ROWAN COMPANIES PLC HOUSTON, Feb. 24, 2017 /PRNewswire/ -- For the quarter ended December 31, 2016, Rowan Companies plc ("Rowan" or the "Company") (NYSE: RDC) reported a net loss of $24.4 million, or $0.19 per diluted share, compared to net income of $124.4 million, or $0.99 per diluted share, in the fourth quarter of 2015. The net loss for the current quarter included a $33.6 million (after tax), or $0.27 per share, loss on extinguishment of $463.9 million of debt. The net income for the prior-year quarter included 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.
Rowan's revenues were $351.8 million in the fourth quarter of 2016, a decrease of 34% from the prior-year quarter driven by a 41% decline in the Deepwater segment and a 30% decline in the Jack-up segment. The Deepwater decline resulted from Rowan Relentless being idle and Rowan Resolute operating at a reduced day rate due to the blend and extend amendment to its contract. Jack-up revenues were impacted by lower utilization and lower day rates.
Tom Burke, President and Chief Executive Officer, commented, "In the past year, we displayed outstanding operational and safety performance, exercised financial discipline, improved our liquidity and strengthened our balance sheet, and announced a groundbreaking partnership with Saudi Aramco. While we are cognizant that 2017 still presents many challenges, we are hopeful that the commodity price improvement and increase in potential drilling activity will guide our industry toward recovery. Through our continued focus on safe, reliable and efficient operations, we will seek to take advantage of any market recovery."
Rowan will conduct its earnings conference call on Friday, February 24, 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 43395815. 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 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; 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 December 31, Twelve months ended December 31,
-------------------------------
2016 2015 2016 2015
REVENUES $351.8 $535.8 $1,843.2 $2,137.0
COSTS AND EXPENSES:
Direct operating costs
(excluding items below) 179.9 235.8 778.2 993.1
Depreciation and
amortization 101.7 102.2 402.9 391.4
Selling, general and
administrative 25.6 27.4 102.1 115.8
(Gain) loss on disposals of
property and equipment 3.4 (9.8) 8.7 (7.7)
Material charges and other
operating items - - 32.9 337.3
--- --- ---- -----
Total costs and expenses 310.6 355.6 1,324.8 1,829.9
----- ----- ------- -------
INCOME FROM OPERATIONS 41.2 180.2 518.4 307.1
OTHER INCOME (EXPENSE):
Interest expense, net of
interest capitalized (38.9) (40.4) (155.5) (145.3)
Interest income 1.7 0.3 3.8 1.1
Loss on extinguishment of
debt (33.6) (1.5) (31.2) (1.5)
Other - net (4.5) (0.8) (9.9) (3.7)
Total other (expense), net (75.3) (42.4) (192.8) (149.4)
----- ----- ------ ------
INCOME (LOSS) BEFORE INCOME
TAXES (34.1) 137.8 325.6 157.7
Provision (benefit) for
income taxes (9.7) 13.4 5.0 64.4
---- ---- --- ----
NET INCOME (LOSS) $(24.4) $124.4 $320.6 $93.3
====== ====== ====== =====
NET INCOME (LOSS) PER SHARE
-DILUTED $(0.19) $0.99 $2.55 $0.75
====== ===== ===== =====
WEIGHTED AVERAGE SHARES -
BASIC 125.4 124.8 125.3 124.5
===== ===== ===== =====
WEIGHTED AVERAGE SHARES -
DILUTED 125.4 125.8 126.3 125.2
===== ===== ===== =====
ROWAN COMPANIES PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
December 31, December 31,
2016 2015
---- ----
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $1,255.5 $484.2
Receivables -
trade and
other 301.3 410.5
Prepaid
expenses and
other current
assets 23.5 26.6
---- ----
Total current
assets 1,580.3 921.3
Property and
equipment -
net 7,060.0 7,405.8
Other assets 35.3 20.2
---- ----
$8,675.6 $8,347.3
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Current portion
of long-term
debt $126.8 $ -
Accounts
payable -
trade 94.3 109.6
Deferred
revenues 103.9 33.1
Accrued
liabilities 158.8 186.0
----- -----
Total current
liabilities 483.8 328.7
Long-term
debt, less
current
portion 2,553.4 2,692.4
Other
liabilities 338.8 357.9
Deferred income
taxes -net 185.7 195.8
Commitments and contingent
liabilities
Shareholders'
equity 5,113.9 4,772.5
------- -------
$8,675.6 $8,347.3
======== ========
ROWAN COMPANIES PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Twelve months ended December 31,
--------------------------------
2016 2015
---- ----
