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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D. C. 20549
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Form 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR FISCAL YEAR ENDED SEPTEMBER 30, 2003
COMMISSION FILE NUMBER 1-13167
ATWOOD OCEANICS, INC.
(Exact name of registrant as specified in its charter)
TEXAS
(State or other jurisdiction of 74-1611874
incorporation or organization) (I.R.S. Employer Identification No.)
15835 Park Ten Place Drive 77084
Houston, Texas (Zip Code)
(Address of principal executive offices)
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Registrant's telephone number, including area code:
281-749-7800
Securities registered pursuant to
Section 12(b) of the Act:
Common Stock, $1 par value
(Title of Class)
Securities registered pursuant to
Section 12(g) of the Act:
NONE
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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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filings requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation in S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definite proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ].
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12.b-2). Yes [X] No [ ] The aggregate market value
of the voting stock held by non-affiliates of the registrants as of December 26,
2003 is $352,700,000.
The number of shares outstanding of the issuer's class of Common Stock, as
of December 26, 2003: 13,852,301 shares of Common Stock, $1 par value.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Annual Report to Shareholders for the fiscal year ended September 30,
2003 - Referenced in Parts I, II and IV of this report. (2) Proxy Statement for
Annual Meeting of Shareholders to be held February 12, 2004 - Referenced in Part
III of this report.
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PART I
ITEM 1. BUSINESS
Atwood Oceanics, Inc. (which together with its subsidiaries is identified
as the "Company", "Registrant", "we" or "our", unless the context requires
otherwise), a corporation organized in 1968 under the laws of the State of
Texas, is engaged in the international offshore drilling of exploration and
developmental oil and gas wells in offshore areas and related support management
and consulting services. Currently, our offshore drilling fleet includes eight
active, wholly-owned units, which include:
o two semisubmersibles capable of drilling in up to 5,000 feet of water,
o one semisubmersible capable of drilling in up to 3,700 feet of water,
o one semisubmersible capable of drilling in up to 2,000 feet of water,
o one ultra-premium, 400 feet cantilever jack-up,
o one premium, 300 feet cantilever jack-up
o one semisubmersible self-erecting tender-assist rig, and
o one submersible drilling unit.
We also own a semisubmersible hull which is a candidate for a future
conversion to a tender-assist unit once an acceptable contract is identified. In
addition to the owned drilling units, we also manage the maintenance and
operations of two operator-owned platform rigs offshore northwest Australia.
There is currently an indefinite planned break in drilling activity for these
two client-owned rigs; however, we continue to provide maintenance of these two
rigs for future drilling programs.
In 1997, we commenced an internal upgrade program of all of our active
drilling units. Our upgrade program was concluded with the completion of the
upgrade of the ATWOOD EAGLE in November 2002. Collectively, we expended $340
million in upgrading seven offshore mobile drilling units. In August 2003, our
eighth drilling unit, the newbuild ultra-premium jack-up, ATWOOD BEACON,
commenced its initial drilling contract following completion of its construction
and commissioning in July 2003. This drilling unit was constructed on time and
at a cost of approximately $120 million, compared to budgeted costs of $125
million. Thus, our current worldwide operations revolve around eight premium
offshore mobile drilling units located in five areas of the world - the United
States, Southeast Asia, the Mediterranean Sea, Africa and Australia.
Fiscal year 2003 marked our first operating loss in ten years. Our ability
to produce strong financial performance depends on a high demand for drilling
equipment, which is dependent on worldwide oil and gas exploration and
development activities. Soft market conditions have reduced current worldwide
utilization of offshore drilling units to less than 80%. The continuing
disconnect between relatively high commodity prices and soft market conditions
(especially for semisubmersibles) reflects increased conservatism by exploration
and production companies due to a number of factors including:
o weak capital markets,
o increased focus on reducing debt, and
o a host of geopolitical uncertainties (for example, those in
Iraq, Venezuela and Nigeria).
Our ability to return to profitability will depend on maintaining a
relatively high level of equipment utilization. We anticipate that market
conditions (especially for semisubmersibles) during fiscal year 2004 will
continue to be challenging; however, we expect operating results for fiscal year
2004 to improve over results for fiscal year 2003.
