SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D. C. 20549
Form 10-K/A-Amendment No. 1
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
incorporation or organization)
15835 Park Ten Place Drive
Houston, Texas
(Address of principal executive offices)
74-1611874
(I.R.S. Employer Identification No.)
77084
(Zip Code)
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
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.
EXPLANATORY NOTE
We are filing this Amendment No. 1 to our Annual Report on Form 10-K for
the fiscal year ended September 30, 2003, or Form 10-K, to amend Part II, Item 7
in response to comments from the Securities and Exchange Commission. Included in
this filing are the list of exhibits pursuant to Item 15 of Part IV, the
signature page and certifications required by Rule 13a-14(a) of the Securities
Exchange Act of 1934, as amended. Additionally, we are correcting a reference in
exhibit 4.1, two items in Part I, and one item in Part II as indicated herein.
With the exception of the foregoing, no other information in our Form 10-K
for the fiscal year ended September 30, 2003 has been supplemented, updated or
amended.
-2-
PART I
ITEM 1. BUSINESS
. . .
DRILLING CONTRACTS
. . .
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 our drilling vessels. Our active rig utilization for
fiscal years 2003, 2002 and 2001 was 92%, 86% and 83%, respectively.
. . .
EMPLOYEES
We currently employ approximately 1,000 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.
-3-
PART II
ITEM 6. SELECTED FINANCIAL DATA
Atwood Oceanics, Inc. and Subsidiaries
FIVE-YEAR FINANCIAL REVIEW
At or For the Years Ended September 30,
------------------------------------------------------ ------------- ------------- ------------ ------------- -------------
In thousands, except per share amounts, fleet data 2003 2002 2001 2000 1999
and ratios)
------------------------------------------------------ ------------- ------------- ------------ ------------- -------------
STATEMENTS OF OPERATIONS DATA:
Contract revenues............................... $ 144,765 $ 149,157 $ 147,541 $ 135,973 $ 152,850
Contract drilling costs......................... (98,500) (75,088) (70,014) (60,709) (73,196)
General and administrative expenses............. (14,015) (10,080) (9,250) (8,449) (7,519)
Depreciation.................................... (25,758) (23,882) (25,579) (29,624) (23,904)
------- ------- ------- ------- -------
OPERATING INCOME................................ 6,492 40,107 42,698 37,191 48,231
Other expense................................... (4,856) (1,330) (1,577) (1,293) (1,724)
Tax provision................................... (14,438) (10,492) (13,775) (12,750) (18,787)
------- ------- ------- ------- -------
NET INCOME (LOSS)........................ $ (12,802) $ 28,285 $ 27,346 $ $23,148 $ $27,720
=========== ============ =========== ============ ============
PER SHARE DATA:
Earnings (loss) per common share:............... $ (.92) $ 2.04 $ 1.98 $ 1.68 $ 2.03
Basic...................................... (.92) 2.02 1.96 1.66 2.01
Diluted....................................
Average common shares outstanding:..............
Basic...................................... 13,846 13,839 13,828 13,763 13,649
Diluted.................................... 13,846 13,994 13,978 13,916 13,791
FLEET DATA:
Number of rigs owned or managed, at end of period
Utilization rate for in-service rigs (excludes 11 10 11 11 11
managed rigs and contractual downtime for
rigs upgraded).............................
92% 86% 83% 71% 77%
BALANCE SHEET DATA:
Cash and securities held for investment......... $ 21,551 $ 27,055 $ 12,621 $ 42,661 $ 43,041
Working capital................................. 26,063 43,735 25,057 47,433 31,519
Net property and equipment...................... 443,102 368,397 306,254 224,107 218,914
Total assets.................................... 522,674 445,238 353,878 313,251 293,604
Total long-term debt............................ 205,000 115,000 60,000 46,000 54,000
Shareholders' equity (1)........................ 263,467 276,133 247,636 218,205 192,229
Ratio of current assets to current liabilities.. 1.52 2.44 2.21 3.71 2.66
_________
Notes -
(1) We have never paid any cash dividends on our common stock.
-4-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This report includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. We and our representatives may from
time to time make written or verbal forward-looking statements, including
statements contained in this report and our other filings with the Securities
and Exchange Commission and in our reports to shareholders. Generally, the words
"believe", "expect", "intend", "estimate", "anticipate", "plan", and similar
expressions identify forward-looking statements. All statements other than
statements of historical facts included in this report regarding our financial
position, business strategy, budgets and plans and objectives of management for
future operations are forward-looking statements. Although we believe that the
expectations reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to have been correct. The
forward-looking statements are and will be based on management's then current
views and assumptions regarding future events and operating performances. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
These forward-looking statements involve risks and uncertainties that may cause
our actual future activities and results of operations to be materially
different from those suggested or described in this report. These risks include,
but are not limited to:
o our dependence on the oil and gas industry;
o our ability to secure adequate financing;
o competition;
o operations risks;
o risks involved in foreign operations;
o risks associated with possible disruptions in operations due
to terrorism;
o governmental regulation; and
o environmental matters.
