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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2001
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number
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R&B FALCON U. S. SAVINGS PLAN
(Full Title of the Plan and the Address of
the Plan, if Different from that of the
Issuer named below)
TRANSOCEAN INC.
(Name changed May 9, 2002,
formerly "Transocean Sedco Forex Inc.")
4 Greenway Plaza
Houston, Texas 77046
(Name of Issuer of the Securities Held Pursuant
to the Plan and Address of its
Principal Executive Office)
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R&B FALCON U.S. SAVINGS PLAN
Financial Statements
and Supplemental Schedule
For the years ended December 31, 2001 and 2000
with Reports of Independent Auditors
R&B FALCON U.S. SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
Page
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Reports of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . 1
Audited Financial Statements
Statements of Net Assets Available for Benefits . . . . . . . . . . . . . . 3
Statements of Changes in Net Assets Available for Benefits. . . . . . . . . 4
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 5
Supplemental Schedule
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year) . . . . . 10
R&B FALCON U.S. SAVINGS PLAN
We have not been able to obtain, after reasonable efforts, the written consent
of Arthur Andersen LLP to our incorporation by reference in the Registration
Statements (Form S-8 No. 333-46374 and Form S-8 No. 333-54668) pertaining to the
R&B Falcon U.S. Savings Plan of their report dated June 13, 2001 with respect to
the financial statements and the supplemental schedule of the R&B Falcon U.S.
Savings Plan included in this Annual Report on Form 11-K for the year ended
December 31, 2000, as required by Section 7 of the Securities Act of 1933, as
amended (the "Securities Act"). Accordingly, you will not be able to sue Arthur
Andersen LLP pursuant to Section 11(a)(4) of the Securities Act and therefore
your right of recovery under that section may be limited as a result of the lack
of consent.
REPORT OF INDEPENDENT AUDITORS
The Administrative Committee
R&B Falcon U.S. Savings Plan
We have audited the accompanying statement of net assets available for benefits
of the R&B Falcon U.S. Savings Plan as of December 31, 2001 and the related
statement of changes in net assets available for benefits for the year then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001, and the changes in its net assets available for benefits for
the year then ended, in conformity with accounting principles generally accepted
in the United States.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2001, is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audit of the financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Houston, Texas
May 7, 2002
1
THE FOLLOWING REPORT IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN
LLP AND HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP.
REPORT OF INDEPENDENT AUDITORS
The Administrative Committee
R&B Falcon U.S. Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of the R&B Falcon U.S. Savings Plan (the Plan) as of December 31, 2000
and 1999, and the related statement of changes in net assets available for plan
benefits for the year ended December 31, 2000. These financial statements and
supplemental schedule referred to below are the responsibility of the
Administrative Committee. Our responsibility is to express an opinion on these
financial statements and supplemental schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for Plan benefits as of December
31, 2000 and 1999, and the changes in net assets available for Plan benefits for
the year ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of the year) as of December 31, 2000, is presented for purposes of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
Houston, Texas
June 13, 2001
2
R&B FALCON U.S. SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31,
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2001 2000
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Investments, at Fair Value $79,845,070 $93,274,848
Contributions Receivable:
Employee - 383,375
Employer - 255,974
Cash, noninterest-bearing 1,905 22,266
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Net assets available for benefits $79,846,975 $93,936,463
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See accompanying notes.
3
R&B FALCON U.S. SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31,
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2001 2000
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Additions:
Contributions:
Employee $ 4,209,849 $ 8,593,059
Employer 2,798,237 5,647,972
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Total contributions 7,008,086 14,241,031
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Investment income (loss):
Net appreciation (depreciation) in fair value of investments (10,080,845) 7,447,071
Investment income 2,390,765 4,170,446
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Total investment income (loss) (7,690,080) 11,617,517
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Total additions (681,994) 25,858,548
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Deductions:
Participant loan processing fees (43,450) (51,644)
Benefits paid to participants (13,364,044) (10,831,663)
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Total deductions (13,407,494) (10,883,307)
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Net increase (decrease) (14,089,488) 14,975,241
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Net assets available for benefits:
Beginning of year 93,936,463 78,961,222
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End of year $ 79,846,975 $ 93,936,463
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See accompanying notes.
