Hydro Annual Report 2011b

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F24 FINANCIAL STATEMENTS Note 7 - Operating and geographic segment information Bauxite & Alumina activities includes bauxite mining activities, production of alumina and related commercial activities, primarily the sale of alumina. Primary Metal includes primary aluminium production, remelting and casting activities. The main products are comprised of extrusion ingots, foundry alloys and sheet ingot. Metal Markets includes all sales activities relating to products from our primary metal plants and operational responsibility for Hydro's stand-alone remelters as well as physical and financial metal trading activities. Rolled Products includes Hydro's rolling mills. The main products are comprised of aluminium foil, strip, sheet, and lithographic plate for application in such sectors as packaging, automotive and transport industries, as well as for offset printing plates. Extruded Products includes Hydro's extrusion-based businesses. The main products are aluminium extrusion and semifabricated products for the building and construction, transportation and engineered products industrial sectors. Energy includes operating and commercial responsibility for Hydro's power stations in Norway and energy sourcing for Hydro's world-wide aluminium operations. Other consist of Hydro's investments in the Solar Industry, its captive insurance company Industriforsikring, Hydro's industry parks, internal service providers and certain other activities. Hydro's segment structure was changed as of February 28, 2011. The financial information in this report is restated to reflect the current segment structure. Operating segment information Hydro uses two measures of segment results, Earnings before financial items and tax - EBIT and EBITDA. EBIT is consistent with the same measure for the group, considering the principles for measuring certain intersegment transactions and contracts described below. Hydro defines EBITDA as Income (loss) before tax, financial income and expense, depreciation, amortization and write-downs, including amortization and impairment of excess values in equity accounted investments. Hydro's definition of EBITDA may be different from other companies. Because Hydro manages long-term debt and taxes on a Group basis, Net income is presented only for the Group as a whole. Intersegment sales and transfers reflect arm's length prices as if sold or transferred to third parties at the time of inception of the internal contract, which may cover several years. Transfers of businesses or assets within or between Hydro's segments are reported without recognizing gains or losses. Results of activities not considered part of Hydro's main operations as well as unallocated revenues, expenses, liabilities and assets are reported together with Other under the caption Other and eliminations. The accounting policies used for segment reporting reflect those used for the Group with the following exceptions: Internal commodity contracts may meet the definition of a financial instrument in IAS 39 or contain embedded derivatives that are required to be bifurcated and valued at fair value under IAS 39. However, Hydro considers these contracts as sourcing of raw materials or sale of own production, and accounts for such contracts as executory contracts. Certain other internal contracts may contain lease arrangements that qualify as a capital lease. However, the segment reporting reflects the responsibility allocated by Hydro's management for those assets. Costs related to certain pension schemes covering more than one segment are allocated to the operating segments based either on the premium charged or the estimated service cost. Any difference between these charges and pension expenses measured in accordance with IFRS, as well as pension assets and liabilities are included in Other and eliminations. The following tables include information about Hydro's operating segments.
