BUILDING OUR SUBSEA FUTURE

DOF SUBSEA financial report

Q1 2015

DOF Subsea AS Thormøhlens gate 53 C 5006 Bergen NORWAY www.dofsubsea.com

INDEX Financial Report 1ST quarter 2015 . . . . . . . . . . . . . . . . . . 4 Financial statements 1ST quarter 2015 . . . . . . . . . . . . . . 9 Consolidated statement of comprehensive income . . . . . . . . . . . 9 Consolidated statement of financial position . . . . . . . . . . . . . . . . 10 Consolidated statement of financial position . . . . . . . . . . . . . . . . 11 Consolidated statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . 12 Consolidated statement of changes in equity . . . . . . . . . . . . . . . . 13

Notes to the financial statements . . . . . . . . . . . . . . . . . . 15 Note 1 Management reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Note 2 Segment information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Note 3 Financial income and expenses . . . . . . . . . . . . . . . . . . . . . 17 Note 4 Tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Note 5 Interest-bearing debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Note 6 Financial instruments and hedging activities . . . . . . 19 Note 7 Transactions with related parties . . . . . . . . . . . . . . . . . . . 20 Note 8 Investments in associates and joint ventures . . . . . 20 Note 9 Events after the consolidated statement of financial position date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Note 10 Shareholder information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Note 11 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Supplemental information . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Condensed statement of comprehensive income 5 last quarters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Condensed statement of financial position 5 last quarters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

DOF Subsea vessels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Financial Report Q1 2015

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DOF SUBSEA

FINANCIAL REPORT 1ST QUARTER 2015 Headlines For the first 3 months of 2015 DOF Subsea AS had an operating income of NOK 1 558 million (vs. NOK 1 451 million for the first 3 months of 2014) with an EBITDA of NOK 578 million (NOK 663 million). The EBIT was NOK 442 million (NOK 540 million) after depreciation of NOK 135 million (NOK 122 million). Net finance amounted to NOK 320 million (NOK 132 million). The pre-tax profit for period was NOK 122 million (NOK 408 million) and the profit after tax was NOK 139 million (NOK 402 million). During the quarter the vessel utilization was low due to upgrade of vessels for long-term contracts, dry-docking, mobilization and idle time between projects. In the 1st quarter the Group entered into new timecharter and project contracts with a total value of NOK 3 billion. The vessel Skandi Africa was partially delivered from the yard in Norway and crane and VLS are being installed in Holland, with expected final delivery at the end of August 2015. The vessel Skandi Aker was delivered to the new owners during the quarter and profit from the sale of the vessel of NOK 205 million was booked. The financial statements for the first 3 months of 2015 are prepared using the equity method for joint ventures. For management reporting based on proportional consolidation of the joint ventures see notes 1 and 2 and supplemental information. The year to date operating income using the proportional consolidation method was NOK 1 656 million with an EBITDA of NOK 663 million and an EBIT of NOK 515 million. Key figures (NOK million) Operating income

1Q 2015

1Q 2014

1 558

1 451

EBITDA

578

663

EBIT

442

540

9 653

9 008

Net interest-bearing debt

Operational events 1st quarter On the 21st of February, a member of the marine crew suffered a fatal injury on board Skandi Skansen when the vessel was alongside quay in Stavanger. As an organization guided by our values, we have extended our support to his family. We are working closely with the leading industry body, IMCA and will strive to ensure that incidents like this are never repeated on any of our vessels or at any of our worksites. As per 31st of March 2015, the Group’s fleet comprised 22 owned vessels, 5 long-term chartered-in vessels, 4 vessels

4

under construction, an ROV fleet of 58 units and 9 ROVs on order. The vessel Skandi Africa was delivered during the quarter, however the vessel is in Holland to install the 900t crane and the 650t VLS. On delivery end August 2015 the vessel will enter into a long-term contract. During the first quarter the Group was conducting IMR work for Shell New Zealand, mooring installation and installation of umbilicals for Apache and Woodside in Australia, FPSO installation in Malaysia and IMR work for Shell in the Philippines. In the North Sea the Group has been doing survey and light construction work for Statoil, mooring and installation work for Shell, ROV and survey and positioning work for BP, Statoil and HMC among others. In the Gulf of Mexico the Group has conducted IMR work for Freeport McMoran, Chevron and survey and positioning work for Chevron and HMC. In Brazil the Group was engaged in IMR work for Chevron in addition to ROV and survey work for Petrobras. During the 1st quarter 2015, the utilization of the Group’s vessels was 81 %. The main reasons for the low utilization were seasonality in the North Sea and the fact that Skandi Protector and Skandi Hawk were upgraded for long-term contracts. Skandi Singapore was under transit from Angola to New Zealand. Skandi Santos was dry-docked and Skandi Inspector was in transit from Canada to West Africa for maintenance and preparation for an AUV job. In addition. 8 ROV systems were mobilized on five vessels. The utilization for the project vessels during the 1st quarter 2015 was 53 % and for the time charter vessels 98 %. Utilization

1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

Project vessels

53 %

67 %

86 %

72 %

70 %

Time charter vessels

98 %

97 %

97 %

97 %

92 %

Fleet

81 %

86 %

93 %

88 %

84 %

All utilization of vessel numbers are based on actual available days not excluding days at yard for dry-docking, repair / upgrading, transit or idle time between projects.