During our thirty-five year history, the majority of our drilling units
have operated outside of United States waters. Approximately 94%, 95% and 82% of
our contract revenues were derived from foreign operations in fiscal years 2003,
2002 and 2001, respectively. The submersible RICHMOND is our only drilling unit
currently working in United States waters. In addition to operating in United
States waters, we are currently involved in active foreign operations in the
territorial waters of Australia, Malaysia, Egypt and India. We expect to
commence active operations off the coast of Japan in January 2004. For
information relating to the contract revenues, operating income and identifiable
assets attributable to specific geographic areas of operations, see Note 12 of
Notes to Consolidated Financial Statements contained in our Annual Report to
Shareholders for fiscal year 2003, incorporated by reference herein.
OFFSHORE DRILLING EQUIPMENT Our diversified fleet of owned or operated
drilling rigs currently consists of eleven rigs:
o four semisubmersibles,
o one semisubmersible tender assist rig,
o one semisubmersible hull suitable for conversion to a tender
assist vessel at a future date,
o two jack-ups,
o one submersible, and
o two modern, self-contained platform rigs.
Each type of drilling rig is designed for different purposes and
applications, for operations in different water depths, bottom conditions,
environments and geographical areas, and for different drilling and operating
requirements. The following descriptions of the various types of drilling rigs
we own or operate illustrate the diversified range of application of our rig
fleet.
Each semisubmersible drilling unit has two hulls, the lower of which is
capable of being flooded. Drilling equipment is mounted on the main hull. After
the drilling unit is towed to location, the lower hull is flooded, lowering the
entire drilling unit to its operating draft, and the drilling unit is anchored
in place. On completion of operations, the lower hull is deballasted, raising
the entire drilling unit to its towing draft. This type of drilling unit is
designed to operate in greater water depths than a jack-up and in more severe
sea conditions than other types of drilling units. Semisubmersible units are
generally more expensive to operate than jack-up rigs and are often limited in
the amount of supplies that can be stored on board.
Semisubmersible tender assist vessels operate like a semisubmersible except
that their drilling equipment is temporarily installed on permanently
constructed offshore support platforms. The semisubmersible vessel provides crew
accommodations, storage facilities and other support for the drilling
operations.
A jack-up drilling unit contains all of the drilling equipment on a single
hull designed to be towed to the well site. Once on location, legs are lowered
to the sea floor and the unit is raised out of the water by jacking the hull up
the legs. On completion of the well, the unit is jacked down, and towed to the
next location. A jack-up drilling unit can operate in more severe sea and
weather conditions than a drillship and is less expensive to operate than a
semisubmersible. However, because it must rest on the sea floor, a jack-up
cannot operate in water as deep as semisubmersible units.
The submersible drilling unit we own has two hulls, the lower being a mat,
which is capable of being flooded. Drilling equipment and crew accommodations
are located on the main hull. After the drilling unit is towed to its location,
the lower hull is flooded, lowering the entire unit to its operating draft at
which it rests on the sea floor. On completion of operations, the lower hull is
deballasted, raising the entire unit to its towing draft. This type of drilling
unit is designed to operate in shallow water depths ranging from 9 to 70 feet
and can operate in moderately severe sea conditions. Although drilling units of
this type are less expensive to operate, like the jack-up rig, they cannot
operate in as deep water as semisubmersible units.
A modular platform rig is similar to a land rig in its basic components.
Modular platform rigs are temporarily installed on permanently constructed
offshore support platforms in order to perform the drilling operations. After
the drilling phase is completed, the modular rig is broken down into convenient
packages and moved by workboats. A platform rig usually stays at a location for
several months, if not years, since several wells are typically drilled from a
support platform.
DRILLING CONTRACTS
The contracts under which we operate our vessels are obtained either
through individual negotiations with the customer or by submitting proposals in
competition with other contractors and vary in their terms and conditions. The
initial term of contracts for our owned and/or operated vessels has ranged from
the length of time necessary to drill one well to several years and is generally
subject to early termination in the event of a total loss of the drilling
vessel, a force majeure event, excessive equipment breakdown or failure to meet
minimum performance criteria. It is not unusual for contracts to contain renewal
provisions at the option of the customer.
