THE Todco

HOUSTON, May 3 /PRNewswire-FirstCall/ -- TODCO (NYSE:THE) (the "Company") today reported net income for the three months ended March 31, 2007, of $60.7 million, or $1.05 per diluted share, on revenues of $241.9 million compared to net income of $29.3 million, or $0.47 per share, on revenues of $183.6 million for the same quarter of 2006. The results of operations for the first quarter of 2007 included $1.1 million (or $0.01 per diluted share, after tax) of rig reactivation expense versus $17.3 million (or $0.17 per diluted share, after tax) of rig reactivation expense during the first quarter of 2006. In addition, the first quarter 2007 results included a $7.6 million insurance recovery from the May 2006 fire on THE 256 and a $4.1 million charge for repair costs related to THE 205 cargo vessel incident in December 2006. The Company expects to pursue recovery of the repair costs from the cargo vessel's owner. The first quarter of 2006 also included a $4.0 million settlement for damages and personal injury claims associated with the Rig 62 blowout and fire in June 2003. General and administrative expenses for the first quarter of 2007 included $1.9 million in professional fees related to the proposed merger with Hercules Offshore, Inc. Additionally, the quarter ended March 31, 2007 included $5.5 million of gains on disposal of assets, which included $3.1 million in additional proceeds received related to the sale of THE 151, as a result of the purchaser's utilization of the rig for drilling operations compared to only $0.9 million in gains on sale of assets in the first quarter of 2006. Excluding the insurance and settlement recoveries, THE 205 repair costs which may be recoverable later and the gains on sale of assets, TODCO's first quarter 2007 net income would have been $55.2 million or $0.95 per share on a fully diluted basis versus net income of $26.2 million or $0.42 per share on a fully diluted basis for the first quarter of 2006. For the three months ended March 31, 2007, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $119.4 million compared to $67.8 million for the same quarter of 2006. In light of our pending merger with Hercules Offshore, Inc., the Company will not hold an earnings conference call this quarter. Please see our quarterly report on Form 10-Q for the quarterly period ended March 31, 2007 filed with the Securities and Exchange Commission today for a discussion of operating results by segment. 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 insurance and claims recovery. 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. 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 including the Company's Form 10-Q filed today. These factors include, among others, general economic and business conditions, offshore drilling industry conditions, 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. TODCO is a leading provider of contract oil and gas drilling services with the largest rig fleet in the shallow water of the U.S. Gulf of Mexico and along the U.S. Gulf Coast. TODCO's common stock is traded on the New York Stock Exchange under the symbol "THE". For more information about TODCO, please go to the Company's web site at http://www.theoffshoredrillingcompany.com/ . TODCO AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except share data) March 31, December 31, 2007 2006 (Unaudited) ASSETS Cash and cash equivalents $225.5 $169.3 Accounts receivable Trade 189.4 196.8 Other 38.8 32.5 Supplies 4.9 4.9 Deferred income taxes 11.0 11.0 Other current assets 12.0 12.8 Total current assets 481.6 427.3 Property and equipment 979.2 968.4 Less accumulated depreciation 538.3 517.1 Property and equipment, net 440.9 451.3 Other assets 15.7 10.6 Total assets $938.2 $889.2 LIABILITIES AND STOCKHOLDERS' EQUITY Trade accounts payable $74.9 $66.1 Accrued income taxes 23.6 21.8 Accrued income taxes - former parent 35.1 51.7 Other current liabilities 50.6 58.9 Total current liabilities 184.2 198.5 Long-term debt 16.3 16.4 Deferred income taxes 99.7 110.2 