Annual report
Annual report
Accommodating the Offshore Industry
Content
Financial calendar and key figures............
About Prosafe.................................................
Theme: Strategic growth.............................
Directors’ report.............................................
Consolidated accounts.................................
Accounts Prosafe SE......................................
Independent auditors’ report.....................
Fleet overview................................................
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4
6
8
16
60
74
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This prinTed reporT is a shorT
version of The annual reporT.
For a full report, including a presentation
of corporate management and board of
directors, information about HSSEQA,
corporate governance, social responsibility,
risk management and financial and analytical
information, please refer to the Download centre
on Prosafe’s website www.prosafe.com.
This information will be updated whenever
required throughout the year, and will thereby at
all times be as updated and correct as possible.
3
Financial calendar
Reporting results
The following dates have been set for quarterly interim reporting and presentations in 2013:
1st quarter
2nd quarter
3rd quarter
4th quarter
:
:
:
:
14 May 2013
22 August 2013
7 November 2013
6 February 2014
Annual general meeting
The AGM for Prosafe SE will be held in the company’s premises at Stadiou 126,
CY-6020 Larnaca, Cyprus on Wednesday, 14 May 2013.
Key figures
Note
2012
2011
2010
2009
Profit
Operating revenues
EBITDA
Operating profit
Net profit
USD million
USD million
USD million
USD million
Earnings per share
USD
Operating margin
Balance sheet
Total assets
Interest-bearing debt
USD million
USD million
Net interest-bearing debt
USD million
USD million
Book equity
Book equity ratio
Valuation
1
2
3
4
5
510.4
280.1
222.4
177.5
0.80
43.6%
449.6
257.6
192.3
158.0
0.71
442.4
283.1
221.1
198.5
0.89
397.9
274.3
218.6
127.2
0.57
42.8%
50.0%
54.9%
1 487.2
1 376.1
1 266.4
1 355.5
810.4
706.8
516.3
34.7%
760.5
667.1
461.8
33.6%
705.4
607.1
410.3
32.4%
915.1
826.6
263.9
19.5%
Market capitalisation
USD million
Share price
NOK
1 894
47.32
1 529
40.99
1 821
46.40
1 466
36.85
1 Operating profit before depreciation
2 Net profit / Average number of outstanding and potential shares
3
4
5
(Operating profit / Operating revenues) * 100
Interest-bearing debt - Cash and deposits
(Book equity / Total assets) * 100
About Prosafe
Prosafe is the world’s leading owner and operator of semi-submersible
accommodation vessels. The company operates globally and
employed 547 people at year-end. Operating profit reached
USD 222.4 million in 2012 and net profit was USD 177.5 million.
5
Prosafe’s operations are related to
maintenance and modification of installations
on fields already in production, hook-up and
commissioning of new fields, tie-backs to
existing infrastructure and decommissioning.
Prosafe has extensive experience from
operating gangway connected to fixed
installations, FPSOs, TLPs, Semis and Spars.
The company’s track record comprises
operations offshore Norway, UK, Mexico, USA,
Brazil, Denmark, Tunisia, West Africa, North-
west and South Australia, the Philippines and
Russia.
Prosafe is listed on the Oslo Stock Exchange
with ticker code PRS.
With six dynamically positioned vessels and
five anchored vessels, Prosafe’s rig fleet is
versatile and able to operate in nearly all
offshore environments.
In addition, Prosafe has two harsh environment
semi-submersible accommodation vessels
under construction with scheduled delivery
from the yard in the summer of 2014 and
around year-end 2014, respectively. These new
units will be the most advanced and efficient
harsh environment accommodation vessels in
the world and will be constructed to comply
with Norwegian regulations.
Accommodation vessels are used when there
is a need for additional accommodation,
engineering, construction or storage
capacity offshore. Prosafe’s vessels have
accommodation capacity for 306-812 people
and offer high quality welfare and catering
facilities, storage, workshops, offices, medical
services, deck cranes and lifesaving and fire
fighting equipment. The vessels are positioned
alongside the host installation and are
connected by means of a telescopic gangway
so that personnel can walk to work.
Prosafe has a strong track record from
demanding operations world wide, with first
class operational performance and good safety
results.
Theme: Strategic growth
Expanding the fleet with two advanced harsh environment
semi-submersible vessels.
7
Prosafe’s strategy is to be the preferred provider
of semi-submersible accommodation and service
vessels and to pursue profitable growth within
the high-end of the offshore accommodation
industry. Prosafe has a goal of at least doubling
shareholder value over a five-year period,
measured as the combined value creation
of increased earnings per share and capital
returned to shareholders.
This is to be achieved by:
• Employing and training the right people
• Achieving safety and operational standards
that are amongst the best in the offshore
industry
• Maintaining or increasing the market
share within the high end segment of
the offshore accommodation industry
by renewing and increasing the fleet of
accommodation vessels
Over the past year and a half, significant steps
have been taken to progress on this strategy. In
December 2011, Prosafe signed a contract with
Jurong Shipyard Pte Ltd. (“JSPL”) in Singapore for
the provision of a harsh-environment semi-
submersible accommodation vessel compliant
with Norwegian regulations. Delivery is
scheduled for the summer of 2014. On 4 October
2013, a Letter of Intent was signed with JSPL for
the provision of a similar unit to be delivered
from the yard around year-end 2014, and a firm
contract was signed on 19 November 2013.
The two new vessels will be the largest and
most advanced accommodation vessels in the
world, constructed according to the GVA 3000E
design. With high air gap and powerful station
keeping arrangements, they are capable of year-
round operations in the harsh conditions on the
Norwegian continental shelf. They will have the
capacity to accommodate up to 450 persons in
single-bed cabins and will be outfitted with the
most modern and efficient safety equipment,
including free-fall lifeboats.
The vessels will be equipped with DP3 (Dynamic
Positioning) system as well as a 12-point
mooring arrangement. This means that the
vessels will be able to work both in full DP mode
and full anchor moored mode without thruster
assist, giving maximum flexibility for optimising
operational efficiency and cost according to the
client’s needs and wishes.
The cost of each of the new vessels is estimated
at USD 350 million, including owner-furnished
equipment, project management cost and
financing cost. They will be funded by a
combination of bank debt, bond loans and
retained earnings.
In December 2012, Prosafe entered into a USD
420 million term loan facility related to the two
new vessels. The loan, which will be drawn down
on delivery of the vessels, matures in 2017 and
the interest rate is 2.95 per cent above three-
months LIBOR. Furthermore, in early January
2013, a seven-year unsecured bond loan of NOK
500 million was issued. The interest rate is 3.75
per cent above three-months NIBOR.
The two new vessels were ordered on the back
of a positive market outlook. Oil companies
continue to focus on increased recovery rate,
which is leading to a growing amount of
maintenance, upgrade and life extension
projects requiring accommodation vessels
support. There is also an increasing amount of
work related to hook-up and commissioning of
new production installations. This is particularly
visible in the North Sea market, but there is also
evidence of such developments in other markets.
In summary, this has lead to a robust market.
The next couple of years are going to be busy,
but the outlook for the long term also appears
promising, with several concrete prospects for
work from 2015 and onwards.
Prosafe has an ambition to continue to grow in
the long term. With the dividend policy of paying
out up to 75 per cent of previous year’s net profit,
a sufficient amount of cash is retained to not
only renew and replace the current fleet, but also
to provide underlying long-term volume growth.
Directors’ report
Prosafe is the leading player in the global market for high-end
accommodation vessels. The company currently owns
11 semi-submersible vessels, with another two under construction.
The company has an extensive track-record, having worked in all the
major oil producing offshore regions and with most of the largest oil
companies in the world.
9
(USD 1 376.1 million) at the end of 2012.
Investments in tangible assets totalled USD
188.1 million (USD 119.1 million). This is mostly
attributable to the upgrade and life extension
of Safe Caledonia, the first instalment of the
new build Safe Zephyrus, project expenses
related to the new build Safe Boreas and the
upgrade of Safe Astoria. Proceeds from the sale
of Safe Esbjerg amounted to USD 38.5 million.
The vessel was sold at a gross price of USD 55
million in August 2012, meaning that USD 16.5
million, to be paid over a period of three years,
remains outstanding in accordance with the
sale agreement.
In 2012, the company paid interim dividends
of USD 118.6 million (USD 107.1 million),
corresponding to NOK 3.06 per share (NOK 2.65).
Interest-bearing debt amounted to USD
810.4 million (USD 760.5 million) at year-end.
Repayments of debt totalled USD 282.2 million
(USD 806.3 million), while gross increase in
borrowing amounted to USD 317.1 million
(USD 870.4 million). In February 2012, the
company issued a NOK 500 million unsecured
bond loan with an interest rate of 3.75 per cent
above three-months NIBOR and maturity in
February 2017. In December 2012, a USD 420
million term loan facility for the financing of
the two new builds was signed. The loan which
matures in December 2017, can be drawn upon
delivery of the new builds with the interest rate
being 2.95 per cent above three-months LIBOR.
As at year-end 2012, the Prosafe Group had
total liquid assets of USD 103.6 million (USD
93.4 million). The liquidity reserve (liquid assets
plus undrawn credit facilities) totalled USD
464.6 million (USD 603.4 million).
Total shareholders’ equity amounted to USD
516.3 million (USD 461.8 million), resulting in a
book equity ratio of 34.7 per cent (33.6 per cent).
Income statement
Operating revenues totalled USD 510.4 million
in 2012 (USD 449.6 million in 2011). The
increase from 2011 is mainly due to a higher
average day rate level combined with a higher
utilisation of the fleet and a higher level of
income to cover reimbursable non-charter
related expenses. Total operating expenses
increased to USD 230.3 million (USD 192.0
million), largely as a result of the mentioned
increase in reimbursable non-charter related
expenses.
Depreciation decreased to USD 57.7 million
(USD 65.3 million) following an assessment
based on the condition and planned
maintenance programme of the five vessels
operating in Mexico, which resulted in an
extension of their economic life with effect
from 1 January 2012, from an average four
years to ten years.
This resulted in an operating profit of USD
222.4 million (USD 192.3 million).
Net interest expenses totalled USD 39.8
million (USD 42.1 million). Other financial
items amounted to USD -4.6 million (USD 6.9
million). This figure includes the net effect
from changes in value of financial currency
hedging instruments and revaluation of NOK
denominated bond loans.
Taxes for 2012 were USD -0.5 million (USD 0.9
million), including a reversal of around USD 1.4
million of previously expensed taxes in Russia
related to the operation of Safe Astoria at the
Sakhalin field in 2007-09.
Net profit amounted to USD 177.5 million (USD
158.0 million), resulting in diluted earnings per
share of USD 0.80 (USD 0.71).
Capital
Total assets amounted to USD 1 487.2 million
10
Overall, Prosafe has continued to reinforce
its solid financial position allowing it to pay
dividends to shareholders in addition to
maintaining a level of investments that secure
long term growth for the company.
Pursuant to Section 3-3 of the Norwegian
Accounting Act, the Board confirms that the
going-concern assumption applies and that the
annual accounts have been prepared based on
this assumption.
Reference is made to note 26 to the
consolidated accounts for a description of
events after the balance sheet date.
Operations
Prosafe is the world’s largest owner and
operator of semi-submersible accommodation
vessels. It owns 11 out of the 19 vessels
worldwide. The contract backlog increased to
USD 720 million at the end of 2012 from USD
557 million at the end of 2011 (USD 827 million
and USD 595 million, respectively including
clients’ extension options).
Safe Hibernia, Jasminia, Safe Britannia, Safe
Lancia, Safe Regency and Safe Bristolia operated
on long-term charters in Mexico throughout
the year.
Safe Concordia operated in Brazil during the
entire year. The contract with Petrobras expires
in June 2014.
After completing an upgrade in Batam,
Indonesia, Safe Astoria commenced a contract
for Woodside Energy Ltd. at the North Rankin
field in Australia in May 2012. After completion
of the contract at year-end, the vessel relocated
to Indonesia where it is currently laid up.
Safe Caledonia was on charter with BG
International Ltd. on the UK Continental Shelf
until April 2012. Thereafter, the vessel moved to
the Remontowa Yard in Gdansk, Poland, where
she underwent an upgrade and life extension
project. The project included changing
out most of the accommodation modules,
extensive hull renewal and upgrade of mooring
winches. The work, which took approximately
three months longer than expected due to
a combination of increased scope and cold
weather, are estimated to add another 20 years
to the operational life of the vessel. The project
was completed in February 2013.
Safe Scandinavia operated for BP Norge AS at
Valhall in Norway until March 2012. After a
short yard stay, she commenced operations for
ConocoPhillips Skandinavia AS at the Eldfisk
field in Norway, where she remained until end
of June 2012. She then returned to operate for
BP Norge AS at Valhall until March 2013.
Regalia operated for Talisman Energy Norge
AS at the Yme field in Norway until end of
August 2012. Thereafter she moved to the
Hanøytangen yard in Norway for maintenance
work.
The jack-up Safe Esbjerg was laid up in Denmark
until she was sold with effect from 5 August 2012.
Fleet expansion
In November 2012, Prosafe signed a turnkey
contract with Jurong Shipyard Pte Ltd. in
Singapore for the construction of another
semi-submersible accommodation vessel for
operations in harsh environments.
The vessel, named Safe Zephyrus, will have the
same specifications as Safe Boreas, which was
ordered in December 2011.
Both vessels will be constructed in accordance
with the GVA 3000E design and will be
equipped with a DP3 (dynamic positioning)
system as well as a 12 point mooring
arrangement. This will allow for operations
in harsh environments both in dynamic
11
positioning (DP) and anchored mode, providing
maximum cost efficiency and flexibility.
Each unit will have the capacity to
accommodate 450 persons in single man
cabins.
Delivery from the yard is scheduled for the
summer of 2014 in respect of Safe Boreas and
approximately year end 2014 for Safe Zephyrus.
All-in cost including yard cost, owner-furnished
equipment, project management and financing
is estimated at USD 350 million in respect of
each vessel. 20 per cent of the contract price
was paid on the date of the contract with the
remaining 80 per cent payable on delivery.
The new vessels should contribute significantly
to growth and are instrumental for achieving
Prosafe’s target of doubling shareholder values
over a five-year period. In addition, they will
reinforce the company’s leading position in
the high-end accommodation vessel segment,
further strengthening its ability to meet
clients' needs related to increasingly complex
operations in a growing market.
Outlook
The general outlook for the accommodation
vessel market is positive. The trend of
increasing field life continues, resulting
in a growing need for services related to
maintenance and modification projects.
Further, there have been an increasing
number of prospects related to hook-up and
commissioning of new fields, particularly in the
North Sea, where there have been a number of
significant finds over the past year. In general,
the lead time tends to be longer for hook-up
and commissioning jobs (2-3 years) than for
maintenance and upgrade jobs (1-2 years).
The North Sea market remains busy, with high
activity both with regards to work on existing
fields and hook-up and commissioning of new
fields. Lead times between contract award
and operation start-up have increased with
opportunities as long as three years into the
future being discussed. However, there have
not been any changes with regards to contract
lengths and seasonal pattern. Most contracts
are still less than 12 months duration and
opportunities remain greater in the summer
season than in the winter season.
Mexico has been a stable market for many
years. Recently, the activity level with regards to
production drilling and construction has been
high, which should bode well for demand for
offshore accommodation going forward.
The growth outlook in the Brazilian market
appears promising. There are currently three
offshore accommodation vessels working in the
Campos basin, and it is likely that more vessels
12
will be needed in the short-to-medium term. In
the long-term there should also be a significant
growth potential in other areas.
Demand in other parts of the world tends to be
volatile, although there seems to have been an
underlying positive development over the past
few years. Of these markets, Australia appears
to be the most promising for the time being,
with certain identified prospects.
In addition to the existing worldwide fleet of
19 semi-submersible accommodation vessels,
there are 8 vessels confirmed to be under
construction. Although this represents a supply
growth in relative terms, the market should
be able to absorb the new vessels without
significant downward pressure on day rates
and utilisation rates in the long term, taking
into account that demand is likely to continue
to grow over the coming years. Furthermore,
the age of some of the existing vessels is likely
to result in some of these vessels being taken
out of the market over the coming five to ten
years.
