<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File
Number 1-5491
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
ROWAN COMPANIES, INC. SAVINGS AND INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Rowan Companies, Inc.
2800 Post Oak Boulevard, Suite 5450
Houston, Texas 77056-6196
REQUIRED INFORMATION
The Rowan Companies, Inc. Savings and Investment Plan (the "Plan") is
subject to the Employee Retirement Income Security Act of 1974 ("ERISA").
Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial
statements and schedules of the Plan for and as of the fiscal year and fiscal
year-ends reflected therein, which have been prepared in accordance with the
financial reporting requirements of ERISA, are attached hereto as Appendix 1 and
incorporated herein by this reference.
SIGNATURES
The Plan, Pursuant to the requirements of the Securities and Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
ROWAN COMPANIES, INC. SAVINGS AND INVESTMENT PLAN
By: Rowan Companies, Inc. Savings
And Investment Plan
Administrative Committee:
/s/ JOHN R. COLLINS June 28, 2000
John R. Collins
/s/ MARK H. HAY June 28, 2000
Mark H. Hay
/s/ C. R. PALMER June 28, 2000
C. R. Palmer
/s/ E. E. THIELE June 28, 2000
E. E. Thiele
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APPENDIX 1
ROWAN COMPANIES, INC.
SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999 AND 1998
AND FOR THE YEARS THEN ENDED, SUPPLEMENTAL SCHEDULE
AS OF DECEMBER 31, 1999 AND INDEPENDENT AUDITORS' REPORT
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ROWAN COMPANIES, INC. SAVINGS AND
INVESTMENT PLAN
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TABLE OF CONTENTS
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits, December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 1999 and 1998 3
Notes to Financial Statements for the Years Ended December 31, 1999 and 1998 4
SUPPLEMENTAL SCHEDULE:
Assets Held for Investment Purposes at End of Year, December 31, 1999 8
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Schedules other than those listed above are omitted because of the absence of
the conditions under which they are required.
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INDEPENDENT AUDITORS' REPORT
Rowan Companies, Inc. Savings and Investment Plan:
We have audited the accompanying statements of net assets available for benefits
of the Rowan Companies, Inc. Savings and Investment Plan (the "Plan") as of
December 31, 1999 and 1998, and the related statement of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1999 and 1998, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes at End of Year, December 31, 1999, is presented for
the purpose of additional analysis and is not a required part of the basic
financial statements but is supplementary information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The schedule is the responsibility of
the Plan's management. Such schedule has been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects when considered in relation
to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Houston, Texas
June 28, 2000
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ROWAN COMPANIES, INC. SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1999 AND 1998
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<TABLE>
<CAPTION>
1999 1998
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ASSETS:
Cash $ 60,849 $ 58,001
Investments - at fair value 36,037,405 23,403,600
Receivables:
Contributions:
Employee 399,344 414,776
Employer 138,602 141,902
Investment income 495
Unsettled sales 91,167 47,506
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TOTAL ASSETS 36,727,862 24,065,785
LIABILITIES - payable for unsettled purchases 13,556 41,612
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NET ASSETS AVAILABLE FOR BENEFITS $ 36,714,306 $ 24,024,173
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See notes to financial statements.
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ROWAN COMPANIES, INC. SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
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<CAPTION>
1999 1998
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ADDITIONS:
Net appreciation in investments $ 4,302,230 $ 2,039,927
Investment income 2,363,779 1,392,674
Contributions:
Employee 5,477,159 4,851,524
Employer 1,826,339 1,671,916
Other 546 2,363
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Total additions 13,970,053 9,958,404
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DEDUCTIONS:
Employee withdrawals 1,190,258 1,051,667
Administrative expenses 54,612 50,086
Other 35,050
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Total deductions 1,279,920 1,101,753
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INCREASE IN NET ASSETS
AVAILABLE FOR BENEFITS 12,690,133 8,856,651
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 24,024,173 15,167,522
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End of year $36,714,306 $24,024,173
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See notes to financial statements.
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ROWAN COMPANIES, INC. SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
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1. PLAN DESCRIPTION
The following brief description of the Rowan Companies, Inc. Savings and
Investment Plan (the "Plan") is provided for general informational
purposes only. Participants should refer to the Plan agreement for more
complete information.
GENERAL - The Plan is a defined contribution, individual account 401(k)
plan covering substantially all drilling and aviation employees of Rowan
Companies, Inc. and its subsidiaries (the "Company").
PARTICIPATION - Employees are eligible to enter the Plan on the January 1
or July 1 immediately following the completion of 1,000 hours of service
in the 12-month period beginning on the employee's date of hire and ending
on the anniversary of such date.
