Nekkar — Earnings Release 2014

Feb 12, 2015

HIGHLIGHTS FOR THE 4TH QUARTER 2014.

Financial highlights for the quarter were:

• Turnover in the quarter was MNOK 734 (638). $\bullet$
• $\bullet$ 4^th quarter EBITDA reported at MNOK 142 (-110).
• Adjustment of pension plan in Norwegian companies. One time effect on the 4Q EBITDA by MNOK 106, and full year by MNOK 101
• EBITDA in the quarter (exclusive change of pension plan) improved by MNOK $\bullet$ 146 compared to 2013.
• Net profit in the quarter was positive MNOK 89 (-154).
• Total EPS for the quarter was NOK 1,03 (-1,78) and YTD NOK 0,21 (-2,36).
• Order backlog at yearend 2014 was MNOK 3 627 (2 971). $\bullet$
• Order intake in the quarter was MNOK 498 (775).
• New debt covenants established

KEY FIGURES

	Q4 periodic		Full Year
MNOK	2014	2013	2014	2013
Turnover	734	638	2 4 5 4	2693
EBITDA	141,8	$-110,0$	105,2	$-130,3$
EBITDA margin (%)	19,3	$-17,2$	4,3	$-4,8$
Order intake	498	775	2 4 4 6	2913
Order backlog*	3 6 2 7	2971	3 6 27	2971
EPS (NOK) Total	1,03	$-1,79$	0,21	$-2,36$
EPS (NOK) Continued $(4)$ $\alpha$ $\beta$ $\beta$ $\beta$ $\beta$ $\beta$ $\beta$ $\beta$ $\beta$	1,03	$-1.79$	$-0,25$	$-2,63$

(*) Order backlog includes 50% of Joint venture backlog.

Turnover for the Group has decreased compared to last year, mainly due to decreased activity in the segments Container/Bulk/Tank, Multipurpose/General Cargo and Offshore.

The EBITDA for the 4^th quarter of 2014 was positive by MNOK 141,8, of which MNOK 105,7 is related to one time effects from change in pension plan in the Norwegian companies.

EBITDA in the $4^th$ quarter, excluding pension adjustments, is MNOK 36 (-110), and up from MNOK 2,2 in the 3^rd quarter of 2014. Improvement of margins in all segments, and especially service contributes positively to the result. However, low utilization in the Container/Bulk/Tank, Multipurpose/General Cargo and Offshore segments, as well as poor project performance in some large projects, still cause a drag in overall profit.

Order intake for the 4^th quarter of 2014 was MNOK 498, compared to MNOK 775 in the fourth quarter of 2013, the main reason being low order intake in the offshore segment. New sales reported from JV companies continue at an acceptable level.

The order backlog* was MNOK 3 627, up from MNOK 2 971 at the end of 2013. *including 50% of the order backlog, 1186 (519), from the joint ventures.

TOTAL ASSETS AND NET INTEREST BEARING DEBT

Total assets at the end of 4^th quarter 2014 was MNOK 2 304, an increase of MNOK 79 since 2013. The change is mainly due to increased receivables and work in progress. Net working capital has increased by approximately MNOK 12 during this quarter. The net working capital is negative MNOK 35.

In the 4^th quarter of 2014 net interest bearing debt decreased by MNOK 21 to MNOK 262.

TTS has covenants for both equity ratio and 12 months rolling EBITDA related to its debt and bonding facilities with Nordea and DNB. During the 4^th quarter, a set of renegotiated covenants have been established (ref. note 14)

The debt and bonding facilities mature in the $4^th$ quarter 2015. The Group's bank loans of MNOK 100 have been classified as short term debt in the reported balance at 31 Dec.

There were no conversions in the subordinated convertible bond in the fourth quarter.

ACCOUNTING PRINCIPLES

The company has prepared the interim financial report in accordance with IAS 34. The accounting principles applied are explained in detail in the 2013 annual report. There were no changes to the accounting principles in 2014.

SEGMENTS

As from the $3^{rd}$ quarter of 2014, TTS reports its operations in 6 business segments.

	Q4 periodic		Full Year
MNOK	2014	2013	2014	2013
Turnover	157	149	599	562
EBITDA	25	11	77	53
EBITDA margin (%)	16.2	7,4	12,9	9,4
Order backlog	854	762	854	762

RoRo/Cruise/Navy (RCN)

The RCN segment reports improvement in both turnover and profit. The results reflect TTS Group's strong position in the PCTC-market.

The outlook for the segment is positive. Order backlog gives a sound basis for the segment in the quarters to come. Proven solutions, and repeat orders from demanding customers within the PCTC market gives basis for high activity, and the market for Cruise and Navy is positive.

