-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UDmUpGX5sjMVJ+HxyMVFsu4gGk/bqklvN504K85332k9xXXDaTaHmlsZpQ+I5nWY csfo3+ZiCpulO54OMoNBgA== 0000950129-00-002365.txt : 20000515 0000950129-00-002365.hdr.sgml : 20000515 ACCESSION NUMBER: 0000950129-00-002365 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROWAN COMPANIES INC CENTRAL INDEX KEY: 0000085408 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 750759420 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05491 FILM NUMBER: 627953 BUSINESS ADDRESS: STREET 1: 5450 TRANSCO TWR STREET 2: 2800 POST OAK BLVD CITY: HOUSTON STATE: TX ZIP: 77056-6196 BUSINESS PHONE: 7136217800 MAIL ADDRESS: STREET 1: 5450 TRANSCO TOWER STREET 2: 2800 POST OAK BOULEVARD CITY: HOUSTON STATE: TX ZIP: 77056-6196 FORMER COMPANY: FORMER CONFORMED NAME: ROWAN DRILLING CO INC DATE OF NAME CHANGE: 19711110 FORMER COMPANY: FORMER CONFORMED NAME: ROWAN DRILLING CO DATE OF NAME CHANGE: 19671112 10-Q 1 ROWAN COMPANIES, INC. - DATED MARCH 31, 2000 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM_____TO_____ ROWAN COMPANIES, INC. (Exact name of registrant as specified in its charter) Delaware 1-5491 75-0759420 (State or other jurisdiction of Commission File (I.R.S. Employer incorporation or organization) Number Identification No.) 2800 Post Oak Boulevard, Suite 5450 Houston, Texas 77056-6196 - -------------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (713) 621-7800 ------------------------------------------------------------- Registrant's telephone number, including area code Inapplicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- The number of shares of common stock, $.125 par value, outstanding at April 30, 2000 was 93,854,179. 2 ROWAN COMPANIES, INC. INDEX
Page No. -------- PART I. Financial Information: Item 1. Financial Statements: Consolidated Balance Sheet -- March 31, 2000 and December 31, 1999........................2 Consolidated Statement of Operations -- Three Months Ended March 31, 2000 and 1999....................................................4 Consolidated Statement of Cash Flows -- Three Months Ended March 31, 2000 and 1999....................................................5 Notes to Consolidated Financial Statements..................6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...............................................8 Item 3. Quantitative and Qualitative Disclosures About Market Risk..........................................11 PART II. Other Information: Item 4. Submission of Matters to a Vote of Security Holders........................................12 Item 6. Exhibits and Reports on Form 8-K...........................12
3 PART I. FINANCIAL INFORMATION Item 1. Financial statements ROWAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
March 31, December 31, 2000 1999 ------------ ------------ ASSETS (Unaudited) CURRENT ASSETS: Cash and cash equivalents ...................... $ 197,487 $ 87,055 Receivables - trade and other .................. 87,387 93,083 Inventories - at cost: Raw materials and supplies ................... 82,937 87,568 Work-in-progress ............................. 22,835 30,748 Finished goods ............................... 3,626 2,140 Prepaid expenses ............................... 5,270 5,877 Deferred tax assets - net ...................... 17,417 18,604 ------------ ------------ Total current assets ................ 416,959 325,075 ------------ ------------ PROPERTY, PLANT AND EQUIPMENT - at cost: Drilling equipment ............................. 1,298,206 1,268,704 Aircraft and related equipment ................. 223,764 221,776 Manufacturing plant and equipment .............. 89,522 83,835 Construction in progress ....................... 297,016 248,567 Other property and equipment ................... 116,143 113,008 ------------ ------------ Total ............................... 2,024,651 1,935,890 Less accumulated depreciation and amortization . 938,686 910,151 ------------ ------------ Property, plant and equipment - net 1,085,965 1,025,739 ------------ ------------ OTHER ASSETS AND DEFERRED CHARGES ................ 13,473 5,253 ------------ ------------ TOTAL ............................... $ 1,516,397 $ 1,356,067 ============ ============
See Notes to Consolidated Financial Statements. -2- 4
March 31, December 31, 2000 1999 ------------ ------------ LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited) CURRENT LIABILITIES: Current maturities of long-term debt (Note 6)............................. $ 27,638 $ 129,123 Accounts payable - trade ................................................. 20,260 22,742 Other current liabilities ................................................ 41,354 50,418 ------------ ------------ Total current liabilities ........................................... 89,252 202,283 ------------ ------------ LONG-TERM DEBT - less current maturities ................................... 315,105 296,677 ------------ ------------ OTHER LIABILITIES .......................................................... 52,067 55,270 ------------ ------------ DEFERRED INCOME TAXES - net ................................................ 80,540 78,113 ------------ ------------ STOCKHOLDERS' EQUITY (Note 6): Preferred stock, $1.00 par value: Authorized 5,000,000 shares issuable in series: Series III Preferred Stock, authorized 10,300 shares, none outstanding Series A Preferred Stock, authorized 4,800 shares, none outstanding Series B Preferred Stock, authorized 4,800 shares, none outstanding Series A Junior Preferred Stock, authorized 1,500,000 shares, none issued Common stock, $.125 par value: Authorized 150,000,000 shares; issued 93,753,571 shares at March 31, 2000 and 89,061,665 shares at December 31, 1999 .............. 11,719 11,133 Additional paid-in capital ............................................... 614,065 426,380 Retained earnings ........................................................ 353,649 347,545 Less cost of 5,759,319 treasury shares at December 31, 1999 .............. -- 61,334 ------------ ------------ Total stockholders' equity .......................................... 979,433 723,724 ------------ ------------ TOTAL ............................................................... $ 1,516,397 $ 1,356,067 ============ ============
See Notes to Consolidated Financial Statements. -3- 5 ROWAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For The Three Months Ended March 31, ---------------------- 2000 1999 --------- --------- (Unaudited) REVENUES: Drilling services .............................. $ 81,924 $ 60,953 Manufacturing sales and services ............... 23,929 20,020 Aviation services .............................. 21,877 19,080 --------- --------- Total .................................... 127,730 100,053 --------- --------- COSTS AND EXPENSES: Drilling services .............................. 55,765 53,811 Manufacturing sales and services ............... 20,570 20,170 Aviation services .............................. 23,576 21,619 Depreciation and amortization .................. 12,766 13,115 General and administrative ..................... 4,848 4,844 --------- --------- Total .................................... 117,525 113,559 --------- --------- INCOME (LOSS) FROM OPERATIONS ..................... 10,205 (13,506) --------- --------- OTHER INCOME (EXPENSE): Interest expense ............................... (6,520) (4,992) Less interest capitalized ...................... 4,178 2,073 Interest income ................................ 1,811 1,550 Other - net .................................... 66 174 --------- --------- Other income (expense) - net ............. (465) (1,195) --------- --------- INCOME (LOSS) BEFORE INCOME TAXES ................. 9,740 (14,701) Provision (credit) for income taxes ............ 3,636 (4,699) --------- --------- NET INCOME (LOSS) ................................. $ 6,104 $ (10,002) ========= ========= EARNINGS (LOSS) PER SHARE OF COMMON STOCK (Note 5): Basic .......................................... $ .07 $ (.12) ========= ========= Diluted ........................................ $ .07 $ (.12) ========= =========
See Notes to Consolidated Financial Statements. -4- 6 ROWAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS)
