Transocean Inc. to Report Net Loss for Second Quarter 2003
HOUSTON, Jul 17, 2003 (BUSINESS WIRE) -- Transocean Inc.(NYSE:RIG) today announced that it expects to report a net loss forthe three months ended June 30, 2003 of between $0.13 and $0.15 perdiluted share. Excluding the impact of the $14 million ($0.04 perdiluted share) after-tax loss from the early retirement of debt and$26 million ($0.08 per diluted share) of after-tax charges associatedwith asset impairments described below as well as the effect of a $15million ($0.04 per diluted share) favorable resolution of a non-U.S.income tax liability, the company anticipates results for the quarterto be a net loss of between $0.05 and $0.07 per diluted share.
The company reported that in addition to a previously announcedafter-tax loss of approximately $14 million resulting from the earlyretirement of debt, it expects to recognize an approximate $14 millionafter-tax charge relating to the impairment of a note receivable fromDelta Towing Holdings, LLC, the U.S. inland marine and shallow watersupport vessel business in which the company owns a 25% equityinterest. Also, quarterly results are expected to includeapproximately $12 million of after-tax charges pertaining to theimpairment of five jackup rigs belonging to the company's Gulf ofMexico Shallow and Inland Water business segment, one mid-watersemisubmersible rig and one self-erecting tender rig following thedecision to remove the units from drilling service.
The company also reported that its deepwater drillship DiscovererEnterprise has recommenced operations following a riser separationincident on May 21, 2003. Inspections of seven other Transoceandeepwater drillships utilizing the same type of riser have beencompleted, with minimal downtime experienced on the rigs for theseinspections. The company is exploring whether modifications of theriser systems employed on these eight deepwater drillships arenecessary. If modifications are required, they are currently expectedto be made over the balance of 2003 and into early 2004 at a totalrepair cost approximating $10 million.
The riser separation incident on the Discoverer Enterprise,combined with unexpected downtime on other rigs and the estimated $10million loss of revenue from the Nigerian labor strike, is expected toresult in a decline in total revenues in the second quarter of 2003 toapproximately $604 million compared to $616 million reported in thefirst quarter of 2003. In addition, operating costs during the secondquarter are expected to exceed the previously announced guidance of$400 million to $410 million largely due to the unexpected costs ofapproximately $15 million associated with the Discoverer Enterpriseriser incident, the labor strike in Nigeria and the well controlincident on inland barge Rig 62.
Transocean further stated that it anticipates a difficult earningsenvironment for the remainder of 2003 driven mainly by lower thanexpected profitability within the company's Gulf of Mexico Shallow andInland Water jackup and barge fleet and diminishing opportunities forsemisubmersibles and drillships in the North Sea, Brazil and SoutheastAsia. The company has previously noted that a decrease in earnings cansubstantially increase its effective tax rate due in part to theeffect of operations in countries with revenue-based taxes. Thedeterioration in 2003 profitability is now expected to result in aneffective tax rate of approximately 38% on 2003 earnings, excludingthe impact of the above-described asset impairments and debtretirement loss. The application of the higher rate to earnings forthe first six months of 2003 is expected to result in a charge forincome taxes in the second quarter significantly higher thanpreviously anticipated, offset by the tax benefits relating to theasset impairments, debt retirement loss and favorable resolution ofthe non-U.S. income tax liability.
Transocean will report earnings for the six months ended June 30,2003 on the morning of Tuesday, July 29, 2003. Following the earningsreport, expected to be released prior to the commencement of tradingin the United States, the company will conduct a teleconference callat 10:00 a.m. EDT on July 29. Individuals who wish to participate inthe teleconference call should dial 212-329-1455 approximately five to10 minutes 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 loggingonto 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'sNew York Stock Exchange trading symbol, \"RIG.\"
A telephonic replay of the conference call should be availableafter 1:00 p.m. EDT on July 29 and can be accessed by dialing303-590-3000 and referring to the passcode 544298. 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.
Statements regarding expected earnings per share and otherresults, loss on the early retirement of debt, impairments on theDelta Towing note receivable, five jackup rigs, one mid-watersemisubmersible and one self-erecting tender removed from drillingservice, loss resulting from the Rig 62 well control incident, timingand cost of any modifications to drilling risers, decline in revenues,increased operating costs, earnings environment and deterioration inprofitability for the remainder of 2003, effective tax rate, as wellas any other statements that are not historical facts in this releaseare forward-looking statements that involve certain risks,uncertainties and assumptions. These include but are not limited tooperating hazards and delays, risks associated with internationaloperations, results of investigations regarding riser, actions bycustomers and other third parties, the future price of oil and gas andother factors detailed in the company's most recent Form 10-K andother filings with the Securities and Exchange Commission. Should oneor more of these risks or uncertainties materialize, or shouldunderlying assumptions prove incorrect, actual results may varymaterially from those indicated.
Transocean Inc. is the world's largest offshore drillingcontractor with more than 160 full or partially owned and managedmobile offshore drilling units, inland drilling barges and otherassets 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 13fifth-generation semisubmersibles and drillships, 15 other deepwatersemisubmersibles and drillships, 31 mid-water semisubmersibles anddrillships and 50 jackup drilling rigs. Transocean Inc. specializes intechnically demanding segments of the offshore drilling business,including industry-leading positions in deepwater and harshenvironment drilling services. With a current equity marketcapitalization in excess of $6 billion, the company's ordinary sharesare traded on the New York Stock Exchange under the symbol \"RIG.\"
SOURCE: Transocean Inc.Transocean Inc., Houston
Jeffrey L. Chastain, 713-232-7551
Guy A. Cantwell, 713-232-7647