1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM_____TO_____ ROWAN COMPANIES, INC. (Exact name of registrant as specified in its charter) Delaware 1-5491 75-0759420 ------------------------------- ---------------- ------------------- (State or other jurisdiction of Commission File (I.R.S. Employer incorporation or organization) Number Identification No.) 5450 Transco Tower, 2800 Post Oak Boulevard, Houston, Texas 77056-6196 - ----------------------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (713) 621-7800 -------------------------------------------------- Registrant's telephone number, including area code Inapplicable -------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- The number of shares of common stock, $.125 par value, outstanding at October 31, 1995 was 84,781,537. 2 ROWAN COMPANIES, INC. INDEX Page No. -------- PART I. Financial Information: Consolidated Balance Sheet -- September 30, 1995 and December 31, 1994 . . . . . . . . 2 Consolidated Statement of Operations -- Three and Nine Months Ended September 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . 4 Consolidated Statement of Cash Flows -- Nine Months Ended September 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . 5 Notes to Consolidated Financial Statements . . . . . . . 6 Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . 8 PART II. Other Information: Exhibits and Reports on Form 8-K . . . . . . . . . . . . 12 3 PART I. FINANCIAL INFORMATION ROWAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (IN THOUSANDS EXCEPT SHARE AMOUNTS) September 30, December 31, 1995 1994 ------------ ------------ ASSETS (Unaudited) CURRENT ASSETS: Cash and cash equivalents . . . . . . . . . . . . . . . . $ 88,509 $ 111,070 Receivables - trade and other . . . . . . . . . . . . . . 85,848 78,317 Inventories - at cost: Raw materials and supplies . . . . . . . . . . . . . . 48,699 42,364 Work-in-progress . . . . . . . . . . . . . . . . . . . 17,750 14,238 Finished goods . . . . . . . . . . . . . . . . . . . . 2,310 2,784 Prepaid expenses . . . . . . . . . . . . . . . . . . . . 13,791 3,290 Cost of turnkey drilling contracts in progress . . . . . 8,478 1,642 ------------ ------------ Total current assets . . . . . . . . . . . . . . . . 265,385 253,705 ------------ ------------ INVESTMENT IN AND ADVANCES TO 49% OWNED COMPANIES . . . . . 30,615 34,476 ------------ ------------ PROPERTY, PLANT AND EQUIPMENT - at cost: Drilling equipment . . . . . . . . . . . . . . . . . . . 969,179 961,391 Aircraft and related equipment . . . . . . . . . . . . . 182,307 176,874 Manufacturing plant and equipment . . . . . . . . . . . . 21,353 18,955 Other property and equipment . . . . . . . . . . . . . . 88,480 86,883 ------------ ------------ Total . . . . . . . . . . . . . . . . . . . . . . . . 1,261,319 1,244,103 Less accumulated depreciation and amortization . . . . . 773,712 737,982 ------------ ------------ Property, plant and equipment - net . . . . . . . . . 487,607 506,121 ------------ ------------ OTHER ASSETS AND DEFERRED CHARGES . . . . . . . . . . . . . 9,893 10,877 ------------ ------------ TOTAL . . . . . . . . . . . . . . . . . . . . . . . . $ 793,500 $ 805,179 ============ ============ See Notes to Consolidated Financial Statements. -2- 4 September 30, December 31, 1995 1994 ------------ ------------ LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited) CURRENT LIABILITIES: Current maturities of long-term debt . . . . . . . . . . $ 300 $ 289 Accounts payable - trade . . . . . . . . . . . . . . . . 23,401 20,513 Other current liabilities . . . . . . . . . . . . . . . . 44,539 36,958 ------------ ------------ Total current liabilities . . . . . . . . . . . . . . 68,240 57,760 ------------ ------------ LONG-TERM DEBT - less current maturities . . . . . . . . . 248,278 248,504 ------------ ------------ OTHER LIABILITIES . . . . . . . . . . . . . . . . . . . . . 38,119 36,557 ------------ ------------ DEFERRED CREDITS: Income taxes . . . . . . . . . . . . . . . . . . . . . . 4,413 4,468 Gain on sale/leaseback transactions . . . . . . . . . . . 13,151 15,543 Other . . . . . . . . . . . . . . . . . . . . . . . . . . 89 ------------ ------------ Total deferred credits . . . . . . . . . . . . . . . 