<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TRANSOCEAN OFFSHORE INC.
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total Fee Paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided in Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<PAGE> 2
Transocean Sedco Forex November 1999
The World's Leading Offshore Driller
[Photograph of the drillship Discoverer Enterprise]
[Photograph of the Sedco Express-class semisubmersible Sedco Express]
Victor E. Grijalva, Chairman
J. Michael Talbert, President and Chief Executive Officer
Robert L. Long, Executive Vice President and Chief Financial Officer
SLIDE - 1
<PAGE> 3
Disclosure Statement
===============================================================================
Transocean Offshore has filed a registration statement with the U.S. Securities
and Exchange Commission relating to the proposed merger with Sedco Forex and
the Transocean Offshore ordinary shares to be issued in the merger. The
registration statement contains a proxy statement/prospectus dated October 27,
1999 that was first mailed to shareholders on or about November 8, 1999. This
presentation is qualified by reference to that joint proxy statement/prospectus
of Transocean Offshore and Schlumberger. This presentation does not contain all
the information that is important to you in deciding how to vote with respect to
the matters covered by the joint proxy statement/prospectus. All shareholders
should read the joint proxy statement/prospectus, the materials that are
incorporated by reference and the other public filings of Transocean Offshore
and Schlumberger, before making and voting decisions with regard to the proposed
merger and other matters covered by the joint proxy statement/prospectus. The
registration statement, the joint proxy statement/prospectus and other public
filings of Transocean Offshore and Schlumberger are available free of charge at
the SEC's website at www.sec.gov. In addition, copies of Transocean's publicly
filed materials are available free of charge by contacting Jeff Chastain,
Transocean's Director of Investor Relations and Communications, at 713-232-7551.
This presentation is not an offer to sell or the solicitation of an offer to buy
any securities of Transocean Offshore.
Transocean Sedco Forex
SLIDE - 2
<PAGE> 4
Disclosure Statement
===============================================================================
During the course of this presentation, certain forward-looking statements will
be made regarding such matters as the prospects for the company, the profile of
the company following the proposed merger with Sedco Forex, financial
performance, capital expenditures, debt levels and other balance sheet
information, rig utilization, contract backlog, dayrates and other statements
that are not historical facts. It is inherently difficult to make predictions
in a cyclical industry. In addition, these forward looking statements are based
upon certain assumptions and subject to certain risks and uncertainties, such
as the prices of crude oil and natural gas, the level of exploration and
production activity by our customers, the closing of the proposed merger with
Sedco Forex, the completion of construction projects and other risks and
uncertainties identified in our Form 10-Ks and other filings with the
Securities 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. The company undertakes
no obligation to release publicly any revisions to any forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. Please refer to the "Disclosure
Regarding Forward-looking Statements" section of the joint proxy
statement/prospectus (page 31) and "Sedco Forex Management's Discussion and
Analysis of Financial Condition and Results of Operations" of that document
(page 94) for a fuller discussion of the factors that could cause actual
results to differ from expectations. Please also refer to the "Risk Factors"
section of the joint proxy statement/prospectus at page 33 for a discussion of
Risk Factors that should be considered in connection with a vote on the matters
covered by the joint proxy statement/prospectus.
Transocean Sedco Forex
SLIDE - 3
<PAGE> 5
Transocean And Sedco Forex Have
Agreed To A Merger Of Equals
===============================================================================
<TABLE>
<S> <C>
RIG Shares Issued To
SLB Shareholders ..........109 Million (52% Of Post-Transaction Shares)
Pro Forma Equity Market
Cap At $31/Share ..........$6.5 Billion
Debt Assumed At Closing
(12/31/99) ................$435 Million, Subject To Adjustments
Accounting Treatment .......Purchase
Accounting Acquiror ........Sedco Forex
Surviving Legal Entity .....Transocean (Cayman Islands Corporation)
Tax Treatment ..............Tax-Free Reorganization
Listing ....................RIG Will Continue To Trade On NYSE
Board Representation .......Five Designated by Schlumberger
Five Designated By Transocean
Estimated Closing ..........December 31, 1999
</TABLE>
Schlumberger Will Have No Ongoing Ownership Interest In Transocean Sedco Forex
Transocean Sedco Forex
SLIDE - 4
<PAGE> 6
Senior management of Transocean Sedco Forex
===============================================================================
<TABLE>
<S> <C> <C> <C>
Board Of Directors
Victor E. Grijalva
Chairman
|
J. Michael Talbert
President And
Chief Executive Officer
|
_______________________________________________________________________________________________________________
| | | | | | | |
Dennis Heagney | Jean Cahuzac | Robert Long | Jon Cole Donald Ray
Executive Vice President | Executive Vice President,| Executive Vice President | Executive Vice President, Senior Vice President,
Operations | Operations | And Chief Financial Officer | Marketing Technical Services
(Asia And The Americas) | (Europe, ME And Africa) | |
| | |
| | |
---------------- ----------------------- ---------------
Eric Brown Barbara Koucouthakis David Mullen
Vice President, Vice President, Vice President,
General Counsel Information Systems And Human Resources
And Secretary Comm. Tech.
