Isabel Green - Director of Investor Relations Jean Cahuzac - Chief Executive Officer Ricardo Rosa - Chief Financial Officer John Evans - Chief Operating Officer

James Evan - Exane BNP Paribas Andrew Dobbing - SEB Nick Green - Bernstein Rob Pulleyn - Morgan Stanley Michael Rae - Redburn Frederik Lunde - Carnegie Greg Brown - HSBC Mukhtar Garadaghi - Citi Group Christyan Malek - Nomura International Christopher Møllerløkken - SpareBank1 Markets David Farrell - Macquarie Securities

Good morning, and welcome to the Subsea 7 Quarter 4 and Full Year 2015 Results Conference Call. [Operator Instructions] Today I'm pleased to present, Isabel Green, Head of Investor Relations. Please begin your meeting.

Hello, and welcome everyone to our results conference call. With me on the call today are Jean Cahuzac, our Chief Executive Officer; Ricardo Rosa, our Chief Financial Officer; and John Evans, our Chief Operating Officer. The results press release is available for download on our website along with the presentation slides that we'll be referring to on today's call. Turning to Slide 2, I would like you to take note of our forward-looking statement disclosure. A similar wording is also included on the press release. And with that I would like to turn the call over to Jean.

Thank you, Isabel. Good afternoon, everyone and welcome to our results conference call. I will start with the highlights of our performance in the fourth quarter and full year of 2015, before handing over to Ricardo, who'll cover our financial results in more detail. I will conclude by sharing our view of the outlook and how we are actively navigating through this very challenging market. As usual, we will take your questions at the end of the call. I will start first with the 2015 highlights on Slide 4. We delivered a very good operational and good financial results in a very difficult market with declining levels of [Indiscernible] activity as our clients reduce expenditure due to the low oil price. Order intake in the year was $3.4 billion, coming from new awards as well as contract escalations taking our backlog to $6.1 billion at the end of December. While order intake was lower than in previous years, it still demonstrated our competitiveness [Indiscernible] and small projects during the period. This was achieved while remaining disciplined regarding the level of risk that we are willing to accept. Total vessel utilization was 72% for the year and 62% for the fourth quarter. This was lower than the comparable prior year period, particularly for the [Indiscernible] support vessels in the Northern Hemisphere. Our active vessel utilization, which excludes stack vessels, was 78% for the year and 74% for the fourth quarter. Our priority has been to act early throughout the downturn and strengthen our tier one provision. In 2015, we delivered our active fleet and workforce resizing plan and reorganize our reporting structure. We set up powerful alliance with industry-leading partners and established new ways of working with our clients. We continue to invest in innovation to deliver the best cost effective technology such as our pipeline vessels and [Indiscernible] solution. So when I look at 2015 I am very pleased with what our people have been able to achieve around the world. Moving now to the financial results on Slide 5. In the fourth quarter, we generated $310 million adjusted EBITDA and $1 billion of revenue giving a 30% margin. Adjusted diluted earnings per share was $0.29. The goodwill on our balance sheet resulting from the combination in 2011 was impaired by $521 million in the quarter due to a deterioration in the near and medium term outlook for the oil and gas service industry. These non-cash non-recurring impairment charge does not impact our adjusted EBITDA and has been excluded from our adjusted diluted earnings per share. For the full year, our revenue was $4.8 billion and adjusted EBITDA was $1.2 billion giving a margin of 26%. This included a restructuring charge of $176 million relating to the resizing of our workforce. Adjusted diluted earnings per share was $1.45. We ended the year with a robust financial position with net cash of over $400 million reflecting significant cash generated from operation, optimized working capital and tight control of investments. Mindful of the challenge affecting the oil and gas industry in the near to medium term and in order to preserve our financial flexibility, the board will not be recommending a dividend in respect of 2015. Returning to operational performance on Slide 6. We executed well and made significant progress on complex projects in Northern Hemisphere in the fourth quarter. Offshore Norway, the Gullfaks project, which included the installation of the first [Indiscernible] compressor worldwide, was essentially completed and the Maria project progressed as per plan with engineering and procurement. In the Gulf of Mexico, the newly built [Indiscernible] Rio successfully installed umbilicals on the [Stones] project, and has subsequently commenced a day rate work under its long-term contract for Petrobras, offshore Brazil. Also offshore Brazil with the BC-10 project made significant progress. Offshore Angola, the Lianzi SURF project, was substantially completed using leading edge technology to install the world’s deepest electrically heated pipeline. So Lianzi Topside conventional project is also near completion. Significant progress was also made on the TEN project offshore Ghana. The Erha North project offshore Nigeria was substantially completed in the third quarter, but still contributed to the fourth quarter results with successful risk mitigation and commercial closeout. Our capability and capacity differentiators from the competition and its attributes have allowed us to successfully deliver these three large projects, [Indiscernible]. Our [Indiscernible] long-term contract in Brazil continued to operate with high levels of utilization. However, an incident aboard the PLSV Seven Waves that we believe resulted from a failure of the [Indiscernible] project has extensively damaged the pipe lay-tower. The Seven Waves has returned to Europe and expect to minimize operating cost while the tower is repaired. We expect her to resume operation in Brazil in 2017. Our Life of Field business experienced reduced offshore activity levels compared to the fourth quarter 2014, reflecting the prevailing market conditions. Our joint venture, Seaway Heavy Lifting, reported an increasing contribution compared to the fourth quarter 2014 due to higher activity both in oil and gas and renewable projects. Coming to our backlog on Slide 7. The tendering environment is competitive and the timing of new awards remain highly uncertain as our clients continue to delay awards to the market. We entered the quarter with $6.1 billion of orders in our backlog. $3.2 billion of this backlog was for execution in 2016. Of our long-term contract for PLSV offshore Brazil represented $2.2 billion. We won a good share of the available work in 2015, reflecting our proactive measures to increase our clients offering and lower the project cost. Our fourth quarter order intake of $400 million including a number of announced awards, East Nile Delta project, the platform extension and tie-in on the first phase of the West Nile Delta development both located offshore Egypt. Last week we were awarded a contract for Phase 2 of the West Nile Delta development in [fields] offshore Egypt. This contract has a value of over $750 million, and today we announced a contract extension for Life of Field offshore UK [Indiscernible]. These new awards were not included in the Q4 reported backlog. I will now hand over to Ricardo to talk about our financial performance in more detail.

