Rowan Reports Fourth Quarter and Full-Year 2015 Results

News provided by

Rowan Companies plc

Feb 26, 2016, 06:00 ET

HOUSTON, Feb. 26, 2016 /PRNewswire/ -- For the three months ended December 31, 2015, Rowan Companies plc ("Rowan" or the "Company") (NYSE: RDC) reported net income of $124.4 million, or $0.99 per share.  The current quarter includes a gain on the sale of the Rowan Louisiana of $6.3 million (after tax), or $0.05 per share, and a $1.0 million loss on extinguishment of debt (after tax), or $0.01 per share.  Excluding the impact of these items, net income as adjusted was $119.1 million, or $0.95 per share, in the fourth quarter of 2015.  For the prior-year quarter, the Company reported a net loss of $326.9 million, or $2.63 per share, which included a non-cash asset impairment charge of $438.4 million (after tax), or $3.53 per share, relating to the Company's twelve oldest jack-up rigs.  Excluding the impact of this non-cash asset impairment charge, net income was $111.5 million, or $0.89 per share, in the fourth quarter of 2014. 

Rowan's revenues were $535.8 million in the fourth quarter of 2015, a decrease of 4% from the prior-year quarter as a significant increase in jack-up idle time more than offset increased contributions from the Company's four newbuild ultra-deepwater drillships.

Additionally, Rowan is pleased to announce a recently executed contract with EOG in Trinidad for the Ralph Coffman. The rig will mobilize from the US Gulf of Mexico and is estimated to commence operations in the third quarter of this year for five wells with an estimated duration of one year at a rate of $135,000/ day, inclusive of amortized lump sum fees.

Tom Burke, President and Chief Executive Officer, commented, "While Rowan finished 2015 with exceptional operational performance and the best safety related performance, highest EBITDA and EBITDA margins in the Company's recent history, we are mindful of the extremely challenging market environment that lies ahead. We have strategically positioned Rowan to weather this difficult business climate through our solid liquidity position, attractive debt maturity profile, low level of capital commitments, substantial backlog, and high-specification and modern fleet. As we continue to navigate through this down cycle we will continue to focus on revenue efficiency and reducing our cost structure to further enhance our competitive position."

Rowan will conduct its earnings conference call on Friday, February 26, 2016, 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 20623130. 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 31 mobile offshore drilling units, comprised of 27 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, 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 and operating 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, early termination or renegotiation by our customers of drilling contracts, risks associated with fixed cost drilling operations, cost overruns or delays in transportation of drilling units, cost overruns or delays in maintenance and repairs, cost overruns 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, piracy 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)

















December 31,

2015

December 31,

2014








ASSETS







Cash and cash equivalents

$              484.2

$              339.2

Accounts receivable

410.5

545.2

Other current assets

26.6

54.5

     Total current assets

921.3

938.9

Property, plant and equipment - net

7,405.8

7,432.2

Other assets

20.2

21.2

     TOTAL

$          8,347.3

$          8,392.3













LIABILITIES  AND  STOCKHOLDERS'  EQUITY








Accounts payable

$              109.6

$              102.8

Other current liabilities

219.1

230.4

     Total current liabilities

328.7

333.2

Long-term debt

2,692.4

2,788.5

Other liabilities

553.7

579.2

Stockholders' equity

4,772.5

4,691.4

     TOTAL

$          8,347.3

$          8,392.3

ROWAN  COMPANIES  PLC

CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS

Unaudited  (In  Millions  Except  Per  Share  Amounts)











THREE  MONTHS

ENDED  DECEMBER  31

TWELVE  MONTHS

ENDED  DECEMBER  31







2015

2014

2015

2014










REVENUES

$   535.8

$    556.2

$  2,137.0

$  1,824.4










COSTS  AND  EXPENSES:








Operations

235.8

279.5

993.1

991.3

Depreciation and amortization

102.2

92.6

391.4

322.6

Selling, general and administrative

27.4

33.8

115.8

125.8

(Gain) loss on disposals of property and equipment

(9.8)

(3.5)

(7.7)

(1.7)

Material charges, settlements and other expenses

-

565.6

337.3

553.1

                            Total

355.6

968.0

1,829.9

1,991.1

INCOME  FROM  OPERATIONS

180.2

(411.8)

307.1

(166.7)

Net interest and other income (expense)

(42.4)

(29.7)

(149.4)

(102.9)

INCOME  FROM  CONTINUING  OPERATIONS  BEFORE  INCOME  TAXES

137.8

(441.5)

157.7

(269.6)

Income tax provision (benefit)

13.4

(114.6)

