Atwood Oceanics Announces 2016 Fourth Quarter and Fiscal Year End Earnings

11/11/2016, 10:38 PM (Source: GlobeNewswire)

FOR IMMEDIATE RELEASE - EARNINGS

HOUSTON, November 11, 2016 - Atwood Oceanics, Inc. (NYSE: ATW) ("Company"), announced today that it had earned net income of $4.2 million or $0.07 per diluted share, on revenues of $188.7 million for the quarter ended September 30, 2016, compared to net income of $99.5 million or $1.53 per diluted share on revenues of $227.8 million for the quarter ended June 30, 2016 and compared to net income of $150.7 million or $2.32 per diluted share, on revenues of $363.2 million for the quarter ended September 30, 2015.  During the three months ended September 30, 2016, the Company:

  • Recorded a non-cash impairment charge of $38.6 million ($38.6 million, net of tax, or $0.60 per diluted share) in Asset Impairment related to our fleet wide drilling equipment
  • Recorded a non-cash charge of $3.9 million ($3.9 million, net of tax, or $0.06 per diluted share) in Drilling Costs to increase our reserve for excessive and/or obsolete materials and supplies, and
  • Recognized a gain on the purchase of debt of $10.2 million ($6.6 million, net of tax, or $0.10 per diluted share) in Gains on Extinguishment of Debt related to consummation of our modified "Dutch Auction" on July 25, 2016 whereby we acquired $42.0 million aggregate principal amount of the Senior Notes.

For the twelve months ended September 30, 2016, the Company earned net income of $265.3 million or $4.09 per diluted share, on revenues of $1.0 billion compared to net income of $432.6 million or $6.65 per diluted share, on revenues of $1.4 billion for the twelve months ended September 30, 2015.  During the twelve months ended September 30, 2016, the Company:

  • Recorded a non-cash impairment charge of $38.6 million ($38.6 million, net of tax, or $0.60 per diluted share) in Asset Impairment related to our fleet wide drilling equipment
  • Recorded a non-cash charge of $3.9 million ($3.9 million, net of tax, or $0.06 per diluted share) in Drilling Costs to increase our reserve for excessive and/or obsolete materials and supplies,
  • Recognized a gain of the extinguishment of debt of $69.0 million ($54.7 million, net of tax, or $0.84 per diluted share) related to the purchase of $201.4 million of the Senior Notes,
  • Recognized other income of $18.0 million ($18.0 million, net of tax, or $0.28 per diluted share) for expected insurance recoveries related to cyclone damage to the Atwood Osprey, and
  • Recorded a non-cash impairment charge of $64.9 million ($64.9 million, net of tax, or $1.00 per diluted share) in Asset Impairment related to the Atwood Falcon, which was sold to a 3rd party buyer in April 2016. 

During the twelve months ended September 30, 2015, the Company:

  • Recorded a non-cash impairment charge of approximately $60.8 million ($56.1 million, net of tax, or $0.86 per diluted share) related to the Atwood Hunter,
  • Recorded a loss of approximately $5.5 million ($5.5 million, net of tax, or $0.08 per diluted share) for the sale of the Atwood Hunter, and
  • Recorded a loss of approximately $8.0 million ($7.1 million, net of tax, or $0.11 per diluted share) for the sale of the Atwood Southern Cross.
 

 

 
For the Three Months Ended
  (Unaudited)
(In thousands, except per share amounts) September 30,
 2016
  June 30,
 2016
  September 30,
 2015
Revenues $ 188,677     $ 227,797     $ 363,176  
           
Income before Income Taxes 5,918     120,116     166,115  
Provision for Income Taxes 1,669     20,611     15,421  
Net Income $ 4,249     $ 99,505     $ 150,694  
           
Earnings per Common Share -          
Basic $ 0.07     $ 1.54     $ 2.33  
Diluted $ 0.07     $ 1.53     $ 2.32  

      For the Twelve Months Ended
(In thousands, except per share amounts)     September 30,
 2016
  September 30,
 2015
      (Unaudited)    
Revenues     $ 1,020,644     $ 1,395,851  
           
Income before Income Taxes     312,755     478,970  
Provision for Income Taxes     (47,483 )   (46,397 )
Net Income     $ 265,272     $ 432,573  
           
