Attached files
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| 8-K - ROWAN COMPANIES PLC | v200681_8k.htm |
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News Release
|
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FOR
IMMEDIATE RELEASE
|
November
2, 2010
|
Rowan
Reports Third Quarter 2010 Operating Results
HOUSTON,
TEXAS – For the three months ended September 30, 2010, Rowan Companies, Inc.
(“Rowan” or the “Company”) (NYSE: RDC) generated net income of $67.2 million or
$0.57 per share, compared to $78.4 million or $0.69 per share in the third
quarter of 2009. Revenues were $437.9 million in the third quarter of
2010, compared to $393.4 million in the third quarter of
2009. Results for the prior-year period included a $17.0 million or
$0.15 per share net tax benefit related to a third-party tax court ruling which
provided that certain foreign-source income is not taxable in the United
States.
Rowan’s
drilling operations generated revenues of $289.9 million in the third quarter of
2010, up by 12% over the prior-year quarter as the impact of offshore fleet
additions and higher rig utilization more than offset lower average day
rates. The Company’s gross drilling margin was 51% of revenues in the
third quarter of 2010, down from 53% in the prior-year
quarter. Income from drilling operations was $82.9 million in the
third quarter of 2010, up by 2% over the prior-year quarter.
Rowan’s
manufacturing operations generated external revenues of $148.0 million in the
third quarter of 2010, up by 10% over the prior-year quarter. The
Company’s gross manufacturing margin was 15% of revenues in the third quarter of
2010, up from 13% in the prior-year quarter. Income from
manufacturing operations was $5.3 million in the third quarter of 2010, down by
12% from the prior-year quarter.
Matt
Ralls, President and Chief Executive Officer, commented, “During the third
quarter, we took delivery of our second EXL class jack-up rig, which is now in
Trinidad preparing to begin a three-year contract. We added significantly to our
contract drilling backlog, obtaining two three-year contracts with Saudi Aramco
and additional deep-well commitments from McMoRan in the Gulf of Mexico. We
completed the acquisition of Skeie Drilling, adding three of the world’s most
capable jack-ups to the Rowan fleet, the first of which – the Rowan Viking –
will soon mobilize for a 19-month assignment in the UK at a day rate in the low
$200s. And, we raised $1 billion of new financing during the quarter to
refinance the assumed Skeie debt, complete our newbuild program, and remain
well-positioned for further growth opportunities.
“Our
contract drilling operations provided solid results in the third quarter,
tracking closely with consensus expectations. Similarly, our manufacturing
results were in line with expectations, with the performance again led by the
mining products group. LeTourneau expects continuing strong demand for new
mining equipment and has recently seen a significant increase in requests for
jack-up kit quotations. Our third quarter results also benefitted from
continuing progress in lowering our effective income tax rate, which we expect
will improve further in 2011 and beyond as we expand our international
operations.”
2800
Post Oak Blvd., Suite 5450, Houston, Texas 77056
Tel:
(713) 621-7800 Fax: (713) 960-7509
Rowan
will conduct its earnings conference call on Tuesday, November 2, 2010, at 10:00
a.m. Central Daylight Time. Interested parties are invited to listen to
the call by telephone or over the Internet. Individuals who wish to
participate on the conference call by telephone can dial (877) 869-3847, or
internationally (201) 689-8261. Alternatively, to access the online
simulcast and rebroadcast of the conference call, please visit Rowan’s website
at www.rowancompanies.com. You should connect to our website at least 15
minutes prior to the conference call to register, download and install any
necessary software.
