Atwood Oceanics Announces Fiscal 2016 Third Quarter Earnings
August 01 2016 - 4:42PM
FOR IMMEDIATE RELEASE -
EARNINGS
HOUSTON, August
1, 2016 -- Atwood Oceanics, Inc. (NYSE: ATW) ("Company"),
announced today that it had earned 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 compared to $122.4 million or
$1.89 per diluted share, on revenues of $296.4 million for the
quarter ended March 31, 2016 and compared to net income of
$113.0 million or $1.73 per diluted share on revenues of $330.6
million for the quarter ended June 30, 2015. For the nine
months ended June 30, 2016, the Company earned net income of
$261.0 million or $4.02 per diluted share, on revenues of $832.0
million compared to net income of $281.9 million or $4.33 per
diluted share, on revenues of $1.0 billion for the nine months
ended June 30, 2015.
During the three months ended June
30, 2016, we repurchased, through open market transactions, $145.8
million aggregate principal amount of our Senior Notes for $97.4
million, including $2.4 million of accrued interest, representing
an average discount of 34.8%. As a result of the repurchases, we
recognized a gain on debt retirement, net of the related debt
issuance costs and premium of $0.3 million, of $50.5 million ($35.7
million, net of tax, or $0.55 per diluted share) in Gains on
extinguishment of debt on our Condensed Consolidated Statements of
Operations for the three ended June 30, 2016.
During the three months ended
March 31, 2016, we repurchased, through open market transactions,
$13.5 million aggregate principal of our Senior Notes at an
aggregate cost of $5.1 million, including a minimal amount of
accrued interest, representing an average discount of 62.2%. As a
result of the repurchases, we recognized a gain on debt retirement,
net of the related debt issuance costs, of $8.4 million ($8.4
million, net of tax, or $0.13 per diluted share) in Gains on
extinguishment of debt on the Condensed Consolidated Statements of
Operations for the three and six months ended March 31, 2016.
On July 25, 2016, following
consummation of our modified "Dutch Auction" tender offer (the
"Offer"), we acquired $42.0 million aggregate principal amount of
the Senior Notes. Including the purchase price for the Senior
Notes, which totaled $31.5 million, and accrued interest payable on
the Senior Notes acquired and related fees, the total cost of the
Offer was $33.0 million. The purchase price in the Offer
represented a discount to the principal amount of the Senior Notes
of 25.0%.
These repurchases, in the three
month periods ended March 31, 2016 and June 30, 2016 and in July
2016, allowed us to reduce our outstanding indebtedness and related
interest expense at a significant discount to the face value of our
Senior Notes. The gain associated with the repurchases is subject
to tax and will increase our effective tax rate. However, due to
the availability of operating loss carry-forwards the actual cash
tax impact will be minimal. The repurchases were made using
available cash balances. Following these repurchases, the Company
has $448.7 million Senior Notes outstanding.
|
For the Three
Months Ended |
|
(Unaudited) |
(In
thousands, except per share amounts) |
June 30,
2016 |
|
March 31,
2016 |
|
June 30,
2015 |
Revenues |