For The Three Months Ended March 31, ---------------------- 2000 1999 --------- --------- (Unaudited) CASH PROVIDED BY (USED IN): Operations: Net income (loss) ............................................................ $ 6,104 $ (10,002) Adjustments to reconcile net income (loss) to net cash provided by operations: Depreciation and amortization ............................................. 12,766 13,115 Gain on disposals of property, plant and equipment ........................ (613) (698) Compensation expense ...................................................... 1,507 1,181 Change in sale/leaseback payable .......................................... 188 (1,936) Amortization of sale/leaseback gain ....................................... (797) (789) Provision for pension and postretirement benefits ......................... 2,251 2,858 Deferred income taxes ..................................................... 3,199 (4,937) Other - net ............................................................... 120 36 Changes in current assets and liabilities: Receivables- trade and other .............................................. 6,745 8,864 Inventories ............................................................... 12,784 6,465 Other current assets ...................................................... 751 2,240 Current liabilities ....................................................... (17,052) (5,683) Net changes in other noncurrent assets and liabilities ....................... (127) (255) --------- --------- Net cash provided by operations ................................................. 27,826 10,459 --------- --------- Investing activities: Property, plant and equipment additions ...................................... (72,706) (66,821) Purchase of pump companies, net of cash acquired ............................. (7,245) Proceeds from disposals of property, plant and equipment .................... 840 1,937 --------- --------- Net cash used in investing activities ........................................... (79,111) (64,884) --------- --------- Financing activities: Proceeds from borrowings .................................................... 30,321 20,822 Proceeds from common stock offering, net of issue costs ...................... 246,760 Repayments of borrowings ..................................................... (116,378) (6,378) Payments to acquire treasury stock ........................................... (2,258) Other - net .................................................................. 1,014 57 --------- --------- Net cash provided by financing activities ....................................... 161,717 12,243 --------- --------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .................................. 110,432 (42,182) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .................................... 87,055 148,834 --------- --------- CASH AND CASH EQUIVALENTS, END OF PERIOD .......................................... $ 197,487 $ 106,652 ========= =========
See Notes to Consolidated Financial Statements. -5- 7 ROWAN COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The consolidated financial statements of the Company included herein have been prepared without audit pursuant to accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission. Certain information and notes have been condensed or omitted pursuant to such rules and regulations and the Company believes that the disclosures included herein are adequate. It is suggested that these condensed financial statements be read in conjunction with the financial statements and related notes included in the Company's 1999 Annual Report to Stockholders (the "Annual Report") incorporated by reference in the Form 10-K for the year ended December 31, 1999. 2. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications, which are of a normal recurring nature, necessary to present fairly its financial position as of March 31, 2000 and December 31, 1999, and the results of its operations for the three months ended March 31, 2000 and 1999 and its cash flows for the three months ended March 31, 2000 and 1999. 3. The results of operations for the three months ended March 31, 2000 are not necessarily indicative of the results to be expected for the full year. 4. The Company has three principal operating segments: contract drilling of oil and gas wells, both onshore and offshore ("Drilling"), helicopter and fixed-wing aircraft services ("Aviation") and the manufacture and sale of heavy equipment for the mining, timber and transportation industries, alloy steel and steel plate and marine drilling equipment ("Manufacturing"). The following table presents certain financial information of the Company as of March 31, 2000 and 1999 and for the three month periods then ended by operating segment (amounts are in thousands).
2000 Drilling Manufacturing Aviation Consolidated -------------------------- ------------- ------------- ------------- ------------- Total Assets $ 1,200,781 $ 183,697 $ 131,919 $ 1,516,397 Revenues 81,924 23,929 21,877 127,730 Operating Profit (Loss)(1) 18,459 1,661 (5,067) 15,053
1999 Drilling Manufacturing Aviation Consolidated -------------------------- ------------- ------------- ------------- ------------- Total Assets $ 946,918 $ 168,073 $ 132,551 $ 1,247,542 Revenues 60,953 20,020 19,080 100,053 Operating Profit (Loss)(1) (1,211) (1,705) (5,746) (8,662)
(1) Income (loss) from operations before deducting general and administrative expenses. Excluded from the preceding table are the effects of transactions between segments. During the three months ended March 31, 2000 and 1999, the Company's manufacturing division provided approximately $34 million and $38 million, respectively, of products and services to the drilling division and the Company's aviation division provided approximately $364,000 and $44,000, respectively, of flight services to the drilling division. -6- 8 5. Computation of basic and diluted earnings (loss) per share is as follows (in thousands, except per share amounts):
For The Three Months Ended March 31, ------------------- 2000 1999 -------- -------- Weighted average shares of common stock outstanding ........................................ 87,589 83,087 Stock options and related (treasury stock method) .......... 927 423 (A) Shares issuable from assumed conversion of floating rate subordinated debentures ................. 1,053 433 (A) -------- -------- Weighted average shares for diluted earnings per share calculation ........................... 89,569 83,943 ======== ======== Net income (loss) for basic and diluted calculation ........ $ 6,104 $(10,002) ======== ======== Earnings (loss) per share: Basic .................................................... $ .07 $ (.12) ======== ======== Diluted .................................................. $ .07 $ (.12) ======== ========
(A) Shares issuable upon exercise of stock options and conversion of debentures are included in this computation of diluted earnings (loss) per share in accordance with Regulation S-K Item 601(b)(11). Such items would be excluded in this instance under the provisions of Statement of Financial Accounting Standards No. 128 because they have an antidilutive effect. 6. During the first quarter of 2000, the Company completed the sale of 10.3 million shares of its common stock, consisting of 5.8 million shares of treasury stock and 4.5 million newly issued shares. The net proceeds of approximately $247 million were first applied to repayment of the $110 million outstanding under the Company's $155 million bank revolving credit facility maturing in October 2000, which was subsequently cancelled. Remaining offering proceeds were retained for working capital and general corporate purposes. 7. In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, which establishes accounting and reporting standards for derivative instruments and hedging activities. In June 1999, the FASB issued Statement No. 137, delaying the effective date of Statement No. 133 to fiscal years beginning after June 15, 2000. The Company held no derivatives in 2000 and 1999 and believes Statement No. 133, when adopted effective January 1, 2001, will not materially impact its financial position or results of operations. -7- 9 ROWAN COMPANIES, INC. AND SUBSIDIARIES Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Three Months Ended March 31, 2000 Compared to Three Months Ended March 31, 1999 The Company achieved net income of $6.1 million in the first quarter of 2000 compared to a net loss of $10.0 million in the same period of 1999. The improved results were attained largely through a substantial increase in offshore drilling activity between periods, primarily in the Gulf of Mexico, though the Company's manufacturing and aviation divisions performed better as well. A comparison of the revenues and operating profit (loss) from drilling, manufacturing, aviation and consolidated operations for the first quarters of 2000 and 1999, respectively, is reflected below (dollars in thousands):
Drilling Manufacturing Aviation Consolidated --------------------- --------------------- ---------------------- --------------------- 2000 1999 2000 1999 2000 1999 2000 1999 --------- --------- --------- --------- --------- --------- --------- --------- Revenues $ 81,924 $ 60,953 $ 23,929 $ 20,020 $ 21,877 $ 19,080 $ 127,730 $ 100,053 Percent of Consolidated Revenues 64% 61% 19% 20% 17% 19% 100% 100% Operating Profit (Loss) (1) $ 18,459 $ (1,211) $ 1,661 $ (1,705) $ (5,067) $ (5,746) $ 15,053 $ (8,662)
