ROWAN COMPANIES PLC HOUSTON, Aug. 2, 2017 /PRNewswire/ -- For the quarter ended June 30, 2017, Rowan Companies plc (" Rowan " or the " Company ") (NYSE: RDC) reported a net loss of $28.7 million, or $0.23 net loss per diluted share, compared to net income of $216.7 million, or $1.72 per diluted share, in the second quarter of 2016. The net loss for the current quarter included a $2.4 million (after tax), or $0.02 per share, gain on early extinguishment of $35.8 million of debt. The net income for the prior-year quarter included a $120.0 million (after tax), or $0.95 per share, increase to net income for the Rowan Relentless contract termination. The $120.0 million reflects the incremental revenue in excess of the Rowan Relentless drillship's day rate for the quarter ended June 30, 2016. Additionally, net income for the prior-year quarter included a $1.8 million (after tax), or $0.01 per share, gain on early extinguishment of debt.
Tom Burke, President and Chief Executive Officer, commented, "Amidst challenging market conditions, we are encouraged by recent contract awards for the Rowan jack-up fleet. We continue to execute safe, reliable and efficient operations with less than 1% downtime in the quarter. Our balance sheet remains solid and we believe positions us well in a slow industry recovery."
Rowan will conduct its earnings conference call on Wednesday, August 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 20418128. 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; impairments; cyber incidents; the outcomes 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 June 30, Six months ended June 30,
2017 2016 2017 2016
REVENUES $320.2 $611.8 $694.5 $1,112.0
COSTS AND EXPENSES:
Direct operating costs
(excluding items below) 167.5 207.5 337.5 412.3
Depreciation and
amortization 101.5 100.1 200.6 199.0
Selling, general and
administrative 22.0 26.1 46.0 53.0
Loss on disposals of
property and equipment 3.1 1.9 6.5 4.1
Total costs and expenses 294.1 335.6 590.6 668.4
----- ----- ----- -----
INCOME FROM OPERATIONS 26.1 276.2 103.9 443.6
OTHER INCOME (EXPENSE):
Interest expense (38.9) (38.3) (78.5) (77.2)
Interest income 3.2 0.5 5.2 0.9
Gain on extinguishment of
debt 2.4 1.8 2.2 2.4
Other - net (0.1) (0.7) (0.1) (3.3)
Total other (expense), net (33.4) (36.7) (71.2) (77.2)
----- ----- ----- -----
INCOME (LOSS) BEFORE
INCOME TAXES (7.3) 239.5 32.7 366.4
Provision for income taxes 21.4 22.8 51.1 26.9
---- ---- ---- ----
NET INCOME (LOSS) $(28.7) $216.7 $(18.4) $339.5
====== ====== ====== ======
NET INCOME (LOSS) PER
SHARE -DILUTED $(0.23) $1.72 $(0.15) $2.70
====== ===== ====== =====
WEIGHTED AVERAGE SHARES -
BASIC $126.3 $125.4 $126.0 $125.2
====== ====== ====== ======
WEIGHTED AVERAGE SHARES -
DILUTED 126.3 126.3 126.0 125.9
===== ===== ===== =====
ROWAN COMPANIES PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
June 30, 2017 December 31,
2016
----
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $1,145.2 $1,255.5
Receivables -
trade and
other 310.1 301.3
Prepaid
expenses and
other current
assets 29.5 23.5
---- ----
Total current
assets 1,484.8 1,580.3
Property and
equipment -
net 6,901.3 7,060.0
Investment in
unconsolidated
subsidiary 25.0 -
Other assets 45.0 35.3
---- ----
$8,456.1 $8,675.6
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Current
