HOUSTON, Feb. 6, 2017 /PRNewswire/ -- Diamond
Offshore Drilling, Inc. (NYSE: DO) today reported results for the
fourth quarter of 2016.
|
Three Months
Ended
|
|
|
Thousands of
dollars, except per share data
|
December 31,
2016
|
September 30,
2016
|
Change
|
|
|
Total
revenues
|
$
|
391,874
|
$
|
349,178
|
12%
|
|
|
Operating
income
|
|
104,145
|
|
54,071
|
93%
|
|
|
Net income
|
|
73,063
|
|
13,927
|
425%
|
|
|
Earnings per diluted
share
|
$
|
0.53
|
$
|
0.10
|
430%
|
|
|
|
|
|
|
|
|
|
"Considering current market headwinds, I am pleased with our
fourth quarter results, driven in part by continuing cost controls
and improving rig efficiencies," said Marc
Edwards, President and Chief Executive
Officer. "Despite an extremely challenging market environment,
the Ocean GreatWhite, Ocean Scepter and the Ocean
BlackRhino will all commence term contracts in the first
quarter, contributing to our strong backlog and liquidity
positions."
During the quarter, the Company executed a new contract for the
Ocean Monarch with BHP Billiton in Australia, which is scheduled to commence at
the end of the second quarter of 2017. The new contract runs
through late third quarter of 2017.
As of December 31, 2016, the
Company's total contracted backlog was $3.6
billion, which represents 25 rig years of work.
Approximately 94% of the Company's available ultra-deepwater rig
days for 2017 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. 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 54377143. 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
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Contract drilling
|
$
|
384,646
|
|
$
|
544,129
|
|
$
|
1,525,214
|
|
$
|
2,360,184
|
Revenues related to reimbursable expenses
|
7,228
|
|
11,434
|
|
75,128
|
|
59,209
|
Total revenues
|
391,874
|
|
555,563
|
|
1,600,342
|
|
2,419,393
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Contract drilling, excluding
depreciation
|
174,342
|
|
256,393
|
|
772,173
|
|
1,227,864
|
Reimbursable expenses
|
6,775
|
|
11,146
|
|
58,058
|
|
58,050
|
Depreciation
|
86,031
|
|
114,448
|
|
381,760
|
|
493,162
|
General and
administrative
|
14,786
|
|
15,574
|
|
63,560
|
|
66,462
|
Impairment of
assets
|
--
|
|
499,367
|
|
678,145
|
|
860,441
|
Restructuring and separation
costs
|
--
|
|
1,043
|
|
--
|
|
9,778
|
Bad debt recovery
|
(265)
|
|
--
|
|
(265)
|
|
--
|
Loss (gain) on disposition of
assets
|
6,060
|
|
(2,309)
|
|
3,795
|
|
(2,290)
|
Total operating expenses
|
287,729
|
|
895,662
|
|
1,957,226
|
|
2,713,467
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
104,145
|
|
(340,099)
|
|
(356,884)
|
|
(294,074)
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest income
|
176
|
|
1,526
|
|
768
|
|
3,322
|
Interest expense
|
(21,230)
|
|
(23,134)
|
|
(89,934)
|
|
(93,934)
|
Foreign currency transaction
(loss) gain
|
(3,689)
|
|
1,511
|
|
(11,522)
|
|
2,465
|
Other, net
|
472
|
|
171
|
|
(10,727)
|
|
873
|
|
|
|
|
|
|
|
|
Income (loss)
before income tax (expense)
benefit
|
79,874
|
|
(360,025)
|
|
(468,299)
|
|
(381,348)
|
|
|
|
|
|
|
|
|
Income tax
(expense) benefit
|
(6,811)
|
|
114,641
|
|
52,777
|
|
107,063
