251844 Awilco_aars_eng.ps - COSL Drilling Europe AS

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Proforma figures 2004 Awilco Offshore group Proforma accounts General Awilco Offshore ASA was founded on January 21, 2005. The proforma group accounts for 2004 have been prepared on a historical cost basis on a consolidated level. The pro forma accounts are presented as if the offshore segment was reorganized per beginning of the period presented, and is derived from audited financial statements for Awilco group for 2004. The pro forma accounts have been provided based on the assumptions stated below. Pro forma financial statements are provided for informational purposes only and are not necessarily indicative of actual results that would have been achieved if the transactions and assumptions described below had occurred during the period presented. The proforma figures are unaudited. Since the formation of Awilco’s offshore segment into the wholly owned AWO group is seen as a reorganization of a segment in a wholly owned subgroup of Awilco, the reorganization has been recorded using the continuity method. Consequently, the net book value of the assets, rights and liabilities transferred to the AWO group,corresponds to the net book value under the previous organization and ownership structure. Proforma adjustments Equity contribution The Company carried out a private placement in the period from February 14 - 18, 2005. Prior to completion of the private placement, the share capital of the Company was increased through the conversion into equity of part of the consideration for the offshore assets transferred from Awilco. This conversion of debt into equity is rolled-back and reflected in the pro forma balance sheet per beginning of 2004. Correspondingly,debt not converted to equity is also reflected in the pro forma balance sheet per beginning of 2004. Interest cost on this debt is reflected in the accounts using the same interest rate as agreed in 2005. The transfer ofassets from Awilco to AWO is in the pro forma accounts assumed to have been executed using the same underlying values as actually used in the reorganization that took place in 2005. The proceeds from the private placement was received by the Company at end of February 2005, and will be reflected in the financial report for 1st quarter 2005, and is not rolled back to be reflected in the pro-forma accounts for 2004. Management fee The Company has entered into management agreement with Awilco. The management fee will equal the costs incurred by Awilco in delivering the agreed management services. The management fee for 2005 is estimated to be NOK 15-20 million. The pro forma accounts for 2004 include a management fee of approximately NOK 15 million. Tax The accommodation rigs have been organised within the Norwegian tonnage tax regime since the acquisition date of the rigs. In 2005, the tax law was amended such that with effect from fiscal year 2006, the accommodation rigs will no longer qualify for the tonnage tax regime. The Company will not be in position to benefit from the deferred taxation allowed under the new income tax regime. Consequently, deferred tax on historical operating profits from the accommodation units will eventually become payable. The amended tax regulation is reflected in the deferred tax provision recorded in the balance sheet. Income tax expense has been adjusted for the effects of pro forma adjustments to the profit and loss statement. Conversion to USD of the proforma accounts The pro forma accounts presented in the prospectus,dated April 28, 2005, for the listing of the shares on the Oslo Stock Exchange were presented in NOK. These pro forma accounts have been converted to USD appying the following principles: - Balance sheet items are translated at the USD/NOK exchange rate at the balance sheet date, with the exception of fixed assets as the accommodation rigs, jack-up rigs and other non-monetary assets, which are translated at the exchange rate at the acquisition date for the specific assets. - Profit and loss items are translated at the average USD/NOK exchange rate,with the following exceptions; • Depreciation of accommodation rigs are based on historic exchange rates, i.e., the exchange rate at the acquisition date for each individual asset. • Currency gain or loss on USD denominated assets and debt in NOK financials which is caused by USD/NOK exchange rate fluctuation is reversed. Inter-company debt Part of the proceeds from the private placement was used to repay intercompany debt to Awilco. In order to better reflect the actual funding of the segment in 2004, combined with that the proceeds from the private placement mentioned above is not rolled-back to 2004, no pro forma adjustments are made to the actual inter-company debt that existed in 2004. 40
Awilco Offshore group Profit and loss statement Proforma figures in USD thousands 2004 Operating income 40 160 Operating expenses Rig operating expenses 20 226 General and administrative expenses 3 129 Depreciation and amortization 5 244 Operating profit 11 562 Interest income 155 Interest expense -1 832 Net foreign exchange loss -2 931 Other financial items -143 Net financial items -4 750 Profit before tax 6 812 Tax expense -2 132 Net profit 4 679 41
Page 1 and 2: Awilco Offshore ASA Annual Report 2
Page 3 and 4: Key figures Figures in USD 1.000 In
Page 5 and 6: Premium Drilling In it’s venture
Page 7 and 8: Depreciation expense was USD 7.2 mi
Page 9 and 10: Awilco Offshore has built up site t
Page 11 and 12: PPL Design: Class: Water depth Dril
Page 13 and 14: Port Rigmar Design: Built / convert
Page 15: USD mill. Paid 1q06 2q06 3q06 4q06
Page 18 and 19: Profit and Loss Statement Awilco Of
Page 20 and 21: Cash Flow Statement Awilco Offshore
Page 22 and 23: Notes Awilco Offshore group Note 1
Page 24 and 25: Notes Awilco Offshore group Stateme
Page 42 and 43: Balance sheet Awilco Offshore group
Page 44 and 45: Profit and Loss Statement Awilco pa
Page 46 and 47: Cash Flow Statement Awilco parent c
Page 48 and 49: Notes Awilco parent company Note 1
Page 50 and 51: Notes Awilco parent company The com
Page 54 and 55: Notes Awilco parent company Deferre
Page 60: Auditor's Auditors Report report fo

251844 Awilco_aars_eng.ps - COSL Drilling Europe AS

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