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Transocean Sedco Forex Reports Fourth Quarter and Full Year 2001 Results

February 5, 2002

HOUSTON--(BUSINESS WIRE)--Feb. 5, 2002--Transocean Sedco ForexInc. (NYSE:RIG) today reported that net income for the three monthsended December 31, 2001 was $56.0 million, or $0.17 per diluted share,on revenues of $747.6 million. Net income during the final quarter of2001 included a net after-tax charge of $31.1 million, or $0.10 perdiluted share, resulting from asset impairments, partially offset by anet after-tax gain of $17.1 million, or $0.05 per diluted share,resulting primarily from the December 2001 sale of the floatingproduction vessel, the Seillean. A net after-tax extraordinary loss of$1.9 million resulting from the early retirement of debt was alsoreflected in net income for the quarter. Excluding the assetimpairment charges, gain from the sale of assets (net) andextraordinary loss, net income for the three months ended December 31,2001 was $71.9 million or $0.22 per diluted share. During thecorresponding three months in 2000, net income was $33.0 million, or$0.16 per diluted share, before the effect of dispute-relatedafter-tax charges totaling $42.2 million, or $0.20 per diluted share,relating principally to a $37.4 million provision pertaining to thesettlement of a terminated bareboat charter agreement and a $4.8million provision for legal claims. After adjusting for thedispute-related charges, the company reported a net loss for the threemonths ended December 31, 2000 of $9.2 million, or $0.04 per dilutedshare. Revenues during the three months ended December 31, 2000 were$314.9 million.

For the twelve months ended December 31, 2001, net income totaled$252.6 million, or $0.80 per diluted share, on revenues of $2,820.1million. The 2001 results included the previously mentioned after-taxasset impairment charge of $31.1 million, or $0.10 per diluted share,offset by a net after-tax gain totaling $43.1 million, or $0.14 perdiluted share, resulting from the sale of assets. A net after-taxextraordinary loss totaling $19.3 million, or $0.06 per diluted share,resulting from the early retirement of debt, was also reflected in thefull year 2001 net income. After adjusting for these three items, netincome for the twelve months ended December 31, 2001 totaled $259.9million, or $0.83 per diluted share. During the corresponding twelvemonths in 2000, net income was $108.5 million, or $0.51 per dilutedshare, on revenues of $1,229.5 million. The 2000 results included netafter-tax charges of $17.3 million, or $0.08 per diluted share,relating primarily to the previously mentioned settlement of aterminated bareboat charter agreement and provisions for legal claims,partially offset by gains associated with a cash settlement relatingto the early termination of a rig contract, the sale of two rigs andthe early termination of certain debt.

Transocean Sedco Forex completed a merger transaction with R&BFalcon Corporation on January 31, 2001. Therefore, results for thetwelve months ended December 31, 2001 reflect only eleven months ofoperating results of R&B Falcon Corporation. Pro Forma utilizationmeasures noted below have been calculated based on the combined fleetof Transocean Sedco Forex and R&B Falcon for the twelve months endedDecember 31, 2001 and the equivalent period during 2000.

During the three months ended December 31, 2001, the companyearned $687.7 million, or 92% of total operating revenues from itsInternational and U.S. Floater Contract Drilling Services businesssegment, representing a 5% increase from the $655.0 million in segmentoperating revenues reported during the three months ended September30, 2001. The segment's field operating income, defined as operatingrevenues less operating and maintenance expenses, declined 3% to$304.9 million during the three months ended December 31, 2001,compared to $313.4 million during the three months ended September 30,2001. Segment fleet utilization improved to 86% during the threemonths ended December 31, 2001, compared to 81% and 78% during thethree months ended September 30, 2001 and December 31, 2000,respectively.

Operating revenues from the company's Gulf of Mexico Shallow andInland Water business segment declined 48% during the three monthsended December 31, 2001, to $59.9 million, compared to $115.2 millionduring the three months ended September 30, 2001. Segment fieldoperating income declined 92% during the three months ended December31, 2001 to $2.9 million, compared to $38.6 million during the threemonths ended September 30, 2001. Segment fleet utilization fell to 38%during the three months ended December 31, 2001, compared to 63% and67% during the three months ended September 30, 2001 and December 31,2000, respectively.