Container/Bulk/Tank (CBT)

	Q4 periodic		Full Year
MNOK	2014	2013	2014	2013
Turnover	105	167	422	535
EBITDA	$-7$	$-52$	-5	$-71$
EBITDA margin (%)	$-7.1$	$-31.1$	$-1,1$	$-13.2$
Order backlog *)	687	1 0 5 6	.687	1056

*Order backlog includes 50% of joint venture.

The turnover in $4^th$ quarter is reduced from last year. YTD turnover is affected by generally lower activity at South Korean yards, as well as fierce market competition. Focus on overall efficiency, and the TTS-Momentum initiative contributes to a strong EBITDA improvement from last year. The reported profit is negatively affected by restructuring cost related to transfer of operations from Germany to South Korea. Profit from JV-companies in the 4^th quarter is MNOK 3, and MNOK 14 year to date.

Improvement of order backlog is in general related to a solid order intake and order reserve in the JV-companies.

The outlook for the segment is neutral. As a consequence of fierce market competition, the profit margins are pressed. TTS is currently completing the reorganizing of the segment, including transfer of product responsibility and the production process to South Korea.

Offshore

	Q4 periodic		Full Year
MNOK	2014	2013	2014	2013
Turnover	210	143	572	608
EBITDA	33	$-75$	$-50$	$-114$
EBITDA margin (%)	15,5	$-52,6$	$-8,7$	$-18.7$
Order backlog	254	539	254	539

Reported EBITDA in the quarter is positively affected by pension adjustments of MNOK 37.

Although EBITDA has improved significantly compared to the same quarter in 2013. the margin reflects that a few projects still have significant cost overruns.

Order backlog has decreased by MNOK 285 from 4^th quarter 2013, due to low order intake and challenging market conditions.

TTS has taken strong cost-reducing measures to adjust activities and capacity to the current slow market. Following the segment restructuring in 2014, new adjustments are being evaluated in order to match capacity with order backlog and market conditions. The segment is expected to show low utilization and low margins in the quarters to come. Based on adjustments in production capacity, feedback on performance and reliability in our product range, we still find the segment to have a positive future potential.

Multipurpose/General Cargo

	Q4 periodic		Full Year
MNOK	2014	2013	2014	2013
Turnover	47		138	374
EBITDA	$-1$	$-13$	$-32$	$-35$
EBITDA margin (%)	$-2.4$	$-153,7$	$-23,2$	$-9.2$
Order backlog	562	307	562	307

Full year turnover reflects the slow market in the segment for the past two years. Although still reporting a quarterly loss, the EBITDA improvement compared to last vear is significant.

As indicated by the increased order backlog, the market for heavy lift cranes is improving. Cost cutting initiatives in 2013, where TTS Group levelled the seament capacity to a slow market, gives basis for TTS to take part in an improved market. In December 2014, TTS NMF GmbH (controlled by TTS Group) and South China Marine Machinery Ltd (controlled by China State Shipbuilding Company Ltd), established a new joint venture in China to strengthen the economic cooperation and exchange of technical knowledge between the two organizations.

Shipyard Solutions

	Q4 periodic		Full Year
MNOK	2014	2013	2014	2013
Turnover	53	58	192	168
EBITDA	27		32	18
EBITDA margin (%)	50,8	15,9	16,9	10,5
Order backlog	271	308	271	308

The 2014 figures reflect the segment's strong market position in a moderately sized niche market for shiplift and transfer systems. Adjusted for positive pension effects of MNOK 19,5 in the 4^th quarter, and MNOK 17 for the full year, the segment reports profitability in line with 2013.

The order backlog represents a sound operational fundament for the quarters to come. Being the major player in a niche market, restructuring and productivity focus in the shipyard industry is driving both demand and timing.

Services
	Q4 periodic		Full Year
MNOK	2014	2013	2014	2013
Turnover	162	113	530	446
EBITDA	64	18	96	43
EBITDA margin (%)	39,5	15,6	18,2	9,7

Turnover YTD 2014 has increased by 19% compared to turnover in 2013. Turnover in the $4^th$ quarter increased by 43 % compared to $4^th$ quarter 2013.

EBITDA margin in the segment is still improving, and is closing in on our peer competitors. Adjusted for positive pension effects of MNOK 40 in Q4, and MNOK 37 for the full year, the segment still reports improved profitability of 37% compared to 2013.

During 3^rd quarter a service unit has been set up in Houston. In the 2^nd quarter, TTS established a service unit in Brazil.

Structural capacity in the segment provide basis for increased turnover, and improvement to the overall profit margin, however the service market remains influenced by low ship charter rates in some segments.

