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Transocean Inc. Reports Fourth Quarter and Full-Year 2002 Results

January 30, 2003

HOUSTON--(BUSINESS WIRE)--Jan. 30, 2003--Transocean Inc. (NYSE:RIG) today announced that, including the recognition of non-cash charges pertaining substantially to goodwill impairment, results for the three months ended December 31, 2002 were a net loss of $2,780.7 million, or $8.71 per diluted share, on revenues of $664.6 million. Excluding the impact of charges relating to goodwill impairment and the other adjustments detailed below, net income for the three months ended December 31, 2002 was $101.5 million, or $0.32 per diluted share.

During the fourth quarter of 2002, the company conducted its annual test of impairment for goodwill on its two reporting units, Gulf of Mexico Shallow and Inland Water and International and U.S. Floater Contract Drilling Services, utilizing the fair value of the reporting units at October 1, 2002. The test resulted in a non-cash charge of $2,876.0 million, or $9.01 per diluted share, with $2,494.1 million of the impairment associated with the International and U.S. Floater Contract Drilling Services reporting unit. The company's goodwill balance after giving effect to the goodwill write down is $2,218.2 million. In addition, the reported loss for the quarter included an after-tax charge of $6.2 million, or $0.02 per diluted share, pertaining to an impairment loss on long-lived assets previously held for sale.

During the corresponding three months in 2001, net income totaled $56.0 million, or $0.17 per diluted share, on revenues of $747.6 million. The fourth quarter 2001 results included a net after-tax charge of $31.1 million, or $0.10 per diluted share, resulting from non-strategic asset impairments, partially offset by net after-tax gains of $17.9 million, or $0.06 per diluted share, resulting predominately from the sale of a non-strategic asset. A net after-tax extraordinary loss of $1.9 million, pertaining to the early retirement of debt and goodwill amortization of $41.5 million, or $0.13 per diluted share, were also included in the results for the fourth quarter of 2001. Excluding the asset impairment charges, net gain from the sale of assets, extraordinary loss and goodwill amortization, net income for the three months ended December 31, 2001 was $112.6 million, or $0.35 per diluted share.

For the twelve months ended December 31, 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. Excluding the impact of charges relating to goodwill impairment and the other adjustments detailed below, net income for the twelve months ended December 31, 2002 was $362.5 million, or $1.14 per diluted share.

Results for 2002 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 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 previously held for sale. 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, and a net after-tax gain of $3.1 million, or $0.01 per diluted share, relating to the sale of assets.

For the twelve months ended December 31, 2001, net income was $252.6 million, or $0.80 per diluted share, on revenues of $2,820.1 million. The full-year 2001 results included an after-tax charge of $31.1 million, or $0.10 per diluted share, relating to the impairment of non-strategic assets, a net after-tax extraordinary loss on retirement of debt of $19.3 million, or $0.06 per diluted share, and goodwill amortization totaling $154.9 million, or $0.49 per diluted share. These items were partially offset by a net after-tax gain of $44.5 million, or $0.14 per diluted share, resulting from the sale of assets. After adjusting for the asset impairment charges, extraordinary loss, goodwill amortization and net gain from the sale of assets, net income for the twelve months ended December 31, 2001 was $413.4 million, or $1.31 per diluted share.

During the three months ended December 31, 2002, the company's International and U.S. Floater Contract Drilling Services segment reported revenues of $612.6 million and field operating profit (defined as revenues less operating and maintenance expenses) of $295.8 million. The results compare to revenues of $641.2 million and field operating profit of $315.5 million during the three months ended September 30, 2002. The decline in revenues and field operating profit was primarily attributable to deteriorating utilization and dayrate levels within the company's fleet of semisubmersible drilling rigs capable of operating in water depths of up to 3,000 feet.

Revenues generated by the company's Gulf of Mexico Shallow and Inland Water segment during the fourth quarter of 2002 totaled $52.0 million, while field operating profit was $2.3 million. The segment results compare to revenues of $54.0 million and a field operating loss of $1.4 million for the three months ended September 30, 2002.

