EX-99.1 3 release2q06.htm RELEASE 2Q06 Release 2Q06
 
EXHIBIT 99.1

News Release
 
Rowan Companies, Inc.
2800 Post Oak Boulevard, Suite 5450
   Houston, Texas 77056 (713) 621-7800

 
FOR IMMEDIATE RELEASE                                                                              July 25, 2006

ROWAN REPORTS RECORD OPERATING RESULTS

HOUSTON, TEXAS -- For the three months ended June 30, 2006, Rowan Companies, Inc. (RDC-NYSE) generated record net income of $109.7 million, or 98¢ per share, compared to $42.3 million, or 39¢ per share, in the same period of 2005 and $59.1 million, or 53¢ per share, in the first quarter of 2006. Revenues were a record $382.9 million in the second quarter of 2006, compared to $244.6 million in the second quarter of 2005 and $299.8 million in the first quarter of 2006.

Current quarter results included $24.4 million, or 14¢ per share, of gains on asset sales, compared to $11.4 million, or 7¢ per share, in the second quarter of 2005 and $2.5 million, or 2¢ per share, in the first quarter of 2006. The second quarter 2005 results also included $0.9 million, or less than 1¢ per share, of after-tax loss from discontinued operations.

For the six months ended June 30, 2006, Rowan generated net income of $168.8 million, or $1.51 per share, compared to $85.7 million, or 78¢ per share, in the same period of 2005. Revenues were $682.7 million during the first half of 2006 compared to $467.0 million in the first half of 2005. The 2005 results included $12.0 million, or 11¢ per share, of after-tax income from discontinued operations.

Rowan’s offshore rig utilization was 93% during the second quarter of 2006, down from 96% in the comparable 2005 period, as the Company’s four rigs in Saudi Arabia did not commence operations until well into April. The utilization of Rowan’s other available 15 offshore rigs was 96% during the second quarter of 2006. The Company’s average offshore day rate was a record $143,900 during the second quarter of 2006, up $15,300, or 12%, from the first quarter of 2006 and up $74,100, or 106%, from the second quarter of 2005.

Rowan’s land rig utilization was 100% during the second quarter of 2006, up from 89% in the comparable 2005 period. The Company’s average land rig day rate was $22,400 during the second quarter of 2006, up $200, or 1%, from the first quarter of 2006 and up $5,300, or 31%, from the second quarter of 2005.
 
 
 
The Company’s external manufacturing backlog was a record $567 million at June 30, and included $330 million in the marine group, $139 million in the drilling products group and $53 million in the equipment group.

Danny McNease, Chairman and Chief Executive Officer, commented, “Our second quarter operating results were the best in the Company’s 83-year history. With half of our offshore fleet contracted well into 2007 or beyond, and a manufacturing backlog that stretches into 2008, our prospects for future revenues and earnings have never been brighter. Additions to capacity carried out during 2006 and planned over the next three years should enhance opportunities for further growth in our drilling and manufacturing businesses.

“We believe that worldwide demand for competitive jack-up rigs will continue to exceed the available supply, that the migration of rigs from the Gulf of Mexico to international markets will continue and, as a result, that overall drilling day rates will remain firm. Barring a collapse in oil, natural gas or other commodity prices, we expect worldwide demand for new rigs and rig kits, related drilling products and mining and timber equipment to remain strong.”

Rowan Companies, Inc. is a major provider of international and domestic contract drilling services. The Company also owns and operates a manufacturing division that produces equipment for the drilling, mining and timber industries. The Company’s stock is traded on the New York Stock Exchange and NYSE Arca. Common Stock trading symbol: RDC. Contact: William C. Provine, Vice-President - Investor Relations, 713-960-7575. Website: www.rowancompanies.com 
 

This report contains 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 financial performance of the Company that are based on current expectations and are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected by the Company. 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, energy demand, the general economy, including inflation, weather conditions in the Company’s principal operating areas and environmental and other laws and regulations. Other relevant factors have been disclosed in the Company’s filings with the U.S. Securities and Exchange Commission.
 
 
 
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ROWAN COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited (In Thousands)
               
 
    
JUNE 30
  
     
2006
 
  
2005
 
               
ASSETS
              
               
Cash and cash equivalents
  
$
488,331
  
$
487,821
  
Accounts receivable
    
375,489
   
169,962
 
Inventories
    
263,325
   
179,899
 
Other current assets
    
85,389
   
65,502
 
   Total current assets
    
1,212,534
   
903,184
 
Property, plant and equipment - net
    
1,953,704
   
1,694,709
 
Other assets
    
36,177
   
15,565
 
Assets of discontinued operations
    
-
   
3,667
 
   TOTAL
  
$
3,202,415
  
$
2,617,125
  
               
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
               
Current maturities of long-term debt
  
$
64,922
  
$
64,922
  
Other current liabilities
    
360,041
   
133,045
 
   Total current liabilities
    
424,963
   
197,967
 
Long-term debt
    
517,865
   
573,180
 
Other liabilities
    
495,579
   
353,530
 
Stockholders' equity
    
1,764,008
   
1,492,448
 
   TOTAL
  
$
3,202,415
  
$
2,617,125
  
               
 
