Annual report / Profit and loss accounting / Balance / Cash flow statement / Notes. Annual report 2011

Transcription

1 Annual report 2011

2 Content 3 Introduction 4 Annual Report 4 Oslo Lufthavn AS 6 Traffic at Oslo Airport in Safety, audits and inspections 9 The external environment 10 Employees and working environment 12 Developments 13 Future developments and challenges 16 Accounts Profit and loss accounting/revenue statement 19 Balance 21 Cash flow statement 22 Notes Design: DINAMO

3 Forord Preface Oslo Airport reached a milestone in 2011 when the number of passengers exceeded 20 million for the first time ever. With the number of passengers for the year at 21.1 million, traffic is almost 50% higher than the first year of operation (1999). Another important milestone for OSL was the decision to commence development of the terminal facilities (the T2 project) at the airport. The cost of the project is estimated at NOK 12.5 billion, and the first major works will start in April Construction will continue until With the expansion, the airport will increase its capacity by 7 million passengers and be equipped for further growth in the years to come. For the second year in a row, the airport was named Europe's most punctual airport in the "Major European Airports" category. The company views this as recognition of its continuous efforts to maintain stable operations in demanding climatic conditions. Together with Copenhagen, the airport was named Europe's most efficient facility, and the company was awarded the Working Environment Prize for There were no major operational interruptions in The company posted an operating profit of NOK 1,347 million (NOK 66 million less than in 2010), due to the costs related to the T2 project. Profit after tax was NOK 787 million. Managing Director, Nic. Nilsen 3

4 Oslo Lufthavn AS The main purpose of Oslo Lufthavn AS (OSL) is to own and operate Norway s main airport, Oslo Airport Gardermoen. The main purpose of Oslo Lufthavn AS (OSL) is to own and operate Norway s main airport, Oslo Airport Gardermoen. OSL is responsible for providing infrastructure, buildings and service facilities to the users of the airport. Thus, the company is responsible for keeping runways open for traffic, offering air traffic management to arriving and departing aircraft, operating the terminal, including security checks, baggage handling systems and commercial offerings (retail outlets, restaurants and services) as well as facilitating efficient ground transportation services. The vision of the company is to become the best airport in Europe. OSL will be the most attractive airport for airlines and passengers. OSL will be safe, efficient and provide good experiences. Ownership The company is 100 per cent owned by Avinor AS, and is the most important financial element in the co-financing of a total of 46 airports and associated air traffic management in Norway. Corporate governance Pursuant to its Articles of Association, the purpose of the company is to own and operate the main airport at Gardermoen. The company s annual general meeting is of the board of directors of Avinor AS. The company does not have a corporate assembly, but has extended employee representation on the board of directors. The board of directors consists of five directors elected by the shareholders, and three directors elected by the employees. The board adopts an annual plan for its work. The responsibilities and functions of the board of directors and the managing director are set by a directive to the board of directors and the managing director, approved by the board of directors. 4

5 Composition of the board of directors After the annual general meeting of 23 June 2011 the board consists of the following persons: Dag Falk-Petersen Chairman Avinor AS Elected for 2 years Petter Johannessen Deputy Chairman Avinor AS Elected for 1 year Lasse Bardal Director Avinor AS Elected for 1 year Anne Grete Ellingsen Director External Elected for 2 years Hilde Rolandsen Director External Elected for 2 years Ingjerd Kvande Director Employee elected OSL Elected for 2 years Hans Petter Stensjøen Director Employee elected OSL Elected for 2 years Ole Hansen Director Employee elected OSL Elected for 2 years Trine Lysne Regularly meeting deputy member Avinor AS Elected for 2 years Organisation of the company The company is organised into four operations divisions and two staff areas. In addition, a separate division is responsible for coordination between the major development project (T2) and the operations organisation. Managing Director Nic. Nilsen Organisation and Finance Marit Ektvedt Kjær Safety, Security and Enviromental Management Ole Jørgen Holt Hanssenn T2 Operational Coordination Bjørn Vinge Terminal Operations Knut Holen Property and Commercial Development Espen Ettre Airport Services Henning Bråtebæk Technical Division Mariann Hornnes Oslo Lufthavn Eiendom AS OSL's wholly owned subsidiary, Oslo Lufthavn Eiendom AS, is responsible for developing and building commercial buildings on the airport's central sites. The company owns two hotels adjacent to the terminal (Hotel Radisson Blu and Park Inn). Combined, the hotels have 800 rooms and 4,500 m2 of conference facilities. Both hotels are operated by Rezidor Hotels Norway AS. In addition, the company owns OSL Flyporten, an office and service building, as well as a car park for employees. In 2011, the company posted sales of NOK million and a profit of NOK 46.2 million after tax. Oslo Lufthavn Tele og Data AS Oslo Lufthavn Tele og Data AS (OLTD) is owned by Telenor Norge AS and OSL, each with a 50% interest. OLTD is the full-service provider of telecommunications, IT services, IT systems and IT products to airlines, service companies, retail establishments, government agencies and visitors at the Oslo Airport, as well as some Avinor airports. In 2011, the company posted sales of NOK 38.8 million and an annual profit of NOK 2.0 million after tax. 5

