Bruno Chabas - Chairman of Management Board, Chief Executive Officer, Chief Operating Officer and Managing Director Peter van Rossum - Chief Financial Officer and Member of Management Board Sietze Hepkema - Chief Governance & Compliance Officer and Member of Management Board

Wim Gille - ABN Quirijn Mulder - ING Peter Testa - One Investments Nick Green - Sanford C. Bernstein & Co., LLC Hayley Myers - Barclays Capital Alex Brooks - Canaccord Genuity Dirk Verbiesen - KBC Securities NV

Okay, thank you very much, operator. Hope the sound is good on the telephone line.

So we're going to take this opportunity tonight to run through the results of SBM Offshore for 2014 and to discuss about the outlook for the year 2015. Going to the third slide of the presentation, let's give a quicker run of the results for 2014 and really I would like to stick to the three main points.

First of all, the strong financial performance; second of all, the strong operating performance; and third point the progress that we're making in restructuring the company. So the strong financial performance to start with.

First of all, revenues have been ahead of the guidance. We give guidance on the directional revenue and we have been ahead of those guidance.

It has been a great year also for financing, whereby we secured more than $1.9 billion of new financing and more importantly, and that's the thing we're going to retrieve throughout all the presentation, is our order backlog is near record high. The second aspect is the operating performance of the company.

We have had the great year in delivering the project, in particular, Cidade de Ilhabela and N’Goma, both on charter with our clients. Cidade de Ilhabela is a project, which is the most complex we have ever done, is one of the most complex operating in Brazil, has been delivered on time for all the phases of the project, at times even ahead of schedule and is performing extremely well.

The other part is of our project portfolio actually performing according to our plan. More importantly in all of these is the fact that we have been consistently operating our fleet with 99% uptime.

The last point on the highlight for the year is the continued transformation of the company. The first point to say that is that we have reached a settlement with the Dutch authorities on the inquiry into potentially improper sales practice.

I believe you certainly have a number of questions given what had happened to the Dutch press, but we're going to go through these more in detail later on. We are also, in Brazil, cooperating with the authorities in order to find a solution in way forward there.

And last but not least, we have been restructuring the company in light of what the message is we have been given by the clients were over the past two years. Our clients over the past two years have been saying that the project that they are doing are too expensive and that we need to be better as an industry to deliver those projects.

We have reorganized the company accordingly, focusing more on the product line concept, trying to be more efficient and to optimize our cost base. Again, I would come to this later on in the presentation.

Now going to the overview for the company, from a financial standpoint, and I'm on slide 5 for the one on the telephone. First of all, continued sound performance; revenue year-on-year, and here I'm discussing on a directional basis, have increased by 5%.

Our EBIT margin has increased by 219% from $63 million to $201 million. Our revenue under IFRS have increased by 20%, again you can see why we have been reporting on a consistent basis under directional to provide you more detailed information on the cash flow generated by the company rather than under directional [indiscernible] performance of the company.

Having said that, all our members are based on the IFRS 10, 11 and 12, and Peter is going to again go through those numbers much more in detail later on. Now, on the compliance perspective, I would like Sietze to provide you more detail and more flavor on what's happening there.

So Sietze?

Yes, Brazil, as we say here, this is the conclusion of our dealings with the Dutch Public Prosecutor and the Department of Justice in the US. The settlement, as I've explained in November, that we did – these authorities includes Brazil, but Brazil being in the midst of what it is, there are a number of investigations ongoing in Brazil.

And as we have said, we are cooperating with the authorities to do those investigations and we will provide information and we are specifically speaking with the CGU, the Controller's office to see if we can come to an agreement with them to close the matter for us in Brazil. We are not totally in control, as you know, a lot is happening in Brazil.

There is Lava Jato Scheme that concerns all of the local contractors and it is very big and Petrobras is somewhat paralyzed by events you all have seen the resignation of the CEO and the top management team today, which certainly [indiscernible] contributing factors to today's right of the share price. The other thing that happened today was the [indiscernible] article, which suggested – which interviewed Jonathan Taylor, who is now identified as being the guy who we feel has exhorted us and who portrays himself as a whistleblower and in that interview it fairly indicates or makes allegations that we would have covered up in our investigation.

And he uses the word containment for that. Let me explain once more what containment means in the context of an investigation.

We basically, I remind you, a couple of weeks after we were alerted to the fact that something might be wrong went public to say that we were starting an investigation at the same time we went to the authorities to report ourselves. We since have opened our books to the investigators, both the ones that we had appointed as well as the OM and Brazilian authorities that came to look for information.

And what we have done is we followed an evidence-based approach, that means you'll uncover facts in an investigation and on the base of those facts you decide what else needs to be investigated. The idea that we would have tried to keep Brazil out of the investigation bodes on the ridiculous as evidenced by the outcome of the investigation in which Brazil features very largely, but we started the investigation with the fact that was brought to our attention, which had to do with an agent in EG and Angola, not in Brazil.

As far as the other countries that would also have known corruption, both our investigators as well as the Dutch Prosecutor have looked at everything, including those other countries and I quote the Dutch Public Prosecutor who today has responded to those of you that asked him questions about it and will publish this in Dutch on their website tonight, we are told that they felt that the investigation to the three countries was sufficiently representative and I think in the statement it also say we also based it on the fact that 180 million out of 200 million in commissions concern to these three countries. So we will do as per the Dutch Public Prosecutor does, we will respond briefly to the allegations in the article on our website and we hope to have that story available tomorrow morning.

Any other questions that you may have, we can deal with at the end, but we felt it was sort of delaying the facts of the day to not mention it upfront in our presentations, but I'd be happy to take any questions subsequently.

Okay, I propose we keep going on the presentation. The other key indicators of our performance has always been safety performance.

Now, before I go into explaining the numbers, we are first of all extremely sad to have to announce that we have had two fatalities at the beginning of the year. We made an announcement of this at the half year results in the third quarter.

But notwithstanding this, what can be seen is that over the past three years, the company has improved year-on-year on the safety performance as measured by the frequency of incident or the severity of those incidents. And this for me is already a change in focus on the leadership of the organization, looking at better performance in our project and it translate into the operating performance of the company.

We can see the same evolution in terms of environmental impact, whereby we have made improvement year-on-year on the side also. Having said all of these, this is the type of subject whereby we cannot be complacent.

We need to focus on them all the time, we need to make progress all the time, and it's already a key indicator of our performance as an organization. So further to this brief introduction about our performance for 2014, I propose we go through a more macro view of the market and where we stand as an organization in this market.

And after that, Peter would go into the financial presentation and I would conclude with the outlook. So what are we seeing in the market at this stage?

And I mean, all of us have seen that, a significant decrease in price of oil. Yes, it is significant for sure, but the issue that the industry was facing were predicting this decline in price of oil.

