EX-99 2 release2q07.htm PRESS RELEASE release2q07.htm
 
EXHIBIT 99

News Release
 
Rowan Companies, Inc.
2800 Post Oak Boulevard, Suite 5450
   Houston, Texas 77056 (713) 621-7800

 
FOR IMMEDIATE RELEASE                                                                              August 2, 2007
 
ROWAN REPORTS RECORD QUARTERLY OPERATING RESULTS

HOUSTON, TEXAS -- For the three months ended June 30, 2007, Rowan Companies, Inc. (RDC-NYSE) generated record net income of $128.1 million, or $1.14 per share, compared to $86.4 million, or 77¢ per share, in the first quarter of 2007 and $109.7 million, or 98¢ per share, in the second quarter of 2006.  Revenues were a record $507.0 million in the second quarter of 2007, compared to $462.3 million in the first quarter of 2007 and $382.9 million in the second quarter of 2006.

The second quarter 2007 results included $14.6 million, or 8¢ per share, of gains on asset sales, compared to $24.1 million, or 14¢ per share, in the first quarter of 2007 and $24.5 million, or 14¢ per share, in the second quarter of 2006.  The second quarter 2007 results also included approximately $4.5 million, or 2¢ per share, of incremental loss recorded on the Company’s external rig construction project which was completed during the period.

Rowan’s drilling operations generated record revenues of $353.1 million during the second quarter of 2007, up by $64.8 million, or 22%, from the first quarter of 2007 and by $73.0 million, or 26%, from the second quarter of 2006.  The Company’s income from drilling operations improved to $181.9 million, or 52% of revenues, during the second quarter of 2007, up by 45% from the first quarter of 2007 and 20% from the second quarter of 2006.

Rowan’s offshore rig utilization was 97% during the second quarter of 2007, up from 84% in the first quarter of 2007 and 93% in the second quarter of 2006.  The Company’s average offshore day rate was $157,100 during the second quarter of 2007, up by $13,800, or 10%, from the first quarter of 2007 and by $13,300, or 9%, from the second quarter of 2006.  Rowan’s land rig utilization was 97% during the second quarter of 2007, up from 92% in the first quarter of 2007 but down from 100% in the second quarter of 2006, though the number of rig operating days increased between periods.  The Company’s average land rig day rate was $22,400 during the second quarter of 2007, down by $1,500, or 6%, from the first quarter of 2007 and unchanged from the second quarter of 2006.

Rowan’s combined manufacturing operations generated revenues of $153.9 million during the second quarter of 2007, up by $51.1 million or 50% from the second quarter of 2006 and down by $20.1 million, or 12% from the first quarter of 2007.  The Company’s income from manufacturing operations improved to $13.0 million, or 8% of revenues, during the second quarter of 2007, up by 110% from the first quarter of 2007 and down by 10% from the second quarter of 2006.
 
 
 
Danny McNease, Chairman and Chief Executive Officer, commented, “We are proud of the continuing progress made by our manufacturing businesses in expanding product lines, growing external revenues and improving profitability.  Rowan’s quarterly manufacturing operating results, for example, now exceed what were annual levels as recently as 2003, and the market acceptance for many of our innovative drilling products keeps growing.  Our quote volume suggests that the multi-year growth trend in our drilling products and systems segment will continue.

“Rowan’s drilling operations have again contributed record operating results, and our contracted backlog provides significant earnings visibility beyond 2007.  We believe that the overall quality of our drilling equipment and personnel, both land and offshore, have helped us to maintain our domestic fleet utilization near optimum levels and minimize the adverse impact on our day rates caused by the current instability in the North American drilling markets.  Our efforts to diversify our offshore drilling operations to more lucrative international markets have yielded the dramatic increase in our profitability.

“Demand for high-specification drilling equipment in many foreign markets shows no signs of letting up.  Our recent contract extension for the Gorilla V in the North Sea – through June 2009 with a near-50% increase in the day rate – is indicative of the strength of the international market for premium jack-ups.  We are continuing to actively pursue growth opportunities for our drilling and manufacturing businesses in several markets abroad, while remaining focused on improving margins in our existing operations.“
 
Rowan Companies, Inc. is a major provider of international and domestic contract drilling services. The Company also owns and operates a manufacturing division that produces equipment for the drilling, mining and timber industries. The Company’s stock is traded on the New York Stock Exchange. Common Stock trading symbol: RDC. Contact: William C. Provine, Vice-President - Investor Relations, 713-960-7575. Website: www.rowancompanies.com 
 

This report contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs and future expected financial performance of the Company that are based on current expectations and are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected by the Company. Among the factors that could cause actual results to differ materially include oil and natural gas prices, the level of offshore expenditures by energy companies, energy demand, the general economy, including inflation, weather conditions in the Company’s principal operating areas and environmental and other laws and regulations. Other relevant factors have been disclosed in the Company’s filings with the U.S. Securities and Exchange Commission.
 
 
 

 
 
-2-

 


ROWAN COMPANIES, INC.
  
