UNITED STATES | ||
SECURITIES AND EXCHANGE COMMISSION | ||
WASHINGTON, DC 20549 |
(Mark One) | Form 10-Q |
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended March 31, 2017 | ||
or | ||
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from __________________________________to __________________________________ | ||
Commission file number 1-13167 |
Texas | 74-1611874 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) | |
15011 Katy Freeway, Suite 800, Houston, Texas | 77094 | |
(Address of Principal Executive Offices including Zip Code) | (Zip Code) |
N/A | ||||
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Emerging growth company o |
Item 1. | Page | |
a) | ||
b) | ||
c) | ||
d) | ||
e) | ||
f) | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 6. | ||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||
(In thousands, except per share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
REVENUES: | |||||||||||||||
Contract drilling | $ | 162,240 | $ | 282,546 | $ | 312,103 | $ | 577,161 | |||||||
Revenues related to reimbursable expenses | 5,466 | 13,805 | 13,159 | 27,009 | |||||||||||
Total revenues | 167,706 | 296,351 | 325,262 | 604,170 | |||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Contract drilling | 64,277 | 89,918 | 129,947 | 220,570 | |||||||||||
Reimbursable expenses | 4,674 | 9,123 | 11,276 | 17,409 | |||||||||||
Depreciation | 41,443 | 41,053 | 83,251 | 83,880 | |||||||||||
General and administrative | 12,445 | 11,488 | 27,636 | 26,665 | |||||||||||
Asset impairment | 58,962 | 708 | 58,962 | 65,432 | |||||||||||
(Gain) loss on sale of assets | (51 | ) | 77 | (118 | ) | 77 | |||||||||
Other, net | — | (1,137 | ) | — | (1,060 | ) | |||||||||
181,750 | 151,230 | 310,954 | 412,973 | ||||||||||||
OPERATING (LOSS) INCOME | (14,044 | ) | 145,121 | 14,308 | 191,197 | ||||||||||
OTHER (EXPENSE) INCOME: | |||||||||||||||
Interest expense, net of capitalized interest | (13,537 | ) | (17,098 | ) | (29,828 | ) | (30,859 | ) | |||||||
Interest income | 265 | 6 | 269 | 10 | |||||||||||
Gains on extinguishment of debt | — | 8,397 | — | 8,397 | |||||||||||
Other income | — | — | — | 17,976 | |||||||||||
(13,272 | ) | (8,695 | ) | (29,559 | ) | (4,476 | ) | ||||||||
(LOSS) INCOME BEFORE INCOME TAXES | (27,316 | ) | 136,426 | (15,251 | ) | 186,721 | |||||||||
PROVISION FOR INCOME TAXES | 1,546 | 13,989 | 3,940 | 25,203 | |||||||||||
NET (LOSS) INCOME | $ | (28,862 | ) | $ | 122,437 | $ | (19,191 | ) | $ | 161,518 | |||||
(LOSS) EARNINGS PER COMMON SHARE (NOTE 3): | |||||||||||||||
Basic | $ | (0.37 | ) | $ | 1.89 | $ | (0.27 | ) | $ | 2.49 | |||||
Diluted | $ | (0.37 | ) | $ | 1.89 | $ | (0.27 | ) | $ | 2.49 | |||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE 3): | |||||||||||||||
Basic | 78,270 | 64,781 | 71,504 | 64,739 | |||||||||||
Diluted | 78,270 | 64,825 | 71,504 | 64,870 | |||||||||||
Dividend declared per share | $ | — | $ | — | $ | — | $ | 0.075 |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net (loss) income | $ | (28,862 | ) | $ | 122,437 | $ | (19,191 | ) | $ | 161,518 | |||||
Other comprehensive income (loss): | |||||||||||||||
Derivative financial instruments: | |||||||||||||||
Unrealized holding gains/(losses) | 263 | (4,649 | ) | 1,002 | (4,818 | ) | |||||||||
Loss reclassified to net income | 314 | 2,043 | 759 | 2,738 | |||||||||||
Total other comprehensive income (loss) | 577 | (2,606 | ) | 1,761 | (2,080 | ) | |||||||||
Comprehensive (loss) income | $ | (28,285 | ) | $ | 119,831 | $ | (17,430 | ) | $ | 159,438 |
(In thousands, except par value) | March 31, 2017 | September 30, 2016 | |||||
(Unaudited) | |||||||
ASSETS | |||||||
Cash | $ | 435,208 | $ | 145,427 | |||
Accounts receivable, net | 81,630 | 113,091 | |||||
Income tax receivable | 2,889 | 6,095 | |||||
Inventories of materials and supplies, net | 101,721 | 109,925 | |||||
Prepaid expenses, deferred costs and other current assets | 12,498 | 18,504 | |||||
Total current assets | 633,946 | 393,042 | |||||
Property and equipment, net | 4,143,390 | 4,127,696 | |||||
Other receivables | 11,831 | 11,831 | |||||
Deferred income taxes | 165 | 165 | |||||
Deferred costs and other assets | 7,313 | 7,058 | |||||
Total assets | $ | 4,796,645 | $ | 4,539,792 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Accounts payable | $ | 23,693 | $ | 25,299 | |||
Accrued liabilities | 9,747 | 7,868 | |||||
Interest payable | 8,395 | 7,096 | |||||
Income tax payable | 8,582 | 8,294 | |||||
Deferred credits and other liabilities | 1,636 | 799 | |||||
Total current liabilities | 52,053 | 49,356 | |||||
Long-term debt | 1,298,067 | 1,227,919 | |||||
Deferred income taxes | 1,599 | 1,202 | |||||
Deferred credits | 7,910 | — | |||||
Other | 35,994 | 30,929 | |||||
Total long-term liabilities | 1,343,570 | 1,260,050 | |||||
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 80,516 issued (Note 10) and outstanding as of March 31, 2017 and 180,000 shares authorized and 64,799 shares issued and outstanding as of September 30, 2016 | 80,516 | 64,799 | |||||
Paid-in capital | 410,855 | 237,542 | |||||
Retained earnings | 2,909,684 | 2,929,839 | |||||
Accumulated other comprehensive loss | (33 | ) | (1,794 | ) | |||
Total shareholders' equity | 3,401,022 | 3,230,386 | |||||
Total liabilities and shareholders' equity | $ | 4,796,645 | $ | 4,539,792 |
Common Stock | Paid-in | Retained | Accumulated Other Comprehensive | Total Stockholders’ | ||||||||||||||||||
(In thousands) | Shares | Amount | Capital | Earnings | Income (Loss) | Equity | ||||||||||||||||
September 30, 2016 | 64,799 | $ | 64,799 | $ | 237,542 | $ | 2,929,839 | $ | (1,794 | ) | $ | 3,230,386 | ||||||||||
Net (loss) income | — | — | — | (19,191 | ) | — | (19,191 | ) | ||||||||||||||
Cumulative effect of accounting change (Note 1) | — | — | 964 | (964 | ) | — | — | |||||||||||||||
Other comprehensive income | — | — | — | — | 1,761 | 1,761 | ||||||||||||||||
Vesting of restricted stock and performance unit awards | 192 | 192 | (658 | ) | — | — | (466 | ) | ||||||||||||||
Stock compensation expense | — | — | 7,566 | — | — | 7,566 | ||||||||||||||||
Common stock equity issuance | 15,525 | 15,525 | 165,441 | — | — | 180,966 | ||||||||||||||||
March 31, 2017 | 80,516 | $ | 80,516 | $ | 410,855 | $ | 2,909,684 | $ | (33 | ) | $ | 3,401,022 |
Six Months Ended March 31, | |||||||
(In thousands) | 2017 | 2016 | |||||
Cash flows from operating activities: | |||||||
Net (loss) income | $ | (19,191 | ) | $ | 161,518 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation | 83,251 | 83,880 | |||||
Amortization | 3,367 | 1,607 | |||||
Provision for doubtful accounts | 2,369 | 1,141 | |||||
Deferred income tax benefit | (525 | ) | (650 | ) | |||
Share-based compensation expense | 7,566 | 5,009 | |||||
Asset impairment | 58,962 | 65,432 | |||||
(Gain) loss on sale of assets | (118 | ) | 77 | ||||
(Gain) on extinguishment of debt | — | (8,397 | ) | ||||
Other, net | — | (1,137 | ) | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 38,217 | 62,963 | |||||
Income tax receivable | 3,206 | 507 | |||||
Inventories of materials and supplies | (168 | ) | 16,187 | ||||
Prepaid expenses, deferred costs and other current assets | 6,072 | 14,709 | |||||
Deferred costs and other assets | (4,201 | ) | (1,381 | ) | |||
Accounts payable | 3,425 | (25,306 | ) | ||||
Accrued liabilities | 4,023 | (3,760 | ) | ||||
Income tax payable | 288 | 6,534 | |||||
Deferred credits and other liabilities | 6,720 | 1,220 | |||||
Net cash provided by operating activities | 193,263 | 380,153 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (154,448 | ) | (176,175 | ) | |||
Proceeds from sale of assets | — | 6,681 | |||||
Net cash used in investing activities | (154,448 | ) | (169,494 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of long-term debt | 125,000 | 45,000 | |||||
