Diamond Offshore Drilling (DODRW) 8-K Diamond Offshore Announces Fourth Quarter 2014 Results

Exhibit 99.1

Contact: Darren Daugherty Director, Investor Relations (281) 492-5370

Diamond Offshore Announces Fourth Quarter 2014 Results

• Confirms Delivery of Drillships—Ocean BlackHornet and Ocean BlackRhino

• Confirms Delivery of Semisubmersible Rig—Ocean Apex

• Declares Regular Cash Dividend of $0.125 per Share; Does Not Declare Special Dividend

HOUSTON, February 9, 2015 — Diamond Offshore Drilling, Inc. (NYSE: DO) today reported fourth quarter 2014 net income of $99 million, or $0.72 per diluted share, compared to net income of $93 million, or $0.67 per diluted share, in the fourth quarter of 2013. Revenues in the fourth quarter of 2014 were $675 million, compared to revenues of $726 million in the fourth quarter of 2013.

For full year 2014, Diamond Offshore reported net income of $387 million, or $2.81 per diluted share, compared to net income of $549 million, or $3.95 per diluted share, in 2013. Full year 2014 results included a $0.95 per share non-cash impairment charge related to the retirement and scrapping of six mid-water semisubmersible rigs. Results for the fourth quarter of 2013 and full year 2013 were negatively impacted by $0.41 per share to reserve for an uncertain tax position, partially offset by a gain of $0.12 per share related to a settlement agreement with a customer. Revenues for full year 2014 were $2.815 billion, compared to $2.920 billion in 2013.

Diamond Offshore also announced today that the Company has declared a regular quarterly dividend of $0.125 per share, payable March 2, 2015 to shareholders of record on February 20, 2015. Additionally, the Board of Directors of the Company, after careful consideration, has chosen not to declare a special dividend.

“Since Diamond Offshore began paying a special dividend to shareholders in January of 2006, we have paid total dividends of over $41 per share, or approximately $5.7 billion,” said Marc Edwards, President and Chief Executive Officer. “Paying substantial dividends while simultaneously adding new-build capacity to our fleet have been key aspects of our capital allocation strategy. We have achieved these aims while maintaining a strong balance sheet and the highest credit rating among our industry peers.”

“Given the significant downturn in industry fundamentals, we believe it is prudent to retain cash so that the Company is in a stronger position to take advantage of opportunities that may materialize in a distressed market,” added Mr. Edwards.

“In 2014, we took delivery of three new-build drillships and two deepwater semis, and in the first quarters of 2015 and 2016, respectively, we expect to take delivery of our fourth new-build drillship and a new-build harsh environment semisubmersible. All of our new-build units have attractive term contracts in place.”

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 800-247-9979 or 973-321-1100, for international callers. The conference ID number is 65678867. 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 with a total fleet of 38 offshore drilling rigs, including two rigs under construction. Diamond Offshore’s fleet consists of 27 semisubmersibles, one of which is under construction, five dynamically positioned drillships, one of which is under construction, and six jack-ups. Additional information about the Company and access to the Company’s SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 52% 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. Such statements include, but are not limited to, statements concerning drilling rig deliveries, operations and timing; contract effectiveness and effective dates; plans regarding retirement and scrapping of drilling rigs; expectations of future backlog, revenue, operating costs and performance; future liquidity, financial condition, market conditions and strategic opportunities; revenue expected to result from backlog; declaration and payment of dividends; future credit ratings; and other statements that are not of historical fact. 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 general economic and business conditions, contract cancellations, customer or vendor bankruptcy, operations, litigation, 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 and sanction initiatives and compliance with governmental regulations, customer preferences, obtaining necessary partner and third party approvals, timing of construction of new builds, collection of receivables, and various other matters, 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.

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2014			2013			2014			2013
Revenues:
Contract drilling	$	674,376		$	707,972		$	2,737,126		$	2,843,584
Revenues related to reimbursable expenses		945			18,525			77,545			76,837
Total revenues		675,321			726,497			2,814,671			2,920,421
Operating expenses:
Contract drilling, excluding depreciation		358,655			408,907			1,523,623			1,572,525
Reimbursable expenses		698			17,969			76,091			74,967
Depreciation		131,712			96,985			456,483			388,092
General and administrative		19,923			16,298			81,832			64,788
Bad debt (recovery) expense		—			(50	)		—			22,513
Loss (gain) on disposition of assets		2,230			(1,281	)		(5,382	)		(4,070	)
Impairment of assets		—			—			109,462			—
Total operating expenses		513,218			538,828			2,242,109			2,118,815
Operating income		162,103			187,669			572,562			801,606
Other income (expense):
Interest income		157			(323	)		801			701
Interest expense		(15,997	)		(7,130	)		(62,053	)		(24,843	)
Foreign currency transaction gain (loss)		6,923			(966	)		3,199			(4,915	)
Other, net		84			945			682			1,691
Income before income tax expense		153,270			180,195			515,191			774,240
Income tax expense		(54,427	)		(87,580	)		(128,180	)		(225,554	)
Net Income	$	98,843		$	92,615		$	387,011		$	548,686
Income per share:
Basic	$	0.72		$	0.67		$	2.82		$	3.95
Diluted	$	0.72		$	0.67		$	2.81		$	3.95
Weighted average shares outstanding:
Shares of common stock		137,148			139,035			137,473			139,035
Dilutive potential shares of common stock		59			12			50			29
Total weighted average shares outstanding		137,207			139,047			137,523			139,064

