Diamond Offshore Drilling, Inc. Announces First Quarter 2008 Results

Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the first quarter of 2008 of $290.6 million, or $2.09 per share on a diluted basis, compared with net income of $224.1 million, or $1.64 per share on a diluted basis, in the same period a year earlier. Revenues in the first quarter of 2008 were $786.1 million, compared with revenues of $608.2 million for the first quarter of 2007. Diamond Offshore provides contract drilling services to the energy industry and is a leader in deepwater drilling. Additional information on Diamond Offshore Drilling, Inc. 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 first quarter 2008 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 April 24, 2008, 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 may 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 may include, but are not limited to, statements concerning future earnings, future cash flows, market conditions, future market improvements, future 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 full rig utilization may not be achieved during a contract period, the risk that the fleet’s available days may be reduced by unscheduled downtime, the risk that these and other factors outside of the Company’s control may adversely impact the amount of profit realized from a contract, 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, or the risk that the Company may not be able to participate fully in any future market improvements. 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. DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data)   Three Months Ended March 31, 2008   2007   Revenues: Contract drilling $ 770,340 $ 589,912 Revenues related to reimbursable expenses   15,762     18,272   Total revenues   786,102     608,184     Operating expenses: Contract drilling 287,099 214,002 Reimbursable expenses 13,096 16,071 Depreciation 69,050 55,705 General and administrative 15,722 11,966 Gain on disposition of assets   (51 )   (1,502 ) Total operating expenses   384,916     296,242     Operating income 401,186 311,942   Other income (expense): Interest income 4,373 9,793 Interest expense (1,342 ) (10,855 ) Loss on sale of marketable securities (1 ) (3 ) Other, net   1,706     (607 )   Income before income tax expense 405,922 310,270   Income tax expense   (115,297 )   (86,120 )   Net income $ 290,625   $ 224,150     Earnings per share: Basic $ 2.09   $ 1.66   Diluted $ 2.09   $ 1.64     Weighted average shares outstanding: Shares of common stock 138,873 135,286 Dilutive potential shares of common stock   181     3,542   Total weighted average shares outstanding   139,054     138,828   DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS (Unaudited) (In thousands)   Three Months Ended March 31, 2008     2007     REVENUES High-Specification Floaters $ 281,071 $ 246,381 Intermediate Semisubmersibles 373,222 223,726 Jack-ups   116,047         119,805   Total Contract Drilling Revenue $ 770,340       $ 589,912     Revenues Related to Reimbursable Expenses $ 15,762       $ 18,272     CONTRACT DRILLING EXPENSE High-Specification Floaters $ 91,898 $ 62,234 Intermediate Semisubmersibles 144,800 102,751 Jack-ups 46,587 40,926 Other   3,814         8,091   Total Contract Drilling Expense $ 287,099       $ 214,002     Reimbursable Expenses $ 13,096       $ 16,071     OPERATING INCOME High-Specification Floaters $ 189,173 $ 184,147 Intermediate Semisubmersibles 228,422 120,975 Jack-ups 69,460 78,879 Other (3,814 ) (8,091 ) Reimbursable expenses, net 2,666 2,201 Depreciation (69,050 ) (55,705 ) General and administrative expense (15,722 ) (11,966 ) Gain on disposition of assets   51         1,502   Total Operating Income $ 401,186       $ 311,942   DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)         March 31, December 31, 2008 2007 (unaudited) ASSETS   Current assets: Cash and cash equivalents $ 621,324 $ 637,961   Marketable securities 1,282 1,301   Accounts receivable 600,354 522,808   Prepaid expenses and other current assets   101,922   103,120 Total current assets 1,324,882 1,265,190   Drilling and other property and equipment, net of accumulated depreciation 3,144,656 3,040,063 Other assets   33,248   36,212 Total assets $ 4,502,786 $ 4,341,465   LIABILITIES AND STOCKHOLDERS’ EQUITY   Current liabilities $ 495,002 $ 453,011   Long-term debt 503,098 503,071   Deferred tax liability 408,093 397,629   Other liabilities 118,405 110,687   Stockholders’ equity 2,978,188 2,877,067     Total liabilities and stockholders’ equity $ 4,502,786 $ 4,341,465 DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES AVERAGE DAYRATES AND UTILIZATION       First Quarter Fourth Quarter First Quarter     2008   2007   2007     Dayrate   Utilization   Dayrate   Utilization   Dayrate   Utilization (Dayrate in thousands) High Specification Floaters $ 323   87 % $ 317   81 % $ 280   98 % Intermediate Semis $ 249 85 % $ 218 78 % $ 150 86 % Jack-ups $ 102 90 % $ 115 63 % $ 112 90 %