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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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Form 10-Q
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED DECEMBER 31, 2002
COMMISSION FILE NUMBER 1-13167
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
ATWOOD OCEANICS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-1611874
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
15835 Park Ten Place Drive 77084
Houston, Texas (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code:
281-749-7800
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filings
requirements for the past 90 days. Yes X No___
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act. Yes X No __.
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of January 31, 2003: 13,845,051 shares of Common Stock $1 par
value
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ATWOOD OCEANICS, INC.
FORM 10-Q
For the Quarter Ended December 31, 2002
INDEX
Part I. Financial Information
Item 1. Financial Statements Page
a) Statement of Operations
For the Three Months Ended December 31, 2002 and 2001............4
b) Balance Sheets
As of December 31, 2002 and September 30, 2002...................5
c) Cash Flows Statements
For the Three Months Ended December 31, 2002 and 2001............7
d) Notes to Financial Statements....................................8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.........................10
Item 3. Quantitative and Qualitative Disclosures about Market Risk..14
Item 4. Controls and Procedures.....................................14
Part II. Other Information
Item 2. Changes in Securities and Use of Proceeds...................15
Item 6. Exhibits and Reports on Form 8-K............................15
Signature.....................................................................17
PART I. FINANCIAL INFORMATION
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
The unaudited interim financial statements as of December 31, 2002 and for
each of the three month periods ended December 31, 2002 and 2001, included
herein, have been prepared by the Company, pursuant to the rules and regulations
of the Securities and Exchange Commission ("SEC") for interim financial
reporting. Accordingly, these financial statements and related information have
been prepared without audit, and certain information and note disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted, although
management believes that the note disclosures are adequate to make the
information not misleading. The interim financial results may not be indicative
of results that could be expected for a full year. It is suggested these
condensed consolidated financial statements be read in conjunction with the
consolidated financial statements and the notes thereto included in the
Company's September 30, 2002 Annual Report to Shareholders.
This Form 10-Q for the quarterly period ended December 31, 2002 includes
"forwarding-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended. All statements other than statements of
historical facts included in this Form 10-Q regarding the Company's financial
position, business strategy, budgets and plans and objectives of management for
future operations are forward-looking statements. These forward-looking
statements involve risks and uncertainties that may cause the Company's actual
future activities and results of operations to be materially different from
those suggested or described in the Form 10-Q.
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended
December 31,
------------------------
2002 2001
---- ----
(Unaudited)
REVENUES:
Contract drilling $29,841 $37,234
------- -------
COSTS AND EXPENSES:
Contract drilling 19,345 16,214
Depreciation 5,392 5,823
General and administrative 2,680 2,670
------- -------
27,417 24,707
------- -------
OPERATING INCOME 2,424 12,527
------- -------
OTHER INCOME (EXPENSE)
Interest expense (113) (203)
Interest income 63 63
------- -------
(50) (140)
------- -------
INCOME BEFORE INCOME TAXES 2,374 12,387
PROVISION FOR INCOME TAXES 1,424 4,229
------- -------
NET INCOME $ 950 $ 8,158
======= =======
EARNINGS PER COMMON SHARE:
Basic $ .07 $ .59
Diluted .07 .59
AVERAGE COMMON SHARES OUTSTANDING:
Basic 13,845 13,832
Diluted 13,912 13,912
The accompanying notes are an integral part of these consolidated financial
statements.
