13ANNUAL REPORT
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Accommodating the Offshore Industry
Content
Financial calendar and key figures
About Prosafe
Theme: Strengthening the company’s leading position
Directors’ report
Statement of the members of the Board of Directors
and other responsible persons
Consolidated accounts
Accounts Prosafe SE
Independent auditors’ report
Fleet overview
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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 HSEQA, corporate governance,
social responsibility, risk management and financial and analytical
information, please refer to the Download centre on Prosafe’s website
www.prosafe.com.
In order to present updated and correct information at all times,
we will endeavour to update the information on the website
whenever required throughout the year.
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
:
:
:
:
28 May 2014
21 August 2014
5 November 2014
5 February 2015
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, 28 May 2014.
Key figures
Note
2013
2012
2011
2010
2009
Profit
Operating revenues
USD million
EBITDA
Operating profit
Net profit
USD million
1
USD million
USD million
Earnings per share
USD
Operating margin
Balance sheet
Total assets
USD million
Interest-bearing debt
USD million
Net interest-bearing debt USD million
USD million
Book equity
Book equity ratio
Valuation
2
3
4
5
523.5
306.6
245.1
199.1
0.85
510.4
280.1
222.4
177.5
0.80
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
46.8 %
43.6 %
42.8 %
50.0 %
54.9 %
1 618.0
1 487.2
1 376.1
1 266.4
1 355.5
779.6
666.2
739.7
810.4
706.8
516.3
760.5
667.1
461.8
705.4
607.1
410.3
915.1
826.6
263.9
45.7 %
34.7 %
33.6 %
32.4 %
19.5 %
Market capitalisation
USD million
Share price
NOK
1 816
46.80
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 595 people at year-end. Operating
profit reached USD 245.1 million in 2013 and net profit was
USD 199.1 million.
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. 5
With six dynamically positioned vessels and
or storage capacity offshore. Prosafe’s vessels
five anchored vessels, Prosafe’s fleet is versatile
have accommodation capacity for 306-812
and able to operate in nearly all offshore
people and offer high quality welfare and
environments.
catering facilities, storage, workshops, offices,
medical services, deck cranes and lifesaving
Prosafe is constructing two harsh environment
and fire fighting equipment. The vessels are
semi-submersible accommodation vessels at
positioned alongside the host installation
Jurong Shipyard. Both vessels will comply with
and are connected by means of a telescopic
Norwegian regulations and will be ready for
gangway so that personnel can walk to work.
operations in the North Sea in 2015.
Prosafe has a strong track record from
Furthermore, Prosafe is building two semi-
demanding operations world wide, with first
submersible accommodation vessels at COSCO
class operational performance and good safety
(Qidong) Offshore Co. Ltd. These vessels will
results. The company has extensive experience
be the most advanced and flexible units for
from operating gangway connected to fixed
worldwide operations excluding Norway, and
installations, FPSOs, TLPs, Semis and Spars.
will be ready for operations in 2016.
Prosafe’s operations are related to
operations offshore Norway, UK, Mexico, USA,
maintenance and modification of installations
Brazil, Denmark, Tunisia, West Africa, North-
on fields already in production, hook-up and
west and South Australia, the Philippines and
The company’s track record comprises
commissioning of new fields, tie-backs to
Russia.
existing infrastructure and decommissioning.
Prosafe is listed on the Oslo Stock Exchange
Accommodation vessels offer additional
with ticker code PRS.
accommodation, engineering, construction
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. Theme: Strengthening the
company’s leading position
Prosafe has a strong commitment to its target of being the
world leader in offshore accommodation, in line with the
company’s long-term industrial strategy.
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. Theme: Strategic growthExpanding the fleet with two advanced harsh environment semi-submersible vessels. 7
Best client services
well and the vessels will be the most advanced
Prosafe aims at offering the best client services
accommodation vessels in the world.
in the offshore accommodation market. The
company underwent a re-organisation in
In 2013, the company ordered two additional
2013 with the ambition to grow the capacity
new vessels at COSCO (Qidong) in China.
and efficiency of the organisation in order to
These vessels will be the most advanced
handle the operations of a larger fleet and
vessels capable of operating in the UK and the
the execution of large projects related to new
rest of the world, excluding Norway.
builds, upgrades and life extensions.
Best operations
The re-organisation was focused on functional
Prosafe also aims at having the best
areas and aimed at achieving a broader
operational and HSE performance in the
client interface in order to better understand
accommodation industry.
clients’ needs and better support day-to-
day operations. Prosafe is now focusing on
With a long track record of safe and efficient
improving the ways of working within the new
operations in all major offshore oil and gas
organisation.
Best vessels
regions, the company is the most experienced
operator of accommodation vessels in the
world. Substantial experience and best practice
Prosafe’s key goals include having the best
is transferred between the vessels and within
and most capable fleet of accommodation
the organisation. Best practice is further
vessels in the world. With the upgrade of
developed and disseminated by coaching and
Regalia in 2009, the company commenced a
mentoring of crew both prior to and during
life extension programme for its North Sea
operations.
fleet. The Safe Caledonia life extension project
was completed in 2013, and Safe Scandinavia
Lowest cost
underwent a life extension project in the first
Being the largest player in the offshore
quarter of 2014. Including Safe Bristolia, which
accommodation industry, Prosafe enjoys
was converted in 2005/06, Prosafe’s North
substantial economies of scale when it comes
Sea fleet is now in very good condition with
to cost and capital expenditure. The company
approximately 20 years of remaining life.
has a strong balance sheet, which gives easy
access to funding and by far the lowest cost of
During 2011, Prosafe saw the need for more
capital within the accommodation market.
vessels with Norway and North Sea capabilities
and decided to build two vessels capable of
Overall, by combining its current strengths
operating in Norway at the Jurong shipyard
with high ambitions for the future, Prosafe is
in Singapore. The construction is progressing
well placed to further strengthen its leading
Theme: Strengthening the
company’s leading position
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. Theme: Strategic growth Directors’ report
Prosafe is the leading provider of accommodation vessels for
the global offshore oil and gas industry. With an unprecedented
operational track-record combined with the world’s by far
largest and most versatile fleet and an efficient cost structure,
the company is well positioned to enhance this leading position
further over the coming years.
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. 9
Income statement
around USD 1.4 million of previously expensed
Operating revenues totalled USD 523.5 million
taxes in Russia related to the operation of Safe
in 2013 (USD 510.4 million in 2012), with
Astoria at the Sakhalin field in 2007-09.
utilisation of the fleet rising to 83 per cent
(82 per cent). Charter revenues reached USD
Net profit amounted to USD 199.1 million (USD
469.2 million (423.9 million), while non-charter
177.5 million), resulting in diluted earnings per
revenues declined from 86.5 million to USD
share of USD 0.85 (USD 0.80).
54.3 million. The increase in charter revenues is
attributable to a higher average day rate level.
Capital
Total assets amounted to USD 1 619.9 million
Total operating expenses declined to USD
(USD 1 487.2 million) at the end of 2013.
216.9 million (USD 230.3 million), largely as a
Investments in tangible assets totalled
result of a decline in reimbursable non-charter
USD 227.2 million (USD 188.1 million).
expenses.
The investments in 2013 include the upgrades
of Safe Caledonia and Safe Scandinavia, the first
Depreciation increased to USD 61.5 million
instalment on the two new builds Safe Eurus
(USD 57.7 million) mainly due to a planned
and Safe Notos, and project expenses related to
replacement of the cranes on Regalia. The
the new builds Safe Boreas and Safe Zephyrus.
residual value of USD 3.4 million of the
replaced cranes has been written down to
In 2013, the company paid interim dividends
the estimated scrap value.
of USD 139.6 million (USD 118.6 million),
corresponding to NOK 3.47 per share (NOK
Operating profit came to USD 245.1 million
3.06).
(USD 222.4 million).
Interest-bearing debt amounted to USD
Net interest expenses totalled USD 32.9 million
779.6 million (USD 810.4 million) at year-end.
(USD 39.8 million). This decline is mainly due
Repayments of debt totalled USD 407.8 million
to a reduction in the average interest rate on
(USD 282.2 million), while gross increase in
the hedged debt. In accordance with IFRS,
borrowing amounted to USD 404.1 million
interest costs totalling USD 4.5 million (USD
(USD 317.1 million). On 4 January 2013, Prosafe
3.7 million) have been allocated to new build
successfully completed a NOK 500 million
and refurbishment projects, and consequently
unsecured bond issue maturing in January
capitalised as part of the vessel costs.
2020. In connection with this bond issue,
Prosafe bought back NOK 156 million of one
Other financial items amounted to USD
of the existing bonds, PRS06 PRO, which will
-8.5 million (USD -4.6 million). These figures
mature on 14 October 2013 at 102.25.
include the net effect from changes in value
of financial currency hedging instruments and
As at year-end 2013, the Prosafe Group had
revaluation of NOK denominated bond loans.
total liquid assets of USD 113.4 million
(USD 103.6 million). The liquidity reserve (liquid
Taxes for 2013 were USD 4.6 million (USD 0.5
assets plus undrawn credit facilities) totalled
million). The 2012 figure included a reversal of
USD 486.4 million (USD 464.6 million).
Directors’ report
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. 10
Total shareholders’ equity amounted to USD
term bareboat charters in Mexico throughout
739.7 million (USD 516.3 million), resulting
the year. The contracts for Safe Britannia,
in a book equity ratio of 45.7 per cent (34.7
Safe Lancia, Jasminia and Safe Regency were
per cent). On 14 March 2013, the company
extended during the year.
successfully completed a private placement
of 13 million new shares. The proceeds of
Safe Concordia operated on a long term
USD 128.9 million will be used to fund value
contract in Brazil throughout the year.
enhancing growth investments.
In December 2013, Prosafe was awarded an
On 14 May 2013, the annual general meeting
extension is three years and commences
approved the cancellation of 6 963 731 of
in June 2014, in direct continuation of the
Prosafe’s own shares. After the cancellation,
existing firm contract.
extension. The firm period of the contract
the number of issued ordinary shares in the
company is 235 973 059.
After completing a contract with Woodside in
Australia in January, Safe Astoria underwent
Overall, Prosafe has continued to reinforce
maintenance and modification work during
its solid financial position allowing it to pay
lay-up in Indonesia. At the end of December
dividends to shareholders in addition to
the vessel started mobilising for a contract
maintaining a level of investments that secure
with Swiber in Indonesia, which commenced
long-term growth for the company.
in early January 2014.
The board confirms that the going-concern
Safe Caledonia commenced on a contract with
assumption applies and that the annual
BP in the UK on 2 March and operated on this
accounts have been prepared based on this
contract for the rest of 2013.
assumption.