4
R&B FALCON U.S. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. PLAN DESCRIPTION
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The R&B Falcon U. S. Savings Plan (the "Plan") is a defined contribution
plan that was established for the benefit of participating employees, as defined
in the Plan, of R&B Falcon Corporation and certain U.S. subsidiaries. R&B
Falcon Corporation ("R & B Falcon"), an indirect wholly-owned subsidiary of
Transocean Inc. (formerly known as "Transocean Sedco Forex Inc."), is the Plan
sponsor. The following description of the Plan provides only general
information. Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
GENERAL
The Plan is administered by an administrative committee, which is appointed
by Transocean Inc.'s Board of Directors. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA") and
participation in the Plan is voluntary. Plan assets are held by the Plan
trustee, Charles Schwab Trust Company ("Schwab Trust").
On January 31, 2001, R&B Falcon completed a merger transaction with
Transocean Inc. As a result of the merger, the Plan's investment in R&B Falcon
common stock was converted to units of the Transocean Ordinary Shares Fund and
all subsequent participant elections for investments in units of R&B Falcon
common stock were made to the Transocean Ordinary Shares Fund. Transocean Inc.
employees are not allowed to participate in the Plan. Certain employees of R&B
Falcon and its subsidiaries were allowed to begin participation in the
Transocean U.S. Savings Plan (formerly "Transocean Sedco Forex Savings Plan") on
either June 1, 2001, July 1, 2001 or August 1, 2001, based on their assignment
and geographic location. In conjunction with their participation in the
Transocean U.S. Savings Plan, these employees could no longer contribute to the
Plan.
ELIGIBILITY
On August 1, 2001 and as a result of the merger with Transocean Inc., the
Plan was closed to all new participants. Prior to that date, all full-time
regular and part-time regular employees of R&B Falcon and certain U.S.
subsidiaries, except those under a collective bargaining agreement, contract
employees and employees who were non-U.S. residents, were eligible to
participate in the Plan on the first day of the month following three months of
employment.
CONTRIBUTIONS
On August 1, 2001 and as a result of the merger with Transocean Inc.,
contributions into the Plan ceased. Prior to that date, participants could make
contributions to the Plan with pre-tax dollars ("Pre-Tax Contributions"),
pursuant to Section 401(k) of the Internal Revenue Code (the "Code"), and/or
contributions with after-tax dollars ("After-Tax Contributions") up to a maximum
of 15 percent of earnings per pay period.
Prior to August 1, 2001, the Plan allowed rollovers from other qualified
plans. Participants could invest their rollovers in any of the mutual funds,
common stock, or ordinary shares fund available under the Plan. Amounts rolled
over can be withdrawn at any time.
5
R&B FALCON U.S. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
MATCHING CONTRIBUTIONS
Prior to August 1, 2001, R&B Falcon matched contributions for each
participant equal to the sum of 100 percent of the first three percent of
contributions made by the participant to the Plan, plus 50 percent of the next
three percent of contributions made by the participant to the Plan. In
addition, R&B Falcon could elect annually to make a discretionary matching
contribution. For the years ended December 31, 2000 and 2001, R&B Falcon made
an additional 50 percent match of Pre-Tax Contributions and After-Tax
Contributions above three percent, but not in excess of six percent, resulting
in a 100 percent match of up to six percent. Matching Contributions were
applied on a pay period by pay period basis. Diversification of the matching
contributions was permitted. Participants could transfer matching contributions
between the various investment funds on a daily basis.
INVESTMENT OF EARNINGS
All dividends paid on Transocean Inc. ordinary shares held in the
Transocean Ordinary Shares Fund are used to purchase additional units of that
stock fund. Earnings on mutual funds are reinvested in that fund.
VESTING
Participants are immediately vested in their Pre-Tax Contributions,
After-Tax Contributions and matching contributions plus actual earnings thereon.
