Transocean Inc. Reports Third Quarter 2005 Results



Transocean Inc. (NYSE:RIG) reports net income for the three months ended September 30, 2005 of $170.4 million, or $0.50 per diluted share, on revenues of $762.6 million. The results compare to net income of $154.9 million, or $0.47 per diluted share, on revenues of $651.8 million for the three months ended September 30, 2004. Net income for the corresponding three months in 2004 included a gain relating to a secondary offering of TODCO shares of $129.4 million, or $0.39 per diluted share.

For the nine months ended September 30, 2005, net income was $564.0 million, or $1.68 per diluted share, on revenues of $2,120.5 million, compared to net income of $225.6 million, or $0.70 per diluted share, on revenues of $1,937.0 million for the corresponding nine months in 2004. Net income for the nine months ended September 30, 2005 included gains resulting from the sale of TODCO common stock in May and June of 2005 of $165.0 million, or $0.49 per diluted share, gains associated with the sale of the semisubmersible rig Sedco 600, the jackup rig Transocean Jupiter and Land Rig 34 of $27.9 million, or $0.08 per diluted share, and a loss on the early retirement of debt of $6.7 million, or $0.02 per diluted share. The results for the comparable nine months in 2004 included the gain on the sale of the semisubmersible rig Sedco 602 of $21.6 million, or $0.07 per diluted share, a loss on the early retirement of debt of $28.1 million, or $0.09 per diluted share, and items related to the divestiture of TODCO of $130.7 million, or $0.40 per diluted share.

Robert L. Long, President and Chief Executive Officer of Transocean Inc., stated, "The outlook for the offshore drilling industry remains exceptionally strong with both floating rigs and jackup units experiencing improving demand. Dayrate levels reflect the tight supply and demand dynamics into the future, with the company recently establishing an industry high dayrate of $475,000 over a three-year duration for the Discoverer Spirit in the U.S. Gulf of Mexico. We have also seen significant dayrate increases for some of our other floaters. Due to strong customer demand, we are increasingly confident that up to three of our currently idle floaters, the semisubmersible rigs Transocean Prospect, Transocean Winner and C. Kirk Rhein, Jr. could be reactivated with anticipated contract commencement dates during the second or third quarter of 2006. We have announced separately an agreement to upgrade a Sedco 700-series semisubmersible to deepwater drilling capacity and are also in discussions with several operators regarding possible additional upgrades to deepwater drilling capability of other semisubmersibles in our Other Floaters fleet. These other potential upgrades would be supported by firm contracts and require an estimated 24 months to complete at a cost of approximately $300 million per unit, depending on final technical specifications and other factors.

"Our industry is facing significant challenges as it copes with an unprecedented level of customer demand, the repair of mobile offshore drilling units damaged by hurricanes in the U.S. Gulf of Mexico, a growing shortage of qualified personnel and lengthening lead times associated with the delivery of critical rig components. In addition, industry costs, such as those for labor, rig maintenance and insurance, are escalating. To meet these challenges, recruiting, training and developing our people will continue to be one of our highest priorities."

The company's fleet of 32 High-Specification Floaters continues to experience strong customer demand throughout all operating regions. Due in part to the tightening capacity into 2007, operators are increasingly committing to multiple-year contracts, as evidenced by recent contract awards for the Deepwater Millennium, Discoverer Spirit, Deepwater Pathfinder, Discoverer Seven Seas, Transocean Arctic and Deepwater Expedition, each ranging from two to three years in duration. At present, eight of the company's High-Specification Floaters have been awarded contracts with durations into 2010. Continued dayrate improvement remains evident with a recent contract signing involving a Fifth-Generation Deepwater Floater at a high of $475,000, while recent dayrate discussions involving some Other Deepwater Floaters range from $250,000 to $355,000. A total of 14 High-Specification Floaters, including four Fifth-Generation Deepwater Floaters, are expected to complete existing contract commitments between now and 2007, representing opportunities to contract these 14 rigs at market dayrates prevailing at that time. At present, approximately 80% of the High-Specification Floater fleet is committed to contracts in 2006, including 92% of the Fifth-Generation Deepwater Floater fleet while 59% is committed to contracts in 2007, including 80% of the Fifth-Generation Deepwater Floater fleet.

