key FINANCIAL FIGUReS DEFINITIONS Income statement (NOK million) operating revenue gross operating earnings operating earnings e
the woRLd oF NoRSke SkoG 1 32 7 4 6 5 9 8 10 14 15 12 13 11 PRodUCtIoN CAPACIty PeR bUSINeSS UNIt Newsprint (including improved
INtRodUCtIoN contents 2 8 12 18 26 94 114 Introduction key financial figures production capacity per business unit events 2008 t
events//2008 January The CEO and the chair of the board held a telephone conference aimed at the financial market. Two main goal
//tough measures had to be taken in 2008 for Christian rynning-tønnesen and norske skog 6 // norske skog // annual report 2008 /
tough Measures In recent years, Norske Skog has implemented comprehensive structural reductions to adapt to falling markets. We
MARket WorlD consuMption oF publication paper slightly DoWn FroM 2007 The world’s total consumption of publication paper in 2008
or newsprint, there was growth in consumption in Asia and South America, while consumption in Europe and Australasia fell. The s
CoStS the price increase on input Factors levelleD out in 2008 After several years where the prices of most input factors have i
norske skog proDucts This overview presents the complete product range, including printing methods and production sites. norcote
CAPItAL MARketS aFFecteD by the Financial crisis The financial crisis which started in the latter half of 2007 has escalated sev
portfolio was 5.2 years as of 31 December 2008. The bar chart shows the instalment structure for the group's loans as of 31 Dece
norske skog's shareholDer policy The shareholder policy was adopted in 2005 and is as follows: • Norske Skog's goal is to provid
potential profit increases in stages from 30 per cent and reaches 100 per cent if Norske Skog is among the companies in the top
principal shareholDers at 31 DeceMber 2008 Number of shares unIonen as VIken skog Ba JpMorgan CHase Bank, gBr (noM) FolketrYgDFo
key Figures relateD to shares DEFINITIONS nominal value (nok/share) average number of shares excluding shares held in treasury (
CoRPoRAte GoveRNANCe Norske Skog’s goal is to create the best shareholder values in the paper industry. Good corporate governanc
ity. The group CEO’s authorisations entail that the board will handle the company’s contractual relationships only in exceptiona
gies. The board prepares an annual plan for its work. In 2008, the board focused intensively on the company’s strategic developm
reMuneration relateD to eMployMent anD electeD positions in norske skog corporate asseMbly: The remuneration is stipulated annua
// the MeMbers oF the boarD kiM Wahl (48) Chair of the board, elected in 2007. Partner and deputy chair, IK Investment Partners
corporate ManageMent// christian rynning-tønnesen (49) ceo Has worked in Norske Skog since 2005. Chartered engineer from the Nor
MeMbers oF corporate boDies AS OF 31 DECEMBER 2008, NuMBER OF SHARES IN PARENTHESES: corporate asseMbly Members elected by the s
articles oF association For norske skoginDustrier asa (LAST AMENDED IN GENERAL ASSEMBLy 24 APRIL 2008) article 1 the coMpany’s F
RePoRt oF the boARd oF dIReCtoRS norske skog in 2008 26 // norske skog // annual report 2008 he annual report for 2007 stated th
volumes from 2007 to 2008. Measured in local currency, the average price level for newsprint in Europe and Australasia was lower
earnings were reduced by NOK 1 209 million, is mainly related to the fact that the working capital increased in 2007 and was red
therefore 700 000 tonnes. This is 13 per cent of Norske Skog’s overall capacity. The sale of the two mills in South Korea is sig
continental Europe. Throughout most of 2008, energy prices were higher than in 2007, both in the spot and forward markets. Towar
for the production of bio-oil based on wood. Further progress depends, among other factors, on partial financing from Norwegian
usually high in boom periods and lower in recession periods. In periods where the group has experienced pressure on results an c
teMporary anD perManent capacity reDuction Norske Skog shut down 260 000 tonnes of newsprint production capacity in Europe in 20
In connection with the group's global manager meeting in September 2008, the working committee of Global Employee Forum (GEF) (o
down of shares in subsidiaries charged against income amounts to NOK 600 million and is included under financial items. The high
ACCoUNtS GRoUP INCoMe StAteMeNt NOK MILLION Operating revenue Distribution costs Cost of materials Change in inventories employe
bALANCe Sheet NOK MILLION Assets Deferred tax asset other intangible assets property, plant and equipment Investment in associat
CASh FLow StAteMeNt NOK MILLION Cash flow from operating activities Cash generated from operations Cash used in operations Cash
StAteMeNt oF ChANGeS IN GRoUP eQUIty SHARE CAPITAL AND OTHER PAID-IN EQUITY 12 310 0 0 0 0 0 0 0 0 0 0 12 310 RETAINED EARNINGS
1. GeNeRAL INFoRMAtIoN norske skogindustrier asa (“the Company”) and its subsidiaries (together “the group”) manufacture, distri
may also include transfers from equity of any gains/ losses on qualifying cash flow hedges of foreign currency purchases of ppe.
