Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 25, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ROWAN COMPANIES PLC | |
Entity Central Index Key | 85,408 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 125,420,778 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 761,423 | $ 484,228 |
Receivables - trade and other | 550,416 | 410,519 |
Prepaid expenses and other current assets | 30,294 | 26,528 |
Total current assets | 1,342,133 | 921,275 |
PROPERTY AND EQUIPMENT: | ||
Drilling equipment | 8,961,689 | 8,930,434 |
Other property and equipment | 137,680 | 137,659 |
Property and equipment - gross | 9,099,369 | 9,068,093 |
Less accumulated depreciation and amortization | 1,844,436 | 1,662,261 |
Property and equipment - net | 7,254,933 | 7,405,832 |
Other assets | 22,595 | 20,160 |
TOTAL ASSETS | 8,619,661 | 8,347,267 |
CURRENT LIABILITIES: | ||
Accounts payable - trade | 109,644 | 109,574 |
Deferred revenues | 23,619 | 33,062 |
Accrued liabilities | 174,883 | 186,035 |
Total current liabilities | 308,146 | 328,671 |
Long-term debt, less current portion | 2,645,367 | 2,692,419 |
Other liabilities | 348,676 | 357,923 |
Deferred income taxes - net | 190,680 | 195,795 |
Commitments and contingent liabilities (Note 4) | ||
SHAREHOLDERS' EQUITY: | ||
Class A Ordinary Shares, $0.125 par value, 125,974,717 and 125,947,424 shares issued at June 30, 2016, and December 31, 2015 | 15,747 | 15,743 |
Additional paid-in capital | 1,463,297 | 1,458,532 |
Retained earnings | 3,849,354 | 3,509,792 |
Cost of 556,139 and 1,129,440 treasury shares at June 30, 2016, and December 31, 2015, respectively | (7,251) | (12,223) |
Accumulated other comprehensive loss | (194,355) | (199,385) |
Total shareholders' equity | 5,126,792 | 4,772,459 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 8,619,661 | $ 8,347,267 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
SHAREHOLDERS' EQUITY: | ||
Treasury shares | 556,139 | 1,129,440 |
Common Class A [Member] | ||
SHAREHOLDERS' EQUITY: | ||
Common stock, par value (in dollars per share) | $ 0.125 | $ 0.125 |
Common stock, shares issued | 125,974,717 | 125,947,424 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
REVENUES | $ 611,861 | $ 508,736 | $ 1,112,041 | $ 1,055,775 |
COSTS AND EXPENSES: | ||||
Direct operating costs (excluding items below) | 207,485 | 253,944 | 412,317 | 509,678 |
Depreciation and amortization | 100,141 | 95,390 | 198,993 | 185,080 |
Selling, general and administrative | 26,111 | 31,158 | 53,041 | 58,744 |
Loss (gain) on disposals of property and equipment | 1,938 | 338 | 4,115 | (175) |
Material charges and other operating expenses | 0 | 5,000 | 0 | 5,000 |
Total costs and expenses | 335,675 | 385,830 | 668,466 | 758,327 |
Income (loss) from operations | 276,186 | 122,906 | 443,575 | 297,448 |
OTHER INCOME (EXPENSE): | ||||
Interest expense, net of interest capitalized | (38,249) | (30,840) | (77,173) | (63,586) |
Gain on extinguishment of debt | 1,787 | 0 | 2,364 | 0 |
Interest income | 449 | 435 | 893 | 590 |
Other - net | (644) | (80) | (3,221) | (1,121) |
Total other income (expense) - net | (36,657) | (30,485) | (77,137) | (64,117) |
INCOME (LOSS) BEFORE INCOME TAXES | 239,529 | 92,421 | 366,438 | 233,331 |
Provision for income taxes | 22,800 | 7,686 | 26,910 | 24,927 |
NET INCOME (LOSS) | $ 216,729 | $ 84,735 | $ 339,528 | $ 208,404 |
NET INCOME PER SHARE - BASIC (in dollars per share) | $ 1.73 | $ 0.68 | $ 2.71 | $ 1.67 |
NET INCOME PER SHARE - DILUTED (in dollars per share) | 1.72 | 0.68 | 2.70 | 1.67 |
CASH DIVIDENDS DECLARED PER SHARE (in dollars per share) | $ 0 | $ 0.1 | $ 0 | $ 0.2 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME | $ 216,729 | $ 84,735 | $ 339,528 | $ 208,404 |
OTHER COMPREHENSIVE INCOME: | ||||
Net reclassification adjustment for amounts recognized in net income as a component of net periodic benefit cost, net of income tax expense of $1,349 and $1,840 for the three months ended June 30, 2016 and 2015, and $2,698 and $3,648 for the six months ended June 30, 2016 and 2015, respectively | 2,515 | 3,413 | 5,030 | 6,799 |
COMPREHENSIVE INCOME (LOSS) | $ 219,244 | $ 88,148 | $ 344,558 | $ 215,203 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net reclassification adjustments for amounts recognized in net income as a component of net periodic benefit cost, tax expense | $ 1,349 | $ 1,840 | $ 2,698 | $ 3,648 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH PROVIDED BY OPERATIONS: | ||
Net income | $ 339,528 | $ 208,404 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and amortization | 198,993 | 185,241 |
Deferred income taxes | (5,211) | (12,571) |
Provision for pension and other postretirement benefits | 9,513 | 15,776 |
Share-based compensation expense | 17,523 | 16,370 |
Loss (gain) on disposals of property and equipment | 4,115 | (175) |
Other postretirement benefit claims paid | (4,856) | (2,358) |
Contributions to pension plans | (8,154) | (4,698) |
Noncash loss on debt extinguishment | 261 | 0 |
Contingent payment derivative | (6,382) | 0 |
Changes in current assets and liabilities: | ||
Receivables - trade and other | (139,897) | 47,292 |
Prepaid expenses and other current assets | (3,766) | (10,710) |
Accounts payable | 11,174 | 14,681 |
Accrued income taxes | 14,929 | 3,809 |
Deferred revenues | (9,443) | 4,913 |
Other current liabilities | (22,802) | (14,769) |
Net changes in other noncurrent assets and liabilities | (7,155) | (2,485) |
Net cash provided by operations | 388,370 | 448,720 |
CASH USED IN INVESTING ACTIVITIES: | ||
Capital expenditures | (64,395) | (616,398) |
Proceeds from disposals of property and equipment | 1,082 | 2,298 |
Net cash provided by (used in) investing activities | (63,313) | (614,100) |
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES: | ||
Proceeds from borrowings | 0 | 220,000 |
Reductions of long-term debt | (47,862) | (170,000) |
Dividends paid | 0 | (25,220) |
Net cash provided by (used in) financing activities | (47,862) | 24,780 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 277,195 | (140,600) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 484,228 | 339,154 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 761,423 | $ 198,554 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Class A ordinary shares/ Common stock [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Treasury shares [Member] | Accumulated other comprehensive income (loss) [Member] |
Balance at Dec. 31, 2014 | $ 4,691,399 | $ 15,604 | $ 1,436,910 | $ 3,466,993 | $ (7,990) | $ (220,118) |
Balance (in shares) at Dec. 31, 2014 | 124,564 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net shares issued (acquired) under share-based compensation plans | (3,166) | $ 139 | 397 | (3,702) | ||
Net shares issued (acquired) under share-based compensation plans (in shares) | 222 | |||||
Share-based compensation | 12,227 | 12,227 | ||||
Excess tax benefit (deficit) from share-based compensation plans | (2,322) | (2,322) | ||||
Retirement benefit adjustments, net of taxes | 6,799 | 6,799 | ||||
Dividends | (25,220) | (25,220) | ||||
Net income | 208,404 | 208,404 | ||||
Balance at Jun. 30, 2015 | 4,888,121 | $ 15,743 | 1,447,212 | 3,650,177 | (11,692) | (213,319) |
Balance (in shares) at Jun. 30, 2015 | 124,786 | |||||
Balance at Dec. 31, 2015 | 4,772,459 | $ 15,743 | 1,458,532 | 3,509,792 | (12,223) | (199,385) |
Balance (in shares) at Dec. 31, 2015 | 124,818 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net shares issued (acquired) under share-based compensation plans | (4,274) | $ 4 | (9,250) | 4,972 | ||
Net shares issued (acquired) under share-based compensation plans (in shares) | 600 | |||||
Share-based compensation | 11,413 | 11,413 | ||||
Excess tax benefit (deficit) from share-based compensation plans | 2,602 | |||||
Retirement benefit adjustments, net of taxes | 5,030 | 5,030 | ||||
Dividends | 34 | 34 | ||||
Net income | 339,528 | 339,528 | ||||
Balance at Jun. 30, 2016 | $ 5,126,792 | $ 15,747 | $ 1,463,297 | $ 3,849,354 | $ (7,251) | $ (194,355) |
Balance (in shares) at Jun. 30, 2016 | 125,418 |
CONDENSED CONSOLIDATED STATEME9
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Stockholders' Equity [Abstract] | ||
Retirement benefit adjustments, taxes | $ 2,698 | $ 3,648 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Rowan Companies plc, a public limited company incorporated under the laws of England and Wales, is a global provider of offshore contract drilling services to the international oil and gas industry. Our fleet currently consists of 31 mobile offshore drilling units, including 27 self-elevating jack-up drilling units and four ultra-deepwater drillships. We contract our drilling rigs, related equipment and work crews primarily on a day-rate basis in markets throughout the world, currently including the United States Gulf of Mexico (US GOM), the United Kingdom (U.K.) and Norwegian sectors of the North Sea, the Middle East, Trinidad and Suriname. The financial statements included in this Form 10-Q are presented in United States (U.S.) dollars and include the accounts of Rowan Companies plc ( “ Rowan plc ” ) and its direct and indirect subsidiaries. Unless the context otherwise requires, the terms “Rowan,” “Company,” “we,” “us” and “our” are used to refer to Rowan plc and its consolidated subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The financial statements included in this Form 10-Q have been prepared without audit in accordance with accounting principles generally accepted in the United States of America (US GAAP) for interim financial information and the applicable rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and notes have been condensed or omitted as permitted by those rules and regulations. Management believes the accompanying 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. The Company’s results of operations and cash flows for the interim periods are not necessarily indicative of results to be expected for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . Customer Contract Termination and Settlement On May 23, 2016, the Company reached an agreement with Freeport-McMoRan Oil and Gas LLC ("FMOG") and its parent company, Freeport-McMoRan Inc. ("FCX") in connection with the drilling contract for the drillship Rowan Relentless ("FMOG Agreement"), which was scheduled to terminate in June 2017. The FMOG Agreement provided that the drilling contract be terminated immediately, and that FCX will pay the Company $215 million in cash over a period of 90 days to settle outstanding receivables and early termination of the contract, of which $85 million has been received through June 30, 2016 and the remaining $130 million , which is included in Receivables - trade and other on the Condensed Consolidated Balance Sheet as of June 30, 2016, is due to be paid on or before August 21, 2016. In addition, the Company may also receive two additional contingent payments from FCX, payable on September 30, 2017, of $ 10 million and $20 million depending on the average price of West Texas Intermediate ("WTI") crude oil over a 12 -month period beginning June 30, 2016. The $10 million payment will be due if the average price over the period is greater than $50 per barrel and the additional $20 million payment will be due if the average price over the period is greater than $65 per barrel ("FMOG Provision") (See Note 6). The Company warm-stacked the Rowan Relentless in order to reduce costs. During the quarter ended June 30, 2016, the Company recognized $173.2 million in revenue for the Rowan Relentless , including $130.9 million for the cancelled contract value, $6.2 million for the fair value of the derivative associated with the FMOG Provision (See Note 6), $5.6 million for previously deferred revenue related to the contract, and $30.5 million for operations through May 22, 2016. Day Rate Concessions On June 1, 2016, the Company executed a contract extension for the Rowan Viking of 270 days for $275,000 per day following the primary term of the original contract in exchange for day rate concessions reducing the day rate for the primary term from $345,528 per day to $275,000 per day. This reduced day rate was applied to January 1, 2016 through November 6, 2017, and as a result, the Company recorded a reduction to revenue for amounts earned under this contract during the period from January 1, 2016 through March 31, 2016 of $6.3 million in the second quarter of 2016. New Accounting Pronouncements Revenue Recognition – In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which sets forth a global standard for revenue recognition and replaces most existing industry-specific guidance. We will be required to adopt the new standard in annual and interim periods beginning January 1, 2018. The amendments may be applied using a retrospective, modified retrospective or prospective with a cumulative catch-up approach. We are evaluating the standard and have not yet determined our implementation method upon adoption or what impact adoption will have on our financial statements. Presentation of Deferred Taxes – In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires entities to present deferred tax assets and deferred tax liabilities in balance sheets as noncurrent. We will be required to adopt the new standard in annual and interim periods beginning January 1, 2017. The amendments in this ASU may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We are evaluating the standard and have not yet determined our implementation method. Lease Accounting – In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires the balance sheet recognition of lease assets and lease liabilities by lessees for leases previously classified as operating leases under prior GAAP. We will be required to adopt the new standard in annual and interim periods beginning January 1, 2019. Lessees and lessors will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, including a number of optional practical expedients that entities may elect to apply. We have not yet evaluated the standard nor determined our implementation method upon adoption or what impact adoption will have on our financial statements. Stock Compensation – In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-based Payment Accounting, which simplifies several aspects of accounting for employee share-based payment awards, including the accounting for income taxes, withholding taxes and forfeitures, as well as classification on the statement of cash flows. We will be required to adopt the amended guidance in annual and interim reports beginning January 1, 2017, with early adoption permitted. We are in the process of determining the method of adoption and the impact this amendment will have on our consolidated financial statements . Financial Instruments – In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the FASB's guidance on the impairment of financial instruments. The ASU adds to US GAAP an impairment model that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. We will be required to adopt the amended guidance in annual and interim reports beginning January 1, 2020, with early adoption permitted for fiscal years beginning after December 15, 2018. We are in the process of evaluating the impact this amendment will have on our consolidated financial statements . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth a reconciliation of basic and diluted shares (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Average common shares outstanding 125,375 124,734 125,183 124,432 Effect of dilutive securities - share-based compensation 969 669 672 642 Average shares for diluted computations 126,344 125,403 125,855 125,074 There were no adjustments to net income required for purposes of computing diluted earnings per share. Share options, share appreciation rights and restricted share units granted under share-based compensation plans are anti-dilutive and excluded from diluted earnings per share when the hypothetical number of shares that could be repurchased under the treasury stock method exceeds the number of shares that can be exercised, or when the Company reports a net loss from continuing operations. Anti-dilutive shares, which could potentially dilute earnings per share in the future, are set forth below (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Share options and appreciation rights 1,589 1,399 1,589 1,399 Restricted share units 741 603 1,876 1,475 Total potentially dilutive shares 2,330 2,002 3,465 2,874 |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits The Company provides defined-benefit pension, health care and life insurance benefits upon retirement for certain full-time employees. Net periodic pension cost recognized during the periods included the following components (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Service cost $ 3,760 $ 4,235 $ 7,541 $ 8,424 Interest cost 6,466 7,948 12,968 15,808 Expected return on plan assets (9,860 ) (10,530 ) (19,775 ) (20,944 ) Amortization of net loss 5,102 6,378 10,210 12,689 Amortization of prior service credit (1,238 ) (1,126 ) (2,483 ) (2,241 ) Total net pension cost $ 4,230 $ 6,905 $ 8,461 $ 13,736 Other postretirement benefit cost recognized during the periods included the following components (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Service cost $ 114 $ 324 $ 228 $ 644 Interest cost 506 703 1,015 1,398 Amortization of net loss 2 — 1 (2 ) Amortization of prior service credit (96 ) — (192 ) — Total other postretirement benefit cost $ 526 $ 1,027 $ 1,052 $ 2,040 During the six months ended June 30, 2016 , the Company contributed $13.0 million to its pension and other postretirement benefit plans and expects to make additional contributions to such plans totaling approximately $16.9 million for the remainder of 2016 . |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Uncertain tax positions – We have been advised by the U.S. Internal Revenue Service of proposed unfavorable tax adjustments for the open tax years 2009 through 2012. The unfavorable tax adjustments including applicable penalties and interest primarily relate to the following items; 2009 tax benefits recognized as a result of applying the facts of a third-party tax case that provided favorable tax treatment for certain foreign contracts entered into in prior years to the company’s situation; transfer pricing; and domestic production activity deduction. We have submitted a formal protest in response to these unfavorable proposed tax adjustments. In years subsequent to 2012, we have similar positions that could be subject to similar adjustments for the open years. We have provided for amounts that we believe will be ultimately payable under the proposed adjustments and intend to vigorously defend our positions; however, if we determine the provisions for these matters to be inadequate due to new information or we are required to pay a significant amount of additional U.S. taxes and applicable penalties and interest in excess of amounts that have been provided for these matters, our consolidated results of operations and cash flows could be materially and adversely affected. Letters of credit – We periodically employ letters of credit in the normal course of our business, and had outstanding letters of credit of approximately $10.7 million at June 30, 2016 . We are involved in various other legal proceedings incidental to our business and are vigorously defending our position in all such matters. Although the outcome of such proceedings cannot be predicted with certainty, we do not expect resolution of these matters to have a material effect on our financial position, results of operations or cash flows. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation On February 25, 2016, the Company granted restricted share units ("RSUs") to employees for annual incentive awards pursuant to our long-term incentive plan with a grant-date fair value aggregating $19.3 million . The awards vest ratably over three years except to the extent they may vest earlier under our retirement policy. The aggregate grant-date fair value, net of estimated forfeitures, was $18.2 million , which will be recognized as compensation expense over a weighted-average period of 2.6 years from the grant date. Additionally, on February 25, 2016, the Company granted to certain members of management performance units ("P-Units") that have a target value of $100 per unit. The amount ultimately earned with respect to the P-Units will depend on the Company’s total shareholder return ("TSR") relative to a group of peer companies over a three -year period ending December 31, 2018, and could range from zero to $200 per unit depending on performance. Twenty-five percent of the P-Units’ value is determined by the Company’s relative TSR ranking for each one -year period ended December 31, 2016 , 2017 , and 2018 , respectively, and 25% of the P-Units’ value is determined by the relative TSR ranking for the three -year period ending December 31, 2018. The P-Units cliff vest on the third anniversary following the grant date. Settlement may be in cash or shares at the Board's discretion. The grant-date fair value of the P-Units was estimated to be $8.6 million . Fair value was estimated using a Monte Carlo simulation model, which considers the probabilities of the Company’s TSR ranking at the end of each performance period and the amount of the payout at each rank to determine the probability-weighted expected payout. The Company uses liability accounting to account for the P-Units. Compensation is recognized on a straight-line basis over a maximum period of three years from the grant date and is adjusted for changes in fair value through the vesting date. Estimated liabilities for P-Units as of June 30, 2016 , included $8.6 million and $7.9 million classified as short- and long-term, respectively, compared to $7.6 million and $11.4 million , respectively, at December 31, 2015 . At June 30, 2016 , estimated unrecognized share-based compensation totaled approximately $44.3 million , which is expected to be recognized as compensation expense over a remaining weighted-average period of 1.9 years . |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives The Company determined that the FMOG Provision of the FMOG Agreement is a freestanding financial instrument and that it met the criteria of a derivative instrument ("Contingent Payment Derivative"). The Contingent Payment Derivative was initially recorded to revenue at a fair value of $6.2 million on May 23, 2016, and will be revalued at each reporting date with changes in the fair value reported as non-operating income or expense. The fair value of the Contingent Payment Derivative was determined using a Monte Carlo simulation (See Note 7). The following table provides the fair value of the Company’s derivative as reflected in the Condensed Consolidated Balance Sheet (in thousands): Fair Value Balance Sheet Classification June 30, 2016 Derivative: Contingent Payment Derivative Other Assets $ 6,382 The following table provides the effect of the Company’s derivative on the Condensed Consolidated Statements of Income (in thousands): Three months ended June 30, 2016 Six months ended June 30, 2016 Derivative I. II. Contingent Payment Derivative Other Income (Expense) $ 157 $ 157 I. Classification of Gain (Loss) Recognized in Income (Loss) on Derivative II. Amount of Gain (Loss) Recognized in Income (Loss) on Derivative |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prescribed by US GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are: • Level 1 – Quoted prices for identical instruments in active markets; • Level 2 – Quoted market prices for similar instruments in active markets; quoted prices for identical instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as those used in pricing models or discounted cash flow methodologies, for example. The applicable level within the fair value hierarchy is the lowest level of any input that is significant to the fair value measurement. Derivative The fair value of the Contingent Payment Derivative (Level 3) was estimated using a Monte Carlo simulation model, which calculates the probabilities of the daily closing WTI spot price exceeding the $50 price target and the $65 price target ("Price Targets"), respectively, on a daily averaging basis during the 12 -month payment measurement period ending on June 30, 2017. The probabilities are applied to the payout at each Price Target to calculate the probability-weighted expected payout. The following are the significant inputs used in the valuation of the Contingent Payment Derivative: the WTI Spot Price on the valuation date, the expected volatility, and the risk-free interest rate, and the slope of the WTI forward curve, which were $47.48 , 37.5% , 0.765% and 5.5% at May 23, 2016, respectively and $48.33 , 34.35% , 0.482% , and 8% at June 30, 2016, respectively. The expected volatility was estimated from the implied volatility rates of WTI Crude Futures. The risk-free rate was based on yields of U.S. Treasury securities commensurate with the remaining term of the Contingent Payment derivative. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands): Estimated fair value measurements Carrying value Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant other unobservable inputs (Level 3) June 30, 2016: Assets - cash equivalents $ 747,692 $ 747,692 $ — $ — Other assets 16,164 9,782 — 6,382 December 31, 2015: Assets - cash equivalents $ 465,388 $ 465,388 $ — $ — Other assets 13,508 13,508 — — At June 30, 2016 and December 31, 2015, we held Egyptian pounds in the amount of $9.8 million and $13.5 million , respectively, which are classified as Other Assets on the Condensed Consolidated Balance Sheets. We ceased drilling operations in Egypt in 2014, and are currently working to obtain access to the funds for use outside Egypt to the extent they are not utilized. We can provide no assurance we will be able to convert or utilize such funds in the future. At June 30, 2016 , the Company held a Contingent Payment derivative in the amount of $6.4 million , which is classified as Other Assets on the Condensed Consolidated Balance Sheet. Trade receivables and trade payables, which are required to be measured at fair value, have carrying values that approximate their fair values due to their short maturities. Other Fair Value Measurements Financial instruments not required to be measured at fair value consist of the Company’s publicly traded debt securities. Our publicly traded debt securities had a carrying value of $2.645 billion at June 30, 2016 , and an estimated fair value at that date aggregating $2.217 billion , compared to a carrying and fair value of $2.692 billion and $2.072 billion , respectively, at December 31, 2015 . Fair values of our publicly traded debt securities were provided by a broker who makes a market in such securities and were measured using a market-approach valuation technique, which is a Level 2 fair value measurement. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Reclassifications from Accumulated Other Comprehensive Loss – The following table sets forth the significant amounts reclassified out of each component of accumulated other comprehensive loss and the effect on net income for the period (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Amounts recognized as a component of net periodic pension and other postretirement benefit cost: Amortization of net loss $ (5,105 ) $ (6,379 ) $ (10,210 ) $ (12,688 ) Amortization of prior service credit 1,241 1,126 2,482 2,241 Total before income taxes (3,864 ) (5,253 ) (7,728 ) (10,447 ) Income tax benefit 1,349 1,840 2,698 3,648 Total reclassifications for the period, net of income taxes $ (2,515 ) $ (3,413 ) $ (5,030 ) $ (6,799 ) |