Health, safety and the environment (HSE)
A successful performance with respect to HSE is
fundamental to all of Prosafe’s operations and
is reflected in the company’s core values. The
company works proactively and systematically
to reduce injuries and sickness absence.
Prosafe operates a zero accident mind-set
philosophy which means that no accidents or
serious incidents are acceptable. Over the past
years, the company has focused on preventive
measures and a number of initiatives have
been implemented in order to further
strengthen the safety culture. Simultaneously,
new systems and procedures have been
introduced which have resulted in improved
safety results over time.
Injury (LTI) (i.e. incident that resulted in the
employee being absent from the next work
shift). Fortunately, in respect of this incident
there were no long-term consequences for the
employee. This translates into an LTI frequency
rate of 0.98 for 2012, compared to 0.95 in 2011.
The LTI frequency is calculated by multiplying
the number of LTIs by 1 million and dividing
this by the total number of man-hours worked.
Sickness absence increased to 3.3 per cent in
2012 from 2.1 per cent in 2011.
Prosafe had no accidental discharges to the
natural environment in 2012 and continues
to actively reduce emissions by investment in
more modern and fuel efficient equipment
and continuous improvement in operating
procedures.
Human resources and diversity
Prosafe’s workforce consisted of 547 individuals
at the end of 2012, as compared to 551 in the
previous year. Prosafe’s global presence was
reflected in the fact that its employees came
from 27 countries around the world. The overall
workforce turnover in the group was 7.6 per
cent in 2012, an increase from 4.2 per cent in 2011.
The company operates an equal opportunity
policy including gender equality. Men have,
however, traditionally made up a greater
proportion of the recruitment base for offshore
operations, and this is reflected in Prosafe’s
gender breakdown. As of 31 December 2012,
women accounted for 15 per cent of the overall
workforce, compared to 11 per cent in 2011.
Onshore the proportion of women was 41 per
cent, as opposed to 43 per cent in 2011.
Women constituted 15 per cent of the
managers as at 31 December 2012, as opposed
to 18 per cent at the end of 2011.
During the year, Prosafe recorded one Lost Time
Prosafe aims to offer the same opportunities to
all and there is no discrimination due to race,
13
gender, nationality, culture or religion with
respect to recruit ment, remuneration or
promotion.
Corporate governance
Corporate governance in Prosafe is based on
the principles contained in the Norwegian
Code of Practice for Corporate Governance
of 23 October 2012. There are no significant
deviations between the Code of Practice and
the way it has been implemented in Prosafe.
The company’s full Corporate Governance
report is set out on Prosafe’s website http://
www.prosafe.com.
By displaying robust corporate governance,
the company aims to strengthen confidence in
the company among shareholders, the capital
market and other interested parties, and will
help ensure maximum value creation over time
in the best interest of shareholders, employees
and other stakeholders.
At the Annual General Meeting on 23 May
2012, Christian Brinch and Ronny Johan
Langeland were re-elected as Directors for a
period of two years.
Corporate social responsibility
Prosafe aims to be a socially responsible
company and to further develop its business
in a sustainable manner. In order to ensure
long-term, viable development and profit, the
company balances economic, environmental
and social objectives and integrates them into
its daily business activities and decisions.
Prosafe’s objectives for corporate social
responsibility are based on the company’s
strategy, core values, Code of Conduct and
principles for corporate governance, in addition
to international recognised principles and
guidelines. In order to advance its commitment
to sustainability and corporate citizenship,
Prosafe signed up as a member of the United
Nations Global Compact in October 2008.
Going forward, the company will continue to
aim for continuous improvement of internal
standards, the way it works with partners and
suppliers, and to manage the impact of its
operations.
Risk
Prosafe categorises its primary risks under the
following headings: strategic, operational,
financial and compliance related. The
company’s Board and senior officers manage
these risk factors through continuous
reporting, board meetings, periodic reviews of
the business and tenders, and rolling strategy
and budget processes. This is supplemented
by dialogue and exchange of views with the
company’s management.
The company aims to create shareholder value
by allocating capital and resources to the
business opportunities that yield the best
return relative to the risk involved within its
specified strategic direction.
Prosafe seeks to reduce its exposure to
operational, financial and compliance related
risk through proper operating routines, the use
of financial instruments and insurance policies.
Further information on financial risk
management is provided in note 21 to the
consolidated financial statements.
An account of the main features of the
company’s internal control and risk
management systems is available on Prosafe’s
website http://www.prosafe.com.
Shareholders
According to the shareholder register as at 31
December 2012, the ten largest shareholders
held a total of 47.3 per cent of the issued
shares. The remaining shares were held by
14
4 380 investors. A nominee account in the
name of State Street Bank was the largest
shareholder with a holding of 12.2 per cent of
the issued shares.
The number of issued shares in Prosafe is
229 936 790 at a nominal value of EUR 0.25
each, of which 6 963 731 shares were owned
by Prosafe SE. There has been no change in
share capital in the reporting period.
Further information is shown in note 16 to the
consolidated financial statements.
Auditor
The independent auditor of the company,
Ernst & Young Cyprus Ltd., has expressed its
willingness to continue as the company’s
auditor. Reference to auditors’ fee is made to
note 8 to the consolidated accounts.
Proposed dividend
Prosafe’s aim is that its shareholders receive a
competitive return on their shares through a
combination of share price appreciation and a
direct return in the form of dividends. The level
of dividend reflects the underlying financial
development of the company, while taking into
account opportunities for further value creation
through profitable investment.
The Board has approved a dividend policy of
up 75 per cent of the company’s net profit paid
four times per year in the following year.
In 2012, a total dividend equivalent to USD 0.48
per share was distributed to the shareholders.
The dividend was paid in the form of NOK 3.06
per share. Typically, an interim dividend will
be declared together with the release of the
quarterly results.
At 31 December 2012, Prosafe SE had a
distributable equity of USD 1 124.6 million.
The parent company showed a net profit of
USD 27.4 million for 2012, which the Board
proposes to be allocated as follows (in USD
million):
Dividend
Transferred to equity
Total
0.0 million
27.4 million
27.4 million
Events after 31 December 2012
New bond loan
On 4 January 2013, Prosafe successfully
completed a NOK 500 million unsecured bond
issue maturing in January 2020. In connection
with this bond issue, Prosafe bought back NOK
156 million of one of the existing bonds, PRS06
PRO, which will mature on 14 October 2013 at
102.25.
About Prosafe
15
Cyprus crisis
A proposal for an agreement relating to a
stabilisation package between the Government
of Cyprus and the Eurozone countries was
made public on 16 March 2012. At the date of
this report the matter remains unresolved.
On 15 March 2013, Prosafe held approximately
USD 550 000 on deposit in one bank in Cyprus.
Private placing of 13 million shares
On 15 March 2013, the company announced
the successful completion of a private
placement of 13 000 000 new shares directed
towards Norwegian and international
institutional investors, after close of the
Oslo Stock Exchange on 14 March 2013.
The over-subscribed placement was made
at a subscription price of NOK 58 per share,
and the share capital increase represented
approximately 5.7 per cent of the issued shares
in the company. Gross proceeds amounted to
NOK 754 million, and will be used to fund value
enhancing growth investments.
The issuance of the new shares was resolved
by the company's Board of directors pursuant
to an authorisation granted at the company's
annual general meeting on 23 May 2012.
The shares allocated in the private placement
were issued and registered in the Norwegian
Central Securities Depository (VPS) on 18 March
2013, and were tradable on the Oslo Stock
Exchange from the same date. The new share
capital of the company was increased by EUR
3 250 000 to EUR 60 734 197.50, divided on
242 936 790 shares with a nominal value of
EUR 0.25 per share.
Larnaca, 20 March 2013
Board of Directors of Prosafe SE
Michael Raymond Parker
Christian Brinch
Roger Cornish
Non-executive chairman
Non-executive deputy chairman
Non-executive director
Ronny Johan Langeland
Non-executive director
Carine Smith Ihenacho
Non-executive director
Christakis Pavlou
Non-executive director
Consolidated accounts
CONSOLIDATED INCOME STATEMENT
(USD million)
Charter revenues
Other operating revenues
Operating revenues
Employee benefits
Other operating expenses
Operating profit before depreciation
Depreciation
Operating profit
Interest income
Interest expenses
Other financial income
Other financial expenses
Net financial items
Profit before taxes
Taxes
Net profit
Attributable to equity holders of the parent
Earnings per share (USD)
Diluted earnings per share (USD)
17
Note
6
8
9
10
12
12
4, 11, 12
11, 12
13
14
14
2012
423.9
86.5
510.4
(97.7)
(132.5)
280.1
(57.7)
222.4
1.1
(40.9)
27.4
(32.0)
(44.4)
178.0
(0.5)
177.5
2011
400.7
48.9
449.6
(93.0)
(99.0)
257.6
(65.3)
192.3
0.3
(42.4)
32.8
(25.9)
(35.2)
157.1
0.9
158.0
177.5
158.0
0.80
0.80
0.71
0.71
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(USD million)
Net profit for the year
Foreign currency translation
Revaluation hedging instruments
Note
21
2012
177.5
(0.9)
(3.7)
2011
158.0
(0.1)
0.7
Income tax effect on components of comprehensive income
0.0
0.0
Other comprehensive income, net of tax
Total comprehensive income
Attributable to equity holders of the parent
(4.6)
172.9
0.6
158.6
172.9
158.6
18
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(USD million)
ASSETS
Goodwill
Rigs
New builds
Other tangible assets
Other non-current assets
Total non-current assets
Cash and deposits
Debtors
Fair value on derivatives
Other current assets
Total current assets
Total assets
EQUITY AND LIABILITIES
Share capital
Other equity
Total equity
Interest-bearing non-current liabilities
Deferred tax
Fair value on derivatives
Other provisions
Total non-current liabilities
Interest-bearing current debt
Accounts payable
Taxes payable
Fair value on derivatives
Other current liabilities
Total current liabilities
Total equity and liabilities
Larnaca, 20 March 2013
Note
31.12.2012
31.12.2011
10
10
10, 25
10
6
20, 22
20, 21
20, 21
20, 23
16
17, 20, 21
13
20, 21
17, 20, 21
20, 21
13
20, 21
18, 20, 21
226.7
896.3
135.6
5.4
16.5
1 280.5
103.6
45.7
14.6
42.8
206.7
1 487.2
63.9
452.4
516.3
745.6
28.1
36.3
2.4
812.4
64.8
9.3
19.9
0.0
64.5
158.5
1 487.2
226.7
893.7
58.3
5.1
0.0
1 183.8
93.4
56.5
0.0
42.4
192.3
1 376.1
63.9
397.9
461.8
756.9
33.6
32.5
2.1
825.1
3.6
5.3
17.3
12.8
50.2
89.2
1 376.1
Michael Raymond Parker
Christian Brinch
Roger Cornish
Non-executive chairman
Non-executive deputy chairman
Non-executive director
Ronny Johan Langeland
Non-executive director
Carine Smith Ihenacho
Non-executive director
Christakis Pavlou
Non-executive director
19
CONSOLIDATED CASH FLOW STATEMENT
(USD million)
Note
2012
2011
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxes
Unrealised currency (gain)/loss on long-term debt
Gain on sale of shares
Gain on sale of tangible assets
Depreciation
Financial income
Financial cost
Change in working capital
Other items from operating activities
Net cash flow from operating activities
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of shares
Proceeds from sale of tangible assets
Acquisition of shares
Acquisition of tangible assets
Interest received
17
4
10
10
4
6
4
10, 25
178.0
15.0
0.0
(4.8)
57.7
(1.1)
40.9
4.0
(6.6)
283.1
0.0
38.5
0.0
(188.1)
1.1
157.1
(9.0)
(10.2)
0.0
65.3
(0.3)
42.4
(48.5)
(7.6)
189.2
75.1
0.0
(65.0)
(119.1)
0.3
Net cash flow from investing activities
(148.5)
(108.7)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from new interest-bearing debt
Repayments of interest-bearing debt
Dividends paid
Interest paid
Sale of own shares
Net cash flow from financing activities
Net cash flow
Cash and deposits at 1 January
Cash and deposits at 31 December
17, 20, 21
17, 20, 21
15
22
317.1
(282.2)
(118.6)
(40.9)
0.2
(124.4)
10.2
93.4
103.6
870.4
(806.3)
(107.1)
(42.4)
0.0
(85.4)
(4.9)
98.3
93.4
20
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(USD million)
Equity at 31 December 2010
Net profit
Other comprehensive income
Total comprehensive income 1)
Sale of own shares
Dividend
Share
capital
63.9
Own
shares
(49.1)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.0
Equity at 31 December 2011
63.9
(49.0)
Net profit
Other comprehensive income
Total comprehensive income 1)
Sale of own shares
Dividend
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
0.0
Other
equity
375.7
158.0
0.0
158.0
(0.1)
(107.1)
426.5
177.5
0.0
177.5
0.0
(118.6)
Cash
flow
hedges
(24.2)
0.0
0.7
0.7
0.0
0.0
(23.5)
0.0
(3.7)
(3.7)
0.0
0.0
Foreign
currency
translation
44.0
0.0
(0.1)
(0.1)
0.0
0.0
43.9
0.0
(0.9)
(0.9)
0.0
0.0
Total
equity
410.3
158.0
0.6
158.6
0.0
(107.1)
461.8
177.5
(4.6)
172.9
0.2
(118.6)
Equity at 31 December 2012
63.9
(48.8)
485.4
(27.2)
43.0
516.3
1) Total comprehensive income is attributable to the equity owner of the parent
The legal form of the share capital and the share premium accounts are reflected in the statement
of changes in equity of the accompanying parent financial statements. Other equity includes share
premium reserve and retained earnings.
21
Notes to the consolidated financial statements
NOTE 1: CORPORATE INFORMATION
Prosafe SE (the ‘Company’) is a public limited company domiciled in Larnaca, Cyprus. The Company is
listed on the Oslo Stock Exchange with ticker code PRS. The consolidated financial statements comprise
the financial statements of the Company and its subsidiaries (together referred to as the ‘Group’). The
consolidated financial statements for the year ended 31 December 2012 were authorised for issue
in accordance with a resolution of the board of directors on 20 March 2013. The Group is the world’s
leading owner and operator of semi-submersible accommodation/service rigs.
NOTE 2: BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) endorsed by the European Union (EU) and the requirements of the Cyprus
Companies Law, Cap 113. The accounts have been prepared on a historical cost basis, except for
derivative financial instruments and financial investments that are stated at fair value. The consolidated
financial statements are presented in US dollars (USD), and all values are presented in USD million
unless otherwise stated. The accounting principles adopted are consistent with those of the previous
financial year.
New and amended standards
The accounting policies adopted are consistent with those of the previous financial year, except for the
following new and amended IFRS and IFRIC interpretations effective as of 1 January 2012:
• IFRS 7 Financial instruments; Disclosures – Enhanced Derecognition Disclosure Requirements.
The amendment requires additional disclosure about financial assets that have been transferred but
not derecognized to enable the user of the Group’s financial statements to understand the
relationship with those assets that have not been derecognized and their associated liabilities.
In addition, the amendment requires disclosures about the entity’s continuing involvement in
derecognized assets to enable the users to evaluate the nature of, and risks associated with, such
involvement. The amendment is effective for annual periods beginning on or after 1 July 2011.
The Group does not have any assets with these characteristics so there has been no effect on the
presentation of its financial statements.
• IAS 12 Income taxes. The amendment clarifies the determination of deferred tax on investment
property measured at fair value and introduces a rebuttable presumption that deferred tax on
investment property measured using the fair value model in IAS 40 shall be determined on the basis
that its carrying amount will be recovered through sale. The presumption can be rebutted if two
specific criteria have been met. The amendment also includes an implementation of SIC 21 – Income
22
Taxes – Recovery of Revalued Non-depreciable Assets stating that deferred tax on non-depreciable
assets measured using to the revaluation model in IAS 16 Property, Plant and Equipment shall always
be measured on a sale basis. Within the EU/EEA area, the amendments are effective for annual periods
beginning on or after 1 July 2011.
Approved IFRSs and IFRICs with future effective dates
Standards and interpretations that are issued up to the date of issuance of the consolidated financial
statements, but not yet effective, are disclosed below. The Group’s intention is to adopt the relevant
new and amended standards and interpretations when they become effective, subject to EU approval
before the consolidated financial statements are issued.