- ------------------------------------------------------------------------------- (1) Income (loss) from operations before deducting general and administrative expenses. As reflected above, the Company's consolidated operating results increased by $23.7 million when comparing the first quarters of 2000 and 1999. Day rate drilling revenues increased by $21.0 million or 34% as the Company's offshore fleet was 86% utilized during the first quarter of 2000, compared to only 49% in the first quarter of 1999. Related expenses increased by $2.0 million, or 4%, between periods, primarily due to mobilization costs of approximately $3.2 million to relocate Rowan Gorilla IV and the Arch Rowan from the North Sea to the Gulf of Mexico. The $3.4 million increase shown above in the Company's manufacturing results between periods reflects increased contributions from the division's equipment, steel and marine groups, as well as the initial two months of operations of the pump group, LeTourneau Ellis Williams Company, which the Company acquired during the first quarter of 2000. The division's external backlog increased by more than 50% during the quarter to $15.6 million at March 31, 2000. Manufacturing operations exclude approximately $34.2 million of products and services provided to the Company's drilling division during the first quarter of 2000, most of which was attributable to construction progress on Rowan Gorilla VI and Rowan Gorilla VII, compared to $37.7 million in the same period of 1999. The Company's aviation operating results in the first quarter of 2000 were slightly improved over the prior-year quarter, due primarily to the increase in energy-related flying in the Gulf of Mexico and growth of the commuter airline in Alaska, although both periods reflect the normal seasonal slowdown in helicopter flying activity in Alaska. -8- 10 Perceptible trends in the offshore drilling markets in which the Company is currently operating and the number of Company-operated rigs in each of those markets are as follows:
AREA RIGS PERCEPTIBLE INDUSTRY TRENDS - --------------------------- ------------- ------------------------------------------------------------ Gulf of Mexico 19 Moderately improving exploration and development activity Eastern Canada 3 Generally stable demand for harsh environment equipment
With the recent relocation of Rowan Gorilla IV and the Arch Rowan to the Gulf of Mexico, the Company has effectively withdrawn from the North Sea market at this time. While remaining confident in the market's long-term viability, the Company does not believe a significant increase in jack-up drilling activity will occur until the fall of 2000, at the earliest. Perceptible trends in the principal aviation markets in which the Company is currently operating and the number of Company-operated aircraft based in each of those markets are as follows:
AREA AIRCRAFT PERCEPTIBLE INDUSTRY TRENDS - ------------------------ ------------------- ---------------------------------------------------- Alaska 68 Normal seasonal improvement Gulf of Mexico 46 Moderately improving levels of flight support activity
The drilling and aviation markets in which the Company competes frequently experience significant changes in supply and demand. Offshore drilling utilization and day rates are primarily a function of the demand for drilling services, as measured by the level of exploration and development expenditures, and the supply of capable drilling equipment. These expenditures, in turn, are affected by many factors such as existing and newly discovered oil and natural gas reserves, political and regulatory policies, seasonal weather patterns, contractual requirements under leases or concessions, trends in finding and extraction costs and, probably most influential, oil and natural gas prices. The Company's aviation operations are also affected by such factors, as flying in support of offshore energy operations remains a major source of business and Alaska operations are hampered by weather each winter. The volatile nature of such factors prevents the Company from being able to accurately predict whether existing market conditions or the perceptible market trends reflected in the preceding tables will continue. In response to fluctuating market conditions, the Company can, as it has done in the past, relocate its drilling rigs and aircraft from one geographic area to another, but only when the Company believes such moves are economically justified. At current levels, the Company's drilling operations are profitable, but there can be no assurance that existing and anticipated market conditions will be sustained. Though considerably less volatile than its drilling and aviation operations, the Company's manufacturing operations have been adversely impacted by a prolonged period of depressed world commodity prices; in particular, prices for copper, iron ore and gold. Although prices for some commodities have recently improved, the Company's external manufacturing backlog remains at a depressed level. As a result, the Company cannot accurately predict whether or not its manufacturing operations will continue to be profitable throughout the remainder of 2000. -9- 11 LIQUIDITY AND CAPITAL RESOURCES A comparison of key balance sheet figures and ratios as of March 31, 2000 and December 31, 1999 is as follows (dollars in thousands):
March 31, December 31, 2000 1999 ------------ ------------ Cash and cash equivalents $ 197,487 $ 87,055 Current assets $ 416,959 $ 325,075 Current liabilities $ 89,252 $ 202,283 Current ratio 4.67 1.61 Long-term debt $ 315,105 $ 296,677 Stockholders' equity $ 979,433 $ 723,724 Long-term debt/total capitalization .24 .29
Reflected in the comparison above are the effects in the first quarter of 2000 of net cash provided by operations of $27.8 million, proceeds from borrowings of $30.3 million, net proceeds from the issuance of common stock of $246.8 million, capital expenditures of $80.0 million and debt payments of $116.4 million, including the $110 million outstanding under the Company's $155 million revolving credit facility maturing in October 2000. Capital expenditures during the first quarter were primarily related to construction of Rowan Gorilla VI and Rowan Gorilla VII, each being an enhanced version of the Company's Gorilla Class jack-ups like Rowan Gorilla V featuring a combination drilling and production capability. In addition, the Company acquired the two companies that manufacture Ellis Williams (EWCO) mud pumps, which currently range in size from 350 to 2,200 horsepower and have wide acceptance in both oilfield and non-oilfield applications. The Company is financing up to $171 million of the cost of Gorilla VI and up to $185 million of the cost of Gorilla VII through 12-year bank loans guaranteed by the U. S. Department of Transportation's Maritime Administration under its Title XI Program. At March 31, 2000, the Company had drawn down about $167 million and $39 million for Gorilla VI and Gorilla VII, respectively, under the facilities with outstanding advances bearing interest at floating rates averaging approximately 6.6%. Gorilla VI is undergoing final outfitting at the Company's Sabine Pass, Texas facility and should be completed during June 2000. Gorilla VII is being constructed at the Company's Vicksburg, Mississippi shipyard and should be completed by year-end 2001. On April 28, 2000, the Company announced plans for the design and construction of an enhanced version of its Super Gorilla design, the Super Gorilla XL Class jack-up. The new rig, to be named Rowan Gorilla VIII, will be outfitted with 708 feet of leg, 134 feet more than Gorillas V, VI or VII, and have 30% larger spud cans enabling operation in the Gulf of Mexico in water depths up to 550 feet. Gorilla VIII will also be able to operate in water depths up to 400 feet in the hostile environments of eastern Canada and the North Sea. Gorilla VIII is estimated to cost $190 million and will be constructed at Vicksburg, Mississippi. Delivery is expected during the third quarter of 2003. The Company estimates remaining 2000 capital expenditures will be between $100 million and $125 million, including approximately $75-100 million for Gorillas VI, VII and VIII. The Company may also spend amounts to acquire additional aircraft as market conditions justify and to upgrade existing offshore rigs and manufacturing facilities. -10- 12 During the first quarter of 2000, the Company completed the sale of 10.3 million shares of its common stock, consisting of 5.8 million shares of treasury stock and 4.5 million newly issued shares. The net proceeds of approximately $247 million were first applied to repayment of the $110 million outstanding under the Company's $155 million bank revolving credit facility, which was subsequently cancelled. Remaining offering proceeds were retained for working capital and general corporate purposes. The Company currently has no other available credit facilities, but believes financing could be arranged if deemed necessary. On January 31, 2000, in connection with the Ellis Williams acquisition, the Company issued $3 million in 7.5% promissory notes that are repayable in equal annual installments through January 31, 2003. Based upon current operating levels and the previously discussed market trends, management believes that 2000 operations, together with existing working capital and available financial resources, will generate sufficient cash flow to sustain planned capital expenditures and debt service requirements at least through the remainder of 2000. In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, which establishes accounting and reporting standards for derivative instruments and for hedging activities. In June 1999, the FASB issued Statement No. 137, which delays the effective date of Statement No. 133 to fiscal years beginning after June 15, 2000. The Company held no derivatives in 2000 or 1999 and believes that Statement No. 133, when adopted effective January 1, 2001, will not materially impact its financial position or results of operations. 