External revenue Internal revenue Total revenue Amounts in NOK million 2011 2010 2011 2010 2011 2010 Bauxite & Alumina 8 595 3 364 5 876 4 518 14 471 7 882 Primary Metal 4 462 1 603 30 258 25 988 34 720 27 592 Metal Markets 33 363 27 090 15 362 15 911 48 725 43 001 Rolled Products 21 392 20 611 (95) 569 21 297 21 180 Extruded Products 19 944 19 225 140 180 20 085 19 405 Energy 3 424 3 448 2 969 3 607 6 393 7 055 Other and eliminations 1) 264 414 (54 510) (50 774) (54 246) (50 360) Total 91 444 75 754 91 444 75 754 Other income, net Share of the profit (loss) in equity accounted investments 2) Depreciation, amortization and impairment 3) Amounts in NOK million 2011 2010 2011 2010 2011 2010 Bauxite & Alumina 4 903 6 177 1 580 2 Primary Metal 43 40 13 (574) 3 136 1 737 Metal Markets 3 10 (4) 101 106 Rolled Products 10 47 (76) (64) 399 398 Extruded Products 75 24 16 13 742 571 Energy 659 15 29 132 118 Other and eliminations 529 448 (235) (182) 69 52 Total 6 222 568 (260) (606) 6 158 2 985 Earnings before financial items and tax (EBIT) EBITDA Amounts in NOK million 2011 2010 2011 2010 4) Bauxite & Alumina 5 846 847 7 438 875 Primary Metal 1 265 615 4 421 2 372 Metal Markets 457 160 557 266 Rolled Products 66 1 214 519 1 668 Extruded Products (240) 426 501 997 Energy 2 550 1 438 2 685 1 561 Other and eliminations 1) (116) (1 514) 109 (1 395) Total 9 827 3 184 16 231 6 343 Current assets 5) FINANCIAL STATEMENTS Note 7 - Operating and geographic segment information F25 Noncurrent assets Total assets 5) Amounts in NOK million 2011 2010 2011 2010 2011 2010 Bauxite & Alumina 5 292 1 343 43 603 7 372 48 895 8 714 Primary Metal 9 005 9 218 33 133 24 306 42 138 33 524 Metal Markets 6 915 7 460 1 165 1 402 8 079 8 861 Rolled Products 7 424 7 692 4 636 4 807 12 059 12 500 Extruded Products 5 844 5 556 4 653 5 120 10 497 10 677 Energy 1 015 1 244 5 420 5 875 6 436 7 120 Other and eliminations 2 691 4 304 1 758 3 088 4 449 7 393 Total 38 185 36 817 94 368 51 971 132 554 88 788
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Annual Report - 2011
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Annual Report - 2011 HyDRO’S REPO
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Aluminium market price weakens LME
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cost renewable energy production, w
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Corporate Management Board AnnuAl r
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• Secure stable production and fi
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Key financial information NOK milli
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for foundry alloys continued to be
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• Using viable energy sources •
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Share of non-Norwegian leaders Perc
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Capital employed - - upstream focus
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petitive supply of standard alumini
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Further improved bauxite and alumin
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Alumina production Million mt 7 6 5
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and Hydro - but both have also rest
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Operations Hydro’s primary alumin
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Plant Country Employees (per Dec. 3
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Active risk management We have deve
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Contribution margin to profit EUR p
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Flat rolled products consumption We
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Build on the high performance of ou
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European extrusion consumption (tot
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Operations Hydro is a global energy
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expected remediation costs relating
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Direct greenhouse gas emissions fro
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The Qatalum aluminium plant, in whi
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postponed in 2011 due to the market
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Water management Enough clean water
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The annual business planning proces
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Total payments (taxes, fees, etc.)
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Qatalum, where Hydro holds a 50 per
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Effective organization Hydro had 22
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Cooperating for safety at Slovalco
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from a 10-year perspective, we redu
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In 2011, we established an electron
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sold or demerged during the year ha
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vIABIlItY perForMAnCe Auditor’s R
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Current income tax tax vIABIlItY pe
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Environment Greenhouse gases gases
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Total waste vIABIlItY perForMAnCe F
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81 FInAnCIAl AnD operAtInG perForMA
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FINANCIAL AND OPERATING PERFORMANCE
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Market developments and outlook Mar
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Items excluded from underlying EBIT
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Items excluded from underlying EBIT
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Financial income (expense), net Yea
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Primary Metal Operational and finan
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Liquidity and capital resources The
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3) Including provisions for pension
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108 RISK REVIEW Risk factors Risk f
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110 RISK REVIEW Risk factors or var
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Page 131 and 132: Description Developments and events
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Page 135 and 136: Topic Comments References 8 Corpora
Page 137: Topic Comments References 13 Inform
Page 140 and 141: F2 FINANCIAL STATEMENTS Consolidate
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F74 FINANCIAL STATEMENTS Note 9 - R
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F76 FINANCIAL STATEMENTS Responsibi
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F78 FINANCIAL STATEMENTS Auditor's
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PENDIX A2 Appendix A1 APPENDIX Term
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Hydro is a global supplier of alumi
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Hydro Annual Report 2011b

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