Activity levels for the company's Other Floaters, or mid-water rigs, are expected to improve into 2007. Dayrates for these floaters continue to advance, especially in the U.K. sector of the North Sea, where a short-term contract was recently awarded to the semisubmersible rig Sedco 714 at a dayrate of $250,000, up from a previous dayrate of $200,000, and in the U.S. Gulf of Mexico, where the semisubmersible rig Falcon 100 was recently awarded a one-year contract at a dayrate of $180,000, up from $145,000 on a previous contract. At present, approximately 59% and 22% of the Other Floaters fleet is contracted in 2006 and 2007, respectively.

The company's fleet of 25 Jackups continues to experience strong utilization, achieving 98% during the three months ended September 30, 2005. Contract opportunities with expected 2006 commencements are expanding in the Middle East, Southeast Asia and India. Some of these contract opportunities are for multiple-year contract durations with dayrates ranging from $85,000 to $130,000. At present, approximately 58% and 18% of the Jackup fleet is contracted in 2006 and 2007, respectively.

An increase in revenues in the fourth quarter of 2005 due to the above described trends is expected to be substantially offset by out-of-service time resulting from hurricane damage to the semisubmersible rigs Deepwater Nautilus and Transocean Marianas. The combined impact on revenues and operating costs during the fourth quarter of 2005 from hurricane damage is expected to be between $40 million and $50 million. Repair costs resulting from hurricane damage, along with planned upgrades and maintenance for the Sedco Energy, Trident 8 and Shelf Explorer and reactivation programs for the Peregrine I and at least one currently idle semisubmersible are expected to result in higher fourth quarter 2005 operating and maintenance expenses as compared to the reported level for the third quarter of 2005. The higher operating and maintenance expenses are expected to more than offset any increase in revenues the company might realize in the fourth quarter of 2005.

Operations Quarterly Review - Revenues for the three months ended September 30, 2005 totaled $762.6 million, a 5% improvement from revenues of $727.4 million during the three months ended June 30, 2005. The increase was due primarily to higher fleet activity and dayrates, with activity levels favorably impacted by improved utilization on a number of rigs, including the semisubmersible rigs Sedco Express, M.G. Hulme, Jr. and Transocean Legend, which spent time in shipyards during the previous three months in 2005 for planned maintenance or upgrades. Higher dayrates resulted in an average fleet dayrate of $107,100 compared to $103,100 during the three months ended June 30, 2005. The revenue improvement was partially offset by fleet downtime relating to shipyard programs for the semisubmersible rig Sedco Energy, ahead of its two-year contract in Nigeria, and the drillship Deepwater Navigator, combined with reduced revenues from integrated services activities in the North Sea.

Operating income before general and administrative expenses(1) and field operating income (defined as revenues less operating and maintenance expense) were $222.9 million and $322.8 million, respectively, for the three months ended September 30, 2005 and compared favorably to $202.8 million and $288.5 million, respectively, for the three months ended June 30, 2005. The improved results were due primarily to increased revenues resulting from higher activity and dayrates. Operating and maintenance expenses for the three months ended September 30, 2005 were $439.8 million, which were essentially flat with the preceding three months in 2005. Expenses in the most recently completed quarter of $13 million associated with the reactivation of the drillship Peregrine I, ahead of its multiple-year contract in Brazil, and scheduled shipyard and maintenance programs on the drillship Deepwater Navigator and the semisubmersible rig Sedco Energy, as well as project expenses of $3.4 million relating to semisubmersible rigs damaged by hurricanes in the U.S. Gulf of Mexico, were partially offset by lower expenses pertaining to reduced integrated services activity. Average fleet utilization for the three months ended September 30, 2005 improved to 82%, up from 79% during the preceding three months in 2005, with improvements shown throughout most of the company's fleet.

TODCO Tax Sharing Agreement - The company reported $10.1 million in the third quarter of 2005 related to the recognition of income under the tax sharing agreement with TODCO. The TODCO tax sharing agreement provides that TODCO will pay Transocean as it utilizes pre-IPO tax benefits from net operating losses and similar items. This income is recognized when TODCO files its income tax return. The amount recognized in the third quarter of 2005 and reflected in "Other, net" in the company's condensed consolidated statements of operations relates to TODCO's filing of its 2004 U.S. federal income tax return.

Conference Call Information

Transocean will conduct a teleconference call at 10:00 a.m. ET on November 8, 2005. To participate, dial 303-262-2050 approximately five to 10 minutes prior to the scheduled start time of the call.

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

A telephonic replay of the conference call should be available after 1:00 p.m. ET on November 8 and can be accessed by dialing 303-590-3000 and referring to the passcode 11041313. Also, a replay will be available through the Internet and can be accessed by visiting either of the above-referenced Worldwide Web addresses.

