| CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) | ||
| In Thousands | Sep. 30, 2009
| Dec. 31, 2008
|
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $681,107 | $222,428 |
| Receivables - trade and other | 361,167 | 484,962 |
| Inventories - raw materials and supplies | 318,244 | 337,503 |
| Inventories - work-in-progress | 161,826 | 213,177 |
| Inventories - finished goods | 715 | 749 |
| Prepaid expenses and other current assets | 84,195 | 59,466 |
| Deferred tax assets - net | 43,647 | 50,902 |
| Total current assets | 1,650,901 | 1,369,187 |
| PROPERTY, PLANT AND EQUIPMENT - at cost: | ||
| Drilling equipment | 3,674,265 | 3,503,590 |
| Manufacturing plant and equipment | 250,107 | 249,725 |
| Construction in progress | 653,125 | 425,182 |
| Other property and equipment | 140,349 | 126,915 |
| Property, plant and equipment - gross | 4,717,846 | 4,305,412 |
| Less accumulated depreciation and amortization | 1,277,839 | 1,157,884 |
| Property, plant and equipment - net | 3,440,007 | 3,147,528 |
| Other assets | 91,674 | 32,177 |
| TOTAL ASSETS | 5,182,582 | 4,548,892 |
| CURRENT LIABILITIES: | ||
| Current maturities of long-term debt | 64,922 | 64,922 |
| Accounts payable - trade | 118,275 | 235,048 |
| Deferred revenues | 156,753 | 174,086 |
| Billings in excess of costs and estimated profits on uncompleted contracts | 40,684 | 57,119 |
| Accrued compensation and related employee costs | 60,613 | 108,060 |
| Accrued income taxes | 1,479 | 58,317 |
| Other current liabilities | 49,377 | 47,090 |
| Total current liabilities | 492,103 | 744,642 |
| Long-term debt - less current maturities | 801,162 | 355,560 |
| Other liabilities | 427,115 | 362,026 |
| Deferred income taxes - net | 490,135 | 426,848 |
| STOCKHOLDERS' EQUITY | ||
| Common Stock | 14,233 | 14,141 |
| Additional paid-in capital | 1,069,106 | 1,063,202 |
| Retained earnings | 2,108,697 | 1,802,022 |
| Cost of treasury shares | (2,953) | (2,533) |
| Accumulated other comprehensive loss | (217,016) | (217,016) |
| Total stockholders' equity | 2,972,067 | 2,659,816 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $5,182,582 | $4,548,892 |
| PARENTHETICAL DATA TO THE CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) | ||
| Sep. 30, 2009
| Dec. 31, 2008
| |
| Preferred stock, par value per share | 1 | 1 |
| Preferred stock, shares authorized | 1,509,606 | 1,509,606 |
| Preferred stock, shares outstanding | 0 | 0 |
| Preferred stock, shares issued | 0 | 0 |
| Common stock, par value per share | 0.125 | 0.125 |
| Common stock, shares authorized | 150,000,000 | 150,000,000 |
| Common stock, shares issued | 113,860,569 | 113,115,830 |
| Treasury shares | 109,623 | 79,948 |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $) | ||||
| In Thousands, except Per Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
| REVENUES: | ||||
| Drilling services | $258,394 | $357,143 | $959,571 | $1,064,944 |
| Manufacturing sales and services | 135,027 | 169,915 | 410,818 | 534,745 |
| Total revenues | 393,421 | 527,058 | 1,370,389 | 1,599,689 |
| COSTS AND EXPENSES: | ||||
| Drilling services (excluding items shown below) | 121,238 | 163,330 | 403,459 | 483,107 |
| Manufacturing sales and services (excluding items shown below) | 116,949 | 149,174 | 355,145 | 454,755 |
| Depreciation and amortization | 43,747 | 36,230 | 126,855 | 102,782 |
| Selling, general and administrative | 24,094 | 27,595 | 73,390 | 85,767 |
| Loss (gain) on disposals of property and equipment | 305 | (21,447) | (4,336) | (28,329) |
| Total costs and expenses | 306,333 | 354,882 | 954,513 | 1,098,082 |
| INCOME FROM OPERATIONS | 87,088 | 172,176 | 415,876 | 501,607 |
| OTHER INCOME (EXPENSE): | ||||
| Interest expense | (10,810) | (4,456) | (16,410) | (14,351) |
| Less interest capitalized | 7,348 | 4,456 | 12,455 | 13,624 |
| Interest income | 441 | 1,081 | 973 | 5,445 |
| Other - net | 2,303 | (1,924) | 6,139 | (680) |
| Total other income (expense) - net | (718) | (843) | 3,157 | 4,038 |
| INCOME BEFORE INCOME TAXES | 86,370 | 171,333 | 419,033 | 505,645 |
| Provision for income taxes | 7,978 | 57,219 | 112,358 | 172,298 |
| NET INCOME | $78,392 | $114,114 | $306,675 | $333,347 |
| PER SHARE AMOUNTS: | ||||
| Net income - basic | 0.69 | 1.01 | 2.7 | 2.96 |
| Net income - diluted | 0.69 | $1 | 2.7 | 2.94 |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) | ||
| In Thousands | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
| Net income | $306,675 | $333,347 |
| Adjustments to reconcile net income to net cash provided by operations: | ||
