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 29, 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 Transocean Inc. Press Release Reporting Second Quarter 2003 Financial
Results.
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 29, 2003, concerning second quarter 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 loss (income), excluding an
after-tax loss from early retirement of debt, after-tax charges pertaining to
the impairment of certain assets and the favorable resolution of a non-U.S.
income tax liability, on a total and per share basis for the quarter and six
months ended June 30, 2003. We also discuss net income, excluding non-cash
charges pertaining to the impairment of an asset belonging to our Gulf of Mexico
Shallow and Inland Water business segment and the adoption of Statement of
Financial Accounting Standards 142, Goodwill and Other Tangible Assets, on a
total and per share basis for the six months ended June 30, 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 quarter and six months ended June 30, 2003.
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 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
-1-
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.
-2-
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 29, 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
- -------------- -----------
99.1 Transocean Inc. Press Release Reporting Second Quarter 2003
Financial Results.
-1-
----------------------
TRANSOCEAN INC.
TRANSOCEAN INC. [logo] 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: July 29, 2003
713-232-7647
TRANSOCEAN INC. REPORTS
SECOND QUARTER 2003 RESULTS
HOUSTON--Transocean Inc. (NYSE: RIG) today reported a net loss for the
three months ended June 30, 2003 of $44.5 million, or $0.14 per diluted share,
on revenues of $603.9 million. The results compared to net income of $80.0
million, or $0.25 per diluted share, on revenues of $646.2 million for the three
months ended June 30, 2002. Results for the second quarter of 2003 reflected the
effect of an after-tax loss of $13.8 million, or $0.04 per diluted share,
relating to the early retirement of debt, in addition to after-tax charges
totaling $25.6 million, or $0.08 per diluted share, pertaining to the impairment
of assets described below. Partially offsetting these losses was a favorable
resolution of a non-U.S. income tax liability totaling $14.6 million, or $0.04
per diluted share. Excluding each of the above-mentioned items, the company's
net loss for the three months ended June 30, 2003 was $19.7 million, or $0.06
per diluted share.
As noted above, during the second quarter of 2003 the company recorded
after-tax asset impairments of $13.8 million, relating to a note receivable from
Delta Towing, LLC, the U.S. inland marine and shallow water support vessel
business in which the company has a 25% equity interest, and $11.8 million,
which pertained to 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.
For the six months ended June 30, 2003, the company reported net income of
$2.7 million, or $0.01 per diluted share, on revenues of $1,219.9 million.
During the corresponding six months in 2002, the company reported a net loss of
$1,206.4 million, or $3.73 per diluted share, on revenues of $1,314.1 million.
Excluding the impact of the losses from the early retirement of debt and asset
impairments, partially offset by the favorable tax resolution, net income for
the six months ended June 30, 2003 was $28.5 million, or $0.09 per diluted
share. Results for the first six months of 2002 included non-cash
charges of $1,364.4 million, or $4.22 per diluted share, pertaining to the
impairment of an asset belonging to the company's Gulf of Mexico Shallow and
Inland Water business segment and the adoption in January 2002 of Statement of
Financial Accounting Standards 142, Goodwill and Other Tangible Assets.
Excluding these non-cash charges, net income for the six months ended June 30,
2002 was $158.0 million, or $0.49 per diluted share.