The company's cash and cash equivalents balance at December 31, 2002 increased to $1,214.2 million, reducing net debt to $3,282.5 million, down from $3,508.8 million and $4,155.3 million at September 30, 2002 and December 31, 2001, respectively. At January 30, 2003, the company had 51% of the remaining fleet days in 2003 associated with its International and U.S. Floater Contract Drilling Services segment committed to firm contracts, including 59% of the days associated with its high specification fleet, which substantially consists of the company's ultra-deepwater drilling rigs.

Commenting on the company's prospects for the initial quarter of 2003, Robert L. Long, President and Chief Executive Officer of Transocean Inc., stated, "Utilization of our fleet of other floaters (specifically second and third generation semisubmersible rigs) is expected to remain depressed and we expect these units to experience lower dayrates than those seen in the preceding quarter. This is especially true for the fleet of other floaters in the North Sea, where utilization stood at 46% in the quarter just completed and is not expected to show measurable improvement before the second quarter of 2003. In addition, the utilization of our high-specification fleet is expected to decline from levels experienced in the fourth quarter of 2002 with the deepwater drillship Discoverer Seven Seas and semisubmersible rig Jack Bates idle. The deepwater semisubmersible rig Transocean Rather should also be idle for the majority of the quarter. Significant potential for earnings variability currently exists in 2003 as a result of the estimated 49% of fleet time that remains uncommitted. This variability is demonstrated by the current analyst estimates of diluted earnings per share for the first quarter of $0.11 to $0.30. Our current expectations are for diluted earnings per share to be at the low end of this range, or approximately $0.11 to $0.16."

Statements regarding future utilization, dayrates, expected earnings per share range, 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 the future price of oil and gas, demand for rigs, operating hazards and delays, risks associated with international operations, actions by customers and other third parties, competition, risks of drilling, contract terminations or suspensions and other factors detailed in the company's most recent Form 10-K for the year ended December 31, 2001 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.

Conference Call Information

The company will conduct a teleconference call at 10:00 a.m. ET on January 30, 2003. Individuals who wish to participate in the teleconference call should dial 212/329-1454 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." It may also be accessed via the Worldwide Web at www.CompanyBoardroom.com by typing in the company's NYSE trading symbol, "RIG."

A telephonic replay of the conference call should be available after 1:00 p.m. ET on January 30 and can be accessed by dialing 303/590-3000 and referring to the passcode 519997. 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 Information

Drilling rig status and contract information on Transocean Inc.'s offshore drilling fleet has been condensed into two reports titled "Monthly Fleet Update" and "Monthly Fleet Update - Jackups and Barges," 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, which 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.

Transocean Inc. is the world's largest offshore drilling contractor with more than 150 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 31 high-specification semisubmersibles and drillships, 27 other semisubmersibles and two other drillships, and 55 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 of approximately $7 billion, the company's ordinary shares are traded on the New York Stock Exchange under the symbol "RIG."


                   TRANSOCEAN INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In millions, except per share data)

                              Three Months Ended  Twelve Months Ended
                                 December 31,         December 31,
                              ------------------- --------------------
                                 2002      2001      2002      2001
                              ---------- -------- ---------- ---------
Operating Revenues               $664.6   $747.6   $2,673.9  $2,820.1

Costs and Expenses
  Operating and maintenance       366.5    439.8    1,494.2   1,603.3
  Depreciation                    126.2    121.8      500.3     470.1
  Goodwill amortization               -     41.5          -     154.9
  General and administrative       14.0     14.0       65.6      57.9
  Impairment Loss on Long-
   Lived Assets                 2,885.4     40.4    2,927.4      40.4
  Gain from Sale of Assets,
   net                             (0.2)   (27.5)      (3.7)    (56.5)
                                3,391.9    630.0    4,983.8   2,270.1

Operating Income (Loss)        (2,727.3)   117.6   (2,309.9)    550.0

Other Income (Expense), net
  Equity in earnings of joint
   ventures                         3.0      4.5        7.8      16.5
  Interest income                   9.6      5.0       25.6      18.7
  Interest expense, net of
   amounts capitalized            (51.3)   (59.1)    (212.0)   (223.9)
  Other, net                       (0.5)     1.2       (0.3)     (0.8)
                                  (39.2)   (48.4)    (178.9)   (189.5)

