Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - ATWOOD OCEANICS INC | atw5817fleetstatusfinal4.htm |
| 8-K - 8-K - ATWOOD OCEANICS INC | a8-kearningsreleaseandflee.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE - EARNINGS
HOUSTON, May 8, 2017 -- Atwood Oceanics, Inc. (NYSE: ATW) ("Company"), announced today that it had recognized a net loss of $28.9 million or $(0.37) per diluted share, on revenues of $167.7 million for the quarter ended March 31, 2017 compared to net income of $9.7 million or $0.15 per diluted share on revenues of $157.6 million for the quarter ended December 31, 2016 and compared to net income of $122.4 million or $1.89 per diluted share, on revenues of $296.4 million for the quarter ended March 31, 2016. For the six months ended March 31, 2017, the Company recognized a net loss of $19.2 million or $(0.27) per diluted share, on revenues of $325.3 million compared to net income of $161.5 million or $2.49 per diluted share, on revenues of $604.2 million for the six months ended March 31, 2016.
During the three months ended March 31, 2017, we concluded that the Atwood Eagle and its materials and supplies were impaired, and we wrote them down to their approximate salvage value. We recorded a non-cash impairment charge of approximately $59.0 million ($57.6 million, net of tax, or $0.74 per diluted share), which is included in Asset Impairment on the Unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2017. This impairment charge includes a write-down of property and equipment and deferred costs of $49.6 million, a write-down of our inventory of materials and supplies that was specific to the Atwood Eagle of $8.4 million, and accrued estimated transaction costs of $1.0 million. On May 5, 2017, we executed a sale and recycling agreement with respect to the Atwood Eagle, pursuant to which the vessel, together with associated equipment and machinery will be sold to a third party to be demolished and recycled.
In January 2017, the client for the Atwood Achiever exercised its option provided as part of the “blend and extend” agreement we entered into in October 2015 to revert the contract to the original operating day rate and original end date. Exercise of this option resulted in a one-time payment to us of $48.1 million that includes the difference in day rates, taxes, and administrative fees covering the time periods for which the reduced day rate was applicable for previously provided drilling services, and is reported as a component of Contract drilling revenue in our Unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2017.
During the three months ended March 31, 2017, we issued, in a public offering, 15,525,000 shares of common stock. The net proceeds from the offering, before deducting estimated offering expenses, were approximately $181 million. The net proceeds are currently held as cash and are expected to be used for general corporate purposes, which may include the repayment of borrowings under the Credit Facility, the funding of future purchases or redemption of our Senior Notes, working capital and capital expenditures, and otherwise to enhance our liquidity.
During the three months ended March 31, 2016, we repurchased, through open market transactions, $13.5 million aggregate principal of our Senior Notes at an aggregate cost of $5.1 million, including a minimal amount of accrued interest, representing an average discount of 62.2%. As a result of the repurchases, we recognized a gain on debt retirement, net of the related debt issuance costs, of $8.4 million (or $0.13 per diluted share) in Gains on extinguishment of debt on the Unaudited Condensed Consolidated Statement of Operations for the three and six months ended March 31, 2016.
For the Three Months Ended | |||||||||||
(Unaudited) | |||||||||||
(In thousands, except per share amounts) | March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||
Revenues | $ | 167,706 | $ | 157,556 | $ | 296,351 | |||||
Income (Loss) before Income Taxes | (27,316 | ) | 12,064 | 136,426 | |||||||
Provision for Income Taxes | (1,546 | ) | (2,393 | ) | (13,989 | ) | |||||
Net Income (Loss) | $ | (28,862 | ) | $ | 9,671 | $ | 122,437 | ||||
Earnings per Common Share - | |||||||||||
Basic | $ | (0.37 | ) | $ | 0.15 | $ | 1.89 | ||||