Reference is made to note 25 to the
Valhall in Norway at the start of the year until
consolidated accounts for a description of
1 March. The contract with ConocoPhillips at
events after the balance sheet date.
Jasmine in the UK commenced 6 April until 12
Safe Scandinavia was in operation for BP at
Operations
November. Following the contract, she went
to the Remontowa yard in Gdansk in Poland to
Prosafe is the world’s largest owner and
undertake a life extension refurbishment and
operator of semi-submersible accommodation
five-year special period survey (SPS).
vessels, owning 11 vessels worldwide.
The total value of contracts increased to
Regalia was off-hire and at the yard
USD 1 258 million at the end of 2013 from USD
undertaking planned maintenance work
720 million at the end of 2012 (USD 1 689
during the first quarter. The vessel commenced
million and USD 827 million, respectively
operation for Shell at the Draugen field in
including clients’ extension options).
Norway on 30 April and was in operation until
Safe Hibernia, Jasminia, Safe Britannia, Safe
she went to Keppel Verolme in the Netherlands
Lancia and Safe Regency operated on long-
for refurbishment work and a five-year SPS.
12 November. On completion of the contract,
11
Fleet growth and renewal
ready for use in 2016.
Prosafe currently has four new semi-
submersible accommodation vessels
In addition to the new builds, the company has
under construction. In December 2011 and
also invested substantially in the existing fleet
November 2012, respectively, the company
over the past years. A refurbishment and life
ordered Safe Boreas and Safe Zephyrus from
extension programme for the North Sea fleet
Jurong Shipyard Pte Ltd. in Singapore. The
was initiated by the 20-year life extension and
vessels are constructed according to the strict
upgrade of Regalia in 2009, and in 2012/13,
Norwegian regulations and they will be the
Safe Caledonia underwent a similar project. In
most well-equipped and sophisticated offshore
2013/14 the programme was completed by
accommodation units in the world. Deliveries
the life extension and refurbishment of Safe
from the yard are scheduled for the third
Scandinavia.
quarter of 2014 and the fist quarter of 2015,
respectively.
With these investments Prosafe not only
owns and operates by far the largest and
During the first quarter of 2013 it became
most capable fleet in the accommodation
apparent that further opportunities for growth
market, but also the most modern. Including
were likely to evolve. As a consequence, the
the vessels under construction, one third of
company in March issued USD 13 million
Prosafe’s fleet is less than ten years old, whilst
shares (5.65 per cent of the share capital at the
another third of the fleet has gone through
time) for total proceeds of USD 128.9 million to
conversion and/or major refurbishment and
fund such growth opportunities.
life-extension projects during the past ten
In November 2013 Prosafe entered into
years.
a turnkey contract with COSCO (Qidong)
Both the investments in new builds and
Offshore Co., Ltd. China, for the delivery of two
in the current fleet should contribute
accommodation vessels for use worldwide,
significantly to growth and sustainability
excluding Norway. The vessels are designed
for many years to come. As such, they are
and equipped to meet the requirements of the
instrumental for achieving Prosafe’s target
accommodation industry and they will be the
of doubling shareholder values over a five-
leading vessels in their sector when they are
year period. In addition, they will reinforce
12
the company’s leading position in the high-
A number of new semi-submersible
end accommodation vessel sector, further
accommodation vessels are scheduled to
strengthening its ability to meet clients' needs
enter the market over the next couple of years.
and expectations related to increasingly
The supply side is anticipated to more than
complex operations in a growing market.
double in size during the period from 2012 to
Outlook
2016. This increase is partly due to a possible
under-supply situation historically and partly a
The year 2013 was a record year for Prosafe
consequence of a positive underlying demand
in terms of contract inflow. At the end of
development which has arisen during the past
2013, the gross value of contracts (including
years. Furthermore, it should be noted that the
extension options) amounted to USD 1 689
growth in number of units comprises vessels
million, up from USD 827 million during the
of a varying degree of quality, both in respect
previous year. This is by far the highest level
of technical specifications, owners’ operating
ever seen and the Board expects it to rise
capabilities and financing structures.
further during 2014.
In addition to being the world’s largest
Over the past six months a number of the
owner and operator of semi-submersible
largest oil companies in the world have
accommodation vessels, the company also has
announced cost cutting initiatives and
the longest track-record in terms of operations
signalled lower investment growth. This
and HSEQ. Furthermore, it has the most
could have a negative impact on demand
efficient cost structure through economies of
going forward, however, the company has
scale, the world’s most cost efficient fleet and
so far experienced few tangible signs of
an efficient financing structure. Accordingly,
such development. The accommodation
Prosafe is well placed to further enhance its
vessel segment is a late cyclical business and
position in the accommodation market in the
has historically experienced lower demand
years to come.
volatility than most of the early cyclical
segments. The worldwide market for semi-
In the Budget Statement on 19 March 2014,
submersible accommodation vessels remains
the UK Chancellor announced a new measure
busy with a large number of enquiries from
for taxation of offshore drilling rigs and
clients.
accommodation vessels operating on the UK
continental shelf. The new legislation will
Looking further ahead, the development
take effect from 1 April 2014 when passed.
in underlying demand drivers remains
It is anticipated that the tax cost related to
positive. The number of oil and gas fields
Prosafe’s UK operations will increase as a result
and installations on stream is expected to
of the new measure.
increase in all the main markets over the
coming years. Furthermore, existing fields are
The accommodation vessel business is
constantly growing older at the same time
international by nature and therefore Prosafe is
as the prospects for increased oil recovery are
exposed to potential tax changes in a number
improving due to technological development.
of jurisdictions.
This in turn bodes well for demand for services
related to maintenance, modifications and
upgrades.
13
Health, safety and the environment (HSE)
presence was reflected in the fact that its
Robust HSE performance is fundamental to
employees came from 26 countries around
all of Prosafe’s operations and is therefore
the world. The overall workforce turnover in
reflected in the company’s core values. As a
the group was 7.0 per cent in 2013, a decrease
consequence, the company works proactively
from 7.6 per cent in 2012.
and systematically to reduce injuries and
sickness absence.
The company operates an equal opportunity
policy including gender equality. Men have,
Prosafe operates a zero accident mind-set
however, traditionally made up a greater
philosophy which means that no accidents
proportion of the recruitment base for offshore
or serious incidents are acceptable. Over
operations, and this is reflected in Prosafe’s
the past years, the company has focused
gender breakdown. As of 31 December 2013,
on preventive measures and a number of
women accounted for 14 per cent of the overall
initiatives have been implemented in order to
workforce, compared to 15 per cent in 2012.
further strengthen the safety culture. Together
Onshore the proportion of women was 40 per
with the introduction of new systems and
cent, as opposed to 41 per cent in 2012.
procedures this has led to an improvement of
the HSE results.
Women constituted 14 per cent of the
managers as at 31 December 2013, as opposed
During 2013, Prosafe recorded no Lost Time
to 15 per cent at the end of 2013.
Injury (LTI) (i.e. incident that resulted in the
employee being absent from the next work
Prosafe aims to offer the same opportunities
shift). This translates into an LTI frequency rate
to all and there is no discrimination due to
of 0 for 2013, compared to 0.98 in 2012.
race, gender, nationality, culture or religion
The LTI frequency is calculated by multiplying
with respect to recruitment, remuneration or
the number of LTIs by 1 million and dividing
promotion.
this by the total number of man-hours worked.
Corporate governance
Sickness absence increased to 4.4 per cent in
Corporate governance in Prosafe is based on
2013 from 3.3 per cent in 2012.
the principles contained in the Norwegian
Code of Practice for Corporate Governance
Prosafe had no accidental discharges to the
of 23 October 2012. There are no significant
natural environment in 2013 and continues
deviations between the Code of Practice and
to actively reduce emissions by investment in
the way it has been implemented in Prosafe.
more modern and fuel efficient equipment
The company’s full Corporate Governance
and continuous improvement in operating
report is set out on Prosafe’s website
procedures.
http://www.prosafe.com.
Human resources and diversity
By displaying robust corporate governance,
Prosafe’s workforce consisted of 595
the company aims to strengthen confidence in
individuals at the end of 2013, compared
the company among shareholders, the capital
to 547 in the previous year. Prosafe’s global
market and other interested parties, and will
14
help ensure maximum value creation over time
these risk factors through continuous
in the best interest of shareholders, employees
reporting, board meetings, periodic reviews of
and other stakeholders.
the business and tenders, and rolling strategy
and budget processes. This is supplemented
At the Annual General Meeting on 14 May
by dialogue and exchange of views with the
2013, Michael Raymond Parker was re-elected
company’s management.
as Chairman of the Board for one year. Carine
Smith Ihenacho and Roger Cornish were
The company aims to create shareholder
re-elected as Directors for a period of two
value by allocating capital and resources to
years, and Christakis Pavlou was re-elected as
the business opportunities that yield the best
Director for a period of one year.
return relative to the risk involved within its
specified strategic direction.
Corporate social responsibility
Prosafe aims to be a socially responsible
Prosafe seeks to reduce its exposure to
company and to further develop its business
operational, financial and compliance related
in a sustainable manner. In order to ensure
risk through proper operating routines, the use
long-term, viable development and profit, the
of financial instruments and insurance policies.
company balances economic, environmental
and social objectives and integrates them into
Further information on financial risk
its daily business activities and decisions.
management is provided in note 20 to the
consolidated financial statements.
Prosafe’s objectives for corporate social
responsibility are based on the company’s
An account of the main features of the
strategy, core values, Code of Conduct and
company’s internal control and risk
principles for corporate governance, in addition
management systems is available on Prosafe’s
to international recognised principles and
website http://www.prosafe.com.
guidelines. In order to advance its commitment
to sustainability and corporate citizenship,
Shareholders
Prosafe signed up as a member of the United
According to the shareholder register as at 31
Nations Global Compact in October 2008.
December 2013, the ten largest shareholders
held a total of 46.1 per cent of the issued
Going forward, the company will continue to
shares. The remaining shares were held by
aim for continuous improvement of internal
4 447 investors. A nominee account in the
standards, the way it works with partners and
name of State Street Bank was the largest
suppliers, and to manage the impact of its
shareholder with a holding of 12.7 per cent of
operations.
Risk
the issued shares.
Prosafe carry out a survey every quarter
Prosafe categorises its primary risks under the
attempting to identify the underlying owners
following headings: strategic, operational,
of shares held at nominee accounts. This
financial and compliance related. The
survey can be found at the web site:
company’s Board and senior officers manage
http://www.prosafe.com.