Other Financial Statement Discl
Other Financial Statement Disclosures | 6 Months Ended |
Jun. 30, 2016 | |
Other Financial Statement Disclosures [Abstract] | |
Other Financial Statement Disclosures | Other Financial Statement Disclosures Accounts Receivable – The following table sets forth the components of Receivables - trade and other (in thousands): June 30, 2016 December 31, 2015 Trade (1) $ 532,208 $ 395,694 Income tax 9,092 4,463 Other 9,116 10,362 Total receivables - trade and other $ 550,416 $ 410,519 (1) June 30, 2016 balance includes $130 million due from FCX under the Rowan Relentless contract termination settlement (see note 1). Accrued Liabilities – The following table sets forth the components of accrued liabilities (in thousands): June 30, 2016 December 31, 2015 Pension and other postretirement benefits $ 21,228 $ 31,389 Compensation and related employee costs 58,629 73,628 Interest 42,420 44,338 Income taxes 38,856 23,927 Other 13,750 12,753 Total accrued liabilities $ 174,883 $ 186,035 Long-term Debt – Long-term debt consisted of the following (in thousands): June 30, 2016 December 31, 2015 5% Senior Notes, due September 2017 ($357.7 million and $366.6 million principal amount, respectively; 5.2% effective rate) $ 356,953 $ 365,494 7.875% Senior Notes, due August 2019 ($396.5 million and $435.5 million principal amount, respectively; 8.0% effective rate) 394,492 432,870 4.875% Senior Notes, due June 2022 ($700 million principal amount; 4.7% effective rate) 705,753 706,236 4.75% Senior Notes, due January 2024 ($400 million principal amount; 4.8% effective rate) 397,250 397,069 5.4% Senior Notes, due December 2042 ($400 million principal amount; 5.4% effective rate) 394,818 394,720 5.85% Senior Notes, due January 2044 ($400 million principal amount; 5.9% effective rate) 396,101 396,030 Total carrying value $ 2,645,367 $ 2,692,419 In the first quarter of 2016, we paid $15.9 million in cash to retire $16.5 million aggregate principal amount of the 5% Senior Notes due 2017 and 7.875% Senior Notes due 2019, plus accrued interest, and recognized a $0.6 million gain on early extinguishment of debt. Also during the first quarter, we repurchased an additional $21.4 million aggregate principal amount of the 5% and 7.875% Senior Notes, which settled in April 2016 and resulted in a $1.2 million gain on early extinguishment of debt in the second quarter of 2016. In April 2016, we repurchased $10.0 million aggregate principal amount of the 7.875% Senior Notes which resulted in a $0.6 million gain on early extinguishment of debt in the second quarter of 2016. Supplemental Cash Flow Information – Accrued capital expenditures, which are excluded from capital expenditures in the Condensed Consolidated Statements of Cash Flows until settlement, totaled $21.1 million and $41.4 million at June 30, 2016 and 2015 , respectively. Interest capitalized in connection with rig construction projects totaled $8.7 million and $16.2 million in the three and six months ended June 30, 2015. We did not capitalize any interest for the three and six months ended June 30, 2016 . Income Taxes – In accordance with US GAAP for interim reporting, the Company estimates its full-year effective tax rate and applies this rate to its year-to-date pretax income. In addition, the Company separately calculates the tax impact of unusual items, if any. We provide for income taxes based upon the tax laws and rates in effect in the countries in which we conduct operations. The amounts of our provisions are impacted by such laws and rates and the availability of deductions, credits and other benefits in each of the various jurisdictions. Our overall effective tax rate may therefore vary considerably from quarter to quarter and from year to year based on the actual or projected location of operations, levels of income, our consolidated effective income tax rate, deferred intercompany gains or losses, and other factors. Our effective tax rate was 9.5% and 7.3% , respectively, for the three and six months ended June 30, 2016 , compared to 8.3% and 10.7% , respectively, for the comparable prior-year periods. The higher effective tax rate for the three months ended June 30, 2016 is primarily due to the recognition of unfavorable discrete items in the current quarter, partially offset by the change in the geographic mix of earnings. The lower effective tax rate for the six months ended June 30, 2016, was primarily attributable to the change in the geographic mix of earnings. The Company has not provided for deferred income taxes on undistributed earnings of its non-U.K. subsidiaries, including non-U.S. entities under Rowan Companies, Inc. (RCI). It is the Company’s policy and intention to permanently reinvest outside the U.S. the earnings of non-U.S. entities directly or indirectly owned by RCI. Generally, earnings of non-U.K. entities in which RCI does not have a direct or indirect ownership interest can be distributed to the Company without imposition of either U.K. or local country tax. Material Charges and Other Operating Expenses – Material charges for the three months ended June 30, 2015, included a $5.0 million adjustment to an estimated liability for the termination of a contract in connection with refurbishment work on the Rowan Gorilla III . This matter was settled during the third quarter of 2015. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We operate in two principal operating segments – deepwater, which consists of our drillship operations, and jack-ups. Both segments provide one service – contract drilling. The Company evaluates performance primarily based on income from operations. Depreciation and amortization and selling, general and administrative expenses related to our corporate and other administrative offices have not been allocated to our operating segments for purposes of measuring segment operating income and are included in the column "Unallocated costs and other." "Other operating items" consists of gains and losses on equipment sales and litigation. Segment information for the three and six months ended June 30, 2016 and 2015 is set forth below (in thousands): Deepwater Jack-ups Segment total Unallocated costs and other Consolidated Three months ended June 30, 2016: Revenues from external customers $ 341,389 $ 270,472 $ 611,861 $ — $ 611,861 Operating expenses: Direct operating costs (excluding items below) 56,029 151,456 207,485 — 207,485 Depreciation and amortization 29,891 71,131 101,022 (881 ) 100,141 Selling, general and administrative — — — 26,111 26,111 Other operating items 1 1,840 1,841 97 1,938 Income (loss) from operations $ 255,468 $ 46,045 $ 301,513 $ (25,327 ) $ 276,186 Six months ended June 30, 2016: Revenues from external customers $ 563,923 $ 548,118 $ 1,112,041 $ — $ 1,112,041 Operating expenses: Direct operating costs (excluding items below) 123,011 289,306 412,317 — 412,317 Depreciation and amortization 57,239 139,485 196,724 2,269 198,993 Selling, general and administrative — — — 53,041 53,041 Other operating items 298 3,736 4,034 81 4,115 Income (loss) from operations $ 383,375 $ 115,591 $ 498,966 $ (55,391 ) $ 443,575 Three months ended June 30, 2015: Revenues from external customers $ 161,889 $ 346,847 $ 508,736 $ — $ 508,736 Operating expenses: Direct operating costs (excluding items below) 70,430 183,514 253,944 — 253,944 Depreciation and amortization 21,150 70,925 92,075 3,315 95,390 Selling, general and administrative — — — 31,158 31,158 Other operating items — 5,000 5,000 338 5,338 Income (loss) from operations $ 70,309 $ 87,408 $ 157,717 $ (34,811 ) $ 122,906 Six months ended June 30, 2015: Revenues from external customers $ 308,760 $ 747,015 $ 1,055,775 $ — $ 1,055,775 Operating expenses: Direct operating costs (excluding items below) 129,457 380,221 509,678 — 509,678 Depreciation and amortization 38,813 139,958 178,771 6,309 185,080 Selling, general and administrative — — — 58,744 58,744 Other operating items — 5,000 5,000 (175 ) 4,825 Income (loss) from operations $ 140,490 $ 221,836 $ 362,326 $ (64,878 ) $ 297,448 |
Guarantees of Registered Securi
Guarantees of Registered Securities | 6 Months Ended |
Jun. 30, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Guarantees of Registered Securities | Guarantees of Registered Securities RCI, a 100% -owned Delaware subsidiary of Rowan plc, is the issuer of all of our publicly traded debt securities consisting of the following series: 5% Senior Notes due 2017; 7.875% Senior Notes due 2019; 4.875% Senior Notes due 2022; 4.75% Senior Notes due 2024; 5.4% Senior Notes due 2042; and 5.85% Senior Notes due 2044 (the “Senior Notes”). The Senior Notes and amounts outstanding under our revolving credit facility are guaranteed by Rowan plc on a full, unconditional and irrevocable basis. The condensed consolidating financial information that follows is presented on the equity method of accounting in accordance with Rule 3-10 of Regulation S-X in connection with Rowan plc’s guarantee of the Senior Notes. Rowan Companies plc and Subsidiaries Condensed Consolidating Balance Sheets June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated CURRENT ASSETS: Cash and cash equivalents $ 7,849 $ 148,161 $ 605,413 $ — $ 761,423 Receivables - trade and other 110 3,438 546,868 — 550,416 Other current assets — 23,484 6,810 — 30,294 Total current assets 7,959 175,083 1,159,091 — 1,342,133 Property and equipment - gross — 610,407 8,488,962 — 9,099,369 Less accumulated depreciation and amortization — 258,901 1,585,535 — 1,844,436 Property and equipment - net — 351,506 6,903,427 — 7,254,933 Investments in subsidiaries 5,125,250 6,327,992 — (11,453,242 ) — Due from affiliates 251 831,567 25,650 (857,468 ) — Other assets — 5,182 17,413 — 22,595 $ 5,133,460 $ 7,691,330 $ 8,105,581 $ (12,310,710 ) $ 8,619,661 CURRENT LIABILITIES: Current portion of long-term debt $ — $ — $ — $ — $ — Accounts payable - trade 426 32,921 76,297 — 109,644 Deferred revenues — — 23,619 — 23,619 Accrued liabilities 317 102,376 72,190 — 174,883 Total current liabilities 743 135,297 172,106 — 308,146 Long-term debt, less current portion — 2,645,367 — — 2,645,367 Due to affiliates 1,529 25,693 830,246 (857,468 ) — Other liabilities 4,396 304,574 39,706 — 348,676 Deferred income taxes - net — 538,035 148,169 (495,524 ) 190,680 Shareholders' equity 5,126,792 4,042,364 6,915,354 (10,957,718 ) 5,126,792 $ 5,133,460 $ 7,691,330 $ 8,105,581 $ (12,310,710 ) $ 8,619,661 Rowan Companies plc and Subsidiaries Condensed Consolidating Balance Sheets December 31, 2015 (in thousands) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated CURRENT ASSETS: Cash and cash equivalents $ 17,297 $ 9,506 $ 457,425 $ — $ 484,228 Receivables - trade and other 110 1,369 409,040 — 410,519 Other current assets 394 19,230 6,904 — 26,528 Total current assets 17,801 30,105 873,369 — 921,275 Property and equipment - gross — 592,809 8,475,284 — 9,068,093 Less accumulated depreciation and amortization — 242,665 1,419,596 — 1,662,261 Property and equipment - net — 350,144 7,055,688 — 7,405,832 Investments in subsidiaries 4,763,306 6,028,242 — (10,791,548 ) — Due from affiliates 629 1,218,233 55,751 (1,274,613 ) — Other assets — 4,999 15,161 — 20,160 $ 4,781,736 $ 7,631,723 $ 7,999,969 $ (12,066,161 ) $ 8,347,267 CURRENT LIABILITIES: Accounts payable - trade $ 960 $ 19,111 $ 89,503 $ — $ 109,574 Deferred revenues — 6 33,056 — 33,062 Accrued liabilities 778 119,388 65,869 — 186,035 Total current liabilities 1,738 138,505 188,428 — 328,671 Long-term debt — 2,692,419 — — 2,692,419 Due to affiliates 2,880 55,750 1,215,983 (1,274,613 ) — Other liabilities 4,659 304,709 48,555 — 357,923 Deferred income taxes - net — 522,927 150,822 (477,954 ) 195,795 Shareholders' equity 4,772,459 3,917,413 6,396,181 (10,313,594 ) 4,772,459 $ 4,781,736 $ 7,631,723 $ 7,999,969 $ (12,066,161 ) $ 8,347,267 Rowan Companies plc and Subsidiaries Condensed Consolidating Income Statements Three months ended June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 15,070 $ 610,108 $ (13,317 ) $ 611,861 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 6,244 213,305 (12,064 ) 207,485 Depreciation and amortization — 4,487 95,455 199 100,141 Selling, general and administrative 6,811 — 20,752 (1,452 ) 26,111 Loss on disposals of property and equipment — 60 1,878 — 1,938 Total costs and expenses 6,811 10,791 331,390 (13,317 ) 335,675 INCOME (LOSS) FROM OPERATIONS (6,811 ) 4,279 278,718 — 276,186 OTHER INCOME (EXPENSE): Interest expense, net of interest capitalized — (38,249 ) (1,130 ) 1,130 (38,249 ) Interest income 9 1,226 344 (1,130 ) 449 Gain on extinguishment of debt — 1,787 — — 1,787 Other - net 5,111 (5,091 ) (664 ) — (644 ) Total other income (expense) - net 5,120 (40,327 ) (1,450 ) — (36,657 ) INCOME (LOSS) BEFORE INCOME TAXES (1,691 ) (36,048 ) 277,268 — 239,529 Provision (benefit) for income taxes — 10,706 20,030 (7,936 ) 22,800 Equity in earnings of subsidiaries, net of tax 218,420 162,264 — (380,684 ) — NET INCOME (LOSS) $ 216,729 $ 115,510 $ 257,238 $ (372,748 ) $ 216,729 Rowan Companies plc and Subsidiaries Condensed Consolidating Income Statements Three months ended June 30, 2015 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 18,290 $ 509,095 $ (18,649 ) $ 508,736 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 3,173 268,259 (17,488 ) 253,944 Depreciation and amortization — 3,388 91,538 464 95,390 Selling, general and administrative 7,006 1,423 24,354 (1,625 ) 31,158 Gain on disposals of property and equipment — 346 (8 ) — 338 Material charges and other operating expenses — — 5,000 — 5,000 Total costs and expenses 7,006 8,330 389,143 (18,649 ) 385,830 INCOME (LOSS) FROM OPERATIONS (7,006 ) 9,960 119,952 — 122,906 OTHER INCOME (EXPENSE): Interest expense, net of interest capitalized — (30,840 ) (4,092 ) 4,092 (30,840 ) Interest income 124 4,100 303 (4,092 ) 435 Other - net 5,601 (5,595 ) (86 ) — (80 ) Total other income (expense) - net 5,725 (32,335 ) (3,875 ) — (30,485 ) INCOME (LOSS) BEFORE INCOME TAXES (1,281 ) (22,375 ) 116,077 — 92,421 Provision (benefit) for income taxes — 2,017 13,467 (7,798 ) 7,686 Equity in earnings of subsidiaries, net of tax 86,016 1,429 — (87,445 ) — NET INCOME (LOSS) $ 84,735 $ (22,963 ) $ 102,610 $ (79,647 ) $ 84,735 Rowan Companies plc and Subsidiaries Condensed Consolidating Income Statements Six months ended June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 35,858 $ 1,109,519 $ (33,336 ) $ 1,112,041 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 7,220 435,663 (30,566 ) 412,317 Depreciation and amortization — 8,682 189,794 517 198,993 Selling, general and administrative 13,838 — 42,490 (3,287 ) 53,041 Loss on disposals of property and equipment — 70 4,045 — 4,115 Total costs and expenses 13,838 15,972 671,992 (33,336 ) 668,466 INCOME (LOSS) FROM OPERATIONS (13,838 ) 19,886 437,527 — 443,575 OTHER INCOME (EXPENSE): Interest expense, net of interest capitalized — (77,173 ) (3,072 ) 3,072 (77,173 ) Interest income 24 3,201 740 (3,072 ) 893 Gain on extinguishment of debt — 2,364 — — 2,364 Other - net 10,468 (10,424 ) (3,265 ) — (3,221 ) Total other income (expense) - net 10,492 (82,032 ) (5,597 ) — (77,137 ) INCOME (LOSS) BEFORE INCOME TAXES (3,346 ) (62,146 ) 431,930 — 366,438 (Benefit) Provision for income taxes — 22,183 22,502 (17,775 ) 26,910 Equity in earnings of subsidiaries, net of tax 342,874 188,858 — (531,732 ) — NET INCOME (LOSS) 339,528 104,529 409,428 (513,957 ) 339,528 Rowan Companies plc and Subsidiaries Condensed Consolidating Income Statements Six months ended June 30, 2015 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 33,336 $ 1,056,446 $ (34,007 ) $ 1,055,775 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 4,870 536,550 (31,742 ) 509,678 Depreciation and amortization — 7,968 176,399 713 185,080 Selling, general and administrative 11,218 2,065 48,439 (2,978 ) 58,744 Loss (gain) on disposals of property and equipment — 4 (179 ) — (175 ) Material charges and other operating expenses — — 5,000 — 5,000 Total costs and expenses 11,218 14,907 766,209 (34,007 ) 758,327 INCOME (LOSS) FROM OPERATIONS (11,218 ) 18,429 290,237 — 297,448 OTHER INCOME (EXPENSE): Interest expense, net of interest capitalized — (63,586 ) (6,541 ) 6,541 (63,586 ) Interest income 258 6,567 306 (6,541 ) 590 Other - net 11,205 (11,118 ) (1,208 ) — (1,121 ) Total other income (expense) - net 11,463 (68,137 ) (7,443 ) — (64,117 ) INCOME (LOSS) BEFORE INCOME TAXES 245 (49,708 ) 282,794 — 233,331 Provision for income taxes — 2,407 42,216 (19,696 ) 24,927 Equity in earnings of subsidiaries, net of tax 208,159 23,507 — (231,666 ) — NET INCOME (LOSS) 208,404 (28,608 ) 240,578 (211,970 ) 208,404 Rowan Companies plc and Subsidiaries Statements of Comprehensive Income Three months ended June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 216,729 $ 115,510 $ 257,238 $ (372,748 ) $ 216,729 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes 2,515 2,515 — (2,515 ) 2,515 COMPREHENSIVE INCOME (LOSS) $ 219,244 $ 118,025 $ 257,238 $ (375,263 ) $ 219,244 Rowan Companies plc and Subsidiaries Statements of Comprehensive Income Three months ended June 30, 2015 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 84,735 $ (22,963 ) $ 102,610 $ (79,647 ) $ 84,735 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes 3,413 3,413 — (3,413 ) 3,413 COMPREHENSIVE INCOME (LOSS) $ 88,148 $ (19,550 ) $ 102,610 $ (83,060 ) $ 88,148 Rowan Companies plc and Subsidiaries Statements of Comprehensive Income Six months ended June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 339,528 $ 104,529 $ 409,428 $ (513,957 ) $ 339,528 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes 5,030 5,030 — (5,030 ) 5,030 COMPREHENSIVE INCOME (LOSS) $ 344,558 $ 109,559 $ 409,428 $ (518,987 ) $ 344,558 Rowan Companies plc and Subsidiaries Statements of Comprehensive Income Six months ended June 30, 2015 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 208,404 $ (28,608 ) $ 240,578 $ (211,970 ) $ 208,404 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes 6,799 6,799 — (6,799 ) 6,799 COMPREHENSIVE INCOME (LOSS) $ 215,203 $ (21,809 ) $ 240,578 $ (218,769 ) $ 215,203 Rowan Companies plc and Subsidiaries Consolidating Statements of Cash Flows Six months ended June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (8,274 ) $ (49,243 ) $ 445,165 $ 722 $ 388,370 INVESTING ACTIVITIES: Capital expenditures — (23,399 ) (40,996 ) — (64,395 ) Proceeds from disposals of property and equipment — 410 672 — 1,082 Collections on subsidiary notes receivables — 357,795 — (357,795 ) — Investments in consolidated subsidiaries (200 ) (109,126 ) — 109,326 — Net cash provided by (used in) investing activities (200 ) 225,680 (40,324 ) (248,469 ) (63,313 ) FINANCING ACTIVITIES: Advances (to) from affiliates (974 ) 10,080 (8,384 ) (722 ) — Contributions from parent — — 109,326 (109,326 ) — Reductions of long-term debt — (47,862 ) (357,795 ) 357,795 (47,862 ) Net cash provided by (used in) financing activities (974 ) (37,782 ) (256,853 ) 247,747 (47,862 ) (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (9,448 ) 138,655 147,988 — 277,195 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 17,297 9,506 457,425 — 484,228 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 7,849 $ 148,161 $ 605,413 $ — $ 761,423 Rowan Companies plc and Subsidiaries Consolidating Statements of Cash Flows Six months ended June 30, 2015 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (3,758 ) $ 6,654 $ 474,316 $ (28,492 ) $ 448,720 INVESTING ACTIVITIES: Capital expenditures — (7,113 ) (609,285 ) — (616,398 ) Proceeds from disposals of property, plant and equipment — 1,704 594 — 2,298 Net cash used in investing activities — (5,409 ) (608,691 ) — (614,100 ) FINANCING ACTIVITIES: Advances (to) from affiliates (16,323 ) (74,952 ) 92,783 (1,508 ) — Proceeds from borrowings — 220,000 — — 220,000 Reductions of long-term debt — (170,000 ) — — (170,000 ) Dividends paid (25,220 ) — (30,000 ) 30,000 (25,220 ) Net cash provided by (used in) financing activities (41,543 ) (24,952 ) 62,783 28,492 24,780 DECREASE IN CASH AND CASH EQUIVALENTS (45,301 ) (23,707 ) (71,592 ) — (140,600 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 45,909 48,580 244,665 — 339,154 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 608 $ 24,873 $ 173,073 $ — $ 198,554 |
Nature of Operations and Basi21
Nature of Operations and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The financial statements included in this Form 10-Q have been prepared without audit in accordance with accounting principles generally accepted in the United States of America (US GAAP) for interim financial information and the applicable rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and notes have been condensed or omitted as permitted by those rules and regulations. Management believes the accompanying 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. The Company’s results of operations and cash flows for the interim periods are not necessarily indicative of results to be expected for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . |
New Accounting Pronouncements | New Accounting Pronouncements Revenue Recognition – In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which sets forth a global standard for revenue recognition and replaces most existing industry-specific guidance. We will be required to adopt the new standard in annual and interim periods beginning January 1, 2018. The amendments may be applied using a retrospective, modified retrospective or prospective with a cumulative catch-up approach. We are evaluating the standard and have not yet determined our implementation method upon adoption or what impact adoption will have on our financial statements. Presentation of Deferred Taxes – In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires entities to present deferred tax assets and deferred tax liabilities in balance sheets as noncurrent. We will be required to adopt the new standard in annual and interim periods beginning January 1, 2017. The amendments in this ASU may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We are evaluating the standard and have not yet determined our implementation method. Lease Accounting – In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires the balance sheet recognition of lease assets and lease liabilities by lessees for leases previously classified as operating leases under prior GAAP. We will be required to adopt the new standard in annual and interim periods beginning January 1, 2019. Lessees and lessors will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, including a number of optional practical expedients that entities may elect to apply. We have not yet evaluated the standard nor determined our implementation method upon adoption or what impact adoption will have on our financial statements. Stock Compensation – In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-based Payment Accounting, which simplifies several aspects of accounting for employee share-based payment awards, including the accounting for income taxes, withholding taxes and forfeitures, as well as classification on the statement of cash flows. We will be required to adopt the amended guidance in annual and interim reports beginning January 1, 2017, with early adoption permitted. We are in the process of determining the method of adoption and the impact this amendment will have on our consolidated financial statements . Financial Instruments – In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the FASB's guidance on the impairment of financial instruments. The ASU adds to US GAAP an impairment model that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. We will be required to adopt the amended guidance in annual and interim reports beginning January 1, 2020, with early adoption permitted for fiscal years beginning after December 15, 2018. We are in the process of evaluating the impact this amendment will have on our consolidated financial statements . |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Earnings per Share | The following table sets forth a reconciliation of basic and diluted shares (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Average common shares outstanding 125,375 124,734 125,183 124,432 Effect of dilutive securities - share-based compensation 969 669 672 642 Average shares for diluted computations 126,344 125,403 125,855 125,074 |
Antidilutive Securities Excluded From Earnings per Share | Anti-dilutive shares, which could potentially dilute earnings per share in the future, are set forth below (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Share options and appreciation rights 1,589 1,399 1,589 1,399 Restricted share units 741 603 1,876 1,475 Total potentially dilutive shares 2,330 2,002 3,465 2,874 |
Pension and Other Postretirem23
Pension and Other Postretirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Summary of Net Periodic Pension and Other Postemployment Benefit Costs | Net periodic pension cost recognized during the periods included the following components (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Service cost $ 3,760 $ 4,235 $ 7,541 $ 8,424 Interest cost 6,466 7,948 12,968 15,808 Expected return on plan assets (9,860 ) (10,530 ) (19,775 ) (20,944 ) Amortization of net loss 5,102 6,378 10,210 12,689 Amortization of prior service credit (1,238 ) (1,126 ) (2,483 ) (2,241 ) Total net pension cost $ 4,230 $ 6,905 $ 8,461 $ 13,736 Other postretirement benefit cost recognized during the periods included the following components (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Service cost $ 114 $ 324 $ 228 $ 644 Interest cost 506 703 1,015 1,398 Amortization of net loss 2 — 1 (2 ) Amortization of prior service credit (96 ) — (192 ) — Total other postretirement benefit cost $ 526 $ 1,027 $ 1,052 $ 2,040 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments, Statements of Financial Performance and Financial Position | The following table provides the fair value of the Company’s derivative as reflected in the Condensed Consolidated Balance Sheet (in thousands): Fair Value Balance Sheet Classification June 30, 2016 Derivative: Contingent Payment Derivative Other Assets $ 6,382 The following table provides the effect of the Company’s derivative on the Condensed Consolidated Statements of Income (in thousands): Three months ended June 30, 2016 Six months ended June 30, 2016 Derivative I. II. Contingent Payment Derivative Other Income (Expense) $ 157 $ 157 I. Classification of Gain (Loss) Recognized in Income (Loss) on Derivative II. Amount of Gain (Loss) Recognized in Income (Loss) on Derivative |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands): Estimated fair value measurements Carrying value Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant other unobservable inputs (Level 3) June 30, 2016: Assets - cash equivalents $ 747,692 $ 747,692 $ — $ — Other assets 16,164 9,782 — 6,382 December 31, 2015: Assets - cash equivalents $ 465,388 $ 465,388 $ — $ — Other assets 13,508 13,508 — — |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Schedule of Amounts Reclassified out of Each Component of Accumulated Other Comprehensive Loss | The following table sets forth the significant amounts reclassified out of each component of accumulated other comprehensive loss and the effect on net income for the period (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Amounts recognized as a component of net periodic pension and other postretirement benefit cost: Amortization of net loss $ (5,105 ) $ (6,379 ) $ (10,210 ) $ (12,688 ) Amortization of prior service credit 1,241 1,126 2,482 2,241 Total before income taxes (3,864 ) (5,253 ) (7,728 ) (10,447 ) Income tax benefit 1,349 1,840 2,698 3,648 Total reclassifications for the period, net of income taxes $ (2,515 ) $ (3,413 ) $ (5,030 ) $ (6,799 ) |