WITHDRAWALS
Participants may not withdraw Pre-Tax Contributions and earnings thereon
until the earliest of termination of employment, attainment of age 59 1/2 or in
the event of financial hardship. There is no limit on the number of withdrawals
that may be made by participants from their accounts after age 70 1/2.
Participants can withdraw any portion or all of their After-Tax Contributions
and earnings thereon. Pre-1999 matching contributions and earnings thereon can
be withdrawn from the Plan prior to termination of employment; however, upon
withdrawal of matching contributions, the participant is suspended from making
contributions to the Transocean U.S. Savings Plan for a period of six months.
Post-1998 matching contributions cannot be withdrawn prior to termination of
employment.
All distributions from mutual funds are made in cash. All amounts invested
in the Transocean Ordinary Shares Fund, whether purchased with participant
contributions or matching contributions, are distributed in the form of stock
certificates or cash at the participant's election. Dividends paid to Schwab
Trust on units purchased for or credited to the participant's account prior to
the distribution of such units to the participant are applied to the purchase of
additional units for the participant's account.
Upon termination of employment for any reason, if a participant's account
is less than or equal to $5,000, the account balance will automatically be
distributed to the participant within 12 months following termination. For
accounts greater than $5,000, participants may request distribution upon
termination but are not required to do so.
6
R&B FALCON U.S. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
PARTICIPANT LOANS
Participants may borrow from their account the lessor of 50 percent of
their vested balance or $50,000, with a minimum loan amount of $1,000.
Participants may have only one loan outstanding at any one time. The Plan
allows participants to borrow under a "general loan" provision, which can be
used for any purpose and is to be repaid over five years or less or a "home
loan" provision, which can only be used to purchase a primary residence and is
required to be repaid in equal amounts over 10 years or less. All loans bear a
reasonable rate of interest, as determined by the administrative committee,
which provides the Plan with a return commensurate with the prevailing interest
rate charged on similar commercial loans. Principle and interest are paid
ratably to the participant's account through payroll deductions. There is a
one-time loan origination fee of $40 per loan and a maintenance fee of $10 for
each calendar quarter the loan is outstanding. These fees are deducted from the
participant's account. Outstanding loan amounts are due if employment is
terminated.
PLAN TERMINATION
Although it is intended that the Plan will continue, it may be amended or
discontinued at any time subject to the provisions of ERISA. In the event the
Plan is terminated, the full amount credited to each participant's account will
be payable as soon as practicable following such termination.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared under the accrual
method of accounting in accordance with accounting principles generally accepted
in the United States. The following is a summary of significant accounting
policies followed by the Plan.
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the current
year presentation.
USE OF ESTIMATES
The preparation of these financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates that affect the amounts reported in the financial statements,
accompanying notes and schedule. Actual results may differ from those
estimates.
INVESTMENT VALUATION
Amounts invested in the mutual funds, ordinary shares fund and common stock
are carried at fair value based on the last quoted sales price of the year.
Participant loans are valued at amortized cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded as earned and dividends are recorded on the ex-dividend date.
7
R&B FALCON U.S. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
BENEFIT PAYMENTS
Benefit payments are recorded when paid.
UNIT ACCOUNTING
The Plan utilizes the unit method of accounting, which allows the
Transocean Ordinary Shares Fund to hold a small amount of cash for liquidity
purposes. The value of each unit does not vary significantly from the price of
the ordinary shares held in the fund. The ordinary share price is printed in
many publications and is readily available to the participants. Participants may
hold units of the Transocean Ordinary Shares Fund representing their
proportionate interest in both the ordinary shares and cash held in the fund.
RISKS AND UNCERTAINTIES
The Plan provides for various investments in ordinary shares, mutual funds
and short-term investments. Investment securities, in general, are exposed to
various risks, such as interest rate, credit and overall market volatility risk.
Due to the level of risk associated with certain investment securities, it is
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect the amounts
reported in the statements of net assets available for benefits and participant
account balances.
