Rowan Reports Third Quarter 2012 Operating Results PR Newswire HOUSTON, Oct. 31, 2012 HOUSTON, Oct. 31, 2012 /PRNewswire/ --For the three months ended September 30, 2012, Rowan Companies plc ("Rowan" or the "Company") (NYSE: RDC) generated net income from continuing operations of $26.4 million or $0.21 per share, compared to $31.4 million or $0.25 per share in the third quarter of 2011. (Logo: http://photos.prnewswire.com/prnh/20120827/DA62568LOGO) Net income from continuing operations during the third quarter of 2012 included $28.1 million of non-recurring or unusual items, or $0.18 per share after tax, including costs associated with early redemption of MARAD debt, repairs to the EXL I due to a tanker collision, equity compensation charges related to a retiring executive, settlement costs related to the Company's frozen manufacturing pension plan and certain corporate redomestication costs, net of gains on asset disposals. Excluding such items, net income from continuing operations was $48.8 million or $0.39 per share during the third quarter of 2012. The third quarter results also reflect additional tax expense related to an increase in the Company's full year 2012 estimated tax rate primarily due to adjustments related to the completion of its 2011 U.S. federal tax return and changes to projected foreign and domestic earnings. The full-year effective tax rate for continuing operations is now projected to be 2%, up from the 6% credit projected at the end of the second quarter, which resulted in increased tax expense in the third quarter of $10.6 million, or $0.09 per share. Net income totaled $27.6 million or $0.22 per share in the third quarter of 2012, compared to $193.8 million or $1.53 per share in the third quarter of 2011, as the prior year quarter included income from discontinued manufacturing and land drilling operations of $162.4 million or $1.28 per share, including the after-tax gain on the sale of land drilling operations of $155.0 million. Rowan's revenues were $353.9 million in the third quarter of 2012, up 51% over the prior-year quarter due primarily to incremental activity from fleet additions and higher utilization and day rates for existing rigs between periods. The Company's operating income was $59.3 million in the third quarter of 2012, up 86% over the prior-year quarter. Matt Ralls, President and Chief Executive Officer, commented, "While our operating revenues and earnings for the third quarter were generally in line with analysts' expectations, a number of non-recurring or unusual items negatively impacted our net income. As we look ahead to coming quarters, we see several positive factors. We have nine jack-ups in our active fleet with contract expirations in the next three quarters, and we expect all of those rigs to move to contracts at higher day rates. We also expect our days off rate due to shipyard, transit and inspection time to trend lower in the fourth quarter of this year and in 2013. Finally, for our three uncontracted remaining ultra-deepwater drillships, we continue to have serious discussions with multiple customers for long term contracts at day rates that are consistent with those recently announced for other high-end drillships." Rowan will conduct its earnings conference call on Wednesday, October 31, 2012, at 10:00 a.m. Central Daylight Time. Interested parties are invited to listen to the call by telephone or over the Internet. Individuals who wish to participate on the conference call by telephone can dial (877) 869-3847, or internationally (201) 689-8261. You should dial-in approximately five to 10 minutes prior to the scheduled start time. Alternatively, to access the online simulcast and rebroadcast of the conference call, please visit Rowan's website at www.rowancompanies.com. You should connect to our website at least 15 minutes prior to the conference call to register, download and install any necessary software. Rowan Companies plc is a major provider of international and domestic contract drilling services with a leading position in high-specification jack-up rigs. The Company's fleet of 31 jack-up rigs is located worldwide, including the Middle East, the North Sea, Trinidad, Southeast Asia and the Gulf of Mexico. Rowan will enter the ultra-deepwater market with four high-specification drillships expected to be delivered starting in late 2013. The Company's Class A Ordinary Shares are traded on the New York Stock Exchange under the symbol "RDC". For more information on the Company, please visit www.rowancompanies.com. Statements herein that are not historical facts are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs and future expected business, financial performance and prospects of the Company. These forward-looking statements are based on our current expectations and are subject to certain risks, assumptions, trends and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. Among the factors that could cause actual results to differ materially include oil and natural gas prices, the level of offshore expenditures by energy companies, variations in energy demand, changes in day rates, cancellation by our customers of drilling contracts or letter agreements or letters of intent for drilling contracts or the exercise of early termination provisions, risks associated with fixed cost drilling operations, cost overruns or delays on shipyard repair or transportation of rigs, maintenance and repair costs, costs or delays for conversion or upgrade projects, operating hazards