15
The number of issued shares in Prosafe is
The Board has approved a dividend policy of up
235 973 059 at a nominal value of EUR 0.25
to 75 per cent of the company’s net profit paid
each. In March the company issued 13 million
four times per year in the following year. In
new shares and in May the Annual General
2013, a total dividend equivalent to USD 0.60
Meeting resolved to cancel the company’s
per share was distributed to the shareholders.
holding of own shares and thereby reduce the
The dividend was paid in the form of NOK 3.47
number of issued shares by 6 963 731.
per share. Typically, an interim dividend will
be declared together with the release of the
Further information is shown in note 15 to the
quarterly results.
consolidated financial statements.
Auditor
At 31 December 2013, Prosafe SE had a
distributable equity of USD 922 million. The
The independent auditor of the company,
parent company showed a net loss of USD 41.9
Ernst & Young Cyprus Ltd., has expressed its
million for 2013, which the Board proposes to
willingness to continue as the company’s
be covered as follows (in USD million):
Dividend
Transferred from equity
Total
0.0 million
41.9 million
41.9 million
auditor. Reference to auditors’ fee is made in
note 7 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.
Larnaca, 2 April 2014
Board of Directors of Prosafe SE
Michael Raymond Parker
Ronny J. Langeland
Christakis Pavlou
Non-executive Chairman
Non-executive Deputy Chairman
Non-executive Director
Christian Brinch
Carine Smith Ihenacho
Roger Cornish
Non-executive Director
Non-executive Director
Non-executive Director
Statement of the members
of the Board of Directors and
other responsible persons
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. 17
Statement of the members of the Board of
Directors and other responsible persons of
Prosafe SE for the financial statements in the
Annual Report for the year ending December
2013
International Financial Reporting
Standards as adopted by the European
Union, and in accordance with the
provisions of Section 9 (4), of the Law;
and
In accordance with Sections 9 (3) (c) and 9
(7) of the Cyprus Transparency Requirements
(Securities for Trading on Regulated Market)
Law of 2007 (“Law”) and Cyprus Companies
Law Cap. 113, we the members of the Board
of Directors and the other responsible persons
for the consolidated financial statements of
Prosafe SE and the other companies included
in the consolidated accounts (“the Group”) and
the financial statements of Prosafe SE, for the
year ended 31 December 2013, confirm that, to
the best of our knowledge:
(a) the annual consolidated and financial state-
ments that are presented on pages 18 to 73:
(i) were prepared in accordance with the
(ii) give a true and fair view of the assets,
liabilities, the financial position, and the
profit or losses of Prosafe SE and the Group
included in the consolidated accounts taken
as a whole; and
(b) the Directors’ Report gives a fair review
of the development and performance of the
business and the financial position of
Prosafe SE and the consolidated accounts of
the Group as a whole, together with a
description of the principal risks and
uncertainties that they face.
Michael Raymond Parker
Non-executive Chairman
Ronny J. Langeland
Non-executive Deputy Chairman
Christakis Pavlou
Non-executive Director
Christian Brinch
Non-executive Director
Carine Smith Ihenacho
Non-executive Director
Roger Cornish
Non-executive Director
Karl Ronny Klungtvedt
Chief Executive Officer
Prosafe Management AS
Sven Børre Larsen
Chief Financial Officer
Prosafe Management AS
Larnaca, Cyprus
2 April 2014
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels.
18
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)
19
Note
2013
2012
5
7
8
9
11
11
5, 10, 11
10, 11
12
13
13
469.2
54.3
523.5
(99.4)
423.9
86.5
510.4
(97.7)
(117.5)
(132.5)
306.6
(61.5)
245.1
1.3
(34.2)
23.3
(31.8)
(41.4)
203.7
(4.6)
199.1
280.1
(57.7)
222.4
1.1
(40.9)
27.4
(32.0)
(44.4)
178.0
(0.5)
177.5
199.1
177.5
0.85
0.85
0.80
0.80
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(USD million)
Net profit for the year
Note
2013
199.1
2012
177.5
Other comprehensive income to be reclassified to profit or loss
in subsequent periods
Foreign currency translation
Revaluation hedging instruments
20
(0.4)
35.4
(0.9)
(3.7)
Income tax effect on components of comprehensive income
0.0
0.0
Net other comprehensive income to be reclassified to profit or
loss in subsequent periods
35.0
(4.6)
Total comprehensive income for the year, net of tax
234.1
172.9
Attributable to equity holders of the parent
234.1
172.9
20
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(USD million)
ASSETS
Goodwill
Vessels
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, 2 April 2014
Note
31.12.2013
31.12.2012
9
9
9, 24
9
5
19, 21
19, 20
19, 20
19, 22
15
16, 19, 20
11
19, 20
16, 19, 20
19, 20
12
19, 20
17, 19, 20
226.7
946.9
248.9
4.9
0.0
1 427.4
113.4
55.2
0.0
23.9
192.5
1 619.9
65.9
673.8
739.7
779.6
20.1
0.9
4.0
804.6
0.0
4.7
18.3
6.5
46.1
75.6
1 619.9
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
Michael Raymond Parker
Non-executive Chairman
Ronny J. Langeland
Christakis Pavlou
Non-executive Deputy Chairman
Non-executive Director
Christian Brinch
Non-executive Director
Carine Smith Ihenacho
Non-executive Director
Roger Cornish
Non-executive Director
21
CONSOLIDATED CASH FLOW STATEMENT
(USD million)
Note
2013
2012
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxes
Unrealised currency (gain)/loss on long-term debt
Loss/(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 tangible assets
Acquisition of tangible assets
Interest received
Net cash flow from investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from new interest-bearing debt
Repayments of interest-bearing debt
Share issue
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
16
5
9
5
9, 24
16, 19, 20
16, 19, 20
15
14
21
203.7
(27.1)
2.4
61.5
(1.3)
34.2
5.8
(11.3)
267.9
178.0
15.0
(4.8)
57.7
(1.1)
40.9
4.0
(6.6)
283.1
16.4
(227.2)
1.3
38.5
(188.1)
1.1
(209.5)
(148.5)
404.1
(407.8)
128.9
(139.6)
(34.2)
0.0
(48.6)
9.8
103.6
113.4
317.1
(282.2)
0.0
(118.6)
(40.9)
0.2
(124.4)
10.2
93.4
103.6
22
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(USD million)
Share
capital
Own
shares
Other
equity
Cash
flow
hedges
Foreign
currency
translation
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
Equity at 31 December 2012
63.9
(48.8)
Net profit
Other comprehensive income
Total comprehensive income 1)
New shares (note 4)
Cancellation of own shares (note 4)
Dividend (note 15)
Equity at 31 December 2013
0.0
0.0
0.0
4.3
(2.3)
0.0
65.9
0.0
0.0
0.0
0.0
48.8
0.0
0.0
426.5
177.5
0.0
177.5
0.0
(118.6)
485.4
199.1
0.0
199.1
124.6
(46.5)
(139.6)
623.1
(23.5)
0.0
(3.7)
(3.7)
0.0
0.0
(27.2)
0.0
35.4
35.4
0.0
0.0
0.0
8.2
1) Total comprehensive income is attributable to the equity owner of the parent
Total
equity
461.8
177.5
(4.6)
172.9
0.2
(118.6)
516.3
199.1
35.0
234.1
128.9
0.0
(139.6)
43.9
0.0
(0.9)
(0.9)
0.0
0.0
43.0
0.0
(0.4)
(0.4)
0.0
0.0
0.0
42.6
739.7
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.
23
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 2013 were authorised for issue in accordance with a
resolution of the board of directors on 2 April 2014. The Group is the world’s leading owner and operator of
semi-submersible accommodation/service vessels.
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 2013:
• Amendments to IAS 1 - Presentation of items of Other Comprehensive income. The amendments intro-
duce a grouping of items presented in OCI. Items that will be reclassified to profit and loss at a future point
in time, have to be presented separately from items that will not be reclassified. The amendments affect
presentation only and have no impact on the Group’s financial position or performance.
• Amendments to IAS 1 - Clarification of the requirement for comparative information. The amendments
clarify the difference between voluntary additional comparative information and the minimum required
comparative information. An entity must include comparative information in the related notes to the
financial statements when it voluntarily provides comparative information beyond the minimum required
comparative period. The amendments affect presentation only and have no impact on the Group’s
financial position or performance.
• IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does
not change when an entity is required to use fair value, but rather provides guidance on how to measure
fair value.
Application of IFRS has not materially impacted the fair value measurements of the Group. Additional
disclosures are provided in the individual notes, if required.
24
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 27 Separate Financial Statements
As a consequence of the issuance of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint
Arrangements and IFRS 12 Disclosure of Interests in Other Entities, the IASB has amended IAS 27. IAS
27 now only deals with accounting in the separate financial statements. The title of the standard
is amended accordingly. 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 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.
IAS 36 Impairment of Assets
IAS 36 is amended to address the disclosure of information about the recoverable amount of impaired
assets if that amount is based on fair value less costs of disposal. These amendments are issued to
align the disclosure requirements in IAS 36 with the IASB’s original intention when consequential
amendments to IAS 36 were made as a result of the issuance of IFRS 13 Fair Value Measurement.
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 39 Financial Instruments: Recognition and Measurement
IAS 39 is amended to provide relief from discontinuing hedge accounting when a derivative designated
as a hedging instrument is novated to provide clearing with a central counterparty as a result of law
or other regulation, when certain criteria are met. These amendments are effective for annual periods
beginning on or after 1 January 2014.
25
The amendment is not expected to have any impact on disclosures, financial position or performance
when applied at a future date.
IFRS 9 Financial Instruments: Classification and Measurement
IFRS 9, as issued, reflects the two first phases of IASB’s work on the replacement of IAS 39, which are
classification and measurement of financial assets and financial liabilities and hedge accounting.
Third and last phase of this project will address amortised cost measurement and impairment of
financial assets. The mandatory effective date of IFRS 9 has been removed to allow sufficient time for
entities to prepare to apply the new Standard. The IASB have decided that a new date should be decided
upon when the entire IFRS 9 project is closer to completion.
The Group will evaluate potential effects of IFRS 9 as soon as the final standard, including all phases,
is issued.
IFRS 10 Consolidated 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. 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. In accordance with IFRS 10, an investor controls
another entity when it is exposed, or has rights, to variable returns from its involvement with the other
entity, and has the ability to affect those returns through its power over the entity. Within the EU/EEA
area, IFRS 10 is effective for annual periods starting 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
in Joint Ventures. A number of new disclosures are also required. Within the EU/EEA area, IFRS 12 is
effective for annual periods beginning on or after 1 January 2014.
The amendment will have impact on the disclosure notes when applied at a future date, but is not
expected to have any impact on financial position or performance.