</TABLE>
Transocean Sedco Forex
SLIDE - 5
<PAGE> 7
Schlumberger's Spin-Off of Sedco Forex
The Rationale
===============================================================================
*Continuation of a long-term strategy
-focus on the reservoir via advanced integrated solutions
Integrated } -Reservoir evaluation
Reservoir optimization } -Reservoir development
} -Reservoir management
-value-added growth through internal R&D programs ($400 M/year) and
through acquisitions
*Participate in the creation of the largest offshore drilling contractor
-a drilling powerhouse
-SLB shareholders to benefit
-allows for development of proprietary technology
*Transocean Offshore - a unique merger partner
-seen as best in business
-similar business focus
-strategic fit -fleet, technical and geographical
Transocean Sedco Forex
SLIDE - 6
<PAGE> 8
Business Rationale
[Photograph of the drillship Discoverer Enterprise]
[Photograph of the semisubmersible Transocean Richardson]
[Photograph of the semisubmersible Sedco 710]
[Photograph of the semisubmersible Sovereign Explorer]
Transocean Sedco Forex
SLIDE - 7
<PAGE> 9
Business Rationale For the Merger
===============================================================================
*We are Creating:
-The Largest Offshore Driller - Number Of Offshore Rigs, Floating Rigs,
Deepwater Rigs
Transocean Sedco Forex
SLIDE - 8
<PAGE> 10
Merger Creates Clear World Leader
In Offshore Mobile Units
===============================================================================
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART ON THIS SLIDE]
<TABLE>
<CAPTION>
Company Floaters Jackups Other Total
- ------- -------- ------- ----- -----
<S> <C> <C> <C> <C>
Transocean Sedco Forex 53 17 4 74
R&B Falcon 23 42 8 73
Noble Drilling 12 32 3 47
ENSCO 1 37 9 47
Diamond Offshore 31 15 0 46
Pride International 9 18 13 40
Global Marine 11 23 1 35
Santa Fe Drilling 3 23 0 26
Rowan Companies 1 23 0 24
</TABLE>
Source: ODS
Transocean Sedco Forex
SLIDE - 9
<PAGE> 11
. . . Particularly In Deepwater
===============================================================================
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART ON THIS SLIDE]
Number of Deepwater Rigs By Water Depth Capability
<TABLE>
<CAPTION>
Company 3,000'-4,999' 5,000'-6,999' 7,000'+
- ------- ------------- ------------- -------
<S> <C> <C> <C>
Transocean Sedco Forex 10 3 9
R&B Falcon 4 2 10
Diamond Offshore 7 4 2
Noble Drilling 2 7 1
Pride International 5 0 2
Global Marine 1 1 3
</TABLE>
Source: ODS
Transocean Sedco Forex
SLIDE - 10
<PAGE> 12
Worldwide Deepwater Discoveries
Water Depth Greater Than 3,000 Feet
===============================================================================
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART ON THIS SLIDE]
Billion Barrels Of Equivalent (in approximate numbers)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
.26 .46 1.60 .26 .74 .33 .51 .08 .38 1.67 .24 2.82
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
3.11 3.33 4.34
---- ---- ----
1997 1998 1999
</TABLE>
Transocean Sedco Forex
SLIDE - 11
<PAGE> 13
Business Rationale For The Merger
===============================================================================
* We Are Creating:
-The Largest Offshore Driller - Number Of Offshore Rigs, Floating Rigs,
Deepwater Rigs