These risk factors are disclosed in various places throughout this report.
All subsequent written and oral forward-looking statements attributable to us,
or persons acting on our behalf, are expressly qualified in their entirety by
these risk factors.
OUTLOOK
Even though we incurred our first loss in ten years, fiscal year 2003 was a
year marked with some significant accomplishments. Our upgrade program,
commenced in fiscal year 1997, was concluded with the completion of the upgrade
of the ATWOOD EAGLE in November 2002. Collectively, we have expended
approximately $340 million in upgrading seven active offshore mobile drilling
units since 1997. In August 2003, an eighth drilling unit, the ATWOOD BEACON, an
ultra-premium jack-up drilling vessel, commenced its initial drilling contract
following completion of its construction and commissioning. 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 active premium offshore mobile drilling units located in five areas
of the world - the United States, Southeast Asia, the Mediterranean Sea, Africa
and Australia.
Current worldwide utilization of offshore drilling units is less than 80%.
However, our utilization for fiscal year 2003 was 92% as our primary focus is to
maintain utilization of our active drillings units at available market dayrates,
as compared to seeking the most lucrative contracts with increased risk of idle
time. The continuous disconnect between relatively high commodity prices and
soft market conditions (especially for semisubmersibles)
-5-
reflects increased conservatism by exploration and production companies due
to a number of factors including weak capital markets, increased focus on
reducing debt, and a host of geopolitical uncertainties (for example, those in
Iraq, Venezuela and Nigeria), which have curtailed drilling. The weakest sector
of the drilling market is semisubmersibles, with a current worldwide utilization
level of less than 70%. We expect that the market outlook for semisubmersibles
will continue to be challenging for most, if not all, of fiscal year 2004, with
the level of dayrates for mid and deep water work continuing to be relatively
low. In recent months, the demand for jack-up drilling units has improved mainly
as a result of increased demand in the Gulf of Mexico, Asia Pacific and Mexico,
with a current worldwide utilization level of around 85%. We anticipate that
utilization for our two jack-up units will be at or above 90% during fiscal year
2004.
Of our current eight active drilling units, only the VICKSBURG, SEAHAWK and
ATWOOD HUNTER have contract terms that could extend beyond fiscal year 2004.
Besides these three drilling units, we anticipate that utilization for the
ATWOOD BEACON, ATWOOD FALCON and RICHMOND will also be at or above 90% for
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-term contract commitment in India. Despite the current challenging market
conditions, we anticipate that our operating results for fiscal year 2004 will
improve over results from fiscal year 2003. With our upgraded, premium
equipment, we believe that we are well positioned to take advantage of improving
market conditions and remain optimistic about the longer-term outlook and
fundamentals of the offshore drilling market.
RESULTS OF OPERATIONS
Fiscal Year 2003 Versus Fiscal Year 2002
Contract revenues for the current fiscal year decreased 3% compared to
prior year. A comparative analysis of contract revenues by rig for fiscal years
2003 and 2002 is as follows:
CONTRACT REVENUES
(In millions)
-----------------------------------------
Fiscal Fiscal
2003 2002 Variance
---- ---- --------
ATWOOD EAGLE........................ $ 19.8 $ 15.2 $ 4.6
ATWOOD BEACON....................... 3.0 --- 3.0
VICKSBURG........................... 25.0 22.5 2.5
RICHMOND............................ 8.3 7.1 1.2
SEAHAWK............................. 22.8 22.3 0.5
GOODWYN `A' / NORTH RANKIN `A'...... 1.8 1.9 (0.1)
ATWOOD FALCON....................... 32.4 33.5 (1.1)
ATWOOD SOUTHERN CROSS............... 14.5 19.3 (4.8)
ATWOOD HUNTER....................... 17.2 27.4 (10.2)
---- ------- ------
$ 144.8 $ 149.2 $ (4.4)
======== ======= ======
While utilization was consistent with prior year, the average dayrate for
ATWOOD EAGLE during fiscal year 2003 was approximately $85,000 compared to
$75,000 in the prior year. The current fiscal year also includes $2.7 million of
mobilization revenue for the rig's relocation to West Africa. The ATWOOD BEACON
commenced operations in August 2003 while being under construction all of the
prior fiscal year. The current fiscal year revenue for the VICKSBURG includes
$2.0 million of client reimbursements for capital upgrades, as utilization and
average dayrates were consistent with prior year. The increase in revenue for
the RICHMOND is primarily due to the rig being 100% utilized in fiscal year 2003
compared to having 76 days of idle time in fiscal year 2002. The decrease in
revenue for the ATWOOD FALCON is due to its mobilization to Australia and back
to Malaysia during the current fiscal year compared to working at full operating
dayrates for all of the prior fiscal year. Due to the softness of the
Mediterranean market, utilization for the ATWOOD SOUTHERN CROSS decreased from
-6-
approximately 85% in fiscal year 2002 to 70% in the current fiscal year. Average
dayrates for the ATWOOD HUNTER decreased from approximately $90,000 to $55,000
for the same periods.