portion of
long-term
debt $ - $126.8
Accounts
payable -
trade 87.8 94.3
Deferred
revenues 74.5 103.9
Accrued
liabilities 134.9 158.8
----- -----
Total current
liabilities 297.2 483.8
Long-term
debt, less
current
portion 2,516.6 2,553.4
Other
liabilities 309.8 338.8
Deferred
income taxes
-net 22.4 185.7
Shareholders'
equity 5,310.1 5,113.9
------- -------
$8,456.1 $8,675.6
======== ========
ROWAN COMPANIES PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Six months ended June 30,
-------------------------
2017 2016
---- ----
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income
(loss) $(18.4) $339.5
Adjustments to reconcile net
income (loss) to net cash
provided by operations:
Depreciation
and
amortization 200.6 199.0
Deferred
income taxes 36.4 (5.2)
Provision for
pension and
other
postretirement
benefits 5.1 9.5
Share-based
compensation
expense 12.2 17.5
Loss on
disposals of
property and
equipment 6.5 4.1
Contingent
payment
derivative 0.1 (6.4)
Other 1.3 0.4
Net changes
in current
assets and
liabilities (26.5) (135.6)
Other
postretirement
benefit
claims paid (1.8) (4.9)
Contributions
to pension
plans (12.0) (8.2)
Deferred
revenues (39.9) (9.4)
Net changes
in other
noncurrent
assets and
liabilities (25.1) (7.1)
----- ----
Net cash
provided by
operating
activities 138.5 393.2
----- -----
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital
expenditures (57.3) (64.4)
Investment in
unconsolidated
subsidiary (25.0) -
Proceeds from
disposals of
property and
equipment 1.3 1.1
--- ---
Net cash used
in investing
activities (81.0) (63.3)
----- -----
CASH FLOWS FROM FINANCING
ACTIVITIES:
Reductions of
long-term
debt (163.4) (47.9)
Shares
repurchased
for tax
withholdings
on vesting
of
restricted
share units (4.4) (4.8)
---- ----
Net cash used
in financing
activities (167.8) (52.7)
------ -----
INCREASE
(DECREASE)
IN CASH AND
CASH
EQUIVALENTS (110.3) 277.2
CASH AND CASH
EQUIVALENTS,
BEGINNING OF
PERIOD 1,255.5 484.2
------- -----
CASH AND CASH
EQUIVALENTS,
END OF
PERIOD $1,145.2 $761.4
======== ======
ROWAN COMPANIES PLC
SUPPLEMENTAL OPERATING SEGMENT INFORMATION
(In millions)
(Unaudited)
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2017 2016 2017 2016
---- ---- ---- ----
Deepwater:
Revenues $122.7 $341.4 $283.4 $563.9
Operating expenses:
Direct operating costs
(excluding items
below) 38.7 56.0 83.3 123.0
Depreciation and
amortization 28.4 29.9 56.7 57.2
Other operating items - - - 0.3
--- --- --- ---
Income from Operations $55.6 $255.5 $143.4 $383.4
===== ====== ====== ======
Jack-ups:
Revenues $197.5 $270.4 $411.1 $548.1
Operating expenses:
Direct operating costs
(excluding items
below) 128.8 151.5 254.2 289.3
Depreciation and
amortization 72.4 71.1 142.5 139.5
Other operating items 3.2 1.8 6.6 3.7
--- --- --- ---
Income (loss) from
Operations $(6.9) $46.0 $7.8 $115.6
===== ===== ==== ======
Unallocated costs and other:
Operating expenses:
Depreciation and
amortization 0.7 (0.9) 1.4 2.3
Selling, general and
administrative 22.0 26.1 46.0 53.0
Other operating items (0.1) 0.1 (0.1) 0.1
---- --- ---- ---
Loss from Operations $(22.6) $(25.3) $(47.3) $(55.4)
====== ====== ====== ======
Consolidated:
Revenues $320.2 $611.8 $694.5 $1,112.0
Operating expenses:
Direct operating costs
(excluding items
below) 167.5 207.5 337.5 412.3
Depreciation and