$ |
227,797 |
|
|
$ |
296,351 |
|
|
$ |
330,562 |
|
Income
before Income Taxes |
120,116 |
|
|
136,426 |
|
|
122,539 |
|
Provision for Income Taxes |
(20,611 |
) |
|
(13,989 |
) |
|
(9,547 |
) |
Net
Income |
$ |
99,505 |
|
|
$ |
122,437 |
|
|
$ |
112,992 |
|
|
|
|
|
|
|
Earnings per Common Share - |
|
|
|
|
|
Basic |
$ |
1.54 |
|
|
$ |
1.89 |
|
|
$ |
1.75 |
|
Diluted |
$ |
1.53 |
|
|
$ |
1.89 |
|
|
$ |
1.73 |
|
|
|
|
Nine Months
Ended |
|
|
|
(Unaudited) |
(In
thousands, except per share amounts) |
|
|
June 30,
2016 |
|
June 30,
2015 |
Revenues |
|
|
$ |
831,967 |
|
|
$ |
1,032,675 |
|
Income
before Income Taxes |
|
|
306,837 |
|
|
312,855 |
|
Provision for Income Taxes |
|
|
(45,814 |
) |
|
(30,976 |
) |
Net
Income |
|
|
$ |
261,023 |
|
|
$ |
281,879 |
|
|
|
|
|
|
|
Earnings per Common Share - |
|
|
|
|
|
Basic |
|
|
$ |
4.03 |
|
|
$ |
4.37 |
|
Diluted |
|
|
$ |
4.02 |
|
|
$ |
4.33 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
(In
thousands, except per share amounts) |
2016 |
|
2015 |
|
2016 |
|
2015 |
REVENUES: |
|
|
|
|
|
|
|
Contract drilling |
$ |
217,818 |
|
|
$ |
317,531 |
|
|
$ |
794,979 |
|
|
$ |
992,913 |
|
Revenues related to reimbursable expenses |
9,979 |
|
|
13,031 |
|
|
36,988 |
|
|
39,762 |
|
Total
revenues |
227,797 |
|
|
330,562 |
|
|
831,967 |
|
|
1,032,675 |
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
Contract drilling |
80,524 |
|
|
134,258 |
|
|
301,094 |
|
|
401,847 |
|
Reimbursable expenses |
5,489 |
|
|
9,066 |
|
|
22,898 |
|
|
29,634 |
|
Depreciation |
41,084 |
|
|
42,534 |
|
|
124,964 |
|
|
129,637 |
|
General and administrative |
12,028 |
|
|
10,473 |
|
|
38,693 |
|
|
42,619 |
|
Asset
impairment |
(659 |
) |
|
- |
|
|
64,773 |
|
|
60,777 |
|
Loss
on sale of assets |
- |
|
|
27 |
|
|
77 |
|
|
15,362 |
|
Other,
net |
16 |
|
|
- |
|
|
(1,044 |
) |
|
- |
|
|
138,482 |
|
|
196,358 |
|
|
551,455 |
|
|
679,876 |
|
|
|
|
|
|
|
|
|
OPERATING INCOME |
89,315 |
|
|
134,204 |
|
|
280,512 |
|
|
352,799 |
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
Interest expense, net of capitalized interest |
(19,674 |
) |
|
(11,677 |
) |
|
(50,533 |
) |
|
(40,028 |
) |
Interest income |
9 |
|
|
12 |
|
|
19 |
|
|
84 |
|
Gains
on extinguishment of debt
|
50,466 |
|
|
- |
|
|
58,863 |
|
|
- |
|
Other
income |
- |
|
|
- |
|
|
17,976 |
|
|
- |
|
|
30,801 |
|
|
(11,665 |
) |
|
26,325 |
|
|
(39,944 |
) |
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES |
120,116 |
|
|
122,539 |
|
|
306,837 |
|
|
312,855 |
|
PROVISION FOR INCOME TAXES |
20,611 |
|
|
9,547 |
|
|
45,814 |
|
|
30,976 |
|
NET INCOME |
$ |
99,505 |
|
|
$ |
112,992 |
|
|
$ |
261,023 |
|
|
$ |
281,879 |
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON SHARE (NOTE 2): |
|
|
|
|
|
|
|
Basic |
$ |
1.54 |
|
|
$ |
1.75 |
|
|
$ |
4.03 |
|
|
$ |
4.37 |
|
Diluted |
$ |
1.53 |
|
|
$ |
1.73 |
|
|
$ |
4.02 |
|
|
$ |
4.33 |
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE
2): |
|
|
|
|
|
|
|
Basic |
64,795 |
|
|
64,649 |
|
|
64,750 |
|
|
64,557 |
|
Diluted |
64,847 |
|
|
65,130 |
|
|
64,852 |
|
|
65,063 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
UNAUDITED ANALYSIS OF REVENUES AND DRILLING
COSTS
|
REVENUES |
|
Three Months Ended |
|
Nine Months Ended |
(In
millions) |
June 30,
2016 |
|
March 31,
2016 |
|
June 30,
2015 |
