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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-13926
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
DIAMOND OFFSHORE DEFINED CONTRIBUTION RETIREMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
DIAMOND OFFSHORE DRILLING, INC.
15415 KATY FREEWAY
HOUSTON, TEXAS 77094
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REQUIRED INFORMATION
Item 4.
The financial statements and schedules of the Diamond Offshore Defined
Contribution Retirement Plan for the fiscal year ended December 31, 1999
(attached)
Exhibits
23.1 Consent of Deloitte & Touche LLP
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AUDITED FINANCIAL STATEMENTS AND SCHEDULES
DIAMOND OFFSHORE DEFINED CONTRIBUTION RETIREMENT PLAN
Years ended December 31, 1999 and 1998 and
Supplemental Schedules for Year ended December 31, 1999
with Report of Independent Auditors
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DIAMOND OFFSHORE DEFINED CONTRIBUTION RETIREMENT PLAN
Audited Financial Statements and Schedules
Years ended December 31, 1999 and 1998
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors................................................................... 1
Financial Statements
Statements of Net Assets Available for Benefits, December 31, 1999 and 1998...................... 2
Statements of Changes in Net Assets Available for Benefits for the Years ended
December 31, 1999, 1998 and 1997....................................................... 3
Notes to Financial Statements.................................................................... 4
ERISA Supplemental Schedules
Schedule of Assets Held for Investment Purposes at End of Year, December 31, 1999................ 7
Schedules other than those listed above have been omitted because of the absence
of the conditions under which they are required.
</TABLE>
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INDEPENDENT AUDITORS' REPORT
TO THE PARTICIPANTS AND ADMINISTRATIVE COMMITTEE
OF THE DIAMOND OFFSHORE DEFINED CONTRIBUTION
RETIREMENT PLAN
HOUSTON, TEXAS
We have audited the accompanying statements of net assets available for benefits
of the Diamond Offshore Defined Contribution Retirement Plan (the "Plan") as of
December 31, 1999 and 1998, and the related statements of changes in net assets
available for benefits for each of the three years ended December 31, 1999, 1998
and 1997. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in net assets available for benefits
for each of the three years in the period ended December 31, 1999, 1998 and 1997
in conformity with accounting principles generally accepted in the United States
of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes at end of year, December 31, 1999 is presented for the
purpose of additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employment
Retirement Income Security Act of 1974. This schedule is the responsibility of
the Plan's management. Such schedule has been subjected to the auditing
procedures applied in our audit of the basic 1999 financial statements and, in
our opinion, is fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
June 16, 2000
1
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DIAMOND OFFSHORE DEFINED CONTRIBUTION
RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1999 1998
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<S> <C> <C>
INVESTMENTS AT FAIR VALUE:
Mutual funds .............................................. $ 88,437,584 $ 62,859,786
Company stock ............................................. 2,552,069 1,419,733
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Total investments ............................... 90,989,653 64,279,519
CONTRIBUTIONS RECEIVABLE:
Employee .................................................. 654,669 768,666
Employer .................................................. 1,531,022 1,640,115
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Total contributions receivable .................. 2,185,691 2,408,781
LOANS TO PARTICIPANTS ........................................... 3,597,285 2,882,871
OTHER ASSETS .................................................... 7,021 2,942
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NET ASSETS AVAILABLE FOR BENEFITS ............................... $ 96,779,650 $ 69,574,113
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
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DIAMOND OFFSHORE DEFINED CONTRIBUTION
RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends and interest ........................................ $ 5,350,459 $ 3,740,948 $ 2,938,430
Net appreciation in fair value of investments ................. 12,142,679 2,124,346 3,659,059
------------ ------------ ------------
Total investment income ................................. 17,493,138 5,865,294 6,597,489
CONTRIBUTIONS:
Employee ...................................................... 8,867,035 8,389,378 4,680,340
Employer ...................................................... 6,435,106 5,786,246 6,477,438
Rollover ...................................................... 20,919 334,664 11,231,765
------------ ------------ ------------
Total contributions ..................................... 15,323,060 14,510,288 22,389,543
------------ ------------ ------------
Total additions ......................................... 32,816,198 20,375,582 28,987,032
