09 07-16 rdc investor-presentation - final

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Rowan Strong: Safe. Reliable. Efficient.Investor Presentation

September 7, 2016

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Forward-Looking Statements

Statements herein that are not historical facts are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs and future expected business, financial and operating performance and prospects of the Company. These forward-looking statements are based on our current expectations and are subject to certain risks, assumptions, trends and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. Among the factors that could cause actual results to differ materially include oil and natural gas prices, the level of offshore expenditures by energy companies, variations in energy demand, changes in day rates, cancellation, early termination or renegotiation by our customers of drilling contracts, risks associated with fixed cost drilling operations, cost overruns or delays in transportation of drilling units, cost overruns or delays in maintenance and repairs, cost overruns or delays for conversion or upgrade projects, operating hazards and equipment failure, risks of collision and damage, casualty losses and limitations on insurance coverage, customer credit and risk of customer bankruptcy, conditions in the general economy and energy industry, weather conditions and severe weather in the Company’s operating areas, increasing complexity and costs of compliance with environmental and other laws and regulations, changes in tax laws and interpretations by taxing authorities, civil unrest and instability, terrorism, piracy and hostilities in our areas of operations that may result in loss or seizure of assets, the outcome of disputes and legal proceedings, effects of the change in our corporate structure, and other risks disclosed in the Company’s filings with the U.S. Securities and Exchange Commission. Each forward-looking statement speaks only as of the date hereof, and the Company expressly disclaims any obligation to update or revise any forward-looking statements, except as required by law.

Company Overview & Investment Highlights

Market Dynamics

Delivering Shareholder Value

Conclusion

Rowan has evolved into a pure play, high-specification offshore driller

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COMPANY OVERVIEW & INVESTMENT HIGHLIGHTS

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Rowan is well positioned to navigate the current challenging market and capitalize on investments to dramatically improve our return on capital

Rowan is well positioned to navigate the current challenging market and capitalize on investments to dramatically improve our return on capital

(1) Approximate value as of July 31, 2016(2) Ultra-deepwater (UDW) refers to floating drilling rigs rated for water depths of 7,500 feet or greater(3) High-specification defined as rigs with a two million pound or greater hookload capacity


Company Overview

• RDC: NYSE-listed

• ~3,200 direct employees worldwide(1)

• 31 offshore drilling units

• 4 UDW(2) drillships

• 27 Jack-ups

• 19 High-Specification(3)

• 8 Premium

Investment Highlights

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3

4

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Competitive differentiation in drilling demanding wells

Modern high-specification fleet strategically positioned in global markets

Proven workforce & processes focused on performance

Backlog diversified among premium customer base, geographic regions, and asset types

Strong & flexible financial position

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Competitive: Rowan is focused on demanding drilling services1

“Our mission is to be recognized by our customers as the most efficient and capable provider of demanding contract drilling services”

Rowan ranks #1 among offshore drillers for HPHT applications in five out of the last six Energypoint Research Inc. surveys


Rowan’s Demanding Drilling Achievements:

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Global: Rowan’s fleet is strategically positioned in key markets2

• HP/HT Deep Gas• Key location for demanding UDW

US Gulf of Mexico 2 JU; 3 UDW

• Demanding environmental conditions

Central & South America 3 JU; 1 UDW

• Harsh environment HP/HT market• Super Gorilla / N-Class well

suited

North Sea 6 JU

• Most active jack-up region in the world

Middle East & Asia 13 JU

Featuring: 4UDW

Drillships

19High-SpecJack-ups

5PremiumJack-ups

Note: Excludes 3 cold-stacked older jack-ups


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High-Specification: Rowan has a leading position in high-spec jack-ups 2


RowanNoble

Sead

rill / N

ADL / Se

aMex

Maersk

Drilling

Aban Offshore

COSLEn

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Drilling C

ompany In

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Hercules O

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Perforad

ora Mexic

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0

2

4

6

8

10

12

14

16

18

20

19Rowan High-Spec

Jack-ups

Customers Demand Higher-Specification Rigs

• Drilling challenging wellbore designs

• Focused on achieving lower wellbore costs

• Higher regulatory standards

• Rowan specializes in rigs that have: 2,000,000+ lb hookload

capability Rugged and reliable

legs and jacking systems

Efficient, high pressure drilling systems 9

Number of Delivered High-Specification Jack-ups *

* Approximately 50 additional high-specification jack-ups are currently on order or under construction. Includes data supplied by IHS-Petrodata, Inc. Copyright 2016 and Rowan Companies as of September 06,2016

High-Specification: Rowan has a leading position in high-spec jack-ups 2


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High-Specification: Rowan’s ultra-deepwater drillships are best-in-class


2

* Includes data supplied by IHS-Petrodata, Inc; Copyright 2016; Rowan estimate, includes newbuilds; as of August 16, 2016.