The rate of compensation specified in each contract depends on the nature
of the operation to be performed, the duration of the work, the amount and type
of equipment and services provided, the geographic areas involved, market
conditions and other variables. Generally, contracts for drilling, management
and support services specify a basic rate of compensation computed on a dayrate
basis. Such agreements generally provide for a reduced dayrate payable when
operations are interrupted by equipment failure and subsequent repairs, field
moves, adverse weather conditions or other factors beyond our control. Some
contracts also provide for revision of the specified dayrates in the event of
material changes in certain items of cost. Any period during which a vessel is
not earning a full operating dayrate because of the above conditions or because
the vessel is idle and not on contract will have an adverse effect on operating
profits. An over-supply of drilling rigs in any market area can adversely affect
our ability to employ its drilling vessels. Our active rig utilization for
fiscal years 2003, 2002 and 2001 was 92%, 86% and 80%, respectively.
Of our current eight active drilling units, only the VICKSBURG, SEAHAWK and
ATWOOD HUNTER have current contract terms that could extend beyond fiscal year
2004. Besides these drilling units, we anticipate that the ATWOOD BEACON, ATWOOD
FALCON, and RICHMOND will also be highly utilized in fiscal year 2004.
Currently, the ATWOOD EAGLE is idle offshore Angola and is expected to be
mobilized to Australia in January 2004 for its next contract opportunity. The
ATWOOD SOUTHERN CROSS, after incurring some idle time at the beginning of the
first quarter of fiscal year 2004, has just commenced a short-time contract
commitment in India. There is no guarantee that we will not experience
additional idle time on some of our drilling units during the remainder of
fiscal year 2004.
For long moves of drilling equipment, we attempt to obtain either a lump
sum or a dayrate as mobilization compensation for expenses incurred during the
period in transit. A surplus of certain types of units, either worldwide or in
particular operating areas, can result in our acceptance of a contract which
provides only partial, or no recovery of relocation costs. In order to maintain
equipment utilization during these soft market conditions, two of our rigs
incurred long moves during fiscal year 2003. The ATWOOD EAGLE was moved from
Greece to Angola during the year at a cost of $8.2 million, and we only received
$2.7 million in mobilization compensation. The ATWOOD FALCON was relocated to
and from Australia at mobilization costs of approximately $2 million, which
approximated mobilization compensation. We can give no assurance that it will
receive full recovery of any future relocation costs.
Operation of our drilling equipment is subject to the offshore drilling
requirements of petroleum exploration companies and agencies of foreign
governments. These requirements are, in turn, subject to fluctuations in
government policies, world demand and prices for petroleum products, proved
reserves in relation to such demand and the extent to which such demand can be
met from onshore sources.
We also contract to provide various types of services to third party owners
of drilling rigs. These contracts are normally for a stated term or until
termination of operations or stages of operation at a particular facility or
location. The services may include, as in the case of contracts we have entered
into in connection with operations offshore Australia, the supply of personnel
and rig design, fabrication, installation and operation. The contracts normally
provide for reimbursement to us for all out-of-pocket expenses, plus a service
or management fee for all of the services performed. In most instances, the
amount charged for the services may be adjusted if there are changes in
conditions, scope or costs of operations. We generally obtain insurance or a
contractual indemnity from the owner for liabilities which could be incurred in
operations.
OPERATIONAL RISKS AND INSURANCE
Our operations are subject to the usual hazards associated with the
drilling of oil and gas wells, such as blowouts, explosions and fires. In
addition, our vessels are subject to those perils peculiar to marine operations,
such as capsizing, grounding, collision and damage from severe weather
conditions. Any of these risks could result in damage or destruction of drilling
rigs and oil and gas wells, personal injury and property damage, suspension of
operations or environmental damage through oil spillage or extensive,
uncontrolled fires. Our operations are also subject to disruption due to
terrorism. As a result of significant losses incurred by the insurance industry
in recent times due to terrorism and other events, we have experienced
significant increases in premium for certain insurance coverages. Although we
believe that we are adequately insured against normal and foreseeable risks in
our operations in accordance with industry standards, such insurance may not be
adequate to protect us against liability from all consequences of well
disasters, marine perils, extensive fire damage, damage to the environment or
disruption due to terrorism. To date, we have not experienced difficulty in
obtaining insurance coverage, although no assurance can be given as to the
future availability of such insurance or cost thereof. The occurrence of a
significant event against which we are not fully insured could have a material
adverse effect on our financial position.
ENVIRONMENTAL PROTECTION
Under the Federal Water Pollution Control Act, as amended by the Oil
Pollution Act of 1990, operators of vessels in navigable United States waters
and certain offshore areas are liable to the United States government for the
costs of removing oil and certain other pollutants for which they may be held
responsible, subject to certain limitations, and must establish financial
responsibility to cover such liability. We have taken all steps necessary to
comply with this law, and have received a Certificate of Financial
Responsibility (Water Pollution) from the U.S. Coast Guard. Our operations in
United States waters are also subject to various other environmental regulations
regarding pollution, and we have taken steps to ensure compliance with these
regulations.