Earnings per Common Share -          
Basic     $ 4.09     $ 6.70  
Diluted     $ 4.09     $ 6.65  

ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

  Three Months Ended September 30,   Twelve Months Ended September 30,
(In thousands, except per share amounts) 2016   2015   2016   2015
  (Unaudited)   (Unaudited)    
REVENUES:              
Contract drilling $ 181,369     $ 349,139     $ 976,348     $ 1,342,052  
Revenues related to reimbursable expenses 7,308     14,037     44,296     53,799  
Total revenues 188,677     363,176     1,020,644     1,395,851  
               
COSTS AND EXPENSES:              
Contract drilling 77,441     118,574     378,535     520,421  
Reimbursable expenses 5,393     9,110     28,291     38,744  
Depreciation 40,706     42,310     165,669     171,947  
General and administrative 11,857     14,610     50,550     57,229  
Asset impairment 38,651     -     103,539     60,777  
(Gain)/loss on sale of assets -     (59 )   77     15,303  
Other, net 859     -     (299 )   -  
  174,907     184,545     726,362     864,421  
               
OPERATING INCOME 13,770     178,631     294,282     531,430  
               
OTHER INCOME (EXPENSE):              
Interest expense, net of capitalized interest (18,032 )   (12,523 )   (68,566 )   (52,551 )
Interest income 2     7     21     91  
Gains on extinguishment of debt 10,178     -     69,041     -  
Other income -     -     17,977     -  
  (7,852 )   (12,516 )   18,473     (52,460 )
               
INCOME BEFORE INCOME TAXES 5,918     166,115     312,755     478,970  
PROVISION FOR INCOME TAXES 1,669     15,421     47,483     46,397  
NET INCOME $ 4,249     $ 150,694     $ 265,272     $ 432,573  
               
EARNINGS PER COMMON SHARE (NOTE 2):              
Basic $ 0.07     $ 2.33     $ 4.09     $ 6.70  
Diluted $ 0.07     $ 2.32     $ 4.09     $ 6.65  
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE 2):              
Basic 64,827     64,654     64,789     64,581  
Diluted 64,955     64,932     64,839     65,030  

ATWOOD OCEANICS, INC. AND SUBSIDIARIES
UNAUDITED ANALYSIS OF REVENUES AND DRILLING COSTS

  REVENUES
  Three Months Ended   Twelve Months Ended
(In millions) September 30,
 2016
  June 30,
 2016
  September 30,
 2015
  September 30,
 2016
  September 30,
 2015
Ultra-Deepwater $ 154     $ 182     $ 198     $ 708     $ 721  
Deepwater -     -     78     131     336  
Jackups 27     36     73     138     285  
Reimbursable 7     10     14     44     54  
  188     228     363     1,021     1,396  

  DRILLING COSTS
  Three Months Ended   Twelve Months Ended
(In millions) September 30,
 2016
  June 30,
 2016
  September 30,
 2015
  September 30,
 2016
  September 30,
 2015
Ultra-Deepwater $ 58     $ 54     $ 60     $ 225     $ 264  
Deepwater 2     10     24     73     127  
Jackups 17     16     34     79     126  
Reimbursable 5     5     9     28     39  
Other -     1     -     2     3  
  $ 82     $ 86     $ 127     $ 407     $ 559  

ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In thousands, except par value) September 30,
 2016
  September 30,
 2015
  (Unaudited)    
ASSETS      
Cash $ 145,427     $ 113,983  
Accounts receivable, net 113,091     311,514  
Income tax receivable 6,095     8,705  
Inventories of materials and supplies, net 109,925     137,998  
Prepaid expenses, deferred costs and other current assets 18,504     33,735  
Total current assets 393,042     605,935  
       
Property and equipment, net 4,127,696     4,172,132  
       
Other receivables 11,831     11,831  
Deferred income taxes 165     150  
Deferred costs and other assets 7,058     11,285  
Total assets $ 4,539,792     $ 4,801,333  
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Accounts payable $ 25,299     $ 70,161  
Accrued liabilities 7,868     23,572  
Dividends payable -     16,164  
Interest payable 7,096     7,704  
Income tax payable 8,294     13,906  
Deferred credits and other liabilities 799     3,941  
Total current liabilities 49,356     135,448  
       
