Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 25, 2017 | |
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 | 126,098,617 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
REVENUES | $ 374.3 | $ 500.2 |
COSTS AND EXPENSES: | ||
Direct operating costs (excluding items below) | 170 | 204.8 |
Depreciation and amortization | 99.1 | 98.9 |
Selling, general and administrative | 24 | 26.9 |
Loss on disposals of property and equipment | 3.4 | 2.2 |
Total costs and expenses | 296.5 | 332.8 |
INCOME FROM OPERATIONS | 77.8 | 167.4 |
OTHER INCOME (EXPENSE): | ||
Interest expense | (39.6) | (38.9) |
Gain (loss) on extinguishment of debt | (0.2) | 0.6 |
Interest income | 2 | 0.4 |
Other - net | 0 | (2.6) |
Total other (expense), net | (37.8) | (40.5) |
INCOME BEFORE INCOME TAXES | 40 | 126.9 |
Provision for income taxes | 29.7 | 4.1 |
NET INCOME | $ 10.3 | $ 122.8 |
NET INCOME (LOSS) PER SHARE - BASIC (in dollars per share) | $ 0.08 | $ 0.98 |
NET INCOME (LOSS) PER SHARE - DILUTED (in dollars per share) | $ 0.07 | $ 0.98 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
NET INCOME | $ 10.3 | $ 122.8 |
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 $0.5 and $1.3 for the three months ended March 31, 2017 and 2016, respectively (see Notes 3 and 8). | 0.9 | 2.5 |
COMPREHENSIVE INCOME | $ 11.2 | $ 125.3 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net reclassification adjustments for amounts recognized in net income as a component of net periodic benefit cost, tax expense | $ 0.5 | $ 1.3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,173.2 | $ 1,255.5 |
Receivables - trade and other | 317.1 | 301.3 |
Prepaid expenses and other current assets | 24.6 | 23.5 |
Total current assets | 1,514.9 | 1,580.3 |
PROPERTY AND EQUIPMENT: | ||
Drilling equipment | 8,984.1 | 8,965.3 |
Other property and equipment | 138.1 | 135.5 |
Property and equipment - gross | 9,122.2 | 9,100.8 |
Less accumulated depreciation and amortization | 2,138.4 | 2,040.8 |
Property and equipment - net | 6,983.8 | 7,060 |
Other assets | 54.6 | 35.3 |
TOTAL ASSETS | 8,553.3 | 8,675.6 |
CURRENT LIABILITIES: | ||
Current portion of long-term debt | 0 | 126.8 |
Accounts payable - trade | 93.1 | 94.3 |
Deferred revenues | 108.2 | 103.9 |
Accrued liabilities | 138.3 | 158.8 |
Total current liabilities | 339.6 | 483.8 |
Long-term debt, less current portion | 2,552.5 | 2,553.4 |
Other liabilities | 320.6 | 338.8 |
Deferred income taxes - net | 8.8 | 185.7 |
Commitments and contingent liabilities (Note 4) | ||
SHAREHOLDERS' EQUITY: | ||
Class A Ordinary Shares, $0.125 par value, 128.0 and 128.0 shares issued, respectively; and 126.1 and 125.5 shares outstanding, respectively | 16 | 16 |
Additional paid-in capital | 1,473.9 | 1,471.7 |
Retained earnings | 4,047.3 | 3,830.4 |
Cost of 1.9 and 2.5 treasury shares, respectively | (9.3) | (7.2) |
Accumulated other comprehensive loss | (196.1) | (197) |
Total shareholders' equity | 5,331.8 | 5,113.9 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 8,553.3 | $ 8,675.6 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
SHAREHOLDERS' EQUITY: | ||
Common stock, shares outstanding (in shares) | 126.1 | 125.5 |
Treasury shares (in shares) | 1.9 | 2.5 |
Common Class A [Member] | ||
SHAREHOLDERS' EQUITY: | ||
Common stock, par value (in dollars per share) | $ 0.125 | $ 0.125 |
Common stock, shares issued (in shares) | 128 | 128 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | 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] |
Beginning Balance at Dec. 31, 2015 | $ 4,772.5 | $ 15.7 | $ 1,458.5 | $ 3,509.8 | $ (12.2) | $ (199.3) |
Beginning Balance (in shares) at Dec. 31, 2015 | 124.8 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net shares issued (acquired) under share-based compensation plans | (2.8) | $ 0 | (6.6) | 3.8 | ||
Net shares issued (acquired) under share-based compensation plans (in shares) | 0.4 | |||||
Share-based compensation | 5.9 | 5.9 | ||||
Excess tax deficit from share-based awards | (0.8) | (0.8) | ||||
Retirement benefit adjustments, net of taxes | 2.5 | 2.5 | ||||
Net income | 122.8 | 122.8 | ||||
Ending Balance at Mar. 31, 2016 | 4,900.1 | $ 15.7 | 1,457 | 3,632.6 | (8.4) | (196.8) |
Ending Balance (in shares) at Mar. 31, 2016 | 125.2 | |||||
Beginning Balance at Dec. 31, 2016 | 5,113.9 | $ 16 | 1,471.7 | 3,830.4 | (7.2) | (197) |
Beginning Balance (in shares) at Dec. 31, 2016 | 125.5 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net shares issued (acquired) under share-based compensation plans | (5.3) | $ 0 | (3.2) | (2.1) | ||
Net shares issued (acquired) under share-based compensation plans (in shares) | 0.6 | |||||
Share-based compensation | 5.4 | 5.4 | ||||
Retirement benefit adjustments, net of taxes | 0.9 | 0.9 | ||||
Net income | 10.3 | 10.3 | ||||
Ending Balance at Mar. 31, 2017 | 5,331.8 | $ 16 | $ 1,473.9 | 4,047.3 | $ (9.3) | $ (196.1) |
Ending Balance (in shares) at Mar. 31, 2017 | 126.1 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Adoption of new accounting standard | $ 206.6 | $ 206.6 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Retirement benefit adjustments, taxes | $ 0.5 | $ 1.3 |
CONDENSED CONSOLIDATED STATEME9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 10.3 | $ 122.8 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and amortization | 99.1 | 98.9 |
Deferred income taxes | 16.8 | (12.6) |
Provision for pension and other postretirement benefits | 2.5 | 4.8 |
Share-based compensation expense | 6.8 | 8.2 |
Loss on disposals of property and equipment | 3.4 | 2.2 |
Other | 0.2 | 0 |
Changes in current assets and liabilities: | ||
Receivables - trade and other | (22.2) | (16.4) |
Prepaid expenses and other current assets | (1.2) | 6.8 |
Accounts payable | 3.4 | (17.2) |
Accrued income taxes | 2.3 | 5.2 |
Other current liabilities | (17.1) | (28.1) |
Other postretirement benefit claims paid | (0.9) | (3) |
Contributions to pension plans | (5.9) | (3.1) |
Deferred revenues | (6.3) | (2.5) |
Net changes in other noncurrent assets and liabilities | (9.7) | (3.1) |
Net cash provided by operating activities | 81.5 | 162.9 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (30.9) | (32.9) |
Proceeds from disposals of property and equipment | 0.1 | 0.3 |
Net cash used in investing activities | (30.8) | (32.6) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Reductions of long-term debt | (127.7) | (16.5) |
Shares repurchased for tax withholdings on vesting of restricted share units | (5.3) | (2.8) |
Net cash used in financing activities | (133) | (19.3) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (82.3) | 111 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,255.5 | 484.2 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 1,173.2 | $ 595.2 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
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 29 mobile offshore drilling units, including 25 self-elevating jack-up drilling units and four ultra-deepwater drillships. The Company contracts its 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), United Kingdom (U.K.) and Norwegian sectors of the North Sea, the Middle East and Trinidad. 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 in accordance with accounting principles generally accepted in the United States of America ( “ US GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission. Certain information and notes have been condensed or omitted as permitted by those rules and regulations. The financial information included in this report is unaudited, but 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 financial position, results of operations and cash flows for the interim periods presented. The preparation of our condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 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, 2016 . Joint Venture On November 21, 2016, Rowan and the Saudi Arabian Oil Company (“Saudi Aramco”), through their subsidiaries, entered into a Shareholders’ Agreement to create a 50 / 50 joint venture to own, manage and operate offshore drilling units in Saudi Arabia. The new entity is anticipated to commence operations in the second quarter of 2017. At formation of the new company, Rowan and Saudi Aramco will each contribute $25 million to be used for working capital needs. The Asset Contribution and Transfer Agreements provide that at commencement of operations, Rowan will contribute three rigs and its local shore based operations, and Saudi Aramco will contribute two rigs and cash to maintain equal equity ownership in the new company. Rowan will then contribute two more rigs in late 2018 when those rigs complete their current contracts, and Saudi Aramco will make a matching cash contribution at that time. At the various asset contribution dates, excess cash is expected to be distributed in equal parts to the shareholders. Rigs contributed will receive contracts for an aggregate 15 years, renewed and re-priced every three years, provided that the rigs meet the technical and operational requirements of Saudi Aramco. Rowan rigs in Saudi Arabia not selected for contribution will be managed by the new company until the end of their current contracts pursuant to a management services agreement that provides for a management fee equal to a percentage of revenue to cover overhead costs. After the management period ends, such rigs may be selected for contribution, lease, or they will be required to relocate outside of the Kingdom. Each of Rowan and Saudi Aramco will be obligated to fund their portion of the purchase of up to 20 newbuild jack-up rigs ratably over 10 years. The first rig is expected to be delivered as early as 2021. The partners intend that the newbuild jack-up rigs will be financed out of available cash from operations and/or funds available from third party debt financing. Saudi Aramco as a customer will provide drilling contracts to support the new company in the acquisition of the new rigs. If cash from operations or financing is not available to fund the cost of the newbuild jack-up rig, each partner will be obligated to contribute funds to purchase such rigs, up to a maximum amount of $1.25 billion per partner in the aggregate for all 20 newbuild jack-up rigs. 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, (ASC 606), which sets forth a global standard for revenue recognition and replaces most existing industry-specific guidance. The Company will be required to adopt the new standard in annual and interim periods beginning January 1, 2018. ASC 606 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company will adopt ASC 606, effective January 1, 2018 concurrently with ASU No. 2016-02, Leases (ASC 842) as discussed below. The Company is currently evaluating the impact ASC 606 will have on our consolidated financial statements and to complete that evaluation, the Company has completed training on the ASU, formed an implementation team and has started the review and documentation of contracts. Lease Accounting – In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842): Amendments to the FASB Accounting Standards Codification, which requires an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key qualitative and quantitative information about the entity's leasing arrangements. 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. ASC 842 is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Under the updated accounting standards, the Company has preliminarily determined that our drilling contracts contain a lease component, and our adoption, therefore, will require that the Company separately recognize revenues associated with the lease and services components. Our adoption, and the ultimate effect on our consolidated financial statements, will be based on an evaluation of the contract-specific facts and circumstances, and such effect could result in differences in the timing of our revenue recognition relative to current accounting standards. Due to the interaction with the issued accounting standard on revenue recognition, the Company expects to adopt ASC 842 effective January 1, 2018 concurrently with ASC 606. Our adoption will have an impact on how our consolidated balance sheets, statements of income, cash flows and disclosures contained in our notes to consolidated financial statements will be presented. The Company is currently evaluating the impact ASC 842 will have on our consolidated financial statements and to complete that evaluation, the Company has completed training on the ASU, formed an implementation team and has started the review and documentation of contracts. 