OUTLOOK

TTS on track to improve profitability

• Revenues* for TTS Group expected to grow to NOK 2,1-2,3 billion in 2015
• EBITDA margins* for TTS Group expected to improve to approx, 6% in 2015
• TTS expect a modest revenue growth in 2016, with margins approaching industry average level

* Offshore segment excluded as it is currently exposed to a weaker market sentiment, and has a different risk profile compared to the rest of the group

The total market is improving in line with increased demand for sea transport activity in most segments. TTS Group expects a period of future growth, and our market share has increased somewhat. Within the RoRo/Cruise/Navy segment, the PCTC market has been favorable for TTS, and we expect the strong market to continue. Multipurpose/General Cargo has shown a positive development, which we expect to continue. Market expectations for the Container/Bulk/Tank segment are positive for the Chinese market, with stronger competition in South Korea. The Service market is still influenced by low ship charter rates. The Offshore market is expected to remain tough.

During 2014 TTS Group has implemented initiatives to adjust capacity towards a shifted demand, improve internal processes, and focus on the overall value chain. Market initiatives are taken to provide ship-type solutions to key customers. Effects of the actions taken will continue into 2015, and are expected to contribute positively in the quarters to come.

TTS Group has a strategy to grow its product portfolio and service offering. Sales of larger bundled equipment packages and solutions will improve efficiency for both shipyards and ship owners. The company has therefore reorganized its business units from a product focus to a ship-type focus. The aim is to increase the order value per ship and increase TTS' market position, both in China and internationally.

In order to position the TTS Group for this growth the Board of Directors of TTS Group has decided to run a strategic process to explore opportunities for both acquisitions and partnerships.

TTS Group ASA Q4.2014 / 31.12.2014

Consolidated statement of comprehensive income / Konsolidert oppstilling av totalresultat

o on somewed statement of comprenensive income i monsolidert oppstilling av totaliesuitet
NOK 1000	Unaudited/ Urevidert	Audited/ Revidert	Unaudited/ Urevidert	Unaudited/ Urevidert*
PROFIT AND LOSS ACCOUNT/ RESULTAT	YTD 31.12.2014	YTD 31.12.2013	4 th quarter 2014	4 th quarter 2013
Income from projects/ Driftsinntekter	2 453 658	2 693 167	734 090	638 564
Other operating income/ Andre driftsinntekter
Total operating income/ Sum driftsinntekter	2 453 658	2 693 167	734 090	638 564
Raw materials and consumables used/ Varekostnad	1419801	1871093	431 547	456 772
Other operating costs/ Andre driftskostnader	942 968	964 321	164 443	293 739
Result from JV ( - is income)/ Resultat fra JV ( - er inntekt)	$-14325$	$-11964$	$-3625$	$-1953$
EBITDA Driftsresultat før avskrivninger	105 215	$-130284$	141 725	$-109993$
Depreciation/ Avskrivninger	43 766	33814	14 076	9967
Other depreciation/write-downs/ Andre avskrivninger/nedskrivninger
Operating profit/ Driftsresultat	61 449	$-164098$	127 649	$-119960$
Financial income/ Finansinntekter	98 173	31 29 6	48 173	17 471
Financial expense/ Finanskostnader	136 361	68 079	54 707	39 659
Net finance/ Netto finans	$-38$ 188	$-36783$	$-6534$	$-22$ 188
Profit/loss before tax/ Resultat før skattekostnader	23 261	$-200881$	121 115	$-142$ 147
Tax/ Skattekostnad	45 079	26 48 2	32 019	12 540
Net result continued business/ Periodens resultat videreført virksomhet	$-21819$	$-227363$	89 095	$-154687$
Net result divested business/ Resultat fra avhendet virksomhet	39 562	22 945
Net result/ Netto resultat	17 743	$-204417$	89 095	$-154687$
NET RESULT FOR THE YEARI Oppstilling av totalresultatet
Net result for the period/ Periodens resultat	17 743	$-204417$	89 095	$-154687$
Actuarial gain/loss on defined pension benefit plan/ Estimatavvik pensioner	$-30700$	$-10220$	$-30700$	$-10220$
Translation differences/ Omregningsdifferanser	55 289	71 398	74 712	14 035
Comprehensive income/ Totalresultat	42 332	$-143239$	133 107	$-150872$
Earnings per share (NOK) continued business/ Fortjeneste pr. aksje (NOK) videreført virksomhet	$-0,25$
Diluted earnings per share (NOK) continued business/		$-2,63$	1,03	$-1,79$
Utvannet fortjeneste pr. aksje (NOK) viderefert virksomhet	$-0.25$	$-2,63$	1,03	$-1,79$
Earnings per share (NOK) divested business/ Fortjeneste pr. aksje (NOK) avhendet virksomhet	0,46	0.27
Diluted earnings per share (NOK) divested business/ Utvannet fortjeneste pr. aksje (NOK) avhendet virksomhet	0,46	0,27
Earnings per share (NOK)/ Fortjeneste pr. aksje (NOK)	0,21	$-2,36$	1,03	$-1,79$
Diluted earnings per share (NOK)/ Utvannet fortjeneste pr. aksje (NOK)	0,21	$-2,36$	1,03	$-1,79$
Average number of shares used as calculation basis for diluted EPS (000)/ Gjennomsnittlig antall utestående aksjer som basis for utvannet EPS (000)	86 443	86 486	86 430	86 541