CUSTOMERS
During fiscal year 2003, we performed operations for 18 customers. Because
of the relatively limited number of customers for which we can operate at any
given time, revenues from each of 3 different customers amounted to 10% or more
of our fiscal 2003 revenues as indicated below:
PERCENTAGE OF
CUSTOMER FISCAL YEAR 2003 REVENUES
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ExxonMobil Production Malaysia, Inc. 33%
Woodside Energy Ltd. 17%
Esso Exploration Angola 13%
Our business operations are subject to the risks associated with a business
having a limited number of customers for our products or services, and a
decrease in the drilling programs of these customers in the areas where we are
employed may adversely affect our revenues.
COMPETITION
We compete with approximately 10 other drilling contractors, most of which
are substantially larger than the Company and possess appreciably greater
financial and other resources. Although some business combinations among
drilling companies have resulted in a decrease in the total number of
competitors, the drilling industry still remains very competitive, with no
single drilling contractor being dominant. Thus, there continues to be
competition in securing available drilling contracts.
Price competition is generally the most important factor in the drilling
industry, but the technical capability of specialized drilling equipment and
personnel at the time and place required by customers are also important. Other
competitive factors include work force experience, rig suitability, efficiency,
condition of equipment, reputation and customer relations. We believe that we
compete favorably with respect to these factors. If demand for drilling rigs
increases in the future, rig availability may also become a competitive factor.
Competition usually occurs on a regional basis and, although drilling rigs are
mobile and can be moved from one region to another in response to increased
demand, an oversupply of rigs in any region may result. Demand for drilling
equipment is also dependent on the exploration and development programs of oil
and gas companies, which are in turn influenced by the financial condition of
such companies, by general economic conditions, by prices of oil and gas, and,
from time to time, by political considerations and policies.
FOREIGN OPERATIONS
Our operations are conducted primarily in foreign waters and are subject to
certain political, economic and other uncertainties not encountered by purely
domestic drilling contractors. Risks encountered in foreign operations are as
follows:
o nationalization,
o expropriation,
o war,
o confiscation,
o deprivation,
o foreign exchange restrictions,
o foreign taxation,
o changing foreign governments regulations and policies,
o foreign monetary policies, and
o higher risk of terrorism.
Generally, we purchase insurance to protect against some or all of the
above risks. Occasionally, customers will indemnify us against such losses.
Moreover, offshore drilling activity is affected by government regulations and
policies limiting the withdrawal of offshore oil and gas, regulations affecting
production, regulations restricting the importation of foreign petroleum,
environmental regulations and regulations which may limit operations in offshore
areas by foreign companies and/or personnel. See Note 12 to Consolidated
Financial Statements contained in our Annual Report to Shareholders for fiscal
year 2003, incorporated herein by reference, for a summary of contract revenues,
operating income and identifiable assets by geographic region.
Virtually all of our tax provision for fiscal year 2003 relates to taxes in
foreign jurisdictions. Due to the operating loss in the United States, in
addition to operating losses in certain nontaxable foreign jurisdiction, our
effective tax rate for the fiscal year 2003 significantly exceeds the United
States statutory rate.
EMPLOYEES
We currently employ approximately 800 persons in our domestic and worldwide
operations. In connection with our foreign drilling operations, we have often
been required by the host country to hire substantial portions of our work force
in that country and, in some cases, these employees may be represented by
foreign unions. To date, we have experienced little difficulty in complying with
such requirements, and our drilling operations have not been significantly
interrupted by strikes or work stoppages.
SECURITIES LITIGATION SAFE HARBOR STATEMENT
Some of the information presented in, or in connection with, this report
constitutes "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve potential risks and
uncertainties. Our future results could differ materially from those discussed
here. Some of the factors that could cause or contribute to such differences
include:
o Our dependence on the oil and gas industry;
o the risks involved in the construction and upgrade of our drilling units;
o the operational risks involved in drilling for oil and gas;
o the efforts of vigorous competition;
o the risk of disruption in operations by terrorism;
o the risk inherent in international operations, including possible economic,
political or monetary instability; and,
o governmental regulations and
environmental matters.