Contract drilling costs for the current fiscal year increased 31% as
compared to the prior year. As discussed below, in order to maintain relatively
high utilization of our fleet during the recent downturn in the offshore
drilling market, we pursued short-term contract opportunities for the ATWOOD
EAGLE, ATWOOD FALCON and ATWOOD SOUTHERN CROSS in high operating cost areas of
West Africa, Australia and Italy. Compared to fiscal year 2002, approximately
90% of the increase in contract drilling costs in fiscal year 2003 related to
these three rigs. A comparative analysis of contract drilling costs by rig for
fiscal years 2003 and 2002 is as follows:
CONTRACT DRILLING COSTS
(In millions)
-------------------------------
Fiscal Fiscal
2003 2002 Variance
---- ---- --------
ATWOOD EAGLE.......................... $ 19.4 $ 9.0 $ 10.4
ATWOOD FALCON......................... 18.7 10.2 8.5
ATWOOD SOUTHERN CROSS................. 14.3 11.1 3.2
ATWOOD BEACON......................... 1.4 --- 1.4
SEAHAWK............................... 9.7 9.2 0.5
GOODWYN 'A'/NORTH RANKIN 'A'.......... 2.0 2.1 (0.1)
VICKSBURG............................. 9.3 9.5 (0.2)
ATWOOD HUNTER......................... 12.9 13.4 (0.5)
RICHMOND.............................. 8.2 9.3 (1.1)
OTHER................................. 2.6 1.3 1.3
------- ------ -------
$ 98.5 $ 75.1 $ 23.4
======= ====== =======
Contract drilling costs for the ATWOOD EAGLE include $8.2 million of
mobilization expenses incurred during the rig's relocation to West Africa. In
addition, daily operating costs of the ATWOOD EAGLE have increased as operating
costs in West Africa are approximately 30% higher than in the Mediterranean, the
rig's previous location. This increase in daily operating costs relates
primarily to a significantly higher onshore cost of services to support our
offshore operations, plus higher local labor costs. Due to limited office and
living facilities in West Africa compared to the rig's previous location in the
Mediterranean, the daily costs for such facilities and other services in West
Africa is significantly higher than most other areas of the world. During fiscal
year 2003, the ATWOOD FALCON worked seven months in Australia, where operating
costs are higher than Southeast Asia, its primary operating location for all of
the prior fiscal year, by approximately $25,000 per day due to increased
personnel-related costs. Australian labor regulations require that marine union
personnel must be employed for all offshore vessels that have propulsion. During
the period that the ATWOOD FALCON worked in Australia, it was equipped with
propulsion assist, which required the employment of marine personnel that was
not required when the rig worked in Southeast Asia. We also incurred
approximately $2.0 million in mobilization costs re-locating the ATWOOD FALCON
to and from Australia.
The increase in costs for the ATWOOD SOUTHERN CROSS resulted from the
amortization of 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. In addition, Italian regulations do not allow
drilling rigs to operate in Italian waters without having original certification
for all electrical equipment. We incurred additional operating costs in
complying with this requirement. The ATWOOD BEACON commenced operations in
August 2003 while being under construction all of the prior fiscal year. The
decrease in costs for the RICHMOND for fiscal year 2003 is due to the shipyard
repairs incurred during the prior fiscal year.
