Diamond Offshore Announces Fourth Quarter 2019 Results
HOUSTON, Feb. 10, 2020 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported the following results for the fourth quarter of 2019:
Three Months Ended
Thousands of
dollars, except
per share data December 31, 2019 September 30, 2019
---
Total revenues $276,376 $254,020
Operating loss (48,869) (72,834)
Adjusted
operating loss (48,869) (70,291)
Net loss (74,770) (95,128)
Adjusted net loss (62,706) (92,803)
Loss per diluted
share $(0.54) $(0.69)
Adjusted loss per
diluted share $(0.45) $(0.67)
During 2019, the Company secured $620 million of backlog, including over $50 million secured in the fourth quarter related to a 12-month extension for the Ocean Patriot in the North Sea. As of January 1, 2020, the Company's total contracted backlog was $1.6 billion, excluding approximately a $100 million margin commitment from one of the Company's customers.
CONFERENCE CALL
A conference call to discuss Diamond Offshore's earnings results has been scheduled for 8:00 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 844-492-6043 or 478-219-0839 for international callers. The conference ID number is 5959776. 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 innovation, thought leadership and contract drilling services to solve complex deepwater challenges 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 certain 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, depressed levels 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, litigation and disputes, changes in tax laws and rates, regulatory initiatives and compliance with governmental regulations, 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
---
December 31,
September 30,
December 31, December 31,
---
2019 2019 2018 2019 2018
---
Revenues:
Contract drilling $258,650 $242,315 $226,003 $934,934 $1,059,973
Revenues related to reimbursable expenses 17,726 11,705 6,519 45,710 23,242
Total revenues 276,376 254,020 232,522 980,644 1,083,215
---
Operating expenses:
Contract drilling, excluding depreciation 199,633 201,568 160,368 793,412 722,834
Reimbursable expenses 17,537 11,423 6,459 45,016 22,917
Depreciation 91,752 88,693 86,255 355,596 331,789
General and administrative 16,442 18,830 15,294 67,878 85,351
Impairment of assets 27,225
Restucturing and separation costs 116 5,041
(Gain) loss on disposition of assets (119) 6,340 1,307 1,072 241
Total operating expenses 325,245 326,854 269,799 1,262,974 1,195,398
---
Operating loss (48,869) (72,834) (37,277) (282,330) (112,183)
Other income (expense):
Interest income 718 1,317 2,476 6,382 8,477
Interest expense, net of amounts capitalized (30,650) (31,098) (31,044) (122,832) (123,240)
Foreign currency transaction loss (2,053) (77) (494) (3,936) (379)
Other, net 182 82 36 702 700
---
Loss before income tax (expense) benefit (80,672) (102,610) (66,303) (402,014) (226,625)
Income tax benefit (expense) 5,902 7,482 (12,904) 44,800 46,353
---
Net loss $(74,770) $(95,128) $(79,207) $(357,214) $(180,272)
Loss per share $(0.54) $(0.69) $(0.58) $(2.60) $(1.31)
Weighted-average shares outstanding:
Shares of common stock 137,698 137,694 137,436 137,652 137,399
Dilutive potential shares of common stock -
Total weighted-average shares outstanding 137,698 137,694 137,436 137,652 137,399
===
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
December 31,
2019 2018
---
ASSETS
Current assets:
Cash and cash equivalents $156,281 $154,073
Marketable securities 299,849
Accounts receivable, net of
allowance for bad debts 250,856 168,620
Prepaid expenses and other
current assets 68,658 163,396
Asset held for sale 1,000
---
Total current assets 476,795 785,938
Drilling and other property and equipment, net of
accumulated
depreciation 5,152,828 5,184,222
Other assets 204,421 65,534
---
Total assets $5,834,044 $6,035,694
LIABILITIES AND STOCKHOLDERS' EQUITY
Other current liabilities $302,594 $236,846
Long-term debt 1,975,741 1,973,922
Deferred tax liability 47,528 104,380
Other liabilities 275,971 135,893
Stockholders' equity 3,232,210 3,584,653
---
Total liabilities and
stockholders' equity $5,834,044 $6,035,694
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Years Ended
December 31,
2019 2018
---
Operating activities:
Net loss $(357,214) $(180,272)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation 355,596 331,789
Loss on impairment of assets 27,225
Deferred tax provision (56,908) (75,993)
Stock-based compensation
expense 6,208 6,749
Contract liabilities, net 27,578 183
Deferred contract costs, net 59,141 22,765
Other 15,812 (7,466)
Net changes in operating working
capital (41,124) 107,078
Net cash provided by operating
activities 9,089 232,058
---
Investing activities:
Capital expenditures (326,090) (222,406)
Proceeds from disposition of
assets, net of disposal costs 16,217 70,067
Proceeds from maturities of
marketable securities 2,300,000 1,600,000
Purchase of marketable
securities (1,996,996) (1,895,997)
Net cash used in investing
activities (6,869) (448,336)
---
Financing activities:
Other (12) (5,686)
Net cash used in financing
activities (12) (5,686)
---
Net change in cash and cash
equivalents 2,208 (221,964)
Cash and cash equivalents,
beginning of period 154,073 376,037
Cash and cash equivalents, end
of period $156,281 $154,073
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATE, UTILIZATION AND OPERATIONAL EFFICIENCY
(Dayrate in thousands)
TOTAL FLEET
Fourth Quarter Third Quarter Fourth Quarter
2019 2019 2018
Average Dayrate Utilization Operational Efficiency Average Dayrate Utilization Operational Efficiency Average Dayrate Utilization Operational Efficiency
(1) (2) (3) (1) (2) (3) (1) (2) (3)
---
$264 59% 94.7% $253 65% 96.6% $315 46% 95.4%
(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).
Our current fleet includes two
floaters 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, non-
revenue earning 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 loss, adjusted net loss and adjusted loss 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 items 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 various items and their related tax effects are appropriate measures of the continuing and normal operations of the Company. The amounts excluded from our adjusted results include the loss on sale of mooring equipment recognized during the third quarter of 2019 in relation to a new leasing initiative and other discrete tax items recognized in the fourth quarter of 2019. 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 or loss, cash flows from operations or other measures of financial performance prepared in accordance with GAAP.
Three Months Ended
December 31,
September 30,
2019 2019
Reconciliation of As Reported Operating Loss to Adjusted
Operating Loss:
(In thousands)
As reported operating loss $(48,869) $(72,834)
Adjustments:
Loss on sale of mooring equipment 2,543
Adjusted operating loss $(48,869) $(70,291)
Reconciliation of As Reported Net Loss to Adjusted Net Loss:
(In thousands)
As reported net loss $(74,770) $(95,128)
Adjustments:
Loss on sale of mooring equipment 2,543
Tax effect of adjustments:
Loss on sale of mooring equipment (218)
Other discrete items 12,064
Adjusted net loss $(62,706) $(92,803)
Three Months Ended
December 31,
September 30,
2019 2019
Reconciliation of As Reported Loss per Diluted Share to
Adjusted Loss per Diluted Share:
As reported loss per diluted share $(0.54) $(0.69)
Adjustments:
Loss on sale of mooring equipment 0.02
Tax effect of adjustments:
Loss on sale of mooring equipment
Other discrete items 0.09
Adjusted loss per diluted share $(0.45) $(0.67)
Contact:
Samir Ali
Vice President, Investor Relations & Corporate Development
(281) 647-4035
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SOURCE Diamond Offshore Drilling, Inc.