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 are the following: oil, natural gas and other commodity prices; the level of offshore expenditures by energy companies; 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. Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company's believes that its exposure to risk of earnings loss due to changes in interest rates is not significant. -11- 13 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders At the Annual Meeting of Stockholders on April 28, 2000, stockholders elected the three nominees for Class III Director as set forth in the Company's Proxy Statement relating to the meeting. With respect to such election, proxies were solicited pursuant to Regulation 14 under the Securities Exchange Act of 1934 and there was no solicitation in opposition to such nominees. Of the Company's 92,387,446 shares of record, 86,155,578 were voted at the meeting by proxy. The following numbers of votes were cast as to the Class III Director nominees: Henry O. Boswell, 85,555,861 votes for and 599,717 votes withheld; Frederick R. Lausen, 85,574,589 votes for and 580,989 votes withheld; and C. R. Palmer, 85,297,418 votes for and 858,160 votes withheld. Item 6. Exhibits and Reports on Form 8-K (a) The following is a list of Exhibits filed with this Form 10-Q: 3a Amendment dated April 28, 2000, to the Bylaws, as Amended 3b Bylaws, as Amended, as of April 28, 2000 27 Financial Data Schedule (b) Reports on Form 8-K During the first quarter of 2000, the Company filed a Form 8-K dated February 14, 2000 and comprised entirely of the following exhibits: Press release, dated January 13, 2000 - pertaining to the Company's financial results for the year ended December 31, 1999. Press release, dated January 31, 2000 - pertaining to the Company's purchase of the Ellis Williams Company, Inc. and EWCO, Inc. dba Traitex Machine Co. Press release, dated February 7, 2000 - pertaining to the Company's relocation of Gorilla IV and the Arch Rowan from the North Sea to the Gulf of Mexico. -12- 14 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 thereunto duly authorized. ROWAN COMPANIES, INC. (Registrant) Date: May 12, 2000 /s/ E. E. Thiele ----------------------------------------- E. E. Thiele Senior Vice President- Finance, Administration and Treasurer (Chief Financial Officer) Date: May 12, 2000 /s/ W. H. Wells ----------------------------------------- W. H. Wells Controller (Chief Accounting Officer) -13- 15 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 3a Amendment dated April 28, 2000, to the Bylaws, as Amended 3b Bylaws, as Amended, as of April 28, 2000 27 Financial Data Schedule
EX-3.A 2 AMENDMENT BYLAWS - DATED APRIL 28, 2000 1 EXHIBIT 3a ROWAN COMPANIES, INC. Amendment Dated April 28, 2000 to the Bylaws of the Company, as Amended Section 2 of Article III of the Company's Bylaws has been amended to read in its entirety as follows; Section 2. Classes of Directors and Term of Office. As provided in the Certificate of Incorporation, the Board of Directors shall be and is divided into three classes, Class I, Class II and Class III, which shall be as nearly equal in number as possible. Each director shall serve for a term ending on the date of the third annual meeting following the annual meeting at which such class of directors of which he is a member was elected. Effective as of April 28, 2000, Class I shall have four directors and Class II and Class III shall have three directors each. Each director shall serve until his successor is elected and qualified or until death, retirement, resignation or removal for cause. EX-3.B 3 BYLAWS, AS AMENDED - DATED APRIL 28, 2000 1 EXHIBIT 3b BYLAWS AS AMENDED ROWAN COMPANIES, INC. A DELAWARE CORPORATION April 28, 2000 2 B Y L A W S I N D E X
Page ---- ARTICLE I. OFFICES Section 1. Principal Offices 4 Section 2. Registered Office 4 Section 3. Other Offices 4 ARTICLE II. MEETINGS OF STOCKHOLDERS Section 1. Place of Meetings 4 Section 2. Notice of Meetings 4 Section 3. Quorum 5 Section 4. Annual Meetings; Election of Directors 5 Section 5. Special Meetings 5 Section 6. Voting; Elections; Inspectors; Votes by Ballot 5 Section 7. Conduct of Stockholders' Meetings 6 Section 8. Validity of Proxies; Ballots, etc. 6 Section 9. Stock List 6 ARTICLE III. BOARD OF DIRECTORS Section 1. Number, Qualification and Nominations 7 Section 2. Classes of Directors and Term of Office 8 Section 3. Newly Created Directorships 8 Section 4. Vacancies 8 Section 5. Compensation 8 ARTICLE IV. MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings of Directors 8 Section 2. First Meeting 8 Section 3. Election of Officers 8 Section 4. Regular Meetings 9 Section 5. Special Meetings 9 Section 6. Notice 9 Section 7. Quorum 9 Section 8. Order of Business 9 Section 9. Presumption of Assent 9 Section 10. Action Without a Meeting or Telephone Conference Meeting 9
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Page ---- ARTICLE V. COMMITTEES Section 1. Executive Committee and Other Committees 10 Section 2. Procedure; Meetings; Quorum 10 ARTICLE VI. OFFICERS Section 1. Number, Titles, and Term of Office 11 Section 2. Salaries 11 Section 3. Removal of Officers 11 Section 4. The Chairman of the Board 11 Section 5. Powers and Duties of the President 11 Section 6. Vice Presidents 11 Section 7. Treasurer 12 Section 8. Assistant Treasurer 12 Section 9. Secretary 12 Section 10. Assistant Secretaries 12 ARTICLE VII. INDEMNIFICATION OF DIRECTORS, OFFICERS EMPLOYEES AND AGENTS Section 1. Right to Indemnification 12 Section 2. Indemnification of Employees and Agents 13 Section 3. Right of Claimant to Bring Suite 13 Section 4. Nonexclusivity of Rights 14 Section 5. Insurance 14 Section 6. Savings Clause 14 Section 7. Definitions 14 ARTICLE VIII. CAPITAL STOCK Section 1. Certificates of Stock 14 Section 2. Transfer of Shares 15 Section 3. Ownership of Shares 15 Section 4. Record Date 15 Section 5. Regulations Regarding Certificates 15 Section 6. Dividends 15 Section 7. Lost or Destroyed Certificates 15 ARTICLE IX. MISCELLANEOUS PROVISIONS Section 1. Fiscal Year 16 Section 2. Seal 16 Section 3. Notice and Waiver of Notice 16 Section 4. Resignations 16 ARTICLE X. AMENDMENTS 16
-3- 4 BYLAWS OF ROWAN COMPANIES, INC. AS AMENDED Article I Offices Section 1. Principal Office. The principal office of the Corporation shall be in the City of Houston, County of Harris, State of Texas. Section 2. Registered Office. Until the Board of Directors otherwise determines, the registered office of the Corporation required by law (meaning, here and hereinafter, as required from time to time by the General Corporation Law of the State of Delaware) to be maintained in the State of Delaware, shall be in the City of Wilmington, County of New Castle, State of Delaware, and the name of the resident agent in charge thereof is The Corporation Trust Company, or such other office and agent as may be designated from time to time by the Board of Directors in the manner provided by law. Such registered office need not be identical to the principal place of business of the Corporation. Section 3. Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require. Article II Meetings of Stockholders Section 1. Place of Meetings. All meetings of the stockholders shall be held in the City of Houston at the principal offices of the Corporation or at such other places as may be designated by the Board of Directors or Executive Committee and shall be specified or fixed in the notices or waivers of notices thereof. Section 2. Notice of Meetings. Written or printed notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting, either personally or by mail, by or at the direction of the Chairman of the Board, the President, the Secretary, or the officer or person calling the meeting, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the stockholder at his address as it appears on the records of the Corporation, with postage thereon prepaid. When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date, and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty (30) days after the date for the original meeting, or if after the -4- 5 adjournment a new record date is fixed for the adjourned meeting, written notice of the place, date, and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting. Section 3. Quorum. The holders of at least a majority of the outstanding shares entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of stockholders for the transaction