and equipment failure, risks of collision and damage, casualty losses and limitations on insurance coverage, customer credit and risk of customer bankruptcy, conditions in the general economy and energy industry, weather conditions and severe weather in the Company's operating areas, increasing complexity and costs of compliance with environmental and other laws and regulations, changes in tax laws and interpretations by taxing authorities, civil unrest and instability, terrorism and hostilities in our areas of operations that may result in loss or seizure of assets, the outcome of disputes and legal proceedings, effects of the change in our corporate structure, and other risks disclosed in the Company's filings with the U.S. Securities and Exchange Commission. Each forward-looking statement speaks only as of the date hereof, and the Company expressly disclaims any obligation to update or revise any forward-looking statements, except as required by law. ROWAN COMPANIES plc CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (In Millions) SEPTEMBER 30, DECEMBER 31, 2012 2011 ASSETS Cash and cash equivalents $ 328.3 $ 438.9 Accounts receivable 403.5 283.6 Other current assets 107.8 71.6 Assets of discontinued operations 26.9 27.6 Total current assets 866.5 821.7 Property, plant and equipment - net 6,021.9 5,678.7 Other assets 100.4 97.4 TOTAL $ 6,988.8 $ 6,597.8 LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term $ $ debt - 45.0 Accounts payable 90.1 111.1 Other current liabilities 138.3 167.3 Liabilities of discontinued 21.3 25.0 operations Total current liabilities 249.7 348.4 Long-term debt 1,393.1 1,089.3 Other liabilities 867.7 834.1 Stockholders' equity 4,478.3 4,326.0 TOTAL $ 6,988.8 $ 6,597.8 ROWAN COMPANIES plc CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Millions Except Per Share Amounts) THREE MONTHS NINE MONTHS ENDED SEPTEMBER ENDED SEPTEMBER 30 30 2012 2011 2012 2011 REVENUES $ 353.9 $ 234.7 $ 1,038.4 $ 664.2 COSTS AND EXPENSES: Operations 188.2 129.8 558.4 345.6 Depreciation and amortization 63.0 50.3 183.3 129.3 Selling, general and 25.8 22.6 73.9 65.2 administrative Gain on disposals of property (0.6) - (2.6) (1.4) and equipment Material charges and other 18.2 - 30.9 6.1 expenses Total 294.6 202.7 843.9 544.8 INCOME FROM OPERATIONS 59.3 32.0 194.5 119.4 Net interest and other income (24.4) (4.4) (58.9) (17.8) INCOME FROM CONTINUING 34.9 27.6 135.6 101.6 OPERATIONS BEFORE INCOME TAXES Provision (credit) for income taxes 8.5 (3.8) 2.9 (1.0) NET INCOME FROM CONTINUING 26.4 31.4 132.7 102.6 OPERATIONS Discontinued operations, net of 1.2 162.4 (6.2) 589.1 tax NET INCOME $ $ 193.8 $ 126.5 $ 691.7 27.6 PER SHARE AMOUNTS: Income from continuing $ $ $ $ operations 0.21 0.25 1.07 0.81 Discontinued operations, net of $ $ $ $ tax 0.01 1.28 (0.05) 4.64 Net income $ $ $ $ 0.22 1.53 1.02 5.45 AVERAGE DILUTED SHARES 124.0 126.4 123.8 127.0 ROWAN COMPANIES plc CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited (In Millions) NINE MONTHS ENDED SEPTEMBER 30 2012 2011 CASH PROVIDED BY (USED IN): Operations: Net income $ 126.5 $ 691.7 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 183.3 150.2 Deferred income taxes (5.1) (30.9) Gain on disposals of assets (2.7) (881.2) Other - net 6.8 (29.0) Net changes in current assets and (129.2) 190.6 liabilities Net changes in other noncurrent 9.9 36.6 assets and liabilities Net cash provided by operations 189.5 128.0 Investing activities: Property, plant and equipment (566.1) (1,155.1) additions Proceeds from disposals of property, 10.6 5.5 plant and equipment Proceeds from sale of manufacturing - 1,560.5 operations - net Change in Restricted cash - 15.3 Net cash provided by (used in) (555.5) 426.2 investing activities Financing activities: Proceeds from borrowings 492.6 - Repayments of borrowings (238.5) (38.4) Proceeds from equity compensation 1.3 20.2 plans and other Payments to acquire treasury stock (80.9) Net cash provided by (used in) 255.4 (99.1) financing activities INCREASE (DECREASE) IN CASH AND CASH (110.6) 455.1 EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF 438.9 437.5 PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD $ 328.3 $ 892.6 ROWAN COMPANIES plc SUPPLEMENTAL OPERATING INFORMATION Unaudited THREE MONTHS ENDED NINE MONTHS ENDED Sept 30, June 30, Sept 30, Sept 30, Sept 30, 2012 2012 2011 2012 2011 RIG DAYS: Operating 2,130 2,217 1,576 6,435 4,721 Shipyard / transit 401 313 694 1,014 1,754 Stacked and other 321 291 306 1,000 758 downtime Total available 2,852 2,821 2,576 8,449 7,233 Utilization 75% 79% 61% 76% 65% AVERAGE DAY RATES (in thousands): North Sea $ 250.2 $ 234.5 $ 224.9 $ 237.5 $ 204.9 Middle East 129.3 130.8 125.4 134.3 125.9 Gulf of Mexico 120.4 119.1 115.8 119.0 117.7 All rigs 161.5 154.0 148.5 157.3 139.3 OPERATIONS COSTS AND EXPENSES (in millions): Personnel (a) $ 112.8 $ 113.9 $ 74.3 $ 331.6 $ 197.6 Repairs and maintenance 34.5 32.3 32.0 105.4 75.4 Insurance 8.6 8.1 7.3 24.7 22.8 Rig moves 6.3 8.4 3.0 22.1 13.3 Rebillables (b) 9.8 9.5 1.5 25.8 6.7 All other 16.2 15.9 11.7 48.8 29.8 Total $ 188.2 $ 188.1 $ 129.8 $ 558.4 $ 345.6 (a) Includes labor, fringes, training, travel and catering costs. (b) Amounts are fully offset by incremental revenues. SOURCE Rowan Companies plc Website: http://www.rowancompanies.com Contact: Suzanne M. Spera, Director of Investor Relations, +1-713-960-7517, firstname.lastname@example.org
Rowan Reports Third Quarter 2012 Operating Results
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