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. The Company adopted this ASU as of January 1, 2017 and elected to account for forfeitures when they occur, on a modified retrospective basis. As required by this ASU, the Condensed Consolidated Statement of Cash Flows was retroactively adjusted for the three months ended March 31, 2016 to reclass $2.8 million from operating activities to financing activities related to shares repurchased for tax withholdings on vesting of restricted share units. The Company prospectively adopted the provision of this ASU related to the classification of excess tax benefits on the statement of cash flows as an operating cash flow. The adoption did not have a material impact on our 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. The Company 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. The Company is in the process of evaluating the impact this amendment may have on our consolidated financial statements . Statement of Cash Flows - In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides guidance on eight cash flow classification issues with the objective of reducing differences in practice. The Company will be required to adopt the amendments in this ASU in annual and interim periods beginning January 1, 2018, with early adoption permitted. Adoption is required to be on a retrospective basis, unless impracticable for any of the amendments, in which case a prospective application is permitted. The Company is in the process of evaluating the impact these amendments may have on our consolidated financial statements. Income Taxes - In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory , which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. As permitted under this ASU, the Company elected early adoption of this ASU as of January 1, 2017 and recorded a $206.6 million increase to retained earnings for the remaining unamortized deferred tax liability resulting from intra-entity transactions. The Company evaluated the impact to net income and earnings per share related to the adoption of this ASU on the three months ended March 31, 2017 and determined such impact to be immaterial. Business Combinations - In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company will be required to adopt the amendments in this ASU in annual and interim periods beginning January 1, 2018, with early adoption permitted. Adoption is required to be applied on a prospective basis on or after the effective date. The Company is in the process of evaluating the impact these amendments may have on our consolidated financial statements. Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost - In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires entities to present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs. The other components of net benefit cost, including interest cost, expected return on plan assets, amortization of prior service cost/credit and actuarial gain/loss, and settlement and curtailment effects, are to be presented outside of any subtotal of operating income. Entities will have to disclose the line(s) used to present the other components of net periodic benefit cost, if the components are not presented separately in the income statement . The ASU also allows only the service cost component to be eligible for capitalization. This ASU is effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company is in the process of evaluating the impact these amendments may have on our consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share A reconciliation of income from continuing operations for basic and diluted income per share is set forth below (in millions): Three months ended March 31, 2017 2016 Income from continuing operations $ 10.3 $ 122.8 Income from continuing operations allocated to non-vested share awards (0.9 ) — Income from continuing operations available to shareholders $ 9.4 $ 122.8 A reconciliation of shares for basic and diluted income per share is set forth below (in millions): Three months ended March 31, 2017 2016 Average common shares outstanding 125.7 125.0 Effect of dilutive securities - share-based compensation 1.7 0.8 Average shares for diluted computations 127.4 125.8 Share options, share appreciation rights, nonvested restricted stock, performance units (“P-Units”) 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 millions): Three months ended March 31, 2017 2016 Share options and appreciation rights 1.5 1.7 Nonvested restricted shares and restricted share units 1.4 2.2 Total potentially dilutive shares 2.9 3.9 |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 3 Months Ended |
Mar. 31, 2017 | |
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. The components of net periodic pension cost were as follows (dollars in millions): Three months ended March 31, 2017 2016 Service cost $ 4.0 $ 3.8 Interest cost 6.3 6.5 Expected return on plan assets (9.4 ) (9.9 ) Amortization of net loss 5.7 5.1 Amortization of prior service credit (1.2 ) (1.2 ) Net periodic pension cost $ 5.4 $ 4.3 The components of net periodic cost of other postretirement benefits were as follows (dollars in millions): Three months ended March 31, 2017 2016 Service cost $ — $ 0.1 Interest cost 0.2 0.5 Amortization of net loss 0.2 — Amortization of prior service credit (3.3 ) (0.1 ) Total other postretirement benefit cost $ (2.9 ) $ 0.5 During the three months ended March 31, 2017 , the Company contributed $6.8 million to its pension and other postretirement benefit plans and expects to make additional contributions to such plans totaling approximately $25.3 million for the remainder of 2017 . |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Uncertain tax positions – The Company has been advised by the U.S. Internal Revenue Service (IRS) of proposed unfavorable tax adjustments of $85 million including applicable penalties for the open tax years 2009 through 2012. The unfavorable tax adjustments primarily related 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. The Company has protested the proposed adjustment. However, the IRS does not agree with our protest and they have submitted the proposed unfavorable tax adjustments to be reviewed by the IRS Appeals group. In years subsequent to 2012, the Company has similar positions that could be subject to adjustments for the open years. The Company has provided for amounts that the Company believes will be ultimately payable under the proposed adjustments and intends to vigorously defend our positions; however, if the Company determines the provisions for these matters to be inadequate due to new information or the Company is 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. The gross unrecognized tax benefits excluding penalties and interest are $121 million and $120 million as of March 31, 2017 and December 31, 2016, respectively. The increase to gross unrecognized tax benefits was primarily due to interest, penalties, foreign currency exchange revaluation and tax positions taken related to current year-to-date anticipated transfer pricing positions. Realization of the net unrecognized tax benefits excluding penalties and interest would favorably impact our tax provision by $60 million . It is reasonable that the existing liabilities for the unrecognized tax benefits may increase or decrease over the next 12 months as a result of audit closures and statute expirations, however, the ultimate timing of the resolution and/or closure of audits is highly uncertain. Letters of credit – The Company periodically employs letters of credit in the normal course of our business, and had outstanding letters of credit of approximately $9.9 million at March 31, 2017 . Joint venture funding obligations – If the new joint venture company has insufficient cash from operations or financing is not available to fund the cost of the newbuild jack-up rigs, Rowan will be obligated to contribute funds to purchase such rigs, up to a maximum amount of $1.25 billion for all 20 newbuild jack-up rigs (see Note 1 ). Pending or threatened litigation – The Company is involved in various legal proceedings incidental to our businesses and are vigorously defending our position in all such matters. Although the outcome of such proceedings cannot be predicted with certainty, the Company believes that there are no known contingencies, claims or lawsuits that will have a material effect on its financial position, results of operations or cash flows. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation On February 22, 2017, 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 $24.1 million which will be recognized as compensation expense over a weighted-average period of 2.7 years from the grant date. The awards vest ratably over three years except to the extent they may vest earlier under our retirement policy. Additionally, on February 22, 2017, the Company granted to certain members of management P-Units that have a target value of $100 per unit. The amount ultimately earned is determined by the Company’s total shareholder return (TSR) relative to a selected group of peer companies, as defined in the award agreement, over a three -year period ending December 31, 2019. The amount earned 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, 2017 , 2018 , and 2019 and 25% of the P-Units’ value is determined by the relative TSR ranking for the three -year period ending December 31, 2019. P-Units cliff vest and payment is made, if any, on the third anniversary following the grant date. Any employee who terminates employment with the Company prior to the third anniversary for any reason other than retirement will not receive any payment with respect to P-Units unless approved by the Compensation Committee. Settlement of the P-Units granted may be in cash or shares, at the Compensation Committee's discretion. The grant date fair value of P-Units was estimated to be $8.4 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 end of the performance period. Liabilities for estimated P-Unit obligations at March 31, 2017 for 2017 grants and prior, included $9.0 million and $5.5 million classified as current and noncurrent, respectively, compared to $10.9 million and $12.8 million , respectively, at December 31, 2016 . Current and noncurrent estimated P-Unit liabilities are included in Accrued Liabilities, and Other Liabilities, respectively, in the Condensed Consolidated Balance Sheets. At March 31, 2017 , estimated unrecognized compensation cost related to nonvested share-based compensation arrangements totaled approximately $54.8 million , which is expected to be recognized as compensation expense over a remaining weighted-average period of 2.2 years . |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives 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. In connection with this agreement, the Company signed rights to 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 would have been due if the average price over the period was 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”) In January 2017, the Company and FCX settled the $10 million contingent payment provision with a $6.0 million payment received by the Company. 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 remaining Contingent Payment Derivative related to the $20 million contingent payment provision was determined using a Monte Carlo simulation and has no value as of March 31, 2017 (see Note 7 ). The following table provides the fair value of the Company’s derivative as reflected in the Condensed Consolidated Balance Sheets (in millions): Fair value Balance sheet classification March 31, 2017 December 31, 2016 Derivative: Contingent Payment Derivative Prepaid expenses and other current assets $ — $ 6.1 The following table provides the revaluation effect of the Company’s derivative on the Condensed Consolidated Statements of Operations (in millions): Amount of gain (loss) recognized in income (loss) Derivative Classification of gain (loss) recognized in income (loss) Three months ended March 31, 2017 Contingent Payment Derivative Other - net $ (0.1 ) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