IAS 1 Presentation of Financial Statements
The amendments to IAS 1 imply that the items presented in other comprehensive income (OCI) shall
be grouped in two categories. Items that could be reclassified to profit or loss at a future point in
time, for example net gain on hedge of net investment, exchange differences on translation of foreign
operations, net movement on cash flow hedges and net gain or loss on available-for-sale financial
assets, shall be presented separately from items that will never be reclassified, for example, actuarial
gains and losses on defined benefit plans. The amendments affect the presentation only and have no
impact on the Group’s financial position or performance. The amendments become effective for annual
periods beginning on or after 1 July 2012, and will therefore be applied in the Group’s first annual report
after becoming effective.
The amendment is not expected to have any impact on disclosures, financial position or performance
when applied at a future date.
IAS 19 Employee Benefits
The IASB has issued numerous amendments to IAS 19. These range from fundamental changes such
as removing the corridor mechanism and the concept of expected returns on plan assets to simple
clarifications and rewording. Removing the corridor mechanism implies that actuarial gains and losses
shall be recognised in other comprehensive income (OCI) in the current period. The amendments to IAS
19 will impact the net benefit expense, as the expected return on plan assets will be calculated using
the same interest rate as applied for the purpose of discounting the benefit obligation.
The amendments are effective for accounting periods beginning on or after 1 January 2013.
The amendment is not expected to have any impact on disclosures, financial position or performance
when applied at a future date.
IAS 28 Investment in Associates and Joint Ventures
As a consequence of the new standards IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests
in Other Entities, IAS 28 Investments in Associates has been renamed IAS 28 Investment in Associates
and Joint Ventures, and describes the application of the equity method to investments in joint ventures
23
in addition to associates. Within the EU/EEA area, the amendments are effective for annual periods
beginning on or after 1 January 2014.
The amendment is not expected to have any impact on disclosures, financial position or performance
when applied at a future date.
IAS 32 Financial Instruments: Presentation
IAS 32 is amended in order to clarify the meaning of “currently has a legally enforceable right to set-off”
and the application of the IAS 32 offsetting criteria to settlement systems (such as central clearing
house systems) which apply gross settlement mechanisms that are not simultaneous.
The amendments are effective for annual periods beginning on or after 1 January 2014.
The amendment is not expected to have any impact on disclosures, financial position or performance
when applied at a future date.
IFRS 7 Financial Instruments: Disclosures
The amendments imply that entities are required to disclose information about rights to set-off
and related arrangements (e.g., collateral agreements). The disclosures would provide users with
information that is useful in evaluating the effect of netting agreements on an entity’s financial
position. The new disclosures are required for all recognised financial instruments that are set off in
accordance with IAS 32 Financial Instruments: Presentation. The disclosures also apply to recognised
financial instruments that are subject to an enforceable master netting arrangement or similar
agreement, irrespective of whether they are set off in accordance with IAS 32. The amendments will
not impact the Group’s financial position or performance and become effective for annual periods
beginning on or after 1 January 2013 and interim periods within those annual periods.
IFRS 9 Financial Instruments: Classification and Measurement
IFRS 9, as issued, reflects the first phase of IASB’s work on the replacement of IAS 39 and applies to
the classification and measurement of financial assets and financial liabilities as defined in IAS 39.
The standard was initially effective for accounting periods beginning on or after 1 January 2013, but
amendments to IFRS 9 issued in December 2011 moved the mandatory effective date to 1 January
2015. Subsequent phases of this project will address hedge accounting and impairment of financial
assets.
The Group will evaluate potential effects of IFRS 9 in accordance with the other phases as soon as the
final standard, including all phases, is issued.
IFRS 10 Consolidated Financial Statements, IAS 27 Separate Financial Statements
IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses
the accounting for consolidated financial statements and SIC-12 Consolidation – Special Purpose
Entities.
24
IFRS 10 establishes a single control model that applies to all entities including special purpose entities.
The changes introduced by IFRS 10 will require management to exercise significant judgement to
determine which entities are controlled and therefore are required to be consolidated by a parent,
compared with the requirements that were in IAS 27. As a result, the Group has evaluated the entities
to be consolidated pursuant to IFRS 10 and compared with the requirements of the current IAS 27.
Within the EU/EEA area, IFRS 10 is effective for annual periods starting on or after 2014.
The amendment is not expected to have any impact on disclosures, financial position or performance
when applied at a future date.
Amendments to IFRS 10, IAS 27 and IFRS 12 related to Investment Entities
Amendments to IFRS 10 imply that enterprises defined as investment entities no longer shall
consolidate their subsidiaries. With one exception – subsidiaries engaged in investment related services
to the investment entity shall be consolidated. Other investments in subsidiaries, joint ventures and
associates shall be recognised at fair value through profit and loss. Investment entities are required
to recognise all subsidiaries at fair value through profit and loss pursuant to IFRS 10, and present the
separate financial statements as their only financial statements. The disclosure requirements are
extended.
The amendments are effective for annual periods beginning on or after 1 January 2014, but the EU has
not yet approved the amendments.
The amendment is not expected to have any impact on disclosures, financial position or performance
when applied at a future date.
IFRS 11 Joint Arrangements
This standard replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities – Non-
monetary Contributions by Venturers. IFRS 11 removes the option to account for jointly controlled
entities (JCEs) using proportionate consolidation. All entities meeting the definition of a joint venture
must be accounted for using the equity method. Within the EU/EEA area, IFRS 11 is effective for annual
periods beginning on or after 1 January 2014.
The amendment is not expected to have any impact on disclosures, financial position or performance
when applied at a future date.
IFRS 12 Disclosure of Interests in Other Entities
IFRS 12 applies for enterprises with interests in subsidiaries, joint arrangements, associates and
structured entities. IFRS 12 replaces the disclosure requirements that were previously included in IAS 27
Consolidated and Separate Financial Statements, IAS 28 Investments in Associates and IAS 31 Interests
25
in Joint Ventures. A number of new disclosures are also required, but has no impact on the Group’s
financial position or performance. Within the EU/EEA area, IFRS 12 is effective for annual periods
beginning on or after 1 January 2014.
IFRS 13 Fair Value Measurement
The standard establishes a single source of guidance under IFRS for all fair value measurements, i.e.,
for requirements of all standards related to measuring fair value for assets and obligations. IFRS 13 is
effective for annual periods beginning on or after 1 January 2013.
The amendment is not expected to have any impact on disclosures, financial position or performance
when applied at a future date.
Annual Improvements 2009-2011
IAS 1 Presentation of Financial Statements
The amendments to IAS 1 clarify the difference between voluntary additional comparative information
and the minimum required comparative information. Generally, the presentation of the previous
period’s comparative information will meet the minimum requirements. The amendments have no
impact on the Group’s financial position or performance and are effective for annual periods beginning
on or after 1 January 2013, but the EU has not yet approved the amendments.
IAS 16 Property, Plant and Equipment
The amendment clarifies that major spare parts and servicing equipment that meet the definition
of property, plant and equipment are not inventory. The amendment is effective for annual periods
beginning on or after 1 January 2013, but has not yet been approved by the EU.
The amendment is not expected to have any impact on disclosures, financial position or performance
when applied at a future date.
IAS 32 Financial Instruments: Presentation
The amendment clarifies that income taxes arising from distributions to equity holders shall be
accounted for in accordance with IAS 12 Income Taxes. The amendment is effective for annual periods
beginning on or after 1 January 2013, but has not yet been approved by the EU.
The amendment is not expected to have any impact on disclosures, financial position or performance
when applied at a future date.
NOTE 3: SIGNIFICANT ACCOUNTING POLICIES
JUDGMENTS. The preparation of the Group’s consolidated financial statements requires management
to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses,
26
assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting period.
However, uncertainty about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of the asset or liability affected in future periods.
In the process of applying the Group’s accounting policies, management has made the following
judgments, which have the most significant effect on the amount recognised in the consolidated
financial statements.
Prosafe owns and operates a fleet of accommodation and service rigs. Based on an evaluation of the
terms and conditions of the arrangements in the contracts, the Group has determined that it retains all
significant risks and rewards of ownership of the vessels and therefore none of the contracts have been
accounted for as a financial lease.
ESTIMATES AND ASSUMPTIONS. The estimates and assumptions are assessed on a continuous basis.
The estimates and assumptions which have the most significant effect on the amounts recognised in
the financial statements relate to depreciation of fixed assets, impairment assessment of non-financial
assets, share-based payments, taxes and fair value of financial instruments. Estimated useful life of
the Group’s semi-submersible accommodation/service rigs is 30 to 45 years dependent on the age
at the time of acquisition and subsequent refurbishments. The management determines whether
goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the
cash-generating units to which the goodwill is allocated, which requires management to estimate the
future cash flow from the cash-generating units and to apply a suitable discount rate. Further details
are given in note 10. Estimating fair value for share-based payments requires determination of the most
appropriate valuation model and the most appropriate inputs to the valuation model including the
expected life of the share options, volatility and dividend yield.
When the fair value of financial assets and financial liabilities recorded in the statement of financial
position cannot be derived from active markets, they are determined using valuation techniques
including the discounted cash flows model. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree of judgment is required in establishing
fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility.
Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and
timing of future taxable income. Given the wide range of international business relationships and the
long-term nature and complexity of existing contractual agreements, differences arising between the
actual results and the assumptions made, or future changes to such assumptions, could necessitate
future adjustments to tax income and expense already recorded.
BASIS OF CONSOLIDATION. The consolidated financial statements comprise the financial statements of
the parent company and its subsidiaries. Subsidiaries are fully consolidated from the date of acquisition,
being the date on which the Group obtains control, and continue to be consolidated until the date that
such control ceases. The financial statements of the subsidiaries are prepared for the same reporting
27
period as the parent company, using consistent accounting policies. All intra-group balances, income
and expenses, unrealised gains and losses and dividends resulting from intra-group transactions are
eliminated in full.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an
equity transaction. If the Group loses control over a subsidiary, it:
• derecognises the assets and liability of the subsidiary
• derecognises the carrying amount of any non-controlling interest
• derecognises the cumulative translation differences, recorded in equity
• recognises the fair value of the consideration received
• recognises the fair value of any investment retained
• recognises any surplus or deficit in profit and loss
• reclassifies the parent’s share of components previously recognised in other comprehensive income to
profit and loss or retained earnings, as appropriate.
BUSINESS COMBINATIONS AND GOODWILL. Business combinations are accounted for using the
acquisition method. The cost of an acquisition is measured as the aggregate of the consideration
transferred, measured at acquisition date fair value. Acquisition costs incurred are expensed and
included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date.
Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred
and the amount recognised for non-controlling interest over the net identifiable assets acquired and
liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary
acquired, the difference is recognised in profit and loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition
date, allocated to each of the Group’s cash generating units that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those
units.
Where goodwill forms part of a cash generating unit and part of the operation within that unit is
disposed of, the goodwill associated with the operation disposed of is included in the carrying amount
of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in
this circumstance is measured based on the relative values of the operation disposed of and the portion
of the cash generating unit retained.
28
FOREIGN CURRENCY TRANSLATION. The presentation currency is USD. This is also the functional
currency for the parent company. Transactions in other currencies than the USD are translated at
the exchange rate prevailing at the transaction date. Monetary items in other currencies than the
functional currency are translated to the functional currency at the exchange rate on the balance sheet
date, and the currency difference is recognised in the profit and loss account. Non-monetary items in
other currencies than the functional currency are translated at the exchange rate at the transaction
date. When consolidating companies with a functional currency other than the USD, profit and loss
items are translated at the monthly average exchange rate, while balance sheet items are translated at
the exchange rate on the balance sheet date. Translation differences are taken to other comprehensive
income. On disposal of a foreign operation, the deferred cumulative amount recognised in other
comprehensive income, relating to that particular operation, is recognised in the income statement.
SEGMENT REPORTING. For management and monitoring purposes, the Group is organised into one
segment; chartering and operation of accommodation/service rigs. For geographical information,
reference is made to note 5.
REVENUE RECOGNITION. Revenue is recognised to the extent that it is probable that the economic
benefits will flow to Prosafe and the revenue can be reliably measured. Revenue is measured at the fair
value of the consideration received. Charter income is recognised on a straight line basis over the period
the rig has operated. Prosafe does not transfer the risks or benefits of ownership of the asset to the
customers and none of the contracts are accounted for as a financial lease. Management, crew services
and other related income are recognised in the period the services are rendered. Interest income is
recognised on an accrual basis. Interest income is included in financial items in the income statement.
Dividends are recognised when Prosafe’s right to receive the payment is established.
PROVISIONS are recognised when, and only when, the Group has a present obligation as a result of
events that have taken place, and it can be proven probable that a financial settlement will take place
as a result of this liability, and that the size of the amount can be measured reliably. Provisions are
reviewed on each balance sheet date and their level reflects the best estimate of the liability.
When Prosafe expects some or all of a provision to be reimbursed, the reimbursement is recognised
as a separate asset, but only when the reimbursement is virtually certain. The expense relating to any
provision is presented in the income statement net of any reimbursement.
TANGIBLE ASSETS are stated at acquisition cost less cumulative depreciation and accumulated
impairment losses, if any. Assets are depreciated on a straight-line basis over their estimated
economically useful lives, with account taken of their estimated residual value. The management makes
annual assessments of residual value, methods of depreciation and the remaining economic life of
the assets. Components of an asset which have an estimated shorter life than the main component of
the asset are accordingly depreciated over this shorter period. Acquisition cost includes costs directly
29
attributable to the acquisition of the assets. Subsequent expenditures are added to the book value
of the asset or accounted for on a separate basis, when it is likely that future benefits would derive
from the expenditures. The rigs are subject to a periodic survey every five years, and associated costs
are amortised over the five-year period to the next survey. Other repair and maintenance costs are
expensed in the period they are incurred.
In accordance with IAS 23, borrowing costs are capitalised on qualifying assets.
Tangible fixed assets are depreciated on a straight line basis over their useful lifetime as follows:
• Semi-submersible rigs – 30 to 45 years dependent on the age at the time of the acquisition and
subsequent refurbishments
• Buildings – 20 to 30 years
• Equipment – 3 to 5 years
IMPAIRMENT OF NON-FINANCIAL ASSETS. The Group assesses at each reporting date whether there
is an indication that an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s
recoverable amount is the higher of an asset’s or cash generating unit’s fair value less costs to sell
and its value in use and is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets. Where the carrying
amount of an asset or cash generating unit exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and risks specific to the asset. In determining fair value
less costs to sell, recent market transactions are taken into account, if available. If no such transactions
can be identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value
indicators.
The Group bases its impairment calculation on detailed forecast calculations which are prepared
separately for each of the Group’s cash generating units to which the individual assets are allocated.
These forecast calculations are generally covering a period of five years. For longer periods, a long term
growth rate is calculated and applied to project future cash flows after the fifth year.
For non-financial assets excluding goodwill, an assessment is made at each reporting date as
to whether there is any indication that previously recognised impairment losses may no longer
exist or may have decreased. If such indication exists, Prosafe estimates the asset’s recoverable
amount. A previously recognised impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset’s recoverable amount since the last impairment loss was
recognised.
30
IMPAIRMENT OF GOODWILL. Goodwill is tested for impairment annually, and when circumstances
indicate that the carrying value may be impaired. Impairment is determined by assessing the
recoverable amount of each cash-generating unit to which the goodwill relates. When the recoverable
amount is lower than the carrying amount, the impairment loss is recognised in the income statement.
Impairment losses related to goodwill cannot be reversed in future periods.
INVENTORIES are valued at the lower of cost and net realisable value. Net realisable value is the
estimated selling price in the ordinary course of business less estimated costs necessary to make the sale.
FINANCIAL ASSETS
Initial recognition
Financial assets in Prosafe SE are classified as financial assets at fair value through profit or loss, loans and
receivables, available for sale financial assets or as derivatives designated as hedging instruments in an effective
hedge, as appropriate. Prosafe determines the classification of its financial assets at initial recognition.
Financial assets are recognised initially at fair value plus directly attributable costs, with the exception
of assets measured at fair value through profit and loss.
