Hydro Annual Report 2011b

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F42 FINANCIAL STATEMENTS Note 26 - Investments in jointly controlled entities Specification of jointly controlled entities Percentage owned by Hydro at year end Investments in and advances to investees Hydro's current trade receivable (payable), net with investees Amounts in NOK million, except ownership 2011 2011 2010 2011 2010 Alunorf 50.0% 1 152 1 241 (306) (224) Søral 49.9% 631 647 (92) (89) Qatalum 50.0% 8 812 8 574 (664) (267) Alpart (68) Others 102 106 (4) Total 10 697 10 501 (1 066) (580) Below is a description of significant jointly controlled entities' business operation, ownership and the nature of related party transactions with Hydro including amounts if material. Contractual and capital commitments, contingent liabilities and guarantees reported by the jointly controlled entity is included where applicable. Aluminium Norf GmbH (Alunorf) located in Germany is the world's largest rolling mill and is owned by Hydro and Hindalco Industries (50 percent each). Alunorf produces flat rolled products from raw material from the partners based on a tolling arrangement. Sales from Alunorf to Hydro amounted to NOK 1,475 million in 2011 and NOK 1,423 million in 2010. Hydro's capital and financing commitments are regulated in the Joint Venture agreement. Hydro's financing commitment to Alunorf was NOK 159 million as of December 31, 2011. Alunorf is part of Rolled Products. Sør-Norge Aluminium AS (Søral) is the fourth largest primary aluminium manufacturer in Norway located in Husnes, Hordaland. Hydro owns 49.9 percent and Rio Tinto Alcan 50 percent. Each partner purchases its proportional share of production at current market prices. Hydro's purchases from Søral amounted to NOK 956 million in 2011 and NOK 942 million in 2010. Sale of alumina and metal from Hydro to Søral amounted to NOK 458 million in 2011 and NOK 604 million in 2010. Søral is part of Primary Metal. Qatar Aluminium Ltd. (Qatalum) is a primary aluminium smelter with a dedicated power plant located in Qatar. Qatalum has an annual production capacity of about 600,000 mt of liquid metal. Qatalum is owned by Hydro and Qatar Petroleum Ltd., (50 percent each). Hydro is committed to sell fixed quantities of alumina and purchase all products from Qatalum at market based prices. Purchases of metal from Qatalum amounted to NOK 6,358 million in 2011 and NOK 2,025 million in 2010. Sales from Hydro to Qatalum amounted to NOK 1,192 million in 2011 and NOK 695 million in 2010. Qatalum is part of Primary Metal. Alumina Partners of Jamaica (Alpart) is an alumina refinery located in Jamaica. Hydro divested its 35 percent interest in 2011. The income statement and balance sheet information included in the table below is based on reported figures from the joint ventures, which could differ from Hydro's assessment of the underlying values.
Amounts in NOK million (unaudited) 2011 2010 Income statement data Revenues 12 160 7 705 Earnings before financial items and tax 213 (1 164) Income before tax 39 (1 178) Net income 3 (1 207) Balance sheet data FINANCIAL STATEMENTS Note 26 - Investments in jointly controlled entities F43 Current assets 7 405 6 225 Noncurrent assets 34 044 34 503 Assets 41 449 40 728 Current liabilites 1 792 3 017 Noncurrent liabilities 18 516 17 706 Equity 21 140 20 005 Liabilites and equity 41 449 40 728 Note 27 - Jointly owned assets Hydro is invested in certain assets where the legal ownership takes various forms of undivided direct ownership in the assets, and where operational and strategic decisions are made by supermajority among the owners. These arrangements are not joint ventures as defined by IFRS. Hydro accounts for its relative share of assets, liabilities, expenses and, where relevant, revenues related to these arrangements. Assets, liabilities, revenues and expenses are classified with other items of the same nature incurred as part of Hydro's controlled operations. The most significant of these arrangements are Hydro's 20 percent ownership in the Alouette plant in Canada, and the 12.4 percent ownership in the Tomago plant in Australia. Both plants produce primary aluminium. Hydro provides alumina relative to its share of the metal production, and receives produced metal for further processing or sale. Other costs of operations, including power consumption and labor, are incurred on a joint basis by the owners. Unrealized losses or gains relating to embedded derivatives and operational hedges associated with the physical supply of power to the plants are also incurred or earned on a joint basis by the owners. The following key figures show the main impact of these two arrangements: Amounts in NOK million 2011 2010 Property, plant and equipment 2 362 2 388 Share of expenses 1 173 1 097 Depreciation and amortization 230 263 Produced volume (kmt) 183 178
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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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112 RISK REVIEW Risk factors leadin
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Share price development in 2011 Sha
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Major shareholders and voting right
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Key figures for the Hydro share Key
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Tittel Hydro present Based in Norwa
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Corporate directives and code of co
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Pre-approval of audit services The
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Billy Fredagsvik, employee represen
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Page 131 and 132: Description Developments and events
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Page 140 and 141: F2 FINANCIAL STATEMENTS Consolidate
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Page 218 and 219: PENDIX A2 Appendix A1 APPENDIX Term
Page 220: Hydro is a global supplier of alumi
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Hydro Annual Report 2011b

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