EX-99 2 release2q09.htm PRESS RELEASE release2q09.htm
 
EXHIBIT 99

News Release
 
Rowan Companies, Inc.
2800 Post Oak Boulevard, Suite 5450
   Houston, Texas 77056 (713) 621-7800
ROWAN REPORTS SECOND QUARTER 2009 OPERATING RESULTS
 
 
FOR IMMEDIATE RELEASE                                                                                                                                            August 4, 2009
 
HOUSTON, TEXAS – For the three months ended June 30, 2009, Rowan Companies, Inc. (RDC – NYSE) generated net income of $96.6 million or $0.85 per share, compared to $120.6 million or $1.06 per share in the second quarter of 2008 and $131.7 million or $1.16 per share in the first quarter of 2009.  Revenues were $482.2 million in the second quarter of 2009, compared to $587.1 million in the second quarter of 2008 and $494.8 million in the first quarter of 2009.

The second quarter results included an $8.0 million or $0.07 per share tax benefit related to a recent tax court ruling which provides that certain foreign-source income is not taxable in the US.  The prior periods included gains on asset disposals of $1.5 million or $0.01 per share during the second quarter of 2008 and $4.7 million or $0.02 per share in the first quarter of 2009.  There were no significant asset disposals in the second quarter of 2009.

Rowan’s drilling operations generated revenues of $320.8 million in the second quarter of 2009, down by 13% from the prior-year quarter and by 16% from the first quarter of 2009 due primarily to lower rig utilization.  The Company’s income from drilling operations was $127.9 million in the second quarter of 2009, or 40% of drilling revenues, down by 19% from the prior-year quarter and by 32% from the first quarter of 2009.

The Company’s manufacturing operations generated external revenues of $161.4 million in the second quarter of 2009, down by 27% from the prior-year quarter but up by 41% over the first quarter of 2009.  Income from manufacturing operations was $2.7 million in the second quarter of 2009, or 2% of revenues, down by 89% from the prior-year quarter and by 76% from the first quarter of 2009.

Matt Ralls, President and Chief Executive Officer, commented, “Despite continued weakness in worldwide jack-up markets, our contract backlog and heightened focus on cost reduction contributed to a solid performance from our drilling operations during the second quarter.  Our manufacturing operations showed sequential top-line growth, but margins were adversely affected by the mix of sales and warranty cost accruals related to certain drilling products.  Regarding the latter, we are committed to ensuring that all LeTourneau products meet our proven standards for reliability and performance.
 
“Looking forward, we expect that excess rig capacity will continue to put downward pressure on day rates.  Though we are seeing signs of a pick-up in drilling demand in certain areas, there are still more available rigs than drilling tenders.  Nonetheless, we continue to believe that the quality of our rigs and our operational reputation will enable us to maintain above-average utilization and day rates for our available jack-ups.  Rowan has weathered many down cycles in our 86-year history, and our strong liquidity following our recent note offering puts us in an excellent position to get through this one.  We remain very confident in the long-term prospects for offshore drilling in general and for jack-ups in particular.”

 
Rowan will conduct its earnings conference call on Tuesday, August 4, 2009, at 10:00 a.m. Central Daylight Time.  Interested parties are invited to listen to the call by telephone or over the Internet.  Individuals who wish to participate on the conference call by telephone can dial (877) 869-3847, or internationally (201) 689-8261.  Alternatively, to access the online simulcast and rebroadcast of the conference call, please visit Rowan’s website at www.rowancompanies.com.  You should connect to our website at least 15 minutes prior to the conference call to register, download and install any necessary software.

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: Suzanne M. McLeod, Director of Investor Relations, 713-960-7517.  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,
    
DECEMBER 31,
  
   
2009
    
2008
  
             
ASSETS
            
             
Cash  and  cash  equivalents
   $ 213.8     $ 222.4  
Accounts  receivable
     368.1       485.0  
Inventories
     522.0       551.4  
Other  current  assets
     141.8       110.4  
     Total  current  assets
     1,245.7       1,369.2  
Property,  plant  and  equipment  -  net
     3,327.9       3,147.5  
Other  assets
     25.4       32.2  
     TOTAL
   $ 4,599.0     $ 4,548.9  
                 
                 
LIABILITIES  AND  STOCKHOLDERS'  EQUITY
                
                 
Current  maturities  of  long-term  debt
   $ 64.9     $ 64.9  
Accounts  payable
     119.2       235.0  
Other  current  liabilities
     356.4       444.7  
     Total  current  liabilities
     540.5       744.6  
Long-term  debt
     323.1       355.6  
Other  liabilities
     838.0       788.9  
Stockholders'  equity
     2,897.4       2,659.8  
     TOTAL
   $ 4,599.0     $ 4,548.9  
                 
 
 


 

 
 
 
 
 
-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
  
   
2009
    
2008
    
2009
    
2008
  
                         
REVENUES
   $ 482.2     $ 587.1     $ 977.0     $ 1,072.6  
                                 
COSTS  AND  EXPENSES:
                                