CONDENSED CONSOLIDATED BALANCE SHEETS
  
Unaudited (In Millions)
  
             
             
   
JUNE 30
  
   
2007
    
2006
  
             
ASSETS
            
             
Cash  and  cash  equivalents
   $
389.8
     $
488.3
  
Accounts  receivable
    
338.2
      
375.5
  
Inventories
    
407.1
      
263.3
  
Other  current  assets
    
107.5
      
85.4
  
     Total  current  assets
    
1,242.6
      
1,212.5
  
Restricted  cash
    
50.0
      
-
  
Property,  plant  and  equipment  -  net
    
2,303.6
      
1,953.7
  
Other  assets
    
49.9
      
36.2
  
     TOTAL
   $
3,646.1
     $
3,202.4
  
                 
                 
LIABILITIES  AND  STOCKHOLDERS'  EQUITY
                
                 
Current  maturities  of  long-term  debt
   $
64.9
     $
64.9
  
Accounts  payable
    
104.0
      
103.3
  
Other  current  liabilities
    
331.9
      
256.8
  
     Total  current  liabilities
    
500.8
      
425.0
  
Long-term  debt
    
452.9
      
517.9
  
Other  liabilities
    
616.9
      
495.5
  
Stockholders'  equity
    
2,075.5
      
1,764.0
  
     TOTAL
   $
3,646.1
     $
3,202.4
  


 
 
 
 
-3-
 


ROWAN COMPANIES, INC.
  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  
Unaudited (In Millions Except Per Share Amounts)
  
                         
                         
                         
   
THREE MONTHS
    
SIX MONTHS
  
   
ENDED JUNE 30
    
ENDED JUNE 30
  
   
2007
    
2006
    
2007
    
2006
  
                         
REVENUES
   $
507.0
     $
382.9
     $
969.3
     $
682.7
  
                                 
COSTS  AND  EXPENSES:
                                
   Operations
    
274.9
      
200.8
      
579.3
      
373.1
  
Depreciation  and  amortization
    
28.9
      
22.0
      
56.5
      
42.1
  
Selling,  general  and  administrative
    
22.9
      
18.6
      
45.3
      
39.0
  
Gain  on  sale  of  property  and  equipment
     (14.6 )     (24.5 )     (38.7 )     (27.0 )
Total
    
312.1
      
216.9
      
642.4
      
427.2
  
INCOME  FROM  OPERATIONS
    
194.9
      
166.0
      
326.9
      
255.5
  
Net  interest  and  other  income
    
1.2
      
2.0
      
1.8
      
4.8
  
INCOME  BEFORE  INCOME  TAXES
    
196.1
      
168.0
      
328.7
      
260.3
  
Provision  for  income  taxes
    
68.0
      
58.3
      
114.2
      
91.5
  
NET  INCOME
   $
128.1
     $
109.7
     $
214.5
     $
168.8
  
                                 
NET  INCOME  PER  DILUTED  SHARE
   $
1.14
     $
0.98
     $
1.92
     $
1.51
  
                                 
AVERAGE  DILUTED  SHARES
    
112.2
      
112.0
      
111.9
      
111.9
  
                                 
                                 
                                 
NOTE: See pages 6 and 7 for supplemental operating information.
                          
 
 
 
 
 
 
-4-
 
 
ROWAN COMPANIES, INC.
  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  
Unaudited (In Millions)
  
             
   
SIX MONTHS
  
   
ENDED JUNE 30
  
   
2007
    
2006
  
CASH  PROVIDED  BY  (USED  IN):
            
   Operations:
            
      Net income
   $
214.5
     $
168.8
  
      Adjustments  to  reconcile  net  income  to  net cash  provided  by  operations:
                
         Depreciation  and  amortization
    
56.5
      
42.1
  
         Deferred  income  taxes
    
16.6
      
57.2
  
         Gain  on  sale  of  assets
     (38.7 )     (27.0 )
         Other -  net
    
17.8
      
21.4
  
      Net  changes  in  current  assets  and  liabilities
     (34.8 )     (178.8 )
      Net  changes  in  other  noncurrent  assets  and  liabilities
    
19.2
      
15.0
  
   Net  cash  provided  by  operations
    
251.1
      
98.7
  
                 
   Investing  activities:
                
      Property,  plant  and  equipment  additions
     (221.3 )     (258.1 )
      Decrease  in  Restricted  cash  balance
    
106.1
      
-
  
      Proceeds  from  disposals  of  property,  plant  and  equipment
    
43.4
      
34.3
  
   Net  cash  used  in  investing  activities
     (71.8 )     (223.8 )
                 
   Financing  activities:
                
      Repayments  of  borrowings
     (32.5 )     (32.5 )
      Payment  of  cash  dividends
     (22.1 )     (38.5 )
      Proceeds  from  equity  compensation  plans  and  other
    
7.1
      
8.5
  
   Net  cash  used  in  financing  activities
     (47.5 )     (62.5 )
                 
INCREASE  (DECREASE)  IN  CASH  AND  CASH  EQUIVALENTS
    
131.8
       (187.6 )
CASH  AND  CASH  EQUIVALENTS,  BEGINNING  OF  PERIOD
    
258.0
      
675.9
  
CASH  AND  CASH  EQUIVALENTS,  END  OF  PERIOD
   $
389.8
     $
488.3
  


 
 
 
 
-5-
 


ROWAN COMPANIES, INC.
  