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, September 30,
2002 2002
------------ -------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 15,631 $27,055
Accounts receivable, net 26,926 28,776
Inventories of materials and supplies,
at lower of average cost or market 8,982 9,134
Deferred tax assets 223 223
Prepaid expenses 4,809 6,625
--------- ---------
Total Current Assets 56,571 71,813
-------- --------
PROPERTY AND EQUIPMENT, at cost:
Drilling vessels, equipment and drill pipe 617,929 583,241
Other 9,173 9,156
--------- ---------
627,102 592,397
Less-accumulated depreciation 229,362 224,000
------- -------
Net Property and Equipment 397,740 368,397
------- -------
DEFERRED COSTS AND OTHER ASSETS 8,109 4,320
---------- -----------
$462,420 $444,530
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, September 30,
2002 2002
----------- ------------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term note payable $ 3,212 $ 5,023
Accounts payable 5,426 5,584
Accrued liabilities 12,635 13,809
------- --------
Total Current Liabilities 21,273 24,416
------- --------
LONG-TERM DEBT, net of current maturities: 135,000 115,000
------- --------
DEFERRED CREDITS:
Income taxes 15,995 15,545
Other 13,069 13,436
-------- --------
29,064 28,981
-------- --------
SHAREHOLDERS' EQUITY:
Preferred stock, no par value;
1,000,000 shares authorized, none outstanding --- ---
Common stock, $1 par value;
20,000,000 shares authorized with 13,845,051
shares issued and outstanding 13,845 13,845
Paid-in-capital 57,274 57,274
Retained earnings 205,964 205,014
-------- --------
277,083 276,133
-------- --------
$462,420 $444,530
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
December 31,
-----------------------
2002 2001
----- ------
(Unaudited)
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $ 950 $ 8,158
------- --------
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation 5,392 5,823
Amortization 106 450
Deferred federal income tax provision 450 750
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 1,850 (3,439)
Decrease in accounts payable and accrued liabilities (463) (2,409)
Net mobilization fees (1,074) (1,917)
Other (1,220) 351
------- --------
5,041 (391)
------- --------
Net cash provided by operating activities 5,991 7,767
------- --------
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures (35,694) (24,602)
Other 90 ---
------- --------
Net cash used by investing activities (35,604) (24,602)
------- --------
CASH FLOW FROM FINANCING ACITIVITES:
Proceeds from revolving credit facility 20,000 20,000
Principal payments on debt (1,811) ---
------- --------
Net cash provided by financing activities 18,189 20,000
------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (11,424) 3,165
CASH AND CASH EQUIVALENTS, at beginning of period 27,055 12,621
------- --------
CASH AND CASH EQUIVALENTS, at end of period $15,631 $ 15,786
======== ========
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Supplemental disclosure of cash flow information:
Cash paid during the quarter for domestic
and foreign income taxes $ 1,737 $ 1,164
======= ========
Cash paid during the quarter for interest,
net of amounts capitalized $ --- $ 86
======= ========
The accompanying notes are an integral part of these consolidated financial
statements.
PART I. ITEM 1 - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. UNAUDITED INTERIM INFORMATION
For interim periods, the Company records income taxes using the expected
effective tax rate for the fiscal year. In the opinion of the Company's
management, the unaudited interim financial statements reflect all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation of the financial position and results of operations of the Company
for the periods presented.
2. EARNINGS PER COMMON SHARE
The computation of basic and diluted earnings per share is as follows
(in thousands, except per share amounts):
Per Share
Net Income Shares Amount
---------- ------ ---------
Three Months Ended -
December 31, 2002:
Basic earnings per share $ 950 13,845 $ .07
Effect of dilutive securities -
Stock options --- 67 ---
------- ------ -----
Diluted earnings per share $ 950 13,912 $ .07
======= ====== =====
Three Months Ended -
December 31, 2001:
Basic earnings per share $ 8,158 13,832 $ .59
Effect of dilutive securities -
Stock options --- 80 ---
------- ------ -----
Diluted earnings per share $ 8,158 13,912 $ .59
======= ====== =====
3. LONG-TERM DEBT
On December 17, 2002, the Company entered into agreements which amended its
credit facilities to increase the allowed ratio of outstanding debt to earnings,
before interest, income taxes and depreciation from 2.75 to 5.0 at December 31,
2002, reducing to 4.75 at March 31, 2003, 4.25 at June 30, 2003 and 2.75
thereafter. The Company was in compliance with all financial covenants at
December 31, 2002.