17,653 20,011 ------------ ------------ STOCKHOLDERS' EQUITY: Preferred stock, $1.00 par value: Authorized 5,000,000 shares issuable in series: Series I Preferred Stock, authorized 6,500 shares, none issued Series II Preferred Stock, authorized 6,000 shares, none issued Series III Preferred Stock, authorized 10,300 shares, none issued Series A Junior Preferred Stock, authorized 1,500,000 shares, none issued Common stock, $.125 par value: Authorized 150,000,000 shares; issued 86,226,706 shares at September 30, 1995 and 85,737,581 shares at December 31, 1994 . . . . . . . . . . . . . . . . 10,778 10,717 Additional paid-in capital . . . . . . . . . . . . . . . . 394,505 390,925 Retained earnings . . . . . . . . . . . . . . . . . . . . . 18,412 43,190 Less cost of 1,457,919 treasury shares . . . . . . . . . . 2,485 2,485 ------------ ------------ Total stockholders' equity . . . . . . . . . . . . 421,210 442,347 ------------ ------------ TOTAL . . . . . . . . . . . . . . . . . . . . . . . $ 793,500 $ 805,179 ============ ============ See Notes to Consolidated Financial Statements. -3- 5 ROWAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) For The Three Months For The Nine Months Ended September 30, Ended September 30, ----------------------- ------------------------- 1995 1994 1995 1994 ---------- ---------- ----------- ----------- (Unaudited) REVENUES: Drilling services . . . . . . . . . . . . . . . $ 65,738 $ 66,383 $ 174,529 $ 191,183 Manufacturing sales and services . . . . . . . 37,107 25,397 100,165 68,818 Aircraft services . . . . . . . . . . . . . . . 31,498 37,439 69,828 75,302 ---------- ---------- ----------- ----------- Total . . . . . . . . . . . . . . . . . . 134,343 129,219 344,522 335,303 ---------- ---------- ----------- ----------- COSTS AND EXPENSES: Drilling services . . . . . . . . . . . . . . . 55,471 56,298 151,517 155,006 Manufacturing sales and services . . . . . . . 33,491 22,223 91,986 62,901 Aircraft services . . . . . . . . . . . . . . . 22,606 23,987 60,940 58,483 Depreciation and amortization . . . . . . . . . 12,591 12,852 38,271 38,026 General and administrative . . . . . . . . . . 3,770 3,288 10,992 10,545 ---------- ---------- ----------- ----------- Total . . . . . . . . . . . . . . . . . . 127,929 118,648 353,706 324,961 ---------- ---------- ----------- ----------- INCOME (LOSS) FROM OPERATIONS . . . . . . . . . . 6,414 10,571 (9,184) 10,342 ---------- ---------- ----------- ----------- OTHER INCOME (EXPENSE): Interest expense . . . . . . . . . . . . . . . (6,933) (6,985) (20,771) (20,593) Gain on disposals of property, plant and equipment . . . . . . . . . . . . . . . . 153 764 1,230 980 Interest income . . . . . . . . . . . . . . . . 1,071 1,224 3,825 3,269 Other - net . . . . . . . . . . . . . . . . . . 170 93 408 205 ---------- ---------- ----------- ----------- Other income (expense) - net . . . . . . (5,539) (4,904) (15,308) (16,139) ---------- ---------- ----------- ----------- INCOME (LOSS) BEFORE INCOME TAXES . . . . . . . . 875 5,667 (24,492) (5,797) Provision for income taxes . . . . . . . . . . 212 21 286 377 ---------- ---------- ----------- ----------- NET INCOME (LOSS) . . . . . . . . . . . . . . . . $ 663 $ 5,646 $ (24,778) $ (6,174) ========== ========== =========== =========== EARNINGS (LOSS) PER COMMON SHARE (Note 4) . . . . $ .01 $ .07 $ (.29) $ (.07) ========== ========== =========== =========== See Notes to Consolidated Financial Statements. -4- 6 ROWAN COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS) For The Nine Months Ended September 30, --------------------------- 1995 1994 ----------- ----------- (Unaudited) CASH PROVIDED BY (USED IN): Operations: Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . $ (24,778) $ (6,174) Noncash charges (credits) to net income (loss): Depreciation and amortization . . . . . . . . . . . . . . . . . . 38,271 38,026 Gain on disposals of property, plant and equipment . . . . . . . (1,230) (980) Compensation expense . . . . . . . . . . . . . . . . . . . . . . 3,153 3,549 Change in sale/leaseback payable . . . . . . . . . . . . . . . . (3,138) (2,996) Amortization of sale/leaseback gain . . . . . . . . . . . . . . . (2,392) (2,392) Provision for pension and postretirement benefits . . . . . . . . 