Condensed consolidated statement of financial position /	Unaudited/	Audited/
Konsolidert oppstilling av finansiell stilling	Urevidert	Revidert
NOK 1000	31.12.2014	31.12.2013
Intangible assets/ Immaterielle eiendeler	663 535	673 560
Tangible assets/ Varige driftsmidler	160 897	136 049
Financial assets/ Finansielle anleggsmidler	102 582	104 002
Assets available for sale/ Eiendeler tilgjengelig for salg	$\Omega$	28 686
Sum anleggsmidler/ Total non-current assets	927 014	942 296
Inventories/ Varer	189 264	200 801
Total receivables/ Kortsiktige fordringer	1 057 101	925 957
Bank deposits/cash/ Bankinnskudd/kontanter	130 602	155 571
Total current assets/ Sum omløpsmidler	1 376 967	1 282 329
Total assets/ Sum eiendeler	2 303 982	2 2 2 4 6 2 5
Share capital/ Aksjekapital	9530	9526
Other equity/ Annen egenkapital	600 832	557 143
Total equity/ Sum egenkapital	610 362	566 670
Provisions/ Avsetning for forpliktelser	31 740	105 612
Long term interest bearing debt/ Langsiktig rentehærende gjeld	88 143	184 182
Long term liabilities/ Langsiktig gjeld	119883	289 794
Current interest bearing debt/ Kortsiktig rentebærende gjeld	297 764	49 257
Current liabilities/ Kortsiktig gjeld	1 275 972	1 318 905
Total current liabilities / Sum kortsiktig gield	1573736	1 368 162
Total liabilities/ Sum gjeld	1 693 619	1 657 957
Total equity and liabilities/ Sum egenkapital og gjeld	2 303 982	2 2 2 4 6 2 6

Condenced consolidated statement of cash flows/ Unaudited/ Audited/ Kontantstrømoppstilling Urevidert Revidert NOK 1000 YTD 31.12.2014 YTD 31.12.2013 EBITDA/ Driftsresultat før avskrivninger 105 215 $-130284$ Change in net current assets/ Endring i netto omløpsmidler $-255220$ $-7638$ Cash from operations/ Kontantstrøm fra operasjonelle aktiviteter $-137922$ $-150005$ Aquisition of non-current assets / Kjøp av varige driftsmidler -46 096 -49 534 Proceeds discontinued business/ Netto salgssum avhendet virksomhet 39 562 22 945 Other investing activities/ Andre investeringsaktiviteter 40 855 33 604 Cash from investments/ Kontantstrøm fra investeringsaktiviteter 27 070 14 267 New loans and repayment/ Opptak og nedbetaling av lån 134 659 115 007 Paid-in equity/ Innbetaling av egenkapital 500 $\sim$ Payments to shareholders/ Utbetaling til aksjonærer $\sim$ $-86461$ Net interest paid/ Netto betalte renter $-32727$ $-32209$ Cash from financing/ Kontantstrøm fra finansieringsaktiviteter 101 932 $-3164$ Change in cash/ Endring i kontantbeholdning $-21003$ $-126819$ Cash position OB/ Kontantbeholdning IB 155 570 227 666 Effect of exchange rate changes on cash/ Effekt av valutakursendring bank $-3966$ 54 724 Cash position CB/ Kontantbeholdning UB 130 602 155 570

Consolidated statement of changes in equityl Konsolidert oppstilling av endringer i egenkapital
NOK 1000	Aksiekapital	Share capital / Treasury shares/ Eane aksjer	Share premium reserve/ Overkursfond	Other equity/ Annen egenkapital	Total
Equity as of 1.1.2014/ Egenkapital 1.1.2014	9 5 2 6	$-16$	149 378	407 781	566 670
Comprehensive income/ Totalresultat	۳.		۰	42 332	42 332
Sale treasury shares/ Salg egne aksjer				149	153
Options cost/ Opsjonsplaner				1 207	1 207
Equity CB/ Egenkapital UB	9526	$-12$	149 378	451 469	610 362

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS 4TH QUARTER 2014

Note 1 General information

Reporting entity

TTS Group ASA is registered and domiciled in Norway, and the head office is located in Bergen.

The consolidated financial statements cover TTS Group ASA including its subsidiaries. The joint ventures are accounted for using the equity method.

