ITEM 1. BUSINESS
Rowan Companies, Inc. (the "Company") is a major provider of international and domestic contract drilling and aviation services. The Company also operates a mini-steel mill, a manufacturing facility that produces heavy equipment for the mining, timber and transportation industries and a marine construction division that has designed and built over one-third of all mobile offshore jack-up drilling rigs. The Company was organized in 1947 as a Delaware corporation and a successor to a contract drilling business conducted since 1923 under the name Rowan Drilling Company, Inc.
Information regarding each of the Company's industry segments, including revenues, operating profit (loss), assets and foreign sales for 1996, 1997 and 1998, is incorporated herein by reference to Footnote 10 of the Notes to Consolidated Financial Statements on pages 29 and 30 of the Company's 1998 Annual Report to Stockholders ("Annual Report"), incorporated portions of which are filed as Exhibit 13 hereto.
DRILLING OPERATIONS
The Company provides contract drilling services utilizing a fleet of 21 self-elevating mobile offshore drilling platforms ("jack-up rigs"), one mobile offshore floating platform ("semi-submersible rig") and 14 land drilling rigs. The Company's drilling operations are conducted primarily in the Gulf of Mexico, the North Sea, offshore eastern Canada and in Texas and Louisiana. In 1998, drilling operations generated an operating profit (income from operations before deducting general and administrative expenses) of $180.1 million.
Offshore Operations
Since 1970, the Company's drilling operations have featured jack-up rigs performing both exploratory and development drilling and, in certain areas, well workover operations. The Company operates larger, deep-water type jack-up rigs capable of drilling to depths of 20,000 to 30,000 feet in maximum water depths ranging from 225 to 550 feet, depending on the size of the rig and its location.
A jack-up rig is a floating hull with three independently elevating legs, drilling equipment, supplies, crew quarters, loading and unloading facilities, a helicopter landing deck and other related equipment. Drilling equipment includes engines, drawworks or hoist, derrick, pumps to circulate the drilling fluid, drill pipe and drilling bits. The Company's rigs are equipped with propulsion thrusters to assist in towing. At the drilling site, the legs are lowered until they penetrate the ocean floor and the hull is jacked-up on the legs to the desired elevation above the water. The hull then serves as a drilling platform until the well is completed at which time the hull is lowered into the water, the legs are elevated and the rig is towed to the next drilling site.
The Company's cantilever jack-ups can extend that portion of the hull containing the drilling equipment over fixed production platforms so that development or workover operations on the platforms can be carried out with a minimum of interruption to production. In 1989, the Company acquired and developed "skid base" technology enabling its conventional jack-up rigs to work over wells on a production platform that previously required a cantilever jack-up or platform rig.
At December 31, 1998, the Company's offshore drilling fleet included 13 cantilever jack-up rigs, featuring three harsh environment "Gorilla Class rigs" and one enhanced "Super Gorilla Class rig", eight conventional jack-up rigs, including five rigs with skid base capability, and one semi-submersible rig. The Company operates two of the cantilever jack-up rigs under sale/leaseback arrangements expiring during 2000.
The Company's Gorilla Class rigs, Gorillas II, III and IV, are a heavier-duty class of jack-up rig, intended to drill up to 30,000 feet in water depths up to 328 feet in extreme hostile environments (winds up to 100 miles per hour and seas up to 90 feet).
During the fourth quarter of 1998, the Company completed construction of the first of three Super Gorilla Class rigs, Rowan Gorilla V, which is an enhanced version of the Company's Gorilla Class rigs and the world's largest bottom supported mobile offshore drilling unit. Gorilla V is a combination drilling and production unit capable of operating year-round in 400 feet of water south of the 61st parallel in the North Sea, within the worst case combination of 100-year storm criteria for waves, wave periods, winds and currents. The Company financed $153.1 million of the cost of Gorilla V through bank loans guaranteed by the U.S. Department of Transportation's Maritime Administration under its Title XI Program.
