L
$47.42
Loews
$.30
.64%
Earnings Details
4th Quarter December 2016
Monday, February 06, 2017 6:00:00 AM
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Summary

Loews (L) Recent Earnings

Loews (L) reported 4th Quarter December 2016 earnings of $0.79 per share on revenue of $3.3 billion. The consensus earnings estimate was $0.63 per share. Revenue grew 0.2% on a year-over-year basis.

Loews Corp through its subsidiaries is engaged in commercial property & casualty insurance, operation of offshore oil & gas drilling rigs, production of natural gas and liquids, operation of interstate natural gas pipeline and operation of hotels.

Results
Reported Earnings
$0.79
Earnings Whisper
-
Consensus Estimate
$0.63
Reported Revenue
$3.34 Bil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Diamond Offshore Announces Fourth Quarter 2016 Results

Diamond Offshore Drilling, Inc. (DO) today reported results for the fourth quarter of 2016.

Three Months Ended
Thousands of dollars, except per share data December 31, 2016 September 30, 2016
Change
Total revenues
$
391,874
$
349,178
12%
Operating income
104,145
54,071
93%
Net income
73,063
13,927
425%
Earnings per diluted share
$
0.53
$
0.10
430%

"Considering current market headwinds, I am pleased with our fourth quarter results, driven in part by continuing cost controls and improving rig efficiencies," said Marc Edwards, President and Chief Executive Officer. "Despite an extremely challenging market environment, the Ocean GreatWhite, Ocean Scepter and the Ocean BlackRhino will all commence term contracts in the first quarter, contributing to our strong backlog and liquidity positions."

During the quarter, the Company executed a new contract for the Ocean Monarch with BHP Billiton in Australia, which is scheduled to commence at the end of the second quarter of 2017. The new contract runs through late third quarter of 2017.

As of December 31, 2016, the Company’s total contracted backlog was $3.6 billion, which represents 25 rig years of work. Approximately 94% of the Company’s available ultra-deepwater rig days for 2017 are contracted with top tier customers.

CONFERENCE CALL

A conference call to discuss Diamond Offshore’s earnings results has been scheduled for 7:30 a.m. CST 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 844-492-6043 or 478-219-0839, for international callers. The conference ID number is 54377143. An online replay will also be available on www.diamondoffshore.com following the call.

ABOUT DIAMOND OFFSHORE

Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe. Additional information and access to the Company’s SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 53% by Loews Corporation (L).