5,597 4,983 Other - net . . . . . . . . . . . . . . . . . . . . . . . . . . . (767) (519) Changes in current assets and liabilities: Receivables- trade and other . . . . . . . . . . . . . . . . . . (7,531) (160) Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,373) (3,377) Other current assets . . . . . . . . . . . . . . . . . . . . . . (17,337) (642) Current liabilities . . . . . . . . . . . . . . . . . . . . . . . 10,440 11,380 Net changes in other noncurrent assets and liabilities . . . . . . 894 (3,515) ----------- ----------- Net cash provided by (used in) operations . . . . . . . . . . . . . . . (8,191) 37,183 ----------- ----------- Investing activities: Capital expenditures: Property, plant and equipment additions . . . . . . . . . . . . . . (20,457) (25,748) Acquisition of net manufacturing assets . . . . . . . . . . . . . . (10,414) Repayments from affiliates . . . . . . . . . . . . . . . . . . . . . 3,676 Proceeds from disposals of property, plant and equipment . . . . . . 2,138 1,585 ----------- ----------- Net cash used in investing activities . . . . . . . . . . . . . . . . . (14,643) (34,577) ----------- ----------- Financing activities: Repayments of borrowings . . . . . . . . . . . . . . . . . . . . . . (215) (6,094) Other - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488 315 ----------- ----------- Net cash provided by (used in) financing activities . . . . . . . . . . 273 (5,779) ----------- ----------- DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . (22,561) (3,173) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD . . . . . . . . . . . . 111,070 116,778 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD . . . . . . . . . . . . . . . $ 88,509 $ 113,605 =========== =========== See Notes to Consolidated Financial Statements. -5- 7 ROWAN COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The consolidated financial statements of the Company included herein have been prepared without audit pursuant to generally accepted accounting principles and the rules and regulations of the Securities and Exchange Commission. Certain information and notes have been condensed or omitted pursuant to such rules and regulations and the Company believes that the disclosures included herein are adequate. It is suggested that these condensed financial statements be read in conjunction with the financial statements and related notes included in the Company's 1994 Annual Report to Stockholders incorporated by reference in the Form 10-K for the year ended December 31, 1994. 2. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications, which are of a normal recurring nature, necessary to present fairly its financial position as of September 30, 1995 and December 31, 1994, and the results of its operations for the three and nine month periods ended September 30, 1995 and 1994 and its cash flows for the nine months ended September 30, 1995 and 1994. 3. The results of operations for the three and nine month periods ended September 30, 1995 are not necessarily indicative of the results to be expected for the full year. -6- 8 4. Computation of primary and fully diluted earnings (loss) per share is as follows (in thousands except per share amounts): For The For The Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ------------------------- 1995 1994 1995 1994 ---------- ---------- ----------- --------- Weighted average shares of common stock outstanding . . . . . . . . . . . . . . . 84,727 84,177 84,518 84,038 Stock options (treasury stock method) . . . . . . 2,165(A) 1,935(A) 1,614(A) 1,492(A) ---------- ---------- ----------- --------- Weighted average shares for primary earnings (loss) per share calculation . . . . . 86,892 86,112 86,132 85,530 Stock options (treasury stock method) . . . . . . 22(A) Shares issuable from assumed conversion of floating rate convertible subordinated debentures . . . . . . . . . . . . . . . . . . 2,004(A) 478(A) 2,004(A) 478(A) ---------- ---------- ----------- --------- Weighted average shares for fully diluted earnings (loss) per share calculation . . . . . 88,896 86,590 88,158 86,008 ========== ========== =========== ========= Net income (loss) for primary calculation . . . . $ 663 $ 5,646 $ (24,778) $ (6,174) Subordinated debenture interest, net of income tax effect . . . . . . . . . . . . . . . 