Consolidated statement of comprehensive income and consolidated statement of financial position For the 1st quarter 2015, the Group achieved an operating income of NOK 1 558 million compared to an operating income of NOK 1 451 million for the 1st quarter 2014. Operating profit before depreciation (EBITDA) was NOK 578 million, including a profit from sale of non-current assets of NOK 205 million (NOK 663 million including a profit from sale of non-current assets of NOK 204 million) and the operating profit after depreciation (EBIT) was NOK 442 million (NOK 540 million). Depreciation and write-down amounted to NOK 135 million (NOK 122 million).

DOF SUBSEA

NOK million Operating income Operating expenses

1Q 2015

1Q 2014

Change %

1 558

1 451

7%

980

788

24 %

EBITDA

578

663

-13 %

EBIT

442

540

-18 %

The main reasons for the increase in operating expenses are 3 additional vessels on time charter compared to 2014 and increased project and transit cost. Net financial loss was NOK 320 million (NOK 132 million), whereas NOK 104 million (positive NOK 49 million) of the net financial loss was unrealized currency loss and unrealized loss on financial instruments. The profit before tax was NOK 122 million (NOK 408 million) and the profit for the period was NOK 139 million compared with NOK 402 million in 2014.

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Financial Report Q1 2015

Cash and cash equivalents has decreased due to repayment of debt, paid-in equity portion of vessel delivered and instalments on newbuild under construction. The net interest-bearing debt (NIBD) was NOK 9 653 million (NOK 9 008 million) representing 52 % of total assets and 46 % of value adjusted assets. NIBD has increased due to loans on newbuild, refinancing of existing vessels and change in the USD/NOK exchange rate. Cash flow from operating activities during the 1st quarter was NOK 24 million (NOK 161 million). Cash flow from investing activities during the period was NOK -1 333 million (NOK 487 million) of which NOK -1 873 million is from investment in assets that increase or will increase capacity and NOK 975 million is from sales of vessels that reduce capacity for the Group. Cash flow from financing activities was NOK 156 million (NOK -718 million). At the end of the 1st quarter the Group’s cash and cash equivalents was NOK 1 064 million (NOK 1 676 million).

The Group’s total assets were NOK 18 460 million (NOK 17 884 million) where non-current assets amounted to NOK 15 174 million (NOK 14 747 million), including NOK 772 million (NOK 640 million) in intangible assets. Current assets were NOK 3 286 million (NOK 3 137 million) of which NOK 1 064 million (NOK 1 676 million) were cash and cash equivalents. This amount includes restricted cash of NOK 434 million (NOK 528 million). The total equity was NOK 6 077 million (NOK 5 660 million), including non-controlling interests of NOK 265 million (NOK 218 million). Non-current liabilities, including non-current provisions for commitments, were NOK 8 420 million (NOK 8 849 million). Current liabilities were NOK 3 963 million (NOK 3 374 million) of which NOK 2 812 million (NOK 2 375 million) were the short portion of debt including short portion of bond loan. By the end of the 1st quarter the book equity ratio was 32.9 %, with value adjusted equity ratio of 42.7%. The value-adjusted equity ratio is calculated by adjusting the book equity and total asset by excess values on all owned vessels. The value adjusted equity ratio is slightly lower compared to the previous quarter mainly due to debt denominated in USD and lower vessel values. NOK million Tangible assets

31.03.2015

31.03.2014

Change %

13 049

12 904

1%

Cash and cash equivalents

1 064

1 676

-37 %

NIBD

9 859

9 228

7%

Total equity

6 077

5 660

Debt, financing and liquidity During the quarter the Group has repaid loan on Skandi Aker, Skandi Acergy and Skandi Carla with a total amount of NOK 1 242 million and paid ordinary instalments on outstanding debt. During the quarter a new loan on the newbuild Skandi Africa of USD 200 million was drawn and the balance of the committed loan amount will be drawn upon final delivery of the vessel. For the remaining new building program the financing is in progress and the Group has signed a loan agreement with BNDES/FMM for the financing of the 2 Brazilian built PLSVs. The available amount that can be drawn under the BNDES/FMM facility has an 18-year tenor. The Group’s short portion of debt as at 31st March 2015 totals NOK 2 812 million, and includes balloons, bonds, credit facilities and normal amortization. The refinancing of 3 vessels is currently in progress with international shipping banks at terms standard for the Group.

