Keith Russell - IR, Director Jean Cahuzac - CEO, Executive Director Ricardo Rosa - CFO John Evans - COO

Phillip Lindsay - HSBC Andrew Dobbing - SCB Nick Green - Sanford Bernstein Asad Farid - Berenberg Fiona MacLean - Merrill Lynch Peter Testa - One Investments Amy Wong - UBS Rob Pulleyn - Morgan Stanley Muktar Garadaghi - Citigroup Dave Thomas - Credit Suisse

Hello and welcome to the Subsea 7 SA Second Quarter 2014 Results Conference Call. Throughout this call, all participants will be in listen-only mode and afterwards there will be a question-and-answer session. Just a reminder, this session is being recorded. I will now hand you over to Keith Russell, Investor Relations Director of Subsea 7.

Thank you very much. Welcome everyone to our conference call and webcast covering the results of the second quarter and the first half of 2014. Here with me on the call, I have Jean Cahuzac, our Chief Executive Officer; our CFO, Ricardo Rosa; and both our Chief Operating Officer, John Evans. The full press release containing the results can be found in the Investor Relations section of our corporate Web site along with the presentation slides that we will be referring to on today's call. We will be following the usual format today for a quarterly earnings call. Jean and Ricardo will talk you through highlights of the presentation following which they and John Evans will be pleased to answer your questions. Before we start the presentation, just want to draw your attention to Slide number 2, which covers our disclaimer regarding forward-looking statements in the context of this presentation. As time is very limited, we would like to keep the event to about an hour as usual I would ask questioners when we get to that stage to please limit themselves to two questions each at least initially to give everyone a chance. So with that brief introduction, I turn it over to Jean.

Thank you, Keith and good afternoon to everyone. I will start by summarizing the main elements of our second quarter 2014 performance before handing over to Ricardo, who will cover the financials in more detail. I will then conclude with some observation of the market and the outlook for our business for the balance of the year. So let's look first at the highlight for the quarter on Slide 3, the second quarter was another strong quarter of performance for Subsea 7. Group revenue was $1.9 billion, an increase of 13% from the prior year quarter with each territory increasing activity other than AFGoM, which had essentially the same level of revenue as a year ago. In the second quarter, we achieved an adjusted EBITDA margin of 24% owing to the high activity level and good project execution. So let's move to operation first. We had good execution across our project portfolio and made significant progress on a number of major projects. Among the larger projects in our profiles were Ofon 2, Block 31 GES and CLOV in West Africa, with CLOV achieving first oil in June ahead of the clients' schedule. In APME, Gorgon HLTI and ONGC-G1 were the main contributors to revenue. While in Brazil we achieved the key milestone of installing the fourth and final buoy on the Guará Lula Northeast project by mid-May, which drove us to demobilize and redeploy the Seven Polaris and Aker Wayfarer. In NSC, the main projects advancing in the quarter were Martin Linge and Aasta Hansteen, Norway and Western Isles in the U.K. The Brazil territory continued with its financial turnaround which is evident from its result in Q2 even when allowing for reduction of approximately $35 million to the full life project loss provision previously recognized on the Guará Lula project. Our life-of-field activity also had a strong quarter particularly in the U.K. sector of the North Sea where our clients continue to rely on Subsea 7 to offer consistent project delivery. The size of our fleet and our engineering capabilities continue to differentiate us from smaller companies which have entered this market recently. Global vessel utilization was high in Q2 at 91%, which was an increase from the 86% level achieved in the second quarter of 2013. Our new vessel construction program continues to progress well and is in line with cost estimates. The Seven Waves is the first of the four new PLSVs to be completed, commenced operations on their long-term contract in Brazil in mid-May three months ahead of schedule. Although new vessels construction project are all on track in line with cost estimate and schedule. Our strong financial position as well as the success of our cost control initiatives allowed us to continue executing our $200 million share repurchase program and NOK3.6 per share cash dividend was paid on 10th of July this year. I'm also pleased to inform you that in light of the strength of our balance sheet and confidence in our business, the Board as authorized a further repurchase program of up to $200 million. Turning to Slide 4, which provides further detail on our backlog. As we previously guided order backlog fell moderately in the period ending at $11.2 billion. Order intake at $1.6 billion including escalation on existing contracts and the award of a number of contracts below the $50 million value. Enough contract awards in the quarter included the Catcher AF contract in the U.K. and two awards in the U.S. Gulf of Mexico and IRM agreement with BP and the Holstein Deep project. I'd like to take this opportunity to remind you that we only recalled as order intake signed contract and approved those. We do not include order intake letter of intent or extension of contract option – sorry, contract extension options. And just to clarify in the second quarter there was no increase of order intake attributed to PLSVs in Brazil. With that brief summary, I shall pass to Ricardo, who will talk you through the numbers.