The words "believe", "impact", "intend", "estimate", "anticipate", "plan"
and similar expressions identify forward-looking statements. These
forward-looking statements are found at various places throughout the
Management's Discussion and Analysis incorporated by reference in Part II and
elsewhere in this report.
Undue reliance should not be placed on these forward-looking statements,
which are applicable only on the date hereof. Neither we nor our representatives
have a general obligation to revise or update these forward-looking statements
to reflect events or circumstances that arise after the date hereof or to
reflect the occurrence of unanticipated events.
COMPANY INFORMATION
Our filings made with the Securities and Exchange Commission ("SEC") may be
obtained from the SEC at the physical address and Internet address indicated in
our Annual Report to Shareholders for fiscal year 2003, incorporated herein by
reference. Our filings made with the SEC pursuant to sections 13(a) and 15(d) of
the Exchange Act of 1934 are also available free of charge on our website as
soon as reasonably practicable after filing or being furnished to the SEC. Our
Internet address is http://www.atwd.com.
ITEM 2. PROPERTIES
Information regarding the location and general character of our principal
assets may be found in the table with the caption heading "Offshore Drilling
Operations" in the Company's Annual Report to Shareholders for fiscal year 2003,
which is incorporated by reference herein.
Collectively since 1997, we expended $340 million in upgrading seven
offshore mobile drilling units. The timing and costs of the various upgrades are
as follows:
YEAR UPGRADE
DRILLING UNITS COMPLETED COST OF UPGRADE
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(In Millions)
ATWOOD HUNTER (PHASE I) 1997 $40
ATWOOD SOUTHERN CROSS 1997 35
ATWOOD FALCON 1998 45
VICKSBURG 1998 35
SEAHAWK 1999 22
ATWOOD EAGLE (PHASE I) 2000 8
RICHMOND 2000 7
ATWOOD HUNTER (PHASE II) 2001 58
ATWOOD EAGLE (PHASE II) 2002 90
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$340
====
Besides the above upgrades, in 2000 we acquired a semisubmersible hull,
SEASCOUT, for $4.5 million. Subsequently, we have expended an additional $4.3
million in engineering, equipment removal and other costs associated with
preparing the SEASCOUT for a future upgrade to a tender-assist vessel when an
acceptable tender contract opportunity has been identified. In August 2003, our
eighth active drilling unit, the newbuild ultra-premium jack-up, ATWOOD BEACON,
commenced its initial drilling contract following completion of construction and
commissioning. This drilling unit was constructed at a cost of approximately
$120 million. For more information concerning these costs, see Note 3 in
Consolidated Financial Statements contained in our Annual Report to
Shareholders' for fiscal year 2003, incorporated by reference herein.
ITEM 3. LEGAL PROCEEDINGS
We are party to a number of lawsuits which are ordinary, routine litigation
incidental to our business, the outcome of which, individually, or in the
aggregate, is not expected to have a material adverse effect on our financial
conditions or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
During the fourth quarter of fiscal year 2003, no matters were submitted to
a vote of shareholders through the solicitation of proxies or otherwise.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS
As of December 29, 2003, there were over 750 beneficial owners of our
common stock.
We did not pay cash dividends in fiscal years 2002 or 2003 and we do not
anticipate paying cash dividends in the foreseeable future because of the
capital-intensive nature of our business. To enable us to maintain our high
competitive profile in the industry, we expect to utilize cash reserves at the
appropriate time, to upgrade existing equipment or to acquire additional
equipment. Our credit facilities prohibit payment of cash dividends on
common stock without lender approval.
Market information concerning our common stock may be found under the
caption heading "Stock Price Information" in our Annual Report to Shareholders
for fiscal year 2003, which is incorporated by reference herein.
Equity compensation plan information required by this item may be found in
Note 6 to Consolidated Financial Statements contained in our Annual Report to
Shareholders for fiscal year 2003, which is incorporated by reference herein.
ITEM 6. SELECTED FINANCIAL DATA
Information required by this item may be found under the caption "Five Year
Financial Review" in our Annual Report to Shareholders for fiscal year 2003,
which is incorporated by reference herein.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information required by this item may be found in our Annual Report to
Shareholders for fiscal year 2003, which is incorporated by reference herein.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information required by this item may be found under the caption
"Disclosures About Market Risk" in the Company's Annual Report to Shareholders
for fiscal year 2003, which is incorporated by reference herein.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by this item may be found in our Annual Report to
Shareholders for fiscal year 2003, which is incorporated by reference herein.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On May 14, 2002, we dismissed Arthur Andersen LLP ("Arthur Andersen") as
our independent public accountants and appointed PricewaterhouseCoopers LLP as
our new independent accountants. The decision to dismiss Arthur Andersen and to
retain PricewaterhouseCoopers was recommended by our Audit Committee and
approved by our Board of Directors.
