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): February 3, 2004
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 12. Results of Operations and Financial Condition.
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 February 3, 2004, concerning fourth quarter and full
year 2003 financial results, furnished as Exhibit 99.1 to this report, is
incorporated by reference herein. The press release contains certain measures
(discussed below) which may be deemed "non-GAAP financial measures" as defined
in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended.
In the attached press release, we discuss net income, excluding the impact of a
Nigeria benefit plan charge, on a total and per share basis for the quarter
ended December 31, 2003. We also discuss net income, excluding the impact of a
goodwill impairment charge and an impairment loss on long-lived assets, on a
total and per share basis for the quarter ended December 31, 2002. In addition,
we discuss net income, excluding the impact of the restructuring of benefit
plans in Nigeria, costs related to the planned initial public offering of our
Gulf of Mexico Shallow and Inland Water business segment, asset impairment
charges, debt retirement loss and the favorable resolution of a non-U.S. income
tax liability, on a total and per share basis for the twelve months ended
December 31, 2003. We also discuss net income, excluding the impact of charges
relating to goodwill impairment, the impairment of long-lived assets and the
favorable resolution of a non-U.S. income tax liability, on a total and per
share basis for the twelve months ended December 31, 2002. This information is
provided because management believes exclusion of these items 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 (income), and information reconciling the GAAP and
non-GAAP measures are included in the press release.
In the press release, we also discuss field operating income for each of our
business segments for the quarters ended December 31 and September 30, 2003 and
the quarter ended December 31, 2002. Management believes field operating income
is a useful measure of the operating results of a particular segment since the
measure only deducts expenses directly related to a segment's operations from
that segment's revenues. The most directly comparable GAAP financial measure,
operating income before general and administrative expenses, and information
reconciling the GAAP and non-GAAP measures are included in the press release.
The information furnished pursuant to this Item 12, 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.
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: February 3, 2004 By: /s/ Eric B. Brown
--------------------------------
Eric B. Brown
Senior Vice President,
General Counsel and
Corporate Secretary
INDEX TO EXHIBITS
The following exhibit is furnished pursuant to Item 12:
Exhibit Number Description
- -------------- -----------
99.1 Transocean Inc. Press Release Reporting Fourth Quarter
and Full Year 2003 Financial Results.
* * * * * * * * * * *
TRANSOCEAN INC.
[GRAPHIC OMITTED] Post Office Box 2765
Houston TX 77252 2765
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
ANALYST CONTACT: Jeffrey L. Chastain NEWS RELEASE
713 232 7551
MEDIA CONTACT: Guy A. Cantwell FOR RELEASE: February 3, 2004
713 232 7647
TRANSOCEAN INC. REPORTS
FOURTH QUARTER AND FULL-YEAR 2003 RESULTS
HOUSTON--Transocean Inc. (NYSE: RIG) today reported net income for the
three months ended December 31, 2003 of $5.5 million, or $0.02 per diluted
share, on revenues of $591.5 million. Results for the quarter included an
after-tax charge totaling $17.4 million, or $0.05 per diluted share, pertaining
to the restructuring of certain benefit plans in Nigeria. Excluding the impact
of the Nigeria benefit plan charge, net income for the three months ended
December 31, 2003 was $22.9 million, or $0.07 per diluted share.
During the corresponding three months in 2002, the company reported a net
loss of $2,780.7 million, or $8.71 per diluted share, on revenues of $664.6
million. The results included a non-cash charge of $2,876.0 million, or $9.01
per diluted share, relating to the company's annual test for impairment of
goodwill, and an after-tax charge of $6.2 million, or $0.02 per diluted share,
pertaining to an impairment loss on long-lived assets. Excluding the impact of
the goodwill impairment charge and impairment loss on long-lived assets, net
income for the three months ended December 31, 2002 was $101.5 million, or $0.32
per diluted share.