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Unaudited)

(In thousands)

	Three Months Ended
	Dec 31,			Sep 30,			Dec 31,
	2014			2014			2013
REVENUES
Floaters:
Ultra-Deepwater	$	285,991		$	313,124		$	236,842
Deepwater		115,777			111,372			121,222
Mid-water		231,933			258,028			306,485
Total Floaters		633,701			682,524			664,549
Jack-ups		40,675			45,364			43,423
Total Contract Drilling Revenue	$	674,376		$	727,888		$	707,972
Revenues Related to Reimbursable Expenses	$	945		$	9,794		$	18,525
CONTRACT DRILLING EXPENSE
Floaters:
Ultra-Deepwater	$	133,103		$	157,655		$	135,153
Deepwater		66,093			72,367			76,649
Mid-water		119,763			132,340			156,075
Total Floaters		318,959			362,362			367,877
Jack-ups		25,268			28,056			29,349
Other		14,428			9,384			11,681
Total Contract Drilling Expense	$	358,655		$	399,802		$	408,907
Reimbursable Expenses	$	698		$	9,437		$	17,969
OPERATING INCOME
Floaters:
Ultra-Deepwater	$	152,888		$	155,469		$	101,689
Deepwater		49,684			39,005			44,573
Mid-water		112,170			125,688			150,410
Total Floaters		314,742			320,162			296,672
Jack-ups		15,407			17,308			14,074
Other		(14,428	)		(9,384	)		(11,681	)
Reimbursable expenses, net		247			357			556
Depreciation		(131,712	)		(108,854	)		(96,985	)
General and administrative expense		(19,923	)		(18,604	)		(16,298	)
Bad debt recovery		—			—			50
Gain (loss) on disposition of assets		(2,230	)		(1,107	)		1,281
Impairment of assets		—			(109,462	)		—
Total Operating Income	$	162,103		$	90,416		$	187,669

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

	December 31,		December 31,
	2014		2013
ASSETS
Current assets:
Cash and cash equivalents	$	233,623	$	347,011
Marketable securities		16,033		1,750,053
Accounts receivable, net of allowance for bad debts		463,862		469,355
Prepaid expenses and other current assets		185,541		143,997
Asset held for sale		—		7,694
		899,059		2,718,110
Drilling and other property and equipment, net of accumulated depreciation		6,945,953		5,467,227
Other assets		176,277		206,097
Total assets	$	8,021,289	$	8,391,434
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt	$	249,962	$	249,954
Other current liabilities		606,684		495,628
Long-term debt		1,994,526		2,244,189
Deferred tax liability		530,394		525,541
Other liabilities		188,160		238,864
Stockholders’ equity		4,451,563		4,637,258
Total liabilities and stockholders’ equity	$	8,021,289	$	8,391,434

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATES AND UTILIZATION

(Dayrate in thousands)

	Fourth Quarter 2014								Third Quarter 2014								Fourth Quarter 2013
	Average Dayrate (1)		Utilization (2)			Operational Efficiency (3)			Revised Average Dayrate (4)		Utilization (2)			Operational Efficiency (3)			Revised Average Dayrate (4)		Utilization (2)			Operational Efficiency (3)
Ultra-Deepwater Floaters	$	493		66	%		90.2	%	$	491		77	%		92.2	%	$	403		80	%		91.0	%
Deepwater Floaters	$	431		48	%		97.3	%	$	356		57	%		95.5	%	$	404		65	%		97.4	%
Mid-Water floaters	$	270		55	%		96.8	%	$	265		59	%		94.1	%	$	292		63	%		97.6	%
Jack-ups	$	96		77	%		99.5	%	$	99		83	%		99.3	%	$	89		76	%		97.7	%
Fleet Total							95.5	%							94.7	%							95.9	%

(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). As of December 31, 2014, three of ourmid-water semisubmersible drilling rigs (Ocean General, Ocean Saratoga, and Ocean Vanguard) were 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.

(4) Average dayrate reported in prior periods has been revised to conform to fourth quarter of 2014 presentation.