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.