Forward-Looking Disclaimer

Statements regarding fundamental business outlook, duration of current demand cycle, contract backlog, rig demand, timing, cost and impact of rig reactivations, major upgrades, revenues, costs, results, contract duration, contract opportunities, repair costs, impact of storm damage, personnel matters, opportunities for the company, dayrates, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, risks associated with international operations, effect of strike and other labor relations issues, effect of fire, future financial results, actions by customers and other third parties, the future price of oil and gas and other factors detailed in the company's most recent Form 10-K and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.

Transocean Inc. is the world's largest offshore drilling contractor with a fleet of 92 mobile offshore drilling units. The company's mobile offshore drilling fleet, consisting of a large number of high-specification deepwater and harsh environment drilling units, is considered one of the most modern and versatile in the world due to its emphasis on technically demanding segments of the offshore drilling business. The company's fleet consists of 32 High-Specification Floaters (semisubmersibles and drillships), 24 Other Floaters, 25 Jackup Rigs and other assets utilized in the support of offshore drilling activities worldwide. With a current equity market capitalization in excess of $19 billion, Transocean Inc.'s ordinary shares are traded on the New York Stock Exchange under the symbol "RIG."


(1) 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 by Segment.

                   TRANSOCEAN INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In millions, except per share data)
                              (Unaudited)

                             Three Months Ended    Nine Months Ended
                                September 30,         September 30,
                             -------------------   -------------------
                               2005      2004        2005      2004
                             --------- ---------   --------- ---------
Operating Revenues
  Contract drilling revenues   $735.6    $607.1    $2,018.3  $1,789.5
  Other revenues                 27.0      44.7       102.2     147.5
----------------------------------------------------------------------
                                762.6     651.8     2,120.5   1,937.0
----------------------------------------------------------------------
Costs and Expenses
  Operating and maintenance     439.8     432.9     1,267.3   1,251.5
  Depreciation                  102.1     133.9       304.0     398.4
  General and administrative     19.4      15.2        55.5      44.3
----------------------------------------------------------------------
                                561.3     582.0     1,626.8   1,694.2
----------------------------------------------------------------------
Gain from sale of assets, net     2.2       1.3        37.9      28.9
----------------------------------------------------------------------
Operating Income                203.5      71.1       531.6     271.7
----------------------------------------------------------------------

Other Income (Expense), net
  Equity in earnings of
   unconsolidated affiliates      1.8       1.7         8.3       7.7
  Interest income                 5.2       2.5        14.0       6.5
  Interest expense              (24.5)    (42.6)      (87.4)   (132.6)
  Gain from TODCO Stock Sales       -     129.4       165.0     168.8
  Loss on retirement of debt     (0.6)        -        (7.3)    (28.1)
  Other, net                      9.7       0.1         5.6       0.4
----------------------------------------------------------------------
                                 (8.4)     91.1        98.2      22.7
----------------------------------------------------------------------

Income Before Income Taxes
 and Minority Interest          195.1     162.2       629.8     294.4
Income Tax Expense               24.7       6.3        65.8      74.2
Minority Interest                   -       1.0           -      (5.4)
----------------------------------------------------------------------

Net Income                     $170.4    $154.9      $564.0    $225.6
======================================================================

Earnings Per Share
   Basic                        $0.52     $0.48       $1.73     $0.70
   Diluted                      $0.50     $0.47 (1)   $1.68     $0.70
======================================================================

Weighted Average Shares
 Outstanding
   Basic                        328.9     320.9       326.2     320.7
----------------------------------------------------------------------
   Diluted                      340.8     330.5       338.5     324.4
----------------------------------------------------------------------

(1) As a result of EITF 04-08, "The Effect of Contingently Convertible
    Instruments on Diluted Earnings Per Share," which was effective
    for reporting periods ending after December 15, 2004, the diluted
    earnings per share for the three months ended September 30, 2004
    have been restated.


