Philly Shipyard — Investor Presentation 2015

Apr 15, 2015

Annual General Meeting

Aker Philadelphia Shipyard ASA Oslo, 15 April 2015

Agenda

• 1. Opening of the annual general meeting, including approval of the notice and agenda.
• 2. Election of a person to co-sign meeting minutes along with meeting chair.
• 3. Presentation of business activities (non-voting).
• 4. Approval of the 2014 annual accounts of Aker Philadelphia Shipyard ASA, group consolidated accounts and the Board of Directors' report.
• 5. Consideration of the Board of Directors' declaration regarding stipulation of salary and other remuneration to executive management of the company.

• 6. Consideration of the statement of corporate governance (non-voting).

• 7. Stipulation of remuneration to the members of the Board of Directors and the Audit Committee.

• 8. Stipulation of remuneration to the members of the Nomination Committee.
• 9. Approval of remuneration to the auditor for 2014.
• 10. Election of member to the Board of Directors.
• 11. Election of members to the Nomination Committee.
• 12. Authorization to the Board of Directors for payment of dividends.
• 13. Authorization to the Board of Directors to increase the share capital.
• 14. Authorization to the Board of Directors to purchase own shares.

Presentation of Business Activities

Aker Philadelphia Shipyard ASA

Company Overview

A U.S. shipyard that utilizes state-of-the-art shipbuilding practices to manufacture ocean-going commercial vessels for the Jones Act market and opportunistically maintains ownership interests in the vessels it constructs

• Company: AKPS is the most modern U.S. shipyard focused on building commercial vessels protected by the Jones Act
• Products: AKPS builds ocean-going tankers ranging in size from 46,000-115,000 dwt and containerships. The yard has the capabilities and infrastructure to build a variety of vessels
• Facility: AKPS's shipyard was completely rebuilt in 1998 and has been optimally designed to support commercial shipbuilding operations; over USD 650M invested through a public private partnership
• Processes: The yard utilizes modular construction, automated fabrication systems and outsourcing to enhance productivity
• Partners: Relationships with Hyundai Mipo Dockyards, KOMAC, and Samsung Heavy Industries
• Order book: Four vessels currently in the production phase; additional contracts for two product tankers and two containerships with last delivery in late 2018
• Vessel Ownership: Exposure to time charter rates for six tankers through Crowley joint venture and 54% ownership of Philly Tankers
• Ownership: Converto Capital Fund owns 57.6% of the company which is listed on the Oslo Stock Exchange

Modern Shipyard

Commercial Vessels

Tankers Container Ships

Summary of 2014 Main Events

• Successful equity raise
• Closed USD 120 million construction loan
• Sold profit sharing interests to Crowley
• Delivered Hull 019
• Secured contracts for Hulls 025 and 026
• New CEO: Steinar Nerbovik
• Commenced construction of all four product tankers for the AKPS-Crowley joint venture

Hull 021 ready for launch

Presentation of Financial Statements

Aker Philadelphia Shipyard ASA

Consolidated Income Statement

USD (except amounts) Amounts in thousands share per	2014	2013
Operating revenues	240 231 ,	275 838 ,
Other income	32 437 ,	3 187 ,
Operating and other income revenues	272 668 ,	279 025 ,
Cost of vessels	(233 793) ,	(240 962) ,
Wages and other personnel net expenses,	(2 155) ,	(2 288) ,
Other operating expenses	(4 574) ,	(5 660) ,
before (EBITDA) Operating income depr . and amort	32 146 ,	30 115 ,
Depreciation	(7 457) ,	(6 919) ,
Operating income (EBIT)	24 689 ,	23 196 ,
Financial income	835	1 084 ,
Financial expenses	(6 637) ,	(871)
before Income tax	18 887 ,	23 409 ,
Income tax expense	(5 274) ,	(7 814) ,
Net income for the year	13 613 ,	15 595 ,
Basic earnings share (USD) per	1 12	1 53

Consolidated Statement of Financial Position Assets

USD Amounts in thousands	2014	2013
ASSETS
Property , plant and equipment	52 894 ,	54 824 ,
Restricted cash	002 7 ,	20 003 ,
Deferred tax assets	308	2 976 ,
Equity-accounted investees	960 55 ,	-
Other non-current assets	208	380 5 ,
Total non-current assets	116 372 ,	83 183 ,
Vessels-under-construction receivable	87 945 ,	-
Restricted cash	13 000 ,	-
Prepayments and other receivables	10 590 ,	32 051 ,
Income receivable tax	-	3 287 ,
Cash and cash equivalents	40 477 ,	68 775 ,
Total current assets	152 012 ,	104 113 ,
Total assets	268 384 ,	187 296 ,