| Depreciation and amortization | 126,855 | 102,782 |
| Deferred income taxes | 70,542 | 38,004 |
| Provision for pension and postretirement benefits | 32,148 | 24,321 |
| Stock-based compensation expense | 9,571 | 10,330 |
| Postretirement benefit claims paid | (2,689) | (2,084) |
| Loss (gain) on disposals of property and equipment | (4,336) | (28,329) |
| Estimated net benefits from income tax claims | (25,057) | 0 |
| Contributions to pension plans | (34,487) | (23,576) |
| Changes in current assets and liabilities: | ||
| Receivables - trade and other | 129,815 | 61,062 |
| Inventories | 65,578 | (143,848) |
| Prepaid expenses and other current assets | (24,729) | (4,503) |
| Accounts payable | (130,778) | 72,091 |
| Accrued income taxes | (56,838) | (18,369) |
| Deferred revenues | (17,333) | 66,625 |
| Billings in excess of costs and estimated profits on uncompleted contracts | (16,435) | (59,701) |
| Other current liabilities | (11,348) | 8,988 |
| Net changes in other noncurrent assets and liabilities | (8,191) | (3,556) |
| Net cash provided by operations | 408,963 | 433,584 |
| Net cash used in investing activities: | ||
| Capital expenditures | (393,223) | (618,541) |
| Proceeds from disposals of property, plant and equipment | 5,689 | 53,455 |
| Change in restricted cash balance | 0 | 50,000 |
| Net cash used in investing activities | (387,534) | (515,086) |
| Net cash used in financing activities: | ||
| Proceeds from borrowings, net of issue costs | 491,729 | 80,000 |
| Repayments of borrowings | (51,168) | (131,168) |
| Payment of cash dividends | 0 | (33,713) |
| Proceeds from stock option and convertible debenture plans and other | 251 | 32,646 |
| Excess tax benefits from stock-based compensation | (3,562) | 1,999 |
| Net cash provided by (used in) financing activities | 437,250 | (50,236) |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 458,679 | (131,738) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 222,428 | 284,458 |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $681,107 | $152,720 |
| GENERAL | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| General - Organization, Consolidation and Presentation of Financial Statements | The condensed consolidated financial statements of Rowan Companies, Inc. (Rowan or the Company) included in this Form 10-Q have been prepared without audit in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission.Certain information and notes have been condensed or omitted as permitted by those rules and regulations.Rowan believes that the disclosures included herein are adequate, but suggests that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and related notes included in the Companys Annual Report on Form 10-K for the year ended December 31, 2008. Rowan believes the accompanying unaudited condensed consolidated financial statements contain all adjustments, which are of a normal recurring nature unless otherwise noted, necessary for a fair statement of the results for the interim periods presented.Rowans results of operations and cash flows for the interim periods are not necessarily indicative of results to be expected for the full year. The condensed consolidated financial statements of Rowan Companies, Inc. (Rowan or the Company) included in this Form 10-Q have been prepared without audit in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission.Certain information and notes have been condensed or omitted as permitted by those rules and regulations.Rowan believes that the disclosures included herein are adequate, but suggests that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and related notes included in the Companys Annual Report on Form 10-K for the year ended December 31, 2008. Rowan believes the accompanying unaudited condensed consolidated financial statements contain all adjustments, which are of a normal recurring nature unless otherwise noted, necessary for a fair statement of the results for the interim periods presented.Rowans results of operations and cash flows for the interim periods are not necessarily indicative of results to be expected for the full year. |