Thank you, Jean and good afternoon, everyone. Let's first look at the income statement highlights on Slide 9. Fourth quarter revenue of $1 billion taking the full year 2015 to $4.8 billion. This was approximately 30% lower than in 2014 due to lower activity levels industry wide during the year. Adjusted EBITDA was $310 million in the quarter and $1.2 million for the full year reflected the relatively significant proportion of projects in the final stages of successful completion, which gave rise to the high-margins of 30% and 26% respectively. Included in the full year adjusted EBITDA is $136 million restructuring charge in relation to the cost reduction and resizing program that we implemented in 2015. Since our revenue and costs were affected by foreign currency movements year-on-year, but overall the impact from our earnings was not material. In the fourth quarter, we recognized a partial impairment to goodwill, which had resulted from the combination in 2011. This impairment was in response to the low oil price environment and lower for longer market outlook. The $521 million non-cash charge and did not impact our adjusted EBITDA but affected our net operating income and net income figures as well as earnings per share. Excluding the impairment, we generated net operating income of $665 million, net income of [$484 million] and adjusted diluted earnings per share of $1.45 in 2015. Slide 10 provides more detail of our annual income statement. Our reported annual net operating income of $144 million included $136 million in asset impairment charges in addition to the goodwill impairment. These charges $96 million of which was recognized in the fourth quarter related primarily to certain lower specification in niche vessels, some of which have been stacked due to the lack of foreseeable work in the medium term. After having net finance income of $9 million and other mainly foreign exchange gains of $33 million, we reported income before taxes of $185 million for the year. The $222 million tax charge for 2015 was equivalent to an effective tax rate of 31% after excluding the impact of the goodwill impairment on which no tax relief is available. Reported net loss for the year was $37 million. I will now turn to Slide 11, the cover the fourth quarter performance by each business unit. In the Northern Hemisphere Life of Field business unit revenue was $305 million, 50% lower than in the prior year fourth quarter due to significantly lower activity levels in the North Sea and Gulf of Mexico. Excluding the impact of the goodwill impairment charge, net operating loss was $49 million, reflecting reduced margins of certain projects combined with low vessel utilization driven by seasonal considerations. Notwithstanding continued lower activity in the first quarter 2016, we expect profitability to improve in response to our cost reductions and good project execution. In the southern hemisphere and Global Projects business unit revenue was $717 million, a decrease of 8% compared to the fourth quarter of 2014. Activity levels reduced as existing projects were completed and fewer new projects commenced operations offshore. This trend is expected to accelerate in 2016. [Indiscernible] on long-term contracts in Brazil continued to achieve high levels of utilization despite the incident affecting Seven Waves in December. Excluding the impact of the goodwill impairment charge, net operating income was $245 million compared to $116 million in the fourth quarter 2014. The increase was mainly due to the successful execution, risk mitigation and commercial closeout of a number of projects, including the Erha North project offshore Nigeria and the Lianzi SURF project offshore Angola. Turning to Slide 12, in May we commenced a cost reduction and resizing program to adapt to the downturn in market activity. We have exceeded our targeted reductions and the cost savings have already started to impact our results. We announced plans to reduce our workforce by 2,500 people compared with end ’14. At the end of 2015, the reduction was closer to 3,600 as we maintained our focus on streamlining our processes, reducing costs and [efficiency]. We also indicated that we would remove 12 vessels from the active fleet by early 2016. By the end of December, we had removed 10 vessels and by the end of March 2016, we will have removed 13. Seven own vessels have been stacked, five chartered vessels returned to owners and one vessel, the Seven Polaris, was scraped. Our newest addition to the active fleet, the PLSV Seven Rio, commenced operations in September. We incurred a $136 million restructuring charge in 2015 as a consequence of the resizing program. The impact in 2015 of this charge was broadly offset by the benefit the program has already delivered, and we forecast that we will achieve at least $550 million annualized savings in 2016. Our early actions to resize our capacity enable us lower project cost for our clients, thereby enhancing our competitiveness. Our capability remains intact and we continue to provide our clients with excellent execution and position ourselves to win new awards. Using Slide 13, I'd like to reflect on the changes to our cost base in 2015. Our operating expenses are approximately one third lower than the prior year as we optimized costs across all of our operations worldwide and the mix of our work changed as we completed projects. Our procurement and direct project costs in 2015 were $1.6 billion, approximately 40% below the prior year figure as we targeted supply-chain efficiencies and some of the large projects we were executing came to a close. This downward trend is expected to continue in 2016, albeit at a slower pace as the proportion of [epic] projects in our workload reduces. We have achieved significant reductions in the size of our workforce, while retaining core capability. In parallel, we have adopted other measures to reduce the cost of our workforce. Such as decreasing rates for contractors and implementing revised compensation and employment terms for personnel offshore and onshore. As the result, our underlying people cost were approximately $350 million lower than in 2014, after excluding the impact of foreign exchange movement's year-on-year. $800 million of vessel and other costs included a $136 million non-cash impairment charge and that remained in line with the prior year. We expect savings in 2016, as we expect to see the full-year benefits of a reduced active fleet. These savings however, will be partially offset by the operating costs of our remaining four new-build vessels when they commence operations during the year. Depreciation and amortization charges excluding impairments which are non-cash was stable year-on-year with depreciation on new-build vessels offsetting reduced charges on the existing fleet following impairments and disposals. As reflected on the summary balance sheet on slide 14, we ended the quarter with the cash and cash equivalent balance of $947 million. Total borrowings stood at $524 million driven down during the year by the repurchases of $70 million par value of the 217 convertible bonds, but $65 million in cash. Our liquidity position remains strong, in addition to our cash balance, we have unutilized credit facilities totaling $857 million. I now turn to slide 15, which provides an overview of our cash flow for the year. As a result of side site cash management and the focus on cost reduction, we ended the year with net cash of $423 million on the balance sheet, driven mainly by a combination of a high EBITDA margin and close control of sustaining capital expenditures. Net cash generated from operating activities totaled a $1 billion with $421 million generated in the fourth quarter. Somewhat to contrary to forecast trend, net operating liabilities increased by $64 million in the year, largely as the result of our continued success in reducing contract related receivables and a timing of capital expenditure milestones. Net cash used in investing activities was $554 million, approximately 2/3rds of the prior year net investment. We invested $639 million in capital expenditure, largely in relation to the construction of the new-build vessels. With sustaining capital expenditures reduced to a $140 million, 50% below 2015 levels. Move dividend was paid in 2015 and none have been recommended by the board for 2016. As we prioritize financial flexibility in light of the highly uncertain market outlook for new rules. The board remains committed to returning excess cash to shareholders and during the year extended our 200 million share repurchase program to July 2017. In totally, $57 million has been returned to shareholders through this program of which $7 million was in 2015. Moving to slide 16, construction of our new-build vessels is making satisfactory progress, Seven Rio commenced operations in 2015, and the construction program is due to be completed in 2016, with delivery of the remaining four vessels. We spend $499 million on the program in 2015, lured and guided as a result of the timing of certain milestone payments around the year-end. We correspondingly increased our expenditure guidance for 2016 with no significant impact on the total cost or duration of the program. Before I hand back to Jean, I'd like to discuss our financial guidance which is summarized on slide 17. Our guidance for revenue in adjusted EBITDA percentage margin in 2016 is unchanged with both expected to be significantly lower than reported in 2015 results. Administrative expenses in 2016 are expected to be in the range of $240 million to $250 million, somewhat lower than in 2015, excluding the $43 million restructuring charge. The completion of our new-build vessel program, impacts our guidance for depreciation and finance cost. As we will stop capitalizing interest charges, we start depreciating invested capital when the new-build vessels are delivered. We expect net finance cost between $5 million and $10 million, and our depreciation charge will be around $400 million to $420 million. Effective tax rate in the year is expected to be in the range of 31% to 33%, slightly higher than 2015, reflecting the geographical mix of our projects. Capital expenditure is expected to be lower than in 2015, falling within the range of $450 million to $480 million. This includes approximately $340 million to complete the new-build vessel program and a low level of sustaining capital expenditure to forecast to fall between a $110 million and a $140 million, in line with cost saving measures and the reduced active fleet. I will now have passed you back to Jean.