Rowan
Companies, Inc. is a major provider of international and domestic contract
drilling services. The Company also owns and operates a manufacturing
division that produces equipment for the drilling, mining and timber
industries. The Company’s stock is traded on the New York Stock
Exchange. Common Stock trading symbol: RDC. 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
- 2
-
ROWAN
COMPANIES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
Unaudited
(In Millions)
|
SEPTEMBER 30,
|
DECEMBER 31,
|
|||||||
|
2010
|
2009
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$ | 917.8 | $ | 639.7 | ||||
|
Restricted
cash
|
192.8 | - | ||||||
|
Accounts
receivable
|
407.0 | 343.6 | ||||||
|
Inventories
|
382.7 | 451.7 | ||||||
|
Other
current assets
|
127.6 | 114.8 | ||||||
|
Total
current assets
|
2,027.9 | 1,549.8 | ||||||
|
Property,
plant and equipment - net
|
4,440.7 | 3,579.5 | ||||||
|
Other
assets
|
92.3 | 81.4 | ||||||
|
TOTAL
|
$ | 6,560.9 | $ | 5,210.7 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
maturities of long-term debt
|
$ | 536.9 | $ | 64.9 | ||||
|
Accounts
payable
|
130.9 | 124.6 | ||||||
|
Other
current liabilities
|
239.4 | 378.8 | ||||||
|
Total
current liabilities
|
907.2 | 568.3 | ||||||
|
Long-term
debt
|
1,147.3 | 787.5 | ||||||
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Other
liabilities
|
822.8 | 744.5 | ||||||
|
Stockholders'
equity
|
3,683.6 | 3,110.4 | ||||||
|
TOTAL
|
$ | 6,560.9 | $ | 5,210.7 | ||||
- 3
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ROWAN
COMPANIES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Millions Except Per Share Amounts)
|
THREE MONTHS
|
NINE MONTHS
|
|||||||||||||||
|
ENDED SEPTEMBER 30
|
ENDED SEPTEMBER 30
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
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|||||||||||||
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REVENUES
|
$ | 437.9 | $ | 393.4 | $ | 1,360.4 | $ | 1,370.4 | ||||||||
|
COSTS
AND EXPENSES:
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||||||||||||||||
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Operations
|
267.0 | 238.2 | 765.2 | 758.6 | ||||||||||||
|
Depreciation
and amortization
|
47.3 | 43.7 | 139.3 | 126.8 | ||||||||||||
|
Selling,
general and administrative
|
34.7 | 24.1 | 96.6 | 73.4 | ||||||||||||
|
Loss
(gain) on disposals of property and equipment
|
0.7 | 0.3 | 0.6 | (4.3 | ) | |||||||||||
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Material
charge for manufacturing inventories
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- | - | 42.0 | - | ||||||||||||
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Total
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349.7 | 306.3 | 1,043.7 | 954.5 | ||||||||||||
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INCOME
FROM OPERATIONS
|
88.2 | 87.1 | 316.7 | 415.9 | ||||||||||||
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Net
interest and other income
|
(5.0 | ) | (0.7 | ) | (15.4 | ) | 3.1 | |||||||||
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INCOME
BEFORE INCOME TAXES
|
83.2 | 86.4 | 301.3 | 419.0 | ||||||||||||
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Provision
for income taxes
|
16.0 | 8.0 | 78.6 | 112.3 | ||||||||||||
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NET
INCOME
|
$ | 67.2 | $ | 78.4 | $ | 222.7 | $ | 306.7 | ||||||||
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NET
INCOME PER DILUTED SHARE
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$ | 0.57 | $ | 0.69 | $ | 1.92 | $ | 2.70 | ||||||||
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AVERAGE
DILUTED SHARES
|
118.4 | 113.9 | 116.0 | 113.6 | ||||||||||||
NOTE: See
pages 6 and 7 for supplemental operating information.
- 4
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ROWAN
COMPANIES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(In Millions)
|
NINE MONTHS
|
||||||||
|
ENDED SEPTEMBER 30
|
||||||||
|
2010
|
2009
|
|||||||
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CASH
PROVIDED BY (USED IN):
|
||||||||
|
Operations:
|
||||||||
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Net
income
|
$ | 222.7 | $ | 306.7 | ||||
|
Adjustments
to reconcile net income to net cash provided by
operations:
|
||||||||
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Depreciation
and amortization
|
139.3 | 126.8 | ||||||
|
Deferred
income taxes
|
12.2 | 70.6 | ||||||
|
Gain
on disposals of assets
|
0.6 | (4.3 | ) | |||||
|
Other
- net
|
30.3 | 4.5 | ||||||
|
Net
changes in current assets and liabilities
|
(115.7 | ) | (62.1 | ) | ||||
|
Net
changes in other noncurrent assets and liabilities
|
(10.3 | ) | (33.2 | ) | ||||
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Net
cash provided by operations
|
279.1 | 409.0 | ||||||
|
Investing
activities:
|
||||||||
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Property,
plant and equipment additions
|
(316.6 | ) | (393.2 | ) | ||||
|
Proceeds
from disposals of property, plant and equipment
|
3.0 | 5.7 | ||||||
|
Net
cash acquired from SKDP
|
8.5 | - | ||||||
|
Net
cash used in investing activities
|
(305.1 | ) | (387.5 | ) | ||||
|
Financing
activities:
|
||||||||
|
Proceeds
from borrowings
|
395.5 | 491.7 | ||||||
|
Repayments
of borrowings
|
(96.1 | ) | (51.2 | ) | ||||
|
Proceeds
from equity compensation plans and other
|
4.7 | (3.3 | ) | |||||
|
Net
cash provided by financing activities
|
304.1 | 437.2 | ||||||
|
INCREASE
IN CASH AND CASH EQUIVALENTS
|
278.1 | 458.7 | ||||||
|
CASH
AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
639.7 | 222.4 | ||||||
|
CASH
AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 917.8 | $ | 681.1 | ||||
- 5
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ROWAN
COMPANIES, INC.