|
June 30,
2016 |
|
June 30,
2015 |
Ultra-Deepwater |
$ |
182 |
|
|
$ |
189 |
|
|
$ |
174 |
|
|
$ |
553 |
|
|
$ |
524 |
|
Deepwater |
- |
|
|
59 |
|
|
77 |
|
|
131 |
|
|
257 |
|
Jackups |
36 |
|
|
34 |
|
|
67 |
|
|
111 |
|
|
212 |
|
Reimbursable |
10 |
|
|
14 |
|
|
13 |
|
|
37 |
|
|
40 |
|
|
$ |
228 |
|
|
$ |
296 |
|
|
$ |
331 |
|
|
$ |
832 |
|
|
$ |
1,033 |
|
|
DRILLING COSTS |
|
Three Months Ended |
|
Nine Months Ended |
(In
millions) |
June 30,
2016 |
|
March 31,
2016 |
|
June 30,
2015 |
|
June 30,
2016 |
|
June 30,
2015 |
Ultra-Deepwater |
$ |
54 |
|
|
$ |
54 |
|
|
$ |
75 |
|
|
$ |
168 |
|
|
$ |
206 |
|
Deepwater |
10 |
|
|
19 |
|
|
29 |
|
|
71 |
|
|
102 |
|
Jackups |
16 |
|
|
19 |
|
|
29 |
|
|
62 |
|
|
91 |
|
Reimbursable |
5 |
|
|
9 |
|
|
9 |
|
|
23 |
|
|
30 |
|
Other |
1 |
|
|
(2 |
) |
|
1 |
|
|
- |
|
|
3 |
|
|
$ |
86 |
|
|
$ |
99 |
|
|
$ |
143 |
|
|
$ |
324 |
|
|
$ |
432 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In
thousands, except par value) |
June 30,
2016 |
|
September 30,
2015 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Cash |
$ |
198,974 |
|
|
$ |
113,983 |
|
Accounts receivable, net |
166,534 |
|
|
311,514 |
|
Income
tax receivable |
8,194 |
|
|
8,705 |
|
Inventories of materials and supplies, net |
113,161 |
|
|
137,998 |
|
Prepaid expenses, deferred costs and other current assets |
10,040 |
|
|
33,735 |
|
Total
current assets |
496,903 |
|
|
605,935 |
|
|
|
|
|
Property and equipment, net |
4,198,069 |
|
|
4,172,132 |
|
|
|
|
|
Other
receivables |
11,831 |
|
|
11,831 |
|
Deferred income taxes |
150 |
|
|
150 |
|
Deferred costs and other assets |
8,174 |
|
|
11,285 |
|
Total assets |
$ |
4,715,127 |
|
|
$ |
4,801,333 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
Accounts payable |
$ |
43,252 |
|
|
$ |
70,161 |
|
Accrued liabilities |
12,496 |
|
|
23,572 |
|
Dividends payable |
- |
|
|
16,164 |
|
Interest payable |
15,506 |
|
|
7,704 |
|
Income
tax payable |
13,530 |
|
|
13,906 |
|
Deferred credits and other liabilities |
1,486 |
|
|
3,941 |
|
Total
current liabilities |
86,270 |
|
|
135,448 |
|
|
|
|
|
Long-term debt |
1,374,780 |
|
|
1,678,268 |
|
Deferred income taxes |
1,148 |
|
|
1,658 |
|
Deferred credits |
- |
|
|
800 |
|
Other |
30,409 |
|
|
37,989 |
|
Total
long-term liabilities |
1,406,337 |
|
|
1,718,715 |
|
|
|
|
|
Commitments and contingencies (Note 8) |
|
|
|
|
|
|
|
Preferred stock, no par value, 1,000 shares authorized, none
outstanding |
- |
|
|
- |
|
Common
stock, $1.00 par value, 180,000 shares authorized with 64,798
issued and outstanding as of June 30, 2016 and 180,000 shares
authorized and 64,654 shares issued and outstanding as of September
30, 2015 |
64,798 |
|
|
64,654 |
|
Paid-in capital |
235,043 |
|
|
213,096 |
|
Retained earnings |
2,925,589 |
|
|
2,670,148 |
|
Accumulated other comprehensive income |
(2,910 |
) |
|
(728 |
) |
Total
shareholders' equity |
3,222,520 |
|
|
2,947,170 |
|
Total liabilities and shareholders'
equity |
$ |
4,715,127 |
|
|
$ |
4,801,333 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
Nine Months Ended June 30, |
(In
thousands) |
2016 |
|
2015 |
Cash flows from operating activities: |
|
|
|
Net
income |
$ |
261,023 |
|
|
$ |
281,879 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation |
124,964 |
|
|
129,637 |
