SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): July 17, 2003
TRANSOCEAN INC.
(Exact name of registrant as specified in its charter)
CAYMAN ISLANDS 333-75899 66-0587307
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File Number) Identification No.)
organization)
4 GREENWAY PLAZA
HOUSTON, TEXAS 77046
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (713) 232-7500
ITEM 7. Financial Statements and Exhibits.
(c) Exhibits
The following exhibit is furnished pursuant to Item 12:
99.1 Press Release issued by Transocean Inc. dated July 17, 2003.
ITEM 9. Regulation FD Disclosure.
The following information is furnished under Item 12 of Form 8-K (Results of
Operations and Financial Condition) in accordance with Securities and Exchange
Commission Release No. 33-8216.
Our press release dated July 17, 2003, concerning second quarter 2003 financial
results, furnished as Exhibit 99.1 to this report, is incorporated by reference
herein. The press release contains a measure (discussed below) which may be
deemed a "non-GAAP financial measure" as defined in Item 10 of Regulation S-K of
the Securities Exchange Act of 1934, as amended.
In the press release, we discuss net loss per diluted share, excluding the
impact of an after-tax loss from early retirement of debt, after-tax charges
associated with certain asset impairments and the favorable resolution of a
non-U.S. income tax liability. This information is provided because management
believes exclusion of the impact of the loss from retirement of debt, the
charges associated with the asset impairments and the resolution of the non-U.S.
income tax liability will help investors compare results between periods and
identify operating trends that could otherwise be masked by these items. The
most directly comparable GAAP financial measure, net loss per diluted share, and
information reconciling the GAAP and non-GAAP measures are included in the press
release.
The information furnished pursuant to this Item 9, including Exhibit 99.1, shall
not be deemed to be "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934, nor will it be incorporated by reference into any
registration statement filed by Transocean Inc. under the Securities Act of
1933, as amended, unless specifically identified therein as being incorporated
therein by reference. The furnishing of the information in this report is not
intended to, and does not, constitute a determination or admission by Transocean
Inc. that the information in this report is material or complete, or that
investors should consider this information before making an investment decision
with respect to any security of Transocean Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRANSOCEAN INC.
Date: July 22, 2003 By: /s/ Gregory L. Cauthen
--------------------------------
Gregory L. Cauthen
Senior Vice President and Chief
Financial Officer
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INDEX TO EXHIBITS
Exhibit Number Description
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99.1 Press Release issued by Transocean Inc. dated July 17, 2003
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TRANSOCEAN INC.
TRANSOCEAN INC. Post Office Box 2765
Houston TX 77252 2765
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ANALYST CONTACT: Jeffrey L. Chastain NEWS RELEASE
713-232-7551
MEDIA CONTACT: Guy A. Cantwell FOR RELEASE: July 17, 2003
713-232-7647
TRANSOCEAN INC. TO REPORT NET LOSS
FOR SECOND QUARTER 2003
HOUSTON--Transocean Inc. (NYSE: RIG) today announced that it expects to
report a net loss for the three months ended June 30, 2003 of between $0.13 and
$0.15 per diluted share. Excluding the impact of the $14 million ($0.04 per
diluted share) after-tax loss from the early retirement of debt and $26 million
($0.08 per diluted share) of after-tax charges associated with asset impairments
described below as well as the effect of a $15 million ($0.04 per diluted share)
favorable resolution of a non-U.S. income tax liability, the company anticipates
results for the quarter to be a net loss of between $0.05 and $0.07 per diluted
share.
The company reported that in addition to a previously announced after-tax
loss of approximately $14 million resulting from the early retirement of debt,
it expects to recognize an approximate $14 million after-tax charge relating to
the impairment of a note receivable from Delta Towing Holdings, LLC, the U.S.
inland marine and shallow water support vessel business in which the company
owns a 25% equity interest. Also, quarterly results are expected to include
approximately $12 million of after-tax charges pertaining to the impairment of
five jackup rigs belonging to the company's Gulf of Mexico Shallow and Inland
Water business segment, one mid-water semisubmersible rig and one self-erecting
tender rig following the decision to remove the units from drilling service.