96 80 279 210 ---------- ---------- ----------- --------- Net income (loss) for fully diluted calculation . . . . . . . . . . . . . . . . . . $ 759 $ 5,726 $ (24,499) $ (5,964) ========== ========== =========== ========= Earnings (loss) per share: Primary . . . . . . . . . . . . . . . . . . . . $ .01 $ .07 $ (.29) $ (.07) ========== ========== =========== ========= Fully diluted . . . . . . . . . . . . . . . . . $ .01 $ .07 $ (.28)(B) $ (.07) ========== ========== =========== ========= (A) Included in accordance with Regulation S-K Item 601 (b)(11) although not required to be provided by Accounting Principles Board ("APB") Opinion No. 15 because the effect is insignificant. (B) This calculation is submitted in accordance with Regulation S-K Item 601 (b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15 because it produces an antidilutive result. -7- 9 ROWAN COMPANIES, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Nine Months Ended September 30, 1995 Compared to Nine Months Ended September 30, 1994 The Company incurred a net loss of $24.8 million in the first nine months of 1995 compared to a net loss of $6.2 million in the same period of 1994. The increase in loss between periods was primarily due to lower drilling day rates in the Gulf of Mexico which combined with less than expected aviation operating results to more than offset improved manufacturing and land drilling operations. A comparison of the revenues and operating profit (loss) from drilling, manufacturing, aviation and consolidated operations for the first nine months of 1995 and 1994, respectively, is reflected below (dollars in thousands): Drilling Manufacturing Aviation Consolidated --------------------- --------------------- --------------------- --------------------- 1995 1994 1995 1994 1995 1994 1995 1994 -------- -------- -------- -------- -------- -------- -------- -------- Revenues $174,529 $191,183 $100,165 $ 68,818 $ 69,828 $ 75,302 $344,522 $335,303 Percent of Consolidated Revenues 51% 57% 29% 21% 20% 22% 100% 100% Operating Profit (Loss)(1) $ (5,215) $ 6,609 $ 6,954 $ 5,146 $ 69 $ 9,132 $ 1,808 $ 20,887 - --------------------------------------------------- (1) Income (loss) from operations before deducting general and administrative expenses. As reflected above, the Company's consolidated operating profit declined by $19.1 million when the first nine months of 1995 is compared to the first nine months of 1994. Day rate drilling revenues increased by $1.3 million between periods as utilization of the Company's Gulf of Mexico rigs improved from 77% to 88% which, coupled with growing land operations, more than offset lower Gulf of Mexico day rates. While Gulf of Mexico day rates have begun to improve in recent months, they averaged 15% below year-ago levels during the period and soft natural gas prices continue to act as a constraint. Day rate drilling expenses increased by $11.2 million between periods primarily as a result of the Company's expanding land rig operations in Argentina. Turnkey drilling generated revenues of $34.3 million and an incremental operating profit of $.2 million for the first nine months of 1995, compared to $52.2 million and $3.4 million, respectively, for the comparable 1994 period. The increases between periods in manufacturing revenues and operating profits of 46% and 35%, respectively, reflect improving business conditions in the intermodal, mining, timber and marine industries and the Company's increased emphasis on marketing, product reliability and on-time deliveries. The Company's aviation operating results declined between periods primarily due to the conclusion of work for the United Nations in the former Yugoslavia in December 1994 and a 50% decrease in forest fire control services. -8- 10 Three Months Ended September 30, 1995 Compared to Three Months Ended September 30, 1994 The Company generated net income of $.7 million in the third quarter of 1995 compared to net income of $5.6 million in the same period of 1994. The decrease in profit was primarily due to a decline in aviation operations which more than offset improved drilling operations. A comparison of the revenues and operating profit from drilling, manufacturing, aviation and consolidated operations for the third