Exhibit 99.1
| FOR IMMEDIATE RELEASE | CONTACT: Les Van Dyke | |
| Director, Investor Relations | ||
| (281) 492-5370 | ||
DIAMOND OFFSHORE DRILLING, INC. ANNOUNCES
FOURTH QUARTER/YEAR-END 2008 RESULTS
FOURTH QUARTER/YEAR-END 2008 RESULTS
Houston, Texas, February 5, 2009 — Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the fourth quarter of 2008 of $293.5 million, or $2.11 per share on a diluted basis, compared with net income of $164.9 million, or $1.19 per share on a diluted basis, in the same period a year earlier. Revenues in the fourth quarter of 2008 were $903.2 million, compared with revenues of $666.7 million for the fourth quarter of 2007.
Results for the fourth quarter of 2008 were adversely impacted by $51.0 million related to pre tax foreign currency losses. Results for the period were also adversely impacted by provisions for pre tax bad debt of $31.9 million related to a North Sea semisubmersible rig contracted to a UK customer that has entered into administration under UK law.
For the year ended December 31, 2008, the Company reported net income of $1.3 billion, or $9.43 per share on a diluted basis, compared with net income of $846.5 million, or $6.12 per share on a diluted basis, for the year ended December 31, 2007. Revenues for the year ended December 31, 2008 were $3.5 billion, compared with $2.6 billion for 2007.
Diamond Offshore also announced that it has signed an agreement to sell the jack-up rigOcean Tower. The rig was damaged by Hurricane Ike, losing its entire drilling package and derrick. The agreement prohibits competitive use of the rig which is expected to be deployed by the buyer as an accommodation unit. The sale, which is not expected to have a material impact on the Company, is expected to close on or about February 15, 2009.
Diamond Offshore provides contract drilling services to the energy industry and is a leader in deepwater drilling. Additional information on Diamond Offshore Drilling, Inc. and access to the Company’s SEC filings is available on the Internet atwww.diamondoffshore.com.
As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its fourth quarter/year-end 2008 earnings release conference call. The live broadcast of the Diamond Offshore Drilling, Inc. quarterly conference call will be available online atwww.diamondoffshore.com on February 5, 2009, beginning at 9:00 a.m. Central Time. The online replay will follow immediately and continue for the remainder of the first 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 in this press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may include, but are not limited to, statements concerning existing contracts, commitments and backlog, fleet enhancements, access to new markets, future earnings, future cash flows, market conditions, future market improvements, future growth in demand for equipment types or in any region and future contracts. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated or projected, including, among others, the risk that a customer may be financially unable to meet their full financial commitment, the risk that a contract could be canceled, the risk that full rig utilization may not be achieved during a contract period, the risk that the fleet’s available days may be reduced by unscheduled downtime, the risk that these and other factors outside of the Company’s control may adversely impact the amount of profit realized from a contract, the risk that the markets for the Company’s services will not continue to improve, the risk that the Company’s market position may deteriorate, or the risk that the Company may not be able to participate fully in any future market improvements. A discussion of additional risk factors that could impact these areas and the Company’s overall business and financial performance can be found in the Company’s reports and other filings with the Securities and Exchange Commission. These factors include, among others, general economic and business conditions, casualty losses, industry fleet capacity, changes in foreign and domestic oil and gas exploration and production activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, customer preferences and various other matters, many of which are beyond the Company’s control. Given these concerns, 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.
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenues: | ||||||||||||||||
| Contract drilling | $ | 887,498 | $ | 651,578 | $ | 3,476,417 | $ | 2,505,663 | ||||||||
| Revenues related to reimbursable expenses | 15,709 | 15,124 | 67,640 | 62,060 | ||||||||||||
| Total revenues | 903,207 | 666,702 | 3,544,057 | 2,567,723 | ||||||||||||
Operating expenses: | ||||||||||||||||
| Contract drilling | 312,291 | 289,165 | 1,185,007 | 1,003,789 | ||||||||||||