3. INVESTMENTS
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Investments that represent five percent or more of the Plan's net assets
are as follows:
December 31,
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2001 2000
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Transocean ordinary shares $17,401,162 $ -
R&B Falcon Corporation common stock - 25,544,989
PIMCO Short-Term Fund 16,512,166 16,542,943
Vanguard Windsor II Fund 15,004,460 15,553,606
Schwab S&P 500 Select Shares Fund 11,660,151 14,445,171
Managers Special Equity Fund 6,627,280 8,597,312
PIMCO Total Return Fund 6,440,372 4,956,113
During 2001 and 2000, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) in fair value as follows:
Years Ended
December 31,
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2001 2000
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Mutual funds $ (4,280,475) $(2,784,813)
Ordinary shares fund (4,853,499) -
Common stock (946,871) 10,231,884
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Net appreciation (depreciation) $(10,080,845) $ 7,447,071
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8
R&B FALCON U.S. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
4. INCOME TAX STATUS
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The Plan received a determination letter from the Internal Revenue Service
dated August 13, 2001 stating that the Plan is qualified under Section 401(a) of
the Code and, therefore, the related trust is exempt from taxation. Subsequent
to the issuance of the determination letter, the Plan was amended. Once
qualified, the Plan is required to operate in conformity with the Code to
maintain its qualification. The Plan Administrator believes the Plan is being
operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan, as amended, is qualified and the related
trust is tax exempt.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
-------------------------------------
The Plan invests in units of a mutual fund managed by Charles Schwab & Co.
("Schwab"), an affiliate of Schwab Trust. Schwab Trust is the Plan's trustee
and as such executed all mutual fund investment transactions for the years ended
December 31, 2001 and 2000. Schwab Trust also provided certain accounting
services to the Plan. Except for participant loan processing fees, R&B Falcon
pays for all administrative expenses of the Plan, including legal, accounting
and trustee fees.
In 2000, the Plan received consulting services from an advisory firm that
was at least partially owned by the then chairman of the administrative
committee. The fees and expenses for such services were paid by R&B Falcon.
9
SUPPLEMENTAL SCHEDULE
R&B FALCON U.S. SAVINGS PLAN
Schedule H, Line 4 (i) - Schedule of Assets (Held at End of Year)
EIN: 76-0544217
DECEMBER 31, 2001
Current
Identity of Issue Description Value
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* Transocean, Inc. Ordinary Shares; 514,523 Shares $17,401,162
PIMCO Short Term Fund Mutual Fund; 1,646,278 Shares 16,512,166
Vanguard Windsor II Fund Mutual Fund; 568,341 Shares 15,004,460
* Schwab S&P 500 Select Shares
Fund Mutual Fund; 658,394 Shares 11,660,151
Managers Special Equity Fund Mutual Fund; 93,871 Shares 6,627,280
PIMCO Total Return Fund Mutual Fund; 615,714 Shares 6,440,372
T Rowe Price International
Stock Mutual Fund; 201,156 Shares 2,210,705
* Charles Schwab Money Market Fund; 224 Shares 224
* Participant Loans Loans Receivable with various
maturity dates and interest rates
ranging from 5.5% to 10.0% 3,988,550
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Total Investments $79,845,070
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* Indicates a party-in-interest to the Plan
10
Exhibit No. 1
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-46374 and Form S-8 No. 333-54668) pertaining to the R&B Falcon
U.S. Savings Plan of our report dated May 7, 2002 with respect to the financial
statements and the supplemental schedule of the R&B Falcon U.S. Savings Plan
included in this Annual Report (Form 11-K) for the year ended December 31, 2001.
/s/ Ernst & Young LLP
Houston, Texas
June 21, 2002
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the R&B Falcon U.S. Savings Plan has duly caused this Annual Report on Form 11-K
to be signed on its behalf by the undersigned hereunto duly authorized on the 21
day of June, 2002.
By R&B Falcon U.S. Savings Plan
By /s/ Ann Clinton
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Ann Clinton
Plan Administrator