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Diamond Offshore Announces First Quarter 2013 Results



  Diamond Offshore Announces First Quarter 2013 Results

Business Wire

HOUSTON -- April 25, 2013

Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income for the
first quarter of 2013 of $176 million, or $1.27 per share on a diluted basis,
compared with net income of $185 million, or $1.33 per share on a diluted
basis, in the same period a year earlier. Revenues in the first quarter of
2013 were $730 million, compared with revenues of $769 million in the
prior-year quarter. Results for the prior-year quarter included the sale of
the jack-up rig Ocean Columbia, which yielded an after-tax gain of
approximately $16 million, or $0.12 per share.

“We are pleased with the first-quarter results, which reflect our ongoing
success at containing operating expenses,” said Larry Dickerson, President and
Chief Executive Officer of Diamond Offshore.

“We have recently signed a new commitment for the Ocean Saratoga in Nicaragua
at a rate of $320,000 per day, which we believe highlights the continuing
demand for our mid-water semisubmersibles,” said Dickerson. “Along with our
previously announced contract for the Ocean Nomad in Latvia, this commitment
demonstrates how new markets can generate additional demand for this segment
of our fleet.”

“Additionally, we are proud that Diamond Offshore was recently recognized by
EnergyPoint Research in its 2012 customer satisfaction survey as No. 1 in two
important categories: Deepwater Drilling and Latin America & Mexico.”

CONFERENCE CALL

A conference call to discuss Diamond Offshore’s first-quarter results has been
scheduled for 9:00 a.m. CDT today. A live webcast of the call will be
available online on the Company’s website, www.diamondoffshore.com. Those
interested in participating in the question and answer session should dial
800-247-9979 or 973-321-1100, for international callers. The conference ID
number is 32776586. An online replay will also be available on
www.diamondoffshore.com following the call.

ABOUT DIAMOND OFFSHORE

Diamond Offshore provides contract drilling services to the energy industry
and is a leader in deepwater drilling. Diamond Offshore’s fleet of offshore
drilling rigs consists of 30 semisubmersibles, seven jack-ups and one
drillship, in addition to four ultra-deepwater drillships and two deepwater
semisubmersibles currently under construction. For additional information and
access to SEC filings, please visit the Company’s website at
www.diamondoffshore.com. Diamond Offshore is a 50.4% owned subsidiary of Loews
Corporation (NYSE: L).

FORWARD-LOOKING STATEMENTS

Statements contained in this press release that are not historical facts are
“forward-looking statements” within the meaning of the federal securities
laws. Such statements include, but are not limited to, statements concerning
future operating costs and expenses and future operations. Forward-looking
statements are inherently uncertain and subject to a variety of assumptions,
risks and uncertainties that could cause actual results to differ materially
from those anticipated or 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 press 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 at
www.diamondoffshore.com. These factors include, among others, general economic
and business conditions, contract cancellations, customer bankruptcy,
operating risks, 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 risk factors, 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
                                                   
                                                  Three Months Ended
                                                  March 31,
                                                  2013            2012
                                                                   
Revenues:
Contract drilling                               $ 699,973       $ 755,155
Revenues related to reimbursable expenses         29,768          13,487   
Total revenues                                    729,741         768,642  
                                                                   
Operating expenses:
Contract drilling, excluding depreciation         375,094         397,102
Reimbursable expenses                             29,289          13,151
Depreciation                                      96,821          101,393
General and administrative                        16,815          17,586
Bad debt recovery                                 --              (618    )
Gain on disposition of assets                     (2,004  )       (25,382 )
Total operating expenses                          516,015         503,232  
                                                                   
Operating income                                  213,726         265,410
                                                                   
Other income (expense):
Interest income                                   617             1,783
Interest expense                                  (8,069  )       (15,329 )
Foreign currency transaction gain (loss)          159             (104    )
Other, net                                        (254    )       (325    )
                                                                   
Income before income tax expense                  206,179         251,435
                                                                   
Income tax expense                                (30,190 )       (66,266 )
                                                                   
Net income                                      $ 175,989       $ 185,169  
                                                                   
Earnings per share:
Basic                                           $ 1.27          $ 1.33     
Diluted                                         $ 1.27          $ 1.33     
                                                                   