|
Amortization |
2,407 |
|
|
5,179 |
|
Provision for doubtful accounts |
4,619 |
|
|
3,337 |
|
Deferred income tax benefit |
(378 |
) |
|
(3,453 |
) |
Share-based compensation expense |
8,224 |
|
|
9,277 |
|
Asset
impairment |
64,753 |
|
|
60,777 |
|
Loss
on sale of assets |
(71 |
) |
|
15,362 |
|
(Gain)
on extinguishment of debt |
(58,863 |
) |
|
- |
|
Other,
net |
(1,137 |
) |
|
- |
|
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
121,964 |
|
|
(17,917 |
) |
Income
tax receivable |
511 |
|
|
(3,868 |
) |
Inventories of materials and supplies |
12,988 |
|
|
(16,917 |
) |
Prepaid expenses, deferred costs and other current assets |
19,377 |
|
|
13,274 |
|
Deferred costs and other assets |
(1,019 |
) |
|
(341 |
) |
Accounts payable |
(33,674 |
) |
|
(17,511 |
) |
Accrued liabilities |
(3,274 |
) |
|
24,049 |
|
Income
tax payable |
(376 |
) |
|
(5,450 |
) |
Deferred credits and other liabilities |
(6,623 |
) |
|
6,291 |
|
Net
cash provided by operating activities |
515,415 |
|
|
483,605 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
Capital expenditures |
(198,248 |
) |
|
(420,077 |
) |
Proceeds from sale of assets |
20,813 |
|
|
2,339 |
|
Net
cash used in investing activities |
(177,435 |
) |
|
(417,738 |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
Proceeds from borrowing of long-term debt |
45,000 |
|
|
225,000 |
|
Principal repayments on long-term debt |
(290,110 |
) |
|
(250,000 |
) |
Repayments on short-term debt, net |
- |
|
|
(11,885 |
) |
Debt
issuance costs paid |
- |
|
|
- |
|
Dividends paid |
(21,746 |
) |
|
(32,397 |
) |
Proceeds (payments) related to exercise of stock options |
(930 |
) |
|
1,279 |
|
Windfall tax benefits from share-based payment
arrangements
|
14,797 |
|
|
- |
|
Net
cash used by financing activities |
(252,989 |
) |
|
(68,003 |
) |
Net
increase in cash and cash equivalents |
84,991 |
|
|
(2,136 |
) |
Cash
and cash equivalents, at beginning of period |
113,983 |
|
|
80,080 |
|
Cash and cash equivalents, at end of
period |
$ |
198,974 |
|
|
$ |
77,944 |
|
|
|
|
|
Non-cash activities: |
|
|
|
Increase (decrease) in accounts payable and accrued liabilities
related to capital expenditures |
$ |
7,902 |
|
|
$ |
(15,501 |
) |
Atwood Oceanics, Inc. is a leading
offshore drilling company engaged in the drilling and completion of
exploration and development wells for the global oil and gas
industry. The Company currently owns 10 mobile offshore drilling
units and is constructing two ultra-deepwater drillships. The
Company was founded in 1968 and is headquartered in Houston, Texas.
Atwood Oceanics, Inc. common stock is traded on the New York Stock
Exchange under the symbol "ATW." For more information about the
Company, please visit www.atwd.com.
Conference
Call
The Company has scheduled a
conference call and webcast related to its third quarter 2016
results on Tuesday, August 2, 2016, at 9:00 A.M. CDT (10:00
A.M. EDT). Interested parties are invited to listen to the call by
dialing 1-800-862-9098, or internationally 1-785-424-1051,
Conference ID - ATWOOD, Password 62456. 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
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Atwood Oceanics, Inc. via Globenewswire
HUG#2032429
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