Prospectus - SBM Offshore

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(y) Employee, agent or partner misconduct or failure to comply with anti-corruption and other government laws and regulations could harm the Group's reputation, reduce its revenue and profit, and subject it to administrative, criminal and civil enforcement actions. Misconduct, fraud or non-compliance with applicable government laws and regulations, or other improper activities by any of the Group's employees, agents or partners could have an adverse effect on its business and reputation. Such misconduct could include the failure to comply with government procurement regulations, competition laws and regulations, regulations regarding the protection of classified information, regulations prohibiting bribery and other foreign corrupt practices, regulations regarding the pricing of labour and other costs in government contracts, regulations on lobbying or similar activities, regulations pertaining to the internal controls over financial reporting, environmental laws and any other applicable laws or regulations. The policies within the Group enforce compliance with these regulations and laws and the Group takes precautions intended to prevent and detect misconduct. However, since the Group's internal controls are subject to inherent limitations, including human error, it is possible that these controls could be intentionally circumvented or become inadequate because of changed conditions. As a result, the Group cannot ensure that its controls will protect it from reckless or criminal acts committed by its employees, agents, partners and others. Failure to comply with applicable laws or regulations or acts of misconduct could subject the Group to fines and penalties and suspension or debarment from contracting, any or all of which could harm the Group's business and reputation, subject the Group to administrative, criminal and civil enforcement actions and adversely affect its business, results and financial condition. (z) The Company may have violated anti-corruption laws, which, if true, could harm the Company's reputation, reduce its revenue and profit, and result in monetary penalties, criminal and civil sanctions and other remedies. An investigation was commenced in 2012 at the request of the Company into allegations that certain payments involving sales intermediaries in certain African countries in the period 2007 through 2011 violated anticorruption laws. These allegations came to the attention of the Management Board in February 2012, after a review of the Company's compliance procedures in late 2011. The investigation is being carried out by outside legal counsel and forensic accountants, with the support of the Company's Chief Governance and Compliance Officer and under the oversight of the Audit Committee. The investigation is expected to be completed in 2013, although the timing of completion depends in part on further discussions with authorities. As the investigation is not yet concluded, the Company cannot make any conclusive statements regarding the findings of the investigation. However, indications have surfaced that the Company has paid substantial sums, mostly through intermediaries, which appear to have been intended for governmental officials. The Management Board, which was appointed in the course of 2012, has found it necessary and appropriate to increase awareness of proper compliance throughout the Company up to the highest management levels. In the course of the investigation allegations were made that improper payments were also made in countries outside Africa, but to date no conclusive proof of those allegations has been established. The Company voluntarily disclosed the investigation to the Dutch Public Prosecution Service (Openbaar Ministerie) (OM) and the United States Department of Justice (DoJ) in 2012. The Company agreed to periodically update the OM and the DoJ regarding the investigation. The Company is unable to estimate the ultimate consequences, financial and otherwise, if any, of the payments which led to this investigation at this time. Further, violations of law or compliance procedures may have occurred in the same or other jurisdictions, in which the Company's management may have been involved. Failure to comply with anti-corruption laws could give rise to criminal prosecution by the OM, the DoJ or any local authorities, civil claims or administrative proceedings against the Company. This could result in the Company paying damages or significant fines or penalties imposed by the OM, the DoJ or any local authorities, as well as disgorgements, debarment or other remedies. Under US anti-corruption laws, the maximum fine is calculated under a multi-step process set out in the advisory "Federal Sentencing Guidelines" and could have a material financial impact on the Company. The Company may also have to divert significant 0105735-0000002 AMCO:5624830.1 36