The Board of Directors approved the consolidated financial statements for the year ended 31^st of December 2013 on 23^rd of April 2014. The annual report 2013 for the TTS Group and for TTS Group ASA, including the consolidated financial statements for the TTS Group, the separate financial statements for TTS Group ASA and the auditors' opinion from KPMG, are available at our website www.ttsgroup.com.

Basis of preparation

TTS Group's financial reports are prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union.

The unaudited consolidated financial statements for $4^th$ quarter 2014 have been prepared in accordance with IAS 34 Interim Financial Statements. The interim accounts do not include all the information required for a full financial statement and should therefore be read in connection with the consolidated financial statements of 2013.

The accounting principles applied is the same as those described in the consolidated financial statements of 2013.

This condensed consolidated 4^th quarter interim report of 2014 was approved by the Board on 11^th of February 2015.

Judgments, estimates and assumptions

The preparation of the interim report requires the use of judgments, estimates and assumptions that affect the application of accounting principles and the reported amounts of assets and liabilities, income and expenses. Actual future outcome may differ from these estimates.

In preparing these consolidated interim financial statements, the key assessments made by the management in applying the Group's accounting principles and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the financial year ended 31^st of December 2013.

Note 2 Seament information

		Q 4		Q3		Q 2		Q1		Full year
		Turnover	EBITDA	Turnover	EBITDA	Turnover	EBITDA	Turnover	EBITDA	Turnover	EBITDA
Roro, cruise, navy	2014	157	25.3	154	21,4	154	19,4	135	11,1	599	77,3
	2013	149	11.1	128	0,3	142	23,2	142	18,1	562	52,7
Container, bulk, tank	2014	105	$-7.5$	92	$-0.9$	112	2,3	112	1.3	422	$-4,8$
	2013	167	$-51.9$	87	$-24,3$	122	9,0	158	$-3.3$	535	$-70,6$
Offshore	2014	210	32,5	111	$-26,4$	130	$-30,0$	121	$-26,1$	572	$-50,0$
	2013	143	$-75,2$	149	$-39,5$	179	$-5,4$	137	6,3	608	$-113,9$
Multipurpose General Cargo	2014	47	$-1.1$	28	$-6,1$	35	$-11.$	28	$-13,0$	138	$-32,0$
	2013	8	$-13,0$	55	$-19,6$	170	$-1,5$	141	$-0,4$	374	$-34,5$
Shipyard Solutions	2014	53	27,1	59	7,1	43		37	$-2,9$	192	32,5
	2013	58	9.2	31	2.7	42	4,7	37	1,1	168	17,7
Services	2014	162	64,0	105	13,1	142	12,8	120	6,5	530	96,4
	2013	113	17,6	115	6,1	102	11,9	116	7,4	446	43,0
Corporate / Other	2014		,4'		$-5,9$		$-4,4$		$-5,3$		$-14,2$
	2013		$-7,8$		$-7,8$		$-5.0$		$-4,1$		$-24,7$
Total	2014	734	141,8	549	2,2	617	$-10,3$	554	$-28,4$	2453	105,2
	2013	638	$-110.0$	565	$-82.2$	758	36 B	7321	251	2.693	$-1303$

Comparative figures of Q4, Q3, Q2, Q1 and 31.12.2013 have been restated to reflect the changed segment reporting.

From 3^rd quarter 2014 TTS Group changed its segment reporting.

• RoRo/cruise/navy (RCN)
• Container/bulk/tank (incl. JV-companies) (CBT) $\bullet$
• Offshore $\bullet$
• Multipurpose/General cargo (MPGC) $\bullet$
• $\bullet$ Shipvard Solutions
• $\ddot{\bullet}$ Services

The RCN segment delivers complete cargo handling solutions to RoRo, PCTC, cruise and navy vessel, including terminal loading and passenger systems. Product range includes external and internal ramps, covers and doors, liftable decks, passenger gangways and linkspan systems. The segment has earlier been reporting as part of the Marine Division.

The CBT segment delivers complete cargo handling solutions to the container, tanker and bulk vessels. Product range includes 10-40 t winches, 15-50 t cranes and specialized hatch covers designs. The segment has earlier been reporting as part of the Marine Division.

The Offshore segment delivers support solutions to the offshore based oil industry and the supporting service industry. Product range includes 15-50 t offshore cranes, 40-400 t heave compensated cranes, mooring winches, internal and external covers and doors. The segment has earlier been reporting as part of the Offshore and Heavy Lift division.

The MPGC segment delivers supporting solutions to the vessels which is designed to operate in the multipurpose or general cargo market, requiring specialized operating capabilities. Product range includes 40-900 t heavy lift cranes, side loading systems, hatch covers and mooring winches. The segment has earlier been reporting as part of the Offshore and Heavy Lift division.

