CONSOLIDATED SUBSIDIARY OVERVIEW
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
Operating income (loss)
Adjusted operating income
Net income (loss)
Adjusted net income
Earnings (loss) per diluted share
Adjusted earnings per diluted share
"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.
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).
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 SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(In thousands, except per share data)
Three Months EndedSeptember 30,
Nine Months Ended September 30,
Revenues related to reimbursable expenses
Contract drilling, excluding depreciation
General and administrative
Impairment of assets
Restructuring and separation costs
(Gain) loss on disposition of assets
Total operating expenses
Other income (expense):
Foreign currency transaction (loss) gain
Income (loss) before income tax (expense) benefit
Income tax (expense) benefit
Income (loss) per share
Weighted-average shares outstanding:
Shares of common stock
Dilutive potential shares of common stock
Total weighted-average shares outstanding
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIESRESULTS OF OPERATIONS(Unaudited)(In thousands)
Total Contract Drilling Revenue
Revenues Related to Reimbursable Expenses
CONTRACT DRILLING EXPENSE
Total Contract Drilling Expense
OPERATING INCOME (LOSS)
Reimbursable expenses, net
General and administrative expense
Impairment of assets
Restructuring and separation costs
Gain (loss) on disposition of assets
Total Operating Income (Loss)
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Cash and cash equivalents
Accounts receivable, net of allowance for bad debts
Prepaid expenses and other current assets
Assets held for sale
Total current assets
Drilling and other property and equipment, net of accumulated depreciation
LIABILITIES AND STOCKHOLDERS' EQUITY
Other current liabilities
Deferred tax liability
Total liabilities and stockholders' equity
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIESAVERAGE DAYRATE, UTILIZATION AND OPERATIONAL EFFICIENCY(Dayrate in thousands)
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.
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.
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.
Reconciliation of As Reported Operating (Loss) Income to Adjusted Operating Income:
As reported operating income (loss)
Impairments and other charges:
Impairment of rigs and associated inventory (1)
Reconciliation of As Reported Net Loss to Adjusted Net Income:
As reported net income (loss)
Tax effect of impairments and other charges:
Impairment of rigs and associated inventory (2)
Discrete tax items (3)
Reconciliation of As Reported Income (Loss) per Diluted Share to Adjusted Earnings per Diluted Share:
As reported income (loss) per diluted share
Other discrete tax items (3)
Represents the aggregate amount of impairment losses recognized during the second quarter of 2016 related to eight of our drilling rigs and associated inventory.
Represents the income tax effects of the aggregate impairment loss recognized in the second quarter of 2016.
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 AliSr. Director, Investor Relations & Corporate Development(281) 647-4035
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SOURCE Diamond Offshore Drilling, Inc.