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Financial Report Q1 2015

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DOF SUBSEA

Financial risk The Group’s operating income is in NOK, USD, AUD, GBP and BRL, while the Group’s loans are distributed between NOK and USD. This exposes the Group to the risk of exchange rate fluctuations. The Group has an active exchange rate policy, and uses derivatives to hedge the exchange rate exposure. The Group is exposed to fluctuations in interest rates. Part of the Group’s loans has fixed interest rates, reducing the exposure. The Group has an active interest rate policy, and uses derivatives to hedge the interest rate exposure. Shareholders The shares in DOF Subsea AS are 100 % owned by DOF Subsea Holding 2 AS. The number of outstanding shares is 119,733,714, with a book equity of NOK 50.75 per share. The value-adjusted equity per share as per 31st March 2015 was NOK 77.14. Employees As per 31st March 2015 the number of employees in the DOF Subsea Group was 1 816 persons. The numbers do not include marine employees that are employed in DOF Management and Norskan. The Fleet As per 31st of March 2015 the Group fleet comprised 22 owned vessels, 5 chartered in vessels and 4 vessels under construction. All vessels under construction are progressing as planned with delivery of the first vessel expected in June 2016 and the last one in June 2017. Contract Coverage

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Events after the consolidated statement of financial position date The Group has taken delivery of the vessel Skandi Hawk, and the vessel is financed by an international shipping bank with a 7-year tenor and terms and covenants standard for the Group. Forward looking statement The majority of the Group’s vessels are fixed on long-term contracts. The contract backlog including options amounts to approximately NOK 37 billion as per 31st March 2015, equivalent to about 5 years’ turnover. However the Group is exposed to the short-term market fluctuations on the project vessels. On these vessels, management is working to increase the backlog. With an oil price of USD 60 per barrel, the current cost focus in the oil industry and increased supply of vessel, the Board of Directors expects a weak to mixed subsea market for the next 12 months and are pleased with the contracts awarded during the 1st quarter. Bergen, 19th of May 2015 The Board of DOF Subsea AS

Contact information: Mons S. Aase, CEO +47 916 61 012 Marianne Møgster +47 993 06 916 DOF Subsea AS Thormølens gate 53 C 5006 Bergen www.dofsubsea.com

DOF SUBSEA

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Financial Report Q1 2015

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Financial Report Q1 2015

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DOF SUBSEA

DOF SUBSEA

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Financial Report Q1 2015

Amounts in NOK million

FINANCIAL STATEMENTS 1ST QUARTER 2015 Consolidated statement of comprehensive income Note

1Q 2015

1Q 2014

2014

1, 2

1 558

1 451

7 073

Payroll expenses

-535

-406

-1 961

Other operating expenses

-650

-609

-3 308

Operating income

Share of net income of associates and joint ventures

1, 8

-1

23

125

205

204

465

-980

-788

-4 679

1, 2

578

663

2 394

4

-135

-122

-577

442

540

1 817

Profit from sale of non-current assets Total operating expenses Operating profit before depreciation (EBITDA) Depreciation and write-down Operating profit (EBIT) Financial income

3

11

18

49

Financial expenses

3

-152

-183

-691

Realized gain / loss on financial instruments

3

-75

-16

-90

Unrealized gain / loss on financial instruments

3

-104

49

-375

-320

-132

-1 108

122

408

709

17

-6

25

139

402

734

-11

12

165

3

4

18

-164

26

-22

Net financial income / loss Profit / loss before tax Tax expense Profit / loss for the period Other comprehensive income Items that may be subsequently reclassified to profit / loss Currency translation difference (CTA) Cash flow hedges Share of other comprehensive income of associates and joint ventures

8

Items that will not be subsequently reclassified to profit / loss Defined benefit plan actuarial gains / losses Other comprehensive income / loss net of tax Total comprehensive income for the period

-

-

3

-172

44

164

-33

446

898

Total comprehensive income attributable to: Non-controlling interests Owners of the parents

1

3

50

-34

444

848

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Financial Report Q1 2015

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DOF SUBSEA

Amounts in NOK million

Consolidated statement of financial position Assets

Note

31.03.2015

31.03.2014

31.12.2014

Deferred tax asset

289

179

269

Goodwill

483

461

477

Intangible assets

772

640

746

Vessels

4

9 650

11 384

10 477

ROVs

4

930

750

991

Machinery and other equipment

4

484

460

421

Newbuilds

4

1 986

310

255

13 049

12 904

12 143

Tangible assets Investment in associates and joint ventures Other non-current receivables