The Shipyard Solutions segment includes shiplift and transfer systems, as well as complete production lines to the yard industry. Products range includes shiplift system, ship transfer systems, multiwheelers and translifters.

This segment has earlier been reporting as part of the Marine Division.

The Services segment includes service and after sales for all segments within TTS. This enables TTS to offer service and after sale worldwide for the full range of its products.

Note 3 Share capital and equity

As per 31^th of December 2014 TTS Group ASA has issued 86 605 660 shares, each with a face value of NOK 0.11 giving a share capital of total NOK 9 526 623.

TTS Group ASA holds 112 882 own shares.

At the end of 2014 senior management had 505 000 outstanding share options. During 1^st quarter the senior management was awarded 170 000 new share options with an exercise price of 6.42. In $2^{nd}$ quarter the senior management was awarded 375 000 new share options with an exercise price per share of NOK 6.15.

Note 4 Earnings per share

Earnings per share (EPS) are based upon the weighted average number of shares outstanding during the period. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments.

The components of the numerator for the basic and diluted EPS are as follows:

Earnings per share/ Resultat per aksie:	YTD	YTD	PTD	PTD
	31.12.2014	31.12.2013	Q4 2014	Q4 2013
Net income available to shareholders, continued business/ Resultat tilordnet selskapets aksionærer, videreført
virksomhet	$-21819$	$-227363$	89 095	$-154687$
Effect of dilution/ Utvanningseffekt
Diluted net income available to shareholders, continued business/ Utvannet resultat tilordnet selskapets aksionærer,
videraført virksomhet	$-21819$	$-227363$	89 095	$-154687$
Net income available to shareholders, divested business/ Resultat tilordnet selskapets aksionærer, avhendet
virksomhet	39 562	22 945
Effect of dilution/ Utvanningseffekt
Diluted net income available to shareholders, divested business/ Resultat tilordnet selskapets aksjonærer, avhendet
virksomhet	39 5 6 2	22 945
Net income available to shareholders/ Utvannet resultat tilordnet selskapets aksionærer	17743	$-204418$	89 095	$-154687$
Effect of dilution/ Utvanningseffekt
Diluted net income available to shareholders/ Utvannet resultat tilordnet selskapets aksionærer	17743	$-204418$	89 095	$-154687$

The components of the denominator for the calculation of basic and diluted EPS are as follows:

		31.12.2014 31.12.2013 Q4 2014 Q4 2013
Weighted average number of shares outstanding/ Gjennomsnittlig utestående aksjer	86443	86 406	86 430	86 568
Effect of dilution/ Utvanningseffekt
Diluted numbers of shares/ Utvannet gjennom snittlig utestående aksjer	86443	86 486	86 430	86 541

Accordingly, the basic and diluted EPS for the quarter is as follows:

.		31.12.2014 31.12.2013 Q4 2014 Q4 2013
Earnings per share (NOK)/ Fortjeneste pr. aksje (NOK)	0.205	$-2.364$	1.031	$-1,788$
Diluted earnings per share (NOK)/ Utvannet fortjeneste pr. aksje (NOK)	0.205	$-2.364$	1.031	$-1.789$

Note 5 Restatement of the 4^th quarter 2013 interim financial report

Presented 2013 figures are based on restated 2013 figures.

In the period between the issuance of the $4^th$ quarter 2013 interim financial report and the 2013 annual financial report, TTS Group identified a significant increase in costestimates for several projects in production. When issuing the annual financial report on 24 April 2014, increased operating cost of MNOK 90 was reported to Oslo Stock Exchange. The effect of the increased cost is shown below:

INUA TUUU
Restatement 4th quarter 2013 interim financial report/	Reported 4Q13 /	Restated 4Q2013/
Omarbeidet 4. kvartal 2013 delårsrapport	Rapportert 4Q13	Omarbeidet 4Q2013
EBITDA Driftsresultat før avskrivninger	$-19.993$	$-109993$
Net result/ Netto resultat	$-64687$	$-154687$
Earnings per share (NOK)/ Fortieneste pr. aksie (NOK)	$-0.75$	$-1.79$
Diluted earnings per share (NOK)/ Utvannet fortjeneste pr. aksje (NOK)	$-0.75$	$-1,79$

Note 6 Related parties

Note 21 and accounting principles section 2.2 in the consolidated financial statements of 2013 describe the principles related to elimination of transactions between group subsidiaries. Eliminated transactions have no significance for the financial position and profit for the period.

The Group has carried out various transactions with subsidiaries and joint ventures. All the transactions have been carried out as part of the ordinary operations and at arm's length prices.