Thank you, Ricardo. Slide 19, summarizes our view of the outlook for 2016. Low oil and gas price continue to depress industry activity. The outlook for awards to the market is uncertain and clients delay new projects. Medium and smaller projects are still achieving final investment decision, practically where substantial cost savings have been [indiscernible] engagement and you as a working. [Indiscernible] project is more certain. In hidden market, we are facing aggressive competition, but our competitiveness remains intact and we expect to maintain our market share of new work. As the result of our successful strategic focus on the right opportunities, we have won [indiscernible] propelling $1.5 billion for execution over the next few years. We continue to carefully target our resources in the areas most likely to make progress, despite the prevailing market conditions. Our bidding strategy will not change. We will remain disciplined and only commit to projects when the risk profile is acceptable. I am aware that there has been continuous speculation regarding our long-term contracts for PLSV in Brazil. They are two [indiscernible] party Brazilian flag [indiscernible] PLSVs with [indiscernible] capacity of less than 350 tons available in the market today. This may be given priority by low, opening conventional vessels of a similar specification. As a result, the proportional backlog and that of our competitors could be affected. Discussions are in progress with the clients on how to align better our respective objective and a direct fee string. Our conventional and hook-up segment offshore West Africa is expected to continue to suffer low activity levels in 2016, and we are taking steps to minimize our local cost base and till activity resumes. Life of field and I-Tech experience lower levels of activity in 2015, and it is expected to persist in 2016. Our Seaway Heavy Lifting joint venture has a good end to 2015, and we see dome potential for renewables activity in the North Sea. In Asia, our joint venture of SapuraAcergy has limited prospect for newer walls in the near term. Moving to slide 20, we are remaining proactive in this very challenging business environment. I strongly believe the initiative we have already implemented, our key differentiators that would enable us not only to navigate to down term but also build a better company long-term. And I see a widening gap between Tier 1 companies like Subsea 7 and some of our competitors, as our client seek our preferred partners that can provide them with a most cost effective solution and consistently good execution. Turning to slide 21. As Ricardo has already detailed, we move quickly and delivered our plans to simplify organization and resize our workforce and active fleet in 2015. If needed, we are ready to take further actions to protect our business in a down term, but without losing focus on our long-term strategic priorities. Looking now at slide 22. We are driving a number of business improvements to lower our cost base and deliver savings to our clients. Risk changes, which include proposing fit-for-purpose solution and reducing the administrative burden are happening right across our business. We are adapting the way we work while managing our risks and staying focused on cost effect good execution. It project a difference in the areas for cost efficiency vary but by applying new best practice solutions to vendors across our portfolio, we are making a much real difference to the breakeven on many of the projects waiting for sanction today. Savings of 20% to 30% can be achieved, sometimes more when reengineering and technology are involved. The recent example comes from a Project 1 in 2015. To reduce bureaucracy, we propose to a client as our expertise and reputation to grow them to adopt a more hands-off approach, trusting us to monitor our own work, we significantly lower clientele resign. This resulted in growth to 30% reduction in combined project man hours between us and was a major contributor to our winning the award. Progress on this project is approximately 50% now, and I'm very pleased we are on time and on budget. Turning to slide 23. We form two strategic alliance with leading industry partners in 2015. Both alliances provide a framework for long-term collaboration. We believe its alliance strengthen our competitive position and enable us to deliver sustainable improvements in the economics of the porter oil and gas projects. We do not claim to have a silver bullet fuel for the challenges of our industry expecting, but by working together to jointly serve our clients, we can unlock new solutions that substantially reduce the cost of production. Our concept engineering and field alliance with KBR and the subsidiary Granherne, combines the best in class engineering capability with our technology, engineering and installation expertise. Together we have a market leading offering with early engagements. We're already working together on several concepts and ship studies, where early engagement significantly improves its cost efficiencies. Our alliance with one Subsea offers clients integrated [software] development solutions encompassing a wide range of experience and expertise than any other combination in the market today. Client interest in an integrated approach is growing and we’re working on a number of studies to establish a case for the combined [self FBS] business model. Moving on to slide 24, our position as a tier-1 operator with a long track record of innovation and performance makes us a strategic partner of choice for our clients. These have enabled us to extend our relationship with some of our clients to provide support on an exclusive or preferred supplier basis. We have been working this way with Centrica in the UK for some time and during 2015, we signed additional agreements with Centrica Norway, Premier and Mol. This collaboration brings mutual benefits by driving down cost and developing better solution for the engagement. As a result of this approach today we’re working on the FEED as a Premier Sea Lions project in the Falklands. Slide 25 illustrates our strategic technology programs. We’ve delivered technology advances in a number of areas in 2015 such as electrical heat traced flow line, high pressure, high temperature bundles, automatic welding and ultrasonic inspection technology. We have been laying bundles for over 35 years, but our technology had not stood still. In 2015 we qualified a high temperature, high pressure bundle solution and also developed new low friction model components to reduce manufacturing costs. In Life of Field, our technology teams have been adopting ultrasonic technology developed to inspect [indiscernible] to support [IMR] work on subsea pipelines. The result has reduced in water time and quick and simple machinery of internal cohesions and tracks. With that expensive training and equipment thereby saving time and money. We will continue to invest through the cycle to develop new enabling and cost reducing innovation which will help our clients address key development challenges. Turning to slide 26, in conclusion, the environments for our industry is very challenging, even more challenging that it was four months ago. We [indiscernible] oil and gas, the oil price we can move definitively and purposefully to strengthen our place in the top tier and help our clients to find new ways to make project work at the lower cost despite the headwinds we all face. The fundamental long term [indiscernible] oil and gas remain strong and activity is expected to recover when the market rebalances. We’re productively building on our capacity, on our capability and adopting to industry conditions while staying focused on our strategic priorities. I’ll now open the call for your questions?