Annual Improvements 2010 – 2012
IASBs annual improvements project 2010 – 2012 includes amendments to a number of standards:
26
IFRS 2 Share-based Payment
Performance condition and service condition are defined in order to clarify various issues, including the
following:
• A performance condition must contain a service condition
• A performance target must be met while the counterparty is rendering service
• A performance target may relate to the operations or activities of an entity, or to those of another
entity in the same group
• A performance condition may be a market or non-market condition
• If the counterparty, regardless of the reason, ceases to provide service during the vesting period, the
service condition is not satisfied
IFRS 3 Business Combinations
Contingent consideration in a business acquisition that is not classified as equity is subsequently
measured at fair value through profit or loss whether or not it falls within the scope of IFRS 9 Financial
Instruments.
IFRS 8 Operating Segments
Operating segments may be combined/aggregated if aggregation is consistent with the core principle
of the standard, if the segments have similar economic characteristics and if they are similar in other
qualitative respects. If they are combined, the entity must disclose the economic characteristics (e.g.,
sales and gross margins) used to assess whether the segments are ‘similar’.
IFRS 13 Fair Value Measurement
The IASB clarified that short-term receivables and payables with no stated interest rates can be held at
invoice amounts when the effect of discounting is immaterial.
IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets
The amendment to IAS 16.35(a) and IAS 38.80(a) clarifies that revaluation can be performed, as follows:
• Adjust the gross carrying amount of the asset to market value, or
• Determine the market value of the carrying amount and adjust the gross carrying amount
proportionately so that the resulting carrying amount equals the market value
The IASB also clarified that accumulated depreciation/amortisation is the difference between the
gross carrying amount and the carrying amount of the asset. The amendment to IAS 16.35(b) and
IAS 38.80(b) clarifies that the accumulated depreciation/amortisation is eliminated so that the gross
carrying amount and carrying amount equal the market value.
Annual Improvements 2011 – 2013
IASBs annual improvements project 2011 – 2013 includes amendments to a number of standards:
27
IFRS 3 Business Combinations
The amendment clarifies that:
• Joint arrangements are outside the scope of IFRS 3, not just joint ventures
• The scope exception applies only to the accounting in the financial statements of the joint
arrangement itself
IFRS 13 Fair Value Measurement
The portfolio exception in IFRS 13 can be applied to financial assets, financial liabilities and other
contracts.
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,
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 vessels. 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 vessels 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 9. 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
28
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
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 other comprehensive income
• 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.
29
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.
FOREIGN CURRENCY TRANSLATION. The presentation currency is USD. This is also the functional
currency for the parent company. Transactions in other currencies than the functional currency 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 vessels. For geographical information,
reference is made to note 4.
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 vessel 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.
30
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
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 vessels 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 vessels – 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 a detailed forecast calculation which is prepared for the
Group’s cash generating unit. The forecast calculation is generally covering a period of five years.
31
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.
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 are classified as financial assets at fair value through profit or loss, loans and
receivables 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.
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 assets held for trading are recognised in the income
statement. 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
32
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.
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.
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.
33
Financial liabilities are recognised initially at fair value and, in case of loans and borrowings, net of
directly attributable costs.
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.
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.
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.
34
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.
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
35
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.
Prosafe applies hedge accounting only for the interest rate swaps. Hedges which meet the strict criteria
for hedge accounting are accounted for as follows:
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 fair value of
the derivative instrument 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 is provided using the liability method.
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.
36
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.
37
2012
218.3
199.3
92.8
0.0
510.4
2)
29%
17%
0%
0%
10%
17%
16%
5%
2012
754.0
402.0
279.0
52.2
NOTE 4: SEGMENT REPORTING
Prosafe has one segment, which is chartering and operation of accommodation/service vessels.
2013
342.5
175.3
5.7
0.0
523.5
2012
1)
148.2
88.7
0.0
0.0
51.1
87.6
81.8
24.4
2013
943.5
256.6
397.5
22.3
Operating revenues by geographical location
Europe excluding Cyprus
Americas
Australia/Asia
Cyprus
Total operating revenues
The revenue allocation is based on place of operation of the vessel.
2013
1)
124.5
108.7
85.7
73.6
50.8
5.2
0.0
0.0
2)
24%
21%
16%
14%
10%
1%
0%
0%
Operating revenues from major customers situated in:
Americas1
Europe1
Europe2
Europe3
Americas2
Australia/Asia1
Europe4
Europe5
1) Operating revenues in USD million
2) Percentage of total revenues
Total assets by geographical location
Europe excluding Cyprus
Americas
Australia/Asia
Cyprus
Total assets
NOTE 5: OTHER OPERATING REVENUES
Mobilisation/demobilisation income
Gain on sale of non-current assets
Other contract income
Total other operating revenues
1 619.9
1 487.2
2013
9.1
0.0
45.2
54.3
2012
2.0
4.8
79.7
86.5
38
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 2012.
The remaining USD 16.5 million is paid as a three-year term loan with an interest rate of 10 per
cent, and was included under ‘other non-current assets’ in the statement of financial position as at
31 December 2012. The gain on the sale amounted to USD 4.8 million and was recognised as other
operating revenue in 2012. On 7 October 2013, the remaining loan and interest balance of USD 11.8
million was repaid early by the buyer.
NOTE 6: QUARTERLY RESULTS
Operating revenues
Operating expenses
EBITDA
Depreciation
Operating profit
Net financial items
Profit before taxes
Taxes
Net profit
Q1
85.8
(52.4)
33.4
(14.4)
19.0
(18.6)
0.4
(1.1)
(0.7)
Q2
Q3
Q4
2013
143.5
159.4
134.8
523.5
(60.3)
(50.8)
(53.4)
(216.9)
83.2
108.6
(14.5)
68.7
(12.5)
56.2
(1.3)
54.9
(18.2)
90.4
(3.4)
87.0
(1.8)
85.2
81.4
(14.4)
67.0
(6.9)
60.1
(0.4)
59.7
306.6
(61.5)
245.1
(41.4)
203.7
(4.6)
199.1
NOTE 7: EMPLOYEE BENEFITS, MANAGEMENT REMUNERATION AND AUDIT FEE
Wages and salaries
Contract personnel
Pension expenses
Other remuneration
Change in share option provision
Social security taxes
Other personnel-related expenses
Total employee benefits
2013
50.3
25.6
5.1
1.8
(0.2)
6.3
10.4
99.4
2012
46.7
29.3
5.2
2.3
(1.4)
5.9
9.7
97.7
Bonus scheme
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.
39
Share options
The corporate management and other key employees (in total 14 persons) are included in a synthetic
share option programme. The outstanding options were granted in 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)
2013
46.80
5.09
0.4
2012
47.32
5.37
0.6
Options granted 2008
Options granted 2009
Options granted 2011
Forfeited in 2010
Exercised in 2011
Forfeited in 2011
Exercised in 2012
Forfeited in 2012
Exercised in 2013
Forfeited in 2013
Outstanding options at 31 December 2013
Exercisable at 31 December 2013
Vesting date in November 2015
Grant date
Exercise price at grant (NOK)
Exercise price at 31.12.2013 (NOK)
Vesting date
Expiry date
Lifetime closing balance
Volatility closing balance
Interest rate closing balance
Fair value closing balance (NOK)
Outstanding options at 31.12.2013
2 768 829
910 000
770 000
(917 524)
(70 000)
(20 000)
(673 000)
(2 036 305)
(32 000)
(70 000)
630 000
0
31.05.2011
58.21
49.00
30.11.2015
30.11.2015
1.92
0.26
0.02
4.93
315 000
40
Vesting date in November 2014
Grant date
Exercise price at grant (NOK)
Exercise price at 31.12.2013 (NOK)
Vesting date
Expiry date
Lifetime closing balance
Volatility closing balance
Interest rate closing balance
Fair value closing balance (NOK)
Outstanding options at 31.12.2013
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
31.05.2011
54.05
44.84
30.11.2014
30.11.2014
0.92
0.24
0.01
5.25
315 000
22.05.2009
30.45
21.64
22.05.2011
22.05.2013
0.39
0.29
0.01
19.93
32 000
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 retirement pension
will equal 24 times the Norwegian national insurance base rate.
41
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)
Karl Ronny Klungtvedt (CEO)
Robin Laird (Deputy CEO)
Sven Børre Larsen (CFO)
Karl Ronny Klungtvedt (CEO)
Robin Laird (Deputy CEO)
Sven Børre Larsen (CFO)
Year
Salary Bonus 1)
Pension 2)
Other
benefits 3)
Value of share
options 4)
2013
2013
2013
2012
2012
2012
636
558
392
614
556
377
383
344
239
385
343
237
184
84
35
165
83
34
38
255
50
557
778
45
69
52
52
18
14
14
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 in 2012 include exercise of share options granted in 2009
4) Valuation based on the Black-Scholes option pricing model
Board of directors
(USD 1 000)
Michael Raymond Parker (chair)
Ronny Johan Langeland (deputy chair)
Christian Brinch
Roger Cornish
Christakis Pavlou
Carine Smith Ihenacho
Michael Raymond Parker (chair)
Ronny Johan Langeland
Christian Brinch (deputy chair)
Roger Cornish
Christakis Pavlou
Carine Smith Ihenacho
Elin Nicolaisen (resigned May 2012)
Year
2013
2013
2013
2013
2013
2013
2012
2012
2012
2012
2012
2012
2012
Board
fees 1)
165
147
105
103
93
88
143
109
116
98
92
83
33
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
2013
2012
341
33
374
363
29
392
Auditor’s fee is included in general and administrative expenses (note 8).
42
NOTE 8: OTHER OPERATING EXPENSES
Repair and maintenance
Other vessel operating expenses
General and administrative expenses
Total other operating expenses
NOTE 9: TANGIBLE ASSETS AND GOODWILL
Acquisition cost 31 December 2011
Additions
Disposals
Vessels
1 390.7
109.7
(66.0)
Acquisition cost 31 December 2012
1 434.3
Additions
Disposals
113.4
(10.7)
New
builds
58.4
77.2
0.0
135.6
113.3
0.0
Acquisition cost 31 December 2013
1 537.0
248.9
Accumulated depreciation 31 December
2011
Accumulated depreciation on disposals
Depreciation for the year
Accumulated depreciation 31 December
2012
Accumulated depreciation on disposals
Depreciation for the year
Accumulated depreciation 31 December
2013
497.1
(15.9)
56.8
538.0
(8.4)
60.6
0.0
0.0
0.0
0.0
0.0
0.0
2013
33.5
47.6
36.4
117.5
2012
29.0
69.3
34.2
132.5
Equip-
ment
Build-
ings
Good-
will
Total
4.2
0.3
(0.1)
4.4
0.5
(0.2)
4.7
2.8
0.0
0.5
3.3
(0.2)
0.5
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
0.0
0.0
0.0
0.0
227.2
(10.9)
7.4 226.7 2 024.8
2.7
0.0
0.4
3.2
0.0
0.5
0.0
0.0
0.0
0.0
0.0
0.0
502.7
(15.9)
57.7
544.5
(8.6)
61.5
590.1
0.0
3.6
3.7
0.0
597.4
Net carrying amount 31 December 2013
946.9
248.9
1.2
3.7 226.7 1 427.4
Net carrying amount 31 December 2012
896.3
135.6
1.1
4.2 226.7 1 263.9
Depreciation rate (%)
Economically useful life (years)
2-20
5-45
-
-
20-33
3-5
3-5
20-30
-
-
-
-
New builds include prepayment of 20 % of the yard cost for the four new builds, owner-furnished
equipment and other project costs incurred. For details, reference is made to note 24.