 
 
 
 
 
 
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ROWAN COMPANIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited (In Thousands Except Per Share Amounts)
                           
                           
   
THREE MONTHS 
 
 
SIX MONTHS
 
 
 
 
ENDED JUNE 30 
 
 
ENDED JUNE 30
 
 
 
 
2006
 
 
2005
 
 
2006
 
 
2005
  
REVENUES:
                          
  Drilling services
  
$
280,110
  
$
182,637
  
$
497,212
  
$
342,916
  
  Manufacturing sales and services
    
102,776
   
61,923
   
185,461
   
124,036
 
    Total
    
382,886
   
244,560
   
682,673
   
466,952
 
COSTS AND EXPENSES:
                          
  Drilling services
    
121,389
   
99,182
   
230,184
   
188,607
 
  Manufacturing sales and services
    
81,125
   
51,687
   
146,512
   
108,361
 
  Depreciation and amortization
    
21,951
   
20,106
   
42,062
   
39,960
 
  Selling, general and administrative
    
16,895
   
16,086
   
35,404
   
29,346
 
  Gain on sale of property and equipment
    
(24,432
)
  
(9,592
)
  
(26,976
)
  
(10,182
)
    Total
    
216,928
   
177,469
   
427,186
   
356,092
 
INCOME FROM OPERATIONS
    
165,958
   
67,091
   
255,487
   
110,860
 
OTHER INCOME (EXPENSE):
                          
  Interest expense
    
(7,128
)
  
(6,318
)
  
(14,125
)
  
(12,174
)
  Less: interest capitalized
    
2,261
   
1,088
   
3,620
   
1,859
 
  Interest income
    
6,948
   
3,565
   
15,277
   
6,111
 
  Gain on sale of investments
    
-
   
1,852
   
-
   
9,553
 
  Other - net
    
(61
)
  
233
   
71
   
569
 
    OTHER INCOME (EXPENSE) - NET
    
2,020
   
420
   
4,843
   
5,918
 
INCOME BEFORE INCOME TAXES
    
167,978
   
67,511
   
260,330
   
116,778
 
Provision for income taxes
    
58,287
   
24,325
   
91,534
   
43,053
 
INCOME FROM CONTINUING OPERATIONS
    
109,691
   
43,186
   
168,796
   
73,725
 
Income (loss) from discontinued operations, net of tax
    
-
   
(920
)
  
-
   
11,963
 
NET INCOME
  
$
109,691
  
$
42,266
  
$
168,796
  
$
85,688
  
                           
PER SHARE AMOUNTS:
                          
  Income from continuing operations
  
$
0.98
  
$
0.39
  
$
1.51
  
$
0.67
  
  Income from discontinued operations, net of tax
  
$
-
  
$
-
  
$
-
  
$
0.11
  
  Net income
  
$
0.98
  
$
0.39
  
$
1.51
  
$
0.78
  
AVERAGE DILUTED SHARES
    
111,951
   
109,752
   
111,864
   
109,567
 
                           
 
 
 
 
 
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ROWAN COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited (In Thousands)
               
 
    
SIX MONTHS 
  
 
    
ENDED JUNE 30 
  
     
2006
 
 
2005
 
CASH PROVIDED BY (USED IN):
              
  Operations:
              
    Net income
  
$
168,796
  
$
85,688
  
    Adjustments to reconcile net income to net cash provided by operations:
              
      Depreciation and amortization
    
42,062
   
40,047
 
      Deferred income taxes
    
57,176
   
44,847
 
      Contributions to pension plans
    
(920
)
  
(66,052
)
      Gain on sale of assets
    
(26,976
)
  
(40,471
)
      Other - net
    
22,281
   
13,822
 
    Net changes in current assets and liabilities
    
(178,763
)
  
(25,046
)
    Net changes in other noncurrent assets and liabilities
    
15,043
   
65
 
  Net cash provided by operations
    
98,699
   
52,900
 
               
  Investing activities:
              
    Property, plant and equipment additions
    
(258,091
)
  
(76,059
)
    Proceeds from disposals of property, plant and equipment
    
34,305
   
23,900
 
    Proceeds from sale of boat purchase options
    
-
   
20,866
 
    Proceeds from sale of investments
    
-
   
9,553
 
  Net cash used in investing activities
    
(223,786
)
  
(21,740
)
               
  Financing activities:
              
    Proceeds from borrowings
    
-
   
28,302
 
    Repayments of borrowings
    
(32,461
)
  
(29,472
)
    Payment of cash dividends
    
(38,462
)
  
(26,935
)
    Proceeds from option and debenture plans and other
    
8,438
   
18,789
 
  Net cash used in financing activities
    
(62,485
)
  
(9,316
)
               
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
(187,572
)
  
21,844
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
675,903
   
465,977
 
CASH AND CASH EQUIVALENTS, END OF PERIOD
  
$
488,331
  
$
487,821
  
               
 
 
 
 
 
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