Principal payments on long-term debt | (55,000 | ) | (120,156 | ) | |||
Dividends paid | — | (21,746 | ) | ||||
Payments related to exercise of stock options | — | (928 | ) | ||||
Proceeds from issuance of common stock | 180,966 | — | |||||
Net cash provided by (used in) financing activities | 250,966 | (97,830 | ) | ||||
Net increase in cash and cash equivalents | 289,781 | 112,829 | |||||
Cash and cash equivalents, at beginning of period | 145,427 | 113,983 | |||||
Cash and cash equivalents, at end of period | $ | 435,208 | $ | 226,812 | |||
Non-cash activities: | |||||||
(Decrease) increase in accounts payable related to capital expenditures | $ | (5,031 | ) | $ | 950 | ||
Increase in deferred credits not yet collected | 9,125 | — |
Three Months Ended | Six Months Ended | ||||||||||||||||||||
(In thousands, except per share amounts) | Net (Loss) Income | Shares | Per Share Amount | Net (Loss) Income | Shares | Per Share Amount | |||||||||||||||
March 31, 2017 | |||||||||||||||||||||
Basic (loss) earnings per share | $ | (28,862 | ) | 78,270 | $ | (0.37 | ) | $ | (19,191 | ) | 71,504 | $ | (0.27 | ) | |||||||
Effect of dilutive securities: | |||||||||||||||||||||
Restricted stock and performance units | — | — | — | — | — | — | |||||||||||||||
Diluted (loss) earnings per share | $ | (28,862 | ) | 78,270 | $ | (0.37 | ) | $ | (19,191 | ) | 71,504 | $ | (0.27 | ) | |||||||
March 31, 2016 | |||||||||||||||||||||
Basic earnings per share | $ | 122,437 | 64,781 | 1.89 | 161,518 | 64,739 | $ | 2.49 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||
Restricted stock and performance units | — | 44 | — | — | 131 | — | |||||||||||||||
Diluted earnings per share | $ | 122,437 | 64,825 | $ | 1.89 | $ | 161,518 | 64,870 | $ | 2.49 |
(In thousands) | March 31, 2017 | September 30, 2016 | |||||
Drilling vessels and equipment | $ | 3,741,648 | $ | 3,898,686 | |||
Construction work in progress | 1,011,063 | 857,572 | |||||
Drill pipe | 51,328 | 52,543 | |||||
Office equipment and other | 39,173 | 39,213 | |||||
Total cost | 4,843,212 | 4,848,014 | |||||
Less: Accumulated depreciation | (699,822 | ) | (720,318 | ) | |||
Property and equipment, net | $ | 4,143,390 | $ | 4,127,696 |
(In thousands) | March 31, 2017 | September 30, 2016 | |||||
6.5% Senior Notes due 2020 ("Senior Notes") aggregate principal amount | $ | 448,650 | $ | 448,650 | |||
Senior Notes unamortized premium | 2,797 | 3,245 | |||||
Senior Notes unamortized debt issuance costs | (3,380 | ) | (3,976 | ) | |||
Total Senior Notes | 448,067 | 447,919 | |||||
Revolving Credit Facility ("Credit Facility") | 850,000 | 780,000 | |||||
Total long-term debt | $ | 1,298,067 | $ | 1,227,919 |
(In thousands) | Balance Sheet Classification | March 31, 2017 | September 30, 2016 | ||||||
Derivative assets designated as cash flow hedging instruments: | |||||||||
Short-term interest rate swaps asset | Prepaid expenses, deferred costs and other current assets | $ | 66 | $ | — | ||||
Derivative liabilities designated as cash flow hedging instruments: | |||||||||
Short-term interest rate swaps | Accrued liabilities | — | (1,312 | ) | |||||
Long-term interest rate swaps | Other long-term liabilities | (99 | ) | (482 | ) | ||||
Total derivative contracts, net | $ | (33 | ) | $ | (1,794 | ) |
Six Months Ended March 31, | |||||||
(In thousands, except average service periods) | 2017 | 2016 | |||||
Share-based compensation recognized | $ | 7,566 | $ | 5,009 | |||
Unrecognized compensation cost, net of estimated forfeitures | 22,901 | 21,469 | |||||
Remaining weighted-average service period (years) | 1.8 | 2.1 |
Number of Shares (000s) | Weighted Average Fair Value | |||||
Unvested as of October 1, 2016 | 1,515 | $ | 21.96 | |||
Granted | 1,126 | 7.92 | ||||
Vested | (193 | ) | 42.44 | |||
Forfeited | (44 | ) | 21.29 | |||
Unvested as of March 31, 2017 | 2,404 | 13.75 |
Number of Shares (000s) | Weighted Average Fair Value | |||||
Unvested as of October 1, 2016 | 426 | $ | 26.69 | |||
Granted | 360 | 8.50 | ||||
Vested | (47 | ) | 53.55 | |||
Forfeited | (16 | ) | 53.55 | |||
Unvested as of March 31, 2017 | 723 | 15.29 |
Number of Options (000s) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value (000s) | ||||||||||
Outstanding as of October 1, 2016 | 617 | $ | 35.47 | 3.4 | $ | (16,533 | ) | ||||||
Granted | — | — | — | — | |||||||||
Exercised | — | — | — | — | |||||||||
Forfeited | — | — | — | — | |||||||||
Expired | (62 | ) | 26.02 | — | (1,025 | ) | |||||||
Outstanding as of March 31, 2017 | 555 | 36.53 | 3.2 | (14,989 | ) | ||||||||
Exercisable as of March 31, 2017 | 555 | 36.53 | 3.2 | (14,989 | ) |
• | Operating revenues totaling $168 million and $325 million on 273 and 646 operating days for the three and six months ended March 31, 2017, respectively, as compared to operating revenues of $296 million and $604 million on 778 and 1,570 operating days for the three and six months ended March 31, 2016, respectively; |
• | Net loss of $29 million and $19 million for the three and six months ended March 31, 2017, respectively, as compared to net income of $122 million and $162 million for the three and six months ended March 31, 2016, respectively; |
• | Capital expenditures of $154 million for the six months ended March 31, 2017, as compared to capital expenditures of $176 million for the six months ended March 31, 2016; and |
• | Increase in cash on hand of $290 million for the six months ended March 31, 2017 to $435 million. |
Contract Drilling Revenue Backlog1 | Remaining Fiscal 2017 | Fiscal 2018 | Fiscal 2019 | Fiscal 2020 | Fiscal 2021 | Total | |||||||||||||||||
(In millions) | |||||||||||||||||||||||
Ultra-deepwater2 | $ | 211 | $ | 106 | $ | 64 | $ | — | $ | — | $ | 381 | |||||||||||
Jackups | 8 | 11 | — | — | — | 19 | |||||||||||||||||
Total | $ | 219 | $ | 117 | $ | 64 | $ | — | $ | — | $ | 400 |
Percentage of Available Operating Days Committed1 | Remaining Fiscal 2017 | Fiscal 2018 | Fiscal 2019 | Fiscal 2020 | Fiscal 2021 | |||||||||
Ultra-deepwater2 | 86 | % | 31 | % | 14 | % | — | % | — | % | ||||
Jackups | 17 | % | 12 | % | — | % | — | % | — | % | ||||
Total | 43 | % | 20 | % | 6 | % | — | % | — | % |
REVENUES | |||||||||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
(In millions) | 2017 | 2016 | Variance | 2017 | 2016 | Variance | |||||||||||||||||
Ultra-Deepwater | $ | 162 | $ | 189 | $ | (27 | ) | $ | 310 | $ | 371 | $ | (61 | ) | |||||||||
Deepwater | — | 59 | (59 | ) | — | 131 | (131 | ) | |||||||||||||||
Jackups | — | 34 | (34 | ) | 2 | 75 | (73 | ) | |||||||||||||||
Reimbursable | 6 | 14 | (8 | ) | 13 | 27 | (14 | ) | |||||||||||||||
$ | 168 | $ | 296 | $ | (128 | ) | $ | 325 | $ | 604 | $ | (279 | ) |
CONTRACT DRILLING COSTS | |||||||||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
(In millions) | 2017 | 2016 | Variance | 2017 | 2016 | Variance | |||||||||||||||||
Ultra-Deepwater | $ | 53 | $ | 54 | $ | (1 | ) | $ | 103 | $ | 115 | $ | (12 | ) | |||||||||
Deepwater | — | 19 | (19 | ) | — | 62 | (62 | ) | |||||||||||||||
Jackups | 11 | 19 | (8 | ) | 25 | 45 | (20 | ) | |||||||||||||||
Reimbursable | 5 | 9 | (4 | ) | 11 | 17 | (6 | ) | |||||||||||||||
Other | — | (2 | ) | 2 | 2 | (1 | ) | 3 | |||||||||||||||
$ | 69 | $ | 99 | $ | (30 | ) | $ | 141 | $ | 238 | $ | (97 | ) |
DEPRECIATION EXPENSE | |||||||||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
(In millions) | 2017 | 2016 | Variance | 2017 | 2016 | Variance | |||||||||||||||||
Ultra-Deepwater | $ | 29 | $ | 29 | $ | — | $ | 58 | $ | 58 | $ | — | |||||||||||
Deepwater | 3 | 2 | 1 | 6 | 5 | 1 | |||||||||||||||||
Jackups | 8 | 9 | (1 | ) | 17 | 18 | (1 | ) | |||||||||||||||
Other | 1 | 1 | — | 2 | 3 | (1 | ) | ||||||||||||||||
$ | 41 | $ | 41 | $ | — | $ | 83 | $ | 84 | $ | (1 | ) |
Six Months Ended March 31, | |||||||