Income (Loss) Before Income
 Taxes, Minority Interest,
 Extraordinary Items and
 Cumulative Effect of a
 Change in
 Accounting Principle          (2,766.5)    69.2   (2,488.8)    360.5

Income Tax Expense (Benefit)       14.1     10.8     (123.0)     85.7
Minority Interest                   0.1      0.5        2.4       2.9
Net Income (Loss) Before
 Extraordinary Items and
 Cumulative Effect of a Change
 in Accounting Principle       (2,780.7)    57.9   (2,368.2)    271.9

Loss on Extraordinary Items,
 net of tax                           -     (1.9)         -     (19.3)
Cumulative Effect of  a Change
 in Accounting Principle              -        -   (1,363.7)        -
Net Income (Loss)             $(2,780.7)   $56.0  $(3,731.9)   $252.6

Basic Earnings (Loss) Per
 Share
  Income (Loss) Before
   Extraordinary Items and
   Cumulative Effect of a
   Change in Accounting
   Principle                     $(8.71)   $0.18     $(7.42)    $0.88
  Loss on Extraordinary Items,
   net of tax                         -        -          -     (0.06)
  Loss on Cumulative Effect of
   a Change in Accounting
   Principle                          -        -      (4.27)        -
  Net Income (Loss)              $(8.71)   $0.18    $(11.69)    $0.82

Diluted Earnings (Loss) Per
 Share
  Income (Loss) Before
   Extraordinary Items and
   Cumulative Effect of a
   Change in Accounting
   Principle                     $(8.71)   $0.17     $(7.42)    $0.86
  Loss on Extraordinary Items,
   net of tax                         -        -          -     (0.06)
  Loss on Cumulative Effect of
   a Change in Accounting
   Principle                          -        -      (4.27)        -
  Net Income (Loss)              $(8.71)   $0.17    $(11.69)    $0.80

Weighted Average Shares
 Outstanding
  Basic                           319.2    318.7      319.1     309.2
  Diluted                         319.2    322.7      319.1     314.8

    On January 31, 2001, the Company completed a merger transaction
with R&B Falcon Corporation. As a result of the merger, R&B Falcon
Corporation became an indirect wholly owned subsidiary of the Company.
The Company accounted for the merger using the purchase method of
accounting with the Company treated as the accounting acquiror. The
above Consolidated Statement of Operations for the twelve months ended
December 31, 2001 includes eleven months of operating results of R&B
Falcon Corporation.

                   TRANSOCEAN INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                   (In millions, except share data)

                                                  Dec. 31,   Dec. 31,
                                                 ---------------------
                                                    2002       2001
                                                 ---------- ----------
                                ASSETS
Cash and Cash Equivalents                         $1,214.2     $853.4
Accounts Receivable
   Trade                                             437.6      602.9
   Other                                              61.7       72.8
Materials and Supplies                               155.8      158.8
Deferred Income Taxes                                 21.9       21.0
Other Current Assets                                  20.5       27.9
   Total Current Assets                            1,911.7    1,736.8

Property and Equipment                            10,198.0   10,081.4
Less Accumulated Depreciation                      2,168.2    1,713.3
   Property and Equipment, net                     8,029.8    8,368.1

Goodwill, net                                      2,218.2    6,466.7
Investments in and Advances to Joint Ventures        108.5      107.1
Deferred Income Tax                                   26.2       28.0
Other Assets                                         370.7      341.1
   Total Assets                                  $12,665.1  $17,047.8

                 LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts Payable                                    $134.1     $188.4
Accrued Income Taxes                                  59.5      118.3
Debt Due Within One Year                           1,048.1      484.4
Other Current Liabilities                            262.2      283.4
   Total Current Liabilities                       1,503.9    1,074.5

Long-Term Debt                                     3,629.9    4,539.4
Deferred Income Taxes                                107.2      345.1
Other Long-Term Liabilities                          282.7      178.5
   Total Long-Term Liabilities                     4,019.8    5,063.0

