EX-99.1 2 h22327exv99w1.txt PRESS RELEASE DATED FEBRUARY 9, 2005 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 2004 RESULTS Houston, Texas, February 9, 2005 -- Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the fourth quarter of 2004 of $11.3 million, or $0.09 per share on a diluted basis, compared with net income of $1.3 million, or $0.01 per share on a diluted basis, in the same period a year earlier. Revenues for the fourth quarter of 2004 were $237.3 million, compared with revenues of $187.7 million for the fourth quarter of 2003. Pretax results for the fourth quarter included other income of $11.4 million resulting from the settlement of a lawsuit against an equipment manufacturer. Significant items offsetting pretax income included revenue reductions of $7.2 million related to down time from storm damage, $8.6 million in reactivation costs and operating expense to bring the mid-water semisubmersible Ocean Voyager out of cold-stack, and $3.4 million related to a combination of storm damage and higher operating costs due to the relocation of the Ocean Vanguard to Norway. The Company also recorded an additional charge to tax expense in the fourth quarter that was $3.8 million higher than the effective 27.7% tax rate experienced in the third quarter and anticipated for the fourth quarter of 2004. The increased charge resulted from a change in the mix between domestic and international earnings as well as a change in the mix of international tax jurisdictions during the quarter. For the year ended December 31, 2004, the Company reported a net loss of $7.2 million, or $0.06 per share on a diluted basis, compared with a net loss of $48.4 million, or $0.37 per share on a diluted basis for the year ended December 31, 2003. Revenue for the year ended December 31, 2004 was $814.7 million, compared with $680.9 million for the year 2003. The overall market for the Company's drilling rigs continued to improve in the fourth quarter of 2004 and early in 2005. Particular strength was evident in the Gulf of Mexico (GOM) and the Southeast Asia floater markets, where effective industry utilization is near 100%. In the GOM, the dayrate on one of our mid-water semisubmersibles has reached $110,000 for work beginning in early June 2005. In addition, dayrates for work commencing in the third quarter of 2005 on two of Diamond Offshore's 4th generation semisubmersibles located in the GOM are at $150,000 per day. The market for jack-up rigs in the GOM has also continued to improve, with dayrates for the Company's 300-ft. units in the high $40,000s to low $50,000s and dayrates for our 350-ft. jack-ups in the mid $50,000s. Additionally, as previously announced, the Company has signed two Letters of Intent (LOI) for contracts totaling approximately $243 million and covering a total of 1,315 days for the 5th generation semisubmersibles Ocean Baroness and Ocean Rover. Both contracts are expected to commence late in the third quarter or early in the fourth quarter of 2005. Under the LOIs, the Ocean Baroness is expected to relocate to the GOM, while the Ocean Rover would remain in Southeast Asia. Larry Dickerson, President and Chief Operating Officer, said, "We remain confident in the strength of our markets in 2005 and are encouraged as we begin to build backlog extending into 2006, 2007 and beyond." Diamond Offshore provides contract drilling services to the energy industry around the globe and is a leader in deepwater drilling. The Company's fleet of 45 offshore drilling rigs consists of 30 semisubmersibles, 14 jack-ups and one drillship. As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its fourth quarter and year end 2004 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 February 9, 2005, 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 include, but are not limited to, statements concerning commitments for drilling work or contracts, future dayrates, future contract revenues 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 the risk that a Letter of Intent may not result in a binding contract or the risk that the markets for the Company's services will not continue to improve. 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. #### DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES AVERAGE DAYRATES AND UTILIZATION
FOURTH QUARTER THIRD QUARTER FOURTH QUARTER 2004 2004 2003 ---------------------------- ---------------------------- ---------------------------- DAYRATE UTILIZATION DAYRATE UTILIZATION DAYRATE UTILIZATION ------------ ------------ ------------ ------------ ------------ ------------ (Dayrate in thousands) HIGH SPECIFICATION FLOATERS $ 94 95% $ 92 89% $ 97 84% OTHER SEMISUBMERSIBLES $ 63 81% $ 55 75% $ 56 69% JACK-UPS $ 42 88% $ 40 89% $ 30 72%
