8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 25, 2011

ROWAN COMPANIES, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	1-5491	75-0759420
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	file Number)	Identification No.)

2800 POST OAK BOULEVARD
SUITE 5450
HOUSTON, TEXAS	77056-6189
(Address of principal executive offices)	(zip code)

(713) 621-7800

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

Item 2.02 - Results of Operations and Financial Condition

The following information is disclosed pursuant to Item 2.02 - Results of Operations and Financial Condition:

On February 25, 2011, Rowan Companies, Inc. issued a press release announcing its operating results for the three and twelve months ended December 31, 2010. The press release is attached as Exhibit 99.

Item 9.01 - Financial Statements and Exhibits

(c) Exhibits

Exhibit
Number	Exhibit Description
99	Press release of Rowan Companies, Inc. dated February 25, 2011 announcing its operating results for the three and twelve months ended December 31, 2010

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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 hereunto duly authorized.

ROWAN COMPANIES, INC
By:	/s/ W. H. WELLS
	W. H. Wells,
	Senior Vice President - Chief Financial Officer and Treasurer

Dated: February 25, 2011

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INDEX TO EXHIBITS

Exhibit
Number	Exhibit Description
99	Press release of Rowan Companies, Inc. dated February 25, 2011 announcing its operating results for the three and twelve months ended December 31, 2010

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EX-99

  News Release

FOR IMMEDIATE RELEASE February 25, 2011

Rowan Reports Fourth Quarter 2010 Operating Results

HOUSTON, TEXAS – For the three months ended December 31, 2010, Rowan Companies, Inc. (“Rowan” or the “Company”) (NYSE: RDC) generated net income of $57.3 million or $0.45 per share, compared to $60.8 million or $0.53 per share in the fourth quarter of 2009.  Revenues were $458.8 million in the fourth quarter of 2010, compared to $399.8 million in the fourth quarter of 2009.

Results for the fourth quarter of 2010 included $5.7 million or $0.03 per share of net gains on debt redemptions and asset disposals, compared to $1.4 million or $0.01 per share of asset disposal gains in the fourth quarter of 2009.

For the year ended December 31, 2010, the Company generated net income of $280.0 million or $2.36 per share on revenues of $1.82 billion, compared to net income of $367.5 million or $3.24 per share on revenues of $1.77 billion in 2009.  The 2010 results included $4.5 million or $0.03 per share of net gains on debt redemptions and asset disposals, compared to $5.7 million or $0.03 per share of asset disposal gains in 2009.  The 2010 results also included a $42.0 million pre-tax charge in the first quarter, or $0.26 per share after tax, for estimated losses associated with non-conforming and slow-moving inventory items in the Company’s Drilling Products and Systems manufacturing segment.  The 2009 results included no such charges but included $25.4 million or $0.22 per share of tax benefits related to a third-party tax court ruling, which provided that certain foreign-source income is not taxable in the United States.  Excluding these charges and tax benefits and the gains described above, earnings were $307.8 million or $2.59 per share in 2010 and $338.3 million or $2.98 per share in 2009.

Rowan’s drilling operations generated revenues of $259.6 million in the fourth quarter of 2010, up by 2% over the prior-year quarter as the impact of offshore fleet additions and higher land rig utilization more than offset lower average day rates.  The Company’s gross drilling margin was 47% of revenues in the fourth quarter of 2010, down from 52% in the prior-year quarter.  Income from drilling operations was $55.3 million in the fourth quarter of 2010, down by 27% from the prior-year quarter.

Rowan’s manufacturing operations generated external revenues of $199.2 million in the fourth quarter of 2010, up by 38% over the prior-year quarter.  The Company’s gross manufacturing margin was 17% of revenues in the fourth quarter of 2010, unchanged from the prior-year quarter.  Income from manufacturing operations was $18.9 million in the fourth quarter of 2010, up by 108% from the prior-year quarter.

Matt Ralls, President and Chief Executive Officer, commented, “Our contract drilling operations provided solid results in the fourth quarter, exceeding consensus expectations primarily due to continued success in managing our costs.  Similarly, our manufacturing results were above expectations, with the out-performance again led by the mining products group.  We expect demand for our mining products to continue to strengthen in 2011.

2800 Post Oak Blvd., Suite 5450,  Houston, Texas 77056

Tel: (713) 621-7800  Fax: (713) 960-7509

“The current jack-up newbuilding cycle appears to be gaining momentum, with several contractors ordering new higher specification jack-ups in response to increasingly demanding drilling requirements.  Rowan’s strategy has been to stay at the front of this trend, with six high-spec jack-ups delivered over the past year, three more scheduled for delivery in 2011 and an industry-leading share of the high-spec jack-up market going forward.  We expect LeTourneau’s drilling products segment, which has been experiencing an increase in jack-up inquiries and quotation activity, to benefit from this trend through new kit and equipment package orders.