-7-
Depreciation expense for the current fiscal year increased 8% as compared
to the prior fiscal year. A comparative analysis of depreciation expense by rig
for fiscal year 2003 and 2002 is as follows:
DEPRECIATION EXPENSE
(In millions)
---------------------------------------
Fiscal Fiscal
2003 2002 Variance
---- ---- --------
ATWOOD HUNTER.................. $ 5.4 $ 4.2 $ 1.2
ATWOOD EAGLE................... 3.1 2.2 0.9
ATWOOD BEACON.................. 0.7 --- 0.7
RICHMOND....................... 1.9 1.6 0.3
VICKSBURG...................... 2.5 2.3 0.2
ATWOOD SOUTHERN CROSS.......... 4.0 3.9 0.1
ATWOOD FALCON.................. 2.6 2.7 (0.1)
SEAHAWK........................ 4.7 4.8 (0.1)
OTHER.......................... 0.9 2.2 (1.3)
------ ------ -----
$ 25.8 $ 23.9 $ 1.9
====== ====== =====
During the period when a rig is out of service for a significant upgrade
that extends its useful life, no depreciation expense is recognized. The
increased depreciation on the ATWOOD HUNTER in fiscal year 2003 is due to a full
year of depreciation expense compared to only three quarters in the prior fiscal
year as the rig was completing its upgrade and relocation to the Mediterranean
during the first quarter of fiscal year 2002. The increase for the ATWOOD EAGLE
is due to an increase in the rig's depreciable basis resulting from the
completion of its $90 million upgrade during the current fiscal year. The ATWOOD
BEACON commenced operations in August 2003 while being under construction all of
prior fiscal year. The depreciable basis of the RICHMOND increased by
approximately $1 million during the current fiscal year which will be
depreciated over the rig's remaining useful life of 2 years. Other depreciation
expense decreased due to the fact that RIG-200 (sold in May 2003) was fully
depreciated to its salvage value in fiscal year 2002 and thus had no
depreciation expense for fiscal year 2003.
General and administrative expense increase 39% in fiscal year 2003
primarily due to higher professional fees related to our worldwide restructuring
initiative. Our worldwide group of consolidated entities derives substantially
all of their operating revenues from international offshore drilling of
exploratory and developmental oil and gas wells and related support services. At
the beginning of fiscal year 2003, we initiated a restructuring of our foreign
subsidiaries and deployment of our worldwide assets to focus potential civil
litigation which may arise from future offshore activities in foreign operations
in the jurisdictions of the areas of those operations, to simplify our worldwide
organizational structure for administrative and marketing reasons, to facilitate
more efficient management and control of business operations, and to deploy our
worldwide assets and capital in a more efficient manner among our consolidated
group of companies. In addition to these operational efficiencies, it is
expected that this restructuring will also provide long-term tax efficiencies. A
significant part of this restructuring involved the contribution of a majority
of our non-U.S. operations to Atwood Oceanics Pacific Limited, a wholly-owned
Cayman Islands company, which had historically served as our offshore company
for marketing, negotiating, and performing drilling contracts outside of the
United States. At September 30, 2003, most of our planned restructuring
initiative had been completed, with approximately $3 million of the increase in
general and administrative expenses related to professional fees associated with
this restructuring process.
Virtually all of our current 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 jurisdictions, our
effective tax rate for the fiscal year 2003 significantly exceeds the United
States statutory rate.
We recorded deferred foreign tax liabilities of $4.7 million relating to
Australian and Malaysian taxes after reassessing certain tax planning strategies
in conjunction with the reorganization of our foreign subsidiaries undertaken in
fiscal year 2003. This deferred tax expense has no cash effect on us.
-8-
RESULTS OF OPERATIONS
Fiscal Year 2002 Versus Fiscal Year 2001
An analysis of contract revenues by rig for fiscal years 2002
and 2001 is as follows:
CONTRACT REVENUES
(In millions)
-------------------------------------
Fiscal Fiscal
2002 2001 Variance
---- ---- --------
ATWOOD HUNTER.......................... $ 27.4 $ 15.8 $ 11.6
VICKSBURG.............................. 22.5 12.7 9.8
ATWOOD SOUTHERN CROSS.................. 19.3 17.9 1.4
SEAHAWK................................ 22.3 23.4 (1.1)
RICHMOND............................... 7.1 11.3 (4.2)
GOODWYN `A' / NORTH RANKIN `A'......... 1.9 6.1 (4.2)
ATWOOD EAGLE........................... 15.2 19.9 (4.7)
ATWOOD FALCON.......................... 33.5 40.4 (6.9)
------- ------- ------
$ 149.2 $ 147.5 $ 1.7
======= ======= ======
The ATWOOD HUNTER worked continuously in Egypt during fiscal year 2002 at
dayrates ranging from $90,000 to $110,000, compared to being idle for upgrade
during a significant portion of fiscal year 2001, which accounts for its
increase in revenue. In April/May 2001, the VICKSBURG was relocated from India
to Southeast Asia, and after its relocation, received higher dayrates than those
received while in India, which accounts for its increase in revenue. The ATWOOD
SOUTHERN CROSS had an average per day revenue of approximately $53,000 in fiscal
year 2002 compared to approximately $49,000 in fiscal year 2001. In February
2000, the SEAHAWK commenced its four-year contract extension in Malaysia, with
its dayrate ranging from a high of $50,000 to a low of $30,000 depending upon
the price of oil. The rig was at the top of this dayrate range in fiscal year
2002 and fiscal year 2001. RICHMOND revenues declined in fiscal year 2002
compared to fiscal year 2001 due to 78 days of idle time incurred during the
year for certain repairs and inspections and to a decline in dayrate levels in
the Gulf of Mexico. At the end of fiscal year 2001, an indefinite planned break
in drilling activities was instigated on the GOODWYN `A'/NORTH RANKIN `A'
platform rigs, which accounts for the decline in revenues from these units in
fiscal year 2002. The decline in revenues for the ATWOOD EAGLE was due to the
rig undergoing upgrades in a shipyard in Greece from April 2002 to November
2002. In May 2002, the ATWOOD FALCON was relocated from the Philippines to
Malaysia following the completion of a long-term contract. The rig's effective
dayrate in the Philippines was over $100,000 compared to $70,000 in Malaysia,
which accounts for the decline in revenues.