------------ ------------ ------------
DEDUCTIONS:
Benefit payments .............................................. (5,346,395) (3,631,644) (4,362,444)
Miscellaneous expenditures .................................... (264,266) (149,569) (16,541)
------------ ------------ ------------
Total deductions ........................................ (5,610,661) (3,781,213) (4,378,985)
------------ ------------ ------------
NET INCREASE IN NET ASSETS AVAILABLE
FOR BENEFITS .................................................. 27,205,537 16,594,369 24,608,047
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period ........................................... 69,574,113 52,979,744 28,371,697
------------ ------------ ------------
End of period ................................................. $ 96,779,650 $ 69,574,113 $ 52,979,744
============ ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 8
DIAMOND OFFSHORE DEFINED CONTRIBUTION RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
1. ORGANIZATION
The Diamond Offshore Defined Contribution Retirement Plan (the "Plan")
was established effective July 1, 1989. Effective January 1, 1997, Diamond
Offshore Drilling, Inc. (the "Company") merged the Arethusa Off-Shore Company
Profit Sharing Plan (the "Arethusa Plan") with and into the Plan. Net assets
available for benefits for the Arethusa Plan were $10,731,913 as of December 31,
1996. In connection with this merger, the Plan changed trustees from The Dreyfus
Trust Company ("Dreyfus") to The Scudder Trust Company ("Scudder") effective
January 1, 1997. The adoption of the Plan in its entirety is intended to comply
with the provisions of Sections 401(a), 401(k) and 401(m) of the Internal
Revenue Code (the "IRC") and applicable regulations thereunder. The Plan is
intended to qualify as a profit-sharing plan in accordance with the requirement
of Section 401(a)(27) of the IRC.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING BASIS - The financial statements of the Plan are prepared
using the accrual basis of accounting.
INVESTMENTS - Investments are reported in the financial statements at
fair value.
TRUSTEE FEES - Normal recurring trustee fees are paid by the Company,
the Plan's sponsor. Fees paid by the Company were $47,329 and $49,314 for the
years ended December 31, 1999 and 1998, respectively.
USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires Plan
management to make estimates and assumptions that affect the reported amounts of
net assets available for benefits and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
the Plan income and expenses during the reporting period. Actual results could
differ from these estimates.
3. DESCRIPTION OF PLAN
The following description of the Plan provides only general
information. Participants should refer to the Plan agreement for a complete
description of the Plan's provisions.
GENERAL - The Plan is a defined contribution retirement plan for
U.S. employees of the Company and its subsidiaries. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA")
and the IRC.
ADMINISTRATION - The Plan is administered by an administrative
committee appointed by the President of the Company.
PARTICIPANTS - Prior to July 1, 1997, any employee of the Company
became a participant of the Plan on the first quarterly entry date (January 1,
April 1, July 1 or October 1) following the completion of one year of service.
From July 1, 1997 through December 31, 1998, an employee of the Company became a
participant of the Plan beginning in the month following the completion of a
90-day service period. The Plan was amended effective January 1, 1999. All U.S.
employees as of December 31, 1998 became eligible to participate in the Plan as
of January 1, 1999. Employees with an original hire date on or after January 1,
1999 will become a participant of the Plan one year from the date of hire.
CONTRIBUTIONS - The Company makes a profit sharing contribution equal
to 3.75% of the employee's qualified yearly earnings and a matching contribution
equal to 25% for every percent the employee contributes up to a maximum of 6%.
In 1999 and 1998, Company contributions were made quarterly. In addition, each
participant may make voluntary contributions of up to 15% of his or her annual
compensation, as defined by the Plan. Employee contributions are made through
payroll deductions.
4
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INVESTMENT FUNDS - The following investment options are available to plan
participants:
Scudder Stable Value Funds: This collective investment trust
invests in high-quality instruments, including guaranteed
investment contracts, bank investment contracts, money market
instruments and synthetic contracts.
Scudder Income Fund: This fund invests primarily in high-grade
corporate bonds, convertible bonds and government securities.
Scudder Balanced Fund: This fund invests in common stocks of
companies that the fund's advisor believes offer the potential
for above-average growth of earnings, cash flow or assets
relative to the overall market.
Scudder Growth & Income Fund: This fund's primary investments
are income-producing common and preferred stocks of
established companies.
Scudder Stock Index Fund: This collective investment trust
invests in common stocks of companies listed in the S&P 500.