As of December 31, 2001, net debt (long-term debt plus debt duewithin one year, less cash and cash equivalents) of $4,170 million haddeclined by $260 million from net debt of $4,430 million as ofSeptember 30, 2001.

J. Michael Talbert, Chief Executive Officer of Transocean SedcoForex Inc., stated, \"During the fourth quarter of 2001, ourInternational and U.S. Floater Contract Drilling Services businesssegment experienced higher average utilization and dayrates whencompared to the third quarter of 2001. However, segment profitabilitydeclined as operating and maintenance expenses increased compared withthe third quarter, which benefited from $13.6 million in acceleratedamortization of deferred gain relating to the semisubmersible rig, theDrill Star. In addition, operating results within our U.S. Shallow andInland Water business segment continued to decline as lower averagenatural gas prices and reduced customer spending levels sentutilization and average dayrates among our jackup rigs to their lowestlevel for the year.\"

Talbert added, \"As we enter 2002, some regions requiringsemisubmersibles and drillships, or floaters, are displaying signs ofweakening demand as operators reassess exploration and productionspending plans against the risk of increased volatility in crude oilprices. In the U.S. Gulf of Mexico mid-water and deepwater marketsegments, dayrates have begun to soften as drilling rig availabilityhas increased. Consequently, we recently signed a contract for thedeepwater drillship Discoverer 534 for work offshore India. The rig iscurrently mobilizing to India from the U.S. Gulf of Mexico and isexpected to begin drilling by April 2002. In the U.K. sector of theNorth Sea, the seasonal decline in utilization, particularly amongsemisubmersibles, has encouraged us to mobilize the semisubmersiblerig Sovereign Explorer to West Africa for a one-year contract offshoreEquatorial Guinea, expected to commence during March 2002. In Norway,demand for rigs is continuing to soften as production-related drillingprograms and exploration activity decline. The Transocean Arctic, oneof our high-specification semisubmersible rigs operating in Norway, isexpected to become idle in February 2002, with no additional workvisible in the next three to six months. In contrast to the floatermarket, the international jackup market remains stable, particularlyin the West Africa, Middle East and Southeast Asia regions.

Prospects for an immediate recovery within our U.S.-based jackuprig fleet are currently limited. Natural gas storage levels areapproximately 76% higher than levels seen at this time one year ago asunseasonably warm weather persists in the U.S., keeping natural gasprices depressed and development of shallow water drilling prospectsuncertain through the first half of 2002. The actively marketedportion of our U.S.-based jackup fleet has been reduced to 17 rigs atpresent from 25 rigs at mid-year 2001 in an effort to limit operatingcosts. Despite the weak drilling environment created by decliningnatural gas prices, the performance of our inland drilling barge fleethas improved in early 2002 as utilization and dayrates have benefitedfrom an increasing level of operator interest in deep gas drilling.\"

In closing, Talbert remarked on the year just completed, stating,\"As a company, we achieved a number of goals during 2001. The January2001 closing of our merger with R&B Falcon expanded our offshoredrilling fleet, providing unprecedented global presence, fleetcapabilities and improved marketing and technical support in most ofthe world's offshore drilling locations. Substantial progress was madeover the year in integrating approximately 15,000 employees from theformer Transocean Offshore, Sedco Forex and R&B Falcon companies, toform a coordinated base of knowledge and skill with common goals andcorporate values. In addition, delivery of five newly constructedultra-deepwater drilling rigs completed a five-year, approximately $5billion capital expansion program which saw 15 technically advancedrigs added to the company's deepwater fleet. Following the conclusionof this program, capital expenditure levels declined while operatingcash flow improved, resulting in a $420 million reduction in net debtsince February 28, 2001. These accomplishments, along with financialsuccesses such as the issuance of $1.7 billion in public debt tofinance the retirement of R&B Falcon high yield notes at substantiallylower interest rates, have positioned Transocean Sedco Forex tocompete more effectively in the global offshore drilling market andshould enhance the company's long-term financial position.\"