-9-
Contract drilling costs during fiscal year 2002 increased 7% primarily due
to the ATWOOD HUNTER returning to work following its upgrade and to higher
operating costs associated with the VICKSBURG, RICHMOND, ATWOOD FALCON, SEAHAWK
and ATWOOD SOUTHERN CROSS. An analysis of contract drilling costs by rig for
fiscal year 2002 and 2001 is as follows:
CONTRACT DRILLING COSTS
(In millions)
------------------------------------
Fiscal Fiscal
2002 2001 Variance
---- ---- --------
ATWOOD HUNTER................... $ 13.4 $ 8.1 $ 5.3
VICKSBURG....................... 9.5 7.4 2.1
RICHMOND........................ 9.3 7.6 1.7
ATWOOD FALCON................... 10.2 8.6 1.6
SEAHAWK......................... 9.2 7.8 1.4
ATWOOD SOUTHERN CROSS........... 11.1 10.3 0.8
ATWOOD EAGLE.................... 9.0 11.9 (2.9)
GOODWYN `A'/NORTH RANKIN `A'.... 2.1 5.7 (3.6)
OTHER........................... 1.3 2.6 (1.3)
--- --- ----
$ 75.1 $ 70.0 $ 5.1
======== ======= =======
During the period that the ATWOOD HUNTER was in a shipyard in the United
States for upgrades and its subsequent relocation to Egypt (April 2001 through
November 2001), no drilling costs were incurred. Higher drilling costs for the
VICKSBURG were due to operating costs being higher in Southeast Asia than in
India. During fiscal year 2002, the RICHMOND incurred higher repairs and
maintenance costs. The increase in operating costs for the ATWOOD FALCON is
primarily due to additional costs incurred on relocating the rig from the
Philippines to Malaysia. The decline in costs for the ATWOOD EAGLE was due to
the rig being in a shipyard during the last few months of fiscal year 2002 for
upgrade, whereby no drilling costs were incurred. Drilling costs on the GOODWYN
`A'/NORTH RANKIN `A' platforms declined due to the planned break in drilling
activities.
An analysis of depreciation expense by rig is as follows:
DEPRECIATION EXPENSE
(In millions)
-------------------------------------
Fiscal Fiscal
2003 2002 Variance
---- ---- --------
ATWOOD HUNTER................... $ 5.4 $ 4.2 $ 1.2
ATWOOD EAGLE.................... 3.1 2.2 0.9
ATWOOD BEACON................... 0.7 --- 0.7
RICHMOND........................ 1.9 1.6 0.3
VICKSBURG....................... 2.5 2.3 0.2
ATWOOD SOUTHERN CROSS........... 4.0 3.9 0.1
ATWOOD FALCON................... 2.6 2.7 (0.1)
SEAHAWK......................... 4.7 4.8 (0.1)
OTHER........................... 0.9 2.2 (1.3)
------- ------- -------
$ 25.8 $ 23.9 $ 1.9
======= ======= =======
-10-
The reduced depreciation on the ATWOOD HUNTER in fiscal year 2001 and the
ATWOOD EAGLE in fiscal year 2002 was due to the policy of not recognizing
depreciation expense during the period a rig is out of service for a significant
upgrade. The decrease in depreciation expense for the SEAHAWK was due to the
rig's 1992 upgrade costs becoming fully depreciated, thereby leaving only
approximately $12 million of its 2000 upgrade cost of approximately $22 million
to be depreciated over a remaining period of approximately three years.
General and administrative expenses increased 9% in both fiscal year 2002
and 2001, primarily due to higher travel, communication, and other personnel
related costs. Our effective tax rate was 27% in fiscal year 2002 compared to
33% in fiscal year 2001. The effective tax rate in fiscal year 2002 was reduced
by a $2.3 million foreign income tax credit benefit generated in September 2002.