| General - Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Recently Adopted Accounting Standards In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 168, The FASB Accounting Standards Codification and Hierarchy of Generally Accepted Accounting Principles, which establishes the Accounting Standards Codification (ASC) as the authoritative source of U.S. GAAP to be applied to nongovernmental entities.On the effective date, the ASC superseded all then-existing non-SEC accounting and reporting standards, with certain limited exceptions.Concurrently, all nongrandfathered, non-SEC accounting literature not included in the ASC was deemed nonauthoritative.The ASC is a topically based model organized by topic number.In the future, ASC topics will by updated by Accounting Standards Updates (ASUs), which will replace guidance previously issued as FASB Statements, Interpretations, Staff Positions and other non-SEC GAAP.Rowan adopted the provisions of SFAS No. 168 (ASC 105 under the codification) during the third quarter of 2009.Adoption had no material impact on the Companys financial statements. In May 2009, the FASB issued SFAS No. 165, Subsequent Events.SFAS No. 165 (ASC 855) establishes general standards of accounting and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued, and is effective for interim or annual periods ending after June 15, 2009.Rowan adopted the provisions of ASC 855 during the second quarter of 2009.Adoption had no material impact on the Companys financial statements.(See Note 13.) In April 2009, the FASB issued FASB Staff Position (FSP) No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (ASC 820-10-50), which expands the fair value disclosures required for financial instruments to interim periods for publicly traded entities.ASC 820-10-50 is effective for interim and annual periods ending after June 15, 2009.Rowan adopted the provisions of ASC 820-10-50 during the second quarter of 2009.Adoption had no material impact on the Companys financial statements.(See Note 12.) |
| SEGMENT INFORMATION | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Segment Information | Rowan has three principal operating segments Drilling Services, Drilling Products and Systems, and Mining, Forestry and Steel Products.The Drilling Services segment provides onshore and offshore oil and gas contract drilling services on a daily-rate basis.The Drilling Products and Systems segment manufactures equipment and parts for the drilling industry featuring jack-up rigs, rig kits and related components and parts, mud pumps, drawworks, top drives, rotary tables, other rig equipment, variable-speed motors, drives and other electrical components.The Mining, Forestry and Steel Products segment manufactures large-wheeled mining and timber equipment and related parts, and carbon and alloy steel and steel plate.The Drilling Products and Systems and Mining, Forestry and Steel Products segments operate under the Companys wholly owned subsidiary, LeTourneau Technologies, Inc (LTI). 5 Table of Contents ROWAN COMPANIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table presents certain financial information by operating segment for the three and nine months ended September 30, 2009 and 2008 (in millions): Three Months Nine Months Ended September 30, Ended September 30, 2009 2008 2009 2008 Revenues: Drilling Services $ 258.4 $ 357.1 $ 959.6 $ 1,064.9 Manufacturing: Drilling Products and Systems 177.6 189.4 464.0 618.4 Mining, Forestry and Steel Products 41.5 59.0 139.5 174.5 Eliminations (84.1 ) (78.4 ) (192.7 ) (258.1 ) Total Manufacturing 135.0 170.0 410.8 534.8 Total revenues from external customers $ 393.4 $ 527.1 $ 1,370.4 $ 1,599.7 Income from operations: Drilling Services $ 81.1 $ 166.9 $ 396.1 $ 468.5 Manufacturing: Drilling Products and Systems 29.5 12.8 59.7 66.5 Mining, Forestry and Steel Products 4.9 7.3 18.9 16.1 Eliminations (28.4 ) (14.8 ) (58.8 ) (49.5 ) Total Manufacturing 6.0 5.3 19.8 33.1 Total income from operations $ 87.1 $ 172.2 $ 415.9 $ 501.6 |
| EARNINGS PER SHARE | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Earnings Per Share | A reconciliation of basic and diluted income per share for the three and nine months ended September 30, 2009 and 2008 follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Average common shares outstanding 113,859 113,055 113,530 112,482 Dilutive securities: Employee and director stock options 74 727 54 847 Convertible debentures - 8 - 130 Average shares for diluted calculations 113,933 113,790 113,584 113,459 Net income $ 78,392 $ 114,114 $ 306,675 $ 333,347 Net income per share: Basic $ .69 $ 1.01 $ 2.70 $ 2.96 Diluted $ .69 $ 1.00 $ 2.70 $ 2.94 6 Table of Contents ROWAN COMPANIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table sets forth securities excluded from the diluted calculations because they were antidilutive for the periods indicated.Options and other potentially dilutive securities are antidilutive when the average stock market price during the period is less than the exercise price.Such securities could potentially dilute earnings per share in the future (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Employee and director stock options 1,473 63 1,792 63 Stock appreciation rights 88 - 2 - Convertible debentures 35 - 35 - Total potentially dilutive securities 1,596 63 1,829 63 |