(In thousands) | 2017 | 2016 | |||||
Net cash provided by operating activities | $ | 193,263 | $ | 380,153 | |||
Net cash used in investing activities | (154,448 | ) | (169,494 | ) | |||
Net cash provided by (used in) financing activities | 250,966 | (97,830 | ) |
Commitment under Credit Facility | $ | 1,395 | |
Borrowings under Credit Facility | 850 | ||
Letters of Credit Outstanding | — | ||
Availability | $ | 545 |
• | prices of oil and natural gas and industry expectations about future prices; |
• | market conditions and level of activity in the drilling industry and the global economy in general; |
• | the level of capital expenditures by our clients; |
• | the termination, renegotiation, or repudiation of contracts or payment delays by our clients; |
• | the operational risks involved in drilling for oil and gas; |
• | the highly competitive and volatile nature of our business; |
• | our ability to enter into, and the terms of, future drilling contracts, including contracts for our newbuild units, for rigs currently idled and for rigs whose contracts are expiring; |
• | our ability to service our indebtedness and make payments on our rigs under construction; |
• | our ability to access debt and equity capital markets, and the terms and prices that are available if we issue debt or equity securities; |
• | the impact of governmental or industry regulation, both in the United States and internationally; |
• | the risks of and disruptions to international operations, including political instability and the impact of terrorist acts, acts of piracy, embargoes, war or other military operations; |
• | our ability to obtain and retain qualified personnel to operate our vessels; |
• | unplanned downtime and repairs on our rigs; |
• | timely access to spare parts, equipment and personnel to maintain and service our fleet; |
• | client requirements for drilling capacity and client drilling plans; |
• | the adequacy of sources of liquidity for us and for our clients; |
• | changes in tax laws, treaties and regulations; |
• | the risks involved in the construction, upgrade, and repair of our drilling units; and |
• | such other risks discussed in Item 1A. “Risk Factors” of this Form 10-K and in our other reports filed with the Securities and Exchange Commission, or SEC. |
(a) | Evaluation of Disclosure Controls and Procedures |
(b) | Change in Internal Control over Financial Reporting |
(a) | Exhibits |
10.1† | Atwood Oceanics, Inc. 2013 Long-Term Incentive Plan, as amended and restated (incorporated by reference to Appendix A to Atwood Oceanics, Inc.’s definitive proxy statement on Schedule 14A filed on January 9, 2017). | |
10.2† | Form of Notice of Restricted Stock Unit Award. (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on November 22, 2016). | |
*31.1 | Certification of Chief Executive Officer. | |
*31.2 | Certification of Chief Financial Officer. | |
**32.1 | Certificate of Chief Executive Officer pursuant to Section 906 of Sarbanes – Oxley Act of 2002. | |
**32.2 | Certificate of Chief Financial Officer pursuant to Section 906 of Sarbanes – Oxley Act of 2002. | |
*101 | Interactive data files. | |
* | Filed herewith | |
** | Furnished herewith | |
† | Management contract or compensatory plan or arrangement |
ATWOOD OCEANICS, INC. | ||||
(Registrant) | ||||
Date: | May 9, 2017 | /S/ MARK W. SMITH | ||
Mark W. Smith | ||||
Senior Vice President and Chief Financial Officer | ||||
(Principal Financial and Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(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; and |
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: | May 9, 2017 | /S/ ROBERT J. SALTIEL | |
ROBERT J. SALTIEL | |||
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(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; and |
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: | May 9, 2017 | /S/ MARK W. SMITH | |
MARK W. SMITH | |||
Senior Vice President and Chief Financial Officer |
(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: | May 9, 2017 | /S/ ROBERT J. SALTIEL | |
ROBERT J. SALTIEL | |||
President and Chief Executive Officer |
(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: | May 9, 2017 | /S/ MARK W. SMITH | |
MARK W. SMITH | |||
Senior Vice President and Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Mar. 31, 2017 |
May 01, 2017 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | ATWOOD OCEANICS INC | |
Entity Central Index Key | 0000008411 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 80,519,422 | |
Trading Symbol | atw |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2017 |
Mar. 31, 2016 |
|
REVENUES: | ||||
Contract drilling | $ 162,240 | $ 282,546 | $ 312,103 | $ 577,161 |
Revenues related to reimbursable expenses | 5,466 | 13,805 | 13,159 | 27,009 |
Total revenues | 167,706 | 296,351 | 325,262 | 604,170 |
COSTS AND EXPENSES: | ||||
Contract drilling | 64,277 | 89,918 | 129,947 | 220,570 |
Reimbursable expenses | 4,674 | 9,123 | 11,276 | 17,409 |
Depreciation | 41,443 | 41,053 | 83,251 | 83,880 |
General and administrative | 12,445 | 11,488 | 27,636 | 26,665 |
Asset impairment | 58,962 | 708 | 58,962 | 65,432 |
(Gain) loss on sale of assets | (51) | 77 | (118) | 77 |
Other, net | 0 | (1,137) | 0 | (1,060) |
Costs and Expenses | 181,750 | 151,230 | 310,954 | 412,973 |
OPERATING (LOSS) INCOME | (14,044) | 145,121 | 14,308 | 191,197 |
OTHER (EXPENSE) INCOME: | ||||
Interest expense, net of capitalized interest | (13,537) | (17,098) | (29,828) | (30,859) |
Interest income | 265 | 6 | 269 | 10 |
Gains on extinguishment of debt | 0 | 8,397 | 0 | 8,397 |
Other income | 0 | 0 | 0 | 17,976 |
Other income (expense) total | (13,272) | (8,695) | (29,559) | (4,476) |
(LOSS) INCOME BEFORE INCOME TAXES | (27,316) | 136,426 | (15,251) | 186,721 |
PROVISION FOR INCOME TAXES | 1,546 | 13,989 | 3,940 | 25,203 |
NET (LOSS) INCOME | $ (28,862) | $ 122,437 | $ (19,191) | $ 161,518 |
(LOSS) EARNINGS PER COMMON SHARE (NOTE 3): | ||||
Basic (in dollars per share) | $ (0.37) | $ 1.89 | $ (0.27) | $ 2.49 |
Diluted (in dollars per share) | $ (0.37) | $ 1.89 | $ (0.27) | $ 2.49 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE 3): | ||||
Basic (in shares) | 78,270 | 64,781 | 71,504 | 64,739 |
Diluted (in shares) | 78,270 | 64,825 | 71,504 | 64,870 |
Dividend declared per share (in USD per share) | $ 0 | $ 0 | $ 0 | $ 0.075 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (28,862) | $ 122,437 | $ (19,191) | $ 161,518 |
Derivative financial instruments: | ||||
Unrealized holding gains/(losses) | 263 | (4,649) | 1,002 | (4,818) |
Loss reclassified to net income | 314 | 2,043 | 759 | 2,738 |
Total other comprehensive income (loss) | 577 | (2,606) | 1,761 | (2,080) |
Comprehensive (loss) income | $ (28,285) | $ 119,831 | $ (17,430) | $ 159,438 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2017 |
Sep. 30, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Common stock, authorized (in shares) | 180,000,000 | 180,000,000 |
Common stock, issued (in shares) | 80,516,000 | 64,799,000 |
Common stock, outstanding (in shares) | 80,516,000 | 64,799,000 |
UNAUDITED INTERIM INFORMATION |
6 Months Ended |
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Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