FORWARD-LOOKING STATEMENTS

Statements contained in this press release or made during the above conference call that 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 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 risk factors include, among others, risks associated with worldwide demand for drilling services, level of activity in the oil and gas industry, renewing or replacing expired or terminated contracts, contract cancellations and terminations, maintenance and realization of backlog, competition and industry fleet capacity, impairments and retirements, operating risks, changes in tax laws and rates, regulatory initiatives and compliance with governmental regulations, construction of new builds, casualty losses, and various other factors, 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
Twelve Months Ended
December 31,
December 31,
2016
2015
2016
2015
Revenues:
Contract drilling
$
384,646
$
544,129
$
1,525,214
$
2,360,184
Revenues related to reimbursable expenses 7,228
11,434
75,128
59,209
Total revenues
391,874
555,563
1,600,342
2,419,393
Operating expenses:
Contract drilling, excluding depreciation 174,342
256,393
772,173
1,227,864
Reimbursable expenses
6,775
11,146
58,058
58,050
Depreciation
86,031
114,448
381,760
493,162
General and administrative
14,786
15,574
63,560
66,462
Impairment of assets
--
499,367
678,145
860,441
Restructuring and separation costs
--
1,043
--
9,778
Bad debt recovery
(265)
--
(265)
--
Loss (gain) on disposition of assets
6,060
(2,309)
3,795
(2,290)
Total operating expenses
287,729
895,662
1,957,226
2,713,467
Operating income (loss)
104,145
(340,099)
(356,884)
(294,074)
Other income (expense):
Interest income
176
1,526
768
3,322
Interest expense
(21,230)
(23,134)
(89,934)
(93,934)
Foreign currency transaction (loss) gain
(3,689)
1,511
(11,522)
2,465
Other, net
472
171
(10,727)
873
Income (loss) before income tax (expense) 79,874
(360,025)
(468,299)
(381,348)
benefit
Income tax (expense) benefit
(6,811)
114,641
52,777
107,063
Net income (loss)
$
73,063
$
(245,384)
$
(415,522)
$
(274,285)
Income (loss) per share
$
0.53
$
(1.79)
$
(3.03)
$
(2.00)
Weighted-average shares outstanding:
Shares of common stock
137,170
137,159
137,168
137,157
Dilutive potential shares of common stock 93
--
--
--
Total weighted-average shares outstanding 137,263
137,159
137,168
137,157
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
Three Months Ended
December 31,
September 30,
December 31,
2016
2016
2015
REVENUES
Floaters:
Ultra-Deepwater
$
231,820
$
217,275
$
395,798
Deepwater
64,678
66,011
92,125
Mid-water
88,130
56,350
44,766
Total Floaters
384,628
339,636
532,689
Jack-ups
18
--
11,440
Total Contract Drilling Revenue
384,646
339,636
$
544,129
Revenues Related to Reimbursable Expenses $
7,228
$
9,542
$
11,434
CONTRACT DRILLING EXPENSE
Floaters:
Ultra-Deepwater
$
119,490
$
124,099
$
147,991
Deepwater
30,481
36,226
60,010
Mid-water
16,814
17,634
28,767
Total Floaters
166,785
177,959
236,768
Jack-ups
3,090
1,833
10,749
Other
4,467
6,862
8,876
Total Contract Drilling Expense
$
174,342
$
186,654
$
256,393
Reimbursable Expenses
$
6,775
$
7,965
$
11,146
OPERATING INCOME (LOSS)
Floaters:
Ultra-Deepwater
$
112,330
$
93,176
$
247,807
Deepwater
34,197
29,785
32,115
Mid-water
71,316
38,716
15,999
Total Floaters
217,843
161,677
295,921
Jack-ups
(3,072)
(1,833)
691
Other
(4,467)
(6,862)
(8,876)
Reimbursable expenses, net
453
1,577
288
Depreciation
(86,031)
(86,473)
(114,448)
General and administrative expense
(14,786)
(15,237)
(15,574)
Impairment of assets
--
--
(499,367)
Restructuring and separation costs
--
--
(1,043)
Bad debt recovery
265
--
--
(Loss) gain on disposition of assets
(6,060)
1,222
2,309
Total Operating Income (Loss)
$
104,145
$
54,071
$
(340,099)
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
December 31,
December 31,
2016
2015
ASSETS
Current assets:
Cash and cash equivalents
$
156,233
$
119,028
Marketable securities
35
11,518
Accounts receivable, net of allowance for bad debts
247,028
405,370
Prepaid expenses and other current assets
102,111
119,479
Assets held for sale
400
14,200
Total current assets
505,807
669,595
Drilling and other property and equipment, net of accumulated 5,726,935
6,378,814
depreciation
Other assets
139,135
101,485
Total assets
$
6,371,877
$
7,149,894
LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-term borrowings
$
104,200
$
286,589
Other current liabilities
236,299
339,134
Long-term debt
1,980,884
1,979,778
Deferred tax liability
197,011
276,529
Other liabilities
146,368
155,094
Stockholders’ equity
3,707,115
4,112,770
Total liabilities and stockholders’ equity
$
6,371,877
$
7,149,894
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands, except per share data)
Year ended December 31,
2016
2015
Operating activities:
Net loss
$
(415,522)
$
(274,285)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation
381,760
493,162
Loss on impairment of assets
678,145
860,441
Deferred tax provision
(106,263)
(242,034)
Other
(27,696)
(69,771)
Net changes in operating working capital
136,130
(31,086)
Net cash provided by operating activities
646,554
736,427
Investing activities:
Capital expenditures (including rig construction)
(652,673)
(830,655)
Proceeds from disposition of assets, net of disposal costs 221,722
13,049
Proceeds from sale and maturities of marketable securities 4,614
51
Net cash used in investing activities
(426,337)
(817,555)
Financing activities:
Repayment of long-term debt
--
(250,000)
(Repayment of) proceeds from short-term borrowings, net
(182,389)
286,589
Debt issuance costs and arrangement fees
(215)
(624)
Payment of dividends and anti-dilution payments
(408)
(69,432)
Net cash used in financing activities
(183,012)
(33,467)
Net change in cash and cash equivalents
37,205
(114,595)
Cash and cash equivalents, beginning of year
119,028
233,623
Cash and cash equivalents, end of year
$
156,233
$
119,028

Non-GAAP Financial Measures (Unaudited)

To supplement the Company’s unaudited condensed consolidated financial statements presented on a GAAP basis, this press release provides investors with adjusted operating income, adjusted net income and adjusted earnings per diluted share, which are non-GAAP financial measures. Management believes that these measures provide meaningful information about the Company’s performance by excluding certain charges that may not be indicative of the Company’s ongoing operating results. This allows investors and others to better compare the company’s financial results across previous and subsequent accounting periods and to those of peer companies and to better understand the long-term performance of the Company. Non-GAAP financial measures should be considered to be a supplement to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

In order to fully assess the financial operating results of the Company, management believes that the results of operations adjusted to exclude charges recorded for the impairment of rigs and associated inventory, as well as the related tax effect thereof and other discrete tax items, are appropriate measures of the continuing and normal operations of the Company. However, these measures should be considered in addition to, and not as a substitute for, or superior to, contract drilling revenue, contract drilling expense, operating income, cash flows from operations or other measures of financial performance prepared in accordance with GAAP.