Our clients were not making enough money on the project that they were doing, the type of project that we were doing in the structure of those projects have to be changed and I would say that the decrease in price of oil is in fact going to be a catalyst to change the structure of the industry and the way of working. In fact, the last time we have seen such change in the industry was probably in the mid-80s, whereby the price of oil decreased quite significantly and this industry change, we went from an industry where most of the offshore developments were done through platforms to an industry whereby the developments started to be done subsea with FPSOs.

We really believe that even though the market is actually difficult, 2015 is not going to be a good year in terms of order intakes, it's going to give opportunity to restructure the industry and really to help the industry to grow over the medium and long term. No, we also believe that the deepwater developments is the place to be.

50% of the resources worldwide are in deepwater and they are going to have to be developed. They're going to have to b developed over the medium and long-term and we're well positioned as a company in order to do that.

In the medium term, we need to find different ways of working with our clients. We need to find ways to reduce the costs of giving a project to our clients, we need to find a better way to integrate in working with our clients, not to be duplicate the cost, to create more trust in the relationship between clients and operators, so there is a lot of things to be done, things that we have been working on actively over the past two, three years and hopefully we are going to be able to reach some of the objective that we have set ourselves were over this period.

Now, what is the market telling us. If we look on a short-term basis, basically it's not ready.

In 2014, 10 FPSO have been awarded and here again I'm speaking about the overall market. I'm speaking about the market for FPSO that we are targeting, but also for FPSO we're not targeting.

Only three months ago, we thought that the overall market for the year was going to be 12 FPSO. So it gives you a magnitude of the change and the speed at which the changes is happening in the market.

Today, we believe that only six FPSOs are going to be awarded in 2015. And even that is without a great level of certainty.

We consider our clients are basically cancelling a lot of tenders, they are reviewing their development plan and they are thinking about what to do next. So 2015, the overall market is going to be bad, even extremely bad.

Having said that a number of field study are going to happen, it's the opportunity to engage closely with our clients, it's the opportunity to have discussion about what can be done in order to reduce the cost of development and we should see what's happening in 2016 or 2017. Now, what our clients telling us, they basically want to save cash at this stage.

There is a high level of uncertainty linked to the price of oil, where is the price of oil going to be tomorrow morning, nobody has a clue, you get forecasts ranging from $40 to $100 in the same day. Nobody has a clue.

The volatility here is not good for people to make plans. So the only thing that people can do at this stage is ready to preserve cash.

What can we do as an organization? First of all, we need to listen to our clients and we are spending a huge, huge amount of time in doing that.

We need to understand what they want and we need to be able to provide solution which we have in our portfolio to adapt to the existing market. The second aspect to this is, in particular in an industry whereby drilling an FPSO takes three years and that's operating an FPSO for a period of 10 to 20 years, you need to lean on the reliable contractors.

And today in the FPSO market, there's not a reliable contractor. We are one of them, I would like to think that we are the best in terms of reliability and people can lean on us, can lean on our experience and know that what we are going to promise we are going to be able to deliver and they are going to be able to have their cash flow once the time is going to get better.

The third point is also we have a strong backlog. And financially, we are in a stable position.

It's quite a unique position to be as a contractor today in the offshore industry. So we have those three elements: we are willing to listen to our clients, we are willing to find new solutions with them, we are reliable, we have a track record and we are demonstrating this in the delivery of our projects and running our projects, and we are stable financially.

So that's what we're proposing to the market at this stage. Now, what are the sources of resilience?

The first one is so backlog, $21.8 billion. This backlog is secure basically, it's not linked to the volume or price of oil, something which is secured.

The average cost of our FPSO is less than $7 per barrel, so it's here to stay. The second aspect is we are adapting the company to the reality of the market.

We made an announcement in December about the reduction of our workforce to optimize our cost base, but also we are monitoring on what's happening in the market. And the market could give a lot of different directions and we're going to be able to adapt to this, either going the company and workforce again or to adapt according to the market if the market were to deteriorate further.

The third aspect is we are investing quite heavily in the company to transform the company to be more efficient to optimize our ways of working and to perform better. We discussed with you about the Odyssey24 project, about the fleet maintenance project, the R&D activities, just to give you a magnitude on the number every year for the past three years we have been investing around $40 million in R&D to bring new technology to the market.

That technology today more than 80% of the budget that we're investing is focused on delivering cost efficient solutions. We really believe that this is going to help us to make a difference going forward.

So by and large, we are well positioned, we have a strong backlog, again we are adapting the company to the reality of the market and we are providing new product which are going to help the industry to grow once the markets is going to be there. Now on the backlog, two aspects to the backlog.

First of all, the turnkey backlog, which stand at $1.1 billion, rather low, but clearly reflects the volume of activity in the world that we got in 2014? The bulk of the backlog is actually $20.6 billion for the lease and operate activity.

And you can see that's starting in 2016, we are going to be generating between $1.3 billion to $1.5 billion of revenue in the lease and operate activities. Now, one other question you can have is how much cash flow do you generate in doing that?

It's good to generate revenue, but what does it mean in terms of operating cash flow. And we try to provide you with some information today is that out of the $20.6 billion, we believe that 63% of it is going to be going through the operating line of cash flow, a significant number.

I'll let you do the math, you have a lot of spreadsheet and calculate us, but I'll let you do the math on this and you can see what it means in terms of value of SBM Offshore. Now, I'm going to leave the floor to Peter to go through more of the detail of the financials.

Thanks, Bruno. Good evening.

And for those in the US, good afternoon. Let's start with the overall overview, the underlying directional performance comparison 2013, 2014.

As Bruno said, we've seen a 5% increase in the revenue which was beat of the guidance of 3.3 billion and it's really been driven mostly by the turnkey sector, good performance on the projects as a result we're seeing in higher revenue and I will go on to some of that detail on the next slide. EBITDA, the underlying EBITDA 643 million, as presented at 486 million, there are a few exceptional items in between.

And here, I bring to your attention exceptional items includes the 240 million settlement with the Dutch Public Prosecutor to some extent offset by the proceeds from the real estate, or actually the profit we generated by the real estate divestment. The directional EBIT level to the exceptional items, we had a number of the non-cash items as specified in the year end update, mostly related to impairments and also some reversals of previous impairments.

At the EBIT level last year underlying we produced about $0.5 billion, this year it's slightly lower and of course for that decline is purely in the turnkey sector, which I will explain to you now. Looking at the turnkey P&L, what we see there is that the revenue has been driven by the large projects, Ilhabela, Maricá, Saquarema, N’Goma; although Ilhabela and N’Goma have been put in production in November 2014, of course they've had an important contribution to the revenue on this particular line.