of business, except as otherwise provided by law, by the Certificate of Incorporation or by these Bylaws. If, however, such quorum shall not be present or represented at any meeting of stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place to which the meeting is being adjourned, to a time when a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally called. A holder of a share shall be treated as being present at a meeting if the holder of such share is (i) present in person at the meeting or (ii) represented at the meeting by a valid proxy, whether the proxy card granting such proxy is marked as casting a vote or abstaining or is left blank. Section 4. Annual Meetings; Election of Directors. An annual meeting of the stockholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held on the fourth Friday in April of each year, at 9:00 a.m., local time, if not a legal holiday, at the principal offices of the Corporation in Houston, Texas or at such other place, date, and time as the Board of Directors or Executive Committee shall designate each year. Any business may be transacted at the annual meeting, except as otherwise provided by law, the Certificate of Incorporation or these Bylaws. Section 5. Special Meetings. In addition to any condition that may be provided for in the Certificate of Incorporation, special meetings of the stockholders for any purpose or purposes may be called at any time in the interval between annual meetings by the Chairman of the Board, the President, the Board of Directors, or the Executive Committee. Special meetings of the Stockholders may not be called by any other person or persons. Section 6. Voting; Elections; Inspectors; Votes by Ballot. Unless otherwise provided in the Certificate of Incorporation, at all meetings of stockholders, every stockholder of record of any class entitled to vote thereat shall have one vote for each share of stock standing in his name on the books of the Corporation on the date for the determination of stockholders entitled to vote at such meeting, either in person or by proxy appointed by instrument in writing subscribed by such stockholder or his duly authorized attorney, and bearing a date not more than three years prior to said meeting unless said instrument provides for a longer period. If a quorum exists, action on a matter (including the election of directors) shall be approved if the votes cast in favor of the matter or election of the director exceed the votes cast opposing the matter or election of such director. In determining the number of votes cast, shares abstaining from voting on a matter (including elections) will not be treated as votes cast. The provisions of this paragraph will govern with respect to all votes of stockholders except as otherwise provided for in these Bylaws or in the Certificate of Incorporation or by some specific -5- 6 statutory provision superseding the provisions contained in these Bylaws or the Certificate of Incorporation. At any meeting of stockholders, the chairman of the meeting may, and upon the request of the holders of 10% of the stock present in person or represented by proxy and entitled to vote at such meeting, shall appoint two inspectors of election who shall subscribe an oath or affirmation to execute faithfully the duties of inspectors at such election with strict impartiality and according to the best of their ability shall canvass the votes and make and sign a certificate of the results thereof. No candidate for the office of director shall be appointed as such inspector. As provided in the Certificate of Incorporation of the Corporation, all elections of directors shall be viva voce unless one or more stockholders present at the meeting at which directors are elected shall request in writing that such election be by ballot. The chairman of the meeting may cause a vote by ballot to be taken upon any other matter, and such vote by ballot shall be taken upon the request of the holders of 10% of the stock present and entitled to vote on such other matter. Section 7. Conduct of Stockholders' Meetings. The meetings of the stockholders shall be presided over by the Chairman of the Board, or if he is not present, by the President, or if he is not present, by a Vice President, or if neither the Chairman of the Board, President nor a Vice President is present, by a chairman elected at the meeting. The Secretary of the Corporation, if present, shall act as secretary of such meetings, or if he is not present, an Assistant Secretary shall so act; if neither the Secretary nor an Assistant Secretary is present, then a secretary shall be appointed by the chairman of the meeting. The chairman of any meeting of stockholders shall determine the order of business and the procedures at the meeting, including such regulation of the manner of voting which is not otherwise prescribed by law, the Certificate of Incorporation or these Bylaws. Section 8. Validity of Proxies; Ballots, etc. At every meeting of the stockholders, all proxies shall be received and taken charge of, and all ballots shall be received and canvassed by, the secretary of the meeting who shall decide all questions touching the qualification of voters, the validity of the proxies, and the acceptance or rejection of votes, unless inspectors of election shall have been appointed by the chairman of the meeting, in which event such inspectors of election shall decide all such questions. Section 9. Stock List. At least ten (10) days before every meeting of stockholders, the Secretary shall prepare (or cause to be prepared) a complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in his name. Such list shall be open to the examination of any such stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The stock list shall also be kept at the place of the meeting during the whole time thereof and shall be open to the examination of any such stockholder who is present. This list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them. -6- 7 Article III Board of Directors Section 1. Number, Qualification and Nominations. The business and property of the Corporation shall be managed by the Board of Directors, and subject to the restrictions imposed by law, the Certificate of Incorporation or these Bylaws, they may exercise all the powers of the Corporation. Directors need not be stockholders or residents of Delaware. The Board of Directors shall consist of not less than one nor more than thirty directors, as so determined from time to time by resolution of the Board of Directors. If the Board of Directors makes no such determination, the number of directors shall be the number set forth in the Certificate of Incorporation. Within the above limits, the number of directors may be increased or decreased (provided such decrease does not shorten the term of any incumbent director) from time to time by resolution of the Board of Directors. Nominations of candidates for election as directors of the Corporation at any meeting of stockholders of the Corporation may be made by the Chairman of the Board of Directors, the President or by any stockholder entitled to vote at such meeting who complies with the provisions of this paragraph. Not less than 60 days prior to the date of the anniversary of the annual meeting held in the prior year, in the case of an annual meeting, or, in the case of a special meeting called by the Chairman of the Board, the President, the Board of Directors or the Executive Committee for the purpose of electing directors, not more than 10 days following the earlier of the date of notice of such special meeting or the date on which a public announcement of such meeting is made, any stockholder who intends to make a nomination at the meeting shall deliver written notice to the Secretary of the Corporation setting forth (i) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (ii) a representation that the stockholder (A) is a holder of record of stock of the Corporation specified in such notice, (B) is or will be entitled to vote at such meeting, and (C) intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; and (iii) such other information concerning each such nominee as would be required under the rules of the Securities and Exchange Commission in a proxy statement soliciting proxies for the election of such nominee and in a Schedule 14B (or other comparable required filing then in effect) under the Securities Exchange Act of 1934. In the event that a person is validly designated as a proposed nominee in accordance with this paragraph (including a bona fide statement that the nominee is willing to be nominated) and shall thereafter become unable or unwilling to stand for election to the Board of Directors, the stockholder who made such designation may designate promptly in the manner set forth above a substitute proposed nominee, notwithstanding the minimum time period set forth in this paragraph. No person may be elected as a director at a meeting of stockholders unless nominated in accordance with this paragraph, and any purported nomination or purported election not made