SUPPLEMENTAL DRILLING INFORMATION
  
Unaudited (dollars in millions, except where otherwise indicated )
  
                                     
                                     
   
THREE MONTHS ENDED
  
   
June 30, 2007
    
March 31, 2007
    
June 30, 2006
  
   
  $  
    
% Revenues
             $    
% Revenues
              $    
% Revenues
  
                                           
DRILLING  OPERATIONS (a):
                                          
Revenues
   $
353.1
      
100
     $
288.3
      
100
     $
280.1
      
100
  
 Operating  costs
     (144.6 )     (41 )     (146.8 )     (51 )     (119.7 )     (43 )
   Depreciation  and  amortization  expense
     (25.3 )     (7 )     (24.1 )     (8 )     (18.6 )     (7 )
    Selling,  general  and  administrative  expenses (b)
     (16.0 )     (5 )     (15.7 )     (5 )     (13.9 )     (5 )
   Gain  on  sale  of  property  and  equipment
    
14.7
      
4
      
24.1
      
8
      
23.7
      
8
  
   Income  from  operations
   $
181.9
      
52
     $
125.8
      
44
     $
151.6
      
54
  
                                                 
OFFSHORE  RIG  DAYS:
                                                
Operating
    
1,848
              
1,587
              
1,605
          
Available
    
1,911
              
1,890
              
1,729
          
Utilization
     97 %             84 %             93 %        
                                                 
LAND  RIG  DAYS:
                                                
Operating
    
2,377
              
2,154
              
1,560
          
Available
    
2,457
              
2,352
              
1,561
          
Utilization
     97 %             92 %             100 %        
                                                 
AVERAGE  DAY  RATES  (in  thousands):
                                                
 Gulf  of  Mexico  rigs
   $
123.8
             $
127.7
             $
143.3
          
 Middle  East  rigs
    
153.0
              
132.4
              
114.1
          
 North  Sea  rigs
    
249.5
              
213.4
              
167.2
          
 All  offshore  rigs
    
157.1
              
143.3
              
143.8
          
Land  rigs
    
22.4
              
23.9
              
22.4
          
                                                 
                                                 
(a) Amounts exclude effects of intercompany transactions.            
                        
(b) Amounts include corporate SG&A costs that are allocated between operating segments.          
              



 
 
 
-6-
 
 
 
                                     
ROWAN COMPANIES, INC.
  
SUPPLEMENTAL MANUFACTURING INFORMATION
  
Unaudited (dollars in millions)
  
                                     
                                     
   
THREE MONTHS ENDED
  
   
June 30, 2007
    
March 31, 2007
    
June 30, 2006
  
          $    
% Revenues
              $    
% Revenues
              $    
% Revenues
  
MANUFACTURING  OPERATIONS (a):
                                          
     Revenues    $
153.9
      
100
      $
174.0
      
100
      $
102.8
      
100
  
Direct  cost  of  sales
     (122.3 )     (79 )     (148.7 )     (85 )     (74.7 )     (73 )
Other  operating  costs
     (8.0 )     (5 )     (8.9 )     (5 )     (6.4 )     (6 )
 Depreciation  and  amortization  expense
     (3.6 )     (2 )     (3.5 )     (2 )     (3.4 )     (3 )
 Selling,  general  and  administrative  expenses (b)
     (6.9 )     (4 )     (6.7 )     (4 )     (4.7 )     (5 )
 Gain  (loss)  on  sale  of  property  and  equipment
     (0.1 )     (0 )    
-
      
-
      
0.8
      
1
  
Income  from  operations
   $
13.0
      
8
     $
6.2
      
4
     $
14.4
      
14
  
                                                 
                                                 
REVENUES (a):
                                                
Drilling  Products  and  Systems:
                                                
Offshore  Products
   $
46.5
      
30
     $
67.1
      
39
     $
40.0
      
39
  
Drilling  Systems
    
57.9
      
38
      
35.6
      
20
      
9.7
      
9
  
Power  Systems
    
8.2
      
5
      
17.4
      
10
      
3.4
      
3
  
Mining,  Forestry  and  Steel  Products
    
41.3
      
27
      
53.9
      
31
      
49.7
      
49
  
Total
   $
153.9
      
100
     $
174.0
      
100
     $
102.8
      
100
  
                                                 
                                                 
MANUFACTURING  BACKLOG:
                                                
Drilling  Products  and  Systems:
                                                
Offshore  Products
   $
166.4
             $
209.0
             $
330.1
          
Drilling  Systems
    
138.9
              
192.3
              
138.8
          
Power  Systems
    
23.5
              
25.9
              
36.5
          
Mining,  Forestry  and  Steel  Products
    
36.6
              
34.3
              
61.2
          
Total
   $
365.4
             $
461.5
             $
566.6
          
                                                 
(a) Amounts exclude effects of intercompany transactions.
                                          
(b) Amounts include corporate SG&A costs that are allocated between operating segments.
                                  


 
 
 
 
-7-