The company's International and U.S. Floater Contract Drilling Services
business segment reported revenues of $548.5 million during the three months
ended June 30, 2003, a 3% decline from revenues of $562.7 million reported over
the three months ended March 31, 2003. During the corresponding three months in
2002, segment revenues were $609.1 million. Revenues in the second quarter of
2003 were adversely impacted by a $16 million loss of revenue due to both the
labor strike in Nigeria and the riser separation incident on the drillship
Discoverer Enterprise. Segment operating income before general and
administrative expense was $84.2 million for the three months ended June 30,
2003 compared to income of $144.0 million for the first three months of 2003 and
$185.9 million for the corresponding three months in 2002. Field operating
income (defined as revenues less operating and maintenance expenses) was $192.6
million for the three months ended June 30, 2003, down 22% from $247.2 million
during the first three months of 2003. For the corresponding three months in
2002, field operating income was $289.0 million. As expected, operating and
maintenance expense in the second quarter of 2003 was significantly higher than
first quarter 2003 due primarily to increased activity, including a seasonal
increase in the North Sea, higher shipyard and maintenance expenses, the
acquisition of ConocoPhillips' interest in Deepwater Drilling II L.L.C. and the
net effect of various deferrals and amortization of costs. In addition,
unexpected costs were incurred primarily related to the Discoverer Enterprise
riser incident and the labor strike in Nigeria. Segment fleet utilization
declined during the three months ended June 30, 2003 to 68%, from 69% and 78%
during the three months ended March 31, 2003 and June 30, 2002, respectively.
The company's International and U.S. Floater Contract Drilling Services
business segment is expected to experience diminishing opportunities during the
second half of 2003 for mid-water semisubmersible rigs in the North Sea, Brazil
and Southeast Asia. However, customer inquiries for deepwater drilling programs
in the Gulf of Mexico have improved in recent weeks and we remain optimistic
regarding deepwater drilling activity in West Africa. The recent two-year
contract for the semisubmersible rig Transocean Richardson for drilling
operations offshore Ivory Coast in West Africa represents one of several
development drilling programs possible in the region over the next 12 to 18
months. Finally, the company's non-U.S. jackup rig fleet is expected to
benefit from stable-to-improving activity for the remainder of 2003 and into
2004, despite some current idle jackup rig capacity in West Africa. However,
recently announced contract awards for three of the company's international
jackup rigs, each for three-year terms, will result in reduced revenue for these
units during the third quarter of 2003 when these rigs mobilize to India for
anticipated late-October-to-early-November 2003 contract commencements.
Operating revenues from the company's Gulf of Mexico Shallow and Inland
Water business segment totaled $55.4 million for the three months ended June 30,
2003, improving 4% from revenues of $53.3 million reported for the first three
months of 2003. Segment revenues during the corresponding three months in 2002
were $37.1 million. The segment's operating loss before general and
administrative expense was $49.5 million for the three months ended June 30,
2003 compared to a loss of $28.5 million for the first three months of 2003 and
$30.9 million for the corresponding three months in 2002. The segment recorded a
field operating loss of $15.2 million during the three months ended June 30,
2003 compared to field operating losses in both the three months ended March 31,
2003 and June 30, 2002 of $5.3 million and $8.4 million, respectively. Segment
operating and maintenance expense during the second quarter of 2003 increased
from first quarter 2003 levels due mainly to costs associated with the well
control incident on inland barge Rig 62 and improved activity. Segment fleet
utilization was 42% during the three months ended June 30, 2003, up from 38% and
27% during the three months ended March 31, 2003 and June 30, 2002,
respectively.
The outlook for the company's Gulf of Mexico Shallow and Inland Water
business segment remains uncertain for the balance of 2003. Although
utilization among the segment's jackup rigs improved to 46% during the second
quarter of 2003, up from 32% during the first three months of the year,
utilization in recent weeks has flattened, while activity among the segment's
inland barge fleet has declined. Recent dayrates for some of the segment's
jackup rigs have increased slightly, aided by the continued contraction of the
Gulf of Mexico jackup rig supply, while barge dayrates have declined. The
company was recently notified by Petroleos Mexicanos (PEMEX) that two of its
jackup rigs in the Gulf of Mexico and a platform rig in Trinidad were awarded
multi-year contracts for work offshore Mexico. The contracts for jackup rigs RBF
205 and RBF 206 are expected to begin during the fourth quarter of 2003, while
the contract for platform rig Cliffs #3 is expected to commence during the third
quarter of 2004.