1, 8

802

924

971

6

551

280

478

1 353

1 204

1 448

15 174

14 747

14 336

1 498

1 059

1 558

725

401

406

2 222

1 460

1 964

Financial assets Non-current assets Trade receivables Other current receivables

6

Total receivables Restricted cash

434

528

485

Unrestricted cash and cash equivalents

630

1 148

1 635

1 064

1 676

2 120

3 286

3 137

4 084

18 460

17 884

18 420

Cash and cash equivalents Current assets Total assets

10

5

DOF SUBSEA

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Financial Report Q1 2015

Amounts in NOK million

Consolidated statement of financial position Equity and liabilities Paid in equity

Note 10

Other equity Non-controlling interests Total equity

31.03.2015

31.03.2014

31.12.2014

4 069

4 069

4 069

1 743

1 373

1 778

265

218

265

6 077

5 660

6 112

Deferred taxes

10

5

11

Pensions

12

16

12

Non-current provisions for commitments

22

21

22

5

2 041

2 739

2 040

Debt to credit institutions

5

6 070

5 790

5 593

Financial non-current derivatives

6

259

267

290

29

33

27

Non-current liabilities

8 398

8 828

7 950

Short portion of debt

2 812

2 375

2 974

702

631

797

449

369

565

3 963

3 374

4 336

Total liabilities

12 383

12 224

12 308

Total equity and liabilities

18 460

17 884

18 420

Bond loans

Other non-current liabilities

Trade payables Other current liabilities Current liabilities

6

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Financial Report Q1 2015

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DOF SUBSEA

Amounts in NOK million

Consolidated statement of cash flows Note Operating profit (EBIT) Depreciation and write-down

4

Profit from sale of non-current assets Share of net income of associates and joint ventures

1, 8

Change in trade receivables

31.03.2015

31.03.2014

31.12.2014

442

540

1 817

135

122

577

-205

-204

-465

1

-23

-125

60

213

-285

Change in trade payables

-95

-157

9

Changes in other working capital

-53

-127

-76

Exchange rate effect on operating activities Cash flow from operating activities Interest received Interest paid Tax paid Net cash flow from operating activities Sale of tangible assets Purchase of tangible assets Dividend received Changes in other receivables Cash flow from investing activities Proceeds of interest-bearing debt Installments on interest-bearing debt Payments to non-controlling interests

4

-19

-19

24

267

345

1 476

14

21

42

-175

-197

-693

-82

-8

-44

24

161

781

975

927

2 074

-1 873

-400

-897

3

-

-

-438

-41

-167

-1 333

487

1 011

1 578

135

2 068

-1 421

-850

-3 553

-

-3

-3

156

-718

-1 488

Net change in cash and cash equivalents

-1 152

-70

304

Cash and cash equivalents at the beginning of period

2 120

1 752

1 752

Exchange rate effect on cash and cash equivalents

97

-6

64

Cash and cash equivalents at the end of the period

1 064

1 676

2 120

Cash flow from financing activities

From the first quarter 2015 the Group has changed the presentation of cash flows. Comparative figures for previous periods have been restated accordingly.

12

DOF SUBSEA

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Financial Report Q1 2015

Amounts in NOK million

Consolidated statement of changes in equity Share capital

Share premium

Other paid-in capital

1 197

741

2 130

Profit / loss for the period

-

-

-

138

-

Other comprehensive income for the period

-

-

-

-164

-11

Total comprehensive income for the period

-

-

-

-26

-11

Changes in non-controlling interests

-

-

-

-

Equity at 31.03.2015

1 197

741

2 130

Equity at 01.01.2014

Equity at 01.01.2015

Currency Retained translation earnings differences

Total

Noncontrolling interests

Total equity

5 847

265

6 112

-

138

1

139

3

-172

-

-172

3

-34

1

-33

-

-

-

-2

-2

1 767

-3

-20

5 813

265

6 077

1 793

8

Cash flow hedges -23

1 197

741

2 130

1 126

-157

-40

4 998

218

5 216

Profit / loss for the period

-

-

-

396

-

-

396

5

402

Other comprehensive income for the period

-

-

-

26

12

6

46

-2

44

Total comprehensive income for the period

-

-

-

423

12

6

444

3

446

Changes in non-controlling interests

-

-

-

-

-

-

-

-3

-3

1 197

741

2 130

1 549

-145

-34

5 442

218

5 660

Equity at 31.03.2014

Cash flow hedges and change in defined benefit actuarial gains / losses are presented after tax. Tax rate used is 27-34%.

