ROWAN COMPANIES PLC HOUSTON, May 2, 2017 /PRNewswire/ -- For the quarter ended March 31, 2017, Rowan Companies plc (" Rowan " or the " Company ") (NYSE: RDC) reported net income of $10.3 million, or $0.07 per diluted share, compared to net income of $122.8 million, or $0.98 per diluted share, in the first quarter of 2016.
Rowan's revenues totaled $374.3 million in the first quarter of 2017, a decrease of 25% from the prior-year quarter driven by a 28% decline in the Deepwater segment and a 23% decline in the Jack-up segment. The decline in Deepwater revenues resulted from the Rowan Relentless being idle in the current quarter versus operating in the prior-year quarter and the Rowan Resolute operating at a reduced day rate compared to the prior year period. Jack-up revenues declined due to lower average day rates partially offset by increased operating days.
Tom Burke, President and Chief Executive Officer, commented, "While our revenues were down significantly year-over-year as a result of poor market conditions, I am pleased with our continued strong operating performance and sustained cost reduction efforts. We are preparing to start up our new joint venture with Saudi Aramco in the second quarter and look forward to the long term growth of this new company with our partner."
Rowan will conduct its earnings conference call on Tuesday, May 2, 2017, 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 81482409. 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, download and install any necessary software.
Rowan is a global provider of contract drilling services with a fleet of 29 mobile offshore drilling units, comprised of 25 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 numerous 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 and the impact of the economic climate; changes in the offshore drilling market, including fluctuations in supply and demand; variable levels of drilling activity and expenditures in the energy industry; changes in day rates; ability to secure future drilling contracts; cancellation, early termination or renegotiation by our customers of drilling contracts; customer credit and risk of customer bankruptcy; risks associated with fixed cost drilling operations; unplanned downtime; risks related to our joint venture with Saudi Aramco; cost overruns or delays in transportation of drilling units; cost overruns or delays in maintenance, repairs, or other rig projects; operating hazards and equipment failure; risks of collision and damage; casualty losses and limitations on insurance coverage; weather conditions in the Company's operating areas; increasing costs of compliance with regulations; changes in tax laws and interpretations by taxing authorities; hostilities, terrorism, and piracy in our areas of operations that may result in loss or seizure of assets or interruption of operations; impairments; a cyber incident which impairs our ability to conduct operations; the outcome of disputes, including tax disputes and legal proceedings; 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 STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Three months ended March 31,
2017 2016
REVENUES $374.3 $500.2
COSTS AND EXPENSES:
Direct operating
costs (excluding
items below) 170.0 204.8
Depreciation and
amortization 99.1 98.9
Selling, general
and
administrative 24.0 26.9
Loss on disposals
of property and
equipment 3.4 2.2
Total costs and
expenses 296.5 332.8
----- -----
INCOME FROM
OPERATIONS 77.8 167.4
OTHER INCOME (EXPENSE):
Interest expense (39.6) (38.9)
Interest income 2.0 0.4
Gain (loss) on
extinguishment
of debt (0.2) 0.6
Other - net - (2.6)
Total other
(expense), net (37.8) (40.5)
----- -----
INCOME BEFORE
INCOME TAXES 40.0 126.9
Provision for
income taxes 29.7 4.1
---- ---
NET INCOME $10.3 $122.8
===== ======
NET INCOME PER
SHARE -DILUTED $0.07 $0.98
===== =====
WEIGHTED AVERAGE
SHARES -DILUTED 127.4 125.8
===== =====
ROWAN COMPANIES PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
March 31, 2017 December 31,
2016
----
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $1,173.2 $1,255.5
Receivables -
trade and
other 317.1 301.3
Prepaid
expenses and
other
current
assets 24.6 23.5
---- ----
Total current
assets 1,514.9 1,580.3
Property and
equipment -
net 6,983.8 7,060.0
Other assets 54.6 35.3
---- ----
$8,553.3 $8,675.6
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current
portion of
long-term
