

Dayrate

Utilization

Dayrate

Utilization

Dayrate

Utilization

Ultra-Deepwater Floaters

$350

91%

$284

93%

$348

89%

Deepwater Floaters

$402

65%

$380

84%

$372

85%

Mid-Water Floaters

$277

66%

$258

68%

$268

70%

Jack-Ups

$87

76%

$93

84%

$85

71%

(a) Dayrate and utilization calculations include revenue earning days for which revenue was not recognized pursuant to GAAP.  These days by rig category are ultra-deepwater floaters: Q4-82 days, Q3-88 days; deepwater floaters: Q3-31 days; and mid-water floaters: Q4-42 days, Q3-94 days.

SOURCE Diamond Offshore Drilling, Inc.

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