EXHIBIT 99.1
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FOR IMMEDIATE RELEASE CONTACT: LES VAN DYKE
OCTOBER 16, 2003 DIRECTOR, INVESTOR RELATIONS
(281) 492-5370
DIAMOND OFFSHORE DRILLING, INC. ANNOUNCES
THIRD QUARTER 2003 RESULTS
Houston, Texas, October 16, 2003 -- Diamond Offshore Drilling, Inc. (NYSE:DO)
today reported a net loss for the third quarter of 2003 of $11.5 million, or
$0.09 per share on a diluted basis, compared with net income of $21.7 million,
or $0.16 per share on a diluted basis in the same period a year earlier.
Revenues for the third quarter of 2003 were $183.9 million, compared with
revenues of $180.2 million for the third quarter of 2002.
For the first nine months of 2003, the Company reported a net loss of $49.7
million, or $0.38 per share on a diluted basis, compared with net income of
$56.2 million, or $0.42 per share on a diluted basis for the same period in
2002. Revenues for the first nine months of 2003 were $493.3 million, compared
with revenues of $569.5 million in the same period a year earlier.
Diamond Offshore President and Chief Operating Officer, Larry Dickerson, noted,
"Results for the third quarter of 2003 were also impacted by non-operating
factors. Lower interest rates yielded a decline in interest income in the
quarter, while fixed income securities sales produced losses in the quarter
versus gains in the third quarter of 2002.
In addition, in order to help maintain the Company's strong liquidity position
in light of recent earnings declines, the Board of Directors has decided to
reduce the Company's quarterly cash dividend effective December 1, 2003, for
stockholders of record on November 3, 2003. The new dividend rate will be
$0.0625 per common share, compared with $0.125 per common share the previous
quarter."
Mr. Dickerson also noted that "effective September 30, 2003, the Company has
retired two of its second generation semisubmersible drilling rigs, the Ocean
Century and the Ocean Prospector. The rigs, which have been cold stacked in the
Gulf of Mexico since July 1998 and October 1998, respectively, are being offered
for sale and will not be returned to service as offshore drilling units. The
Company has been successful over the past few years in modernizing its fleet,
and we recognize that the Century and Prospector are not future upgrade
candidates in any likely market scenario."
Diamond Offshore is a leader in deep water drilling. As a result of the
retirement of the two drilling units, the Company has a fleet of 45 offshore
drilling rigs consisting of 30 semisubmersibles, 14 jack-ups and one drillship.
The fleet operates in the waters of six of the world's seven continents.
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As previously announced, Diamond Offshore will provide an online, real-time
simulcast and rebroadcast of its 2003 third quarter earnings release conference
call. The live broadcast of the Diamond Offshore Drilling, Inc. quarterly
conference call will be available online at www.diamondoffshore.com on October
16, 2003, beginning at 9:00 a.m. Central Daylight Time. The online replay will
follow immediately and continue for 5 days 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
include, but are not limited to, statements related to maintaining liquidity and
regarding estimates of reductions in the carrying costs related to the
Prospector and Century. 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. A discussion of the 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)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------------------------------------------
2003 2002 2003 2002
---------------- --------------- --------------- --------------
REVENUES:
Contract drilling.................................... $ 174,923 $ 174,146 $ 471,820 $ 547,488
Revenues related to reimbursable expenses.......... 8,984 6,037 21,436 22,032
---------------- --------------- --------------- --------------
Total revenues................................. 183,907 180,183 493,256 569,520
---------------- --------------- --------------- --------------
OPERATING EXPENSES:
Contract drilling.................................... 126,934 112,963 365,210 354,163
Reimbursable expenses................................ 8,208 5,457 19,471 20,012
Depreciation......................................... 43,256 45,187 132,086 132,469
General and administrative........................... 7,181 7,026 22,595 21,114
(Gain) loss on sale and disposition of assets........ 1,509 23 1,451 (42)
---------------- --------------- --------------- --------------
Total operating expenses....................... 187,088 170,656 540,813 527,716
---------------- --------------- --------------- --------------
OPERATING INCOME (LOSS)...................................... (3,181) 9,527 (47,557) 41,804
OTHER INCOME (EXPENSE):
Interest income...................................... 2,742 6,660 10,235 23,892
Interest expense..................................... (6,432) (5,998) (17,385) (17,758)
Gain (loss) on sale of marketable securities......... (6,179) 21,858 (7,310) 34,021
Other, net........................................... (140) (534) 2,891 627
---------------- --------------- --------------- --------------
INCOME (LOSS) BEFORE INCOME TAX EXPENSE...................... (13,190) 31,513 (59,126) 82,586
INCOME TAX BENEFIT (EXPENSE)................................. 1,727 (9,809) 9,410 (26,362)
---------------- --------------- --------------- --------------
NET INCOME (LOSS)............................................ $ (11,463) $ 21,704 $ (49,716) $ 56,224
================ =============== =============== ==============
EARNINGS (LOSS) PER SHARE:
BASIC................................................ $ (0.09) $ 0.17 $ (0.38) $ 0.43
================ =============== =============== ==============
DILUTED.............................................. $ (0.09) $ 0.16 $ (0.38) $ 0.42
================ =============== =============== ==============
WEIGHTED AVERAGE SHARES OUTSTANDING:.........................