Arthur Andersen's reports on our consolidated financial statements for each
of the years ended September 30, 2001 and 2000 did not contain any adverse
opinion or disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles. During the years ended
September 30, 2001 and 2000, and the subsequent interim period through May 14,
2002, there were no disagreements between us and Arthur Andersen on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to Arthur
Andersen's satisfaction, would have caused them to make reference to the subject
matter of the disagreement in connection with their report. None of the
reportable events described in Item 304(a)(1)(v) of Regulation S-K occurred
during the years ended September 30, 2001 and 2000 or during the subsequent
interim period through May 14, 2002.
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and
Chief Financial Officer, evaluated the effectiveness of our disclosure controls
and procedures as of the end of the period covered by this report. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures as of the end of the period covered
by this report have been designed and are functioning effectively to provide
reasonable assurance that the information required to be disclosed by us in our
periodic SEC filings is recorded, processed, summarized and reported within the
time periods specific in the SEC's rules and forms. We believe that a controls
system, no matter how well designed and operated, cannot provide absolute
assurance that the objectives of the controls system are met, and no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within a company have been detected.
(b) Change in Internal Control over Financial Reporting
No change in our internal control over financial reporting occurred during
the fiscal quarter covered by this report that has materially affected, or is
reasonably likely to materially affect our internal control over financial
reporting.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
This information is incorporated by reference from our definitive Proxy
Statement for the Annual Meeting of Shareholders to be held February 12, 2004,
to be filed with the SEC not later than 120 days after the end of the fiscal
year covered by this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
This information is incorporated by reference from our definitive Proxy
Statement for the Annual Meeting of Shareholders to be held February 12, 2004,
to be filed with the SEC not later than 120 days after the end of the fiscal
year covered by this Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
This information is incorporated by reference from our definitive Proxy
Statement for the Annual Meeting of Shareholders to be held February 12, 2004,
to be filed with the SEC not later than 120 days after the end of the fiscal
year covered by this Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
This information is incorporated by reference from our definitive Proxy
Statement for the Annual Meeting of Shareholders to be held February 12, 2004,
to be filed with the SEC not later than 120 days after the end of the fiscal
year covered by this Form 10-K.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
This information is incorporated by reference from our definitive Proxy
Statement for the Annual Meeting of Shareholders to be held February 12, 2004,
to be filed with the SEC not later than 120 days after the end of the fiscal
year covered by this Form 10-K.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
(a) FINANCIAL STATEMENTS AND EXHIBITS
1. FINANCIAL STATEMENTS
The following financial statements, together with the report of
PricewaterhouseCoopers LLP dated December 29, 2003 appearing in our Annual
Report to Shareholders, for fiscal year 2003, are incorporated by reference
herein:
Reports of Independent Auditors
Consolidated Balance Sheets as of September 30, 2003 and 2002
Consolidated Statements of Operations for each of the three years
in the period ended September 30, 2003
Consolidated Statements of Cash Flows for each of the three years in
the period ended September 30, 2003
Consolidated Statements of Changes in Shareholders' Equity for each of
the three years in the period ended September 30, 2003
Notes to Consolidated Financial Statements
2. EXHIBITS
See the "EXHIBIT INDEX" for a listing of all of the Exhibits filed as part
of this report.
The management contracts and compensatory plans or arrangements required to
be filed as exhibits to this report are as follows:
Rights Agreement dated effective September 27, 2002 between the
Company and Continental Stock Transfer & Trust Company - See Exhibit 4.1
Atwood Oceanics, Inc. 1990 Stock Option Plan - See Exhibit 10.1.1 hereof.
Form of Atwood Oceanics, Inc. Stock Option Agreement (1990 Stock Option
Plan) - See Exhibit 10.1.2 hereof
Amendment No. 1 to the Atwood Oceanics, Inc. 1990 Stock Option Plan -
See Exhibit 10.1.3 hereof
Form of Amendment No. 1 to the Atwood Oceanics, Inc. Stock Option
Agreement (1990 Stock Option Plan) - See Exhibit 10.1.4 hereof
Atwood Oceanics, Inc. 1996 Incentive Equity Plan -
See Exhibit 10.3.1 hereof.