Thank you, Jean, good afternoon everyone. Jean has given you an overview of the quarter and I will now provide more detail on the consolidated income statement and territories operating results for the second quarter 2014. And then comment on cash flow for the first half of the year. Let's first look at highlights of the income statement on Slide 5. Second quarter revenue at $1.9 billion was 13% above that recorded in the same quarter of 2013. Compared to the prior year period, revenue has improved significantly in Asia Pacific and the Middle East and Brazil with higher in North Sea in Canada and flat in Africa and Gulf of Mexico. Second quarter net operating income was $350 million which was up moderately on the second quarter of 2013 after adjusting for the $300 million full life project loss provision on the Guará Lula project recognized in the prior year period. After adding net finance income of $2 million and including net foreign exchange gains of $10 million, income before taxes was $362 million representing a moderate increase on the prior year second quarter, again, after adjusting for the Guará Lula loss provision. The $98 million tax charge – sorry, $98 million tax charge for the quarter was equivalent to an effective tax rate of 26.9% which was at the low end of our guidance for the full year. Net income for the quarter was $265 million resulting in diluted earnings per share of $0.73. I will now turn to Slide 6, and the territories operational performance in the second quarter. Africa, Mediterranean and Gulf of Mexico delivered revenue of $661 million for the quarter which was marginally lower than a year earlier. Net operating income at $85 million gave rise to a net operating margin of 12.9% down 7 percentage points on the prior quarter's margin of 19.9%. The reduction in the territories margin was due to the phasing of various projects in Nigeria and Angola and additional costs incurred on the line – 60 in line -- 67 projects in Mexico. These additional costs included field access issues and the consequences of the breakdown of the third party vessel, which since have been replaced by our own vessel the Seven Borealis. As we have previously mentioned we are having ongoing discussions with our client regarding the recovery of some of the cost incurred in executing the two projects. But these discussions have not reached a stage where it would be prudent to recognize the associated revenue. Asia Pacific and Middle East, delivered revenue of $243 million, an increase of $101 million on the prior year quarter owing largely to the continued execution offshore of the heavy lift and ties-in project on the Golden Field in Australia on which we recognized 100% project revenue for which SapuraAcergy, our joint venture acts as our subcontractor charging to us the heavy lift vessel, the Sapura3000. Net operating income was $22 million down from $33 million in the prior year's second quarter the decline in profit margin was caused mainly by a lower level of contribution from the SapuraAcergy joint venture which was executing Gumusut-Kakap project in Malaysia during the second quarter of 2013. In Brazil, revenue increased substantially in this year's second quarter to $265 million up from the $159 million in the second quarter of 2013. The offshore phase of the Guará Lula project progressed well and our fleet of PLSVs were very active throughout the quarter installing flexible pipe under their long-term day rate contract. Revenue also benefited from a $25 million insurance settlement relating a completed project. The settlement had an insignificant impact on Brazil's net operating income. The territory recorded a net operating profit of $57 million which includes a reduction of approximately $35 million in the full life loss previously recognized on the Guará Lula project this compares favorably with a net operating loss of $294 million reported in the second quarter of 2013, that was largely comprised of $300 million addition to the Guará Lula project loss provision. We recorded the $35 million reduction n the estimated full life project loss this quarter after detailed review of the project status in which we concluded that the completed installation of the remaining submerged buoys and demobilization of two of the four assigned vessels all of which was efficiently executed represented a significant derisking of the projects offshore phase. We will continue regularly to evaluate the remaining risks and economics of the project throughout the remainder of the riser installation phase that is currently being executed by the remaining two vessels. The North Sea and Canada territory generated revenue of $732 million an increase of $28 million from the prior year period. While net operating income amounted to $156 million which represents a 15% increase compared to the second quarter of 2013. The increase in revenue and profit compared to the second quarter of 2013 was primarily due to high levels of SURF and life-of-field activity aided by favorable weather conditions that facilitated good progression of projects offshore and high vessel utilization. Vessel utilization in the territory reached 93% in the quarter up from 88% in the same period last year. Lastly, the corporate segment had net operating income of $30 million compared to $32 million in the previous year period. In reduced contribution from the Seaway heavy lifting joint venture caused by the completion of the Stanislav Yudin dry docking and lower renewables activity in the North Sea was partially offset by lower operating costs. Slide 7 provides supplementary details on the income statement some of which I have already commented on. The contribution from joint ventures was down materially from the year before due mainly to the reduced profitability of SapuraAcergy and Seaway Heavy Lifting. Net finance cost was significantly down on the prior year period due mainly to the redemption of the $500 million convertible notes in October 2013. While other gains and losses of $10 million primarily reflected net foreign exchange gains incurred in the quarter. I now turn to Slide 8, which provides an overview of cash flow over the first half of 2014. Net cash generated from operating activities totaled $716 million in the first half of 2014 but, the decrease in net operating assets of $151 million in the six month period making a significant contribution. Our continued focus on working capital discipline has enabled us in particular to improve the overall receivables position of the Group. Net cash flow used in investing activities amounted to $397 million which included $428 million of capital expenditure largely on the construction of the remaining five vessels in our build vessel program. Our capital expenditure guidance remains unchanged for the year between $900 million and $1 billion. Net cash used in financing activities was $106 million which included $93 million spent repurchasing shares during the first six months under the $200 million share repurchase program which was completed in July. As reflected on the summary balance sheet on Slide 9, we finished the first half of the year with a cash and cash equivalents balance of $845 million, an increase of $195 million since the start of 2014. Total borrowings at the end of the first half stood at $919 million a slight increase of $8 million from the start of the year attributable to convertible bond accretion. Moving on to Slide 10, our financial guidance for the full year 2014 has not changed from what we communicated to you in late April and is reaffirmed on the slide. In line with our continued commitment to returning cash to shareholders through 28th of July this year, we have spent almost $199 million to repurchase approximately 10.7 million shares under the $200 million share repurchase program that commenced in October 2013. This program is now considered complete and as we announce today our Board of Directors have authorized up to $200 million to be spent on share repurchases over the next 12 months. This new repurchase program is subject to the customary Safe Harbor provisions of the Oslo Bors. This decision reflects the strength of the company's balance sheet and our continued confidence in the medium and long-term outlook for the business. In addition, as previously announced our shareholders approved at our Annual General Meeting in June, a cash dividend of NOK3.6 per share equivalent to about $200 million in total which was accrued in current liabilities at 30th June and paid utilizing part of the Group's available cash on the 10th of July this year. On Slide 11, we have provided an update of the actual debate in future expected capital expenditure relating to the vessel new built program. I'm pleased to reiterate that this program continue to be executed inline with our cost and timing expectations. As mentioned by Jean, the PLSV, the Seven Waves commenced operations on the long-term contract in Brazil mid-May about three months ahead of our initial schedule. Details of the six vessels can be seen on Slide 12, which was reviewed on our last call and the target base for the remaining 5 vessels to start operations have not changed. I will now pass you back to Jean to comment further on the markets and our outlook.