4. NEW ACCOUNTING STANDARDS
As discussed in the consolidated financial statements included in the
Company's Annual Report on Form 10-K of the year ended September 30, 2002, the
provisions of Financial Accounting Standards Board ("FASB") statements No. 142,
Goodwill and Other Intangible Assets; No. 143, Accounting for Asset Retirement
Obligations; No. 144, Accounting for the Impairment or Disposal of Long-lived
Assets; and No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment
of FASB Statement No. 13 and Technical Corrections became effective for the
Company on October 1, 2002. The adoption of these statements did not have a
material impact on the consolidated financial statements of the Company.
The provisions of SFAS No. 146, Accounting for Costs Associated with Exit
or Disposal Activities, become effective for exit or disposal activities that
were initiated after December 31, 2002. Management does not expect the adoption
of SFAS No. 146 to have a material impact or its financial statements or results
of operations.
In December 2002, the FASB issued SFAS No, 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure on amendment of SFAS No. 123. "SFAS"
No. 148 amends SFAS No. 123, "Accounting for Stock-Based compensation" to
provide alternative methods of transition for a voluntary change to the fair
value based method of stock-based employee compensation. In addition, the
statement amends the disclosure requirements of SFAS No. 123 to require
pertinent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. The Company does not intend to adopt the fair
value based method of stock-based compensation. The disclosure provisions are
effective for the Company in the second quarter of fiscal 2003.
PART I. ITEM 2
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
All non-historical information set forth herein is based upon expectations
and assumptions deemed reasonable by the Company. The Company can give no
assurance that such expectations and assumptions will prove to be correct, and
actual results could differ materially from the information presented herein.
The Company's periodic reports filed with the SEC should be consulted for a
description of risk factors associated with an investment in the Company.
MARKET OUTLOOK
The worldwide offshore demand for drilling units continues to be impacted
by the political uncertainties in the Middle East and Venezuela, as well as
current soft market conditions. Over the last ten years the Company has
maintained a relatively high level of equipment utilization. Presently, the
Company only has two drilling units, the VICKSBURG and SEAHAWK that have
contract terms that extend into fiscal 2004. During these current market
conditions, management will emphasize utilization over higher dayrates; however,
no assurance can be given that some idle time will not be incurred by some of
the Company's drilling units during the remainder of fiscal year 2003.
The ATWOOD EAGLE completed its upgrade at the end of November 2002 and is
currently being mobilized to Angola pursuant to a commitment from ESSO
Exploration Angola (Block 15) Limited to enter into a contract for the use of
this rig to drill three firm wells plus options for four additional wells. The
contract, which should be formalized in February 2003, provides for a dayrate of
around $86,000 and will include approximately $3.1 million in payments for
mobilization and incidental expenses. Following its major upgrade in 2001, the
ATWOOD HUNTER has worked continuously and successfully off the coast of Egypt.
However, its dayrate has declined from approximately $100,000 in fiscal year
2002 to a current level of approximately $30,000. The ATWOOD SOUTHERN CROSS,
ATWOOD FALCON and RICHMOND have current contract commitments which should keep
the units employed into the third quarter fiscal year 2003. The construction of
the ultra-premium jack-up drilling unit, the ATWOOD BEACON, continues on
schedule and within cost estimates, with delivery expected by June 2003.
Since the current political uncertainties and soft market conditions have
resulted in a lower level of dayrates on some of the Company's drilling units,
revenues, operating cash flows and net income are expected to be below results
of fiscal year 2002. The current near-term outlook has not weakened the
Company's optimism about the longer-term outlook and fundamentals of the
offshore drilling market. The Company has completed its $340 million fleet
upgrade program of its current seven active drilling units that began in 1996.
The Company looks forward to fiscal year 2004 when all seven of these units,
plus the ATWOOD BEACON, should be available for work throughout the entire year,
which in an improving market, could provide an increase in earnings and cash
flows.