Consolidated Statement of Financial Position Equity & Liabilities

USD Amounts in thousands	2014	2013
EQUITY AND LIABILITIES
Paid in capital	81 619 ,	70 995 ,
Other equity	56 563 ,	42 950 ,
Total equity attributable equity holders of the to parent	138 182 ,	945 113 ,
Total equity	138 182 ,	113 945 ,
Interest-bearing long-term debt	726	2 870 ,
Non-current portion of payable note	10 753 ,	-
Other long-term liabilities	7 210 ,	7 030 ,
Deferred liabilities tax	-	896 7 ,
Total liabilities non-current	18 689 ,	17 796 ,
Interest-bearing short-term debt	212	2 695 ,
Trade payables and accrued liabilities	31 929 ,	18 293 ,
Note payable	45 552 ,	-
Income payable taxes	6 259 ,	-
Customer advances , net	26 054 ,	33 821 ,
Other provisions - warranties	1 507 ,	746
Total liabilities current	111 513 ,	55 555 ,
Total liabilities	130 202 ,	73 351 ,
Total equity and liabilities	268 384 ,	187 296 ,

Aker Philadelphia Shipyard ASA Income Statement

Amounts in USD thousands	2014	2013
Operating revenues	8 6	2,085
Gain-on-sale of profit sharing asset	22,834	-
Operating expenses	(1,272)	(611)
Operating income	21,648	1,474
Interest income from subsidiary	196	-
Interest expense to subsidiaries	(87)	(407)
Other interest and financial income	464	699
Other interest and financial expenses	(3,205)	(136)
Income before tax	19,016	1,630
Tax (expense)/benefit	(7,046)	410
Net income for the year	11,970	2,040
Allocation of net income:
Net income	11,970	2,040
Other equity	(11,970)	(2,040)
Total	-	-

Aker Philadelphia Shipyard ASA Statement of Financial Position

USD Amounts in thousands	2014	2013	USD Amounts in thousands	2014	2013
ASSETS			EQUITY AND LIABILITIES
Shares in subsidiaries	67 000 ,	67 000 ,	Share capital	22 664 ,	18 709 ,
Deferred tax asset	-	410	Share premium reserve	58 955 ,	52 286 ,
Loan subsidiary to	35 000 ,	-	Total paid in capital	81 619 ,	995 70 ,
Other receivables non-current	-	14 110 ,	Other equity	28 081 ,	16 111 ,
Total non-current assets	102 000 ,	81 520 ,	equity Total	109 700 ,	87 106 ,
Other receivables current	2 7	2 642 ,	Long-term subsidiary notes to	-	13 980 ,
Cash and cash equivalents	13 916 ,	17 527 ,	Total liabilities non-current	-	13 980 ,
Total current assets	13 943 ,	20 169 ,
			Other short-term liabilities	202	603
			Tax payable	6 041 ,	-
			Total liabilities current	6 243 ,	603
Total assets	115 943 ,	101 689 ,	equity liabilities Total and	115 943 ,	101 689 ,

Other short-term liabilities	202	603
Tax payable	6 041 ,	-
Total liabilities current	6 243 ,	603

Auditor's Report 2014

KPMG AS Tom Myhre, State Authorized Public Accountant

Consideration of the Board of Directors' declaration regarding stipulation of salary and other remuneration to executive management of the Company

The General Meeting supports the Board of Directors' statement regarding establishment of salary and other benefits for the executive management pursuant to the Public Limited Liability Companies Act section 6-16a.

Corporate Governance Report 2014

Aker Philadelphia Shipyard ASA's corporate governance report is presented on pages 52-55 of the 2014 annual report.

Proposal from the Nomination Committee of remuneration to the members of the Board of Directors, the Audit Committee and the Nomination Committee

Board of Directors

>	Board chairman		NOK 320 000
>	Board members		NOK 215 000
>	Audit committee chairman	NOK	45 000
>	Audit committee members	NOK	35 000

Nomination Committee

Chairman and members NOK 33 000

Approval of remuneration to the auditor for 2014

The remuneration to the auditor of USD 58,000 ex.-VAT for the audit of the Company's 2014 annual accounts is approved. In addition, the Group has paid fees to KPMG of USD 74,000 ex.-VAT for services other than audit.

Nomination committee

Leif-Arne Langøy (chairman)

Gerhard Heiberg

Arild Støren Frick

Board composition

Kristian Røkke (chairman)

Audun Stensvold (deputy chairman)

Amy E. Humphreys

Elin Karfjell

Board authorizations

• Authorization to the Board of Directors for payment of dividends.

• Authorization to the Board of Directors to increase the share capital.

• Authorization to the Board of Directors to acquire own shares.

Disclaimer

This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Aker Philadelphia Shipyard ASA and Aker Philadelphia Shipyard ASA's (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for Aker Philadelphia Shipyard's businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although Aker Philadelphia Shipyard ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. Aker Philadelphia Shipyard ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Aker Philadelphia Shipyard ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.

The Aker Philadelphia Shipyard group consists of many legally independent entities, constituting their own separate identities. Aker Philadelphia Shipyard is used as the common brand or trade mark for most of this entities. In this presentation we may sometimes use "Aker Philadelphia Shipyard", "Group, "we" or "us" when we refer to Aker Philadelphia Shipyard companies in general or where no useful purpose is served by identifying any particular Aker Philadelphia Shipyard company.