Statements regarding future oil and gas prices, exploration andproduction spending, drilling market conditions, rig demand, date ofcommencement of drilling contracts, prospects for recovery for theU.S. jackup market, dayrates, shallow water prospects, effect ofaccomplishments and financial successes, as well as any otherstatements that are not historical facts in this release, areforward-looking statements that involve certain risks, uncertaintiesand assumptions. These include but are not limited to the future priceof oil and gas, demand for rigs, operating hazards and delays, risksassociated with international operations, actions by customers andother third parties, competition, risks of drilling contractterminations or suspensions and other factors detailed in thecompany's most recent Form 10-Q and Form 10-K and other filings withthe Securities and Exchange Commission. Should one or more of theserisks or uncertainties materialize, or should underlying assumptionsprove incorrect, actual results may vary materially from thoseindicated.

Conference Call Information

The company will conduct a teleconference call at 10:00 a.m. ESTon February 5, 2002. Individuals who wish to participate in theteleconference call may dial 719/457-2657 and refer to confirmationcode 678175. It is recommended that participants dial in five to 10minutes prior to the scheduled start time of the call.

In addition, the conference call will be simulcast through alisten-only broadcast over the Internet and can be accessed by loggingon to the company's Worldwide Web address at www.deepwater.com andselecting \"Investor Relations.\" It may also be accessed via theWorldwide Web at www.CompanyBoardroom.com by typing in the company'sNYSE trading symbol, \"RIG.\"

A telephonic replay of the conference call should be availableafter 1:00 p.m. EST on February 5 and can be accessed by dialing719/457-0820 and referring to the passcode 678175. Also, a replay willbe available through the Internet and can be accessed by visitingeither of the above-referenced Worldwide Web addresses. Both replayoptions will be available for approximately 30 days.

Monthly Fleet Update Information

Drilling rig status and contract information on Transocean SedcoForex's offshore drilling fleet has been condensed into two reportstitled \"Monthly Fleet Update\" and \"Monthly Fleet Update - Jackups andBarges\" which are available through the company's Website atwww.deepwater.com. The reports are located in the \"InvestorRelations/Financial Reports\" section of the Website. The reports willalso be available through a free monthly email distribution. To beadded to the email distribution, please contact Jeffrey L. Chastain,Vice President of Investor Relations and Communications, atjchastain@houston.deepwater.com or at fax number 713/232-7031.

Transocean Sedco Forex Inc. is the world's largest offshoredrilling contractor with more than 160 fully or partially owned oroperated mobile offshore drilling units, inland drilling barges andother assets utilized in the support of offshore drilling activitiesworldwide. The company's mobile offshore drilling fleet is consideredone of the most modern and versatile in the world with 31high-specification semisubmersibles and drillships, 29 othersemisubmersibles and one drillship (other floaters), and 54 jackupdrilling rigs, of which 28 are located in the U.S. Gulf of Mexico.Transocean Sedco Forex specializes in technically demanding segmentsof the offshore drilling business, including industry-leadingpositions in deepwater and harsh environment drilling services. With acurrent equity market capitalization in excess of $9 billion, thecompany's ordinary shares are traded on the New York Stock Exchangeunder the symbol \"RIG.\"