| PENSION AND OTHER POSTRETIREMENT BENEFITS | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Pension and Other Postretirement Benefits | Rowan sponsors defined benefit pension plans covering substantially all of its employees, and provides health care and life insurance benefits upon retirement for certain employees. Net periodic pension cost recognized for the three and nine months ended September 30, 2009 and 2008 included the following components (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Service cost $ 3,126 $ 4,033 $ 12,031 $ 10,774 Interest cost 7,562 8,356 24,280 23,656 Expected return on plan assets (7,297 ) (7,681 ) (21,684 ) (22,243 ) Recognized actuarial loss 5,531 2,698 13,587 6,664 Amortization of prior service cost (2,444 ) (64 ) (2,569 ) (191 ) Curtailment loss 71 - 71 - Total net pension cost $ 6,549 $ 7,342 $ 25,716 $ 18,660 Other postretirement benefit cost recognized for the three and nine months ended September 30, 2009 and 2008 included the following components (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Service cost $ 637 $ 509 $ 1,891 $ 1,018 Interest cost 1,258 1,105 3,732 2,209 Recognized actuarial loss 157 68 467 138 Amortization of transition obligation 167 164 495 329 Amortization of prior service cost (52 ) (50 ) (153 ) (101 ) Total other postretirement benefit cost $ 2,167 $ 1,796 $ 6,432 $ 3,593 7 Table of Contents ROWAN COMPANIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) Effective July 1, 2009, the Company amended the benefit formula for its largest pension plan for active employees who were earning benefits in the plan prior to January 1, 2008.The effect of the change through September 30, 2009, was to reduce third quarter pension expense by approximately $3.6 million, or $0.02 per share net of tax.Pension expense for the fourth quarter is expected to be reduced by a similar amount. During the nine months ended September 30, 2009, Rowan contributed $37.2 million to its pension and other postretirement benefit plans and expects to make additional contributions to such plans totaling approximately $2.7 million during the remainder of 2009. |
| CASH AND CASH EQUIVALENTS | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Cash and Cash Equivalents | Certain of Rowans debt securities are government-guaranteed through the Title XI program of U.S. Department of Transportations Maritime Administration (MARAD).At the Companys request, MARAD waived certain windstorm insurance coverage requirements under the loan agreements, for which the Company agreed to maintain a minimum unrestricted cash balance, which is currently $25 million.Rowan remains subject to restrictions on the use of certain insurance proceeds should the Company experience future windstorm losses.Each of these security provisions will be released by MARAD should Rowan be able to obtain windstorm coverage that satisfies the original terms of its debt agreements. |
| CONSTRUCTION CONTRACTS IN PROCESS | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Construction Contracts in Process | The following table summarizes the status of the Drilling Products and Systems segments long-term construction contracts in process.Payments, revenues and costs are cumulative from inception of the contract through the date indicated.Payments include those received for contracts in progress or not yet begun and completed contracts with outstanding collections (in millions): September 30, December 31, 2009 2008 Total contract value of long-term contracts in process or not yet begun $ 239.4 $ 290.7 Payments received 147.8 168.6 Revenues recognized 108.9 119.7 Costs recognized 67.9 74.5 Payments received in excess of revenues recognized 38.9 48.9 Billings in excess of costs and estimated profits on uncompleted contracts, included in other current liabilities $ 40.7 $ 57.1 Costs and estimated profits in excess of billings on uncompleted contracts, included in other current assets $ 1.8 $ 8.2 During the three months ended September 30, 2009, Rowan recognized approximately $22.8 million of manufacturing revenues and $14.7 million of manufacturing costs related to long-term construction contracts on the percentage-of-completion basis, as compared to $37.0 million of revenues and $25.4 million of costs for the comparable period of 2008. During the nine months ended September 30, 2009, Rowan recognized approximately $73.4 million of manufacturing revenues and $50.2 million of manufacturing costs on the percentage-of-completion basis, as compared to $117.5 million of revenues and $78.3 million of costs for the comparable period of 2008. |
