NYSE: RIG 9.45 0.06 0.63% 4:02 P.M. ET
Share Page Print Page
Back to all news articles

Transocean Inc. Reports Second Quarter 2003 Results

July 29, 2003

HOUSTON--(BUSINESS WIRE)--July 29, 2003--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 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. 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."


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

                               Three Months Ended  Six Months Ended
                                    June 30,            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
                                           -------------- ------------
                                             (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
Services Segment:              June 30, March 31, June 30,
                                   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 January 1, 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 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
                                        ---------- ---------- --------

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
                                        ---------- ---------- --------
      Field operating income               $192.6     $247.2   $289.0
                                        ---------- ---------- --------

    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)
                                        ---------- ---------- --------
      Field operating income (loss)        $(15.2)     $(5.3)   $(8.4)
                                        ---------- ---------- --------


                   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
                                        --------- --------- ----------
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
                                        --------- --------- ----------
Net income (loss) as adjusted             $(19.7)    $28.5     $158.0
                                        --------- --------- ----------

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
                                        --------- --------- ----------
Net income (loss) as adjusted             $(0.06)    $0.09 $0.49
                                        --------- --------- ----------

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

SOURCE: Transocean Inc.