UNAUDITED INTERIM INFORMATION | UNAUDITED INTERIM INFORMATION The accompanying unaudited condensed consolidated financial statements of Atwood Oceanics, Inc. and its subsidiaries as of March 31, 2017 and for the three and six months ended March 31, 2017 and 2016, have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Unless otherwise indicated, references to “we”, “us”, “our” and the “Company” refer collectively to Atwood Oceanics, Inc. and subsidiaries. The year-end Consolidated Balance Sheet data was derived from the audited financial statements as of September 30, 2016. Although these financial statements and related information have been prepared without audit and certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.") have been condensed or omitted, we believe that the note disclosures are adequate to make the information not misleading. The interim financial results may not be indicative of results that could be expected for a full fiscal year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended September 30, 2016. In our opinion, the unaudited interim financial statements reflect all adjustments considered necessary for a fair statement of our financial position, results of operations, changes in shareholders' equity, and cash flows for the periods presented. Recently adopted accounting pronouncements In August 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The ASU is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. The new guidance clarifies the classification of cash activity related to: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate and bank-owned life insurance policies, (6) distributions received from equity-method investments, and (7) beneficial interests in securitization transactions. This update is effective for annual and interim periods beginning after December 15, 2017. Effective October 1, 2016, we elected to early adopt ASU 2016-15. The adoption of ASU 2016-15 did not have an impact on our Unaudited Condensed Consolidated Statements of Cash Flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, as part of its simplification initiative. The ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, classification of excess tax benefits on the statements of cash flows, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification of employee taxes paid on the statements of cash flows when an employer withholds shares for tax-withholding purposes. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The standard contains various amendments, each requiring a specific method of adoption, and designates whether each amendment should be adopted using a retrospective, modified retrospective, or prospective transition method. Effective October 1, 2016, we elected to early adopt the ASU. The amendments within the ASU relate to the timing of when excess tax benefits are recognized and the accounting for forfeitures. We adopted this ASU using a modified retrospective method. In accordance with this method, we have recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of October 1, 2016, relating to the timing of recognition of excess tax benefits, of $6.6 million to the beginning Retained earnings that was offset by an equal increase to Deferred tax assets valuation allowance of the same amount resulting in no impact on Retained earnings. We also recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of October 1, 2016, to reflect actual forfeitures versus the previously-estimated forfeiture rate, of $1.0 million reduction to the Retained earnings with an offset to Paid-in capital. The amendments within the ASU related to the recognition of excess tax benefits and tax shortfalls in the income statement and presentation of excess tax benefits on the statements of cash flows were adopted prospectively, with no impact to prior periods. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Amendments for the Balance Sheet Classification of Deferred Income Taxes. The amended guidance requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Deferred tax assets and liabilities will continue to be offset and presented as a single amount under the amended guidance. The effective date for public business entities is for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Effective October 1, 2016, we elected to early adopt the ASU on a prospective basis. The adoption of the ASU did not have a material impact on our Condensed Consolidated Balance Sheet. Recently issued accounting pronouncements In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The ASU eliminates the exception to defer the tax effect for all intra-entity sales of assets other than inventory until the transferred asset is sold to a third party or otherwise recovered through use. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. This update is effective for annual and interim periods beginning after December 15, 2017. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new model will apply to: (1) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, (2) loan commitments and certain other off-balance sheet credit exposures, (3) debt securities and other financial assets measured at fair value through other comprehensive income/(loss), and (4) beneficial interests in securitized financial assets. This update is effective for annual and interim periods beginning after December 15, 2019. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards Codification. The amendments require an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key qualitative and quantitative information about the entity's leasing arrangements. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective approach is required. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The new guidance requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Disclosures are required when conditions give rise to substantial doubt. Substantial doubt is deemed to exist when it is probable that the company will be unable to meet its obligations within one year from the financial statement issuance date. The new guidance is effective for the annual period ending after December 15, 2016, and all annual and interim periods thereafter. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In May 2014, the FASB issued ASU 2014-09, Revenues from Contracts with Customers (Topic 606): A new guidance intended to change the criteria for recognition of revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We have not yet adopted nor selected a transition method and are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. |
ACCOUNTS RECEIVABLE AND LONG TERM CONTRACTS |
6 Months Ended |
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Mar. 31, 2017 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE AND LONG TERM CONTRACTS | ACCOUNTS RECEIVABLE AND LONG TERM CONTRACTS Accounts Receivable We record accounts receivable at the amount we invoice our clients. Our clients are major international corporate entities and government organizations with stable payment experience. Historically, our uncollectible accounts receivable have been immaterial, and typically, we do not require collateral for our receivables. We provide an allowance for uncollectible accounts, as necessary, on a specific identification basis. Our allowance for doubtful accounts as of March 31, 2017 and September 30, 2016 was $2.3 million and $1.2 million, respectively. Our provision for doubtful accounts for the three and six months ended March 31, 2017 was $2.4 million and $2.4 million, and for the three and six months ended March 31, 2016 was $0.8 million and $1.1 million, respectively. The provision for doubtful accounts is reported as a component of Contract drilling costs in our Unaudited Condensed Consolidated Statements of Operations. Long Term Contracts In March 2017, the client for the Atwood Osprey exercised its option to drill an additional well at an operating day rate of $185,000. Drilling services commenced on the option well in mid-April and is estimated to be completed in June 2017. In January 2017, the client for the Atwood Achiever exercised its option provided as part of the “blend and extend” agreement we entered into in October 2015 to revert the contract to the original operating day rate and original end date. Exercise of this option resulted in a one-time payment to us of $48.1 million that includes the difference in day rates, taxes, and administrative fees covering the time periods for which the reduced day rate was applicable for previously provided drilling services, and is reported as a component of Contract drilling revenue in our Unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2017. Effective February 1, 2017 and continuing until the contract end date of approximately November 12, 2017, the operating day rate is $595,000. |
