Chapter 11 Proceedings (Tables)

6 Months Ended

Jun. 30, 2020

Schedule of Reorganization Items Incurred

The following table provides information about reorganization items incurred during the three- and six-month periods ended June 30, 2020, subsequent to the Petition Date (in thousands):

	June 30,
	2020
Professional fees ⁽¹⁾	$	20,659
Write-off of debt issuance costs		27,493
Adjustments for estimated claims and rejected contracts		6,539
Gain on settlement with certain unsecured vendors		(714	)
Total reorganization items, net	$	53,977

⁽¹⁾

^{Payments of $0.3 million related to professional fees have been presented as cash outflows from operating activities in our unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020. See Note 5.}

Summary of Liabilities Subject to Compromise

Liabilities subject to compromise at June 30, 2020 consist of the following (in thousands):

	June 30,
	2020
Debt subject to compromise:
Borrowings under credit facility	$	436,000
3.45% Senior Notes due 2023		250,000
7.875% Senior Notes due 2025		500,000
5.70% Senior Notes due 2039		500,000
4.875% Senior Notes due 2043		750,000
Lease liabilities		144,999
Accrued interest		47,636
Accounts payable		65,526
Other accrued liabilities		24,460
Other liabilities		4,058
Total liabilities subject to compromise	$	2,722,679

Debtor-in-Possession Condensed Combined Balance Sheet

Unaudited condensed consolidated financial statements of the Debtors are set forth below. These financial statements exclude the financial statements of the non-Debtor subsidiaries. Transactions and balances of receivables and payables between the Debtors have been eliminated in consolidation. Amounts payable to the non-Debtor subsidiaries are reported in the unaudited condensed consolidated balance sheet of the Debtors

DIAMOND OFFSHORE DRILLING, INC. AND CERTAIN SUBSIDIARIES PARTY TO THE BANKRUPTCY CASES (DEBTOR-IN-POSSESSION)

CONDENSED COMBINED BALANCE SHEET

(Unaudited)

(In thousands)

	June 30,
	2020
ASSETS
Current assets:
Cash and cash equivalents	$	475,285
Restricted cash		25,519
Accounts receivable		165,590
Less: allowance for credit losses		(208	)
Accounts receivable, net		165,382
Prepaid expenses and other current assets		62,265
Assets held for sale		1,000
Total current assets		729,451
Drilling and other property and equipment, net of
accumulated depreciation		4,275,371
Investments in non-debtor subsidiaries		2,458,447
Noncurrent deferred tax assets, net		29,542
Other assets		195,162
Total assets	$	7,687,973
LIABILITIES AND DEBTORS’ EQUITY
Current liabilities:
Accounts payable	$	30,456
Accrued liabilities		128,721
Taxes payable		17,394
Amounts payable to non-debtor subsidiaries		1,031,470
Total current liabilities		1,208,041
Note payable to non-debtor subsidiary		328,000
Other liabilities		44,450
Total liabilities not subject to compromise		1,580,491
Liabilities subject to compromise		2,722,679
Total debtors’ equity		3,384,803
Total liabilities and debtors’ equity	$	7,687,973

Debtor-in-Possession Condensed Combined Statement of Operations

DIAMOND OFFSHORE DRILLING, INC. AND CERTAIN SUBSIDIARIES PARTY TO THE BANKRUPTCY CASES (DEBTOR-IN-POSSESSION)

CONDENSED COMBINED STATEMENT OF OPERATIONS

(Unaudited)

(In thousands)

	Six Months Ended
	June 30,
	2020
Revenues:
Contract drilling	$	349,704
Revenues related to reimbursable expenses		20,909
Total revenues		370,613
Operating expenses:
Contract drilling, excluding depreciation		301,060
Reimbursable expenses		19,458
Depreciation		167,392
General and administrative		29,405
Impairment of assets		774,028
Restructuring and separation costs		15,085
Gain on disposition of assets		(3,615	)
Total operating expenses		1,302,813
Operating loss		(932,200	)
Other income (expense):
Interest income		488
Interest expense, net of amounts capitalized		(49,631	)
Foreign currency transaction gain		1,194
Reorganization items, net		(53,977	)
Other, net		(456	)
Loss before income tax benefit		(1,034,582	)
Income tax benefit		25,864
Net loss	$	(1,008,718	)

Debtor-in-Possession Condensed Combined Statement of Cash Flows

DIAMOND OFFSHORE DRILLING, INC. AND CERTAIN SUBSIDIARIES PARTY TO THE BANKRUPTCY CASES (DEBTOR-IN-POSSESSION)

CONDENSED COMBINED STATEMENT OF CASH FLOWS

(Unaudited)

(In thousands)

	Six Months Ended
	June 30,
	2020
Operating activities:
Net loss	$	(1,008,718	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		167,392
Loss on impairment of assets		774,028
Reorganization items, net		33,318
Gain on disposition of assets		(3,615	)
Deferred tax provision		(14,986	)
Stock-based compensation expense		5,636
Contract liabilities, net		22,320
Contract assets, net		3,444
Deferred contract costs, net		(13,487	)
Long-term employee remuneration programs		(5,421	)
Noncurrent collateral deposits		(18,262	)
Other assets, noncurrent		(6,450	)
Other liabilities, noncurrent		(33	)
Other		4,382
Changes in operating assets and liabilities:
Accounts receivable		31,047
Prepaid expenses and other current assets		(325	)
Accounts payable and accrued liabilities		50,296
Taxes payable		(18,545	)
Due to non-debtor subsidiaries		35,254
Net cash provided by operating activities		37,275
Investing activities:
Capital expenditures		(113,575	)
Capital contribution to non-debtor subsidiary		(5,724	)
Proceeds from disposition of assets, net of disposal costs		4,730
Net cash used in investing activities		(114,569	)
Financing activities:
Borrowings under Credit Facility		436,000
Net cash provided by financing activities		436,000
Net change in cash, cash equivalents and restricted cash		358,706
Cash, cash equivalents and restricted cash, beginning of period		142,098
Cash, cash equivalents and restricted cash, end of period	$	500,804