| LONG TERM DEBT | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Long-term debt | On July 21, 2009, Rowan issued $500 million aggregate principal amount of 7.875% Senior Notes due 2019 (the Senior Notes), in an SEC registered offering at a price to the public of 99.341% of the principal amount.After deduction for underwriters discount and offering expenses, the Company received net proceeds of approximately $492 million from the sale of these notes, and the Company expects to use those net proceeds for general corporate purposes.The Senior Notes will mature on August 1, 2019.Interest on the Senior Notes is payable semi-annually on February 1 and August 1 of each year, beginning February 1, 2010, to the holders of record on the immediately preceding January 15 or July 15, respectively. The Senior Notes are general unsecured, senior obligations. Accordingly, they rank: senior in right of payment to all of the Companys subordinated indebtedness, if any; pari passu in right of payment with any of the Companys existing and future unsecured indebtedness that is not by its terms subordinated to the Senior Notes, including any indebtedness under the Companys senior revolving credit facility (other than letter of credit reimbursement obligations that are secured by cash deposits); effectively junior to the Companys existing and future secured indebtedness (including indebtedness under its secured notes issued pursuant to the MARAD Title XI program to finance several offshore drilling rigs), in each case, to the extent of the value of the Companys assets constituting collateral securing that indebtedness; and effectively junior to all existing and future indebtedness and other liabilities of the Companys subsidiaries (other than indebtedness and liabilities owed to the Company). The Company may, at its option, redeem any or all of the Senior Notes at any time for an amount equal to 100% of the principal amount to be redeemed plus a make-whole premium and accrued and unpaid interest to the redemption date.The Company may purchase Senior Notes in the open market, or otherwise, at any time without restriction under the indenture.The Company is not required to make mandatory redemption or sinking fund payments with respect to the Senior Notes. The indenture governing the Senior Notes contains covenants that, among other things, limit the ability of the Company to (a) create liens that secure debt, (b) engage in sale and leaseback transactions and (c) merge or consolidate with another company. On August 4, 2009, Rowan fixed the interest rate for the remainder of the term on $65.7 million of MARAD debt collateralized by the offshore rig, Bob Keller, at an annual rate of 3.525%.Prior to that time, the interest rate floated based on a short-term commercial paper rate plus 0.15%. |
| COMMITMENTS | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Commitments | The following table presents the status of all of the Companys rigs under construction as of September 30, 2009, and reflects the Companys decision in October 2009 to resume construction of the EXL #4 (see Note 13).Amounts include capitalized interest (in millions): Total estimated project costs Total costs incurred through September 30, 2009 Projected costs for the remainder of 2009 and 2010 Projected costs in 2011 and 2112 Ralph Coffman (240C) $ 245 $ 212 $ 33 $ - Joe Douglas (240C) 257 69 116 72 EXL #1 190 140 50 - EXL #2 191 117 74 - EXL #3 192 85 107 - EXL #4 192 30 56 106 Total rigs under construction $ 1,267 $ 653 $ 436 $ 178 Rowan periodically employs letters of credit or other bank-issued guarantees in the normal course of its businesses, and had unused letters of credit of approximately $42.4 million at September 30, 2009. |