Form of Atwood Oceanics, Inc. Stock Option Agreement (1996 Incentive
Equity Plan) - See Exhibit 10.3.2 hereof
Amendment No. 1 to Atwood Oceanics, Inc. 1996 Incentive Equity Plan -
See Exhibit 10.3.3 hereof
Form of Amendment No. 1 to the Atwood Oceanics, Inc. Stock Option
Agreement (1996 Incentive Equity Plan) - See Exhibit 10.3.4 hereof
Amendment No. 2 to Atwood Oceanics, Inc. 1996 Incentive Equity Plan -
See Exhibit 10.3.5 hereof.
Atwood Oceanics, Inc. 2001 Stock Incentive Plan -
See Exhibit 10.3.6 hereof.
Atwood Oceanics, Inc. Retention Plan for Certain Salaried Employees
dated effective as of December 5, 2002 - See Exhibit 10.4.1 hereof.
Atwood Oceanics, Inc. Retention Plan for Certain Salaried Employees
dated effective as of January 1, 2004 - See Exhibit 10.4.2
hereof.
Executive Agreement dated as of September 18, 2002 between the Company
and John R. Irwin - See Exhibit 10.5.1 hereof.
Executive Agreement dated as of September 18, 2002 between the Company
and James M. Holland - See Exhibit 10.5.2 hereof.
Executive Agreement dated as of September 18, 2002 between the Company
and Glen P. Kelley - See Exhibit 10.5.3 hereof.
(b) REPORTS ON FORM 8-K
On July 16, 2003, we furnished a report on Form 8-K announcing that
ExxonMobil Exploration and Production Malaysia Inc. had exercised an option to
extend the contract for the SEAHAWK for one year.
On July 29, 2003, in conjunction with releasing our third quarter operating
results, we furnished a report on Form 8-K reporting certain information
relating to FD disclosure.
On July 30, 2003, we filed a report on Form 8-K announcing the closing of
the general syndication of our Senior Secured Credit Facility dated as of April
1, 2003 with a total of nine industry banks and the increase of the size of the
Senior Secured Credit Facility.
On August 21, 2003, we furnished a report on Form 8-K announcing that the
ATWOOD HUNTER was awarded a one-well contract by Isramco, and other information
relating to FD disclosure.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
/S/ JOHN R. IRWIN
JOHN R. IRWIN, President and Chief Executive Officer
DATE: December 29, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/S/ JAMES. M. HOLLAND /S/ JOHN R. IRWIN
- ----------------- -------------
JAMES M. HOLLAND JOHN R. IRWIN
Senior Vice President and Chief Financial Officer President, Chief Executive Officer and Director
(Principal Financial and Accounting Officer) (Principal Executive Officer)
Date: December 29, 2003 Date: December 29, 2003
/S/ ROBERT W. BURGESS /S/ GEORGE S. DOTSON
- ----------------- ----------------
ROBERT W. BURGESS GEORGE S. DOTSON
Director Director
Date: December 29, 2003 Date: December 29, 2003
/S/ HANS HELMERICH /S/ WILLIAM J. MORRISSEY
- -------------- --------------------
HANS HELMERICH WILLIAM J. MORRISSEY
Director Director
Date: December 29, 2003 Date: December 29, 2003
/S/ DEBORAH A. BECK
- ---------------
DEBORAH A. BECK
Director
DATE: December 29, 2003
EXHIBIT INDEX
3.1.1 Restated Articles of Incorporation dated January 1972
(Incorporated herein by reference to Exhibit 3.1.1 of our
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 our 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 our 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 our 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 our 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 our 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 our Form 8-K filed
October 21, 2002.)
10.1.1 Atwood Oceanics, Inc. 1990 Stock Option Plan (Incorporated herein by
reference to Exhibit 10.2 of our Form 10-K for the year ended
September 30, 1993).
10.1.2 Form of Atwood Oceanics, Inc. Stock Option Agreement - 1990 Stock
Option Plan (Incorporated herein by reference to our Form 10-K for
the year ended September 30, 1999).
10.1.3 Amendment No.1 to the Atwood Oceanics, Inc. 1990 Stock Option Plan
(Incorporated herein by reference to our Form 10-K for the year ended
September 30, 1999).