The company also reported that its deepwater drillship Discoverer
Enterprise has recommenced operations following a riser separation incident on
May 21, 2003. Inspections of seven other Transocean deepwater drillships
utilizing the same type of riser have been completed, with minimal downtime
experienced on the rigs for these inspections. The company is exploring whether
modifications of the riser systems employed on these eight deepwater drillships
are necessary. If modifications are required, they are currently expected to be
made over the balance of 2003 and into early 2004 at a total repair cost
approximating $10 million.
The riser separation incident on the Discoverer Enterprise, combined with
unexpected downtime on other rigs and the estimated $10 million loss of revenue
from the Nigerian labor strike, is expected to result in a decline in total
revenues in the second quarter of 2003 to approximately $604 million compared to
$616 million reported in the first quarter of 2003. In addition, operating costs
during the second quarter are expected to exceed the previously announced
guidance of $400 million to $410 million largely due to the unexpected costs of
approximately $15 million associated with the Discoverer Enterprise riser
incident, the labor strike in Nigeria and the well control incident on inland
barge Rig 62.
Transocean further stated that it anticipates a difficult earnings
environment for the remainder of 2003 driven mainly by lower than expected
profitability within the company's Gulf of Mexico Shallow and Inland Water
jackup and barge fleet and diminishing opportunities for semisubmersibles and
drillships in the North Sea, Brazil and Southeast Asia. The company has
previously noted that a decrease in earnings can substantially increase its
effective tax rate due in part to the effect of operations in countries with
revenue-based taxes. The deterioration in 2003 profitability is now expected to
result in an effective tax rate of approximately 38% on 2003 earnings, excluding
the impact of the above-described asset impairments and debt retirement loss.
The application of the higher rate to earnings for the first six months of 2003
is expected to result in a charge for income taxes in the second quarter
significantly higher than previously anticipated, offset by the tax benefits
relating to the asset impairments, debt retirement loss and favorable resolution
of the non-U.S. income tax liability.
Transocean will report earnings for the six months ended June 30, 2003 on
the morning of Tuesday, July 29, 2003. Following the earnings report, expected
to be released prior to the commencement of trading in the United States, the
company will conduct a teleconference call at 10:00 a.m. EDT on July 29.
Individuals who wish to participate in the teleconference call should dial
212-329-1455 approximately five to 10 minutes prior to the scheduled start time
of the call.
In addition, the conference call will be simulcast through a listen-only
broadcast over the Internet and can be accessed by logging onto the company's
Worldwide Web address at www.deepwater.com and selecting "Investor Relations."
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It may also be accessed via the Worldwide Web at www.CompanyBoardroom.com by
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typing in the company's New York Stock Exchange trading symbol, "RIG."
A telephonic replay of the conference call should be available after 1:00
p.m. EDT on July 29 and can be accessed by dialing 303-590-3000 and referring to
the passcode 544298. Also, a replay will be available through the Internet and
can be accessed by visiting either of the above-referenced Worldwide Web
addresses. Both replay options will be available for approximately 30 days.
Statements regarding expected earnings per share and other results, loss on
the early retirement of debt, impairments on the Delta Towing note receivable,
five jackup rigs, one mid-water semisubmersible and one self-erecting tender
removed from drilling service, loss resulting from the Rig 62 well control
incident, timing and cost of any modifications to drilling risers, decline in
revenues, increased operating costs, earnings environment and deterioration in
profitability for the remainder of 2003, effective tax rate, as well as any
other statements that are not historical facts in this release are
forward-looking statements that involve certain risks, uncertainties and
assumptions. These include but are not limited to operating hazards and delays,
risks associated with international operations, results of investigations
regarding riser, actions by customers and other third parties, the future price
of oil and gas and other factors detailed in the company's most recent Form 10-K
and other filings with the Securities and Exchange Commission. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
indicated.
Transocean Inc. is the world's largest offshore drilling contractor with
more than 160 full or partially owned and managed mobile offshore drilling
units, inland drilling barges and other assets utilized in the support of
offshore drilling activities worldwide. The company's mobile offshore drilling
fleet is considered one of the most modern and versatile in the world with 13
fifth-generation semisubmersibles and drillships, 15 other deepwater
semisubmersibles and drillships, 31 mid-water semisubmersibles and drillships
and 50 jackup drilling rigs. Transocean Inc. specializes in technically
demanding segments of the offshore drilling business, including industry-leading
positions in deepwater and harsh environment drilling services. With a current
equity market capitalization in excess of $6 billion, the company's ordinary
shares are traded on the New York Stock Exchange under the symbol "RIG."
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