EX-99 2 release4q07.htm PRESS RELEASE release4q07.htm
 
EXHIBIT 99

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


ROWAN REPORTS RECORD REVENUES AND PROFITS
 
FOR IMMEDIATE RELEASE                                                                                                                                                      February 28, 2008
 
HOUSTON, TEXAS – For the three months ended December 31, 2007, Rowan Companies, Inc. (RDC – NYSE) generated record net income of $138.5 million or $1.23 per share, compared to $62.4 million or 56¢ per share in the fourth quarter of 2006 and $130.8 million or $1.16 per share in the third quarter of 2007.  Revenues were a record $623.6 million in the fourth quarter of 2007, compared to $410.9 million in the fourth quarter of 2006 and $502.2 million in the third quarter of 2007.
 
The fourth quarter 2007 results included $0.7 million or less than 1¢ per share of gains on asset sales, compared to $1.1 million or 1¢ per share in the third quarter of 2007.  There were no significant asset sales in the fourth quarter of 2006, though that period included $12.8 million or 10¢ per share of charges related to environmental matters.
 
For the year ended December 31, 2007, the Company generated record net income of $483.8 million or $4.31 per share on record revenues of $2.1 billion, compared to net income of $318.2 million or $2.85 per share on revenues of $1.5 billion during 2006.  The prior-year results included approximately $1.2 million, or 1¢ per share, of after-tax income from the Company’s discontinued aviation operations which were sold in 2004.
 
Rowan’s offshore rig utilization was 97% during the fourth quarter of 2007, compared to 81% in the fourth quarter of 2006 and 99% in the third quarter of 2007.  The Company’s average offshore day rate was $164,300 during the fourth quarter of 2007, up by $19,900 or 14% from the fourth quarter of 2006 and by $6,100 or 4% from the third quarter of 2007.  Rowan’s land rig utilization was 94% during the fourth quarter of 2007, compared to 95% in the fourth quarter of 2006 and 96% in the third quarter of 2007, though the number of rig operating days increased between periods.  The Company’s average land rig day rate was $23,000 during the fourth quarter of 2007, up by $300 or 1% from the fourth quarter of 2006, but down by $300 or 1% from the third quarter of 2007.
 
Rowan’s drilling operations generated record revenues of $372.4 million during the fourth quarter of 2007, up by $91.8 million or 33% from the fourth quarter of 2006 and by $3.6 million or 1% from the third quarter of 2007.  The Company’s income from drilling operations was $170.6 million or 46% of revenues during the fourth quarter of 2007, up by 91% from the fourth quarter of 2006, but down by 7% from the third quarter of 2007.  The Company’s current backlog of drilling contracts is estimated to be approximately $2.1 billion.

 
 
 

Rowan’s combined manufacturing operations generated record revenues of $251.2 million during the fourth quarter of 2007, up by $120.9 million or 93% from the fourth quarter of 2006 and by $117.8 million or 88% from the third quarter of 2007.  The Company’s income from manufacturing operations improved to $38.3 million or 15% of revenues during the fourth quarter of 2007, up by 312% from the fourth quarter of 2006 and by 162% from the third quarter of 2007.
 
Danny McNease, Chairman and Chief Executive Officer, commented, “Rowan’s fourth quarter operating results concluded another record year for the Company.  By just about any financial measure, our performance in 2007 was the best in the Company’s 85-year history.  Our backlog of business, which currently approaches $2.5 billion, together with our aggressive strategic growth plan, suggest that even better times are ahead for Rowan.”

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.
 

 
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ROWAN COMPANIES, INC.
  
CONDENSED CONSOLIDATED BALANCE SHEETS
  
Unaudited (In Millions)
  
             
             
   
DECEMBER 31
  
   
2007
    
2006
  
             
ASSETS
            
             
Cash  and  cash  equivalents
   $ 284.5     $ 258.0  
Accounts  receivable
     478.0       419.0  
Inventories
     456.4       345.1  
Other  current  assets
     84.1       80.7  
     Total  current  assets
     1,303.0       1,102.8  
Restricted  cash
     50.0       156.1  
Property,  plant  and  equipment  -  net
     2,487.8       2,133.2  
Other  assets
     34.5       43.3  
     TOTAL
   $ 3,875.3     $ 3,435.4  
                 
