<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____ TO _____
ROWAN COMPANIES, INC.
---------------------
(Exact name of registrant as specified in its charter)
Delaware 1-5491 75-0759420
-------- ------ ----------
(State or other jurisdiction of Commission File (I.R.S. Employer
incorporation or organization) Number Identification No.)
5450 Transco Tower, 2800 Post Oak Boulevard, Houston, Texas 77056-6196
- ----------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(713) 621-7800
--------------
Registrant's telephone number, including area code
Inapplicable
------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares of common stock, $.125 par value, outstanding at October
31, 1996 was 85,539,572.
<PAGE> 2
ROWAN COMPANIES, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. Financial Information:
Consolidated Balance Sheet --
September 30, 1996 and December 31, 1995 . . . . . . . . 2
Consolidated Statement of Operations --
Three and Nine Months Ended September 30, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statement of Cash Flows --
Nine Months Ended September 30, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . 6
Management's Discussion and Analysis
of Financial Condition and Results
of Operations . . . . . . . . . . . . . . . . . . . . . . 8
PART II. Other Information:
Exhibits and Reports on Form 8-K . . . . . . . . . . . 12
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ROWAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................................. $ 75,233 $ 90,338
Receivables - trade and other............................................. 114,323 87,811
Inventories - at cost:
Raw materials and supplies.............................................. 59,061 51,898
Work-in-progress........................................................ 28,047 23,015
Finished goods.......................................................... 3,236 708
Prepaid expenses.......................................................... 11,401 11,430
Cost of turnkey drilling contracts in progress............................ 13,044 8,259
---------- ----------
Total current assets................................................ 304,345 273,459
---------- ----------
INVESTMENT IN AND ADVANCES TO 49% OWNED COMPANIES........................... 28,362 29,770
---------- ----------
PROPERTY, PLANT AND EQUIPMENT - at cost:
Drilling equipment........................................................ 954,241 944,021
Aircraft and related equipment............................................ 188,929 189,954
Manufacturing plant and equipment......................................... 33,140 25,037
Other property and equipment.............................................. 94,321 91,089
Construction in progress.................................................. 43,842
---------- ----------
Total............................................................... 1,314,473 1,250,101
Less accumulated depreciation and amortization 797,775 763,062
---------- ----------
Property, plant and equipment - net ................................ 516,698 487,039
---------- ----------
OTHER ASSETS AND DEFERRED CHARGES........................................... 7,749 12,220
---------- ----------
TOTAL............................................................... $ 857,154 $ 802,488
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
-2-
<PAGE> 4
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Note payable and current maturities of long-term debt............. $ 4,276 $ 7,039
Accounts payable - trade.......................................... 32,846 21,774
Other current liabilities......................................... 59,831 44,058
----------- -----------
Total current liabilities.................................... 96,953 72,871
----------- -----------
LONG-TERM DEBT - less current maturities........................... 238,402 247,744
----------- -----------
OTHER LIABILITIES.................................................. 36,109 36,227
----------- -----------
DEFERRED CREDITS:
Income taxes...................................................... 4,502 4,146
Gain on sale/leaseback transactions............................... 9,953 12,345
----------- -----------
Total deferred credits....................................... 14,455 16,491
----------- -----------
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value:
Authorized 5,000,000 shares issuable in series:
Series I Preferred Stock, authorized 6,500 shares, none issued
Series II Preferred Stock, authorized 6,000 shares, none issued
Series III Preferred Stock, authorized 10,300 shares, none issued
Series A Junior Preferred Stock, authorized
1,500,000 shares, none issued
Common stock, $.125 par value:
Authorized 150,000,000 shares; issued 86,974,216
shares at September 30, 1996 and 86,353,792 shares
at December 31, 1995........................................... 10,872 10,794
Additional paid-in capital......................................... 400,362 396,092
Retained earnings.................................................. 62,486 24,754
Less cost of 1,457,919 treasury shares............................. 2,485 2,485
----------- -----------
Total stockholders' equity................................... 471,235 429,155
----------- -----------
TOTAL........................................................ $ 857,154 $ 802,488
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
-3-
<PAGE> 5
ROWAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
For The Three Months For The Nine Months
Ended September 30, Ended September 30,
----------------------- ------------------------
1996 1995 1996 1995
--------- -------- --------- ---------
(Unaudited)
<S> <C> <C> <C> <C>
REVENUES:
Drilling services........................................... $ 77,927 $ 65,738 $ 226,000 $ 174,529
Manufacturing sales and services............................ 36,538 37,107 104,205 100,165
Aircraft services........................................... 40,218 31,498 88,452 69,828