SUPPLEMENTAL
DRILLING INFORMATION
Unaudited
(dollars in millions, except where otherwise indicated )
|
THREE MONTHS ENDED
|
||||||||||||||||||||||||||||||||||||||||
|
September 30, 2010
|
June 30, 2010
|
September 30, 2009
|
||||||||||||||||||||||||||||||||||||||
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$ (a)
|
Elims.
|
$ (b)
|
% Revs.
|
$ (a)
|
Elims.
|
$ (b)
|
% Revs.
|
$
|
% Revs.
|
|||||||||||||||||||||||||||||||
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DRILLING
OPERATIONS:
|
||||||||||||||||||||||||||||||||||||||||
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Revenues
|
$ | 289.9 | $ | 289.9 | 100 | $ | 328.3 | $ | 328.3 | 100 | $ | 258.4 | 100 | |||||||||||||||||||||||||||
|
Operating
costs (excluding items shown below)
|
(142.6 | ) | $ | 0.9 | (141.7 | ) | (49 | ) | (139.7 | ) | $ | 0.7 | (139.0 | ) | (42 | ) | (121.3 | ) | (47 | ) | ||||||||||||||||||||
|
Depreciation
and amortization expense
|
(44.6 | ) | 1.6 | (43.0 | ) | (15 | ) | (43.3 | ) | 1.4 | (41.9 | ) | (13 | ) | (39.8 | ) | (15 | ) | ||||||||||||||||||||||
|
Selling,
general and administrative expenses (c)
|
(21.6 | ) | (21.6 | ) | (7 | ) | (23.4 | ) | (23.4 | ) | (7 | ) | (16.3 | ) | (6 | ) | ||||||||||||||||||||||||
|
Gain
(loss) on sale of property and equipment
|
(0.7 | ) | (0.7 | ) | (0 | ) | - | - | - | 0.1 | 0 | |||||||||||||||||||||||||||||
|
Income
from operations
|
$ | 80.4 | $ | 2.5 | $ | 82.9 | 29 | $ | 121.9 | $ | 2.1 | $ | 124.0 | 38 | $ | 81.1 | 31 | |||||||||||||||||||||||
|
EBITDA
(d)
|
$ | 125.7 | $ | 0.9 | $ | 126.6 | 44 | $ | 165.2 | $ | 0.7 | $ | 165.9 | 51 | $ | 120.8 | 47 | |||||||||||||||||||||||
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OFFSHORE
RIG DAYS:
|
||||||||||||||||||||||||||||||||||||||||
|
Operating
|
1,580 | 1,589 | 1,197 | |||||||||||||||||||||||||||||||||||||
|
Available
|
2,208 | 2,128 | 2,024 | |||||||||||||||||||||||||||||||||||||
|
Utilization
|
72 | % | 75 | % | 59 | % | ||||||||||||||||||||||||||||||||||
|
LAND
RIG DAYS:
|
||||||||||||||||||||||||||||||||||||||||
|
Operating
|
2,322 | 2,265 | 1,652 | |||||||||||||||||||||||||||||||||||||
|
Available
|
2,760 | 2,912 | 2,944 | |||||||||||||||||||||||||||||||||||||
|
Utilization
|
84 | % | 78 | % | 56 | % | ||||||||||||||||||||||||||||||||||
|
AVERAGE
DAY RATES (in thousands):
|
||||||||||||||||||||||||||||||||||||||||
|
Gulf
of Mexico rigs
|
$ | 126.2 | $ | 137.2 | $ | 137.9 | ||||||||||||||||||||||||||||||||||
|
Middle
East rigs
|
131.2 | 142.7 | 161.4 | |||||||||||||||||||||||||||||||||||||
|
North
Sea rigs
|
194.9 | 269.3 | 209.2 | |||||||||||||||||||||||||||||||||||||
|
All
offshore rigs
|
147.3 | 174.5 | 182.5 | |||||||||||||||||||||||||||||||||||||
|
Land
rigs
|
21.0 | 19.8 | 22.5 | |||||||||||||||||||||||||||||||||||||
|
|
(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.
- 6
-
ROWAN
COMPANIES, INC.
SUPPLEMENTAL
MANUFACTURING INFORMATION
Unaudited
(dollars in millions)