EARNINGS (LOSS) PER COMMON SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER COMMON SHARE | EARNINGS (LOSS) PER COMMON SHARE The computation of basic and diluted earnings (loss) per share for the three and six months ended March 31, 2017 and 2016 is as follows:
Potential dilutive common shares outstanding stock-based awards totaling 911,370 and 505,372 shares were considered in the calculation of diluted weighted-average shares for the three and six months ended March 31, 2017, respectively; however, due to our net loss position, those shares have not been reflected above because they would be anti-dilutive. For the purpose of calculating diluted earnings per share for the three and six months ended March 31, 2017, there were approximately 2,783,284 and 3,189,282 anti-dilutive securities, respectively, and for the three and six months ended March 31, 2016, there were approximately 2,090,399 and 2,085,649 anti-dilutive securities, respectively. |
PROPERTY AND EQUIPMENT |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT A summary of property and equipment by classification is as follows:
Impairments In February 2017, we agreed with Woodside Energy Ltd (“Woodside”) to (i) substitute the Atwood Condor for the Atwood Osprey, offshore Australia, for approximately 550 days starting, at the latest, March 2018 and (ii) utilize the Atwood Osprey for an additional exploration well with an estimated duration of approximately 100 days. As a result, the Atwood Condor will join the Atwood Osprey and the Atwood Eagle as one of our three rigs available to provide drilling services to clients in the Australian/Southeast Asian markets. Due to the age, specifications and marketability of the Atwood Eagle relative to the Atwood Condor and Atwood Osprey, the Atwood Eagle is positioned behind each of those two rigs to bid for contracting opportunities in the Australian/Southeast Asian markets. Based on the foregoing and our ongoing review of market conditions in the region as we continue into 2017, we determined that the Atwood Eagle is less likely to obtain future drilling contracts that would provide sufficient financial returns to justify keeping the drilling rig in a marketable condition within our existing fleet. Based on our analysis, we concluded that the Atwood Eagle and its materials and supplies were impaired as of March 31, 2017, and we wrote them down to their approximate salvage value. We recorded a non-cash impairment charge of approximately $59.0 million ($57.6 million, net of tax, or $0.74 per diluted share), which is included in Asset Impairment on the Unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2017. This impairment charge includes a write-down of property and equipment and deferred costs of $49.6 million, a write-down of our inventory of materials and supplies that was specific to the Atwood Eagle of $8.4 million, and accrued estimated transaction costs of $1.0 million. On May 5, 2017, we executed a sale and recycling agreement with respect to the Atwood Eagle, pursuant to which the vessel, together with associated equipment and machinery will be sold to a third party to be demolished and recycled. The Atwood Falcon completed the contract under which it was working in early March 2016. Based on the lack of contracting opportunities and the further deterioration of commodity prices, we determined that it was not likely that additional work would be obtained in the foreseeable future. Based on our analysis, we concluded that the Atwood Falcon and its materials and supplies were impaired as of December 31, 2015, and we wrote them down to their approximate salvage value. We recorded a non-cash impairment charge of approximately $64.7 million ($64.7 million net of tax, or $1.00 per diluted share), which is included in Asset Impairment on the Unaudited Condensed Consolidated Statement of Operations for the three months ended December 31, 2015. This impairment charge includes a write-down of property and equipment of $53.0 million and a write-down of our inventory of materials and supplies specific to the Atwood Falcon of $11.7 million. In April 2016, we completed the sale of the Atwood Falcon. As of March 31, 2017, we had expended approximately $972 million towards our two ultra-deepwater drillships under construction at the Daewoo Shipbuilding and Marine Engineering Co. ("DSME") shipyard in South Korea. Remaining expected capital expenditure for these two drillships under construction totaled approximately $298 million at March 31, 2017. On December 5, 2016, we entered into supplemental agreements (collectively, "Supplemental Agreement No. 5") to the construction contracts with DSME which delay our requirements to take delivery of our two newbuild ultra-deepwater drillships, the Atwood Admiral and the Atwood Archer, by two years to September 30, 2019 and June 30, 2020, respectively. Supplemental Agreement No. 5 amends all material terms of the previous supplemental agreements. In consideration of Supplemental Agreement No. 5, we made a payment of $125 million for the Atwood Archer on December 13, 2016 and will make an additional interim payment of $15 million on the earlier of June 30, 2018 or the delivery date. With respect to the Atwood Admiral we will make a payment of $10 million on the earlier of September 30, 2017 or the delivery date. Remaining milestone payments, $83.9 million for the Atwood Admiral and $165 million for the Atwood Archer, have been extended until December 30, 2022 through our ability to choose to finance such amounts in the form of promissory notes to be entered into on the delivery dates for each vessel bearing interest at a rate of 5% per annum and to be secured by a mortgage on the respective drillship. We have the option to take earlier delivery of each vessel, upon 45 days' notice. Other Income During the six months ended March 31, 2016, we recognized approximately $18.0 million ($18.0 million, net of tax, or $0.28 per diluted share) of expected insurance recoveries related to cyclone damage to the Atwood Osprey. This amount is included in Other income on the Unaudited Condensed Consolidated Statement of Operations and was subsequently collected. |
DEBT |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT A summary of long-term debt is as follows:
Revolving Credit Facility As of March 31, 2017, our Credit Facility had $1.395 billion of total commitments and $850 million of outstanding borrowings. As of March 31, 2017, we had approximately $545 million available for borrowings under the Credit Facility. Approximately $275 million of the commitments under the Credit Facility mature in May 2018 with the remaining $1.12 billion of the commitments maturing in May 2019. We were in compliance with all financial covenants under the Credit Facility as of March 31, 2017 and September 30, 2016, and we anticipate that we will continue to be in compliance for at least twelve months subsequent to the date our financial statements are issued. The weighted-average effective interest rate on our long-term debt was approximately 5.0% per annum as of March 31, 2017. The effective rate was determined after giving consideration to the effect of our interest rate swaps accounted for as hedges and the amortization of our debt issuance costs and debt premiums. Interest capitalized for the three and six months ended March 31, 2017 was approximately $6.5 million and $12.0 million, respectively. Interest capitalized for the three and six months ended March 31, 2016 was approximately $3.8 million and $8.4 million, respectively. |