Prosafe’s financial assets include cash and short-term deposits, trade and other receivables, financial
derivatives and shares.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at fair value through profit and loss
Financial assets at fair value through profit and loss include financial assets held for trading.
Prosafe has no financial instruments designated as at fair value through profit and loss. Financial assets
are classified as held for trading if they are acquired for the purpose of selling in the near future.
This category also includes derivative instruments entered into that do not meet the hedge accounting
criteria as defined by IAS 39. Financial assets at fair value through profit and loss are carried in the
balance sheet at fair value with gains and losses recognised in the income statement.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. Such financial assets are carried at amortised cost using the effective
interest rate method. Gains and losses are recognised in the consolidated income statement when
the loans and receivables are derecognised or impaired, as well as through the amortisation process.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available for
sale or are not classified in any of the three preceding categories. After initial measurement, available
31
for sale financial assets are measured at fair value with unrealised gains and losses recognised directly
in other comprehensive income until the investment is derecognised, at which time cumulative gain or
loss recorded in equity is recognised in the income statement, or determined to be impaired, at which
time the cumulative loss recorded in equity is recognised in the income statement.
Derecognition
A financial asset is derecognised when:
• The rights to receive cash flows from the asset have expired.
• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a “pass-through”
arrangement; and either the Group has transferred substantially all the risks and rewards of the asset,
or the Group has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
Impairment of financial assets
The Group assesses at each reporting date whether there is any objective evidence that a financial asset
or a group of financial assets is impaired. A financial asset or a group of financial assets are deemed to
be impaired if, and only if, there is objective evidence of impairment as a result of one or more events
that have occurred after the initial recognition of the asset and that loss event has an impact on the
estimated future cash flows of the financial asset or the group of financial assets that can be reliable
estimated.
In the case of equity investments classified as available for sale, objective evidence would include
a significant or prolonged decline in the fair value of the investment below its cost. Significant is
evaluated against the original cost of the investment and prolonged against the period in which the
fair value has been below its original cost. Where there is evidence of impairment, the cumulative
loss, measured as the difference between the acquisition cost and the current fair value, less any
impairment loss on the investment previously recognised in the income statement, is removed
from other comprehensive income and recognised in the income statement. Impairment losses on
equity investments are not reversed through the income statement; increases in their fair value after
impairment are recognised directly in other comprehensive income.
FINANCIAL LIABILITIES
Initial recognition
Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through
profit or loss, financial liabilities measured at amortised cost or as derivatives designated as hedging
instruments in an effective hedge, as appropriate. Prosafe determines the classification of its financial
liabilities at initial recognition.
Financial liabilities are recognised initially at fair value and, in case of loans and borrowings, net of
directly attributable costs.
32
Prosafe’s financial liabilities include trade and other payables, bank overdraft, loans and borrowings,
financial guarantee contracts and derivative financial instruments.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities held for trading.
Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the
near future. This category also includes derivative instruments entered into that do not meet the hedge
accounting criteria as defined by IAS 39. Gains and losses on liabilities held for trading are recognised in
the income statement.
Financial liabilities measured at amortised cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised
cost. Amortised cost is computed using the effective interest method. The calculation takes into account
any transaction costs and fees that are an integral part of the effective interest rate.
Gains and losses are recognised in the income statement when the liabilities are derecognised as well
as through the amortisation process.
Fair value of financial instruments
The fair value of financial instruments that are actively traded in organised financial markets is
determined by reference to quoted market bid prices at the close of business on the balance sheet
date. For financial instruments where there is no active market, fair value is determined using valuation
techniques. Such techniques may include using recent arm’s length market transactions, reference
to the current fair value of another instrument that is substantially the same, discounted cash flow
analysis or other valuation models.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires.
When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and the recognition of a new liability,
and the difference in the respective carrying amounts is recognised in the income statement.
EMPLOYEE BENEFITS. Companies within the Group make contributions to pension schemes that are
defined contribution plans. The companies’ payments are recognised in the income statement for the
year to which the contribution applies.
33
SHARE-BASED PLANS. The Group has an option plan for key personnel which provides a cash settlement
if an option is exercised. The fair value of the options is expensed over the period until vesting with
recognition of a corresponding liability which also includes social security tax where relevant. This
liability is remeasured at each balance sheet date up to and including the settlement date with changes
in fair value recognised in the income statement.
EVENTS AFTER THE BALANCE SHEET DATE. New information on the Group’s positions at the balance sheet
date is taken into account in the annual financial statements. Events after the balance sheet date that
do not affect the position at the balance sheet date, but which will affect the position in the future, are
stated if significant.
BORROWING COSTS. Borrowing costs directly attributable to the acquisition, construction or production
of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale
are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the
period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection
with the borrowing of funds.
DERIVATIVE FINANCIAL INSTRUMENTS. Prosafe uses derivative financial instruments such as forward
currency contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks
respectively. Such instruments are initially recognised at fair value on the date on which a derivative
contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial
assets when the fair value is positive and as financial liabilities when the fair value is negative.
Any gains and losses arising from changes in fair value on derivatives during the year that do not qualify
for hedge accounting and the ineffective portion of an effective hedge, are taken directly to the income
statement.
The fair value of forward currency contracts is the discounted difference between the forward exchange
rate and the contract price. The fair value of interest rate swap contracts is determined by reference to
market price for similar instruments.
At the inception of a hedge relationship, Prosafe formally designates and documents the hedge
relationship to which the Group wishes to apply hedge accounting and the risk management objective
and strategy for undertaking the hedge. The documentation includes identification of the hedging
instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity
will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged
item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly
effective in achieving offsetting changes in fair value or cash flows, and are assessed on an ongoing basis
to determine that they actually have been highly effective throughout the financial reporting periods for
which they were designated.
34
Hedges which meet the strict criteria for hedge accounting are accounted for as follows:
Fair value hedges
The change in fair value of a hedging derivative is recognised in the income statement. The change in
the fair value of the hedged item attributable to the risk is recorded as a part of the carrying value of the
hedged item and is also recognised in the income statement.
For fair value hedges relating to items carried at amortised cost, the adjustment to carrying value is
amortised through the income statement over the remaining term to maturity.
Cash flow hedges
The effective portion of the gain and loss on the hedging instrument is recognised directly in other
comprehensive income, while any ineffective portion is recognised immediately in the income
statement.
Amounts recognised as other comprehensive income are transferred to the income statement when
the hedged transaction affects profit and loss, such as when the hedged financial income or financial
expense is recognised or when a forecast sale occurs. When the hedged item is the cost of a non-
financial asset or a non-financial liability, the amounts recognised as other comprehensive income are
transferred to the initial carrying amount of the non-financial assets or liability.
Current versus non-current classification
Derivative instruments that are not a designated and effective hedging instrument are classified as
current or non-current or separated into a current and non-current portion based on an assessment of
the facts and circumstances.
When Prosafe holds a derivative as an economic hedge for a period beyond 12 months after the balance
sheet date or a derivative instrument is designated as an effective hedging instrument, the derivative is
classified as current or non-current consistent with the classification of the underlying item. Economic
hedges are not treated as hedging for accounting purposes.
TAXES in the income statement include taxes payable and changes in deferred tax. Deferred tax is
calculated on the basis of temporary differences between book and tax values that exist at the end of
the period. Deferred tax asset is recognised in the balance sheet when it is likely that the tax benefit can
be utilised. Deferred tax and deferred tax asset are measured at nominal value.
Income tax assets and liabilities for the current and prior periods are measured at the amount expected
to be recovered or paid to the taxation authorities.
Deferred tax liabilities are measured at the tax rates that are expected to apply in the year when the
liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting
date. Deferred tax are provided using the liability method.
35
Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off current tax
assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and
the same taxation authority.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date
and are recognised to the extent that it has become probable that future taxable profits will allow the
deferred tax asset to be recovered.
CASH AND DEPOSITS include cash, bank deposits and other short-term deposits with an original
maturity of three months or less.
SHAREHOLDER’S EQUITY. Any difference between the issue price of share capital and the nominal
value is recognised as share premium. The costs incurred attributable to the issue of share capital are
deducted from equity.
OWN SHARES. Own equity instruments which are reacquired are recognised at cost and deducted from
equity. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation
of the Group’s own equity instruments.
NOTE 4: GAIN ON SALE OF SHARES IN 2011
In July 2011, the Company acquired 21 542 568 shares in Floatel International Ltd (Floatel), which
equalled 22.2 per cent of the shares. The acquisition price was NOK 16 per share. In August 2011,
Floatel announced that the company had signed a heads of agreement to enter into an amalgamation
agreement with Aqua Pellentesque Ltd. The shares were realised in September 2011, and the Company
received a cash consideration of NOK 19.50 per share. A net gain of USD 10.2m in relation to this
transaction has been recognised in the income statement. Net proceeds were USD 75.1 million.
36
NOTE 5: SEGMENT REPORTING
Prosafe has one segment, which is chartering and operation of accommodation/service rigs.
Operating revenues by geographical location
Europe
Americas
Australia/Asia
Total operating revenues
The revenue information above is based on the location of the customer.
Operating revenues from major customers situated in:
2012
1)
148.2
88.7
87.6
81.8
51.1
24.4
0.0
2)
29%
17%
17%
16%
10%
5%
0%
Americas
Europe
Australia/Asia
Europe
Americas
Europe
Europe
1) Operating revenues in USD million
2) Percentage of total revenues
Total assets by geographical location
Europe
Americas
Australia/Asia
Total assets
NOTE 6: OTHER OPERATING REVENUES
Mobilisation/demobilisation income
Gain on sale of non-current assets
Other contract income
Total other operating revenues
2012
218.3
199.3
92.8
510.4
2011
277.4
172.2
0.0
449.6
2011
1)
141.3
106.8
0.0
21.3
30.9
73.0
54.7
2)
31%
24%
0%
4%
6%
16%
12%
2012
806.2
402.0
279.0
2011
769.4
420.8
185.9
1 487.2
1 376.1
2012
2011
2.0
4.8
79.7
86.5
4.1
0.0
44.8
48.9
37
On 7 August 2012, Prosafe entered into an agreement to sell the accommodation jack-up Safe Esbjerg
to a buyer in South East Asia. Total proceeds amount to USD 55 million and are divided into two
tranches. In accordance with the agreement an amount of USD 38.5 million was paid on 5 October.
The remaining USD 16.5 million will be paid as a three-year term loan with an interest rate of 10 per
cent, and is included under 'other non-current assets' in the statement of financial position. The gain
on the sale amounted to USD 4.8 million and has been recognised as other operating revenue.
NOTE 7: QUARTERLY RESULTS
Operating revenues
Operating expenses
EBITDA
Depreciation
Operating profit
Net financial items
Profit before taxes
Taxes
Net profit
Q1
125.7
(51.1)
74.6
(14.0)
60.6
(12.5)
48.1
(0.6)
47.5
Q2
129.3
(65.2)
64.1
(14.3)
49.8
(13.3)
36.5
(0.6)
35.9
Q3
142.3
(61.4)
80.9
(14.4)
66.5
(13.7)
52.8
(1.0)
51.8
Q4
113.1
(52.6)
60.5
(15.0)
45.5
(4.9)
40.6
1.7
42.3
2012
510.4
(230.3)
280.1
(57.7)
222.4
(44.4)
178.0
(0.5)
177.5
NOTE 8: EMPLOYEE BENEFITS, MANAGEMENT REMUNERATION AND AUDIT FEE
Wages and salaries
Contract personnel
Other remuneration
Social security taxes
Change in share option provision
Pension expenses
Other personnel-related expenses
Total employee benefits
Bonus scheme
2012
46.7
29.3
2.3
5.9
(1.4)
5.2
9.7
97.7
2011
39.0
36.0
2.2
5.1
(0.4)
3.6
7.5
93.0
The Company’s bonus scheme embraces the corporate management and the operational
management team. The bonus depends on achieving defined results relating to earnings, the
attainment of strategic goals and HSE.
38
Share options
The corporate management and other key employees (in total 16 persons) are included in a synthetic
share option programme. The outstanding options were granted in 2009 and 2011. When a synthetic
option is exercised, the option holder is paid a cash consideration corresponding to the difference
between the share price at the exercise date adjusted for any dividends paid during the period, and
the share price at grant. All synthetic options are capped at two times strike price. Net proceeds after
tax shall be used to purchase shares in the Company at market price. This plan has no dilution effect,
since the shares will be purchased in the market. The options are valued by using the Black-Scholes
option pricing model. The right to exercise is subject to the employee being employed during the
vesting period.
Share price at 31 December (NOK)
Weighted average fair value (NOK) at 31 December
Provision at 31 December (USD million)
2012
47.32
5.37
0.6
2011
40.99
4.39
2.2
Options granted 2008
Options granted 2009
Options granted 2011
Forfeited in 2010
Exercised in 2011
Forfeited in 2011
Exercised in 2012
Forfeited in 2012
Outstanding options at 31 December 2012
Exercisable at 31 December 2012
Vesting date in May 2011
Grant date
Exercise price at grant (NOK)
Exercise price at 31.12.2012 (NOK)
Vesting date
Expiry date
Lifetime closing balance
Volatility closing balance
Interest rate closing balance
Fair value closing balance (NOK)
Outstanding options at 31.12.2012
2 768 829
910 000
770 000
(917 524)
(70 000)
(20 000)
(673 000)
(2 036 305)
732 000
32 000
22.05.2009
30.45
21.64
22.05.2011
22.05.2013
0.39
0.29
0.01
19.93
32 000
Vesting date in November 2014
Grant date
Exercise price at grant (NOK)
Exercise price at 31.12.2012 (NOK)
Vesting date
Expiry date
Lifetime closing balance
Volatility closing balance
Interest rate closing balance
Fair value closing balance (NOK)
Outstanding options at 31.12.2012
Vesting date in November 2015
Grant date
Exercise price at grant (NOK)
Exercise price at 31.12.2012 (NOK)
Vesting date
Expiry date
Lifetime closing balance
Volatility closing balance
Interest rate closing balance
Fair value closing balance (NOK)
Outstanding options at 31.12.2012
39
31.05.2011
54.05
48.31
30.11.2014
30.11.2014
1.92
0.32
0.01
6.26
350 000
31.05.2011
58.21
52.47
30.11.2015
30.11.2015
2.92
0.33
0.01
5.27
350 000
The right to exercise is subject to the employee being employed during the vesting period.
Pension and severance pay
Members of the corporate management have agreements on severance pay. Under these agreements,
the Company guarantees a remuneration corresponding to the base salary received at the time of
departure for a period of up to two years after the normal six-month period of notice.
With the exception of the agreement with the CEO, these agreements specify that benefits received
from new employers are deducted from the remuneration due, unless the person concerned left as a
result of an acquisition, sale or merger. The CEO has an agreement on early retirement pension after
the age of 60 and until the age of 67. With full earning of pension entitlement, the annual early retire-
ment pension will equal 24 times the Norwegian national insurance base rate.
40
In accordance with the code of practice for corporate governance recommended by the Oslo Stock
Exchange, remuneration for the corporate management and the board of directors is specified below.
Senior officers
(USD 1 000)
Year
Salary
Bonus 1) Pension 2)
benefits 3) options 4)
Value of
Other
share
Karl Ronny Klungtvedt (CEO)
Sven Børre Larsen (CFO)
Robin Laird (COO)
Karl Ronny Klungtvedt (CEO)
Sven Børre Larsen (CFO)
Robin Laird (COO)
2012
2012
2012
2011
2011
2011
614
377
556
580
345
523
385
237
343
283
0
266
55
34
83
54
33
78
557
45
778
38
34
181
18
14
14
353
8
350
1) Payment based on previous years’ achievements
2) For the CEO, the figures include increase in early retirement pension liability
3) For Mr Klungtvedt and Mr Laird, the amounts include exercise of share options granted in 2009
4) Valuation at 31 December 2012 based on the Black-Scholes option pricing model
Board of directors
(USD 1 000)
Michael Raymond Parker (chair)
Christian Brinch (deputy chair)
Ronny Johan Langeland
Christakis Pavlou
Roger Cornish
Carine Smith Ihenacho
Elin Nicolaisen (resigned May 2012)
Michael Raymond Parker (chair)
Christian Brinch (deputy chair)
Ronny Johan Langeland
Elin Nicolaisen
Christakis Pavlou
Roger Cornish
Carine Smith Ihenacho (appointed May 2011)
Board
fees 1)
143
116
109
92
98
83
33
135
98
96
75
79
88
45
Year
2012
2012
2012
2012
2012
2012
2012
2011
2011
2011
2011
2011
2011
2011
1) If applicable, figures include compensation from audit committee, compensation committee and
election committee.