For the twelve months ended December 31, 2003, net income was $19.2
million, or $0.06 per diluted share, on revenues of $2,434.3 million. Full year
2003 results included the previously discussed charge relating to the
restructuring of benefit plans in Nigeria, as well as costs totaling $8.8
million, or $0.03 per diluted share, relating to the planned initial public
offering (IPO) of the company's Gulf of Mexico Shallow and Inland Water business
segment, operated through its wholly-owned subsidiary, TODCO, after-tax charges
of $26.4 million, or $0.08 per diluted share, resulting from the impairment of
certain assets, and an after-tax loss of $13.8 million, or $0.04 per diluted
share, relating to the early retirement of debt, partially offset by a favorable
resolution of a non-U.S. income tax liability of $14.6 million, or $0.04 per
diluted share. Excluding the impact of the charge relating to the restructuring
of benefit plans in Nigeria, IPO costs, asset impairment charges, debt
retirement loss and favorable income tax resolution, net income for the twelve
months ended December 31, 2003 was $71.0 million, or $0.22 per diluted share.
During the corresponding twelve months in 2002, the company reported a net
loss of $3,731.9 million, or $11.69 per diluted share, on revenues of $2,673.9
million. Full year 2002 results included a non-cash charge of $4,239.7 million,
or $13.29 per diluted share, relating to the impairment of goodwill following
the company's adoption of Statement of Financial Accounting Standards (SFAS)
142, Goodwill and Other Intangible Assets, and the October 2002 annual test for
impairment of goodwill as prescribed by SFAS 142. In addition, full year 2002
results included an after-tax loss of $33.5 million, or $0.10 per diluted share,
resulting from the non-cash impairment of certain long-lived assets. These
charges were partially offset by a tax benefit totaling $175.7 million, or $0.55
per diluted share, attributable to the restructuring of certain non-U.S.
operations. Excluding the impact of charges relating to goodwill impairment,
the impairment of long-lived assets and the tax benefit, net income for the
twelve months ended December 31, 2002 was $365.6 million, or $1.15 per diluted
share.
Cash flow from operations totaled $61.2 million and $525.8 million for the
three and twelve months ended December 31, 2003, respectively. During 2003, the
company reduced total debt by $1,019.9 million. In addition, the company's
capital expenditures for 2003 included $382.8 million to terminate two deepwater
drillship synthetic operating leases.
Revenues for the company's International and U.S. Floater Contract Drilling
Services business segment totaled $531.1 million for the three months ended
December 31, 2003, down 6% from segment revenues of $564.4 million in the
preceding three months of 2003. During the corresponding three months in 2002,
segment revenues were $612.6 million. Segment operating income, before general
and administrative expense, was $75.4 million during the three months ended
December 31, 2003, while field operating income (defined as revenues less
operating and maintenance expenses) totaled $177.0 million. The segment results
compared to operating income, before general and administrative expense, of
$118.9 million and field operating income of $222.0 million for the preceding
quarter of 2003. During the corresponding three months in 2002, the segment
reported an operating loss, before general and administrative expense, of
$2,309.8 million, which included a non-cash charge of $2,494.1 million resulting
from the company's annual test for impairment of goodwill. Field operating
income during the same three months in 2002 was $295.8 million. Segment fleet
utilization for the three months ended December 31, 2003 declined to 68% from
71% during the preceding three months in 2003, due principally to lower business
activity among floating rigs in the U.S. Gulf of Mexico and North Sea. Segment
fleet utilization during the fourth quarter of 2002 was 74%.
The company expects continued difficulty in its International and U.S.
Floater Contract Drilling Services business segment in the near-term, with
encouraging signs of improvement for this segment during the second half of the
year and into 2005. The company's Other Floater rigs, consisting largely of
second- and third-generation semisubmersibles with conventional capabilities,
will remain in a business environment characterized by excess capacity on a
global scale. Seasonal improvement through the spring and summer drilling period
in the U.K.-sector of the North Sea should offer a modest recovery. In Norway,
improvement in semisubmersible demand has recently produced a contract extension
on one of the company's rigs as well as other near-term contract possibilities.
With respect to the international jackup market sector, excess capacity
continues in West Africa, although global demand for these jackup rigs remains
strong and is expected to improve throughout 2004. Although the company expects
intermittent idle time on some of its deepwater rigs through the first half of
2004, it has seen an increase in bid opportunities for long-term contracts
starting in the second half of 2004 and into 2005 for these units.