“We have repeatedly stated that our strategy is to separate LeTourneau from Rowan when suitable market conditions exist.  We believe favorable conditions now exist and expect to begin a process soon to either spin off or sell our manufacturing operations.  Likewise, the land rig market in the US has been strengthening, particularly for more capable land rigs like those that characterize the Rowan fleet, and we expect to begin a process to monetize this business in the near future as well.  As always, we will look at all alternatives for both businesses with the objective of maximizing shareholder value.”

Rowan will conduct its earnings conference call on Friday, February 25, 2011, at 10:00 a.m. Central 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.  For more information on Rowan, please visit 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.

Contact:

Suzanne M. McLeod

Director of Investor Relations

(713) 960-7517

smcleod@rowancompanies.com

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ROWAN COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited (In Millions)

	DECEMBER 31,
	2010		2009
ASSETS
Cash and cash equivalents	$	437.5	$	639.7
Restricted cash		15.2		-
Accounts receivable		417.9		343.6
Inventories		347.9		451.7
Other current assets		106.3		114.8
Total current assets		1,324.8		1,549.8
Property, plant and equipment - net		4,793.4		3,579.5
Other assets		99.3		81.4
TOTAL	$	6,217.5	$	5,210.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt	$	52.2	$	64.9
Accounts payable		116.9		124.6
Other current liabilities		360.2		378.8
Total current liabilities		529.3		568.3
Long-term debt		1,133.7		787.5
Other liabilities		802.2		744.5
Stockholders'equity		3,752.3		3,110.4
TOTAL	$	6,217.5	$	5,210.7

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ROWAN COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited (In Millions Except Per Share Amounts)

	THREE MONTHS					TWELVE MONTHS
	ENDED DECEMBER 31					ENDED DECEMBER 31
	2010		2009			2010			2009
REVENUES	$	458.8	$	399.8		$	1,819.2		$	1,770.2
COSTS AND EXPENSES:
Operations		301.1		242.1			1,066.3			1,000.7
Depreciation and amortization		47.3		44.6			186.6			171.4
Selling, general and administrative		36.0		29.4			132.6			102.8
Loss (gain) on disposals of property and equipment		0.2		(1.4	)		0.8			(5.7	)
Material charge for manufacturing inventories		-		-			42.0			-
Total		384.6		314.7			1,428.3			1,269.2
INCOME FROM OPERATIONS		74.2		85.1			390.9			501.0
Net interest and other income (expense)		3.5		(3.1	)		(11.9	)		0.1
INCOME BEFORE INCOME TAXES		77.7		82.0			379.0			501.1
Provision for income taxes		20.4		21.2			99.0			133.6
NET INCOME	$	57.3	$	60.8		$	280.0		$	367.5
NET INCOME PER DILUTED SHARE	$	0.45	$	0.53		$	2.36		$	3.24
AVERAGE DILUTED SHARES		127.0		114.0			118.8			113.6

NOTE:  See pages 6 and 7 for supplemental operating information.

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ROWAN COMPANIES, INC.

CONDENSED CONSOLIDATED  STATEMENTS OF CASH FLOWS

Unaudited (In Millions)

	TWELVE MONTHS
	ENDED DECEMBER 31
	2010			2009
CASH PROVIDED BY (USED IN):
Operations:
Net income	$	280.0		$	367.5
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization		186.6			171.4
Deferred income taxes		45.2			15.8
Gain on disposals of assets		0.8			(5.7	)
Other - net		30.7			12.9
Net changes in current assets and liabilities		(22.1	)		7.1
Net changes in other noncurrent assets and liabilities		(13.0	)		(24.9	)
Net cash provided by operations		508.2			544.1
Investing activities:
Property, plant and equipment additions		(490.6	)		(566.4	)
Proceeds from disposals of property, plant and equipment		3.3			8.6
Net cash used in acquisition of SKDP		(17.7	)		-
Increase in Restricted cash		(15.2	)		-
Net cash used in investing activities		(520.2	)		(557.8	)
Financing  activities:
Proceeds from borrowings		395.5			491.7
Repayments of borrowings		(594.0	)		(64.9	)
Proceeds from equity compensation plans and other		8.3			4.2
Net cash provided by (used in) financing activities		(190.2	)		431.0
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(202.2	)		417.3
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		639.7			222.4
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	437.5		$	639.7

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ROWAN COMPANIES, INC.