management time and effort away from the business to these proceedings. In addition, and regardless of the outcome of any claims, prosecutions or proceedings, the Company could suffer reputational damage and loss of business. In order to prevent any violations by the Company of the applicable anti-corruption laws and regulations in the future, the Company has taken remedial action to enhance its compliance programme. The new Management Board has consistently emphasized the importance of compliance. The Company introduced new policies, processes and systems and established a compliance department and enhanced its internal controls and monitoring systems. The Company furthermore revised and improved its procedure for identifying and mitigating integrity risks with regard to sales intermediaries. This procedure includes due diligence on existing and new sales intermediaries as well as enhanced internal controls around transactions involving sales intermediaries. Due diligence on sales intermediaries is now approved by a newly established validation committee consisting of members of the Management Board and other executives. See "Business Overview – Sustainability and corporate social responsibility – Compliance programme" for further information. However, since the Company's internal controls are subject to inherent limitations, including human error, it is possible that these controls could fail, or be intentionally circumvented. As a result, the Company cannot ensure that these internal controls will at all times protect it from reckless or criminal acts committed by its employees, agents, partners and others. (aa) Failure by the Group to be successful in product and technology development activities, and to respond quickly to technological developments, could adversely affect the Group's ability to compete. The Group operates in an intensely competitive industry that experiences rapid technological developments, changes to industry standards and customer requirements, and frequent new product introductions and improvements. If the Group does not respond quickly and successfully to these changes and developments, its products or technologies could become less attractive and it could lose its competitive position. As new market segments emerge (large, deep water and arctic FPSOs are some examples), the Group faces new sources of competition, and customers with different requirements than customers in its traditional business. To be successful in these new segments, the Group is dependent on its product and technology development (P&TD) to ensure that the cost, energy efficiency, and security functionality of its products and systems are competitive with that of new competitors and meets the requirements of new customers. Although the Group invests significantly in P&TD, projects are aimed at solving increasingly complex problems and not all projects will be successful. Even if a P&TD project is successful, the Group may not be successful in marketing or selling the new development. Where the development is successfully marketed or sold, it may not be well received by customers or developments offered by competitors could decrease demand for the Group's development. These events could have a variety of negative effects on the Group's competitive position and financial results, such as reducing revenue, increasing costs, lowering gross margins, and decreasing the value of product portfolio. (bb) The Group could infringe the intellectual property rights of third parties, which could lead to legal action against the Group. This could cause a disruption to the Group's business and financial loss. Although it is not currently involved in any such claims, the Group could in the future be subject to claims that it is (or its customers are) infringing a third party's intellectual property rights. These types of claims could be made by third parties seeking to protect their intellectual property rights portfolio, or by more opportunistic companies who acquire patent portfolios for the sole purpose of asserting such claims. Regardless of its merit or the ultimate outcome, any claim that the Group's systems, products or processes infringe the intellectual property rights of another could cost the Group significant time and resources, at the expense of other activities of the business. A claim could result in the Group having to pay damages to a third party, temporarily or permanently discontinue the manufacturing, using, or selling a particular product, system, technology or process, develop new technology or workarounds, or licence technology from a third party 0105735-0000002 AMCO:5624830.1 37
Page 1 and 2: SBM OFFSHORE N.V. (a public company
Page 3 and 4: TABLE OF CONTENTS Section Page 1. S
Page 5 and 6: 0105735-0000002 AMCO:5624830.1 5 Gr
Page 7 and 8: B.6 Persons who, directly and indir
Page 9 and 10: As at 31 December (in thousands of
Page 11 and 12: eport qualifications B.11 Explanati
Page 13 and 14: 0105735-0000002 AMCO:5624830.1 13
Page 15 and 16: 0105735-0000002 AMCO:5624830.1 15
Page 17 and 18: D.3 Risks specific to the Offer Sec
Page 19 and 20: E.3 Terms and conditions of the Off
Page 21 and 22: offering to sell the securities and
Page 23 and 24: economic downturn, and because of t
Page 25 and 26: an unspecified amount alleging unre
Page 27 and 28: for the Group's FPSOs operating in
Page 29 and 30: (i) The Group enters into turnkey c
Page 31 and 32: conditions at the time of a lease e
Page 33 and 34: labour disruptions and other factor
Page 35: penalties and materially and advers
Page 39 and 40: The Group's participation in indust
Page 41 and 42: and covenants in the agreements gov
Page 43 and 44: exercise significant influence over
Page 45 and 46: 2010 financial information In 2011,
Page 47 and 48: "may", "will", "could", "should", "
Page 49 and 50: Independent Source, no facts have b
Page 51 and 52: If a proposal is made to distribute
Page 53 and 54: During decommissioning, ownership o