Other long-term liabilities 6.0 0.2 Total long-term liabilities 122.0 126.8 Commitments and contingencies Preferred Stock, $0.01 par value, 50,000,000 shares authorized, none outstanding --- --- Common stock, $0.01 par value, 500,000,000 shares authorized, 57,770,990 shares and 57,742,030 shares issued and outstanding at March 31, 2007 and 0.6 0.6 December 31, 2006, respectively Additional paid-in capital 6,411.6 6,409.0 Retained deficit (5,780.2) (5,845.7) Total stockholders' equity 632.0 563.9 Total liabilities and stockholders' equity $938.2 $889.2 TODCO AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) (Unaudited) Three Months Ended March 31, 2007 2006 Operating revenues $241.9 $183.6 Costs and expenses Operating and maintenance 114.7 107.3 Depreciation 22.0 22.3 General and administrative 13.3 9.7 150.0 139.3 Operating income 91.9 44.3 Other income (expense), net Interest income 2.8 2.1 Interest expense (0.7) (0.7) Gain on disposal of assets, net 5.5 0.9 Other, net --- 0.2 7.6 2.5 Income before income taxes and cumulative effect of a change in accounting principle 99.5 46.8 Income tax expense 38.8 17.6 Income before cumulative effect of a change in accounting principle 60.7 29.2 Cumulative effect of a change in accounting principle, net of tax --- 0.1 Net income $60.7 $29.3 Net income per common share: Basic: Income before cumulative effect of a change in accounting principle $1.06 $0.48 Cumulative effect of a change in accounting principle, net of income tax --- --- Net income per common share $1.06 $0.48 Diluted: Income before cumulative effect of a change in accounting principle $1.05 $0.47 Cumulative effect of a change in accounting principle, net of income tax --- --- Net income per common share $1.05 $0.47 Weighted average common shares outstanding: Basic 57.5 61.4 Diluted 57.9 62.0 TODCO AND SUBSIDIARIES SELECTED SEGMENT AND OPERATING DATA (In millions, except daily amounts) (Unaudited) Three Months Ended March 31, December 31, March 31, 2007 2006 2006 U.S. Gulf of Mexico Segment Operating days 1,184 1,261 944 Available days 1,890 1,932 1,890 Utilization 63% 65% 50% Average rig revenue per day $90,200 $97,100 $78,700 Operating revenues $106.8 $122.5 $74.3 Operating and maintenance expenses 31.2 52.2 44.0 Depreciation 8.9 8.6 10.7 Operating income $66.7 $61.7 $19.6 U.S. Inland Barge Segment Operating days 1,342 1,501 1,454 Available days 2,430 2,484 2,430 Utilization 55% 60% 60% Average rig revenue per day $47,800 $44,800 $33,700 Operating revenues $64.1 $67.2 $49.0 Operating and maintenance expenses 37.0 35.0 25.2 Depreciation 6.6 6.1 5.5 Operating income $20.5 $26.1 $18.3 International and Other Segment Operating days 1,042 1,099 970 Available days 1,440 1,472 1,440 Utilization 72% 75% 67% Average rig revenue per day $47,900 $44,100 $45,700 Operating revenues $49.9 $48.5 $44.3 Operating and maintenance expenses 37.9 36.3 31.7 Depreciation 5.5 5.4 5.1 Operating income $6.5 $6.8 $7.5 Delta Towing Segment Operating revenues $21.1 $21.9 $16.0 Operating and maintenance expenses 8.6 9.6 6.4 Depreciation 1.0 1.0 1.0 General and administrative expenses 1.2 1.1 1.3 Operating income $10.3 $10.2 $7.3 Total Company Rig operating days 3,568 3,861 3,368 Rig available days 5,760 5,888 5,760 Rig utilization 62% 66% 58% Operating revenues $241.9 $260.1 $183.6 Operating and maintenance expenses 114.7 133.1 107.3 Depreciation 22.0 21.1 22.3 General and administrative expenses 13.3 10.1 9.7 Operating income $91.9 $95.8 $44.3 TODCO AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (In millions) (Unaudited) For the Three Months Ended March 31, December 31, March 31, 2007 2006 2006 Net income to EBITDA Net income $60.7 $64.1 $29.3 Adjustments: Depreciation 22.0 21.1 22.3 Income tax expense 38.8 34.4 17.6 Interest income (2.8) (2.4) (2.1) Interest expense 0.7 2.5 0.7 EBITDA $119.4 $119.7 $67.8 DATASOURCE: TODCO CONTACT: Dale Wilhelm, Vice President & CFO of TODCO, +1-713-278-6014 Web site: http://www.theoffshoredrillingcompany.com/

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