[Operator Instructions] Our first question comes from the line of James Evan from Exane BNP Paribas. Please go ahead sir, your line is open.

Hi good afternoon, thank you for taking my questions. Just a couple from me please. Firstly, Ricardo just talking through the guidance actually not so much for next year, but the year just gone, I mean, you originally guided margins down, you delivered underlying actually structuring 700 basis points up. I think we’re also just struggling with just how much of that is coming from contingent receiver lease etcetera. So maybe you could talk a little bit more what drove the delta there? And then secondly, just on the maintenance to sustain any CapEx, quite a low number this year, how sustainable is that sustaining CapEx if you will as we head into 2017 if activity levels do not improve? Thank you.

Okay James, thanks for your question. I’ll perhaps take the second question first because it’s probably the less complex one. In respect of maintenance CapEx I think what we’ve been able to show in the course of 2015 is that we’ve very much on spending where necessary and minimizing any subsequent to have. I think this level of expenditure we expect to repeat and perhaps improve in 2016. It’s driven largely by the dry-docking of the existing fleet and on occasions some equipment renewals. It’s an approach that could be sustained for a number of years, but long term is not sustainable. Although it’s difficult to say whether we can sustain it for 2, 3 or 5 years, but certainly in the near term we can do so. As far as the margins are concerned for 2015, I think there are a number of factors here, but the fundamental one is that as the year has progressed and as we’ve executed projects in the course of that year and addressed and mitigated risks in that offshore execution, we’ve been able to enhance the margins that we had expected earlier on in the year. And on top of that we’ve been able to and as a result of our good performance and delivering projects sometimes ahead of schedule in terms of first oil for our clients, we have been able to reach settlements with our clients on issues that had risen during the course of this project. So overall, I think it's a significant testament to what the company can achieve on very large projects particularly in tough environments in Africa.

I would like to add one comment on the operating CapEx, we have been talking about the great execution on our projects that we delivered to our clients, I have been saying the same thing on what we did GPRs and what we did in maintenance where we have been able not only to deliver on time, on budget, but also improve our processes and simplify what we are doing therefore lowering the cost. I think it's one of the strongpoint of the highlights of Subsea 7 that we have maintained in the coming years.

Thank you.

Our next question comes from the line of Andrew Dobbing at SEB. Please go ahead sir your line is open.