  Operations (excluding items shown below)
     284.2       342.7       520.4       625.4  
  Depreciation  and  amortization
     42.6       33.5       83.1       66.6  
  Selling,  general  and  administrative
     24.7       30.7       49.3       58.1  
  Loss  (gain)  on  sale  of  property  and  equipment
     0.1       (1.5 )     (4.6 )     (6.9 )
    Total
     351.6       405.4       648.2       743.2  
INCOME  FROM  OPERATIONS
     130.6       181.7       328.8       329.4  
Net  interest  and  other  income
     2.5       2.1       3.9       4.9  
INCOME  BEFORE  INCOME  TAXES
     133.1       183.8       332.7       334.3  
Provision  for  income  taxes
     36.5       63.2       104.4       115.1  
NET  INCOME
   $ 96.6     $ 120.6     $ 228.3     $ 219.2  
                                 
NET  INCOME  PER  DILUTED  SHARE
   $ 0.85     $ 1.06     $ 2.01     $ 1.94  
                                 
AVERAGE  DILUTED  SHARES
     113.6       113.8       113.4       113.3  
                                 
                                 
                                 
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
  
   
2009
    
2008
  
CASH  PROVIDED  BY  (USED  IN):
            
   Operations:
            
      Net income
   $ 228.3     $ 219.2  
      Adjustments  to  reconcile  net  income  to  net cash  provided  by  operations:
                
         Depreciation  and  amortization
     83.1       66.6  
         Deferred  income  taxes
     42.2       28.1  
         Gain  on  disposals  of  assets
     (4.6 )     (6.9 )
         Other -  net
     11.0       6.9  
      Net  changes  in  current  assets  and  liabilities
     (133.1 )     (135.0 )
      Net  changes  in  other  noncurrent  assets  and  liabilities
     (2.0 )     (14.3 )
   Net  cash  provided  by  operations
     224.9       164.6  
                 
   Investing  activities:
                
      Property,  plant  and  equipment  additions
     (210.3 )     (319.1 )
      Proceeds  from  disposals  of  property,  plant  and  equipment
     5.5       19.2  
      Decrease  in  restricted  cash  balance
     -       50.0  
   Net  cash  used  in  investing  activities
     (204.8 )     (249.9 )
                 
   Financing  activities:
                
      Repayments  of  borrowings
     (32.5 )     (32.5 )
      Payment  of  cash  dividends
     -       (22.3 )
      Proceeds  from  equity  compensation  plans  and  other
     3.8       34.7  
   Net  cash  used  in  financing  activities
     (28.7 )     (20.1 )
                 
DECREASE  IN  CASH  AND  CASH  EQUIVALENTS
     (8.6 )     (105.4 )
CASH  AND  CASH  EQUIVALENTS,  BEGINNING  OF  PERIOD
     222.4       284.5  
CASH  AND  CASH  EQUIVALENTS,  END  OF  PERIOD
   $ 213.8     $ 179.1  
 
 
 
 
 
 
 

 
 
 
 
-5-
 
 
 
 
 
ROWAN  COMPANIES,  INC.
SUPPLEMENTAL  DRILLING  INFORMATION
Unaudited  (dollars  in  millions,  except  where  otherwise  indicated )
                                             
             
THREE  MONTHS  ENDED
             
June 30, 2009
  
March 31, 2009
  
June 30, 2008
             
$ (a)
  
Elims.
  
$ (b)
% Revs.
  
$ (a)
  
Elims.
  
$ (b)
% Revs.
  
$ (b)
% Revs.
                                             
DRILLING  OPERATIONS:
                                      
 
Revenues
        
 $       320.8
      
 $       320.8
         100
  
 $       380.4
      
 $       380.4
         100
  
 $       367.4
         100
 
Operating costs (excluding items shown below)
  
         (137.1)
  
 $    0.3
  
         (136.8)
          (43)
  
         (146.6)
  
 $    1.2
  
         (145.4)
          (38)
  
         (163.3)
          (44)
 
Depreciation and amortization expense
    
            (38.7)
      
            (38.7)
          (12)
  
            (36.8)
      
            (36.8)
          (10)
  
            (29.7)
             (8)
 
Selling, general and administrative expenses (c)
  
            (17.4)
      
            (17.4)
             (5)
  
            (15.8)
      
            (15.8)
             (4)
  
            (17.9)
             (5)
 
Gain on sale of property and equipment
    
                      -
      
                      -
                -
  
                 4.7
      
                 4.7
               1
  
                 1.5
               0
   
Income from operations
      
 $       127.6
  
 $    0.3
  
 $       127.9
            40
  
 $       185.9
  
 $    1.2
  
 $       187.1
            49
  
 $       158.0
            43
   
EBITDA (d)
        
 $       166.3
  
 $    0.3
  
 $       166.6
            52
  
 $       218.0
  
 $    1.2
  
 $       219.2
            58
  
 $       186.2
            51
                                             
OFFSHORE  RIG  DAYS:
                                      