The accommodation jack-up, Safe Esbjerg was sold in 2012. For details, reference is made to note 5.
43
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 2013, capitalised borrowing costs amount to USD 8.1 million.
Estimated useful life for the semi-submersible accommodation/service vessels is 30-45 years.
Certain equipment on a vessel is depreciated over a shorter period than the life of the vessel itself.
The estimated scrap value is USD 3 million per vessel.
The depreciation plan for five of the rigs operating in the Gulf of Mexico was revised with effect from
1 January 2012. The remaining depreciation period for these five rigs was 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
only one defined cash-generating unit comprising all accommodation/service vessels and the goodwill
has been allocated to this one. 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
- Annual increase of capital expenditures 3% (general sector inflation assumption)
Group weighted average cost of capital (WACC) 8%.
- Sensitivity: a 1% increase in WACC or a reasonable change in other assumptions would still give a
present value of the cash flow well in excess of the carrying value.
44
NOTE 10: OTHER FINANCIAL ITEMS
Currency gain
Fair value adjustment currency forwards
Gain on sale of shares
Total other financial income
Currency loss
Fair value adjustment currency forwards
Amortisation of borrowing costs
Other financial expenses
Total other financial expenses
NOTE 11: FINANCIAL ITEMS - IAS 39 categories
2013
23.3
0.0
0.0
23.3
0.0
(19.0)
(4.6)
(8.2)
(31.8)
Loans and
receivables
Fair value
through profit
and loss
Financial liabilities
measured at
amortised cost
Year ended 31 Dec 2013
Interest income
Fair value adjustment FX forwards
Currency gain 1)
Total financial income
Interest expenses
Fair value adjustment FX forwards
Amortisation of borrowing costs
Other financial expenses
Currency loss 1)
Total financial expenses
Net financial items
1.3
0.0
0.0
1.3
0.0
0.0
0.0
0.0
0.0
0.0
1.3
0.0
0.0
0.0
0.0
0.0
(19.0)
0.0
0.0
0.0
(19.0)
(19.0)
2012
0.0
27.4
0.0
27.4
(23.9)
0.0
(2.6)
(5.5)
(32.0)
Total
1.3
0.0
23.3
24.6
(34.2)
(19.0)
(4.6)
(8.2)
0.0
0.0
0.0
0.0
0.0
(34.2)
0.0
(4.6)
(8.2)
0.0
(47.0)
(66.0)
(47.0)
(41.4)
45
Total
1.1
27.4
28.5
0.0
0.0
0.0
(40.9)
(40.9)
(2.6)
(5.5)
0.0
(49.0)
(2.6)
(5.5)
(23.9)
(72.9)
Loans and
receivables
Fair value
through profit
and loss
Financial liabilities
measured at
amortised cost
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
0.0
27.4
27.4
0.0
0.0
0.0
0.0
0.0
1.1
0.0
1.1
0.0
0.0
0.0
0.0
0.0
1.1
27.4
(49.0)
(44.4)
1) Currency effects (gain/loss) are excluded from the category break-down, but added to the total for net
effect.
NOTE 12: TAXES
Taxes in income statement:
Taxes payable
Change in deferred tax
Total taxes in income statement
Temporary differences:
Exit from Norwegian tonnage tax system
Non-current assets
Current assets
Current liabilities
Basis for deferred tax
Recognised deferred tax
Deferred tax 1 January
Change in deferred tax in income statement
Translation difference
Deferred tax 31 December
2013
2012
10.3
(5.7)
4.6
74.1
(3.3)
(0.3)
3.9
74.5
20.1
28.1
(5.7)
(2.3)
20.1
7.6
(7.1)
0.5
101.3
(4.5)
(0.3)
3.9
100.4
28.1
33.6
(7.1)
1.6
28.1
Payable tax as at 31 December
18.3
19.9
46
The cumulated tax loss carried forward in Cyprus as at 31 December 2013 and 2012 amounts to USD
37.4 million and USD 22.6 million respectively. The tax rate in Cyprus is 12.5% (2012: 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 vessel 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 13: 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
2013
199.1
2012
177.5
233 806
222 961
0.85
0.80
Weighted average number of outstanding and potential shares (1 000)
233 806
222 961
Diluted earnings per share
0.85
0.80
NOTE 14: DIVIDENDS
Dividend declared during the year
Total dividends declared
Dividends per share (NOK)
2013
139.6
139.6
2012
118.6
118.6
3.47
3.06
47
NOTE 15: 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
2013
2012
235 973 059
229 936 790
275 924 148
275 924 148
0
EUR 0.25
4 447
6 963 731
EUR 0.25
4 380
On 15 March 2013, Prosafe completed a private placement of 13 000 000 new shares directed towards
Norwegian and international institutional investors. The placement was made at a subscription price of
NOK 58 per share. Net proceeds amounted to USD 128.9 million. The share capital was increased by EUR
3.3 million.
On 14 May 2013, the general meeting approved the cancellation of 6 963 731 ordinary shares held by
Prosafe as treasury shares. After the cancellation, the issued share capital is made up of 235 973 059
shares of EUR 0.25 each.
Largest shareholders/groups of shareholders at 31.12.2013
No of shares
Percentage
State Street Bank (nom.)
Folketrygdfondet
State Street Bank (nom.)
Clearstream Banking (nom.)
Pareto
FLPS
JP Morgan Chase Bank (nom.)
Goldman Sachs (nom.)
State Street Bank (nom.)
Pimco
RBC (nom.)
JP Morgan Chase Bank (nom.)
JP Morgan Chase Bank (nom.)
JP Morgan Chase Bank (nom.)
KLP
State Street Bank (nom.)
KAS Bank (nom.)
BNP Paribas (nom.)
The Northern Trust (nom.)
DNB
29 867 220
16 561 978
14 761 141
8 762 667
8 707 003
8 137 101
6 815 492
5 921 087
4 650 407
4 597 714
4 571 724
4 090 030
3 732 591
3 648 784
3 640 575
3 169 135
3 031 358
3 009 691
2 806 520
2 651 840
12.7 %
7.0 %
6.3 %
3.7 %
3.7 %
3.4 %
2.9 %
2.5 %
2.0 %
1.9 %
1.9 %
1.7 %
1.6 %
1.5 %
1.5 %
1.3 %
1.3 %
1.3 %
1.2 %
1.1 %
Total 20 largest shareholders/groups of shareholders
143 134 058
60.7 %
48
NOTE 16: INTEREST-BEARING DEBT
As of 31 December 2013, Prosafe’s interest-bearing debt totalled USD 779.6 million. Loans secured
by mortgages (credit facility) accounted for USD 418.0 million of this total and unsecured bond loans
accounted for about USD 361.6 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
2013
418.0
361.6
779.6
361.6
418.0
779.6
779.6
0.0
779.6
2012
566.0
244.4
810.4
244.4
566.0
810.4
745.6
64.8
810.4
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 2013, the availability
under the credit facility totalled USD 791 million (USD 373 million undrawn credit lines).
The annual interest rate on the credit facility is 1.875 per cent above 3-month LIBOR.
USD 420 million credit facility repayment structure
In December 2012, the company secured a new credit facility. The credit facility, which has a maturity
of five years, consists of two tranches of USD 210 million (USD 420 million in total) that can be drawn
upon delivery of the two new builds, Safe Boreas and Safe Zephyrus. The availability under each tranche
is reduced quarterly with USD 4.375 million, starting 3 months after delivery of the tranche security.
The annual interest rate on the credit facility is 2.950 per cent above 3-month LIBOR.
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 4.5
• Value adjusted equity ratio: Minimum 35 per cent
• Collateral maintenance: Market value vessels/total commitments above 175
Bond loans repayment structure
The bond debt is divided into four loans of NOK 500 million maturing February 2016 (PRS07), NOK 500
million maturing February 2017 (PRS08) and NOK 500 million maturing January 2020 (PRS09) and NOK
700 million maturing October 2018 (PRS10). PRS07, PRS08, PRS09 and PRS10 are listed on the Oslo Stock
Exchange.
49
Loan
PRS06
PRS07
PRS08
PRS09
PRS10
Principal
Outstanding
NOK 500 million
NOK 0 million
Maturity
Oct 2013
NOK 500 million
NOK 500 million
Feb 2016
NOK 500 million
NOK 500 million
Feb 2017
NOK 500 million
NOK 500 million
Jan 2020
NOK 700 million
NOK 700 million
Oct 2018
Interest
Loan margin
3m Nibor
3m Nibor
3m Nibor
3m Nibor
3m Nibor
4.00%
3.50%
3.75%
3.75%
2.95%
Financial covenants bond loans
PRS 07/08/09/10
Value adjusted equity ratio: Minimum 30 per cent
Leverage ratio: Total debt/EBITDA must not exceed 5.0
As of 31 December 2013, 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 2013 compared to 2012.
NOTE 17: OTHER CURRENT LIABILITIES
Other accrued costs
Deferred income
Accrued interest costs
Provision share option costs
Public taxes
Other interest-free current liabilities
Total interest-free current liabilities
2013
37.7
3.9
3.5
0.4
0.3
0.4
2012
45.9
14.1
3.0
0.5
0.3
0.7
46.1
64.5
NOTE 18: MORTGAGES AND GUARANTEES
As of 31 December 2013, Prosafe’s interest-bearing debt secured by mortgages totalled USD 418
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 946.9 million. Prosafe had issued
parent company guarantees and bank guarantees (USD 0 million) to customers on behalf of its
subsidiaries in connection with the award and performance of contracts.
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. Prosafe had issued
parent company guarantees and bank guarantees (USD 8 million) to customers on behalf of its
subsidiaries in connection with the award and performance of contracts.
