Rowan Companies plc (NYSE:RDC) Q4 2015 Earnings Conference Call - Final Transcript

Feb 26, 2016 • 11:00 am ET

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Rowan Companies plc (NYSE:RDC) Q4 2015 Earnings Conference Call - Final Transcript

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Operator
Operator

Good morning. My name is Laurel and I will be your conference operator today. At this time, I would like to welcome everyone to the Rowan's Fourth Quarter 2015 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

I'll now turn the call over to Chris Pitre, Director of Investor Relations. Please go ahead.

Executive
Chris Pitre

Thank you and good morning, everyone. Welcome to Rowan's Fourth Quarter and Full Year 2015 Earnings Call. And thank you for your interest in Rowan. A copy of the company's earnings report issued earlier this morning can be found on our website at rowan.com.

Joining me on the call this morning are Tom Burke, President and Chief Executive Officer; Mark Keller, Executive Vice President, Business Development; and Stephen Butz, Executive Vice President and Chief Financial Officer.

Before I turn the call over to Tom, I'd like to remind you that expectations expressed during this conference call are forward-looking statements and are subject to risks and uncertainties, such as market conditions, commodity prices, offshore drilling activity levels and other risks and uncertainties that could cause actual results to differ materially.

Please refer to our earnings release and SEC filings on our website which more fully describe forward-looking statements and risk factors and other events that could impact the future results. Please note that information contained herein is as of the date of today's call and may be outdated at the time of replay of this call.

With that, I would like to turn the call over to Tom Burke, Rowan's President and Chief Executive Officer.

Tom?

Executive
Thomas Peter Burke

Thank you, Chris. Good morning and welcome to our earnings call. We appreciate your participation today and your continued interest and investment in Rowan. Following my prepared comments, Mark will give you an update on the offshore drilling market and then Stephen will walk you through our financial performance and future guidance. After that, we'll open up the call for your questions.

As you've seen from our press release, we had a strong fourth quarter despite challenging market conditions. Our earnings normalized for certain items, which Stephen will address shortly with $0.95 per share, up from $0.89 per share in the third quarter on a normalized basis.

Our solid performance was attributed to all four of our newbuild ultra-deepwater drillships being on rates and our continued focus on offshore and onshore cost control underpinned by excellent operational execution throughout our fleet. Our earnings and cost focus resulted in robust free cash flow in the quarter ending year with over $480 million of cash even after retiring nearly $100 million of our debt.

We sold the Rowan Louisiana, our last slot type rig, as we continue to make steady progress toward high-grading our fleet. Although we are fortunate to have some of our older rigs working under profitable contracts, we do have three other older assets that are now cold stacked and