When mentioning Turritella as a project that is contributing actually – if we look at the definition of what is directional revenue in the turnkey sector, is really the margin of the revenue that we make on selling the projects to our joint venture partners. In the case of Turritella, we don't have a joint venture partner, so we would not expect to see any revenue.

But the reality is that on this project the client Shell also pays one-off payment, every quarter, payments that were reduced to bareboat charter later on. This has been a great contract actually upfront and they come through in revenue.

The thing that is important to take into account is it does not generate margin. We take that the revenue as costs and therefore the revenue and the cost of sales line is equal, the margin is actually recognized when the vessel goes into operation and start to produce the bareboat.

In 2013, and those of you who have been following this, we had a pretty good EBIT margin on this particular sector. That was driven by projects like OSX-2, Paraty that we delivered, we closed out a project for Shell FRAM, and all of these generated healthy margins, we were able at the end of the project to release contingencies.

We booked the profit which is also a little bit more back ended. And therefore 2013 was a very good year and at that time I remember very well telling you is that was to some extent exceptional and not to be expected every quarter, every semester, every year.

In 2014 though, we had a couple of things that actually worked the other way. First of all, based on let's say our risk management and our risk assessment that we decided to take an additional charge to the warranty fund that we keep at the company, which was $40 million one-off charge, which hits the gross margin and EBIT in this particular segment.

And secondly, as I told you, we had a significant amount of these upfront payments based on Cidade de Ihabela as well as on Turritella, which don't generate margin. Have we taken a normal margin, then indeed, the EBIT margin for this sector would have come out the healthy, the high end of the usual 8% to 10% margin that we predict at EBIT level.

Going to the lease and operate segment revenue increased really based on the fact that we have Paraty and Deep Panuke onstream on hire for a full year. We did start up Ihabela and N’Goma, but of course there was only one month and didn't have a major impact.

The vessels that left the fleet at the end of 2013, 2014, not an overall big impact on revenue, particularly six of those vessels, we're only operating maintenance contract and didn't have a bareboat component to it. If you look at the numbers for 2013 here, you can clearly see that the Yme settlement has had an impact at the EBIT level.

In 2014, we had a number of impacts as we disclosed at the year-end update and again the press release that is in front of you, so – reiterate those kind of things, by and large compensating element, therefore it didn't have a big impact at the bottom line. To remind you and as Bruno said also already, the focused preventative maintenance program in the fleet that we announced early last year as part of the 2013 results announcement continues, that will continue into 2015.

At the group level, I'm going to highlight a few things that we haven't talked before, I will come back to the overheard where we see a significant increase. Other operating income that really covers the settlement with the OM offset by the divestment proceeds on real estate.

DD&A particularly last year $457 million, so significantly higher than this year is [indiscernible] element, the impairment charges on some of the vessels related to the decommissioning costs residual value as well as the overall impairment on the Thunder Hawk facility that we made in 2013. Financing costs, it looks like a steep increase, there are a few elements in there.

First of all, there is the impairment of a financial asset to the tune of around $30 million. Next to that, of course, we have seen the loan portfolio go up, particularly the fact that Paraty and Deep Panuke are onstream, the loans that are related to those assets are now also attracting interest in the P&L, so we see an increased charge.

I have to say that on average, though, the cost of debt has come down from over 5% to 4.2% over this period and that is also due to the fact that we had a number of bridge loans in place, which are short-term and therefore have made optimal use of the current low interest rate environment. Tax, a low tax charge for the year, and that's really due to the fact that the company is making optimal use of its tax forward losses that is accumulated over the losses that have been realized on projects in the past number of years.

As I said, overhead, we're seeing a pretty sharp increase from year-on-year going up to over $300 million in 2014. If we analyze where that is coming from, we classify $50 million out of that as kind of one-off.

What we find in there is the Odyssey24 improvement program, part of it is increased research and development, so it's not the full R&D charge for the elements that we have put in addition, in particular targeted R&D programs. The costs, particularly legal costs of dealing with the compliance issues are in there and that sort of leaves us with about $ 39 million of the regular increases, which would be very much the focus of targeted cost savings program from 2015.

With the adaptation of the size of the company and the activity levels, it's clear that the overhead need to follow suit. Although I do not have a specific number for you, this is going to be very clearly an area of focus.

Some of the cost increases though are just effect of the consequence of decisions we have taken. If I look at the decision to do the sale and leaseback of real estate of offices in particular, when an asset is held for sale, you don't depreciate on it.

When you have sold it and you lease it back, you pay commercial rent, as some of the increase is really related to that event. Coming to the balance sheet, we are now looking at IFRS numbers and I should now following the introduction of IFRS 10 and 11, we need to consolidate joint ventures, fully consolidate joint ventures that are controlled and particularly the Brazilian fleet and where we have joint control with a joint venture partner, those ventures can no longer be consolidated and their equity accounted.

And therefore you see them back in a single line, which indeed is the non-controlling interests. We've seen a pretty steep increase in the overall size of the balance sheet and 2013 has been restated for IFRS 10 and 11, so it is a like-for-like comparison.

We saw about $2.3 billion of capex in the year, that's capex on the finance lease projects as well as the existing assets. It's considerably higher than what we've seen in previous years, it's very easily explained by the fact that we have generation three FPSOs under construction in the year as well as 100% of the Turritella, which comes back of course in this project as well.

We've seen a shift, Ihabela was let's say in a construction contracts, which of course reclassified into an investment in associate and financial assets towards the end of the year. And because this is IFRS accounting, FPSO N’Goma which we probably own for 50% is not appearing on those balance sheet.

This is just to explain the logic of what IFRS does. Believe me, the asset is there and we are running it and we're very much making sure that it's producing as we want.

The company equity, actually the equity line reflects the equity of both the joint venture partners and the fully consolidated assets as well as SBM share and let's say in the information we've given to you, you can actually see the split between the two. There is one line I'd like to highlight in addition, that's the cash and cash equivalents, we had $475 million in cash on the balance sheet, which is a significant number, it significantly higher than we would normally see.

That's a consequence of the fact that on December 31 we received literally hundreds of millions of dollars from clients, in particular Petrobras making the upfront payment on Ilhabela which was due after the vessel was on hire, which happened at the end of November. So it's good to see that that money has come in and there were some payments from Shell on variation orders as well.

So say a bit higher than usual but I explains really year end payments coming to us. How did we let's say build up the cash and we spend the cash, there's a little bridge that talk us through the numbers.

Again, it is IFRS. The cash from operations came to $922 million, close to $1 billion, we signed up a new loans to the tune of $2.2 billion, then we had repayment on funding loans, investment funding loans to the tune of $200 million in total and the disposal proceeds on real estate as well as the SBM Installer contributed almost $300 million to our bank account.

Now, obviously we also spent money, $2.3 billion in capex, very significant number. We repaid loans that existed to the tune of almost $900 million, we paid interest, and that left us with a balance at the end of the year of $452 million.