The Gulf of Mexico Shallow and Inland Water business segment (TODCO)
experienced a 3% improvement in revenues for the three months ended December 31,
2003, to $60.4 million, compared to segment revenues of $58.5 million during the
preceding three months in 2003. During the corresponding three months in 2002,
segment revenues were $52.0 million. The business segment's operating loss,
before general and administrative expense, declined during the three months
ended December 31, 2003, to $14.6 million, from an operating loss, before
general and administrative expense, of $24.9 million during the preceding three
months in 2003. An operating loss, before general and administrative expense,
of $403.5 million during the corresponding three months in 2002 included a
non-cash charge of $381.9 million pertaining to the company's annual test for
impairment of goodwill. Field operating income increased to $7.7 million for the
three months ended December 31, 2003, from a field operating loss of $2.1
million during the preceding three months in 2003. Field operating income
totaled $ 2.3 million during the corresponding three months in 2002. Higher
average dayrates of $25,800 among the segment's jackup and submersible rigs were
a primary contributor to the improved revenue and operating measures for the
three months ended December 31, 2003. The average dayrate compared to $20,800
for the preceding three months in 2003 and $21,700 for the corresponding three
months in 2002.
Conference Call Information
-----------------------------
Transocean will conduct a teleconference call at 10:00 a.m. ET on February
3, 2004. To participate, dial 303-262-2075 approximately five to 10 minutes
prior to the scheduled start time of the call.
In addition, the conference call will be simultaneously broadcast over the
Internet in a listen-only mode and can be accessed by logging onto the company's
website at www.deepwater.com and selecting "Investor Relations." It may also be
-----------------
accessed via the Internet at www.CompanyBoardroom.com by 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. ET on February 3 and can be accessed by dialing 303-590-3000 and referring
to the passcode 566555. Also, a replay will be available through the Internet
and can be accessed by visiting either of the above-referenced Worldwide Web
addresses.
Monthly Fleet Update
----------------------
Drilling rig status and contract information on Transocean Inc.'s offshore
drilling fleet has been condensed into a report titled "Monthly Fleet Update,"
--------------------
which is available through the company's website at www.deepwater.com. The
report is located in the "Investor Relations/Financial Reports" section of
--------------------------------------
the website. By subscribing to the Transocean Financial Report Alert, you will
---------------------------------
be immediately notified when new postings are made to this page by an automated
e-mail that will provide a link directly to the page that has been updated.
Shareholders and other interested parties are invited to sign up for this
service.
Forward-Looking Disclaimer
---------------------------
Statements regarding future opportunities and outlook for the company and
the company's International and U.S. Floater Contract Drilling Services business
segments and fleet categories, dayrates, rig utilization, drilling activity, 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 due to its
concentration in technically demanding segments of the offshore drilling
business, including industry-leading positions in high-specification deepwater
and harsh environment drilling units. The company's fleet consists of 32
high-specification semisubmersibles and drillships (floaters), 27 other floaters
and 50 jackup drilling rigs. With a current equity market capitalization in
excess of $8 billion, Transocean Inc.'s ordinary shares are traded on the New
York Stock Exchange under the symbol "RIG."
