Annual Report

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Note 26 – Sales Amounts in USD 1 000 2009 2008 Charter revenues (see note 7) 98 729 43 726 Gain on sale of asset 0 16 242 Other operating revenues 1 926 3 496 Total Sales 100 654 63 463 In 2008 Marine Subsea entered into a 10+5 year sale-lease-back transaction with Parbarge AS set up by Pareto Private Equity AS. The transaction includes the two Accommodation Construction Support Barges, African Fjord and African Caribe. Total sales price for the barges were MUSD 79 million. Marine Subsea will maintain full operational control of the assets (bareboat). The transaction resulted in a gain on sale of asset of MUSD 8,1 for African Fjord and MUSD 8,1 for African Caribe. The lease is recognised as an operating lease in the Financial Statements. Note 27 – Changes in Group Structure In August 2009 Marine Subsea acquired 38% of TS Marine Ltd, later renamed to Marine Subsea UK Ltd. The company was formed trough a management buy out of trade and assets from TS Marine Contracting. The acquition cost was £ 700. In November the shares in Marine Subsea UK were transferred from Marine Subsea AS to Marine Subsea Cyprus Holding Ltd. On completion of the refinancing process, Marine Subsea paid a further £ 1 100 to obtain 60% of the shares. The remaining 40% of the shares of the company will be aquired by an earn out model based on the financial results in Marine Subsea UK Ltd in 2011, 2012 and 2013. There are no material assets in the company, nor any long term contracts that support a valuation exceeding the purchase price. Marine Subsea obtained control over the company in late December. The profit & loss from Marine Subsea UK for 2009 is calculated based on the equity method. Net loss is not calculated at year end. The balance at the end of the year is fully consolidated. The new company provides a suite of subsea engineering and construction services to leading oil companies and contractors. Their offering spans a broad spectrum of oil and gas activities from subsea construction through to decommissioning. The company will thus support and enhance operations for Sarah and Karianne. In December 2009, Lewis Ltd, a 100% owned subsidiary, announced voluntary liquidation after the business faced financial difficulties as a result of the slow-down in the subsea sector. The profit & loss from Lewis Ltd for 2009 is fully consolidated up til the month of December. According to the purchase agreement between Drummond Lawson and Marine Subsea AS in 2008, Marine Subsea AS has an obligation to cover certain guarantees. Total exposure: USD 191 thousand. No accruals recorded in profit and loss 2009. In 2008, Marine Subsea entered into an agreement to acquire On & Offshore AS in May 2010. A USD 3 million break-fee was agreed, should Marine Subsea be unwilling or unable to proceed with the transaction. As part of the agreement with bondholders and new lenders, the Company will not proceed with the transaction under the original terms. Marine Subsea and On & Offshore have agreed to discuss alternative transaction structures in early 2010, with a view to reaching an agreement to acquire the company. A loss of USD 3 million was recorded in 2009. 25% of the shares in Marine Subsea Karianne Ltd and 25% of the shares in Marine Subsea Lifter are sold to Sonangol during 2009. See note 5. 52 Marine Subsea Annual Report 2009
Notes – Marine Subsea Consolidated Note 28 – Stocks and work in progress Amounts in USD 1 000 2009 2 008 Raw materials and consumeables 9 14 Long term contracts 0 889 Total stocks and work in progress 9 903 Note 29 – Additional information regarding the Sonangol back-stop contract Amounts in USD 1 000 2009 2 008 Subordinated debt to Sonangol included in other non current liabilities 2 687 0 Under the terms of the back-stop contract between MS Sarah Ltd and Sonangol, Sonangol is obligated to pay a base rate for the vessel for 250 days per year for 10 years. If, during the annual 250 days, Sonangol is not using the vessel, or the vessel is chartered by a third party at a rate lower than the base rate, the payments from Sonangol will be recognised as subordinated debt to Sonangol. The Sonangol debt can only be repaid with future charter hire revenues exceeding the Sonangol base rate. If the Sonangol debt is not repaid within 5 years, Sonangol can convert the debt to equity in MS Sarah Ltd. For the 4th quarter of 2009, the Sarah vessel did not work for Sonangol or any other charterer, and as such, all payments from Sonangol were recognised as debt to Sonangol. Hence, no revenues were recognised in MS Sarah Ltd or in the consolidated Group accounts, even though payments were made on a monthly basis in accordance with the Sonangol contract. To provide an overview of the actual MS Sarah Ltd contributions to the Group, the table below shows the Group key figures with MS Sarah Ltd on an unconsolidated basis (not in accordance with IFRS). MS Sarah Ltd has USD 93 million of debt to MS Cyprus Holding Ltd. This debt is serviced with LIBOR+8,5% interest and is senior to the Sonangol debt under the back-stop contract. MS Sarah Ltd also pays management fees to MS UK Ltd and MS AS. The interest income and management fees are eliminated in the consolidated Group accounts, but included when MS Sarah Ltd is included on an unconsolidated basis. Amounts in USD 1 000 Unaudited 2009 Revenues Consolidated 100 654 Adjustment Consolidated – mgm fees from MS Sarah Ltd 1 207 MS Sarah Ltd 0 Adjusted revenues 101 861 Operating expenditures Consolidated 97 342 MS Sarah Ltd 659 Adjusted operating expenditures 96 683 Net operating profit (loss) Consolidated 3 312 Adjustment Consolidated – mgm fees from MS Sarah Ltd 1 207 MS Sarah Ltd 659 Adjusted net operating profit (loss) 5 178 Annual Report 2009 Marine Subsea 53
Page 1 and 2: Annual Report 2009
Page 3 and 4: Content Chairman’s Remarks Vessel
Page 5 and 6: Highlights 2009 August November Dec
Page 7 and 8: Managing Director’s statement Mar
Page 9 and 10: Marine Subsea’s Corporate Structu
Page 11 and 12: Marine Subsea’s Corporate Structu
Page 13 and 14: Marine Subsea Fleet Offshore Interv
Page 15 and 16: Marine Subsea Fleet Semi-Submersibl
Page 17 and 18: Board of Directors Report The compa
Page 19 and 20: I SARAH LIMASSOL MARINE SUBSEA MAR.
Page 21 and 22: Consolidated statement of financial
Page 23 and 24: Consolidated statement of cash flow
Page 25 and 26: Notes - Marine Subsea Consolidated
Page 51: Notes - Marine Subsea Consolidated
Page 55 and 56: Annual Report 2009 Marine Subsea 55
Page 57 and 58: Balance sheet As of 31 December (Al
Page 59 and 60: Cash flow statement Year ended 31 D
Page 61 and 62: Notes - Marine Subsea AS Name 2009
Page 63 and 64: Notes - Marine Subsea AS Note 6 - T
Page 65 and 66: Notes - Marine Subsea AS Note 9 - T
Page 67 and 68: Notes - Marine Subsea AS Note 14 -
Page 70: signatur.no • 100112 Main Office,

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