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, 319,219,072 and 318,816,035 
 shares issued and outstanding at December 31, 
 2002 and 2001, respectively                           3.2        3.2
Additional Paid-in Capital                        10,623.1   10,611.7
Accumulated Other Comprehensive Income               (31.5)      (2.3)
Retained Earnings (Deficit)                       (3,453.4)     297.7
   Total Shareholders' Equity                      7,141.4   10,910.3
   Total Liabilities and Shareholders' Equity    $12,665.1  $17,047.8

Consolidated Debt                                 $4,678.0   $5,023.8
Less: Cash and Cash Equivalents                    1,214.2      853.4
Less: Swap Receivable                                181.3       15.1
Net Debt                                          $3,282.5   $4,155.3

Net Debt/Tangible Capital (excluding Goodwill,
 net)                                                 40.0%      48.3%

                   TRANSOCEAN INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (In millions)

                                              Years Ended December 31,
                                              ------------------------
                                                 2002          2001
                                              ----------    ----------
Cash Flows from Operating Activities
 Net income (loss)                            $(3,731.9)       $252.6
 Adjustments to reconcile net income (loss)
  to net cash provided by operating
  activities
    Depreciation                                  500.3         470.1
    Goodwill amortization                             -         154.9
    Impairment loss on goodwill                 4,239.7             -
    Deferred income taxes                        (224.4)        (98.2)
    Equity in earnings of joint ventures           (7.8)        (16.5)
    Net (gain) loss from disposal of assets         3.9         (52.5)
    Impairment loss on long-lived assets           51.4          40.4
    Amortization of debt-related
     discounts/premiums, fair value
     adjustments and issue costs, net               6.2          (4.0)
    Deferred income, net                           (6.0)        (46.5)
    Deferred expenses, net                        (20.0)        (53.8)
    Tax benefit from exercise of stock
     options                                        0.3           9.6
    Extraordinary loss on debt
     extinguishment, net of tax                       -          19.3
    Other, net                                      3.9          (6.8)
    Changes in operating assets and
     liabilities, net of effects from the
     R&B Falcon merger
       Accounts receivable                        179.4         (55.2)
       Accounts payable and other current
        liabilities                               (78.8)        (95.9)
       Income taxes receivable/payable, net         8.9          48.2
       Other current assets                        11.5          (5.3)
Net Cash Provided by Operating Activities         936.6         560.4

Cash Flows from Investing Activities
 Capital expenditures                            (141.0)       (506.2)
 Proceeds from sale of securities                     -          17.2
 Proceeds from sale of subsidiary                     -          85.6
 Proceeds from disposal of assets, net             88.3         116.1
 Merger costs paid                                    -         (24.4)
 Cash acquired in merger, net of cash paid            -         264.7
 Joint ventures and other investments, net          7.4          20.6
Net Cash Used in Investing Activities             (45.3)        (26.4)

Cash Flows from Financing Activities
 Net borrowings (repayments) on revolving
  credit agreements                                   -        (180.1)
 Net borrowings (repayments) under commercial
  paper program                                  (326.4)        326.4
 Net proceeds from issuance of other debt             -       1,693.5
 Net repayments on other debt obligations        (189.3)     (1,551.0)
 Net proceeds from issuance of ordinary
  shares under stock-based compensation plans      10.2          29.6
 Decrease in cash dedicated to debt service           -           6.4
 Proceeds from issuance of ordinary shares
  upon exercise of warrants                           -          10.6
 Dividends paid                                   (19.1)        (38.2)
 Financing costs                                   (8.5)        (15.2)
 Other, net                                         2.6           2.9
Net Cash Provided by (Used in) Financing
 Activities                                      (530.5)        284.9

Net Increase in Cash and Cash Equivalents         360.8         818.9
Cash and Cash Equivalents at Beginning of
 Period                                           853.4          34.5
Cash and Cash Equivalents at End of Period     $1,214.2        $853.4

                            Transocean Inc.
                      Fleet Operating Statistics

                             Operating Revenues ($ Millions)
                   ---------------------------------------------------
                                                  Twelve Months Ended
                        Three Months Ended             Dec. 31,
                   ----------------------------- ---------------------
International and
 U.S. Floater
 Contract Drilling  Dec. 31, Sept. 30,  Dec. 31,               2001
 Services Segment:    2002      2002    2001 (2)    2002      (1)(2)
                   --------- --------- --------- --------- -----------
  High-Specification
   Floaters          $365.2    $326.4    $354.7  $1,336.6    $1,289.4
  Other Floaters     $113.9    $157.8    $176.9    $579.1      $611.2
  Jackups - 
   Non-U.S.          $114.5    $117.0    $112.5    $462.9      $352.8
  Other               $19.0     $40.0     $34.3    $107.5      $213.9
Segment Total        $612.6    $641.2    $678.4  $2,486.1    $2,467.3

