AWO Prospectus - COSL Drilling Europe AS

More documents

Recommendations

Info

7. Financial information 7.1 Proforma accounts Awilco Offshore ASA General Awilco Offshore ASA was founded on 21 January 2005. The pro forma 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. 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. Pro forma adjustments Equity contribution The Company carried out a private placement in the period from 14 – 18. February 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 of assets 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 were 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. Inter-company debt Part of the proceeds from the private placement was used to repay inter-company 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. 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. The Norwegian Ministry of Finance is currently carrying out an assessment of the tonnage tax regime, inter alia with respect to whether moveable rigs shall continue to qualify for 34
Awilco Offshore ASA the regime. An consultation paper concerning this subject, issued 11 March 2005, proposes that moveable rigs, with effect from 1 January 2006, will no longer qualify for the regime. If this proposal is implemented, the Company will no longer be in a position to benefit from the deferred taxation allowed under the regime. Consequently, the deferred tax on historical operating profits from the accommodation units will become payable. In the pro forma accounts, the Company has provided for income tax on the basis of their profit for financial reporting purposes, adjusted for income and expense items which are not taxable or deductible for income tax purposes, using the current tax rate. This deferred tax provision is reflecting the possible change on tax rules mentioned above. Income tax expense has been adjusted for the effects of pro forma adjustments to the profit and loss statement. 7.2 Effect of International Financial Reporting Standards (IFRS) General information As from 2005 Norwegian public companies are subject to new accounting standards introduced in the European Union. The new accounting standards are called International Financial Reporting Standards (IFRS). The objective of IFRS is to develop, in the public interest, a single set of high quality, understandable and enforceable global accounting standards that provide accurate, transparent and comparable information to help users make economic decisions. AWO has prepared the pro forma accounts for 2004 according to the IFRS. There are still inherent uncertainties to how these standards should be interpreted and implemented. AWO has prepared the pro forma accounts based on the current understanding of IFRS. Below is a description of the main effects between the accounting principles previously used by Awilco compared with the IFRS principles used in the pro-forma accounts of AWO; Assets The useful economic lives of the accommodation rigs are estimated for the material components of the rigs separately. The major components of the rigs are estimated to have useful economic lives in the range from 20-38 years. Based on experience, performance and future scheduled dockings, economic lives are evaluated on a regular basis – at least annually. If the estimated useful economic life changes future depreciations are adjusted accordingly. There is established residual value for the accommodation rigs. Awilco’s previous principle has been to depreciate assets to zero over the economic life. We have recalculated accumulated depreciations for each asset taking into account the residual value and dismantling expenses. The asset value has been appreciated by the difference in accumulated depreciation based on IFRS and Norwegian GAAP. Future depreciations are based on depreciation schedules including residual values and dismantling expenses. The residual value is based on the market value for scrapping at the reporting date. Reclassification of docking expenses Docking expenses are regarded as a separate part of the rig value with a different depreciation period than the rig. Depreciation of docking expenses is therefore reclassified from operating expenses to depreciation. Deferred tax and tax expense Income tax expense has been adjusted for the effects of IFRS adjustments to the profit and loss statement. Deferred tax is adjusted due to changes in asset values. 35
Page 1 and 2: Prospectus Listing of the shares of
Page 3 and 4: Table of Contents Awilco Offshore A
Page 5 and 6: Awilco Offshore ASA Statements of r
Page 7 and 8: Definitions Awilco Offshore ASA And
Page 9 and 10: Awilco Offshore ASA The project pri
Page 11 and 12: Awilco Offshore ASA 2. Summary in N
Page 13 and 14: 2.2 Finansielle forhold Awilco Offs
Page 15 and 16: Awilco Offshore ASA d. The pre-empt
Page 17 and 18: Awilco Offshore ASA In the event of
Page 19 and 20: 4. Company description 4.1 Company
Page 21 and 22: Awilco Offshore ASA 4.3 Relation to
Page 23 and 24: Awilco Offshore ASA Capacities: Var
Page 25 and 26: Contracts No contracts have been se
Page 27 and 28: Awilco Offshore ASA (1983) and hold
Page 29 and 30: 6. Market overview 6.1 Market posit
Page 31 and 32: Awilco Offshore ASA accommodation u
Page 33 and 34: Jack-ups Jack-ups have legs that ar
Page 35: Awilco Offshore ASA The fleet of
Page 39 and 40: Awilco Offshore ASA The useful live
Page 41 and 42: Awilco Offshore ASA Balance sheet A
Page 43 and 44: 7.5 Auditor’s statement Awilco Of
Page 45 and 46: Awilco Offshore ASA 8. Share capita
Page 47 and 48: Awilco Offshore ASA Shareholder pol
Page 49 and 50: Awilco Offshore ASA In addition to
Page 51 and 52: Awilco Offshore ASA 1. The Contract
Page 53 and 54: Awilco Offshore ASA Keppel Option A
Page 55 and 56: Awilco Offshore ASA 2. A pre- and p
Page 57 and 58: 10. Taxation 10.1 Introduction Awil
Page 59 and 60: 10.4 Inheritance tax Awilco Offshor
Page 61 and 62: Awilco Offshore ASA Political risks
Page 63 and 64: Awilco Offshore ASA Appendix 1 Rig
Page 65 and 66: Awilco Offshore ASA 63
Page 77 and 78: Awilco Offshore ASA Appendix 6 Firs
Page 87 and 88:
Awilco Offshore ASA 85
Page 89 and 90:
Awilco Offshore ASA 87
Page 91:
Filipstad Brygge 1 PO Box 1363 Vika
show all

AWO Prospectus - COSL Drilling Europe AS

Create successful ePaper yourself

Delete template?

Save as template?