85408--3/2/2009--ROWAN_COMPANIES

related topics

{cost, contract, operation}

{gas, price, oil}

{operation, natural, condition}

{cost, regulation, environmental}

{condition, economic, financial}

{loss, insurance, financial}

{competitive, industry, competition}

{provision, law, control}

{operation, international, foreign}

{control, financial, internal}

{capital, credit, financial}

{tax, income, asset}

The drilling industry has historically been cyclical, and periods of low demand could have an adverse effect on our operating results. The recent deterioration in global capital markets may reduce demand for our drilling services and manufactured products or result in contract delays or cancellations and slow collections from customers. If our customers terminate or seek to renegotiate our drilling contracts, our results of operations may be adversely affected. Our markets are highly competitive, which may make it difficult for us to maintain satisfactory price levels. We have incurred losses recently and over prolonged periods in the past, a circumstance that could occur again in the future. The recent deterioration in global capital markets may limit our ability to meet our future capital needs. Our fleet expansion program may result in liquidity problems. Our results of operations will be adversely affected if we are unable to secure drilling contracts for our rigs on economically favorable terms. Many of our drilling rigs are subject to damage or destruction by severe weather. We are subject to operating risks such as blowouts and well fires that could result in environmental damage, property loss, personal injury and death, some of which may not be covered by insurance or recoverable indemnification. Our insurance coverage may be inadequate and has become more expensive. We have a significant insurance receivable related to the salvage of several offshore drilling rigs lost or damaged during recent hurricanes. Our four Super Gorilla class rigs and two of our Tarzan Class rigs are pledged as security under our government-guaranteed debt arrangements. Most of our contracts are fixed-price contracts, and increases in our operating costs could have an adverse effect on the profitability of those contracts. Our operations are increasingly being conducted in foreign areas. Changes to our inventory valuation allowances may reduce our future operating results. Rig upgrade, enhancement and new construction projects are subject to risks which could cause delays or cost overruns and adversely affect our financial position, results of operations and cash flows. Our customers may be unable to indemnify us. Government regulations and environmental risks, which reduce our business opportunities and increase our operating costs, might worsen in the future. Anti-takeover provisions in our Certificate of Incorporation, bylaws and stockholder rights plan could make it difficult for holders of our common stock to receive a premium for their shares upon a change of control.

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85408--3/2/2009--ROWAN_COMPANIES_INC