The 44% decline in net interest expense was primarily due to a $1.8 million
increase in capitalized interest. Investment income in fiscal year 2002 declined
76% due to us having less funds to invest due to its capital expenditure
requirements.
LIQUIDITY AND CAPITAL RESOURCES
We currently operate eight active offshore drilling units. Since 1997, we
have expended approximately $340 million on upgrading seven existing drilling
units and approximately $120 million on constructing our eighth drilling unit,
the ATWOOD BEACON. We operate in a cyclical industry. Maintaining high equipment
utilization in up, as well as down, cycles, is a key factor in generating cash
to satisfy current and future obligations. For fiscal years 1998 through 2002,
net cash provided by operating activities ranged from a low of approximately
$39.2 million to a high of $70.9 million compared to net cash provided by
operating activities of approximately $13.7 million for fiscal year 2003. Our
operating cash flows are primarily driven by our operating income, which
reflects dayrates and rig utilization. Due to a downturn in market conditions
during fiscal year 2003, we pursued short-term contract opportunities in high
operating cost areas in order to maintain a high utilization of our fleet. We
anticipate market conditions to improve in fiscal year 2004 and accordingly
expect improvements in earnings and cash flows. With the completion of our
upgrade program and construction of the ATWOOD BEACON during fiscal year 2003,
we have no significant capital commitments at September 30, 2003. Our only
existing cash commitments for fiscal year 2004 and beyond, outside of funding
current rig operations from current operating cash flows, are estimated annual
capital expenditures of $10 million for maintenance of our eight active drilling
rigs and required quarterly repayments under our credit facility which will
total $24 million for fiscal year 2004. We expect to generate sufficient cash
flows from operations to satisfy these obligations.
We have funded our equipment upgrade and construction programs through a
combination of internally generated funds and funds borrowed under credit
facilities. At September 30, 2002, we had a $175 million credit facility with a
bank group under which $115 million had been borrowed. Subsequent to September
31, 2002, an additional $57.5 million was borrowed under this facility to bring
the outstanding balance at March 31, 2003 to $172.5 million. On April 1, 2003,
we executed a $225 million senior secured credit facility with a new bank group
and borrowed $190 million of which $172.5 million was utilized to repay and
terminate the $175 million credit facility. In June 2003, the borrowing capacity
under the current credit facility was increased to $250 million, with an
outstanding balance of $205 million as of September 30, 2003. In June we also
amended the credit facility to increase the allowed ratio limit of outstanding
debt to earnings before interest, income taxes and depreciation. This credit
facility consists of a $150 million term loan facility (requiring quarterly
payments of $6 million during fiscal year 2004) and a $100 million revolving
loan facility (maturing in March 2008). The financial covenant relating to our
ratio of outstanding debt to earnings, before interest, income tax and
depreciation included in the credit facility executed in April 2003, as amended
in June 2003, was based upon estimates that did not assume a continuing decline
in the market conditions which negatively impacted our fiscal year 2003 fourth
quarter results. In November 2003, the credit facility was further amended to
redefine the calculation of the allowed ratio of outstanding debt to earnings,
before interest, income taxes and depreciation and to increase the allowed ratio
limits for the first three quarters of fiscal year 2004. We were in compliance
with all financial covenants in effect at September 30, 2003, and since the
amended financial covenant allows for more variability in operating results, we
expect to remain in compliance with all financial covenants during fiscal year
2004. Further, at all times during fiscal years 2001, 2002 and 2003 when we were
required to determine compliance with our financial covenants, we were in
compliance with those covenants.
-11-
Primarily from utilizing $90 million in net proceeds borrowed under our
credit facilities, in fiscal year 2003 capital expenditures totaling
approximately $101 million were invested as follows:
o approximately $25 million in completing the upgrade of the
ATWOOD EAGLE,
o approximately $64 million in completing the construction of the
ATWOOD BEACON and
o approximately $12 million in other capital projects.
The SEASCOUT, a semisubmersible hull planned for a future conversion and
upgrade to a semisubmersible tender assist vessel, continues to be cold-stacked.
The cost to convert and upgrade the SEASCOUT could range from $50 million to $70
million. There are no current capital commitments on the SEASCOUT, with a
conversion and upgrade not to be undertaken until an acceptable contract
opportunity has been secured and adequate financing is in place. We continue to
periodically review and adjust our planned capital expenditures and financing of
such expenditures in light of current market conditions.
Our portfolio of accounts receivable is comprised of major international
corporate entities with stable payment experience. Historically, we have not
encountered significant difficulty in collecting receivables and typically do
not require collateral for our receivables. We have no allowance for doubtful
accounts at September 30, 2003.