Other Financial Statement Dis27
Other Financial Statement Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Other Financial Statement Disclosures [Abstract] | |
Components of Receivables - Trade and Other | The following table sets forth the components of Receivables - trade and other (in thousands): June 30, 2016 December 31, 2015 Trade (1) $ 532,208 $ 395,694 Income tax 9,092 4,463 Other 9,116 10,362 Total receivables - trade and other $ 550,416 $ 410,519 |
Schedule of Accrued Liabilities | The following table sets forth the components of accrued liabilities (in thousands): June 30, 2016 December 31, 2015 Pension and other postretirement benefits $ 21,228 $ 31,389 Compensation and related employee costs 58,629 73,628 Interest 42,420 44,338 Income taxes 38,856 23,927 Other 13,750 12,753 Total accrued liabilities $ 174,883 $ 186,035 |
Schedule of Long-term Debt | Long-term debt consisted of the following (in thousands): June 30, 2016 December 31, 2015 5% Senior Notes, due September 2017 ($357.7 million and $366.6 million principal amount, respectively; 5.2% effective rate) $ 356,953 $ 365,494 7.875% Senior Notes, due August 2019 ($396.5 million and $435.5 million principal amount, respectively; 8.0% effective rate) 394,492 432,870 4.875% Senior Notes, due June 2022 ($700 million principal amount; 4.7% effective rate) 705,753 706,236 4.75% Senior Notes, due January 2024 ($400 million principal amount; 4.8% effective rate) 397,250 397,069 5.4% Senior Notes, due December 2042 ($400 million principal amount; 5.4% effective rate) 394,818 394,720 5.85% Senior Notes, due January 2044 ($400 million principal amount; 5.9% effective rate) 396,101 396,030 Total carrying value $ 2,645,367 $ 2,692,419 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information for the three and six months ended June 30, 2016 and 2015 is set forth below (in thousands): Deepwater Jack-ups Segment total Unallocated costs and other Consolidated Three months ended June 30, 2016: Revenues from external customers $ 341,389 $ 270,472 $ 611,861 $ — $ 611,861 Operating expenses: Direct operating costs (excluding items below) 56,029 151,456 207,485 — 207,485 Depreciation and amortization 29,891 71,131 101,022 (881 ) 100,141 Selling, general and administrative — — — 26,111 26,111 Other operating items 1 1,840 1,841 97 1,938 Income (loss) from operations $ 255,468 $ 46,045 $ 301,513 $ (25,327 ) $ 276,186 Six months ended June 30, 2016: Revenues from external customers $ 563,923 $ 548,118 $ 1,112,041 $ — $ 1,112,041 Operating expenses: Direct operating costs (excluding items below) 123,011 289,306 412,317 — 412,317 Depreciation and amortization 57,239 139,485 196,724 2,269 198,993 Selling, general and administrative — — — 53,041 53,041 Other operating items 298 3,736 4,034 81 4,115 Income (loss) from operations $ 383,375 $ 115,591 $ 498,966 $ (55,391 ) $ 443,575 Three months ended June 30, 2015: Revenues from external customers $ 161,889 $ 346,847 $ 508,736 $ — $ 508,736 Operating expenses: Direct operating costs (excluding items below) 70,430 183,514 253,944 — 253,944 Depreciation and amortization 21,150 70,925 92,075 3,315 95,390 Selling, general and administrative — — — 31,158 31,158 Other operating items — 5,000 5,000 338 5,338 Income (loss) from operations $ 70,309 $ 87,408 $ 157,717 $ (34,811 ) $ 122,906 Six months ended June 30, 2015: Revenues from external customers $ 308,760 $ 747,015 $ 1,055,775 $ — $ 1,055,775 Operating expenses: Direct operating costs (excluding items below) 129,457 380,221 509,678 — 509,678 Depreciation and amortization 38,813 139,958 178,771 6,309 185,080 Selling, general and administrative — — — 58,744 58,744 Other operating items — 5,000 5,000 (175 ) 4,825 Income (loss) from operations $ 140,490 $ 221,836 $ 362,326 $ (64,878 ) $ 297,448 |
Guarantees of Registered Secu29
Guarantees of Registered Securities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Balance Sheets | Condensed Consolidating Balance Sheets June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated CURRENT ASSETS: Cash and cash equivalents $ 7,849 $ 148,161 $ 605,413 $ — $ 761,423 Receivables - trade and other 110 3,438 546,868 — 550,416 Other current assets — 23,484 6,810 — 30,294 Total current assets 7,959 175,083 1,159,091 — 1,342,133 Property and equipment - gross — 610,407 8,488,962 — 9,099,369 Less accumulated depreciation and amortization — 258,901 1,585,535 — 1,844,436 Property and equipment - net — 351,506 6,903,427 — 7,254,933 Investments in subsidiaries 5,125,250 6,327,992 — (11,453,242 ) — Due from affiliates 251 831,567 25,650 (857,468 ) — Other assets — 5,182 17,413 — 22,595 $ 5,133,460 $ 7,691,330 $ 8,105,581 $ (12,310,710 ) $ 8,619,661 CURRENT LIABILITIES: Current portion of long-term debt $ — $ — $ — $ — $ — Accounts payable - trade 426 32,921 76,297 — 109,644 Deferred revenues — — 23,619 — 23,619 Accrued liabilities 317 102,376 72,190 — 174,883 Total current liabilities 743 135,297 172,106 — 308,146 Long-term debt, less current portion — 2,645,367 — — 2,645,367 Due to affiliates 1,529 25,693 830,246 (857,468 ) — Other liabilities 4,396 304,574 39,706 — 348,676 Deferred income taxes - net — 538,035 148,169 (495,524 ) 190,680 Shareholders' equity 5,126,792 4,042,364 6,915,354 (10,957,718 ) 5,126,792 $ 5,133,460 $ 7,691,330 $ 8,105,581 $ (12,310,710 ) $ 8,619,661 Rowan Companies plc and Subsidiaries Condensed Consolidating Balance Sheets December 31, 2015 (in thousands) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated CURRENT ASSETS: Cash and cash equivalents $ 17,297 $ 9,506 $ 457,425 $ — $ 484,228 Receivables - trade and other 110 1,369 409,040 — 410,519 Other current assets 394 19,230 6,904 — 26,528 Total current assets 17,801 30,105 873,369 — 921,275 Property and equipment - gross — 592,809 8,475,284 — 9,068,093 Less accumulated depreciation and amortization — 242,665 1,419,596 — 1,662,261 Property and equipment - net — 350,144 7,055,688 — 7,405,832 Investments in subsidiaries 4,763,306 6,028,242 — (10,791,548 ) — Due from affiliates 629 1,218,233 55,751 (1,274,613 ) — Other assets — 4,999 15,161 — 20,160 $ 4,781,736 $ 7,631,723 $ 7,999,969 $ (12,066,161 ) $ 8,347,267 CURRENT LIABILITIES: Accounts payable - trade $ 960 $ 19,111 $ 89,503 $ — $ 109,574 Deferred revenues — 6 33,056 — 33,062 Accrued liabilities 778 119,388 65,869 — 186,035 Total current liabilities 1,738 138,505 188,428 — 328,671 Long-term debt — 2,692,419 — — 2,692,419 Due to affiliates 2,880 55,750 1,215,983 (1,274,613 ) — Other liabilities 4,659 304,709 48,555 — 357,923 Deferred income taxes - net — 522,927 150,822 (477,954 ) 195,795 Shareholders' equity 4,772,459 3,917,413 6,396,181 (10,313,594 ) 4,772,459 $ 4,781,736 $ 7,631,723 $ 7,999,969 $ (12,066,161 ) $ 8,347,267 |
Condensed Consolidating Income Statements | Condensed Consolidating Income Statements Three months ended June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 15,070 $ 610,108 $ (13,317 ) $ 611,861 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 6,244 213,305 (12,064 ) 207,485 Depreciation and amortization — 4,487 95,455 199 100,141 Selling, general and administrative 6,811 — 20,752 (1,452 ) 26,111 Loss on disposals of property and equipment — 60 1,878 — 1,938 Total costs and expenses 6,811 10,791 331,390 (13,317 ) 335,675 INCOME (LOSS) FROM OPERATIONS (6,811 ) 4,279 278,718 — 276,186 OTHER INCOME (EXPENSE): Interest expense, net of interest capitalized — (38,249 ) (1,130 ) 1,130 (38,249 ) Interest income 9 1,226 344 (1,130 ) 449 Gain on extinguishment of debt — 1,787 — — 1,787 Other - net 5,111 (5,091 ) (664 ) — (644 ) Total other income (expense) - net 5,120 (40,327 ) (1,450 ) — (36,657 ) INCOME (LOSS) BEFORE INCOME TAXES (1,691 ) (36,048 ) 277,268 — 239,529 Provision (benefit) for income taxes — 10,706 20,030 (7,936 ) 22,800 Equity in earnings of subsidiaries, net of tax 218,420 162,264 — (380,684 ) — NET INCOME (LOSS) $ 216,729 $ 115,510 $ 257,238 $ (372,748 ) $ 216,729 Rowan Companies plc and Subsidiaries Condensed Consolidating Income Statements Three months ended June 30, 2015 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 18,290 $ 509,095 $ (18,649 ) $ 508,736 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 3,173 268,259 (17,488 ) 253,944 Depreciation and amortization — 3,388 91,538 464 95,390 Selling, general and administrative 7,006 1,423 24,354 (1,625 ) 31,158 Gain on disposals of property and equipment — 346 (8 ) — 338 Material charges and other operating expenses — — 5,000 — 5,000 Total costs and expenses 7,006 8,330 389,143 (18,649 ) 385,830 INCOME (LOSS) FROM OPERATIONS (7,006 ) 9,960 119,952 — 122,906 OTHER INCOME (EXPENSE): Interest expense, net of interest capitalized — (30,840 ) (4,092 ) 4,092 (30,840 ) Interest income 124 4,100 303 (4,092 ) 435 Other - net 5,601 (5,595 ) (86 ) — (80 ) Total other income (expense) - net 5,725 (32,335 ) (3,875 ) — (30,485 ) INCOME (LOSS) BEFORE INCOME TAXES (1,281 ) (22,375 ) 116,077 — 92,421 Provision (benefit) for income taxes — 2,017 13,467 (7,798 ) 7,686 Equity in earnings of subsidiaries, net of tax 86,016 1,429 — (87,445 ) — NET INCOME (LOSS) $ 84,735 $ (22,963 ) $ 102,610 $ (79,647 ) $ 84,735 Rowan Companies plc and Subsidiaries Condensed Consolidating Income Statements Six months ended June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 35,858 $ 1,109,519 $ (33,336 ) $ 1,112,041 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 7,220 435,663 (30,566 ) 412,317 Depreciation and amortization — 8,682 189,794 517 198,993 Selling, general and administrative 13,838 — 42,490 (3,287 ) 53,041 Loss on disposals of property and equipment — 70 4,045 — 4,115 Total costs and expenses 13,838 15,972 671,992 (33,336 ) 668,466 INCOME (LOSS) FROM OPERATIONS (13,838 ) 19,886 437,527 — 443,575 OTHER INCOME (EXPENSE): Interest expense, net of interest capitalized — (77,173 ) (3,072 ) 3,072 (77,173 ) Interest income 24 3,201 740 (3,072 ) 893 Gain on extinguishment of debt — 2,364 — — 2,364 Other - net 10,468 (10,424 ) (3,265 ) — (3,221 ) Total other income (expense) - net 10,492 (82,032 ) (5,597 ) — (77,137 ) INCOME (LOSS) BEFORE INCOME TAXES (3,346 ) (62,146 ) 431,930 — 366,438 (Benefit) Provision for income taxes — 22,183 22,502 (17,775 ) 26,910 Equity in earnings of subsidiaries, net of tax 342,874 188,858 — (531,732 ) — NET INCOME (LOSS) 339,528 104,529 409,428 (513,957 ) 339,528 Rowan Companies plc and Subsidiaries Condensed Consolidating Income Statements Six months ended June 30, 2015 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 33,336 $ 1,056,446 $ (34,007 ) $ 1,055,775 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 4,870 536,550 (31,742 ) 509,678 Depreciation and amortization — 7,968 176,399 713 185,080 Selling, general and administrative 11,218 2,065 48,439 (2,978 ) 58,744 Loss (gain) on disposals of property and equipment — 4 (179 ) — (175 ) Material charges and other operating expenses — — 5,000 — 5,000 Total costs and expenses 11,218 14,907 766,209 (34,007 ) 758,327 INCOME (LOSS) FROM OPERATIONS (11,218 ) 18,429 290,237 — 297,448 OTHER INCOME (EXPENSE): Interest expense, net of interest capitalized — (63,586 ) (6,541 ) 6,541 (63,586 ) Interest income 258 6,567 306 (6,541 ) 590 Other - net 11,205 (11,118 ) (1,208 ) — (1,121 ) Total other income (expense) - net 11,463 (68,137 ) (7,443 ) — (64,117 ) INCOME (LOSS) BEFORE INCOME TAXES 245 (49,708 ) 282,794 — 233,331 Provision for income taxes — 2,407 42,216 (19,696 ) 24,927 Equity in earnings of subsidiaries, net of tax 208,159 23,507 — (231,666 ) — NET INCOME (LOSS) 208,404 (28,608 ) 240,578 (211,970 ) 208,404 |