Thank you, Ricardo. So let's turn to Slide 13, our view on the market has not changed from what we are seeing three months ago. SURF tendering activity remains fairly high worldwide, however, the timing of some last contract awards remains uncertain. Demand for the life-of-field remains strong particularly in the U.K. sector of the North Sea, as IOCs and independents continued to invest in existing fields. Uncertainly remains on the timing of new projects award in Nigeria in shallow water where our conventional business is. I would like now to offer some comments on the market and the outlook by territory for the remainder of the year. Let's turn to Slide 14. Firstly, Africa and the Gulf of Mexico, in West and East Africa tendering for SURF activity continues at a high level. This is encouraging for the future and we are confident that this territory will continue to offer substantial opportunities for Subsea contractors with our particular capabilities. However, as we have said before the timing of awards for some project is uncertain particularly in West and East Africa. One should not conclude that all projects are postponed for a long period. For example, one large project in Egypt, which has been cancelled by IOC in 2013 maybe awarded to market late 2014 or early 2015. I also mentioned earlier the slowdown in the shallow water conventional market in Nigeria. Tendering activity particularly for larger projects is currently very limited and is uncertain when the situation will change. We continue to believe that is a temporary situation that we are monitoring closely. We are tendering for a number of SURF project in both the U.S. and Mexican sector in the Gulf of Mexico, the operating environment in this area remain competitive. In APME Slide 15, we see emerging deep-water prospects in Asia with potential market awards for large projects in particular in India and Indonesia. In Australia, market award of large SURF project is unlikely in the near-term of local costs remained a major challenge for our clients. However, we have identified more opportunities in life-of-field in this country. Turning to Slide 16, in Brazil the demand for PLSV by Petrobras continue to be high. Including our new build, we expect to have at least nine vessels dedicated to this activity by the end 2016. As announced previously, while we are not currently participating in tender for EPIC contracts in the pre-salt for Petrobras, we continue with our efforts to agree on recent sharing model which we believe to become active again in the future. Discussion with Petrobras is positive. Let's turn to Slide 17, in the North Sea and Canada; there are a number of SURF project that we expect maybe awarded to the market still in 2014, although the exact timing is uncertain. We continue to attract the interest of operators in our bundle technology offering which play the role in winning the Catcher Field SURF contract. Meanwhile, demand for life-of-field activity continues to be strong as evidenced by high vessel utilization in AFC in Q2. So longer term prospect and medium term prospect remain good particularly for development in the harsher climates of Norway and Eastern Canada. Turning to Slide 18, in recent months I have been talking over the last month with the oil operators focusing on optimizing their cash flow and the cost of that project. We are seeing some softening of pricing in the fabrication and equipment market from our suppliers which will allow us to part savings to our clients. But more importantly, through early engagement with our clients that we are also able to propose optimal and cost effective solution for that project. These are project positive for our clients but it's also very positive for Subsea 7 as it creates opportunities for us, it is clear that our engineering capability, the size and flexibility of our fleets and the new technology that we can propose are clear differentiators. Turning to Slide 19 and the summary for the quarter. The second quarter was a strong reporting period for Subsea 7. We had good overall project execution and significant progress on Guará-Lula. Our backlog remain high although somewhat reduced from a record level at the start of the year. Our financial guidance for the full year 2014 remains unchanged. We expect to increase revenue and achieve a moderate increase in adjusted EBITDA from the underlying level achieved in 2013 excluding the Guará-Lula loss provision at $355 million booked in that year. The high level of tendering activity across the territories was well for the future. In the near-term, however, the lack of transparency of the timing of some SURF awards and the current slow down in commercial work in Africa continues to make it difficult to provide guidance for 2015 at this point. We will communicate our outlook as we always have as soon as it becomes clear in the year. And Ricardo, John and I will be pleased to answer your questions.

Good. Jerry, we are ready now to take questions, please.

Thank you very much. (Operator Instructions) And our first question comes from the line of Phillip Lindsay of HSBC. Please go ahead. Your line is now open. Phillip Lindsay - HSBC: Yes. Thanks. Good afternoon gentlemen. Two questions please. First one, delays in project award that you are flagging, also is it the difficulty in assessing the timing, I mean that's not seen as you say. But, are there sort of specific projects where you are seeing the delays in awards, I mean Gendalo for example perhaps you should comment on that or specific regions or customers. And is it much more widespread than the past and end data, do they go any worst? That's the first question.

Thanks for your question. I would say when you look at delays in some project awards which relates to local administrative issues or negotiation with government et cetera, I would say that nothing have changed. We have seen that over the last past year, and I think we will continue to see that in the years to come, so no specific comment on that, no particular worry, the world hasn't changed from that perspective. Regarding delays on some the projects, it makes things difficult to predict and but I wouldn't conclude that the project which have been postponed – are postponed necessary for very long time, an example is, this one project that I mentioned in Egypt which had been postponed more indefinitely in 2013 and came back to the market very recently from what we understand the fast track process – with the fast track process. So no change compared with the last three months, I would say still uncertainty is driving this market. Phillip Lindsay - HSBC: Okay. And specifically on Gendalo?