In October 1996, the Company announced plans for the construction of two additional Super Gorilla Class rigs, Rowan Gorilla VI and Rowan Gorilla VII. To date, the Company has assembled a significant portion of Gorilla VI and has ordered most long lead-time components for Gorilla VII. The Company has secured Title XI bank financing for up to $171.0 million of the cost of Gorilla VI on terms and conditions similar to those obtained for Gorilla V. Gorilla VI should be completed by mid-2000 and Gorilla VII about one year thereafter.
This fleet expansion program began in 1995 and represents the Company's first new construction since the mid-1980s. Since that time, the Company's capital expenditures have been primarily for enhancements to existing drilling rigs and manufacturing facilities and for the purchase of aircraft. Of the Company's 17 remaining jack-up rigs, six cantilever rigs and one conventional rig have been modified to provide a degree of hostile environment operating capability, while five cantilever rigs and three conventional rigs can operate in water depths up to 350 feet.
The Company takes advantage of lulls in drilling activity, as is currently being experienced, to perform needed maintenance and make certain enhancements to its drilling fleet. Within the past six months, the Company has completed the following enhancements: upgrading solids control mud systems on all nine of the Company's Class 116-C jack-up rigs and one of its four Class 52 rigs; adding one to two engines to six of the Class 116-C rigs, each such rig now being equipped with six engines; installing new generation top-drives on four of the Class 116-C rigs and one of the Gorilla Class Rigs; upgrading the electrical systems on one of the Class 84 rigs; and reconditioning the subsea equipment on the Company's semi-submersible rig.
For a further discussion of the Company's availability of funds in 1999 to sustain operations, debt service and planned capital expenditures, including those related to construction of Gorillas VI and VII, see "Liquidity and Capital Resources" under "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 15, 16 and 17 of the Annual Report, which information is incorporated herein by reference. Also, see ITEM 2.
ITEM 2. PROPERTIES
The Company leases as its corporate headquarters 59,600 square feet of space in an office tower located at 2800 Post Oak Boulevard in Houston, Texas.
DRILLING RIGS
The following is a summary of the principal drilling equipment owned or operated by the Company and in service at March 26, 1999. See "Liquidity and Capital Resources" under "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 15 through 17 in the Annual Report, which pages are incorporated herein by reference.
OFFSHORE
ITEM 2. PROPERTIES
OFFSHORE (Continued)
ITEM 2. PROPERTIES
OFFSHORE (Continued)
(a) Classes 219-C ("Super Gorilla"), 200-C ("Gorilla"), 116-C, 116, 84 and 52 are nomenclature assigned by LeTourneau, Inc. to jack-ups of its design and construction.
(b) Indicates rated water depth in current location and rated drilling depth, respectively.
(c) Unit modified to increase operating capability in hostile environments.
(d) Gorilla Class unit designed for extreme hostile environment capability.
(e) Super Gorilla Class Unit (an enhanced version of the Gorilla Class) designed for extreme hostile environment capability.
(f) Unit equipped with a "top-drive" drilling system.
(g) Unit equipped with three mud pumps.
(h) Unit equipped with four mud pumps.
(i) Unit equipped with a "skid base" unit.
(j) Unit equipped with drilling/heavy-lift crane option.
(k) Unit equipped with leg extensions.
(l) Rig sold in December 1984 and leased back through September 2000.
(m) Rig sold in December 1985 and leased back through December 2000.
(n) Refer to "Contracts" on page 3 of this Form 10-K for a definition of types of contracts.
(o) Indicates estimated completion date of work to be performed.
ITEM 2. PROPERTIES
ONSHORE (a)
(a) Onshore rigs were constructed at various dates between 1960 and 1982, utilizing, in some instances, new as well as used equipment. Most of the rigs have been substantially rebuilt subsequent to their respective dates of construction.
(b) Refer to "Contracts" on page 3 of this Form 10-K for definition of types of contracts.
(c) Indicates estimated completion date of work to be performed.
The Company's drilling division leases and, in some cases, owns various operating and administrative facilities generally consisting of office, maintenance and storage space in the states of Alaska, Texas and Louisiana and in the countries of Canada, England, Scotland and The Netherlands.
