EXHIBIT 99
News Release
Rowan Companies, Inc.
2800 Post Oak Boulevard, Suite 5450
Houston, Texas 77056 (713) 621-7800
ROWAN REPORTS RECORD REVENUES AND PROFITS
FOR IMMEDIATE RELEASE 60; February 28, 2008
HOUSTON, TEXAS – For the three months ended December 31, 2007, Rowan Companies, Inc. (RDC – NYSE) generated record net income of $138.5 million or $1.23 per share, compared to $62.4 million or 56¢ per share in the fourth quarter of 2006 and $130.8 million or $1.16 per share in the third quarter of 2007. Revenues were a record $623.6 million in the fourth quarter of 2007, compared to $410.9 million in the fourth quarter of 2006 and $502.2 million in the third quarter of 2007.
The fourth quarter 2007 results included $0.7 million or less than 1¢ per share of gains on asset sales, compared to $1.1 million or 1¢ per share in the third quarter of 2007. There were no significant asset sales in the fourth quarter of 2006, though that period included $12.8 million or 10¢ per share of charges related to environmental matters.
For the year ended December 31, 2007, the Company generated record net income of $483.8 million or $4.31 per share on record revenues of $2.1 billion, compared to net income of $318.2 million or $2.85 per share on revenues of $1.5 billion during 2006. The prior-year results included approximately $1.2 million, or 1¢ per share, of after-tax income from the Company’s discontinued aviation operations which were sold in 2004.
Rowan’s offshore rig utilization was 97% during the fourth quarter of 2007, compared to 81% in the fourth quarter of 2006 and 99% in the third quarter of 2007. The Company’s average offshore day rate was $164,300 during the fourth quarter of 2007, up by $19,900 or 14% from the fourth quarter of 2006 and by $6,100 or 4% from the third quarter of 2007. Rowan’s land rig utilization was 94% during the fourth quarter of 2007, compared to 95% in the fourth quarter of 2006 and 96% in the third quarter of 2007, though the number of rig operating days increased between periods. The Company’s average land rig day rate was $23,000 during the fourth quarter of 2007, up by $300 or 1% from the fourth quarter of 2006, but down by $300 or 1% from the third quarter of 2007.
Rowan’s drilling operations generated record revenues of $372.4 million during the fourth quarter of 2007, up by $91.8 million or 33% from the fourth quarter of 2006 and by $3.6 million or 1% from the third quarter of 2007. The Company’s income from drilling operations was $170.6 million or 46% of revenues during the fourth quarter of 2007, up by 91% from the fourth quarter of 2006, but down by 7% from the third quarter of 2007. The Company’s current backlog of drilling contracts is estimated to be approximately $2.1 billion.
Rowan’s combined manufacturing operations generated record revenues of $251.2 million during the fourth quarter of 2007, up by $120.9 million or 93% from the fourth quarter of 2006 and by $117.8 million or 88% from the third quarter of 2007. The Company’s income from manufacturing operations improved to $38.3 million or 15% of revenues during the fourth quarter of 2007, up by 312% from the fourth quarter of 2006 and by 162% from the third quarter of 2007.
Danny McNease, Chairman and Chief Executive Officer, commented, “Rowan’s fourth quarter operating results concluded another record year for the Company. By just about any financial measure, our performance in 2007 was the best in the Company’s 85-year history. Our backlog of business, which currently approaches $2.5 billion, together with our aggressive strategic growth plan, suggest that even better times are ahead for Rowan.”