Gendalo is – I mean basically – the function of the project depends on the timing of agreement of negotiation between Chevron and the Indonesian government. And we know that these negotiations are ongoing. It's difficult to know when they will be concluded. Phillip Lindsay - HSBC: Okay. Fine. And then an unrelated question on your investment in Seven Arctic, gets back to the investment clearly delivery still someway off. But, really keen to hear about early climb in interest in the vessel, so as far as you know, when it hits the water in 2016, as part of the question, in the market you are ready for I think and most people view targets around the whole Subsea factory in 2020 is quite ambitious maybe even more so today than they have been sort of in the six to 12 months ago. So I just sort of wonder how you envisage using the vessel in the first several years of operation.

I will ask John to comment on the technical capabilities of the vessel. But, I would say that the vessel is fully suitable for lot of application including the Subsea factory as you mentioned. And we do expect that it would be a very high utilization of this vessel as soon as she is delivered. But, John you want to comment on the option we took?

Yes. Phil, I think the important thing Jean talked about there; the vessel is fully capable with vertically A-system, a large deck to handle a lot of the existing work we have with two charter vessels in our fleet today, the Skandi Acergy and the Normand Oceanic. We do know that the factory of the future will be on the seabed, the timing of that remains – it's under development, under Broad. So we believe the vessel will certainly have a key role to work in our business immediately that comes off the blocks. The other thing we saw in the past was that the industry adapted the size of the 10 clips and sort of these structures to suit the Skandi Acergy when she first come out to run 280 ton lifts. And we can with the 900 ton crane we can see adapting this size of some of the Subsea hardware as a standard size of some of the SGS manufacturers make. So we had scope the vessel around the market we believe, we would have in 2016 but knowing that full well in due course, the ability to handle larger structures will allow the Subsea factory to come into place towards the end of the decade.

I would just want to add that when we prevent the vessel and our technical specification, the feedback for the – from the clients is very encouraging. Phillip Lindsay - HSBC: Okay. Thanks a lot.

Thank you. Our next question comes from the line of Andrew Dobbing of SCB. Please go ahead. Your line is now open. Andrew Dobbing - SCB: Yes. Good afternoon. Your order intake was $1.6 billion in the quarter and your backlog execution at 15 increased by – it increased from $3 billion at the end of Q1, so $3.8 billion at the end of Q2. Can you explain that $800 million increases, it's a lot, lot bigger than would typically be expected from that $1.6 billion order intake in the quarter? Is that being driven by slower execution on the existing projects and kind of revenue that you were expecting in 2014 being pushed into 2015. So that's my question. Thank you.

I'm not sure, I fully understood the question. I just would like to have – maybe a word on the backlog and I will let Ricardo comment. I mean the first thing, I mean I stated how we calculated order intake, I mean signed contracts, no letter of intent, approve variation orders. And no additional order intake at PLSV during quarters. So and it's a good – you show the good success that we have in terms of capturing smaller projects and working with our client. I find that very reassuring because when – one hand you have more competition. We are talking about some projects being delayed and we still manage to acquire our share of the market and good share of the market on the small project in particular in life-of-field but not only in life-of-field. So it's a good news.

I think – Jean, what we need to remember a number of our life-of-field contracts involve a series of call-offs, where our clients can call-off services from it as they need them and they adapt to their needs. So again, we regularly each quarter get different call-offs from our clients under to different frame of agreements that we have. So that has Jean said is the underlying business that we actually have, it varies by quarter. But, that is a reasonably a constant part of our business is taking call-offs from our clients as they need us under the life-of-field relationships that we have in many parts of the world.

And we can change from one quarter to another quarter.

I think Andrew just to close out on this issue and understand what you are driving at is that, the – we project out the revenues that we believe will be – is already existing in backlog and will be executed in the coming months and years. What we do not factor in are variation orders that in the intermediating period approved and therefore recorded or as John as mentioned, life-of-field work that SURFs that is not being yet recognized in order intake. So I think if you are trying to square first half with the second half that's the missing element of the picture. Andrew Dobbing - SCB: Okay. I think I understand. Thank you.

Thank you. Our next question comes from the line of Nick Green of Sanford Bernstein. Please go ahead. Your line is now open. Nick Green - Sanford Bernstein: Good afternoon. Nick Green from Bernstein here. Thanks for taking my question. Okay. Just a couple of quick ones please, just following on the last question, okay, it sounds pretty normal that’s okay, the part of this backlog this intake is due to the say the North Sea fleet or the expense in the repair and maintenance fleet. Is this how you typically record intake the past because that is – by our calculations the intake is about double the amount of construction awards in the period maybe $750 million, $850 million, so that seems a bigger intake from the spot markets and the vessel fleet and previously. Is that the case?

Nick, we have said absolutely nothing in the way we recall the order intake. Nick Green - Sanford Bernstein: Okay. No problem. Thank you. Then a high level question please on regional sales strategy. Are you able to give a sense on how your Brazilian and your Asia Pacific businesses are likely to develop. So specifically on Brazil, if Petrobras does continue at a lump sum contracting and we think it will at the moment. What are your options to competing in the market, I mean do you believe you can realistically stay away given the sector slowdown elsewhere? And then the second point here is on the Asia Pacific, if SapuraAcergy JV does dry up or less work coming to it, can you elaborate on any plans you may have to establish in a more sustainable business in the region. Thank you.