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Financial Report Q1 2015

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DOF SUBSEA

Amounts in NOK million

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DOF SUBSEA

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Financial Report Q1 2015

Amounts in NOK million

NOTES TO THE FINANCIAL STATEMENTS Note 1 Management reporting

The table below shows the effect of application of IFRS 11 on the main items in the consolidated statement of comprehensive income and the consolidated statement of financial position. The Group uses proportional consolidation method when accounting for joint ventures in management reporting. 1Q 2015 Consistent with management reporting

IFRS 11 impact

1Q 2015

1 656

-98

1 558

-994

14

-979

1

-1

-1

Operating profit before depreciation (EBITDA)

663

-86

578

Operating profit (EBIT)

515

-73

442

Net financial income / loss

-395

74

-320

Profit / loss for the period

139

-

139

1Q 2015 Consistent with management reporting

IFRS 11 impact

1Q 2015

Consolidated statement of comprehensive income

Total operating income Total operating expenses Share of net income of associates and joint ventures

Consolidated statement of financial position

Intangible assets Tangible assets Financial assets Non-current assets Current assets

887

-115

772

15 413

-2 364

13 049

425

928

1 353

16 726

-1 551

15 174

3 414

-129

3 286

20 140

-1 680

18 460

1Q 2015 Consistent with management reporting

IFRS 11 impact

1Q 2015

6 077

-

6 077

24

-2

22

Non-current liabilities

9 900

-1 502

8 398

Current liabilities

4 139

-176

3 963

Total liabilities

14 063

-1 680

12 383

Total equity and liabilities

20 140

-1 680

18 460

Total assets

Consolidated statement of financial position

Total equity Non-current provisions for commitments

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Financial Report Q1 2015

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DOF SUBSEA

Amounts in NOK million

Note 2 Segment information The Group applies the equity method to account for joint ventures, as required by IFRS 11. The segment reporting below is presented according to internal management reporting, based on the proportionate consolidation method of accounting for joint ventures. The bridge between the management reporting and the figures reported in the financial statement is presented below. Presentation of segments includes information that are reported to the chief operating decision-makers on a regular basis. Corporate expenses and similar are allocated to the segments proportionately based on estimated split of services delivered to each segment.

Operating income consistent with management reporting Chartering of vessels

1Q 2015

1Q 2014

2014

570

496

2 044

Subsea projects

1 086

1 035

5 378

Total consistent with management reporting

1 656

1 530

7 422

Effect of IFRS 11 Total

-98

-79

-349

1 558

1 451

7 073

566

537

1 895

EBITDA consistent with management reporting Chartering of vessels Subsea projects Total consistent with management reporting Effect of IFRS 11 Total

97

165

668

663

701

2 563

-86

-39

-169

578

663

2 394

EBITDA for the first quarter 2015 in the chartering of vessels segment includes NOK 205 million gain on sale of vessel compared to the NOK 204 million in the first quarter 2014. From the first quarter 2015 the calculation method for allocation of corporate expenses and similar expenses was adjusted. First quarter 2014 figures were restated accordingly. Figures reported in the chartering of vessels segment are covering all vessels on long-term charters to external customers. The subsea projects segment is covering the Group’s integrated service activities in survey, subsea construction and inspection repair and maintenance services (IMR).

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DOF SUBSEA

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Financial Report Q1 2015

Amounts in NOK million

Note 3 Financial income and expenses

Interest income Other financial income Financial income Interest expenses

1Q 2015

1Q 2014

2014

10

14

38

1

4

10

11

18

49 -687

-152

-181

Capitalization of interest

-

-

8

Other financial expenses

-

-2

-4

-152

-183

-691

43

1

-11

Net gain / loss on operational capital

101

-12

96

Net gain / loss on financial derivatives

-219

-6

-175

-75

-16

-90

-244

26

-227

22

-2

25

118

24

-174

Unrealized gain / loss on financial instruments

-104

49

-375

Net financial income / loss

-320

-132

-1 108

Financial expenses Net gain / loss on non-current debt

Net realized gain / loss on financial instruments Net unrealized gain / loss on non-current debt Net unrealized gain / loss on operational capital Net unrealized gain / loss on financial derivatives

Note 4 Tangible assets 31.03.2015

Net booked value 01.01.

Vessels & periodic maintenance

ROVs

Machinery & other equipment

Newbuilds

Total

10 476

991

421

255

12 143

Additions

70

-

81

1 722

1 873

Disposals

-754

-

-17

-

-771

-

-19

19

-

-

-76

-39

-20

-

-135

Reclassification Depreciation Currency translation differences Net booked value 31.03.

-66

-3

-

9

-60

9 650

930

484

1 986

13 049

13 337

31.03.2014

Net booked value 01.01.

12 025

801

425

86

Additions

84

19

73

224

400

Disposals

-655

-45

-24

-

-724

-83

-26

-13

-

-122

Depreciation Currency translation differences Net booked value 31.03.

