For the twelve months ended December 31, 2001, net income totaled $252.6 million, or $0.80 per diluted share, on revenues of $2,820.1 million. The 2001 results included the previously mentioned after-tax asset 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 per diluted share, resulting from the sale of assets. A net after-tax extraordinary loss totaling $19.3 million, or $0.06 per diluted share, resulting from the early retirement of debt, was also reflected in the full year 2001 net income. After adjusting for these three items, net income for the twelve months ended December 31, 2001 totaled $259.9 million, or $0.83 per diluted share. During the corresponding twelve months in 2000, net income was $108.5 million, or $0.51 per diluted share, on revenues of $1,229.5 million. The 2000 results included net after-tax charges of $17.3 million, or $0.08 per diluted share, relating primarily to the previously mentioned settlement of a terminated bareboat charter agreement and provisions for legal claims, partially offset by gains associated with a cash settlement relating to the early termination of a rig contract, the sale of two rigs and the early termination of certain debt.
Transocean Sedco Forex completed a merger transaction with R&B Falcon Corporation on January 31, 2001. Therefore, results for the twelve months ended December 31, 2001 reflect only eleven months of operating results of R&B Falcon Corporation. Pro Forma utilization measures noted below have been calculated based on the combined fleet of Transocean Sedco Forex and R&B Falcon for the twelve months ended December 31, 2001 and the equivalent period during 2000.
During the three months ended December 31, 2001, the company earned $687.7 million, or 92% of total operating revenues from its International and U.S. Floater Contract Drilling Services business segment, representing a 5% increase from the $655.0 million in segment operating revenues reported during the three months ended September 30, 2001. The segment's field operating income, defined as operating revenues 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 three months ended December 31, 2001, compared to 81% and 78% during the three months ended September 30, 2001 and December 31, 2000, respectively.
Operating revenues from the company's Gulf of Mexico Shallow and Inland Water business segment declined 48% during the three months ended December 31, 2001, to $59.9 million, compared to $115.2 million during the three months ended September 30, 2001. Segment field operating income declined 92% during the three months ended December 31, 2001 to $2.9 million, compared to $38.6 million during the three months ended September 30, 2001. Segment fleet utilization fell to 38% during the three months ended December 31, 2001, compared to 63% and 67% 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 due within one year, less cash and cash equivalents) of $4,170 million had declined by $260 million from net debt of $4,430 million as of September 30, 2001.
J. Michael Talbert, Chief Executive Officer of Transocean Sedco Forex Inc., stated, "During the fourth quarter of 2001, our International and U.S. Floater Contract Drilling Services business segment experienced higher average utilization and dayrates when compared to the third quarter of 2001. However, segment profitability declined as operating and maintenance expenses increased compared with the third quarter, which benefited from $13.6 million in accelerated amortization of deferred gain relating to the semisubmersible rig, the Drill Star. In addition, operating results within our U.S. Shallow and Inland Water business segment continued to decline as lower average natural gas prices and reduced customer spending levels sent utilization and average dayrates among our jackup rigs to their lowest level for the year."
Talbert added, "As we enter 2002, some regions requiring semisubmersibles and drillships, or floaters, are displaying signs of weakening demand as operators reassess exploration and production spending plans against the risk of increased volatility in crude oil prices. In the U.S. Gulf of Mexico mid-water and deepwater market segments, dayrates have begun to soften as drilling rig availability has increased. Consequently, we recently signed a contract for the deepwater drillship Discoverer 534 for work offshore India. The rig is currently mobilizing to India from the U.S. Gulf of Mexico and is expected to begin drilling by April 2002. In the U.K. sector of the North Sea, the seasonal decline in utilization, particularly among semisubmersibles, has encouraged us to mobilize the semisubmersible rig Sovereign Explorer to West Africa for a one-year contract offshore Equatorial Guinea, expected to commence during March 2002. In Norway, demand for rigs is continuing to soften as production-related drilling programs and exploration activity decline. The Transocean Arctic, one of our high-specification semisubmersible rigs operating in Norway, is expected to become idle in February 2002, with no additional work visible in the next three to six months. In contrast to the floater market, the international jackup market remains stable, particularly in the West Africa, Middle East and Southeast Asia regions.
Prospects for an immediate recovery within our U.S.-based jackup rig fleet are currently limited. Natural gas storage levels are approximately 76% higher than levels seen at this time one year ago as unseasonably warm weather persists in the U.S., keeping natural gas prices depressed and development of shallow water drilling prospects uncertain through the first half of 2002. The actively marketed portion of our U.S.-based jackup fleet has been reduced to 17 rigs at present from 25 rigs at mid-year 2001 in an effort to limit operating costs. Despite the weak drilling environment created by declining natural gas prices, the performance of our inland drilling barge fleet has improved in early 2002 as utilization and dayrates have benefited from 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 January 2001 closing of our merger with R&B Falcon expanded our offshore drilling fleet, providing unprecedented global presence, fleet capabilities and improved marketing and technical support in most of the world's offshore drilling locations. Substantial progress was made over the year in integrating approximately 15,000 employees from the former Transocean Offshore, Sedco Forex and R&B Falcon companies, to form a coordinated base of knowledge and skill with common goals and corporate values. In addition, delivery of five newly constructed ultra-deepwater drilling rigs completed a five-year, approximately $5 billion capital expansion program which saw 15 technically advanced rigs added to the company's deepwater fleet. Following the conclusion of this program, capital expenditure levels declined while operating cash flow improved, resulting in a $420 million reduction in net debt since February 28, 2001. These accomplishments, along with financial successes such as the issuance of $1.7 billion in public debt to finance the retirement of R&B Falcon high yield notes at substantially lower interest rates, have positioned Transocean Sedco Forex to compete more effectively in the global offshore drilling market and should enhance the company's long-term financial position."
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