| Reimbursable expenses | 15,235 | 14,826 | 65,895 | 60,261 | ||||||||||||
| Depreciation | 75,125 | 63,646 | 286,850 | 235,251 | ||||||||||||
| General and administrative | 14,708 | 16,238 | 60,142 | 53,483 | ||||||||||||
| Bad debt expense | 31,952 | — | 31,952 | — | ||||||||||||
| Casualty loss | — | — | 6,281 | — | ||||||||||||
| Gain on disposition of assets | (2,326 | ) | (3,165 | ) | (2,831 | ) | (8,583 | ) | ||||||||
| Total operating expenses | 446,985 | 380,710 | 1,633,296 | 1,344,201 | ||||||||||||
Operating income | 456,222 | 285,992 | 1,910,761 | 1,223,522 | ||||||||||||
Other income (expense): | ||||||||||||||||
| Interest income | 1,375 | 7,439 | 11,744 | 33,566 | ||||||||||||
| Interest expense | (3,870 | ) | (2,232 | ) | (10,096 | ) | (19,191 | ) | ||||||||
| Gain on sale of marketable securities | 608 | 41 | 1,282 | 1,796 | ||||||||||||
| Other, net | (51,131 | ) | 4,327 | (66,078 | ) | 6,844 | ||||||||||
Income before income tax expense | 403,204 | 295,567 | 1,847,613 | 1,246,537 | ||||||||||||
Income tax expense | (109,742 | ) | (130,626 | ) | (536,593 | ) | (399,996 | ) | ||||||||
Net Income | $ | 293,462 | $ | 164,941 | $ | 1,311,020 | $ | 846,541 | ||||||||
Income per share: | ||||||||||||||||
Basic | $ | 2.11 | $ | 1.19 | $ | 9.43 | $ | 6.14 | ||||||||
Diluted | $ | 2.11 | $ | 1.19 | $ | 9.43 | $ | 6.12 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
| Shares of common stock | 139,001 | 138,801 | 138,959 | 137,816 | ||||||||||||
| Dilutive potential shares of common stock | 65 | 230 | 114 | 1,129 | ||||||||||||
| Total weighted average shares outstanding | 139,066 | 139,031 | 139,073 | 138,945 | ||||||||||||
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2008 | 2007 | |||||||
REVENUES | ||||||||
| High Specification Floaters | $ | 342,812 | $ | 261,805 | ||||
| Intermediate Semisubmersibles | 389,647 | 302,914 | ||||||
| Jack-ups | 155,039 | 86,859 | ||||||
Total Contract Drilling Revenue | $ | 887,498 | $ | 651,578 | ||||
Revenues Related to Reimbursable Expenses | $ | 15,709 | $ | 15,124 | ||||
CONTRACT DRILLING EXPENSE | ||||||||
| High Specification Floaters | $ | 92,360 | $ | 93,978 | ||||
| Intermediate Semisubmersibles | 143,640 | 136,984 | ||||||
| Jack-ups | 71,105 | 52,991 | ||||||
| Other | 5,186 | 5,212 | ||||||
Total Contract Drilling Expense | $ | 312,291 | $ | 289,165 | ||||
Reimbursable Expenses | $ | 15,235 | $ | 14,826 | ||||
OPERATING INCOME | ||||||||
| High Specification Floaters | $ | 250,452 | $ | 167,827 | ||||
| Intermediate Semisubmersibles | 246,007 | 165,930 | ||||||
| Jack-ups | 83,934 | 33,868 | ||||||
| Other | (5,186 | ) | (5,212 | ) | ||||
| Reimbursable expenses, net | 474 | 298 | ||||||
| Depreciation | (75,125 | ) | (63,646 | ) | ||||
| General and administrative expense | (14,708 | ) | (16,238 | ) | ||||
| Bad debt expense | (31,952 | ) | — | |||||
| Gain on disposition of assets | 2,326 | 3,165 | ||||||
| Total Operating Income | $ | 456,222 | $ | 285,992 | ||||
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| December 31, | ||||||||
| 2008 | 2007 | |||||||
| (Unaudited) | ||||||||
ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 336,052 | $ | 637,961 | ||||
| Marketable securities | 400,592 | 1,301 | ||||||
| Accounts receivable | 574,842 | 522,808 | ||||||
| Prepaid expenses and other | 123,046 | 103,120 | ||||||
| Assets held for sale | 32,201 | — | ||||||
| Total current assets | 1,466,733 | 1,265,190 | ||||||
| Drilling and other property and equipment, net of accumulated depreciation | 3,398,704 | 3,040,063 | ||||||
| Other assets | 73,325 | 36,212 | ||||||
| Total assets | $ | 4,938,762 | $ | 4,341,465 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | $ | 509,087 | $ | 453,011 | ||||
| Long-term debt | 503,280 | 503,071 | ||||||
| Deferred tax liability | 459,205 | 397,629 | ||||||
| Other liabilities | 118,553 | 110,687 | ||||||
| Stockholders’ equity | 3,348,637 | 2,877,067 | ||||||
| Total liabilities and stockholders’ equity | $ | 4,938,762 | $ | 4,341,465 | ||||
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
AVERAGE DAYRATES AND UTILIZATION
| Fourth Quarter | Third Quarter | Fourth Quarter | ||||||||||||||||||||||||
| 2008 | 2008 | 2007 | ||||||||||||||||||||||||
| Dayrate | Utilization | Dayrate | Utilization | Dayrate | Utilization | |||||||||||||||||||||
| (Dayrate in thousands) | ||||||||||||||||||||||||||
High Specification Floaters | $ | 386 | 89 | % | $ | 394 | 86 | % | $ | 317 | 81 | % | ||||||||||||||
Intermediate Semis | $ | 284 | 78 | % | $ | 288 | 79 | % | $ | 218 | 78 | % | ||||||||||||||
Jack-ups | $ | 121 | 92 | % | $ | 112 | 89 | % | $ | 115 | 63 | % | ||||||||||||||
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