FAIR VALUE OF FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS We have certain assets and liabilities that are required to be measured and disclosed at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels. Priority is given to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Assets and liabilities measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values, stated below, takes into account the market for our financial assets and liabilities, the associated credit risk and other considerations. We have classified and disclosed fair value measurements using the following levels of the fair value hierarchy: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity). Fair value of Certain Assets and Liabilities The fair value of cash, accounts receivable and accounts payable approximate fair value because of their short term maturities. Fair Value of Financial Instruments Independent third party services are used to determine the fair value of our financial instruments using quoted market prices and observable inputs. When independent third party services are used, we obtain an understanding of how the fair values are derived and selectively corroborate fair values by reviewing other readily available market based sources of information. Long-term Debt— Our long-term debt consists of both our Senior Notes and our Credit Facility. Senior Notes - The carrying value of our Senior Notes, net of unamortized premium, is $451.4 million ($448.7 million principal amount) while the fair value of our Senior Notes was $404.9 million at March 31, 2017. The fair value is determined by a market approach using quoted period-end bond prices. We have classified this as a Level 2 fair value measurement as valuation inputs for fair value measurements are quoted market prices at March 31, 2017 that can only be obtained from independent third party sources. The fair value amount has been calculated using these quoted prices. However, no assurance can be given that the fair value would be the amount realized in an active market exchange. Credit Facility - Our Credit Facility is variable-rate and the carrying amounts of our variable-rate debt approximates fair value because such debt bears short-term, market-based interest rates. We have classified the fair value measurement of this instrument as Level 2 as valuation inputs for purposes of determining our fair value disclosure are readily available published Eurodollar rates. Derivative financial instruments— Our derivative financial instruments consist of our interest rate swaps. We record our derivative contracts at fair value on our Unaudited Condensed Consolidated Balance Sheet. The fair values of our interest rate swaps are based upon valuations calculated by an independent third party. The derivatives were valued according to the "Market approach" where possible, and the "Income approach" otherwise. A third party independently valued each instrument using forward price data obtained from reputable data providers (e.g., Bloomberg and Reuters) and reviewed market activity and similarity of pricing terms to determine appropriate reliability level assertions for each instrument. The contribution of the credit valuation adjustment to total fair value is less than 1% for all derivatives and is therefore not significant. Based on valuation inputs for fair value measurement and independent review performed by third party consultants, we have classified our derivative contracts as Level 2 as they were valued based upon observable inputs from dealer markets. The following table sets forth the estimated fair value of our derivative financial instruments, for which we elected hedge accounting, as of March 31, 2017 and September 30, 2016, by location and hedge type, which are measured and recorded at fair value on a recurring basis:
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SHARE-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION A summary of our share-based compensation expense recognized during the six months ended March 31, 2017 and 2016 and unrecognized compensation cost and remaining weighted-average service period as of March 31, 2017 and 2016 is as follows:
Restricted Stock Units During the six months ended March 31, 2017, we granted to certain employees and our non-employee directors, restricted stock units that are subject to vesting conditions. The grant date fair value of these awards was based on the fair value of our common stock on the date of grant. A summary of our restricted stock activity for the six months ended March 31, 2017 is as follows:
Performance Units During the six months ended March 31, 2017, we granted to certain employees share-based awards that are subject to market-based performance conditions ("Performance Units"). The grant date fair value of these Performance Units was determined through use of the Monte Carlo simulation method. A summary of Performance Units stock activity for the six months ended March 31, 2017 is as follows:
Stock Options A summary of stock option activity for the six months ended March 31, 2017 is as follows:
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INCOME TAXES |
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Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Beginning with the prior reporting period, we used a discrete effective tax rate method to calculate taxes for the three months ended March 31, 2017. We determined that since small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate that the historical annualized method would not provide a reliable estimate for the three months ended March 31, 2017. We anticipate that we will utilize the discrete effective tax rate method to calculate taxes for the remainder of the fiscal year. Our estimated consolidated effective income tax rate for the three and six months ended March 31, 2017 was approximately (6)% and (26)%, respectively, as compared to 10% and 13% for the three and six months ended March 31, 2016, respectively. The effective tax rate for the six months ended March 31, 2017 was lower than the rate for the six months ended March 31, 2016, primarily due to a significant drop in pre-tax earnings due primarily to the non-cash impairment charge against the Atwood Eagle as the charge did not result in a corresponding reduction to our provision for income tax. Our effective tax rate was lower than the U.S. statutory rate primarily due to the non-cash impairment charge against the Atwood Eagle in addition to the Company working in certain lower tax rate jurisdictions outside the United States. We record estimated accrued interest and penalties related to uncertain tax positions as income tax expense. As of March 31, 2017, we had approximately $16.4 million of reserves for uncertain tax positions, including estimated accrued interest and penalties of $3.7 million, which are included in Other long-term liabilities in the Unaudited Condensed Consolidated Balance Sheet. None of our reserves for uncertain tax positions relate to timing differences. All of the net uncertain tax liabilities would affect the effective tax rate if realized. |
COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation We are party to a number of lawsuits which are ordinary, routine litigation incidental to our business, the outcome of which is not expected to have, either individually or in the aggregate, a material adverse effect on our consolidated financial position, results of operations or cash flows. |
SHAREHOLDERS' EQUITY |