And before you ask, I will say on the previous slide it was $475 million, there's a $23 million overdraft which is netted from this amount which we don't net on the balance sheet. Net debt, steep increase, and we compare here IFRS as well as the proportional.

Just to remind you, IFRS is what you see on the balance sheet, so it's not the total picture. We take 100% on the consolidated vessels, those vessels like N’Goma for instance doesn't appear as part of IFRS debt.

Therefore we also provide you with a proportional view, really what is the part that is related to the things that – the shareholders and SBM ultimately hold. We've seen an increase there as well from $2.4 billion to $3.3 billion at the end of 2014.

And hold that thought, because that $3.3 billion will come back later in the presentation. Funding, Bruno referred to it and said we had an excellent year, $1.9 billion, actually I would call it $2.9 billion because besides project funding, the Deep Panuke USPP as well as the $1.45 billion facility that we arranged on Cidade de Maricá, one of the generation three vessels for Petrobras, we also renewed – actually it was for the new revolving credit facility in place to the tune of $1 billion.

Of an average cost of debt also referred to that, quite a bit lower than last year on the back of the use of cheap short-term bridge financing. I want to spend a few minutes with you on the new revolving credit facility, we signed it up in December.

I think we've told you several times in 2014 that we had the intention to renew it or to put a new facility in place before the world one expired in the middle of 2015, we've been able to do that with a good consortium of banks, actually 13 banks in total that have subscribed to this facility. We increased the size from $750 million to $1 billion, five years, two extensions, there's also what we call our Marica facility in it, so we need more than $1 billion, we can actually talk to the banks and without putting a new facility in place, extends the total facility to $1.25 billion, which is useful and handy to have.

The margin has decreased, also using the low interest rate environment that we have today. The covenants have been kept reasonably intact, I'm saying reasonably, we had made few adjustments.

If I look at the solvency ratio, it's linked to the balance sheet, now the balance sheet is IFRS, but what we do there is rather than looking at the SBM equity over the tangible assets, we look at the total equity over total assets and that's – it comes pretty close to what we have seen before. There is a level as ratio which is the net borrowings over adjusted EBITDA and I will say something about that in a second and then we have the interest coverage ratio which is the adjusted EBITDA over net interest payable, where the banks really asked us to ignore the effects of IFRS 10 and 11 and therefore don't do IFRS consolidation, let's stick to the principle of proportional consolidation and that's why I say the numbers are proportional that just as well as let's say the directional EBIT, EBITDA will remain important in the overall view.

Looking at the level as ratio, as Bruno said, the expectation is given the current macro environment is that the order intake is going to be slow. That will have an impact on EBITDA in 2015, it will have an impact on EBITDA in 2016.

2015, we see an increase – 2014, we have seen an increase in net debt on the basis of high capex, part of that capex is paying off in 2015, but the full force of this cash flow contributions of the generation three vessels will only come in 2016, which means that we have seen an increase to a high level of debt, we've seen EBITDA – we will see EBITDA come down in 2015 and the discussions we had on the renewal of RCF, we had a discussion with the bank in saying now what if we can't meet that particular covenant just because we don't have any order intake. We are actually building cash.

In the year 2016, we expect to be free cash flow positive. And what we did is we decided to also build on what we call a holiday covenant.

So we have the option in 2015, 2016 to replace the leverage ratio by an operating leverage ratio, which effectively there is nothing else but to ignore project debt, but then to come out at a lower level than the $375 million, but it comes down to $275 million. So it's effectively the fleet and the loans that we have on the fleet, where the fleet's EBITDA should be able to cover that level of loans.

That gives us a lot of flexibility and a lot of confidence that in the coming years covenants are not going to be the driving force and we can see through a period of lower order intake and therefore lower revenue and EBITDA with confidence. That's why – I would like to keep it.

Bruno?

Thank you, Peter. And so let’s discuss about the outlook for the remaining part of the presentation.

And let’s start first of all with the project overview, the project portfolio that we have in hand. What you can see here is really the project that we still need to deliver for the coming year or year and a half, Cidade de Maricá, Cidade de Saquarema, Turritella, Ichthys, Prelude, so those project portfolio, they are on line with the plan that we have set.

There is really no major concern there. What you do not see here is really all the brownfield activity, the smaller type of project, which really is not something that is visible in terms of large projects, but really provides a lot of opportunity for us to generate additional revenues, provide additional resources coming to our facilities, also some FEED study which really are the bedrock of the future project to come.

What you're not seeing also, more importantly, is really the lease and operate portfolio of activity, which has an average life of 14 years and seven months. Now, over the past two, three years, we already have gone through a large transformation of the company and last year we told you about the transformation program linked to what we call Odyssey24, which really aim at changing your ways of working, becoming a much more professional organization, standardizing your ways of doing things, already seeing cost base basically at the end of the day and being more efficient.

We also have been investing quite significantly into the R&D programs, and all of this is costing us per year between 2.5% to 3% of directional revenue. Or in other words between $75 million to $100 million, that's the amount of money that we are spending on this.

And we are spending it because we have the belief that the market is there, maybe not in the short term, but when the upturn in the market is going to happen, we need to be ready, we need to be able to deliver projects on track, we need to satisfy the requirements of our clients and for this we need to have a strong foundation for the company. And that's what we are doing by investing into our system and our process, our ways of working, but also into the technology in the products that we have.

Now, we also have done a number of other strategic initiatives in order to position ourselves for the future. The first part is really linked to a reaction to the market, with the drop of the price of oil and market volume, we have had to reduce the workforce and we made an announcement on this in December, basically reducing our workforce by roughly 12%.

What does it mean? It means that we need to take a one-off cost of $25 million, with another saving per year on a full-year basis of around $40 million.

We are also looking at other ways to reduce our cost and there are ways that we need to look at in terms of being more efficient, our relationship with our suppliers and so on and so forth. Also more importantly, we have reorganized the company along the line of product lines.

When we put the organization in place in 2012, the aim was for every execution center, they were called at the time, to be able to do FPSO to be able to do all the type of products we have. Now, this is all good when the market is there and buoyant, but maybe there is a lack of efficiency.

So the way we have done, we have taken this, listening to our clients is we have refocused the company along regional centers, which are focusing along some key product lines. And those product lines are in charge of the strategy for that product, in charge of sending that product to the clients and in charge of delivering the product to the clients.

And therefore, we can be much more reactive or we can be much more adaptive to the reclaim into what clients and be better at what we are doing. We are also making changes to our management board.

Over the past three years, clearly we have been in the face of turnaround of this company. We have had a lot of legacy issues to solve, we have had lots of issues to solve and today we are coming into a different face of the organization.