The company also reported that cash flow from operations was $114.4 million
and $305.2 million for the three and six months ended June 30, 2003,
respectively. Cash and cash equivalents declined to $714.0 million at June 30,
2003 from $1,520.4 million at March 31, 2003, following cash paid for debt
repayments and retirements totaling $871.4 million during the second quarter of
2003.
The company anticipates a difficult earnings environment over the remainder
of 2003. 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 resulted 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.
Conference Call Information
-----------------------------
The company will conduct a teleconference call at 10:00 a.m. EDT on July
29, 2003. To participate, 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 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
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accessed via the internet at www.CompanyBoardroom.com by typing in the company's
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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.
Monthly Fleet Update and Cash Operating Cost Information
---------------------------------------------------------------
Drilling rig status and contract information as well as cash operating cost
information on Transocean Inc.'s offshore drilling fleet has been condensed into
three reports titled "Monthly Fleet Update," "Monthly Fleet Update - Jackups and
Barges" and "Cash Operating Cost," which are available through the company's
website at www.deepwater.com. The reports are 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 two business segments, rig utilization, timing of commencement of
drilling contracts, drilling contract duration, drilling activity, dayrates,
deterioration in profitability for the remainder of 2003, diminishing
opportunities for mid-water semisubmersible rigs in the North Sea, Brazil and
Southeast Asia during the second half of 2003, deepwater drilling activity in
West Africa, activity in the non-U.S. jackup rig fleet, 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."
### 03-___
TRANSOCEAN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
-------------------------------- ------------------------------
2003 2002 2003 2002
-------------- ---------------- ------------ ----------------
Operating Revenues
Contract Drilling Revenues $ 576.6 $ 646.2 $ 1,166.2 $ 1,314.1
Client Reimbursable Revenues 27.3 - 53.7 -
603.9 646.2 1,219.9 1,314.1
Costs and Expenses
Operating and maintenance 426.5 365.6 800.6 746.6
Depreciation 127.5 124.3 254.3 249.9
General and administrative 14.9 16.0 28.8 35.8
Impairment loss on long-lived assets 15.8 - 16.8 1.1
(Gain) loss from sale of assets, net (0.6) 1.3 (2.0) (0.6)
584.1 507.2 1,098.5 1,032.8
Operating Income 19.8 139.0 121.4 281.3
Other Income (Expense), net
Equity in earnings of joint ventures 1.8 2.5 5.4 4.4
Interest income 5.8 5.7 12.7 9.9
Interest expense (52.8) (52.5) (105.4) (108.4)
Loss on retirement of debt (15.7) - (15.7) -
Loss on impairment of note receivable from related party (21.3) - (21.3) -
Other, net (2.7) (0.4) (3.3) (1.1)
(84.9) (44.7) (127.6) (95.2)
Income (Loss) Before Income Taxes, Minority Interest and
Cumulative Effect of a Change in Accounting Principle (65.1) 94.3 (6.2) 186.1
Income Tax Expense (Benefit) (20.8) 13.9 (9.0) 27.7
Minority Interest 0.2 0.4 0.1 1.1
Net Income (Loss) Before Cumulative Effect of a Change in
Accounting Principle (44.5) 80.0 2.7 157.3
Cumulative Effect of a Change in Accounting Principle - - - (1,363.7)
Net Income (Loss) $ (44.5) $ 80.0 $ 2.7 $ (1,206.4)
Basic Earnings (Loss) Per Share
Income (Loss) Before Cumulative Effect of a Change in
Accounting Principle $ (0.14) $ 0.25 $ 0.01 $ 0.49
Loss on Cumulative Effect of a Change in Accounting Principle - - - (4.27)
Net Income (Loss) $ (0.14) $ 0.25 $ 0.01 $ (3.78)
Diluted Earnings (Loss) Per Share
Income (Loss) Before Cumulative Effect of a Change in