MANUFACTURING FACILITIES
LeTourneau's principal manufacturing facility and headquarters are located in Longview, Texas on approximately 2,400 acres with about 1.2 million square feet of covered working area. The facility contains:
o a mini-steel mill with 330,000 square feet of covered working area; the mill has two 25-ton electric arc furnaces capable of producing 120,000 tons per year;
o a fabrication shop with 300,000 square feet of covered working area; the shop has a 3,000 ton vertical bender for making roll-ups or flattening materials down to 2 1/2 inches thick by 11 feet wide;
o a machine shop with 140,000 square feet of covered working area;
o an assembly shop with 124,000 square feet of covered working area.
The marine group's facility is located in Vicksburg, Mississippi on 1,850 acres of land and has approximately 560,000 square feet of covered work area.
The Company-owned distributor of forest products in the northwestern United States is located on a six-acre site in Troutdale, Oregon with approximately 22,000 square feet of building space.
The Company-owned distributor of LeTourneau's mining equipment products in the western United States is located in a 20,000 square foot leased facility in Tucson, Arizona.
AIRCRAFT
At March 26, 1999, the Company's aviation division owned a fleet of 92 helicopters and 18 fixed-wing aircraft, consisting of the following:
o 64 twin-engine turbine aircraft, including:
o 3 Sikorsky S-61Ns (26 passengers)
o 2 Eurocopter AS-332L Super Pumas (19 passengers)
o 16 Bell 212s (14 passengers)
o 14 Bell 412s (14 passengers)
o 2 Sikorsky S-76A+s (13 passengers)
o 27 Eurocopter BO-105CBSs (5 passengers)
o 28 single-engine turbine aircraft, including:
o 5 Bell 206LRs (6 passengers)
o 23 Eurocopter AS350B-2 AStars (6 passengers)
o 18 fixed-wing aircraft, including:
o 5 Convair 580s (50 passengers)
o 9 DeHavilland Twin Otters (9-19 passengers)
o 2 DeHavilland Dash 8s (37 passengers)
o 2 Douglas DC-3s (28 passengers).
Era's principal aircraft bases in Alaska, all located on leased property, are a fixed-wing air service center (57,000 square feet of hangar, repair and office facilities) at Anchorage International Airport, with two adjacent hangars housing the Company's helicopter and fixed-wing operations totaling approximately 45,000 square feet, and hangar, office and repair facilities at Fairbanks International Airport (13,000 square feet). The Company also maintains similar, smaller helicopter facilities in Alaska at Deadhorse, Juneau, Valdez and Yakutat.
Era's principal base for its Gulf of Mexico operations is located on leased property at Lake Charles Regional Airport. The facility has 63,000 square feet of space, including helicopter hangars, a repair facility and an operations and administrative building. The Company also operates a helicopter base (20,700 square feet of hangar, repair and office facilities) located on leased property at the Terrebonne Airport in Houma, Louisiana, a helicopter base (5,700 square feet of hangar, repair and office facilities) located on leased property in New Iberia, Louisiana and a helicopter base (10,000 square feet of hangar, repair and office facilities) located on leased property in Fourchon, Louisiana.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved from time to time in litigation arising in the normal course of the Company's business and other matters, not all of the potential liabilities from which are covered by the terms of the Company's insurance policies. While the Company is unable to predict the ultimate liabilities which may result from such litigation, the Company believes that no such litigation in which the Company was involved as of March 26, 1999 will have a material adverse effect on its financial position or results of operations.
On January 19, 1999, the Company received notice from Amoco (UK) Exploration Company that its one-year North Sea drilling contract for Gorilla V, which commenced in late-December 1998, was being terminated. Amoco alleged a performance breach relating to certain equipment problems as the basis for the termination. The Company believes that it did not breach the contract and is vigorously pursuing all legal remedies to enforce its rights under the contract.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the Company's common stockholders during the fourth quarter of the fiscal year ended December 31, 1998.
ADDITIONAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT
The names, positions, years of credited service and ages of the officers of the Company and a certain officer of one of the Company's wholly-owned subsidiaries, LeTourneau Inc., as of March 26, 1999 are listed below. Officers of both entities are normally appointed annually by each entity's Board of Directors at the bylaws-prescribed meetings held in the spring and serve at the discretion of the Board of Directors. There are no family relationships among these officers, nor any arrangements or understandings between any officer and any other person pursuant to which the officer was selected.