Weighted average shares outstanding:
Shares of common stock                            139,032         139,028
Dilutive potential shares of common stock         49              12       
Total weighted average shares outstanding         139,081         139,040  
                                                                   

                                 
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
                                     
                                    Three Months Ended
                                    Mar 31,         Dec 31,         Mar 31,
                                    2013            2012            2012
                                                                 
REVENUES
Floaters:
Ultra-Deepwater                   $ 191,357       $ 229,560       $ 244,589
Deepwater                           164,420         145,310         146,003
Mid-water                           305,221         326,520         318,595   
Total Floaters                      660,998         701,390         709,187
Jack-ups                            38,975          39,233          45,968    
Total Contract Drilling           $ 699,973       $ 740,623       $ 755,155   
Revenue
                                                                     
Revenues Related to               $ 29,768        $ 9,914         $ 13,487    
Reimbursable Expenses
                                                                     
CONTRACT DRILLING EXPENSE
Floaters:
Ultra-Deepwater                   $ 135,776       $ 135,837       $ 139,961
Deepwater                           56,436          67,772          58,594
Mid-water                           143,647         143,124         162,779   
Total Floaters                      335,859         346,733         361,334
Jack-ups                            29,667          21,582          31,443
Other                               9,568           9,274           4,325     
Total Contract Drilling           $ 375,094       $ 377,589       $ 397,102   
Expense
                                                                     
Reimbursable Expenses             $ 29,289        $ 9,427         $ 13,151    
                                                                     
OPERATING INCOME
Floaters:
Ultra-Deepwater                   $ 55,581        $ 93,723        $ 104,628
Deepwater                           107,984         77,538          87,409
Mid-water                           161,574         183,396         155,816   
Total Floaters                      325,139         354,657         347,853
Jack-ups                            9,308           17,651          14,525
Other                               (9,568  )       (9,274  )       (4,325   )
Reimbursable expenses, net          479             487             336
Depreciation                        (96,821 )       (92,844 )       (101,393 )
General and administrative          (16,815 )       (14,837 )       (17,586  )
expense
Impairment of assets                --              (62,437 )       --
Bad debt recovery                   --              --              618
Gain on disposition of              2,004           1,559           25,382    
assets
Total Operating Income            $ 213,726       $ 194,962       $ 265,410   
                                                                              

                                             
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                                                               
                                                March 31,         December 31,
                                                2013              2012
                                                (unaudited)
ASSETS
                                                                   
Current assets:
Cash and cash equivalents                     $ 308,109         $ 335,432
                                                                   
Marketable securities                           1,150,168         1,150,158
                                                                   
Accounts receivable, net of allowance           485,900           499,660
for bad debts
                                                                   
Prepaid expenses and other current              117,804           136,099
assets
                                                                   
Assets held for sale                            11,594            11,594
                                                                   
Total current assets                            2,073,575         2,132,943
                                                                   
Drilling and other property and
equipment, net of accumulated                   4,967,242         4,864,972
depreciation
                                                                   
Other assets                                    226,042           237,371
Total assets                                  $ 7,266,859       $ 7,235,286
                                                                   
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                                                   
Current liabilities                           $ 458,132         $ 485,546
                                                                   
Long-term debt                                  1,496,128         1,496,066
                                                                   
Deferred tax liability                          500,292           490,946
                                                                   
Other liabilities                               182,855           186,334
                                                                   
Stockholders’ equity                            4,629,452         4,576,394
                                                                   
Total liabilities and stockholders’           $ 7,266,859       $ 7,235,286
equity
                                                                   

                                                                             
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
(Dayrate in thousands)
                                                                                                       
                      First Quarter               Fourth Quarter              First Quarter
                      2013                        2012                        2012
                      Dayrate     Utilization     Dayrate     Utilization     Dayrate     Utilization
Ultra-Deepwater       $360        73%             $348        89%             $364        85%
Floaters
Deepwater             $389        94%             $372        85%             $359        88%
Floaters
Mid-Water             $262        64%             $268        70%             $266        65%
Floaters
Jack-Ups              $85         71%             $85         71%             $87         44%
                                                                                                       

Contact:

Diamond Offshore Drilling, Inc.
Darren Daugherty, 281-492-5370
Director, Investor Relations
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