-With Worldwide Market Presence - U.K., Norway, GOM, Brazil, Africa,
Asia, Middle East/FSU
Transocean Sedco Forex
SLIDE - 12
<PAGE> 14
Worldwide Market Presence
===============================================================================
[WORLD MAP WITH THE FOLLOWING TEXTUAL PRESENTATIONS SUPERIMPOSED:
<TABLE>
<S> <C> <C> <C>
U.S. Gulf - 12 Rigs U.K. And Europe - 16 Rigs Norway - 6 Rigs
- ------------------- ------------------------- ---------------
8 Semis 14 Semis 6 Semis
4 Drillships 2 Jackups
Caspian - 1 Rig Southeast Asia - 12 Rigs India - 2 Rigs
- --------------- ------------------------ --------------
1 Jackup 4 Semis 1 Drillship
1 Drillship 1 Jackup
5 Jackups
2 Tenders
Egypt, Mid East, Med - 5 Rigs South And West Africa - 13 Rigs
- ----------------------------- -------------------------------
1 Semi 7 Semis
4 Jackups 4 Jackups
2 Tenders
Brazil - 6 Rigs Australia - 1 Rig
- --------------- -----------------
5 Semis 1 Semi
1 Drillship]
</TABLE>
#1 or #2 Floater Contractor In All Operating Regions
#1 MODU Contractor In 5 Out Of 7 Operating Regions
Transocean Sedco Forex
SLIDE - 13
<PAGE> 15
Worldwide Market Presence
===============================================================================
[WORLDWIDE MAP WITH THE FOLLOWING LOCATIONS NOTED:
St. Johns, Houston, Brazil, Spain, Paris, Brest, Nigeria, U.K., Norway, Egypt,
Cameroon, Congo, Angola, Denmark, S. Africa, Germany, Holland, Azerbaijan,
Dubai, India, Malaysia, Singapore, Indonesia, Thailand, Vietnam, Australia,
Brunei]
Transocean Sedco Forex
SLIDE - 14
<PAGE> 16
Business Rationale For The Merger
===============================================================================
*We Are Creating:
-The Largest Offshore Driller - Number Of Offshore Rigs,
Floating Rigs, Deepwater Rigs
-With Worldwide Market Presence - U.K., Norway, GOM,
Brazil, Africa, Asia, Middle East/FSU
-A History Of Technical Leadership - Engineering
Innovation and Deepwater Operating Expertise
Transocean Sedco Forex
SLIDE - 15
<PAGE> 17
History Of Engineering Innovation
===============================================================================
*Transocean
-First Offshore Jackup Drilling Rig
-First Turret-Moored Drillship
-First Fourth Generation Semisubmersible
-First Dual Activity Drilling Rig
*Sedco Forex
-First Semisubmersible Drilling Rig
-First Dynamically Positioned Drillship, Designed For Exploration
-First Dynamically Positioned Semisubmersible
-First Sedco Express-Class 5th Generation Semisubmersible
Transocean Sedco Forex
SLIDE - 16
<PAGE> 18
. . . And Ultra-Deepwater Expertise
===============================================================================
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART ON THIS SLIDE]
Wells Drilled
<TABLE>
<CAPTION>
Company 5,000'-6,000' 6,000'-7,000' Greater than 7,000'
- ------- ------------- ------------- -------------------
<S> <C> <C> <C>
Transocean Sedco Forex 34 24 4
Noble Drilling 5 1 2
Diamond Offshore 5 2 1
Global Marine 2 0 1
R&B Falcon 2 0 1
Other 1 1 0
</TABLE>
Source: Offshore Data Services, results through September 1999
Transocean Sedco Forex
SLIDE - 17
<PAGE> 19
Business Rationale For The Merger
===============================================================================
*We Are Creating:
-The Largest Offshore Driller - Number Of Offshore Rigs,
Floating Rigs, Deepwater Rigs
-With Worldwide Market Presence - U.K., Norway, GOM,