13

1

-1

-

13

11 384

750

460

310

12 904

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Financial Report Q1 2015

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DOF SUBSEA

Amounts in NOK million

Note 5 Interest-bearing debt 31.03.2015

31.03.2014

31.12.2014

2 041

2 739

2 040

Non-current interest-bearing debt Bond loan floating rate Debt to credit institutions

6 070

5 790

5 593

Total non-current interest bearing debt

8 111

8 529

7 633

Current interest-bearing debt Bond loan, floating rate

700

454

700

Debt to credit institutions

2 004

1 798

2 144

Total current interest-bearing debt

2 704

2 252

2 844

10 815

10 781

10 477

1 064

1 676

2 120

99

97

101

9 653

9 008

8 256

Total non-current and current interest-bearing debt Net interest-bearing debt Cash and cash equivalent Other interest-bearing assets - non-current Total net interest-bearing debt

Non-current interest-bearing debt in the consolidated statement of financial position includes amortized cost. Amortized costs and accrued interest expenses are excluded in the figures below.

Debt repayment profile Bond loan

Remaining balance 2015

2016

2017

2018

2019

Thereafter

Total 2 750

700

750

-

1 300

-

-

Debt to credit institutions

1 083

1 677

684

683

1 820

2 159

8 106

Total repayment

1 783

2 427

684

1 983

1 820

2 159

10 856

A long-term loan has been provided by Eksportfinans and is invested as a restricted deposit. The repayment terms on the loan from Eksportfinans are equivalent with the reduction on the deposit. The loan is fully repaid in 2020. The cash deposit is included in restricted deposits.

Share of debt secured by fixed interest rate 31.03.2015

Fixed rate

Floating rate

Total

100 %

NOK Debt to credit institutions

97 %

3%

Bond loan

0%

100 %

100 %

Total NOK

59 %

41 %

100 %

Debt to credit institutions

100 %

0%

100 %

Total USD

100 %

0%

100 %

Total debt

74 %

26 %

100 %

USD

18

DOF SUBSEA

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Financial Report Q1 2015

Amounts in NOK million

Note 5 Interest-bearing debt (continued from previous page) Financial covenants The Group’s long-term financing agreements include the following covenants: - The Group shall have available cash of at least NOK 500 million at all times - The Group shall have value adjusted equity to value adjusted assets varying from 25-30% - The Group shall have equity of at least NOK 3 000 million at all times - The Group shall have positive working capital at all times, excl. short portion of debt - The fair value of the Group’s vessels shall always be at least 100-130% of the outstanding amount.   In addition to the above mentioned financial covenants, the loan agreements are also subject to the following covenants: - The Group’s assets shall be fully insured - There shall not be any change to classification, management or ownership of the ships without the prior written approval of the lenders - DOF ASA shall be the principal shareholder in DOF Subsea AS, and own a minimum of 50% of the shares - DOF Subsea AS shall not merge, demerge or divest activities without the prior written approval of the lenders - DOF Subsea AS shall report financial information to the banks and Oslo Stock Exchange on a regular basis - The Group’s ships shall be operated in accordance with current laws and regulations. The Group is in compliance with all covenants.

Note 6 Financial instruments and hedging activities 31.03.2015

31.03.2014

Assets

Liabilities

Assets

Liabilities

17

249

27

231

-

27

-

49

Non-current and current portion Interest rate swaps - cash flow hedges Interest rate swaps - cash flow hedges under hedge accounting Foreign exchange contracts cash flow hedges

51

106

10

15

Total non-current and current

68

382

37

295

17

240

27

231

-

19

-

36

Total non-current portion

17

259

27

267

Total current portion

51

123

10

28

Non-current portion Interest rate swaps - cash flow hedges Interest rate swaps - cash flow hedges under hedge accounting

31.03.2015 Committed Received

NOK

31.03.2014

Amount

Committed Received

Amount

1 990

NOK

623

Instrument Foreign exchange contracts, buy NOK

19

Financial Report Q1 2015

|

DOF SUBSEA

Amounts in NOK million

Note 7 Transactions with related parties Description of transactions with related parties is given in the Annual Report for 2014. There are no major changes in type of transactions between related parties during the quarter.

Note 8 Investments in associates and joint ventures Entity

Proportion of ownership

31.03.2015 Joint ventures DOFTech DA

50 %

DOFCON Brasil AS

50 %

Associated companies DOF Management AS

34 %

Marin IT AS

35 %

Master & Commander AS

20 %

31.03.2015 Booked value of investments in associates and joint ventures 31.12.2014 Share of net income of associates and joint ventures Share of other comprehensive income related to associates and joint ventures Dividend received from associates and joint ventures Booked value of investments in associates and joint ventures 31.03.2015

971 -1 -164 -3 802

See also note 1 and note 2.