Yes, good afternoon. In your Q3 presentation you were approaching completion on a number of your major projects. I personally expect a lot of those projects to complete in Q4 and that to kind of help us really, it’s a lot of contingencies. Now we saw the contingencies but a lot of those projects haven’t completed does that mean there are still good prospects for contingency release in Q1 and Q2 this year? Thank you.

Well, I mean we continue to execute the project well and I think the confidence that is on us makes commercial negotiations easier. But, one has to says that there are a number of projects which are almost complete and there will be less and less project to be completed in the future that we have induct on the result.

Okay. Just I guess, following on for Guara-Lula is that being completely fine lights in terms of the negotiations you are having with the client or is that perhaps opportunity for some release from that contract as well?

Largely completely in a very good spirit with the client with fully line objective.

And finally, could you give us any indications at all of the financial consequences of the accident on the seven ways, it is going to be out of action for 12 months that's quite a long time, it's a vessel with a pretty healthy day rate contract, are you going to suffer a lot on the back of that?

No, when you look at incidents like that you have to look at what happened, we believe it's an equipment provided by the client which fails and therefore that has to be taken into account. But we are not in a position to give numbers on the wave on the other periods, we’re in discussions.

Can you tell us what piece of equipment was it filed?

We would rather not enter into detail, technical complex detail which would be I think misleading and when we say, when I said equipment sorry I should have meant product provided by the client, it's not an equipment, it's a product provided by the client. You need to correct that.

Thanks very much.

Our next question comes from the line of [indiscernible] please go ahead sir your line is open.

Yes, good afternoon and thank you for taking my question. In fact my question is more or less in line with the two previous ones, I would like to try to dig a little bit more regarding 2016’s profitability. Maybe I missed it, but I got the impression that Ricardo said that he was relatively confident for having 2016 profitability maybe I missed it, but somewhere else little bit later in the presentation you said that more mitigating action might be needed, so if we can reconcile those two elements?

No, I think let me try to clarify, I think what we mean is that we are considering that we will continue to deliver very well our projects. When there is a lack of visibility on the markets and depending what happens in terms of timing of project world we may have to take additional measures to adjust our structure to the evolution of the market that's what we meant. It's the not question mitigation it's the question of level of activity. I think we’ve demonstrated in 2015 that we are able to be very proactive in terms of taking the necessary measures to adapt to market trend, we will continue to take the same approach in 2016 if needed.

Okay very clear. Thank you.

Our next question comes from the line of Nick Green from Bernstein, please go ahead sir your line is open.

Good afternoon, thank you for taking my question, Nick Green from Bernstein. Just a couple of questions here firstly, on the additional headcount cut that you have – not the cut you announced but the lower headcount numbers which is a welcome data point. Can you comment why the annualized savings you are expecting to see the 550 million hasn't increased from your Q3 guidance even though the headcount has come down further? And secondly, can you talk a little bit how you see the North Sea footprint going forward and particularly how can you justify in your mind keeping, I think it's about 6 yards, you have 6 yards in school basis for that region when even if the offshore does recover a number of them think you may not do even in a recovery scenario presumably the North Sea will be the one the slowest paces to recover? And then, perhaps finally, if we could return into the potential sales and EBITDA impact of the PLSV fleet in Brazil potentially losing two of the vessels and the Seven Ways as well, got a sort cursory numbers which suggest about 100 million sales per vessel and they’re quite a high EBITDA margin, so you are able to give us any scenario numbers around that please? Thank you.

Lot of questions there, so let me try to take them one by one. Regarding the PSLVs what we have said that there are two locally built PLSVs which after the available, which resident flag, which are today available on the market. I am going to ask John to explain how the process work and what he could mean for us, but maybe also our competitors?

Yes, thank you Jean, thank you Nick. As you know there is a process in Brazil which [ANTAC] state body in Brazil regulate which allows local Brazilian boat vessels to have priority over international vessels of a similar category and similar capability. As Jean says we then need to look at the PLSV fleet globally in Brazil and they generally break into three groups, AAA vessels and we have two AAA vessels in Subsea 7 which is a certain category and certain capability. There are then single A vessels of a certain low attention capability around 350 and below, and there is a group of assets which Subsea 7, some of our competitors in that group. And finally, then there is a group of high attention single A vessels which are generally the newer assets which are coming into the market. And the process requires [ANTAC] to compare similar Brazilian boat vessels. As Jean mentioned in his narrative there are two Brazilian boat vessels of 350 tons single A capability in the market today. So Jean says we need to look at the whole market, the position of ourselves and our competitors and then the very specifics which assets maybe blocked or may not be blocked. So that's the way we look at this and that's the way the industry will be managed by [ANTAC] in the future.

Regarding the North Sea, I mean, first I am, I’m not sure I share, I don't share your view on the medium term and long term of the North Sea. I mean, the North Sea today is obviously very depressed, but North Sea will pick up when the oil price start to picking up in particular because it’s an area where we are demonstrating today and that we can work in a different way. We can work differently with our clients, we have different processes, we have alliance which will allow to lower the price of the project and make project viable at a given oil price when they were not in the past. So, I would say on the long term I may not be a pessimist because you are on the North Sea. The second point is regarding the school base and the yards what we are doing for the school base and the yards, what we’re doing, I mean we actually stack equipment, we cut cash, we cut cost, we cut cash and we will navigate with this approach to the down term with more limited cost. Regarding the savings, Ricardo do you want to comment?

