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Transocean Inc. Reports Second Quarter 2004 Results

July 27, 2004

HOUSTON--(BUSINESS WIRE)--July 27, 2004--Transocean Inc. (NYSE:RIG) today reported net income for the three months ended June 30,2004 of $48.0 million, or $0.15 per diluted share, on revenues of$633.2 million. The results compare to a net loss of $44.5 million, or$0.14 per diluted share, on revenues of $603.9 million for thecorresponding three months in 2003. Net income adjusted (1) for thesale of the semisubmersible rig Sedco 602 was $26.4 million, or $0.08per diluted share, for the three months ended June 30, 2004. Thiscompares to a net loss of $19.7 million, or $0.06 per diluted share,for the corresponding three months in 2003, after adjustment for earlyretirement of debt, asset impairment charges and the favorableresolution of an existing tax liability.

For the six months ended June 30, 2004, net income totaled $70.7million, or $0.22 per diluted share, on revenues of $1,285.2 million,compared to net income of $2.7 million, or $0.01 per diluted share, onrevenues of $1,219.9 million for the six months ended June 30, 2003.Net income adjusted for the sale of the semisubmersible rig Sedco 602,the early retirement of debt and TODCO initial public offering(IPO)-related items, was $75.9 million, or $0.23 per diluted share,for the six months ended June 30, 2004. For the six months ended June30, 2003, net income was $28.5 million, or $0.09 per diluted share,after adjustment for early retirement of debt, asset impairmentcharges and the favorable resolution of an existing tax liability.

Transocean Drilling Segment - Revenues for the three months endedJune 30, 2004 declined 4% to $552.5 million, compared to revenues of$578.2 million during the three months ended March 31, 2004. Thedecline was due in part to a reduction in integrated services revenueand lower average utilization among the company's High SpecificationFloaters. The lower utilization was most pronounced in the company'sOther Deepwater Floaters where five units experienced fewer days oncontract compared to the previous three months in 2004, due chiefly toplanned shipyard programs and idle time between contracts. Operatingincome before general and administrative expense (2) was $127.2million and field operating income (2) (defined as revenues lessoperating and maintenance expenses) was $214.4 million for the threemonths ended June 30, 2004. Both figures declined relative to levelsfor the three months ended March 31, 2004 of $178.2 million and $245.0million, respectively, due primarily to lower revenues and, in thecase of operating income before general and administrative expenses,the absence of the gain recorded in the first quarter in connectionwith the TODCO IPO. Average fleet utilization and dayrates for thethree months ended June 30, 2004 were 68% and $89,100, respectively,compared to 69% and $90,200, respectively, for the three months endedMarch 31, 2004.

The company also provided an update on the labor strike in Norwayand the fire on jackup rig Trident 20, two previously reported eventsthat occurred early in the third quarter of 2004. A labor strike inNorway, which was called on July 1 by one of three unions representingoffshore workers in the country, has disrupted operations onTransocean's active Norwegian fleet, comprised of the semisubmersiblesPolar Pioneer, Transocean Leader and Transocean Searcher. The threerigs are expected to complete the process of securing well operationsduring the week and rig headcounts will be reduced to a minimum safelevel. The company has a contract for the semisubmersible rigTransocean Arctic with Statoil which was expected to commence byAugust 15, 2004, but could now also be affected by the strike. Thecompany cannot currently estimate the possible length of the strikenor its financial impact.

In addition, an engine room fire aboard the jackup rig Trident 20,which occurred on July 3, is now expected to idle the rig forapproximately four months. The rig has a three-well contract providingdrilling services offshore Turkmenistan. The contract has beensuspended by the customer to allow time for rig repairs and thecompany expects to resume operations upon completion of the repairs.The company is in the process of completing an estimate of theexpected costs to repair the rig.

These events, coupled with expected downtime due to rigmobilizations, including the drillship Deepwater Discovery to WestAfrica, the semisubmersible rigs Jack Bates and Actinia to Australiaand India, respectively, and jackup rigs Trident VI and J.T. Angel toSoutheast Asia, as well as planned shipyard programs on thesemisubmersible rigs Polar Pioneer and Sedco 709, will have a negativeimpact on revenues and profitability in the third quarter of 2004relative to revenue and profitability levels in the second quarter of2004.