Balance sheet items to/from Joint Ventures/ Balanseposter til/fra felleskontrollert virksomhet	31.12.2014	31.12.2013
Current receivables/ Kortsiktige fordringer	28 472	22 258
Current liabilities/ Kortsiktig gield	$-2.198$	$-4493$
Net receivables $(+)$ / liabilities $(-)$ to/from Joint Ventures/ Netto fordringer $(+)$ / gield $(-)$	26 274	17 765

Note 7 Tax

TTS Group is taxable in more than one jurisdiction based on its operations. A loss in one jurisdiction may not be offset against taxable income in another jurisdiction. Thus, the Group may pay tax within some jurisdictions even though it might have an overall loss or have tax losses exceeding taxable profit at the consolidated level. Based on challenging markets in the offshore market, deferred tax asset in the Norwegian companies has been impaired by MNOK 20 in the 4^th quarter. The change is presented as tax. Remaining tax cost is in general related to payable taxes in different jurisdictions.

Deferred tax

Deferred income tax reflects the impact of temporary differences between the amount of assets and liabilities recognized for financial purposes and such amounts recognized for tax purposes. The net recognized deferred tax consists of the following:

	31.12.2014	31.12.2013
Gross deferred tax asset 1 / Brutto utsatt skattefordel 1)	31 152	57 748
Gross deferred tax liability1)/ Brutto utsatt skatteforpliktelse1)	$-31336$	$-30.929$
Net deferred tax asset $(+)$ / liability $(-)$ Netto utsatt skattefordel $(+)$ / -forpliktelse $(-)$	$-183$	26 819

¹⁾ Gross deferred tax asset is recognized as intangible assets and gross deferred tax liability is recognized as provisions

¹⁾ Brutto utsatt skattefordel er innregnet som immateriell eiendel og brutto utsatt skatteforpliktelse er innregnet som avsetning for forpliktelser

Recognized deferred tax asset primarily relates to tax losses in the Norwegian companies. The criteria that have been utilized to estimate that future taxable profit can be utilized against deferred tax losses are:

. The Group will have taxable profits before unused tax losses expire

• The Group has sufficient temporary differences

. Tax losses result from particular identifiable causes

Based on changed market outlook in the Offshore segment, deferred tax asset in the Norwegian companies has been impaired by MNOK 20. Deferred tax asset in Norwegian companies that is not recognized in the balance sheet at yearend is close to MNOK 135.

Note 8 Goodwill and other intangible assets

TTS Group tests the value of goodwill and other intangible assets annually or at the end of each reporting period if any indication that the assets may be impaired.

TTS shares are freely traded at Oslo Stock Exchange. Closing price of last trading date in 2014 was NOK 4,47 per share, indicating a nominal trade value of TTS of MNOK 386,4. Book value of the equity at 31.12.2014 was MNOK 630.3.

For the subsidiary NMF, which was acquired in the 3rd quarter of 2012, the results are weaker than expected. TTS Group expects improved results, and has concluded that the value in use is higher than the book value. The future market development could have a material impact in the impairment test.

TTS Group considers that there are no major events, major changes in assumptions or other new information indicating a changed assessment of goodwill and other intangible assets from year-end 2013. At 31^th of December 2014 TTS Group has evaluated, however found no basis for impairment of goodwill or other intangible assets. Future market development could have a material impact in the impairment test.

		Overview of goodwill and other intangible assets are as follows:

	Goodwill		Other intangible assets
	31.12.2014	31.12.2013	31.12.2014	31.12.2013
Net book value, beginning of period/ Bokført verdi, periodestart	538 119	471 150	77 693	80724
Acquisition/ Oppkjøp	$\sim$	12 000
Divestment/ Avhendelse	$\overline{\phantom{a}}$		×
Additions/Tilgang i året			$-419$	1782
Depreciations/Amortizations/ Avskrivninger			$-12$ 179	$-10233$
Impairment/ Nedskrivninger
Foreign currency differences/ Omregningsdifferanser	26 346	54 969	2 8 2 2	5420
Net book value, end of period/ Bokført verdi, periodeslutt	564 465	538 119	67 918	77 693

Note 9 Non-current assets

	Non-current assets
	31.12.2014	31.12.2013
Net book value, beginning of period/ Bokført verdi, periodestart	136 049	115 034
Acquisition/ Oppkiep		$\sim$
Divestment/ Avhendelse	$-500$
Additions/Tilgang i året	47 015	35 751
Depreciations/Amortizations/ Avskrivninger	$-31782$	$-23580$
Impairment/ Nedskrivninger
Foreign currency differences/ Omregningsdifferanser	10 115	8844
Net book value, end of period/ Bokfort verdi, periodeslutt	160 897	136 049