Accounting Principle $ (0.14) $ 0.25 $ 0.01 $ 0.49
Loss on Cumulative Effect of a Change in Accounting Principle - - - (4.22)
Net Income (Loss) $ (0.14) $ 0.25 $ 0.01 $ (3.73)
Weighted Average Shares Outstanding
Basic 319.8 319.1 319.7 319.1
Diluted 319.8 323.9 321.5 323.6
TRANSOCEAN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
June 30, December 31,
----------------------------
2003 2002
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(Unaudited)
------------
ASSETS
Cash and Cash Equivalents $ 714.0 $ 1,214.2
Accounts Receivable
Trade 380.4 437.6
Other 61.9 61.7
Materials and Supplies 160.0 155.8
Deferred Income Taxes 19.7 21.9
Other Current Assets 91.0 20.5
Total Current Assets 1,427.0 1,911.7
Property and Equipment 10,196.5 10,198.0
Less Accumulated Depreciation 2,413.8 2,168.2
Property and Equipment, net 7,782.7 8,029.8
Goodwill, net 2,222.9 2,218.2
Investments in and Advances to Joint Ventures 68.3 108.5
Deferred Income Taxes 26.2 26.2
Other Assets 178.7 370.7
Total Assets $ 11,705.8 $ 12,665.1
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts Payable $ 140.0 $ 134.1
Accrued Income Taxes 64.4 59.5
Debt Due Within One Year 282.3 1,048.1
Other Current Liabilities 239.2 262.2
Total Current Liabilities 725.9 1,503.9
Long-Term Debt 3,476.0 3,629.9
Deferred Income Taxes 50.7 107.2
Other Long-Term Liabilities 291.7 282.7
Total Long-Term Liabilities 3,818.4 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,
319,853,774 and 319,219,072 shares issued and outstanding at
June 30, 2003 and December 31, 2002, respectively 3.2 3.2
Additional Paid-in Capital 10,638.5 10,623.1
Accumulated Other Comprehensive Loss (29.5) (31.5)
Retained Earnings (Deficit) (3,450.7) (3,453.4)
Total Shareholders' Equity 7,161.5 7,141.4
Total Liabilities and Shareholders' Equity $ 11,705.8 $ 12,665.1
TRANSOCEAN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Six Months Ended June 30,
2003 2002
------------ ----------------
Cash Flows from Operating Activities
Net income (loss) $ 2.7 $ (1,206.4)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Depreciation 254.3 249.9
Impairment loss on goodwill - 1,363.7
Stock-based compensation expense 2.9 0.4
Deferred income taxes (59.5) (38.3)
Equity in earnings of joint ventures (5.4) (4.4)
Net loss from disposal of assets 7.8 2.3
Loss on retirement of debt 15.7 -
Impairment loss on long-lived assets 16.8 1.1
Impairment of note receivable from related party 21.3 -
Amortization of debt-related discounts/premiums, fair value adjustments
and issue costs, net (7.9) 2.9
Deferred income, net (1.6) (6.0)
Deferred expenses, net 2.7 7.0
Other, net 13.5 9.3
Changes in operating assets and liabilities
Accounts receivable 51.6 84.1
Accounts payable and other current liabilities 4.0 (84.7)
Income taxes receivable/payable, net 9.6 22.3
Other current assets (23.3) (22.7)
Net Cash Provided by Operating Activities 305.2 380.5
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (50.2) (81.2)
Note issued to related party, net of repayments (45.3) -
Proceeds from disposal of assets, net 3.2 65.0
Acquisition of 40% interest in Deepwater Drilling II L.L.C., net of cash acquired 18.1 -
Joint ventures and other investments, net 2.2 -
Net Cash Used in Investing Activities (72.0) (16.2)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments under commercial paper program - (326.4)
Repayments on other debt instruments (919.2) (119.6)
Cash from termination of interest rate swaps 173.5 -
Decrease in cash dedicated to debt service 1.2 -
Net proceeds from issuance of ordinary shares under
stock-based compensation plans 11.7 10.3
Dividends paid - (19.1)
Financing costs (0.1) (8.1)
Other, net (0.5) 1.1
Net Cash Used in Financing Activities (733.4) (461.8)
Net Decrease in Cash and Cash Equivalents (500.2) (97.5)
Cash and Cash Equivalents at Beginning of Period 1,214.2 853.4
Cash and Cash Equivalents at End of Period $ 714.0 $ 755.9
Transocean Inc.