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 $50.6 , 28.337% , 0.908% , and 7.071% at March 31, 2017 , 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. At December 31, 2016 , the Company held a Contingent Payment Derivative in the amount of $6.1 million which was classified as Prepaid Expenses and Other Current Assets on the Consolidated Balance Sheet. In January 2017, the Company and FCX settled the $10 million contingent payment provision with a $6.0 million payment received by the Company (see Note 6 ). The remaining Contingent Payment Derivative had no value at March 31, 2017 . 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 millions): Estimated fair value measurements Fair value Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant other unobservable inputs (Level 3) March 31, 2017: Assets - cash equivalents $ 1,160.1 $ 1,160.1 $ — $ — Derivative — — — — Other assets (Egyptian Pounds) 3.5 3.5 — — December 31, 2016: Assets - cash equivalents $ 1,242.3 $ 1,242.3 $ — $ — Derivative 6.1 — — 6.1 Other assets (Egyptian Pounds) 4.2 4.2 — — At March 31, 2017 and December 31, 2016 , the Company held Egyptian pounds in the amount of $3.5 million and $4.2 million , respectively, that are classified as Other Assets on the Condensed Consolidated Balance Sheets. The Company ceased drilling operations in Egypt in 2014, and is currently working to obtain access to the funds for use outside Egypt to the extent they are not utilized. The Company can provide no assurance it will be able to convert or utilize such funds in the future. 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 $2.553 billion at March 31, 2017 , and an estimated fair value at that date aggregating $2.300 billion , compared to a carrying and fair value of $2.680 billion and $2.448 billion , respectively, at December 31, 2016 . 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 | 3 Months Ended |
Mar. 31, 2017 | |
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 their effect on net income (loss) for the period (in millions): Three months ended March 31, 2017 2016 Amounts recognized as a component of net periodic pension and other postretirement benefit cost: Amortization of net loss $ (5.9 ) $ (5.1 ) Amortization of prior service credit 4.5 1.3 Total before income taxes (1.4 ) (3.8 ) Income tax benefit 0.5 1.3 Total reclassifications for the period, net of income taxes $ (0.9 ) $ (2.5 ) The Company records unrealized gains and losses related to net periodic pension and other postretirement benefit cost net of estimated taxes in Accumulated other comprehensive income (loss). The Company has a valuation allowance against its net U.S. deferred tax asset that is not expected to be realized. A portion of this valuation allowance is related to deferred tax benefits or expense as recorded in Accumulated other comprehensive income (loss). |
Other Financial Statement Discl
Other Financial Statement Disclosures | 3 Months Ended |
Mar. 31, 2017 | |
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 millions): March 31, 2017 December 31, 2016 Trade $ 297.6 $ 286.2 Income tax 8.7 7.7 Other 10.8 7.4 Total receivables - trade and other $ 317.1 $ 301.3 Accrued Liabilities – The following table sets forth the components of Accrued Liabilities (in millions): March 31, 2017 December 31, 2016 Pension and other postretirement benefits $ 27.4 $ 32.1 Compensation and related employee costs 42.2 62.4 Interest 39.8 33.6 Income taxes 20.7 18.3 Other 8.2 12.4 Total accrued liabilities $ 138.3 $ 158.8 Long-term Debt – Long-term debt consisted of the following (in millions): March 31, 2017 December 31, 2016 5% Senior Notes, due September 2017 ($92.2 million principal amount; 5.2% effective rate) $ — $ 92.0 7.875% Senior Notes, due August 2019 ($207.9 million and $209.8 million principal amount, respectively; 8.0% effective rate) 207.1 208.9 4.875% Senior Notes, due June 2022 ($656.6 million and $690.2 million principal amount, respectively; 4.7% effective rate) 661.3 695.4 4.75% Senior Notes, due January 2024 ( $398.1 million principal amount; 4.8% effective rate) 395.7 395.6 7.375% Senior Notes, due June 2025 ($500 million principal amount; 7.4% effective rate) 497.2 497.2 5.4% Senior Notes, due December 2042 ($400 million principal amount; 5.4% effective rate) 395.0 394.9 5.85% Senior Notes, due January 2044 ($400 million principal amount; 5.9% effective rate) 396.2 396.2 Total carrying value 2,552.5 2,680.2 Current portion (1) — 126.8 Carrying value, less current portion $ 2,552.5 $ 2,553.4 (1) Current portion of long-term debt at December 31, 2016 included the 5% Senior Notes due 2017, as well as the portion of 7.875% Senior Notes due 2019 and 4.875% Senior Notes due 2022 tendered in December 2016 but not settled until January 2017. In the first quarter of 2016, the Company paid $15.8 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 and recognized a $0.6 million gain on early extinguishment of debt. Also during the first quarter of 2016, the Company repurchased an additional $21.4 million aggregate principal amount of the 5% and 7.875% Senior Notes, which settled in April 2016 for cash paid of $20.1 million and resulted in a $1.2 million gain on early extinguishment of debt in the second quarter of 2016. In April 2016, the Company paid $9.4 million to 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. In December 2016, the Company commenced cash tender offers for $750 million aggregate principal amount of certain Senior Notes (the 2017 Notes, 2019 Notes, 2022 Notes and the 2024 Notes) issued by the Company. The tender offers expired on January 3, 2017; however, there was also an early tender expiration on December 16, 2016 which provided for an early tender premium. Senior Notes in the amount of $463.9 million were redeemed in December 2016 pursuant to notes validly tendered and accepted for purchase prior to the early tender expiration time. At the expiration of the tender offers on January 3, 2017, the Company paid $32.8 million to redeem $34.6 million aggregate principal amount of outstanding Senior Notes, consisting of $0.1 million of the 2017 Notes, $0.9 million of the 2019 Notes and $33.6 million of the 2022 Notes. On January 9, 2017, the Company called for redemption $92.1 million aggregate principal amount of the 2017 Notes that remained outstanding and on February 8, 2017, the Company paid $94.0 million to redeem such notes. Supplemental Cash Flow Information – Accrued capital expenditures, which are excluded from capital expenditures in the Condensed Consolidated Statements of Cash Flows until settlement, totaled $15.9 million and $27.0 million at March 31, 2017 and 2016 , respectively. 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. The Company provides for income taxes based upon the tax laws and rates in effect in the countries in which it conducts 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. The Company recognized tax expense of $29.7 million for the three months ended March 31, 2017 , compared to tax expense of $4.1 million for the comparable period in 2016 . Our effective tax rate was 74.2% for the three months ended March 31, 2017 compared to 3.2% for the comparable prior-year period ended March 31, 2016 . The increase in tax expense of $25.6 million for the three month period compared to the prior-year period is primarily attributed to: • an increase in deferred tax expense as a result of prior year restructuring and an increase to the valuation allowance on Luxembourg deferred tax assets, and • a reduction of tax benefit from amortization of intra-entity transfers due to adoption of ASU No. 2016-16. The Company has not provided deferred income taxes on certain undistributed earnings of its non-U.K. subsidiaries. Generally, earnings of non-U.K. subsidiaries in which Rowan Companies, Inc. (“RCI”) does not have a direct or indirect ownership interest can be distributed to Rowan plc without imposition of either U.K. or local country tax. It is generally the Company’s policy and intention to permanently reinvest earnings of non-U.S. subsidiaries of RCI outside the U.S. However, the Company has recognized taxes related to the earnings of certain subsidiaries that are not permanently reinvested or that will not be permanently reinvested in the future. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates 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 function and other administrative offices have not been allocated to our operating segments for purposes of measuring segment operating income and are included in “Unallocated costs and other.” “Other operating items” consists of net losses on equipment sales. Segment information for the three months ended March 31, 2017 and 2016 is set forth below (in millions): Three months ended March 31, 2017 2016 Deepwater: Revenues $ 160.7 $ 222.5 Operating expenses: Direct operating costs (excluding items below) 44.6 67.0 Depreciation and amortization 28.3 27.3 Selling, general and administrative — — Other operating items — 0.3 Income from operations $ 87.8 $ 127.9 Jack-ups: Revenues $ 213.6 $ 277.7 Operating expenses: Direct operating costs (excluding items below) 125.4 137.8 Depreciation and amortization 70.1 68.4 Selling, general and administrative — — Other operating items 3.4 1.9 Income from operations $ 14.7 $ 69.6 Unallocated costs and other: Revenues $ — $ — Operating expenses: Direct operating costs (excluding items below) — — Depreciation and amortization 0.7 3.2 Selling, general and administrative 24.0 26.9 Loss from operations $ (24.7 ) $ (30.1 ) Consolidated: Revenues $ 374.3 $ 500.2 Operating expenses: Direct operating costs (excluding items below) 170.0 204.8 Depreciation and amortization 99.1 98.9 Selling, general and administrative 24.0 26.9 Other operating items 3.4 2.2 Income from operations $ 77.8 $ 167.4 |
Guarantees of Registered Securi
Guarantees of Registered Securities | 3 Months Ended |
Mar. 31, 2017 | |
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: 7.875% Senior Notes due 2019; 4.875% Senior Notes due 2022; 4.75% Senior Notes due 2024; 7.375% Senior Notes due 2025; 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 and reflects the ownership structure as of March 31, 2017. Financial Information for the three months ended March 31, 2016, has been recast to reflect changes to the corporate ownership structure that occurred in the fourth quarter of 2016. Rowan Companies plc and Subsidiaries Condensed Consolidating Statements of Operations Three months ended March 31, 2017 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 14.5 $ 374.5 $ (14.7 ) $ 374.3 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 5.1 178.5 (13.6 ) 170.0 Depreciation and amortization — 4.7 94.4 — 99.1 Selling, general and administrative 5.9 — 19.2 (1.1 ) 24.0 Loss on disposals of property and equipment — 0.2 3.2 — 3.4 Total costs and expenses 5.9 10.0 295.3 (14.7 ) 296.5 INCOME (LOSS) FROM OPERATIONS (5.9 ) 4.5 79.2 — 77.8 OTHER INCOME (EXPENSE): Interest expense — (39.6 ) (0.1 ) 0.1 (39.6 ) Interest income — 0.7 1.4 (0.1 ) 2.0 Loss on extinguishment of debt — (0.2 ) — — (0.2 ) Other - net 5.1 (5.1 ) — — — Total other income (expense), net 5.1 (44.2 ) 1.3 — (37.8 ) INCOME (LOSS) BEFORE INCOME TAXES (0.8 ) (39.7 ) 80.5 — 40.0 Provision (benefit) for income taxes — (9.6 ) 39.6 (0.3 ) 29.7 Equity in earnings of subsidiaries, net of tax 11.1 19.9 — (31.0 ) — NET INCOME (LOSS) $ 10.3 $ (10.2 ) $ 40.9 $ (30.7 ) $ 10.3 Rowan Companies plc and Subsidiaries Condensed Consolidating Statements of Operations Three months ended March 31, 2016 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 20.8 $ 499.4 $ (20.0 ) $ 500.2 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 1.0 222.3 (18.5 ) 204.8 Depreciation and amortization — 4.2 94.4 0.3 98.9 Selling, general and administrative 7.0 — 21.7 (1.8 ) 26.9 Loss on disposals of property and equipment — — 2.2 — 2.2 Total costs and expenses 7.0 5.2 340.6 (20.0 ) 332.8 INCOME (LOSS) FROM OPERATIONS (7.0 ) 15.6 158.8 — 167.4 OTHER INCOME (EXPENSE): Interest expense — (38.9 ) (2.0 ) 2.0 (38.9 ) Interest income — 2.0 0.4 (2.0 ) 0.4 Gain on extinguishment of debt — 0.6 — — 0.6 Other - net 5.4 (5.4 ) (2.6 ) — (2.6 ) Total other income (expense), net 5.4 (41.7 ) (4.2 ) — (40.5 ) INCOME (LOSS) BEFORE INCOME TAXES (1.6 ) (26.1 ) 154.6 — 126.9 Provision for income taxes — 11.0 2.4 (9.3 ) 4.1 Equity in earnings of subsidiaries, net of tax 124.4 25.1 — (149.5 ) — NET INCOME (LOSS) $ 122.8 $ (12.0 ) $ 152.2 $ (140.2 ) $ 122.8 Rowan Companies plc and Subsidiaries Statements of Comprehensive