While third quarter financial performance will decline for thereasons stated, there are encouraging indications of growing customerinterest and an improving offshore drilling environment. Thisimproving level of interest is supported by recent contract signingsinvolving the company's High Specification Floaters, including atwo-year contract on the semisubmersible rig P.B. Loyd, Jr. in theUK-sector of the North Sea, an estimated 210-day program for thesemisubmersible rig Cajun Express in the U.S. Gulf of Mexico, anestimated 120-day contract for the drillship Deepwater Discovery inWest Africa and the reactivation of the semisubmersible rig SovereignExplorer for an estimated 320-day contract in Trinidad and Venezuela.In addition, customers have recently issued two tenders for deepwaterrigs in India and the Black Sea. Although customer interest for HighSpecification rigs appears to be building, the timing of some drillingprograms remains uncertain, leaving some rigs at risk of downtime.

The company's Other Floaters are experiencing relatively stablebusiness conditions, although the sector remains underutilized in mostregions. Improving conditions are evident in the North Sea region,where the company currently has contracts in place on four units towork through the traditionally weak winter period, and expects furtherimprovement in the region during 2005. Finally, customer demand forthe company's Jackup Rig fleet remains strong, particularly inSoutheast Asia and the Middle East. The company plans to mobilize twojackup rigs currently located in West Africa and another jackup rig inIndia to Southeast Asia during the third quarter of 2004. Two of thethree units are expected to begin drilling assignments during thefourth quarter of 2004.

Currently, 60% of the company's remaining fleet days in 2004 arecommitted to contracts, including 71% of the remaining HighSpecification Floater fleet days. In 2005, 34% of the fleet days arecurrently committed to contracts, with 48% of the High SpecificationFloater fleet committed.

TODCO Segment - Revenues for the three months ended June 30, 2004totaled $80.7 million. The segment reported an operating loss beforegeneral and administrative expenses (2) of $9.4 million and fieldoperating income (2) of $12.6 million for the three months ended June30, 2004.

Effective Tax Rate -The increase in the company's effective taxrate (3) to 34.7% for the six months ended June 30, 2004 from 27.3% inthe first quarter was primarily due to an increase in the taxvaluation allowance established at the time of the TODCO IPO (a 2.6percentage point increase), international tax dispute developments (aone percentage point increase), and changes in the expected amount andgeographical concentration of taxable income for the remainder of 2004(which accounts for the remainder of the increase). The companycurrently estimates its effective tax rate for the year to be 34.7%.The final effective tax rate for the year could vary significantlyfrom current expectations.

Liquidity - Cash flow from operations totaled $280.6 million forthe six months ended June 30, 2004. Net debt (4) declined 13% to$2,754.8 million at June 30, 2004 compared to $3,184.1 million atDecember 31, 2003.

Conference Call Information

Transocean will conduct a teleconference call at 10:00 a.m. ET onJuly 27, 2004. To participate, dial 303-275-2170 approximately five to10 minutes prior to the scheduled start time of the call.

In addition, the conference call will be simultaneously broadcastover the Internet in a listen-only mode and can be accessed by loggingonto the company's website at www.deepwater.com and selecting\"Investor Relations.\" It may also be accessed via the Internet atwww.CompanyBoardroom.com by typing in the company's New York StockExchange trading symbol, \"RIG.\"

A telephonic replay of the conference call should be availableafter 1:00 p.m. ET on July 27 and can be accessed by dialing303-590-3000 and referring to the passcode 11002859. Also, a replaywill be available through the Internet and can be accessed by visitingeither of the above-referenced Worldwide Web addresses.

TODCO, a publicly traded company in which Transocean owns amajority interest, will also conduct a teleconference call at 9:00a.m. ET on July 27, 2004. To participate, dial 877-692-2086approximately five to 10 minutes prior to the scheduled start time ofthe call. TODCO's conference call will be simultaneously broadcastover the Internet in a listen-only mode and can be accessed by loggingonto the TODCO website at www.theoffshoredrillingcompany.com. For moreinformation, see TODCO's website.

Monthly Fleet Update Information

Drilling rig status and contract information on Transocean Inc.'soffshore drilling fleet has been condensed into a report titled\"Monthly Fleet Update,\" which is available through the company'swebsite at www.deepwater.com. The report is located in the \"InvestorRelations/Financial Reports\" section of the website. By subscribing tothe Transocean Financial Report Alert, you will be immediatelynotified when new postings are made to this page by an automatede-mail that will provide a link directly to the page that has beenupdated. Shareholders and other interested parties are invited to signup for this service.