I think with Brazil first, I think what's important is, whatever the market is that we keep our consistent approach to sign contract and increase backlog with the right risk profile. And that's something we are committed to do and that's something we will continue to do in the future. We will not go for backlog with a wrong risk profile. So once you put that as a first assumption, then if we talk about Brazil, the way I look at Brazil they are two markets, you have the pre-salt and you have the sub-salt market. Starting with the pre-salt because I think your question comes from – for the pre-salt. And they are two types of development in the pre-salt, they are fields which are developed with flexible pipes and the way that Petrobras organizes market, it's a free placement a flexible pipes which they actually provide to install like ourselves, who provide engineering and exploration capabilities. We are very competitive in this market and an example is Seven Seas which is working today on pre-salt. In the combination of lump sum and day rate with the right risk profile and very successfully for Petrobras and there will be other projects as this kind. So we need to work with Petrobras, who defines the right risk profile on the rigid pipelay projects and fabrication project for the pre-salt and that's something that we are working on. And when we saw this – when this discussion come to conclusion with Petrobras, we will be back in this business. But, again, we are not going to increase our risk profile just to increase the backlog in this area. I think we have a good future in Brazil even in pre-salt, when you talk about the PLSVs, I think we have been – we are quite successful with our new build project. We are delivering very good result for Petrobras. And we have – and the last one I want to mention about Brazil is that we have reorganized Brazil; we have reduced significantly our cost and optimized our organization there. So we are fully in line with the turnaround of the financial in Brazil. Talking about Asia, the way we see Asia is that what I mentioned in my script. That there are a number of large project in Asia that we will be tendering in the future if you take Indonesia where we already made offers, India, you have Malaysia, we see a slowdown for the last project in Australia. And I think within this context we will optimize the use of the fleets including SapuraAcergy vessel between Asia and Europe of the world to optimize our results I would say. And we see life-of-field in Australia picking up; it's an area where we want to focus in the future. Nick Green - Sanford Bernstein: Okay, thank you. Just on the Asia Pacific question there, specific question. I mean is it fair to see this is a bit of sort of, I don't know double o quick strategy needs to be – decision needs to be made here. As a JV does dry up you either chose to step away from the market, or you chose to go into it in a deeper way because it feels as if the underlying business outside of the JV is probably a little bit subscale at the moment? Thank you.

Well, outside of Australia, I will target our large 18 projects in deep-water and we haven't send our approach so depending upon the timing of these large projects award, our – I mean the business would be driven by the timing of this last project award that's the type of project we are targeting in Asia outside of Australia. Nick Green - Sanford Bernstein: Okay. Many thanks.

Thank you. Our next question comes from the line of Asad Farid of Berenberg. Please go ahead. Your line is now open. Asad Farid - Berenberg: Hi, this is Asad Farid from Berenberg. I have two quick questions. First is with regards to Guará Lula between the second quarter, we saw further 7% execution on the project, even right now 21% of the project is remaining. I wanted to ask – what are the key factors why your comfort with regards to the project has improved considering that in the third and the fourth quarter, the ramp up or the completion of the project needs to improve further as compared to second and the first quarter. And I'm assuming the weather conditions in Brazil are going to be – are going to deteriorate in the third quarter looking at the weather cycle. And secondly, can you please talk a bit about the competitive pressures on the offshore space, whether you think that incrementally competition is increasing especially in the North Sea from new entrants? Thank you.

I'm going to ask John to answer on Guará Lula and then I will the question on the North Sea.

Okay. As we discussed in the Jean's recap of our quarter here, we achieved a significant set of milestones this quarter on Guará Lula. We had four buoys fully sold and commissioned. And we installed 14 out of the 27 risers, so we are halfway through the riser activities. You are right that we are in the worst of the weather we are in the Santos basin winter period at the moment. But since the end of the quarter we have put two more risers in and as we speak we are putting our 17th riser in at the moment. So we have been running an ongoing model of scheduling of this activity. We do allow for the weather. We did a lot of work with Petrobras in the last year on getting very good quality weather dated for a new period of development and there was a lot of adoption of that data towards the back end of last year. We now have very good weather data, which allows the plan the work that we have got. We have also de-risked the project by taking it from a full vessel project with two vessel projects. So we now have the oceans laying pipe and Neptune doing the commissioning. That is all going as we have planned. And this last trip that we are just doing now which is in quarter three is growing in line with our plan. So we feel reasonably comfortable that we have a good understanding of what's left to do everything that we have done, we have done all once before. And we are now towards the backend of the riser installation program. Petrobras are comfortable with the work and comfortable with our progress and hence the reason, we re-reviewed our project estimates and made an adjustment to the end of quarter two. I will pass the other question back to Jean.

Thanks for your question. I mean talking by the North Sea; I think the Q2 result show that we remain competitive in the North Sea in spite of the fact that we see more and more competition. The way I look at the competition I would say not only in the North Sea but generally speaking. There are different types of projects, when you look at the launch in complex projects or the projects which requires a specific technology. The market hasn't really changed because the companies which actually execute this project in a reliable manner for the clients is the same. It's us and basically two of our main competitors. But the market doesn't change and the pricing trends then is specific and unique to each project depending upon timing why it happens and everything else. When we talk about the smaller projects of SURF, the tie-back for instance in the North Sea, there is more competition and we are going to see I mean we would see some pressure to our margins until the activity level increase again. So if there is lower activity in some part of the world and more competition it's not unrealistic to see some pressure margin on the – easier to execute project. And then the life-of-field where competition as increased also, the size of our fleet, our expertise, the way we deliver the projects put us in a good position as we can differentiate ourselves through execution compared with the new scope. So I mean, just to summarize, obviously, more competition if the market slowdown, we will put some pressure on margin for some projects. But it's not true everywhere from a geographical perspective and from type of project that we are picking. Asad Farid - Berenberg: Great. Thank you.