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, ----------------------------- ----------------------------- 2004 2003 2004 2003 ------------ ------------ ------------ ------------ REVENUES: Contract drilling .............................. $ 227,870 $ 180,278 $ 782,405 $ 652,098 Revenues related to reimbursable expenses ...... 9,450 7,407 32,257 28,843 ------------ ------------ ------------ ------------ Total revenues ............................ 237,320 187,685 814,662 680,941 ------------ ------------ ------------ ------------ OPERATING EXPENSES: Contract drilling .............................. 159,860 122,629 568,628 487,839 Reimbursable expenses .......................... 8,526 6,579 28,899 26,050 Depreciation ................................... 44,718 43,492 178,835 175,578 General and administrative ..................... 8,482 6,273 32,759 28,868 Write down of rigs ............................. -- -- -- 1,598 Loss (gain) on sale of assets .................. 272 (522) 1,613 (669) ------------ ------------ ------------ ------------ Total operating expenses .................. 221,858 178,451 810,734 719,264 ------------ ------------ ------------ ------------ OPERATING INCOME (LOSS) ............................... 15,462 9,234 3,928 (38,323) OTHER INCOME (EXPENSE): Interest income ................................ 4,624 1,772 12,205 12,007 Interest expense ............................... (9,873) (6,543) (30,257) (23,928) Gain (loss) on sale of marketable securities ... 23 426 254 (6,884) Other, net ..................................... 10,670 -- 10,337 2,891 ------------ ------------ ------------ ------------ INCOME (LOSS) BEFORE INCOME TAX (EXPENSE) BENEFIT ..... 20,906 4,889 (3,533) (54,237) INCOME TAX (EXPENSE) BENEFIT .......................... (9,623) (3,587) (3,710) 5,823 ------------ ------------ ------------ ------------ NET INCOME (LOSS) ..................................... $ 11,283 $ 1,302 $ (7,243) $ (48,414) ============ ============ ============ ============ EARNINGS (LOSS) PER SHARE: BASIC .......................................... $ 0.09 $ 0.01 $ (0.06) $ (0.37) ============ ============ ============ ============ DILUTED ........................................ $ 0.09 $ 0.01 $ (0.06) $ (0.37) ============ ============ ============ ============ WEIGHTED AVERAGE SHARES OUTSTANDING: Shares of common stock ........................ 128,545 130,005 129,021 130,253 Dilutive potential shares of common stock ..... 108 -- -- -- ------------ ------------ ------------ ------------ Total weighted average shares outstanding ......................................... 128,653 130,005 129,021 130,253 ============ ============ ============ ============
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS (In thousands)
THREE MONTHS ENDED DECEMBER 31, ----------------------------- 2004 2003 ------------ ------------ CONTRACT DRILLING REVENUE High Specification Floaters .................. $ 82,524 $ 74,862 Other Semisubmersibles ....................... 93,433 74,711 Jack-ups ..................................... 50,000 28,086 Other ........................................ 1,913 2,619 ------------ ------------ TOTAL CONTRACT DRILLING REVENUE ................ $ 227,870 $ 180,278 ============ ============ REVENUES RELATED TO REIMBURSABLE EXPENSES ...... $ 9,450 $ 7,407 ============ ============ CONTRACT DRILLING EXPENSE High Specification Floaters .................. $ 45,347 $ 40,093 Other Semisubmersibles ....................... 84,591 59,790 Jack-ups ..................................... 28,093 22,365 Integrated Services .......................... -- (419) Other ........................................ 1,829 800 ------------ ------------ TOTAL CONTRACT DRILLING EXPENSE ................ $ 159,860 $ 122,629 ============ ============ REIMBURSABLE EXPENSES ........................ $ 8,526 $ 6,579 ============ ============ OPERATING INCOME High Specification Floaters .................. $ 37,177 $ 34,769 Other Semisubmersibles ....................... 8,842 14,921 Jack-ups ..................................... 21,907 5,721 Integrated Services .......................... -- 419 Other ........................................ 84 1,819 Reimbursables, net ........................... 924 828 Depreciation Expense ......................... (44,718) (43,492) General and Administrative Expense ........... (8,482) (6,273) (Loss) Gain on Sale and Disposal of Assets ... (272) 522 ------------ ------------ TOTAL OPERATING INCOME ......................... $ 15,462 $ 9,234 ============ ============
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
DECEMBER 31, DECEMBER 31, ------------ ------------ 2004 2003 ------------ ------------ ASSETS Current assets: Cash and cash equivalents ................................. $ 266,007 $ 106,345 Investments and marketable securities ..................... 661,849 503,995 Accounts receivable ....................................... 187,558 154,124 Rig inventory and supplies ................................ 47,590 48,035 Prepaid expenses and other ................................ 32,677 22,764 ------------ ------------ Total current assets ......................... 1,195,681 835,263 Drilling and other property and equipment, net of accumulated depreciation .................................. 2,154,593 2,257,876 Goodwill, net of accumulated amortization ...................... -- 11,099 Other assets ................................................... 29,112 30,781 ------------ ------------ Total assets ................................. $ 3,379,386 $ 3,135,019 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt ......................... $ 484,102 $ 11,969 Other current liabilities ................................. 129,805 88,031 ------------ ------------ Total current liabilities .................... 613,907 100,000 Long-term debt ................................................. 709,413 928,030 Deferred tax liability ......................................... 369,722 384,505 Other liabilities .............................................. 60,516 42,004 Stockholders' equity ........................................... 1,625,828 1,680,480 ------------ ------------ Total liabilities and stockholders' equity ... $ 3,379,386 $ 3,135,019 ============ ============