Rowan Reports Second Quarter 2015 Results

Aug 05, 2015, 07:30 ET from Rowan Companies plc

HOUSTON, Aug. 5, 2015 /PRNewswire/ -- For the three months ended June 30, 2015, Rowan Companies plc ("Rowan" or the "Company") (NYSE: RDC) reported net income of $84.7 million, or $0.68 per share, compared to $32.8 million, or $0.26 per share in the second quarter of 2014.  Net income for the prior-year quarter included a non-cash asset impairment charge which reduced net income by $8.3 million, or $0.07 per share.  Excluding the impact of this item, net income for the second quarter of 2014 was $41.1 million or $0.33 per share. 

Rowan's revenues were $508.7 million in the second quarter of 2015, an increase of 20% over the prior-year quarter due primarily to the contributions from the Company's four newbuild ultra-deepwater drillships. All four drillships have commenced operations over the past year including the Company's fourth drillship, the Rowan Relentless, which began operating in June 2015.

Tom Burke, President and Chief Executive Officer, commented, "We are pleased with the completion of our ultra-deepwater newbuild program and the early contract commencement of the Rowan Relentless, our fourth drillship. The additional operating days from our drillships coupled with continued cost control efforts provided solid results in the second quarter.

"Our industry is in the midst of a difficult downturn with an uncertain duration, but we believe our contractual backlog and strong balance sheet remain key strengths that will safeguard us until market recovery."

Rowan will conduct its earnings conference call on Wednesday, August 5, 2015, at 10:00 a.m. Central 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 may dial (877) 201-0168, or internationally (647) 788-4901.  The conference ID is 77199246. 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.rowan.com.  You should connect to our website at least 15 minutes prior to the conference call to register, and download any necessary software.

Rowan is a global provider of contract drilling services with a fleet of 32 mobile offshore drilling units, comprised of 28 jack-up rigs and four ultra-deepwater drillships.  The Company's fleet operates worldwide, including the United States Gulf of Mexico, the United Kingdom and Norwegian sectors of the North Sea, the Middle East, North Africa, Southeast Asia, and Trinidad.  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.rowan.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 or renegotiation by our customers of drilling contracts, letter agreements or letters of intent or the exercise of early termination provisions, risks associated with fixed cost drilling operations, cost overruns or delays on shipyard repair, construction or transportation of drilling units, 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.

Non-GAAP Measures We report our financial results in accordance with generally accepted accounting principles (GAAP) in the United States. However, in our earnings release and during our earnings calls we may reference company information that does not conform to GAAP.  Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.   Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and allows investors to better evaluate the financial results of the Company.  However, these measures should not be viewed as an alternative to or substitute for GAAP measures of performance, and these non-GAAP measures may not be consistent with previously published Company reports on Forms 10-K, 10-Q and 8-K. Non-GAAP measures we may reference have been reconciled to the nearest GAAP measure in the table entitled Reconciliation of GAAP to Non-GAAP Financial Measures below.    

ROWAN  COMPANIES  PLC

CONDENSED  CONSOLIDATED  BALANCE  SHEETS

Unaudited  (In  Millions)

June 30,

December 31,

2015

2014

ASSETS

Cash and cash equivalents

$     198.6

$              339.2

Accounts receivable

497.9

545.2

Other current assets

67.4

56.7

     Total current assets

763.9

941.1

Property, plant and equipment - net

7,854.2

7,432.2

Other assets

38.7

37.9

     TOTAL

$  8,656.8

$          8,411.2

LIABILITIES  AND  STOCKHOLDERS'  EQUITY

Short-term debt

$        50.0

$                       -

Accounts payable

110.2

102.8

Other current liabilities

224.2

230.4

     Total current liabilities

384.4

333.2

Long-term debt

2,806.9

2,807.3

Other liabilities

577.4

579.3

Stockholders' equity

4,888.1

4,691.4

     TOTAL

$  8,656.8

$          8,411.2

 

ROWAN  COMPANIES  PLC

CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS

Unaudited  (In  Millions  Except  Per  Share  Amounts)

THREE  MONTHS

SIX  MONTHS

ENDED  JUNE  30

ENDED  JUNE  30

2015

2014

2015

2014

REVENUES

$  508.7

$  422.9

$  1,055.8

$  800.5

COSTS  AND  EXPENSES:

Operations

253.9

244.6

509.7

464.9

Depreciation and amortization

95.4

77.7

185.1

148.6

Selling, general and administrative

31.2

29.1

58.7

59.0

(Gain) loss on disposals of property and equipment

0.3

0.9

(0.2)

1.7

Material charges, settlements and other expenses

5.0

8.3

5.0

(12.6)

Total

385.8

360.6

758.3

661.6

INCOME FROM  OPERATIONS

122.9

62.3

297.5

138.9

Net interest and other income (expense)

(30.5)

(27.5)

(64.2)

(48.2)

INCOME FROM  CONTINUING  OPERATIONS  BEFORE  INCOME  TAXES

92.4

34.8

233.3

90.7

Provision for income taxes

7.7

2.0

24.9

2.3

NET INCOME FROM  CONTINUING  OPERATIONS

84.7

32.8

208.4

88.4

Discontinued operations, net of tax

-

-

-

4.0

NET INCOME

$    84.7

$    32.8

$     208.4

$    92.4

PER  SHARE  AMOUNTS:

Income from continuing operations

$    0.68

$    0.26

$        1.67

$    0.71

Discontinued operations, net of tax

$           -

$           -

$              -

$    0.03

Net income

$    0.68

$    0.26

$        1.67

$    0.74

AVERAGE  DILUTED  SHARES

125.4

124.9

125.1

124.8

NOTE:  See page 7 for supplemental operating information.