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. 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 Millions) | ||||||||
DECEMBER 31 | ||||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 284.5 | $ | 258.0 | ||||
Accounts receivable | 478.0 | 419.0 | ||||||
Inventories | 456.4 | 345.1 | ||||||
Other current assets | 84.1 | 80.7 | ||||||
Total current assets | 1,303.0 | 1,102.8 | ||||||
Restricted cash | 50.0 | 156.1 | ||||||
Property, plant and equipment - net | 2,487.8 | 2,133.2 | ||||||
Other assets | 34.5 | 43.3 | ||||||
TOTAL | $ | 3,875.3 | $ | 3,435.4 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current maturities of long-term debt | $ | 64.9 | $ | 64.9 | ||||
Accounts payable | 100.9 | 141.2 | ||||||
Other current liabilities | 329.8 | 310.6 | ||||||
Total current liabilities | 495.6 | 516.7 | ||||||
Long-term debt | 420.5 | 485.4 | ||||||
Other liabilities | 610.8 | 559.3 | ||||||
Stockholders' equity | 2,348.4 | 1,874.0 | ||||||
TOTAL | $ | 3,875.3 | $ | 3,435.4 |
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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 | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
REVENUES | $ | 623.6 | $ | 410.9 | $ | 2,095.0 | $ | 1,510.7 | ||||||||
COSTS AND EXPENSES: | ||||||||||||||||
Operations | 355.8 | 258.2 | 1,187.9 | 877.1 | ||||||||||||
Depreciation and amortization | 32.5 | 24.6 | 118.8 | 90.0 | ||||||||||||
Selling, general and administrative | 27.1 | 20.3 | 94.9 | 78.2 | ||||||||||||
Gain on sale of property and equipment | (0.7 | ) | - | (40.5 | ) | (29.3 | ) | |||||||||
Charge for environmental fine | - | 9.0 | - | 9.0 | ||||||||||||
Total | 414.7 | 312.1 | 1,361.1 | 1,025.0 | ||||||||||||
INCOME FROM OPERATIONS | 208.9 | 98.8 | 733.9 | 485.7 | ||||||||||||
Net interest and other income | 1.7 | 0.8 | 5.2 | 7.7 | ||||||||||||
INCOME BEFORE INCOME TAXES | 210.6 | 99.6 | 739.1 | 493.4 | ||||||||||||
Provision for income taxes | 72.1 | 37.2 | 255.3 | 176.4 | ||||||||||||
INCOME FROM CONTINUING OPERATIONS | $ | 138.5 | $ | 62.4 | $ | 483.8 | $ | 317.0 | ||||||||
Income from discontinued operations, net of tax | - | - | - | 1.2 | ||||||||||||
NET INCOME | $ | 138.5 | $ | 62.4 | $ | 483.8 | $ | 318.2 | ||||||||
PER SHARE AMOUNTS: | ||||||||||||||||
Income from continuing operations | $ | 1.23 | $ | .56 | $ | 4.31 | $ | 2.84 | ||||||||
Income from discontinued operations, net of tax | $ | - | $ | - | $ | - | $ | .01 | ||||||||
Net income | $ | 1.23 | $ | .56 | $ | 4.31 | $ | 2.85 | ||||||||
AVERAGE DILUTED SHARES | 112.6 | 111.6 | 112.3 | 111.8 | ||||||||||||
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 | ||||||||
2007 | 2006 | |||||||
CASH PROVIDED BY (USED IN): | ||||||||
Operations: | ||||||||
Net income | $ | 483.8 | $ | 318.2 | ||||
Adjustments to reconcile net income to net cash provided by operations: | ||||||||
Depreciation and amortization | 118.8 | 90.0 | ||||||
Deferred income taxes | 51.2 | 94.3 | ||||||
Gain on sale of assets | (40.5 | ) | (30.5 | ) | ||||
Other - net | 33.0 | 47.3 | ||||||
Net changes in current assets and liabilities | (225.4 | ) | (221.6 | ) | ||||
Net changes in other noncurrent assets and liabilities | 11.7 | (5.6 | ) | |||||
Net cash provided by operations | 432.6 | 292.1 | ||||||
Investing activities: | ||||||||
Property, plant and equipment additions | (462.6 | ) | (479.1 | ) | ||||
(Increase) decrease in Restricted cash balance | 106.1 | (156.1 | ) | |||||
Proceeds from disposals of assets | 45.8 | 39.1 | ||||||
Net cash used in investing activities | (310.7 | ) | (596.1 | ) | ||||
Financing activities: | ||||||||
Repayments of borrowings | (64.9 | ) | (64.9 | ) | ||||
Payment of cash dividends | (44.4 | ) | (60.5 | ) | ||||
