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Additional information

Purchase of treasury shares

No treasury shares were purchased on the market during 2010.
Saipem SpA holds 3,710,372 treasury shares (5,651,047 at December 31, 2009), amounting to € 84 million (€ 119 million at December 31, 2009). These are ordinary shares of Saipem SpA with a nominal value of € 1 each.
At March 8, 2011, the share capital amounted to € 441,410,900.
On the same day, the number of shares in circulations was 437,898,478.

Shares held by the Directors, Statutory Auditors and the General Managers in the issuer and its controlled companies

Pursuant to Consob resolution 11971 of May 14, 1999 and subsequent addenda, the following table indicates the number of shares held in Saipem and its controlled companies by the Directors, Statutory Auditors and General Managers, as well as by their spouses, where not legally separated, and by their minor  children, either directly or through subsidiary companies,fiduciaries or third parties.

Name and surname
Company
Number of shares
held at Dec. 31, 2009
Number of shares
purchased
Number of shares sold
Number of shares
held at Dec. 31, 2010
Pietro Franco Tali Saipem SpA 201,122 252,775 (1) 243,897 210,000
Hugh O’Donnell Saipem SpA - 74,000 (1) 74,000 -
Jacques Yves Léost (2) Saipem SpA 230,167 140,000 (1) 80,060 n.d.
Umberto Vergine (3) Saipem SpA - 920 - 920
Senior managers with strategic responsibilities
Saipem SpA 74,872 394,950 (1) 425,050 42,372 (4)
(1) Exercise of stock options. (2) Board Director of Saipem SpA from January 1, 2010 to August 18, 2010 and Chairman and General Manager of Saipem sa from January 1, 2010 to August 29, 2010. As of August 29, 2010, Mr. Léost no longer holds any office within the Group. (3) Board Director of Saipem SpA as from October 27, 2010. (4) The difference of 2,400 shares relates to directors who were no longer in office as of December 31, 2010.

Consob Regulation on markets

Article 36 of Consob Regulation on Markets:
conditions for the listing of shares of companies with control over companies established and regulated under the law of non-EU countries

With regard to the recently published regulations setting out conditions for the listing of shares of companies with control over companies established and regulated under the law of non-EU countries that are deemed to be of material significance in relation to the consolidated financial statements, the Company discloses that at December 31, 2010, the following eleven Saipem subsidiaries fell within the scope of application of the regulation in question:
- Ersai Caspian Contractor Llc;
- Petrex SA;
- Saipem Contracting (Nigeria) Ltd;
- Saipem Contracting Algérie SpA;
- Snamprogetti Saudi Arabia Ltd;
- Global Petroprojects Services AG;
- Saipem Asia Sdn Bhd;
- Saipem Misr for Petroleum Services (S.A.E.);
- Saudi Arabian Saipem Ltd;
- Saipem America Inc;
- PT Saipem Indonesia.

Procedures designed to ensure full compliance with Article 36 with regard to the above companies have already been adopted.

No further regulatory compliance plans are therefore scheduled for 2011.

Article 37 of Consob Regulation on Markets: conditions preventing the admission to trading on an Italian regulated market of the shares of subsidiaries subject to management and coordination by another company

Pursuant to the requirements set out in paragraph 13 of Article 2.6.2 of the Rules of the Markets organised and managed by Borsa Italiana SpA, the Board of Directors has ascertained that the company satisfies the conditions set out in Article 37 of Consob Regulation on Markets for the admission to trading on an Italian regulated market of the shares of subsidiaries subject to management and coordination by another company.

Disclosure of transactions with related parties

Transactions with related parties entered into by Saipem and identified by IAS 24 concern mainly the exchange of goods, the supply of services, and the provision and utilisation of financial resources, including entering into derivative contracts. All such transactions are an integral part of ordinary day-to-day business and are carried out on an arm’s length basis (i.e. at conditions which would be applied between independent parties) and in the interest of Group companies.
Directors, general managers and senior managers with strategic responsibilities must declare, every six months, any transactions they enter into with Saipem SpA or its subsidiaries, directly or through a third party, in compliance with the provisions of IAS 24.
The amounts of trade, financial or other operations with related parties are provided in Note 43 to the consolidated financial statements.
As of January 1, 2011, the new procedure ‘Transactions involving interests held by board directors and statutory auditors and transactions with related parties’ came into effect. The procedure can be consulted on Saipem’s website www.saipem.com under the section ‘Corporate Governance’.