Auditors’ fee
(USD 1 000)
Audit
Fees for other services
Total auditors’ fee
NOTE 9: OTHER OPERATING EXPENSES
Repair and maintenance
Other vessel operating expenses
General and administrative expenses
Total other operating expenses
NOTE 10: TANGIBLE ASSETS AND GOODWILL
Acquisition cost 31 December 2010
Additions
Disposals
Acquisition cost 31 December 2011
Additions
Disposals
Rigs
1 331.7
59.1
0.0
1 390.7
109.7
(66.0)
Acquisition cost 31 December 2012
1 434.3
135.6
Accumulated depreciation 31 December 2010
432.8
Accumulated depreciation on disposals
Depreciation for the year
0.0
64.3
Accumulated depreciation 31 December 2011
497.1
Accumulated depreciation on disposals
Depreciation for the year
(15.9)
56.8
Accumulated depreciation 31 December 2012
538.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
41
2012
2011
363
29
392
335
65
400
2012
2011
29.0
69.3
34.2
132.5
27.1
40.6
31.3
99.0
New
builds
Equip-
ment
Build-
ings
Good-
will
Total
0.0
58.4
0.0
58.4
77.2
0.0
2.8
1.3
0.0
4.2
0.3
(0.1)
4.4
2.2
0.0
0.6
2.8
0.0
0.5
3.3
6.2 226.7 1 567.4
0.3
0.0
0.0
0.0
119.2
0.0
6.5 226.7 1 686.5
0.9
0.0
0.0
0.0
188.1
(66.1)
7.4 226.7 1 808.5
2.4
0.0
0.4
2.7
0.0
0.4
3.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
437.4
0.0
65.3
502.7
(15.9)
57.7
544.5
Net carrying amount 31 December 2012
896.3
135.6
1.1
4.2 226.7 1 264.0
Net carrying amount 31 December 2011
893.7
58.4
1.3
3.8 226.7 1 184.0
Depreciation rate (%)
Economically useful life (years)
2-20
5-45
- 20-33
3-5
-
3-5
20-30
-
-
-
-
42
New builds include prepayment of 20 % of the yard cost for the two new builds, owner-furnished
equipment and other project costs incurred. For details, reference is made to note 25.
The accommodation jack-up, Safe Esbjerg was sold in 2012. For details, reference is made to note 6.
Tangible fixed assets and goodwill are initially recorded at cost. Subsequent to recognition, these
assets are stated at cost less accumulated depreciation and any accumulated impairment losses.
The costs of upgrades and modification of vessels are capitalised, and each vessel is accounted for as
a single asset.
Borrowing costs are capitalised as part of the asset in accordance with revised IAS 23. As at 31
December 2012, capitalised borrowing costs amount to USD 3.7 million.
Estimated useful life for the semi-submersible accommodation/service rigs is 30-45 years. Certain
equipment on a rig is depreciated over a shorter period than the life of the rig itself. The estimated
scrap value is USD 3 million per rig.
The depreciation plan for five of the rigs operating in the Gulf of Mexico has been revised. With effect
from 1 January 2012 the remaining depreciation period for these five rigs has been extended to ten
years from an average of four years previously. The impact of this change is an estimated annual
reduction in deprecation of USD 5 million.
The goodwill of USD 226.7 million relates to the acquisition of Consafe Offshore AB in 2006.
Prosafe has one defined cash-generating unit comprising all accommodation/service rigs, to which
the goodwill has been allocated. The recoverable amount has been identified by calculating the value
in use. The calculation is based on the present value of the estimated cash flow. The discount rates
applied reflect management’s estimate of the risks specific to each unit. The present value of this cash
flow exceeds the carrying value, and no need for a write-down is indicated.
The present value of the estimated cash flows from the cash-generating unit, is based on the
following inputs:
Revenues
- Current contracts portfolio and contract renewals reflecting current market conditions, remaining
life of asset, and historical utilisation rates
- Annual increase of operating revenues 3% (general sector inflation assumption)
Expenses
- Operating expenses and overheads reflecting current market conditions and historical utilisation
rates
- Annual increase of operating expenses and overheads 3% (general sector inflation assumption)
Capital expenditures
- Life extension capex reflecting historical actuals and upgrade capex reflecting long-term capex
projections
43
- Annual increase of capital expenditures 3% (general sector inflation assumption)
Group weighted average cost of capital (WACC) 8%
- Sensitivity: a 1% increase in WACC would still give a present value of the cash flow well in excess of
the carrying value
NOTE 11: OTHER FINANCIAL ITEMS
Currency gain
Fair value adjustment currency forwards
Fair value adjustment interest rate swaps
Gain on sale of shares
Other financial income
Total other financial income
Currency loss
Fair value adjustment currency forwards
Fair value adjustment interest rate swaps
Amortisation of borrowing costs
Other financial expenses
Total other financial expenses
NOTE 12: FINANCIAL ITEMS - IAS 39 categories
2012
0.0
27.4
0.0
0.0
0.0
27.4
(23.9)
0.0
0.0
(2.6)
(5.5)
2011
22.3
0.0
0.3
10.2
0.0
32.8
0.0
(16.4)
0.0
(6.1)
(3.4)
(32.0)
(25.9)
Fair value
through
profit and
loss
Financial
liabilities
measured at
amortised
cost
Available
for sale
Loans and
receivables
1.1
0.0
1.1
0.0
0.0
0.0
0.0
0.0
1.1
0.0
27.4
27.4
0.0
0.0
(5.5)
0.0
(5.5)
0.0
0.0
0.0
(40.9)
(2.6)
0.0
0.0
(43.5)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Total
1.1
27.4
28.5
(40.9)
(2.6)
(5.5)
(23.9)
(72.9)
21.9
(43.5)
0.0
(44.4)
Year ended 31 Dec 2012
Interest income
Fair value adjustment FX forwards
Total financial income
Interest expenses
Amortisation of borrowing costs
Other financial expenses
Currency loss 1)
Total financial expenses
Net financial items
44
Year ended 31 Dec 2011
Interest income
Fair value adjustment interest swaps
Other financial items
Currency gain 1)
Total financial income
Interest expenses
Fair value adjustment FX forwards
Amortisation of borrowing costs
Other financial items
Total financial expenses
Net financial items
Fair value
through
profit and
loss
Financial
liabilities
measured at
amortised
cost
Available
for sale
Loans and
receivables
0.3
0.0
0.0
0.0
0.3
0.0
0.0
0.0
0.0
0.0
0.3
0.0
0.3
0.0
0.0
0.3
0.0
(16.4)
0.0
(3.4)
(19.8)
0.0
0.0
0.0
0.0
0.0
(42.4)
0.0
(6.1)
0.0
(48.5)
0.0
0.0
10.2
0.0
10.2
0.0
0.0
0.0
0.0
0.0
Total
0.3
0.3
10.2
22.3
33.1
(42.4)
(16.4)
(6.1)
(3.4)
(68.3)
(19.5)
(48.5)
10.2
(35.2)
1) Currency effects (gain/loss) are excluded from the category break-down, but added to the total for
net effect.
NOTE 13: TAXES
Taxes in income statement:
Taxes payable
Change in deferred tax
Total taxes in income statement
Temporary differences:
2012
2011
7.6
(7.1)
0.5
7.3
(8.2)
(0.9)
Exit from Norwegian tonnage tax system
101.3
117.2
Non-current assets
Current liabilities
Tax loss carried forward
Basis for deferred tax
Recognised deferred tax
Deferred tax 1 January
Change in deferred tax in income statement
Translation difference
Deferred tax 31 December
(4.5)
3.9
0.0
100.4
28.1
33.6
(7.1)
1.6
28.1
(2.5)
5.4
0.0
120.1
33.6
41.7
(8.2)
0.1
33.6
Payable tax as at 31 December
19.9
17.3
45
Tax loss carried forward in Cyprus as at 31 December 2012 and 2011 amounts to USD 22.6 million
and USD 16.3 million respectively. The tax rate in Cyprus is 10%. No deferred tax asset is recognised in
respect of this tax loss carried forward. The tax loss for each year may be carried forward for five years.
A material part of taxes in the income statement relates to withholding tax paid on several of the
Group’s operations. The tax cost may therefore vary independently of profit before taxes.
The Group’s vessels are subject to taxation based on the special rules for taxation of shipping and
offshore companies in Singapore. Profit from these charters is not taxable to Singapore, but the
company pays tax deducted at source in some of the countries in which it operates.
The deferred tax liability related to the enforced departure of the rig business from the Norwegian
tonnage tax system effective 1 January 2006 was initially calculated to NOK 780 million equivalent to
USD 115 million applying the exchange rate prevailing on this date. This liability is paid at a rate of 20
per cent annually on the outstanding balance.
NOTE 14: EARNINGS PER SHARE
Earnings per share are calculated by dividing net profit by the weighted average number of ordinary
shares outstanding during the year. There are no dilutive share options.
Net profit
Weighted average number of outstanding shares (1 000)
Basic earnings per share
2012
177.5
2011
158.0
222 961
222 949
0.80
0.71
Weighted average number of outstanding and potential shares (1 000)
222 961
222 949
Diluted earnings per share
0.80
0.71
NOTE 15: DIVIDENDS
Dividend declared during the year
Total dividends declared
Dividends per share (NOK)
2012
2011
118.6
118.6
107.1
107.1
3.06
2.65
46
NOTE 16: SHARE CAPITAL AND SHAREHOLDER INFORMATION
Issued and paid number of shares at 31 December
Authorised number of shares at 31 December
Holding of own shares at 31 December
Nominal value at 31 December
Number of shareholders at 31 December
2012
2011
229 936 790
229 936 790
275 924 148
275 924 148
6 963 731
6 975 818
EUR 0.25
EUR 0.25
4 380
4 621
Largest shareholders/groups of shareholders at 31.12.2012
No of shares
Percentage
State Street Bank (nom.)
Folketrygdfondet
State Street Bank (nom.)
Pareto
Goldman Sachs (nom.)
FLPS
Prosafe SE
JP Morgan Chase Bank (nom.)
Clearstream Banking (nom.)
JP Morgan Chase Bank (nom.)
KAS Depositary Trust nom.)
BNP Paribas (nom.)
The Northern Trust (nom.)
JP Morgan Chase Bank (nom.)
Bank of New York (nom.)
BNP Paribas (nom.)
RBC (nom.)
Citibank (nom.)
KLP
Citibank (nom.)
28 011 029
15 851 685
15 081 253
9 954 810
7 988 297
7 900 000
6 963 731
6 388 984
5 588 460
4 964 949
4 411 029
4 153 673
3 754 918
3 653 053
3 058 904
2 869 200
2 738 296
2 625 527
2 386 257
2 315 207
12.2%
6.9%
6.6%
4.3%
3.5%
3.4%
3.0%
2.8%
2.4%
2.2%
1.9%
1.8%
1.6 %
1.6%
1.3%
1.2%
1.2%
1.1%
1.0%
1.0%
Total 20 largest shareholders/groups of shareholders
140 659 262
61.2%
NOTE 17: INTEREST-BEARING DEBT
As of 31 December 2012, Prosafe’s interest-bearing debt totalled USD 810 million. Loans secured by
mortgages (credit facility) accounted for USD 566 million of this total and unsecured bond loans
accounted for about USD 244 million.
Credit facility
Bond loans
Total interest-bearing debt
Debt in NOK
Debt in USD
Total interest-bearing debt
Long-term interest-bearing debt
Current interest-bearing debt
Total interest-bearing debt
47
2012
566.0
244.4
810.4
244.4
566.0
810.4
745.6
64.8
810.4
2011
590.0
170.5
760.5
166.9
593.6
760.5
756.9
3.6
760.5
USD 1 100 million credit facility repayment structure
In August 2011, the company secured a new credit facility. The credit facility has a total availability
of USD 1 100 million and a maturity of six years. After the sale of the Safe Esbjerg, the availability
under the credit facility is reduced semi-annually with USD 68 million. As of 31 December 2012, the
availability under the credit facility totalled USD 927 million (USD 361 million undrawn credit lines).
Applicable margin on the credit facility is 1.875 per cent per annum.
USD 420 million credit facility repayment structure
In December 2012, the company secured a new credit facility. The credit facility has a total availability
of USD 420 million (two tranches of USD 210 million) and a maturity of five years. The availability
under each tranche is reduced quarterly with USD 4 375 million, starting 3 months after delivery of
the tranche security. As of 31 December 2012, the availability under the credit facility totalled USD
420 million (USD 420 million undrawn credit lines). Applicable margin on the credit facility is 2.950
per cent per annum.
Financial covenants credit facilities
- Liquidity: Minimum USD 65 million (including up to USD 25 million of total commitments available
for utilisation)
- Leverage ratio: Total debt/EBITDA must not exceed 5.0 (4.5 following the second anniversary after
closing, i.e. in August 2013)
- Value adjusted equity ratio: Minimum 35 per cent
- Collateral maintenance: Market value vessels/total commitments above 150 per cent
Bond loans repayment structure
The bond debt is divided into three loans of NOK 500 million maturing October 2013 (PRS06), NOK
500 million maturing February 2016 (PRS07) and NOK 500 million maturing February 2017 (PRS08).
PRS06 is listed on Oslo ABM (Alternative Bond Market), while PRS07 and PRS08 are listed on the Oslo
Stock Exchange.
48
Loan
PRS06
PRS07
PRS08
Principal
Outstanding
Maturity
Interest
Loan margin
NOK 500 million
NOK 360.5 million
October 2013
3m Nibor
NOK 500 million
NOK 500 million
February 2016
3m Nibor
NOK 500 million
NOK 500 million
February 2017
3m Nibor
4.00%
3.50%
3.75%
Financial covenants bond loans
PRS 06/07/08
Value adjusted equity ratio: Minimum 30 per cent
Leverage ratio: Total debt/EBITDA must not exceed 5.0
As of 31 December 2012, the Group was in compliance with all covenants on interest-bearing debt.
3 month LIBOR is the basis for interests on the loans denominated in USD, whereas 3 month NIBOR
is the basis for interests on the loans denominated in NOK. On average, LIBOR interest fixings and
NIBOR interest fixings were lower in 2012 compared to 2011. The average interest cost, including
interest rate swap agreements, was around 5.0 per cent in 2012 as opposed to 5.5 per cent in 2011.
NOTE 18: OTHER CURRENT LIABILITIES
Other accrued costs
Deferred income
Accrued interest costs
Provision share option costs
Public taxes
2012
45.9
14.1
3.0
0.5
0.3
2011
30.2
14.9
2.7
2.2
0.2
Total interest-free current liabilities
64.5
50.2
NOTE 19: MORTGAGES AND GUARANTEES
As of 31 December 2012, Prosafe’s interest-bearing debt secured by mortgages totalled USD 566
million. The debt is secured by mortgages on shares in Prosafe Rigs Pte Ltd, and the accommodation/
service fleet owned by this entity. Book value of the fleet was USD 896.3 million. In line with industry
practice, Prosafe had issued parent company guarantees and bank guarantees (around USD 8 million)
to customers on behalf of its subsidiaries in connection with the award and performance of contracts.
As of 31 December 2011, Prosafe’s interest-bearing debt secured by mortgages totalled USD 590
million. This debt was secured by mortgages on shares in Prosafe Rigs Pte Ltd, and the accommoda-
tion/service fleet owned by this entity. Book value of the fleet is USD 893.7 million. In line with industry
practice, Prosafe has issued parent company guarantees and bank guarantees (around USD 8 million)
to customers on behalf of its subsidiaries in connection with the award and performance of contracts.