COMMITMENTS (In Thousands)
The following table summarizes our obligations and commitments at
September 30, 2003:
Fiscal Fiscal Fiscal Fiscal Fiscal
2004 2005 2006 2007 2008
---- ---- ---- ---- ----
Long-Term Debt........ $24,000 $36,000 $36,000 $36,000 $73,000
Operating Leases...... 588 628 647 647 54
--- --- --- --- --
$24,588 $36,628 $36,647 $36,647 $73,054
======= ======= ======= ======= =======
CRITICAL ACCOUNTING POLICIES
Significant accounting policies are included in Note 2 to our consolidated
financial statements for the year ended September 30, 2003. These policies,
along with the underlying assumptions and judgments made by management in their
application, have a significant impact on our consolidated financial statements.
We identify our most critical accounting policies as those that are the most
pervasive and important to the portrayal of our financial position and results
of operations, and that require the most difficult, subjective and/or complex
judgments by management regarding estimates about matters that are inherently
uncertain. Our most critical accounting policies are those related to property
and equipment, impairment of assets and income taxes.
We currently operate eight active offshore drilling units. All of these
assets are premium equipment and should provide many years of quality service.
At September 30, 2003, the carrying value of our property and equipment totaled
$443.1 million, which represents 85% of total assets. This carrying value
reflects the application of our property and equipment accounting policies,
which incorporate estimates, assumptions and judgments by management relative to
the useful lives and salvage values of our rigs and vessels. The estimated
useful lives of our drilling units and related equipment range from 5 years to
22 years and our salvage values are generally based on 5% of capitalized costs.
Any future increases in our estimates of useful lives or salvage values will
have the effect of decreasing future depreciation expense in earlier future
years and spreading the expense to later years. Any future decreases in our
useful lives or salvage values will have the effect of accelerating future
depreciation expense. For example, effective October 1, 2003, we extended the
remaining depreciable life of the RICHMOND from 2 to 5 years, due to our recent
assessment of the rig's commercial viability,
-12-
coupled with our intent to continue marketing and operating the rig beyond
2 years. Depreciation expense will continue to be recorded on a straight-line
method over the next 5 years. However, as a result of the change in depreciable
life and related depreciation expense being extended into years 3 to 5,
depreciation expense will be lower in the next two years than it otherwise would
have been.
We evaluate the carrying value of our property and equipment when events or
changes in circumstances indicate that the carrying value of such assets may be
impaired. Asset impairment evaluations are, by nature, highly subjective.
Operations of our drilling equipment are subject to the offshore drilling
requirements of oil and gas exploration and production companies and agencies of
foreign governments. These requirements are, in turn, subject to fluctuations in
government policies, world demand and price for petroleum products, proved
reserves in relation to such demand and the extent to which such demand can be
met from onshore sources. The critical estimates which result from these
dynamics include projected utilization, dayrates, and operating expenses, each
of which impact our estimated future cash flows. Over the last ten years, our
equipment utilization rate has averaged approximately 90%; however, if a
drilling vessel incurs significant idle time or receives dayrates below
operating costs, its carrying value could become impaired. The estimates,
assumptions and judgments used by management in the application of our property
and equipment and asset impairment policies reflect both historical experience
and expectations regarding future industry conditions and operations. The use of
different estimates, assumptions and judgments, especially those involving the
useful lives of our rigs and vessels and expectations regarding future industry
conditions and operations, would likely result in materially different carrying
values of assets and results of operations.
We conduct operations and earn income in numerous foreign countries and are
subject to the laws of taxing jurisdictions within those countries, as well as
United States federal and state tax laws. At September 30, 2003, we have a $20.7
million net deferred income tax liability, with a current United States federal
income tax receivable of approximately $3.3 million. These balances reflect the
application of our income tax accounting policies in accordance with statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes". Such
accounting policies incorporate estimates, assumptions and judgments by
management relative to the interpretation of applicable tax laws, the
application of accounting standards, and future levels of taxable income. The
estimates, assumptions and judgments used by management in connection with
accounting for income taxes reflect both historical experience and expectations
regarding future industry conditions and operations. Changes in these estimates,
assumptions and judgments could result in materially different provisions for
deferred and current income taxes.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
On May 31, 2003, the Financial Accounting Standards Board (FASB) issued
FASB Statement No. 150 ("SFAS 150"), Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity, which improves
the accounting for certain financial instruments that, under previous guidance,
issuers could account for as equity and requires that those instruments be
classified as liabilities (or assets in certain circumstances) in statements of
financial position. SFAS 150 is generally effective for all financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003. Management does not expect the adoption of SFAS 150 to have a material
impact on it financial statements or results of operations.
DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk, including adverse changes in interest rates
and foreign currency exchange rates as discussed below.