                   TRANSOCEAN INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                   (In millions, except share data)

                                           September 30, December 31,
                                               2005          2004
                                           ------------- -------------
                                            (Unaudited)
                  ASSETS

Cash and Cash Equivalents                        $596.8        $451.3
Accounts Receivable, net of allowance for
 doubtful accounts of $18.0 and $16.8 at
 September 30, 2005 and December 31, 2004,
 respectively                                     596.5         442.0
Materials and Supplies, net of allowance
 for obsolescence of $18.5 and $20.3 at
 September 30, 2005 and December 31, 2004,
 respectively                                     155.2         144.7
Deferred Income Taxes, net                         19.9          19.0
Other Current Assets                               36.3          52.1
----------------------------------------------------------------------
   Total Current Assets                         1,404.7       1,109.1
----------------------------------------------------------------------

Property and Equipment                          9,802.6       9,732.9
Less Accumulated Depreciation                   2,983.6       2,727.7
----------------------------------------------------------------------
   Property and Equipment, net                  6,819.0       7,005.2
----------------------------------------------------------------------

Goodwill                                        2,254.9       2,251.9
Investments in and Advances to
 Unconsolidated Affiliates                          6.4         109.2
Deferred Income Taxes                              60.9          43.8
Other Assets                                      226.7         239.1
----------------------------------------------------------------------
   Total Assets                               $10,772.6     $10,758.3
======================================================================

   LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts Payable                                 $200.8        $180.8
Accrued Income Taxes                               38.1          17.1
Debt Due Within One Year                          400.0          19.4
Other Current Liabilities                         266.6         213.0
----------------------------------------------------------------------
   Total Current Liabilities                      905.5         430.3
----------------------------------------------------------------------

Long-Term Debt                                  1,197.7       2,462.1
Deferred Income Taxes, net                        144.9         124.1
Other Long-Term Liabilities                       322.7         345.2
----------------------------------------------------------------------
   Total Long-Term Liabilities                  1,665.3       2,931.4
----------------------------------------------------------------------

Commitments and Contingencies

Minority Interest                                   4.1           4.0

Preference 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,
 330,077,072 and 321,533,998 shares issued
 and outstanding at September 30, 2005 and
 December 31, 2004, respectively                    3.3           3.2
Additional Paid-in Capital                     10,935.4      10,695.8
Accumulated Other Comprehensive Loss              (23.0)        (24.4)
Retained Deficit                               (2,718.0)     (3,282.0)
----------------------------------------------------------------------
   Total Shareholders' Equity                   8,197.7       7,392.6
----------------------------------------------------------------------
   Total Liabilities and Shareholders'
    Equity                                    $10,772.6     $10,758.3
======================================================================


                   TRANSOCEAN INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (In millions)
                              (Unaudited)

                               Three Months Ended   Nine Months Ended
                                  September 30,       September 30,
                               ------------------- -------------------
                                 2005      2004      2005      2004
                               --------- --------- --------- ---------

Cash Flows from Operating
 Activities
  Net income                     $170.4    $154.9    $564.0    $225.6

  Adjustments to reconcile net
   income to net cash provided
   by operating activities
    Depreciation                  102.1     133.9     304.0     398.4
    Stock-based compensation
     expense                        6.2       4.2      12.1      17.7
    Deferred income taxes          (8.8)     (7.6)     (6.6)     20.4
    Equity in earnings of
     unconsolidated affiliates     (1.8)     (1.7)     (8.3)     (7.7)
    Net (gain)/loss from
     disposal of assets            (0.7)      1.4     (34.2)    (23.6)
    Gain from TODCO Stock Sales       -    (129.4)   (165.0)   (168.8)
    Loss on retirement of debt      0.6         -       7.3      28.1
    Amortization of debt-
     related
     discounts/premiums, fair
     value adjustments and
     issue costs, net              (0.8)     (5.1)     (6.3)    (17.6)
    Deferred income, net          (22.0)      1.0      (9.9)     15.1
    Deferred expenses, net         18.0      (5.8)     27.1     (18.5)
    Tax benefit from exercise
     of options to purchase and
     vesting of ordinary shares
     under stock-based
     compensation plans            15.2         -      20.1         -
    Other long-term liabilities     5.5      (1.5)     18.0       5.4
    Other, net                    (15.6)      3.7     (16.9)     (0.6)
    Changes in operating assets
     and liabilities
       Accounts receivable        (27.1)      8.6    (146.7)    (23.2)
       Accounts payable and
        other current
        liabilities                14.5      61.0      85.6      61.1
       Income taxes
        receivable/payable, net   (20.1)      3.4     (13.0)      5.4
       Other current assets         2.0       5.0     (18.1)    (10.6)
----------------------------------------------------------------------
Net Cash Provided by Operating
 Activities                       237.6     226.0     613.2     506.6
-----------------------------------------=========--------------------

