Hydro Annual Report 2011b

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98 FINANCIAL AND OPERATING PERFORMANCE Pro forma information Pro forma information Pro forma information related to the acquisition of Vale Aluminium The above discussion on reported and underlying operating results includes the assets acquired from Vale from March 1, 2011. Amounts relating to previous periods have not been restated to reflect the reported and underlying results of the acquired assets. To provide a presentation of Hydro's performance on a comparable basis, certain pro forma financial and operating information is also presented in the following section based on including the results of the acquired Vale assets for the full calendar quarter when the acquisition was completed, and for all previous periods presented in this report. See note 5 to the consolidated financial statements later in this report for more information on the acquisition. Bauxite & Alumina Operational and financial information Year 2011 Year 2010 % change prior year Underlying EBIT (NOK million) 969 1 225 (21) % Underlying EBITDA (NOK million) 2 865 3 061 (6) % Alumina production (kmt) 1) 5 827 5 805 Sourced alumina (kmt) 1 958 2 141 (9) % Total alumina sales (kmt) 2) 7 897 7 941 (1) % Realized alumina price (USD/mt) 3) 333 295 13 % Apparent alumina cash cost (USD/mt) 4) 266 238 12 % Bauxite production (kmt) 5) 8 151 7 524 8 % Sourced bauxite (kmt) 6) 8 235 7 832 5 % 1) Including Alunorte on a 100 percent basis. 2) Including Hydro's own production and third party contracts. 3) Weighted average of own production and third party contracts, excluding hedge results. 4) Apparent integrated alumina cash production cost based on cost of produced alumina and cost of alumina sourced on contracts. Paragominas bauxite is included at cost. MRN bauxite is included at contract price. 5) Paragominas on wet basis (100 percent). 6) 40 percent MRN off take from Vale and 5 percent Hydro share on wet basis. Underlying EBIT for Bauxite & Alumina declined compared with 2010, which included insurance proceeds from the settlement of a claim for business interruption. Significant improvements in operational stability and capacity utilization were achieved during 2011. Following the integration of our new bauxite and alumina operations, we have focused on improving operational performance and stability. Bauxite production improved throughout the year reaching record volumes for the year as a whole. Alumina production at Alunorte increased slightly for the year. Despite these improvements, developments in underlying results were not satisfactory and further initiatives are planned for 2012. Realized alumina prices improved 7) compared to 2010, driven by higher LME prices, but positive effects were mostly offset by increased raw material costs. 7) The majority of our alumina is sold linked to LME with a one month delay
Primary Metal Operational and financial information 1) Year 2011 Year 2010 % change prior year Underlying EBIT (NOK million) 2 495 816 >100 % Underlying EBITDA (NOK million) 4 753 3 006 58 % Realized aluminium price LME (USD/mt) 2) 2 478 2 128 16 % Realized aluminium price LME (NOK/mt) 2) 13 885 12 758 9 % Realized premium above LME (USD/mt) 3) 329 273 20 % Realized premium above LME (NOK/mt) 3) 1 846 1 641 12 % Realized NOK/USD exchange rate 5.61 5.96 (6) % Primary aluminium production (kmt) 2 056 1 867 10 % Casthouse production (kmt) 2 537 2 470 3 % Casthouse sales (kmt) 2 510 2 453 2 % 1) Operating and financial information includes Hydro's proportionate share of underlying profit (loss), production, prices, premiums and exchange rates in equity accounted investments. 2) Including effect of strategic LME hedges (hedge accounting applied). 3) Average realized premium above LME for total metal products sold from Primary Metal. FINANCIAL AND OPERATING PERFORMANCE Primary Metal Pro forma underlying EBIT for Primary Metal improved significantly in 2011 compared to the previous year, influenced by the same factors discussed above. 99
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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
Page 47 and 48: expected remediation costs relating
Page 49 and 50: Direct greenhouse gas emissions fro
Page 51 and 52: The Qatalum aluminium plant, in whi
Page 53 and 54: postponed in 2011 due to the market
Page 55 and 56: Water management Enough clean water
Page 57 and 58: The annual business planning proces
Page 59 and 60: Total payments (taxes, fees, etc.)
Page 61 and 62: Qatalum, where Hydro holds a 50 per
Page 63 and 64: Effective organization Hydro had 22
Page 65 and 66: Cooperating for safety at Slovalco
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Page 69 and 70: In 2011, we established an electron
Page 71 and 72: sold or demerged during the year ha
Page 73 and 74: vIABIlItY perForMAnCe Auditor’s R
Page 75 and 76: Current income tax tax vIABIlItY pe
Page 77 and 78: Environment Greenhouse gases gases
Page 79 and 80: Total waste vIABIlItY perForMAnCe F
Page 81 and 82: 81 FInAnCIAl AnD operAtInG perForMA
Page 83 and 84: FINANCIAL AND OPERATING PERFORMANCE
Page 85 and 86: Market developments and outlook Mar
Page 93 and 94: Items excluded from underlying EBIT
Page 95 and 96: Items excluded from underlying EBIT
Page 97: Financial income (expense), net Yea
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Page 108 and 109: 108 RISK REVIEW Risk factors Risk f
Page 110 and 111: 110 RISK REVIEW Risk factors or var
Page 112 and 113: 112 RISK REVIEW Risk factors leadin
Page 115 and 116: Share price development in 2011 Sha
Page 117 and 118: Major shareholders and voting right
Page 119 and 120: Key figures for the Hydro share Key
Page 121 and 122: Tittel Hydro present Based in Norwa
Page 123 and 124: Corporate directives and code of co
Page 125 and 126: Pre-approval of audit services The
Page 127 and 128: Billy Fredagsvik, employee represen
Page 129 and 130: Hans-Joachim Kock Key experience: H
Page 131 and 132: Description Developments and events
Page 133 and 134: Topic Comments References Transacti
Page 135 and 136: Topic Comments References 8 Corpora
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Page 140 and 141: F2 FINANCIAL STATEMENTS Consolidate
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F10 FINANCIAL STATEMENTS Note 1 - S
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F16 FINANCIAL STATEMENTS Note 3 - B
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F22 FINANCIAL STATEMENTS Note 6 - F
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F28 FINANCIAL STATEMENTS Note 9 - R
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F30 FINANCIAL STATEMENTS Note 10 Bo
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F32 FINANCIAL STATEMENTS Note 11 -
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F56 Financial assets, classified as
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F64 FINANCIAL STATEMENTS Financial
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F66 FINANCIAL STATEMENTS Financial
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F70 FINANCIAL STATEMENTS Note 2 - E
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F72 FINANCIAL STATEMENTS Note 4 - P
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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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