49
NOTE 20: FINANCIAL ASSETS AND LIABILITIES
As of 31 December 2012, the group had financial assets and liabilities in the following categories:
Loans and
receivables
Fair value
through profit
and loss
103.6
45.7
0.0
28.5
16.5
194.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
14.6
0.0
0.0
14.6
0.0
0.0
0.0
0.0
36.3
0.0
0.0
36.3
Financial
liabilities
measured at
amortised
cost
0.0
0.0
0.0
0.0
0.0
0.0
Available
for sale
Book
value
Fair
value
0.0 103.6
103.6
0.0
0.0
0.0
0.0
45.7
14.6
28.5
16.5
45.7
14.6
28.5
16.5
0.0 208.9
208.9
566.0
0.0 566.0
562.0
64.8
89.8
89.8
0.0
9.3
49.4
869.1
0.0
0.0
0.0
0.0
0.0
0.0
64.8
89.8
89.8
36.3
9.3
49.4
66.1
91.1
91.1
36.3
9.3
49.4
0.0 905.4
905.4
Year ended 31 Dec 2012
Cash and deposits
Accounts receivable
Fair value FX forwards
Other current assets
Other non-current assets
Total financial assets
Credit facility 1)
Bond loan PRS06 2)
Bond loan PRS07 3)
Bond loan PRS08 4)
Fair value interest swaps
Accounts payable
Other current liabilities
Total financial liabilities
1) Fair value reflects current market conditions with the assumption that the credit margin would
increase from the actual 187.5 basis points to 200 basis points. The net present value of the interest
advantage, discounted with USD 5-year swap rate, is around USD 4 million.
2,3,4) Fair value reflects current market conditions based on prices estimated by the Norwegian
Securities Dealers Association as of 31 December 2012: PRS06 102.00, PRS07 101.50, PRS08 101.50.
Assets measured at fair value in the balance sheet
The Group uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 -
Level 3 -
Inputs other than quoted prices included within level 1 that are observable for assets or
liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Inputs for assets or liabilities that are not based on observable market data (unobservable
inputs)
50
The FX forwards and interest swaps are valued based on current exchange rates and forward curves.
Fair value FX forwards
Fair value interest swaps
Total financial assets/liabilities
Total
14.6
(36.3)
(21.7)
Level 1
Level 2
Level 3
0.0
0.0
0.0
14.6
(36.3)
(21.7)
0.0
0.0
0.0
As of 31 December 2011, the group had financial assets and liabilities in the following categories:
Year ended 31 Dec 2011
Cash and deposits
Accounts receivable
Other current assets
Total financial assets
Credit facility 1)
Bond loan PRS03 2)
Bond loan PRS06 3)
Bond loan PRS07 4)
Fair value FX forwards
Fair value interest swaps
Accounts payable
Other current liabilities
Total financial liabilities
Loans and
receivables
93.4
56.5
19.5
169.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Fair value
through
profit and
loss
Financial
liabilities
measured at
amortised
cost
Available
for sale
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
12.8
32.5
0.0
0.0
45.3
0.0
0.0
0.0
0.0
590.0
3.6
83.5
83.5
0.0
0.0
5.3
35.1
800.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Book
value
93.4
56.5
19.5
Fair
value
93.4
56.5
19.5
169.4
169.4
590.0
585.0
3.6
83.5
83.5
12.8
32.5
5.3
35.1
3.6
84.3
82.0
12.8
32.5
5.3
35.1
846.2
840.6
1) Fair value reflects current market conditions with the assumption that the credit margin would
increase from the actual 187.5 basis points to 200 basis points. The net present value of the interest
advantage, discounted with USD 5-year swap rate, is around USD 5 million.
2,3,4) Fair value reflects current market conditions based on prices estimated by the Norwegian Securities
Dealers Association as of 31 December 2011: PRS03 100.24, PRS06 101.00, PRS07 98.25.
51
Assets measured at fair value in the balance sheet
The Group uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:
Level 1 -
Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 -
Level 3 -
Inputs other than quoted prices included within level 1 that are observable for assets or
liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Inputs for assets or liabilities that are not based on observable market data
(unobservable inputs)
The FX forwards and interest swaps are valued based on current exchange rates and forward curves.
Fair value FX forwards
Fair value interest swaps
Total financial assets/liabilities
Total
Level 1
Level 2
Level 3
(12.8)
(32.5)
(45.3)
0.0
0.0
0.0
(12.8)
(32.5)
(45.3)
0.0
0.0
0.0
NOTE 21: FINANCIAL RISKS AND DERIVATIVE FINANCIAL INSTRUMENTS
Prosafe operates on a global basis with cash flows and financing in various currencies. This means
that the Group is exposed to market risks related to fluctuations in exchange rates and interest rates.
Prosafe’s functional currency is USD, and financial risk exposure is managed with financial instruments.
Currency risk
Prosafe is exposed to currencies other than USD associated with operating expenditure, capital
expenditure, debt financing, tax liabilities and cash and deposits. Operating expenses are mainly
denominated in GBP and NOK, but depending on the country of operation and the nationality of the
crew, operating expenses can also be in EUR, USD and BRL. Capital expenditure in terms of general
maintenance will typically be denominated in GBP and NOK. Value enhancing investments, such as
upgrades and/or refurbishment programmes, will, depending on the origin of equipment and the
location of the yard, tend to be in USD, GBP and EUR. Debt financing consists of both USD and NOK
denominated liabilities, while tax liabilities predominantly consist of a NOK denominated deferred
tax associated with the exit from the Norwegian tonnage tax system effective 1 January 2006.
Cash and deposits are mainly denominated in USD, GBP, EUR and NOK.
52
Operating expenditure and maintenance related capital expenditure in other currencies than USD is
typically currency-hedged using forward contracts with a time horizon of 9-12 months, while planned
value enhancing capital expenditure is hedged independent of time horizon. Interest payments
related to debt financing in other currencies than USD are typically treated the same way, with a time
horizon of 9-12 months, while downpayments are hedged independent of time horizon. Payable tax
related to the deferred tax liability is also currency-hedged with a time horizon of 9-12 months. Cash and
deposits in currencies other than USD, function as natural hedges for any GBP, EUR and NOK liabilities.
As of 31 December 2012, Prosafe had entered into the following forward exchange contracts:
- Forward purchase of GBP 36 million against USD 58 million at a weighted average GBPUSD of 1.61
- Forward purchase of NOK 1 490 million against USD 260 million at a weighted average of USDNOK
5.74
Fair value of forward exchange contracts are estimated using quoted market prices. The fair value
estimates the gain or loss that would have been realised if the contracts had been closed out at the
balance sheet date. As of 31 December 2012, the fair value and maximum credit risk exposure of
forward exchange contracts was USD 14.6 million positive.
Currency risk - sensitivity
The sensitivity analysis is based on a reasonably possible change in the relevant exchange rates and
reflects the main effects on profit or loss and equity assuming that the change had occurred at the
balance sheet date. A 10% strengthening/weakening of the USD towards all other currencies is
applied in the analysis.
USD +10%
Re-valuation cash and deposits
Re-valuation currency forwards
Re-valuation NOK bonds
Total
USD -10%
Re-valuation cash and deposits
Re-valuation currency forwards
Re-valuation NOK bonds
Total
2012
2011
Income effect
Equity effect
Income effect Equity effect
(2.3)
(16.0)
25.0
6.7
2.3
16.0
(25.0)
(6.7)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(2.4)
(28.0)
16.0
(14.4)
2.4
28.0
(16.0)
14.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Interest rate risk
As of 31 December 2012, Prosafe’s interest-bearing debt totalled USD 810.4 million. Loans secured
by mortgages (credit facility) accounted for USD 566 million of this total and unsecured bond loans
accounted for USD 244.4 million.
53
Interest on debt is in principle floating, but has been hedged to reduce the variability of cash flows in
the interest payments through the use of interest rate swap agreements. Prosafe evaluates the hedge
profile in relation to the repayment schedule of its loans, the company’s portfolio of contracts, cash
flow and cash in hand. The proportion hedged will normally lie between 75 and 100 per cent for all
loan terms. The average interest cost, including interest rate swap agreements, was 5.0 per cent in
2012 as opposed to 5.5 per cent in 2011.
Hedge accounting
The objective of the interest rate hedging is to reduce the variability of cash flows in the interest
payments for the floating-rate debt (i.e. cash flow hedging). Changes in the cash flows of the interest
rate swaps are expected to offset the changes in cash flows (i.e. changes in interest payments)
attributable to fluctuations in the benchmark interest rate on the part of the floating-rate debt that is
hedged. At the inception of the hedge and in subsequent periods, expected effectiveness during the
subsequent quarter is demonstrated based on a comparison of the change in fair value of the actual
swap designated as the hedging instrument and the change in fair value of a hypothetical swap
(dollar offset). If the terms of the swap and debt differ (notional amount, interest rate reset dates,
maturity/expiration date, underlying index) or the counterparty’s ability to honour its obligation
under the swap change during the life of the hedge, the measurement of hedge ineffectiveness will
be based on a comparison of the change in fair value of the actual swap designated as the hedging
instrument and the change in fair value of a hypothetical swap (dollar offset). Changes in fair value for
interest swaps treated as effective hedges (hedge accounting) will affect equity directly, while interest
swaps not treated as effective hedges (not hedge accounting) will affect equity through the income
statement. During 2012, interest swaps treated as effective hedges has been highly effective, and no
ineffectiveness has been recognised in the income statement.
As of 31 December 2012, Prosafe’s hedging agreements totalled USD 1 375 million (including USD
750 million with forward start):
Notional amount
Fixed rate Maturity
Swap type Fair value
USD 150 million
USD 150 million
USD 150 million
USD 75 million
USD 100 million
USD 150 million
USD 100 million
USD 100 million
USD 100 million
USD 150 million
USD 150 million
Total
1.662%
1.612%
1.363%
5.194%
2.205%
1.481%
2.045%
2.060%
1.265%
1.778%
2.100%
2019
2017
2018
2014
2014
2014
2015
2015
2016
2017
2017
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
(0.0)
(3.1)
(0.4)
(6.5)
(3.6)
(2.1)
(4.2)
(4.7)
(2.5)
(4.3)
(4.7)
(36.3)
hedge accounting
hedge accounting
hedge accounting
hedge accounting
hedge accounting
hedge accounting
hedge accounting
hedge accounting
hedge accounting
hedge accounting
hedge accounting
54
Fair value of interest rate swap agreements are estimated using quoted market prices. The fair value
estimates the gain or loss that would have been realised if the contracts had been closed out at the
balance sheet date. As of 31 December 2012, the fair value and maximum credit risk exposure of
interest rate swap agreements was USD 36.3 million negative.
Interest rate risk - sensitivity
The sensitivity analysis is based on a reasonably possible change in the relevant forward curves and
reflects the main effects on profit or loss and equity assuming that the change had occurred at the
balance sheet date. A forward curve shift of ±100bps is applied in the analysis.
Forward curve +100bps
Re-valuation interest rate swaps
Total
Forward curve -100bps
Re-valuation interest rate swaps
Total
2012
2011
Income effect
Equity effect Income effect
Equity effect
0.0
0.0
0.0
0.0
30.0
30.0
(32.0)
(32.0)
0.0
0.0
0.0
0.0
28.0
28.0
(30.0)
(30.0)
Changes in equity related to financial instruments
As of 31 December 2012, the following changes in equity were related to financial instruments:
Re-valuation interest rate swaps
Ineffectiveness
Total
Change
(3.8)
0.0
(3.8)
2012
(36.3)
0.0
(36.3)
2011
(32.5)
0.0
(32.5)
Credit risk
The Gulf of Mexico contracts contain a cancellation clause allowing the ultimate customer, Pemex, to
cancel the agreement with 30 days notice without compensation, if the Mexican authorities annul
financing of the project. These clauses reflect the crisis that Mexico saw during the 1980s. Prosafe
takes the view that a cancellation on this basis is only likely if the Mexican economy suffers another
deep and lengthy crisis. Prosafe does not regard this as a realistic scenario, given the high present
and planned levels of activity in the Gulf of Mexico, and the importance of oil production to Mexico’s
economic development.
In line with industry practice, other contracts normally contain clauses which give the customer
an opportunity for early cancellation under specified conditions. Providing Prosafe has not acted
negligently, however, the effect on results in such cases will normally be wholly or partly offset by a
financial settlement in the company’s favour. Following a potential notice of convenience termination,
the customer will have to pay Prosafe a substantial part of the remaining contract value.
55
Credit assessment of yards, sub-contractors and equipment suppliers is part of Prosafe’s project
evaluations and risk analyses.
The counterparty risk is in general limited when it comes to Prosafe’s clients, since these are typically
major oil companies and national oil companies with strong balance sheets and high credit ratings.
As of 31 December 2012, there is no objective evidence that accounts receivable is impaired, and no
impairment loss has been recognised in the income statement.
Liquidity risk
Under the existing credit facility agreements, the Group is required to maintain a minimum liquidity
reserve of USD 65 million (including up to USD 25 million of total commitments available for
utilisation). Prosafe makes active use of a system for planning and forecasting the development of its
liquidity, and utilises scenario analyses to secure stable and sound development.
As of 31 December 2012, the Group’s main financial liabilities had the following remaining
contractual maturities:
Interest-bearing debt (downpayments/credit facility
reductions)
Interest-bearing debt (interest including interest
swaps)
2013
64.8
2014
2015
2016 2017 →
0.0
136.0
225.8
383.8
44.2
48.2
62.9
63.8
120.0
Accounts payable and other current liabilities
9.3
0.0
0.0
0.0
0.0
Total
118.3
48.2
198.9
289.6
503.8
As of 31 December 2012, the availability under the credit facility totalled USD 927 million (USD 361
million undrawn credit lines), meaning that the first actual downpayment on the credit facility will
not occur until 2015.
As of 31 December 2011, the Group’s main financial liabilities had the following remaining
contractual maturities:
56
Interest-bearing debt (downpayments/credit facility
reductions)
Interest-bearing debt (interest including interest
swaps)
2012
3.6
2013
2014
2015 2016 →
83.5
140.0
140.0
393.5
42.7
41.3
46.7
47.0
80.0
Accounts payable and other current liabilities
55.5
0.0
0.0
0.0
0.0
Total
101.8
124.8
186.7
187.0
473.5
As of 31 December 2011, the availability under the credit facility totalled USD 1.1 billion (USD 510
million undrawn credit lines), meaning that the first actual downpayment on the credit facility will
not occur until 2014.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a healthy
capital structure in line with economic conditions. Prosafe’s main tool to assess its capital structure
is the leverage ratio, which is calculated by dividing total interest-bearing debt, including bank
guarantees, by EBITDA over the last 12 months. To stay in compliance with financial covenants, the
leverage ratio is not allowed to exceed 5.0 up until 23 August 2013, and 4.5 thereafter.
At 31 December 2012 (2011), the leverage ratio was 2.9 (3.0).
Credit facility
Bond loan PRS03
Bond loan PRS06
Bond loan PRS07
Bond loan PRS08
Total interest-bearing debt
Bank guarantees
EBITDA last 12 months
Leverage ratio
2012
2011
566.0
590.0
0.0
64.8
89.8
89.8
3.6
83.5
83.5
0.0
810.4
760.5
8.0
8.0
280.1
257.6
2.9
3.0
NOTE 22: CASH AND DEPOSITS
Restricted cash deposits
Free cash and short-term deposits
Total cash and deposits
NOTE 23: OTHER CURRENT ASSETS
Receivables
Prepayments
Stock
Other current assets
Total other current assets
57
2012
0.1
103.5
103.6
2011
0.1
93.3
93.4
2012
2011
10.9
11.5
2.7
17.6
42.8
5.3
18.2
4.4
14.4
42.4
NOTE 24: RELATED PARTY DISCLOSURES
The financial statements comprise the parent company, Prosafe SE, and the subsidiaries listed below.
Company name
Prosafe AS
Prosafe Offshore AS
Prosafe Management AS
Prosafe (UK) Holdings Limited
Prosafe Rigs Limited
Prosafe Offshore Limited
Prosafe Rigs (Cyprus) Limited
Prosafe Holding Limited
Consafe Offshore AB
Prosafe Rigs Pte. Ltd.
Prosafe Offshore Pte. Limited
Prosafe Offshore Employment Company Pte.
Limited
Prosafe Offshore Services Pte. Ltd.
Prosafe Offshore S.a.r.l.
Prosafe Offshore Sp.zo.o.
