EX-99.1 3 v227135_ex99-1.htm Unassociated Document
Exhibit 99.1
Rowan Companies Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Financial Information

On June 22, 2011, Rowan Companies, Inc. (“Rowan” and, together with its consolidated subsidiaries, the “Company”) completed the sale of all of the issued and outstanding common stock of LeTourneau Technologies, Inc. (“LeTourneau”) pursuant to a stock purchase agreement dated May 13, 2011 (the “Purchase Agreement”), between Rowan, as seller, and Joy Global Inc., as buyer. The purchase price was $1.1 billion in cash, subject, however, to certain post-closing working capital and other adjustments as specified in the Purchase Agreement.

The following unaudited pro forma consolidated financial information was derived from (i) the unaudited historical financial statements of the Company as of March 31, 2011, and for the three months ended March 31, 2011 and 2010, and (ii) the audited consolidated financial statements of the Company for the years ended December 31, 2010, 2009 and 2008.  The unaudited pro forma consolidated financial information contained herein should be read in conjunction with the historical quarterly and annual consolidated financial statements of the Company from which the pro forma financial information was derived.

The unaudited pro forma consolidated financial information as of March 31, 2011, gives effect to the sale of LeTourneau as though the sale occurred on March 31, 2011, and the unaudited pro forma consolidated financial information for the three months ended March 31, 2011 and 2010, and for the years ended December 31, 2010, 2009, and 2008 gives effect to the sale of LeTourneau as though the transaction occurred on January 1, 2008, which is the beginning of the earliest period presented.

 
 
 

Rowan Companies, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Balance Sheet at March 31, 2011
Assuming sale of LeTourneau occurred on March 31, 2011
(in thousands)

         
Pro forma adjustments
        
         
Deduct:
              
         
Balances
              
   
March 31, 2011
    
attributable to
    
Other pro forma
    
March 31, 2011
  
   
Historical
    
LeTourneau
    
adjustments
    
Pro forma
  
                         
Current assets:
                        
Cash and cash equivalents
   $ 189,654     $ (4,234 )   $ 1,028,000 (a)   $ 1,213,420  
Receivables - trade and other
     382,701       (97,519 )     -       285,182  
Inventories
     395,964       (395,964 )     -       -  
Prepaid expenses and other current assets
     61,828       (26,105 )     27,716 (b)     63,439  
Deferred tax assets, net
     36,174       (27,782 )     -       8,392  
Total current assets
     1,066,321       (551,604 )     1,055,716       1,570,433  
                                 
Property, plant and equipment - net
     5,092,220       (138,598 )     -       4,953,622  
                                 
Other assets
     99,452       (1,976 )     -       97,476  
                                 
Total assets
   $ 6,257,993     $ (692,178 )   $ 1,055,716     $ 6,621,531  
                                 
Current liabilities:
                                
Current maturities of long-term debt
   $ 52,149     $ -     $ -     $ 52,149  
Accounts payable - trade
     147,186       (66,266 )     -       80,920  
Deferred revenues
     169,752       (160,364 )     20,122 (b)     29,510  
Billings in excess of costs and estimated profits on uncompleted contracts
     19,404       (19,404 )     -       -  
Accrued income taxes
     12,272       -       169,000 (c)     181,272  
Other current liabilities
     123,107       (59,642 )     -       63,465  
Total current liabilities
     523,870       (305,676 )     189,122       407,316  
                                 
Long-term debt
     1,121,585       -       -       1,121,585  
Deferred income taxes - net
     551,119       (15,394 )     63,000 (c)      598,725  
Other liabilities
     264,229       -       -       264,229  
                                 
Total stockholders' equity
     3,797,190       (371,108 )(d)     803,594 (d)     4,229,676  
                                 
Total liabilities and stockholders' equity
   $ 6,257,993     $ (692,178 )   $ 1,055,716     $ 6,621,531  

(a) Estimated net cash proceeds from sale, after estimated working capital adjustments of $54 million, estimated employee-related costs of $8 million, and estimated transaction costs of $10 million.
 
(b) Assets and liabilities transferred from LeTourneau to the Company in connection with the transfer to the Company of an equipment purchase agreement between LeTourneau, as seller, and a customer, under the terms of the Purchase Agreement.
 
(c) Estimated income tax effects of the gain on sale of LeTourneau.
 
(d) Estimated after-tax gain on sale, which totals $432 million.