Sietze is going to step to the supervisory board; Erik Lagendijk, and I am sorry because I am making a mess of your name all the time, is going to join us and he is with us today, Philippe Barril also is going to join us as of March 1 as the Chief Operating Officer. The idea there is really with a four-man board, Peter and myself included there, is really to focus the company on the future growth that there is and that's the opportunity that we are seeing ourselves to keep – to go from a turnaround of the company to a transformation to become much better and rate further leading to the market.

Now, the dividend policy, again we spoke about it last year, so there is no surprise on this subject, but let me reiterate what we said. In 2014 – we are not going to pay any dividend for the 2014 year.

We also intend to change the policy on dividend. And this policy is going to be leading to the directional P&L that we have and basically the intent is to pay between 25% to 35% of the directional net income that we generate, assuming that we have generated enough free cash flow from the operations.

So that's basically what we told you a year ago, we are going to formalize these at the next general assembly in April and is a confirmation of such. Now the guidance for 2015, the guidance in terms of revenue, there would be at least $2.2 billion, $1 billion for the turnkey activity and $1.2 billion for the lease and operate activity segment.

Also, we are providing you some guidance associated with net debt and the net debt guidance is basically $3.5 billion for 2015 or at the end of 2015. Now as a conclusion, 2015 is going to be a difficult year, there is absolutely no doubt about this.

The market is not good, no many awards, but that's what it is. Now, it's actually pretty surprising what I'm going to tell you, but actually feel much more confident about SBM Offshore today than I've ever been since I've been unheard of the company.

And why is it the case? We have a strong backlog, almost $22 billion, out of which 63% is going to be translated into operating cash.

It's quite a unique position to be in by any standards in this industry at this stage. The second part is today we are focused as an organization, we have demonstrated our ability to deliver our project, we are focusing trying to being closer to our clients in delivering our product better and developing new capacity also.

The third aspect is we are aiming at improving our productivity in everything that we do. We think we have a lot of ways to improve our productivity, but more importantly we have a lot of ways to improve our productivity working with our clients.

And basically finding new solution in order to find ways to develop the field in deep water and for this field to be economical at much lower price of oil than what it has been in the past. So all of this makes me that either confident in SBM Offshore in the positioning of where we are, in the fact that we have a strong backlog, the fact that there is big potential market in front of us and the fact that we can provide solution in order to make this market effective.

So that's the end of the formal presentation and I propose to open the floor to questions. Thank you for your attention.

Good afternoon. Wim Gille from ABN.

Good evening. First of all, Peter, can you help us out a little bit in terms of reconciling the three brackets of the EBIT line on the directional side?

In which line are which exceptionals for this year because to be honest, I'm a bit confused there so I can definitely have some help there? Also all along the same lines on the Odyssey24 project, you recorded $63 million in cost this year, can you split it out per division so that we have a better feeling where we should put which costs?

And with respect to the guidance for next year, obviously you indicated that you're planning to spend between 2.5% to 3% of the directional revenues. Looking at your outlook, directional revenues are going to take a bit of a plunge.

So what should we be expecting on the Odyssey24 program for next year? And maybe the last question on the Turritella, you indicated that you had some milestone payments from Shell which are included in the turnkey numbers on a pass-through basis with no margin.

Can you give us a bit of feeling what kind of numbers are we looking at for 2014 and 2015 as well?

That's a long question, that's a lots of questions. To start with the last one, so at least I will remember this one.

The milestone payment, it's really – not really a milestone, because milestone you do on the turnkey sale projects, it is not the turnkey sale. It's lease and operate, where we have an agreement with the client, that are, I will recall, upfront payments being made.

We talk for Turritella of an amount of over $200 million. We are not giving any predictions for next year, so not the kind of detail that we generally speaking provide.

Yes, I can imagine that you're a bit confused on which exceptional goes where. If I look at the EBITDA for this year, the exceptional was $157 million, they are mostly built off of two elements.

There is the provision or I should say settlement that we have made on the compliance case for $240 million, even though only $100 million of that was cash and $140 million is deferred that will be paid at the end of this year and the end of next year, but there is $240 million correction in there. And there is the proceeds, although the profit that we have made with the divestments of real estate and the SBM Installer.

There are a few other bits and pieces in there, but these two make up the majority of the adjustments. You had a question – I'm starting to lose track.

Yes, and then there are some numbers, those are overhead numbers related to the segment. They are not specified here, looking at your own – do we have that later on in the note, it's part of the – so middle of next week, we will have the note available, the notes to the account with the financial statement.

One of the things that this new this year as well is that the directional reporting is not included in segment reporting as part of the annual account, so they have been reviewed by external audit and therefore at least have a seal, a seal of approval, and we are quite happy with that because it takes any potential doubt away that we are starting to gaming with it, these are serious numbers. We apply normal accounting rules, it's just switch off finance lease accounting and we switch off IFRS 10 and 11, but the rest everything is according to normal accounting rules.

Odyssey24, it's going to continue. We have a lot of momentum on Odyssey24, we are seeing a lot of part of the program which is too large to discuss here in detail, but lots of deliverables are coming through.

The projects will have sufficient momentum to delegate whatever continues into following years to existing departments. So the costs should stop at the end of 2015, and then the initiative is over, a bit of cost will be at least at the same level as we've seen in 2014.

Good evening. Quirijn Mulder from ING.

I have some principal three questions. The first question is about six FPSOs you're mentioning might be awarded in 2015, so can you may be inform us about the number you're chasing of that six FPSOs?

And what is the number you were already looking for last year [indiscernible]. And then the other question, the second question is about that this interview of Mr.

Taylor, I hear already for more than one half year that you're going to chase him and it seems that he is always finding new roads to make public his offence against SBM and he says in an interview that he is not – has not received anything from SBM. So can you may be elaborate that for us?

And then my last question about your transition phase, Mr. Chabas, can you may be give some idea about the last three FPSOs were $1.7 billion in general, can you give me some indication of what the price of these FPSOs would be in this – after this transition period, what is the value or let me say what is the cost price of these FPSOs?

So let me take the question one and three in turns and I propose that Sietze take the question two on Mr. Taylor.

The first question is the number of project we are targeting out of the six that we have identified. Today, we are targeting one potential project out of the six, that's the one where we believe we have some chance.

This project is not a certainty by any stretch of the imagination, it's a project that we're looking at. If I were to – if you had to ask me this question three months ago, the answer would be that we would be targeting between 4 to 5 FPSO.

You need to put in perspective the market was much higher and the expected award was around seven projects. Some of the project that we were targeting have been either postponed or cancelled.

And so at this stage, there is a lot of level of uncertainty in the market. It doesn't mean that new project will not be coming in the market, but at this stage it is too uncertain to see where we are.