Shares of common stock.............................. 130,366 131,450 130,336 131,595
Dilutive potential shares of common stock........... - 9,383 - 9,425
---------------- --------------- --------------- --------------
Total weighted average shares outstanding........ 130,366 140,833 130,336 141,020
================ =============== =============== ==============
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
THREE MONTHS ENDED
SEPTEMBER 30,
----------------------------
2003 2002
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CONTRACT DRILLING REVENUE
High Specification Floaters....................... $ 79,688 $ 72,376
Other Semisubmersibles............................ 72,588 80,745
Jack-ups.......................................... 23,006 18,703
Integrated Services............................... -- 3,017
Other............................................. (359) --
Eliminations...................................... -- (695)
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TOTAL CONTRACT DRILLING REVENUE..................... $ 174,923 $ 174,146
============= ============
REVENUES RELATED TO REIMBURSABLE EXPENSES........... $ 8,984 $ 6,037
============= ============
CONTRACT DRILLING EXPENSE
High Specification Floaters....................... $ 39,974 $ 38,301
Other Semisubmersibles............................ 62,494 51,363
Jack-ups.......................................... 23,677 20,714
Integrated Services............................... (6) 3,038
Other............................................. 795 242
Eliminations...................................... -- (695)
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TOTAL CONTRACT DRILLING EXPENSE..................... $ 126,934 $ 112,963
============= ============
REIMBURSABLE EXPENSES............................. $ 8,208 $ 5,457
============= ============
OPERATING INCOME
High Specification Floaters....................... $ 39,714 $ 34,075
Other Semisubmersibles............................ 10,094 29,382
Jack-ups.......................................... (671) (2,011)
Integrated Services............................... 6 (21)
Other............................................. (1,154) (242)
Reimbursables, net................................ 776 580
Depreciation Expense.............................. (43,256) (45,187)
General and Administrative Expense................ (7,181) (7,026)
Loss on Sale and Disposition of Assets............ (1,509) (23)
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TOTAL OPERATING INCOME (LOSS)....................... $ (3,181) $ 9,527
============= ============
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
SEPTEMBER 30, DECEMBER 31,
---------------------------------------------
2003 2002
---------------------- --------------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents......................................... $ 175,674 $ 184,910
Marketable securities............................................. 405,447 627,614
Accounts receivable............................................... 168,499 146,957
Rig inventory and supplies........................................ 48,295 45,405
Prepaid expenses and other....................................... 22,304 28,870
---------------------- --------------------
Total current assets................................ 820,219 1,033,756
Drilling and other property and equipment, net of
accumulated depreciation........................................... 2,270,377 2,164,627
Goodwill, net of accumulated amortization............................... 14,503 24,714
Other assets............................................................ 32,194 35,668
---------------------- --------------------
Total assets........................................ $ 3,137,293 $ 3,258,765
====================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities..................................................... $ 103,138 $ 118,402
Long-term debt.......................................................... 936,075 924,475
Deferred tax liability.................................................. 351,501 375,309
Other liabilities....................................................... 41,024 33,065
Stockholders' equity.................................................... 1,705,555 1,807,514
---------------------- --------------------
Total liabilities and stockholders' equity.......... $ 3,137,293 $ 3,258,765
====================== ====================
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
THIRD QUARTER SECOND QUARTER THIRD QUARTER
2003 2003 2002
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DAYRATE UTILIZATION DAYRATE UTILIZATION DAYRATE UTILIZATION
- ------------------------------------------------------------------------------------------------------------------------------------
(Dayrate in thousands)
HIGH SPECIFICATION FLOATERS $97 90% $96 92% $109 80%
OTHER SEMISUBMERSIBLES $60 57% $58 52% $69 61%
JACK-UPS $28 64% $27 68% $22 65%
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