RESULTS OF OPERATIONS
Contract revenues for the three months ended December 31, 2002 decreased
20% compared to the three months ended December 31, 2001. A comparative analysis
of contract revenues is as follows:
CONTRACT REVENUES
(In millions)
-------------------------------------------------------
First Quarter First Quarter
Fiscal Year 2003 Fiscal Year 2002 Variance
---------------- ---------------- --------
ATWOOD HUNTER $ 6.4 $ 2.0 $ 4.40
VICKSBURG 6.4 5.2 1.2
SEAHAWK 5.3 5.6 (0.3)
RICHMOND 2.0 3.3 (1.3)
ATWOOD FALCON 6.9 9.4 (2.5)
ATWOOD SOUTHERN CROSS 2.3 5.8 (3.5)
ATWOOD EAGLE 0.0 5.3 (5.3)
OTHER 0.5 0.6 (0.1)
----- ----- -----
$29.8 $37.2 $(7.4)
===== ===== =====
The increase in revenue for the ATWOOD HUNTER resulted from the completion
of the upgrade and its relocation to the Mediterranean for most of the first
quarter of the prior fiscal year compared to a full quarter of operations for
the current quarter. The VICKSBURG's average dayrate increased from $57,000
during the first quarter of fiscal year 2002 to $64,000 during the same period
for fiscal year 2003. The SEAHAWK continues to have a consistent level of
operations under its long-term contract in Malaysia and experienced a slight
decrease in revenue due to downtime for planned repairs and maintenance. The
average dayrate for the RICHMOND was $22,000 for the current quarter as compared
to $36,000 for the same quarter in the prior fiscal year. The ATWOOD FALCON
spent approximately three weeks relocating to Australia during the current
quarter, accounting for its decrease in revenue. The ATWOOD SOUTHERN CROSS
operated for only 33 days during the first quarter of fiscal year 2003 as it was
under tow to Italy and undergoing planned maintenance and upgrades to meet
Italian operating standards for its current contract commitment. The ATWOOD
SOUTHERN CROSS had a full quarter of operations during the first quarter of
fiscal year 2002. The ATWOOD EAGLE received no dayrate revenue for the quarter
ended December 31, 2002 as the rig completed its $90 million upgrade in late
November 2002 and was relocating to Angola during the quarter.
Contract drilling costs increased 21% in the first quarter of fiscal year
2003, compared to the first quarter of fiscal year 2002. An analysis of contract
drilling and management costs by rig is as follows:
CONTRACT DRILLING COSTS
(In millions)
------------------------------------------------
First Quarter First Quarter
Fiscal Year 2003 Fiscal Year 2002 Variance
---------------- ---------------- --------
ATWOOD HUNTER $ 3.5 $ 0.7 $ 2.8
ATWOOD FALCON 4.1 2.2 1.9
ATWOOD SOUTHERN CROSS 3.8 2.5 1.3
SEAHAWK 2.4 2.1 0.3
VICKSBURG 2.5 2.2 0.3
RICHMOND 2.0 1.9 0.1
ATWOOD EAGLE 0.0 3.3 (3.3)
OTHER 1.0 1.3 (0.3)
----- ----- -----
$19.3 $16.2 $ 3.1
===== ===== =====
The ATWOOD HUNTER operated for the full quarter ended December 31, 2002,
compared to only a half month of operations in the same quarter of the prior
fiscal year as the rig completed its shipyard upgrade and was relocating to the
Mediterranean. The ATWOOD FALCON is currently operating in Australia, and its
increase in costs is primarily due to the higher costs of operating in
Australia, especially for payroll and certain upgrade costs for work in
Australia. The increase in costs for the ATWOOD SOUTHERN CROSS is due to the
planned maintenance and upgrade costs to meet Italian operating standards, as
well as, higher costs of operating in Italy for travel, shorebase operations and
rentals. The decrease in operating costs for the ATWOOD EAGLE resulted from its
shipyard upgrade and relocation, as a result of which no operating costs were
recognized during the current quarter.