50
NOTE 19: FINANCIAL ASSETS AND LIABILITIES
As of 31 December 2013, the group had financial assets and liabilities in the following categories:
Fair value
through
profit and
loss
Financial
liabilities
measured at
amortised cost
Year ended 31 Dec 2013
Cash and deposits
Accounts receivable
Other current assets
Total financial assets
Credit facility 1100 million 1)
Bond loan PRS07 2)
Bond loan PRS08 3)
Bond loan PRS09 4)
Bond loan PRS10 5)
Fair value interest swaps
Fair value FX forwards
Accounts payable
Other current liabilities
Total financial liabilities
Loans and
receivables
113.4
55.2
20.0
188.6
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
0.0
0.0
0.0
0.0
0.0
0.0
0.9
6.5
0.0
0.0
7.4
Book
value
113.4
55.2
20.0
Fair value
113.4
55.2
20.0
188.6
188.6
0.0
0.0
0.0
0.0
418.0
418.0
414.0
82.2
82.2
82.2
82.2
82.2
82.2
84.3
84.9
84.0
115.1
115.1
115.1
0.0
0.0
4.7
41.6
826.0
0.9
6.5
4.7
41.6
833.4
0.9
6.5
4.7
41.6
835.9
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.
2,3,4,5) Fair value reflects current market conditions based on prices estimated by the Norwegian
Securities Dealers Association as of 31 December 2013: PRS07 102.50, PRS08 103.25, PRS09 102.25,
PRS10 100.00.
The management assessed the cash and deposits, accounts receivables, other current assets, accounts
payable and other current liabilities to approximate their carrying amounts largely due to the short-
term maturities of these instruments.
The Group enters into derivative financial instruments with various counterparties, principally financial
institutions with investments grade credit ratings. Derivatives valued using valuation techniques with
market observable inputs are mainly interest rate swaps and foreign exchange forward contracts.
The most frequently applied valuation techniques include forward pricing and swap models, using
present value calculations. The models incorporate various inputs including the credit quality of
counterparties, foreign exchange spot and forward rates, interest rate and forward rate curves. All
derivative contracts are fully collateralised.
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 - 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)
Level 3 - 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.
Credit facility 1100 million
Bond loan PRS07
Bond loan PRS08
Bond loan PRS09
Bond loan PRS10
Fair value FX forwards
Fair value interest swaps
Total financial assets/liabilities
Total
(414.0)
(84.3)
(84.9)
(84.0)
(115.1)
(6.5)
(0.9)
(789.7)
Level 1
Level 2
Level 3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(414.0)
(84.3)
(84.9)
(84.0)
(115.1)
(6.5)
(0.9)
(789.7)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
As of 31 December 2012, the group had financial assets and liabilities in the following categories:
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 1100 million 1)
Bond loan PRS06 2)
Bond loan PRS07 3)
Bond loan PRS08 4)
Fair value FX forwards
Fair value interest swaps
Accounts payable
Other current liabilities
Total financial liabilities
Fair value
through
profit
and loss
Financial
liabilities
measured at
amortised
cost
Loans and
receivables
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
0.0
14.6
0.0
0.0
14.6
0.0
0.0
0.0
0.0
0.0
36.3
0.0
0.0
36.3
Book
value
103.6
45.7
14.6
28.5
16.5
Fair
value
103.6
45.7
14.6
28.5
16.5
208.9
208.9
0.0
0.0
0.0
0.0
0.0
0.0
566.0
566.0
562.0
64.8
89.8
89.8
0.0
0.0
9.3
49.4
64.8
89.8
89.8
0.0
36.3
9.3
49.4
66.1
91.1
91.1
0.0
36.3
9.3
49.4
869.1
905.4
905.4
52
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 - 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)
Level 3 - 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.
Credit facility 1100 million
Bond loan PRS06
Bond loan PRS07
Bond loan PRS08
Fair value FX forwards
Fair value interest swaps
Total financial assets/liabilities
Total
Level 1
(562.0)
(66.1)
(91.1)
(91.1)
14.6
(36.3)
(832.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Level 2
(562.0)
(66.1)
(91.1)
(91.1)
14.6
(36.3)
(832.0)
Level 3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
NOTE 20: 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.
53
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 2013, Prosafe had entered into the following forward exchange contracts:
- Forward purchase of NOK 2200 million against USD 364 million at a weighted average of
NOKUSD 6.05
- Forward purchase of GBP 12 million against USD 18 million at a weighted average USDGBP of 1.52
- Forward purchase of EUR 8 million against USD 11 million at a weighted average USDEUR of 1.33
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 2013, the fair value and maximum credit risk exposure of
forward exchange contracts was USD 4.6 million negative.
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 against the NOK will have the
following effects. Exposures to foreign currency changes for all other currencies are not material.
2013
Income
statement effect
2012
Income
Equity effect
statement effect Equity effect
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
(2.5)
(35.0)
33.0
(4.5)
2.5
35.0
(33.0)
4.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(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
Interest rate risk
As of 31 December 2013, Prosafe’s interest-bearing debt totalled USD 779.6 million. Loans secured
by mortgages (credit facility) accounted for USD 418.0 million of this total and unsecured bond loans
accounted for USD 361.6 million.
54
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.
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 other comprehensive income, while interest
swaps not treated as effective hedges (not hedge accounting) will affect equity through the income
statement. During 2013, interest swaps treated as effective hedges have been highly effective, and no
ineffectiveness has been recognised in the income statement.
As of 31 December 2013, Prosafe’s hedging agreements totalled USD 1 825 million (including USD 1 200
million with forward start):
Notional amount
Fixed rate Maturity
Swap type
Fair value
USD 150 million
USD 75 million
USD 100 million
USD 100 million
USD 100 million
USD 150 million
USD 100 million
USD 150 million
USD 150 million
USD 150 million
USD 150 million
USD 150 million
USD 150 million
USD 150 million
Total
2.3265 %
5.1940 %
2.0450 %
2.0600 %
2.2045 %
1.4813 %
1.2650 %
1.7780 %
2.1000 %
1.6120 %
1.6624 %
1.3625 %
2.2325 %
2.7195 %
2020
2017
2015
2015
2014
2014
2016
2017
2017
2017
2019
2018
2020
2020
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
Bullet
5.6 hedge accounting
(2.9) hedge accounting
(2.6) hedge accounting
(3.1) hedge accounting
(1.9) hedge accounting
(0.4) hedge accounting
(1.5) hedge accounting
(3.5) hedge accounting
(2.8) hedge accounting
(1.9) hedge accounting
5.9 hedge accounting
3.5 hedge accounting
2.2 hedge accounting
2.5 hedge accounting
(0.9)
55
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 2013, the fair value and maximum credit risk exposure of
interest rate swap agreements was USD 0.9 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
2013
2012
Income
statement effect
Equity
effect
Income
statement effect
Equity
effect
0.0
0.0
0.0
0.0
35.0
35.0
(40.0)
(40.0)
0.0
0.0
0.0
0.0
30.0
30.0
(32.0)
(32.0)
Changes in other comprehensive income related to financial instruments
As of 31 December 2013, the following changes in other comprehensive income were related to
financial instruments:
Re-valuation interest rate swaps
Ineffectiveness
Total
Change
35.4
0.0
35.4
2013
(0.9)
0.0
(0.9)
2012
(36.3)
0.0
(36.3)
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.
56
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 2013, 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 2013, the Group’s main financial liabilities had the following remaining contractual
maturities:
Interest-bearing debt (downpayments/credit facility
reductions)
2014
2015
2016
2017 2018 →
0.0 136.0
82.2
364.2
197.2
Interest-bearing debt (interest including interest swaps)
44.7 59.9
70.4
Accounts payable and other current liabilities
4.7
0.0
0.0
73.2
0.0
120.0
0.0
Total
49.4 195.9 152.6 437.4
317.2
As of 31 December 2013, the availability under the credit facility secured in 2011 totalled USD
791 million (USD 373 million undrawn credit lines), meaning that the first actual downpayment on
the credit facility will not occur until 2015.
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)
Accounts payable and other current liabilities
Total
2013 2014
2015
2016 2017 →
64.8
44.2
9.3
0.0 136.0 225.8
383.8
48.2
62.9
63.8
120.0
0.0
0.0
0.0
0.0
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.
57
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 manages the total of shareholder’s equity
and long term debt as their capital. Prosafe’s main tool to assess its capital structure is the leverage
ratio, which is calculated by dividing total interest-bearing debt (excluding debt related to newbuilds)
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 2013 (2012), the leverage ratio was 1.7 (2.4).
Credit facility
Bond loan PRS03
Bond loan PRS06
Bond loan PRS07
Bond loan PRS08
Bond loan PRS09
Bond loan PRS10
Total interest-bearing debt
Interest-bearing debt related to newbuilds
Bank guarantees
EBITDA last 12 months
Leverage ratio
2013
418.0
0.0
0.0
82.2
82.2
82.2
115.0
779.6
248.9
0.0
306.6
1.7
2012
566.0
0.0
64.8
89.8
89.8
0.0
0.0
810.4
135.6
8.0
280.1
2.4
Tax risk
The accommodation vessel business is international by nature and therefore Prosafe is exposed
to potential tax changes in a number of jurisdictions.
NOTE 21: CASH AND DEPOSITS
Restricted cash deposits
Free cash and short-term deposits
Total cash and deposits
2013
0.1
113.3
113.4
2012
0.1
103.5
103.6
58
NOTE 22: OTHER CURRENT ASSETS
Receivables
Prepayments
Stock
Other current assets
Total other current assets
2013
3.3
3.2
0.7
16.7
23.9
2012
10.9
11.5
2.7
17.6
42.8
NOTE 23: 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
Country
Norway
Norway
Norway
United Kingdom
United Kingdom
United Kingdom
Cyprus
Cyprus
Sweden
Singapore
Singapore
Prosafe Offshore Employment Company Pte. Limited
Singapore
Prosafe Offshore Services Pte. Ltd.
Prosafe Offshore S.a.r.l.
Prosafe Offshore Sp.zo.o.
Prosafe Offshore BV
Prosafe Services Maritimos Ltda
Prosafe Rigs Nigeria Ltd
Singapore
Luxembourg
Poland
Netherlands
Brazil
United Kingdom
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%
100%
100%
Transactions and outstanding balances within the Group have been eliminated in full.
Shares owned by senior officers and directors at 31 December 2013:
(includes shares owned by wholly-owned companies)
Senior officers:
Karl Ronny Klungtvedt - CEO
Robin Laird - Deputy CEO
Sven Børre Larsen - CFO
Directors:
Michael Raymond Parker - chair
Ronny Johan Langeland - deputy chair
Christian Brinch - director
Christakis Pavlou - director
Roger Cornish - director
Carine Smith Ihenacho - director
59
Synthetic
options
80 000
60 000
60 000
Shares
70 000
58 000
18 000
10 000
28 000
0
0
7 000
0
NOTE 24: 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 vessel at Jurong Shipyard Pte Ltd. in Singapore.
The vessel will be ready for operation in 2015, 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 9), 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 vessel at Jurong Shipyard Pte Ltd. in
Singapore. The vessel will be ready for operation in 2015, 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 9), while
the remaining 80 per cent will be paid at delivery.