Gulf of Mexico
 Shallow and Inland
 Water Segment:
  Jackups and
   Submersibles       $20.8     $21.7     $24.4     $73.1      $253.1
  Inland Barges       $24.8     $27.5     $32.0     $87.5      $171.7
  Other                $6.4      $4.8     $12.8     $27.2       $53.9
Segment Total         $52.0     $54.0     $69.2    $187.8      $478.7

Total Company        $664.6    $695.2    $747.6  $2,673.9    $2,946.0

                                  Average Dayrates (3)
                   ---------------------------------------------------
                                                  Twelve Months Ended
                        Three Months Ended             Dec. 31,
                   ----------------------------- ---------------------
International and
 U.S. Floater
 Contract Drilling  Dec. 31, Sept. 30,  Dec. 31,
 Services Segment:    2002      2002      2001     2002      2001 (1)
                   --------- --------- --------- --------- -----------
  High-Specification
   Floaters        $147,700  $144,600  $145,000  $147,000    $141,800
  Other Floaters    $78,800   $81,300   $71,100   $78,500     $65,100
  Jackups - 
   Non-U.S.         $57,700   $60,400   $52,800   $58,600     $46,500
  Other             $40,500   $55,100   $41,300   $45,800     $39,900
Segment Total       $97,200   $95,500   $88,200   $94,500     $83,600

Gulf of Mexico
 Shallow and Inland
 Water Segment:
  Jackups and
   Submersibles     $21,900   $23,000   $30,600   $22,000     $36,800
  Inland Barges     $19,600   $20,700   $22,800   $19,900     $22,400
Segment Total       $20,600   $21,600   $25,600   $20,800     $29,200

Total Mobile
 Offshore Drilling
 Fleet              $77,200   $76,400   $74,000   $77,600     $64,900

                                     Utilization (3)
                   ---------------------------------------------------
                                                  Twelve Months Ended
                        Three Months Ended             Dec. 31,
                   ----------------------------- ---------------------
International and
 U.S. Floater
 Contract Drilling  Dec. 31, Sept. 30,  Dec. 31,
 Services Segment:    2002      2002      2001      2002     2001 (1)
                   --------- --------- --------- --------- -----------
  High-Specification
   Floaters              93%       85%       90%       85%         86%
  Other Floaters         56%       76%       89%       72%         81%
  Jackups - 
   Non-U.S.              83%       84%       89%       85%         84%
  Other                  47%       51%       54%       54%         52%
Segment Total            75%       79%       86%       78%         81%

Gulf of Mexico
 Shallow and Inland
 Water Segment:
  Jackups and
   Submersibles          33%       34%       27%       30%         57%
  Inland Barges          44%       47%       49%       39%         66%
Segment Total            39%       40%       38%       34%         61%

Total Mobile
 Offshore Drilling
 Fleet                   60%       63%       67%       61%         73%


(1) Transocean completed a merger transaction with R&B Falcon on
    January 31, 2001. Therefore, operating revenues, average dayrates
    and utilization for the twelve months ended December 31, 2001 are
    stated as pro forma results based on the combined fleet of
    Transocean and R&B Falcon.

(2) Certain reclassifications have been made to prior periods to
    conform to current quarter presentation.

(3) Average dayrates are defined as revenue earned per revenue earning
    day and utilization is defined as the percentage of revenue
    earning days to days available. These terms are applicable to core
    assets only, defined as high-specification drillships and
    semisubmersibles ("floaters"), other floaters, jackup rigs,
    drilling barges, tenders and submersible drilling rigs.

CONTACT:
Transocean Inc., Houston
Analyst Contact:
Jeffrey L. Chastain, 713/232-7551
or
Media Contact:
Guy A. Cantwell, 713/232-7647