Atwood Oceanics Announces First Quarter Earnings

FOR THE THREE MONTHS ENDED

(In thousands)

December 31,
2012

September 30,
2012

December 31,
2011

Revenues

$

245,093

$

252,525

$

184,672

Income before Income Taxes

84,087

109,891

77,931

Provision for Income Taxes

(11,256)

(14,365)

(12,463)

Net Income

$

72,831

$

95,526

$

65,468

Earnings per Common Share -

Basic

1.11

1.46

1.01

Diluted

1.10

1.45

1.00

Weighted Average Shares

Outstanding -

Basic

65,528

65,407

65,024

Diluted

66,092

65,982

65,541

ATWOOD OCEANICS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

Three Months Ended December 31,

2012

2011

REVENUES:

Contract drilling

$

245,093

$

184,672

COSTS AND EXPENSES:

Contract drilling

111,916

78,344

Depreciation

27,578

15,363

General and administrative

17,221

14,094

Other, net

7

—

156,722

107,801

OPERATING INCOME

88,371

76,871

OTHER INCOME (EXPENSE)

Interest expense, net of capitalized interest

(4,408)

(603)

Interest Income

124

86

Other

—

1,577

(4,284)

1,060

INCOME  BEFORE INCOME TAXES

84,087

77,931

PROVISION FOR INCOME TAXES

11,256

12,463

NET INCOME

$

72,831

$

65,468

EARNINGS PER COMMON SHARE:

Basic

1.11

1.01

Diluted

1.10

1.00

AVERAGE COMMON SHARES OUTSTANDING:

Basic

65,528

65,024

Diluted

66,092

65,541

ATWOOD OCEANICS, INC. AND SUBSIDIARIES

ANALYSIS OF REVENUES AND DRILLING COSTS

(Unaudited)

REVENUES

(In millions)

Three Months Ended

December 31,
2012

September 30,
2012

December 31,
2011

Atwood Condor

$

40.4

$

32.8

$

—

Atwood Osprey

$

42.4

$

46.0

$

39.8

Atwood Eagle

27.5

32.7

34.7

Atwood Falcon

35.4

35.2

28.6

Atwood Hunter

37.1

50.1

43.4

Atwood Aurora

12.3

14.6

12.5

Atwood Beacon

14.0

17.1

10.4

Atwood Mako

13.3

4.1

—

Atwood Manta

3.2

—

—

Vicksburg

9.2

8.9

8.7

Reimbursable/Other

10.3

11.0

6.6

$

245.1

$

252.5

$

184.7

CONTRACT DRILLING COSTS

(In millions)

Three Months Ended

December 31,
2012

September 30,
2012

December 31,
2011

Atwood Condor

$

14.3

$

12.7

$

—

Atwood Osprey

$

15.3

$

16.8

$

15.5

Atwood Eagle

19.9

13.6

17.8

Atwood Falcon

14.2

13.7

6.9

Atwood Hunter

11.6

12.1

11.0

Atwood Aurora

6.4

6.3

8.6

Atwood Beacon

10.2

11.0

6.7

Atwood Mako

5.1

2.9

—

Atwood Manta

2.1

—

—

Vicksburg

4.7

5.5

5.2

Reimbursable/Other

8.1

7.5

6.6

$

111.9

$

102.1

$

78.3

ATWOOD OCEANICS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

December 31,
2012

September 30,
2012

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

108,341

$

77,871

Accounts receivable, net of allowance for doubtful accounts of $1,871 and $0 at December 31, 2012 and September 30, 2012, respectively

142,934

167,186

Income tax receivable

5,609

5,750

Inventories of materials and supplies

80,367

80,290

Prepaid expenses and deferred costs

31,117

39,437

Total current assets

368,368

370,534

PROPERTY AND EQUIPMENT, net

2,854,515

2,537,340

LONG TERM ASSETS:

Other receivables

11,868

11,875

Deferred costs and other assets

24,195

24,013

Total long-term assets

36,063

35,888

Total assets

$

3,258,946

$

2,943,762

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

78,420

$

83,592

Accrued liabilities

29,261

24,478

Notes payable

—

5,148

Income tax payable

13,314

9,711

Deferred credits

15,095

13,738

Total current liabilities

136,090

136,667

LONG TERM LIABILITIES:

Long-term debt

1,070,000

830,000

Deferred income taxes

8,571

8,791

Deferred credits

7,659

8,928

Other

20,300

19,954

Total long-term liabilities

1,106,530

867,673

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:

Preferred stock, no par value;

1,000 shares authorized, none outstanding

—

—

Common Stock, $1.00 par value;

Common stock, $1.00 par value, 90,000 shares authorized with 65,632 and 65,452 issued and outstanding at December 31, 2012 and September 30, 2012, respectively

65,632

65,452

Paid-in capital

164,061

160,540

Retained earnings

1,789,272

1,716,441

Accumulated other comprehensive loss

(2,639)

(3,011)

Total shareholders' equity

2,016,326

1,939,422

Total liabilities and shareholders' equity

$

3,258,946

$

2,943,762

Atwood Oceanics, Inc. and Subsidiaries

UNAUDITED CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Three Months Ended December 31,

(In thousands)

2012

2011

Cash flows from operating activities:

Net income

$

72,831

$

65,468

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

27,578

15,363

Amortization of debt issuance costs

1,036

681

Amortization of deferred items

(127)

393

Provision for doubtful accounts

1,871

—

Provision for inventory obsolescence

181

255

Deferred income tax benefit

(220)

(186)

Share-based compensation expense

3,048

1,790

Other, net

7

—

Change in assets and liabilities:

(Increase) decrease in accounts receivable

22,388

(32,511)

Decrease in income tax receivable

141

1,640

(Increase) decrease in inventory

(257)

6,106

Decrease in prepaid expenses

5,470

1,378

Increase in deferred costs and other assets

(3,767)

(1,040)

Increase (decrease) in accounts payable

(27,978)

3,463

Increase (decrease) in accrued liabilities

4,937

(9,143)

Increase in income tax payable

3,603

3,249

Increase in deferred credits and other liabilities

6,177

843

44,088

(7,719)

Net Cash Provided by Operating Activities

116,919

57,749

Cash flows from investing activities:

Capital expenditures

(321,995)

(257,446)

Proceeds from sale of assets

41

—

Net Cash Used by Investing Activities

(321,954)

(257,446)

Cash flows from financing activities:

Proceeds from bank credit facilities

240,000

—

Principal payments on notes payable

(5,148)

(5,461)

Proceeds from exercise of stock options

653

79

Net Cash Provided (Used) by Financing Activities

235,505

(5,382)

Net increase (decrease) in cash and cash equivalents

$

30,470

$

(205,079)

Cash and cash equivalents, at beginning of period

$

77,871

$

295,002

Cash and cash equivalents, at end of period

$

108,341

$

89,923

Non-cash activities

Increase (decrease) in accounts payable and accrued liabilities related to capital expenditures

$

22,806

$

(83,190)