Yes, I will pick up on that Nick, I think and in doing so I’m referring to, I will use as a reference slide 13. I think the first point to make is that when we talked about the $550 million reduction we were talking about the benefits that we foresaw and the measures that we initiated in May 2015. If you have to remember and I think we highlighted on the couple of occasions that we started our cost based reduction process back in 2014 when we had early signs that the market was [indiscernible]. So I think what you are seeing is in 2015 the potential impact of measures already initiated in the prior year and now let’s talk about more specifically in terms of numbers and I think that the reduction that is most evidence is the drop from $2 billion in personnel costs that we incurred in 2014 down to $1.4 billion in 2015. Now that's about $600 million of that approximately $250 million reflects the benefits of a strengthened U.S. dollar versus the main currency we work in, which leaves us with a net $350 million reduction that we have achieved in the course of last year that $350 million need to be looked at in the context of – taking into account I should say the $136 million residing provision that we took in 2015. So underlying that you got a reduction of around $490 million and this is as a result of measures taken in the course of 2015. So in 2016 we are expecting to see the full annualized benefit of our measures which we had estimated in the order of $550 million. And that last comment on that you should also consider that the movement on vessels and other courses is in fact placed on the side, it’s nil. But on the line that what you have is a hiring payment in 2015 and you ought to take into account the fact that most of the vessels that we took out of service occurred in the third and fourth quarter this year and had some associated stacking costs. The last variable in this equation is the fact that we will have four new built vessels entering services 2016 and they will mitigate some of the very significant reductions that we have achieved so far since we started our efforts to reduce our base.

Okay, thank you very much John for those comments. Just and a follow-up on Jean regarding the PLSV, just quickly it sounds from your comment that we are talking about the Seven Mar and the Normand Seven. And they would be as I said generating about a 100 million a year if it's something like 40% EBITDA margin, that's a sizeable 40 million EBITDA range. You also have seven way -- not producing EBITDA in the years. So, can you confirm to us whether the guidance you gave for the margin in the year, does or doesn't reflect profit coming from three vessels in Brazil. Thank you.

I'm not going to give you numbers on the PLSVs for good reason. For reason that you understand, we are in having some discussions with our client. When you look at the group guidance, we gave you guidance on this. I would just say that before expecting material difference between our views and whatever market you're saying, we obviously would have the obligation to say it and we don’t.

Thank you, very much, for your time. I'll turn it over.

[Operator Instructions] Our next question comes from the line of Rob Pulleyn from Morgan Stanley. Please go ahead. Sir, your line is open.

Hi, yes, good afternoon gentlemen. Rob Pulleyn from Morgan Stanley. Two questions if I may. The first one, to Ricardo. Could you maybe give us a bit of a steer us to how you think working capital is going to evolve through 2016 as you wrap up some other projects in the backlog, obviously a good inflow in the fourth quarter. That'd be interesting to hear how that pans out going forward. And secondly, not to be a little bit too specific about things, but just looking at your ongoing charter project execution, obviously several things going well there. And but the SLMP project in Norway seems to have gone backwards a bit, for about 58% or about 55% over last three months. I was just wondering what was going on there. Thanks, very much.

Jean. Do you want to take the question on the project and then Ricardo will answer the other part of the question?

Yes. The Norwegian project is a series of Riser replacements that we get contracted ETA by different quantities of Riser replacements. So, as we get additional work added in, our path moves backwards and forwards. So, there is nothing to be considered about materially in our contract, is just the choices of which Risers and which locations will be working in different years as being modified.

Very clear.

And Rob, good afternoon. A couple of comments on networking capital position. As you quite likely point out we ended the year with a negative networking capital position of around $700 million if you take out cash and short-term borrowings, which is a significant improvement on Q3 on contrary to expectation. I mean, it sort of highlights the difficulty in being able to model quarter-to-quarter, the movement to working capital because the very many variable that drive in. I think we've identified the main driver as being excellent collections in the quarter from trials. The timing of certain milestone payments in particular in relation to the new-builds from the CapEx program there, and if you like for those extended close ups of certain lump sum projects with the associated residual liabilities. So, going forward in 2016, I don’t think I'm in a position to be too specific about the [indiscernible] timing of the reversal of our negative position in working capital. What I can say is that we are expecting it to occur, I can't tell here if it's going to be significant in Q1 or Q2 or Q3. And the order of magnitude will be significant. At this stage, I don’t really want to put an exact figure on it. But I would highlight too that a proportion of the cash we are holding in the balance sheet is will be marked to cover that eventuality and furthermore we have additional liquidity that's available through our facilities.

Okay. That's very helpful. Thanks, Ricardo. I'll leave you then.

Okay.

Our next question comes from the line of Hogan Anderson [ph] from ABB [ph]. Please go ahead. Sir, your line is open.

Yes, Robert. Thanks for taking my question. I just wanted if you could give some color on the fixed cost reduction. With respect to review for '17 and '18, is the current cost paid or the new cost paid matching that view and maybe if you could give some color also on what further potential you have to reduce those further, if the outlook worsens from here?

We're not in a position to indicate numbers, for '17 and '18. It's too early and I would say in terms of the cost base, I think we demonstrated in '15 that the organization was ready to [indiscernible] in a timely manner. We are ready today, if it supposed to be a required, we will be ready to take action. But cannot really give you numbers.

Okay. Thanks, well. And just a question on Brazil. Your discussions with Petrobras, are those specifically relating to the issue with blocking or is it a more general negotiation of the entire fleet rate structure term, etcetera?

It relates to the blocking from the Brazilian flag vessel and as John told you, I mean, this two available stack party vessel cannot block a number of other vessel. So, it's a kind of a general discussion we take into account. What the local law say about this Brazilian vessel, but we are looking at how to align objective between the two company in I would say at this age a very constructive approach.

Okay, thanks. That's it for me.

Thank you. Our next question comes from the line of Michael Rae from Redburn. Please go ahead. Sir, your line is open.