--------- -------- --------- ---------
Total..................................................... 154,683 134,343 418,657 344,522
--------- -------- --------- ---------
COSTS AND EXPENSES:
Drilling services........................................... 47,674 55,471 150,478 151,517
Manufacturing sales and services............................ 33,710 33,491 95,232 91,986
Aircraft services........................................... 28,892 22,606 72,370 60,940
Depreciation and amortization............................... 12,083 12,591 36,113 38,271
General and administrative.................................. 4,046 3,770 11,963 10,992
--------- -------- --------- ---------
Total..................................................... 126,405 127,929 366,156 353,706
--------- -------- --------- ---------
INCOME (LOSS) FROM OPERATIONS................................. 28,278 6,414 52,501 (9,184)
--------- -------- --------- ---------
OTHER INCOME (EXPENSE):
Interest expense............................................ (6,903) (6,933) (20,714) (20,771)
Less: interest capitalized.................................. 711 1,270
Gain on disposals of property, plant and equipment.......... 165 153 2,171 1,230
Interest income............................................. 875 1,071 3,124 3,825
Other - net................................................. 93 170 351 408
--------- -------- --------- ---------
Other income (expense) - net.............................. (5,059) (5,539) (13,798) (15,308)
--------- -------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES............................. 23,219 875 38,703 (24,492)
Provision for income taxes.................................. 509 212 971 286
--------- -------- --------- ---------
NET INCOME (LOSS)............................................. $ 22,710 $ 663 $ 37,732 $ (24,778)
========= ======== ========= =========
EARNINGS (LOSS) PER COMMON SHARE (Note 4)..................... $ 0.26 $ 0.01 $ 0.43 $ (0.29)
========= ======== ========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
-4-
<PAGE> 6
ROWAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
For The Nine Months
Ended September 30,
----------------------------
1996 1995
---------- -----------
(Unaudited)
<S> <C> <C>
CASH PROVIDED BY (USED IN):
Operations:
Net income (loss)........................................................ $ 37,732 $ (24,778)
Noncash charges (credits) to net income (loss):
Depreciation and amortization........................................... 36,113 38,271
Gain on disposals of property, plant and equipment...................... (2,171) (1,230)
Compensation expense.................................................... 3,510 3,153
Change in sale/leaseback payable........................................ (4,258) (3,138)
Amortization of sale/leaseback gain..................................... (2,392) (2,392)
Provision for pension and postretirement benefits....................... 6,510 5,597
Other - net............................................................. 2,072 (767)
Changes in current assets and liabilities:
Receivables- trade and other............................................ (26,512) (7,531)
Inventories............................................................. (14,723) (9,373)
Other current assets.................................................... (2,019) (17,337)
Current liabilities..................................................... 16,755 10,440
Net changes in other noncurrent assets and liabilities................... 3,657 894
---------- -----------
Net cash provided by (used in) operations................................. 54,274 (8,191)
---------- -----------
Investing activities:
Property, plant and equipment additions.................................. (71,486) (20,457)
Repayments from affiliates............................................... 32 3,676
Proceeds from disposals of property, plant and equipment................ 3,583 2,138
---------- -----------
Net cash used in investing activities..................................... (67,871) (14,643)
---------- -----------
Financing activities:
Repayments of borrowings................................................. (2,096) (215)
Other - net.............................................................. 588 488
---------- -----------
Net cash provided by (used in) financing activities....................... (1,508) 273
---------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS..................................... (15,105) (22,561)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............................ 90,338 111,070
---------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD.................................. $ 75,233 $ 88,509
========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
-5-
<PAGE> 7
ROWAN COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements of the Company included herein have
been prepared without audit pursuant to generally accepted accounting
principles and the rules and regulations of the Securities and Exchange
Commission. Certain information and notes have been condensed or omitted
pursuant to such rules and regulations and the Company believes that the
disclosures included herein are adequate. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and related notes included in the Company's 1995 Annual Report
to Stockholders incorporated by reference in the Form 10-K for the year
ended December 31, 1995.
2. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments and reclassifications, which
are of a normal recurring nature, necessary to present fairly its financial
position as of September 30, 1996 and December 31, 1995, and the results of
its operations for the three and nine month periods ended September 30,
1996 and 1995 and its cash flows for the nine months ended September 30,
1996 and 1995.
3. The results of operations for the three and nine month periods ended
September 30, 1996 are not necessarily indicative of the results to be
expected for the full year.