FUNDING - Under the Plan, eligible employees may make basic contributions
of up to 6%, and additional contributions of up to 9%, of their regular
compensation on a before-tax basis. Effective July 1, 2000, the additional
contribution limit will be increased to 14%. The Company makes a matching
contribution equal to 50% of a participant's basic contribution.
INVESTMENT OPTIONS - The assets of the Plan are held and managed by
Fidelity Management Trust Company, the Trustee of the Plan (the
"Trustee"). Participants direct the investment of their accounts into any
of the following:
Fidelity Puritan Fund seeks current income and capital preservation by
investing primarily in high-yielding domestic and foreign stocks and
bonds.
Fidelity Magellan Fund seeks long-term capital appreciation by
investing primarily in domestic and foreign stocks and convertible
bonds across a variety of industries and sectors.
Fidelity Intermediate Bond Fund seeks a high level of current income
by investing primarily in domestic and foreign securities with
intermediate maturities.
Fidelity Equity-Income II Fund seeks current income and capital
appreciation by investing primarily in income-producing stocks.
Fidelity Aggressive Growth Fund seeks long-term capital appreciation
by investing primarily in stocks of companies believed to offer the
potential for accelerated growth.
Fidelity (Retirement Government) Money Market Portfolio seeks a high
level of current income and capital and liquidity preservation by
investing primarily in obligations issued or guaranteed by the U. S.
government or its agencies.
Fidelity Managed Income Portfolio seeks capital preservation and a
competitive level of current income over time by investing primarily
in short- and long-term investment contracts.
The Rowan Companies Unitized Stock Fund allows participants convenient
access to the common stock of Rowan Companies, Inc., the Plan's
sponsor.
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Effective July 1, 2000, additional investment options will be made
available to participants:
Fidelity Freedom Funds consist of five separate funds holding
investments in other Fidelity fixed-income, money market and equity
funds in varying allocations consistent with investment goals ranging
from high current income (for investors currently or soon to be in
retirement) to high total return (for investors expecting to retire
around the year 2030).
Spartan U.S. Equity Index Fund seeks to provide investment results
that correspond to the total return of a broad range of common stocks
publicly traded in the United States by attempting to duplicate the
composition and return of the Standard & Poor's 500.
Fidelity Diversified International Fund seeks capital growth primarily
through investment in foreign securities, normally common stock.
Fidelity Small Cap Selector Fund seeks capital appreciation through
investments in common stocks of domestic and foreign issuers, with at
least 65% of total assets invested in companies with small
capitalizations.
EXPENSES - Participants' accounts are charged with investment advisory and
other fees by the Trustee. Other expenses of administering the Plan are
borne by the Plan or by the Company, at its discretion.
VESTING PROVISIONS - Participants are 100% vested at all times in their own
contributions, plus any earnings accrued thereon, and achieve 100% vesting
in employer matching contributions, plus any earnings thereon, after five
years or more of qualified service.
Participants at age 65 are entitled to 100% of all contributions, plus any
earnings accrued thereon. Upon death or permanent disability, a
participant, or his beneficiary, will be entitled to 100% of all
contributions, plus any earnings accrued thereon.
DISTRIBUTIONS - Participants can obtain lump-sum or installment
distributions of vested balances upon termination of employment,
retirement, disability or death. Other hardship withdrawals can be obtained
under certain conditions. At December 31, 1999 and 1998, Plan assets
included approximately $21,000 and $27,000, respectively, of distributions
payable to former Plan participants.
FORFEITURES - Upon termination of employment, participants' nonvested
balances are forfeited. Such forfeitures can be applied to reduce employer
contributions or Plan administrative expenses otherwise payable by the
Company. During 1999 and 1998, the Company utilized approximately $52,000
and $50,000, respectively, of employee forfeitures for Plan administrative
expenses. At December 31, 1999 and 1998, Plan assets included approximately
$69,000 and $52,000, respectively, of nonvested forfeited accounts.
PLAN TERMINATION - Although it has not expressed any intention to do so,
the Company may terminate the Plan at any time subject to the provisions of
the Employee Retirement Income Security Act of 1974. In the event the Plan
is terminated, each participant shall be entitled to 100% of all
contributions, plus any earnings accrued thereon, as of the date of
termination.
PARTY-IN-INTEREST TRANSACTIONS - The investment by the Trustee of Plan
contributions into mutual funds managed by an affiliate of the Trustee are
party-in-interest transactions, and the related management fees are
deducted from investment earnings. The Company is also a party-in-interest.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan have been prepared on the accrual
basis of accounting. Investments are stated at fair value as determined by
the Trustee based upon quoted market prices for the underlying securities,
and realized and unrealized gains or losses are computed based on the fair
value of the assets at the beginning of the Plan year.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the
Plan's management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of additions to and deductions from such assets and
liabilities during the reporting period. Actual results could differ from
these estimates.
