2008 Annual Report - SBM Offshore

SBM Offshore Annual Report 2008 / Financial Review85Order portfolioThe contracts for the FPSO Mondo and FPSO Saxi BatuqueNew Ordersfor ExxonMobil consist of significant lump sum elements,500040003000200010000in millions of US$Turnkey Lease4916436538223549 1886 2928143663415101044802 4661367 1936 14372004 2005 2006 2007 2008plus fifteen year front loaded leases, which are accounted foras finance leases. This means that the entire capital valuesare recognised as turnkey turnover during construction,but with only the return on investment recognised as leaseincome during the lease period, thus negatively impactingturnkey margins and improving lease margins. Under anoperating lease treatment only the partner’s 50% shareof the Capex investment would have been accounted foras a turnkey sale and the Company's 50% share of fullTotal new booked orders for 2008 amounted to US$ 4,365million. This amount includes a major contract amendmentfor the relocation of the FPSO Capixaba to Petrobras’Cachalote field in Brazil contracts, other lease extensionsrevenues recognise as lease turnover during the charter. In2008, total turnover recognised in respect of constructionof assets accounted for as finance leases amounted toUS$ 61 million (2007: US$ 315 million).(FPSO Falcon, FPSO Rang Dong I and FSO Sakhalin Okha)as well as substantial turnkey contracts (Petrobras P-57Order PortfolioFPSO, Woodside Cossack FPSO).40003000200010000in millions of US$Turnkey Lease10695375331519934Turnover585199013965942871218169030602004 2005 2006 2007 20082250810900070005000300010000in millions of US$Turnkey Lease407149835734059 8393220699225854407795523045651924729692004 2005 2006 2007 20086278The year-end order portfolio at US$ 9.25 billion is up 16.2%from last year’s level of US$ 7.96 billion and represents ayear-end record. The current order portfolio includes US$Total turnover increased when compared with 2007,with turnkey business representing 74% of total turnoverin 2008 (76% in 2007). Lease and operate turnoverincreased by 17% compared with 2007 as the first revenuesfrom FPSO Saxi Batuque and full year revenues from theFPSO Kikeh and FPSO Mondo more than compensated for6.28 billion (2007: US$ 5.65 billion) for the non-discountedvalue of future revenues from the long-term charters ofthe lease fleet, of which US$ 4.25 billion (2007: US$ 3.86billion) represents the bareboat element of the operatingleases. The turnkey order backlog increased by 29% andrepresents more than one year of turnkey turnover.the reduction in revenues resulting from the sale of FPSOMystras (May 2008), sale of FPSO Tantawan Explorer(August 2008) and termination of Rang Dong I charter(October 2008).