2

Best-in-Class Specifications:

• 1,250 ton hook load

• Dual 7-ram blowout preventers

• Managed Pressure Drilling capable

• Advanced Riser Gas Handling

• 12,000 ft water depth equipped

• IMO Tier III emissions compliance

Few rigs possess the specifications required for today’s demanding wells and pending regulations

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140

24 44

221

1,250 tons Dual BOP

1,250 tons Single BOP

1,000 tons750 tonsAll UDW

Under 20% of UDW Rigs*

High-Specification: Rowan’s ultra-deepwater drillships are best-in-class


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93-year history of operating excellence Strong culture of continuous improvement Experienced employees with proven industry leadership Strong commitment to performance delivering safe, reliable and

efficient operations for our customers

3 Proven: Rowan has a experienced workforce & established processes


Backlog Diversified: Rowan has solid backlog with diversity among customers, geographic regions, and asset types4


Total backlog of $2.4B that extends to 2024*

* Backlog as of September 6, 2016

48%

33%

11% 6% 2%

Middle East Deepwater Norway C&S America UK

Majors / Independents52%

NOCs48%

Over 80% of backlog is with NOCs or investment grade customers

Contract Backlog by Region & Asset Type

Contract Backlog* by Customer Type

Rowan has key competitive advantages in adding new backlog:

• Solid track record as a capable and efficient driller of demanding wells

• Modern, high specification fleet

• Deep customer relationships

• Strong financial counterparty to customers

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ORIGSDRLPACDATW

RIGESVNEDO

RDC

0 12 24 36 48 60 722016 2017 2018 2019 2020 2021

Maturity of Revolving Credit Facilities for Peer Group

5

2016 2017 2018 2019 2020 2021$0

$4,000

$8,000

$12,000

Total Peer Group Debt Maturities and Newbuild Commitments*Rowan DebtPeer Group Debt

* Source: FactSet, Company Filings as of 2Q2016; includes Newbuild Capex Commitments and Debt Maturities for DO, ATW, NE, PACD, ESV, ORIG, RIG, SDRL

• Rowan has the longest visible runway of the publically traded offshore drillers• Rowan’s cash balance of $1 billion exceeds all debt maturities through 2021• Many peer group revolving credit facilities will expire prior to significant

debt maturities and capital commitments

Mill

ions

Strong Financial Position: In an uncertain near-term market, having long-term liquidity visibility provides Rowan with a clear advantage

N/A


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5 Strong Financial Position: Our robust balance sheet and industry-leading liquidity runway assure our financial health through the cycle

• Strong balance sheet provides the ability to invest counter-cyclically to significantly improve our return on capital

• Attractive debt maturity profile with significant untapped borrowing capacity available from $1.5B revolver*

• Retired $150 million of debt since 4Q 2015, eliminating $10 million/year in interest payments

• Total outstanding debt is $2.65 billion; net debt of $1.65 billion

* As of August 2, 2016; availability under the facility is $1.5 billion through January 23, 2019, declining to $1.44 billion through January 23, 2020, and to approximately $1.29 billion through the maturity in 2021.

2016 2017 2018 2019 2020 2021 2022 2023 2024 2042 2043 2044$0

$200,000,000$400,000,000$600,000,000$800,000,000

$1,000,000,000$1,200,000,000$1,400,000,000$1,600,000,000

$357,730,000 $396,518,000

$700,000,000

$400,000,000 $400,000,000 $400,000,000

600000001500000001289000000

Bond DebtRevolver Due

5.00

0%

7.78

5%

4.87

5%

4.75

0%

5.40

0%

5.85

0%


0

2,000

4,000

6,000

8,000

10,000

Row

an

755

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pany

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F

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G

Com

pany

H

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D

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C

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B

USD

mill

ions

Source: Company filings; as of 2Q2016; Competitive Companies include ATW, DO, ESV, NE, ORIG, PACD, SDRL & RIG.