Each of the officers listed above continuously served in the position shown above for more than the past five years except as noted in the following paragraphs.
Since April 1996, Mr. Kelly's principal occupation has been in the position set forth. For more than five years prior to that time Mr. Kelly served as Vice President, Special Projects.
Since April 1994, Mr. Thiele's principal occupation has been in the position set forth. From January 1994 to April 1994, Mr. Thiele served in the position of Vice President, Finance, Administration and Treasurer. From February 1989 to January 1994, he served as Vice President, Finance and Administration.
Since April 1994, Mr. Johnson's principal occupation has been in the position set forth. From December 1993 to present, Mr. Johnson has also served in the position of President and Chief Operating Officer of Era Aviation, Inc., a subsidiary of the Company. For more than five years prior to that time, he served as Executive Vice President of Era.
Since April 1994, Mr. Keller's principal occupation has been in the position set forth. From July 1992 to present and April 1993 to present, Mr. Keller has also served in the positions of Vice President of Terminator, Inc. and Rowandrill, Inc., respectively, both subsidiaries of the Company.
Since joining the Company in March 1994, Mr. Wells' occupation has been in the position set forth. For more than five years prior to that time, Mr. Wells served in various positions with the independent accounting firm of Deloitte & Touche LLP, including Audit Manager and, most recently, Senior Audit Manager. Deloitte & Touche LLP is not a parent, subsidiary or affiliate of the Company but does serve as the Company's independent auditors.
Since April 1994, Ms. Aycock's principal occupation has been in the position set forth. From October 1993 to April 1994, Ms. Aycock served in the position of Assistant Treasurer. For more than five years prior to that time, Ms. Aycock served as an Accountant for the Company.
Since September 1996, Mr. Eckermann's principal occupation has been in the position set forth. From February 1994 to September 1996, Mr. Eckermann served in the position of President of LeTourneau Marine Group and Vice President, Operations of LeTourneau, Inc, a subsidiary of the Company. From May 1990 to February 1994, he served as President of Marathon LeTourneau Marine Company, a subsidiary of Marathon LeTourneau Company. Marathon LeTourneau was a company whose net assets were purchased by LeTourneau, Inc. in February 1994. Marathon LeTourneau was not, and is not now, a parent, subsidiary or affiliate of the Company.
In addition to serving in the position shown above, Mr. Wheeler has also served as Corporate Tax Director of the Company for more than five years.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The information required hereunder regarding the Common Stock price range and cash dividend information for 1998 and 1997 and the number of holders of Common Stock is set forth on page 33 of the Company's Annual Report under the title "Common Stock Price Range, Cash Dividends and Stock Splits (Unaudited)", and is incorporated herein by reference, except for the final two paragraphs under such title. Also incorporated herein by reference to the Annual Report is the ninth full paragraph appearing on page 16 within "Management's Discussion and Analysis of Financial Condition and Results of Operations", which provides information pertinent to the Company's ability to pay cash dividends subject to certain restrictions. The Company's Common Stock is listed on the New York Stock Exchange and the Pacific Stock Exchange.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The information required hereunder is set forth on pages 10 and 11 of the Company's Annual Report under the title "Ten-Year Financial Review" and is incorporated herein by reference except for the information for the years 1993, 1992, 1991, 1990 and 1989.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required hereunder is set forth on pages 12 through 17 under the title "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report and is incorporated herein by reference.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Company believes that its exposure to risk of earnings loss due to changes in market interest rates is not significant. The Company did not enter into derivative financial instruments in 1996, 1997 or 1998.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Refer to ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K on pages 20 through 24 of this Form 10-K for a listing of financial statements of the registrant and its subsidiaries, all of which financial statements are incorporated by reference under this item.