Note 9 Events after the consolidated statement of financial position date

The Group has taken delivery of the vessel Skandi Hawk, and the vessel is financed by an international shipping bank with a 7-year tenor and terms and covenants standard for the Group.

20

DOF SUBSEA

|

Financial Report Q1 2015

Amounts in NOK million

Note 10 Shareholder information Name DOF Subsea Holding 2 AS

No. shares

Shareholding

Voting shares

119 733 714

100 %

100 %

Note 11 General This interim report has been prepared in accordance with the standard for interim reporting (IAS34). The accounting principles and calculation methods applied for the last annual accounts published have been applied to the quarterly financial report. Amendment and interpretations to the standards which are effective for the financial year beginning on 1 January 2015 are not material to the Group. The Financial Statement is unaudited.

21

Financial Report Q1 2015

|

DOF SUBSEA

Amounts in NOK million

SUPPLEMENTAL INFORMATION The supplemental information below is presented according to internal management reporting, based on the proportionate consolidation method.

Condensed statetement of comprehensive income 5 last quarters 1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

1 656

2 025

1 904

1 963

1 530

Payroll expenses

-539

-605

-501

-460

-409

Other operating expenses

-660

-912

-851

-960

-619

1

-6

-1

3

-4

205

262

-

-

204

-993

-1 261

-1 353

-1 417

-829

Operating profit before depreciation (EBITDA)

663

764

552

546

701

Depreciation and write-down

-148

-172

-165

-151

-136

515

591

386

395

566

Operating income

Share of net income of associates and joint ventures Profit from sale of non-current assets Total operating expenses

Operating profit (EBIT) Financial income Financial expenses Realized gain / loss on financial instruments

8

10

9

10

19

-164

-177

-179

-181

-194 -16

-77

-60

24

-49

Unrealized gain / loss on financial instruments

-162

-371

-119

28

47

Net financial income / loss

-395

-598

-265

-192

-145

121

-7

121

203

421

19

70

-30

-25

-19

139

63

91

178

402

Profit / loss before tax Tax expenses Profit / loss for the period

22

DOF SUBSEA

|

Financial Report Q1 2015

Amounts in NOK million

Condensed statement of financial position 5 last quarters Assets Intangible assets Tangible assets Financial assets

1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

887

788

638

645

671

15 413

14 614

15 218

15 188

15 040

425

394

360

317

300

16 726

15 796

16 215

16 151

16 012

Total receivables

2 305

2 035

1 940

1 852

1 518

Cash and cash equivalents

1 109

2 189

1 057

1 400

1 729

Current assets

3 414

4 223

2 998

3 252

3 247

20 140

20 019

19 213

19 403

19 258

1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

Paid in equity

4 069

4 069

4 069

4 069

4 069

Other equity

1 743

1 778

1 645

1 670

1 373

265

265

224

223

220

6 077

6 112

5 938

5 962

5 662

Non-current assets

Total assets

Equity and liabilities

Non-controlling interests Total equity

24

22

13

19

21

Other non-current liabilities

Non-current provisions for commitment

9 900

9 380

9 655

9 681

10 105

Non-current liabilities

9 924

9 402

9 667

9 701

10 126

Short portion of debt to credit institutions

2 947

3 105

2 430

2 458

2 417

Other current liabilities

1 191

1 400

1 177

1 282

1 053

Current liabilities

4 139

4 505

3 607

3 741

3 470

Total liabilities

14 063

13 907

13 275

13 441

13 596

Total equity and liabilities

20 140

20 019

19 213

19 403

19 258

1Q 2015

4Q 2014

3Q 2014

2Q 2014

1Q 2014

Key figures

Profit per share (NOK)

1.2

0.5

0.8

1.5

3.4

EBITDA margin

28 %

25 %

29 %

28 %

33 %

EBIT margin

19 %

16 %

20 %

20 %

24 %

2%

1%

2%

3%

7%

50.8

51.0

49.6

49.8

47.3

Return on net capital Book value equity per share (NOK) Value-adjusted equity per share (NOK)

77.1

75.1

75.2

74.1

72.6

Net interest-bearing debt (NOK million)

11 242

9 730

10 529

10 200

10 268

23

Financial Report Q1 2015

|

DOF SUBSEA

DOF SUBSEA VESSELS Owned vessels DOF Subsea currently owns one of the largest fleets of high-end construction vessels (including newbuilds) in the world. Offering a versatile, new generation of high power and purpose-built vessels with broad offshore capabilities.