Forward-Looking Disclaimer

Statements regarding future opportunities and outlook for thecompany, including the company's Transocean Drilling business segment,involving dayrates, contract duration, rig utilization, drillingactivity, contract opportunities, revenues, profitability, theduration and financial impact of a labor strike in Norway, rigmobilizations, the Trident 20 repair time and contract status, theeffective tax rate, as well as any other statements that are nothistorical facts in this release, are forward-looking statements thatinvolve certain risks, uncertainties and assumptions. These includebut are not limited to operating hazards and delays, risks associatedwith international operations, effect of strike and other laborrelations issues, effect of fire, future financial results, 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 a fleet of 95 mobile offshore drilling units,excluding the 70-rig fleet of TODCO, a publicly traded drillingcompany in which Transocean Inc. owns a majority interest. Thecompany's mobile offshore drilling fleet, consisting of a large numberof high-specification deepwater and harsh environment drilling units,is considered one of the most modern and versatile in the world due toits emphasis on technically demanding segments of the offshoredrilling business. The company's fleet consists of 32High-Specification Floaters (semisubmersibles and drillships), 25Other Floaters, 26 Jackup Rigs and other assets utilized in thesupport of offshore drilling activities worldwide. With a currentequity market capitalization in excess of $8 billion, TransoceanInc.'s ordinary shares are traded on the New York Stock Exchange underthe symbol \"RIG.\"