-6-
<PAGE> 8
4. Computation of primary and fully diluted earnings (loss) per share is as
follows (in thousands except per share amounts):
<TABLE>
<CAPTION>
For The For The
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------- ---------------------------
1996 1995 1996 1995
----------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Weighted average shares of common
stock outstanding ...................................... 85,495 84,727 85,261 84,517
Stock options and related (treasury stock method)......... 2,195 949(A) 1,828 327 (A)
----------- ------------ --------- -----------
Weighted average shares for primary
earnings (loss) per share calculation................... 87,690 85,676 87,089 84,844
Stock options and related (treasury stock method)......... 241 466 241 (A)
Shares issuable from assumed conversion
of the Series II Convertible Subordinated
Debenture .............................................. 400 400(A) 400 400 (A)
----------- ------------ --------- -----------
Weighted average shares for fully diluted
earnings (loss) per share calculation .................. 88,331 86,076 87,955 85,485
=========== ============ ========= ===========
Net income (loss) for primary calculation................. $ 22,710 $ 663 $ 37,732 $ (24,778)
Subordinated debenture interest, net of
income tax effect ...................................... 80 96 242 279
----------- ------------ --------- -----------
Net income (loss) for fully diluted
calculation ............................................ $ 22,790 $ 759 $ 37,974 $ (24,499)
=========== ============ ========= ===========
Earnings (loss) per share:
Primary ................................................ $ .26 $ .01 $ .43 $ (.29)
=========== ============ ========= ===========
Fully diluted .......................................... $ .26 $ .01 $ .43 $ (.29)
=========== ============ ========= ===========
</TABLE>
(A) Included in accordance with Regulation S-K Item 601 (b) (11) although not
required to be provided by Accounting Principles Board ("APB") Opinion No.
15 because the effect is insignificant. Earnings (loss) per share computed
under APB Opinion No. 15 is as set forth on the Consolidated Statement of
Operations.
-7-
<PAGE> 9
ROWAN COMPANIES, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Nine Months Ended September 30, 1996 Compared to
Nine Months Ended September 30, 1995
The Company achieved net income of $37.7 million in the first nine
months of 1996 compared to a net loss of $24.8 million in the same period of
1995. The improvement in financial results was primarily due to increased
drilling day rates and fleet utilization, in addition to the enhanced
contribution made by the Company's aviation operations.
A comparison of the revenues and operating profit (loss) from
drilling, manufacturing, aviation and consolidated operations for the first
nine months of 1996 and 1995, respectively, is reflected below (dollars in
thousands):
<TABLE>
<CAPTION>
Drilling Manufacturing Aviation Consolidated
--------------------- ---------------------- --------------------- ----------------------
1996 1995 1996 1995 1996 1995 1996 1995
--------- --------- --------- --------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 226,000 $ 174,529 $ 104,205 $ 100,165 $ 88,452 $ 69,828 $ 418,657 $ 344,522
Percent of Consolidated
Revenues 54% 51% 25% 29% 21% 20% 100% 100%
Operating Profit (Loss)(1) $ 49,637 $ (5,215) $ 7,196 $ 6,954 $ 7,631 $ 69 $ 64,464 $ 1,808
</TABLE>
- -----------------------------------------------------------------------------
(1) Income (loss) from operations before deducting general and administrative
expenses.
As reflected above, the Company's consolidated operating results
improved by $62.7 million when the first nine months of 1996 is compared to the
same period of 1995. Day rate drilling revenues increased by $75.0 million
between periods as the Company's offshore fleet achieved a 36% increase in
average rates, or about $9,300 per day, while overall utilization improved from
88% to 97%. Offshore day rates began to improve in the second quarter of 1995
due to increasing demand for drilling services brought on by strengthening oil
and natural gas prices. The Company's day rate drilling expenses do not
typically fluctuate in direct correlation with revenues and increased by only
$21.0 million between periods. Turnkey drilling generated revenues of $10.7
million and an incremental operating loss of $1.3 million in the first nine
months of 1996, compared to $34.3 million and a $.2 million profit,
respectively, in the same period of 1995.
The Company's manufacturing operations achieved a 4% increase in
revenues between periods and consistent profitability while making meaningful
progress on the construction of Rowan Gorilla V. Manufacturing operations
exclude approximately $20.7 million of products and services provided to the
Company's drilling division during the first nine months of 1996, including
more than $17 million related to Gorilla V, as compared to $3.7 million in the
same period of 1995.