 
 
 

Rowan Companies, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Income Statement
For the Three Months Ended March 31, 2011
Assuming sale of LeTourneau occurred on January 1, 2008
(in thousands)

   
Three months ended March 31, 2011
  
         
Deduct: Operations
        
         
attributable to
        
   
Historical
    
LeTourneau
    
Pro Forma
  
                   
REVENUES
   $ 364,281     $ (114,246 )   $ 250,035  
                         
COSTS AND EXPENSES:
                        
Direct operating costs (excluding items below)
     241,921       (98,562 )     143,359  
Depreciation and amortization
     49,366       (3,484 )     45,882  
Selling, general and administrative
     32,392       (11,422 )     20,970  
Gain on disposals of property and equipment
     (2,014 )     199       (1,815 )
Total costs and expenses
     321,665       (113,269 )     208,396  
                         
INCOME FROM OPERATIONS
     42,616       (977 )     41,639  
                         
OTHER INCOME/EXPENSE:
                        
Interest expense, net of interest capitalized
     (5,319 )     -       (5,319 )
Interest income
     146       (117 )     29  
Other - net
     (14 )     (1,069 )     (1,083 )
Total other income/expense - net
     (5,187 )     (1,186 )     (6,373 )
                         
INCOME BEFORE INCOME TAXES
     37,429       (2,163 )     35,266  
Provision for income taxes
     5,357       (711 )     4,646  
                         
NET INCOME
   $ 32,072     $ (1,452 )   $ 30,620  
                         
PER SHARE AMOUNTS:
                        
Net income - basic
   $ 0.26             $ 0.24  
Net income - diluted
   $ 0.25             $ 0.24  
                         
Shares - basic
     125,431               125,431  
Shares - diluted
     127,188               127,188  
 
 
 
 

Rowan Companies, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Income Statement
For the Three Months Ended March 31, 2010
Assuming sale of LeTourneau occurred on January 1, 2008
(in thousands)

   
Three months ended March 31, 2010
  
         
Deduct: Operations
        
         
attributable to
        
   
Historical
    
LeTourneau
    
Pro Forma
  
                   
REVENUES
   $ 432,405     $ (101,421 )   $ 330,984  
                         
COSTS AND EXPENSES:
                        
Direct operating costs (excluding items below)
     221,117       (84,570 )     136,547  
Depreciation and amortization
     45,492       (3,992 )     41,500  
Selling, general and administrative
     25,797       (9,456 )     16,341  
Gain on disposals of property and equipment
     (129 )     (171 )     (300 )
Material charge - manufacturing inventories
     42,024       (42,024 )     -  
Total costs and expenses
     334,301       (140,213 )     194,088  
                         
INCOME FROM OPERATIONS
     98,104       38,792       136,896  
                         
OTHER INCOME/EXPENSE:
                        
Interest expense, net of interest capitalized
     (5,679 )     -       (5,679 )
Interest income
     181       (20 )     161  
Other - net
     1,545       (1,529 )     16  
Total other income/expense - net
     (3,953 )     (1,549 )     (5,502 )
                         
INCOME BEFORE INCOME TAXES
     94,151       37,243       131,394  
Provision for income taxes
     29,528       11,611       41,139  
                         
NET INCOME
   $ 64,623     $ 25,632     $ 90,255  
                         
PER SHARE AMOUNTS:
                        
Net income - basic
   $ 0.57             $ 0.80  
Net income - diluted
   $ 0.56             $ 0.79  
                         
Shares - basic
     112,857               112,857  
Shares - diluted
     114,467               114,467  
 
 
 
 

Rowan Companies, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Income Statement for the year ended December 31, 2010
Assuming sale of LeTourneau occurred on January 1, 2008
(in thousands)

   
Year ended December 31, 2010
  
         
Deduct: Operations
        
         
attributable to
        
   
Historical
    
LeTourneau
    
Pro Forma
  
                   
REVENUES
   $ 1,819,207     $ (610,441 )   $ 1,208,766  
                         
COSTS AND EXPENSES:
                        
Direct operating costs (excluding items below)
     1,066,290       (512,384 )     553,906  
Depreciation and amortization
     186,563       (16,378 )     170,185  
Selling, general and administrative
     132,586       (47,550 )     85,036  
Loss on disposals of property and equipment
     788       (168 )     620  
Material charge - manufacturing inventories
     42,024       (42,024 )     -  
Total costs and expenses
     1,428,251       (618,504 )     809,747  
                         
INCOME FROM OPERATIONS
     390,956       8,063       399,019  
                         
OTHER INCOME/EXPENSE:
                        