Diluted | $ | (0.37 | ) | $ | 0.15 | $ | 1.89 | ||||
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Six Months Ended | |||||||||
(Unaudited) | |||||||||
(In thousands, except per share amounts) | March 31, 2017 | March 31, 2016 | |||||||
Revenues | $ | 325,262 | $ | 604,170 | |||||
Income (Loss) before Income Taxes | (15,251 | ) | 186,721 | ||||||
Provision for Income Taxes | (3,940 | ) | (25,203 | ) | |||||
Net Income (Loss) | $ | (19,191 | ) | $ | 161,518 | ||||
Earnings per Common Share - | |||||||||
Basic | $ | (0.27 | ) | $ | 2.49 | ||||
Diluted | $ | (0.27 | ) | $ | 2.49 | ||||
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||
(In thousands, except per share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
REVENUES: | |||||||||||||||
Contract drilling | $ | 162,240 | $ | 282,546 | $ | 312,103 | $ | 577,161 | |||||||
Revenues related to reimbursable expenses | 5,466 | 13,805 | 13,159 | 27,009 | |||||||||||
Total revenues | 167,706 | 296,351 | 325,262 | 604,170 | |||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Contract drilling | 64,277 | 89,918 | 129,947 | 220,570 | |||||||||||
Reimbursable expenses | 4,674 | 9,123 | 11,276 | 17,409 | |||||||||||
Depreciation | 41,443 | 41,053 | 83,251 | 83,880 | |||||||||||
General and administrative | 12,445 | 11,488 | 27,636 | 26,665 | |||||||||||
Asset impairment | 58,962 | 708 | 58,962 | 65,432 | |||||||||||
(Gain) loss on sale of assets | (51 | ) | 77 | (118 | ) | 77 | |||||||||
Other, net | — | (1,137 | ) | — | (1,060 | ) | |||||||||
181,750 | 151,230 | 310,954 | 412,973 | ||||||||||||
OPERATING (LOSS) INCOME | (14,044 | ) | 145,121 | 14,308 | 191,197 | ||||||||||
OTHER (EXPENSE) INCOME: | |||||||||||||||
Interest expense, net of capitalized interest | (13,537 | ) | (17,098 | ) | (29,828 | ) | (30,859 | ) | |||||||
Interest income | 265 | 6 | 269 | 10 | |||||||||||
Gains on extinguishment of debt | — | 8,397 | — | 8,397 | |||||||||||
Other income | — | — | — | 17,976 | |||||||||||
(13,272 | ) | (8,695 | ) | (29,559 | ) | (4,476 | ) | ||||||||
(LOSS) INCOME BEFORE INCOME TAXES | (27,316 | ) | 136,426 | (15,251 | ) | 186,721 | |||||||||
PROVISION FOR INCOME TAXES | 1,546 | 13,989 | 3,940 | 25,203 | |||||||||||
NET (LOSS) INCOME | $ | (28,862 | ) | $ | 122,437 | $ | (19,191 | ) | $ | 161,518 | |||||
(LOSS) EARNINGS PER COMMON SHARE (NOTE 3): | |||||||||||||||
Basic | $ | (0.37 | ) | $ | 1.89 | $ | (0.27 | ) | $ | 2.49 | |||||
Diluted | $ | (0.37 | ) | $ | 1.89 | $ | (0.27 | ) | $ | 2.49 | |||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE 3): | |||||||||||||||
Basic | 78,270 | 64,781 | 71,504 | 64,739 | |||||||||||
Diluted | 78,270 | 64,825 | 71,504 | 64,870 | |||||||||||
Dividend declared per share | $ | — | $ | — | $ | — | $ | 0.075 | |||||||
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
UNAUDITED ANALYSIS OF REVENUES AND DRILLING COSTS
REVENUES | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
(In millions) | March 31, 2017 | December 31, 2016 | March 31, 2016 | March 31, 2017 | March 31, 2016 | ||||||||||||||
Ultra-Deepwater | $ | 162 | $ | 148 | $ | 189 | $ | 310 | $ | 371 | |||||||||
Deepwater | — | — | 59 | — | 131 | ||||||||||||||
Jackups | — | 2 | 34 | 2 | 75 | ||||||||||||||
Reimbursable | 6 | 8 | 14 | 13 | 27 | ||||||||||||||
$ | 168 | $ | 158 | $ | 296 | $ | 325 | $ | 604 | ||||||||||
DRILLING COSTS | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
(In millions) | March 31, 2017 | December 31, 2016 | March 31, 2016 | March 31, 2017 | March 31, 2016 | ||||||||||||||
Ultra-Deepwater | $ | 53 | $ | 50 | $ | 54 | $ | 103 | $ | 115 | |||||||||
Deepwater | — | — | 19 | — | 62 | ||||||||||||||
Jackups | 11 | 14 | 19 | 25 | 45 | ||||||||||||||
Reimbursable | 5 | 7 | 9 | 11 | 17 | ||||||||||||||
Other | — | 1 | (2 | ) | 2 | (1 | ) | ||||||||||||
$ | 69 | $ | 72 | $ | 99 | $ | 141 | $ | 238 | ||||||||||
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value) | March 31, 2017 | September 30, 2016 | |||||
(Unaudited) | |||||||
ASSETS | |||||||
Cash | $ | 435,208 | $ | 145,427 | |||
Accounts receivable, net | 81,630 | 113,091 | |||||
Income tax receivable | 2,889 | 6,095 | |||||
Inventories of materials and supplies, net | 101,721 | 109,925 | |||||
Prepaid expenses, deferred costs and other current assets | 12,498 | 18,504 | |||||