Income (Loss) Three months ended March 31, 2017 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 10.3 $ (10.2 ) $ 40.9 $ (30.7 ) $ 10.3 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income (loss) as a component of net periodic benefit cost, net of income taxes 0.9 0.9 — (0.9 ) 0.9 COMPREHENSIVE INCOME (LOSS) $ 11.2 $ (9.3 ) $ 40.9 $ (31.6 ) $ 11.2 Rowan Companies plc and Subsidiaries Statements of Comprehensive Income (Loss) Three months ended March 31, 2016 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 122.8 $ (12.0 ) $ 152.2 $ (140.2 ) $ 122.8 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income (loss) as a component of net periodic benefit cost, net of income taxes 2.5 2.5 — (2.5 ) 2.5 COMPREHENSIVE INCOME (LOSS) $ 125.3 $ (9.5 ) $ 152.2 $ (142.7 ) $ 125.3 Rowan Companies plc and Subsidiaries Condensed Consolidating Balance Sheets March 31, 2017 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated CURRENT ASSETS: Cash and cash equivalents $ 3.9 $ 302.1 $ 867.2 $ — $ 1,173.2 Receivables - trade and other — 6.3 310.8 — 317.1 Prepaid expenses and other current assets 0.2 20.9 3.5 — 24.6 Total current assets 4.1 329.3 1,181.5 — 1,514.9 Property and equipment - gross — 615.7 8,506.5 — 9,122.2 Less accumulated depreciation and amortization — 280.0 1,858.4 — 2,138.4 Property and equipment - net — 335.7 6,648.1 — 6,983.8 Investments in subsidiaries 5,339.6 6,118.8 — (11,458.4 ) — Due from affiliates 0.3 623.4 48.8 (672.5 ) — Other assets — 6.9 47.7 — 54.6 $ 5,344.0 $ 7,414.1 $ 7,926.1 $ (12,130.9 ) $ 8,553.3 CURRENT LIABILITIES: Accounts payable - trade 0.2 27.7 65.2 — 93.1 Deferred revenues — — 108.2 — 108.2 Accrued liabilities 0.1 94.1 44.1 — 138.3 Total current liabilities 0.3 121.8 217.5 — 339.6 Long-term debt, less current portion — 2,552.5 — — 2,552.5 Due to affiliates 7.5 47.6 617.4 (672.5 ) — Other liabilities 4.4 277.6 38.6 — 320.6 Deferred income taxes - net — 521.4 39.6 (552.2 ) 8.8 Shareholders' equity 5,331.8 3,893.2 7,013.0 (10,906.2 ) 5,331.8 $ 5,344.0 $ 7,414.1 $ 7,926.1 $ (12,130.9 ) $ 8,553.3 Rowan Companies plc and Subsidiaries Condensed Consolidating Balance Sheets December 31, 2016 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated CURRENT ASSETS: Cash and cash equivalents $ 3.7 $ 532.0 $ 719.8 $ — $ 1,255.5 Receivables - trade and other — 1.8 299.5 — 301.3 Prepaid expenses and other current assets 0.3 12.9 10.3 — 23.5 Total current assets 4.0 546.7 1,029.6 — 1,580.3 Property and equipment - gross — 631.0 8,469.8 — 9,100.8 Less accumulated depreciation and amortization — 273.8 1,767.0 — 2,040.8 Property and equipment - net — 357.2 6,702.8 — 7,060.0 Investments in subsidiaries 5,115.8 6,097.9 — (11,213.7 ) — Due from affiliates 0.4 437.2 64.2 (501.8 ) — Other assets — 5.6 29.7 — 35.3 $ 5,120.2 $ 7,444.6 $ 7,826.3 $ (11,715.5 ) $ 8,675.6 CURRENT LIABILITIES: Current portion of long-term debt $ — $ 126.8 $ — $ — $ 126.8 Accounts payable - trade $ 0.4 $ 22.4 $ 71.5 $ — $ 94.3 Deferred revenues — 0.1 103.8 — 103.9 Accrued liabilities 0.3 107.4 51.1 — 158.8 Total current liabilities 0.7 256.7 226.4 — 483.8 Long-term debt, less current portion — 2,553.4 — — 2,553.4 Due to affiliates 0.4 63.9 437.5 (501.8 ) — Other liabilities 5.2 283.9 49.7 — 338.8 Deferred income taxes - net — 598.3 139.3 (551.9 ) 185.7 Shareholders' equity 5,113.9 3,688.4 6,973.4 (10,661.8 ) 5,113.9 $ 5,120.2 $ 7,444.6 $ 7,826.3 $ (11,715.5 ) $ 8,675.6 Rowan Companies plc and Subsidiaries Condensed Consolidating Statements of Cash Flows Three months ended March 31, 2017 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (1.7 ) $ 87.5 $ (4.3 ) $ — $ 81.5 INVESTING ACTIVITIES: Capital expenditures — (9.7 ) (21.2 ) — (30.9 ) Proceeds from disposals of property and equipment — — 0.1 — 0.1 Net cash used in investing activities — (9.7 ) (21.1 ) — (30.8 ) FINANCING ACTIVITIES: Advances (to) from affiliates 7.2 (180.0 ) 172.8 — — Reductions of long-term debt — (127.7 ) — — (127.7 ) Shares repurchased for tax withholdings on vesting of restricted share units (5.3 ) — — — (5.3 ) Net cash provided by (used in) financing activities 1.9 (307.7 ) 172.8 — (133.0 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 0.2 (229.9 ) 147.4 — (82.3 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3.7 532.0 719.8 — 1,255.5 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3.9 $ 302.1 $ 867.2 $ — $ 1,173.2 Rowan Companies plc and Subsidiaries Condensed Consolidating Statements of Cash Flows Three months ended March 31, 2016 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ 0.3 $ (46.6 ) $ 208.6 $ 0.6 $ 162.9 INVESTING ACTIVITIES: Capital expenditures — (9.1 ) (23.8 ) — (32.9 ) Proceeds from disposals of property and equipment — 0.2 0.1 — 0.3 Collections on subsidiary notes receivable — 248.8 — (248.8 ) — Investments in consolidated subsidiaries (0.2 ) (59.9 ) — 60.1 — Net cash provided by (used in) investing activities (0.2 ) 180.0 (23.7 ) (188.7 ) (32.6 ) FINANCING ACTIVITIES: Advances (to) from affiliates (1.1 ) (38.3 ) 40.0 (0.6 ) — Contributions from issuer — — 60.1 (60.1 ) — Reductions of long-term debt — (16.5 ) (248.8 ) 248.8 (16.5 ) Shares repurchased for tax withholdings on vesting of restricted share units (2.8 ) — — — (2.8 ) Net cash used in financing activities (3.9 ) (54.8 ) (148.7 ) 188.1 (19.3 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3.8 ) 78.6 36.2 — 111.0 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 17.3 9.5 457.4 — 484.2 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 13.5 $ 88.1 $ 493.6 $ — $ 595.2 |
Nature of Operations and Basi21
Nature of Operations and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The financial statements included in this Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America ( “ US GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission. Certain information and notes have been condensed or omitted as permitted by those rules and regulations. The financial information included in this report is unaudited, but 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 financial position, results of operations and cash flows for the interim periods presented. The preparation of our condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 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, 2016 . |
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, (ASC 606), which sets forth a global standard for revenue recognition and replaces most existing industry-specific guidance. The Company will be required to adopt the new standard in annual and interim periods beginning January 1, 2018. ASC 606 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company will adopt ASC 606, effective January 1, 2018 concurrently with ASU No. 2016-02, Leases (ASC 842) as discussed below. The Company is currently evaluating the impact ASC 606 will have on our consolidated financial statements and to complete that evaluation, the Company has completed training on the ASU, formed an implementation team and has started the review and documentation of contracts. Lease Accounting – In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842): Amendments to the FASB Accounting Standards Codification, which requires an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key qualitative and quantitative information about the entity's leasing arrangements. 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. ASC 842 is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. Under the updated accounting standards, the Company has preliminarily determined that our drilling contracts contain a lease component, and our adoption, therefore, will require that the Company separately recognize revenues associated with the lease and services components. Our adoption, and the ultimate effect on our consolidated financial statements, will be based on an evaluation of the contract-specific facts and circumstances, and such effect could result in differences in the timing of our revenue recognition relative to current accounting standards. Due to the interaction with the issued accounting standard on revenue recognition, the Company expects to adopt ASC 842 effective January 1, 2018 concurrently with ASC 606. Our adoption will have an impact on how our consolidated balance sheets, statements of income, cash flows and disclosures contained in our notes to consolidated financial statements will be presented. The Company is currently evaluating the impact ASC 842 will have on our consolidated financial statements and to complete that evaluation, the Company has completed training on the ASU, formed an implementation team and has started the review and documentation of contracts. 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. The Company adopted this ASU as of January 1, 2017 and elected to account for forfeitures when they occur, on a modified retrospective basis. As required by this ASU, the Condensed Consolidated Statement of Cash Flows was retroactively adjusted for the three months ended March 31, 2016 to reclass $2.8 million from operating activities to financing activities related to shares repurchased for tax withholdings on vesting of restricted share units. The Company prospectively adopted the provision of this ASU related to the classification of excess tax benefits on the statement of cash flows as an operating cash flow. The adoption did not have a material impact on our 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. The Company 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. The Company is in the process of evaluating the impact this amendment may have on our consolidated financial statements . Statement of Cash Flows - In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides guidance on eight cash flow classification issues with the objective of reducing differences in practice. The Company will be required to adopt the amendments in this ASU in annual and interim periods beginning January 1, 2018, with early adoption permitted. Adoption is required to be on a retrospective basis, unless impracticable for any of the amendments, in which case a prospective application is permitted. The Company is in the process of evaluating the impact these amendments may have on our consolidated financial statements. Income Taxes - In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory , which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. As permitted under this ASU, the Company elected early adoption of this ASU as of January 1, 2017 and recorded a $206.6 million increase to retained earnings for the remaining unamortized deferred tax liability resulting from intra-entity transactions. The Company evaluated the impact to net income and earnings per share related to the adoption of this ASU on the three months ended March 31, 2017 and determined such impact to be immaterial. Business Combinations - In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company will be required to adopt the amendments in this ASU in annual and interim periods beginning January 1, 2018, with early adoption permitted. Adoption is required to be applied on a prospective basis on or after the effective date. The Company is in the process of evaluating the impact these amendments may have on our consolidated financial statements. Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost - In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires entities to present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs. The other components of net benefit cost, including interest cost, expected return on plan assets, amortization of prior service cost/credit and actuarial gain/loss, and settlement and curtailment effects, are to be presented outside of any subtotal of operating income. Entities will have to disclose the line(s) used to present the other components of net periodic benefit cost, if the components are not presented separately in the income statement . The ASU also allows only the service cost component to be eligible for capitalization. This ASU is effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company is in the process of evaluating the impact these amendments may have on our consolidated financial statements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Earnings per Share | A reconciliation of income from continuing operations for basic and diluted income per share is set forth below (in millions): Three months ended March 31, 2017 2016 Income from continuing operations $ 10.3 $ 122.8 Income from continuing operations allocated to non-vested share awards (0.9 ) — Income from continuing operations available to shareholders $ 9.4 $ 122.8 A reconciliation of shares for basic and diluted income per share is set forth below (in millions): Three months ended March 31, 2017 2016 Average common shares outstanding 125.7 125.0 Effect of dilutive securities - share-based compensation 1.7 0.8 Average shares for diluted computations 127.4 125.8 |