An analysis of depreciation expense by rig for the first quarter of fiscal
year 2003 compared to the first quarter of fiscal year 2002 is as follows:
DEPRECIATION EXPENSE
(In millions)
----------------------------------------------------
First Quarter First Quarter
Fiscal Year 2003 Fiscal Year 2002 Variance
---------------- ---------------- ---------
ATWOOD HUNTER $ 1.4 $ 0.2 $ 1.2
RICHMOND 0.4 0.4 0.0
VICKSBURG 0.6 0.6 0.0
ATWOOD SOUTHERN CROSS 1.0 1.0 0.0
ATWOOD FALCON 0.6 0.7 (0.1)
SEAHAWK 1.2 1.3 (0.1)
ATWOOD EAGLE 0.0 0.9 (0.9)
OTHER 0.2 0.7 (0.5)
----- ----- ------
$ 5.4 $ 5.8 $ (0.4)
===== ===== ======
The Company does not recognize depreciation expense during the period a rig
is out of service for a significant upgrade, which accounts for the increase in
depreciation expense for the ATWOOD HUNTER, which was undergoing its upgrade
during 2002, and the decrease in expense for the ATWOOD EAGLE for the first
quarter of fiscal 2003. Other depreciation expense decreased as RIG-200 was
fully depreciated to its salvage value by the third quarter of fiscal year 2002.
The Company's effective tax rate for the first quarter of fiscal year 2003
was 60% compared to an effective tax rate of 27% for fiscal year 2002. The
anticipated higher effective tax rate for fiscal year 2003 results from expected
lower pre-tax earnings coupled with excess foreign tax credits.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of fiscal year 2003, the Company utilized $20
million borrowed under its credit facilities, $11 million cash on hand, and $6
million net cash provided by operating activities to invest $17.4 million in the
upgrade of the ATWOOD EAGLE, to invest $14.9 million in the construction of the
ATWOOD BEACON, to fund approximately $3.3 million of other capital expenditures
and to repay $1.8 million in short-term notes payable. Despite an increase in
long-term debt, interest expense for the first quarter of fiscal year 2003
remained relatively consistent as compared to the first quarter of fiscal year
2002 due to an increase in capitalized interest costs from $600,000 to $1.2
million.
With the completion of the ATWOOD EAGLE upgrade, the Company has completed
its $340 million fleet upgrade on time and within cost estimates. Currently, the
Company's only significant on-going capital project relates to the completion of
the construction of the ATWOOD BEACON, with approximately $30 million remaining
to be funded. The Company presently has no plans to incur any upgrade costs on
the SEASCOUT during fiscal year 2003.
Subsequent to December 31, 2002, the Company borrowed an additional $35
million under its credit facilities for an outstanding balance of $170 million.
The Company has an additional $5 million of borrowing capacity under its credit
facilities. The Company is discussing with its current bank group, as well as
other lenders, a refinancing of its credit facilities to increase its borrowing
capacity from $175 million to $200 million (or greater), as well as exploring
other sources of capital, such as senior notes, in order to increase its capital
resources. The Company can give no assurances that it can increase its borrowing
capacity or that additional debt financing or other sources of capital will be
available on terms acceptable to the Company. The inability of the Company to
obtain additional capital resources could have a material adverse impact on the
Company's financial position in the latter part of fiscal year 2003.
PART I. ITEM 3
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk, including adverse change in interest
rates and foreign currency exchange rates as discussed below.
INTEREST RATE RISK
All of the $135 million of long-term debt outstanding at December 31, 2002,
was floating rate debt. As a result, the Company's annual interest costs in
fiscal year 2003 will fluctuate based on interest rate changes. Because the
interest rate on the Company's long-term debt is a floating rate, the fair value
of the Company's long-term debt approximates carrying value as of December 31,
2002. The impact on annual cash flow of a 10% change in the floating rate
(approximately 40 basis points) would be approximately $0.5 million. The Company
did not have any open derivative contracts relating to its floating rate debt at
December 31, 2002.