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Mar. 31, 2017 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Equity Offering On January 13, 2017, we issued, in a public offering, 15,525,000 shares of common stock. The net proceeds from the offering, before deducting estimated offering expenses, were approximately $181 million. The net proceeds are currently held as cash and are expected to be used for general corporate purposes, which may include the repayment of borrowings under the Credit Facility, the funding of future purchases or redemption of our Senior Notes, working capital and capital expenditures, and otherwise to enhance our liquidity. |
SUBSEQUENT EVENTS |
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Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On May 5, 2017, we executed a sale and recycling agreement with respect to the Atwood Eagle, pursuant to which the vessel, together with associated equipment and machinery will be sold to a third party to be demolished and recycled. See Note 4 to the Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report. |
UNAUDITED INTERIM INFORMATION (Policies) |
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Accounting Policies [Abstract] | |
Recently adopted and issued accounting pronouncements | Recently adopted accounting pronouncements In August 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The ASU is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. The new guidance clarifies the classification of cash activity related to: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate and bank-owned life insurance policies, (6) distributions received from equity-method investments, and (7) beneficial interests in securitization transactions. This update is effective for annual and interim periods beginning after December 15, 2017. Effective October 1, 2016, we elected to early adopt ASU 2016-15. The adoption of ASU 2016-15 did not have an impact on our Unaudited Condensed Consolidated Statements of Cash Flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, as part of its simplification initiative. The ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, classification of excess tax benefits on the statements of cash flows, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification of employee taxes paid on the statements of cash flows when an employer withholds shares for tax-withholding purposes. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The standard contains various amendments, each requiring a specific method of adoption, and designates whether each amendment should be adopted using a retrospective, modified retrospective, or prospective transition method. Effective October 1, 2016, we elected to early adopt the ASU. The amendments within the ASU relate to the timing of when excess tax benefits are recognized and the accounting for forfeitures. We adopted this ASU using a modified retrospective method. In accordance with this method, we have recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of October 1, 2016, relating to the timing of recognition of excess tax benefits, of $6.6 million to the beginning Retained earnings that was offset by an equal increase to Deferred tax assets valuation allowance of the same amount resulting in no impact on Retained earnings. We also recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of October 1, 2016, to reflect actual forfeitures versus the previously-estimated forfeiture rate, of $1.0 million reduction to the Retained earnings with an offset to Paid-in capital. The amendments within the ASU related to the recognition of excess tax benefits and tax shortfalls in the income statement and presentation of excess tax benefits on the statements of cash flows were adopted prospectively, with no impact to prior periods. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Amendments for the Balance Sheet Classification of Deferred Income Taxes. The amended guidance requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Deferred tax assets and liabilities will continue to be offset and presented as a single amount under the amended guidance. The effective date for public business entities is for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Effective October 1, 2016, we elected to early adopt the ASU on a prospective basis. The adoption of the ASU did not have a material impact on our Condensed Consolidated Balance Sheet. Recently issued accounting pronouncements In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The ASU eliminates the exception to defer the tax effect for all intra-entity sales of assets other than inventory until the transferred asset is sold to a third party or otherwise recovered through use. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. This update is effective for annual and interim periods beginning after December 15, 2017. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new model will apply to: (1) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, (2) loan commitments and certain other off-balance sheet credit exposures, (3) debt securities and other financial assets measured at fair value through other comprehensive income/(loss), and (4) beneficial interests in securitized financial assets. This update is effective for annual and interim periods beginning after December 15, 2019. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards Codification. The amendments require an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key qualitative and quantitative information about the entity's leasing arrangements. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective approach is required. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The new guidance requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Disclosures are required when conditions give rise to substantial doubt. Substantial doubt is deemed to exist when it is probable that the company will be unable to meet its obligations within one year from the financial statement issuance date. The new guidance is effective for the annual period ending after December 15, 2016, and all annual and interim periods thereafter. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In May 2014, the FASB issued ASU 2014-09, Revenues from Contracts with Customers (Topic 606): A new guidance intended to change the criteria for recognition of revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We have not yet adopted nor selected a transition method and are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. |
Fair value of financial Instruments | We have certain assets and liabilities that are required to be measured and disclosed at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels. Priority is given to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Assets and liabilities measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values, stated below, takes into account the market for our financial assets and liabilities, the associated credit risk and other considerations. We have classified and disclosed fair value measurements using the following levels of the fair value hierarchy: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity). |
Income Taxes | We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. |
EARNINGS (LOSS) PER COMMON SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The computation of basic and diluted earnings (loss) per share for the three and six months ended March 31, 2017 and 2016 is as follows:
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PROPERTY AND EQUIPMENT (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property and Equipment by Classification | A summary of property and equipment by classification is as follows:
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DEBT (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-Term Debt | A summary of long-term debt is as follows:
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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Value Of Financial Instruments | The following table sets forth the estimated fair value of our derivative financial instruments, for which we elected hedge accounting, as of March 31, 2017 and September 30, 2016, by location and hedge type, which are measured and recorded at fair value on a recurring basis:
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SHARE-BASED COMPENSATION (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unrecognized Compensation Cost | A summary of our share-based compensation expense recognized during the six months ended March 31, 2017 and 2016 and unrecognized compensation cost and remaining weighted-average service period as of March 31, 2017 and 2016 is as follows:
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Summary of Restricted Stock Activity | A summary of our restricted stock activity for the six months ended March 31, 2017 is as follows:
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Summary of Performance Stock Activity | A summary of Performance Units stock activity for the six months ended March 31, 2017 is as follows:
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Stock Option Activity | A summary of stock option activity for the six months ended March 31, 2017 is as follows:
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ACCOUNTS RECEIVABLE AND LONG TERM CONTRACTS (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
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Jan. 31, 2017 |
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Mar. 31, 2016 |
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Mar. 31, 2016 |
Sep. 30, 2016 |
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Allowance for doubtful accounts | $ 2,300,000 | $ 2,300,000 | $ 2,300,000 | $ 1,200,000 | ||||
Provision for doubtful accounts | $ 2,400,000 | $ 800,000 | $ 2,369,000 | $ 1,141,000 | ||||
Atwood Osprey | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Contract terms, daily operating rate, receivable, amount | $ 185,000 | |||||||
Atwood Achiever | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Contract terms, daily operating rate, receivable, amount | $ 595,000 | |||||||
Contract terms, proceeds from contract term adjustment, amount | $ 48,100,000 |
PROPERTY AND EQUIPMENT - Summary of Property and Equipment by Classification (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Sep. 30, 2016 |
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Property, Plant and Equipment | ||
Total cost | $ 4,843,212 | $ 4,848,014 |
Less: Accumulated depreciation | (699,822) | (720,318) |
Property and equipment, net | 4,143,390 | 4,127,696 |
Drilling vessels and equipment | ||
Property, Plant and Equipment | ||
Total cost | 3,741,648 | 3,898,686 |
Construction work in progress | ||
Property, Plant and Equipment | ||
Total cost | 1,011,063 | 857,572 |
Drill pipe | ||
Property, Plant and Equipment | ||
Total cost | 51,328 | 52,543 |
Office equipment and other | ||
Property, Plant and Equipment | ||
Total cost | $ 39,173 | $ 39,213 |
DEBT - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Sep. 30, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,298,067 | $ 1,227,919 |
Senior Notes | 6.5% Senior Notes | ||
Debt Instrument [Line Items] | ||
6.5% Senior Notes due 2020 (Senior Notes) aggregate principal amount | 448,650 | 448,650 |
Senior Notes unamortized premium | 2,797 | 3,245 |
Senior Notes unamortized debt issuance costs | (3,380) | (3,976) |
Long-term debt | $ 448,067 | 447,919 |
Stated interest rate | 6.50% | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 850,000 | $ 780,000 |
DEBT - Narrative (Details) - Revolving Credit Facility - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Line of Credit Facility [Line Items] | ||||
Long-term line of credit, maximum borrowing capacity | $ 1,395,000,000 | $ 1,395,000,000 | ||
Long-term line of credit | 850,000,000 | 850,000,000 | ||
Long-term line of credit, remaining borrowing capacity | $ 545,000,000 | $ 545,000,000 | ||
Weighted average interest rate (percent) | 5.00% | 5.00% | ||
Interest costs capitalized | $ 6,500,000 | $ 3,800,000 | $ 12,000,000 | $ 8,400,000 |
Revolving Credit Facility, Maturing May 2019 | ||||
Line of Credit Facility [Line Items] | ||||
Long-term line of credit, maximum borrowing capacity | 1,120,000,000 | 1,120,000,000 | ||
Revolving Credit Facility, Maturing May 2018 | ||||
Line of Credit Facility [Line Items] | ||||
Long-term line of credit, maximum borrowing capacity | $ 275,000,000 | $ 275,000,000 |
FAIR VALUE OF FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Sep. 30, 2016 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Credit valuation adjustment to total fair value percentage (less than) | 1.00% | |
Senior Notes | 6.5% Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long-term debt, carrying value | $ 451,400 | |
Principal amount | 448,650 | $ 448,650 |
Long-term debt, fair value | $ 404,900 |
SHARE-BASED COMPENSATION (Schedule of Unrecognized Compensation Cost) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share-based compensation recognized | $ 7,566 | $ 5,009 |
Unrecognized compensation cost, net of estimated forfeitures | $ 22,901 | $ 21,469 |
Remaining weighted-average service period (years) | 1 year 9 months 18 days | 2 years 1 month 6 days |
SHARE-BASED COMPENSATION (Summary of Restricted Stock Activity) (Details) - Restricted Stock shares in Thousands |
6 Months Ended |
---|---|
Mar. 31, 2017
$ / shares
shares
| |
Number of Shares (000s) | |
Unvested, Beginning Balance (in shares) | shares | 1,515 |
Granted (in shares) | shares | 1,126 |
Vested (in shares) | shares | (193) |
Forfeited (in shares) | shares | (44) |
Unvested, Ending Balance (in shares) | shares | 2,404 |
Weighted Average Fair Value | |
Unvested, Beginning Balance (in dollars per share) | $ / shares | $ 21.96 |
Granted (in dollars per share) | $ / shares | 7.92 |
Vested (in dollars per share) | $ / shares | 42.44 |
Forfeited (in dollars per share) | $ / shares | 21.29 |
Unvested, Ending Balance (in dollars per share) | $ / shares | $ 13.75 |
SHARE-BASED COMPENSATION (Summary of Performance Stock Activity) (Details) - Performance Shares shares in Thousands |
6 Months Ended |
---|---|
Mar. 31, 2017
$ / shares
shares
| |
Number of Shares (000s) | |
Unvested, Beginning Balance (in shares) | shares | 426 |
Granted (in shares) | shares | 360 |
Vested (in shares) | shares | (47) |
Forfeited (in shares) | shares | (16) |
Unvested, Ending Balance (in shares) | shares | 723 |
Weighted Average Fair Value | |
Unvested, Beginning Balance (in dollars per share) | $ / shares | $ 26.69 |
Granted (in dollars per share) | $ / shares | 8.50 |
Vested (in dollars per share) | $ / shares | 53.55 |
Forfeited (in dollars per share) | $ / shares | 53.55 |
Unvested, Ending Balance (in dollars per share) | $ / shares | $ 15.29 |
IINCOME TAXES - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Income Tax Contingency [Line Items] | ||||
Effective income tax rate (percent) | (6.00%) | 10.00% | (26.00%) | 13.00% |
Unrecognized tax benefits | $ 16.4 | $ 16.4 | ||
Other long-term liabilities | ||||
Income Tax Contingency [Line Items] | ||||
Estimated accrued interest and penalties | $ 3.7 | $ 3.7 |
SHAREHOLDERS' EQUITY (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jan. 13, 2017 |
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Equity [Abstract] | |||
Shares issued in the public offering (in shares) | 15,525,000 | ||
Proceeds from Issuance public offering | $ 181,000 | $ 180,966 | $ 0 |
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