| LEGAL PROCEEDINGS | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Legal Proceedings | During 2005, Rowan lost four offshore rigs, including the Rowan-Halifax, and incurred significant damage on a fifth as a result of Hurricanes Katrina and Rita.The Company had leased the Rowan-Halifax under a charter agreement that commenced in 1984 and was scheduled to expire in March 2008.The rig was insured for $43.4 million, a value that Rowan believes to be more than sufficient to satisfy its obligations under the charter agreement, and by a margin sufficient to cover the $6.3 million carrying value of Rowan equipment installed on the rig.However, the parties holding interests in the rig under the charter claimed that the rig should have been insured for its fair market value and sought recovery from Rowan for compensation above the insured value.Thus, Rowan assumed no insurance proceeds related to the Rowan-Halifax and recorded a charge during 2005 for the full carrying value of its equipment.On November 3, 2005, the Company filed a declaratory judgment action styled Rowan Companies, Inc. vs. Textron Financial Corporation and Wilmington Trust Company as Owner Trustee of the Rowan-Halifax 116-C Jack-Up Rig in the 215th Judicial District Court of Harris County, Texas. The owner interests filed a counterclaim for a variety of relief, claiming a right to payment under the charter based on a post-casualty rig valuation of approximately $83 million.The insurance proceeds were placed in escrow.The district court ultimately granted judgment against Rowan for the difference between (a) what Rowan had already paid to the Owner Trustee out of the escrowed insurance proceeds and (b) that rig valuation.On March 31, 2009, the Court of Appeals for the 14th District of Texas reversed this judgment, holding that the Companys interpretation of the charter was substantially correct, but directing Rowan to pay additional amounts due under the charter.The Company has since made this payment out of the escrowed insurance proceeds.In addition, the Court of Appeals remanded the case for further proceedings in the district court to resolve additional issues and to determine the parties respective rights to the balance of the escrowed insurance proceeds, which is currently $21.4 million.The owner interests filed a motion for rehearing of the Court of Appeals decision. On October 8, 2009, the Court of Appeals denied the motion, but issued a substitute opinion to clarify the scope of the remand.The Court of Appeals again held that the trial court is to resolve issues concerning the proper disposition of excess insurance proceeds.The Court of Appeals further held that the owner interests claim that Rowan breached the charter agreement by failing to maintain adequate insurance remains to be decided by the trial court.The owner interests have filed another motion for rehearing, which motion remains pending.The Company believes that no further payment is owed to the opposing parties under the charter and intends to pursue that position vigorously in all subsequent court proceedings. 10 Table of Contents ROWAN COMPANIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) During 2004, Rowan learned that the Env |
| STOCK-BASED COMPENSATION | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Stock-Based Compensation | In May 2009, stockholders of the Company approved the adoption of the 2009 Rowan Companies, Inc. Incentive Plan (the 2009 Plan), which authorizes the Compensation Committee of the Companys Board of Directors to grant employees and non-employee directors, through May 2019, incentive awards covering up to 4,500,000 shares of Rowan common stock.The awards may be in the form of stock options, stock appreciation rights (SARs), restricted stock awards (RSAs), restricted stock units (RSUs), and performance-based awards, in which the number of shares issued is dependent on the achievement of certain long-term performance goals over a specified period.The 2009 Plan replaced the 2005 Rowan Companies, Inc. Long-Term Incentive Plan.All awards outstanding under the 2005 Plan at the effective date of the 2009 Plan will remain outstanding.All grants after adoption are made under the 2009 Plan. On May 5, 2009, the Company granted RSAs, SARs, and RSUs covering a total of 1,216,433 shares, which generally vest over a three-year service period, with a fair value aggregating approximately $16.7 million.Fair value, net of estimated forfeitures, was $16.1 million, which will be amortized over a weighted-average vesting period of 2.9 years from the grant date. At September 30, 2009, Rowan had approximately $24.2 million of unrecognized future stock-based compensation expense, which is expected to be recognized over a remaining weighted-average period of 2.1 years. |