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 millions): Three months ended March 31, 2017 2016 Share options and appreciation rights 1.5 1.7 Nonvested restricted shares and restricted share units 1.4 2.2 Total potentially dilutive shares 2.9 3.9 |
Pension and Other Postretirem23
Pension and Other Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Summary of Net Periodic Pension and Other Postemployment Benefit Costs | The components of net periodic pension cost were as follows (dollars in millions): Three months ended March 31, 2017 2016 Service cost $ 4.0 $ 3.8 Interest cost 6.3 6.5 Expected return on plan assets (9.4 ) (9.9 ) Amortization of net loss 5.7 5.1 Amortization of prior service credit (1.2 ) (1.2 ) Net periodic pension cost $ 5.4 $ 4.3 The components of net periodic cost of other postretirement benefits were as follows (dollars in millions): Three months ended March 31, 2017 2016 Service cost $ — $ 0.1 Interest cost 0.2 0.5 Amortization of net loss 0.2 — Amortization of prior service credit (3.3 ) (0.1 ) Total other postretirement benefit cost $ (2.9 ) $ 0.5 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 Sheets (in millions): Fair value Balance sheet classification March 31, 2017 December 31, 2016 Derivative: Contingent Payment Derivative Prepaid expenses and other current assets $ — $ 6.1 The following table provides the revaluation effect of the Company’s derivative on the Condensed Consolidated Statements of Operations (in millions): Amount of gain (loss) recognized in income (loss) Derivative Classification of gain (loss) recognized in income (loss) Three months ended March 31, 2017 Contingent Payment Derivative Other - net $ (0.1 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 millions): Estimated fair value measurements Fair value Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant other unobservable inputs (Level 3) March 31, 2017: Assets - cash equivalents $ 1,160.1 $ 1,160.1 $ — $ — Derivative — — — — Other assets (Egyptian Pounds) 3.5 3.5 — — December 31, 2016: Assets - cash equivalents $ 1,242.3 $ 1,242.3 $ — $ — Derivative 6.1 — — 6.1 Other assets (Egyptian Pounds) 4.2 4.2 — — |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 their effect on net income (loss) for the period (in millions): Three months ended March 31, 2017 2016 Amounts recognized as a component of net periodic pension and other postretirement benefit cost: Amortization of net loss $ (5.9 ) $ (5.1 ) Amortization of prior service credit 4.5 1.3 Total before income taxes (1.4 ) (3.8 ) Income tax benefit 0.5 1.3 Total reclassifications for the period, net of income taxes $ (0.9 ) $ (2.5 ) |
Other Financial Statement Dis27
Other Financial Statement Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Financial Statement Disclosures [Abstract] | |
Components of Receivables - Trade and Other | The following table sets forth the components of Receivables - Trade and Other (in millions): March 31, 2017 December 31, 2016 Trade $ 297.6 $ 286.2 Income tax 8.7 7.7 Other 10.8 7.4 Total receivables - trade and other $ 317.1 $ 301.3 |
Schedule of Accrued Liabilities | The following table sets forth the components of Accrued Liabilities (in millions): March 31, 2017 December 31, 2016 Pension and other postretirement benefits $ 27.4 $ 32.1 Compensation and related employee costs 42.2 62.4 Interest 39.8 33.6 Income taxes 20.7 18.3 Other 8.2 12.4 Total accrued liabilities $ 138.3 $ 158.8 |
Schedule of Long-term Debt | Long-term debt consisted of the following (in millions): March 31, 2017 December 31, 2016 5% Senior Notes, due September 2017 ($92.2 million principal amount; 5.2% effective rate) $ — $ 92.0 7.875% Senior Notes, due August 2019 ($207.9 million and $209.8 million principal amount, respectively; 8.0% effective rate) 207.1 208.9 4.875% Senior Notes, due June 2022 ($656.6 million and $690.2 million principal amount, respectively; 4.7% effective rate) 661.3 695.4 4.75% Senior Notes, due January 2024 ( $398.1 million principal amount; 4.8% effective rate) 395.7 395.6 7.375% Senior Notes, due June 2025 ($500 million principal amount; 7.4% effective rate) 497.2 497.2 5.4% Senior Notes, due December 2042 ($400 million principal amount; 5.4% effective rate) 395.0 394.9 5.85% Senior Notes, due January 2044 ($400 million principal amount; 5.9% effective rate) 396.2 396.2 Total carrying value 2,552.5 2,680.2 Current portion (1) — 126.8 Carrying value, less current portion $ 2,552.5 $ 2,553.4 (1) Current portion of long-term debt at December 31, 2016 included the 5% Senior Notes due 2017, as well as the portion of 7.875% Senior Notes due 2019 and 4.875% Senior Notes due 2022 tendered in December 2016 but not settled until January 2017. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information for the three months ended March 31, 2017 and 2016 is set forth below (in millions): Three months ended March 31, 2017 2016 Deepwater: Revenues $ 160.7 $ 222.5 Operating expenses: Direct operating costs (excluding items below) 44.6 67.0 Depreciation and amortization 28.3 27.3 Selling, general and administrative — — Other operating items — 0.3 Income from operations $ 87.8 $ 127.9 Jack-ups: Revenues $ 213.6 $ 277.7 Operating expenses: Direct operating costs (excluding items below) 125.4 137.8 Depreciation and amortization 70.1 68.4 Selling, general and administrative — — Other operating items 3.4 1.9 Income from operations $ 14.7 $ 69.6 Unallocated costs and other: Revenues $ — $ — Operating expenses: Direct operating costs (excluding items below) — — Depreciation and amortization 0.7 3.2 Selling, general and administrative 24.0 26.9 Loss from operations $ (24.7 ) $ (30.1 ) Consolidated: Revenues $ 374.3 $ 500.2 Operating expenses: Direct operating costs (excluding items below) 170.0 204.8 Depreciation and amortization 99.1 98.9 Selling, general and administrative 24.0 26.9 Other operating items 3.4 2.2 Income from operations $ 77.8 $ 167.4 |
Guarantees of Registered Secu29
Guarantees of Registered Securities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Income Statements | Rowan Companies plc and Subsidiaries Condensed Consolidating Statements of Operations Three months ended March 31, 2017 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 14.5 $ 374.5 $ (14.7 ) $ 374.3 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 5.1 178.5 (13.6 ) 170.0 Depreciation and amortization — 4.7 94.4 — 99.1 Selling, general and administrative 5.9 — 19.2 (1.1 ) 24.0 Loss on disposals of property and equipment — 0.2 3.2 — 3.4 Total costs and expenses 5.9 10.0 295.3 (14.7 ) 296.5 INCOME (LOSS) FROM OPERATIONS (5.9 ) 4.5 79.2 — 77.8 OTHER INCOME (EXPENSE): Interest expense — (39.6 ) (0.1 ) 0.1 (39.6 ) Interest income — 0.7 1.4 (0.1 ) 2.0 Loss on extinguishment of debt — (0.2 ) — — (0.2 ) Other - net 5.1 (5.1 ) — — — Total other income (expense), net 5.1 (44.2 ) 1.3 — (37.8 ) INCOME (LOSS) BEFORE INCOME TAXES (0.8 ) (39.7 ) 80.5 — 40.0 Provision (benefit) for income taxes — (9.6 ) 39.6 (0.3 ) 29.7 Equity in earnings of subsidiaries, net of tax 11.1 19.9 — (31.0 ) — NET INCOME (LOSS) $ 10.3 $ (10.2 ) $ 40.9 $ (30.7 ) $ 10.3 Rowan Companies plc and Subsidiaries Condensed Consolidating Statements of Operations Three months ended March 31, 2016 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated REVENUES $ — $ 20.8 $ 499.4 $ (20.0 ) $ 500.2 COSTS AND EXPENSES: Direct operating costs (excluding items below) — 1.0 222.3 (18.5 ) 204.8 Depreciation and amortization — 4.2 94.4 0.3 98.9 Selling, general and administrative 7.0 — 21.7 (1.8 ) 26.9 Loss on disposals of property and equipment — — 2.2 — 2.2 Total costs and expenses 7.0 5.2 340.6 (20.0 ) 332.8 INCOME (LOSS) FROM OPERATIONS (7.0 ) 15.6 158.8 — 167.4 OTHER INCOME (EXPENSE): Interest expense — (38.9 ) (2.0 ) 2.0 (38.9 ) Interest income — 2.0 0.4 (2.0 ) 0.4 Gain on extinguishment of debt — 0.6 — — 0.6 Other - net 5.4 (5.4 ) (2.6 ) — (2.6 ) Total other income (expense), net 5.4 (41.7 ) (4.2 ) — (40.5 ) INCOME (LOSS) BEFORE INCOME TAXES (1.6 ) (26.1 ) 154.6 — 126.9 Provision for income taxes — 11.0 2.4 (9.3 ) 4.1 Equity in earnings of subsidiaries, net of tax 124.4 25.1 — (149.5 ) — NET INCOME (LOSS) $ 122.8 $ (12.0 ) $ 152.2 $ (140.2 ) $ 122.8 |
Statements of Comprehensive Income (Loss) | Rowan Companies plc and Subsidiaries Statements of Comprehensive Income (Loss) Three months ended March 31, 2017 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 10.3 $ (10.2 ) $ 40.9 $ (30.7 ) $ 10.3 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income (loss) as a component of net periodic benefit cost, net of income taxes 0.9 0.9 — (0.9 ) 0.9 COMPREHENSIVE INCOME (LOSS) $ 11.2 $ (9.3 ) $ 40.9 $ (31.6 ) $ 11.2 Rowan Companies plc and Subsidiaries Statements of Comprehensive Income (Loss) Three months ended March 31, 2016 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET INCOME (LOSS) $ 122.8 $ (12.0 ) $ 152.2 $ (140.2 ) $ 122.8 OTHER COMPREHENSIVE INCOME: Net reclassification adjustments for amount recognized in net income (loss) as a component of net periodic benefit cost, net of income taxes 2.5 2.5 — (2.5 ) 2.5 COMPREHENSIVE INCOME (LOSS) $ 125.3 $ (9.5 ) $ 152.2 $ (142.7 ) $ 125.3 |
Condensed Consolidating Balance Sheets | Rowan Companies plc and Subsidiaries Condensed Consolidating Balance Sheets March 31, 2017 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated CURRENT ASSETS: Cash and cash equivalents $ 3.9 $ 302.1 $ 867.2 $ — $ 1,173.2 Receivables - trade and other — 6.3 310.8 — 317.1 Prepaid expenses and other current assets 0.2 20.9 3.5 — 24.6 Total current assets 4.1 329.3 1,181.5 — 1,514.9 Property and equipment - gross — 615.7 8,506.5 — 9,122.2 Less accumulated depreciation and amortization — 280.0 1,858.4 — 2,138.4 Property and equipment - net — 335.7 6,648.1 — 6,983.8 Investments in subsidiaries 5,339.6 6,118.8 — (11,458.4 ) — Due from affiliates 0.3 623.4 48.8 (672.5 ) — Other assets — 6.9 47.7 — 54.6 $ 5,344.0 $ 7,414.1 $ 7,926.1 $ (12,130.9 ) $ 8,553.3 CURRENT LIABILITIES: Accounts payable - trade 0.2 27.7 65.2 — 93.1 Deferred revenues — — 108.2 — 108.2 Accrued liabilities 0.1 94.1 44.1 — 138.3 Total current liabilities 0.3 121.8 217.5 — 339.6 Long-term debt, less current portion — 2,552.5 — — 2,552.5 Due to affiliates 7.5 47.6 617.4 (672.5 ) — Other liabilities 4.4 277.6 38.6 — 320.6 Deferred income taxes - net — 521.4 39.6 (552.2 ) 8.8 Shareholders' equity 5,331.8 3,893.2 7,013.0 (10,906.2 ) 5,331.8 $ 5,344.0 $ 7,414.1 $ 7,926.1 $ (12,130.9 ) $ 8,553.3 Rowan Companies plc and Subsidiaries Condensed Consolidating Balance Sheets December 31, 2016 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated CURRENT ASSETS: Cash and cash equivalents $ 3.7 $ 532.0 $ 719.8 $ — $ 1,255.5 Receivables - trade and other — 1.8 299.5 — 301.3 Prepaid expenses and other current assets 0.3 12.9 10.3 — 23.5 Total current assets 4.0 546.7 1,029.6 — 1,580.3 Property and equipment - gross — 631.0 8,469.8 — 9,100.8 Less accumulated depreciation and amortization — 273.8 1,767.0 — 2,040.8 Property and equipment - net — 357.2 6,702.8 — 7,060.0 Investments in subsidiaries 5,115.8 6,097.9 — (11,213.7 ) — Due from affiliates 0.4 437.2 64.2 (501.8 ) — Other assets — 5.6 29.7 — 35.3 $ 5,120.2 $ 7,444.6 $ 7,826.3 $ (11,715.5 ) $ 8,675.6 CURRENT LIABILITIES: Current portion of long-term debt $ — $ 126.8 $ — $ — $ 126.8 Accounts payable - trade $ 0.4 $ 22.4 $ 71.5 $ — $ 94.3 Deferred revenues — 0.1 103.8 — 103.9 Accrued liabilities 0.3 107.4 51.1 — 158.8 Total current liabilities 0.7 256.7 226.4 — 483.8 Long-term debt, less current portion — 2,553.4 — — 2,553.4 Due to affiliates 0.4 63.9 437.5 (501.8 ) — Other liabilities 5.2 283.9 49.7 — 338.8 Deferred income taxes - net — 598.3 139.3 (551.9 ) 185.7 Shareholders' equity 5,113.9 3,688.4 6,973.4 (10,661.8 ) 5,113.9 $ 5,120.2 $ 7,444.6 $ 7,826.3 $ (11,715.5 ) $ 8,675.6 |