Transanctions with the parent company and with entities subject to its direction and coordination

Saipem SpA is subject to the direction and coordination of Eni SpA. Transactions with Eni SpA and with entities subject to its direction and coordination constitute transactions with related parties and are commented on in Note 45 ‘Transactions with related parties’ in the notes to the consolidated financial statements.

Events subsequent to year end

New contracts

During January 2011, Saipem was awarded new contracts and negotiated variations to existing contracts amounting to approximately € 1 billion. These can be broken down as follows:

- approximately € 750 million in the Onshore sector relating to contracts reported in the press release of January 14, 2011;
- approximately € 240 million in the Offshore and Onshore Drilling sectors relating to contracts reported in the press release of January 26, 2011.

Organisational changes

With the aim of facilitating enhanced integration of the Engineering & Project Management competencies with those deriving from our powerful Asset Base, the Onshore and Offshore Business Units have been unified. The resulting single Business Unit, denominated ‘Engineering & Construction’, will be headed by Chief Operating Officer Pietro Varone. The Drilling Business Unit, headed by Chief Operating Officer Giuseppe Caselli, already comprises both Onshore and Offshore segments. In view of the differences in terms of invested capital and margins, reporting of financial results will continue to be split by Onshore and Offshore segments, both for Drilling and Engineering & Construction. In addition, responsibilities for development of new Assets, along with maintenance of Assets (which was previously a support function to the Business Units) have now been reallocated to the two Business Units – Engineering & Construction and Drilling, respectively – based on Asset type.

Management outlook

Oil industry spending is expected to increase in 2011, underpinning expectations of  improved market prospects for the oil services industry. Specifically, Onshore sector spending is expected to experience similar high levels of investment as in 2010, whilst the Offshore sector spending is expected to increase.
This should allow for a continued positive trend in the Onshore market and a gradual recovery in the Offshore market, a sector that has remained weak over the last two years. In the Drilling sectors, good demand is expected to lead to a gradual recovery of both utilisation levels and daily rates.
As far as Saipem is concerned, the record level of the backlog, its size and quality, and the strong operating performance of the industrial model, underpin expectations of again achieving record results.
Specifically compared to 2010, revenues are expected to increase by 5% and EBITDAi by 10%. Depreciation is forecast to increase over € 100 million due to the asset base expansion. Financial expenses are expected to rise due to the charge to the income statement of interest previously capitalised on investments completed in 2010 or to be completed in 2011. The tax rate is currently expected to remain in line with that of 2010. The increase in adjusted net profit is expected to be around 5% compared to the record level of 2010.
Investments for 2011 are forecast around € 1 billion and will be spent on progressively strengthening the Offshore asset base and completing the expansion of the Drilling fleet. Leveragei is expected to drop slightly.

Non-GAAP measures

Certain of the performance indicators used in the Directors’ Report are not included in the IFRS (Non-GAAP measures). They are disclosed to enhance the user’s understanding of the Group’s performance and are not intended to be considered as a substitute for IFRS measures.
The Non-GAAP measures used in the Directors’ Report are as follows:

- cash flow: the sum of net profit plus depreciation and amortisation;
- capital expenditure: calculated by excluding investments in equity interests from total investments;
-gross operating profit: a useful measure for evaluating the operating performance of the Group as a whole and of the individual sectors of activity, in addition to operating profit.
Gross operating profit is an intermediate measure, which is calculated by adding depreciation and amortisation to operating profit;
- non-current assets: the sum of net tangible assets, net intangible assets and investments;
- net current assets: includes working capital and provisions for contingencies;
- net capital employed: the sum of non-current assets, working capital and the provision for employee benefits;
- sources of capital employed/coverage: the sum of shareholders’ equity, minority interest and net borrowings.

Declaration pursuant to Legislative Decree No.196 of June 30,2003

In his capacity as data controller of personal data, the Chairman declares that the Security Policy Document has been updated pursuant to Legislative Decree No. 196 of June 30, 2003.

Secondary offices

Pursuant to Article 2428 of the Italian Civil Code, the company declares that it has a secondary office in Cortemaggiore (PC), Via Enrico Mattei 20.