-8-
<PAGE> 10
The Company's aviation operations achieved significant improvements in
revenues and profitability between periods as demand for the Company's flying
services increased in all markets, especially in the commuter airline and
forest fire control areas.
Three Months Ended September 30, 1996 Compared to
Three Months Ended September 30, 1995
The Company achieved net income of $22.7 million in the third quarter
of 1996 compared to $.7 million in the same period of 1995. The improvement in
financial results was primarily due to increased drilling day rates coupled
with continued strong fleet utilization, in addition to the enhanced
contribution made by the Company's aviation operations.
A comparison of the revenues and operating profit (loss) from
drilling, manufacturing, aviation and consolidated operations for the third
quarter of 1996 and 1995, respectively, is reflected below (dollars in
thousands):
<TABLE>
<CAPTION>
Drilling Manufacturing Aviation Consolidated
--------------------- ---------------------- --------------------- ----------------------
1996 1995 1996 1995 1996 1995 1996 1995
--------- --------- --------- --------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 77,927 $ 65,738 $ 36,538 $ 37,107 $ 40,218 $ 31,498 $ 154,683 $ 134,343
Percent of Consolidated
Revenues 50% 49% 24% 28% 26% 23% 100% 100%
Operating Profit (Loss) $ 21,665 $ 1,039 $ 2,130 $ 3,185 $ 8,529 $ 5,960 $ 32,324 $ 10,184
</TABLE>
As reflected above, the Company's consolidated operating results
improved by $22.1 million when the third quarter of 1996 is compared to the
third quarter of 1995. Day rate drilling revenues increased by $23.9 million
between periods as the Company's offshore fleet achieved a 43% increase in
average rates, or about $11,200 per day, while overall utilization improved
from 92% to 98%. Offshore day rates began to improve in the second quarter of
1995 due to increasing demand for drilling services brought on by strengthening
oil and natural gas prices. The Company's day rate drilling expenses do not
typically fluctuate in direct correlation with revenues and increased by only
$4.0 million between periods. Turnkey drilling generated revenues of $2.5
million and an incremental operating profit of $.3 million in the third quarter
of 1996 as compared to $14.3 million and $.2 million, respectively, in the
third quarter of 1995.
The Company's manufacturing operations achieved slightly less volume between
quarters as meaningful progress on the construction of Rowan Gorilla V was
attained. Manufacturing operations exclude approximately $9.7 million of
products and services provided to the Company's drilling division during the
third quarter of 1996, as compared to $.6 million in the third quarter of 1995.
The Company's aviation operations experienced the normal seasonal improvement in
flying activity in Alaska during both periods, but third quarter 1996 operating
results were further enhanced as demand for the Company's flying services
increased in all markets, especially in the commuter airline and forest fire
control areas.
-9-
<PAGE> 11
Perceptible trends in the offshore drilling markets in which the
Company is currently operating and the number of Company-operated rigs in each
of those markets are as follows:
<TABLE>
<CAPTION>
AREA RIGS PERCEPTIBLE INDUSTRY TRENDS
---- ---- ---------------------------
<S> <C> <C>
Gulf of Mexico 16 Continuing high levels of exploration and development
activity
North Sea 4 Continuing high levels of drilling activity for jack-up
rigs
Eastern Canada 1 Stable demand
</TABLE>
The preceding table does not reflect the impending relocation of Rowan
Gorilla IV to the North Sea from the Gulf of Mexico.
Perceptible trends in the aviation markets in which the Company is
currently operating and the number of Company aircraft based in each of those
markets are as follows:
<TABLE>
<CAPTION>
COMPANY-OWNED
AREA AIRCRAFT (1) PERCEPTIBLE INDUSTRY TRENDS
---- -------------- ---------------------------
<S> <C> <C>
Alaska 62 Normal seasonal decline
Gulf of Mexico 43 Moderately improving market conditions
China 2 Generally stable flight support activity
North Sea (Dutch) 9 Generally stable flight support activity
North Sea (U. K.) 5 Generally stable flight support activity
</TABLE>
- -------------------------------------------
(1) Includes 13 units which are 49% owned.