in accordance with the procedures as set forth in this paragraph shall be void. In addition to any other requirements relating to amendments to these Bylaws, no proposal by any stockholder to repeal or amend this paragraph shall be brought before any meeting of the stockholders of the Corporation unless written notice is given of (i) such proposed repeal or the substance of such proposed amendment; (ii) the name and address of the stockholder who intends to propose such repeal or amendment, and (iii) a representation that the stockholder is a holder of record of stock of the Corporation specified in such notice, is or will be entitled to vote at such meeting and intends to appear in person or by proxy at such meeting to make the proposal. Such notice shall be given in the manner and at the time specified above in this paragraph. Any proposal to repeal or amend or any such purported -7- 8 repeal or purported amendment of this paragraph not made or adopted in accordance with the procedures set forth in this paragraph shall be void. Section 2. Classes of Directors and Term of Office. As provided in the Certificate of Incorporation, the Board of Directors shall be and is divided into three classes, Class I, Class II and Class III, which shall be as nearly equal in number as possible. Each director shall serve for a term ending on the date of the third annual meeting following the annual meeting at which such class of directors of which he is a member was elected. Effective as of April 28, 2000, Class I shall have four directors and Class II and Class III shall have three directors each. Each director shall serve until his successor is elected and qualified or until death, retirement, resignation or removal for cause. Section 3. Newly Created Directorships. In the event of any increase or decrease in the authorized number of directors, (i) each director then serving as such shall nevertheless continue as a director of the class of which he is a member until the expiration of his current term, or his prior death, retirement, resignation, or removal for cause, and (ii) the newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the three classes of directors so as to maintain such classes as nearly equal as possible. Section 4. Vacancies. Should a vacancy occur or be created, whether arising through death, resignation or removal of a director for cause, or through an increase in the number of directors of any class, such vacancy shall be filled by a majority vote of the remaining directors of the class in which such vacancy occurs, or by the sole remaining director of that class if only one such director remains, or by the majority vote of the remaining directors of the other two classes if there be no remaining member of the class in which the vacancy occurs. A director so elected to fill a vacancy shall serve for the remainder of the then present term of office of the class to which he was elected. Section 5. Compensation. The Board of Directors shall have the authority to fix the compensation of directors. Article IV Meetings of the Board of Directors Section 1. Meetings of Directors. The directors may hold their meetings and may have an office and keep the books of the corporation, except as otherwise provided by the Certificate of Incorporation or Bylaws, in such place or places in the State of Delaware, or outside the State of Delaware, as the Board of Directors may from time to time determine. Section 2. First Meeting. Each newly elected Board of Directors may hold its first meeting for the purpose of organization and the transaction of business, if a quorum is present, immediately after and at the same place as the annual meeting of the stockholders, and no notice of such meeting shall be necessary. Section 3. Election of Officers. At the first meeting of the Board of Directors in each year at which a quorum shall be present, held next after the annual meeting of stockholders, the Board of Directors shall proceed to the election of the officers of the Corporation. -8- 9 Section 4. Regular Meetings. Regular meetings of the Board of Directors shall be held at such times and places as shall be designated from time to time by resolution of the Board of Directors. Notice of such regular meetings shall not be required. Section 5. Special Meetings. Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board, the President, or by a majority of the directors in office at the time. Each such special meeting shall be held at such time and place as shall be designated by the officer or directors calling such meeting. Section 6. Notice. The Secretary shall give notice of each special meeting in person, or by mail or telegraph to each director at least twenty-four (24) hours before the time of such meeting. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called or convened. Notice may also be waived in writing as provided in Article IX, Section 3 of these Bylaws. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in any written waiver of notice of such meeting. Section 7. Quorum. Unless the Certificate of Incorporation or these Bylaws otherwise require, a majority of the total number of directors then in office shall constitute a quorum for the transaction of business, but if at any meeting of the Board of Directors there is less than a quorum present, a majority of those present or any director solely present may adjourn the meeting from time to time without further notice. The act of a majority of the directors present at a meeting at which a quorum is in attendance shall be the act of the Board of Directors, unless the act of a greater number is required by the Certificate of Incorporation or by these Bylaws. Section 8. Order of Business. At meetings of the Board of Directors, business shall be transacted in such order as from time to time the Board of Directors may determine and the Chairman of the Board shall preside. In the absence of the Chairman of the Board, the President shall preside, and in the absence of the President a chairman shall be chosen by the Board of Directors from among the directors present. The Secretary of the Corporation shall act as secretary of the meetings of the Board of Directors, but in the absence of the Secretary, the presiding officer may appoint any person to act as secretary of the meeting. Section 9. Presumption of Assent. A director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. Section 10. Action Without a Meeting or Telephone Conference Meeting. Any action permitted or required by law, the Certificate of Incorporation or these Bylaws, to be taken at a meeting of the Board of Directors (or any committee designated by the Board of Directors) may be taken without a meeting if a consent in writing, setting forth the action to be taken is signed by all the members of the Board of Directors or committee, as the case may be. Such consent shall have the same force and effect as a unanimous vote at a meeting, and may be stated as such in any document or instrument filed with the Secretary of State. Subject to the -9- 10 requirement for notice of meetings, members of the Board of Directors (or members of any committee designated by the Board of Directors), may participate in and hold a meeting of such Board of Directors or committee, as the case may be, by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in such a meeting shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Article V Committees Section 1. Executive Committee and Other Committees. The Board of Directors, by resolution adopted by a majority of the whole Board of Directors, may designate from among its members an Executive Committee and one or more other committees, each of which, to the extent provided in such resolution, shall have and may exercise all of the authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority of the Board of Directors in reference to amending the Certificate of Incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors pursuant to Article Fourth of the Restated Certificate of Incorporation of the Corporation, fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series), adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending, altering or repealing the bylaws of the Corporation or adopting new bylaws for the Corporation, filling vacancies in the Board of Directors or any such committee, electing or removing officers or members of any such committee, fixing the compensation of any member of such committee or altering or repealing any resolution of the Board of Directors which by its terms provided that it shall not be so amendable or repealable and, unless such resolution expressly so provides, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of shares of the Corporation or to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law. The designation of such committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed by law. All action by any committee shall be reported to the Board of Directors at its meeting next succeeding such action, and shall be subject to revision or alteration by the Board of Directors; provided