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Newbuild Commitments through 2021

Debt Maturities through 2021

• Rowan has $0 in Newbuild Capex Commitments and only $755mm in Debt Maturities through 2021

• Revolving credit facility available into 2021• Rowan’s cash balance of $1 billion exceeds all debt maturities through 2021

Strong Financial Position: With minimal debt maturities over the next five years, our focus can be on positioning for a recovery



Market Dynamics


Conclusion

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As oil prices recover and long-term service contracts roll off, deflated supply chain costs will make incremental investment more attractive

MARKET DYNAMICS

Macro Fundamentals Improving:• Significant number of projects deferred in recent years; Global oil demand

increasing; spare production capacity decreasing2017 E&P Capital Spending Flat:• Indications are that capital spending will be flat with 2016• An increasing amount of spending will be dedicated to incremental

investments

Direction for next year’s E&P spending Relative share of budgets

Source: Pareto E&P Survey 2016, dated August 16, 2016

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Barclays: “Statoil recently mentioned a deepwater breakeven of $41/bbl with Shell guiding close to $45/bbl”

McKinsey: “Cost compression will continue to push deepwater costs lower…making most deepwater projects economical at an oil price between $50 and $60.”

Scotia Howard Weil: “While some peers are exiting or de-emphasizing Deepwater, RDS has an attractive suite of assets located primarily in two low breakeven basins (Gulf of Mexico & Brazil). Pre-FID projects have a breakeven of around $45/bbl with some pre-salt Brazil trending below $40/bbl.”

Morgan Stanley: "$60/bbl for 6 months was generally regarded as what was necessary to get deepwater activity to pick up.”

Investment break even levels for deepwater have become competitive with other options

Break-even reported for major offshore projects

MARKET DYNAMICS

Source: Pareto E&P Survey 2016, dated August 16, 2016

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Floaters: Throughout the market cycles, higher specification drilling units provide higher levels of utilization

Jan 20

06

Jan 20

07

Jan 20

08

Jan 20

09

Jan 20

10

Jan 20

11

Jan 20

12

Jan 20

13

Jan 20

14

Jan 20

15

Jan 20

1640

60

80

100

<5,000' 5,000'-7,499' 7,500'+ / <1,250 tons

%

Includes data supplied by IHS-Petrodata, Inc; Copyright 2016, as of August 25, 2016

Worldwide Floater Total Utilization by Water Depth / Hookload

61 units

106 units89 units

39 units

MARKET DYNAMICS

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Floaters: In 2017 there is a substantial roll off of the current floater contracts; we believe this will force attrition of remaining older rigs

* Includes data supplied by IHS-Petrodata, Inc., Copyright 2016; and Rowan Analysis; as of August 18, 2016

MARKET DYNAMICS

64

193

101

050

100150200

250300350400

Projected Future

Supply Range

190 - 240

Potential Newbuild

Cancellations

Cold Stacked Post 1996

Contracted Pre-1996

Stacked Pre 1996

Total Current Supply

358

Potential Floater Supply Attrition ?

Roll-off of Contracted Floater Fleet

Post-1996 FloatersPre-1996 Floaters

Floaters Under Construction

0

50

100

150

200

250

YE’2

5

YE’2

4

YE’2

3

YE’2

2

YE’2

1

YE’2

0

YE’1

9

YE’1

8

YE’1

7

YE’1

6

Toda

y

YE15

YE14

YE13

YE12

YE11

YE10

YE09

YE08

YE07

YE06

• 2017 will bring a dramatic increase in roll-offs of contracts signed in the 2011 to 2014 up cycle

• 29% of all floaters are older than 20 years; they currently represent 28% of working floaters

• New contracts will favor modern rigs; older rigs will be much less competitive, unless they have a “niche”

Post 1996 - Existing ContractsContracted Rig Demand

Pre 1996 - Existing Contracts

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Jack-ups: Throughout the market cycles, newer higher specification drilling units provide higher levels of utilization

* Jack-ups with two million pound or greater hookloadIncludes data supplied by IHS-Petrodata, Inc; Copyright 2016 as of August, 25 2016