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information provided in the table spanning pages 2 and 3, in footnotes (1) and (3) on page 3 and in the paragraph under the caption, "Section 16(a) Beneficial Ownership Reporting Compliance" on page 14 of the Proxy Statement for the Company's 1999 Annual Meeting of Stockholders (the "Proxy Statement") is incorporated herein by reference. There are no family relationships among the directors or nominees for directors and the executive officers of the Company, nor any arrangements or understandings between any director or nominee for director and any other person pursuant to which such director or nominee for director was selected. Except as otherwise indicated, each director or nominee for director of the Company has been employed or engaged for the past five years in the principal occupation set forth opposite his name in the information incorporated by reference. See ADDITIONAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT on pages 17 and 18 of this Form 10-K for information relating to executive officers.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The standard arrangement for compensating directors described under the title, "Director Compensation" on page 4 of the Proxy Statement and the information appearing under the titles "Summary Compensation Table", "Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values", "Debentures Offered in Last Fiscal Year" and "Pension Plans" on pages 9 through 11 of the Proxy Statement are incorporated herein by reference. In accordance with the instructions to Item 402 of Regulation S-K, the information contained in the Proxy Statement under the titles "Board Compensation Committee Report on Executive Compensation" and "Stock Performance Graphs" shall not be deemed to be filed as part of this Form 10-K.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information regarding security ownership of management of the Company set forth under the heading "Director and Officer Stock Ownership" appearing on page 6 and the information appearing under the title "Principal Stockholders" appearing on page 14 of the Proxy Statement is incorporated herein by reference.
The business address of all directors is the principal executive offices of the Company as set forth on the facing page of this Form 10-K.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain business relationships and transactions between the Company and certain of the directors of the Company under the heading "Compensation Committee Interlocks and Insider Participation; Certain Transactions" appearing on page 13 of the Proxy Statement is incorporated herein by reference.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
The following financial statements and independent auditors' report, included in the Annual Report, are incorporated herein by reference:
2. Financial Statement Schedules
Financial Statement Schedules I, II, III, IV, and V are not included in this Form 10-K because such schedules are not required, not significant or because the required information is shown in Notes to the Consolidated Financial Statements of the Company's Annual Report.
3. Exhibits:
Unless otherwise indicated below as being incorporated by reference to another filing of the Company with the Securities and Exchange Commission, each of the following exhibits is filed herewith:
3a Restated Certificate of Incorporation of the Company, dated February 17, 1984, incorporated by reference to: Exhibit 3a to the Company's Form 10-K for the fiscal year ended December 31, 1983 (File No. 1-5491); Exhibit 4.2 to the Company's Registration Statement on Form S-3 (Registration No. 33-13544); and Exhibits 4a, 4b, 4c and 4d below.
3b Bylaws of the Company amended as of July 14, 1998, incorporated by reference to Exhibit 3 to the Company's Form 10-Q for the fiscal quarter ended June 30, 1998 (File No. 1-5491).
4a Certificate of Designation of the Company's Series III Preferred Stock dated November 30, 1994 incorporated by reference to Exhibit 4d to the Company's Form 10-K for the fiscal year ended December 31, 1994 (File No. 1-5491).
4b Certificate of Designation of the Company's Series A Junior Preferred Stock dated March 2, 1992 incorporated by reference to Exhibit 4d to the Company's Form 10-K for the fiscal year ended December 31, 1991 (File No. 1-5491).
4c Certificate of Designation of (and Certificate of Correction related thereto) the Company's Series A Preferred Stock dated August 5, 1998 and January 28, 1999, respectively.
4d Certificate of Elimination related to the Company's $2.125 Convertible Exchangeable Preferred Stock, Series I Preferred Stock and Series II Preferred Stock.
4e Rights Agreement as amended between the Company and Citibank, N.A. as Rights Agent incorporated by reference to Exhibit 4d to the Company's Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-5491).
4f Specimen Common Stock certificate incorporated by reference to Exhibit 4h to the Company's Form 10-K for the fiscal year ended December 31, 1996 (File No. 1-5491).
4g Form of Promissory Note dated November 30, 1994 between the purchasers of Series III Floating Rate Subordinated Convertible Debentures due 2004 and the Company incorporated by reference to Exhibit 4j to the Company's Form 10-K for the fiscal year ended December 31, 1994 (File No. 1-5491).
4h Form of Promissory Note date April 24, 1998 between the purchasers of Series A Floating Rate Subordinated Convertible Debentures due 2008 and the Company.