                 
LIABILITIES  AND  STOCKHOLDERS'  EQUITY
                
                 
Current  maturities  of  long-term  debt
   $ 64.9     $ 64.9  
Accounts  payable
     100.9       141.2  
Other  current  liabilities
     329.8       310.6  
     Total  current  liabilities
     495.6       516.7  
Long-term  debt
     420.5       485.4  
Other  liabilities
     610.8       559.3  
Stockholders'  equity
     2,348.4       1,874.0  
     TOTAL
   $ 3,875.3     $ 3,435.4  
 
 




 
 
 
 
-3-
 

 


ROWAN COMPANIES, INC.
  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  
Unaudited (In Millions Except Per Share Amounts)
  
                         
                         
   
THREE MONTHS
    
TWELVE MONTHS
  
   
ENDED DECEMBER 31
    
ENDED DECEMBER 31
  
   
2007
    
2006
    
2007
    
2006
  
                         
REVENUES
   $ 623.6     $ 410.9     $ 2,095.0     $ 1,510.7  
                                 
COSTS  AND  EXPENSES:
                                
Operations     355.8       258.2       1,187.9       877.1  
Depreciation  and  amortization
     32.5       24.6       118.8       90.0  
Selling,  general  and  administrative
     27.1       20.3       94.9       78.2  
Gain  on  sale  of  property  and  equipment
     (0.7 )     -       (40.5 )     (29.3 )
Charge for environmental fine
     -       9.0       -       9.0  
Total
     414.7       312.1       1,361.1       1,025.0  
INCOME  FROM  OPERATIONS
     208.9       98.8       733.9       485.7  
Net  interest  and  other  income
     1.7       0.8       5.2       7.7  
INCOME  BEFORE  INCOME  TAXES
     210.6       99.6       739.1       493.4  
Provision  for  income  taxes
     72.1       37.2       255.3       176.4  
INCOME  FROM  CONTINUING  OPERATIONS
   $ 138.5     $ 62.4     $ 483.8     $ 317.0  
Income  from  discontinued  operations,  net  of  tax
     -       -       -       1.2  
NET  INCOME
   $ 138.5     $ 62.4     $ 483.8     $ 318.2  
                                 
PER  SHARE  AMOUNTS:
                                
  Income  from  continuing  operations
   $ 1.23     $ .56     $ 4.31     $ 2.84  
Income  from  discontinued  operations,  net  of  tax
   $ -     $ -     $ -     $ .01  
  Net  income
   $ 1.23     $ .56     $ 4.31     $ 2.85  
                                 
AVERAGE  DILUTED  SHARES
     112.6       111.6       112.3       111.8  
                                 
NOTE: See pages 6 and 7 for supplemental operating information.
                          
 
 
 
 
 
 
 
 
 
 
-4-
 

 
ROWAN COMPANIES, INC.
  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  
Unaudited (In Millions)
  
             
   
TWELVE MONTHS
  
   
ENDED DECEMBER 31
  
   
2007
    
2006
  
CASH  PROVIDED  BY  (USED  IN):
            
   Operations:
            
      Net income
   $ 483.8     $ 318.2  
      Adjustments  to  reconcile  net  income  to  net cash  provided  by  operations:
                
         Depreciation  and  amortization
     118.8       90.0  
         Deferred  income  taxes
     51.2       94.3  
         Gain  on  sale  of  assets
     (40.5 )     (30.5 )
         Other -  net
     33.0       47.3  
      Net  changes  in  current  assets  and  liabilities
     (225.4 )     (221.6 )
      Net  changes  in  other  noncurrent  assets  and  liabilities
     11.7       (5.6 )
   Net  cash  provided  by  operations
     432.6       292.1  
                 
   Investing  activities:
                
      Property,  plant  and  equipment  additions
     (462.6 )     (479.1 )
      (Increase)  decrease  in  Restricted  cash  balance
     106.1       (156.1 )
      Proceeds  from  disposals  of  assets
     45.8       39.1  
   Net  cash  used  in  investing  activities
     (310.7 )     (596.1 )
                 
   Financing  activities:
                
      Repayments  of  borrowings
     (64.9 )     (64.9 )
      Payment  of  cash  dividends
     (44.4 )     (60.5 )
      Net  proceeds  from  equity  compensation  plans  and  other
     13.9       11.5  
   Net  cash  used  in  financing  activities
     (95.4 )     (113.9 )
                 