amortization 101.5 100.1 200.6 199.0
Selling, general and
administrative 22.0 26.1 46.0 53.0
Other operating items 3.1 1.9 6.5 4.1
--- --- --- ---
Income from Operations $26.1 $276.2 $103.9 $443.6
===== ====== ====== ======
ROWAN COMPANIES PLC
SUPPLEMENTAL OPERATING INFORMATION
(Unaudited)
Three months ended Six months ended
------------------
June 30, March 31 June 30, June 30,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
RIG DAYS (1)
Deepwater:
Operating 204 270 325 474 686
Available 364 360 364 724 728
Jack-up:
Operating 1,503 1,547 1,605 3,050 3,101
Available 2,093 2,071 2,184 4,164 4,368
Total:
Operating 1,707 1,817 1,930 3,524 3,787
Available 2,457 2,431 2,548 4,888 5,096
UTILIZATION (1)
Deepwater 56% 75% 89% 65% 94%
Jack-up 72% 75% 73% 73% 71%
Total 69% 75% 76% 72% 74%
AVERAGE DAY RATES (2) (in thousands)
Deepwater (3) $599.6 $592.1 $607.0 $595.3 $609.8
Jack-up $129.9 $135.7 $164.9 $132.8 $173.3
Total (3) $186.0 $203.5 $239.4 $195.0 $252.4
REBILLABLES (4) (in millions)
Deepwater $0.4 $0.8 $1.5 $1.2 $2.7
Jack-up 2.1 3.4 5.0 5.5 8.4
Total $2.5 $4.2 $6.5 $6.7 $11.1
==== ==== ==== ==== =====
(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) Average day rate for the three and six months ended June
30, 2016 includes operating days for the drillship Rowan
Relentless up to the contract termination which was 52 days
and 143 days for the three and six months ended June 30, 2016,
respectively.
(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 June 30, 2017 Three months ended June 30, 2016
-------------------------------- --------------------------------
Pretax Tax Net Diluted Pretax Tax Net Diluted
EPS* EPS*
--- ---
GAAP NET INCOME (LOSS) $(7.3) $(21.4) $(28.7) $(0.23) $239.5 $(22.8) $216.7 $1.72
Gain on extinguishment of debt (2.4) - (2.4) (0.02) (1.8) - (1.8) (0.01)
Customer contract termination
settlement - - - - (120.0) - (120.0) (0.95)
--- --- --- ------ --- ------
NON-GAAP NET INCOME (LOSS) $(9.7) $(21.4) $(31.1) $(0.25) $117.7 $(22.8) $94.9 $0.75
===== ====== ====== ====== ====== =====
Six months ended June 30, 2017 Six months ended June 30, 2016
------------------------------ ------------------------------
Pretax Tax Net Diluted Pretax Tax Net Diluted
EPS* EPS*
--- ---
GAAP NET INCOME (LOSS) $32.7 $(51.1) $(18.4) $(0.15) $366.4 $(26.9) $339.5 $2.70
Gain on extinguishment of debt (2.2) - (2.2) (0.02) (2.4) - (2.4) (0.02)
Customer contract termination
settlement - - - - (120.0) - (120.0) (0.95)
------ --- ------
NON-GAAP NET INCOME (LOSS) $30.5 $(51.1) $(20.6) $(0.16) $244.0 $(26.9) $217.1 $1.73
===== ====== ====== ====== ====== ======
* Per share amounts may not sum
due to rounding.
Three months ended Six months ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
ADJUSTED EARNINGS BEFORE
INTEREST, TAXES AND
DEPRECIATION (EBITDA):
GAAP NET INCOME (LOSS) $(28.7) $216.7 $(18.4) $339.5
Depreciation and amortization 101.5 100.1 200.6 199.0
Interest (income) expense and
other, net 35.8 38.5 73.4 79.6
Income tax expense 21.4 22.8 51.1 26.9
Gain on extinguishment of debt (2.4) (1.8) (2.2) (2.4)
Loss on disposals of property
and equipment 3.1 1.9 6.5 4.1
Customer contract termination
settlement - (120.0) - (120.0)
--- ------ --- ------
NON-GAAP ADJUSTED EBITDA $130.7 $258.2 $311.0 $526.7
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SOURCE Rowan Companies plc