10a 1980 Nonqualified Stock Option Plan of the Company incorporated by reference to Exhibit 5.10 to the Company's Registration Statement on Form S-7 (Registration No. 2-68622).
10b Restated 1988 Nonqualified Stock Option Plan of the Company incorporated by reference to Exhibit 10a of the Company's Form 10-Q for the fiscal quarter ended March 31, 1998 (File No. 1-5491).
10c 1998 Nonemployee Director Stock Option Plan of the Company incorporated by reference to Exhibit 10b of the Company's Form 10-Q for the fiscal quarter ended March 31, 1998 (File No. 1-5491).
10d 1986 Convertible Debenture Incentive Plan of the Company as amended incorporated by reference to Exhibit 10h to the Company's Form 10-K for the fiscal year ended December 31, 1996 (File No. 1-5491).
10e 1998 Convertible Debenture Incentive Plan of the Company incorporated by reference to Exhibit 10c to the Company's Form 10-Q for the fiscal quarter ended March 31, 1998 (File No. 1-5491).
10f Pension Restoration Plan of the Company incorporated by reference to Exhibit 10h to the Company's Form 10-K for the fiscal year ended December 31, 1992 (File No. 1-5491).
10g Pension Restoration Plan of LeTourneau, Inc. incorporated by reference to Exhibit 10j to the Company's Form 10-K for the fiscal year ended December 31, 1994 (File No. 1-5491).
10h Participation Agreement dated December 1, 1984 between the Company and Textron Financial Corporation et al. and Bareboat Charter dated December 1, 1984 between the Company and Textron Financial Corporation et al. incorporated by reference to Exhibit 10c to the Company's Form 10-K for the fiscal year ended December 31, 1985 (File No. 1-5491).
10i Participation Agreement dated December 1, 1985 between the Company and Eaton Leasing Corporation et. al. and Bareboat Charter dated December 1, 1985 between the Company and Eaton Leasing Corporation et. al. incorporated by reference to Exhibit 10d to the Company's Form 10-K for the fiscal year ended December 31, 1985 (File No.1-5491).
10j Amendment No. 4 dated January 1, 1998 to the Consulting Agreement between the Company and C. W. Yeargain.
10k Consulting Agreement as amended as of January 1, 1998 between the Company and C. W. Yeargain.
10l Consulting Agreement dated January 1, 1990 and Amendment No. 1 thereto dated August 30, 1994, but effective January 1, 1994, between Rowan Energy Investments Inc., wholly-owned subsidiary of the Company, and Hans M. Brinkhorst.
10m Commitment to Guarantee Obligations and First Preferred Ship Mortgage both dated December 17, 1996 between the Company and the Maritime Administration of the U.S. Department of Transportation incorporated by reference to Exhibit 10t to the Company's Form 10-K for fiscal year ended December 31, 1996 (File No. 1-5491).
10n Amendment No. 1 dated June 30, 1997 to Commitment to Guarantee Obligations between the Company and the Maritime Administration of the U.S. Department of Transportation incorporated by reference to Exhibit 10p to the Company's 10-K for the fiscal year ended December 31, 1997 (File No. 1-5491).
10o Amendment No. 2 dated July 1, 1998 to Commitment to Guarantee Obligations between the Company and the Maritime Administration of the U.S. Department of Transportation.
10p Credit Agreement and Trust Indenture both dated December 17, 1996 between the Company and Citibank, N.A. incorporated by reference to Exhibit 10u to the Company's Form 10-K for the fiscal year ended December 31, 1996 (File No. 1-5491).
10q Amendment No. 1 to the Credit Agreement and Supplement No. 1 to Trust Indenture both dated July 1, 1997 between the Company and Citibank, N.A. incorporated by reference to Exhibit 10r to the Company's Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-5491).
10r Supplement No. 2 to Trust Indenture dated July 1, 1998 between the Company and Citibank, N.A.
10s Commitment to Guarantee Obligations and First Preferred Ship Mortgage both dated September 29, 1998 between the Company and the Maritime Administration of the U.S. Department of Transportation incorporated by reference to Exhibit 10a to the Company's Form 10-Q for fiscal quarter ended September 30, 1998 (File No. 1-5491).