Consolidating Statements of Cash Flows | Rowan Companies plc and Subsidiaries Condensed Consolidating Statements of Cash Flows Three months ended March 31, 2017 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (1.7 ) $ 87.5 $ (4.3 ) $ — $ 81.5 INVESTING ACTIVITIES: Capital expenditures — (9.7 ) (21.2 ) — (30.9 ) Proceeds from disposals of property and equipment — — 0.1 — 0.1 Net cash used in investing activities — (9.7 ) (21.1 ) — (30.8 ) FINANCING ACTIVITIES: Advances (to) from affiliates 7.2 (180.0 ) 172.8 — — Reductions of long-term debt — (127.7 ) — — (127.7 ) Shares repurchased for tax withholdings on vesting of restricted share units (5.3 ) — — — (5.3 ) Net cash provided by (used in) financing activities 1.9 (307.7 ) 172.8 — (133.0 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 0.2 (229.9 ) 147.4 — (82.3 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3.7 532.0 719.8 — 1,255.5 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3.9 $ 302.1 $ 867.2 $ — $ 1,173.2 Rowan Companies plc and Subsidiaries Condensed Consolidating Statements of Cash Flows Three months ended March 31, 2016 (In millions) (Unaudited) Rowan plc (Parent) RCI (Issuer) Non-guarantor subsidiaries Consolidating adjustments Consolidated NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ 0.3 $ (46.6 ) $ 208.6 $ 0.6 $ 162.9 INVESTING ACTIVITIES: Capital expenditures — (9.1 ) (23.8 ) — (32.9 ) Proceeds from disposals of property and equipment — 0.2 0.1 — 0.3 Collections on subsidiary notes receivable — 248.8 — (248.8 ) — Investments in consolidated subsidiaries (0.2 ) (59.9 ) — 60.1 — Net cash provided by (used in) investing activities (0.2 ) 180.0 (23.7 ) (188.7 ) (32.6 ) FINANCING ACTIVITIES: Advances (to) from affiliates (1.1 ) (38.3 ) 40.0 (0.6 ) — Contributions from issuer — — 60.1 (60.1 ) — Reductions of long-term debt — (16.5 ) (248.8 ) 248.8 (16.5 ) Shares repurchased for tax withholdings on vesting of restricted share units (2.8 ) — — — (2.8 ) Net cash used in financing activities (3.9 ) (54.8 ) (148.7 ) 188.1 (19.3 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3.8 ) 78.6 36.2 — 111.0 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 17.3 9.5 457.4 — 484.2 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 13.5 $ 88.1 $ 493.6 $ — $ 595.2 |
Nature of Operations and Basi30
Nature of Operations and Basis of Presentation (Details) | 3 Months Ended | ||
Mar. 31, 2017USD ($)drilling_unit | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Number of mobile offshore drilling units | drilling_unit | 29 | ||
Number of fleet of self-elevating mobile offshore jack-up drilling units | drilling_unit | 25 | ||
Number of ultra-deepwater drillships | drilling_unit | 4 | ||
Net cash provided by (used in) operating activities | $ 81,500,000 | $ 162,900,000 | |
Net cash provided by (used in) financing activities | (133,000,000) | (19,300,000) | |
Cumulative effect of new accounting principle in period of adoption | 206,600,000 | ||
Saudi Arabia Joint Venture [Member] | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Expected payment to acquire equity method investments | $ 25,000,000 | ||
Duration of drilling contract | 15 years | ||
Frequency of drilling rig contract repricing | 3 years | ||
Period of joint venture funding of drilling rigs | 10 years | ||
Saudi Arabia Joint Venture [Member] | Saudi Aramco [Member] | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Equity method investment, ownership percentage | 50.00% | ||
Initial number of rigs expected to be contributed to joint venture | drilling_unit | 2 | ||
Parent Company [Member] | Saudi Arabia Joint Venture [Member] | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Equity method investment, ownership percentage | 50.00% | ||
Initial number of rigs expected to be contributed to joint venture | drilling_unit | 3 | ||
Additional number of rigs expected to be contributed to joint venture | drilling_unit | 2 | ||
Maximum [Member] | Saudi Arabia Joint Venture [Member] | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Number of drilling rigs to be purchased by joint venture | drilling_unit | 20 | ||
Contingent funding obligation to equity method investment | $ 1,250,000,000 | ||
New Accounting Pronouncement, Early Adoption, Effect [Member] | Accounting Standards Update 2016-09, Statutory Tax Withholding Component [Member] | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Net cash provided by (used in) operating activities | (2,800,000) | ||
Net cash provided by (used in) financing activities | $ 2,800,000 | ||
Retained earnings [Member] | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Cumulative effect of new accounting principle in period of adoption | $ 206,600,000 | ||
Retained earnings [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member] | Accounting Standards Update 2016-16 [Member] | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Cumulative effect of new accounting principle in period of adoption | $ 206,600,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Income from continuing operations | $ 10.3 | $ 122.8 |
Income from continuing operations allocated to non-vested share awards | (0.9) | 0 |
Income from continuing operations available to shareholders | $ 9.4 | $ 122.8 |
Average common shares outstanding (in shares) | 125.7 | 125 |
Effect of dilutive securities - share-based compensation (in shares) | 1.7 | 0.8 |
Average shares for diluted computations (in shares) | 127.4 | 125.8 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 2.9 | 3.9 |
Share Options and Appreciation Rights [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 1.5 | 1.7 |
Novested Restricted Shares and Restricted Share Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 1.4 | 2.2 |
Pension and Other Postretirem32
Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||
Contribution to pension and other postemployment benefit plans | $ 6.8 | |
Future contributions to pension and other postemployment benefit plans | 25.3 | |
Defined Benefit Pension [Member] | ||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||
Service cost | 4 | $ 3.8 |
Interest cost | 6.3 | 6.5 |
Expected return on plan assets | (9.4) | (9.9) |
Amortization of net loss | 5.7 | 5.1 |
Amortization of prior service credit | (1.2) | (1.2) |
Total net pension cost and other postretirement benefit cost | 5.4 | 4.3 |
Other Postretirement Benefit [Member] | ||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||
Service cost | 0 | 0.1 |
Interest cost | 0.2 | 0.5 |
Amortization of net loss | 0.2 | 0 |
Amortization of prior service credit | (3.3) | (0.1) |
Total net pension cost and other postretirement benefit cost | $ (2.9) | $ 0.5 |
Commitments and Contingent Li33
Commitments and Contingent Liabilities (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)drilling_unit | Dec. 31, 2016USD ($) | |
Long-term Purchase Commitment [Line Items] | ||
IRS proposed unfavorable tax adjustments | $ 85 | |
Gross unrecognized tax benefits | 121 | $ 120 |
Tax impact of unrecognized tax benefits, if reversed | 60 | |
Outstanding letters of credit | 9.9 | |
Newbuild Jack-Up Rigs [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Long-term purchase commitment, amount | $ 1,250 | |
Saudi Arabia Joint Venture [Member] | Maximum [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Number of drilling rigs to be purchased by joint venture | drilling_unit | 20 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 22, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average period for remaining recognition of compensation expense | 2 years 2 months 12 days | ||
Unrecognized compensation cost related to nonvested share-based compensation arrangements | $ 54.8 | ||
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Estimated liabilities for share-based compensation awards classified as short-term | 9 | $ 10.9 | |
Estimated liabilities for share-based compensation awards classified as long-term | $ 5.5 | $ 12.8 | |
February 22, 2017 Grant [Member] | Restricted Share Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based awards, grant-date fair value | $ 24.1 | ||
Weighted-average period for remaining recognition of compensation expense | 2 years 8 months 12 days | ||
Awards vesting period | 3 years | ||
February 22, 2017 Grant [Member] | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based awards, grant-date fair value | $ 8.4 | ||
Awards vesting period | 3 years | ||
Target value of P-Units (in dollars per unit) | $ 100 | ||
February 22, 2017 Grant [Member] | 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 | ||
February 22, 2017 Grant [Member] | Performance Shares [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards vesting period | 3 years | ||
Expected payout on P-Units (in dollars per unit) | $ 200 | ||
February 22, 2017 Grant [Member] | Performance Shares [Member] | One-Year Period ending December 31, 2017 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance unit value percentage determined on an annual performance | 25.00% | ||
Period for value determination | 1 year | ||
February 22, 2017 Grant [Member] | Performance Shares [Member] | One-Year Period Ending December 31, 2018 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance unit value percentage determined on an annual performance | 25.00% | ||
Period for value determination | 1 year | ||
February 22, 2017 Grant [Member] | Performance Shares [Member] | One-Year Period Ending December 31, 2019 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance unit value percentage determined on an annual performance | 25.00% | ||
Period for value determination | 1 year | ||
February 22, 2017 Grant [Member] | Performance Shares [Member] | Three-Year Period Ending December 31, 2019 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Period for value determination | 3 years | ||
Performance unit value percentage determined on total vesting period performance | 25.00% |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) | May 23, 2016USD ($)$ / bbl | Jan. 31, 2017USD ($) | Mar. 31, 2017USD ($)$ / bbl | Dec. 31, 2016USD ($) |
Rowan Relentless [Member] | ||||
Derivative [Line Items] | ||||
Contingent payments, period of evaluation | 12 months | 12 months | ||
Revenue, fair value of derivative associated with early contract termination agreement | $ 6,200,000 | |||
Contingent Consideration Threshold 1 [Member] | Rowan Relentless [Member] | ||||
Derivative [Line Items] | ||||
Additional contingent payments | $ 10,000,000 | |||
Contingent payment, threshold price per barrel (in usd per bbl) | $ / bbl | 50 | 50 | ||
Proceeds from customers | $ 6,000,000 | |||
Contingent Consideration Threshold 2 [Member] | Rowan Relentless [Member] | ||||
Derivative [Line Items] | ||||
Additional contingent payments | $ 20,000,000 | |||
Contingent payment, threshold price per barrel (in usd per bbl) | $ / bbl | 65 | 65 | ||
Recurring Basis [Member] | ||||
Derivative [Line Items] | ||||
Contingent Payment Derivative | $ 0 | $ 6,100,000 |
Derivatives - Derivative Reflec
Derivatives - Derivative Reflected in the Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Contingent Payment Derivative | $ 0 | $ 6.1 |
Derivatives - Effect of Derivat
Derivatives - Effect of Derivative on the Consolidated Statements of Operations (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Other net [Member] | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Contingent Payment Derivative | $ (0.1) |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | May 23, 2016USD ($)$ / bbl | Jan. 31, 2017USD ($) | Mar. 31, 2017USD ($)$ / bbl | Dec. 31, 2016USD ($) |
Prepaid Expenses and Other Current Assets [Member] | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Derivative | $ 0 | $ 6,100,000 | ||
Recurring Basis [Member] | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Derivative | 0 | 6,100,000 | ||
Recurring Basis [Member] | Egypt, Pounds [Member] | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Other assets | $ 3,500,000 | $ 4,200,000 | ||
Rowan Relentless [Member] | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Contingent payments, period of evaluation | 12 months | 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 | 50 | ||
Proceeds from customers | $ 6,000,000 | |||
Additional contingent payments | $ 10,000,000 | |||
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 | 65 | ||
Additional contingent payments | $ 20,000,000 | |||
Derivative [Member] | Rowan Relentless [Member] | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
WTI spot price (in usd per bbl) | $ / bbl | 47.48 | 50.6 | ||
