Diamond Offshore cuts special dividend. 4Q profit up

Diamond Offshore Drilling, a Houston-headquartered drilling contractor, today reported its fourth quarter 2014 net income of $99 million, compared to net income of $93 million, or $0.67 per diluted share, in the fourth quarter of 2013.

Revenues in the fourth quarter of 2014 were $675 million, compared to revenues of $726 million in the fourth quarter of 2013.

For full year 2014, Diamond Offshore reported net income of $387 million, compared to net income of $549 million, or $3.95 per diluted share, in 2013.

Full year 2014 results included a $0.95 per share non-cash impairment charge related to the retirement and scrapping of six mid-water semi-submersible rigs.

Results for the fourth quarter of 2013 and full year 2013 were negatively impacted by $0.41 per share to reserve for an uncertain tax position, partially offset by a gain of $0.12 per share related to a settlement agreement with a customer. Revenues for full year 2014 were $2.815 billion, compared to $2.920 billion in 2013.

Diamond Offshore also announced today that the company has declared a regular quarterly dividend of $0.125 per share, payable March 2, 2015 to shareholders of record on February 20, 2015. Additionally, the Board of Directors of the company, after careful consideration, has chosen not to declare a special dividend.

“Since Diamond Offshore began paying a special dividend to shareholders in January of 2006, we have paid total dividends of over $41 per share, or approximately $5.7 billion,” said Marc Edwards, President and Chief Executive Officer.

“Paying substantial dividends while simultaneously adding new-build capacity to our fleet have been key aspects of our capital allocation strategy. We have achieved these aims while maintaining a strong balance sheet and the highest credit rating among our industry peers.

“Given the significant downturn in industry fundamentals, we believe it is prudent to retain cash so that the company is in a stronger position to take advantage of opportunities that may materialize in a distressed market,” added Edwards.

“In 2014, we took delivery of three new-build drillships and two deepwater semis, and in the first quarters of 2015 and 2016, respectively, we expect to take delivery of our fourth new-build drillship and a new-build harsh environment semi-submersible. All of our new-build units have attractive term contracts in place.”

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