EXHIBIT 99
News Release
Rowan Companies, Inc.
2800 Post Oak Boulevard, Suite 5450
Houston, Texas 77056 (713) 621-7800
FOR IMMEDIATE RELEASE & #160; April 26, 2006
ROWAN REPORTS IMPROVED OPERATING RESULTS
HOUSTON, TEXAS -- For the three months ended March 31, 2006, Rowan Companies, Inc. (RDC-NYSE) generated net income of $59.1 million, or 53¢ per share, compared to $43.4 million, or 40¢ per share, in the same period of 2005. Revenues were $299.8 million in the first quarter of 2006, compared to $222.4 million in the first quarter of 2005.
Current period results included $2.5 million of gains on asset sales and $1.9 million of incremental expense associated with the change in accounting for stock-based compensation. The prior period results included $12.9 million, or 12¢ per share, of after-tax income from discontinued operations.
Rowan’s offshore rig utilization was 78% during the first quarter of 2006, down from 98% in the comparable 2005 period, as the Company’s four rigs in Saudi Arabia only recently commenced operations. The utilization of Rowan’s other available 15 offshore rigs was 99% during the first quarter of 2006. The Company’s average offshore day rate was a record $128,600 during the first quarter of 2006, up $24,400, or 23%, from the fourth quarter of 2005 and up $67,400, or 110%, from the first quarter of 2005. Rowan’s land rig utilization was 98% during the first quarter of 2006, up from 84% in the comparable 2005 period. The Company’s average land rig day rate was $22,200 during the first quarter of 2006, up $1,100, or 5%, from the fourth quarter of 2005 and up $5,900, or 36%, from the first quarter of 2005.
As previously disclosed, Rowan will receive $14.9 million per rig for shipyard time, modifications and mobilization related to its four-rig contract in Saudi Arabia. Such fees are being recognized as revenues over the three-year contract period, which began when the rigs commenced drilling operations earlier this month. Labor and other routine operating costs were expensed as incurred throughout the three-to-four month period each rig was in the shipyard or being mobilized to Saudi Arabia.
Danny McNease, Chairman and Chief Executive Officer, commented, “Our businesses continue to perform at record levels and we expect further improvement in the months ahead. Barring a collapse in oil and natural gas prices, worldwide demand for competitive jack-ups should continue to exceed the supply enabling further increases in day rates and contract length. Our manufacturing division made a significant contribution to our first quarter results and its external backlog, at $442 million, continues to grow.”
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 and the Pacific Exchange - Stock & Options. Common Stock trading symbol: RDC. Contact: William C. Provine, Vice-President - Investor Relations, 713-960-7575. Website: www.rowancompanies.com
This report contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs and future expected financial performance of the Company that are based on current expectations and are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected by the Company. Among the factors that could cause actual results to differ materially include oil and natural gas prices, the level of offshore expenditures by energy companies, energy demand, the general economy, including inflation, weather conditions in the Company’s principal operating areas and environmental and other laws and regulations. Other relevant factors have been disclosed in the Company’s filings with the U.S. Securities and Exchange Commission.
