Transocean Inc. Reports First Quarter 2003 Results
Transocean Inc. announced that net income for the three months ended March 31, 2003 was $47.2 million, or $0.15 per diluted share, on revenues of $616.0 million. The first quarter 2003 results compare to a net loss of $1,286.4 million, or $3.98 per diluted share on revenues of $667.9 for the three months ended March 31, 2002. Results for the first three months of 2002 included a non-cash charge of $1,363.7 million, or $4.22 per diluted share, to reflect the impairment of goodwill associated with the company's Gulf of Mexico Shallow and Inland Water reporting unit following the January 2002 adoption of Statement of Financial Accounting Standards 142, Goodwill and Other Intangible Assets. Excluding the non-cash charge for impairment of goodwill, net income for the three months ended March 31, 2002 was $77.3 million, or $0.24 per diluted share.
Operating revenues from the company's International and U.S. Floater Contract Drilling Services business segment totaled $562.7 million during the three months ended March 31, 2003, an 8% decline from revenues of $612.6 million recorded for the three months ended December 31, 2002. Operating revenues for the first quarter of 2003 included $21.6 million related to costs incurred and billed to customers on a reimbursable basis. Prior to 2003, similar items were reflected as a reduction of operating and maintenance expense. The decline in segment revenues was due primarily to lower semisubmersible dayrates in the North Sea, reduced activity in Southeast Asia and planned downtime and contract preparation on two of our deepwater rigs. Operating income before general and administrative expense for this segment was $144.0 million for the three months ended March 31, 2003 as compared to a $2,309.8 million loss for the fourth quarter of 2002, which included a non-cash charge of $2,494.1 million pertaining to the impairment of goodwill. Field operating income (defined as revenues less operating and maintenance expenses) of $247.2 million declined 16% during the three months ended March 31, 2003, compared to field operating income of $295.8 million achieved in the fourth quarter of 2002. The reduction in field operating income was caused primarily by declining revenues, while operating and maintenance expenses remained essentially unchanged from levels in the fourth quarter of 2002 due in part to the change noted above on reimbursable costs. At April 29, 2003, the company had 58% of the remaining fleet days in 2003 associated with this business segment committed to firm contracts, up from 51% at January 30, 2003.
Operating revenues from the company's Gulf of Mexico Shallow and Inland Water business segment were $53.3 million during the three months ended March 31, 2003, up 3% from levels experienced in the fourth quarter of 2002. Operating revenues for the first quarter of 2003 included $4.8 million related to costs incurred and billed to customers on a reimbursable basis. Operating loss before general and administrative expense for this segment was $28.5 million for the first quarter of 2003 compared to an operating loss of $403.5 million for the fourth quarter of 2002, which included a non-cash charge of $381.9 million pertaining to impairment of goodwill. A field operating loss of $5.3 million was recorded during the first quarter of 2003, compared to field operating income of $2.3 million during the fourth quarter of 2002. The field operating loss in the first quarter of 2003 was due chiefly to higher operating and maintenance expenses associated with jackup rigs being activated for service.
Cash flow from operations was $190.8 million during the three months ended March 31, 2003 and cash and cash equivalents increased to $1,520.4 million, from $1,214.2 million at December 31, 2002. Long-term debt plus debt due within one year (total debt) at March 31, 2003 equaled $4,619.8 million compared to total debt of $4,678.0 million at December 31, 2002. Net Debt (defined as total debt less cash and cash equivalents and swap receivables) declined to $3,099.4 million at March 31, 2003, from $3,282.5 million at December 31, 2002.
Robert L. Long, President and Chief Executive Officer of Transocean Inc., stated, "Mid-water semisubmersible dayrates in the North Sea and activity in Southeast Asia have deteriorated and these lower levels could persist through the balance of the year. Also, the Gulf of Mexico market segment for deepwater rigs continues to be over-supplied, resulting in periodic downtime on some units. Furthermore, while we have seen some signs of increased activity in our Gulf of Mexico Shallow and Inland Water business segment, the recovery to date has been limited. As a result of the uncertainty in the market, along with scheduled shipyard and rig reactivation programs, the previously announced labor dispute in Nigeria and an anticipated loss associated with the early retirement of debt, the company expects a deterioration in its financial results for the second quarter of 2003. Due to the number of jurisdictions where we operate which impose taxes that are effectively based on revenue rather than on net profits, these results are expected to lead to a higher effective tax rate. In summary, the remainder of 2003 continues to develop as a difficult year for our business."
Manages 53 Offshore Rigs
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