That's why when you look at the slide where we discuss about the market potential for 2015 and 2016, we have not changed the outlook of 2016 is not because we don't believe that the outlook for 2016 is not going to change, simply because there is not enough information at this stage to see where we stand. Now, regarding the potential of cost saving in the projects, we have been launching the project actually almost a year ago looking at ways to reduce the cost of our project and also more importantly is the overall value that we provide to our clients.

Today, more often than not, an FPSO is on the critical class of the field development. So usually it takes between 36 to 40 months to deliver an FPSO.

If we were able to shrink the time to delivery from 36 months to 24 months, basically the clients will be able to have a huge amount of present value there and being able to get additional value. We are looking at some alternative there, it's stretch at this time, but one of the focus that we have is really to see if we could accelerate the delivery of our project and also if we could standardize more some of the things that we are doing.

We're going to be able to comment more on this by the middle of the year, but I am quite optimistic that we are going to come with some good alternative there. I propose that Sietze take the floor on Mr.

Jonathan Taylor.

Yeah, it's true that we have been hearing from him for quite some time already, Wikipedia article quote, to us it's also fairly surprising as the same news keeps popping up apparently as long as newspapers still express interest he can vent his story. You know that we have [indiscernible] charges against him when we were done with our own investigation, he likes to present his alternatively as an employment dispute or that he is a whistleblower.

We have engaged with him on the employment dispute and had to conclude that there was no reason to pay him. We also believe that in the context of an investigation where we took the initiative to make it public and report ourselves to the authorities, you can't speak of whistleblowers, I mean when he said that he had stuff to tell we referred him to the Dutch Public Prosecutor, the OM and he's spoken with him.

So we cannot pay him anything and he is angry about that and he continues to be angry. And that doesn't make it possible for us to pay him.

So all that we can do is wait for the court in Monaco who have indicated that it would take the matter up, he is going to do deal with it and for the rest we can present the factors we have presented to him all the time. It's unfortunate because we have given everything that we have to give to the people of investigators and to the authorities.

So as far as we're concerned, the matters that he is talking about are done. But if that is interest in it, there is interest in it.

The next question will come from conference call line.

Hi, actually it's Peter Testa. I might take the questions one at a time just to save everyone's memory.

On the first one, just continuing on the compliance question, when you're looking at the CGU's investigation of SBM, can you give a sense as to whether in your view how this is being impeded by Petrobras management issues?

Yes, I think it's more the general circumstances in Brazil that affect how the CGU behaves rather than you know what's now happening at Petrobras, I mean they are a government body that has taken it upon themselves to be the shepherd of the new corruption or anticorruption laws. And so they like to take the forefront, but there are also other instances in Brazil that have similar ideas about prosecuting the many cases that are there, the Federal prosecutor, Parliamentary committees and it being Brazil, they each lead their own life, we have chosen to engage with CGU because we feel that's most conducive for us to clear the matter out for us in Brazil.

And we are pursuing that track and that in of itself is pretty independent from what's happening at Petrobras today.

Okay. And then just on the lease and operate business looking forward.

Given that there's been issues that make it hard to fully understand the ongoing EBITDA margin on a directional basis, I was wondering if you could give us some sort of view especially when considering that there are new vessels coming into the process. If we could have some understanding of how the new vessels and any past year items might be affecting the directional EBITDA margin when looking forward into 2015 and maybe if you could give us some view also on depreciation on the lease and operate vessels, please?

Peter, what Bruno said on the basis of the breakdown of the backlog, we see that all the generation three vessels are let's say in production that on average, of course, there is not an exact number, but on average something like 63% of the future backlog would translate into cash flow. So if I just remind you, the lease and operate backlog consists of bareboat charter plus the lease and operate – the lease and maintenance contracts, plus the let's say a fair assessment of what bonuses we can achieve, plus for the first couple of years of feeling for indexation on the operate and maintenance part, which tends to be in local currency and which tends to increase.

The translation into cash is really then also making an estimate on what do we need to spend to keep those vessels in operation and in some cases, that's on the basis of an operate and maintenance contract which is reimbursable with a margin in other countries, we get a fixed rate which increases over time and we just have to manage the actual expenditure in or around that kind of an allowance. So having given you that kind of an indication, 2015 will not get to that 63% level, because simply one of the generation three vessels is actually on stream, which is Ilhabela and the rest is yet to follow.

The message that we want to give its considerable and you can run the math on it and that I would say a significant additional piece of information compared to what we have shared with you in the past I think at this point in time, particularly when it deals with the outlook for the future, it's as far as we want to go.

And the depreciation step up?

That’s here at my fingertips, but there is depreciation information related to the segment in the notes to the account, they will be out mid next week.

Okay. And then the other question is on the turnkey business.

I mean looking at the order intake roughly $720 million last year and then a significant chunk, I don't know if that's turnkey or not, but it related to variation orders. I was wondering if you could give some sort of sense on two things.

One, when looking at the order flow, the extent to which based upon that degree of flow and the decision to reduce the headcount, the extent which you think that degree of flow would need to repeat to sustain this headcount or not? And then on the variation order part, the degree to which that has all been agreed and funded by clients?

On the addition to the backlog, so we have $3.1 billion of new order intake, I think it's roughly $1.3 billion on lease and operate and $1.8 billion on the turnkey sector. On the lease and operate there are few elements that make up this amount.

There is the production handling agreements that we signed with Noble and Thunder Hawk which is very significant which we disclosed in the press release at the time. There is the operate and maintenance contract with Shell on Turritella.

Normally speaking, we do the bareboat and the operate and maintenance at the same time and in this particular case there were some time in between. So we signed the bareboat in 2013 and the operate and maintenance in 2014 and there are a few other bits and pieces including some indexation assumptions that we've made for the year for the future.

On the turnkey side, there are quite a few variation orders and that's work, I mean that's real work, that keeps our engineers busy and it's substantial and its value generating. So we are quite happy with that, it continues on most of these projects and also it happened in the past, it happens today, and that will happen with think in the future.

There is one element in that turnkey that we've recognized this year, it's also part of a disclosure we made in December upon first oil on Ilhabela, one of the partners, the clients to make use of our core option, it's 12.5% or 12.25% share in the joint venture that owns Ilhabela that could have come out of our share. The fact that this call is not being exercised and has been cancelled, generates significant uptick in the future income that we are going to get out of this vessel.

And that's part of the $3.1 billion overall.

Okay. And the variation orders, they've been all agreed and signed, funded?

We only recognize something in the backlog once we have it contractually agreed.

Okay. And on the capacity just thinking about 2015 if you had a similar level, do you require a similar level of intake to the 23% or $3.1 billion on the turnkey side to sustain your employment count on the new adjusted basis?

I think you need to look at the order intake for 2015 in a different light. We don't believe that we are going to see any significant order intake during the year.

Where we can see some order intake is on the brownfield activities and modification of some FPSOs, smaller type of project. But what we could get, which is not going to generate a lot of revenue, but is going to generate a lot of employment and utilization of our resources is the number of FEED study with our clients in order to find different solution to develop their field.