Brazil, Africa, Asia, Middle East/FSU
-A History Of Technical Leadership -
Engineering Innovation and Deepwater Operating Expertise
- Unmatched Financial Strength - Balance Sheet, Cash
Flow Generation Capacity
Transocean Sedco Forex
SLIDE - 18
<PAGE> 20
Financial Strength
===============================================================================
*Strong Balance Sheet
-Debt To Total Capitalization Projected To Be
Approximately 25% After The Merger
-Reduced Cost Of Capital
-Flexibility To Initiate And Control Future Acquisition And
Expansion Opportunities
*High Cash Flow Generation Capability
-Combined Proforma 1998 EBITDA Of $1.1 Billion
Transocean Sedco Forex
SLIDE - 19
<PAGE> 21
Business Rationale For The Merger
===============================================================================
*We Are Creating:
-The largest Offshore Driller - Number Of Offshore Rigs,
Floating Rigs, Deepwater Rigs
-With Worldwide Market Presence - U.K., Norway, GOM,
Brazil, Africa, Asia, Middle East/FSU
-A History Of Technical Leadership - Engineering
Innovation and Deepwater Operating Expertise
-Unmatched Financial Strength - Balance Sheet, Cash
Flow Generation Capacity
-A Unique Investment Vehicle - Superior Trading Liquidity,
Tremendous Operating Leverage
Transocean Sedco Forex
SLIDE - 20
<PAGE> 22
Public Float Will Be Much Greater Than
Other Contract Drillers
===============================================================================
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART ON THIS SLIDE]
Market Equity Capitalization At November 19, 1999
<TABLE>
<CAPTION>
Company Billions of Dollars
- ------- -------------------
<S> <C>
Transocean Sedco Forex 6.5
Diamond Offshore 4.8
Noble Drilling 3.8
ENSCO 3.2
Global Marine 2.9
Santa Fe Drilling 2.8
R&B Falcon 2.7
Rowan Companies 1.6
Marine Drilling 1.0
Pride International 0.9
</TABLE>
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART ON THIS SLIDE]
Public Float at November 19, 1999
<TABLE>
<CAPTION>
Company Billions of Dollars
- ------- -------------------
<S> <C>
Transocean Sedco Forex 6.3
Diamond Offshore 2.2
Noble Drilling 3.7
ENSCO 3.0
Global Marine 2.8
Santa Fe Drilling 1.3
R&B Falcon 2.6
Rowan Companies 1.6
Marine Drilling 1.0
Pride International 0.7
</TABLE>
Transocean Sedco Forex
SLIDE - 21
<PAGE> 23
Merger Creates Fourth Largest Oil Service Company
================================================================================
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART ON THIS SLIDE]
Equity Market Capitalization At November 19, 1999
<TABLE>
<CAPTION>
Company Billions of Dollars
- ------- -------------------
<S> <C>
Schlumberger 36.3
Halliburton 18.6
Baker Hughes 8.9
Transocean Sedco Forex 6.5
Diamond Offshore 4.8
Weatherford 3.9
Noble 3.8
Nabors 3.2
Transocean 3.1
Global Marine 2.9
</TABLE>
Transocean Sedco Forex
SLIDE - 22
<PAGE> 24
Offshore Drillers Significantly Outperformed "Large Caps" When Market Tightened
================================================================================
[LINE GRAPH DISPLAYING A COMPARISON OF SHARE PRICE PERFORMANCE MEASURED FROM
JANUARY 1, 1994 OF (1) AN INDEX COMPOSED OF BAKER HUGHES, HALLIBURTON AND
SCHLUMBERGER, (2) AN INDEX COMPOSED OF OFFSHORE DRILLING COMPANIES COMPILED BY
SIMMONS & COMPANY INTERNATIONAL AND (3) TRANSOCEAN OFFSHORE INC.]
