REGISTRATION DOCUMENT - Bourbon

MANAGEMENT REPORT3Risk factorsThe following table shows the Group’s net exposure to variable rates before and after risk management, based on the hedges in place and thesensitivity of the Group’s income before taxes (related to changes in the fair value of monetary assets and liabilities) to a reasonable variationin interest rates, with all other variables remaining constant:Less than oneyearOne to twoyearsTwo to threeyearsAs of December 31, 2011Three to fouryearsFour to fiveyearsMore than fiveyearsFixed Variable Fixed Variable Fixed Variable Fixed Variable Fixed Variable Fixed Variable Fixed Variable(in € millions)rate rate rate rate rate rate rate rate rate rate rate rate rate rateCash - 229.6 - - - - - - - - - - - 229.6Term deposits - - - - - - - - - - - - - -Loans and securities - 0.9 - - - - - - - - - - - 0.9Financial assets - 230.5 - - - - - - - - - - - 230.5Bank overdrafts andshort-term lines - (273.3) - - - - - - - - - - - (273.3)Deposits and securitiesreceived - - (0.3) (0.0) - - - - - - - - (0.3) (0.0)Finance lease liabilities (67.2) (3.3) - (3.5) - (3.7) - (3.9) - (4.1) - (6.3) (67.2) (24.7)Bank borrowings (18.2) (249.1) (18.4) (233.4) (18.9) (289.7) (19.8) (234.7) (20.7) (192.5) (104.1) (411.1) (200.1) (1,610.5)Financial liabilities (85.5) (525.7) (18.6) (236.9) (18.9) (293.4) (19.8) (238.6) (20.7) (196.6) (104.1) (417.5) (267.6) (1,908.5)Hedging (111.5) 111.5 (240.0) 240.0 (262.0) 262.0 (143.0) 143.0 (47.2) 47.2 (165.3) 165.3 (969.1) 969.1Net position afterhedging (196.9) (414.2) (258.7) 3.1 (281.0) (31.3) (162.7) (95.6) (67.9) (149.3) (269.4) (252.1) (1,236.7) (708.9)TotalAssuming the position reached on December 31, 2011 to beconstant, a change in interest rates of 100 basis points (1%) wouldtherefore result in increasing or decreasing the cost of the Group’sfi nancial debt by €7.1 million over one year.Foreign exchange riskObjectivesThe Group’s policy is to reduce as far as possible the economic riskrelated to foreign currency fl uctuations over the medium term. TheGroup also tries to minimize the impact of the US dollar’s volatility onannual operating income.Cash flows from operating activitiesThe main foreign exchange risks on operations are related to invoicingclients. BOURBON invoices a large portion (69.5%) of its services inUS dollars. The Group has a natural foreign exchange hedge thanksto the payment of expenses in dollars (representing about 24% ofrevenues). The policy is to maximize this natural hedge.The residual risk is partially hedged in the short term by using forwardUS dollar sales and/or currency puts. On the unhedged portion, andover time, offshore oil and gas marine services are directly exposedto foreign currency risks, particularly on the US dollar.Long-term cash flows3 PolicyFor vessel acquisitions in foreign currencies, the policy is to partlyhedge the foreign exchange risk during the construction period bysetting up currency futures call options.The policy is to fi nance these acquisitions in the currency in which thecorresponding charters will be paid by the customers. However, inorder to avoid accounting exchange differences in countries outsidethe euro zone and the US dollar zone (particularly, in Norway), theentities fi nance their investments in their functional currency.3 Current practiceAs an exception, at the beginning of 2004 it was decided totemporarily abandon this practice and convert the majority ofborrowings that were in dollars at the time to euros. This was doneto recognize the unrealized foreign exchange gains booked duringprevious fi scal years.Since then, most of the new borrowings (outside Norway) have beencontracted in euros or US dollars. Where the euro/dollar exchangerate allows, borrowings in euros to fi nance assets generating revenuein dollars will be converted to dollars and future acquisitions will againbe fi nanced in dollars.The tables below show the Group’s net exposure to changes inforeign exchange rates:3 on income: transaction risk;3 on equity: currency translation risk.BOURBON - 2011 Registration Document 45