   (1) Net income adjusted for certain items, a non-GAAP measure,       is computed by subtracting from or adding to net income, a       GAAP measure, items that occurred during the three months       ended June 30, 2004 and are considered by management to be       outside the normal course of operations. A reconciliation       for the periods reported may be found in the accompanying       schedule titled Non-GAAP Financial Measures and       Reconciliations - Adjusted Net Income and Diluted Earnings       Per Share.   (2) For a reconciliation of segment operating income before       general and administrative expense to field operating       income, see the accompanying schedule titled Non-GAAP       Financial Measures and Reconciliations - Operating Income       (Loss) Before General and Administrative Expense to Field       Operating Income (Loss) by Segment.   (3) For the analysis of the effective tax rate, see the       accompanying schedule titled Effective Tax Rate Analysis.   (4) Net Debt is a non-GAAP measure defined as total debt less       cash and cash equivalents.
                   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,                                   ---------------   ---------------                                     2004    2003     2004     2003                                   ------- -------   ------- -------Operating Revenues Contract drilling revenues        $584.9  $574.7  $1,182.4  $1,162.2 Other revenues                      48.3    29.2     102.8      57.7                                    633.2   603.9   1,285.2   1,219.9Costs and Expenses  Operating and maintenance         406.2   426.5     818.6     800.6  Depreciation                      133.0   127.5     264.5     254.3  General and administrative         14.0    14.9      29.1      28.8  Impairment loss on long-lived   assets                               -    15.8         -      16.8  Gain from sale of assets, net     (23.8)   (0.6)    (27.6)     (2.0)  Gain from TODCO initial public   offering                             -       -     (39.4)        -                                    529.4   584.1   1,045.2   1,098.5Operating Income                    103.8    19.8     240.0     121.4Other Income (Expense), net  Equity in earnings of joint   ventures                           3.7     1.8       6.0       5.4  Interest income                     1.9     5.8       4.0      12.7  Interest expense                  (42.6)  (52.8)    (90.0)   (105.4)  Loss on retirement of debt            -   (15.7)    (28.1)    (15.7)  Impairment loss on note   receivable from related party        -   (21.3)        -     (21.3)  Other, net                         (1.1)   (2.7)      0.3      (3.3)                                    (38.1)  (84.9)   (107.8)   (127.6)Income (Loss) Before Income Taxes and Minority Interest               65.7   (65.1)    132.2      (6.2)Income Tax Expense (Benefit)         19.9   (20.8)     67.9      (9.0)Minority Interest                    (2.2)    0.2      (6.4)      0.1Net Income (Loss)                   $48.0  $(44.5)    $70.7      $2.7Earnings (Loss) Per Share  Basic                             $0.15  $(0.14)    $0.22     $0.01  Diluted                           $0.15  $(0.14)    $0.22     $0.01Weighted Average Shares Outstanding   Basic                            320.8   319.8     320.7     319.7   Diluted                          324.1   319.8     324.2     321.5                   TRANSOCEAN INC. AND SUBSIDIARIES                 CONDENSED CONSOLIDATED BALANCE SHEETS                   (In millions, except share data)                                                 June 30,    Dec. 31,                                               -----------  ----------                                                  2004         2003                                               -----------  ----------                                               (Unaudited)                                ASSETSCash and Cash Equivalents                          $322.1      $474.0Accounts Receivable, net   Trade                                            481.9       435.3   Other                                             30.2        45.0Materials and Supplies, net                         151.9       152.0Deferred Income Taxes                                39.2        41.0Other Current Assets                                 47.2        31.6Total Current Assets                              1,072.5     1,178.9Property and Equipment                           10,642.3    10,673.0Less Accumulated Depreciation                     2,863.5     2,663.4Property and Equipment, net                       7,778.8     8,009.6Goodwill                                          2,232.0     2,230.8Investments in and Advances to Joint Ventures         6.8         5.5Deferred Income Taxes, net                           28.2        28.2Other Assets                                        217.4       209.6   Total Assets                                 $11,335.7   $11,662.6                 LIABILITIES AND SHAREHOLDERS' EQUITYAccounts Payable                                   $157.3      $146.1Accrued Income Taxes                                 54.7        57.2Debt Due Within One Year                            398.9        45.8Other Current Liabilities                           260.9       262.0   Total Current Liabilities                        871.8       511.1Long-Term Debt                                    2,678.0     3,612.3Deferred Income Taxes                                69.2        42.8Other Long-Term Liabilities                         310.1       299.4   Total Long-Term Liabilities                    3,057.3     3,954.5Commitments and ContingenciesMinority Interest                                   120.8         4.4Preference 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, 320,819,763 and 319,926,500  shares issued and outstanding at June 30, 2004   and December 31, 2003, respectively                3.2         3.2Additional Paid-in Capital                       10,666.1    10,643.8Accumulated Other Comprehensive Loss                (20.0)      (20.2)Retained Deficit                                 (3,363.5)   (3,434.2)   Total Shareholders' Equity                     7,285.8     7,192.6   Total Liabilities and Shareholders' Equity   $11,335.7   $11,662.6                   TRANSOCEAN INC. AND SUBSIDIARIES            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                             (In millions)                              (Unaudited)                                      Three Months       Six Months                                          Ended             Ended                                        June 30,           June 30,                                     ---------------   ---------------                                      2004     2003     2004     2003                                     ------- -------   ------- -------Cash Flows from Operating Activities   Net income (loss)                  $48.0   $(44.5)  $70.7     $2.7   Adjustments to reconcile net    income (loss) to     net cash provided by operating      activities    Depreciation                      133.0    127.5   264.5    254.3    Deferred income taxes              (3.3)   (87.1)   28.0    (59.5)    Equity in earnings of joint     ventures                          (3.7)    (1.8)   (6.0)    (5.4)    Net (gain) loss from disposal of     assets                           (23.1)     8.5   (25.0)     7.8    Gain from TODCO initial public     offering                             -        -   (39.4)       -    Loss on retirement of debt            -     15.7    28.1     15.7    Impairment loss on long-lived     assets                               -     15.8       -     16.8    Impairment loss on note     receivable from related party        -     21.3       -     21.3    Amortization of debt-related     discounts/premiums, fair value     adjustments and issue costs, net  (4.9)    (6.1)  (12.5)    (7.9)    Deferred income, net               17.4     (8.0)   14.1     (1.6)    Deferred expenses, net            (10.8)     7.5   (12.7)     2.7    Other long-term liabilities         4.7      6.6     6.9     13.5    Other, net                          3.9      7.3     9.2      8.0 Changes in operating assets and  liabilities      Accounts receivable             (61.6)    34.0   (31.8)    51.6      Accounts payable and other       current liabilities            (23.5)   (44.0)    0.1     (1.6)      Income taxes       receivable/payable, net          4.4     50.3     2.0      9.6      Other current assets              8.9     11.2   (15.6)   (23.3)Net Cash Provided by Operating Activities                            89.4    114.2   280.6    304.7Cash Flows from Investing Activities Capital expenditures                 (37.3)   (25.8)  (55.8)   (50.2) Note issued to related party             -    (46.1)      -    (46.1) Payments received from note issued  to related party                        -      0.8       -      0.8 Proceeds from disposal of assets,  net                                  31.5      1.0    42.0      3.2 Deepwater Drilling II L.L.C.'s cash  acquired, net of cash paid              -     18.1       -     18.1 Proceeds from TODCO initial public  offering                                -        -   155.7        - Joint ventures and other  investments, net                      3.2      0.8     4.7      2.2Net Cash Provided by (Used in) Investing Activities                  (2.6)   (51.2)  146.6    (72.0)Cash Flows from Financing Activities Repayments on revolving credit  agreements                         (150.0)       -  (200.0)       - Net borrowings from issuance of  debt                                    -        -     1.1        - Repayments on other debt instruments (13.6)  (871.4) (395.2)  (919.2) Cash from termination of interest  rate swaps                              -        -       -    173.5 Net proceeds from issuance of  ordinary shares under   stock-based compensation plans       1.0      0.8    15.0     11.7 Other, net                               -      1.2       -      1.1Net Cash Used in Financing Activities                          (162.6)  (869.4) (579.1)  (732.9)Net Decrease in Cash and Cash Equivalents                          (75.8)  (806.4) (151.9)  (500.2)Cash and Cash Equivalents at Beginning of Period                  397.9  1,520.4   474.0  1,214.2Cash and Cash Equivalents at End of Period                              $322.1   $714.0  $322.1   $714.0                            Transocean Inc.                      Fleet Operating Statistics                             Operating Revenues ($ Millions) (1)                      ================================================                                                     Six Months Ended                           Three Months Ended            June 30,                      ============================= ==================Transocean Drilling   June 30,  March 31, June 30, Segment:               2004      2004      2003      2004      2003                      ========= ========= ========= ========= ========Contract Drilling Revenues  High-Specification   Floaters:    Fifth-Generation     Deepwater      Floaters         $189.0    $208.5    $168.5    $397.5    $344.2    Other Deepwater     Floaters          $103.3    $108.1    $106.0    $211.4    $222.2    Other High-     Specification      Floaters          $31.5     $30.6     $31.2     $62.1     $64.5  Total High-   Specification    Floaters           $323.8    $347.2    $305.7    $671.0    $630.9  Other Floaters        $66.3     $62.7     $82.7    $129.0    $164.5  Jackups              $106.6    $101.5    $116.6    $208.1    $231.9  Other Rigs            $19.9     $24.1     $18.6     $44.0     $35.3Subtotal               $516.6    $535.5    $523.6  $1,052.1  $1,062.6Other Revenues  Client Reimbursable   Revenues             $21.4     $16.6     $23.0     $38.0     $44.6  Integrated Services   and Other            $14.5     $26.1      $1.9     $40.6      $4.0Subtotal                $35.9     $42.7     $24.9     $78.6     $48.6Segment Total          $552.5    $578.2    $548.5  $1,130.7  $1,111.2TODCO SegmentContract Drilling Revenues               $68.3     $62.0     $51.1    $130.3     $99.6Other Revenues  Client Reimbursable   