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
73,063
|
|
$
|
(245,384)
|
|
$
|
(415,522)
|
|
$
|
(274,285)
|
|
|
|
|
|
|
|
|
Income (loss) per
share
|
$
|
0.53
|
|
$
|
(1.79)
|
|
$
|
(3.03)
|
|
$
|
(2.00)
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
Shares of common
stock
|
137,170
|
|
137,159
|
|
137,168
|
|
137,157
|
Dilutive potential shares
of common stock
|
93
|
|
--
|
|
--
|
|
--
|
Total weighted-average shares outstanding
|
137,263
|
|
137,159
|
|
137,168
|
|
137,157
|
|
|
|
|
|
|
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
RESULTS OF
OPERATIONS
|
(Unaudited)
|
(In
thousands)
|
|
|
Three Months
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
Floaters:
|
|
|
|
|
|
Ultra-Deepwater
|
$
|
231,820
|
|
$
|
217,275
|
|
$
|
395,798
|
Deepwater
|
64,678
|
|
66,011
|
|
92,125
|
Mid-water
|
88,130
|
|
56,350
|
|
44,766
|
Total
Floaters
|
384,628
|
|
339,636
|
|
532,689
|
Jack-ups
|
18
|
|
--
|
|
11,440
|
Total Contract
Drilling Revenue
|
384,646
|
|
339,636
|
|
$
|
544,129
|
|
|
|
|
|
|
Revenues Related
to Reimbursable Expenses
|
$
|
7,228
|
|
$
|
9,542
|
|
$
|
11,434
|
|
|
|
|
|
|
CONTRACT DRILLING
EXPENSE
|
|
|
|
|
|
Floaters:
|
|
|
|
|
|
Ultra-Deepwater
|
$
|
119,490
|
|
$
|
124,099
|
|
$
|
147,991
|
Deepwater
|
30,481
|
|
36,226
|
|
60,010
|
Mid-water
|
16,814
|
|
17,634
|
|
28,767
|
Total Floaters
|
166,785
|
|
177,959
|
|
236,768
|
Jack-ups
|
3,090
|
|
1,833
|
|
10,749
|
Other
|
4,467
|
|
6,862
|
|
8,876
|
Total Contract
Drilling Expense
|
$
|
174,342
|
|
$
|
186,654
|
|
$
|
256,393
|
|
|
|
|
|
|
Reimbursable
Expenses
|
$
|
6,775
|
|
$
|
7,965
|
|
$
|
11,146
|
|
|
|
|
|
|
OPERATING INCOME
(LOSS)
|
|
|
|
|
|
Floaters:
|
|
|
|
|
|
Ultra-Deepwater
|
$
|
112,330
|
|
$
|
93,176
|
|
$
|
247,807
|
Deepwater
|
34,197
|
|
29,785
|
|
32,115
|
Mid-water
|
71,316
|
|
38,716
|
|
15,999
|
Total Floaters
|
217,843
|
|
161,677
|
|
295,921
|
Jack-ups
|
(3,072)
|
|
(1,833)
|
|
691
|
Other
|
(4,467)
|
|
(6,862)
|
|
(8,876)
|
Reimbursable expenses, net
|
453
|
|
1,577
|
|
288
|
Depreciation
|
(86,031)
|
|
(86,473)
|
|
(114,448)
|
General
and administrative expense
|
(14,786)
|
|
(15,237)
|
|
(15,574)
|
Impairment of assets
|
--
|
|
--
|
|
(499,367)
|
Restructuring and separation costs
|
--
|
|
--
|
|
(1,043)
|
Bad debt
recovery
|
265
|
|
--
|
|
--
|
(Loss)
gain on disposition of assets
|
(6,060)
|
|
1,222
|
|
2,309
|
Total Operating Income (Loss)
|
$
|
104,145
|
|
$
|
54,071
|
|
$
|
(340,099)
|
|
|
|
|
|
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
156,233
|
|
$
|
119,028
|
Marketable
securities
|
35
|
|
11,518
|
Accounts receivable,
net of allowance for bad debts
|
247,028
|
|
405,370
|
Prepaid expenses and
other current assets
|
102,111
|
|
119,479
|
Assets held for
sale
|
400
|
|
14,200
|
Total current assets
|
505,807
|
|
669,595
|
|
|
|
|
Drilling and other
property and equipment, net of accumulated
depreciation
|
5,726,935
|
|
6,378,814
|
Other
assets
|
139,135
|
|
101,485
|
Total assets
|
$
|
6,371,877
|
|
$
|
7,149,894
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Short-term
borrowings
|
$
|
104,200
|
|
$
|
286,589
|
Other current
liabilities
|
236,299