Fleet Operating Statistics
Operating Revenues ($Millions)(1)
--------------------------------------------------------------------
Six Months Ended
Three Months Ended June 30,
----------------------------------------- -------------------------
INTERNATIONAL AND U.S. FLOATER CONTRACT DRILLING June 30, March 31, June 30,
SERVICES SEGMENT: 2003 2003 2002 2003 2002 (1)(2)
----------- ----------- --------------- ----------- ------------
Deepwater:
5th Generation $ 168.5 $ 175.7 $ 168.1 $ 344.2 $ 317.6
Other Deepwater $ 106.0 $ 116.2 $ 144.1 $ 222.2 $ 278.0
Total Deepwater $ 274.5 $ 291.9 $ 312.2 $ 566.4 $ 595.6
Mid-Water $ 113.9 $ 115.1 $ 166.2 $ 229.0 $ 356.9
Jackups - Non-U.S. $ 116.6 $ 115.3 $ 107.3 $ 231.9 $ 231.4
Other Rigs $ 20.5 $ 18.8 $ 23.4 $ 39.3 $ 48.4
Subtotal $ 525.5 $ 541.1 $ 609.1 $ 1,066.6 $ 1,232.3
Client Reimbursables $ 23.0 $ 21.6 - $ 44.6 -
Segment Total $ 548.5 $ 562.7 $ 609.1 $ 1,111.2 $ 1,232.3
GULF OF MEXICO SHALLOW AND INLAND WATER SEGMENT:
Contract Drilling Revenues
Jackups and Submersibles $ 22.1 $ 16.6 $ 14.7 $ 38.7 $ 27.1
Inland Barges $ 17.7 $ 23.0 $ 13.5 $ 40.7 $ 35.2
Other $ 11.3 $ 8.9 $ 8.9 $ 20.2 $ 19.5
Subtotal $ 51.1 $ 48.5 $ 37.1 $ 99.6 $ 81.8
Client Reimbursables $ 4.3 $ 4.8 - $ 9.1 -
Segment Total $ 55.4 $ 53.3 $ 37.1 $ 108.7 $ 81.8
Total Company $ 603.9 $ 616.0 $ 646.2 $ 1,219.9 $ 1,314.1
Average Dayrates (1)(2)
--------------------------------------------------------------------
Six Months Ended
Three Months Ended June 30,
----------------------------------------- -------------------------
INTERNATIONAL AND U.S. FLOATER CONTRACT DRILLING June 30, March 31, June 30,
SERVICES SEGMENT: 2003 2003 2002 2003 2002 (1)
----------- ----------- --------------- ----------- ------------
Deepwater:
5th Generation $ 185,100 $ 183,800 $ 188,400 $ 184,400 $ 187,200
Other Deepwater $ 111,500 $ 113,600 $ 124,300 $ 112,600 $ 122,600
Total Deepwater $ 147,500 $ 147,500 $ 152,200 $ 147,500 $ 150,200
Mid-Water $ 73,600 $ 77,200 $ 81,300 $ 75,400 $ 81,400
Jackups - Non-U.S. $ 57,400 $ 56,900 $ 57,400 $ 57,100 $ 58,100
Other Rigs $ 41,500 $ 43,200 $ 40,400 $ 42,300 $ 41,400
Segment Total $ 88,900 $ 91,600 $ 93,500 $ 90,300 $ 91,800
GULF OF MEXICO SHALLOW AND INLAND WATER SEGMENT:
Jackups and Submersibles $ 18,200 $ 19,700 $ 20,200 $ 18,800 $ 20,900
Inland Barges $ 16,100 $ 17,600 $ 20,200 $ 16,900 $ 19,600
Other $ 18,600 $ 19,000 $ 24,100 $ 18,800 $ 20,400
Segment Total $ 17,500 $ 18,500 $ 21,000 $ 18,000 $ 20,200
Total Mobile Offshore Drilling Fleet $ 65,300 $ 69,100 $ 78,000 $ 67,100 $ 75,100
Utilization (1)(2)
--------------------------------------------------------------------
Six Months Ended
Three Months Ended June 30,
----------------------------------------- -------------------------
INTERNATIONAL AND U.S. FLOATER CONTRACT DRILLING June 30, March 31, June 30,
SERVICES SEGMENT: 2003 2003 2002 2003 2002 (1)
----------- ----------- --------------- ----------- ------------
Deepwater:
5th Generation 88% 97% 89% 92% 85%
Other Deepwater 70% 76% 85% 73% 84%
