Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the second quarter of 2010 of $224.4 million, or $1.61 per share on a diluted basis, compared with net income of $387.4 million, or $2.79 per share on a diluted basis, in the same period a year earlier. Revenues in the second quarter of 2010 were $822.6 million, compared with revenues of $946.4 million for the second quarter of 2009.
For the six months ended June 30, 2010, the Company reported net income of $515.2 million, or $3.70 per share on a diluted basis, compared with net income of $736.0 million, or $5.29 per share on a diluted basis, for the same period in 2009. Revenue for the six months ended June 30, 2010 was $1.7 billion, compared with $1.8 billion for the first six months of 2009.
Larry Dickerson, President and CEO, stated, “The decline in renewal contract dayrates from peak levels is continuing to impact our results. In a related statement today, we announced a special quarterly dividend of $.75 per share, representing a reduction of $.625 per share from the previous special dividend, as well as our regular quarterly dividend of $.125 per share. The reduction in the special dividend reflects the lower revenue stream and the continuing uncertainty surrounding a drilling moratorium in the Gulf of Mexico. We believe that given the current and anticipated industry conditions, it is increasingly prudent at this time to retain cash to maintain the Company’s financial strength and strategic flexibility, as well as to position us for potential rig acquisition opportunities. We believe that our special dividend policy is an important part of our efforts to enhance shareholder value.”
Any decision by the Board to declare a special dividend, as well as the amount of any special dividend that may be declared, will be based on the Company’s financial position, earnings, earnings outlook, capital spending plans, and other relevant factors at that time.
Diamond Offshore provides contract drilling services to the energy industry and is a leader in deepwater drilling. Additional information on Diamond Offshore and access to the Company’s SEC filings is available on the Internet at www.diamondoffshore.com.
As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its second quarter 2010 earnings release conference call. The live broadcast of our quarterly conference call will be available online at www.diamondoffshore.com on July 22, 2010 beginning at 9:00 a.m. Central Daylight Time. The online replay will follow immediately and continue for the remainder of the calendar quarter after the original call. Please go to the web site at least 15 minutes before the broadcast to register, download and install any necessary audio software.
Statements contained in this press release which 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 risks that could cause actual results to differ materially from those 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 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 www.diamondoffshore.com. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Any such forward-looking statements speak 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 | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Revenues: | ||||||||||||||||
| Contract drilling | $ | 811,739 | $ | 923,458 | $ | 1,656,177 | $ | 1,779,166 | ||||||||
| Revenues related to reimbursable expenses | 10,864 | 22,949 | 26,107 | 52,961 | ||||||||||||
| Total revenues | 822,603 | 946,407 | 1,682,284 | 1,832,127 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Contract drilling | 348,971 | 304,853 | 654,098 | 602,600 | ||||||||||||
| Reimbursable expenses | 10,379 | 22,431 | 25,084 | 52,146 | ||||||||||||
| Depreciation | 100,746 | 85,431 | 198,148 | 170,493 | ||||||||||||
| General and administrative | 16,849 | 16,166 | 33,503 | 32,481 | ||||||||||||
| Gain on disposition of assets | (149 | ) | (93 | ) | (1,033 | ) | (148 | ) | ||||||||
| Total operating expenses | 476,796 | 428,788 | 909,800 | 857,572 | ||||||||||||
| Operating income | 345,807 | 517,619 | 772,484 | 974,555 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 477 | 1,190 | 1,759 | 1,766 | ||||||||||||