Total current assets | 633,946 | 393,042 | |||||
Property and equipment, net | 4,143,390 | 4,127,696 | |||||
Other receivables | 11,831 | 11,831 | |||||
Deferred income taxes | 165 | 165 | |||||
Deferred costs and other assets | 7,313 | 7,058 | |||||
Total assets | $ | 4,796,645 | $ | 4,539,792 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Accounts payable | $ | 23,693 | $ | 25,299 | |||
Accrued liabilities | 9,747 | 7,868 | |||||
Interest payable | 8,395 | 7,096 | |||||
Income tax payable | 8,582 | 8,294 | |||||
Deferred credits and other liabilities | 1,636 | 799 | |||||
Total current liabilities | 52,053 | 49,356 | |||||
Long-term debt | 1,298,067 | 1,227,919 | |||||
Deferred income taxes | 1,599 | 1,202 | |||||
Deferred credits | 7,910 | — | |||||
Other | 35,994 | 30,929 | |||||
Total long-term liabilities | 1,343,570 | 1,260,050 | |||||
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 80,516 issued (Note 10) and outstanding as of March 31, 2017 and 180,000 shares authorized and 64,799 shares issued and outstanding as of September 30, 2016 | 80,516 | 64,799 | |||||
Paid-in capital | 410,855 | 237,542 | |||||
Retained earnings | 2,909,684 | 2,929,839 | |||||
Accumulated other comprehensive loss | (33 | ) | (1,794 | ) | |||
Total shareholders' equity | 3,401,022 | 3,230,386 | |||||
Total liabilities and shareholders' equity | $ | 4,796,645 | $ | 4,539,792 | |||
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended March 31, | |||||||
(In thousands) | 2017 | 2016 | |||||
Cash flows from operating activities: | |||||||
Net (loss) income | $ | (19,191 | ) | $ | 161,518 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation | 83,251 | 83,880 | |||||
Amortization | 3,367 | 1,607 | |||||
Provision for doubtful accounts | 2,369 | 1,141 | |||||
Deferred income tax benefit | (525 | ) | (650 | ) | |||
Share-based compensation expense | 7,566 | 5,009 | |||||
Asset impairment | 58,962 | 65,432 | |||||
(Gain) loss on sale of assets | (118 | ) | 77 | ||||
(Gain) on extinguishment of debt | — | (8,397 | ) | ||||
Other, net | — | (1,137 | ) | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 38,217 | 62,963 | |||||
Income tax receivable | 3,206 | 507 | |||||
Inventories of materials and supplies | (168 | ) | 16,187 | ||||
Prepaid expenses, deferred costs and other current assets | 6,072 | 14,709 | |||||
Deferred costs and other assets | (4,201 | ) | (1,381 | ) | |||
Accounts payable | 3,425 | (25,306 | ) | ||||
Accrued liabilities | 4,023 | (3,760 | ) | ||||
Income tax payable | 288 | 6,534 | |||||
Deferred credits and other liabilities | 6,720 | 1,220 | |||||
Net cash provided by operating activities | 193,263 | 380,153 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (154,448 | ) | (176,175 | ) | |||
Proceeds from sale of assets | — | 6,681 | |||||
Net cash used in investing activities | (154,448 | ) | (169,494 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of long-term debt | 125,000 | 45,000 | |||||
Principal payments on long-term debt | (55,000 | ) | (120,156 | ) | |||
Dividends paid | — | (21,746 | ) | ||||
Payments related to exercise of stock options | — | (928 | ) | ||||
Proceeds from issuance of common stock | 180,966 | — | |||||
Net cash provided by (used in) financing activities | 250,966 | (97,830 | ) | ||||
Net increase in cash and cash equivalents | 289,781 | 112,829 | |||||
Cash and cash equivalents, at beginning of period | 145,427 | 113,983 | |||||
Cash and cash equivalents, at end of period | $ | 435,208 | $ | 226,812 | |||
Non-cash activities: | |||||||
(Decrease) increase in accounts payable related to capital expenditures | $ | (5,031 | ) | $ | 950 | ||
Increase in deferred credits not yet collected | $ | 9,125 | $ | — | |||
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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 two 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 second quarter 2017 results on Tuesday, May 9, 2017, at 9:00 A.M. CDT (10:00 A.M. EDT). Interested parties are invited to listen to the call by dialing 1-800-894-5910, or internationally 1-785-424-1052, Conference ID - Atwood, Password 46829. 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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