DIAMOND OFFSHORE DRILLING, INC. - FORM 8-K - EX-99.1

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8-K - FORM 8-K - DIAMOND OFFSHORE DRILLING, INC.	h79409e8vk.htm

Exhibit 99.1



FOR IMMEDIATE RELEASE		CONTACT: Les Van Dyke Director, Investor Relations (281) 492-5370

DIAMOND OFFSHORE ANNOUNCES
FOURTH QUARTER 2010 RESULTS

Houston, Texas, February 3, 2011 — Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the fourth quarter of 2010 of $241.7 million, or $1.74 per share on a diluted basis, compared with net income of $276.1 million, or $1.98 per share on a diluted basis, in the same period a year earlier. Revenues in the fourth quarter of 2010 were $840.9 million, compared with revenues of $890.8 million for the fourth quarter of 2009.

Results for the fourth quarter of 2010 were positively impacted by lower tax expense resulting from passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 in mid-December 2010. Provisions in the legislation contributed to an effective tax rate for the Company of 22.2% for the fourth quarter of the year, compared to an effective tax rate of 30.4% for the first nine months of 2010 which did not include any impact from the legislation.

For the year ended December 31, 2010, the Company reported net income of $955.5 million, or $6.87 per share on a diluted basis, compared with net income of $1.4 billion, or $9.89 per share on a diluted basis, for the year ended December 31, 2009. Revenues for the year ended December 31, 2010 were $3.3 billion, compared with $3.6 billion for 2009.

Diamond Offshore provides contract drilling services to the energy industry and is a leader in deepwater drilling. Additional information on Diamond Offshore and access to the Company’s SEC filings is available on the Internet at www.diamondoffshore.com.

As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its fourth quarter 2010 earnings release conference call. The live broadcast of our quarterly conference call will be available online at www.diamondoffshore.com on February 3, 2010 beginning at 9:00 a.m. Central Time. The online replay will follow immediately and continue for the remainder of the 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 contained in this press release which are not historical facts are “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are inherently uncertain and subject to a variety of risks that could cause actual results to differ materially from those 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 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 www.diamondoffshore.com. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Any such forward-looking statements speak 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,
	2010			2009			2010			2009

Revenues:
Contract drilling	$	824,561		$	872,132		$	3,229,736		$	3,536,579
Revenues related to reimbursable expenses		16,405			18,650			93,238			94,705

Total revenues		840,966			890,782			3,322,974			3,631,284


Operating expenses:
Contract drilling, excluding depreciation		382,535			317,025			1,391,086			1,223,771
Reimbursable expenses		15,843			18,078			91,240			93,097
Depreciation		95,912			89,468			393,177			346,446
General and administrative		16,098			14,804			66,600			62,913
Bad debt (recovery) expense		(3,843	)		9,746			(9,789	)		9,746
Gain on disposition of assets		(1,289	)		(7,537	)		(34,714	)		(7,902	)

Total operating expenses		505,256			441,584			1,897,600			1,728,071


Operating income		335,710			449,198			1,425,374			1,903,213

Other income (expense):
Interest income		755			852			2,909			4,497
Interest expense		(24,477	)		(23,174	)		(90,698	)		(49,610	)
Foreign currency transaction gain (loss)		1,175			(6,438	)		1,369			11,483
Other, net		(2,651	)		(1,467	)		(2,938	)		(1,152	)


Income before income tax expense		310,512			418,971			1,336,016			1,868,431

Income tax expense		(68,825	)		(142,907	)		(380,559	)		(492,212	)


Net Income	$	241,687		$	276,064		$	955,457		$	1,376,219


Income per share:
Basic	$	1.74		$	1.99		$	6.87		$	9.90

Diluted	$	1.74		$	1.98		$	6.87		$	9.89


Weighted average shares outstanding:
Shares of common stock		139,027			139,019			139,026			139,007
Dilutive potential shares of common stock		11			118			44			90

Total weighted average shares outstanding		139,038			139,137			139,070			139,097

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)


	Three Months Ended
	December 31,
	2010			2009


REVENUES
High Specification Floaters	$	385,187		$	380,792
Intermediate Semisubmersibles		396,604			394,677
Jack-ups		42,678			96,663
Other		92			—

Total Contract Drilling Revenue	$	824,561		$	872,132


Revenues Related to Reimbursable Expenses	$	16,405		$	18,650


CONTRACT DRILLING EXPENSE
High Specification Floaters	$	184,263		$	111,326
Intermediate Semisubmersibles		154,506			152,067
Jack-ups		40,882			48,214
Other		2,884			5,418

Total Contract Drilling Expense	$	382,535		$	317,025


Reimbursable Expenses	$	15,843		$	18,078


OPERATING INCOME
High Specification Floaters	$	200,924		$	269,466
Intermediate Semisubmersibles		242,098			242,610
Jack-ups		1,796			48,449
Other		(2,792	)		(5,418	)
Reimbursable expenses, net		562			572
Depreciation		(95,912	)		(89,468	)
General and administrative expense		(16,098	)		(14,804	)
Bad debt recovery (expense)		3,843			(9,746	)
Gain on disposition of assets		1,289			7,537

Total Operating Income	$	335,710		$	449,198

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)


	December 31,
	2010		2009

ASSETS

Current assets:
Cash and cash equivalents	$	464,393	$	376,417

Marketable securities		612,346		400,853

Accounts receivable, net of provision for bad debts		609,606		791,023

Prepaid expenses and other		177,153		155,077


Total current assets		1,863,498		1,723,370
Drilling and other property and equipment, net of accumulated depreciation		4,283,792		4,432,052

Long-term receivable		35,361		—

Other assets		544,333		108,839

Total assets	$	6,726,984	$	6,264,261


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities		626,288		413,475

Long-term debt		1,495,593		1,495,375

Deferred tax liability		542,258		546,024

Other liabilities		201,133		178,745

Stockholders’ equity		3,861,712		3,630,642


Total liabilities and stockholders’ equity	$	6,726,984	$	6,264,261

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


	Fourth Quarter					Third Quarter					Fourth Quarter
	2010					2010					2009
	Dayrate		Utilization			Dayrate		Utilization			Dayrate		Utilization

						(Dayrate in thousands)
High Specification Floaters	$	357		79	%	$	364		56	%	$	388		81	%
Intermediate Semis	$	281		79	%	$	280		76	%	$	280		78	%
Jack-ups	$	82		43	%	$	82		60	%	$	112		63	%

DIAMOND OFFSHORE DRILLING, INC. - FORM 8-K - EX-99.1 - February 3, 2011

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DIAMOND OFFSHORE DRILLING, INC. Reports