### 04-04
TRANSOCEAN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------ -----------------------
2003 2002 2003 2002
- ---------------------------------------------------------------- ------------ ---------- ----------- ----------
Operating Revenues
Contract Drilling Revenues $ 569.1 $ 664.6 $ 2,333.8 $ 2,673.9
Client Reimbursable Revenues 22.4 - 100.5 -
591.5 664.6 2,434.3 2,673.9
Costs and Expenses
Operating and maintenance 406.8 366.5 1,610.4 1,494.2
Depreciation 127.1 126.2 508.2 500.3
General and administrative 15.3 14.0 65.3 65.6
Impairment loss on long-lived assets (0.3) 2,885.4 16.5 2,927.4
Gain from sale of assets, net (2.9) (0.2) (5.8) (3.7)
546.0 3,391.9 2,194.6 4,983.8
Operating Income (Loss) 45.5 (2,727.3) 239.7 (2,309.9)
Other Income (Expense), net
Equity in earnings (losses) of joint ventures (2.2) 3.0 5.1 7.8
Interest income 3.1 9.6 18.8 25.6
Interest expense (47.6) (51.3) (202.0) (212.0)
Loss on retirement of debt - - (15.7) -
Impairment loss on note receivable from related party - - (21.3) -
Other, net 0.5 (0.5) (3.0) (0.3)
(46.2) (39.2) (218.1) (178.9)
Income (Loss) Before Income Taxes, Minority Interest and
Cumulative Effect of a Change in Accounting Principle (0.7) (2,766.5) 21.6 (2,488.8)
Income Tax Expense (Benefit) (5.3) 14.1 3.0 (123.0)
Minority Interest (0.1) 0.1 0.2 2.4
Income (Loss) Before Cumulative Effect of a Change in
Accounting Principle 4.7 (2,780.7) 18.4 (2,368.2)
Cumulative Effect of a Change in Accounting Principle 0.8 - 0.8 (1,363.7)
Net Income (Loss) $ 5.5 $(2,780.7) $ 19.2 $(3,731.9)
Basic Earnings (Loss) Per Share
Income (Loss) Before Cumulative Effect of a Change in
Accounting Principle $ 0.02 $ (8.71) $ 0.06 $ (7.42)
Loss on Cumulative Effect of a Change in Accounting Principle - - - (4.27)
Net Income (Loss) $ 0.02 $ (8.71) $ 0.06 $ (11.69)
Diluted Earnings (Loss) Per Share
Income (Loss) Before Cumulative Effect of a Change in
Accounting Principle $ 0.02 $ (8.71) $ 0.06 $ (7.42)
Loss on Cumulative Effect of a Change in Accounting Principle - - - (4.27)
Net Income (Loss) $ 0.02 $ (8.71) $ 0.06 $ (11.69)
Weighted Average Shares Outstanding
Basic 319.9 319.2 319.8 319.1
Diluted 321.3 319.2 321.4 319.1
TRANSOCEAN INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
December 31,
-------------------------
2003 2002
------------ -----------
ASSETS
Cash and Cash Equivalents $ 474.0 $ 1,214.2
Accounts Receivable
Trade, net 435.3 437.6
Other 45.0 61.7
Materials and Supplies 152.0 155.8
Deferred Income Taxes 41.0 21.9
Other Current Assets 31.6 20.5
Total Current Assets 1,178.9 1,911.7
Property and Equipment 10,673.0 10,198.0
Less Accumulated Depreciation 2,663.4 2,168.2
Property and Equipment, net 8,009.6 8,029.8
Goodwill, net 2,230.8 2,218.2
Investments in and Advances to Joint Ventures 5.5 108.5
Deferred Income Taxes 28.2 26.2
Other Assets 209.6 370.7
Total Assets $ 11,662.6 $ 12,665.1
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts Payable $ 146.1 $ 134.1
Accrued Income Taxes 57.2 59.5
Debt Due Within One Year 45.8 1,048.1
Other Current Liabilities 262.0 262.2
Total Current Liabilities 511.1 1,503.9
Long-Term Debt 3,612.3 3,629.9
Deferred Income Taxes 42.8 107.2
Other Long-Term Liabilities 303.8 282.7
Total Long-Term Liabilities 3,958.9 4,019.8