Prosafe Offshore BV
Prosafe Services Maritimos Ltda
Country
Norway
Norway
Norway
United Kingdom
United Kingdom
United Kingdom
Cyprus
Cyprus
Sweden
Singapore
Singapore
Singapore
Singapore
Luxembourg
Poland
Netherlands
Brazil
Ownership Voting share
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
58
Transactions and outstanding balances within the Group have been eliminated in full as of year-end.
Shares owned by senior officers and directors at 31 December 2012:
(includes shares owned by wholly-owned companies)
Senior officers:
Karl Ronny Klungtvedt - CEO
Robin Laird - COO
Sven Børre Larsen - CFO
Directors:
Michael Raymond Parker - chair
Christian Brinch - deputy chair
Ronny Johan Langeland - director
Christakis Pavlou - director
Roger Cornish - director
Carine Smith Ihenacho - director
Synthetic
options
80 000
60 000
60 000
Shares
64 630
58 000
11 000
0
0
20 000
0
0
0
NOTE 25: CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
On 14 December 2011, Prosafe announced that the company has entered into a turnkey contract for
the construction of a semi-submersible accommodation rig at Jurong Shipyard Pte Ltd. in Singapore.
Delivery from the yard is scheduled for the summer of 2014 and all-in cost including yard cost, owner-
furnished equipment, project management and financing is estimated at USD 350 million. 20 per cent
of the yard cost was paid at signing of the contract and is included within tangible assets (note 10),
while the remaining 80 per cent will be paid at delivery.
On 19 November 2012, Prosafe announced that the company has entered into a turnkey contract
for the construction of a second semi-submersible accommodation rig at Jurong Shipyard Pte Ltd. in
Singapore. Delivery from the yard is scheduled around year-end 2014 and all-in cost including yard
cost, owner-furnished equipment, project management and financing is estimated at USD 350 million.
20 per cent of the yard cost was paid at signing of the contract and is included within tangible assets
(note 10), while the remaining 80 per cent will be paid at delivery.
59
NOTE 26: EVENTS AFTER THE BALANCE SHEET DATE
New bond loan
On 4 January 2013, Prosafe successfully completed a NOK 500 million unsecured bond issue with
maturity in January 2020. In connection with this bond issue, Prosafe bought back NOK 156 million in
one of the existing bonds, PRS06 PRO, with maturity 14 October 2013 at 102.25.
Share issue
On 15 March 2013, the Company announced the successful completion of a private placement of
13 000 000 new shares directed towards Norwegian and international institutional investors after
close of the Oslo Stock Exchange on 14 March 2013. The over-subscribed placement was made at a
subscription price of NOK 58 per share, and the share capital increase represented approximately 5.7
per cent of the issued shares in the Company. Gross proceeds amounted to NOK 754 million, and will
be used to fund value enhancing growth investments.
The issuance of the new shares was resolved by the Company’s board of directors pursuant to an
authorisation granted at the Company’s annual general meeting on 23 May 2012. The shares allocated
in the private placement were issued and registered in the Norwegian Central Securities Depository
(VPS) on 18 March 2013, and thus tradable on the Oslo Stock Exchange from the same date. The new
share capital of the Company was increased by EUR 3 250 000 to EUR 60 734 197.50, divided on
242 936 790 shares with a nominal value of EUR 0.25 per share.
Accounts Prosafe SE
61
INCOME STATEMENT - PROSAFE SE
(USD 1 000)
Note
2012
2011
Operating revenues
Operating expenses
Depreciation
Operating profit
Income from investments in subsidiaries
Other financial income
Other financial expenses
Net financial items
Profit before taxes
Taxes
Net profit
2
3
5
4, 5, 8
4, 5
5
6
0
(10 301)
(16)
(10 317)
72 462
84 597
0
(8 658)
(10)
(8 668)
202 578
104 022
(119 357)
(133 794)
37 701
27 385
0
172 806
164 138
0
27 385
164 138
Attributable to the owners of the company
27 385
164 138
STATEMENT OF COMPREHENSIVE INCOME - PROSAFE SE
(USD 1 000)
Net profit for the year
Revaluation hedging instruments
2012
2011
27 385
(3 746)
164 138
742
Income tax effect on components of comprehensive income
0
0
Other comprehensive income, net of tax
Total comprehensive income
(3 746)
23 639
742
164 880
Attributable to the owners of the company
23 639
164 880
62
STATEMENT OF FINANCIAL POSITION - PROSAFE SE
ASSETS
Tangible assets
Shares in subsidiaries
Note
31.12.12
31.12.11
3
7
44
37
2 499 033
2 513 942
Intra-group long-term receivables
13, 15
137 761
132 075
Total non-current assets
Cash and deposits
Fair value derivatives
Other current assets
Total current assets
Total assets
EQUITY AND LIABILITIES
Share capital
Own shares
Share premium reserve
Total paid-in equity
Other equity
Total retained earnings
Total equity
Interest-bearing long-term debt
Intra-group long-term debt
Fair value derivatives
Interest-free long-term liabilities
Total long-term liabilities
Interest-bearing current debt
Fair value derivatives
Intra-group current liabilities
Other interest-free current liabilities
Total current liabilities
Total equity and liabilities
Larnaca, 20 March 2013
15
15, 16
9, 13, 15
10
10
11, 15, 16
13, 15, 16
15, 16
15, 16
11, 15, 16
15,16
13, 15
12, 15, 16
2 636 838
2 646 054
19 114
13 621
17 692
50 427
28 781
0
14 340
43 121
2 687 264
2 689 175
63 903
(48 901)
620 496
635 498
63 903
(49 089)
620 496
635 310
1 124 606
1 219 582
1 124 606
1 219 582
1 760 104
1 854 892
745 613
756 870
9 663
36 295
1 148
23 163
32 549
1 130
792 719
813 712
64 800
0
64 090
5 552
3 600
7 958
1 352
7 661
134 442
20 571
2 687 264
2 689 175
Michael Raymond Parker
Christian Brinch
Roger Cornish
Non-executive chairman
Non-executive deputy chairman
Non-executive director
Ronny Johan Langeland
Non-executive director
Carine Smith Ihenacho
Non-executive director
Christakis Pavlou
Non-executive director
CASH FLOW STATEMENT - PROSAFE SE
Cash flow from operating activities
Profit before taxes
Unrealised currency loss / (gain) on long-term debt
Gain on sale of shares
Depreciation
Interest income
Interest expenses
Change in working capital
Other from operating activities
Net cash flow from operating activities
Cash flow from investing activities
Proceeds from sale / repayment of shares
Acquisition of shares
Acquisition of tangible fixed assets
Change in intra-group balances
Interest received
Net cash flow from investing activities
Cash flow from financing activities
New interest-bearing long-term debt
Repayment of interest-bearing long-term debt
Dividends paid
Interest paid
Net cash flow from financing activities
Net cash flow
Cash and deposits at 1 January
Cash and deposits at 31 December
63
Note
2012
2011
8
3
3
13
11
11
27 385
15 043
0
16
(6 179)
45 113
(5 460)
(21 373)
54 544
164 138
(9 007)
(10 246)
10
(5 875)
42 497
(8 410)
9 743
182 850
14 909
0
(23)
75 085
(64 839)
(36)
43 552
(113 570)
6 179
64 617
5 875
(97 485)
317 100
870 400
(282 200)
(806 300)
(118 615)
(107 149)
(45 113)
(128 828)
(42 497)
(85 546)
(9 666)
28 781
19 114
(181)
28 962
28 781
64
STATEMENT OF CHANGES IN EQUITY - PROSAFE SE
(USD 1 000)
Share
capital
Own
shares
Share
premium
Retained
earnings
Cash flow
hedges
Total
equity
Equity at 31 December 2010
63 903
(49 137)
620 496 1 186 124
(24 273) 1 797 113
Net profit
Other comprehensive income
Total comprehensive income 1)
Dividends
Sale of own shares
0
0
0
0
0
0
0
0
0
48
0
0
0
0
0
164 138
0
164 138
0
164 138
(107 149)
0
742
742
0
0
742
164 880
(107 149)
48
Equity at 31 December 2011
63 903
(49 089)
620 496 1 243 113
(23 531) 1 854 892
Net profit
Other comprehensive income
Total comprehensive income 1)
Dividends
Sale of own shares
0
0
0
0
0
0
0
0
0
188
0
0
0
0
0
27 385
0
27 385
(118 615)
0
0
27 385
(3 746)
(3 746)
0
0
(3 746)
23 639
(118 615)
188
Equity at 31 December 2012
63 903
(48 901)
620 496 1 151 883
(27 277) 1 760 104
1) Total comprehensive income is attributable to the owners of the company
65
Notes -Prosafe SE
All figures in USD 1 000 unless otherwise stated.
NOTE 1: ACCOUNTING POLICIES
The financial statements have been prepared in accordance with the International Financial Reporting
Standards (IFRS) endorsed by the European Union (EU) and the requirements of the Cyprus Companies
Law, Cap 113. The accounting policies applied to the consolidated accounts have also been applied to
the parent company, Prosafe SE. The notes to the consolidated accounts provide additional information
to the parent company’s accounts which is not presented here separately. The company’s financial
statements are presented in US dollars (USD). Investments in subsidiaries are measured at historic cost,
unless there is any indication of impairment. In case of impairment, an investment is written down to
fair value.
NOTE 2: OPERATING EXPENSES
Services from subsidiaries
Share option costs
Salaries and management bonus
Directors’ fees
Pension expenses
Other remuneration
Auditors’ audit fees
Payroll taxes
Auditors’ other fees
Other operating expenses
Total operating expenses
2012
8 502
(1 437)
867
675
(173)
163
179
54
35
2011
6 043
(370)
634
613
(155)
133
162
33
240
1 437
10 301
1 324
8 658
66
NOTE 3: TANGIBLE ASSETS
Acquisition cost 31.12.10
Additions
Disposals at acquisition cost
Acquisition cost 31.12.11
Additions
Disposals at acquisition cost
Acquisition cost 31.12.12
Accumulated depreciation 31.12.10
Accumulated depreciation on disposals
Depreciation for the year
Accumulated depreciation 31.12.11
Accumulated depreciation on disposals
Depreciation for the year
Accumulated depreciation 31.12.12
Carrying value 31.12.12
Carrying value 31.12.11
Depreciation rate (%)
NOTE 4: OTHER FINANCIAL ITEMS
Gain on sale of shares
Interest receivable from subsidiaries
Other interest receivable
Currency gain
Fair value adjustment derivative financial instruments
Total other financial income
Interest payable to subsidiaries
Interest expenses
Currency loss
Fair value adjustment derivative financial instruments
Other financial items
Total other financial expenses
Equipment
145
36
0
181
23
0
204
134
0
10
144
0
16
160
44
37
20-30
Total
145
36
0
181
23
0
204
134
0
10
144
0
16
160
44
37
-
2012
0
6 112
67
56 839
21 579
84 597
(512)
(44 601)
(66 059)
0
(8 185)
2011
10 246
5 729
146
87 586
315
104 022
(146)
(42 351)
(71 910)
(10 091)
(9 295)
(119 357)
(133 794)
NOTE 5: FINANCIAL ITEMS - IAS 39 categories
Year ended 31 Dec 2012
Interest income
Currency gain 1)
Dividend
Fair value adjustment financial instr.
Loans and
receivables
6 179
0
0
0
Total financial income
6 179
Fair value
through
profit and
loss
0
0
0
21 579
21 579
Financial
liabilities
measured at
amortised
cost
Available
for sale
0
0
0
0
0
Interest expenses
Currency loss 1)
Fair value adjustment financial instr.
Other financial expenses
Total financial expenses
0
0
0
0
0
0
0
0
0
0
(45 113)
0
0
(8 185)
(53 298)
Net financial items
6 179
21 579
(53 298)
67
Total
6 179
56 839
72 462
21 579
157 058
(45 113)
(66 059)
0
(8 185)
(119 357)
37 701
0
0
0
0
0
0
0
0
0
0
0
1) Currency effects (gain/loss) are excluded from the category breakdown, but added to the total for net effect.
Year ended 31 Dec 2011
Interest income
Currency gain 1)
Dividend
Gain on sale of shares
Fair value adjustment financial instr.
Loans and
receivables
5 875
0
0
0
0
Total financial income
5 875
Interest expenses
Currency loss 1)
Fair value adjustment financial instr.
Fair value adjustment shares
Other financial expenses
Total financial expenses
0
0
0
0
0
0
Fair value
through
profit and
loss
Financial
liabilities
measured at
amortised
cost
0
0
0
0
315
315
0
0
(10 091)
0
0
(10 091)
0
0
0
0
0
0
(42 497)
0
0
0
(9 295)
(51 792)
Available
for sale
0
0
0
Total
5 875
87 586
202 578
10 246
10 246
0
315
10 246
306 600
0
0
0
0
0
0
(42 497)
(71 910)
(10 091)
0
(9 295)
(133 794)
Net financial items
5 875
(9 776)
(51 792)
10 246
172 806
1) Currency effects (gain/loss) are excluded from the category breakdown, but added to the total for
net effect.
68
NOTE 6: TAXES
Profit before taxes
Permanent differences
Change in tax loss carried forward
Tax base
Taxes
Temporary differences:
Loss carried forward
Basis for deferred tax liability (+)/benefit (-)
Deferred tax liability (+)/benefit (-)
Taxes payable at 31 December
2012
27 385
(33 692)
6 307
0
0
2011
164 138
(157 337)
(6 801)
0
0
(22 576)
(22 576)
(16 269)
(16 269)
0
0
0
0
No deferred tax asset has been recognised in respect of the tax loss carried forward.
The tax losses for each year are carried forward for five years. The tax rate in Cyprus is 10%.
NOTE 7: SHARES IN SUBSIDIARIES
(Share capital and carrying value in 1 000)
Company
Prosafe AS
Prosafe Offshore AS
Prosafe Management AS
Prosafe (UK) Holdings Ltd
Prosafe Offshore Pte Ltd
Consafe Offshore AB
Prosafe Offshore Services Pte Ltd
Marzouka Investments Ltd
Prosafe Rigs Pte Ltd
Total carrying value
Share
capital
Carrying
value 2012
Carrying
value 2011
Owner-
ship
100
100
100
11 000
10 000
27 786
10
10
69 316
69 316
270
15
270
15
22 826
22 826
10
10
141 974
156 884
150
8
150
10
2 500 040
2 264 464
2 264 461
2 499 033
2 513 942
100%
100%
100%
100%
100%
100%
100%
100%
91%
NOK
NOK
NOK
GBP
USD
SEK
USD
USD
USD
69
NOTE 8: GAIN ON SALE OF SHARES IN 2011
In July 2011, the Company acquired 21 542 568 shares in Floatel International Ltd (Floatel), which
equalled 22.2 per cent of the shares. The acquisition price was NOK 16 per share. In August 2011,
Floatel announced that the company had signed a heads of agreement to enter into an amalgamation
agreement with Aqua Pellentesque Ltd. The shares were realised in September 2011, and the Company
received a cash consideration of NOK 19.50 per share. A net gain of USD 10.2 million in relation to this
transaction has been recognised in the income statement. Net proceeds were USD 75.1 million.
NOTE 9: OTHER CURRENT ASSETS
Current receivables from group companies
Other current assets
Total other current assets
NOTE 10: SHARE CAPITAL
2012
242
17 450
17 692
2011
136
14 204
14 340
Authorised ordinary shares as of 31 December
Issued and paid number of shares as of 31 December
Holding of own shares as of 31 December
Nominal value
2012
275 924 148
229 936 790
6 963 731
EUR 0.25
2011
275 924 148
229 936 790
6 975 818
EUR 0.25
NOTE 11: INTEREST-BEARING DEBT
As of 31 December 2012, Prosafe SE’s interest-bearing debt totalled about USD 810 million. Loans
secured by mortgages (credit facility) accounted for USD 566 million of this total and unsecured bond
loans accounted for about USD 244 million.
Credit facility
Bond loans
Total interest-bearing debt
Debt in NOK
Debt in USD
Total interest-bearing debt
Long-term interest-bearing debt
Current interest-bearing debt
Total interest-bearing debt
2012
566 000
244 413
810 413
244 413
566 000
810 413
745 613
64 800
810 413
2011
590 000
170 470
760 470
166 870
593 600
760 470
756 870
3 600
760 470
70
For further information, see note 17 of the consolidated accounts.