| INCOME TAXES | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Income Taxes | In the second quarter of 2009, the Company recognized an $8 million tax benefit ($0.07 per diluted share) as a result of a recent third-party tax case that provides a more favorable tax treatment for certain foreign contracts entered into in prior years, and lowered its estimated full-year 2009 effective tax rate to 31.4% from 33.6%. During the third quarter of 2009, the Company completed its assessment of the impact of the case as to all open tax years and, as a result, recognized an additional $17 million tax benefit ($0.15 per diluted share) in the quarter, which further lowered the Companys estimated full-year 2009 effective tax rate to 27.9%.The Company has deferred recognition of a remaining $50 million estimated benefit in accordance with FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (ASC 740-10).In connection with the above, the Company has recorded a long-term receivable, which is included in Other Assets on the Condensed Consolidated Balance Sheet at September 30, 2009, for the gross claim of approximately $75 million and a long-term liability, which is included in Other Liabilities, of approximately $50 million. |
| OTHER FINANCIAL STATEMENT DISCLOSURES | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Other Financial Statement Disclosures - Fair Value Disclosures | Fair Values of Financial Instruments The carrying amounts of the Companys cash and cash equivalents, trade receivables and payables and floating-rate debt approximated their fair values due to their short maturity or variable interest-rate terms, as applicable.As of September 30, 2009, the fair values of the Companys fixed-rate notes, which had an aggregate carrying value of $741.2 million, approximated $784.5 million.As of December 31, 2008, the fair values of the $216.5 million carrying value of fixed-rate notes approximated $244 million.Fair values of the Companys fixed-rate notes were estimated based on quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. |
| Other Financial Statement Disclosures - Cash Flow, Supplemental Information | Supplemental Cash Flow Information Interest payments totaled $10.5 million and $17.5 million for the nine months ended September 30, 2009 and 2008, respectively.Interest capitalized totaled $12.5 million and $13.6 million for the same periods of 2009 and 2008, respectively.Tax payments (net of refunds) were $131.8 million and $150.9 million for the nine months ended September 30, 2009 and 2008, respectively.Accrued capital expenditures, which are excluded from capital expenditures in the Condensed Consolidated Statement of Cash Flows until settlement, were $13.3 million and $13.8 million at September 30, 2009 and 2008, respectively. |
| Other Financial Statement Disclosures - Comprehensive Income | Other Comprehensive Income Rowan had no items of other comprehensive income during the three or nine months ended September 30, 2009 or 2008. |
| SUBSEQUENT EVENTS | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| Subsequent Events | On October 5, 2009, the Company announced that it will resume construction of its fourth EXL class rig at the Keppel AmFELS, Inc. shipyard in Brownsville, Texas, with delivery expected in the first quarter of 2012. The Company had suspended construction in early 2009 due to liquidity concerns and a weakening jack-up drilling market.The decision to resume construction had no effect on amounts recognized in the Companys financial statements. Rowan evaluated events and transactions subsequent to September 30, 2009, through November 6, 2009, the date that these financial statements were issued.There were no other events or transactions that occurred during that period requiring recognition or disclosure in the financial statements. |
| Document Information | |
| 9 Months Ended
Sep. 30, 2009 USD / shares | |
| Document Information [Line Items] | |
| Document Type | 10-Q |
| Document Period End Date | 2009-09-30 |
| Amendment Flag | false |
| Entity Information (USD $) | |||
| In Thousands, except Share data | 9 Months Ended
Sep. 30, 2009 | Oct. 31, 2009
| Jun. 30, 2008
|
| Entity Information [Line Items] | |||
| Entity Registrant Name | ROWAN COMPANIES INC | ||
| Entity Central Index Key | 0000085408 | ||
| Current Fiscal Year End Date | --12-31 | ||
| Entity Well-known Seasoned Issuer | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Current Reporting Status | Yes | ||
| Entity Filer Category | Large Accelerated Filer | ||
| Entity Public Float | $5,200,000 | ||
| Entity Common Stock, Shares Outstanding | 113,750,946 |