Total Deepwater 78% 85% 87% 81% 84%
Mid-Water 55% 53% 72% 54% 77%
Jackups - Non-U.S. 86% 87% 82% 86% 86%
Other Rigs 41% 36% 64% 38% 63%
Segment Total 68% 69% 78% 68% 80%
GULF OF MEXICO SHALLOW AND INLAND WATER SEGMENT:
Jackups and Submersibles 44% 31% 27% 38% 24%
Inland Barges 39% 47% 24% 43% 32%
Other 44% 35% 37% 39% 46%
Segment Total 42% 38% 27% 40% 31%
Total Mobile Offshore Drilling Fleet 56% 55% 56% 56% 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
has changed to include all rigs based on contract drilling revenues. Prior periods have been
restated to reflect the change.
TRANSOCEAN [LOGO]
TRANSOCEAN INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(IN US$ MILLIONS)
FOR THE QUARTER ENDED
---------------------------------------
JUNE 30, MARCH 31, JUNE 30,
2003 2003 2002
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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 $ 84.2 $ 144.0 $ 185.9
Add back: Depreciation 104.4 103.6 101.4
Impairment loss on long-lived assets 4.2 1.0 -
(Gain) loss from sale of assets, net (0.2) (1.4) 1.7
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Field operating income $ 192.6 $ 247.2 $ 289.0
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Gulf of Mexico Shallow and Inland Water Segment
Operating loss before general and administrative expense $ (49.5) $ (28.5) $ (30.9)
Add back: Depreciation 23.1 23.2 22.9
Impairment loss on long-lived assets 11.6 - -
(Gain) loss from sale of assets, net (0.4) - (0.4)
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Field operating income (loss) $ (15.2) $ (5.3) $ (8.4)
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TRANSOCEAN [LOGO]
TRANSOCEAN INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
ADJUSTED INCOME (LOSS) AND EARNINGS (LOSS) PER SHARE RECONCILIATION
(IN US$ MILLIONS)
QTD YTD YTD
06/30/03 06/30/03 06/30/02
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ADJUSTED INCOME
Net income (loss) as reported $ (44.5) $ 2.7 $(1,206.4)
Add back:
After-tax loss on early retirement of debt 13.8 13.8 -
After-tax loss on impairment of certain long-lived assets 11.8 12.8 0.7
After-tax impairment of note receivable from Delta Towing LLC 13.8 13.8 -
Favorable resolution of a non-U.S. income tax liability (14.6) (14.6) -
After-tax impairment of goodwill - - 1,363.7
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Net income (loss) as adjusted $ (19.7) $ 28.5 $ 158.0
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DILUTED EARNINGS PER SHARE:
Net income (loss) as reported $ (0.14) $ 0.01 $ (3.73)
Add back:
After-tax loss on early retirement of debt 0.04 0.04 -
After-tax loss on impairment of certain long-lived assets 0.04 0.04 -
After-tax impairment of note receivable from Delta Towing LLC 0.04 0.04 -
Favorable resolution of a non-U.S. income tax liability (0.04) (0.04) -
After-tax impairment of goodwill - - 4.22
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Net income (loss) as adjusted $ (0.06) $ 0.09 $ 0.49
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