Thank you. Our next question comes from the line of Fiona MacLean of Merrill Lynch. Please go ahead. Your line is now open. Fiona MacLean - Merrill Lynch: Thank you. Yes, it's Fiona, its Merrill Lynch. I have two questions. First of all, on the North Sea you produced a very strong margin in the second quarter of this year, could you maybe walk us through how you think that margin is going to develop in the third quarter and also in 2015. Are there any say one off items in that number or a lot of project completion, or is that actually a real number. And then second question, if you would be so kind of as to walk through each of your four regions in terms of the amount of offshore activity you are expecting for the rest of 2014 and also for 2015? Thank you.

Yes. Thank you, Fiona. I'm going to ask John to answer your questions.

So Fiona, if I take the last question first and we will go way back around again and partially answer your first segment. The North Sea this year has been a pretty conventional North Sea. As we mentioned, the weather has been good, so we liquidated a lot of projects in the North Sea without too much disruption due to weather, it's a fact of life some times the weather disrupts our activities. We are making good progress on a number of projects that we have at the usual portfolio of the projects from mature life-of-field to CapEx projects to bundle installation contracts. So as you recall, Vic has been very busy, so we have one bundled installed at the end of quarter two, we have the canal bundle going in early August. So we have some bundle activity which will come into quarter three in terms of offshore activity there. So for us the – we will see quarter three and quarter two being reasonably the same in the amount of workload and quarter four is pretty historically depending on, if there is any carry over work due to weather disruption or things that client finds in their field during an inspection or an away program, which then need intervention in quarter four. Going into next year in the North Sea, we have projects like Aasta Hansteen; we continue to be working on some of the bigger U.K. project into next year such as Montrose and such like. So it's a – we are also focusing a lot on cost control in the North Sea and making sure that our activities are cost effective. In quarter two, we did four projects with our new base out of Leigh that we talked about at the end of quarter one. And Navica has now been redeployed, so that will be one change you will the Navica will be earning her money in the Gulf of Mexico at the back end of quarter three into quarter four. So again, that was around putting U.K. cost centric model into the U.K. markets to increase our competitiveness on some of the central and southern sector projects. So to answer your question in a round about way, I think the North Sea; it's a typical North Sea season we are looking at. First, with a lot of work underway with a lot of activity and a lot of coordination of assets which is working well. If we move around the globe then in Africa, we are coming to the end of Jean says a lot of global activity, we have still some work to tidy up even after first oil. So that's coming to a conclusion. We will be working on Inagha towards the end of the year and will be working on the (indiscernible) towards the end of the year in Africa. In the Gulf of Mexico we have two projects for Navica to do as well as one project for the Borealis as to do at the back end of this year in the U.S. Gulf. We have Mexico, we will tidy up L60 and L67 before the year is out. And we are then looking at Brazil where its PLSV work pretty much all the way through with the exception of concluding Guará Lula. And then if you go down to Asia Pacific, we have to do a lot of work on Gorgon heavy lift at times which is progressing well for us at the moment. But, it's still a significant work load in quarter three and quarter four. So that in a nutshell is how the year plays out for us.

And 2015 it's a bit too early into year to be more specific. Fiona MacLean - Merrill Lynch: Okay. Just going back to the Mexican projects that you are currently executing. Can you give us a little bit of more detail as to why you were exposed to additional cost because of the third party asset?

Yes. We have two projects in Mexico, L60, L67 they are made up of different packages of work ethic for humans of the pipeline system on both projects which we have done and completed. We also had schools and time sensors which looks up the pipelines to platforms and need some platform medication activity to do on the top sites. The pipelay activities has gone well for us, what has taken us substantially longer to get access to the platforms through the tie-ins. The tie-in work is underway at the moment. But we also have accommodation vessel which is a third party vessel that we chartered into act as a floater cover accommodation vessel will allow us to do the top sites activities where we have a large number of people working on the top sites doing modification to pipings, it's like very similar to the work that we do everyday in Nigeria and in Angola. So third party assets that we rented at the substantial breakdown in the quarter, we have chosen to replace that with Polaris. The Polaris is purely there as an accommodation vessel to allow us to put people on to the platforms. So that's the reason we employ the third party assets and therefore then we replace that asset with our own assets since we had a gap in the Polaris workload.

The life time of this project as we mentioned we have some delays on the project because of indifference with the activity of PEMEX. We are taking a prudent approach there. We recognize all the cost. We obviously are in discussion with PEMEX for some claims on this – on to delays that they induced. So we are taking a prudent approach on this project. Fiona MacLean - Merrill Lynch: Okay. Thank you very much.

Thank you. Our next question comes from the line of Peter Testa of One Investments. Please go ahead. Peter Testa - One Investments: Hi. Thank you for taking the question. Just on the order intake, you talked about the escalation of orders as being an important component. I was wondering if you could give us some set of understanding as to how important the escalation was in the order intake and the extent when you are looking at your business, the extent with Statoil further opportunity for that to come through this year?