             TRANSOCEAN SEDCO FOREX INC. AND SUBSIDIARIES                 CONSOLIDATED STATEMENTS OF OPERATIONS                      Three Months Ended        Twelve Months Ended                          December 31,              December 31,                      ------------------        -------------------                       2001         2000        2001         2000                      ------       ------      ------       ------                          (In millions, except per share data)Operating Revenues    $747.6       $314.9     $2,820.1     $1,229.5Costs and Expenses Operating and  maintenance          439.8        250.6      1,603.3        812.6 Depreciation          121.8         56.8        470.1        230.6 Goodwill  amortization          41.5          8.9        154.9         28.9 General and  administrative        14.0         10.5         57.9         42.1                       617.1        326.8      2,286.2      1,114.2Impairment Loss on Long Lived Assets      40.4           --         40.4           --Gain from Sale of Assets, net            27.5          4.2         56.5         17.8Operating Income (Loss)                117.6         (7.7)       550.0        133.1Other Income (Expense), net Equity in earnings  of joint ventures      4.5          1.8         16.5          9.4 Interest income         5.0          1.6         18.7          6.2 Interest expense,  net of amounts  capitalized          (59.1)        (0.9)      (223.9)        (3.0) Other, net              1.2         (2.6)        (0.8)        (1.3)                       (48.4)        (0.1)      (189.5)        11.3Income (Loss) Before Income Taxes, Minority Interest and Extraordinary Items                  69.2         (7.8)       360.5        144.4Income Tax Expense      10.8          1.3         85.7         36.7Minority Interest        0.5          0.1          2.9          0.6Income (Loss) Before Extraordinary Items                  57.9         (9.2)       271.9        107.1Gain (Loss) on Extraordinary Items, net of tax      (1.9)          --        (19.3)         1.4Net Income (Loss)      $56.0        $(9.2)      $252.6       $108.5Basic Earnings Per Share Income (Loss)  Before  Extraordinary  Items                 $0.18       $(0.04)       $0.88        $0.51 Gain (Loss) on  Extraordinary  Items, net of tax        --           --        (0.06)        0.01 Net Income (Loss)      $0.18       $(0.04)       $0.82        $0.52Diluted Earnings Per Share Income (Loss)  Before  Extraordinary  Items                 $0.17       $(0.04)       $0.86        $0.50 Gain (Loss) on  Extraordinary  Items, net of tax        --           --        (0.06)        0.01 Net Income (Loss)      $0.17       $(0.04)       $0.80        $0.51Weighted Average Shares Outstanding Basic                  318.7        210.6        309.2        210.4 Diluted                322.7        210.6        314.8        211.7    On January 31, 2001, the Company completed a merger transactionwith R&B Falcon Corporation. As a result of the merger, R&B FalconCorporation became an indirect wholly owned subsidiary of the Company.The Company accounted for the merger using the purchase method ofaccounting with the Company treated as the accounting acquiror. Theabove Consolidated Statement of Operations for the twelve months endedDecember 31, 2001, includes eleven months of operating results of R&BFalcon Corporation.             TRANSOCEAN SEDCO FOREX INC. AND SUBSIDIARIES                      CONSOLIDATED BALANCE SHEETS                   (In millions, except share data)                                                December 31,                                         ------------------------                                          2001              2000                                         ------            ------                            ASSETSCash and Cash Equivalents                $853.4             $34.5Accounts Receivable   Trade                                  602.9             268.8   Other                                   72.8              27.1Materials and Supplies                    158.8              89.5Deferred Income Taxes                      21.0              18.1Other Current Assets                       27.9              10.1                                       --------          --------   Total Current Assets                 1,736.8             448.1                                       --------          --------Property and Equipment                 10,081.4           6,003.2Less Accumulated Depreciation           1,713.3           1,308.2                                       --------          --------   Property and Equipment, net          8,368.1           4,695.0                                       --------          --------Goodwill, net                           6,466.7           1,037.9Investments in and Advances to Joint Ventures                         28.2             105.9Other Assets                              420.0              71.9                                       --------          --------   Total Assets                       $17,019.8          $6,358.8                                       ========          ========               LIABILITIES AND SHAREHOLDERS' EQUITYAccounts Payable                         $188.4            $135.6Accrued Income Taxes                      188.2             113.1Debt Due Within One Year                  484.4              23.1Deferred Gain on Sale of Rigs                --              57.7Other Current Liabilities                 283.4             165.7                                       --------          --------   Total Current Liabilities            