Transocean Sedco Forex
SLIDE - 23
<PAGE> 25
Merger Creates A Unique Investment Vehicle
================================================================================
[THE FOLLOWING TABLES WERE REPRESENTED AS BAR CHARTS ON THIS SLIDE]
1998 EBITDA
<TABLE>
<CAPTION>
Company Millions Of Dollars
- ------- -------------------
<S> <C>
Schlumberger(1) 1,803
Halliburton 1,770
Transocean Sedco Forex(2) 1,079
Baker Hughes 1,058
1998 Net Income
<CAPTION>
Company Millions Of Dollars
- ------- -------------------
<S> <C>
Schlumberger(1) 1,053
Halliburton 965
Transocean Sedco Forex(2) 662
Baker Hughes 138
1998 Cash Flow
<CAPTION>
Company Millions Of Dollars
- ------- -------------------
<S> <C>
Schlumberger(1) 2,064
Halliburton 1,552
Transocean Sedco Forex(2) 943
Baker Hughes 896
</TABLE>
- -------------
(1) Schlumberger results exclude Sedco Forex.
(2) Proforma.
Transocean Sedco Forex
SLIDE - 24
<PAGE> 26
Merger Creates A Unique Investment Vehicle
================================================================================
o Significantly Greater Float Than Other Offshore Drillers
o Greater Operating Leverage Than Other Large Cap Oil Service Companies
o Solid Investment Grade Rating
o Tax - Advantaged Structure
The Transocean Sedco Forex Merger Creates
A Unique Risk/Reward Opportunity In
The Oil Field Services Sector
Transocean Sedco Forex
SLIDE - 25
<PAGE> 27
Business Rationale Summary
================================================================================
Transocean Sedco Forex's Goal Is To Be The
Offshore Drilling Contractor Of First Choice:
- For Customers
- For Investors
- For Employees
Transocean Sedco Forex
SLIDE - 26
<PAGE> 28
Why Own Transocean Sedco Forex Today?
================================================================================
o Worldwide Hydrocarbon Demand Growth Is Accelerating
o Worldwide Depletion Rates Continue To Erode The Production Base
o Non-OPEC Supply Response Has Been Minimal Due To Decline In E&P
Capital Spending
o OPEC Quota Discipline Appears Strong
o Worldwide Inventories Approaching Low Levels
o Technology Advances Have Created Spending Treadmill
o Strong Rebound In E&P Cash Flows
o E&P Capital Spending Expected To Be Up Next Year
Transocean Sedco Forex
SLIDE - 27
<PAGE> 29
Financial Review
================================================================================
[Photograph of the drillship Discoverer Enterprise]
[Photograph of the semisubmersible Transocean Richardson]
[Photograph of the semisubmersible Sedco 710]
[Photograph of the semisubmersible Sovereign Explorer]
SLIDE - 28
<PAGE> 30
Financial Overview
===============================================================================
o Combined Pro Forma Financials
- Starting Balance Sheet
- Pro Forma Results For 1998/1999 Through June
o Expectations - Guiding Wall Street
o Near-term Outlook
- Contract Status
- Contracted Backlog
- Capex Program
- Resulting Debt
Transocean Sedco Forex
SLIDE - 29
<PAGE> 31
Forecast Combined Balance Sheet(1)
(At December 31, 1999)
================================================================================
Dollar
Amounts
In Millions
-----------
Current Assets $ 480
Net PP&E 4,400
Deferred Charges And Other 130
Goodwill 1,140
-----------
Total Assets $ 6,150
===========
Current Liabilities $ 430
Total Debt 1,320
Deferred Credits And Taxes 510
Shareholders' Equity 3,890
-----------
Total Liabilities And Equity $ 6,150
===========
Debt/Total Capitalization 25%
(1) Please refer to the disclosure statement presented on page 2 of the
presentation. A number of risks could materialize that could cause actual
balance sheet figures to differ materially from this forecast, including the
amount of capital expenditures actually incurred prior to year-end, working
capital variations as a result of changes in rig activity levels and the other
information presented in "Disclosure Regarding Forward - Looking Statements"
(page 31), "Risk Factors" (page 33) and elsewhere in the joint proxy
statement/prospectus and the documents incorporated by reference therein.
