Diamond Offshore Drilling Inc DO
Q1 2010 Earnings Call Transcript

Transcript Call Date 04/22/2010

Operator: Good morning. My name is Brandy and I will be your conference operator today. At this time, I would like to welcome everyone to the Diamond Offshore Drilling First Quarter 2010 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remark, there will be a question-and-answer session. (Operator instructions).

I would now like to turn the call over to Les Van Dyke, Director of Investor Relations. Please go ahead, sir.

Les Van Dyke - Director of IR: Good morning. Thank you for joining us. With me on the call today are Larry Dickerson, President and Chief Executive Officer; John Vecchio, Executive Vice President; Gary Krenek, Senior Vice President and Chief Financial Officer; and Bob Blair, Senior Vice President, Contracts and Marketing.

Before Larry begins his remarks, I should remind you that statements made during this conference call may constitute forward-looking statements, and are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Forward-looking statements include, but are not limited to discussions about future revenues and earnings, capital expenditures, industry conditions and competition, dates the drilling rigs will enter service, as well as management’s plans and objectives for the future.

A discussion of the risk factors that could impact these areas and the Company's overall business and financial performance can be found in the Company's reports filed with the Securities and Exchange Commission. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements. The Company expressly disclaims any obligation to release publicly any updates to any forward-looking statements to reflect any changes in the Company's expectation or any changes in events, conditions or circumstances on which any forward-looking statement is based.

After we have discussed our results, we will have a question-and-answer session during which we ask that you please limit yourself to one question and one follow-up, so that we can open the floor to as many people as possible.

With that, I'll turn the meeting over to Larry.

Lawrence R. Dickerson - President and CEO: Thank you and good morning. I want to get right to the news everyone’s focused on today which is the new level of our special quarterly dividend. We know how important the special dividend is to all of our shareholders and even post this cut, it remains an important part of our effort to enhance shareholder value.

However, day rates on renewal contracts for our industry have declined from peak levels which will impact revenues, earnings and cash flow. With that in mind, the Company’s Board of Directors has elected to reduce the special quarterly dividend by $0.50 from $1.875 a share to $1.375 a share in this particular quarter.

So, the combined special and total dividend – combined, I am sorry, regular and special dividend declines from $2 a share to $1.50 share a quarter. Making this decision, the Company also believes it’s prudent at this time to retain some cash for potential rig acquisition opportunities and other corporate purposes.

Read our Earnings Call Transcript disclaimer.
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