that no rights of third parties shall be affected by any such revision or alteration. Section 2. Procedure; Meetings; Quorum. The Board of Directors shall designate the Chairman and Secretary of each committee appointed by the Board of Directors. Each such committee shall fix its own rules or procedure, and shall meet at such times and at such place -10- 11 or places as may be provided by such rules, or by resolution of the Executive Committee or of the Board of Directors. A majority of all the then members of a committee shall be necessary to constitute a quorum and the affirmative vote of a majority of the members present shall be necessary for the adoption by it of any resolution. The Board of Directors shall have power at any time to change the number, subject as aforesaid, and members of any such committee, to fill vacancies, and to discharge any such committee. Article VI Officers Section 1. Number, Titles and Term of Office. The officers of the Corporation shall be a Chairman of the Board, a President, one or more Vice Presidents, a Secretary, a Treasurer, and such other officers as the Board of Directors may from time to time elect or appoint. Each officer shall hold office until his successor shall have been duly elected and qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Any two offices may be held by the same person. None of the officers need be a director, except that the Chairman of the Board and the President shall be directors. Section 2. Salaries. The salaries or other compensation of the officers shall be fixed from time to time by the Board of Directors, and no officer shall be prevented from receiving such salary or other compensation by reason of the fact that he is also a director of the Corporation. Section 3. Removal of Officers. Any officer or agent elected or appointed by the Board of Directors may be removed, either with or without cause, by the Board of Directors whenever in its judgment the best interests of the Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. Section 4. The Chairman of the Board. The Chairman of the Board shall preside at all meetings of stockholders and directors and shall have such other powers and duties as from time to time may be assigned to him by the Board of Directors. Section 5. Powers and Duties of the President. The President shall be the chief executive and administrative officer of the Corporation and, subject to the Board of Directors, he shall be in charge of, and manage the properties and operations of the Corporation in the ordinary course of its business with all such powers with respect to such properties and operations as may be reasonably incident to such responsibilities; in the absence of the Chairman of the Board, he shall preside at all meetings of stockholders and directors; he may agree upon and execute all division and transfer orders, bonds, agreements, contracts and other obligations in the name of the Corporation; and he shall have such other powers and duties as designated in these Bylaws and as from time to time may be assigned to him by the Board of Directors. Section 6. Vice Presidents. Each Vice President shall have such powers and duties as may be assigned to him by the Board of Directors and shall exercise the powers of Chairman of the Board or President during their absence, refusal or inability to act. Any action taken by a Vice President in the performance of the duties of the Chairman of the Board or the President shall be conclusive evidence of the absence, refusal or inability of the Chairman of the Board or the President to act at the time such action was taken. -11- 12 Section 7. Treasurer. The Treasurer shall have custody of all the funds and securities of the Corporation which come into his hands. When necessary or proper, he may endorse, on behalf of the Corporation, for collection, checks, notes and other obligations and shall deposit the same to the credit of the Corporation in such bank or banks or depositaries as shall be designated by, and in the manner prescribed by, the Board of Directors; he may sign all receipts and vouchers for payments made to the Corporation, either alone or jointly with such other officer as is designated by the Board of Directors; he shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements. Whenever required by the Board of Directors, he shall render a statement of his cash account; he shall enter or cause to be entered regularly in the books of the Corporation to be kept by him for that purpose full and accurate accounts of all monies received and paid out on account of the Corporation; and he shall perform all acts incident to the position of Treasurer subject to the control of the Board of Directors; he shall, if required by the Board of Directors, give such bond for the faithful discharge of his duties in such form as the Board of Directors may require. Section 8. Assistant Treasurer. Each Assistant Treasurer shall have the usual powers and duties pertaining to his office, together with such other powers and duties as may be assigned to him by the Board of Directors. The Assistant Treasurer shall exercise the powers of the Treasurer during the officer's absence, refusal or inability to act. Section 9. Secretary. The Secretary shall keep the minutes of all meetings of the Board of Directors and the minutes of all meetings of the stockholders, in books provided for that purpose; he shall attend to the giving and serving of all notices; he may sign with the Chairman of the Board or the President in the name of the Corporation all contracts of the Corporation and affix the seal of the Corporation thereto; he may affix and attest the seal of the Corporation to such instruments and documents as may be properly executed by the Corporation; and he shall have charge of the certificate books, transfer books and stock ledgers, and such other books and papers as the Board of Directors may direct, all of which shall at all reasonable times be open to the inspection of any director upon application at the office of the Corporation during ordinary business hours, and he shall in general perform all duties incident to the office of Secretary subject to the control of the Board of Directors. Section 10. Assistant Secretaries. Each Assistant Secretary shall have the usual powers and duties pertaining to his office, together with such other powers and duties as may be assigned to him by the Board of Directors or the Secretary. The Assistant Secretaries shall exercise the powers of the Secretary during the officer's absence, refusal or inability to act. Article VII Indemnification of Directors, Officers, Employees and Agents Section 1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is the legal representative, is or was or has agreed to become a director or officer of the Corporation or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any -12- 13 other capacity while serving or having agreed to serve as a director or officer, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended, (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) against all expense, liability and loss (including without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to serve in the capacity which initially entitled such person to indemnity hereunder and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article VII shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the Delaware General Corporation Law requires, the payment of such expenses incurred by a current, former or proposed director or officer in his or her capacity as a director or officer or proposed director or officer (and not in any other capacity in which service was or is or has been agreed to be rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnified person, to repay all amounts so advanced if it shall ultimately be determined that such indemnified person is not entitled to be indemnified under this Section or otherwise. Section 2. Indemnification of Employees and Agents. The Corporation may, by action of its Board of Directors, provide indemnification to employees and agents of the Corporation, individually or as a group, with the same scope and effect as the indemnification of directors and officers provided for in this Article. Section 3. Right of Claimant to Bring Suit. If a written claim received by the Corporation from or on behalf of an indemnified party under this Article VII is not paid in full by the Corporation within ninety days after such receipt, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. -13- 14 Section 4. Nonexclusivity of Rights. The right to indemnification and the advancement and payment of expenses conferred in this Article VII shall not be exclusive of any other right which any person may have or hereafter acquire under any law (common or statutory), provision of the Certificate of Incorporation of the Corporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise. Section 5. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any person who is or was serving as a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. Section 6. Savings Clause. If this Article VII or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and hold harmless each director and officer of the Corporation, as to costs, charges and expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative to the full extent permitted by any applicable portion of this Article VII that shall not have been invalidated and to the fullest extent permitted by applicable law. Section 7. Definitions. For purposes of this Article, reference to the "Corporation" shall include, in addition to the Corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger prior to (or, in the case of an entity specifically designated in a resolution of the Board of Directors, after) the adoption hereof and which, if its separate existence had continued, would have had the power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. Article VIII Capital Stock Section 1. Certificates of Stock. The certificates for shares of the capital stock of the Corporation shall be in such form, not inconsistent with statutory provisions and the Certificate of Incorporation, as shall be approved by the Board of Directors. The Chairman of the Board, President or a Vice President shall cause to be issued to each stockholder one or more certificates under the seal of the Corporation and signed by the Chairman of the Board, President or Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying the number of shares (and, if the stock of the Corporation shall be divided into classes or series, the class and series of such shares) owned by such stockholder in the Corporation; provided, however, that any or all of the signatures on the certificate may be facsimile. The stock record books and the blank stock certificate books shall be kept by the Secretary, or at the office of such transfer agent or transfer agents as the Board of Directors or the Executive Committee may from time to time by resolution determine. In case any officer, transfer agent or registrar who shall have signed or whose facsimile signature or signatures -14- 15 shall have been used on, any such certificate or certificates shall cease to be such officer, transfer agent or registrar, whether because of death, resignation or otherwise, before such certificate or certificates shall have been issued by the Corporation, such certificate or certificates may nevertheless be issued and delivered by the Corporation as though the officer, transfer agent or registrar who signed such certificate or certificates or whose facsimile signature or signatures shall have been used thereon had not ceased to be such officer, transfer agent or registrar. Section 2. Transfer of Shares. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Section 3. Ownership of Shares. The Corporation shall be entitled to treat the holder of record of any share or shares as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware. Section 4. Record Date. For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders, or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of stockholders for any other proper purpose, the Board of Directors of the Corporation may fix, in advance, a date as record date for any such determination of stockholders, such date in any case not to be more than sixty (60) days (unless a shorter period is provided for in the Certificate of Incorporation) and, in case of a meeting of stockholders, not less than ten (10) days prior to the date on which the particular action requiring such determination of stockholders is to be taken. If no record date is fixed for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders or either (a) to notice of or to vote at a meeting of stockholders or (b) to receive payment of a dividend, the close of business on the day next preceding the date on which the notice of the meeting is mailed or on the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of stockholders. Section 5. Regulations Regarding Certificates. The Board of Directors shall have the power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer and registration or the replacement of certificates for shares of capital stock of the Corporation. Section 6. Dividends. The Board of Directors may, from time to time, declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and the Certificate of Incorporation. Section 7. Lost or Destroyed Certificates. The Board of Directors or the Executive Committee may determine the conditions upon which a new certificate of stock may be issued in place of a certificate which is alleged to have been lost or destroyed; and may, in their discretion, require the owner of such certificate or his legal representative to give bond, with sufficient surety, to indemnify the Corporation and each transfer agent against any and all losses or claims which may arise by reason of the issue of a new certificate in the place of the one so lost or destroyed. -15- 16 Article IX Miscellaneous Provisions Section 1. Fiscal Year. The fiscal year of the Corporation shall be the calendar year or such other period as shall be established by the Board of Directors from time to time. Section 2. Seal. The seal of the Corporation shall be such as from time to time may be approved by the Board of Directors. Section 3. Notice and Waiver of Notice. Whenever any notice whatever is required to be given under the provisions of these Bylaws, said notice shall be deemed to be sufficient if given by depositing the same in a post office box in a sealed postpaid wrapper addressed to the person entitled thereto at his post office address, as it appears on the books of the Corporation, and such notice shall be deemed to have been given on the day of such mailing. A waiver of notice, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Section 4. Resignations. Any director or officer may resign at any time. Such resignations shall be made in writing and shall take effect at the time specified therein, or, if no time be specified, at the time of its receipt by the Chairman of the Board, the President or Secretary. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. Article X Amendments As provided in the Certificate of Incorporation of the Corporation, the Board of Directors shall have the power to make, adopt, alter, amend and repeal from time to time bylaws of the Corporation, subject to the right of the stockholders entitled to vote with respect thereto to adopt, alter, amend and repeal such bylaws as adopted, altered or amended by the Board of Directors; provided, however, that bylaws shall not be adopted, altered, amended or repealed by the stockholders of the Corporation except by the vote of the holders of not less than eighty percent (80%) of the outstanding shares of capital stock of the Corporation normally entitled to vote in the election of directors. Amendment No. 1 herein: Article III Section 2. Classes of Directors and Term of Office, October 26, 1984. Amendment No. 2 herein: Article II Section 4. Annual Meetings; Election of Directors, July 26, 1985. Amendment No. 3 herein: Article V Section 1. Executive Committee and Other Committees, June 30, 1986. Amendment No. 4 herein: Article VII (in entirety) Indemnification of Directors, Officers, Employees and Agents, April 23, 1987. -16- 17 Amendment No. 5 herein: Article III Section 2. Classes of Directors and Term of Office, October 23, 1987. Amendment No. 6 herein: Article III Section 2. Classes of Directors and Term of Office, April 28, 1989. Amendment No. 7 herein: Article III Section 2. Classes of Directors and Term of Office, January 25, 1990. Amendment No. 8 herein: Article II Section 5. Special Meetings, February 25, 1992. Amendment No. 9 herein: Article III Section 2. Classes of Directors and Term of Office, April 24, 1992. Amendment No. 10 herein: Article II Section 3. Quorum and Section 6. Voting; Elections; Inspectors; Votes by Ballot, December 21, 1992. Amendment No. 11 herein: Article III Section 2. Classes of Directors and Term of Office, April 23, 1993. Amendment No. 12 herein: Article III Section 2. Classes of Directors and Term of Office, April 26, 1996. Amendment No. 13 herein: Article III Section 1. Number, Qualifications and Nominations, September 1, 1996. Amendment No. 14 herein: Article III Section 2. Classes of Directors and Term of Office, April 25, 1997. Amendment No. 15 herein: Article III Section 2. Classes of Directors and Term of Office, January 22, 1998. Amendment No. 16 herein: Article III Section 2. Classes of Directors and Term of Office, July 14, 1998. Amendment No. 17 herein: Article III Section 2. Classes of Directors and Term of Office, April 28, 2000. -17- EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF ROWAN COMPANIES, INC. FOR THE THREE MONTHS ENDED MARCH 31, 2000 INCLUDED IN ITS FORM 10-Q FOR THE QUARTERLY PERIOD THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-2000 MAR-31-2000 $197,487 0 87,387 0 109,398 416,959 2,024,651 938,686 1,516,397 89,252 315,105 0 0 11,719 967,714 1,516,397 22,091 127,730 15,252 117,525 0 0 2,342 9,740 3,636 6,104 0 0 0 6,104 0.07 0.07
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