 

ROWAN  COMPANIES  PLC

CONDENSED  CONSOLIDATED   STATEMENTS  OF  CASH  FLOWS

Unaudited  (In  Millions)

SIX  MONTHS

ENDED  JUNE  30

2015

2014

CASH  PROVIDED  BY  (USED  IN):

   Operations:

      Net income

$  208.4

$        92.4

      Adjustments to reconcile net income to net cash provided  by  operations:

         Depreciation  and  amortization

185.2

148.6

         Deferred  income  taxes

(12.6)

1.1

         Gain  on  disposals  of  assets

(0.2)

(0.3)

         Other -  net

25.1

5.9

      Net  changes  in  current  assets  and  liabilities

45.3

(97.4)

      Net  changes  in  other  noncurrent  assets  and  liabilities

(2.5)

(0.8)

   Net  cash  provided  by  operations

448.7

149.5

   Investing  activities:

      Property,  plant  and  equipment  additions

(616.4)

(787.3)

      Proceeds  from  disposals  of  property,  plant  and  equipment

2.3

7.9

   Net  cash  used  in  investing  activities

(614.1)

(779.4)

   Financing  activities:

      Proceeds from borrowings, net

50.0

792.7

      Payment of cash dividends

(25.2)

(12.6)

      Other, net

-

4.0

   Net  cash  provided  by financing  activities

24.8

784.1

INCREASE (DECREASE)  IN  CASH  AND  CASH  EQUIVALENTS

(140.6)

154.2

CASH  AND  CASH  EQUIVALENTS,  BEGINNING  OF  PERIOD

339.2

1,092.8

CASH  AND  CASH  EQUIVALENTS,  END  OF  PERIOD

$  198.6

$  1,247.0

 

ROWAN  COMPANIES  PLC

SUPPLEMENTAL  OPERATING  INFORMATION

Unaudited

THREE  MONTHS  ENDED

June 30,

March 31,

June 30,

2015

2015

2014

RIG  DAYS:

Operating

2,238

2,411

2,213

Out of service (shipyard/transit/inspections/other)

68

82

318

Idle (uncontracted)

373

139

45

Operational downtime (off rate during rig operations)

66

47

41

Cold stacked

273

260

182

Total available

3,018

2,939

2,799

Utilization

74%

82%

79%

Utilization (excluding cold-stacked rigs)

82%

90%

85%

AVERAGE  DAY  RATES  (in  thousands):

Jack-ups:

North Sea

$  269.1

$      295.8

$   290.5

Middle East

128.4

138.5

141.4

Gulf of Mexico

87.2

115.4

156.9

All jack-up rigs

171.1

180.2

177.5

Drillships

$  620.2

$      631.9

$   605.0

OPERATIONS  COSTS  AND  EXPENSES  (in  millions):

Personnel (a)

$  177.1

$      181.9

$   151.8

Repairs and maintenance

33.0

31.5

48.6

All other

30.7

32.0

32.5

Subtotal (excluding rebillables)

$  240.8

$      245.4

$   232.9

Rebillables (equally offset with rebillable revenue)

13.1

10.3

11.7

Total

$  253.9

$      255.7

$   244.6

(a)  Includes labor, fringes, training, travel and catering costs.

 

ROWAN  COMPANIES  PLC

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

THREE  MONTHS

SIX  MONTHS

ENDED  JUNE  30

ENDED  JUNE  30

2015

2014

2015

2014

NET INCOME:

  GAAP NET INCOME

$          84.7

$   32.8

$ 208.4

$   92.4

Litigation charge (settlement), net of tax

3.3

-

3.3

(20.9)

Non-cash asset impairment charges, net of tax

-

8.3

-

8.3

Discontinued operations, net of tax

-

-

-

(4.0)

  NON-GAAP NET INCOME

$          88.0

$   41.1

$ 211.7

$   75.8

DILUTED INCOME PER SHARE*:

  GAAP NET INCOME PER SHARE

$          0.68

$   0.26

$   1.67

$   0.74

Litigation charge (settlement), net of tax

0.02

-

0.02

(0.17)

Non-cash asset impairment charges, net of tax

-

0.07

-

0.07

Discontinued operations, net of tax

-

-

-

(0.03)

  NON-GAAP NET INCOME PER SHARE

$          0.70

$   0.33

$   1.69

$   0.61

ADJUSTED EARNINGS BEFORE INTEREST, TAXES AND DEPRECIATION (EBITDA)

  GAAP NET INCOME

$          84.7

$   32.8

$ 208.4

$   92.4

Litigation charge (settlement)

5.0

-

5.0

(20.9)

Non-cash asset impairment charges

-

8.3

-

8.3

Interest (income) expense and other, net

30.5

27.5

64.2

48.2

Depreciation and amortization

95.4

77.7

185.1

148.6

Income tax expense (benefit)

7.7

2.0

24.9

2.3

Discontinued operations, net of tax

-

-

-

(4.0)

  NON-GAAP ADJUSTED EBITDA

$       223.3

$ 148.3

$ 487.6

$ 274.9

* Per share amounts may not sum due to rounding.

 

SOURCE Rowan Companies plc



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