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $320.6 $93.3
Adjustments to reconcile net
income to net cash provided by
operations:
Depreciation
and
amortization 402.9 392.7
Provision for
pension and
postretirement
benefits 15.0 34.0
Share-based
compensation
expense 34.6 33.6
(Gain) loss on
disposals of
property and
equipment 8.7 (7.7)
Deferred
income taxes (37.9) (1.1)
Contingent
payment
derivative (6.1) -
Asset
impairment
charges 34.3 329.8
Other 3.7 0.5
Net changes in
current
assets and
liabilities 78.8 156.0
Other
postretirement
benefit
claims paid (7.9) (4.4)
Contributions
to pension
plans (22.5) (11.4)
Deferred
revenues 63.7 (3.1)
Net changes in
other
noncurrent
assets and
liabilities 12.7 (15.3)
---- -----
Net cash
provided by
operating
activities 900.6 996.9
----- -----
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital
expenditures (117.6) (722.9)
Proceeds from
disposals of
property and
equipment 6.2 19.4
--- ----
Net cash used
in investing
activities (111.4) (703.5)
------ ------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from
borrowings 500.0 220.0
Reduction of
long-term
debt (511.8) (317.9)
Dividends paid - (50.5)
Debt issue
costs (8.7) -
Excess tax
benefits from
share-based
compensation 2.6 -
--- ---
Net cash used
in financing
activities (17.9) (148.4)
----- ------
INCREASE IN
CASH AND CASH
EQUIVALENTS 771.3 145.0
CASH AND CASH
EQUIVALENTS,
BEGINNING OF
PERIOD 484.2 339.2
----- -----
CASH AND CASH
EQUIVALENTS,
END OF PERIOD $1,255.5 $484.2
======== ======
ROWAN COMPANIES PLC
SUPPLEMENTAL OPERATING SEGMENT INFORMATION
(In millions)
(Unaudited)
Three months ended December 31, Twelve months ended December 31,
------------------------------- --------------------------------
2016 2015 2016 2015
---- ---- ---- ----
Deepwater:
Revenues $128.5 $218.1 $827.5 $747.8
Operating expenses:
Direct operating costs
(excluding items
below) 46.6 69.3 222.0 276.6
Depreciation and
amortization 29.0 28.2 115.0 94.6
Selling, general and
administrative - - - -
Other operating items (0.3) - 0.1 -
---- --- --- ---
Income from operations $53.2 $120.6 $490.4 $376.6
===== ====== ====== ======
Jack-ups:
Revenues $223.3 $317.7 $1,015.7 $1,389.2
Operating expenses:
Direct operating costs
(excluding items
below) 133.3 166.5 556.2 716.5
Depreciation and
amortization 71.6 70.7 282.6 283.9
Selling, general and
administrative - - - -
Other operating items 3.6 (9.7) 40.9 328.8
--- ---- ---- -----
Income from operations $14.8 $90.2 $136.0 60.0
===== ===== ====== ====
Unallocated costs and other:
Revenues $ - $ - $ - $ -
Operating expenses:
Direct operating costs
(excluding items
below) - - - -
Depreciation and
amortization 1.1 3.3 5.3 12.9
Selling, general and
administrative 25.6 27.4 102.1 115.8
Other operating items 0.1 (0.1) 0.6 0.8
--- ---- --- ---
Loss from operations $(26.8) $(30.6) $(108.0) $(129.5)
====== ====== ======= =======
Consolidated:
Revenues $351.8 $535.8 $1,843.2 $2,137.0
Operating expenses:
Direct operating costs
(excluding items
below) 179.9 235.8 778.2 993.1
Depreciation and
amortization 101.7 102.2 402.9 391.4
Selling, general and
administrative 25.6 27.4 102.1 115.8
Other operating items 3.4 (9.8) 41.6 329.6
--- ---- ---- -----
Income from operations $41.2 $180.2 $518.4 $307.1
===== ====== ====== ======
ROWAN COMPANIES PLC
SUPPLEMENTAL OPERATING INFORMATION
(Unaudited)
Three months ended Twelve months ended
------------------
December 31, September 30, December 31, December 31,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
RIG DAYS (1)
Deepwater:
Operating 276 276 348 1,238 1,178
Available 368 368 368 1,464 1,263
Jack-up:
Operating 1,389 1,509 1,758 5,999 7,852
Available 2,208 2,208 2,250 8,784 9,558
Total:
Operating 1,665 1,785 2,106 7,237 9,030
Available 2,576 2,576 2,618 10,248 10,821
UTILIZATION (1)
Deepwater 75% 75% 95% 85% 93%
Jack-up 63% 68% 78% 68% 82%
Total 65% 69% 80% 71% 83%
AVERAGE DAY RATES (2) (in thousands)
Deepwater (3) $464.5 $490.0 $623.3 $550.7 $620.5
Jack-up $156.6 $158.8 $176.3 $165.8 $173.4
Total (3) $207.6 $210.1 $250.1 $231.7 $231.7
REBILLABLES (4) (in millions)
Deepwater $0.2 $(0.2) $1.4 $2.7 $17.0
Jack-up 5.3 4.5 6.5 18.2 26.1
Total $5.5 $4.3 $7.9 $20.9 $43.1
==== ==== ==== ===== =====
(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) The twelve months ended December 31, 2016 includes 143 operating days for the Rowan Relentless up to the contract termination.