| Interest expense | (21,333 | ) | (11,288 | ) | (43,654 | ) | (12,405 | ) | ||||||||
| Foreign currency transaction gain (loss) | (3,991 | ) | 13,733 | (3,530 | ) | 9,608 | ||||||||||
| Other, net | (34 | ) | (416 | ) | (121 | ) | 651 | |||||||||
| Income before income tax expense | 320,926 | 520,838 | 726,938 | 974,175 | ||||||||||||
| Income tax expense | (96,533 | ) | (133,398 | ) | (211,692 | ) | (238,154 | ) | ||||||||
| Net Income | $ | 224,393 | $ | 387,440 | $ | 515,246 | $ | 736,021 | ||||||||
| Income per share: | ||||||||||||||||
| Basic | $ | 1.61 | $ | 2.79 | $ | 3.71 | $ | 5.30 | ||||||||
| Diluted | $ | 1.61 | $ | 2.79 | $ | 3.70 | $ | 5.29 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Shares of common stock | 139,026 | 139,002 | 139,026 | 139,001 | ||||||||||||
| Dilutive potential shares of common stock | 53 | 79 | 78 | 72 | ||||||||||||
| Total weighted average shares outstanding | 139,079 | 139,081 | 139,104 | 139,073 | ||||||||||||
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS (Unaudited) (In thousands) | ||||||||
| Three Months Ended | ||||||||
| June 30, | ||||||||
| 2010 | 2009 | |||||||
| REVENUES | ||||||||
| High Specification Floaters | $ | 340,387 | $ | 334,527 | ||||
| Intermediate Semisubmersibles | 389,094 | 465,762 | ||||||
| Jack-ups | 82,223 | 123,169 | ||||||
| Other | 35 | -- | ||||||
| Total Contract Drilling Revenue | $ | 811,739 | $ | 923,458 | ||||
| Revenues Related to Reimbursable Expenses | $ | 10,864 | $ | 22,949 | ||||
| CONTRACT DRILLING EXPENSE | ||||||||
| High Specification Floaters | $ | 134,500 | $ | 98,991 | ||||
| Intermediate Semisubmersibles | 157,446 | 132,696 | ||||||
| Jack-ups | 48,919 | 66,233 | ||||||
| Other | 8,106 | 6,933 | ||||||
| Total Contract Drilling Expense | $ | 348,971 | $ | 304,853 | ||||
| Reimbursable Expenses | $ | 10,379 | $ | 22,431 | ||||
| OPERATING INCOME | ||||||||
| High Specification Floaters | $ | 205,887 | $ | 235,536 | ||||
| Intermediate Semisubmersibles | 231,648 | 333,066 | ||||||
| Jack-ups | 33,304 | 56,936 | ||||||
| Other | (8,071 | ) | (6,933 | ) | ||||
| Reimbursable expenses, net | 485 | 518 | ||||||
| Depreciation | (100,746 | ) | (85,431 | ) | ||||
| General and administrative expense | (16,849 | ) | (16,166 | ) | ||||
| Gain on disposition of assets | 149 | 93 | ||||||
| Total Operating Income | $ | 345,807 | $ | 517,619 | ||||
| DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (In thousands) | ||||||
| June 30, | December 31, | |||||
| 2010 | 2009 | |||||
| (unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 525,119 | $ | 376,417 | ||
| Marketable securities | 250,691 | 400,853 | ||||
| Accounts receivable, net of provision for bad debts | 636,572 | 791,023 | ||||
| Prepaid expenses and other | 170,819 | 155,077 | ||||
| Asset held for sale | 152,280 | -- | ||||
| Total current assets | 1,735,481 | 1,723,370 | ||||
Drilling and other property and equipment, net of accumulated depreciation | 4,299,215 | 4,432,052 | ||||
| Long-term receivable | 57,254 | -- | ||||
| Other assets | 423,015 | 108,839 | ||||
| Total assets | $ | 6,514,965 | $ | 6,264,261 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities | 584,583 | 413,475 | ||||
| Long-term debt | 1,495,483 | 1,495,375 | ||||
| Deferred tax liability | 555,786 | 546,024 | ||||
| Other liabilities | 222,239 | 178,745 | ||||
| Stockholders’ equity | 3,656,874 | 3,630,642 | ||||
| Total liabilities and stockholders’ equity | $ | 6,514,965 | $ | 6,264,261 | ||
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES AVERAGE DAYRATES AND UTILIZATION | ||||||||||||
| Second Quarter | First Quarter | Second Quarter | ||||||||||
| 2010 | 2010 | 2009 | ||||||||||
| Dayrate | Utilization | Dayrate | Utilization | Dayrate | Utilization | |||||||
| (Dayrate in thousands) | ||||||||||||
| High Specification Floaters | $373 | 69% | $400 | 79% | $381 | 79% | ||||||
| Intermediate Semis | $269 | 82% | $276 | 78% | $286 | 93% | ||||||
| Jack-ups | $85 | 76% | $100 | 63% | $146 | 63% | ||||||
Director, Investor Relations
Les Van Dyke, 281-492-5370