8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 5, 2016

ATWOOD OCEANICS, INC.

(Exact name of registrant as specified in its charter)

Texas	1-13167	74-1611874
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

15011 Katy Freeway, Suite 800, Houston, Texas	77094
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (281) 749-7800

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

Our press release dated May 5, 2016, concerning financial results for the second quarter ended March 31, 2016, furnished as Exhibit 99.1, is incorporated herein by reference.

SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) EXHIBITS

The exhibits to this report furnished pursuant to item 9.01 are as follows:

99.1 Press Release dated May 5, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ATWOOD OCEANICS, INC.
	(Registrant)
Date: May 5, 2016
	/s/ Mark W. Smith
	Mark W. Smith
	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

EXHIBIT NO	DESCRIPTION
99.1	Press Release dated May 5, 2016

EX-99..1

Exhibit 99.1

FOR IMMEDIATE RELEASE - EARNINGS

HOUSTON, May 5, 2016 -- Atwood Oceanics, Inc. (NYSE: ATW) ("Company"), announced today that it had earned net income of $122.4 million or $1.89 per diluted share, on revenues of $296.4 million for the quarter ended March 31, 2016 compared to net income of $39.1 million or $0.60 per diluted share on revenues of $307.8 million for the quarter ended December 31, 2015 and compared to net income of $122.7 million or $1.89 per diluted share, on revenues of $350.4 million for the quarter ended March 31, 2015. For the six months ended March 31, 2016, the Company earned net income of $161.5 million or $2.49 per diluted share, on revenues of $604.2 million compared to net income of $168.9 million or $2.60 per diluted share, on revenues of $702.1 million for the six months ended March 31, 2015.

During the three months ended March 31, 2016, we repurchased, through open market transactions, $13.5 million aggregate principal of our Senior Notes at an aggregate cost of $5.1 million, including a minimal amount of accrued interest, representing an average discount of 62.2%. As a result of the repurchases, we recognized a gain on debt retirement, net of the related debt issuance costs, of $8.4 million (or $0.13 per diluted share) in Gains on extinguishment of debt on the Condensed Consolidated Statement of Operations for the three and six months ended March 31, 2016. In April 2016, we completed additional repurchases of $140.7 million aggregate principal amount of our Senior Notes for $94.0 million, including $2.3 million of accrued interest, representing an average discount of 34.8%. 

These repurchases, both in the period ended March 31, 2016 and in April 2016, allowed us to reduce our outstanding indebtedness and related interest expense at a significant discount to the face value of our Senior Notes. The gain associated with the repurchases is subject to tax and will increase our effective tax rate. However, due to the availability of operating loss carry-forwards the actual cash tax impact will be minimal. The repurchases were made using available cash balances. Following these repurchases, the Company has $495.8 million Senior Notes outstanding.

On April 13, 2016, the Atwood Falcon sale and recycling transaction closed and title of the vessel and associated equipment and machinery transferred to the buyer. The estimated loss on sale of the Atwood Falcon of $0.7 million is recognized in the three and six months ended March 31, 2016.

	For the Three Months Ended
	(Unaudited)
(In thousands, except per share amounts)	March 31, 2016			December 31, 2015			March 31, 2015
Revenues	$	296,351		$	307,819		$	350,387
Income before Income Taxes	136,426			50,295			134,976
Provision for Income Taxes	(13,989		)	(11,214		)	(12,307		)
Net Income	$	122,437		$	39,081		$	122,669
Earnings per Common Share -
Basic	$	1.89		$	0.60		$	1.90
Diluted	$	1.89		$	0.60		$	1.89

	For the Six Months Ended
	(Unaudited)
(In thousands, except per share amounts)	March 31, 2016			March 31, 2015
Revenues	$	604,170		$	702,113
Income before Income Taxes	186,721			190,316
Provision for Income Taxes	(25,203		)	(21,429		)
Net Income	$	161,518		$	168,887
Earnings per Common Share -
Basic	$	2.49		$	2.62
Diluted	$	2.49		$	2.60

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ATWOOD OCEANICS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,						Six Months Ended March 31,
(In thousands, except per share amounts)	2016			2015			2016			2015
REVENUES:
Contract drilling	$	282,546		$	338,621		$	577,161		$	675,382
Revenues related to reimbursable expenses	13,805			11,766			27,009			26,731
Total revenues	296,351			350,387			604,170			702,113
COSTS AND EXPENSES:
Contract drilling	89,918			131,124			220,570			267,589
Reimbursable expenses	9,123			8,661			17,409			20,568
Depreciation	41,053			42,528			83,880			87,103
General and administrative	11,488			14,737			26,665			32,146
Asset impairment	708			—			65,432			60,777
Loss on sale of assets	77			5,529			77			15,335
Other, net	(1,137		)	—			(1,060		)	—
	151,230			202,579			412,973			483,518
OPERATING INCOME	145,121			147,808			191,197			218,595
OTHER INCOME (EXPENSE):
Interest expense, net of capitalized interest	(17,098		)	(12,847		)	(30,859		)	(28,351		)
Interest income	6			15			10			72
Gains on extinguishment of debt	8,397			—			8,397			—
Other income	—			—			17,976			—
	(8,695		)	(12,832		)	(4,476		)	(28,279		)
INCOME BEFORE INCOME TAXES	136,426			134,976			186,721			190,316
PROVISION FOR INCOME TAXES	13,989			12,307			25,203			21,429
NET INCOME	$	122,437		$	122,669		$	161,518		$	168,887
EARNINGS PER COMMON SHARE (NOTE 2):
Basic	$	1.89		$	1.90		$	2.49		$	2.62
Diluted	$	1.89		$	1.89		$	2.49		$	2.60
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE 2):
Basic	64,781			64,620			64,739			64,513
Diluted	64,825			65,048			64,870			65,031