Interest Rate Risk
All of the $205 million of long-term debt outstanding at September 30,
2003, is floating rate debt. As a result, our annual interest costs in fiscal
year 2004 will fluctuate based on interest rate changes. Because the interest
rate on our long-term debt is a floating rate, the fair value of our long-term
debt approximates carrying value as of September 30, 2003. The impact on annual
cash flow of a 10% change in the floating rate (approximately 40 basis points)
-13-
would be approximately $0.8 million. We do not have any open derivative
contracts relating to our floating rate debt at September 30, 2003.
Foreign Currency Risk
Certain of our subsidiaries have monetary assets and liabilities that are
denominated in a currency other than their functional currencies. Based on
September 30, 2003 amounts, a decrease of 10% in the foreign currency value
relative to the United States dollar from the year-end exchange rates would not
result in a material foreign currency transaction loss. Thus, we consider our
current risk exposure to foreign currency exchange rate movements, based on net
cash flows, to be immaterial. We do not have any open derivative contracts
relating to foreign currencies at September 30, 2003.
PART IV
ITEM 15.EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
(a) FINANCIAL STATEMENTS AND EXHIBITS
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 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.
-14-
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.
-15-
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: October 1, 2004
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 President, Chief Executive
Chief Financial Officer Officer and Director
(Principal Financial and Accounting Officer) (Principal Executive Officer)
Date: October 1, 2004 Date: October 1, 2004
/s/ Robert W. Burgess /s/ George S. Dotson
ROBERT W. BURGESS GEORGE S. DOTSON
Director Director
Date: October 1, 2004 Date: October 1, 2004
/s/ Hans Helmerich /s/ William J. Morrissey
HANS HELMERICH WILLIAM J. MORRISSEY
Director Director
Date: October 1, 2004 Date: October 1, 2004
/s/ Deborah A. Beck
DEBORAH A. BECK
Director
DATE: October 1, 2004
-16-
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 October 18, 2002 between the Company
and Continental Stock Transfer & Trust Company
(Incorporated herein by reference to Exhibit 4.1 of our Form 8-A
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 to 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).
-1-
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 effective 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 Public 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.
-2-
32.1 Certification of Chief Executive Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
* Filed with the original filing of our Annual Report on Form 10-K
on December 29, 2003.
-3-
EXHIBIT 31.1
CERTIFICATIONS
I, John R. Irwin, certify that:
1. I have reviewed this annual report on Form 10-K of Atwood
Oceanics, Inc.;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other
financial information included in this 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 report;
4. The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be
designed under our supervision, 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 report is being prepared;
(b) [Paragraph omitted in accordance with SEC transition
instructions contained in SEC Release 34-47986]; and
(c) Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation;
and
(d) Disclosed in this report any change in the
registrant's internal control over financial reporting that
occurred during the registrant's most recent fiscal quarter
(the registrant's fourth fiscal quarter in the case
of an annual report) that has materially affected, or is
reasonably likely to materially affect, the
registrant's internal control over financial reporting.
5. The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal
control over financial reporting, 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 and material weaknesses
in the design or operation of internal control over
financial reporting which are reasonably likely to
adversely affect the registrant's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal control over financial reporting.
Date: October 1, 2004
/s/ John R. Irwin
John R. Irwin
Chief Executive Officer
-1-
EXHIBIT 31.2
CERTIFICATIONS
I, James M. Holland, certify that:
1. I have reviewed this annual report on Form 10-K of Atwood
Oceanics, Inc.;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other
financial information included in this 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 report;
4. The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be
designed under our supervision, 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 report is being prepared;
(b) [Paragraph omitted in accordance with SEC transition
instructions contained in SEC Release 34-47986]; and
(c) Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that
occurred during the registrant's most recent fiscal
quarter (the registrant's fourth fiscal quarter in the case
of an annual report) that has materially affected, or is
reasonably likely to materially affect, the
registrant's internal control over financial reporting.
5. The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal
control over financial reporting, 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 and material weaknesses
in the design or operation of internal control over
financial reporting which are reasonably likely to
adversely affect the registrant's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal control over financial reporting.
Date: OCtober 1, 2004
/s/ James M. Holland
James M. Holland
Chief Financial Officer
-1-
EXHIBIT 32.1
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 Annual Report of Atwood Oceanics, Inc. (the
"Company") on Form 10-K for the period ended September 30, 2003, 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. Section 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: October 1, 2004
/s/ John R. Irwin
John R. Irwin
Chief Executive Officer
-1-
EXHIBIT 32.2
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 Annual Report of Atwood Oceanics, Inc. (the
"Company") on Form 10-K for the period ended September 30, 2003, 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. Section 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: October 1, 2004
/s/ James M. Holland
James M. Holland
Chief Financial Officer
-1-