Statement of Financial Position

• ¹ Net debt is calculated as total borrowings (including lease liabilities) less cash and cash equivalents.

Total equity increased from US$4,914 million at December 31, 2022 to US$5,531 million. Notwithstanding the dividend distributed to the shareholders of US$197 million, this increase mainly resulted from (i) the positive result over the current period, (ii) capital contributions from non-controlling interests in special purpose entities and (iii) the increase of the hedging reserves. The movement in hedging reserve is mainly caused by (i) the increase in marked-to-market value of forward currency contracts, mainly driven by the depreciation of the US$ exchange rate versus the hedged currencies (especially EUR and BRL), partially offset by (ii) the decrease in marked-to-market value of the interest rate swaps, due to decreasing US$ market interest rates during the year.

Net debt increased by US$867 million to US$8,748 million at year-end 2023. While the Company’s net debt was positively impacted by (i) the amount of the net cash proceeds of the sale of FPSO Liza Unity (with a cash consideration of US$1,259 million received, primarily used for the full repayment of the US$1,140 million project financing), (ii) the settlements of interest rate swaps related to the financing of FPSO Almirante Tamandaré and FPSO Alexandre de Gusmão of US$154 million and (iii) the Lease and Operate segment's strong operating cash flow, as, in order to fund continued investment growth, the Company drew on project finance facilities for FPSO Prosperity, FPSO ONE GUYANA, FPSO Almirante Tamandaré, FPSO Alexandre de Gusmão, the Revolving Credit Facility RCF and the new Revolving Credit Facility for MPF hull financing.

In line with its aim to diversify its sources of debt and equity funding and to accelerate equity cash flow from the backlog, in 2023, the Company finalized the funding loan agreement and received US$125 million from CMFL in relation to FPSO Cidade de Ilhabela.

Almost half of the Company’s debt, as of December 31, 2023, consisted of non-recourse project financing (US$4 billion) in special purpose investees. The remainder (US$5.2 billion) comprised (i) borrowings to support the on-going construction of FPSO ONE GUYANA, FPSO Almirante Tamandaré, FPSO Alexandre de Gusmão, which will become non-recourse following project execution finalization and release of the related parent company guarantee, (ii) a project loan on FPSO Sepetiba (the Company is currently going through the process of releasing the corporate guarantee, after which this project loan will become non-recourse), (iii) the Company’s RCF,which was drawn for US$550 million as at December 31, 2023, and (iv) the new US$210 million Revolving Credit Facility for MPF hull financing, completed and fully drawn in December 2023. Cash and cash equivalents amounted to US$543 million (December 31, 2022: US$683 million). Lease liabilities totaled US$85 million as of December 31, 2023.

Total assets increased to US$17.2 billion as of December 31, 2023, compared with US$15.9 billion at year end 2022. This primarily resulted from (i) the increase of contract assets related to the FPSO projects under construction at the end of the year, (ii) the increase in inventory balance for the new multipurpose hull for use on a future FPSO project and (iii) the increase of finance lease receivables following first oil of FPSO Prosperity during the current period partially offset by (iv) the decrease of finance lease receivables following the sale of FPSO Liza Unity during the current period and (v) a reduction of the gross amount of the finance lease receivables, in line with the repayment schedules.

Return On Average Equity

Return on average equity (ROAE) measures the performance of the Company based on the average equity attributable to the shareholders of the parent company. ROAE is calculated as (underlying) profit attributable to shareholders divided by the annual average of equity attributable to shareholders of the parent company.

2023 ROAE stood at 13.8%, in line with the past three-year average of 13.8%.