Transocean Soars, Doubling 2Q Profits to $1.107 Billion

Transocean Inc. reported net income for the three months ended June 30, 2008 of $1.107 billion, or $3.45 per diluted share, compared to net income of $549 million, or $2.63 per diluted share for the three months ended June 30, 2007. Revenues for the second quarter of 2008 were $3.102 billion compared to $1.434 billion for the second quarter of 2007.

For the six months ended June 30, 2008, net income totaled $2.296 billion, or $7.15 per diluted share, on revenues of $6.212 billion. For the same period last year, net income totaled $1.102 billion, or $5.24 per diluted share, on revenues of $2.762 billion. Net income for the first half of 2008 included after-tax charges of $31 million, or $0.10 per diluted share, resulting primarily from $25 million of discrete tax items, $3 million of merger-related costs and a $3 million loss from the early retirement of debt. For the same period last year, net income included after-tax gains of $33 million, or $0.15 per diluted share, resulting primarily from a $20 million gain on the sale of the tender rig Charley Graves and $13 million of discrete tax items during the first quarter 2007.

On November 27, 2007, Transocean Inc. merged with GlobalSantaFe Corporation and reclassified its ordinary shares into cash and shares. Reported results for the second quarter and first half of 2008 include a full three and six months, respectively, from GlobalSantaFe's operations. Diluted earnings per share for the second quarter and first half of 2007 exclude GlobalSantaFe's operations and are based on a weighted average diluted share count of 210 million and 211 million shares, respectively, which includes the effect of restating the historical diluted share count for the Reclassification.

Revenues for the three months ended June 30, 2008 were $3.102 billion compared to revenues of $3.110 billion during the three months ended March 31, 2008. The $8 million quarter-to-quarter decrease in total revenues included $53 million of lower contract drilling revenues reflecting an increase in out-of-service time for planned shipyards, which were partially offset by an increase in average dayrates, and $34 million of lower non-cash contract drilling intangible revenues. These net declines were offset by a $79 million increase in other revenues, primarily from non-drilling activities. The average dayrate for the fleet increased 4% from $229,000 in the first quarter to $238,600 in the second quarter, primarily as a result of rigs commencing new contracts at higher dayrates in the second quarter.
 

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