Statements of Comprehensive Income | Rowan Companies plc and Subsidiaries Statements of Comprehensive Income Three months ended June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 216,729 $ 115,510 $ 257,238 $ (372,748 ) $ 216,729 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes 2,515 2,515 — (2,515 ) 2,515 COMPREHENSIVE INCOME (LOSS) $ 219,244 $ 118,025 $ 257,238 $ (375,263 ) $ 219,244 Rowan Companies plc and Subsidiaries Statements of Comprehensive Income Three months ended June 30, 2015 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 84,735 $ (22,963 ) $ 102,610 $ (79,647 ) $ 84,735 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes 3,413 3,413 — (3,413 ) 3,413 COMPREHENSIVE INCOME (LOSS) $ 88,148 $ (19,550 ) $ 102,610 $ (83,060 ) $ 88,148 Rowan Companies plc and Subsidiaries Statements of Comprehensive Income Six months ended June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 339,528 $ 104,529 $ 409,428 $ (513,957 ) $ 339,528 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes 5,030 5,030 — (5,030 ) 5,030 COMPREHENSIVE INCOME (LOSS) $ 344,558 $ 109,559 $ 409,428 $ (518,987 ) $ 344,558 Rowan Companies plc and Subsidiaries Statements of Comprehensive Income Six months ended June 30, 2015 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 208,404 $ (28,608 ) $ 240,578 $ (211,970 ) $ 208,404 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes 6,799 6,799 — (6,799 ) 6,799 COMPREHENSIVE INCOME (LOSS) $ 215,203 $ (21,809 ) $ 240,578 $ (218,769 ) $ 215,203 |
Consolidating Statements of Cash Flows | Consolidating Statements of Cash Flows Six months ended June 30, 2016 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (8,274 ) $ (49,243 ) $ 445,165 $ 722 $ 388,370 INVESTING ACTIVITIES: Capital expenditures — (23,399 ) (40,996 ) — (64,395 ) Proceeds from disposals of property and equipment — 410 672 — 1,082 Collections on subsidiary notes receivables — 357,795 — (357,795 ) — Investments in consolidated subsidiaries (200 ) (109,126 ) — 109,326 — Net cash provided by (used in) investing activities (200 ) 225,680 (40,324 ) (248,469 ) (63,313 ) FINANCING ACTIVITIES: Advances (to) from affiliates (974 ) 10,080 (8,384 ) (722 ) — Contributions from parent — — 109,326 (109,326 ) — Reductions of long-term debt — (47,862 ) (357,795 ) 357,795 (47,862 ) Net cash provided by (used in) financing activities (974 ) (37,782 ) (256,853 ) 247,747 (47,862 ) (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (9,448 ) 138,655 147,988 — 277,195 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 17,297 9,506 457,425 — 484,228 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 7,849 $ 148,161 $ 605,413 $ — $ 761,423 Rowan Companies plc and Subsidiaries Consolidating Statements of Cash Flows Six months ended June 30, 2015 (in thousands) (unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (3,758 ) $ 6,654 $ 474,316 $ (28,492 ) $ 448,720 INVESTING ACTIVITIES: Capital expenditures — (7,113 ) (609,285 ) — (616,398 ) Proceeds from disposals of property, plant and equipment — 1,704 594 — 2,298 Net cash used in investing activities — (5,409 ) (608,691 ) — (614,100 ) FINANCING ACTIVITIES: Advances (to) from affiliates (16,323 ) (74,952 ) 92,783 (1,508 ) — Proceeds from borrowings — 220,000 — — 220,000 Reductions of long-term debt — (170,000 ) — — (170,000 ) Dividends paid (25,220 ) — (30,000 ) 30,000 (25,220 ) Net cash provided by (used in) financing activities (41,543 ) (24,952 ) 62,783 28,492 24,780 DECREASE IN CASH AND CASH EQUIVALENTS (45,301 ) (23,707 ) (71,592 ) — (140,600 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 45,909 48,580 244,665 — 339,154 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 608 $ 24,873 $ 173,073 $ — $ 198,554 |
Nature of Operations and Basi30
Nature of Operations and Basis of Presentation (Details) | Jun. 01, 2016$ / d | May 23, 2016USD ($)$ / bbl | Jun. 30, 2016USD ($) | May 22, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($)drilling_unit | May 31, 2016$ / d |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Number of mobile offshore drilling units | drilling_unit | 31 | ||||||
Number of fleet of self-elevating mobile offshore jack-up drilling units | drilling_unit | 27 | ||||||
Number of ultra-deepwater drillships | drilling_unit | 4 | ||||||
Rowan Relentless [Member] | |||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||
Contingent payments, period of evaluation | 12 months | ||||||
Revenue | $ 30,500,000 | $ 173,200,000 | |||||
Revenue, canceled contract value | 130,900,000 | ||||||
Revenue, fair value of derivative associated with early contract termination agreement | $ 6,200,000 | 6,200,000 | |||||
Recognition of previously deferred revenue | 5,600,000 | ||||||
Rowan Relentless [Member] | Contingent Consideration Threshold 1 [Member] | |||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||
Additional contingent payments | $ 10,000,000 | ||||||
Contingent payment, threshold price per barrel (in usd per bbl) | $ / bbl | 50 | ||||||
Rowan Relentless [Member] | Contingent Consideration Threshold 2 [Member] | |||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||
Additional contingent payments | $ 20,000,000 | ||||||
Contingent payment, threshold price per barrel (in usd per bbl) | $ / bbl | 65 | ||||||
Rowan Relentless [Member] | Outstanding Receivables And Early Contract Termination [Member] | |||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||
Outstanding receivables and early termination of contract | $ 215,000,000 | $ 130,000,000 | 130,000,000 | $ 130,000,000 | |||
Outstanding receivables and early termination of contract, settlement period | 90 days | ||||||
Outstanding receivables and early termination contract, cash received in period | $ 85,000,000 | ||||||
Rowan Viking [Member] | |||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||
Contract extension, number of days | 270 days | ||||||
Day rate (in usd per day) | $ / d | 275,000 | 345,528 | |||||
Rowan Viking [Member] | Change In Contract Day Rate [Member] | Restatement Adjustment [Member] | |||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||
Revenue | $ (6,300,000) |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Average common shares outstanding | 125,375 | 124,734 | 125,183 | 124,432 |
Effect of dilutive securities - share-based compensation (in shares) | 969 | 669 | 672 | 642 |
Average shares for diluted computations | 126,344 | 125,403 | 125,855 | 125,074 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 2,330 | 2,002 | 3,465 | 2,874 |
Share Options and Appreciation Rights [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 1,589 | 1,399 | 1,589 | 1,399 |
Restricted Share Units [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 741 | 603 | 1,876 | 1,475 |
Pension and Other Postretirem32
Pension and Other Postretirement Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Contribution to pension and other postemployment benefit plans | $ 13,000 | |||
Future contributions to pension and other postemployment benefit plans | 16,900 | |||
Defined Benefit Pension [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 3,760 | $ 4,235 | 7,541 | $ 8,424 |
Interest cost | 6,466 | 7,948 | 12,968 | 15,808 |
Expected return on plan assets | (9,860) | (10,530) | (19,775) | (20,944) |
Amortization of net loss | 5,102 | 6,378 | 10,210 | 12,689 |
Amortization of prior service credit | (1,238) | (1,126) | (2,483) | (2,241) |
Total net pension cost and other postretirement benefit cost | 4,230 | 6,905 | 8,461 | 13,736 |
Other Postretirement Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 114 | 324 | 228 | 644 |
Interest cost | 506 | 703 | 1,015 | 1,398 |
Amortization of net loss | 2 | 0 | 1 | (2) |
Amortization of prior service credit | (96) | 0 | (192) | 0 |
Total net pension cost and other postretirement benefit cost | $ 526 | $ 1,027 | $ 1,052 | $ 2,040 |
Commitments and Contingent Li33
Commitments and Contingent Liabilities (Details) $ in Millions | Jun. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Outstanding letters of credit | $ 10.7 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 25, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost related to nonvested share-based compensation arrangements | $ 44.3 | ||
Compensation expense over a remaining weighted-average period | 1 year 10 months 24 days | ||
Restricted Share Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of restricted stock granted | $ 19.3 | ||
Awards vesting period | 3 years | ||
Aggregate grant date fair value, net of estimated forfeitures | $ 18.2 | ||
Requisite service period | 2 years 7 months 6 days | ||
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards vesting period | 3 years | ||
Target value of P-Units (in dollars per unit) | $ 100 | ||
Grant date fair value of P-Units | $ 8.6 | ||
Performance measurement period | 3 years | ||
Estimated liabilities for share-based compensation awards classified as short-term | $ 8.6 | $ 7.6 | |
Estimated liabilities for share-based compensation awards classified as long-term | $ 7.9 | $ 11.4 | |
Performance Shares [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected payout on P-Units (in dollars per unit) | $ 0 | ||
Performance Shares [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected payout on P-Units (in dollars per unit) | $ 200 | ||
Performance Shares [Member] | One-Year Period ending December 31, 2016 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage based on relative total shareholder return ranking on annual basis | 25.00% | ||
Period for value determination | 1 year | ||
Performance Shares [Member] | One-Year Period Ending December 31, 2017 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage based on relative total shareholder return ranking on annual basis | 25.00% | ||
Period for value determination | 1 year | ||
Performance Shares [Member] | One-Year Period Ending December 31, 2018 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage based on relative total shareholder return ranking on annual basis | 25.00% | ||
Period for value determination | 1 year | ||
Performance Shares [Member] | Three-Year Period Ending December 31, 2018 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Period for value determination | 3 years | ||
Vesting percentage of performance units periodically | 25.00% |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Millions | May 23, 2016 | Jun. 30, 2016 |
Rowan Relentless [Member] | ||
Derivative [Line Items] | ||
Revenue, fair value of derivative associated with early contract termination agreement | $ 6.2 | $ 6.2 |
Derivatives - Derivative Reflec
Derivatives - Derivative Reflected in the Balance Sheet (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Other Assets [Member] | |
Derivatives, Fair Value [Line Items] | |
Contingent Payment Derivative | $ 6,382 |
Derivatives - Effect of Derivat
Derivatives - Effect of Derivative on the Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | |
Other Income (Expense) [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Contingent Payment Derivative | $ 157 | $ 157 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | May 23, 2016$ / bbl | Jun. 30, 2016USD ($)$ / bbl | Dec. 31, 2015USD ($) |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
WTI spot price (in usd per bbl) | $ / bbl | 47.48 | 48.33 | |
Expected volatility rate | 37.50% | 34.35% | |
Risk-free interest rate | 0.765% | 0.482% | |
Slope of the WTI forward curve | 5.50% | 8.00% | |
Other Assets [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Contingent payment derivative | $ | $ 6,382 | ||
Recurring Basis [Member] | Carrying Value [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Other assets | $ | 16,164 | $ 13,508 | |
Recurring Basis [Member] | Carrying Value [Member] | Egypt, Pounds [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Other assets | $ | $ 9,800 | $ 13,500 | |
Rowan Relentless [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Contingent payments, period of evaluation | 12 months | ||
Rowan Relentless [Member] | Contingent Consideration Threshold 1 [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Contingent payment, threshold price per barrel (in usd per bbl) | $ / bbl | 50 | ||
Rowan Relentless [Member] | Contingent Consideration Threshold 2 [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Contingent payment, threshold price per barrel (in usd per bbl) | $ / bbl | 65 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring Basis [Member] - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets - cash equivalents | $ 747,692 | $ 465,388 |
Other assets | 16,164 | 13,508 |
Estimate of Fair Value Measurement [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets - cash equivalents | 747,692 | 465,388 |
Other assets | 9,782 | 13,508 |
Estimate of Fair Value Measurement [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets - cash equivalents | 0 | 0 |
Other assets | 0 | 0 |
Estimate of Fair Value Measurement [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets - cash equivalents | 0 | 0 |
Other assets | $ 6,382 | $ 0 |
Fair Value Measurements - Other
Fair Value Measurements - Other Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Carrying value of publicly traded debt securities | $ 2,645,367 | $ 2,692,419 |
Fair value of publicly traded debt securities | $ 2,217,000 | $ 2,072,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Amortization of Net Loss [Member] | ||||
Amounts recognized as a component of net periodic pension and other postretirement benefit cost: | ||||
Total before income taxes | $ (5,105) | $ (6,379) | $ (10,210) | $ (12,688) |
Amortization of Prior Service Credit [Member] | ||||
Amounts recognized as a component of net periodic pension and other postretirement benefit cost: | ||||
Total before income taxes | 1,241 | 1,126 | 2,482 | 2,241 |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||
Amounts recognized as a component of net periodic pension and other postretirement benefit cost: | ||||
Total before income taxes | (3,864) | (5,253) | (7,728) | (10,447) |
Income tax benefit | 1,349 | 1,840 | 2,698 | 3,648 |
Total reclassifications for the period, net of income taxes | $ (2,515) | $ (3,413) | $ (5,030) | $ (6,799) |
Other Financial Statement Dis42