Expected volatility rate | 37.50% | 28.337% | ||
Risk-free interest rate | 0.765% | 0.908% | ||
Slope of the WTI forward curve | 5.50% | 7.071% |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring Basis [Member] - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets - cash equivalents | $ 1,160,100,000 | $ 1,242,300,000 |
Derivative | 0 | 6,100,000 |
Other assets (Egyptian Pounds) | 3,500,000 | 4,200,000 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets - cash equivalents | 1,160,100,000 | 1,242,300,000 |
Derivative | 0 | 0 |
Other assets (Egyptian Pounds) | 3,500,000 | 4,200,000 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets - cash equivalents | 0 | 0 |
Derivative | 0 | 0 |
Other assets (Egyptian Pounds) | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets - cash equivalents | 0 | 0 |
Derivative | 0 | 6,100,000 |
Other assets (Egyptian Pounds) | $ 0 | $ 0 |
Fair Value Measurements - Other
Fair Value Measurements - Other Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Carrying value of publicly traded debt securities | $ 2,552.5 | $ 2,680.2 |
Fair value of publicly traded debt securities | $ 2,300 | $ 2,448 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Amounts recognized as a component of net periodic pension and other postretirement benefit cost: | ||
Total reclassifications for the period, net of income taxes | $ (0.9) | $ (2.5) |
Amortization of Net Loss [Member] | ||
Amounts recognized as a component of net periodic pension and other postretirement benefit cost: | ||
Total before income taxes | (5.9) | (5.1) |
Amortization of Prior Service Credit [Member] | ||
Amounts recognized as a component of net periodic pension and other postretirement benefit cost: | ||
Total before income taxes | 4.5 | 1.3 |
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 | (1.4) | (3.8) |
Income tax benefit | $ 0.5 | $ 1.3 |
Other Financial Statement Dis42
Other Financial Statement Disclosures - Components of Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Other Financial Statement Disclosures [Abstract] | ||
Trade | $ 297.6 | $ 286.2 |
Income tax | 8.7 | 7.7 |
Other | 10.8 | 7.4 |
Total receivables - trade and other | $ 317.1 | $ 301.3 |
Other Financial Statement Dis43
Other Financial Statement Disclosures - Accrued Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Other Financial Statement Disclosures [Abstract] | ||
Pension and other postretirement benefits | $ 27.4 | $ 32.1 |
Compensation and related employee costs | 42.2 | 62.4 |
Interest | 39.8 | 33.6 |
Income taxes | 20.7 | 18.3 |
Other | 8.2 | 12.4 |
Total accrued liabilities | $ 138.3 | $ 158.8 |
Other Financial Statement Dis44
Other Financial Statement Disclosures - Long Term Debt (Details) - USD ($) | Mar. 31, 2017 | Jan. 09, 2017 | Dec. 31, 2016 | Apr. 30, 2016 | Mar. 31, 2016 |
Debt Instrument [Line Items] | |||||
Total carrying value | $ 2,552,500,000 | $ 2,680,200,000 | |||
Current portion of long-term debt | 0 | 126,800,000 | |||
Carrying value, less current portion | 2,552,500,000 | 2,553,400,000 | |||
Senior Notes [Member] | 5% Senior Notes, due September 2017 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total carrying value | $ 0 | $ 92,000,000 | |||
Stated rate | 5.00% | 5.00% | 5.00% | ||
Principal amount | $ 92,100,000 | $ 92,200,000 | |||
Effective rate | 5.20% | ||||
Senior Notes [Member] | 7.875% Senior Notes, due August 2019 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total carrying value | $ 207,100,000 | $ 208,900,000 | |||
Stated rate | 7.875% | 7.875% | 7.875% | ||
Principal amount | $ 207,900,000 | $ 209,800,000 | |||
Effective rate | 8.00% | 8.00% | |||
Senior Notes [Member] | 4.875% Senior Notes, due June 2022 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total carrying value | $ 661,300,000 | $ 695,400,000 | |||
Stated rate | 4.875% | ||||
Principal amount | $ 656,600,000 | $ 690,200,000 | |||
Effective rate | 4.70% | 4.70% | |||
Senior Notes [Member] | 4.75% Senior Notes, due January 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total carrying value | $ 395,700,000 | $ 395,600,000 | |||
Stated rate | 4.75% | ||||
Principal amount | $ 398,100,000 | $ 398,100,000 | |||
Effective rate | 4.80% | 4.80% | |||
Senior Notes [Member] | 7.375% Senior Note Payable Due June 2025 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total carrying value | $ 497,200,000 | $ 497,200,000 | |||
Stated rate | 7.375% | ||||
Principal amount | $ 500,000,000 | $ 500,000,000 | |||
Effective rate | 7.40% | 7.40% | |||
Senior Notes [Member] | 5.4% Senior Notes due, December 2042 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total carrying value | $ 395,000,000 | $ 394,900,000 | |||
Stated rate | 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 | $ 396,200,000 | $ 396,200,000 | |||
Stated rate | 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 ($) | Feb. 08, 2017 | Jan. 03, 2017 | Dec. 31, 2016 | Apr. 30, 2016 | Mar. 31, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | Jan. 09, 2017 |
Debt Instrument [Line Items] | ||||||||
Gain (loss) on extinguishment of debt | $ (200,000) | $ 600,000 | ||||||
Accrued capital expenditures | $ 15,900,000 | 27,000,000 | ||||||
Senior Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Early repayment of debt | $ 32,800,000 | |||||||
Aggregate amount of debt paid | 34,600,000 | $ 463,900,000 | ||||||
Debt instrument, face amount of tender offer | $ 750,000,000 | |||||||
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 | $ 20,100,000 | 15,800,000 | ||||||
Gain (loss) on extinguishment of debt | $ 1,200,000 | 600,000 | ||||||
Senior Notes [Member] | 5% Senior Notes due September 2017 and 7.875% Senior Notes due August 2019, First Extinguishment [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate amount of debt paid | 16,500,000 | |||||||
Senior Notes [Member] | 5% Senior Notes due September 2017 and 7.875% Senior Notes due August 2019, Second Extinguishment [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate amount of debt paid | $ 21,400,000 | |||||||
Senior Notes [Member] | 5% Senior Notes, due September 2017 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Early repayment of debt | $ 94,000,000 | |||||||
Aggregate amount of debt paid | 100,000 | |||||||
Stated rate | 5.00% | 5.00% | 5.00% | |||||
Principal amount | $ 92,200,000 | $ 92,100,000 | ||||||
Senior Notes [Member] | 7.875% Senior Notes, due August 2019 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Early repayment of debt | 9,400,000 | |||||||
Aggregate amount of debt paid | 900,000 | $ 10,000,000 | ||||||
Stated rate | 7.875% | 7.875% | 7.875% | |||||
Gain (loss) on extinguishment of debt | $ 600,000 | |||||||
Principal amount | 209,800,000 | $ 207,900,000 | ||||||
Senior Notes [Member] | 4.875% Senior Notes, due June 2022 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate amount of debt paid | $ 33,600,000 | |||||||
Stated rate | 4.875% | |||||||
Principal amount | $ 690,200,000 | $ 656,600,000 |
Other Financial Statement Dis46
Other Financial Statement Disclosures - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Supplemental Cash Flow Information | ||
Accrued capital expenditures | $ 15.9 | $ 27 |
Income Taxes | ||
Provision (benefit) for income taxes | $ 29.7 | $ 4.1 |
Effective tax rate | 74.20% | 3.20% |
Increase (decrease) in income tax expense as compared to prior year periods | $ 25.6 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)segment | Mar. 31, 2016USD ($) | |
Segment Reporting [Abstract] | ||
Number of operating segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 374.3 | $ 500.2 |
Operating expenses: | ||
Direct operating costs (excluding items below) | 170 | 204.8 |
Depreciation and amortization | 99.1 | 98.9 |
Selling, general and administrative | 24 | 26.9 |
Other operating items | 3.4 | 2.2 |
INCOME FROM OPERATIONS | 77.8 | 167.4 |
Operating Segments [Member] | Deepwater [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 160.7 | 222.5 |
Operating expenses: | ||
Direct operating costs (excluding items below) | 44.6 | 67 |
Depreciation and amortization | 28.3 | 27.3 |
Selling, general and administrative | 0 | 0 |
Other operating items | 0 | 0.3 |
INCOME FROM OPERATIONS | 87.8 | 127.9 |
Operating Segments [Member] | Jack-ups [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 213.6 | 277.7 |
Operating expenses: | ||
Direct operating costs (excluding items below) | 125.4 | 137.8 |
Depreciation and amortization | 70.1 | 68.4 |
Selling, general and administrative | 0 | 0 |
Other operating items | 3.4 | 1.9 |
INCOME FROM OPERATIONS | 14.7 | 69.6 |
Unallocated Costs and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 0 | 0 |
Operating expenses: | ||
Direct operating costs (excluding items below) | 0 | 0 |
Depreciation and amortization | 0.7 | 3.2 |
Selling, general and administrative | 24 | 26.9 |
INCOME FROM OPERATIONS | $ (24.7) | $ (30.1) |
Guarantees of Registered Secu48
Guarantees of Registered Securities - Narrative (Details) - RCI (Issuer) [Member] | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Financial Statements, Captions [Line Items] | |
Subsidiary ownership percentage by parent | 100.00% |
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] | 7.375% Senior Note Payable Due June 2025 [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Stated interest rate percentage | 7.375% |
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 Millions | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | |
Condensed Consolidating Income Statements | ||||
REVENUES | $ 374.3 | $ 500.2 | ||
COSTS AND EXPENSES: | ||||
Direct operating costs (excluding items below) | 170 | 204.8 | ||
Depreciation and amortization | 99.1 | 98.9 | ||
Selling, general and administrative | 24 | 26.9 | ||
Loss on disposals of property and equipment | 3.4 | 2.2 | ||
Total costs and expenses | 296.5 | 332.8 | ||
INCOME FROM OPERATIONS | 77.8 | 167.4 | ||
OTHER INCOME (EXPENSE): | ||||
Interest expense | (39.6) | (38.9) | ||
Interest income | 2 | 0.4 | ||
Loss on extinguishment of debt | (0.2) | 0.6 | ||
Other - net | 0 | (2.6) | ||
Total other (expense), net | (37.8) | (40.5) | ||
INCOME BEFORE INCOME TAXES | 40 | 126.9 | ||
Provision (benefit) for income taxes | 29.7 | 4.1 | ||
Equity in earnings of subsidiaries, net of tax | 0 | 0 | ||
NET INCOME | 10.3 | 122.8 | ||
Statements of Comprehensive Income (Loss) | ||||
NET INCOME (LOSS) | 10.3 | 122.8 | ||
OTHER COMPREHENSIVE INCOME: | ||||
Net reclassification adjustments for amount recognized in net income (loss) as a component of net periodic benefit cost, net of income taxes | 0.9 | 2.5 | ||
COMPREHENSIVE INCOME | 11.2 | 125.3 | ||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 1,255.5 | 484.2 | $ 1,173.2 | $ 1,255.5 |
Receivables - trade and other | 317.1 | 301.3 | ||
Prepaid expenses and other current assets | 24.6 | 23.5 | ||
Total current assets | 1,514.9 | 1,580.3 | ||
Property and equipment - gross | 9,122.2 | 9,100.8 | ||
Less accumulated depreciation and amortization | 2,138.4 | 2,040.8 | ||
Property and equipment - net | 6,983.8 | 7,060 | ||
Investments in subsidiaries | 0 | 0 | ||
Due from affiliates | 0 | 0 | ||
Other assets | 54.6 | 35.3 | ||
TOTAL ASSETS | 8,553.3 | 8,675.6 | ||
CURRENT LIABILITIES: | ||||
Current portion of long-term debt | 0 | 126.8 | ||
Accounts payable - trade | 93.1 | 94.3 | ||
Deferred revenues | 108.2 | 103.9 | ||
Accrued liabilities | 138.3 | 158.8 | ||
Total current liabilities | 339.6 | 483.8 | ||
Long-term debt, less current portion | 2,552.5 | 2,553.4 | ||
Due to affiliates | 0 | 0 | ||
Other liabilities | 320.6 | 338.8 | ||
Deferred income taxes - net | 8.8 | 185.7 | ||
Shareholders' equity | 5,331.8 | 5,113.9 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 8,553.3 | 8,675.6 | ||
Consolidating Statements of Cash Flows | ||||
Net cash provided by operating activities | 81.5 | 162.9 | ||
INVESTING ACTIVITIES: | ||||
Capital expenditures | (30.9) | (32.9) | ||
Proceeds from disposals of property and equipment | 0.1 | 0.3 | ||
Collections on subsidiary notes receivable | 0 | |||
Investments in consolidated subsidiaries | 0 | |||
Net cash used in investing activities | (30.8) | (32.6) | ||
FINANCING ACTIVITIES: | ||||
Advances (to) from affiliates | 0 | 0 | ||
Contributions from issuer | 0 | |||
Reductions of long-term debt | (127.7) | (16.5) | ||
Shares repurchased for tax withholdings on vesting of restricted share units | (5.3) | (2.8) | ||