Interest expense, net of interest capitalized
     (24,879 )     -       (24,879 )
Interest income
     1,508       (219 )     1,289  
Gain on debt extinguishment
     5,324       -       5,324  
Other - net
     6,108       (6,569 )     (461 )
Total other income/expense - net
     (11,939 )     (6,788 )     (18,727 )
                         
INCOME BEFORE INCOME TAXES
     379,017       1,275       380,292  
Provision for income taxes
     99,022       1,145       100,167  
                         
NET INCOME
   $ 279,995     $ 130     $ 280,125  
                         
PER SHARE AMOUNTS:
                        
Net income - basic
   $ 2.39             $ 2.39  
Net income - diluted
   $ 2.36             $ 2.36  
                         
Shares - basic
     117,021               117,021  
Shares - diluted
     118,818               118,818  
 
 
 
 

Rowan Companies, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Income Statement for the year ended December 31, 2009
Assuming sale of LeTourneau occurred on January 1, 2008
(in thousands)

   
Year ended December 31, 2009
  
         
Deduct: Operations
        
         
attributable to
        
   
Historical
    
LeTourneau
    
Pro Forma
  
                   
REVENUES
   $ 1,770,180     $ (555,284 )   $ 1,214,896  
                         
COSTS AND EXPENSES:
                        
Direct operating costs (excluding items below)
     1,000,710       (475,553 )     525,157  
Depreciation and amortization
     171,445       (15,522 )     155,923  
Selling, general and administrative
     102,760       (34,756 )     68,004  
Gain on disposals of property and equipment
     (5,748 )     (562 )     (6,310 )
Total costs and expenses
     1,269,167       (526,393 )     742,774  
                         
INCOME FROM OPERATIONS
     501,013       (28,891 )     472,122  
                         
OTHER INCOME/EXPENSE:
                        
Interest expense, net of interest capitalized
     (8,028 )     -       (8,028 )
Interest income
     1,240       (46 )     1,194  
Other - net
     6,866       (6,853 )     13  
Total other income/expense - net
     78       (6,899 )     (6,821 )
                         
INCOME BEFORE INCOME TAXES
     501,091       (35,790 )     465,301  
Provision for income taxes
     133,587       (11,084 )     122,503  
                         
NET INCOME
   $ 367,504     $ (24,706 )   $ 342,798  
                         
PER SHARE AMOUNTS:
                        
Net income - basic
   $ 3.24             $ 3.02  
Net income - diluted
   $ 3.24             $ 3.02  
                         
Shares - basic
     113,515               113,515  
Shares - diluted
     113,584               113,584  

 
 
 
 
Rowan Companies, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Income Statement for the year ended December 31, 2008
Assuming sale of LeTourneau occurred on January 1, 2008
(in thousands)

   
Year ended December 31, 2008
  
         
Deduct: Operations
        
         
attributable to
        
   
Historical
    
LeTourneau
    
Pro Forma
  
                   
REVENUES
   $ 2,212,736     $ (761,113 )   $ 1,451,623  
                         
COSTS AND EXPENSES:
                        
Direct operating costs (excluding items below)
     1,254,610       (624,814 )     629,796  
Depreciation and amortization
     141,395       (15,534 )     125,861  
Selling, general and administrative
     115,226       (45,991 )     69,235  
Gain on disposals of property and equipment
     (30,701 )     (257 )     (30,958 )
Material charges
     111,171       (86,536 )     24,635  
Gain on hurricane-related event
     (37,088 )     -       (37,088 )
Total costs and expenses
     1,554,613       (773,132 )     781,481  
                         
INCOME FROM OPERATIONS
     658,123       12,019       670,142  
                         
OTHER INCOME/EXPENSE:
                        
Interest expense, net of interest capitalized
     (1,198 )     -       (1,198 )
Interest income
     6,295       (56 )     6,239  
Other - net
     (9,129 )     10,491       1,362  
Total other income/expense - net
     (4,032 )     10,435       6,403  
                         
                         
INCOME BEFORE INCOME TAXES
     654,091       22,454       676,545  
Provision for income taxes
     226,463       6,286       232,749  
                         
NET INCOME
   $ 427,628     $ 16,168     $ 443,796  
                         
PER SHARE AMOUNTS:
                        
Net income - basic
   $ 3.80             $ 3.94  
Net income - diluted
   $ 3.77             $ 3.92  
                         
Shares - basic
     112,632               112,632  
Shares - diluted
     113,346               113,346