Atwood Oceanics Inc. (ATW) filed Annual Report for the period ended 2009-09-30.
Atwood Oceanics, Inc., its international operating subsidiary, Atwood Oceanics Pacific Limited and related subsidiaries are engaged in the business of international offshore drilling and completion of exploratory and developmental oil and gas wells as well as related support, management, and consulting services. Enhancing shareholder value through safe, quality operations is at the core of all of the Atwood Group's activities. Atwood Oceanics Inc. has a market cap of $2.41 billion; its shares were traded at around $37.59 with a P/E ratio of 8.7 and P/S ratio of 4.6. Atwood Oceanics Inc. had an annual average earning growth of 7.8% over the past 10 years.
Highlight of Business Operations:
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which our Common Stock, $1 par value was last sold, or the average bid and asked price of such Common Stock, as of March 31, 2009 was $1,065,000,000.
When necessary, we update and upgrade our fleet in order to maintain premium, modern equipment. In fiscal year 1997, we commenced an internal upgrade program of all of our active drilling units. Collectively, since fiscal year 1997, we have invested approximately $410 million in upgrading seven offshore mobile drilling units in connection with our upgrade program. Our eighth drilling unit, the ATWOOD BEACON, an ultra-premium, jack-up rig, commenced its initial drilling contract following completion of the construction and commissioning in early August 2003 at a cost of approximately $120 million, while our ninth unit, the ATWOOD AURORA, another ultra-premium jack-up rig, commenced its initial drilling contract following the completion of the construction and commissioning in April 2009 at a cost of approximately $197 million.
Besides our current nine operating drilling units, we are also in the process of constructing two additional drilling units. During fiscal year 2008, we entered into construction contracts with Jurong Shipyard Pte. Ltd. to construct two Friede & Goldman ExD Millennium semisubmersible drilling units (the ATWOOD OSPREY, a conventionally moored 6,000 foot water depth unit and a to-be-named dynamically positioned 10,000 foot water depth unit). The ATWOOD OSPREY is expected to cost approximately $625 million and is scheduled for delivery in early 2011. The to-be-named dynamically positioned unit is expected to cost approximately $750 million and is scheduled for delivery in mid 2012.
Currently, we have approximately 65% and 35% of our available rig days contracted for fiscal years 2010 and 2011, respectively, with approximately $1.8 billion of revenue backlog compared to approximately $1.0 billion of estimated capital commitments primarily related to the construction of our two new drilling units. For many years, one of our strategic focuses has been maintaining high equipment utilization. We had an 85% utilization rate in fiscal year 2009 and a 100% utilization rate for fiscal years 2008 and 2007 while our utilization rate has averaged over 90% during the past ten years. Of our nine (9) owned operational drilling units, and the two drillings units currently under construction, five (5) have current contract commitments that extend into fiscal year 2011 or later; one (1) has a contract commitment through fiscal year 2010; three (3) have current contract commitments that expire during fiscal year 2010, one (1) is currently idle, and one (1) of our units under construction scheduled for delivery in mid-2012, is currently without a contract.
Virtually all of our tax provision for fiscal years 2007, 2008 and 2009 relates to taxes in foreign jurisdictions. As a result of working in foreign jurisdictions, we earned a high level of operating income in certain nontaxable and deemed profit tax jurisdictions which significantly reduced our effective tax rate for the current fiscal year when compared to the United States statutory rate. Our effective tax rate for fiscal year 2009 was 15%. Excluding any discrete items that may occur, we expect our effective tax rate to be approximately 16%-18% for fiscal year 2010. We do not record United States federal income taxes on the undistributed earnings of our foreign subsidiaries that we consider to be permanently reinvested in foreign operations. The cumulative amount of such undistributed earnings was approximately $537 million at September 30, 2009. It is not practicable to estimate the amount of any deferred tax liability associated with these undistributed earnings. If these earnings were to be remitted to us, any United States income taxes payable would be substantially reduced by foreign tax credits generated by the repatriation of the earnings. Such foreign tax credits totaled approximately $137 million at September 30, 2009. For information about risk associated with our foreign operations, see Part I, Item 1A, “Risk Factors — Our Reliance on Foreign Operations Exposes Us to Additional Risks Not Generally Associated With Domestic Operations Which Could Have an Adverse Effect on Our Operations or Financial Results.”
ATW is in the portfolios of Robert Rodriguez of FPA Capital, David Dreman of Dreman Value Management, George Soros of Soros Fund Management LLC, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
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