Transocean Sedco Forex
SLIDE - 30
<PAGE> 32
Forecast Debt Structure - Post Merger
(At December 31, 1999)
================================================================================
<TABLE>
<CAPTION>
Interest Rate
-------------
<S> <C>
o $400 Million Term Loan L + 55 BPS
o $90 Million Trident Leases 7.55%
o $200 Million 30-Year Debentures 8.00%
o $100 Million 30-Year/Put 10 Notes 7.45%
o $30 Million Senior Notes ($21 Million O/S) 6.90%
o $540 Million Revolver ($282 Million O/S) L + 25 BPS
o $227 Million Lease Securitization Facility 7.25%
</TABLE>
Total Forecast Debt Outstanding: $1,320 Million
Transocean Sedco Forex
SLIDE - 31
<PAGE> 33
Summary Pro Forma Combined
Cash Flows And Earnings
================================================================================
(Dollar amounts in millions, except per share amounts)
<TABLE>
<CAPTION>
6 Months
Pro Forma Transocean Ended
Sedco Forex 1998 6/30/99
-------------------------------- ---- --------
<S> <C> <C>
Revenue $2,180 $ 894
EBITDA 1,079 364
Earnings From Operations 798 220
------ -----
Net Income $ 662 $ 176
====== =====
Cash Flow $ 943 $ 320
====== =====
Earnings Per Share $ 3.15 $0.84
====== =====
</TABLE>
Transocean Sedco Forex
SLIDE - 32
<PAGE> 34
Summary Pro Forma Combined
Cash Flows And Earnings
================================================================================
(Dollar amounts in millions, except per share amounts)
<TABLE>
<CAPTION>
6 Months
Pro Forma Transocean Ended
Sedco Forex 1998 6/30/99
- ---------------------------------------------------- ---------- ----------
<S> <C> <C>
Revenue $ 2,180 $ 894
EBITDA 1,079 364
Earnings From Operations 798 220
---------- ----------
Net Income $ 662 $ 176
========== ==========
Cash Flow $ 943 $ 320
========== ==========
Earnings Per Share $ 3.15 $ 0.84
========== ==========
Adjustments
Related Party Transaction Elimination (Insurance) $ 55 $ 18
Sedco Forex Depreciation Adjustment 62 30
Provisions and Writedowns (after tax) 20 33
Income Taxes On Adjustments (assumes 10% tax rate) (12) (5)
---------- ----------
Total 125 76
Adjusted Net Income $ 788 $ 252
========== ==========
Adjusted Cash Flow $ 1,048 $ 363
========== ==========
Adjusted EPS $ 3.75 $ 1.21
========== ==========
Transocean EPS (Diluted) $ 3.41 $ 1.41
========== ==========
</TABLE>
Transocean Sedco Forex
SLIDE - 33
<PAGE> 35
Other Financial Considerations
===============================================================================
o No Significant Consolidation Savings in 2000
-Integration Process
*IT Infrastructure
*Accounting And Purchasing Systems
*Engineering Support For Construction Program
*Schlumberger Transition Services
*Movement Of Personnel
o Will Change Estimated Lives On Sedco Rigs
o Pro Forma Combined Effective Tax Rate
Transocean Sedco Forex
SLIDE - 34
<PAGE> 36
Financial Reporting
================================================================================
o 1999 Reported Results
- Income Statement:
* TSF = Sedco Forex, Not Transocean Offshore
* Not Sedco Forex And Transocean Offshore
* Transocean Offshore Alone Will Not Be Published
- Balance Sheet:
* TSF Will Equal Sedco Forex And Transocean Offshore
o Historic Comparisons Will Have Little Meaning
- Quarter to Quarter
- Year to Year
Transocean Sedco Forex
SLIDE - 35
<PAGE> 37
Wall Street Expectations
TSF Reported Results
================================================================================
RIG Historic Results Will Disappear Post-Merger.
[BAR CHART DEPICTS TRANSOCEAN OFFSHORE INC. HISTORICAL EARNINGS PER SHARE FOR
THE FIRST THREE QUARTERS OF 1999 AND THE FIRST CALL ESTIMATE(1) OF PROJECTED
FOURTH QUARTER AND FULL YEAR 1999 EARNINGS PER SHARE ($0.30 AND $2.17,
RESPECTIVELY). THE HISTORICAL INFORMATION IS SHOWN AS CROSSED-THROUGH TO
INDICATE THAT RIG HISTORIC RESULTS WILL DISAPPEAR POST-MERGER]
(1) Represents a consensus view of analysts' estimates prepared by third parties
for which RIG assumes no responsibility. RIG undertakes no obligation to review
or confirm this or other analysts' expectations or estimates regarding RIG or
the combined Transocean Sedco Forex company.