Cash Flows from Investing
 Activities
  Capital expenditures            (35.3)    (45.1)   (144.9)    (99.8)
  Proceeds from disposal of
   assets, net                      2.3       4.3      62.8      46.3
  Proceeds from TODCO Stock
   Sales, net                         -     269.9     271.9     425.6
  Joint ventures and other
   investments, net                   -       4.3       4.5       9.0
-----------------------------------------=========--------------------
Net Cash Provided by (Used in)
 Investing Activities             (33.0)    233.4     194.3     381.1
----------------------------------------------------------------------

Cash Flows from Financing
 Activities
  Repayments on revolving
   credit agreement                   -         -         -    (200.0)
  Repayments on other debt
   instruments                   (592.4)    (11.8)   (880.2)   (407.0)
  Net proceeds from issuance of
   ordinary shares under stock-
   based compensation plans        36.7       5.0     196.1      20.0
  Proceeds from issuance of
   ordinary shares upon
   exercise of warrants             6.0         -      10.6         -
  Decrease in cash dedicated to
   debt service                       -         -      12.0         -
  Other, net                       (0.6)      1.1      (0.5)      1.1
----------------------------------------------------------------------
Net Cash Used in Financing
 Activities                      (550.3)     (5.7)   (662.0)   (585.9)
----------------------------------------------------------------------

Net Increase (Decrease) in Cash
 and Cash Equivalents            (345.7)    453.7     145.5     301.8
----------------------------------------------------------------------
Cash and Cash Equivalents at
 Beginning of Period              942.5     322.1     451.3     474.0
----------------------------------------------------------------------
Cash and Cash Equivalents at
 End of Period                   $596.8    $775.8    $596.8    $775.8
======================================================================


                            Transocean Inc.
                      Fleet Operating Statistics

                             Operating Revenues ($ Millions) (1)
                      ------------------------------------------------
                                                     Nine Months Ended
                           Three Months Ended          September 30,
                      ----------------------------- ------------------
Transocean Drilling   Sept. 30, June 30,  Sept. 30,
 Segment:               2005      2005      2004      2005      2004
                      --------- --------- --------- --------- --------
Contract Drilling
 Revenues
    High-Specification
     Floaters:
        Fifth-
         Generation
         Deepwater
         Floaters       $220.9    $213.8    $192.8    $627.0    $590.3
        Other
         Deepwater
         Floaters       $161.8    $145.7    $112.5    $432.8    $323.9
        Other High-
         Specification
         Floaters        $60.8     $56.0     $34.2    $167.0     $96.3
    Total High-
     Specification
     Floaters           $443.5    $415.5    $339.5  $1,226.8  $1,010.5
    Other Floaters      $136.1    $114.2     $67.0    $338.5    $196.0
    Jackups             $133.2    $128.3    $101.4    $387.9    $309.5
    Other Rigs           $22.8     $24.1     $20.1     $65.1     $64.1
Subtotal                $735.6    $682.1    $528.0  $2,018.3  $1,580.1
Other Revenues
    Client
     Reimbursable
     Revenues            $19.8     $25.0     $17.6     $63.7     $55.6
    Integrated
     Services and
     Other                $7.2     $20.3     $13.1     $38.5     $53.7
Subtotal                 $27.0     $45.3     $30.7    $102.2    $109.3
Segment Total           $762.6    $727.4    $558.7  $2,120.5  $1,689.4

TODCO Segment (3)
Contract Drilling
 Revenues                   $-        $-     $79.1        $-    $209.4
Other Revenues
    Client
     Reimbursable
     Revenues               $-        $-      $5.6        $-     $16.2
    Delta Towing and
     Other                  $-        $-      $8.4        $-     $22.0
Subtotal                    $-        $-     $14.0        $-     $38.2
Segment Total               $-        $-     $93.1        $-    $247.6

Total Company           $762.6    $727.4    $651.8  $2,120.5  $1,937.0

                                Average Dayrates  (1) (2) (4)
                      ------------------------------------------------
                                                     Nine Months Ended
                           Three Months Ended          September 30,
                      ----------------------------- ------------------
Transocean Drilling   Sept. 30, June 30,  Sept. 30,
 Segment:               2005      2005      2004      2005      2004
                      --------- --------- --------- --------- --------
    High-Specification
     Floaters:
        Fifth-
         Generation
         Deepwater
         Floaters     $197,100  $197,100  $193,400  $192,300  $187,600
        Other
         Deepwater
         Floaters     $141,700  $132,700  $103,900  $133,300  $104,200
        Other High-
         Specification
         Floaters     $166,300  $170,500  $111,200  $163,400  $113,800
    Total High-
     Specification
     Floaters         $168,800  $165,500  $142,200  $163,000  $142,300
    Other Floaters     $90,400   $82,400   $65,400   $82,000   $64,400
    Jackups            $58,900   $58,200   $52,500   $58,200   $52,200
    Other Rigs         $48,000   $47,000   $44,700   $47,000   $44,100
Segment Total         $107,100  $103,100   $91,100  $102,400   $90,200