|
|
339,134
|
Long-term
debt
|
1,980,884
|
|
1,979,778
|
Deferred tax
liability
|
197,011
|
|
276,529
|
Other
liabilities
|
146,368
|
|
155,094
|
Stockholders'
equity
|
3,707,115
|
|
4,112,770
|
Total liabilities and stockholders' equity
|
$
|
6,371,877
|
|
$
|
7,149,894
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In thousands, except
per share data)
|
|
|
Year ended
December 31,
|
|
2016
|
|
2015
|
Operating
activities:
|
|
|
|
Net loss
|
$
|
(415,522)
|
|
$
|
(274,285)
|
Adjustments to
reconcile net loss to net cash
|
|
|
|
provided
by operating activities
|
|
|
|
Depreciation
|
381,760
|
|
493,162
|
Loss on
impairment of assets
|
678,145
|
|
860,441
|
Deferred
tax provision
|
(106,263)
|
|
(242,034)
|
Other
|
(27,696)
|
|
(69,771)
|
Net changes in
operating working capital
|
136,130
|
|
(31,086)
|
Net cash provided by operating activities
|
646,554
|
|
736,427
|
Investing
activities:
|
|
|
|
Capital expenditures
(including rig construction)
|
(652,673)
|
|
(830,655)
|
Proceeds from
disposition of assets, net of disposal costs
|
221,722
|
|
13,049
|
Proceeds from sale and
maturities of marketable securities
|
4,614
|
|
51
|
Net cash used in investing activities
|
(426,337)
|
|
(817,555)
|
Financing
activities:
|
|
|
|
Repayment of long-term
debt
|
--
|
|
(250,000)
|
(Repayment of)
proceeds from short-term borrowings, net
|
(182,389)
|
|
286,589
|
Debt issuance costs
and arrangement fees
|
(215)
|
|
(624)
|
Payment of dividends
and anti-dilution payments
|
(408)
|
|
(69,432)
|
Net cash used in financing activities
|
(183,012)
|
|
(33,467)
|
Net change in cash
and cash equivalents
|
37,205
|
|
(114,595)
|
Cash and cash
equivalents, beginning of year
|
119,028
|
|
233,623
|
Cash and cash
equivalents, end of year
|
$
|
156,233
|
|
$
|
119,028
|
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 charges recorded for the impairment of rigs and
associated inventory, as well as the related tax effect 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
|
|
Twelve Months
Ended
|
|
December
31,
|
September
30,
|
|
December
31,
|
|
2016
|
2016
|
|
2016
|
2015
|
Reconciliation of
As Reported
Operating Income (Loss) to
Adjusted Operating Income:
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
As reported
operating income (loss)
|
$
|
104,145
|
$
|
54,071
|
|
$
|
(356,884)
|
$
|
(294,074)
|
|
|
|
|
|
|
Impairments and other charges:
|
|
|
|
|
|
Impairment of rigs and associated
inventory(1)
|
--
|
--
|
|
678,145
|
860,441
|
Restructuring
and separation costs(2)
|
--
|
--
|
|
--
|
9,778
|
|
|
|
|
|
|
Adjusted operating
income
|
$
|
104,145
|
$
|
54,071
|
|
$
|
321,261
|
$
|
576,145
|
|
|
|
|
|
|
Reconciliation of
As Reported Net
Income (Loss) to Adjusted Net
Income:
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
As reported net
income (loss)
|
$
|
73,063
|
$
|
13,927
|
|
$
|
(415,522)
|
$
|
(274,285)
|
|
|
|
|
|
|
Impairments and other
charges:
|
|
|
|
|
|
Impairment of rigs and
associated
inventory(1)
|
--
|
--
|
|
678,145
|
860,441
|
Restructuring
and separation costs(2)
|
--
|
--
|
|
--
|
9,778
|
|
|
|
|
|
|
Tax effect of
impairments and other
charges:
|
|
|
|
|
|
