Contract Drilling Backlog and Revenue - As of July 1, 2021, the contract drilling backlog was $1,073 million, down from $1,187 million on January 1, 2021, and $1,192 million on July 1, 2020[213]. - The contract drilling backlog for 2021 is projected to generate $370 million, with $529 million for 2022, $169 million for 2023, and $5 million for 2024[214]. - For the period from April 24 through June 30, 2021, the company reported contract drilling revenue of $114.9 million, with 498 revenue-earning (R-E) days and an average daily revenue of $197,000[232]. - The company recognized $0.2 million of contract drilling revenue related to a management and marketing services arrangement that commenced in May 2021[232]. - Total revenues for the six months ended June 30, 2020, were $427.4 million, attributed to 1,615 revenue-earning days and an average daily revenue of $251,700[254]. Financial Performance and Losses - The net loss for the period from April 24 through June 30, 2021, was $47.3 million, a significant improvement from a net loss of $1.6 billion in the prior period[240]. - The company reported a net loss of $47.3 million for the period from April 24 through June 30, 2021, compared to a net loss of $1.0 billion for the six months ended June 30, 2020[250]. - The effective tax rate for the period from April 24 through June 30, 2021, was negative 57.7%, resulting in a tax expense of $17.3 million[248]. - The effective tax rate for the period from April 24 through June 30, 2021, was negative 57.7%, primarily due to the mix of estimated pre-tax income and loss[267]. Costs and Expenses - Contract drilling expense, excluding depreciation, was $90.7 million for the period from April 24 through June 30, 2021, reflecting lower costs compared to previous periods[234]. - Depreciation expense for the period from April 24 through June 30, 2021, was $18.7 million, down from $74.8 million in the same period of the previous year[238]. - The company incurred additional costs due to COVID-19, including increased travel expenses and health protocols for crew safety[219][220]. - The company incurred $5.5 million in professional fees directly related to Chapter 11 cases during the period from April 24 through June 30, 2021[243]. - Interest expense for the period from April 24 through June 30, 2021, was $4.9 million related to new debt on the Effective Date[262]. Utilization and Operational Metrics - The percentage of rig days committed for 2021 is 77%, with projections of 53% for 2023 and 15% for 2024[216]. - Global floater contracted utilization was approximately 64% at the end of Q2 2021, with 127 out of 197 available rigs contracted[207]. - The total utilization rate for the period was 61%, compared to 52% for the prior period from April 1 through April 23, 2021[230]. - The total utilization rate for the period from April 24 through June 30, 2021, was 61%, reflecting planned downtime for two rigs[252]. Bankruptcy and Restructuring - The company emerged from Chapter 11 bankruptcy on April 23, 2021, adopting fresh start accounting, resulting in a new entity for financial reporting purposes[200][201]. - The company emerged from Chapter 11 reorganization on April 23, 2021, significantly reducing its indebtedness and entering into a $400 million senior secured revolving credit facility[271]. - The company incurred $7.4 million in legal and other professional advisor fees related to restructuring alternatives during the first half of 2020[260]. Cash Flow and Liquidity - For the period from April 24 to June 30, 2021, the company reported a cash outflow of $66 million from operating activities, with total cash expenditures of $134.4 million[276]. - The company expects capital expenditures for the remaining six months of 2021 to be approximately $20 million to $25 million, totaling $95 million to $100 million for the year[281]. - The company plans to manage liquidity needs through cash flows from operations and cash reserves, focusing on servicing debt and funding capital expenditures[272]. - Total contractual cash obligations as of June 30, 2021, amounted to $863.8 million, including various debt instruments and service agreements[284]. - As of July 30, 2021, the company had $153.5 million in borrowings under the Exit RCF and $243.9 million available for further borrowings[271]. Market Conditions and Strategic Alternatives - The offshore contract drilling market is facing challenges due to an oversupply of rigs and depressed commodity prices, although prices have shown modest improvement[206]. - Brent crude oil prices rose to the high-$60-per-barrel range, supported by OPEC+ supply commitments and increased summer demand[207]. - The company has appointed an independent committee to explore strategic alternatives, including potential asset acquisitions or business combinations[205]. - Forward-looking statements indicate potential impacts from market conditions, customer spending, and ongoing business strategies, with a focus on maximizing shareholder value[292]. Risks and Legal Proceedings - The company is subject to various risks and uncertainties that could materially affect its business and financial performance[295]. - The company is involved in ongoing litigation and legal proceedings that may affect its financial condition[300]. - The company has plans and strategies in place to address the impacts of the COVID-19 pandemic on its operations[300]. Asset Management and Impairments - The company recognized an impairment charge of $197.0 million during the period from January 1 to April 23, 2021, and an aggregate impairment charge of $774.0 million for the first six months of 2020[259]. - The company is evaluating asset impairments and has assets held for sale[300]. - The company is focused on capital expenditure budgets and the timing and cost of completion of capital projects[300].
Diamond Offshore Drilling(DO) - 2021 Q2 - Quarterly Report