10.1.4 Form of Amendment No. 1 to the Atwood Oceanics, Inc. Stock Option
Agreement 1990 Stock Option Plan (Incorporated herein by reference our
Form 10-K for the year ended September 30, 1999).
10.2 Joint Venture Letter Agreement dated November 4, 1994 between the
Company and Helmerich & Payne, Inc. (Incorporated herein by reference
to Exhibit 10.3 of our Form 10-K for the year ended September 30,
1994).
10.3.1 Atwood Oceanics, Inc. 1996 Incentive Equity Plan (Incorporated herein
by reference to Exhibit 10.2 of our Form 10-Q for the quarter ended
June 30, 1997).
10.3.2 Form of Atwood Oceanics, Inc. Stock Option Agreement - 1996 Incentive
Equity Plan (Incorporated herein by reference to our Form 10-K for
the year ended September 30, 1999).
10.3.3 Amendment No. 1 to the Atwood Oceanics, Inc. 1996 Incentive Equity Plan
(Incorporated herein by reference to our Form 10-K for the year ended
September 30, 1999).
10.3.4 Form of Amendment No. 1 to the Atwood Oceanics, Inc. Stock Option
Agreement -1996 Incentive Equity Plan (Incorporated herein by reference
to our Form 10-K for the year ended September 30, 1999).
10.3.5 Amendment No. 2 to the Atwood Oceanics, Inc. 1996 Incentive Equity Plan
(Incorporated herein by reference to Appendix A to our Form DEF14A
filed January 12, 2001).
10.3.6 Atwood Oceanics, Inc. 2001 Stock Incentive Plan (Incorporated herein by
reference to Appendix A to our Form DEF14A filed January 15, 2002).
10.4.1 Atwood Oceanics, Inc. Retention Plan for Certain Salaried Employees
dated effective as of December 5, 2002 (Incorporated herein by
reference to Exhibit 10.4 of our Form 10-K for the year ended
September 30, 2002).
*10.4.2 Atwood Oceanics, Inc. Retention Plan for Certain Salaried Employees
dated as of January 1, 2004.
10.5.1 Executive Agreement dated as of September 18, 2002 between the Company
and John R. Irwin (Incorporated herein by reference to Exhibit 10.5.1
of our Form 10-K for the year ended September 30, 2002).
10.5.2 Executive Agreement dated as of September 18, 2002 between the Company
and James M. Holland (Incorporated herein by reference to
Exhibit 10.5.2 of our Form 10-K for the year ended September 30, 2002).
10.5.3 Executive Agreement dated as of September 18, 2002 between the Company
and Glen P. Kelley (Incorporated herein by reference to Exhibit 10.5.3.
of our Form 10-K for the year ended September 30, 2002).
10.6 Vessel Construction Agreement dated July 24, 2001 between the Company
and Keppel Fels Limited to construct a KFELS Mod V Enhanced B-Class
Jack-up drilling unit (Incorporated herein by reference to
Exhibit 10.9 of our Form 10-K for the year ended September 30, 2001).
10.7 Credit Agreement for $225 million dated April 1, 2003 between the
Company and Nordea Bank Finland Plc and other Financial Institutions.
(Incorporated herein by reference to Exhibit 99.1 of our 8-K filed
April 7, 2003).
10.8 Pooled Assignment and First Amendment to Credit Agreement dated
June 27, 2003 between the Company and Nordea Bank Finland Plc and
other Financial Institutions (Incorporated herein by reference to
Exhibit 99.1 of our Form 8-K filed July 30, 2003).
10.9 Second Amendment to Credit Agreement dated June 27, 2003 between the
Company and Nordea Bank Finland Plc and other Financial Institutions
(Incorporated herein by reference to Exhibit 99.2 of our Form 8-K
filed July 30, 2003).
10.10 Third Amendment to Credit Agreement dated November 12, 2003 between
the Company and Nordea Bank Finland Plc and other Financial Institution.
(Incorporated herein of reference to Exhibit 99.2 of our Form 8-K
filed November 13, 2003).
*13.1 Annual Report to Shareholders.
16.1 Letter regarding change in certifying accountants (Incorporated
herein by reference to Exhibit 16.1 of our 8-K filed May 21, 2002).
*21.1 List of Subsidiaries.
*23.1 Consent of Independent Accountants.
*31.1 Certification of Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
*31.2 Certification of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
*32.1 Certificate of Chief Executive Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
*32.2 Certificate of Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Action of 2002.
* Filed herewith