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ROWAN COMPANIES, INC. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
Unaudited (In Thousands) | |||||||
MARCH 31 | |||||||
2006 | 2005 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 553,219 | $ | 408,578 | |||
Accounts receivable | 336,922 | 157,969 | |||||
Inventories | 236,187 | 167,053 | |||||
Other current assets | 65,067 | 24,164 | |||||
Total current assets | 1,191,395 | 757,764 | |||||
Property, plant and equipment - net | 1,818,938 | 1,684,647 | |||||
Other assets | 37,044 | 15,627 | |||||
Assets of discontinued operations | - | 7,665 | |||||
TOTAL | $ | 3,047,377 | $ | 2,465,703 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current maturities of long-term debt | $ | 64,922 | $ | 64,922 | |||
Other current liabilities | 334,942 | 101,830 | |||||
Total current liabilities | 399,864 | 166,752 | |||||
Long-term debt | 531,619 | 568,232 | |||||
Other liabilities | 455,492 | 286,862 | |||||
Liabilities of discontinued operations | - | 1,902 | |||||
Stockholders' equity | 1,660,402 | 1,441,955 | |||||
TOTAL | $ | 3,047,377 | $ | 2,465,703 |
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ROWAN COMPANIES, INC. | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
Unaudited (In Thousands Except Per Share Amounts) | |||||||
THREE MONTHS | |||||||
ENDED MARCH 31, | |||||||
2006 | 2005 | ||||||
REVENUES: | |||||||
Drilling services | $ | 217,102 | $ | 160,279 | |||
Manufacturing sales and services | 82,685 | 62,113 | |||||
Total | 299,787 | 222,392 | |||||
COSTS AND EXPENSES: | |||||||
Drilling services | 108,795 | 89,425 | |||||
Manufacturing sales and services | 65,387 | 56,674 | |||||
Depreciation and amortization | 20,111 | 19,854 | |||||
Selling, general and administrative | 18,509 | 13,260 | |||||
Gain on sale of property and equipment | (2,544 | ) | (590 | ) | |||
Total | 210,258 | 178,623 | |||||
INCOME FROM OPERATIONS | 89,529 | 43,769 | |||||
OTHER INCOME (EXPENSE): | |||||||
Interest expense | (6,997 | ) | (5,856 | ) | |||
Less: interest capitalized | 1,359 | 771 | |||||
Interest income | 8,329 | 2,546 | |||||
Gain on sale of investments | - | 7,701 | |||||
Other - net | 132 | 336 | |||||
OTHER INCOME (EXPENSE) - NET | 2,823 | 5,498 | |||||
INCOME BEFORE INCOME TAXES | 92,352 | 49,267 | |||||
Provision for income taxes | 33,247 | 18,728 | |||||
INCOME FROM CONTINUING OPERATIONS | 59,105 | 30,539 | |||||
Income from discontinued operations, net of tax | - | 12,883 | |||||
NET INCOME | $ | 59,105 | $ | 43,422 | |||
PER SHARE AMOUNTS: | |||||||
Income from continuing operations | $ | 0.53 | $ | 0.28 | |||
Income from discontinued operations, net of tax | $ | - | $ | 0.12 | |||
Net income | $ | 0.53 | $ | 0.40 | |||
AVERAGE DILUTED SHARES | 111,775 | 109,252 |
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ROWAN COMPANIES, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
Unaudited (In Thousands) | |||||||
THREE MONTHS | |||||||
ENDED MARCH 31, | |||||||
2006 | 2005 | ||||||
CASH PROVIDED BY (USED IN): | |||||||
Operations: | |||||||
Net income | $ | 59,105 | $ | 43,422 | |||
Adjustments to reconcile net income to net cash provided by (used in) operations: | |||||||
Depreciation and amortization | 20,111 | 19,913 | |||||
Deferred income taxes | 28,931 | 23,094 | |||||
Contributions to pension plans | (154 | ) | (60,931 | ) | |||
Gain on sale of assets | (2,544 | ) | (29,027 | ) | |||
Other - net | 9,759 | 6,977 | |||||
Net changes in current assets and liabilities | (79,068 | ) | (37,274 | ) | |||
Net changes in other noncurrent assets and liabilities | (2,229 | ) | 35 | ||||
Net cash provided by (used in) operations | 33,911 | (33,791 | ) | ||||
Investing activities: | |||||||
Property, plant and equipment additions | (124,360 | ) | (32,274 | ) | |||
Proceeds from sale of boat purchase options | - | 20,736 | |||||
Proceeds from sale of investments | - | 7,701 | |||||
Proceeds from disposals of property, plant and equipment | 8,622 | 816 | |||||
Net cash used in investing activities | (115,738 | ) | (3,021 | ) | |||
Financing activities: | |||||||
Proceeds from borrowings | - | 12,589 | |||||
Repayments of borrowings | (18,707 | ) | (18,707 | ) | |||
Payment of cash dividends | (27,435 | ) | (26,935 | ) | |||
Proceeds from stock option and convertible debenture plans | 5,285 | 12,466 | |||||
Net cash used in financing activities | (40,857 | ) | (20,587 | ) | |||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (122,684 | ) | (57,399 | ) | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 675,903 | 465,977 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 553,219 | $ | 408,578 | |||
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