Yes. Hi, there. Thanks very much for taking my two questions. Firstly, thanks for providing the cost deflation example from slide 22, I think they're really useful. I'm just wondering, on top of these deflation re-forces, are you seeing any sort of irrational competitive behavior, do you think competitors are bidding zero or negative margins, just in order to secure visibility. Then the second question, I can see in the slide, you've also removed the list of project tenders which are currently underway which you usually provide, which is kind of understandable, given the customer commentary. But are there any bright spots that you would highlight as offering potential major awards anywhere in the world this year? Thanks.

No, I can't really comment on what the competition is doing in terms of margin and profitability. This really the other one who knows what they are doing. What I can say, that's a very aggressive competition as you would expect in today market. Regarding the projects, and the last projects, I think, I mean, the highlight for us had been the Egypt. And I think we continue to be hedged. We see good prospect in this part of the world. And also it has the [indiscernible] that we could be very competitive by getting key contracts in a challenging market in a country where we were. So, timing of a world of other projects around the world, remain very uncertain. So, I'm not really in a position to be more precise than that. We'll see how it goes. I'm just confident that we will be in our share when it comes. The other thing is when something which may not have been going through everybody, highlight or so right at screen this morning. But we announce an IRM contract in the North Sea, West of Shetland, with one of our key operators, an extension of two years of a contract which demonstrate a number of things. It demonstrates the confidence that the clients has in our performance, the fact that we are a very competitive from a price perspective. And that the clients is looking at us as a long-term partner. So, when you put all that together, I'm quite opinionistic on our ability to control what we can control. We cannot control the timing of the project. But we deliver and that's important for the clients when they have the choice.

Okay, that's great. Thank you.

Our next question comes from the line of Frederik Lunde from Carnegie. Please go ahead. Sir, your line is open.

Thank you. Just one question for you, [indiscernible] caller kind of '16 in terms of this is now can also the completions. You do have quite a few products and their completion. So, do you expect 2016 to be some frontend loaded? I appreciate you don’t want to give guidance, that is a call on that.

I think there will be less project in the second part of the year, have to be completed than in the beginning of the year. So, I think you're right from that perspective. There is some frontend loading in 2016. You're right.

Would you expect a seasonal uptick in Q2, Q3, or you expect a very [indiscernible] from this year?

No. I mean, there is a seasonal effect in the North Sea and part of the result in Q4, relate to the seasonal effect in the North Sea. So, we are still seeing the same seasonal effect that we're seeing in the past years audit in a more competitive environment with less work. So, it's a combination of seasonal effect and less work.

Thank you.

Thank you. Our next question comes from the line of Greg Brown from HSBC. Please go ahead. Sir, your line is open.

Hi, good afternoon, everybody. Thank you, for taking my questions. This certainly is perhaps one for John. The BP contract now this morning seems is just, you're resisting base model, to work in North Sea. I was wondering if you have observed anything you suggest the movement away from same agreement, the life of field. And into a greater reliant from the stock market, given you a variability at tonnage. And that any requirement to lower cost. And in the second question, to me working part is that you discussed enabled cost savings of between 20% and 30%. And those cost have been taken out relatively quickly. Do you or any of your clients believe that much more can and indeed needs to be done? And also what levers are you looking to pull to get that cost lower? Thank you, very much.

Okay. On the life of field, you're right that we have extended our position in the North Sea through a renewal on the West Shetland also need our DSVi contract. So, we are seeing that a number of clients are prepared to enter into those type of arrangements. What we need to remember is that we also provide project management engineering and the full capability to our appliance in terms of how they handle their managed asset base. And so for us, we are seeing interest in our number of bids at the moment in Australia. Where clients are looking at how they might approach the life of field of some of the large LNG projects which will come into play. And as you know, we provided some of type of those for BP and in the Gulf of Mexico at the moment. So, I think it's [indiscernible] and different clients approach in different way, and our model in life of field is we give our clients what they want, whoever our client is, so we can offer them quick turn around on a stock basis, or a complete three or five year framework. So, we have a very flexible modeled in life of field. In terms of the cost reduction, I think the key thing we're seeing is early involvement. The key to this is earlier involvement. The quicker there is an involvement of the installation contractor, and in some cases the hardware SKS guys from on the installation contracted together. The more ability we have to pull the big levers, the later we get involved it gets tougher in terms of what we can do. So I think we are finding that clients are responsive to that view and that we are in number of discussions which are very interesting about how we can re-look in re-engineering fields and re-configuring fields so that is always a two way street for our clients. We have to give and take in terms of profiling such like, but it's a very interesting discussion we are in at the moment.

Okay thank you very much, I will turn it back.

Thank you. Our next question comes from the line of Mukhtar Garadaghi from Citi Group. Please go ahead sir your line is open.

Good afternoon gentlemen, thanks for taking my two questions. On the Egyptian winds a big success for you guys, could you elaborate on what exactly allowed you to be so successful there, I mean, is it in terms of approach, was it price based bidding, and you were the lowest bidder or was it more behind this theme? And my second question is on your One Subsea partnership, could you just elaborate on what’s happening there and at what point could we see a joint bid from One Subsea and Subsea 7? Thank you.

John, I’ll let you on some of those questions because you are directly involved on this and I think is one of the highlights of 2015.

Yes. Yes, One Subsea to take that one first, I think we will definitely be putting joint bids in during this year, there is a responsiveness from our clients that is interesting toward that model, so I think we will be in a place this year where we will submitting offers to our clients on that basis. In terms of Egypt, Egypt is an interesting example where our client looked at how we’re going to procure and we’re going to involve the contractors early. So BP went through a bidding process on both phases of West Nile Delta and then went through a process of about nine months where they worked the terms and conditions but also maybe one fleet contract in parallel where we proactively worked with our client on challenging the field, challenging the sequence of production as I mentioned on the previous question. And that was a good example of where we could get fields to sanction for our clients at a number that worked to him and at a number that worked for us.