I wouldn't extrapolate numbers, the split between order intake on those and small jobs to every quarter. I mean it comes and goes depending upon the quarter. It's not a new phenomenon, I mean we have that in the past year and we expect to see that in the future. But it would be – it would move itself. So it's part of our business and it shows that we are successful to get additional work because our customer are pleased with what we execute to actually have – to give you numbers that we would be able to extrapolate quarter-to-quarter is very difficult. Peter Testa - One Investments: Okay. Can you give us some sense how substantial was this quarter?

I mean, if I can give reiterate some guidance that we have given in the past that we have announced element of our order intake. As John said, it can be lumpy in the same way as order intake for the big SURF projects is lumpy. But, if we look back across a number of years, and very roughly we have averaged throughout the cycle approximately $500 million to $600 million a quarter. But, again, it's lumpy. But I heard that gives you some indication of the sort of assumptions you should make going forward. Peter Testa - One Investments: Right, okay. And then just to cut through some of the other questions to the point being addressed, there is a lot being written about the 2015 E&C backlog comparing it to different phases last year. And it is – you made good progress this quarter, it is still lower. And I was wondering if you could give us some sense as to how you perceive the opportunities to fill the non-PLSV E&C backlog please for 2015?

The way I look at – if you look at where we are at the end of Q2 compared with where we are a year ago. The backlog that would have to be executed for next year is inline with what we have a year ago to be executed in 2014. It was about $4.1 billion in Q2 2013; it's more than $3.8 billion in Q2 2014, which represent I think about 55% of what the street evaluation of next year revenue is. These numbers are not unusual I mean they are – they have been – I mean basically in line with last year. The question is, what will happen in the next six months and I would just refer to my comment before. I mean there is uncertainty on the timing of project awards both in conventional and self. And depending upon what happen in the near future, I mean what happen in the near future will dictate what the revenue will be in 2015. We said it's a bit too early to comment on that we will be more specific later this year. Peter Testa - One Investments: Okay. All right. But just to stop you on the $3.8 billion, I think you have the pipelay order in this year, which you did not have at this stage last year, so there is still something to do. And I just maybe to impress you a little bit just try to understand as to why you see the immediate opportunities to come and to the extent to which given your strict order recognition for example, do you see a lot that's in LOI ready for financing, they were waiting final signature which is important, do you see particular orders. You got an excellent view on the short-term decisions. I mean, where do you see this coming from?

I think – I propose that we could -- we provide you offline and clarify the situation of the PLSVs but the PLSVs didn't impact the number that I just mentioned $.38 billion versus a $4.1 billion. Regarding the LOI and the rate, I mean as you can imagine, we are in discussion with a number of projects. But we don't comment on this commercial discussion and experience have shown that until the contract is signed, it's very premature to make any assumptions on what will happen. And that's why we are very strict on order intake. And I think the right thing to do. Peter Testa - One Investments: Okay.

Let me reiterate Jean's comments there is no order intake relating to the Brazilian PLSVs in 2014. Peter Testa - One Investments: Relating to 2015, that's $3.8 billion for 2015 execution doesn't that include some PLSV business?

There is PLSV business for execution clearly in 2015, yes. Peter Testa - One Investments: But it's not enough $3.8 billion for execution in 2015?

Yes, there is. Peter Testa - One Investments: Okay. It is. So let's comparing to $4.1 billion that did not have that number?

The $4.1 billion had some of these numbers in particular with the Waves. Peter Testa - One Investments: Yes. Okay. All right. Well, thank you. I will be looking forward to day orders.

Thank you. Our next question comes from the line of Amy Wong of UBS. Please go ahead. Your line is open. Amy Wong - UBS: Hi. I appreciate you can give any guidance on 2015, but could you at least give us some insight into when you start your budgeting and scheduling cycle for your 2015, when you are going to finalize that and in terms of like in the calendar year so we can get a sense of one, you will be ready to communicate that to the market. And I have a question also on Guará Lula just how much of revenues are related -- in the quarter were related to Guará Lula and how much is left in the backlog to be executed? Thanks.

Ricardo turn to and break on our budget reprocess and yes.

I mean additionally we have provided guidance on the following year in the – let me discuss the quarter four results, which is early in the New Year. We have on an exceptional basis provided earlier guidance in the review of the third quarter. So obviously mindful of the questions that we are getting from our investors and analysts about 2015. Jean has made it clear that to the extent that we have improved visibility in the second half of this year, you will share that improved visibility with our investors. Our budget process kicks off very shortly, added a very detailed bottoms up process which allows us to identify additional opportunities and quantify them with improved accuracy. So give us a chance to do that and we will see what we can provide as part of our Q3 earnings release and trading that at the very latest will be early next year. That was regard to the guidance of 2015.

Regarding the Guará Lula project, the revenue in 2014, it's around $350 million and where we are up-to-date there is about $160 million to $170 million to be executed. Amy Wong - UBS: Okay. Can you give me the Q2 revenue number for Guará Lula?

No. We are not – I don't have that in front of me but when we are really reporting on project by project basis every quarter.

I think what we indicated was that we would be targeting approximately $350 million to be executed during the quarter this year. I think you can assume that we have executed roughly half of that in the course, year-to-date.

Q1 and Q2. Amy Wong - UBS: All right. Great. That's very helpful. Thank you very much.

Okay.