The trust may invest in all 500 stocks or in other mutual
funds that approximately mirror the S&P 500 in their
weightings.
MFS Research Fund A: This fund invests in common stocks or
securities convertible into common stocks of companies
believed to possess better-than-average prospects for
long-term growth.
Templeton Foreign Fund I: This fund generally invests in
common stock, although it may also invest in preferred stocks
and certain debt securities, rated or unrated.
Putnam New Opportunities Fund A: This fund invests primarily
in common stocks in the following sectors: personal
communications, environmental services, media/entertainment,
medical technology/medical cost containment, applied advanced
technology, value-oriented consuming and personal finance.
Diamond Offshore Drilling, Inc. Common Stock: This fund
invests in the common stock of the Company and reinvests
dividends of the Company's stock, if any, into additional
shares of the Company.
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
Company's and the participant's contributions and an allocation of the Plan's
earnings. Allocations are based primarily on account balances at specified dates
as provided under the terms of the Plan.
VESTING - Each participant has at all times a fully vested and
nonforfeitable interest in their contributions, the earnings thereon, and
contributions made by the Company. Prior to January 1, 1999, matching
contributions made by the Company to participant accounts were vested 100% after
five years of service.
FORFEITURES - Forfeitures are applied to reduce the Company
contributions to the Plan.
LOANS - Participants may borrow from his or her account up to the
lessor of (i) one-half of the vested value of their accounts or (ii) $50,000.
PAYMENT OF BENEFITS - Upon separation of service, each participant may
elect to receive the entire account balance in a lump sum payment. As of
December 31, 1999 and 1998, amounts payable to participants who had terminated
or withdrawn from the Plan were $251,151 and $86,255, respectively.
5
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4. The following is a summary of individual Plan assets in excess of 5% of total
Plan assets at December 31, 1999 and 1998:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
NUMBER OF
UNITS OR FAIR
DESCRIPTION OF INVESTMENT SHARES VALUE
<S> <C> <C>
Scudder Stable Value Fund 25,186,497.932 $25,186,498
Scudder Growth and Income Fund 553,558.134 14,774,467
MFS Research Fund A 493,508.500 14,242,655
Putnam New Opportunities Fund A 273,845.426 24,908,980
</TABLE>
5. PLAN TERMINATION
Although the Company has not expressed any intent to do so, it has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. Upon termination of the
Plan by the Company, the trustee will distribute to each participant the amounts
credited to his or her account. No amount will revert to the Company in the
event of the Plan's termination.
6. FEDERAL INCOME TAXES
The Plan obtained a favorable tax determination letter from the
Internal Revenue Service ("IRS") dated February 25, 1997. It is the opinion of
the Plan administrative committee that the Plan has met, and continues to meet,
all necessary IRS requirements exempting it from federal income taxes;
therefore, no provision for income taxes has been made.
6
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DIAMOND OFFSHORE DEFINED CONTRIBUTION RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES
December 31, 1999
<TABLE>
<CAPTION>
IDENTITY OF ISSUE DESCRIPTION CURRENT VALUE
<S> <C> <C>
Scudder Stable Value Fund Mutual Fund $ 25,186,498
Scudder Income Fund Mutual Fund 1,559,484
Scudder Balanced Fund Mutual Fund 1,009,022
Scudder Growth and Income Fund Mutual Fund 14,774,467
Scudder Stock Index Fund Mutual Fund 2,527,839
MFS Research Fund A Mutual Fund 14,242,655
Templeton Foreign Fund I Mutual Fund 4,228,639
Putnam New Opportunities Fund A Mutual Fund 24,908,980
*Diamond Offshore Drilling, Inc. Common Stock, par value $0.01 2,552,069
*Participant Loans Loans to participants, bearing interest of
Prime +1.0%, with varying maturity dates 3,597,285
------------
TOTAL $ 94,586,938
============
</TABLE>
*Party in interest
7
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Plan administrative committee of the Diamond Offshore Defined
Contribution Retirement Plan (the "Plan"), which administers the Plan, has duly
caused this annual report to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 28th day of June, 2000.
By: /s/ Robert L. Charles
Name: Robert L. Charles
Title: Administrative Committee Member
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
23.1 Consent of Independent Auditors
</TABLE>