And just to add one more point, I was in Egypt ten days ago and visited BP, but also the partners on other projects, the Egyptian authority. And let’s say I have been very, very pleased with the feedback we are getting from the authorities in Egypt regarding our performance. Schedule of gas is very important for the Egyptian and since they are quite relieved with what we have already done on the number of projects that increase our chances to be well positioned in this country, but also you know in other countries not only Egypt.

Jean, given the size of work you are doing there, are there any big sort of procurement you base setup any sort of challenges like that or its pretty straightforward?

No, I mean, you have to manage with our Egyptian contractor who are very competent and logistic etcetera, but there is no investment on our side we have not put any CapEx and there is no need. You have a quite mature and performance industry in oil and gas in Egypt and working in partnership with them will deliver results.

That's very helpful. Thank you very much.

Thank you. Our next question comes from the line of Christyan Malek from Nomura International. Please go ahead sir your line is open.

Yes hi, good afternoon gentlemen, just two questions if I may. First of all, in terms of just the underlying margin within Subsea particularly in the high end, you talked about separating yourself from the competition given your tier-1 which would imply there is still bifurcation in the market and your vessels are so worth of premium. What sort of – very competition, but what sort of pricing environment are you seeing occurs with this counsel, the range and pricing on bids that are coming into the market. Could you talk a bit about that or qualify what the range is and how much more discounts is the competition versus yourselves and the reason I asked is just understand what is the underlying or normalized margin that you are heading towards given the moment it's being mitigated by cost reduction, but just looking further out where you see that the industry going?

Yes, not looking at it exactly the same way, I think when we say when we are tier-1 with early involvement and we actually demonstrating today that we have way of differentiating ourselves. The first step is that actually we are able to propose to the client to deliver the cost at a lower price for them through efficiency, through leaner processes and everything else. And that's step one you improve your competitiveness and therefore you win more than your market share. And then, you have to execute the project within this context working with them continuous improvement on a number of operation and then it’s the execution side which generate bottom line results. So there is no doubt that pressure on margin today, in the market there is pressure on the margin. The end result of the project is driven by this pressure on margin, but I would say also driven and maybe sometimes more driven by how well you execute the project on these projects. So pressure on margin yes, but delivery is key and in 2015 we have delivered very well. But you will see pressure on margin and overall margin of the future projects.

Right and if you could quantify that in terms of where you think the move will be for the industry, is it sort of single digit margin business going forward or is it sort of, is anyway you can give us some idea of the trajectory?

There is pressure on margin. Margins are going down in absolute term, I’m sorry your question depends on the project, the size of the project, is it filling projects between two jobs, is it the last projects where you can improve margins with excellent delivery there is no rule. Lower margin in the good old days but we can still deliver.

Right and then just a follow-up if I may, is on your JV to One Subsea. Given it seems to be a trend towards more horizontal degradation and more collaboration, do you find that will be a differentiating factor in securing work and given others are also adopting similar strategies, how do you view your ability to secure market share particularly given others, have others in early start in the process of integration or collaboration?

I think there is no doubt today that there is a demand from clients for more earlier involvement to other prices and one as you approach, one as a key approach is what we are doing as part of this alliance. I think today it's very healthy to have competition because in fact it gives you opportunities to the client to move faster to these new models. One can argue where this alliance of joint venture are versus each other. I think we are very pleased with the progress we made with One Subsea and we’re in particularly very pleased with the involvement on [indiscernible] on a number of projects. And I think what is, when I look at where we are today we look at the number of project that we are bidding, we are looking at the interest of the clients, but we are also looking at the alignment that we have and the great alignment we have on a number of area on the technology side, which would be the step to further decrease of costs for our clients on their projects. So, there is no, I mean, no doubt for me that it's a way to go and there is no doubt for me that we will be tier-1 of these alliances and I am quite optimistic on that. Basically we have to move for the next question.

Our next question comes from the line of Christopher Møllerløkken from SpareBank1 Markets, please go ahead sir, your line is open. Christopher Møllerløkken: Yes hello, this is Christopher Møllerløkken in SpareBank1 Markets, just a quick question on Q4. Could you quantify a bit the effect you did see regarding the closeout of projects which delivered the strong Q4 margin? Thank you.

Not really, it's a combination of very different factors, closeout of projects, contingencies, successful completion, the PLSV is high performance in Brazil so it's a combination of very, very different factors which we’ll deliver. I think we can take one more question before we close.

Yes. Our next question comes from the line of David Farrell from Macquarie Securities. Please go ahead sir.

Hi there gentlemen, one quick question from me. Obviously on the PLSV got into out of potential risk for two of the lower tonnage vessels, is there any risk or can you envisage a scenario when after Petrobras is forthcoming stuff they outdate, there is a risk to the higher tonnage vessels that you currently have on the contract and the date to deliver?

No. No as John was mentioning we have strict rules on what can be done and we have AAA vessel which are different design from single A vessels which are locally built or not locally built which have Brazilian flag and high end vessel have higher specification in terms of attention with the Brazilian vessel so much.

My question about higher capacity even in high end size?

Sorry I missed your question.

There is no concern that there might be over capacity in the high end space or is it just everyone would be on an equal playing they would with non-Brazilian flagged vessels?

No, these contracts are firm contracts so and there is no vessel to displace them from an operating license locally because of Brazilian flags so it's firm contract and I think it’s on.

Okay. Great thank you.

With that I think we have to close. I would like to thank everybody for participating to this call. Quite pleased with the 2015 on what we have achieved in a very difficult environment asking that we cannot control like the oil and gas price. But I think the team all around the world has been very performance in delivering in a difficult environment and acting on what we can control and we will continue to do that in 2016. Thank you.

This now concludes our conference call. Thank you all for attending, you may now disconnect your lines.