In accordance with the provisions of Statement of Position 99-3,
"Accounting for and Reporting of Certain Defined Contribution Benefit Plan
Investments and Other Disclosure Matters", which was issued on September
15, 1999, the by-fund disclosures previously required have been omitted.
3. INVESTMENTS
Plan investments, at fair value, at December 31, 1999 and 1998 consisted of
the following:
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1999 1998
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Fidelity mutual funds:
Puritan Fund $ 6,881,335 * $ 6,179,737 *
Magellan Fund 15,001,818 * 10,214,908 *
Intermediate Bond Fund 1,419,862 1,273,131 *
Equity-Income II Fund 942,615 855,293
Aggressive Growth Fund 4,798,599 * 986,123
Money Market Portfolio 2,530,566 * 1,697,187 *
Managed Income Portfolio 1,450,238 1,049,231
Rowan Companies Stock Fund 3,012,372 * 1,147,990
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Total Investments $36,037,405 $23,403,600
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* Represents investments greater than 5% of Plan assets.
4. TAX STATUS OF THE PLAN
The Internal Revenue Service has determined and informed the Company by a
letter dated October 22, 1996, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code
("IRC"). Though the Plan has been amended since that date, the Plan
administrator and the Company believe that the Plan continues to be
designed and is currently being operated in compliance with the applicable
requirements of the IRC. A request for a new determination letter has been
made.
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5. MASTER DEFINED CONTRIBUTION TRUST
A Master Defined Contribution Trust (the "Trust") commingles, for
investment and administrative purposes, Plan assets included in the Rowan
Companies Unitized Stock Fund with those of another plan sponsored by the
Company. The Trustee maintains supporting records for the purpose of
allocating investment gains or losses to the participating plans. The
investment accounts of the Trust are valued at fair value at the end of
each trading day based upon quoted market prices. Net investment gains or
losses for each day are allocated by the Trustee to each participating plan
based on the plans' relative interest in the investment units of the Trust.
At December 31, 1999, the Trust had net assets available for benefits of
$4,800,631, including $91,223 of cash, $187,745 of receivables and
$4,542,100 fair value of Rowan Companies, Inc. common stock, net of $20,437
of payables. At December 31, 1998, the Trust had net assets available for
benefits of $1,938,442, including $90,620 of cash, $119,100 of receivables
and $1,793,740 fair value of Rowan Companies, Inc. common stock, net of
$65,018 of payables. The net investment gain for the Trust during the year
ended December 31, 1999 was $2,837,305, including $2,831,474 of net
appreciation in Rowan Companies, Inc. common stock and $5,831 of interest
income. The net investment loss for the Trust during the year ended
December 31, 1998 was $998,675, including $1,001,903 of net depreciation in
Rowan Companies, Inc. common stock, net of $3,228 of interest income.
The Plan's interest in the Trust's total investment units was 66% at
December 31, 1999 and 64% at December 31, 1998, with the balance attributed
to the other Rowan-sponsored plan.
6. UNIT VALUES
The Plan's Rowan Companies Unitized Stock Fund had 681,226 and 575,681
participation units outstanding at December 31, 1999 and 1998,
respectively. Plan participants' equity per unit during 1998 and 1999 was
as follows: $9.40 at March 31, 1998, $6.33 at June 30, 1998, $3.69 at
September 30, 1998, $3.29 at December 31, 1998, $4.13 at March 31,
1999, $5.98 at June 30, 1999, $5.26 at September 30, 1999 and $6.97 at
December 31, 1999.
******
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ROWAN COMPANIES, INC. SAVINGS AND INVESTMENT PLAN
SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT
PURPOSES AT END OF YEAR, DECEMBER 31, 1999
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COLUMN A COLUMN B COLUMN C COLUMN E
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IDENTITY OF ISSUER,
BORROWER, LESSOR DESCRIPTION OF FAIR
OR SIMILAR PARTY INVESTMENT VALUE
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* Fidelity Management Trust Co. Puritan Fund $ 6,881,335
* Fidelity Management Trust Co. Magellan Fund 15,001,818
* Fidelity Management Trust Co. Intermediate Bond Fund 1,419,862
* Fidelity Management Trust Co. Equity-Income II Fund 942,615
* Fidelity Management Trust Co. Aggressive Growth Fund 4,798,599
* Fidelity Management Trust Co. Money Market Portfolio 2,530,566
* Fidelity Management Trust Co. Managed Income Portfolio 1,450,238
* Rowan Companies, Inc. Rowan Companies Stock 3,012,372
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Total $ 36,037,405
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</TABLE>
* Party-in-interest
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INDEX TO EXHIBITS
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Exhibit
Number Description
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23.1 Independent Auditors' Consent
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