NOTE 12: OTHER INTEREST-FREE CURRENT LIABILITIES
Accrued interest costs
Provision share-based payments
Other current liabilities
Total other interest-free current liabilities
NOTE 13: INTRA-GROUP BALANCES
Loan to Prosafe AS
Intra-group long-term receivables
Loan from Consafe Offshore AB
Intra-group long-term debt
2012
2 981
581
1 990
5 552
2011
2 595
2 203
2 862
7 661
2012
137 761
137 761
2011
132 075
132 075
9 663
9 663
23 163
23 163
Loan agreements with subsidiaries are made at normal market prices using 3M NIBOR and STIBOR
interest rate and a margin of 2.00% and 0.60% respectively (2011 2.00% and 0.60%). Outstanding
balances at year-end are unsecured, and settlement normally occurs in cash. For the year ended 31
December 2012, the Company has not recorded any impairment of receivables relating to amounts
owed by subsidiaries.
Transactions with related parties
2012
2011
Transactions
Interest income
Interest expenses
Dividend
Year-end balances
Current receivables of the ultimate parent to subsidiaries
Intra-group long-term receivables
Current payables from the ultimate parent to subsidiaries
Loans from subsidiaries of the ultimate parent
6 112
(512)
5 729
(146)
72 462
202 578
242
136
137 761
132 075
64 090
9 663
1 352
23 163
71
NOTE 14: MORTGAGES AND GUARANTEES
As of 31 December 2012, Prosafe’s interest-bearing debt secured by mortgages totalled USD
566 million. The debt was secured by mortgages on shares in Prosafe Rigs Pte Ltd, and the
accommodation/service fleet owned by this entity. Book value of the fleet was USD 896.3 million.
In line with industry practice, Prosafe has issued parent company guarantees and bank guarantees
(around USD 8 million) to customers on behalf of its subsidiaries in connection with the award and
performance of contracts.
As of 31 December 2011, Prosafe’s interest-bearing debt secured by mortgages totalled USD 590
million. This debt is secured by mortgages on shares in Prosafe Rigs Pte Ltd, and the accommodation/
service fleet owned by this entity. Book value of the fleet is USD 893.7 million. In line with industry
practice, Prosafe had issued parent company guarantees and bank guarantees (around USD 8 million)
to customers on behalf of its subsidiaries in connection with the award and performance of contracts.
NOTE 15: FINANCIAL ASSETS AND LIABILITIES
As of 31 December 2012, Prosafe SE had financial assets and liabilities in the following categories:
Year ended 31 Dec 2012
Loans and
receivables
Fair value
through profit
and loss
Financial liabilities
measured at
amortised cost Book value
Intra-group long-term receivable
137 761
Cash and deposits
Fair value derivatives
Other current assets
Total assets
Credit facility
Bond loan PRS06
Bond loan PRS07
Bond loan PRS08
Intra-group long-term debt
Fair value derivatives
Interest-free long-term liabilities
Intra-group current liabilities
Other interest free current
liabilities
Total liabilities
19 114
13 621
17 692
188 188
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
36 295
0
0
0
0
0
0
0
0
137 761
19 114
13 621
17 692
188 188
566 000
566 000
64 764
89 825
89 825
9 663
0
1 148
64 090
5 552
64 764
89 825
89 825
9 663
36 295
1 148
64 090
5 552
36 295
890 866
927 161
72
As of 31 December 2011, Prosafe SE had financial assets and liabilities in the following categories:
Year ended 31 Dec 2011
Intra-group long-term receivable
Cash and deposits
Fair value derivatives
Other current assets
Total assets
Credit facility
Bond loan PRS03
Bond loan PRS06
Bond loan PRS07
Intra-group long-term debt
Fair value derivatives
Interest-free long-term liabilities
Intra-group current liabilities
Other interest free current
liabilities
Total liabilities
Loans and
receivables
132 075
28 781
0
14 340
175 196
0
0
0
0
0
0
0
0
0
0
Fair value
through profit
and loss
Financial liabilities
measured at
amortised cost Book value
0
0
0
0
0
0
0
0
0
0
40 507
0
0
0
0
0
0
0
0
132 075
28 781
0
14 340
175 196
590 000
590 000
3 600
83 435
83 435
23 163
0
1 130
1 352
7 661
3 600
83 435
83 435
23 163
40 507
1 130
1 352
7 661
40 507
793 776
834 283
For further information, see note 20 of the consolidated accounts.
NOTE 16: MATURITY PROFILE LIABILITIES
As of 31 December 2012, Prosafe SE’s main financial liabilities had the following remaining
contractual maturities:
Year ended 31 Dec 2012
2013
2014
2015
2016 2017 →
Interest-bearing debt (downpayments)
64 800
0
136 000
225 800 383 800
Interests incl interest swaps
Intra-group long-term debt
Intra-group current liabilities
Interest-free long-term liabilities
Other interest-free current liabilities
44 200
48 200
62 900
63 800 120 000
9 663
64 090
1 148
5 552
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Total
189 453
48 200
198 900
289 600 503 800
73
As of 31 December 2012, the availability under the credit facility totalled USD 927 million (USD 361
million undrawn credit lines), meaning that the first actual downpayment on the credit facility will
not occur until 2015.
As of 31 December 2011, Prosafe SE’s main financial liabilities had the following remaining
contractual maturities:
Year ended 31 Dec 2011
2012
2013
2014
2015 2016 →
Interest-bearing debt (downpayments)
3 600
83 450
140 000
140 000 393 450
Interests incl interest swaps
Intra-group long-term debt
Intra-group current liabilities
Interest-free long-term liabilities
Other interest-free current liabilities
42 700
41 300
46 700
47 000
80 000
23 163
1 352
1 130
7 661
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Total
79 606 124 750
186 700
187 000 473 450
NOTE 17: EVENTS AFTER THE BALANCE SHEET DATE
On 4 January 2013, Prosafe successfully completed a NOK 500 million unsecured bond issue with
maturity in January 2020. In connection with this bond issue, Prosafe bought back NOK 156 million in
one of the existing bonds, PRS06 PRO, with maturity 14 October 2013 at 102.25.
Independent
auditors’ report
75
TO THE MEMBERS OF PROSAFE SE
Report on the Financial Statements
We have audited the accompanying consolidated
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
financial statements of Prosafe SE (the “Company”) and
its subsidiaries ( the “Group”) and the Company’s separate
financial statements, which comprise the statement of
opinion.
Opinion
financial position of the Group and the Company as at 31
In our opinion, the consolidated and the Company’s
December 2012, and the income statement, statement of
separate financial statements give a true and fair view of
comprehensive income, statement of changes in equity
the financial position of the Group and the Company as at
and cash flow statement of the Group and the Company
31 December 2012, and of its financial performance and
for the year then ended, and a summary of significant
its cash flows for the year then ended in accordance with
accounting policies and other explanatory information.
International Financial Reporting Standards as adopted by
the European Union and the requirements of the Cyprus
Board of Directors' Responsibility for the Financial
Companies Law, Cap. 113.
Statements
The Company’s Board of Directors is responsible for the
Report on Other Legal Requirements
preparation of financial statements that give a true
and fair view in accordance with International Financial
Pursuant to the requirements of the Auditors and
Statutory Audits of Annual and Consolidated Accounts Law
Reporting Standards as adopted by the European Union
of 2009, we report the following:
and the requirements of the Cyprus Companies Law, Cap.
• We have obtained all the information and explanations
113, and for such internal control as the Board of Directors
we considered necessary for the purposes of our audit.
determines is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these
financial statements based on our audit. We conducted
our audit in accordance with International Standards on
Auditing. Those Standards require that we comply with
ethical requirements and plan and perform the audit
to obtain reasonable assurance whether the financial
statements are free from material misstatement.
• In our opinion, proper books of account have been kept
by the Company.
• The financial statements are in agreement with the
books of account.
• In our opinion and to the best of our information and
according to the explanations given to us, the financial
statements give the information required by the Cyprus
Companies Law, Cap. 113, in the manner so required.
• In our opinion, the information given in the report of
the Board of Directors is consistent with the financial
statements.
Other Matter
An audit involves performing procedures to obtain audit
This report, including the opinion, has been prepared
evidence about the amounts and disclosures in the
for and only for the Company's members as a body in
financial statements. The procedures selected depend
accordance with Section 34 of the Auditors and Statutory
on the auditor’s judgment, including the assessment
of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making
Audits of Annual and Consolidated Accounts Law of 2009
and for no other purpose. We do not, in giving this opinion,
accept or assume responsibility for any other purpose or
those risk assessments, the auditor considers internal
to any other person to whose knowledge this report may
control relevant to the entity’s preparation of financial
come to.
statements that give a true and fair view in order to
design audit procedures that are appropriate in the
Gabriel Onisiforou
circumstances, but not for the purpose of expressing an
Certified Public Accountant and Registered Auditor
opinion on the effectiveness of the entity's internal control.
for and on behalf of
An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of
Ernst & Young Cyprus Limited
accounting estimates made by the Board of Directors, as
Certified Public Accountants and Registered Auditors
well as evaluating the overall presentation of the financial
statements.
Nicosia
20 March 2013
Fleet overview
With a fleet of 11 vessels and two new builds under construction,
Prosafe is the leading player within the global market for
semi-submersible accommodation vessels for the oil and gas industry.
77
Safe Boreas
: To be delivered summer of 2014
Built, converted
: GVA 3000 E
Design
: 450
No of beds
Gangway
: 38.5m +/- 7.5m
Power generation : 33 600 kW (6 diesel generator sets)
Station keeping
Thrusters
Mooring system
: DP3
: 6 x 4 400 kW azimuthing
: 12-point wire winches
Safe Zephyrus
: To be delivered year-end 2014
Built, converted
: GVA 3000 E
Design
: 450
No of beds
Gangway
: 38.5m +/- 7.5m
Power generation : 33 600 kW (6 diesel generator sets)
Station keeping
Thrusters
Mooring system
: DP3
: 6 x 4 400 kW azimuthing
: 12-point wire winches
Regalia
: 1985
Built, converted
: 2003/2009 (refurbishment)
Upgraded
: GVA 3000 – enhanced
Design
: 306 (NCS: 282)
No of beds
Gangway
: 38.0m +/- 7.5m
Power generation : 19 560 kW (6 diesel generator sets)
Station keeping
Thrusters
Mooring system
: NMD3
: 6 x 2 640 kW azimuthing
: 4-point wire winches
78
Safe Scandinavia
: 1984
Built, converted
: 2003/2005
Upgraded
: Aker H-3.2E
Design
: 583 (NCS: 292)
No of beds
Gangway
: 36.5m +/- 6.0m
Power generation : 6 780 kW (3 diesel generator sets)
Station keeping
Mooring system
: Moored
: 12-point chain winches
Safe Caledonia
: 1982
Built, converted
: 2004/2012 (refurbishment)
Upgraded
: Pacesetter
Design
: 454
No of beds
Gangway
: 36.5m +/- 5.5m
Power generation : 15 900 KW (6 diesel generator sets)
: DP2 / Posmoor
Station keeping
: 4 x 2 400 kW azimuthing
Thrusters
: 10-point wire winches
Mooring system
Safe Bristolia
: 1983, 2006
: 2008
: Earl & Wright Sedco 600
: 587
: 35m +/- 6.0m (port)
Built, converted
Upgraded
Design
No of beds
Gangway
Power generation : 6 420 kW (4 diesel generator sets)
Station keeping
Mooring system
: Moored
: 8-point wire winches
Safe Concordia
: 2005
Built, converted
: Deepwater Technology Group
Design
: 461
No of beds
: 29.5m +/- 5.0m
Gangway
Power generation : 18 550 kW (5 diesel generator sets)
Station keeping
Thrusters
Mooring system
: DP2
: 4 x 2 500 kW azimuthing
: 4-point wire winches
Safe Astoria
: 1983, 2005
: 2012
: Earl & Wright Sedco 600
: 349
: 36.5m +/- 6.0m (starboard)
Built, converted
Upgraded
Design
No of beds
Gangway
Power generation : 6 115 kW (4 diesel generator sets)
Station keeping
Mooring system
: Moored
: 8-point wire winches
Safe Scandinavia
Built, converted
: 1984
Upgraded
Design
No of beds
Gangway
: 2003/2005
: Aker H-3.2E
: 583 (NCS: 292)
: 36.5m +/- 6.0m
Power generation : 6 780 kW (3 diesel generator sets)
Station keeping
: Moored
Mooring system
: 12-point chain winches
Safe Caledonia
Built, converted
: 1982
Upgraded
Design
No of beds
Gangway
: 2004/2012 (refurbishment)
: Pacesetter
: 454
: 36.5m +/- 5.5m
Power generation : 15 900 KW (6 diesel generator sets)
Station keeping
: DP2 / Posmoor
Thrusters
: 4 x 2 400 kW azimuthing
Mooring system
: 10-point wire winches
Safe Bristolia
Built, converted
: 1983, 2006
Upgraded
Design
No of beds
Gangway
: 2008
: 587
: Earl & Wright Sedco 600
: 35m +/- 6.0m (port)
Power generation : 6 420 kW (4 diesel generator sets)
Station keeping
: Moored
Mooring system
: 8-point wire winches
Safe Concordia
Built, converted
: 2005
Design
No of beds
Gangway
: Deepwater Technology Group
: 461
: 29.5m +/- 5.0m
Power generation : 18 550 kW (5 diesel generator sets)
Station keeping
: DP2
Thrusters
: 4 x 2 500 kW azimuthing
Mooring system
: 4-point wire winches
Safe Astoria
Built, converted
: 1983, 2005
Upgraded
Design
No of beds
Gangway
: 2012
: 349
: Earl & Wright Sedco 600
: 36.5m +/- 6.0m (starboard)
Power generation : 6 115 kW (4 diesel generator sets)
Station keeping
: Moored
Mooring system
: 8-point wire winches
79
Safe Britannia
: 1980
Built, converted
: 1987/2003
Upgraded
: Pacesetter - enhanced
Design
: 812
No of beds
Gangway
: 36.5m +/- 6.0m
Power generation : 13 895 kW (7 diesel generator sets)
Station keeping
Thrusters
Mooring system
: DP2
: 4 x 2 400 kW azimuthing, 2 x 1 500 kW fixed
: 9-point wire winches
Safe Regency
: 1982
Built, converted
: 2003/2008
Upgraded
: Pacesetter
Design
: 780
No of beds
Gangway
: 36.5m +/- 6.0m
Power generation : 12 960 kW (6 diesel generator sets)
Station keeping
Thrusters
Mooring system
: DP2
: 4 x 2 400 kW azimuthing
: 8-point wire winches
Safe Lancia
: 1984
: 2003
: GVA 2000
: 605
: 27.5m +/- 5.5m (starboard)
Built, converted
Upgraded
Design
No of beds
Gangway
Power generation : 14 500 kW (6 diesel generator sets)
: DP2 / Posmoor
Station keeping
Thrusters
: 4 x 2 400 kW azimuthing
Mooring system : 7-point wire winches
Jasminia
: 1982
Built, converted
: 2002
Upgraded
: GVA 2000
Design
: 535
No of beds
Gangway
: Rigid, simple span 34.0m +/-3.0m
Power generation : 7 070 kW (3 diesel generator sets)
Station keeping
Thrusters
Mooring system
: Moored
: 2 x 2 400 kW azimuthing
: 8-point wire winches
Safe Hibernia
: 1977
: 1991/1994/2006
: Aker H-3 (modified)
: 632
: 36.0m +/- 6m (starboard)
Built, converted
Upgraded
Design
No of beds
Gangway
Power generation : 6 320 (4 diesel generator sets)
: 2 x 3 300 HP Propulsion (Aft)
Thrusters
Station keeping
: Moored
Mooring system : 12-point wire winches
Prosafe SE
Stadiou 126
CY-6020 Larnaca, Cyprus
Telephone:
Fax:
mail@prosafe.com
www.prosafe.com
+357 2462 2450
+357 2462 2480
Design: Olavstoppen. Photo: Tom Haga, Kjetil Alsvik, iStockphoto. Print: Gunnarshaug Trykkeri.
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