Net proceeds from equity compensation plans and other | 13.9 | 11.5 | ||||||
Net cash used in financing activities | (95.4 | ) | (113.9 | ) | ||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 26.5 | (417.9 | ) | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 258.0 | 675.9 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 284.5 | $ | 258.0 |
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ROWAN COMPANIES, INC. | ||||||||||||
SUPPLEMENTAL DRILLING INFORMATION | ||||||||||||
Unaudited (dollars in millions, except where otherwise indicated ) | ||||||||||||
THREE MONTHS ENDED | ||||||||||||
December 31, 2007 | September 30, 2007 | December 31, 2006 | ||||||||||
$ | % Revenues | $ | % Revenues | $ | % Revenues | |||||||
DRILLING OPERATIONS (a): | ||||||||||||
Revenues | $ | 372.4 | 100 | $ | 368.8 | 100 | $ | 280.6 | 100 | |||
Operating costs | (154.6) | (42) | (145.4) | (39) | (146.9) | (52) | ||||||
Depreciation and amortization expense | (27.1) | (7) | (25.3) | (7) | (21.3) | (8) | ||||||
Selling, general and administrative expenses (b) | (20.8) | (6) | (15.8) | (4) | (14.0) | (5) | ||||||
Gain on sale of property and equipment | 0.7 | 0 | 1.2 | 0 | 0.1 | 0 | ||||||
Charge for environmental fine | - | - | - | - | (9.0) | (3) | ||||||
Income from operations | $ | 170.6 | 46 | $ | 183.5 | 50 | $ | 89.5 | 32 | |||
OFFSHORE RIG DAYS: | ||||||||||||
Operating | 1,868 | 1,907 | 1,514 | |||||||||
Available | 1,932 | 1,932 | 1,860 | |||||||||
Utilization | 97% | 99% | 81% | |||||||||
LAND RIG DAYS: | ||||||||||||
Operating | 2,444 | 2,391 | 2,036 | |||||||||
Available | 2,596 | 2,484 | 2,148 | |||||||||
Utilization | 94% | 96% | 95% | |||||||||
AVERAGE DAY RATES (in thousands): | ||||||||||||
Gulf of Mexico rigs | $ | 133.3 | $ | 132.1 | $ | 140.1 | ||||||
Middle East rigs | 152.7 | 151.8 | 114.3 | |||||||||
North Sea rigs | 257.9 | 238.4 | 195.6 | |||||||||
All offshore rigs | 164.3 | 158.2 | 144.4 | |||||||||
Land rigs | 23.0 | 23.3 | 22.7 | |||||||||
(a) Amounts exclude effects of intercompany transactions. | ||||||||||||
(b) Amounts include corporate SG&A costs that are allocated between operating segments. | ||||||||||||
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ROWAN COMPANIES, INC. | |||||||||||||||||||
SUPPLEMENTAL MANUFACTURING INFORMATION | |||||||||||||||||||
Unaudited (dollars in millions) | |||||||||||||||||||
THREE MONTHS ENDED | |||||||||||||||||||
December 31, 2007 | September 30, 2007 | December 31, 2006 | |||||||||||||||||
$ | % Revenues | $ | % Revenues | $ | % Revenues | ||||||||||||||
MANUFACTURING OPERATIONS (a): | |||||||||||||||||||
Revenues | $ 251.2 | 100 | $ 133.4 | 100 | $ 130.3 | 100 | |||||||||||||
Operating costs | (201.2) | (80) | (107.5) | (81) | (111.3) | (85) | |||||||||||||
Depreciation and amortization expense | (5.4) | (2) | (4.5) | (3) | (3.3) | (3) | |||||||||||||
Selling, general and administrative expenses (b) | (6.3) | (3) | (6.7) | (5) | (6.3) | (5) | |||||||||||||
Gain (loss) on sale of property and equipment | - | - | (0.1) | (0) | (0.1) | (0) | |||||||||||||
Income from operations | $ 38.3 | 15 | $ 14.6 | 11 | $ 9.3 | 7 | |||||||||||||
REVENUES (a): | |||||||||||||||||||
Drilling Products and Systems | $ 182.3 | 73 | $ 83.7 | 63 | $ 80.9 | 62 | |||||||||||||
Mining, Forestry and Steel Products | 68.9 | 27 | 49.7 | 37 | 49.4 | 38 | |||||||||||||
Total | $ 251.2 | 100 | $ 133.4 | 100 | $ 130.3 | 100 | |||||||||||||
(a) Amounts exclude effects of intercompany transactions. | |||||||||||||||||||
(b) Amounts include corporate SG&A costs that are allocated between operating segments. |
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