FOREIGN CURRENCY RISK
Certain of the Company's subsidiaries have monetary assets and liabilities
that are denominated in a currency other than their functional currencies. Based
on December 31, 2002 amounts, a decrease in the value of 10% in the foreign
currencies relative to the U.S. dollar from the year-end exchange rates would
not result in any material foreign currency transaction loss. Thus, the Company
considers its current risk exposure to foreign currency exchange rate movements,
based on net cash flows, to be immaterial. The Company did not have any open
derivative contracts relating to foreign currencies at December 31, 2002.
PART I. ITEM 4
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management , including the Company's Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. The Company's disclosure controls
and procedures are designed to ensure that information required to be disclosed
by the Company in its periodic SEC filings is recorded, processed and reported
within the time period specified in the SEC's rules and forms. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective in timely
alerting them to material information relating to the Company (including its
consolidated subsidiaries) required to be included in the Company's periodic SEC
filings. There were no significant changes in the Company's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of the evaluation.
PART II. OTHER INFORMATION
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In September 2002, the Company authorized and declared a dividend of one
Right for each outstanding share of Common Stock as of November 5, 2002, subject
to lender approval and consent which was obtained. One Right will also be
associated with each share of Common Stock that becomes outstanding after
November 5, 2002 but before the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as defined in Rights Agreement
dated effective October 18, 2002, which governs the Rights). The Rights are not
exercisable until a person or group of affiliated or associated persons commence
to acquire or acquires beneficial ownership of 15 percent or more of the
outstanding Common Stock of the Company. The provision does not apply to
shareholders already holding 15 percent or more of the outstanding Common Stock
of the Company as of November 5, 2002 until they acquire an additional 5
percent. When exercisable , each Right entitles the registered holder to
purchase from the Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, no par value, of the Company, at a price of $150
per one one-thousandth of a Preferred Share, subject to adjustment. The Rights
will expire on November 5, 2012. At December 31, 2002, 500,000 preferred shares
have been reserved for issuance in the event that Rights are exercised.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1.1 Restated Articles of Incorporation dated January 1972
(Incorporated herein by reference to Exhibit 3.1.1 of the
Company's Form 10-K for the year ended September 30, 2002)
3.1.2 Articles of Amendment dated March 1975 (Incorporated herein by
reference to Exhibit 3.1.2 of the Company's Form 10-K for the year
ended September 30, 2002).
3.1.3 Articles of Amendment dated March 1992 (Incorporated herein by
reference to Exhibit 3.1.3 of the Company's Form 10-K for the year
ended September 30, 2002).
3.1.4 Articles of Amendment dated November 7, 1997 (Incorporated herein by
reference to Exhibit 3.1.4 of the Company's Form 10-K for the year
ended September 30, 2002).
3.1.5 Certificate of Designations of Series A Junior Participating Preferred
Stock of Atwood Oceanics, Inc. dated October 17, 2002 (Incorporated
herein by reference to Exhibit 3.1.5 of the Company's Form 10-K for
the year ended September 30, 2002).
3.2 Bylaws, as amended and restated (Incorporated herein by reference to
Exhibit 3.2 of the Company's Form 10-K for the year ended
September 30, 1993).
4.1 Rights Agreement dated effective September 27, 2002 between the
Company and Continental Stock & Transfer & Trust Company
(Incorporated herein by reference to Exhibit 4.1 of the Company's
Form 8-A filed October 21, 2002).
*99.1.1 Certificate of Chief Executive Officer pursuant to Section 906 of
Sarbanes - Oxley Act of 2002.
*99.1.2 Certificate of Chief Financial Officer pursuant to Section 906 of
Sarbanes - Oxley Act of 2002.
*Filed herewith
(b) Reports on Form 8-K
1) On October 23, 2002, the Company filed a report on Form 8-K announcing
the adoption and approval by the Board of Directors of a shareholders'
rights plan, the entry of the Company into a Rights Agreement, and the
declaration of a dividend of one Right per share of Common Stock to
shareholders of record on November 5, 2002.
2) On November 4, 2002, the Company furnished a report on Form 8-K
announcing that the ATWOOD HUNTER was awarded two additional wells
under its current contract, as well as entered into a new contract
to drill one well. Current and planned activities relating to the
ATWOOD SOUTHERN CROSS and ATWOOD FALCON were also disclosed.