On 22 November 2013, Prosafe announced that the company has entered into a turnkey contract for
the construction of two semi-submersible accommodation vessels with COSCO (Qidong) Offshore Co.,
Ltd. in China. Total value of the contracts is in excess of USD 400 million, and the vessels will be ready for
operation in 2016. 20 per cent of the yard cost was paid at signing of the contract and is included within
tangible assets (note 9), while the remaining 80 per cent will be paid at delivery.
NOTE 25: EVENTS AFTER THE BALANCE SHEET DATE
In the 2014 Budget Statement on 19 March 2014, the UK Chancellor announced a new measure for
taxation of offshore drilling rigs and accommodation vessels operating on the UK continental shelf.
The new legislation will take effect from 1 April 2014 when passed. It is anticipated that the tax cost
related to Prosafe’s UK operations will increase as a result of the new measure.
Accounts Prosafe SE
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. Expanding the fleet with two advanced harsh environment semi-submersible vessels. INCOME STATEMENT - PROSAFE SE
(USD 1 000)
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
61
Note
2
3
5
4, 5
4, 5
5
6
2013
0
2012
0
(11 895)
(10 301)
(14)
(16)
(11 909)
(10 317)
24 773
73 385
72 462
84 597
(128 161)
(119 357)
(30 004)
(41 912)
(3)
37 701
27 385
0
(41 916)
27 385
Attributable to the owners of the company
(41 916)
27 385
STATEMENT OF COMPREHENSIVE INCOME - PROSAFE SE
(USD 1 000)
Net profit for the year
Other comprehensive income to be reclassified to profit or loss
in subsequent periods
Revaluation hedging instruments
Re-measurement losses on defined benefit plan
Income tax effect on components of comprehensive income
2013
2012
(41 916)
27 385
35 358
(1 380)
0
(3 746)
0
0
Net other comprehensive income to be reclassified to profit or
loss in subsequent periods
33 978
(3 746)
Total comprehensive income for the year, net of tax
(7 938)
23 639
Attributable to the owners of the company
(7 938)
23 639
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. 62
STATEMENT OF FINANCIAL POSITION - PROSAFE SE
(USD 1 000)
ASSETS
Tangible assets
Shares in subsidiaries
Intra-group long-term receivables
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
Retained earnings
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, 2 April 2014
Note
31.12.13
31.12.12
3
7
32
44
2 499 033
2 499 033
12, 14
135 999
137 761
2 635 063
2 636 838
14
14
8, 14
9
9
10
12, 15
14
14, 15
10, 15
14, 16
9 414
0
14 362
23 776
19 114
13 621
17 692
50 427
2 658 839
2 687 264
65 894
0
745 109
811 003
930 409
930 409
63 903
(48 901)
620 496
635 498
1 124 606
1 124 606
1 741 412
1 760 104
779 622
10 003
937
2 533
793 095
0
6 505
745 613
9 663
36 295
1 148
792 719
64 800
0
64 090
5 552
12, 14, 15
112 026
14, 15
5 800
124 332
134 442
2 658 839
2 687 264
Michael Raymond Parker
Non-executive Chairman
Ronny J. Langeland
Christakis Pavlou
Non-executive Deputy Chairman
Non-executive Director
Christian Brinch
Non-executive Director
Carine Smith Ihenacho
Non-executive Director
Roger Cornish
Non-executive Director
CASH FLOW STATEMENT - PROSAFE SE
(USD 1 000)
Cash flow from operating activities
Profit before taxes
Unrealised currency loss / (gain) on long-term debt
Depreciation
Interest income
Interest expenses
Change in working capital
Taxes paid
Other items from operating activities
Net cash flow from operating activities
Cash flow from investing activities
Proceeds from sale 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
Proceeds from issue of share capital
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
2013
2012
3
6
3
12
9
10
10
(41 912)
(27 050)
14
(5 223)
38 836
3 578
(3)
27,385
15 043
16
(6 179)
45 113
(5 460)
0
18 711
(21 373)
(13 051)
54 544
0
(2)
50 040
5 223
55 261
14 909
(23)
43 552
6 179
64 617
128 880
0
404 100
317 100
(407 800)
(282 200)
(139 634)
(118 615)
(38 836)
(45 113)
(53 290)
(128 828)
(11 079)
19 114
8 035
(9 666)
28 781
19 114
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 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
(3 746)
(3 746)
27 385
(3 746)
23 639
0
0
(118 615)
188
Equity at 31 December 2012
63 903
(48 901)
620 496 1 151 883
(27 277) 1 760 104
Net loss
Other comprehensive income
Total comprehensive income 1)
Dividends
0
0
0
0
Issue of share capital
4 267
0
0
0
0
0
0
0
0
0
(41 916)
0
(41 916)
(1 380)
35 358
(43 296)
35 358
33 978
(7 938)
(139 634)
128 880
0
0
0
0
(139 634)
124 613
0
Cancellation of own shares
(2 276)
48 901
0
(46 625)
Equity at 31 December 2013
65 894
0
745 109
922 328
8 081 1 741 412
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
recoverable amount.
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
2013
8 772
(171)
622
724
87
71
74
44
12
2012
8 502
(1 437)
867
675
(173)
163
179
54
35
1 658
11 895
1 437
10 301
66
NOTE 3: TANGIBLE ASSETS
Acquisition cost 31.12.11
Additions
Disposals at acquisition cost
Acquisition cost 31.12.12
Additions
Disposals at acquisition cost
Acquisition cost 31.12.13
Accumulated depreciation 31.12.11
Accumulated depreciation on disposals
Depreciation for the year
Accumulated depreciation 31.12.12
Accumulated depreciation on disposals
Depreciation for the year
Accumulated depreciation 31.12.13
Carrying value 31.12.13
Carrying value 31.12.12
Depreciation rate (%)
NOTE 4: OTHER FINANCIAL ITEMS
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
Impairment shares
Other financial items
Total other financial expenses
Equipment
181
23
0
204
2
0
206
144
0
16
160
0
14
174
32
44
20-30
2013
5 147
76
68 162
0
73 385
(189)
(38 647)
(55 796)
(20 126)
0
Total
181
23
0
204
2
0
206
144
0
16
160
0
14
174
32
44
-
2012
6 112
67
56 839
21 579
84 597
(512)
(44 601)
(66 059)
0
0
(13 404)
(8 185)
(128 161)
(119 357)
Fair value
through profit
and loss
Financial
liabilities
measured at
amortised cost
Fair value
through profit
and loss
Financial
liabilities
measured at
amortised cost
NOTE 5: FINANCIAL ITEMS - IAS 39 categories
Year ended 31 Dec 2013
Interest income
Currency gain 1)
Dividend
Total financial income
Interest expenses
Currency loss 1)
Fair value adjustment financial instr.
Other financial expenses
Total financial expenses
Loans and
receivables
5 223
0
0
5 223
0
0
0
0
0
Year ended 31 Dec 2012
Interest income
Currency gain 1)
Dividend
Fair value adjustment financial instr.
Total financial income
Interest expenses
Currency loss 1)
Other financial expenses
Total financial expenses
Loans and
receivables
6 179
0
0
0
6 179
0
0
0
0
0
0
0
0
0
0
(20 126)
0
(20 126)
0
0
0
21 579
21 579
0
0
0
0
67
Total
5 223
68 162
24 773
98 158
0
0
0
0
(38 836)
(38 836)
0
0
(55 796)
(20 126)
(13 404)
(13 404)
(52 240)
(128 161)
Total
6 179
56 839
72 462
21 579
157 058
0
0
0
0
0
(45 113)
(45 113)
0
(66 059)
(8 185)
(8 185)
(53 298)
(119 357)
Net financial items
5 223
(20 126)
(52 240)
(30 004)
Net financial items
6 179
21 579
(53 298)
37 701
1) Currency effects (gain/loss) are excluded from the category breakdown, but added to the total for net
effect.
68
NOTE 6: TAXES
Profit/loss 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
2013
2012
(41 912)
27 385
27 036
14 876
(33 692)
6 307
0
3
0
0
(37 402)
(37 402)
(22 576)
(22 576)
0
0
0
0
No deferred tax asset has been recognised in respect of the tax loss carried forward.
Tax losses for each year are carried forward for 5 years. The tax rate in Cyprus is 12.5% (2012:10%)
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
NOK
NOK
NOK
GBP
USD
SEK
USD
USD
USD
NOTE 8: OTHER CURRENT ASSETS
Current receivables from group companies
Other current assets
Total other current assets
Share
capital
Carrying
value 2013
Carrying
value 2012
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
141 974
150
8
150
8
2 500 040
2 264 464
2 264 464
2 499 033
2 499 033
100%
100%
100%
100%
100%
100%
100%
100%
91%
2013
36
14 326
14 362
2012
242
17 450
17 692
The main part of other current assets consists of capitalised borrowing costs.
69
NOTE 9: SHARE CAPITAL
Authorised ordinary shares as of 31 December
275 924 148
275 924 148
Issued and paid number of shares as of 31 December
235 973 059
229 936 790
Holding of own shares as of 31 December
Nominal value
0
EUR 0.25
6 975 818
EUR 0.25
2013
2012
On 15 March 2013, Prosafe completed a private placement of 13 000 000 new shares directed towards
Norwegian and international institutional investors. The placement was made at a subscription price
of NOK 58 per share. Net proceeds amounted to USD 128.9 million. The share capital was increased by
EUR 3.3 million.
On 14 May 2013, the general meeting approved the cancellation of 6 963 731 ordinary shares held by
Prosafe as treasury shares. After the cancellation, the issued share capital is made up of 235 973 059
shares of EUR 0.25 each.
NOTE 10: INTEREST-BEARING DEBT
As of 31 December 2013, Prosafe SE’s interest-bearing debt totalled about USD 779.6 million. Loans
secured by mortgages (credit facility) accounted for USD 418 million of this total and unsecured bond
loans accounted for about USD 361.6 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
For further information, see note 16 of the consolidated accounts.
2013
418 000
361 622
779 622
361 622
418 000
779 622
779 622
0
779 622
2012
566 000
244 413
810 413
244 413
566 000
810 413
745 613
64 800
810 413
70
NOTE 11: OTHER INTEREST-FREE CURRENT LIABILITIES
Accrued interest costs
Provision share-based payments
Other current liabilities
Total other interest-free current liabilities
NOTE 12: INTRA-GROUP BALANCES
Loan to Prosafe AS
Intra-group long-term receivables
Loan from Consafe Offshore AB
Intra-group long-term debt
2013
3 482
410
1 908
5 800
2012
2 981
581
1 990
5 552
2013
135 999
135 999
2012
137 761
137 761
10 003
10 003
9 663
9 663
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 (2012 2.00% and 0.60%). Both long-term
receivables and long-term debt are to be repaid on demand. Outstanding balances at year-end are
unsecured, and settlement normally occurs in cash. For the year ended 31 December 2013, the
Company has not recorded any impairment of receivables relating to amounts owed by subsidiaries.
