8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported):       February 8, 2006                    

Diamond Offshore Drilling, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-13926	76-0321760
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

15415 Katy Freeway
Houston, Texas 77094

(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code:     (281) 492-5300                     

Not Applicable

(Former name or former address, if changed since last report)

     Check the appropriate line below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

     On February 8, 2006, Diamond Offshore Drilling, Inc. issued a press release announcing its financial results for the fiscal quarter and year ended December 31, 2005. A copy of such press release is furnished herewith as Exhibit 99.1.

     The information furnished in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits. The following exhibit is furnished pursuant to Item 2.02 of Form 8-K:

Exhibit number	Description
99.1	Press Release dated February 8, 2006

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DIAMOND OFFSHORE DRILLING, INC.
	By:	/s/ William C. Long
		William C. Long
		Vice President, General Counsel and
		Secretary
Dated: February 8, 2006

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EXHIBIT INDEX

Exhibit number	Description
99.1	Press Release dated February 8, 2006

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EX-99.1

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 2005 RESULTS

Houston, Texas, February 8, 2006 — Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the fourth quarter of 2005 of $106.9 million, or $0.78 per share on a diluted basis, compared with net income of $11.3 million, or $0.09 per share on a diluted basis, in the same period a year earlier. Revenues for the fourth quarter of 2005 were $368.3 million, compared with revenues of $237.3 million for the fourth quarter of 2004.

For the year ended December 31, 2005, the Company reported net income of $260.3 million, or $1.91 per share on a diluted basis, compared with a net loss of $7.2 million, or $0.06 per share on a diluted basis for the year ended December 31, 2004. Revenues for the year ended December 31, 2005 were $1.2 billion, compared with $814.7 million for the year 2004.

“During 2005, our earnings registered quarterly improvement as conditions in the offshore drilling market became increasingly robust,” commented Larry Dickerson, President and Chief Operating Officer. “By employing our capital for upgrades, new-builds and the purchase of existing rigs, we have enhanced our fleet, broadened our access to new markets, boosted our earnings potential and positioned the Company to generate significant cash flow. Virtually all of the fundamental market conditions that defined 2005 appear to remain in place for 2006, and we are confident in our market position and our ability to participate in any future improvements.”

Diamond Offshore provides contract drilling services to the energy industry around the globe and is a leader in deepwater drilling.

As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its fourth quarter/year-end 2005 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 8, 2006, 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 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 fleet enhancements, access to new markets, future earnings, future cash flows, market conditions, future market improvements, future

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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 the markets for the Company’s services will not continue to improve, the risk that the Company’s market position may deteriorate, the risk that the Company may not be able to participate fully in any future market improvements, the risk that full rig utilization may not be achieved during a contract period, or the risk that factors outside of the Company’s control may adversely impact the amount of profit realized from a contract. 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

(In thousands, except per share data)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2005			2004			2005			2004
Revenues:
Contract drilling	$	355,793		$	227,870		$	1,179,015		$	782,405
Revenues related to reimbursable expenses		12,530			9,450			41,987			32,257
Total revenues		368,323			237,320			1,221,002			814,662
Operating expenses:
Contract drilling		167,300			159,860			638,540			568,628
Reimbursable expenses		10,765			8,526			35,549			28,899
Depreciation		45,780			44,718			183,724			178,835
General and administrative		9,575			8,482			37,162			32,759
(Gain) loss on sale and disposition of assets		(6,014	)		272			(14,767	)		1,613
Casualty gain on Ocean Warwick		—			—			(33,605	)		—
Total operating expenses		227,406			221,858			846,603			810,734
Operating income		140,917			15,462			374,399			3,928
Other income (expense):
Interest income		8,054			4,624			26,028			12,205
Interest expense		(8,135	)		(9,873	)		(41,799	)		(30,257	)
Gain (loss) on sale of marketable securities		29			23			(1,180	)		254
Other, net		(3,038	)		10,670			(1,053	)		10,337
Income (loss) before income tax (expense) benefit		137,827			20,906			356,395			(3,533	)
Income tax expense		(30,929	)		(9,623	)		(96,058	)		(3,710	)
Net income (loss)	$	106,898		$	11,283		$	260,337		$	(7,243	)
Earnings (loss) per share:
Basic	$	0.83		$	0.09		$	2.02		$	(0.06	)
Diluted	$	0.78		$	0.09		$	1.91		$	(0.06	)
Weighted average shares outstanding:
Shares of common stock		128,848			128,545			128,690			129,021
Dilutive potential shares of common stock		9,797			108			12,661			—
Total weighted average shares outstanding		138,645			128,653			141,351			129,021

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(In thousands)

	Three Months Ended
	December 31,
	2005			2004
CONTRACT DRILLING REVENUE
High Specification Floaters	$	144,113		$	82,524
Intermediate Semisubmersibles		131,100			93,433
Jack-ups		78,975			50,000
Other		1,605			1,913
Total Contract Drilling Revenue	$	355,793		$	227,870
Revenues Related to Reimbursable Expenses	$	12,530		$	9,450
CONTRACT DRILLING EXPENSE
High Specification Floaters	$	44,456		$	45,347
Intermediate Semisubmersibles		86,557			84,591
Jack-ups		33,247			28,093
Other		3,040			1,829
Total Contract Drilling Expense	$	167,300		$	159,860
Reimbursable Expenses	$	10,765		$	8,526
OPERATING INCOME
High Specification Floaters	$	99,657		$	37,177
Intermediate Semisubmersibles		44,543			8,842
Jack-ups		45,728			21,907
Other		(1,435	)		84
Reimbursables, net		1,765			924
Depreciation Expense		(45,780	)		(44,718	)
General and Administrative Expense		(9,575	)		(8,482	)
Gain (Loss) on Sale and Disposition of Assets		6,014			(272	)
Total Operating Income	$	140,917		$	15,462

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 31,		December 31,
	2005		2004
ASSETS
Current assets:
Cash and cash equivalents	$	842,590	$	266,007
Investments and marketable securities		2,281		661,849
Accounts receivable		357,104		187,558
Rig inventory and supplies		47,196		47,590
Prepaid expenses and other		32,707		32,677
Total current assets		1,281,878		1,195,681
Drilling and other property and equipment, net of Accumulated depreciation		2,302,020		2,154,593
Other assets		23,024		29,112
Total assets	$	3,606,922	$	3,379,386
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	484,102
Other current liabilities		268,986		129,805
Total current liabilities		268,986		613,907
Long-term debt:
4.875% Senior Notes Due 2015		249,485		—
Other long-term debt		728,169		709,413
Total long-term debt		977,654		709,413
Deferred tax liability		445,094		369,722
Other liabilities		61,861		60,516
Stockholders’ equity		1,853,327		1,625,828
Total liabilities and stockholders’ equity	$	3,606,922	$	3,379,386

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION

	Fourth Quarter					Third Quarter					Fourth Quarter
	2005					2005					2004
	Dayrate		Utilization			Dayrate		Utilization			Dayrate		Utilization
						(Dayrate in thousands)
High Specification Floaters	$	181		86	%	$	148		85	%	$	94		95	%
Other Semisubmersibles	$	81		89	%	$	77		86	%	$	63		81	%
Jack-ups	$	69		95	%	$	58		94	%	$	42		88	%

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