TODCO Segment (3)           $-        $-   $27,300        $-   $26,400

Total Drilling Fleet  $107,100  $103,100   $69,800  $102,400   $70,300

                                    Utilization (1) (2) (4)
                          --------------------------------------------
                                                          Nine Months
                                                             Ended
                               Three Months Ended        September 30,
                          ----------------------------- --------------
Transocean Drilling       Sept. 30, June 30,  Sept. 30,
 Segment:                   2005      2005      2004      2005   2004
                          --------- -------- ---------- ------- ------
    High-Specification
     Floaters:
        Fifth-Generation
         Deepwater
         Floaters               94%      92%        83%     92%    88%
        Other Deepwater
         Floaters               83%      80%        78%     79%    76%
        Other High-
         Specification
         Floaters               99%      90%        84%     94%    77%
    Total High-
     Specification
     Floaters                   89%      86%        81%     86%    81%
    Other Floaters              68%      63%        45%     63%    44%
    Jackups                     98%      94%        81%     96%    83%
    Other Rigs                  51%      57%        44%     51%    48%
Segment Total                   82%      79%        67%     79%    68%

TODCO Segment  (3)               -        -         45%      -     41%

Total Drilling Fleet            82%      79%        58%     79%    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. A revenue earning day is
    defined as a day for which a rig earns dayrate after commencement
    of operations. 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.

(3) TODCO was deconsolidated effective December 17, 2004.

(4) Excludes a drillship engaged in scientific geological coring
    activities, the Joides Resolution, that is owned by a joint
    venture in which we have a 50 percent interest and is accounted
    for under the equity method of accounting.


                   Transocean Inc. and Subsidiaries
           Non-GAAP Financial Measures and Reconciliations

  Operating Income (Loss) Before General and Administrative Expense
                 to Field Operating Income by Segment
                          (in US$ millions)

                           Three Months Ended       Nine Months Ended
                       --------------------------- -------------------
                       September  June   September
                          30,      30,      30,       September 30,
                         2005     2005     2004      2005      2004
                       --------- ------- --------- --------- ---------

Transocean Drilling
 Segment
  Operating revenue      $762.6  $727.4    $558.7  $2,120.5  $1,689.4
  Operating and
   maintenance expense    439.8   438.9     360.5   1,267.3   1,031.8
  Depreciation            102.1   101.2     110.0     304.0     326.4
  Gain from sale of
   assets, net             (2.2)  (15.5)     (0.5)    (37.9)    (23.5)
                       --------- ------- --------- --------- ---------
 Operating income
  before general and
  administrative
  expense                 222.9   202.8      88.7     587.1     354.7
Add back: Depreciation    102.1   101.2     110.0     304.0     326.4
          Gain from
           sale of
           assets, net     (2.2)  (15.5)     (0.5)    (37.9)    (23.5)
                       --------- ------- --------- --------- ---------
  Field operating
   income                $322.8  $288.5    $198.2    $853.2    $657.6
                       --------- ------- --------- --------- ---------

TODCO Segment (1)
  Operating revenue          $-      $-     $93.1        $-    $247.6
  Operating and
   maintenance expense
   (2)                        -       -      72.4         -     219.7
  Depreciation                -       -      23.9         -      72.0
  Gain from sale of
   assets, net                -       -      (0.8)        -      (5.4)
                       --------- ------- --------- --------- ---------
 Operating income
  (loss) before
  general and
  administrative
  expense                     -       -      (2.4)        -     (38.7)
Add back: Depreciation        -       -      23.9         -      72.0
          Gain from
           sale of
           assets, net        -       -      (0.8)        -      (5.4)
                       --------- ------- --------- --------- ---------
 Field operating
  income                     $-      $-     $20.7        $-     $27.9
                       --------- ------- --------- --------- ---------

(1) Amounts are representative of TODCO's results through December 16,
    2004. TODCO was deconsolidated effective December 17, 2004 in
    connection with the December offering and conversion of the
    Company's remaining TODCO Class B common stock to Class A common.

(2) Q3 04 and YTD 04 include $6.9 million and $26.3 million,
    respectively, of operating and maintenance expense that TODCO
    classified as general and administrative expense.


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