This summary is based on the third quarter fiscal 2007 earnings call conducted by Rowan Companies Inc. (RDC: chart) on November 1, 2007.

Management:

VP, Investor Relations: William C. Provine
Chairman, President and CEO: D. F. McNease
VP, Finance and CFO: William H. Wells

Key Investors Issues

- Net income of $130.8 million, or $1.16 per share, was up 50.3%.
- Revenues rose 20% to $502.2 million.
- The firm’s offshore rig utilization was 99%, up from 91% in the prior year, and the land rig utilization was 96%, down from 98% in 2006.

Year-to-date Results:

- Revenues were up 33% to $1.5 billion, from $1.1 billion in 2006.
- Total expenses rose 32.7% to $947 million driven by SG&A expenses.
- Net income increased to $345 million or $3.08 a share, from $256 million or $2.29 a share in the prior year.

Third Quarter Highlights

Net income of $130.8 million, or $1.16 per share, was up 50.3% from $87.0 million, or 78 cents per share, in 2006 due to revenue growth.

- In addition, income also included gains on asset sales and after-tax income from the discontinued aviation operations which were sold in 2004.
- Revenues were $502.2 million, an increase of 20% from $417.1 million in the prior year.
- The external manufacturing backlog was $405 million, up by 11% and included $151 million associated with the seven external offshore rig kit projects and $99 million related to 10 land rigs or packages.

Depreciation expense totaled $29.8 million, up 28% over last year, primarily due to rig fleet additions.

- SG&A expense was $22.5 million, up 18% over the prior year reflecting a reclassification from operating expenses.
- Capital expenditures of $102 million brings the year-to-date total to $333 million, most of which related to construction of the fourth Tarzan Class rig, the JP Bussell, and the first two 240C class jackups.
- Full year 2007 capital expenditure including deposits on the four Super 116E rigs is expected to be built by AmFELS and will be in the range of $460 million to $470 million and will continue to be financed through operating cash flows.
- The firm’s offshore rig utilization was 99%, up from 91% in the prior year, giving an average offshore day rate of $158,200, up by $11,400, or 8%, from 2006.
- The land rig utilization was 96%, down from 98% in 2006, though the number of rig operating days increased between periods. The average land rig day rate was $23,300, up by $300, or 1%, from 2006.

Operating Segment Highlights:

- Drilling revenues were $368.8 million, an increase of 27% over the prior year due to rig additions including the Hank Boswell, which was delivered in September 2006, the Rowan Louisiana, which was reactivated in December 2006, and seven new 2,000 horsepower land rigs that were constructed between periods.
- The remaining increase is mostly due to higher average day rates following international expansion.
- Drilling expenses were $145.4 million, an increase of 11% over the prior year due to the rig fleet additions as the costs associated with the existing operations have been reduced.
- Income improved to $183.5 million, or 50% of revenues, up by 44% from 2006.

- Manufacturing revenues were $133.4 million, an increase of 5% over the prior year.

- Drilling and power systems revenues were $42.8 million, an increase of 77% over the prior year as the firm shipped eleven (11) mud pumps and twenty (20) million of land rigs and component packages.
- The firm also shipped 36 motors and another 2.7 million of drive and control system packages.

- Offshore products revenues were $40.9 million, down 10% from 2006 due to the completion of the $130 million external rig construction project this past June.
- Current period revenues include $34.9 million related to six of the seven rig kit projects in process.

- Mining product revenues were $36.4 million, down 21% from the prior year.
- The firm shipped six front-end loaders including two of the larger L-1850 model, compared with eight in the year ago period.
- Mining parts sales totaled $14.5 million, up 1% year-over-year.

Negotiated Contracts:

- The firm received a letter of intent from a major integrated oil company for two years of work offshore Angola that the Gorilla VII should begin late in the first quarter of 2008, and from which it expects revenues of $264 million.
- In the Gulf of Mexico, it is nearing finalization of a six-month commitment for the Gorilla II commencing in April 2008 at a day rate of $195,000, or an 11% increase over the rig''s current rate.
- In the North Sea, the firm is negotiating a six-month extension of the Gorilla VI and expects a day rate in excess of $300,000.

Strategic Review:

- The firm’s strategic plan focuses on maximizing shareholder value in those markets where it sees consistent growth, including the U.S. Gulf of Mexico and the Middle East.
- At the moment, the company has eight jackups in the Middle East market and projects to have between 15 and 17 rigs by 2011 as demand in Saudi Arabia, Kuwait, Qatar, Bahrain, UAE, and Iran continues to set the pace for global demand of jackups.
- The national oil companies in the Middle East and around the world have long-term strategic plans that will require high-spec jackup rigs, and partners to have the operating ability, engineering expertise, asset base, and ability to grow to meet their future needs.
- Consequently, the firm is very well positioned as partners with the NOCs, as the relationship with Aramco demonstrates.