ATWOOD OCEANICS INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - ATWOOD OCEANICS INC	a8-kearningsrelease09302016.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE - EARNINGS

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


•	Recorded a non-cash impairment charge of $38.6 million ($38.6 million, net of tax, or $0.60 per diluted share) in Asset Impairment related to our fleet wide drilling equipment,


•	Recorded a non-cash charge of $3.9 million ($3.9 million, net of tax, or $0.06 per diluted share) in Drilling Costs to increase our reserve for excessive and/or obsolete materials and supplies, and


•	Recognized a gain on the purchase of debt of $10.2 million ($6.6 million, net of tax, or $0.10 per diluted share) in Gains on Extinguishment of Debt related to consummation of our modified “Dutch Auction” on July 25, 2016 whereby we acquired $42.0 million aggregate principal amount of the Senior Notes.

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


•	Recorded a non-cash impairment charge of $38.6 million ($38.6 million, net of tax, or $0.60 per diluted share) in Asset Impairment related to our fleet wide drilling equipment,


•	Recorded a non-cash charge of $3.9 million ($3.9 million, net of tax, or $0.06 per diluted share) in Drilling Costs to increase our reserve for excessive and/or obsolete materials and supplies,


•	Recognized a gain of the extinguishment of debt of $69.0 million ($54.7 million, net of tax, or $0.84 per diluted share) related to the purchase of $201.4 million of the Senior Notes,


•	Recognized other income of $18.0 million ($18.0 million, net of tax, or $0.28 per diluted share) for expected insurance recoveries related to cyclone damage to the Atwood Osprey, and


•	Recorded a non-cash impairment charge of $64.9 million ($64.9 million, net of tax, or $1.00 per diluted share) in Asset Impairment related to the Atwood Falcon, which was sold to a 3rd party buyer in April 2016.

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


•	Recorded a non-cash impairment charge of approximately $60.8 million ($56.1 million, net of tax, or $0.86 per diluted share) related to the Atwood Hunter,


•	Recorded a loss of approximately $5.5 million ($5.5 million, net of tax, or $0.08 per diluted share) for the sale of the Atwood Hunter, and


•	Recorded a loss of approximately $8.0 million ($7.1 million, net of tax, or $0.11 per diluted share) for the sale of the Atwood Southern Cross.



	For the Three Months Ended
	(Unaudited)
(In thousands, except per share amounts)	September 30, 2016		June 30, 2016		September 30, 2015
Revenues	$	188,677	$	227,797	$	363,176

Income before Income Taxes	5,918		120,116		166,115
Provision for Income Taxes	1,669		20,611		15,421
Net Income	$	4,249	$	99,505	$	150,694

Earnings per Common Share -
Basic	$	0.07	$	1.54	$	2.33
Diluted	$	0.07	$	1.53	$	2.32



	For the Twelve Months Ended
(In thousands, except per share amounts)	September 30, 2016			September 30, 2015
	(Unaudited)
Revenues	$	1,020,644		$	1,395,851

Income before Income Taxes	312,755			478,970
Provision for Income Taxes	(47,483		)	(46,397		)
Net Income	$	265,272		$	432,573

Earnings per Common Share -
Basic	$	4.09		$	6.70
Diluted	$	4.09		$	6.65

ATWOOD OCEANICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS



	Three Months Ended September 30,						Twelve Months Ended September 30,
(In thousands, except per share amounts)	2016			2015			2016			2015
	(Unaudited)						(Unaudited)
REVENUES:
Contract drilling	$	181,369		$	349,139		$	976,348		$	1,342,052
Revenues related to reimbursable expenses	7,308			14,037			44,296			53,799
Total revenues	188,677			363,176			1,020,644			1,395,851

COSTS AND EXPENSES:
Contract drilling	77,441			118,574			378,535			520,421
Reimbursable expenses	5,393			9,110			28,291			38,744
Depreciation	40,706			42,310			165,669			171,947
General and administrative	11,857			14,610			50,550			57,229
Asset impairment	38,651			—			103,539			60,777
(Gain)/loss on sale of assets	—			(59		)	77			15,303
Other, net	859			—			(299		)	—
	174,907			184,545			726,362			864,421

OPERATING INCOME	13,770			178,631			294,282			531,430

OTHER INCOME (EXPENSE):
Interest expense, net of capitalized interest	(18,032		)	(12,523		)	(68,566		)	(52,551		)
Interest income	2			7			21			91
Gains on extinguishment of debt	10,178			—			69,041			—
Other income	—			—			17,977			—
	(7,852		)	(12,516		)	18,473			(52,460		)

INCOME BEFORE INCOME TAXES	5,918			166,115			312,755			478,970
PROVISION FOR INCOME TAXES	1,669			15,421			47,483			46,397
NET INCOME	$	4,249		$	150,694		$	265,272		$	432,573

EARNINGS PER COMMON SHARE (NOTE 2):
Basic	$	0.07		$	2.33		$	4.09		$	6.70
Diluted	$	0.07		$	2.32		$	4.09		$	6.65
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE 2):
Basic	64,827			64,654			64,789			64,581
Diluted	64,955			64,932			64,839			65,030

ATWOOD OCEANICS, INC. AND SUBSIDIARIES

UNAUDITED ANALYSIS OF REVENUES AND DRILLING COSTS



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



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

ATWOOD OCEANICS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



(In thousands, except par value)	September 30, 2016			September 30, 2015
	(Unaudited)
ASSETS
Cash	$	145,427		$	113,983
Accounts receivable, net	113,091			311,514
Income tax receivable	6,095			8,705
Inventories of materials and supplies, net	109,925			137,998
Prepaid expenses, deferred costs and other current assets	18,504			33,735
Total current assets	393,042			605,935

Property and equipment, net	4,127,696			4,172,132

Other receivables	11,831			11,831
Deferred income taxes	165			150
Deferred costs and other assets	7,058			11,285
Total assets	$	4,539,792		$	4,801,333

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	25,299		$	70,161
Accrued liabilities	7,868			23,572
Dividends payable	—			16,164
Interest payable	7,096			7,704
Income tax payable	8,294			13,906
Deferred credits and other liabilities	799			3,941
Total current liabilities	49,356			135,448

Long-term debt	1,227,919			1,678,268
Deferred income taxes	1,202			1,658
Deferred credits	—			800
Other	30,929			37,989
Total long-term liabilities	1,260,050			1,718,715

Commitments and contingencies (Note 9)

Preferred stock, no par value, 1,000 shares authorized, none outstanding	—			—
Common stock, $1.00 par value, 180,000 shares authorized with 64,799 issued and outstanding at September 30, 2016 and 180,000 shares authorized and 64,654 shares issued and outstanding at September 30, 2015	64,799			64,654
Paid-in capital	237,542			213,096
Retained earnings	2,929,839			2,670,148
Accumulated other comprehensive loss	(1,794		)	(728		)
Total shareholders’ equity	3,230,386			2,947,170
Total liabilities and shareholders’ equity	$	4,539,792		$	4,801,333

ATWOOD OCEANICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



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

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

Conference Call

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

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

Contact: Mark W. Smith

Senior Vice President and Chief Financial Officer

(281) 749-7840

ATWOOD OCEANICS INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - November 14, 2016

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