INCREASE  (DECREASE)  IN  CASH  AND  CASH  EQUIVALENTS
     26.5       (417.9 )
CASH  AND  CASH  EQUIVALENTS,  BEGINNING  OF  PERIOD
     258.0       675.9  
CASH  AND  CASH  EQUIVALENTS,  END  OF  PERIOD
   $ 284.5     $ 258.0  
 
 

 
b
 


 
 
 
 
-5-
 
 
 


ROWAN COMPANIES, INC.
SUPPLEMENTAL DRILLING INFORMATION
Unaudited (dollars in millions, except where otherwise indicated )
                         
                         
     
THREE MONTHS ENDED
     
December 31, 2007
  
September 30, 2007
  
December 31, 2006
    $
% Revenues
 $
% Revenues
 $
% Revenues
                         
DRILLING  OPERATIONS (a):
                        
  Revenues
   $
372.4
      100
   $
368.8
      100
   $
280.6
      100
  Operating  costs
    
      (154.6)
      (42)
    
     (145.4)
      (39)
    
     (146.9)
      (52)
  Depreciation  and  amortization  expense
    
        (27.1)
        (7)
    
      (25.3)
        (7)
    
      (21.3)
        (8)
  Selling,  general  and  administrative  expenses (b)
    
        (20.8)
        (6)
    
      (15.8)
        (4)
    
      (14.0)
        (5)
  Gain  on  sale  of  property  and  equipment
    
           0.7
          0
    
          1.2
          0
    
          0.1
          0
  Charge  for  environmental  fine
    
             -
          -
    
            -
          -
    
        (9.0)
        (3)
  Income  from  operations
   $
170.6
        46
   $
183.5
        50
   $
89.5
        32
                         
OFFSHORE  RIG  DAYS:
                        
  Operating
    
        1,868
      
      1,907
      
      1,514
  
  Available
    
        1,932
      
      1,932
      
      1,860
  
    Utilization
    
97%
      
99%
      
81%
  
                         
LAND  RIG  DAYS:
                        
  Operating
    
        2,444
      
      2,391
      
      2,036
  
  Available
    
        2,596
      
      2,484
      
      2,148
  
    Utilization
    
94%
      
96%
      
95%
  
                         
AVERAGE  DAY  RATES  (in  thousands):
                        
  Gulf  of  Mexico  rigs
   $
133.3
     $
132.1
     $
140.1
  
  Middle  East  rigs
    
        152.7
      
      151.8
      
      114.3
  
  North  Sea  rigs
    
        257.9
      
      238.4
      
      195.6
  
  All  offshore  rigs
    
        164.3
      
      158.2
      
      144.4
  
  Land  rigs
    
         23.0
      
        23.3
      
        22.7
  
                         
(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
  
                 
December 31, 2007
  
September 30, 2007
  
December 31, 2006
                 
$
% Revenues
  
$
% Revenues
  
$
% Revenues
                                       
MANUFACTURING  OPERATIONS (a):
                            
 
Revenues
            
 $     251.2
      100
    
 $   133.4
      100
    
 $   130.3
      100
  
 
Operating  costs
          
      (201.2)
      (80)
    
     (107.5)
      (81)
    
     (111.3)
      (85)
  
 
Depreciation  and  amortization  expense
      
         (5.4)
        (2)
    
        (4.5)
        (3)
    
        (3.3)
        (3)
  
 
Selling,  general  and  administrative  expenses (b)
    
         (6.3)
        (3)
    
        (6.7)
        (5)
    
        (6.3)
        (5)
  
 
Gain  (loss)  on  sale  of  property  and  equipment
    
             -
          -
    
        (0.1)
        (0)
    
        (0.1)
        (0)
  
   
Income  from  operations
        
 $      38.3
        15
    
 $     14.6
        11
    
 $       9.3
         7
  
                                       
                                       
REVENUES (a):
                                  
 
Drilling  Products  and  Systems
        
 $     182.3
        73
    
 $     83.7
        63
    
 $     80.9
        62
  
 
Mining,  Forestry  and  Steel  Products
      
         68.9
        27
    
        49.7
        37
    
        49.4
        38
  
   
Total
            
 $     251.2
      100
    
 $   133.4
      100
    
 $   130.3
      100
  
                                       
                                       
                                       
   
(a)  Amounts exclude effects of intercompany transactions.
                        
   
(b)  Amounts include corporate SG&A costs that are allocated between operating segments.
              


 
 
 
 
 
 


 
 
 
 
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