Note 10 Investments in Joint Ventures

	31.12.2014	31.12.2013
Net book value, beginning of period/Bokført verdi, periodestart	104 002	134 988
Divestment/ Ayhendelse	$\sim$	. н.
Reclassification/ Reklassifisering
Share of profit (+) / loss (-)/ Andel overskudd (+) / underskudd (-)	14 325	11 964
Share of dividend received/ Utbytte mottatt	$-5796$	$-40.954$
Foreign currency differences/ Omregningsdifferanser	$-9949$	$-1996$
Net book value, end of period/ Bokført verdi, periodeslutt	102 582	104 002

Note 11 Inventories

	31.12.2014	31.12.2013
Inventories, incl non current/ Râvarer og ferdigvarer inkl. ukurans	220 112	243 376
Obsolescence/ Ukurans	$-30.848$	$-42575$
Total inventories/ Sum varelager	189 264	200 801

Note 12 Financial assets measured at fair value

The Group has one financial asset measured at fair value in accordance with IFRS 13.

		31.12.2014		31.12.2013
	Ownership/	Fair value/	Ownership/	Fair value/
Sigma Drilling AS	Eie ande!	Virkelia verdi	Eierandel	Virkelig vardi
	16.19		16.1 - -	28 673

Following the cancellation of a new build contract from STX, Sigma Drilling has made a distribution of cash in the amount of MNOK 23,3 during 3^rd quarter. Sigma Drilling is currently evaluating their future strategy. TTS Group has impaired the value of shares in Sigma Drilling by 5.3 MNOK in the 3^rd quarter.

Note 13 Net result divested operations

In August TTS Group received a release of hold back/earn-out amount from Cameron related to the sale of the Energy-division in 2012. Based upon the release. an additional gain of MNOK 39.5 from discontinued business was allocated in $3^rd$ quarter. No changes in 4^th quarter.

Note 14 Financial risk management

The Group's objectives and principles of financial risk management are consistent with what stated in the consolidated financial statements for the fiscal year 2013.

There has been no execution related to the subordinated bond facility during the 4^th quarter of 2014. The nominal amount and conversion price of the convertible bond loan is unchanged from 4^th quarter 2013 and is MNOK 95.3, giving right to 19 184 104 shares upon conversion.

The overdraft facility of MNOK 300 and the guarantee facility of MNOK 500 with Nordea have been unchanged during 4^th quarter of 2014. Loan facility of MNOK 100, with DNB is unchanged during the 4^th quarter. The guarantee facility with DnB has been increased during the quarter from MNOK 100 to MNOK 140.

At the end of 4^th quarter 2014 TTS-group has drawn MNOK 100 of total MNOK 100 of the 3 year term loan facility in the bank agreement established in December 2012, ref Note 12 in the 2013 annual report. In addition the group has drawn MNOK 123 of the total MNOK 300 overdraft facility.

Covenants for both equity ratio and 12 months rolling EBITDA related to the debt facilities with Nordea and DNB have been renegotiated in the 4^th quarter. The new equity covenant requires an equity-portion of 20,0 % at all times. Nominal value of remaining bond-debt is to be included in the basis for the calculation.

Rolling 12 months NIBD/EBITDA covenant has been waived until 4Q2015. In the period Q4-2014 until 3Q-2015 a new EBITDA covenant is applied

(MNOK)	14 -24.	-15 71	$Q2 - 1F$	$Q3-1F$
EBITDA covenant accumulated __ _______	$\Omega$ ັ	つっ ັ -	$\geq 53$	$\geq 80$

The debt and bonding facilities with Nordea and DNB mature in the $4^th$ quarter 2015. The Group's bank loans of MNOK 100 have consequently been classified as short term debt in the reported balance at 31 Dec.

Additional information regarding financial risk management is available in the annual report 2013.

Note 15 Change in pension scheme

As of 30^th December 2014 TTS Group ASA, and its Norwegian subsidiaries have changed its pension plan from defined pension benefit plan into a contribution based pension plan. The change effects pension plan for all employees hired in the Norwegian companies.

The following table presents the one time effect of the change in pension scheme:

MNOK	Q4-14	2014
EBITDA- effect
RoRo/Cruise/Naw	0,0	0, 0
Container/Bulk/Tank	0,0	0,0
Offshore	36,8	37,4
Multipurpose/Genral cargo	0, 0	0,0
Shipyard Solutions	19,6	17,6
Services	39.6	37,4
Other	9,6	8,5
Total EBITDA effect	105,6	101,0
Finance cost on pension	$-2,6$	$-2,6$
OCI- Actuarial gain/losses	$-30,7$	$-30,7$
Total equity effect	72,3	67,7

Note 16 Subsequent events

On the 2^th of February 2015 TTS Handling Systems AS in Drøbak, a subsidiary of TTS Group ASA, signed a new contract for delivery of a ship transfer system with a total value of approx. 23 MNOK