63 units115 units147 units140 units

MARKET DYNAMICS

Jan 20

06

Jan 20

07

Jan 20

08

Jan 20

09

Jan 20

10

Jan 20

11

Jan 20

12

Jan 20

13

Jan 20

14

Jan 20

15

Jan 20

1620

40

60

80

100

IS, MS, MC <300'IC 300'IC 350'+ IC High Spec*

%Worldwide Jack-up Total Utilization by Rig Class

55 units

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Jack-ups: In 2017 there is a substantial roll off of the current jack-up contracts; we believe this will force attrition of older rigs

* Includes data supplied by IHS-Petrodata, Inc., Copyright 2016; and Rowan Analysis; as of 18-AUG- 2016, includes only independent leg, cantilevered units.

MARKET DYNAMICS

111

247

235

0

100

200

300

400

500

600

Cold Stacked Post 1996

Contracted Pre 1996

Stacked Pre 1996

Total Current Supply

593

Projected Future

Supply Range

325 - 375

Potential Newbuild

Cancellations

Potential JU Supply Attrition ?

Roll-off of Contracted Jack-up Fleet

JUs Under ConstructionPost-1996 JusPre-1996 JUs

• 2017 will bring a dramatic increase in roll-offs of contracts signed in the 2011 to 2014 up cycle

• 45% of all JUs are older than 20 years; they currently represent 46% of working JUs

• Fewer niches for older rigs to “hide” than in floater market

• Many newbuilds will require a change of ownership before they can be marketed effectively

0

50

100

150

200

250

300

350

400

YE’2

5

YE’2

4

YE’2

3

YE’2

2

YE’2

1

YE’2

0

YE’1

9

YE’1

8

YE’1

7

YE’1

6

Toda

y

YE15

YE14

YE13

YE12

YE11

YE10

YE09

YE08

YE07

YE06

Pre 1996 JUs - Existing ContractsPost 1996 JUs - Existing ContractsContracted Rig Demand


Market Dynamics


Conclusion

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Rowan has three company priorities to deliver shareholder value

Our customers want:• Safe, reliable & efficient

operations• Procedural discipline and

management of operational risk• Solid counterparties

Our shareholders want:• Thoughtful capital allocation to

drive strong returns• Exposure to a driller with a

sustainable capital structure

Our employees want:• To be part of a winning team• Some stability in a rough market• A company willing to develop and

challenge them

DELIVERING SHAREHOLDER VALUE

Rowan is taking advantage of this downturn to make a step change in operational performance

Continuously Improving PerformanceThe Way Forward To A Step Change

• Advancing a performance program to improve drilling efficiency

• Applying LEAN philosophy to identify & eliminate waste in our onshore and offshore operations

• A dedicated analytics team to harvest data to drive performance and lower costs


Crew A Crew B Crew C Crew D

Example: Analyzing variance in performance of drilling crews in slip to slip connection time while tripping

We are focused on improving Rowan’s return on invested capital

The improvements we are making now will deliver results in the short and long run

• Control spend and capital efficiencyReduce drilling expense by improving procurement effectiveness: centralize and

optimize all spend Strong inventory control through rigorous data analytics Implementing a fleet-wide state-of-the-art maintenance system for improved reliability

and to optimize maintenance spending

• Much of our cost is personnel-relatedPreserve key talent through high-grading of onshore and offshore workforce; use of an

aggressive bump back strategy to preserve our talent in this downturnReduce overhead costs (SG&A and a portion of drilling expense) by improving the

efficiency and cost of business support functions

• Proactively address Organizational Health to counter negative aspects of the downturnVisible Leadership; lead from the front on cost cutting with pay cuts of executivesContinuously assess Organizational Health; continue to develop future leadersCreate Targeted Initiatives to improve alignment, execution, and renewal of key

business processes. Engage employees in these improvement initiatives.


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Operational performance & EBITDA margins have improved considerably over the last three years

$ in millions

Operational Performance has improved while costs have been reduced

From initial 2015 guidance issued in November 2014 – Current:

• 38 % reduction of TRIR (Total Recordable Incident Rate)

• Downtime held essentially flat while delivering our final two drillships

280

135

1,145

10095

700

Drilling Expense

-29%

SG&A Non-newbuild Capex

-39%

-64%

Midpoint of Initial Guidance for 2015Midpoint of Current Guidance for 2017

USD

mill

ions


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Rowan has an unrelenting focus on improving long-term return on invested capital

Rowan will consider all capital allocation options, but remains committed to maintaining an attractive credit profile and financial flexibility.