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ATWOOD OCEANICS, INC. AND SUBSIDIARIES

UNAUDITED ANALYSIS OF REVENUES AND DRILLING COSTS

	REVENUES
	Three Months Ended						Six Months Ended
(In millions)	March 31, 2016		December 31, 2015		March 31, 2015		March 31, 2016		March 31, 2015
Ultra-Deepwater	$	189	$	182	$	183	$	371	$	350
Deepwater	59		72		82		131		181
Jackups	34		41		73		75		145
Reimbursable	14		13		12		27		26
	$	296	$	308	$	350	$	604	$	702

	DRILLING COSTS
	Three Months Ended							Six Months Ended
(In millions)	March 31, 2016			December 31, 2015		March 31, 2015		March 31, 2016			March 31, 2015
Ultra-Deepwater	$	54		$	61	$	68	$	115		$	131
Deepwater	19			43		32		62			73
Jackups	19			26		30		45			61
Reimbursable	9			8		9		17			21
Other	(2		)	1		1		(1		)	2
	$	99		$	139	$	140	$	238		$	288

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ATWOOD OCEANICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)	March 31, 2016			September 30, 2015
	(Unaudited)
ASSETS
Cash	$	226,812		$	113,983
Accounts receivable, net	240,740			311,514
Income tax receivable	8,198			8,705
Inventories of materials and supplies, net	110,029			137,998
Prepaid expenses, deferred costs and other current assets	18,790			33,735
Total current assets	604,569			605,935
Property and equipment, net	4,209,558			4,172,132
Other receivables	11,831			11,831
Deferred income taxes	150			150
Deferred costs and other assets	8,884			11,285
Total assets	$	4,834,992		$	4,801,333
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	43,878		$	70,161
Accrued liabilities	19,294			23,572
Dividends payable	—			16,164
Interest payable	8,222			7,704
Income tax payable	20,440			13,906
Deferred credits and other liabilities	3,834			3,941
Total current liabilities	95,668			135,448
Long-term debt	1,595,018			1,678,268
Deferred income taxes	1,096			1,658
Deferred credits	71			800
Other	38,032			37,989
Total long-term liabilities	1,634,217			1,718,715
Commitments and contingencies (Note 8)
Preferred stock, no par value, 1,000 shares authorized, none outstanding	—			—
Common stock, $1.00 par value, 180,000 shares authorized with 64,794 issued and outstanding as of March 31, 2016 and 180,000 shares authorized and 64,654 shares issued and outstanding as of September 30, 2015	64,794			64,654
Paid-in capital	217,037			213,096
Retained earnings	2,826,084			2,670,148
Accumulated other comprehensive income	(2,808		)	(728		)
Total shareholders' equity	3,105,107			2,947,170
Total liabilities and shareholders' equity	$	4,834,992		$	4,801,333

8

ATWOOD OCEANICS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended March 31,
(In thousands)	2016			2015
Cash flows from operating activities:
Net income	$	161,518		$	168,887
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	83,880			87,103
Amortization	1,596			3,761
Provision for doubtful accounts	1,141			160
Deferred income tax benefit	(650		)	(3,512		)
Share-based compensation expense	5,009			8,119
Asset impairment	65,432			60,777
Loss on sale of assets	77			15,335
(Gain) on extinguishment of debt	(8,386		)	—
Other, net	(1,137		)	—
Changes in assets and liabilities:
Accounts receivable	62,963			15,829
Income tax receivable	507			(3,604		)
Inventories of materials and supplies	16,187			(17,110		)
Prepaid expenses, deferred costs and other current assets	14,709			9,789
Deferred costs and other assets	(1,381		)	(357		)
Accounts payable	(25,306		)	2,825
Accrued liabilities	(3,760		)	(3,691		)
Income tax payable	6,534			(310		)
Deferred credits and other liabilities	1,220			5,747
Net cash provided by operating activities	380,153			349,748
Cash flows from investing activities:
Capital expenditures	(176,175		)	(177,130		)
Proceeds from sale of assets	6,681			2,524
Net cash used in investing activities	(169,494		)	(174,606		)
Cash flows from financing activities:
Proceeds from borrowing of long-term debt	45,000			—
Principal repayments on long-term debt	(120,156		)	(135,000		)
Repayments on short-term debt, net	—			(11,885		)
Dividends paid	(21,746		)	(16,163		)
Proceeds (payments) related to exercise of stock options	(928		)	1,186
Debt issuance costs paid	—			(3,126		)
Net cash used by financing activities	(97,830		)	(164,988		)
Net increase in cash and cash equivalents	112,829			10,154
Cash and cash equivalents, at beginning of period	113,983			80,080
Cash and cash equivalents, at end of period	$	226,812		$	90,234
Non-cash activities:
Increase (decrease) in accounts payable and accrued liabilities related to capital expenditures	$	950		$	3,020

9

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

Conference Call

The Company has scheduled a conference call and webcast related to its second quarter 2016 results on Friday, May 6, 2016, at 8:00 A.M. CDT (9:00 A.M. EDT). Interested parties are invited to listen to the call by dialing 1-800-862-9098, or internationally 1-785-424-1051, Conference ID - Atwood, Password 34972. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company's Web site.

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

Contact: Mark W. Smith

Senior Vice President and Chief Financial Officer

(281) 749-7840

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