Revenues              $5.6      $5.0      $4.3     $10.6      $9.1  Delta Towing           $6.8      $6.8        $-     $13.6        $-Subtotal                $12.4     $11.8      $4.3     $24.2      $9.1Segment Total           $80.7     $73.8     $55.4    $154.5    $108.7Total Company          $633.2    $652.0    $603.9  $1,285.2  $1,219.9                                  Average Dayrates  (1) (2)                     =================================================                                                     Six Months Ended                           Three Months Ended            June 30,                     ============================== ==================Transocean Drilling   June 30,  March 31, June 30, Segment:               2004      2004      2003      2004      2003                     ========== ========= ========= ========= ========  High-Specification   Floaters:    Fifth-     Generation      Deepwater       Floaters      $177,800  $191,800  $185,100  $184,900  $184,400    Other Deepwater     Floaters        $107,800  $101,300  $111,500  $104,400  $112,600    Other High-     Specification      Floaters       $115,500  $115,200  $114,400  $115,300  $118,900  Total High-   Specification    Floaters         $141,100  $143,500  $143,300  $142,300  $144,000  Other Floaters      $65,000   $62,800   $64,800   $63,900   $65,900  Jackups             $52,700   $51,400   $57,400   $52,100   $57,100  Other Rigs          $43,300   $44,200   $41,500   $43,800   $42,300Segment Total         $89,100   $90,200   $88,900   $89,700   $90,300TODCO Segment         $26,200   $25,700   $17,500   $25,900   $18,000Total Drilling Fleet  $69,600   $71,600   $65,300   $70,600   $67,100                                              Utilization (1)(2)                                         =============================                                                           Six Months                                           Three Months       Ended                                               Ended        June 30,                                         ================= ===========                                         June  March June                                          30,   31,   30,Transocean Drilling Segment:             2004  2004  2003  2004  2003                                         ===== ===== ===== ===== =====  High-Specification Floaters:   Fifth-Generation Deepwater Floaters    90%   92%   88%   91%   92%   Other Deepwater Floaters               70%   78%   70%   74%   73%   Other High-Specification Floaters      75%   73%   75%   74%   75%  Total High-Specification Floaters       79%   83%   77%   81%   80%  Other Floaters                          45%   42%   52%   44%   51%  Jackups                                 85%   83%   86%   84%   86%  Other Rigs                              46%   54%   41%   50%   38%Segment Total                             68%   69%   68%   68%   68%TODCO Segment                             41%   38%   42%   39%   40%Total Drilling Fleet                      56%   56%   57%   56%   56%   (1) Certain reclassifications have been made to prior periods to       conform to current quarter presentation.   (2) Average dayrates are defined as contract drilling revenue       earned per revenue earning day in the period and utilization       is defined as the total actual number of revenue earning days       in the period as a percentage of the total number of calendar       days in the period.                   Transocean Inc. and Subsidiaries                      Effective Tax Rate Analysis                            (in US$ 000's)                                       Three Months       Six Months                                          Ended             Ended                                  --------------------- --------------                                   June   March   June    June                                    30,    31,     30,     30,                                   2004   2004    2003    2004   2003                                  ------ ------ ------- ------- ------Income (Loss) before Income Taxes and Minority Interest            $65.7  $66.5  $(65.1) $132.2  $(6.2)Add back:TODCO IPO date stock option vesting                              -    5.6       -     5.6      -Transocean IPO date stock option vesting                              -    1.5       -     1.5      -Nigeria benefit plan restructuring                        -      -     2.6       -    2.6Impairment loss on note receivable from related party        -      -    21.3       -   21.3Impairment loss on long-lived assets                               -      -    15.8       -   16.8Loss on retirement of debt            -   28.1    15.7    28.1   15.7IPO related costs                     -      -       -       -      -Subtract:Gain on sale of Sedco 602         (21.6)     -       -   (21.6)     -Gain on TODCO IPO                     -  (39.4)      -   (39.4)     -                                  ------ ------ ------- ------- ------Adjusted Income (Loss) before Income Taxes and Minority Interest                         $44.1  $62.3   $(9.7) $106.4  $50.2Income Tax Expense (Benefit)      $19.9  $48.0  $(20.8)  $67.9  $(9.0)Subtract:Valuation allowance related to TODCO IPO                            -  (31.0)      -   (31.0)     -Nigeria benefit plan restructuring                        -      -    (0.1)      -   (0.1)Add back:Italy tax release                     -      -    14.6       -   14.6Impairment loss on note receivable from related party        -      -     7.5       -    7.5Impairment loss on long-lived assets                               -      -     4.0       -    4.0Loss on retirement of debt            -      -     1.9       -    1.9                                  ------ ------ ------- ------- ------Adjusted Income Tax Expense       $19.9  $17.0    $7.1   $36.9  $18.9Effective Tax Rate                 45.1%  27.3%  -73.2%   34.7%  37.6%                   Transocean Inc. and Subsidiaries            Non-GAAP Financial Measures and Reconciliations          Adjusted Net Income and Diluted Earnings Per Share                           (in US$ millions)                                       Three Months       Six Months                                          Ended              Ended                                   --------------------- -------------                                    June   March   June                                     30,    31,    30,      June 30,                                    2004   2004    2003   2004   2003                                   ------ ------ ------- ------ ------Adjusted Net Income (Loss)Net income (loss) as reported      $48.0  $22.7  $(44.5) $70.7   $2.7Add back:After-tax gain from sale of Sedco 602                               (21.6)     -       -  (21.6)     -After-tax gain from TODCO IPO          -  (39.4)      -  (39.4)     -Tax valuation allowance related to TODCO IPO                             -   31.0       -   31.0      -After-tax loss on retirement of debt                                  -   28.1    13.8   28.1   13.8Stock option vesting resulting from the TODCO IPO                    -    7.1       -    7.1      -After-tax impairment loss on long- lived assets                          -      -    11.8      -   12.8After-tax impairment loss on note receivable from related party         -      -    13.8      -   13.8Favorable resolution of a non-U.S. income tax liability                  -      -   (14.6)     -  (14.6)                                   ------ ------ ------- ------ ------Net income (loss) as adjusted      $26.4  $49.5  $(19.7) $75.9  $28.5                                   ------ ------ ------- ------ ------Diluted Earnings (Loss) Per Share:Net income (loss) as reported      $0.15  $0.07  $(0.14) $0.22  $0.01Add back:After-tax gain from sale of Sedco 602                               (0.07)     -       -  (0.07)     -After-tax gain from TODCO IPO          -  (0.12)      -  (0.12)     -Tax valuation allowance related to TODCO IPO                             -   0.09       -   0.09      -After-tax loss on retirement of debt                                  -   0.09    0.04   0.09   0.04Stock option vesting resulting from the TODCO IPO                    -   0.02       -   0.02      -After-tax impairment loss on long- lived assets                          -      -    0.04      -   0.04After-tax impairment loss on note receivable from related party         -      -    0.04      -   0.04Favorable resolution of a non-U.S. income tax liability                  -      -   (0.04)     -  (0.04)                                   ------ ------ ------- ------ ------Net income (loss) as adjusted      $0.08  $0.15  $(0.06) $0.23  $0.09                                   ------ ------ ------- ------ ------                   Transocean Inc. and Subsidiaries            Non-GAAP Financial Measures and Reconciliations   Operating Income (Loss) Before General and Administrative Expense              to Field Operating Income (Loss) by Segment                           (in US$ millions)                             Three Months Ended     Six Months Ended                           ----------------------- -------------------                            June   March    June                             30,     31,     30,          June 30,                            2004    2004    2003      2004      2003                           ------- ------- ------- --------- ---------Transocean Drilling Segment Operating revenue         $552.5  $578.2  $548.5  $1,130.7  $1,111.2 Operating and maintenance  expense                   338.1   333.2   355.9     671.3     671.4 Depreciation               109.1   107.3   104.4     216.4     208.0 Impairment loss on long-  lived assets                  -       -     4.2         -       5.2 Gain from sale of assets,  net                       (21.9)   (1.1)   (0.2)    (23.0)     (1.6) Gain from TODCO IPO            -   (39.4)      -     (39.4)        -                           ------- ------- ------- --------- ---------Operating income before general and  administrative expense    127.2   178.2    84.2     305.4     228.2Add back:  Depreciation     109.1   107.3   104.4     216.4     208.0           Impairment            loss on             long-lived              assets            -       -     4.2         -       5.2           Gain from            sale of             assets, net    (21.9)  (40.5)   (0.2)    (62.4)     (1.6)                           ------- ------- ------- --------- ---------Field operating income     $214.4  $245.0  $192.6    $459.4    $439.8                           ------- ------- ------- --------- ---------TODCO Segment Operating revenue          $80.7   $73.8   $55.4    $154.5    $108.7 Operating and maintenance  expense (1)                68.1    79.2    70.6     147.3     129.2 Depreciation                23.9    24.2    23.1      48.1      46.3 Impairment loss on long-  lived assets                  -       -    11.6         -      11.6 Gain from sale of assets,  net                        (1.9)   (2.7)   (0.4)     (4.6)     (0.4)                           ------- ------- ------- --------- ---------Operating loss before general and  administrative expense     (9.4)  (26.9)  (49.5)    (36.3)    (78.0)Add back:  Depreciation      23.9    24.2    23.1      48.1      46.3           Impairment            loss on             long-lived              assets            -       -    11.6         -      11.6           Gain from            sale of             assets, net     (1.9)   (2.7)   (0.4)     (4.6)     (0.4)                           ------- ------- ------- --------- ---------Field operating income (loss)                     $12.6   $(5.4) $(15.2)     $7.2    $(20.5)                           ------- ------- ------- --------- ---------   (1) Q2 04, Q1 04, Q2 03, YTD Q2 04, and YTD Q2 03 include $7.1       million, $12.3 million, $3.6 million, $19.4 million, and $7.3       million, respectively, of operating and maintenance expense       that TODCO classifies as general and administrative expense.
    CONTACT: Transocean Inc., Houston             Analyst Contact:             Jeffrey L. Chastain, 713-232-7551             or             Media Contact:             Guy A. Cantwell, 713-232-7647    SOURCE: Transocean Inc.