Transocean Sedco Forex
SLIDE - 36
<PAGE> 38
Wall Street Expectations
================================================================================
[TWO BAR CHARTS ARE PRESENTED:
(1) THE FIRST BAR CHART DEPICTS TRANSOCEAN OFFSHORE INC. HISTORICAL EARNINGS
PER SHARE FOR THE FIRST THREE QUARTERS OF 1999 AND THE FIRST CALL ESTIMATE(1) OF
PROJECTED FOURTH QUARTER AND FULL YEAR 1999 EARNINGS PER SHARE ($0.30 AND $2.17,
RESPECTIVELY). THE HISTORICAL INFORMATION IS SHOWN AS CROSSED-THROUGH TO
INDICATE THAT RIG HISTORIC RESULTS WILL DISAPPEAR POST-MERGER
(2) THE SECOND BAR CHART DEPICTS SEDCO FOREX HISTORICAL UNAUDITED EARNINGS PER
SHARE FOR THE FIRST SIX MONTHS OF 1999 DIVIDED BY AN ASSUMED MERGER EXCHANGE
RATIO OF 0.2, WHICH WILL BECOME THE HISTORICAL EARNINGS PER SHARE OF TRANSOCEAN
SEDCO FOREX AFTER THE MERGER, AND ILLUSTRATES THE LACK OF A FIRST CALL ESTIMATE
FOR TRANSOCEAN SEDCO FOREX FOR FOURTH QUARTER AND FULL YEAR 1999]
o 1999 reported results will have little value
- historic comparisons meaningless
- significant adjustments to normalize
- merger related costs will distort numbers
o Focus on future of new TSF
Transocean Sedco Forex
SLIDE - 37
<PAGE> 39
Long-Term Contracts In Place
================================================================================
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART ON THIS SLIDE]
<TABLE>
<CAPTION>
Under Contract Until (approximate quarter)
------------------------------------------
<S> <C>
Enterprise Commencing 4Q 1999, terminating 4Q 2004
Spirit Commencing 2Q 2000, terminating 1Q 2005
Express Commencing 2Q 2000, terminating 1Q 2003
Energy Commencing 2Q 2000, terminating 1Q 2005
Cajun Express Commencing 3Q 2000, terminating 3Q 2003
Deep Seas Commencing 4Q 2000, terminating 4Q 2005
Marianas In place, terminating 4Q 2004
Searcher In place, terminating 3Q 2003
Winner In place, terminating 3Q 2003
Sedco 707 In place, terminating year-end 2002
Sedco 709 In place, terminating 2Q 2002
Sedco 706 In place, terminating 2Q 2002
Seven Seas In place, terminating 1Q 2002
Arctic In place, terminating 1Q 2002
P. Pioneer In place, terminating 3Q 2001
Wildcat In place, terminating 3Q 2001
Amirante In place, terminating 1Q 2001
</TABLE>
Firm Contracts in Place Total $3.2 Billion in Revenues
Transocean Sedco Forex
SLIDE - 38
<PAGE> 40
Operating Leverage Is Substantial
================================================================================
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART ON THIS SLIDE]
Impact Of $10,000/Day Rate Increase(1)
<TABLE>
<CAPTION>
Operating Income EPS(2)
---------------- ------
<S> <C> <C>
Jackups $ 47 $0.17
Floaters $123 $0.45
Total $169 $0.62
</TABLE>
(1) 80% Utilization Assumption
(2) 22.5% Tax Rate Assumption
Transocean Sedco Forex
SLIDE - 39
<PAGE> 41
Newbuild Delivery Schedule
================================================================================
<TABLE>
<CAPTION>
Estimated
Cost(1) Contract Estimated
Newbuild Project Customer ($ Millions) Terms Delivery
- ---------------- -------- ------------ -------- ---------
<S> <C> <C> <C> <C>
Discoverer Spirit Unocal $358 5 Years 2Q 2000
Discoverer Deep Seas Chevron $355 5 Years 3Q 2000
Sedco Express Elf $298 3 Years 1Q/2Q 2000
Cajun Express Marathon $264 3 Years 2Q/3Q 2000
Sedco Energy Texaco $307 5 Years 1Q/2Q 2000
Trident 20 Mobil $132 5 Years 4Q 2000
</TABLE>
(1) Factors such as the availability of qualified shipyard personnel, the delay
of ordered materials and equipment and other factors presented in "Disclosure
Regarding Forward-Looking Statements" (page 31), "Sedco Forex MD&A" (page 94)
and elsewhere in the joint proxy statement/prospectus and the documents
incorporated by reference therein could contribute to cost variations.
