Key questions and answers from the fourth quarter earnings call conducted by Rowan Companies, Inc. on February 28, 2008.

Arun Jayaram (Credit Suisse): You mentioned that beginning in 2008 that most transactions would be at arms length. How does that impact the revenue recognition going forward?

William H. Wells: It does not effect the consolidated numbers, but on a standalone basis there is about a 15% to 20% markup that LTI will now get on Rowan products that we will attempt to share what that number is.

Arun Jayaram (Credit Suisse): Can you give us some help on what revenues and margins could look like for first quarter?

William H. Wells: We have got our external revenues in the range of $900 million. We have got our internal revenues in the range of $270 million. So all told, it is close to $1.2 billion of revenues including Rowan's.

Arun Jayaram (Credit Suisse): Do you think that you won the latest award on pricing or from the technical capabilities of the Tarzan rigs?
D.F. McNease: It is definitely the technical capabilities of the Tarzan rig and two were already there working and Aramco was very pleased with those.

Arun Jayaram (Credit Suisse): Comment on the amendments to the bylaws in terms of the Director nominations?

D.F. McNease: That was actually a proposal we got form a shareholder and we felt like it was appropriate to make that change.

Ian Macpherson (Simmons & Company International): Can you help us what your expectations are for drilling cost inflations?

William H. Wells: We expect an overall increase in the 5% to maybe up to 10% range and we are also expecting insurance cost to come down and at least a 10% production there. And so overall you net it all down and we are looking at probably around a 5% overall increase in drilling OpEx.

Kurt Hallead (RBC Capital Markets): You referenced the LeTourneau external revenue number of $900 million. What is the associated margin you expect to get with that?

William H. Wells: Right at around $200 million.

David Smith (JPMorgan): What do you think the market rate would be today, may be a one-year contract or one of the 240s, if they were available?

William H. Wells: The 240s, we are convinced the market rate is going to be 225 to 260 just depending on what area we are operating in.

David Smith (JPMorgan): You mentioned the internal backlog of $1 billion on LeTourneau. I'm wondering what that would be if you add that up to retail value?

William H. Wells: It is probably going to be another 10% or 15% above that number.

Michael Farah (Merrill Lynch): Is the PEMEX a market that you guys would consider entering?

D.F. McNease: We have worked in that market in past. It just has to do with contractual issues. If PMEX would be wanting to change their we would be willing to go back to Mexico.

Thomas Curran (Wachovia): What is the expectation in 2008 of the generic replacement parts business?

D.F. McNease: About the same level, but we are working to increase our capability as far as delivering more parts, but what they have in their budget is the same level of parts sales.