Page 55 and 56: Share issues Under the Underwriting
Page 57 and 58: All transactions in Rights prior to
Page 59 and 60: 6.15 Joint Global Coordinators The
Page 61 and 62: Amsterdam will be deemed null and v
Page 63 and 64: In this Prospectus, persons who are
Page 65 and 66: the laws or regulations of any juri
Page 67 and 68: 9. INDUSTRY AND MARKET OVERVIEW 9.1
Page 69 and 70: 9.2 Offshore production solutions T
Page 71 and 72: (d) FPSO An FPSO system is containe
Page 73 and 74: Figure 9: Implied capacity among FP
Page 75 and 76: Expected FPSO spending 2013-2017 Af
Page 77 and 78: Figure 14: Main active market playe
Page 79 and 80: Machine Factory founded the Gusto s
Page 81 and 82: continue to be constructed and oper
Page 83 and 84: where the Group leases and operates
Page 85 and 86: Key financials For 2012, the Group'
Page 87 and 88:
(in chronological order per categor
Page 89 and 90:
up to two or three years beyond the
Page 91 and 92:
Ongoing FPSO projects · N'Goma: A
Page 93 and 94:
Contracts Group Companies routinely
Page 95 and 96:
The Group's Order Portfolio at 31 D
Page 97 and 98:
10.9 Customers The Group's customer
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10.13 Property, plant and equipment
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In 2010, 20 accidental releases wer
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Host country sustainability and wor
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claim, BP rejected a settlement pro
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(in thousands of US$) 0105735-00000
Page 109 and 110:
12. SELECTED FINANCIAL INFORMATION
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As at 31 December (in thousands of
Page 113 and 114:
Lumpur (Malaysia). Four of these ex
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accounting treatment of finance lea
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· Increasing complexity and size o
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(l) Impact of availability of finan
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(f) Research and development expens
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The Order Portfolio in the Turnkey
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accounted for US$ 230 million of th
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The increased EBIT in 2012 compared
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Financial year ended 31 December (i
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administrative expenses (which decr
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Net cash inflow from operating acti
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Original Interest per annum on the
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August 2012 (FPSO Cidade de Ilhabel
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· The remaining contractual commit
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entities are eliminated to the exte
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Other fixed assets 2-20 years When
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(i) Provisions General A provision
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Income tax expenses comprise corpor
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Set out below is an overview of the
Page 155 and 156:
and the period during which the pre
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1 July 2013, except where the artic
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Preference Shares must be paid up f
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Management Board, (ii) members of t
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Company. Such transaction must be c
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Additionally, resolutions of the Ma
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Secondary activities The members of
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nomination drawn up by the Supervis
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Board being present. The Audit Comm
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The peer group is selected to repre
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The target number of Performance Or
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Note: (1) As of the respective date
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Shares were conditionally awarded,
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Systems (including other) Turnkey S
Page 183 and 184:
16. MAJOR SHAREHOLDERS AND RELATED
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the repurchase of the Offer Shares
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individual's yield basis. The 4% de
Page 189 and 190:
18. GENERAL INFORMATION 18.1 The Co
Page 191 and 192:
The following table provides an ove
Page 193 and 194:
Name Country of incorporation Perce
Page 195 and 196:
Name Country of incorporation Perce
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ING and the Subscription, Listing a
Page 199 and 200:
downstream Activities related to cr
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MOPUstor Mobile offshore production
Page 203 and 204:
0105735-0000002 AMCO:5624830.1 203
Page 205:
COMPANY SBM Offshore N.V. Karel Doo
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Prospectus - SBM Offshore

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