value of the of the hedged asset or liability that are attributable to the hedged risk. If the hedge no longer meets the criteri
the liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined be
Dividend distribution Dividend distribution to the Company’s shareholders is recognised as a liability in the group’s financial
mance statement, but entities can choose to present one performance statement (the statement of comprehensive income) or two sta
Ias 27 Consolidated and separate financial statements (amendment) When an investment in a subsidiary which is accounted for acco
OPERATING REVENUE AND EXPENSES PER OPERATING SEGMENT NORSKE SKOG GROUP 26 468 (2 340) (15 771) (176) (3 381) (2 077) 2 723 (2 62
OPERATING REVENUE PER GEOGRAPHICAL REGION the allocation of operating revenue and expenses in the newsprint and Magazine paper s
BALANCE SHEET ITEMS AND INVESTMENT IN FIXED ASSETS – KEY FIGURES norske skog manages taxes, non-current debt and cash positions
4. eMPLoyee beNeFIt eXPeNSeS NOTE salaries social security contributions pension costs other salary costs and social costs Total
SHARE BASED REMUNERATION the Ceo and other members of the corporate management are awarded synthetic options. these options are
5. PeNSIoN CoStS ANd obLIGAtIoNS norske skog has various pension schemes. Contributions to these schemes are made in accordance
RECONCILIATION OF THE PENSION PLANS’ FINANCIAL STATUS WITH THE GROUP ACCOUNTS PER 31 DECEMBER UNFUNDED PENSION PLANS 2008 projec
6. otheR oPeRAtING eXPeNSeS Maintenance materials, servicing and spare parts Marketing expenses administration expenses losses o
OTHER INTANGIBLE ASSETS acquisition cost 1 January additions Disposals reclassified from asset under construction Currency trans
PLANTS AND BUILDINGS acquisition cost 1 January additions Disposals reclassified from asset under construction reclassification
Assumptions applied when estimating recoverable amount operational non-current assets and intangible assets are written down to
9. ReStRUCtURING eXPeNSeS restructuring expenses union redundancy payments group Capacity curtailments and closures Total the re
12. FINANCIAL IteMS FINANCIAL INCOME Dividends received Interest income realised / unrealised gain on foreign currency other fin
DEFERRED TAX net deferred tax liability 1 January Deferred tax charged to the income statement tax charged to equity sale of sub
TAX LOSSES TO CARRY FORWARD europe australasia asia south america Total Indefinite carry forward period expires 2011, 2012 or 20
18. ShAReS SHARES INCLUDED AS FINANCIAL ASSETS CURRENCY nok nok SHARE CAPITAL (IN 1 000) 50 000 OWNERSHIP % 2 CARRYING VALUE (IN
SHARES IN OTHER COMPANIES OWNED BY CONSOLIDATED COMPANIES Fletcher paper sales north america Inc., Delaware, usa Forest terminal
19. ReCeIvAbLeS ANd otheR NoN-CURReNt ASSetS CURRENT RECEIVABLES accounts receivable provision for bad debt other receivables pr
21. LIQUId ASSetS NOTE Cash and cash equivalents Current investments Total liquid assets 13, 20 31.12.2008 6 036 159 6 195 31.12
Interest rate risk - cash flow hedge Floating rate liabilities expose norske skog to cash flow interest rate risk which means th
CHANGE IN FAIR VALUE OF DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS DESIGNATED AS NET INVESTMENT HEDGE Changes in spot v
COMMODITY CONTRACTS WITHIN THE SCOPE OF IAS 39 FAIR VALUE 31.12.2008 4 360 4 360 FAIR VALUE 31.12.2007 4 993 4 993 FAIR VALUE 31
FAIR VALUE OF COMMODITY CONTRACTS WITHIN THE SCOPE OF IAS 39 observable market input non-observable market input Total 31.12.200
CATEGORIES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES Financial assets at fair value through profit or loss1) 0 0 0 5 421 5 4