Net cash used in financing activities | (133) | (19.3) | ||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (82.3) | 111 | ||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,255.5 | 484.2 | ||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 1,173.2 | 595.2 | ||
Consolidating adjustments [Member] | ||||
Condensed Consolidating Income Statements | ||||
REVENUES | (14.7) | (20) | ||
COSTS AND EXPENSES: | ||||
Direct operating costs (excluding items below) | (13.6) | (18.5) | ||
Depreciation and amortization | 0 | 0.3 | ||
Selling, general and administrative | (1.1) | (1.8) | ||
Loss on disposals of property and equipment | 0 | 0 | ||
Total costs and expenses | (14.7) | (20) | ||
INCOME FROM OPERATIONS | 0 | 0 | ||
OTHER INCOME (EXPENSE): | ||||
Interest expense | 0.1 | 2 | ||
Interest income | (0.1) | (2) | ||
Loss on extinguishment of debt | 0 | 0 | ||
Other - net | 0 | 0 | ||
Total other (expense), net | 0 | 0 | ||
INCOME BEFORE INCOME TAXES | 0 | 0 | ||
Provision (benefit) for income taxes | (0.3) | (9.3) | ||
Equity in earnings of subsidiaries, net of tax | (31) | (149.5) | ||
NET INCOME | (30.7) | (140.2) | ||
Statements of Comprehensive Income (Loss) | ||||
NET INCOME (LOSS) | (30.7) | (140.2) | ||
OTHER COMPREHENSIVE INCOME: | ||||
Net reclassification adjustments for amount recognized in net income (loss) as a component of net periodic benefit cost, net of income taxes | (0.9) | (2.5) | ||
COMPREHENSIVE INCOME | (31.6) | (142.7) | ||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Receivables - trade and other | 0 | 0 | ||
Prepaid expenses and 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 | (11,458.4) | (11,213.7) | ||
Due from affiliates | (672.5) | (501.8) | ||
Other assets | 0 | 0 | ||
TOTAL ASSETS | (12,130.9) | (11,715.5) | ||
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 | (672.5) | (501.8) | ||
Other liabilities | 0 | 0 | ||
Deferred income taxes - net | (552.2) | (551.9) | ||
Shareholders' equity | (10,906.2) | (10,661.8) | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | (12,130.9) | (11,715.5) | ||
Consolidating Statements of Cash Flows | ||||
Net cash provided by operating activities | 0 | 0.6 | ||
INVESTING ACTIVITIES: | ||||
Capital expenditures | 0 | 0 | ||
Proceeds from disposals of property and equipment | 0 | 0 | ||
Collections on subsidiary notes receivable | (248.8) | |||
Investments in consolidated subsidiaries | 60.1 | |||
Net cash used in investing activities | 0 | (188.7) | ||
FINANCING ACTIVITIES: | ||||
Advances (to) from affiliates | 0 | (0.6) | ||
Contributions from issuer | (60.1) | |||
Reductions of long-term debt | 0 | 248.8 | ||
Shares repurchased for tax withholdings on vesting of restricted share units | 0 | 0 | ||
Net cash used in financing activities | 0 | 188.1 | ||
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 | ||
Rowan plc (Parent) [Member] | Reportable Legal Entities [Member] | ||||
Condensed Consolidating Income Statements | ||||
REVENUES | 0 | 0 | ||
COSTS AND EXPENSES: | ||||
Direct operating costs (excluding items below) | 0 | 0 | ||
Depreciation and amortization | 0 | 0 | ||
Selling, general and administrative | 5.9 | 7 | ||
Loss on disposals of property and equipment | 0 | 0 | ||
Total costs and expenses | 5.9 | 7 | ||
INCOME FROM OPERATIONS | (5.9) | (7) | ||
OTHER INCOME (EXPENSE): | ||||
Interest expense | 0 | 0 | ||
Interest income | 0 | 0 | ||
Loss on extinguishment of debt | 0 | 0 | ||
Other - net | 5.1 | 5.4 | ||
Total other (expense), net | 5.1 | 5.4 | ||
INCOME BEFORE INCOME TAXES | (0.8) | (1.6) | ||
Provision (benefit) for income taxes | 0 | 0 | ||
Equity in earnings of subsidiaries, net of tax | 11.1 | 124.4 | ||
NET INCOME | 10.3 | 122.8 | ||
Statements of Comprehensive Income (Loss) | ||||
NET INCOME (LOSS) | 10.3 | 122.8 | ||
OTHER COMPREHENSIVE INCOME: | ||||
Net reclassification adjustments for amount recognized in net income (loss) as a component of net periodic benefit cost, net of income taxes | 0.9 | 2.5 | ||
COMPREHENSIVE INCOME | 11.2 | 125.3 | ||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 3.7 | 17.3 | 3.9 | 3.7 |
Receivables - trade and other | 0 | 0 | ||
Prepaid expenses and other current assets | 0.2 | 0.3 | ||
Total current assets | 4.1 | 4 | ||
Property and equipment - gross | 0 | 0 | ||
Less accumulated depreciation and amortization | 0 | 0 | ||
Property and equipment - net | 0 | 0 | ||
Investments in subsidiaries | 5,339.6 | 5,115.8 | ||
Due from affiliates | 0.3 | 0.4 | ||
Other assets | 0 | 0 | ||
TOTAL ASSETS | 5,344 | 5,120.2 | ||
CURRENT LIABILITIES: | ||||
Current portion of long-term debt | 0 | |||
Accounts payable - trade | 0.2 | 0.4 | ||
Deferred revenues | 0 | 0 | ||
Accrued liabilities | 0.1 | 0.3 | ||
Total current liabilities | 0.3 | 0.7 | ||
Long-term debt, less current portion | 0 | 0 | ||
Due to affiliates | 7.5 | 0.4 | ||
Other liabilities | 4.4 | 5.2 | ||
Deferred income taxes - net | 0 | 0 | ||
Shareholders' equity | 5,331.8 | 5,113.9 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 5,344 | 5,120.2 | ||
Consolidating Statements of Cash Flows | ||||
Net cash provided by operating activities | (1.7) | 0.3 | ||
INVESTING ACTIVITIES: | ||||
Capital expenditures | 0 | 0 | ||
Proceeds from disposals of property and equipment | 0 | 0 | ||
Collections on subsidiary notes receivable | 0 | |||
Investments in consolidated subsidiaries | (0.2) | |||
Net cash used in investing activities | 0 | (0.2) | ||
FINANCING ACTIVITIES: | ||||
Advances (to) from affiliates | 7.2 | (1.1) | ||
Contributions from issuer | 0 | |||
Reductions of long-term debt | 0 | 0 | ||
Shares repurchased for tax withholdings on vesting of restricted share units | (5.3) | (2.8) | ||
Net cash used in financing activities | 1.9 | (3.9) | ||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 0.2 | (3.8) | ||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 3.7 | 17.3 | ||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 3.9 | 13.5 | ||
RCI (Issuer) [Member] | Reportable Legal Entities [Member] | ||||
Condensed Consolidating Income Statements | ||||
REVENUES | 14.5 | 20.8 | ||
COSTS AND EXPENSES: | ||||
Direct operating costs (excluding items below) | 5.1 | 1 | ||
Depreciation and amortization | 4.7 | 4.2 | ||
Selling, general and administrative | 0 | 0 | ||
Loss on disposals of property and equipment | 0.2 | 0 | ||
Total costs and expenses | 10 | 5.2 | ||
INCOME FROM OPERATIONS | 4.5 | 15.6 | ||
OTHER INCOME (EXPENSE): | ||||
Interest expense | (39.6) | (38.9) | ||
Interest income | 0.7 | 2 | ||
Loss on extinguishment of debt | (0.2) | 0.6 | ||
Other - net | (5.1) | (5.4) | ||
Total other (expense), net | (44.2) | (41.7) | ||
INCOME BEFORE INCOME TAXES | (39.7) | (26.1) | ||
Provision (benefit) for income taxes | (9.6) | 11 | ||
Equity in earnings of subsidiaries, net of tax | 19.9 | 25.1 | ||
NET INCOME | (10.2) | (12) | ||
Statements of Comprehensive Income (Loss) | ||||
NET INCOME (LOSS) | (10.2) | (12) | ||
OTHER COMPREHENSIVE INCOME: | ||||
Net reclassification adjustments for amount recognized in net income (loss) as a component of net periodic benefit cost, net of income taxes | 0.9 | 2.5 | ||
COMPREHENSIVE INCOME | (9.3) | (9.5) | ||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 532 | 9.5 | 302.1 | 532 |
Receivables - trade and other | 6.3 | 1.8 | ||
Prepaid expenses and other current assets | 20.9 | 12.9 | ||
Total current assets | 329.3 | 546.7 | ||
Property and equipment - gross | 615.7 | 631 | ||
Less accumulated depreciation and amortization | 280 | 273.8 | ||
Property and equipment - net | 335.7 | 357.2 | ||
Investments in subsidiaries | 6,118.8 | 6,097.9 | ||
Due from affiliates | 623.4 | 437.2 | ||
Other assets | 6.9 | 5.6 | ||
TOTAL ASSETS | 7,414.1 | 7,444.6 | ||
CURRENT LIABILITIES: | ||||
Current portion of long-term debt | 126.8 | |||
Accounts payable - trade | 27.7 | 22.4 | ||
Deferred revenues | 0 | 0.1 | ||
Accrued liabilities | 94.1 | 107.4 | ||
Total current liabilities | 121.8 | 256.7 | ||
Long-term debt, less current portion | 2,552.5 | 2,553.4 | ||
Due to affiliates | 47.6 | 63.9 | ||
Other liabilities | 277.6 | 283.9 | ||
Deferred income taxes - net | 521.4 | 598.3 | ||
Shareholders' equity | 3,893.2 | 3,688.4 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 7,414.1 | 7,444.6 | ||
Consolidating Statements of Cash Flows | ||||
Net cash provided by operating activities | 87.5 | (46.6) | ||
INVESTING ACTIVITIES: | ||||
Capital expenditures | (9.7) | (9.1) | ||
Proceeds from disposals of property and equipment | 0 | 0.2 | ||
Collections on subsidiary notes receivable | 248.8 | |||
Investments in consolidated subsidiaries | (59.9) | |||
Net cash used in investing activities | (9.7) | 180 | ||
FINANCING ACTIVITIES: | ||||
Advances (to) from affiliates | (180) | (38.3) | ||
Contributions from issuer | 0 | |||
Reductions of long-term debt | (127.7) | (16.5) | ||
Shares repurchased for tax withholdings on vesting of restricted share units | 0 | 0 | ||
Net cash used in financing activities | (307.7) | (54.8) | ||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (229.9) | 78.6 | ||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 532 | 9.5 | ||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 302.1 | 88.1 | ||
Non-guarantor subsidiaries [Member] | Reportable Legal Entities [Member] | ||||
Condensed Consolidating Income Statements | ||||
REVENUES | 374.5 | 499.4 | ||
COSTS AND EXPENSES: | ||||
Direct operating costs (excluding items below) | 178.5 | 222.3 | ||
Depreciation and amortization | 94.4 | 94.4 | ||
Selling, general and administrative | 19.2 | 21.7 | ||
Loss on disposals of property and equipment | 3.2 | 2.2 | ||
Total costs and expenses | 295.3 | 340.6 | ||
INCOME FROM OPERATIONS | 79.2 | 158.8 | ||
OTHER INCOME (EXPENSE): | ||||
Interest expense | (0.1) | (2) | ||
Interest income | 1.4 | 0.4 | ||
Loss on extinguishment of debt | 0 | 0 | ||
Other - net | 0 | (2.6) | ||
Total other (expense), net | 1.3 | (4.2) | ||
INCOME BEFORE INCOME TAXES | 80.5 | 154.6 | ||
Provision (benefit) for income taxes | 39.6 | 2.4 | ||
Equity in earnings of subsidiaries, net of tax | 0 | 0 | ||
NET INCOME | 40.9 | 152.2 | ||
Statements of Comprehensive Income (Loss) | ||||
NET INCOME (LOSS) | 40.9 | 152.2 | ||
OTHER COMPREHENSIVE INCOME: | ||||
Net reclassification adjustments for amount recognized in net income (loss) as a component of net periodic benefit cost, net of income taxes | 0 | 0 | ||
COMPREHENSIVE INCOME | 40.9 | 152.2 | ||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 719.8 | 457.4 | 867.2 | 719.8 |
Receivables - trade and other | 310.8 | 299.5 | ||
Prepaid expenses and other current assets | 3.5 | 10.3 | ||
Total current assets | 1,181.5 | 1,029.6 | ||
Property and equipment - gross | 8,506.5 | 8,469.8 | ||
Less accumulated depreciation and amortization | 1,858.4 | 1,767 | ||
Property and equipment - net | 6,648.1 | 6,702.8 | ||
Investments in subsidiaries | 0 | 0 | ||
Due from affiliates | 48.8 | 64.2 | ||
Other assets | 47.7 | 29.7 | ||
TOTAL ASSETS | 7,926.1 | 7,826.3 | ||
CURRENT LIABILITIES: | ||||
Current portion of long-term debt | 0 | |||
Accounts payable - trade | 65.2 | 71.5 | ||
Deferred revenues | 108.2 | 103.8 | ||
Accrued liabilities | 44.1 | 51.1 | ||
Total current liabilities | 217.5 | 226.4 | ||
Long-term debt, less current portion | 0 | 0 | ||
Due to affiliates | 617.4 | 437.5 | ||
Other liabilities | 38.6 | 49.7 | ||
Deferred income taxes - net | 39.6 | 139.3 | ||
Shareholders' equity | 7,013 | 6,973.4 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 7,926.1 | $ 7,826.3 | ||
Consolidating Statements of Cash Flows | ||||
Net cash provided by operating activities | (4.3) | 208.6 | ||
INVESTING ACTIVITIES: | ||||
Capital expenditures | (21.2) | (23.8) | ||
Proceeds from disposals of property and equipment | 0.1 | 0.1 | ||
Collections on subsidiary notes receivable | 0 | |||
Investments in consolidated subsidiaries | 0 | |||
Net cash used in investing activities | (21.1) | (23.7) | ||
FINANCING ACTIVITIES: | ||||
Advances (to) from affiliates | 172.8 | 40 | ||
Contributions from issuer | 60.1 | |||
Reductions of long-term debt | 0 | (248.8) | ||
Shares repurchased for tax withholdings on vesting of restricted share units | 0 | 0 | ||
Net cash used in financing activities | 172.8 | (148.7) | ||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 147.4 | 36.2 | ||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 719.8 | 457.4 | ||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 867.2 | $ 493.6 |