Three Months Ended
Twelve Months Ended
December 31,
September 30,
December 31,
2016
2016
2016
2015
Reconciliation of As Reported
Operating Income (Loss) to
Adjusted Operating Income:
(In thousands)
As reported operating income (loss)
$
104,145 $
54,071
$
(356,884) $
(294,074)
Impairments and other charges:
Impairment of rigs and associated
--
--
678,145
860,441
inventory(1)
Restructuring and separation costs(2) --
--
--
9,778
Adjusted operating income
$
104,145 $
54,071
$
321,261
$
576,145
Reconciliation of As Reported Net
Income (Loss) to Adjusted Net
Income:
(In thousands)
As reported net income (loss)
$
73,063
$
13,927
$
(415,522) $
(274,285)
Impairments and other charges:
Impairment of rigs and associated
--
--
678,145
860,441
inventory(1)
Restructuring and separation costs(2) --
--
--
9,778
Tax effect of impairments and other
charges:
Impairment of rigs and associated
--
--
(143,165)
(167,129)
inventory(3)
Restructuring and separation costs(4) --
--
--
(2,529)
Discrete tax items(5)
--
--
77,252
--
Adjusted net income
$
73,063
$
13,927
$
196,710
$
426,276
Three Months Ended
Twelve Months Ended
December 31, September 30,
December 31,
2016
2016
2016
2015
Reconciliation of As Reported Income
(Loss) per Diluted Share to Adjusted
Earnings per Diluted Share:
As reported income (loss) per diluted
$
0.53
$
0.10
$
(3.03)
$
(2.00)
share
Impairments and other charges:
Impairment of rigs and associated
--
--
4.94
6.27
inventory(1)
Restructuring and separation costs(2)
--
--
--
.07
Tax effect of impairments and other
charges:
Impairment of rigs and associated
--
--
(1.04)
(1.22)
inventory(3)
Restructuring and separation costs(4)
--
--
--
(.02)
Other discrete items(5)
--
--
0.56
--
Adjusted earnings per diluted share
$
0.53
$
0.10
$
1.43
$
3.10

(1) Represents the aggregate amount of impairment losses recognized during 2015 and 2016 related to several of our drilling rigs and associated inventory. (2) Represents the aggregate amount of restructuring and separation costs recognized in 2015 associated with a planned reduction in workforce at our onshore bases and corporate facilities. (3) Represents the income tax effects of the aggregate impairment loss recognized for the 2015 and 2016 impairments. (4) Represents the income tax effects of the aggregate restructuring and separation costs recognized in 2015. (5) Represents the aggregate of certain discrete income tax adjustments recognized during the second quarter of 2016, primarily related to valuation allowances for current and prior year tax assets associated with foreign tax credits, which we no longer expect to be able to utilize to offset income taxes in the U.S. tax jurisdiction.

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATE, UTILIZATION AND OPERATIONAL EFFICIENCY
(Dayrate in thousands)
Fourth Quarter
Third Quarter
Fourth Quarter
2016
2016
2015
Average
Utilization (2)
Operational Efficiency
Average
Utilization (2)
Operational Efficiency
Average
Utilization (2)
Operational Efficiency
Dayrate
(3)
Dayrate (1)
(3)
Dayrate
(3)
(1)
(1)
Ultra-
$456
49%
92.0%
$452
48%
87.1%
$531
70%
95.5%
Deepwater Floaters
Deepwater Floaters
$287
39%
92.1%
$303
34%
94.5%
$337
42%
97.7%
Mid-Water floaters
$478
35%
99.9%
$311
33%
98.4%
$249
24%
97.8%
Jack-ups
--
--
--
--
--
--
$124
17%
100.0%
Fleet Total
93.5%
91.0%
96.6%
(1)
Average dayrate is defined as contract drilling revenue for all of the specified rigs in our fleet per revenue earning day.
A revenue earning day is defined as a 24-hour period during which a rig earns a dayrate after commencement of operations and excludes mobilization, demobilization and contract preparation days.
(2)
Utilization is calculated as the ratio of total revenue-earning days divided by the total calendar days in the period for all specified rigs in our fleet (including cold-stacked rigs, but excluding rigs under construction).
Our current fleet includes four ultra-deepwater semisubmersibles, three deepwater semisubmersibles, three mid-water semisubmersibles that are cold stacked.
(3)
Operational efficiency is calculated as the ratio of total revenue-earning days divided by the sum of total revenue-earning days plus the number of days (or portions thereof) associated with unanticipated equipment downtime.

Contact:Samir AliSr. Director, Investor Relations & Corporate Development(281) 647-4035

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SOURCE Diamond Offshore Drilling, Inc.

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