Commitments and Contingencies
Preference Shares, $0.10 par value; 50,000,000 shares authorized,
none issued and outstanding - -
Ordinary Shares, $0.01 par value; 800,000,000 shares authorized,
319,926,500 and 319,219,072 shares issued and outstanding at
December 31, 2003 and 2002, respectively 3.2 3.2
Additional Paid-in Capital 10,643.8 10,623.1
Accumulated Other Comprehensive Loss (20.2) (31.5)
Retained Deficit (3,434.2) (3,453.4)
Total Shareholders' Equity 7,192.6 7,141.4
Total Liabilities and Shareholders' Equity $ 11,662.6 $ 12,665.1
TRANSOCEAN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- ----------------------
2003 2002 2003 2002
-------- ---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 5.5 $(2,780.7) $ 19.2 $(3,731.9)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Depreciation 127.1 126.2 508.2 500.3
Impairment loss on goodwill - 2,876.0 - 4,239.7
Deferred income taxes (58.1) (34.6) (98.5) (224.4)
Equity in (earnings) losses of joint ventures 2.2 (3.0) (5.1) (7.8)
Net loss from disposal of assets 1.2 2.7 13.4 3.9
Loss on retirement of debt - - 15.7 -
Impairment loss on long-lived assets (0.3) 9.4 16.5 51.4
Impairment loss on note receivable from related party - - 21.3 -
Amortization of debt-related discounts/premiums, fair value
adjustments and issue costs, net (8.2) 1.6 (24.3) 6.2
Deferred income, net 11.3 3.8 4.4 (5.5)
Deferred expenses, net (30.8) (12.3) (33.2) (20.0)
Other long-term liabilities (2.9) 6.8 10.8 17.1
Other, net (0.6) (15.0) 15.8 (13.4)
Changes in operating assets and liabilities
Accounts receivable 12.2 47.4 19.8 179.4
Accounts payable and other current liabilities (40.1) (36.9) 6.5 (78.8)
Income taxes receivable/payable, net 26.2 24.8 27.8 8.9
Other current assets 16.5 20.2 7.5 11.5
Net Cash Provided by Operating Activities 61.2 236.4 525.8 936.6
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (422.3) (26.4) (495.9) (141.0)
Note issued to related party - - (46.1) -
Payments received from note issued to related party 44.2 - 46.1 -
Proceeds from disposal of assets, net 4.3 14.7 8.4 88.3
Acquisition of 40 percent interest in Deepwater Drilling II L.L.C.,
net of cash acquired - - 18.1 -
Deepwater Drilling L.L.C.'s cash acquired 18.6 - 18.6 -
Joint ventures and other investments, net 0.5 2.8 3.3 7.4
Net Cash Used in Investing Activities (354.7) (8.9) (447.5) (45.3)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under capital lease obligations 1.1 - 2.1 -
Borrowings under revolving credit agreement 250.0 - 250.0 -
Repayments under commercial paper program - - - (326.4)
Repayments on other debt instruments and capital lease obligations (285.5) (35.0) (1,252.7) (189.3)
Cash from termination of interest rate swaps - - 173.5 -
Net proceeds from issuance of ordinary shares under
stock-based compensation plans 0.5 - 12.8 10.2
Dividends paid - - - (19.1)
Financing costs (4.9) (0.4) (4.9) (8.5)
Other, net - 0.3 0.7 2.6
Net Cash Used in Financing Activities (38.8) (35.1) (818.5) (530.5)
Net Increase (Decrease) in Cash and Cash Equivalents (332.3) 192.4 (740.2) 360.8
Cash and Cash Equivalents at Beginning of Period 806.3 1,021.8 1,214.2 853.4
Cash and Cash Equivalents at End of Period $ 474.0 $ 1,214.2 $ 474.0 $ 1,214.2
Transocean Inc.
