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Rowan Companies PLC RDC
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/28/2013

Operator: Greetings and welcome to the Rowan Companies Fourth Quarter and Full Year 2012 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Suzanne Spera, Director of Investor Relations for Rowan Companies. Thank you, Suzanne. You may begin.

Suzanne M. Spera - Director of IR: Thank you Brenda and good morning. Welcome to Rowan's fourth quarter and full year 2012 earnings conference call. Joining me on the call this morning are Matt Ralls, President and Chief Executive Officer; Tom Burke, Chief Operating Officer; Mark Keller, Executive Vice President, Business Development; and Kevin Bartol, Executive Vice President and Chief Financial Officer who will have prepared comments.

Before Matt begins his remarks, I'd like to remind you that during the course of this conference call, forward-looking statements may be made within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, statements about the change in corporate structure as well as statements as to the expectations, beliefs, and future expected financial performance of the Company that are based on current expectations and are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected by the Company. Other relevant factors have been and will be disclosed in the Company's filings with the SEC.

With that, I'll turn the call over to Matt.

W. Matt Ralls - President and CEO: Thank you, Suzanne. Good morning, everyone and thanks for joining our call. We are pleased overall with the results of 2012 which reflected delivery in February of last year of the final jackup in our $3 billion jackup newbuild program in a full year contribution and six others delivered throughout 2011. We had many operational achievements during the year and a few setbacks some of which Tom will discuss in his remarks and we will take the learnings from all of these events and build on them in 2013 as we prepare for the delivery and operation of our four new ultra-deepwater drill ships.

We will be focused in 2013 on operational and project management execution including our expanding operations in Norway, contractual upgrades on several jackups and delivering startup of our first drillship towards the end of this year. Mark will update you in a minute on our view of rig markets, but I will say generally that we see continued strength and demand in both jackup and ultra-deepwater segments. We remain optimistic about opportunities to contract our remaining three drillships on attractive terms and believe that we will see follow-on work at higher day rates for our jackups with contract expirations later this year and in 2014.

With now new rigs being added to our fleet till the end of this year, our earnings growth in 2013 will be moderate compared to the substantial increases in revenues and earnings that we expect for 2014. On a related note, we ended the year with a contract backlog of $3.5 billion, down slightly from our all-time high of $3.8 billion at the end of the third quarter and expect our backlog to grow significantly in 2013 as we contract our three un-contracted newbuild drillships.

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