1,144.4             495.2                                       --------          --------Long-Term Debt                          4,539.4           1,430.3Deferred Income Taxes                     317.1             359.2Deferred Gain on Sale of Rigs                --              12.1Other Long-Term Liabilities               108.6              57.9                                       --------          --------   Total Long-Term Liabilities          4,965.1           1,859.5                                       --------          --------Commitments and ContingenciesSHAREHOLDERS' EQUITYPreference 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, 318,816,035 and 210,710,363 shares issued and outstanding at December 31, 2001 and 2000, respectively                3.2               2.1Additional Paid-in Capital             10,611.7           3,918.7Accumulated Other Comprehensive Income                      (2.3)               --Retained Earnings                         297.7              83.3                                       --------          --------   Total Shareholders' Equity          10,910.3           4,004.1                                       --------          --------   Total Liabilities and    Shareholders' Equity              $17,019.8          $6,358.8                                       ========          ========                      Transocean Sedco Forex Inc.                      Fleet Operating Statistics                            Operating Revenues ($ Millions)                    -------------------------------------------------                        Three Months Ended          Twelve MonthsInternational and                                  Ended December 31, U.S. Floater       ---------------------------    ------------------ Contract           Dec. 31,   Sept. 30, Dec. 31, Drilling Services    2001       2001    2000 (1) 2001 (1)   2000 (1) Segment:           --------   --------- -------- --------   -------- High-Specification  Floaters           $354.7    $341.5    $265.4   $1,289.4     $909.8 Other Floaters      $176.9    $160.6    $119.5     $611.2     $508.6 Jackups - Non-U.S   $112.5     $93.3     $69.5     $352.8     $220.3 Other                $43.6     $59.6     $77.7     $263.3     $340.8Segment Total        $687.7    $655.0    $532.1   $2,516.7   $1,979.5Gulf of Mexico Shallow and Inland Water Segment: Jackups and  Submersibles        $24.4     $59.6     $69.7     $253.1     $190.1 Inland Barges        $32.0     $53.7     $39.5     $171.7     $116.4 Other                 $3.5      $1.9      $3.1       $4.5       $6.4Segment Total         $59.9    $115.2    $112.3     $429.3     $312.9Total Company        $747.6    $770.2    $644.4   $2,946.0   $2,292.4                                   Average Dayrates                   ---------------------------------------------------                       Three Months Ended            Twelve MonthsInternational and                                  Ended December 31, U.S. Floater      -----------------------------   ------------------- Contract          Dec. 31,  Sept. 30,  Dec. 31, Drilling Services  2001       2001     2000 (1)   2001 (1)   2000 (1) Segment:          --------  ---------  --------   --------   -------- High-Specification  Floaters         $145,000  $144,500  $124,300   $141,800   $120,000 Other Floaters     $71,100   $66,600   $56,000    $65,100    $60,000 Jackups - Non-U.S  $52,800   $49,200   $37,100    $46,500    $32,900 Other              $41,300   $42,500   $41,400    $39,900    $40,900Segment Total       $88,200   $86,600   $72,000    $83,600    $70,100Gulf of Mexico Shallow and Inland Water Segment: Jackups and  Submersibles      $30,600   $37,700   $32,000    $36,800    $26,500 Inland Barges      $22,800   $24,400   $20,000    $22,400    $18,500Segment Total       $25,600   $30,000   $26,300    $29,200    $22,800Total Mobile Offshore Drilling Fleet              $74,000   $66,900   $54,200    $64,900    $53,200                                        Utilization                       -----------------------------------------------                           Three Months Ended        Twelve Months                                                    Ended December 31,International and U.S. ---------------------------- ------------------ Floater Contract      Dec. 31,  Sept. 30,  Dec. 31, Drilling Services      2001       2001     2000 (1) 2001 (1) 2000 (1) Segment:              --------  ---------  -------- -------- -------- High-Specification  Floaters               90%       87%       92%        86%        89% Other Floaters          89%       82%       70%        81%        70% Jackups - Non-U.S       89%       84%       86%        84%        79% Other                   54%       48%       47%        52%        47%Segment Total            86%       81%       78%        81%        75%Gulf of Mexico Shallow and Inland Water Segment: Jackups and  Submersibles           27%       52%       70%        57%        58% Inland Barges           49%       75%       65%        66%        52%Segment Total            38%       63%       67%        61%        55%Total Mobile Offshore Drilling Fleet                   67%       73%       74%        73%        66%(1) Transocean Sedco Forex completed a merger transaction with R&B    Falcon on January 31, 2001. Therefore, operating revenues, average    dayrates and utilization for the three months ended December 31,    2000 and twelve months ended December 31, 2001 and 2000 are stated    as pro forma results based on the combined fleet of Transocean    Sedco Forex and R&B Falcon.

--30--EB/ho*

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