Impairment of rigs and
associated
inventory(3)
|
--
|
--
|
|
(143,165)
|
(167,129)
|
Restructuring and separation costs(4)
|
--
|
--
|
|
--
|
(2,529)
|
Discrete tax items(5)
|
--
|
--
|
|
77,252
|
--
|
|
|
|
|
|
|
Adjusted net
income
|
$
|
73,063
|
$
|
13,927
|
|
$
|
196,710
|
$
|
426,276
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
December
31,
|
September
30,
|
|
December
31,
|
|
|
2016
|
2016
|
|
2016
|
|
2015
|
Reconciliation of
As Reported Income
(Loss) per Diluted Share to Adjusted
Earnings per Diluted Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported income
(loss) per diluted
share
|
|
$
|
0.53
|
$
|
0.10
|
|
$
|
(3.03)
|
|
$
|
(2.00)
|
Impairments and other
charges:
|
|
|
|
|
|
|
|
|
Impairment of rigs and
associated
inventory(1)
|
|
--
|
--
|
|
4.94
|
|
|
6.27
|
Restructuring and separation costs(2)
|
|
--
|
--
|
|
--
|
|
|
.07
|
|
|
|
|
|
|
|
|
|
Tax effect of
impairments and other
charges:
|
|
|
|
|
|
|
|
|
Impairment of rigs and
associated
inventory(3)
|
|
--
|
--
|
|
(1.04)
|
|
|
(1.22)
|
Restructuring and separation costs(4)
|
|
--
|
--
|
|
--
|
|
|
(.02)
|
Other
discrete items(5)
|
|
--
|
--
|
|
0.56
|
|
|
--
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
diluted share
|
|
$
|
0.53
|
$
|
0.10
|
|
$
|
1.43
|
|
$
|
3.10
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents the aggregate amount of impairment
losses recognized during 2015 and 2016 related to several of our
drilling rigs and associated inventory.
(2) Represents the aggregate amount of restructuring and
separation costs recognized in 2015 associated with a planned
reduction in workforce at our onshore bases and corporate
facilities.
(3) Represents the income tax effects of the aggregate
impairment loss recognized for the 2015 and 2016 impairments.
(4) Represents the income tax effects of the aggregate
restructuring and separation costs recognized in 2015.
(5) 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.
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
AVERAGE DAYRATE,
UTILIZATION AND OPERATIONAL EFFICIENCY
|
(Dayrate in
thousands)
|
|
|
|
|
|
Fourth
Quarter
2016
|
Third
Quarter
2016
|
Fourth
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
|
$456
|
49%
|
92.0%
|
$452
|
48%
|
87.1%
|
$531
|
70%
|
95.5%
|
|
|
|
|
|
|
|
|
|
|
Deepwater
Floaters
|
$287
|
39%
|
92.1%
|
$303
|
34%
|
94.5%
|
$337
|
42%
|
97.7%
|
|
|
|
|
|
|
|
|
|
|
Mid-Water
floaters
|
$478
|
35%
|
99.9%
|
$311
|
33%
|
98.4%
|
$249
|
24%
|
97.8%
|
|
|
|
|
|
|
|
|
|
|
Jack-ups
|
--
|
--
|
--
|
--
|
--
|
--
|
$124
|
17%
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
Fleet
Total
|
|
|
93.5%
|
|
|
91.0%
|
|
|
96.6%
|
|
|
(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). Our current fleet
includes four ultra-deepwater semisubmersibles, three deepwater
semisubmersibles, three mid-water semisubmersibles 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.
|
Contact:
Samir Ali
Sr. Director, Investor Relations & Corporate Development
(281) 647-4035
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/diamond-offshore-announces-fourth-quarter-2016-results-300402268.html
SOURCE Diamond Offshore Drilling, Inc.