Fleet Operating Statistics
Operating Revenues ($ Millions) (1)
----------------------------------------------------------------
Twelve Months Ended
Three Months Ended December 31,
-------------------------------------------- ------------------
INTERNATIONAL AND U.S. FLOATER CONTRACT DRILLING December 31, September 30, December 31,
SERVICES SEGMENT: 2003 2003 2002 2003 2002
------------- -------------- ------------- -------- --------
Contract Drilling Revenues
High-Specification Floaters:
5th Generation Deepwater $ 187.5 $ 188.7 $ 182.6 $ 720.4 $ 674.0
Other Deepwater $ 96.9 $ 113.2 $ 159.0 $ 432.3 $ 572.1
Other High-Specification Floaters $ 31.9 $ 32.1 $ 33.5 $ 128.5 $ 132.9
Total High-Specification Floaters $ 316.3 $ 334.0 $ 375.1 $1,281.2 $1,379.0
Other Floaters $ 67.9 $ 74.3 $ 104.0 $ 306.7 $ 536.7
Jackups - Non-U.S. $ 104.6 $ 110.4 $ 114.5 $ 446.9 $ 462.9
Other Rigs $ 24.2 $ 25.7 $ 19.0 $ 89.2 $ 107.5
Subtotal $ 513.0 $ 544.4 $ 612.6 $2,124.0 $2,486.1
Client Reimbursables $ 18.1 $ 20.0 - $ 82.7 -
Segment Total $ 531.1 $ 564.4 $ 612.6 $2,206.7 $2,486.1
GULF OF MEXICO SHALLOW AND INLAND WATER SEGMENT:
Contract Drilling Revenues
Jackups and Submersibles $ 30.4 $ 25.7 $ 19.9 $ 94.8 $ 66.0
Inland Barges $ 18.9 $ 17.7 $ 24.8 $ 77.3 $ 87.5
Other $ 6.8 $ 10.7 $ 7.3 $ 37.7 $ 34.3
Subtotal $ 56.1 $ 54.1 $ 52.0 $ 209.8 $ 187.8
Client Reimbursables $ 4.3 $ 4.4 - $ 17.8 -
Segment Total $ 60.4 $ 58.5 $ 52.0 $ 227.6 $ 187.8
Total Company $ 591.5 $ 622.9 $ 664.6 $2,434.3 $2,673.9
Average Dayrates (1) (2)
----------------------------------------------------------------
Twelve Months Ended
Three Months Ended December 31,
-------------------------------------------- ------------------
INTERNATIONAL AND U.S. FLOATER CONTRACT DRILLING December 31, September 30, December 31,
SERVICES SEGMENT: 2003 2003 2002 2003 2002
------------- -------------- ------------- -------- --------
High-Specification Floaters:
5th Generation Deepwater $ 186,500 $ 176,600 $ 188,700 $182,800 $188,300
Other Deepwater $ 101,400 $ 112,500 $ 120,400 $109,900 $120,200
Other High-Specification Floaters $ 117,900 $ 117,200 $ 121,600 $118,200 $120,600
Total High-Specification Floaters $ 141,800 $ 142,200 $ 146,300 $143,000 $146,100
Other Floaters $ 60,600 $ 60,600 $ 76,800 $ 63,300 $ 76,400
Jackups - Non-U.S. $ 53,700 $ 54,400 $ 57,700 $ 55,600 $ 58,600
Other Rigs $ 45,200 $ 48,800 $ 36,200 $ 44,900 $ 42,100
Segment Total $ 87,900 $ 89,000 $ 96,100 $ 89,400 $ 93,500
GULF OF MEXICO SHALLOW AND INLAND WATER SEGMENT:
Jackups and Submersibles $ 25,800 $ 20,800 $ 21,700 $ 21,200 $ 21,600
Inland Barges $ 17,200 $ 16,900 $ 19,600 $ 17,000 $ 19,900
Other $ 20,700 $ 20,500 $ 19,400 $ 19,600 $ 20,800
Segment Total $ 21,500 $ 19,300 $ 20,300 $ 19,200 $ 20,600
Total Mobile Offshore Drilling Fleet $ 67,400 $ 67,000 $ 74,300 $ 67,200 $ 74,800
Utilization (1) (2)
----------------------------------------------------------
Twelve Months Ended
Three Months Ended December 31,
-------------------------------------------- ------------
INTERNATIONAL AND U.S. FLOATER CONTRACT DRILLING December 31, September 30, December 31,
SERVICES SEGMENT: 2003 2003 2002 2003 2002
------------- -------------- ------------- ----- -----
High-Specification Floaters:
5th Generation Deepwater 91% 97% 96% 93% 89%
Other Deepwater 69% 73% 96% 72% 87%
Other High-Specification Floaters 74% 74% 75% 74% 75%
Total High-Specification Floaters 78% 82% 93% 80% 86%
Other Floaters 47% 51% 55% 50% 71%
Jackups - Non-U.S. 81% 85% 83% 85% 85%
Other Rigs 53% 49% 48% 45% 57%
Segment Total 68% 71% 74% 69% 78%
GULF OF MEXICO SHALLOW AND INLAND WATER SEGMENT:
Jackups and Submersibles 52% 54% 34% 45% 28%
Inland Barges 40% 38% 44% 41% 39%
Other 24% 38% 27% 35% 37%
Segment Total 40% 44% 37% 41% 34%
Total Mobile Offshore Drilling Fleet 56% 59% 58% 57% 59%
(1) Certain reclassifications have been made to prior periods to conform to current quarter
presentation.