FINANCIAL ASSETS AND LIABILITIES 31.12.2008 CARRYING AMOUNT 916 270 1 186 3 521 348 16 3 885 6 036 5 262 159 166 5 587 18 820 2
MATURITY OF FINANCIAL LIABILITIES AND FINANCIAL INSTRUMENTS 31 DECEMBER 2008 NON-DERIVATIVE FINANCIAL INSTRUMENTS principal paym
Credit risk norske skog makes a credit evaluation of all financial trading counterparties. the counterparty must be at least an
DEBT REPAYMENT Maturity of the group´s total debt at 31 December 2008 DEBT BANKS 1 617 5 331 345 200 0 0 3 107 0 7 602 BONDS 722
24. eNvIRoNMeNt During 2008 nok 164 million was invested in environmental measures at norske skog’s mills. the equivalent amount
26. INteReSt-beARING CURReNt LIAbILItIeS Current bank debt Bonds Total the group has unused bank overdraft facilities of nok 150
30. otheR CoMMItMeNtS In 1998, norske skog finalised a lease-and-buyback arrangement with three american investors for pM5 and p
ACCoUNtS NoRSke SkoGINdUStRIeR ASA INCoMe StAteMeNt NOK MILLION Operating revenue Distribution costs Cost of materials Change in
bALANCe Sheet NOK MILLION Assets Deferred tax asset other intangible assets property, plant and equipment Investments in subsidi
CASh FLow StAteMeNt NOK MILLION Cash flow from operating activities Cash generated from operations Cash used in operations Cash
1. ACCoUNtING PRINCIPLeS the company accounts of norske skogindustrier asa are prepared in accordance with the norwegian account
RECONCILIATION OF THE PENSION PLANS’ FINANCIAL STATUS WITH THE BALANCE SHEET 2008 projected benefit obligations plan assets at f
5. LoSSeS oN ACCoUNtS ReCeIvAbLe Final losses on accounts receivable received on losses recognised previously Change in provisio
FIXTURES AND FITTINGS acquisition cost 1 January additions Disposals reclassified from asset under construction Acquisition cost
9. FINANCIAL IteMS Dividends received Interest income Interest expense exchange rate gains and losses Write-down of shares in su
DEFERRED TAX 2006 Fixed assets, excess values and depreciation pensions provisions and other liabilities Currency translation di
NON-CURRENT INTER-COMPANY LIABILITIES 4246799 Canada Inc. lysaker Invest as nornews as norske skog Bruck pM3 norske skog golbey
15. deRIvAtIveS 31.12.2008 NET INVESTMENT HEDGING Forward contracts Cross-currency contracts Total FAIR VALUE HEDGING 1) Interes
16. eQUIty equity at 1 January 2008 Change in own share holding profit / (loss) for the year Dividend other adjustments Equity a
SHAREHOLDERS IN THE CORPORATE ASSEMBLY Elected by the employees Øystein Bruce, norske skog saugbrugs paul kristiansen, norske sk
MATURITY OF THE COMPANY’S TOTAL DEBT AT 31 DECEMBER 2006 DEBT BANKS 570 64 1 107 4 187 32 0 0 0 0 0 5 960 BONDS 1 133 0 844 0 3
92 // norske skog // annual report 2008
deCLARAtIoN FRoM the boARd oF dIReCtoRS ANd Ceo We declare that to the best of our knowledge, the accounts for the period 1 Janu
sustainability report//2008 What Does norske skog Do With its environMental challenges? The forest-based industry has a unique p
norske skog’s environMental policy Norske Skog’s environmental policy is an integral part of the strategy to achieve the overall
custoMer cooperation in australia – Working together With our partners anD auDience to raise environMental stanDarDs anD reDuce
just one milestone on the journey we have set to tackle climate change. News Corporation has a three step approach based on the
sustainable raW Materials Consumption of raw materials, 2008 Wood (roundwood and sawmill chips) Purchased pulp The main raw mate
purchase contracts, supplier self-declarations, and control systems for uncertified suppliers. The main global challenges relate
energy consuMption Norske Skog is a leading producer of bioenergy, and we are continously making the energy consumption more env