64.4

(150.7)

NET INCOME  FROM  CONTINUING  OPERATIONS

124.4

(326.9)

93.3

(118.9)

Discontinued operations, net of tax

-

-

-

4.0

NET INCOME 

$   124.4

$  (326.9)

$        93.3

$   (114.9)










PER  SHARE  AMOUNTS:








Income from continuing operations

$     0.99

$    (2.63)

$         0.75

$     (0.96)

Discontinued operations, net of tax

$           -

$            -

$               -

$       0.03

Net income 

$     0.99

$    (2.63)

$         0.75

$     (0.93)










AVERAGE  SHARES

125.8

124.3

125.2

124.1










NOTE:  See page 8 for supplemental information.

ROWAN  COMPANIES  PLC

CONDENSED  CONSOLIDATED   STATEMENTS  OF  CASH  FLOWS

Unaudited  (In  Millions)












TWELVE  MONTHS

ENDED  DECEMBER  31




2015

2014

CASH  PROVIDED  BY  (USED  IN):



   Operations:



      Net income

$    93.3

$  (114.9)

      Adjustments  to  reconcile  net  income  to  net



      cash  provided  by  operations:



         Depreciation  and  amortization

392.7

322.6

         Deferred  income  taxes

(1.1)

(182.5)

         Gain  on  disposals  of  assets

(7.7)

(3.7)

         Impairment charges

329.8

574.0

         Other -  net

52.3

0.7

      Net  changes  in  current  assets  and  liabilities

152.9

(145.4)

      Net  changes  in  other  noncurrent  assets  and  liabilities

(15.3)

(27.8)

   Net  cash  provided  by  operations

996.9

423.0





   Investing  activities:



      Property,  plant  and  equipment  additions

(722.9)

(1,958.2)

      Proceeds  from  disposals  of  property,  plant  and  equipment

19.4

22.0

   Net  cash  used  in  investing  activities

(703.5)

(1,936.2)





   Financing  activities:



      Proceeds from borrowings, net of issue costs

220.0

792.7

      Repayments of borrowings

(317.9)

      Payment of cash dividends

(50.5)

(37.7)

      Other, net

-

4.6

   Net  cash  provided  by (used in)  financing  activities

(148.4)

759.6





INCREASE (DECREASE)  IN  CASH  AND  CASH  EQUIVALENTS

145.0

(753.6)

CASH  AND  CASH  EQUIVALENTS,  BEGINNING  OF  PERIOD

339.2

1,092.8

CASH  AND  CASH  EQUIVALENTS,  END  OF  PERIOD

$  484.2

$     339.2

ROWAN  COMPANIES  PLC

SUPPLEMENTAL  OPERATING  SEGMENT  INFORMATION

Unaudited (In Millions)









Three months ended Dec. 31,

Year ended Dec. 31,

2015

2014

2015

2014

Deepwater:






Revenues

$   218.1

$   100.1

$      747.8

$      179.8

Operating expenses:







Direct operating costs 

69.3

46.6

276.6

87.8

Depreciation and amortization

28.2

13.7

94.6

24.4

Selling, general and administrative

-

-

-

-

Material charges and other

-

-

-

-

Income (loss) from operations

$   120.6

$      39.8

$      376.6

$         67.6








Jack-ups:






Revenues

$   317.7

$   456.1

$   1,389.2

$   1,644.6

Operating expenses:







Direct operating costs 

166.5

232.9

716.5

903.6

Depreciation and amortization

70.7

73.7

283.9

283.5

Selling, general and administrative

-

-

-

-

Material charges and other

(9.7)

565.7

328.8

544.8

Income (loss) from operations

$     90.2

$ (416.2)

$         60.0

$      (87.3)








Unallocated costs and other:






Revenues

$           -

$           -

$              -

$              -

Operating expenses:







Direct operating costs 

-

-

-

-

Depreciation and amortization

3.3

5.1

12.9

14.7

Selling, general and administrative

27.4

33.8

115.8

125.8

Material charges and other

(0.1)

(3.5)

0.8

6.5

Income (loss) from operations

$   (30.6)

$   (35.4)

$    (129.5)

$    (147.0)








Consolidated:






Revenues

$   535.8

$   556.2

$   2,137.0

$   1,824.4

Operating expenses:







Direct operating costs 

235.8

279.5

993.1

991.4

Depreciation and amortization

102.2

92.5

391.4

322.6

Selling, general and administrative

27.4

33.8

115.8

125.8

Material charges and other

(9.8)

562.2

329.6

551.3

Income (loss) from operations

$   180.2

$ (411.8)