(2) Average dayrates are defined as contract drilling revenue earned per revenue earning day and
utilization is defined as the total actual number of revenue earning days as a percentage of the
total number of calendar days in the period. Effective January1, 2003, the calculation of average
dayrates and utilization was changed to include all rigs based on contract drilling revenues. Prior
periods have been restated to reflect the change.
[GRAPHIC OMITTED]
TRANSOCEAN INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
ADJUSTED INCOME (LOSS) AND EARNINGS (LOSS) PER SHARE RECONCILIATION
(IN US$ MILLIONS)
QTD YTD QTD YTD
12/31/03 12/31/03 12/31/02 12/31/02
--------- ---------- ---------- ----------
ADJUSTED INCOME
Net income (loss) as reported $ 5.5 $ 19.2 $(2,780.7) $(3,731.9)
Add back:
After-tax loss on early retirement of debt - 13.8 - -
After-tax loss on impairment of certain long-lived assets - 12.6 6.2 33.5
After-tax impairment of note receivable from Delta Towing LLC - 13.8 - -
Favorable resolution of a non-U.S. income tax liability - (14.6) - -
Tax benefit from the restructuring of non-U.S operations - - - (175.7)
After-tax initial public offering costs - 8.8 - -
After-tax impairment of goodwill - - 2,876.0 4,239.7
After-tax restructuring of Nigeria benefit plans 17.4 17.4 - -
--------- ---------- ---------- ----------
Net income as adjusted $ 22.9 $ 71.0 $ 101.5 $ 365.6
--------- ---------- ---------- ----------
DILUTED EARNINGS PER SHARE:
Net income (loss) as reported $ 0.02 $ 0.06 $ (8.71) $ (11.69)
Add back:
After-tax loss on early retirement of debt - 0.04 - -
After-tax loss on impairment of certain long-lived assets - 0.04 0.02 0.10
After-tax impairment of note receivable from Delta Towing LLC - 0.04 - -
Favorable resolution of a non-U.S. income tax liability - (0.04) - -
Tax benefit from the restructuring of non-U.S operations - - - (0.55)
After-tax initial public offering costs - 0.03 -
After-tax impairment of goodwill - - 9.01 13.29
After-tax restructuring of Nigeria benefit plans 0.05 0.05 - -
--------- ---------- ---------- ----------
Net income as adjusted $ 0.07 $ 0.22 $ 0.32 $ 1.15
--------- ---------- ---------- ----------
TRANSOCEAN INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(IN US$ MILLIONS)
FOR THE QUARTER ENDED
-----------------------------------------------
DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
2003 2003 2002
-------------- --------------- --------------
OPERATING INCOME (LOSS) BEFORE GENERAL AND ADMINISTRATIVE EXPENSES
TO FIELD OPERATING INCOME (LOSS) BY SEGMENT RECONCILIATION
International and U.S. Floater Contract Drilling Services Segment
Operating income (loss) before general and administrative expense $ 75.4 $ 118.9 $ (2,309.8)
Add back: Depreciation 104.1 103.9 103.1
Impairment loss on goodwill - - 2,494.1
Impairment loss on long-lived assets - - 8.3
(Gain) loss from sale of assets, net (2.5) (0.8) 0.1
-------------- --------------- --------------
Field operating income $ 177.0 $ 222.0 $ 295.8
-------------- --------------- --------------
Gulf of Mexico Shallow and Inland Water Segment
Operating loss before general and administrative expense $ (14.6) $ (24.9) $ (403.5)
Add back: Depreciation 23.0 22.9 23.1
Impairment loss on goodwill - - 381.9
Impairment loss on long-lived assets (0.3) - 1.1
Gain from sale of assets, net (0.4) (0.1) (0.3)
-------------- --------------- --------------
Field operating income (loss) $ 7.7 $ (2.1) $ 2.3
-------------- --------------- --------------