 
Operating
                
           1,561
            
           1,841
    
           1,840
  
 
Available
                
           2,002
            
           1,980
    
           1,911
  
   
Utilization
                
78%
            
93%
    
96%
  
                                             
LAND  RIG  DAYS:
                                        
 
Operating
                
           1,721
            
           2,055
    
           2,604
  
 
Available
                
           2,849
            
           2,766
    
           2,672
  
   
Utilization
                
60%
            
74%
    
97%
  
                                             
AVERAGE  DAY  RATES  (in  thousands):
                                    
 
Gulf of Mexico rigs
              
 $       150.4
            
 $       155.5
    
 $       126.6
  
 
Middle East rigs
              
           144.7
            
           150.1
    
           153.5
  
 
North Sea rigs
                
           285.4
            
           279.8
    
           225.1
  
 
All offshore rigs
              
           177.2
            
           173.6
    
           161.6
  
 
Land rigs
                
              22.4
            
              25.5
    
              22.6
  
                                             
                                             
   
(a)  Amounts include intercompany transactions between drilling and manufacturing operations.
   
(b)  Amounts exclude intercompany transactions.
  
   
(c)  Amounts include corporate SG&A costs that are allocated between operating segments.
   
(d)  EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP financial measure that we believe is relevant to our stockholders.
   
       We measure EBITDA as operating income plus depreciation and any loss on sale of property and equipment, less any gain on sale.
 
 
 

 
 
 
 
 
-6-
 
 
 
                                                                         
ROWAN COMPANIES, INC.
  
SUPPLEMENTAL MANUFACTURING INFORMATION
  
Unaudited (dollars in millions)
  
                                                                         
                                                                         
                                                                         
                                                                         
   
THREE MONTHS ENDED
  
   
June 30, 2009
    
March 31, 2009
    
June 30, 2008
  
    $ (a )  
% Revs.
    
Elims.
     $ (b )  
% Revs.
     $ (a )  
% Revs.
    
Elims.
     $ (b )  
% Revs.
     $ (b )  
% Revs.
  
                                                                                   
MANUFACTURING  OPERATIONS:
                                                                                  
   Revenues
   $ 196.5       100     $ (35.1 )   $ 161.4       100     $ 187.9       100     $ (73.5 )   $ 114.4       100     $ 219.7       100  
Operating costs (excluding items shown below)
     (172.6 )     (88 )     25.2       (147.4 )     (91 )     (143.8 )     (77 )     53.0       (90.8 )     (79 )     (179.4 )     (82 )
Depreciation and amortization expense
     (3.9 )     (2 )             (3.9 )     (2 )     (3.7 )     (2 )             (3.7 )     (3 )     (3.8 )     (2 )
Selling, general and administrative expenses (c)
     (7.3 )     (4 )             (7.3 )     (5 )     (8.8 )     (5 )             (8.8 )     (8 )     (12.8 )     (6 )
Gain (loss) on sale of property and equipment
     (0.1 )     (0 )             (0.1 )     (0 )     -       -               -       -       -       -  
Income from operations
   $ 12.6       6     $ (9.9 )   $ 2.7       2     $ 31.6       17     $ (20.5 )   $ 11.1       10     $ 23.7       11  
EBITDA (d)
   $ 16.6       8     $ (9.9 )   $ 6.7       4     $ 35.3       19     $ (20.5 )   $ 14.8       13     $ 27.5       13  
                                                                                                 
                                                                                                 
REVENUES:
                                                                                                
Drilling Products and Systems
   $ 141.9       72     $ (35.1 )   $ 106.8       66     $ 144.6       77     $ (73.5 )   $ 71.1       62     $ 158.2       72  
Mining, Forestry and Steel Products
     54.6       28       -       54.6       34       43.3       23       -       43.3       38       61.5       28  
Total
   $ 196.5       100     $ (35.1 )   $ 161.4       100     $ 187.9       100     $ (73.5 )   $ 114.4       100     $ 219.7       100  
                                                                                                 
                                                                                                 
MANUFACTURING  BACKLOG:
                                                                                                
Drilling Products and Systems
   $ 914.0             $ (424.4 )   $ 489.6             $ 994.8             $ (448.9 )   $ 545.9             $ 282.0          
Mining, Forestry and Steel Products
     28.2               -       28.2               47.5               -       47.5               75.4          
Total
   $ 942.2             $ (424.4 )   $ 517.8             $ 1,042.3             $ (448.9 )   $ 593.4             $ 357.4          
                                                                                                 
                                                                                                 
                                                                                                 
(a) Amounts include intercompany transactions between manufacturing and drilling operations.
                        
(b)  Amounts exclude intercompany transactions.
                                                          
(c) Amounts include corporate SG&A costs that are allocated between operating segments.
                                        
(d) EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP financial measure that we believe is relevant to our stockholders.
      
We measure EBITDA as operating income plus depreciation and any loss on sale of property and equipment, less any gain on sale.
                                
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
-7-