debt $ - $126.8
Accounts
payable -
trade 93.1 94.3
Deferred
revenues 108.2 103.9
Accrued
liabilities 138.3 158.8
----- -----
Total current
liabilities 339.6 483.8
Long-term
debt, less
current
portion 2,552.5 2,553.4
Other
liabilities 320.6 338.8
Deferred
income taxes
-net 8.8 185.7
Shareholders'
equity 5,331.8 5,113.9
------- -------
$8,553.3 $8,675.6
======== ========
ROWAN COMPANIES PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three months ended March 31,
----------------------------
2017 2016
---- ----
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $10.3 $122.8
Adjustments to reconcile net
income to net cash provided by
operations:
Depreciation
and
amortization 99.1 98.9
Deferred income
taxes 16.8 (12.6)
Provision for
pension and
other
postretirement
benefits 2.5 4.8
Share-based
compensation
expense 6.8 8.2
Loss on
disposals of
property and
equipment 3.4 2.2
Other 0.2 -
Net changes in
current assets
and
liabilities (34.8) (49.7)
Other
postretirement
benefit claims
paid (0.9) (3.0)
Contributions
to pension
plans (5.9) (3.1)
Deferred
revenues (6.3) (2.5)
Net changes in
other
noncurrent
assets and
liabilities (9.7) (3.1)
---- ----
Net cash
provided by
operating
activities 81.5 162.9
---- -----
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital
expenditures (30.9) (32.9)
Proceeds from
disposals of
property and
equipment 0.1 0.3
--- ---
Net cash used
in investing
activities (30.8) (32.6)
----- -----
CASH FLOWS FROM FINANCING
ACTIVITIES:
Reductions of
long-term
debt (127.7) (16.5)
Shares
repurchased
for tax
withholdings
on vesting of
restricted
share units (5.3) (2.8)
---- ----
Net cash used
in financing
activities (133.0) (19.3)
------ -----
INCREASE
(DECREASE) IN
CASH AND CASH
EQUIVALENTS (82.3) 111.0
CASH AND CASH
EQUIVALENTS,
BEGINNING OF
PERIOD 1,255.5 484.2
------- -----
CASH AND CASH
EQUIVALENTS,
END OF PERIOD $1,173.2 $595.2
======== ======
ROWAN COMPANIES PLC
SUPPLEMENTAL OPERATING SEGMENT INFORMATION
(In millions)
(Unaudited)
Three months ended March 31,
----------------------------
2017 2016
---- ----
Deepwater:
Revenues $160.7 $222.5
Operating expenses:
Direct
operating
costs
(excluding
items below) 44.6 67.0
Depreciation
and
amortization 28.3 27.3
Other
operating
items - 0.3
--- ---
Income from
Operations $87.8 $127.9
===== ======
Jack-ups:
Revenues $213.6 $277.7
Operating expenses:
Direct
operating
costs
(excluding
items below) 125.4 137.8
Depreciation
and
amortization 70.1 68.4
Other
operating
items 3.4 1.9
--- ---
Income from
Operations $14.7 $69.6
===== =====
Unallocated costs and other:
Operating expenses:
Depreciation
and
amortization 0.7 3.2
Selling,
general and
administrative 24.0 26.9
---- ----
Loss from
Operations $(24.7) $(30.1)
====== ======
Consolidated:
Revenues $374.3 $500.2
Operating expenses:
Direct
operating
costs
(excluding
items below) 170.0 204.8
Depreciation
and
amortization 99.1 98.9
Selling,
general and
administrative 24.0 26.9
Other
operating
items 3.4 2.2
--- ---
Income from
Operations $77.8 $167.4
===== ======
ROWAN COMPANIES PLC
SUPPLEMENTAL OPERATING INFORMATION
(Unaudited)
Three months ended
------------------
March 31, December 31, March 31,
2017 2016 2016
---- ---- ----
RIG DAYS (1)
Deepwater:
Operating 270 276 361
Available 360 368 364
Jack-up:
Operating 1,547 1,389 1,497
Available 2,071 2,208 2,184
Total:
Operating 1,817 1,665 1,858
Available 2,431 2,576 2,548
UTILIZATION (1)
Deepwater 75% 75% 99%
Jack-up 75% 63% 69%
Total 75% 65% 73%
AVERAGE DAY RATES (2) (in thousands)
Deepwater $592.1 $464.5 $612.4
Jack-up $135.7 $156.6 $182.3
Total $203.5 $207.6 $266.0
REBILLABLES (3) (in millions)
Deepwater $0.8 $0.2 $1.2
Jack-up 3.4 5.3 3.4
Total $4.2 $5.5 $4.6
==== ==== ====
(1) Available rig days and utilization exclude cold-stacked days.
(2) Average day rates exclude other revenue, which is primarily revenue received for contract reimbursable costs.
(3) Rebillable operating costs equally offset with rebillable revenue.
ROWAN COMPANIES PLC
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share amounts)
(Unaudited)
Three months ended
March 31,
---------
2017 2016
---- ----
ADJUSTED EARNINGS BEFORE
INTEREST, TAXES AND
DEPRECIATION (EBITDA):
GAAP NET INCOME $10.3 $122.8
Depreciation and amortization 99.1 98.9
Other expense, net 37.8 40.5
Income tax expense 29.7 4.1
---- ---
NON-GAAP ADJUSTED EBITDA $176.9 $266.3
====== ======
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SOURCE Rowan Companies plc