And it's not going to be of high visibility to the financial market at least, but those are going to be opportunity to generate activity in 2016 and 2017.

Okay. And you're confident on the backlog of FEED study conversations you're having that those will come through?

At this stage there is a level of confidence, but there is also high level of uncertainty. Let's not, listen, hide ourselves, but also we also recognize again that there is plenty of things to be developed in the quarter and the only way to be able to develop them efficiently is really to engage with contractor like us and to find different solution and different ways of developing those fields.

So yes, we are confident.

Indeed. Okay.

Thanks very much for the help.

Could we just return to that question about the variation orders, please? From my understanding, $1.8 billion of variation orders is a really sizable number of variation orders.

It's clearly fantastic news for the business coming from such a small number of major projects that you're working on in the turnkey business. I'm just keen to understand a bit more how you've managed to sustain such large variation orders in the year gone by?

Before I give it back to Bruno, Nick, that includes as I said the 12.25% on the Ilhabela contract. And that of course is a significant part of the total amount.

That was my next question actually, just trying to understand the mechanism for that 12.25% a bit more because the way I'd understood it we have generally been understanding this business that you already owned 62.25% of that particular contract and there was an option which could have been exercised, but up until now haven't been. So because of that, just not quite clear how that generates additional order intake?

We took the assumption, it's probably a conservative assumption, but because one of our partner had the option to take an additional share in the business that they were going to exercise this option and therefore we did organize at that time. It's quite conservative like our revenue recognition policy and backlog is conservative, we need to have a variation order signed, we need to have a confirmation that the options are in place before we recognize any revenue into our backlog.

Then obviously, when this a signed, you generate additional revenues. But it would better be in this position than to pretend that we have something in our bag and whereby you could reduce going forward.

So it has been the policy that we have set in place for the past three, four years to be conservative in revenue recognition, in backlog recognition and that's reflected in the number that you can see today.

Maybe just a follow-on question then about the general outlook for the turnkey business, you've been very clear on the call that it is a tough market out there, you don't see too many new orders in the year ahead. I suppose returning to the point there about the FEED studies and you need to see quite a number of FEED studies to keep your employee base busy, I guess at what point will you review the assumption that you intend to keep people busy through the FEED studies?

At what point in the year, is it Q2, is it when you roll-off your existing target work; do you decide that you may need to consider further cost cutting measures?

First of all we can see as further cost-cutting measure that we can take, but it could go the other way around depending on how the market evolves and so on. So that's really something that we're going to have to monitor on a month by month basis.

Again, if you look at the past two, three months, we already have seen quite a bit deterioration of the market, which has been quite steep and quite fast. It doesn't mean that it is going to keep going like this, it means that people are taking step out or step back, they are reviewing their options [indiscernible] they need to put new field into production.

So I think what we're going to see is that the stronger operators or the one with the more full site are going to look at this period as an opportunity to invest into new projects to engage into contractor like us spare capacity and know our financial strength in order to go forward and we need to be able to listen to those guys and we need to be able to engage with them. So to go back to your question, is something we're going to monitor on a month by month basis and we are going to have to adjust our structure accordingly.

Okay, that's very clear. Just one final question then.

Clearly for the FPSO sector generally, it's going to be a tough year if not a tough couple of years. Do you have any thoughts on I guess consolidation or M&A opportunities or if not that, then maybe how your smaller competitors may be faring in the current marketplace?

Thank you.

Definitely these periods are going to lead to consolidation opportunities both from our client base and on the offshore services market. We need to be aware that we need to see what are the gaps in our portfolio in terms of technical capacity or geographic positioning, we need to be able to scan the market and if there is the right opportunity presenting itself, we need to consider them.

But it is not a prerequisite to our strategy or to the evolution of the company, it just looking at what are the good opportunities, which are going to present themselves in the coming two years. In the interest of time, if we could try to limit our questions to one and for follow-ups you can always IR afterwards.

We will take a couple more from the conference call and we'll come back to the room after that.

Just a quick question regarding Brazil. We discussed the management change at Petrobras affecting the compliance in that country.

But just curious on how it's going to be affecting the growth pipeline? You mentioned that seven projects are reduced this year, how many of those were for Petrobras and how many of the six remaining are expected to be from Petrobras?

Thank you.

It's really almost impossible for us to comment on what's happening with Petrobras at this stage, we have seen the news like you today on the wire. We have seen also that Petrobras had some issues to deal with and that they had delays on projects.

So the assumption that we have made at this stage is that the number of the projects that they were supposed to put for tender in 2015 were going to be postponed to 2016 and I believe out of the six projects we have left for 2015, only one of them is coming from Petrobras. But the situation with Petrobras or in Brazil is uncertain at this stage and I don't think anybody has a clear view on what's going to happen and we would be really not in a position to comment on that because it's – we're just witnessing what's happening there.

Operator We will now take our next question from Alex Brooks from Canaccord.

Two questions. Firstly is the $3.5 billion in net debt, it would be very useful if you can give me some elements of the bridge as to how you're going to get there from the end 2014 number?

And the second question is really just to Bruno, you said towards the close of your comments that you feel very optimistic about SBM more so than you have done since you came to the Company and it would be great if you could elaborate a little more on that?

So let me elaborate on the last point first. When we started as a new management team sometime in 2012, we had issue which were absolutely huge.

I mean, we probably have written a book on the company and how to ride a company in that time. We got a number of projects which has been either cancelled or stopped like Ilhabela project, we had number of legacy projects cost us at the end of the [indiscernible] was rather difficult to see the end of the tunnel on this.

We have had investigation into potential improper sales practice, which really is extremely disruptive. You cannot underestimate how much work this generates, how much stress is generated in an organization, and what is the impact in the company like SBM or any other company in terms of the culture that you need to change things and so on.

Really over the past three years, we have actually to redo the financing, I mean the recapitalization of the company and so on and so forth. So already over the past three years when you see all the issues that we have to deal with, it's absolutely huge.

And really at one point in time, I think was by the middle of 2013, it was starting to get a bit overwhelming. Today, four years down the road, a lot of work has been done.

There is a new team throughout the organization. As a reminder, we have changed out of the 1250 people in the organization, we have changed more than 80% of those with internal promotion of people coming from the outside.

It takes time to create a new culture and this new culture today even though is not fully in place, is already starting to take shape where people are in much more comfortable in what they are doing, much more entrepreneurial at their level of and much more focused on the client side. So all of this is giving me a lot of hope for the future.

The second side of it is the type of product and the quality of what SBM Offshore is delivering. You know, we are in a business where it is rather easy to get an order [indiscernible] coming from the field can get an order in this business.

That's not a problem. The problem is to be able to get this order, to deliver it and also to produce this other period of 10 to 20 years.