Other Financial Statement Disclosures - Components of Receivables (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Other Financial Statement Disclosures [Abstract] | ||
Trade | $ 532,208 | $ 395,694 |
Income tax | 9,092 | 4,463 |
Other | 9,116 | 10,362 |
Total receivables - trade and other | $ 550,416 | $ 410,519 |
Other Financial Statement Dis43
Other Financial Statement Disclosures - Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Other Financial Statement Disclosures [Abstract] | ||
Pension and other postretirement benefits | $ 21,228 | $ 31,389 |
Compensation and related employee costs | 58,629 | 73,628 |
Interest | 42,420 | 44,338 |
Income taxes | 38,856 | 23,927 |
Other | 13,750 | 12,753 |
Total accrued liabilities | $ 174,883 | $ 186,035 |
Other Financial Statement Dis44
Other Financial Statement Disclosures - Long Term Debt (Details) - USD ($) | Jun. 30, 2016 | Apr. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||||
Total carrying value | $ 2,645,367,000 | $ 2,692,419,000 | ||
Senior Notes [Member] | 5% Senior Notes, due September 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Total carrying value | $ 356,953,000 | $ 365,494,000 | ||
Stated rate | 5.00% | 5.00% | 5.00% | 5.00% |
Principal amount | $ 357,700,000 | $ 366,600,000 | ||
Effective rate | 5.20% | 5.20% | ||
Senior Notes [Member] | 7.875% Senior Notes, due August 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Total carrying value | $ 394,492,000 | $ 432,870,000 | ||
Stated rate | 7.875% | 7.875% | 7.875% | 7.875% |
Principal amount | $ 396,500,000 | $ 435,500,000 | ||
Effective rate | 8.00% | 8.00% | ||
Senior Notes [Member] | 4.875% Senior Notes, due June 2022 [Member] | ||||
Debt Instrument [Line Items] | ||||
Total carrying value | $ 705,753,000 | $ 706,236,000 | ||
Stated rate | 4.875% | 4.875% | ||
Principal amount | $ 700,000,000 | $ 700,000,000 | ||
Effective rate | 4.70% | 4.70% | ||
Senior Notes [Member] | 4.75% Senior Notes, due January 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Total carrying value | $ 397,250,000 | $ 397,069,000 | ||
Stated rate | 4.75% | 4.75% | ||
Principal amount | $ 400,000,000 | $ 400,000,000 | ||
Effective rate | 4.80% | 4.80% | ||
Senior Notes [Member] | 5.4% Senior Notes due, December 2042 [Member] | ||||
Debt Instrument [Line Items] | ||||
Total carrying value | $ 394,818,000 | $ 394,720,000 | ||
Stated rate | 5.40% | 5.40% | ||
Principal amount | $ 400,000,000 | $ 400,000,000 | ||
Effective rate | 5.40% | 5.40% | ||
Senior Notes [Member] | 5.85% Senior Notes, due January 2044 [Member] | ||||
Debt Instrument [Line Items] | ||||
Total carrying value | $ 396,101,000 | $ 396,030,000 | ||
Stated rate | 5.85% | 5.85% | ||
Principal amount | $ 400,000,000 | $ 400,000,000 | ||
Effective rate | 5.90% | 5.90% |
Other Financial Statement Dis45
Other Financial Statement Disclosures - Long Term Debt, Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Apr. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||||||
Gain on extinguishment of debt | $ 1,787 | $ 0 | $ 2,364 | $ 0 | |||
Senior Notes [Member] | 5% Senior Notes due September 2017 and 7.875% Senior Notes due August 2019 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Early repayment of debt | $ 15,900 | ||||||
Aggregate amount of debt paid | $ 21,400 | 16,500 | |||||
Gain on extinguishment of debt | $ 1,200 | $ 600 | |||||
Senior Notes [Member] | 5% Senior Notes, due September 2017 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Stated rate | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% | ||
Senior Notes [Member] | 7.875% Senior Notes, due August 2019 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate amount of debt paid | $ 10,000 | ||||||
Stated rate | 7.875% | 7.875% | 7.875% | 7.875% | 7.875% | ||
Gain on extinguishment of debt | $ 600 |
Other Financial Statement Dis46
Other Financial Statement Disclosures - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Supplemental Cash Flow Information | ||||
Accrued capital expenditures | $ 21,100,000 | $ 41,400,000 | ||
Interest capitalized in connection with rig construction projects | $ 0 | $ 8,700,000 | $ 0 | $ 16,200,000 |
Income Taxes | ||||
Effective tax rate | 9.50% | 8.30% | 7.30% | 10.70% |
Material Charges and Other Operating Expenses | ||||
Material charges and other operating expenses | $ 0 | $ 5,000,000 | $ 0 | $ 5,000,000 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)segment | Jun. 30, 2015USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | $ 611,861 | $ 508,736 | $ 1,112,041 | $ 1,055,775 |
Operating expenses: | ||||
Direct operating costs (excluding items below) | 207,485 | 253,944 | 412,317 | 509,678 |
Depreciation and amortization | 100,141 | 95,390 | 198,993 | 185,080 |
Selling, general and administrative | 26,111 | 31,158 | 53,041 | 58,744 |
Other operating items | 1,938 | 5,338 | 4,115 | 4,825 |
Income (loss) from operations | 276,186 | 122,906 | 443,575 | 297,448 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 611,861 | 508,736 | 1,112,041 | 1,055,775 |
Operating expenses: | ||||
Direct operating costs (excluding items below) | 207,485 | 253,944 | 412,317 | 509,678 |
Depreciation and amortization | 101,022 | 92,075 | 196,724 | 178,771 |
Selling, general and administrative | 0 | 0 | 0 | 0 |
Other operating items | 1,841 | 5,000 | 4,034 | 5,000 |
Income (loss) from operations | 301,513 | 157,717 | 498,966 | 362,326 |
Operating Segments [Member] | Deepwater [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 341,389 | 161,889 | 563,923 | 308,760 |
Operating expenses: | ||||
Direct operating costs (excluding items below) | 56,029 | 70,430 | 123,011 | 129,457 |
Depreciation and amortization | 29,891 | 21,150 | 57,239 | 38,813 |
Selling, general and administrative | 0 | 0 | 0 | 0 |
Other operating items | 1 | 0 | 298 | 0 |
Income (loss) from operations | 255,468 | 70,309 | 383,375 | 140,490 |
Operating Segments [Member] | Jack-ups [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 270,472 | 346,847 | 548,118 | 747,015 |
Operating expenses: | ||||
Direct operating costs (excluding items below) | 151,456 | 183,514 | 289,306 | 380,221 |
Depreciation and amortization | 71,131 | 70,925 | 139,485 | 139,958 |
Selling, general and administrative | 0 | 0 | 0 | 0 |
Other operating items | 1,840 | 5,000 | 3,736 | 5,000 |
Income (loss) from operations | 46,045 | 87,408 | 115,591 | 221,836 |
Unallocated Costs and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 0 | 0 | 0 | 0 |
Operating expenses: | ||||
Direct operating costs (excluding items below) | 0 | 0 | 0 | 0 |
Depreciation and amortization | (881) | 3,315 | 2,269 | 6,309 |
Selling, general and administrative | 26,111 | 31,158 | 53,041 | 58,744 |
Other operating items | 97 | 338 | 81 | (175) |
Income (loss) from operations | $ (25,327) | $ (34,811) | $ (55,391) | $ (64,878) |
Guarantees of Registered Secu48
Guarantees of Registered Securities - Narrative (Details) - RCI (Issuer) [Member] | 3 Months Ended |
Jun. 30, 2016 | |
Condensed Financial Statements, Captions [Line Items] | |
Subsidiary ownership percentage by parent | 100.00% |
Unsecured Debt [Member] | 5% Senior Notes, due September 2017 [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Stated interest rate percentage | 5.00% |
Unsecured Debt [Member] | 7.875% Senior Notes, due August 2019 [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Stated interest rate percentage | 7.875% |
Unsecured Debt [Member] | 4.875% Senior Notes, due June 2022 [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Stated interest rate percentage | 4.875% |
Unsecured Debt [Member] | 4.75% Senior Notes, due January 2024 [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Stated interest rate percentage | 4.75% |
Unsecured Debt [Member] | 5.4% Senior Notes due 2042 [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Stated interest rate percentage | 5.40% |
Unsecured Debt [Member] | 5.85% Senior Notes, due January 2044 [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Stated interest rate percentage | 5.85% |
Guarantees of Registered Secu49
Guarantees of Registered Securities - Condensed Consolidating Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | |
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ 761,423 | $ 198,554 | $ 484,228 | $ 339,154 | $ 761,423 | $ 484,228 |
Receivables - trade and other | 550,416 | 410,519 | ||||
Other current assets | 30,294 | 26,528 | ||||
Total current assets | 1,342,133 | 921,275 | ||||
Property and equipment - gross | 9,099,369 | 9,068,093 | ||||
Less accumulated depreciation and amortization | 1,844,436 | 1,662,261 | ||||
Property and equipment - net | 7,254,933 | 7,405,832 | ||||
Investments in subsidiaries | 0 | 0 | ||||
Due from affiliates | 0 | 0 | ||||
Other assets | 22,595 | 20,160 | ||||
TOTAL ASSETS | 8,619,661 | 8,347,267 | ||||
CURRENT LIABILITIES: | ||||||
Current portion of long-term debt | 0 | |||||
Accounts payable - trade | 109,644 | 109,574 | ||||
Deferred revenues | 23,619 | 33,062 | ||||
Accrued liabilities | 174,883 | 186,035 | ||||
Total current liabilities | 308,146 | 328,671 | ||||
Long-term debt, less current portion | 2,645,367 | 2,692,419 | ||||
Due to affiliates | 0 | 0 | ||||
Other liabilities | 348,676 | 357,923 | ||||
Deferred income taxes - net | 190,680 | 195,795 | ||||
Shareholders' equity | 5,126,792 | 4,772,459 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 8,619,661 | 8,347,267 | ||||
Condensed Consolidating Income Statements | ||||||
REVENUES | 611,861 | 508,736 | 1,112,041 | 1,055,775 | ||
COSTS AND EXPENSES: | ||||||
Direct operating costs (excluding items below) | 207,485 | 253,944 | 412,317 | 509,678 | ||
Depreciation and amortization | 100,141 | 95,390 | 198,993 | 185,080 | ||
Selling, general and administrative | 26,111 | 31,158 | 53,041 | 58,744 | ||
Loss (gain) on disposals of property and equipment | 1,938 | 338 | 4,115 | (175) | ||
Material charges and other operating expenses | 0 | 5,000 | 0 | 5,000 | ||
Total costs and expenses | 335,675 | 385,830 | 668,466 | 758,327 | ||
Income (loss) from operations | 276,186 | 122,906 | 443,575 | 297,448 | ||
OTHER INCOME (EXPENSE): | ||||||
Interest expense, net of interest capitalized | (38,249) | (30,840) | (77,173) | (63,586) | ||
Interest income | 449 | 435 | 893 | 590 | ||
Gain on extinguishment of debt | 1,787 | 0 | 2,364 | 0 | ||
Other - net | (644) | (80) | (3,221) | (1,121) | ||
Total other income (expense) - net | (36,657) | (30,485) | (77,137) | (64,117) | ||
INCOME (LOSS) BEFORE INCOME TAXES | 239,529 | 92,421 | 366,438 | 233,331 | ||
Provision (benefit) for income taxes | 22,800 | 7,686 | 26,910 | 24,927 | ||
Equity in earnings of subsidiaries, net of tax | 0 | 0 | 0 | 0 | ||
NET INCOME (LOSS) | 216,729 | 84,735 | 339,528 | 208,404 | ||
Statements of Comprehensive Income | ||||||
NET INCOME (LOSS) | 216,729 | 84,735 | 339,528 | 208,404 | ||
OTHER COMPREHENSIVE INCOME: | ||||||
Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes | 2,515 | 3,413 | 5,030 | 6,799 | ||
COMPREHENSIVE INCOME (LOSS) | 219,244 | 88,148 | 344,558 | 215,203 | ||
Consolidating Statements of Cash Flows | ||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 388,370 | 448,720 | ||||
INVESTING ACTIVITIES: | ||||||
Capital expenditures | (64,395) | (616,398) | ||||
Proceeds from disposals of property and equipment | 1,082 | 2,298 | ||||
Collections on subsidiary notes receivables | 0 | |||||
Investments in consolidated subsidiaries | 0 | |||||
Net cash provided by (used in) investing activities | (63,313) | (614,100) | ||||
FINANCING ACTIVITIES: | ||||||
Advances (to) from affiliates | 0 | 0 | ||||
Contributions from parent | 0 | |||||
Proceeds from borrowings | 220,000 | |||||
Reductions of long-term debt | (47,862) | (170,000) | ||||
Dividends paid | 0 | (25,220) | ||||
Net cash provided by (used in) financing activities | (47,862) | 24,780 | ||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 277,195 | (140,600) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 484,228 | 339,154 | ||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 761,423 | 198,554 | 761,423 | 198,554 | ||
Consolidating adjustments [Member] | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | 0 | 0 |
Receivables - trade and other | 0 | 0 | ||||
Other current assets | 0 | 0 | ||||
Total current assets | 0 | 0 | ||||
Property and equipment - gross | 0 | 0 | ||||
Less accumulated depreciation and amortization | 0 | 0 | ||||
Property and equipment - net | 0 | 0 | ||||
Investments in subsidiaries | (11,453,242) | (10,791,548) | ||||
Due from affiliates | (857,468) | (1,274,613) | ||||
Other assets | 0 | 0 | ||||
TOTAL ASSETS | (12,310,710) | (12,066,161) | ||||
CURRENT LIABILITIES: | ||||||
Current portion of long-term debt | 0 | |||||
Accounts payable - trade | 0 | 0 | ||||
Deferred revenues | 0 | 0 | ||||
Accrued liabilities | 0 | 0 | ||||
Total current liabilities | 0 | 0 | ||||
Long-term debt, less current portion | 0 | 0 | ||||
Due to affiliates | (857,468) | (1,274,613) | ||||
Other liabilities | 0 | 0 | ||||
Deferred income taxes - net | (495,524) | (477,954) | ||||
Shareholders' equity | (10,957,718) | (10,313,594) | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | (12,310,710) | (12,066,161) | ||||
Condensed Consolidating Income Statements | ||||||
REVENUES | (13,317) | (18,649) | (33,336) | (34,007) | ||
COSTS AND EXPENSES: | ||||||
Direct operating costs (excluding items below) | (12,064) | (17,488) | (30,566) | (31,742) | ||
Depreciation and amortization | 199 | 464 | 517 | 713 | ||
Selling, general and administrative | (1,452) | (1,625) | (3,287) | (2,978) | ||
Loss (gain) on disposals of property and equipment | 0 | 0 | 0 | 0 | ||