(4) 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 December 31, 2016 Three months ended December 31, 2015
------------------------------------ ------------------------------------
Pretax Tax Net Diluted EPS* Pretax Tax Net Diluted EPS*
------ --- --- ----------- ------ --- --- -----------
GAAP NET INCOME (LOSS) $(34.1) $9.7 $(24.4) $(0.19) $137.8 $(13.4) $124.4 $0.99
------ ---- ------ ------ ------ ------ ------ -----
Loss on debt extinguishment 33.6 - 33.6 0.27 1.5 (0.5) 1.0 0.01
Gain on sale of Rowan Louisiana - - - - (9.7) 3.4 (6.3) (0.05)
NON-GAAP NET INCOME $(0.5) $9.7 $9.2 $0.08 $129.6 $(10.5) $119.1 $0.95
===== ==== ==== ===== ====== ====== ====== =====
Twelve months ended December 31, 2016 Twelve months ended December 31, 2015
------------------------------------- -------------------------------------
Pretax Tax Net Diluted EPS* Pretax Tax Net Diluted EPS*
------ --- --- ----------- ------ --- --- -----------
GAAP NET INCOME $325.6 $(5.0) $320.6 $2.55 $157.7 $(64.4) $93.3 $0.75
------ ----- ------ ----- ------ ------ ----- -----
Customer contract termination
settlement (120.0) - (120.0) (0.95) - - - -
Non-cash asset impairment charges 34.3 - 34.3 0.27 329.8 (56.0) 273.8 2.18
Litigation-related charge (credit) (1.4) - (1.4) (0.01) 7.6 (2.7) 4.9 0.04
Loss on debt extinguishment 31.2 - 31.2 0.25 1.5 (0.5) 1.0 0.01
Gain on sale of Rowan Louisiana - - - - (9.7) 3.4 (6.3) (0.05)
Discrete tax item - - - - - 75.3 75.3 0.60
--- ----
NON-GAAP NET INCOME $269.7 $(5.0) $264.7 $2.11 $486.9 $(44.9) $442.0 $3.53
====== ===== ====== ===== ====== ====== ====== =====
* Per share amounts may not sum due to rounding.
Three months ended Twelve months ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
ADJUSTED EARNINGS BEFORE INTEREST,
TAXES AND DEPRECIATION (EBITDA):
GAAP NET INCOME (LOSS) $(24.4) $124.4 $320.6 $93.3
------ ------ ------ -----
Depreciation and amortization 101.7 102.2 402.9 391.4
Other expense, net 41.7 40.9 161.6 147.9
Income tax expense (benefit) (9.7) 13.4 5.0 64.4
Customer contract termination
settlement - - (120.0) -
Non-cash asset impairment charges - - 34.3 329.8
Litigation-related charge (credit) - - (1.4) 7.6
Loss on debt extinguishment 33.6 1.5 31.2 1.5
Gain on sale of Rowan Louisiana - (9.7) - (9.7)
NON-GAAP ADJUSTED EBITDA $142.9 $272.7 $834.2 $1,026.2
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SOURCE Rowan Companies plc