10t Credit Agreement and Trust Indenture both dated September 30, 1998 between the Company and Citibank, N.A. incorporated by reference to Exhibit 10b to the Company's Form 10-Q for the fiscal quarter ended September 30, 1998 (File No. 1-5491).
10u Revolving Credit Agreement dated as of October 30, 1997 among the Company, Citibank, N.A., Christiania Bank og Kreditkasse (New York Branch), Arab Banking Corporation (B.S.C.), Wells Fargo Bank (Texas) National Association, Credit Lyonnais (New York Branch) and Sumitomo Bank Limited incorporated by reference to Exhibit 10s to the Company's Form 10-K for the fiscal year ended December 31, 1997 (File No. 1-5491).
11 Computation of Basic and Diluted Earnings Per Share for the years ended December 31, 1998, 1997 and 1996 appearing on page 26 in this Form 10-K.
13* Annual Report to Stockholders for fiscal year ended December 31, 1998.
21 Subsidiaries of the Registrant as of March 26, 1999.
23 Independent Auditors' Consent.
24 Powers of Attorney pursuant to which names were affixed to this Form 10-K for the fiscal year ended December 31, 1998.
27 Financial Data Schedule for the year ended December 31, 1998.
The Company agrees to furnish to the Commission upon request a copy of all instruments defining the rights of holders of long-term debt of the Company and its subsidiaries. - --------------------------
* Only portions specifically incorporated herein are deemed to be filed.
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
Compensatory plans in which directors and executive officers of the Company participate are listed as follows:
o 1980 Nonqualified Stock Option Plan of the Company incorporated by reference to Exhibit 5.10 to the Company's Registration Statement on Form S-7 (Registration No. 2-68622).
o Restated 1988 Nonqualified Stock Option Plan of the Company incorporated by reference to Exhibit 10a to the Company's Form 10-Q for the fiscal year ended March 31, 1998 (File No. 1-5491).
o 1998 Nonemployee Director Stock Option Plan of the Company incorporated by reference to Exhibit 10b of the Company's Form 10Q for the fiscal quarter ended March 31, 1998 (File No. 1-5491).
o 1986 Convertible Debenture Incentive Plan of the Company as amended included as Exhibit 10h of this Form 10-K incorporated by reference to Exhibit 10h to the Company's Form 10-K for the fiscal year ended December 31, 1996 (File No. 1-5491).
o 1998 Convertible Debenture Incentive Plan of the Company incorporated by reference to Exhibit 10c to the Company's Form 10-Q for the fiscal quarter ended March 31, 1998 (File No. 1-5491).
o Pension Restoration Plan of the Company incorporated by reference to Exhibit 10i to the Company's Form 10-K for the fiscal year ended December 31, 1992 (File 1-5491).
o Pension Restoration Plan of LeTourneau, Inc. incorporated by reference to Exhibit 10j to the Company's Form 10-K for the fiscal year ended December 31, 1994 (File No. 1-5491).
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant during the fourth quarter of fiscal year 1998.
For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into Registrant's Registration Statements on Form S-8 Nos. 2-67866 (filed May 22, 1980), 2-58700, as amended by Post-Effective Amendment No. 4 (filed June 11, 1980), 33-33755, as amended by Amendment No. 1 (filed March 29, 1990),33-61444 (filed April 23, 1993), 33-51103 (filed November 18, 1993) 33-51105 (filed November 18, 1993), 33-51109 (filed November 18, 1993), 333-25041 (filed April 11, 1997) and 333-25125 (filed April 14, 1997):
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
By: /s/ C. R. PALMER --------------------------- (C. R. Palmer, Chairman of the Board, President and Chief Executive Officer)
Date: March 26, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
EXHIBIT 11
ROWAN COMPANIES, INC. AND SUBSIDIARIES COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE (in thousands except per share amounts)
Note: Reference is made to Note 1 to Consolidated Financial Statements regarding computation of per share amounts.
EXHIBIT INDEX
EXHIBIT INDEX
EXHIBIT INDEX