Transocean Sedco Forex
SLIDE - 40
<PAGE> 42
Sedco Newbuild Contracts
================================================================================
<TABLE>
<S> <C> <C> <C>
o Cajun Express o Sedco Express
- Customer is Marathon - Customer is Elf
- Contract term - 3 years - Contract term - 3 years
- Cancellation provisions - Cancellation provisions
* late delivery March 31, 2001 * late delivery May 28, 2000
o Sedco Energy o Trident 20
- Customer is Texaco - Customer is Mobil
- Contract term - 5 years - Contract term - 3 to 5 years
- Cancellation provisions - Late delivery February 12, 2002
* late delivery of more than two
months reduces contract term
* no cancellation provision
</TABLE>
Transocean Sedco Forex
SLIDE - 41
<PAGE> 43
Capital Expenditures
(Dollar amounts in millions)
================================================================================
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THIS SLIDE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
$59 $19 $213 $406 $520 $570 $450
- ------- ------- ------- ------- ------- ----------- -----------
1994(1) 1995(1) 1996(1) 1997(1) 1998(1) 1999P(1)(2) 2000P(2)(3)
</TABLE>
Estimated Combined Annual Maintenance Capital Expenditures: $110 Million
(1) Amounts for Transocean.
(2) Denotes presently planned/estimated capital expenditure levels. Actual
levels may vary materially and will be subject largely to future contract
requirements, the need to replace equipment on existing drilling units and other
future capital needs which are beyond the control of the Company. Please refer
to the joint proxy statement/prospectus for a fuller discussion of the factors
that could cause actual expenditures to differ from planned/estimated levels.
(3) Amounts for Transocean Sedco Forex.
Transocean Sedco Forex
SLIDE - 42
<PAGE> 44
Total Debt
================================================================================
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THIS SLIDE. SUPERIMPOSED
ACROSS THE CHART IS A LINEAR GRAPH DEPICTING THE PERCENTAGE THAT TOTAL DEBT
REPRESENTS OF TOTAL CAPITALIZATION. THE DATA IS DERIVED FROM TRANSOCEAN
OFFSHORE INC. HISTORICAL BALANCE SHEET INFORMATION THROUGH 1998 AND A PROJECTED
BALANCE SHEET FOR THE COMBINED COMPANIES AT YEAR-END 1999]
<TABLE>
<CAPTION>
Year Debt (Dollar Amounts in Millions) Debt/Total Capitalization
---- ---------------------------------
<S> <C> <C>
1994(1) $30 8.6%
1995(1) $30 7.6%
1996(1) $420 20.5%
1997(1) $733 31.1%
1998(1) $833 29.6%
1999P(2) $1,320 25.5%
</TABLE>
(1) Amounts for Transocean.
(2) Amounts for Transocean Sedco Forex.
Transocean Sedco Forex
SLIDE - 43
<PAGE> 45
Financial Summary
===============================================================================
o Transocean Sedco Forex Will Have Exceptional Financial Strength
- Low Debt To Total Capitalization
- Substantial Contract Backlog
- Effective Access To Equity Markets
- Solid Investment - Grade Debt Rating
- Efficient Tax Structure
o Tremendous Operating Leverage Combined With...
- Deepwater Operating Expertise And Experience
- Best High Specification Fleet
o Transocean Sedco Forex Is The Contractor Of Choice
- For Customers
- For Employees
- For Investors
Transocean Sedco Forex
SLIDE - 44
<PAGE> 46
Transocean Sedco Forex November 1999
The World's Leading Offshore Driller
[Photograph of the drillship Discoverer Enterprise]
[Photograph of the Sedco Express-class semisubmersible Sedco Express]
Victor E. Grijalva, Chairman
J. Michael Talbert, President and Chief Executive Officer
Robert L. Long, Executive Vice President and Chief Financial Officer
SLIDE - 45