$      307.1

$    (166.7)

ROWAN  COMPANIES  PLC

SUPPLEMENTAL  OPERATING  INFORMATION

Unaudited









THREE  MONTHS  ENDED

TWELVE  MONTHS  ENDED




December 31,

2015

September 30,

2015

December 31,

2014

DECEMBER 31,







2015

2014













RIG  DAYS:










Operating

2,105

2,275

2,520

9,030

9,281

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

73

97

101

319

1,017

Idle (uncontracted)

404

373

95

1,289

140

Operational downtime (off rate during rig operations)

36

35

29

183

112

Cold stacked

306

164

184

1,003

730


Total available

2,924

2,944

2,929

11,824

11,280















Utilization

72%

77%

86%

76%

82%


Utilization (excluding cold-stacked rigs)

80%

82%

92%

83%

88%













AVERAGE  DAY  RATES  (in  thousands):










Jack-ups:











North Sea

$              278.2

$                274.3

$              306.4

$     279.6

$        289.8


Middle East

131.6

130.5

145.8

132.2

141.2


Gulf of Mexico

66.7

73.8

150.1

88.6

151.0


All jack-up rigs

176.3

165.3

185.2

173.4

177.3

Drillships

$              623.3

$                610.9

$              658.6

620.5

650.4













OPERATIONS  COSTS  AND  EXPENSES  (in  millions):










Personnel (a)

$              155.7

$                165.6

$              180.7

$     680.3

$        631.7

Repairs and maintenance

38.2

37.6

43.2

140.4

175.5

All other

34.0

32.6

33.5

129.3

130.8


Subtotal (excluding rebillables)

$              227.9

$                235.8

$              257.4

$     950.0

$        938.0

Rebillables (equally offset with rebillable revenue)

7.9

11.8

22.1

43.1

53.3















Total

$              235.8

$                247.6

$              279.5

$     993.1

$        991.3














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







ROWAN  COMPANIES  PLC

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES











THREE  MONTHS

ENDED  DECEMBER  31

TWELVE  MONTHS




ENDED  DECEMBER  31



2015

2014

2015

2014

NET INCOME (LOSS):







  GAAP NET INCOME (LOSS)

$ 124.4

$ (326.9)

$       93.3

$ (114.9)

Gain on sale of Rowan Lousiana, net of tax

(6.3)

-

(6.3)

-

Loss on  debt extinguishment, net of tax

1.0

-

1.0

-

Non-cash asset impairment charges, net of tax

-

438.4

273.8

446.7

Discrete tax item 

-

-

75.3

(41.0)

Litigation charge (proceeds), net of tax

-

-

4.9

(20.9)

Discontinued operations, net of tax

-

-

-

(4.0)

  NON-GAAP NET INCOME

$ 119.1

$  111.5

$    442.0

$  265.9










DILUTED INCOME (LOSS) PER SHARE*:







  GAAP NET INCOME (LOSS) PER SHARE

$   0.99

$   (2.63)

$       0.75

$   (0.93)

Gain on sale of Rowan Lousiana, net of tax

(0.05)

-

(0.05)

-

Loss on  debt extinguishment, net of tax

0.01

-

0.01

-

Non-cash asset impairment charges, net of tax

-

3.53

2.18

3.60

Discrete tax item 

-

-

0.60

(0.33)

Litigation charge (proceeds), net of tax

-

-

0.04

(0.17)

Discontinued operations, net of tax

-

-

-

(0.03)

  NON-GAAP NET INCOME PER SHARE

$   0.95

$     0.89

$       3.53

$     2.14










ADJUSTED EARNINGS BEFORE INTEREST, TAXES AND DEPRECIATION (EBITDA)








  GAAP NET INCOME (LOSS)

$ 124.4

$ (326.9)

$       93.3

$ (114.9)

Gain on sale of Rowan Lousiana

(9.7)

-

(9.7)

-

Loss on  debt extinguishment

1.5

-

1.5

-

Non-cash asset impairment charges

-

565.6

329.8

574.0

Litigation charge (proceeds)

-

-

7.6

(20.9)

Interest (income) expense and other, net

40.9

29.7

147.9

102.9

Depreciation and amortization

102.2

92.6

391.4

322.6

Income tax expense (benefit)

13.4

(114.6)

64.4

(150.7)

Discontinued operations, net of tax

-

-

-

(4.0)

  NON-GAAP ADJUSTED EBITDA

$ 272.7

$  246.4

$ 1,026.2

$  709.0










* Per share amounts may not sum due to rounding.







SOURCE Rowan Companies plc

Related Links

http://www.rowan.com

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