Thank you. Our next question comes from the line of Rob Pulleyn of Morgan Stanley. Please go ahead. Your line is open. Rob Pulleyn - Morgan Stanley: Yes. Good afternoon. Just two follow-on questions from myself. First of all, obviously, a lot of focus on that order intake number and that obviously from your press releases we knew about $700 million of it and $850 million of it was somewhat unannounced, you normally have some of that. Could you give an idea or bit of a stay for us in terms of the comparable margin between the call-off of those framework agreements life-of-field work versus say the SURF work which we have been more aware of and the purpose of that question really is, is the high proportion of unannounced contract something we should worry about the future profitability. And the second question, and I appreciate, there is a lot of uncertainty because Chevron is in the driving seat. But is it fair to say that the award or award of Gendalo is really a binary event which dictates how 2015 looks? Thanks very much.

I think I'm good to answer on Gendalo, I will let John comment on the first part of the question. Again, Gendalo is a binary event, for us again Gendalo is concerned obviously, I mean, if Chevron goes ahead, I think its common knowledge that we won the contract. If Chevron was not to go ahead then we will see a rebid in – probably next year. But, it's not binary in the sense of 2015, because the other projects which are being discussed and which could materialize timing uncertainties as I mentioned before. That's why we are not in a position to comment on 2015 because we are obviously watching Gendalo but it's not the only project that we are not targeting as you can imagine. Rob Pulleyn - Morgan Stanley: Okay. It's very clear. Thanks Jean.

Okay. Coming back to unannounced, just we are clear as we try to clarify a bit earlier, it is a mixture of costs but also variation orders under our SURF contract and smaller projects below $50 million and those projects are a mixture of life-of-field but also some small construction work. So again, I think the question on margins there are obviously hard to put a single number on top of each one. It's a mixture and as Jean said it is lumpy as our backlog comes in generally depends which projects we have depends what's coming through and where we settle. So it's important to remember, it's a measure of the three. Rob Pulleyn - Morgan Stanley: Okay. Thanks. Maybe talk to you guys offline about different profitability, but thank you very much.

Thank you. Our next question comes from the line of Muktar Garadaghi of Citigroup. Please go ahead. Your line is open. Muktar Garadaghi - Citigroup: Good afternoon, gentlemen. Just a couple of quick questions for me. Some of your competitors have been communicating a tough approval process in – for variation orders. Have you been seeing the same in terms of the new work you are doing? And secondly, in terms of the mix of SURF versus life-of-field projects in your portfolio, how is that evolving in 2014 so far and does it have any implications for the margin outlook especially for the North Sea? Thank you very much.

I mean talking about the approach of our customers. When you talk about the variation orders on work which is added to the project. I wouldn't say the things have changed significantly compared with the past. I mean it's already into a case of commercial discussion and I think we are line with clients for most of the time and some time takes a bit more time. But things have not really changed there. What could change on variation order, that if the clients were to put pressure on the CapEx they could – you could have late variation order on the discretionary work. But that has nothing to do with the fact that they are tougher on discussion of variation order. What we are seeing is that some client pushing at the tender stage the risk of – trying to push the risk to offer this company that's how the terms and conditions are concerned. And we are very vigilant with that, I mean we haven't sent our approach and taking this approach we are still successful doing contracts. But that's what I watch, is not to increase the risk profile of the contract at the tender stage. Regarding the way we work with our clients, I would say we work very well with our clients and I would not put as a concern the negotiation of variation orders for work which has been agreed. Muktar Garadaghi - Citigroup: Okay. Thank you. And on the mix of portfolio?

I think we see in the future of the similar mix of portfolio in – I would say generally speaking with an increase in the years to come as the weight of life-of-field as we see clients more and more spending budget on the pollution side on the OpEx side. And as some of the field which are being developed in the past in the quarter come to maturity and require more life-of-field intervention. But, I would say in terms of model, I would keep 2014 and 2015, the type of model that you were using in the past. And then in the years to come life-of-field will increase. Muktar Garadaghi - Citigroup: And just a quick follow-up just on that contractors being pushed to take on more risk, was that a component of why your intake of larger projects in the first half of this year was slightly lower compared to some of your competition or is that other factors? Thank you.

No. It had no impact on what happened over the last year, I would say the impact that it had is in Brazil we have been very clear that we will not come into pre-salt work with what we perceive as our own risk profile. Outside of this particular area or particular – such a specific client, we have always been able to agree with the client acceptable risk profile and the contract that we sign. We haven't closed that because of that. Muktar Garadaghi - Citigroup: Thank you.

Thank you. We have time for one more question from the line of Dave Thomas of Credit Suisse. Please go ahead. Your line is now open. Dave Thomas - Credit Suisse: Yes. Good afternoon, Jean a question for you please. You say in the release that because of strong performance strength of balance sheet confidence of your business, the Board is authorizing to further share repurchase program, but surely if you are very confident about the future, would you not be looking for a sustainable dividend policy that would surely be a very strong stay at the market, could you comment on that please?

I would say that the position of the Board has been very clear, regarding your first part of your question that any excess cash flow that we have generated or we believe we generate in our future will be a return to the shareholders after we have reviewed investment opportunities on business with direct return. Regarding the dividend, we have not declared or announced a regular dividend policy. However, we have been paying in a regular manner $200 million every year for the last three years, which I think shows the commitment of the Board against to deliver excess cash flow either in dividend or share buyback or both. Dave Thomas - Credit Suisse: Yes. I hear what you say, but it's just your competitors have a sustainable dividend policy and it's usually just a very good stair to the market of your confidence in the business model and the future. I understand you had very good cash distribution historically as just how you want to message it to the market. Thank you for your answer anyway.

Thank you. I think that's – we come to the end of the session. I would like to thank everybody for your participation and look forward for the discussion the next quarter. Thank you. Bye.

That concludes our call. Thank you for attending. Participants you may disconnect your lines.