Page 1:
08 annual repo
Page 2:
key FINANCIAL FIGUReS DEFINITIONS Income statement (NOK million)
Page 3:
the woRLd oF NoRSke SkoG 1 32 7 4 6 5 9 8 10 14 15 12 13 11 PRod
Page 4:
INtRodUCtIoN contents 2 8 12 18 26 94 114 Introduction key finan
Page 5:
events//2008 January The CEO and the chair of the board held a t
Page 6:
//tough measures had to be taken in 2008 for Christian rynning-t
Page 7:
tough Measures In recent years, Norske Skog has implemented comp
Page 8:
MARket WorlD consuMption oF publication paper slightly DoWn FroM
Page 9:
or newsprint, there was growth in consumption in Asia and South
Page 10:
CoStS the price increase on input Factors levelleD out in 2008 A
Page 11:
norske skog proDucts This overview presents the complete product
Page 12:
CAPItAL MARketS aFFecteD by the Financial crisis The financial c
Page 13:
portfolio was 5.2 years as of 31 December 2008. The bar chart sh
Page 14:
norske skog's shareholDer policy The shareholder policy was adop
Page 15:
potential profit increases in stages from 30 per cent and reache
Page 16:
principal shareholDers at 31 DeceMber 2008 Number of shares unIo
Page 17:
key Figures relateD to shares DEFINITIONS nominal value (nok/sha
Page 18:
CoRPoRAte GoveRNANCe Norske Skog’s goal is to create the best sh
Page 19:
ity. The group CEO’s authorisations entail that the board will h
Page 20:
gies. The board prepares an annual plan for its work. In 2008, t
Page 21:
reMuneration relateD to eMployMent anD electeD positions in nors
Page 22:
// the MeMbers oF the boarD kiM Wahl (48) Chair of the board, el
Page 23:
corporate ManageMent// christian rynning-tønnesen (49) ceo Has w
Page 24:
MeMbers oF corporate boDies AS OF 31 DECEMBER 2008, NuMBER OF SH
Page 25:
articles oF association For norske skoginDustrier asa (LAST AMEN
Page 26:
RePoRt oF the boARd oF dIReCtoRS norske skog in 2008 26 // norsk
Page 27:
volumes from 2007 to 2008. Measured in local currency, the avera
Page 28:
earnings were reduced by NOK 1 209 million, is mainly related to
Page 29:
therefore 700 000 tonnes. This is 13 per cent of Norske Skog’s o
Page 30:
continental Europe. Throughout most of 2008, energy prices were
Page 31:
for the production of bio-oil based on wood. Further progress de
Page 32:
usually high in boom periods and lower in recession periods. In
Page 33:
teMporary anD perManent capacity reDuction Norske Skog shut down
Page 34:
In connection with the group's global manager meeting in Septemb
Page 35:
down of shares in subsidiaries charged against income amounts to
Page 36:
ACCoUNtS GRoUP INCoMe StAteMeNt NOK MILLION Operating revenue Di
Page 37:
bALANCe Sheet NOK MILLION Assets Deferred tax asset other intang
Page 38:
CASh FLow StAteMeNt NOK MILLION Cash flow from operating activit
Page 39:
StAteMeNt oF ChANGeS IN GRoUP eQUIty SHARE CAPITAL AND OTHER PAI
Page 40:
1. GeNeRAL INFoRMAtIoN norske skogindustrier asa (“the Company”)
Page 41:
may also include transfers from equity of any gains/ losses on q
Page 42:
value of the of the hedged asset or liability that are attributa
Page 43:
the liability recognised in the balance sheet in respect of defi
Page 44:
Dividend distribution Dividend distribution to the Company’s sha
Page 45:
mance statement, but entities can choose to present one performa
Page 46:
Ias 27 Consolidated and separate financial statements (amendment
Page 47:
OPERATING REVENUE AND EXPENSES PER OPERATING SEGMENT NORSKE SKOG
Page 48:
OPERATING REVENUE PER GEOGRAPHICAL REGION the allocation of oper
Page 49:
BALANCE SHEET ITEMS AND INVESTMENT IN FIXED ASSETS – KEY FIGURES
Page 50:
4. eMPLoyee beNeFIt eXPeNSeS NOTE salaries social security contr
Page 51:
SHARE BASED REMUNERATION the Ceo and other members of the corpor
Page 52:
5. PeNSIoN CoStS ANd obLIGAtIoNS norske skog has various pension
Page 53:
RECONCILIATION OF THE PENSION PLANS’ FINANCIAL STATUS WITH THE G
Page 54:
6. otheR oPeRAtING eXPeNSeS Maintenance materials, servicing and
Page 55:
OTHER INTANGIBLE ASSETS acquisition cost 1 January additions Dis
Page 56:
PLANTS AND BUILDINGS acquisition cost 1 January additions Dispos
Page 57:
Assumptions applied when estimating recoverable amount operation
Page 58:
9. ReStRUCtURING eXPeNSeS restructuring expenses union redundanc
Page 59:
12. FINANCIAL IteMS FINANCIAL INCOME Dividends received Interest
Page 60:
DEFERRED TAX net deferred tax liability 1 January Deferred tax c
Page 61:
TAX LOSSES TO CARRY FORWARD europe australasia asia south americ
Page 62:
18. ShAReS SHARES INCLUDED AS FINANCIAL ASSETS CURRENCY nok nok
Page 63:
SHARES IN OTHER COMPANIES OWNED BY CONSOLIDATED COMPANIES Fletch
Page 64:
19. ReCeIvAbLeS ANd otheR NoN-CURReNt ASSetS CURRENT RECEIVABLES
Page 65:
21. LIQUId ASSetS NOTE Cash and cash equivalents Current investm
Page 66:
Interest rate risk - cash flow hedge Floating rate liabilities e
Page 67:
CHANGE IN FAIR VALUE OF DERIVATIVE AND NON-DERIVATIVE FINANCIAL
Page 68:
COMMODITY CONTRACTS WITHIN THE SCOPE OF IAS 39 FAIR VALUE 31.12.
Page 69:
FAIR VALUE OF COMMODITY CONTRACTS WITHIN THE SCOPE OF IAS 39 obs
Page 70:
CATEGORIES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES Financi
Page 71:
FINANCIAL ASSETS AND LIABILITIES 31.12.2008 CARRYING AMOUNT 916
Page 72:
MATURITY OF FINANCIAL LIABILITIES AND FINANCIAL INSTRUMENTS 31 D
Page 73:
Credit risk norske skog makes a credit evaluation of all financi
Page 74:
DEBT REPAYMENT Maturity of the group´s total debt at 31 December
Page 75:
24. eNvIRoNMeNt During 2008 nok 164 million was invested in envi
Page 76:
26. INteReSt-beARING CURReNt LIAbILItIeS Current bank debt Bonds
Page 77:
30. otheR CoMMItMeNtS In 1998, norske skog finalised a lease-and
Page 78:
ACCoUNtS NoRSke SkoGINdUStRIeR ASA INCoMe StAteMeNt NOK MILLION
Page 79:
bALANCe Sheet NOK MILLION Assets Deferred tax asset other intang
Page 80:
CASh FLow StAteMeNt NOK MILLION Cash flow from operating activit
Page 81:
1. ACCoUNtING PRINCIPLeS the company accounts of norske skogindu
Page 82:
RECONCILIATION OF THE PENSION PLANS’ FINANCIAL STATUS WITH THE B
Page 83:
5. LoSSeS oN ACCoUNtS ReCeIvAbLe Final losses on accounts receiv
Page 84:
FIXTURES AND FITTINGS acquisition cost 1 January additions Dispo
Page 85:
9. FINANCIAL IteMS Dividends received Interest income Interest e
Page 86:
DEFERRED TAX 2006 Fixed assets, excess values and depreciation p
Page 87:
NON-CURRENT INTER-COMPANY LIABILITIES 4246799 Canada Inc. lysake
Page 88:
15. deRIvAtIveS 31.12.2008 NET INVESTMENT HEDGING Forward contra
Page 89:
16. eQUIty equity at 1 January 2008 Change in own share holding
Page 90:
SHAREHOLDERS IN THE CORPORATE ASSEMBLY Elected by the employees
Page 91:
MATURITY OF THE COMPANY’S TOTAL DEBT AT 31 DECEMBER 2006 DEBT BA
Page 92:
92 // norske skog /
Page 93:
deCLARAtIoN FRoM the boARd oF dIReCtoRS ANd Ceo We declare that
Page 94:
sustainability report//2008 What Does norske skog Do With its en
Page 95:
norske skog’s environMental policy Norske Skog’s environmental p
Page 96:
custoMer cooperation in australia – Working together With our pa
Page 97:
just one milestone on the journey we have set to tackle climate
Page 98:
sustainable raW Materials Consumption of raw materials, 2008 Woo
Page 99:
purchase contracts, supplier self-declarations, and control syst
Page 100:
energy consuMption Norske Skog is a leading producer of bioenerg
Norske Skog
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