Material charges and other operating expenses | 0 | 0 | ||||
Total costs and expenses | (13,317) | (18,649) | (33,336) | (34,007) | ||
Income (loss) from operations | 0 | 0 | 0 | 0 | ||
OTHER INCOME (EXPENSE): | ||||||
Interest expense, net of interest capitalized | 1,130 | 4,092 | 3,072 | 6,541 | ||
Interest income | (1,130) | (4,092) | (3,072) | (6,541) | ||
Gain on extinguishment of debt | 0 | 0 | ||||
Other - net | 0 | 0 | 0 | 0 | ||
Total other income (expense) - net | 0 | 0 | 0 | 0 | ||
INCOME (LOSS) BEFORE INCOME TAXES | 0 | 0 | 0 | 0 | ||
Provision (benefit) for income taxes | (7,936) | (7,798) | (17,775) | (19,696) | ||
Equity in earnings of subsidiaries, net of tax | (380,684) | (87,445) | (531,732) | (231,666) | ||
NET INCOME (LOSS) | (372,748) | (79,647) | (513,957) | (211,970) | ||
Statements of Comprehensive Income | ||||||
NET INCOME (LOSS) | (372,748) | (79,647) | (513,957) | (211,970) | ||
OTHER COMPREHENSIVE INCOME: | ||||||
Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes | (2,515) | (3,413) | (5,030) | (6,799) | ||
COMPREHENSIVE INCOME (LOSS) | (375,263) | (83,060) | (518,987) | (218,769) | ||
Consolidating Statements of Cash Flows | ||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 722 | (28,492) | ||||
INVESTING ACTIVITIES: | ||||||
Capital expenditures | 0 | 0 | ||||
Proceeds from disposals of property and equipment | 0 | 0 | ||||
Collections on subsidiary notes receivables | (357,795) | |||||
Investments in consolidated subsidiaries | 109,326 | |||||
Net cash provided by (used in) investing activities | (248,469) | 0 | ||||
FINANCING ACTIVITIES: | ||||||
Advances (to) from affiliates | (722) | (1,508) | ||||
Contributions from parent | (109,326) | |||||
Proceeds from borrowings | 0 | |||||
Reductions of long-term debt | 357,795 | 0 | ||||
Dividends paid | 30,000 | |||||
Net cash provided by (used in) financing activities | 247,747 | 28,492 | ||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 0 | 0 | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 0 | 0 | ||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 0 | 0 | 0 | 0 | ||
Rowan plc (Parent) [Member] | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | 7,849 | 608 | 17,297 | 45,909 | 7,849 | 17,297 |
Receivables - trade and other | 110 | 110 | ||||
Other current assets | 0 | 394 | ||||
Total current assets | 7,959 | 17,801 | ||||
Property and equipment - gross | 0 | 0 | ||||
Less accumulated depreciation and amortization | 0 | 0 | ||||
Property and equipment - net | 0 | 0 | ||||
Investments in subsidiaries | 5,125,250 | 4,763,306 | ||||
Due from affiliates | 251 | 629 | ||||
Other assets | 0 | 0 | ||||
TOTAL ASSETS | 5,133,460 | 4,781,736 | ||||
CURRENT LIABILITIES: | ||||||
Current portion of long-term debt | 0 | |||||
Accounts payable - trade | 426 | 960 | ||||
Deferred revenues | 0 | 0 | ||||
Accrued liabilities | 317 | 778 | ||||
Total current liabilities | 743 | 1,738 | ||||
Long-term debt, less current portion | 0 | 0 | ||||
Due to affiliates | 1,529 | 2,880 | ||||
Other liabilities | 4,396 | 4,659 | ||||
Deferred income taxes - net | 0 | 0 | ||||
Shareholders' equity | 5,126,792 | 4,772,459 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 5,133,460 | 4,781,736 | ||||
Condensed Consolidating Income Statements | ||||||
REVENUES | 0 | 0 | 0 | 0 | ||
COSTS AND EXPENSES: | ||||||
Direct operating costs (excluding items below) | 0 | 0 | 0 | 0 | ||
Depreciation and amortization | 0 | 0 | 0 | 0 | ||
Selling, general and administrative | 6,811 | 7,006 | 13,838 | 11,218 | ||
Loss (gain) on disposals of property and equipment | 0 | 0 | 0 | 0 | ||
Material charges and other operating expenses | 0 | 0 | ||||
Total costs and expenses | 6,811 | 7,006 | 13,838 | 11,218 | ||
Income (loss) from operations | (6,811) | (7,006) | (13,838) | (11,218) | ||
OTHER INCOME (EXPENSE): | ||||||
Interest expense, net of interest capitalized | 0 | 0 | 0 | 0 | ||
Interest income | 9 | 124 | 24 | 258 | ||
Gain on extinguishment of debt | 0 | 0 | ||||
Other - net | 5,111 | 5,601 | 10,468 | 11,205 | ||
Total other income (expense) - net | 5,120 | 5,725 | 10,492 | 11,463 | ||
INCOME (LOSS) BEFORE INCOME TAXES | (1,691) | (1,281) | (3,346) | 245 | ||
Provision (benefit) for income taxes | 0 | 0 | 0 | 0 | ||
Equity in earnings of subsidiaries, net of tax | 218,420 | 86,016 | 342,874 | 208,159 | ||
NET INCOME (LOSS) | 216,729 | 84,735 | 339,528 | 208,404 | ||
Statements of Comprehensive Income | ||||||
NET INCOME (LOSS) | 216,729 | 84,735 | 339,528 | 208,404 | ||
OTHER COMPREHENSIVE INCOME: | ||||||
Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes | 2,515 | 3,413 | 5,030 | 6,799 | ||
COMPREHENSIVE INCOME (LOSS) | 219,244 | 88,148 | 344,558 | 215,203 | ||
Consolidating Statements of Cash Flows | ||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (8,274) | (3,758) | ||||
INVESTING ACTIVITIES: | ||||||
Capital expenditures | 0 | 0 | ||||
Proceeds from disposals of property and equipment | 0 | 0 | ||||
Collections on subsidiary notes receivables | 0 | |||||
Investments in consolidated subsidiaries | (200) | |||||
Net cash provided by (used in) investing activities | (200) | 0 | ||||
FINANCING ACTIVITIES: | ||||||
Advances (to) from affiliates | (974) | (16,323) | ||||
Contributions from parent | 0 | |||||
Proceeds from borrowings | 0 | |||||
Reductions of long-term debt | 0 | 0 | ||||
Dividends paid | (25,220) | |||||
Net cash provided by (used in) financing activities | (974) | (41,543) | ||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (9,448) | (45,301) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 17,297 | 45,909 | ||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 7,849 | 608 | 7,849 | 608 | ||
RCI (Issuer) [Member] | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | 148,161 | 24,873 | 9,506 | 48,580 | 148,161 | 9,506 |
Receivables - trade and other | 3,438 | 1,369 | ||||
Other current assets | 23,484 | 19,230 | ||||
Total current assets | 175,083 | 30,105 | ||||
Property and equipment - gross | 610,407 | 592,809 | ||||
Less accumulated depreciation and amortization | 258,901 | 242,665 | ||||
Property and equipment - net | 351,506 | 350,144 | ||||
Investments in subsidiaries | 6,327,992 | 6,028,242 | ||||
Due from affiliates | 831,567 | 1,218,233 | ||||
Other assets | 5,182 | 4,999 | ||||
TOTAL ASSETS | 7,691,330 | 7,631,723 | ||||
CURRENT LIABILITIES: | ||||||
Current portion of long-term debt | 0 | |||||
Accounts payable - trade | 32,921 | 19,111 | ||||
Deferred revenues | 0 | 6 | ||||
Accrued liabilities | 102,376 | 119,388 | ||||
Total current liabilities | 135,297 | 138,505 | ||||
Long-term debt, less current portion | 2,645,367 | 2,692,419 | ||||
Due to affiliates | 25,693 | 55,750 | ||||
Other liabilities | 304,574 | 304,709 | ||||
Deferred income taxes - net | 538,035 | 522,927 | ||||
Shareholders' equity | 4,042,364 | 3,917,413 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 7,691,330 | 7,631,723 | ||||
Condensed Consolidating Income Statements | ||||||
REVENUES | 15,070 | 18,290 | 35,858 | 33,336 | ||
COSTS AND EXPENSES: | ||||||
Direct operating costs (excluding items below) | 6,244 | 3,173 | 7,220 | 4,870 | ||
Depreciation and amortization | 4,487 | 3,388 | 8,682 | 7,968 | ||
Selling, general and administrative | 0 | 1,423 | 0 | 2,065 | ||
Loss (gain) on disposals of property and equipment | 60 | 346 | 70 | 4 | ||
Material charges and other operating expenses | 0 | 0 | ||||
Total costs and expenses | 10,791 | 8,330 | 15,972 | 14,907 | ||
Income (loss) from operations | 4,279 | 9,960 | 19,886 | 18,429 | ||
OTHER INCOME (EXPENSE): | ||||||
Interest expense, net of interest capitalized | (38,249) | (30,840) | (77,173) | (63,586) | ||
Interest income | 1,226 | 4,100 | 3,201 | 6,567 | ||
Gain on extinguishment of debt | 1,787 | 2,364 | ||||
Other - net | (5,091) | (5,595) | (10,424) | (11,118) | ||
Total other income (expense) - net | (40,327) | (32,335) | (82,032) | (68,137) | ||
INCOME (LOSS) BEFORE INCOME TAXES | (36,048) | (22,375) | (62,146) | (49,708) | ||
Provision (benefit) for income taxes | 10,706 | 2,017 | 22,183 | 2,407 | ||
Equity in earnings of subsidiaries, net of tax | 162,264 | 1,429 | 188,858 | 23,507 | ||
NET INCOME (LOSS) | 115,510 | (22,963) | 104,529 | (28,608) | ||
Statements of Comprehensive Income | ||||||
NET INCOME (LOSS) | 115,510 | (22,963) | 104,529 | (28,608) | ||
OTHER COMPREHENSIVE INCOME: | ||||||
Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes | 2,515 | 3,413 | 5,030 | 6,799 | ||
COMPREHENSIVE INCOME (LOSS) | 118,025 | (19,550) | 109,559 | (21,809) | ||
Consolidating Statements of Cash Flows | ||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (49,243) | 6,654 | ||||
INVESTING ACTIVITIES: | ||||||
Capital expenditures | (23,399) | (7,113) | ||||
Proceeds from disposals of property and equipment | 410 | 1,704 | ||||
Collections on subsidiary notes receivables | 357,795 | |||||
Investments in consolidated subsidiaries | (109,126) | |||||
Net cash provided by (used in) investing activities | 225,680 | (5,409) | ||||
FINANCING ACTIVITIES: | ||||||
Advances (to) from affiliates | 10,080 | (74,952) | ||||
Contributions from parent | 0 | |||||
Proceeds from borrowings | 220,000 | |||||
Reductions of long-term debt | (47,862) | (170,000) | ||||
Dividends paid | 0 | |||||
Net cash provided by (used in) financing activities | (37,782) | (24,952) | ||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 138,655 | (23,707) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 9,506 | 48,580 | ||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 148,161 | 24,873 | 148,161 | 24,873 | ||
Non-guarantor subsidiaries [Member] | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | 605,413 | 173,073 | 457,425 | 244,665 | 605,413 | 457,425 |
Receivables - trade and other | 546,868 | 409,040 | ||||
Other current assets | 6,810 | 6,904 | ||||
Total current assets | 1,159,091 | 873,369 | ||||
Property and equipment - gross | 8,488,962 | 8,475,284 | ||||
Less accumulated depreciation and amortization | 1,585,535 | 1,419,596 | ||||
Property and equipment - net | 6,903,427 | 7,055,688 | ||||
Investments in subsidiaries | 0 | 0 | ||||
Due from affiliates | 25,650 | 55,751 | ||||
Other assets | 17,413 | 15,161 | ||||
TOTAL ASSETS | 8,105,581 | 7,999,969 | ||||
CURRENT LIABILITIES: | ||||||
Current portion of long-term debt | 0 | |||||
Accounts payable - trade | 76,297 | 89,503 | ||||
Deferred revenues | 23,619 | 33,056 | ||||
Accrued liabilities | 72,190 | 65,869 | ||||
Total current liabilities | 172,106 | 188,428 | ||||
Long-term debt, less current portion | 0 | 0 | ||||
Due to affiliates | 830,246 | 1,215,983 | ||||
Other liabilities | 39,706 | 48,555 | ||||
Deferred income taxes - net | 148,169 | 150,822 | ||||
Shareholders' equity | 6,915,354 | 6,396,181 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 8,105,581 | $ 7,999,969 | ||||
Condensed Consolidating Income Statements | ||||||
REVENUES | 610,108 | 509,095 | 1,109,519 | 1,056,446 | ||
COSTS AND EXPENSES: | ||||||
Direct operating costs (excluding items below) | 213,305 | 268,259 | 435,663 | 536,550 | ||
Depreciation and amortization | 95,455 | 91,538 | 189,794 | 176,399 | ||
Selling, general and administrative | 20,752 | 24,354 | 42,490 | 48,439 | ||
Loss (gain) on disposals of property and equipment | 1,878 | (8) | 4,045 | (179) | ||
Material charges and other operating expenses | 5,000 | 5,000 | ||||
Total costs and expenses | 331,390 | 389,143 | 671,992 | 766,209 | ||
Income (loss) from operations | 278,718 | 119,952 | 437,527 | 290,237 | ||
OTHER INCOME (EXPENSE): | ||||||
Interest expense, net of interest capitalized | (1,130) | (4,092) | (3,072) | (6,541) | ||
Interest income | 344 | 303 | 740 | 306 | ||
Gain on extinguishment of debt | 0 | 0 | ||||
Other - net | (664) | (86) | (3,265) | (1,208) | ||
Total other income (expense) - net | (1,450) | (3,875) | (5,597) | (7,443) | ||
INCOME (LOSS) BEFORE INCOME TAXES | 277,268 | 116,077 | 431,930 | 282,794 | ||
Provision (benefit) for income taxes | 20,030 | 13,467 | 22,502 | 42,216 | ||
Equity in earnings of subsidiaries, net of tax | 0 | 0 | 0 | 0 | ||
NET INCOME (LOSS) | 257,238 | 102,610 | 409,428 | 240,578 | ||
Statements of Comprehensive Income | ||||||
NET INCOME (LOSS) | 257,238 | 102,610 | 409,428 | 240,578 | ||
OTHER COMPREHENSIVE INCOME: | ||||||
Net reclassification adjustments for amount recognized in net income as a component of net periodic benefit cost, net of income taxes | 0 | 0 | 0 | 0 | ||
COMPREHENSIVE INCOME (LOSS) | 257,238 | 102,610 | 409,428 | 240,578 | ||
Consolidating Statements of Cash Flows | ||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 445,165 | 474,316 | ||||
INVESTING ACTIVITIES: | ||||||
Capital expenditures | (40,996) | (609,285) | ||||
Proceeds from disposals of property and equipment | 672 | 594 | ||||
Collections on subsidiary notes receivables | 0 | |||||
Investments in consolidated subsidiaries | 0 | |||||
Net cash provided by (used in) investing activities | (40,324) | (608,691) | ||||
FINANCING ACTIVITIES: | ||||||
Advances (to) from affiliates | (8,384) | 92,783 | ||||
Contributions from parent | 109,326 | |||||
Proceeds from borrowings | 0 | |||||
Reductions of long-term debt | (357,795) | 0 | ||||
Dividends paid | (30,000) | |||||
Net cash provided by (used in) financing activities | (256,853) | 62,783 | ||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 147,988 | (71,592) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 457,425 | 244,665 | ||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 605,413 | $ 173,073 | $ 605,413 | $ 173,073 |