quarter of 1995 and 1994, respectively, is reflected below (dollars in thousands): Drilling Manufacturing Aviation Consolidated --------------------- --------------------- --------------------- --------------------- 1995 1994 1995 1994 1995 1994 1995 1994 -------- -------- -------- -------- -------- -------- -------- -------- Revenues $ 65,738 $ 66,383 $ 37,107 $ 25,397 $ 31,498 $ 37,439 $134,343 $129,219 Percent of Consolidated Revenues 49% 51% 28% 20% 23% 29% 100% 100% Operating Profit $ 1,039 $ 96 $ 3,185 $ 3,028 $ 5,960 $ 10,735 $ 10,184 $ 13,859 As reflected above, the Company's consolidated operating results declined by $3.7 million when the third quarter of 1995 is compared to the third quarter of 1994. Day rate drilling revenues increased by $10.8 million between periods, as offshore activity improved by 16% and the Company's land drilling revenues grew by $4.2 million, while related costs increased only $9.2 million. Despite strengthening of late, offshore day rates were, on average, down 16% during the quarter from year-ago levels. Turnkey drilling generated third quarter 1995 revenues of $14.3 million and an incremental operating profit of $.2 million, compared to $25.7 million and $1.5 million, respectively, for the third quarter of 1994. The Company's manufacturing operations have yielded operating profits and increasing revenues in every quarter since their acquisition in early 1994. The Company's aviation operating results declined between periods primarily due to the conclusion of work for the United Nations in the former Yugoslavia in December 1994 and a 61% decrease in forest fire control services. Perceptible trends in the offshore drilling markets in which the Company is currently operating and the number of Company- operated rigs in each of those markets are as follows: AREA RIGS PERCEPTIBLE INDUSTRY TRENDS ---- ---- --------------------------- Gulf of Mexico 15 Moderately improving levels of exploration and development activity North Sea 4 Improving market conditions for jack-up rigs used in the exploration and development of natural gas Eastern Canada 1 Improving demand Trinidad 1 Generally stable demand -9- 11 The preceding table reflects the sale of the Company's three barge rigs located in the Gulf of Mexico for about $12 million, which should be completed during the fourth quarter, and the mobilization of Rowan Gorilla II to Trinidad effective October 21, 1995. Perceptible trends in the aviation markets in which the Company is currently operating and the number of Company aircraft based in each of those markets are as follows: COMPANY-OWNED AREA AIRCRAFT (1) PERCEPTIBLE INDUSTRY TRENDS ---- ------------- --------------------------- Alaska 66 Normal seasonal decline Gulf of Mexico 38 Moderately improving market conditions China 1 Generally stable flight support activity Argentina 1 Generally stable flight support activity North Sea (Dutch) 10 Generally stable flight support activity North Sea (U. K.) 5 Improving flight support activity - -------------------------------------- (1) Includes 13 units in the North Sea which are 49% owned. The drilling and aviation markets in which the Company competes frequently experience significant changes in supply and demand. Drilling utilization and day rates achievable in offshore markets are affected by material changes in overall exploration and development expenditures, as well as by shifts of such expenditures between markets. These expenditures, in turn, are driven by major discoveries of oil and natural gas reserves, shifts in the political climate, regulatory changes, seasonal weather patterns, contractual requirements under leases or concessions and changes in oil and natural gas prices, the last being perhaps the most disruptive of all. The markets in which the Company's aviation division competes are similarly affected by these factors, since servicing offshore energy operations remains a significant source of that division's business. The Company can, as it has done in the past, relocate its drilling rigs and aircraft from one geographic area to another in response to such changing market dynamics, but only when these moves are economically justified. The volatile nature of the various factors affecting the level of offshore expenditures