SUPPLEMENTAL DRILLING INFORMATION

Unaudited (dollars in millions, except where otherwise indicated )

	THREE MONTHS ENDED
	December 31, 2010											September 30, 2010											December 31, 2009
	$ (a)			Elims.		$ (b)			% Revs.			$ (a)			Elims.		$ (b)			% Revs.			$ (b)			% Revs.
DRILLING  OPERATIONS:
Revenues	$	259.6				$	259.6			100		$	289.9				$	289.9			100		$	255.3			100
Operating costs (excluding items shown below)		(137.4	)	$	0.7		(136.7	)		(53	)		(142.6	)	$	0.9		(141.7	)		(49	)		(121.7	)		(48	)
Depreciation and amortization expense		(45.4	)		1.6		(43.8	)		(17	)		(44.6	)		1.6		(43.0	)		(15	)		(40.6	)		(16	)
Selling, general and administrative expenses (c)		(23.6	)				(23.6	)		(9	)		(21.6	)				(21.6	)		(7	)		(18.5	)		(7	)
Gain (loss) on sale of property and equipment		(0.2	)				(0.2	)		(0	)		(0.7	)				(0.7	)		(0	)		1.5			1
Income from operations	$	53.0		$	2.3	$	55.3			21		$	80.4		$	2.5	$	82.9			29		$	76.0			30
EBITDA (d)	$	98.6		$	0.7	$	99.3			38		$	125.7		$	0.9	$	126.6			44		$	115.1			45
OFFSHORE  RIG  DAYS:
Operating							1,437											1,580						1,277
Available							2,208											2,208						2,024
Utilization							65	%										72	%					63	%
LAND  RIG  DAYS:
Operating							2,316											2,322						1,747
Available							2,760											2,760						2,944
Utilization							84	%										84	%					59	%
AVERAGE  DAY  RATES  (in  thousands):
Gulf  of  Mexico  rigs						$	126.6										$	126.2					$	123.3
Middle  East  rigs							132.0											131.2						164.2
North  Sea  rigs							175.7											194.9						195.9
All  offshore  rigs							142.5											147.3						167.7
Land  rigs							21.0											21.0						21.8

(a)  Amounts include effects of intercompany transactions between drilling and manufacturing operations.

(b)  Amounts exclude effects of 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, less any gain on sale.

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ROWAN  COMPANIES,  INC.

SUPPLEMENTAL  MANUFACTURING  INFORMATION

Unaudited  (dollars  in  millions)

	THREE MONTHS ENDED
	December 31, 2010															September 30, 2010															December 31, 2009
	$ (a)			% Revs.			Elims.			$ (b)			% Revs.			$ (a)			% Revs.			Elims.			$ (b)			% Revs.			$ (b)			% Revs.
MANUFACTURING OPERATIONS:
Revenues	$	256.7			100		$	(57.5	)	$	199.2			100		$	197.4			100		$	(49.4	)	$	148.0			100		$	144.5			100
Operating costs (excluding items shown below)		(206.1	)		(80	)		41.7			(164.4	)		(83	)		(160.5	)		(81	)		35.2			(125.3	)		(85	)		(120.4	)		(83	)
Depreciation and amortization expense		(3.5	)		(1	)					(3.5	)		(2	)		(4.3	)		(2	)					(4.3	)		(3	)		(4.0	)		(3	)
Selling, general and administrative expenses (c)		(12.4	)		(5	)					(12.4	)		(6	)		(13.1	)		(7	)					(13.1	)		(9	)		(10.9	)		(8	)
Loss on sale of property and equipment		-			-						-			-			-			-						-			-			(0.1	)		(0	)
Income from operations	$	34.7			14		$	(15.8	)	$	18.9			9		$	19.5			10		$	(14.2	)	$	5.3			4		$	9.1			6
EBITDA (d)	$	38.2			15		$	(15.8	)	$	22.4			11		$	23.8			12		$	(14.2	)	$	9.6			6		$	13.2			9
REVENUES:
Drilling Products and Systems	$	167.8			65		$	(57.5	)	$	110.3			55		$	127.4			65		$	(49.4	)	$	78.0			53		$	98.0			68
Mining, Forestry and Steel Products		88.9			35			-			88.9			45			70.0			35			-			70.0			47			46.5			32
Total	$	256.7			100		$	(57.5	)	$	199.2			100		$	197.4			100		$	(49.4	)	$	148.0			100		$	144.5			100
MANUFACTURING BACKLOG:
Drilling Products and Systems	$	232.8					$	(83.2	)	$	149.6					$	332.8					$	(132.7	)	$	200.1					$	331.5
Mining, Forestry and Steel Products		149.7						-			149.7						66.8						-			66.8						81.9
Total	$	382.5					$	(83.2	)	$	299.3					$	399.6					$	(132.7	)	$	266.9					$	413.4

(a)  Amounts include effects of intercompany transactions between manufacturing and drilling operations.

(b)  Amounts exclude effects of 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, less any gain on sale.

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