Today there is one or two of contractors in the world capable of doing that. We are one of them.

We are one of them and we have demonstrated through Cidade de Ilhabela project that we are able to deliver the most complex project in this business on time, on budget and to the satisfaction of our client. The third part is where is the market and there is a huge potential in this market.

I mean, 50% of the order to be developed is going to be – all to be developed in the quarter. And I would say with the changing culture we have, with the type of products that we have and with the willingness with our clients, we are going to be able to position ourselves for the future growth of this industry.

And I'm extremely confident on that. Now I'm not telling you that this is going to happen next year or even in 2016, I think those two years are going to be extremely difficult but us as a company, because we have a strong backlog, because we have a strong operating cash flow, we're going to be able to ride this difficult time and we're going to be able to provide solution going forward.

So that's the reason for that. Your first question was actually associated with guidance in terms of net debt for the year and the bridge to that.

I propose we don't go through the details of the bridge on this, but the reason may be more for the reason why we have provided guidance on the net debt is basically the net debt year-on-year between 2014 and the guidance we are giving for 2015 we are showing a slight increase in terms of net debt. What we wanted to signal there was that we were at the end of the investment stage in the company that we were coming to a point where we are going to generate some free cash flow and that is going to happen in 2016 and that's one way to give a signal to the market of where we stand in terms of our cash flow generation.

Question on, and forgive me if I missed that, the way you choose to work in Brazil by having a discussion with the CGU. Is that also in any form of an agreement and in case you reach any form of agreement there, would that also resolve your position towards Petrobras?

Is that part of these discussions? That's my first question.

The second question is, if I may, on the turnkey guidance, the $900 million security in the order book and the $1 billion guidance. Can you remind me on the services business you also included in the turnkey division and to what extent you have any visibility there?

I tend to remember that that was also a business of a few hundred million dollars annually.

So let me take the second question first before Sietze takes the first question last. So for the service activity in fact as a business we quantify few items on the service activity, we qualified the smaller type of projects for which we really don't have a lot of facility, we have some order intake at this stage and some tenders which are undergoing, so we're making some assumption.

And the second side of the business is the offshore installation business for which we basically have a fair bit of visibility for this year. We know it's going to be a slow year, but we were just making the assumption that we have today in the $1 billion backlog, $1 billion guidance for the turnkey activity.

Again, I think what we're going to see during this year is the number of smaller type projects for brownfield, for small boy to be developed for offshore activity, nothing which is going to be offseting that is going to help us to reach the target of $1 billion revenue for the year on the turnkey side. Sietze?

What was the question, Dirk, no I’m joking. Thus indeed cooperating with investigations in Brazil opened the way to Petrobras, yes, we wouldn't be doing it if it didn't because what we are really trying to do in Brazil is continue our business as before and we have to cut our way through a rather complex forest of all kinds of – some of which concern, some of which don't, I think the basis from which we operate is that we have paid our dues for this past history of SBM with the settlement with the OM and the DoJ and Brazil isn't the only country where there are additional investigations, many of which really do not concern us.

But it paralyzes the whole country and Petrobras also. So while we are engaging with CGU is because we think that that will end up giving us our license to operate back and participate in the tenders that we want to participate in.

Okay, we’ve taken all the calls we’ll be able to take from the conference call. We’ll take one more from the room here.

I have a question about page 18 which is the cash flow statement, look to increase in operating receivables and increase in operating liabilities and if I combine that, I see a delta of around $800 million to $850 million positive for SBM this way I look at it, which can be explained that basically SBM stop paying its suppliers and pushes clients to the max to pay a lot of money. So maybe you can give a little bit more color on that.

We certainly did not stop paying our suppliers, because that's a road to nowhere and we tell this to our clients as well. I'm just looking at, I think at page 18, it's in the press release, right, that you're referring to.

I would have to have a look at the detail and probably in the interest of time around is stable, would you mind if we just take that with IR after the meeting? But the one thing I can tell you is that actually our performance with payments to our suppliers has improved during the year.

So if I look at today's backlog we have in balance, that's improved during 2014.

And then maybe played the role that – you're hinting on payment for the Turritella FPSO in 2014, I think in the past you stated that your account receive prepayment on $200 million for the Turritella FPSO. So basically what happened, did the contract change?

Or the payment schedule?

We have variations in orders also on the project lifetime, which is normal for most projects. What we also do is of course we have, any idea of the year, every reporting period, you make accruals on work that has not been enforced.

But if the work has been done, we have an obligation to pay that is also incorporated under your payables. So with the total increase of workload, you would expect that the total amount of payables increases commensurate with the works in progress.

And just to be clear we had indicated to the market approximately 20%, not a $200 million number.

The final question as I understand it. GE's CEO has said with regards to its oil and gas division that it has received four more notification that clients want to renegotiate contracts.

Now you've just elaborated on the cash flow conversion of your order backlog, how confident are you that in these exceptional circumstances you are actually going to convert those backlog into cash flow? In other words, have you received formal indications of notifications or have you in the past have had such a situation?

No, we have not had. Now, let's things in perspective.

Let's speak generally, we are in a market where by our clients have some issues, so we need to listen to them, we need to find solution, there might be some win-win solution to renegotiate some contract and to adjust with. But if we take yet another further step back, today we are producing with a marginal cost of less than $7 per barrel, that's what it is unless the price of oil goes down to $7 or $5 which I don't think even in the worst forecast we have seen, I don't foresee that we are going to be in a position like this, already I don't foresee that.

I just foresee that we need to engage into discussion with our clients that we need to see what can be done, that we need to see if there is things which needs to evolve that we need to invest more into some things and so on and that we are willing to take. But I don't see any drastic change there.

Okay, because if the whole value chain is hurting, you would expect every player in the value chain to be hurting.

Yeah, but just remember the business model that we have. The business model that we have is we do the investment up front for our clients and is paid over a period of time.

That's the principle. And yes, there's a lot of value to our clients.

It adds a lot of value in the sense that basically we are giving a warranty period of 12 months like any other contractors, but in reality because we are there to produce over a long period of time, if we don't produce we cannot – we will not going to receive the money. So basically there is a vested interest in the clients to make sure that they keep pinging us, that they keep we keep generating their cash flow and that we keep a happy relationship.

Otherwise, it doesn't work. And that's a contractor with the formal contract, but also I would say it's more than that, it's the trust that you can generate into an industry in order to go forward.

And I really believe that the recent operate activity is the way forward for the industry, because it really make the contractor much more engaged into the quality of the product that is going to generate, and for this the clients have also a vested interest to commit and to stick to the contract that they have signed. That's really a strong belief that they have.

But we will see, time will tell.

Okay, with that unfortunately we run out of time. So anybody with follow-up questions please feel free to follow up off line.

Operator?