The drilling and aviation markets in which the Company competes
frequently experience significant changes in supply and demand. Drilling
utilization and day rates achievable in offshore markets are a function of the
demand for drilling services, as measured by the level of exploration and
development expenditures, and the supply of capable drilling equipment. These
expenditures, which often fluctuate between markets, are affected by many
factors such as existing and newly discovered oil and natural gas reserves,
political and regulatory policies, seasonal weather patterns, contractual
requirements under leases or concessions and, probably most influential, oil
and natural gas prices. The Company's aviation operations are also affected by
such factors, as flying in support of offshore energy operations remains a
major source of business and Alaska operations are hampered each winter. The
volatile nature of such factors prevents the Company from being able to predict
whether existing market conditions or the perceptible market trends reflected
in the preceding tables will continue. Assuming such conditions and trends
prevail, however, the Company should remain profitable throughout 1996. The
Company can, as it has done in the past, relocate its drilling rigs and
aircraft from one geographic area to another in response to such changing
market fundamentals, but only when these moves are economically justified.
The Company's manufacturing operations are considerably less volatile
than its drilling and aviation operations and, given a current order backlog of
about $40 million and barring unforeseen circumstances, should continue to
contribute positive operating results throughout the remainder of 1996.
-10-
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
A comparison of key balance sheet figures and ratios as of September
30, 1996 and December 31, 1995 is as follows (dollars in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
Cash and cash equivalents $75,233 $90,338
Current assets $304,345 $273,459
Current liabilities $96,953 $72,871
Current ratio 3.14 3.75
Note payable and current maturities of long-term debt $4,276 $7,039
Long-term debt $238,402 $247,744
Stockholders' equity $471,235 $429,155
Long-term debt/total capitalization .34 .37
</TABLE>
Reflected in the comparison above are the effects in the first nine
months of 1996 of net cash provided by operations of $54.3 million and capital
expenditures of $71.5 million. The operating cash surplus was constrained by
investments in receivables and inventories consistent with expanding
operations.
During the first nine months of 1996, the Company completed the design
and began the construction of Rowan Gorilla V, an enhanced version of the
Company's Gorilla Class jack-ups, which will be the world's largest bottom
supported mobile offshore drilling unit. The rig is being constructed at the
Company's Vicksburg, Mississippi shipyard and should be completed by mid-1998
at an estimated cost of $175 million. The Company will finance 87.5% of the
construction cost though a 12-year bank loan guaranteed by the Maritime
Administration of the U. S. Department of Transportation under its Title XI
Program. The reactivation of the Company's marine construction capability,
principally through rebuilding of the Vicksburg shipyard, is expected to cost
approximately $20 million.
Capital expenditures during the first nine months of 1996 included
$34.3 million related to construction of Gorilla V and $12.0 million toward
reactivation of the Vicksburg shipyard. The Company estimates remaining 1996
capital expenditures will be between $20 million and $25 million, primarily for
Gorilla V and the Vicksburg facility. The Company may also spend amounts to
acquire additional aircraft as market conditions justify and to upgrade
existing offshore rigs.
Based upon current operating levels and the previously discussed
market trends, management believes that remaining 1996 operations, together
with existing working capital, will generate sufficient cash flow to sustain
planned capital expenditures and debt service requirements for the remainder of
1996.
On October 28, 1996, the Company announced plans for the construction
of Rowan Gorilla VI and Rowan Gorilla VII. Each will be combination drilling
and production units like Gorilla V, capable of operating in hostile
environments like the North Sea in water depths of up to 400 feet. The rigs
will be constructed at the Company's Vicksburg facility at a combined cost of
$380 million, with delivery expected during the first quarter of 1999 and the
second quarter of 2000. The Company believes that if operating conditions
continue to improve as expected, internally generated working capital may be
sufficient to finance both rigs, with outside financing obtained if necessary.
There can be no assurance, however, that working capital will be adequate or
that outside financing will be available.
The Company's 11 7/8% Senior Notes contain terms which limit the
Company's ability to pay a cash dividend on its common stock.
-11-
<PAGE> 13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following is a list of Exhibits filed with this
Form 10-Q:
3 - Amendment Dated August 30, 1996 to the Bylaws of the
Company, as Amended
27 - Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant
during the third quarter of fiscal year 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROWAN COMPANIES, INC.
(Registrant)
Date: November 14, 1996 /s/ E. E. THIELE
--------------------------------------
E. E. Thiele
Senior Vice President- Finance,
Administration and Treasurer
(Chief Financial Officer)
Date: November 14, 1996 /s/ W. H. WELLS
--------------------------------------
W. H. Wells
Controller
(Chief Accounting Officer)
-12-
<PAGE> 14
EXHIBIT INDEX
Exhibit
No. Description
- -------- -----------
3 Amendment Dated August 30, 1996 to the Bylaws of the Company, as
Amended
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 3
ROWAN COMPANIES, INC.