Long-term debt 1,227,919     1,678,268  
Deferred income taxes 1,202     1,658  
Deferred credits -     800  
Other 30,929     37,989  
Total long-term liabilities 1,260,050     1,718,715  
       
Commitments and contingencies (Note 9)      
       
Preferred stock, no par value, 1,000 shares authorized, none outstanding -     -  
Common stock, $1.00 par value, 180,000 shares authorized with 64,799 issued and outstanding at September 30, 2016 and 180,000 shares authorized and 64,654 shares issued and outstanding at September 30, 2015 64,799     64,654  
Paid-in capital 237,542     213,096  
Retained earnings 2,929,839     2,670,148  
Accumulated other comprehensive loss (1,794 )   (728 )
Total shareholders' equity 3,230,386     2,947,170  
Total liabilities and shareholders' equity $ 4,539,792     $ 4,801,333  

ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

  Twelve Months Ended September 30,
(In thousands) 2016   2015
  (Unaudited)    
Cash flows from operating activities:      
Net income $ 265,272     $ 432,573  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation 165,669     171,947  
Amortization 3,446     6,299  
Provision for doubtful accounts and inventory obsolescence 9,501     4,286  
Deferred income tax benefit 1,632     (2,747 )
Share-based compensation expense 11,862     12,828  
Asset impairment 103,539     60,777  
(Gain) loss on sale of assets (222 )   15,303  
(Gain) on extinguishment of debt (69,041 )   -  
Change in assets and liabilities:      
Accounts receivable 176,614     (72,575 )
Income tax receivable 2,610     (2,445 )
Inventories of materials and supplies 12,385     (19,068 )
Prepaid expenses, deferred costs and other current assets 7,498     (3,655 )
Deferred costs and other assets (608 )   5,917  
Accounts payable (36,227 )   (11,967 )
Accrued liabilities (16,298 )   1,637  
Income tax payable (5,612 )   (328 )
Deferred credits and other liabilities (7,012 )   5,505  
Net cash provided by operating activities 625,008     604,287  
Cash flows from investing activities:      
Capital expenditures (223,731 )   (448,019 )
Net proceeds from sale of assets 20,792     (4,402 )
Net cash used in investing activities (202,939 )   (452,421 )
Cash flows from financing activities:      
Proceeds from borrowing of long-term debt 45,000     225,000  
Principal repayments on long-term debt (426,623 )   (280,000 )
Repayments on short-term debt, net -     (11,885 )
Dividends paid (21,745 )   (48,562 )
Proceeds from exercise of stock options -     1,064  
Debt issuance costs paid (451 )   (3,580 )
Windfall tax benefits from share-based payment arrangements 13,194     -  
Net cash (used in) or provided by financing activities (390,625 )   (117,963 )
Net increase (decrease) in cash and cash equivalents 31,444     33,903  
Cash at beginning of period 113,983     80,080  
Cash at end of period $ 145,427     $ 113,983  
Cash paid during the period for:      
Domestic and foreign income taxes $ 35,653     $ 50,428  
Interest, net of amounts capitalized $ 67,958     $ 48,209  
Non-cash activities:      
Decrease in accounts payables related to capital expenditures $ (8,028 )   $ (9,532 )
Dividends payable $ -     $ 16,164  

Atwood Oceanics, Inc. is a leading offshore drilling company engaged in the drilling and completion of exploration and development wells for the global oil and gas industry. The Company currently owns 10 mobile offshore drilling units and is constructing 2 ultra-deepwater drillships. The Company was founded in 1968 and is headquartered in Houston, Texas. Atwood Oceanics, Inc. common stock is traded on the New York Stock Exchange under the symbol "ATW." For more information about the Company, please visit www.atwd.com.

Conference Call

The Company has scheduled a conference call and webcast related to its fourth quarter 2016 results on Monday, November 14, 2016, at 9:00 A.M. CDT (10:00 A.M. EDT). Interested parties are invited to listen to the call by dialing 1-800-895-1085, or internationally 1-785-424-1055, Conference ID - Atwood, Password 24864. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company's Web site.

A replay of the conference call will be available on the Company's Web site following the end of the live call.

Contact: Mark W. Smith
Senior Vice President and Chief Financial Officer
(281) 749-7840





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Source: Atwood Oceanics, Inc. via Globenewswire

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