Prospectus - SBM Offshore

equire the Group to pay additional taxes. Any such additional tax exposure could have an adverse effect on
the Group's profit and financial condition. The Group may also face an increase in its (income) taxes, if tax
rates increase in the countries in which the Group operate, or treaties between those countries and the
Netherlands (or other relevant jurisdictions in which the Group is active) are modified in an adverse manner.
This may adversely affect the Group's business, results and financial condition.
(e) The Group's assessment of tax assets and tax liabilities may prove incorrect which may adversely
affect its results and financial condition.
The Group has made provisions for its tax liabilities in its financial statements and although the Group believes
that the assessment of these liabilities on which the provisions have been made is appropriate, the recorded tax
liabilities may prove too high or too low. It is possible that the tax authorities in the countries in which the
Group operates will have a different interpretation than the Group or inconsistent enforcement on tax laws and
regulations applicable. This may affect the Group's results and financial condition.
The Group has recorded deferred tax assets in its financial statements and although the Group believes that the
assessment of these assets is appropriate, the deferred tax assets recorded in its consolidated financial
statements may not be fully recoverable. These assets can be utilised only if, and to the extent that, the Group
generates adequate levels of taxable income in future periods to offset the tax loss carry-forwards and reverse
the temporary differences prior to expiration of those deferred tax assets. The ability of the Group to generate
taxable income is subject to general economic, financial, competitive, legislative, regulatory and other factors
that are beyond its control. If the Group generates lower taxable income than the amount it has assumed in
determining the deferred tax assets, the value of its deferred tax assets will be reduced which may affect the
Group's business, results and financial condition.
(f) The Group's business is capital intensive and requires significant capital outlays for equipment,
such as vessels and other fixed assets. Lease and operate contracts, in particular, are capital
intensive and typically require that significant amounts of third party debt funding be arranged.
The Group may need additional equity or debt funding in the future which may not be available.
The Group's business is capital intensive and requires significant capital outlays for equipment, such as vessels
and other fixed assets, which may be in advance of securing contracts for the utilisation of such assets. Lease
and operate contracts, in particular, are capital intensive. Whereas turnkey contracts typically generate neutral
or positive cash flows from the engineering phase through the construction period of the vessel (as progress
payments from customers are made), lease and operate contracts are capital intensive and typically require that
significant amounts of third party debt funding be arranged.
There can be no assurance that the Group's existing and future contracts will provide income adequate to cover
its significant fixed as well as variable costs associated with its projects, or that such contracts will be renewed,
extended or replaced upon expiration.
The Group's future capital requirements and level of expenses will depend on numerous factors, including,
among other things, the choice of clients between turnkey sales and lease and operate contracts, the timing and
terms on which its contracts can be negotiated, the amount of cash generated from operations, the level of
demand for the Group's services and general industry conditions. In the event that the Group's existing
resources and other committed funding are insufficient to fund its investment program and other operating and
maintenance activities, the Group may need to raise additional capital to pursue its business strategy in the
future. Additional funds may not be available when the Group needs them on terms that are acceptable, or at
all. If adequate funds are not available on a timely basis, the Group may curtail development programmes and
may be required to delay, scale back, sell or eliminate certain of its assets and/or activities, which may have an
adverse affect on the Group's business, results and financial condition or cause the Group to discontinue its
operations.
If the Company raises additional funds by issuing additional equity securities, dilution to the holdings of
existing shareholders may result. Furthermore, any debt financing of the Group is associated with restrictions
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