Geograph

Geoholm

Geosea

Geosund

Skandi Protector

Skandi Acergy

Skandi Achiever

Skandi Arctic

Skandi Carla

Skandi Constructor

Skandi Hercules

Skandi Inspector

Skandi Neptune

Skandi Niteroi

Skandi Singapore

24

DOF SUBSEA

|

Financial Report Q1 2015

Skandi Salvador

Skandi Santos

Skandi Seven

Skandi Skansen

Skandi Patagonia

Skandi Vitoria

25

Financial Report Q1 2015

|

DOF SUBSEA

DOF Subsea vessels (continued from previous page)

Newbuilds DOF Subsea invests in the next generations of vessels. An ambitious New Build program utilises new technology and smart engineering to ensure efficient and environmental friendly operations in the future.

NB-800

EP-9

NB-823

NB-824

EP-10

Chartered vessels DOF Subsea expanded the fleet with a number of Chartered vessels, building greater flexibility and a complementary fleet mix to meet our clients’ subsea challenges.

Skandi Hawk

Harvey Deep Sea

Ross Candies

Normand Reach

26

Chloe Candies

GLOBAL HQ

AUSTRALIA

DOF Management Pte Ltd 460 Alexandra Road# 15-02

DOF Subsea AS

DOF Subsea Australia Pty Ltd

PSA Building, 119963

Thormøhlensgate 53 C

5th Floor, 181 St. Georges Tce

SINGAPORE

5006 Bergen

Perth, Wa 6000

Phone: +65 6868 1001

NORWAY

AUSTRALIA

Fax:

Phone: +47 55 25 22 00

Phone: +61 8 9278 8700

Fax:

Fax:

+47 55 25 22 01

+61 8 9278 8799

+65 6561 2431

UNITED KINGDOM

[email protected]

[email protected]

NORWAY

DOF Management Australia

Exchange No.1, 62 Market St. Aberdeen

Level 1, 441 South Road

AB11 5PJ, UNITED KINGDOM

DOF Subsea Norway AS

Bentleigh, Vic. 3204

Phone: +44 1224 614 000

Thormøhlensgate 53 C

AUSTRALIA

Fax:

5006 Bergen

Phone: +61 3 9556 5478

[email protected]

NORWAY

Mobile: +61 418 430 939

DOF Subsea UK Ltd

DOF Subsea S&P UK Ltd

Phone: +47 55 25 22 00 Fax:

+47 55 25 22 01

+44 1224 614 001

BRAZIL

Exchange No.1, 62 Market St. Aberdeen AB11 5PJ, UNITED KINGDOM

[email protected] DOF Subsea Brasil Serviços Ltda

Phone: +44 1224 614 000

SEMAR AS

Macae address:

Fax:

Oksenøystein 12

Rua A1, numero 35

[email protected]

1366 Lysaker

Vale Encantado - Macaè - RJ

NORWAY

BRAZIL

CSL Engineering

Phone: +47 67 12 40 06

Rio address:

Geo House, Commerce Street

Fax:

Rua Lauro Muller,

Aberdeen AB11 5FN

116 Salas 2802 a 2805,

UNITED KINGDOM

Torre do Rio Sul - Botafogo

Phone: +44 1224 285 566

DOF Management AS

22290-160, Rio de Janeiro, R.J.,

Fax:

Alfabygget

BRAZIL - CEP: 27910-000

[email protected]

5392 Storebø

Phone: +55 22 2123-0100

NORWAY

Fax:

+47 67 12 40 06

[email protected]

+55 22 2123-0199

[email protected]

+44 1224 285 599

DOF (UK) Ltd Geo House, Commerce Street Aberdeen AB11 5FN

Thormøhlensgate 53 C 5006 Bergen

+44 1224 614 001

CANADA

UNITED KINGDOM Phone: +44 12 24 58 66 44

NORWAY Phone: +47 56 18 10 00

DOF Subsea Canada

Fax:

Fax:

26 Allstone Street, Unit 2

[email protected]

+47 56 18 10 06

[email protected]

Mount Pearl, Newfoundland CANADA, A1N 0A4

ANGOLA

+1 709 576 2500

[email protected]

DOF Subsea USA Inc 5365 W. Sam Houston Parkway Suite 400, Houston, Texas

Belas Business Park-Talatona Edificio Bengo, 1º Andar

USA

Phone: +1 709 576 2033 Fax:

DOF Subsea Angola

+44 12 24 58 65 55

SINGAPORE

77041, USA Phone: +1 713 896 2500

Sala 106/107, Luanda Republic of Angola

DOF Subsea Asia Pacific Pte Ltd

Fax:

Phone: +244 222 43 28 58

460 Alexandra Road# 15-02

[email protected]

Fax:

PSA Building, 119963

+244 222 44 40 68

Mobile: +244 227 28 00 96

SINGAPORE



Phone: +65 6561 2780

+244 277 28 00 95

[email protected]

Fax:

+65 6561 2431

[email protected]

+1 713 984 1612

Report design: DOF Corporate Communication Department

DOF Subsea AS Thormøhlens gate 53 C 5006 Bergen NORWAY www.dofsubsea.com