by energy companies and shifts of such expenditures between markets prevent the Company from being able to predict whether the perceptible market trends reflected in the preceding tables will continue. The Company's manufacturing operations are considerably less volatile than its drilling and aviation operations and, given a current order backlog in excess of $40 million and barring unforeseen circumstances, should continue to contribute positive operating results throughout the remainder of 1995. In the opinion of management, based upon current and anticipated market conditions, the Company should be profitable in the fourth quarter of 1995. -10- 12 LIQUIDITY AND CAPITAL RESOURCES A comparison of key balance sheet figures and ratios as of September 30, 1995 and December 31, 1994 is as follows (dollars in thousands): September 30, December 31, 1995 1994 ---- ---- Cash and cash equivalents $88,509 $111,070 Current assets $265,385 $253,705 Current liabilities $68,240 $57,760 Current ratio 3.89 4.39 Current maturities of long-term debt $300 $289 Long-term debt $248,278 $248,504 Stockholders' equity $421,210 $442,347 Long-term debt/total capitalization .37 .36 Reflected in the comparison above are the effects in the first nine months of 1995 of net cash used in operations of $8.2 million and capital expenditures of $20.5 million. The operating cash deficit resulted primarily from outstanding insurance recoveries related to the Rowan Odessa repair, a build-up of inventories consistent with improving manufacturing operations, start- up costs associated with expanding Argentina land rig operations and deferred turnkey drilling costs incurred on projects in progress. Capital expenditures consisted primarily of the purchase of five aircraft and modifications to certain offshore rigs. On April 28, 1995, the Company announced plans for the design and construction of Rowan Gorilla V, an enhanced version of the Company's Gorilla Class jack-up, which will be the world's largest bottom supported mobile offshore drilling unit. The rig will be constructed at the Company's Vicksburg, Mississippi shipyard and should be completed during the second quarter of 1998 at an estimated cost of $135 million. The Company expects to finance a significant portion of the construction cost and is currently evaluating credit alternatives. The reactivation of the Company's Vicksburg shipyard is estimated to cost approximately $20 million. The Company estimates capital expenditures will be between $20 million and $25 million during the fourth quarter, or $40 to $45 million for 1995. The Company currently anticipates that 1996 capital expenditures will be approximately $65 million, primarily for the Rowan Gorilla V construction and related Vicksburg shipyard reactivation discussed above and to upgrade existing offshore rigs and acquire additional aircraft as justified by prevailing market conditions. In the opinion of management, based upon current and anticipated market conditions, existing working capital and cash provided by operations should be adequate to sustain planned capital expenditures and debt service requirements for the remainder of 1995 and in 1996. The Company does not currently have any unused lines of credit. Under the terms of its 11 7/8% Senior Notes, the Company is prohibited from paying a cash dividend on its common stock. In March 1995, the Financial Accounting Standards Board published, to be effective in 1996, standards governing accounting for the impairment of long-lived assets. The Company believes the adoption of such standards will not materially effect its financial position or results of operations. -11- 13 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed by the Registrant during the third quarter of fiscal year 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ROWAN COMPANIES, INC. (Registrant) Date: November 14, 1995 /s/ E. E. THIELE ------------------------------------------ E. E. Thiele Senior Vice President - Finance, Administration and Treasurer (Chief Financial Officer) Date: November 14, 1995 /s/ W. H. WELLS ------------------------------------------ W. H. Wells Controller (Chief Accounting Officer) -12- 14 EXHIBIT INDEX Exhibit No. Description ------- ----------- 27 Financial Data Schedule