During the current challenging business environment we favor: Increased Liquidity

2Q2016 – Generated $277 million of cash during the quarter and currently have a balance of $1 billion

Debt Reduction 4Q2015/ YTD2016 - Retired nearly $150 million of

debt that was due to mature over the next four years

Opportunistic Asset Investments We continue to evaluate opportunistic investments in

assets Investments at attractive prices in the bottom of the

cycle should generate superior returns


Available Capital

Allocation Options

Preserve Liquidity

Dividends/Share Repurchases

Asset Investments

Retire Debt


Market Dynamics


Conclusion

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Rowan is positioned to endure this challenging market and emerge a stronger company

Investment Highlights1

2

3

4

5

Competitive differentiation in drilling demanding wells

Modern high-specification fleet strategically positioned in global markets

Experienced and proven workforce focused on performance

Backlog diversified among premium customer base, geographic regions, and asset types

Strong & flexible financial position

CONCLUSION

Appendix

Worldwide marketed* jack-up utilization has dropped to 71%

* Excludes Cold Stacked / Out of Service unitsIncludes data supplied by IHS-Petrodata, Inc; Copyright 2016 as of July 14, 2016

82%45 Rigs

Marketed Supply: 457 units

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US GOM50%

12 RigsMexico70%

43 Rigs C&S Am58%

12 RigsW. Africa

38% 24 Rigs

North Sea82%

45 RigsMiddle East

79% 157 Rigs

India95%

37 Rigs

SE Asia42%

60 Rigs

Australia100% 1 Rig

Mediterranean86%

14 Rigs

APPENDIX

0%1 Rig

Worldwide marketed* UDW utilization has dropped to 75%

Marketed Supply: 141 units

34*Excludes Cold Stacked / Out of Service unitsIncludes data supplied by IHS-Petrodata, Inc; Copyright 2016 as of July 14, 2016

Far East67% 3 Rigs

Australia100% 1 Rigs

India100% 1 Rig

W. Africa72%

29 Rigs

C&S Am78%

37 Rigs

Mexico100% 4 Rigs

USA84%

38 Rigs

E. Canada100% 2 Rigs

North Sea75% 8 Rigs

Mediterranean40%

10 Rigs SE Asia50% 8 Rigs

APPENDIX

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APPENDIX

Rowan guidance as of September 7, 2016

Key metrics:

FY 2015

Actual

2Q 2016

Actual

3Q 2016 Projecte

dFY 2016

ProjectedFY 2017

ProjectedJack-up Operational Downtime (unbillable)

~1% Less than 2% ~2.5% 2.5% ~2.5%

Drillship Operational Downtime (1) ~7% ~0% ~5% ~5% ~5%

Contract Drilling Expenses (excluding rebills) $950 MM $201 MM ~$190 MM $775 - $785 MM $650 - $750

MM(2)

SG&A $116 MM $26 MM ~$29 MM $105 - $110 MM $90 - $100 MM

Depreciation $391 MM $100 MM ~$102 MM $400 - $405 MM Not Guided

Interest Expense, Net of Capitalized Interest $145 MM $38 MM ~$39 MM ~$155 MM Not Guided

Effective Tax Rate (normalized)

~11% Normalized 9.5% Not Guided Mid Single Digits Not Guided

Capital Expenditures $723 MM $31 MM Not Guided $140 - $150 MM(2) ~$100 MM(2)

(1) Rowan expects operational downtime for the drillships to be approximately 5%.(2) Rowan expects to incur full-year 2017 drilling expense of between $650 MM and $750 MM, depending upon whether certain idle jack-up rigs

secure additional work.(3) Rowan expects 2016 maintenance capital expenditures to range from $140 - $150 MM and 2017 to be approximately $100 MM, excluding any

contractual modifications that may arise due to securing additional work, none of which is currently planned.

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Investor Contacts:Chris Pitre VP, Investor Relations and Corporate [email protected]+1 713 968 6642

Carrie Prati Manager, Marketing and Investor [email protected]+1 713 960 7581