Amendment Dated
August 30, 1996 to the
Bylaws of the Company,
as Amended
Article III
Board of Directors
Section 1. Number, Qualification and Nominations. The business and
property of the Corporation shall be managed by the Board of Directors, and
subject to the restrictions imposed by law, the Certificate of Incorporation or
these Bylaws, they may exercise all the powers of the Corporation. Directors
need not be stockholders or residents of Delaware.
The Board of Directors shall consist of not less than one nor more
than thirty directors, as so determined from time to time by resolution of the
Board of Directors. If the Board of Directors makes no such determination, the
number of directors shall be the number set forth in the Certificate of
Incorporation. Within the above limits, the number of directors may be
increased or decreased (provided such decrease does not shorten the term of any
incumbent director) from time to time by resolution of the Board of Directors.
Nominations of candidates for election as directors of the Corporation
at any meeting of stockholders of the Corporation may be made by the Chairman
of the Board of Directors, the President or by any stockholder entitled to vote
at such meeting who complies with the provisions of this paragraph. Not less
than 60 days prior to the date of the anniversary of the annual meeting held in
the prior year, in the case of an annual meeting, or, in the case of a special
meeting called by the Chairman of the Board, the President, the Board of
Directors or the Executive Committee for the purpose of electing directors, not
more than 10 days following the earlier of the date of notice of such special
meeting or the date on which a public announcement of such meeting is made, any
stockholder who intends to make a nomination at the meeting shall deliver
written notice to the Secretary of the Corporation setting forth (i) the name
and address of the stockholder who intends to make the nomination and of the
person or persons to be nominated; (ii) a representation that the stockholder
(A) is a holder of record of stock of the Corporation specified in such notice,
(B) is or will be entitled to vote at such meeting, and (C) intends to appear
in person or by proxy at the meeting to nominate the person or persons
specified in the notice; and (iii) such other information concerning each such
nominee as would be required under the rules of the Securities and Exchange
Commission in a proxy statement soliciting proxies for the election of such
nominee and in a Schedule 14B (or other comparable required filing then in
effect) under the Securities Exchange Act of 1934. In the event that a person
is validly designated as a proposed nominee in accordance with this paragraph
(including a bona fide statement that the nominee is willing to be nominated)
and shall thereafter become unable or
<PAGE> 2
unwilling to stand for election to the Board of Directors, the stockholder who
made such designation may designate promptly in the manner set forth above a
substitute proposed nominee, notwithstanding the minimum time period set forth
in this paragraph. No person may be elected as a director at a meeting of
stockholders unless nominated in accordance with this paragraph, and any
purported nomination or purported election not made in accordance with the
procedures as set forth in this paragraph shall be void. In addition to any
other requirements relating to amendments to these Bylaws, no proposal by any
stockholder to repeal or amend this paragraph shall be brought before any
meeting of the stockholders of the Corporation unless written notice is given
of (i) such proposed repeal or the substance of such proposed amendment; (ii)
the name and address of the stockholder who intends to propose such repeal or
amendment, and (iii) a representation that the stockholder is a holder of
record of stock of the Corporation specified in such notice, is or will be
entitled to vote at such meeting and intends to appear in person or by proxy at
such meeting to make the proposal. Such notice shall be given in the manner
and at the time specified above in this paragraph. Any proposal to repeal or
amend or any such purported repeal or purported amendment of this paragraph not
made or adopted in accordance with the procedures set forth in this paragraph
shall be void.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF ROWAN COMPANIES, INC. FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1996 INCLUDED IN ITS FORM 10-Q FOR THE QUARTERLY PERIOD THEN
ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 75,233
<SECURITIES> 0
<RECEIVABLES> 114,323
<ALLOWANCES> 0
<INVENTORY> 90,344
<CURRENT-ASSETS> 304,345
<PP&E> 1,314,473
<DEPRECIATION> 797,775
<TOTAL-ASSETS> 857,154
<CURRENT-LIABILITIES> 96,953
<BONDS> 238,402
0
0
<COMMON> 10,872
<OTHER-SE> 460,363
<TOTAL-LIABILITY-AND-EQUITY> 857,154
<SALES> 97,455
<TOTAL-REVENUES> 418,657
<CGS> 80,284
<TOTAL-COSTS> 366,156
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,444
<INCOME-PRETAX> 38,703
<INCOME-TAX> 971
<INCOME-CONTINUING> 37,732
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,732
<EPS-PRIMARY> 0.43
<EPS-DILUTED> 0.43
</TABLE>