Transactions with related parties
Transactions
Administrative services from subsidiaries
Interest income
Interest expenses
Dividend
2013
2012
(8 772)
5 147
(189)
(8 502)
6 112
(512)
24 773
72 462
Prosafe AS and Prosafe Management AS are performing services on behalf of Prosafe SE relating to
management, corporate activities, investor relations, financing and insurance. The services are invoiced
on monthly basis and paid on market terms.
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
36
242
135 999
137 761
112 026
64 090
10 003
9 663
Current receivables and payables are not subject to any interest calculation. The balances will be settled
on ordinary market terms.
71
NOTE 13: MORTGAGES AND GUARANTEES
As of 31 December 2013, Prosafe’s interest-bearing debt secured by mortgages totalled USD 418
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 946.9 million. In line with industry
practice, Prosafe has issued parent company guarantees to customers on behalf of its subsidiaries in
connection with the award and performance of contracts.
As of 31 December 2012, Prosafe’s interest-bearing debt secured by mortgages totalled USD 566
million. This 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 is 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.
NOTE 14: FINANCIAL ASSETS AND LIABILITIES
As of 31 December 2013, Prosafe SE had financial assets and liabilities in the following categories:
Fair value
through
profit and
loss
Financial
liabilities
measured at
amortised cost
Year ended 31 Dec 2013
Intra-group long-term receivables
Cash and deposits
Other current assets
Total assets
Credit facility
Bond loan PRS07
Bond loan PRS08
Bond loan PRS09
Bond loan PRS10
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
135 999
9 414
14 362
159 774
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
7 442
0
0
0
Book value
135 999
9 414
14 362
159 774
0
0
0
0
418 000
418 000
82 187
82 187
82 187
82 187
82 187
82 187
115 062
115 062
10 003
10 003
0
2 533
7 442
2 533
112 026
112 026
5 800
5 800
7 442
909 985
917 427
72
As of 31 December 2012, Prosafe SE had financial assets and liabilities in the following
categories:
Year ended 31 Dec 2012
Intra-group long-term receivables
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
Fair value
through
profit and
loss
Financial
liabilities
measured at
amortised cost
Loans and
receivables
137 761
19 114
0
0
0
13 621
17 692
174 567
0
13 621
Book value
137 761
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
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
890 867
927 161
For further information, see note 19 of the consolidated accounts.
NOTE 15: MATURITY PROFILE LIABILITIES
As of 31 December 2013, Prosafe SE’s main financial liabilities had the following remaining contractual
maturities:
Year ended 31 Dec 2013
2014
2015
2016
2017
2018 →
Interest-bearing debt (downpayments)
0
136 000
82 200 364 200
197 200
Interests incl interest swaps
Intra-group long-term debt
Intra-group current liabilities
Interest-free long-term liabilities
44 700
0
112 026
59 900
10 003
0
0
2 533
Other interest-free current liabilities
5 800
0
70 400
73 200
120 000
0
0
0
0
0
0
0
0
0
0
0
0
Total
162 527
208 436
152 600 437 400
317 200
73
As of 31 December 2013, the availability under the credit facility totalled USD 791 million
(USD 373 million undrawn credit lines), meaning that the first actual downpayment on the credit
facility will not occur until 2015. In addition, the availability under the credit facility secured in 2012
amounts to USD 420 million (USD 420 million undrawn credit lines).
As of 31 December 2012, Prosafe SE had the following ageing profile of outstanding short and
long-term undiscounted liabilities:
Year ended 31 Dec 2012
2013
2014
2015
2016
2017 →
Interest-bearing debt (downpayments)
64 800
0
136 000
225 800
383 00
Interests incl interest swaps
44 200
48 200
Intra-group long-term debt
Intra-group current liabilities
Interest-free long-term liabilities
Other interest-free current liabilities
0
64 090
1 148
5 552
0
0
0
0
62 900
9 663
0
0
0
63 800
120 000
0
0
0
0
0
0
0
0
Total
179 790
48 200
208 563
289 600
503 800
NOTE 16: EVENTS AFTER THE BALANCE SHEET DATE
No significant events have taken place after the balance sheet date.
Independent auditors’
report
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. Expanding the fleet with two advanced harsh environment semi-submersible vessels. 75
To the Members of Prosafe SE
Report on the Consolidated Financial Statements and the
presentation of the consolidated financial statements.
Separate Financial Statements of Prosafe SE
We have audited the accompanying consolidated financial
sufficient and appropriate to provide a basis for our audit
We believe that the audit evidence we have obtained is
statements of Prosafe SE and its subsidiaries (“the Group”),
opinion.
and the separate financial statements of Prosafe SE (“the
Company”), which comprise the consolidated statement
Opinion
of financial position and the statement of financial
In our opinion, the consolidated financial statements and
position of the Company as at 31 December 2013, and the
the separate financial statements give a true and fair view
consolidated statements of income, comprehensive income,
of the financial position of the Group and the Company as
changes in equity and cash flows, and the statements of
at 31 December 2013, and of their financial performance
income, comprehensive income, changes in equity and
and their cash flows for the year then ended in accordance
cash flows of the Company for the year then ended, and
with International Financial Reporting Standards as
a summary of significant accounting policies and other
adopted by the European Union and the requirements of
explanatory information.
the Cyprus Companies Law, Cap. 113.
Board of Directors' Responsibility for the Financial Statements
The Board of Directors is responsible for the preparation
Report on Other Legal Requirements
Pursuant to the additional requirements of the Auditors
of consolidated and separate financial statements of the
and Statutory Audits of Annual and Consolidated Accounts
Company that give a true and fair view in accordance with
Laws of 2009 and 2013, we report the following:
International Financial Reporting Standards as adopted by
• We have obtained all the information and explanations
the European Union and the requirements of the Cyprus
we considered necessary for the purposes of our audit.
Companies Law, Cap. 113, and for such internal control as
• In our opinion, proper books of account have been kept
the Board of Directors determines is necessary to enable
by the Company, so far as appears from our examination
the preparation of consolidated and separate financial
of those books.
statements that are free from material misstatement,
• The consolidated and the separate financial statements
whether due to fraud or error.
are in agreement with the books of account.
Auditor's Responsibility
• In our opinion and to the best of our information and
according to the explanations given to us, the
Our responsibility is to express an opinion on these
consolidated and the separate financial statements give
consolidated and separate financial statements of the
the information required by the Cyprus Companies Law,
Company based on our audit. We conducted our audit
Cap. 113, in the manner so required.
in accordance with International Standards on Auditing.
• In our opinion, the information given in the report of the
Those Standards require that we comply with ethical
Board of Directors is consistent with the consolidated and
requirements and plan and perform the audit to obtain
the separate financial statements.
reasonable assurance about whether the consolidated
and separate financial statements are free from material
Other Matter
misstatement.
This report, including the opinion, has been prepared
for and only for the Company's members as a body in
An audit involves performing procedures to obtain audit
accordance with Section 34 of the Auditors and Statutory
evidence about the amounts and disclosures in the financial
Audits of Annual and Consolidated Accounts Laws of 2009
statements. The procedures selected depend on the
and 2013 and for no other purpose. We do not, in giving
auditor’s judgment, including the assessment of the risks
this opinion, accept or assume responsibility for any other
of material misstatement of the consolidated and separate
purpose or to any other person to whose knowledge this
financial statements, whether due to fraud or error. In
report may come to.
making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation of
Stavros Pantzaris
consolidated and separate financial statements that give
Certified Public Accountant and Registered Auditor
a true and fair view in order to design audit procedures
for and on behalf of
that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness
Ernst & Young Cyprus Limited
of the entity's internal control. An audit also includes
Certified Public Accountants and Registered Auditors
evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made
Nicosia
by the Board of Directors, as well as evaluating the overall
2 April 2014
Independent auditors’
report
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels.
Fleet overview
With a fleet of 11 vessels and four new builds under
construction, Prosafe is the leading player within the global
market for semi-submersible accommodation vessels for the
oil and gas industry.
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. Theme: Strategic growthExpanding the fleet with two advanced harsh environment semi-submersible vessels. 77
Safe Notos
: Ready for North Sea operations in 2016
Built, converted
: GustoMSC’s Ocean 500
Design
: 500
No of beds
: 38.5m +/- 7.5m
Gangway
Power generation : 28 800 kW (6 diesel generator sets)
Station keeping
Thrusters
Mooring system
: DP3
: 6 x 3 700 kW azimuthing
: 10 x 612 t chain
Safe Eurus
Built, converted : Ready for North Sea operations in 2016
: GustoMSC’s Ocean 500
Design
: 500
No of beds
Gangway
: 38.5m +/- 7.5m
Power generation : 28 800 kW (6 diesel generator sets)
Station keeping
Thrusters
Mooring system
: DP3
: 6 x 3 700 kW azimuthing
: 10 x 612 t chain
Safe Boreas
: Ready for North Sea operations in 2015
Built, converted
: GVA 3000 E
Design
: 450
No of beds
Gangway
: 38.0m +/- 7.5m
Power generation : 30 400 kW (6 diesel generator sets)
Station keeping
Thrusters
Mooring system
: DP3
: 6 x 4 400 kW azimuthing
: 12-point wire winches
Safe Zephyrus
Built, converted
: Ready for North Sea operations in 2015
Design
: GVA 3000 E
No of beds
: 450
: 38.0m +/- 7.5m
Gangway
Power generation : 30 400 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
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. Theme: Strategic growth 78
Safe Scandinavia
: 1984
Built, converted
: 2003/2005/2014 (refurbishment)
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
: 36.5m +/- 5.5m
Gangway
Power generation : 16 900 KW (6 diesel generator sets)
: DP2 / Posmoor
Station keeping
: 4 x 2 400 kW azimuthing
Thrusters
Mooring system
: 10-point wire winches
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
Built, converted
: 2005
Design
: Deepwater Technology Group
No of beds
: 461
: 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
: Aker H-3.2E
: 583 (NCS: 292)
: 36.5m +/- 6.0m
: 2003/2005/2014 (refurbishment)
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 : 16 900 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
: 36.5m +/- 6.0m
Gangway
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
Built, converted
Upgraded
Design
No of beds
Gangway
Power generation : 6 320 (4 diesel generator sets)
Station keeping
Thrusters
Mooring system : 12-point wire winches
: Moored
: 2 x 3 300 HP Propulsion (Aft)
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, iStockphoto. Print: Gunnarshaug Trykkeri.
Theme: Strategic growth Expanding the fleet with two advanced harsh environment semi-submersible vessels. Expanding the fleet with two advanced harsh environment semi-submersible vessels.