Transocean has reported net income attributable to controlling interest of $942 million, or $2.93 per diluted share, for the first quarter of 2009, compared to net income attributable to controlling interest of $1,149 million, or $3.58 per diluted share, in the year-ago quarter.

First quarter 2009 results were adversely impacted by certain net charges, after tax, totaling $264 million, or $0.82 per diluted share, as follows:

— $221 million of write-downs to fair market value for the GSF Arctic II and GSF Arctic IV semisubmersible rigs held for sale and

— $43 million of discrete tax items, payments associated with the merger of Transocean and GlobalSantaFe Corporation and losses on the retirement of debt.

First quarter 2008 reported income comprised certain net charges, after-tax, totaling $30 million, or $0.09 per diluted share, consisting of $27 million in discrete tax items, $1 million in merger-related costs and a $2 million loss related to the retirement of debt.

Operations Quarterly Review

Of the $152 million quarter-to-quarter decrease, $127 million reflected a decline in integrated services and other revenue and $29 million resulted from decreased contract drilling intangible revenues.

Operating and maintenance expenses for the first quarter of 2009 were $1.171 billion compared to $1.408 billion in the year-ago quarter, a decline of $237 million or 16.8%. The quarter-to-quarter decline in operating and maintenance costs comprised of $92 million from decreased non-drilling activity, $77 million related to a decrease in shipyard and maintenance projects and the remainder related to reductions in a variety of items including bad debt expense, strengthening of the US dollar and decreases in drilling activity.

Depreciation, depletion and amortization totaled $355 million in the first quarter of 2009, a decrease of 10.4% compared to $396 million in the fourth quarter of 2008. The $41 million quarter-to-quarter decrease resulted mainly from the cumulative effect of different adjustments related to the merger with GlobalSantaFe made during fourth quarter 2008 that did not recur in the first quarter 2009.

General and administrative expenses declined 5.1% to $56 million for the first quarter of 2009 compared to $59 million for the fourth quarter 2008. The decrease mainly reflects a reduction in costs related to Transocean’s move to Switzerland incurred in the first quarter of 2009 compared to the fourth quarter 2008.

Interest Expense and Liquidity

Interest expense, net of amounts capitalized, for the first quarter of 2009 totaled $136 million compared to $167 million for the fourth quarter of 2008. The decline in interest expense comprised $16 million from increased capitalized interest and $11 million from lower interest rates and lower balances in Transocean’s commercial paper program.

During the first quarter 2009, Transocean adopted financial accounting standards board staff position no. APB 14-1, accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) (“FSP APB 14-1”), which requires the company to separately account for the liability and equity components of its convertible debt instruments and to reflect interest expense at its market rate of borrowing. For the first quarter 2009, interest expense, net of amounts capitalized, included a non-cash increase of about $45 million resulting from the adoption of FSP APB 14-1. For the full year 2009, interest expense, net of amounts capitalized, is expected to comprise a non-cash increase of $176 million resulting from the adoption of FSP APB 14-1.

First quarter 2008 results are presented as adjusted for the retrospective application of FSP APB 14-1. For the first quarter 2008, interest expense, net of amounts capitalized, included a non-cash raise of $40 million resulting from the retrospective application of FSP APB 14-1. For the full year 2008, retrospective application of FSP APB 14-1 will result in a non-cash raise to interest expense, net of amounts capitalized, of $171 million. In addition, the retrospective application of FSP APB 14-1 to Transocean’s balance sheet as of March 31, 2008 caused the company’s total assets to decline by $5 million, the company’s liabilities to decrease by $776 million and its equity to rise by $771 million.

As of March 31, 2009, total debt was $12.964 billion, compared to total debt of $13.557 billion as of December 31, 2008 (as adjusted for FSP APB 14-1). The decline in total debt of $593 million during the first quarter 2009 resulted mainly from debt repayments, partly counterbalanced by further borrowings under the company’s joint venture credit facilities and increased amortization of discounts and fair value adjustments. The retrospective application of FSP APB 14-1 to Transocean’s balance sheet as of December 31, 2008 caused our total assets to rise by $11 million, the company’s liabilities to decline by $629 million and its equity to raise by $640 million.

Cash flow from operating activities totaled $1.441 billion for the first quarter of 2009 compared to $1.196 billion for the fourth quarter of 2008.

Effective Tax Rate

Transocean’s reported effective tax rate of 21.1% for the first quarter of 2009 reflects the unfavorable impact of the write-down of rigs to fair market value, as well as different discrete tax items of $36 million which mainly resulted from changes in estimates. Excluding these different discrete items, the Annual effective tax rate for the first quarter of 2009 was 15.2%.