3) On November 18, 2002, the Company furnished a report on Form 8-K
announcing its earnings for the fiscal year and fourth quarter ended
September 30, 2002, along with supportive information.
4) On November 26, 2002, the Company filed a report on Form 8-K announcing
it has a commitment from ESSO Exploration Angola (Block 15)
Limited to enter into a contract for the use of the ATWOOD EAGLE.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ATWOOD OCEANICS, INC.
(Registrant)
Date: February 14, 2003 /s/JAMES M. HOLLAND
-----------------------
James M. Holland
Senior Vice President,
Chief Financial Officer and
Chief Accounting Officer
CERTIFICATIONS
I, John R. Irwin, certify that:
1) I have reviewed this quarterly report on Form 10-Q of Atwood Oceanics,
Inc.
2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others
within those entities, particularly during the
period in which this annual report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date";
and
c) Presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation date;
5) The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated: February 14, 2003
/s/JOHN R. IRWIN
John R. Irwin
Chief Executive Officer
I, James M. Holland, certify that:
1) I have reviewed this quarterly report on Form 10-Q of Atwood Oceanics,
Inc.
2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others
within those entities, particularly during the
period in which this quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report
(the "Evaluation Date"; and
c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation date;
5) The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b) Any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant's internal controls; and
6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated: February 14, 2003
/s/JAMES M. HOLLAND
James M. Holland
Chief Financial Officer
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
3.1.1 Restated Articles of Incorporation dated January 1972
(Incorporated herein by reference to Exhibit 3.1.1 of the
Company's Form 10-K for the year ended September 30, 2002)
3.1.2 Articles of Amendment dated March 1975 (Incorporated herein by
reference to Exhibit 3.1.2 of the Company's Form 10-K for the
year ended September 30, 2002).
3.1.3 Articles of Amendment dated March 1992 (Incorporated herein by
reference to Exhibit 3.1.3 of the Company's Form 10-K for the
year ended September 30, 2002).
3.1.4 Articles of Amendment dated November 7, 1997 (Incorporated
herein by reference to Exhibit 3.1.4 of the Company's Form 10-K
for the year ended September 30, 2002).
3.1.5 Certificate of Designations of Series A Junior Participating
Preferred Stock of Atwood Oceanics, Inc. dated October 17, 2002
(Incorporated herein by reference to Exhibit 3.1.5 of the
Company's Form 10-K for the year ended September 30, 2002).
3.2 Bylaws, as amended and restated (Incorporated herein by
reference to Exhibit 3.2 of the Company's Form 10-K for the year
ended September 30, 1993).
4.1 Rights Agreement dated effective September 27, 2002 between the
Company and Continental Stock & Transfer & Trust Company
(Incorporated herein by reference to Exhibit 4.1 of the
Company's Form 8-A filed October 21, 2002).
*99.1.1 Certificate of Chief Executive Officer pursuant to Section 906
of Sarbanes - Oxley Act of 2002.
*99.1.2 Certificate of Chief Financial Officer pursuant to Section 906
of Sarbanes - Oxley Act of 2002.
*Filed herewith
EXHIBIT 99.1.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Atwood Oceanics, Inc. (the
"Company") on Form 10-Q for the period ended December 31, 2002, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
John R. Irwin, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that, to the best of my knowledge:
(1) The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results
of operations of the Company for the periods presented.
Date: February 14, 2003 /s/ JOHN R. IRWIN
John R. Irwin
President and Chief Executive Officer
EXHIBIT 99.1.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Atwood Oceanics, Inc. (the
"Company") on Form 10-Q for the period ended December 31, 2002, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
James M. Holland, Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that, to the best of my knowledge:
(1) The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results
of operations of the Company for the periods presented.
Date: February 14, 2003 /s/JAMES M. HOLLAND
James M. Holland
Senior Vice President and
Chief Financial Officer