6 Qatar Airways opened a direct route between Oslo and Doha in October Traffic at Oslo Airport in 2011 Growth continued throughout 2011, and the number of passengers increased by a total of 2,012, 086. Growth was noted in all markets with the exception of Egypt (-55,000 passengers) and the Czech Republic (-21,000). In addition to the routes in Norway (+1,026,000) there was a large increase in the routes to Sweden (+160,000), Germany (+136,000), Spain (+115,000) and Denmark (+105,000). OSL's share of traffic in Eastern Norway increased from 86.4% in 2010 to 87.5% in For the time being, the competition from Rygge and Torp has not had a negative impact on OSL. SAS grew by 940,000 passengers (12%), and the company's market share in number of passengers was 41%. Norwegian grew by 696,000 passengers (10%), and the company's market share was 38%, the same from The biggest carriers after SAS and Norwegian were Lufthansa (3%), Thomas Cook and KLM (2% each). Oslo Airport had direct routes to 118 domestic and international destinations, an increase of five compared with From 2010 to 2011 the passenger volume per passenger aircraft movement increased from 94 to 98, whereas the load factor (number of passengers/seats offered) rose from 69% to 71%. 6

7 Passengers Passengers Change in % Scheduled domestic 8,950,404 9,970, Charter domestic 13,765 19, Scheduled international 8,963,271 9,847, Charter international 1,163,673 1,265, Total 19,091,113 21,103, The largest routes in 2011 and the change from 2010 was: Trondheim 1,751,827 passengers 10.3 % Bergen 1,593,426 passengers 12.0% Stavanger 1,435,192 passengers 12.5% Copenhagen 1,213,150 passengers 7.2% Stockholm 1,165,452 passengers 16.2% Comparison with other major Nordic airports Airport Passengers Growth International share Oslo 21,103, % 53% Copenhagen 22,725, % 89% Stockholm 19,069, % 75% Helsinki 14,865, % 82% Source: Airport websites Aircraft movements Change in % Scheduled domestic 98, , Scheduled international 94,028 99, Charter 10,301 11, Cargo 8,944 8, Other (GA, military, etc.) 8,877 8, Total 221, , The number of aircraft movements was still lower in 2011 than during the peak year of 2008, and was on par with Cargo and mail In 2011, the total weight of mail and cargo to/from OSL was 97,801 tonnes. This is an increase of 12,063 tonnes, or 14.1% from Public transport share The percentage of travellers choosing public transport to the airport is high. In 2010, 61% of the travellers chose either buses or trains for their travel to and from the airport. All train traffic at Oslo Central Station was closed for six weeks during the summer of 2011, negatively impacting the public transport share. 7

8 Safety, quality, audits and inspections Safety is always our number one priority, and the company is engaged in extensive safety work in a number of areas. The airport works continuously on reporting and following up incidents in order to both comply with laws and regulations and to create a sound basis for our own management. In 2011, the T2 project carried out considerable airside works in combination with simultaneous airport operations. A number of activities have been directed at construction operations to ensure a safe combination of development and operations. The incident statistics show that these safety measures succeeded in Oslo Lufthavn AS will maintain this focus in the coming years. Oslo Airport had two aviation incidents in 2011 in which the company was a contributing factor, but no aviation accidents. Approximately 30 quality audits, including eight of external contractual parties, were performed in Audit activities are prioritised according to the risk the activity entails, and have not shown any special trends. Maintenance of the quality and safety management system is a continuous activity which in 2011 also included the start-up of a project to develop a process-oriented management system. In 2011, Oslo Lufthavn AS was the subject of several security-related inspection activities by the Civil Aviation Authority, International Civil Aviation Organization (ICAO) and EFTA Surveillance Authority (ESA), which focused on both control of persons and goods. The issues raised during inspections were closed by year-end. The Civil Aviation Authority also carried out an audit of the air navigation service. The airport s crisis management strategy was affected by the events of 22 July in that expanded border control was implemented. There was one airport closure (6 hours) due to icy conditions. 8

9 The external environment «Regulations relating to noise prevention, Gardermoen» led to the implementation of new air traffic provisions at Oslo Airport Gardermoen from 7 April Compliance with the provisions improved considerably through the year. The introduction of a new, regulatory airspace structure for Eastern Norway from the same date is under evaluation with particular focus on increased approach length, fuel consumption and emission of greenhouse gases, as well as undesirable noise effects in peripheral areas. In 2011, OSL maintained the highest level of Airport Carbon Accreditation, a new European industry scheme for the certification of airport operators efforts to manage and reduce the emission of greenhouse gases under their direct control. Four minor violations of the groundwater discharge permit were identified in In addition, OSL de-icing chemicals were detected in a limited area following the /2011 de-icing season. Various risk-reducing measures are being evaluated for this area. A restricting factor in the decomposition of de-icing chemicals is the supply of oxygen and in 2011 a system for injecting air into the ground and groundwater along the western runway was tested. The collection percentage for aircraft de-icing fluid was 76% during the season. While no violations of the discharge permit were detected for river systems, the limit value for discharges of oily water from the fire drill area to the municipal sewer system was exceeded in 4 of in all 14 samples. In 2011, OSL maintained a close dialogue with the authorities to arrive at the best possible solution to clean up the areas polluted with PFOS, an additive in fire-fighting foam. Banned in 2007, the substance was phased out of use by the company in Construction work in connection with the T2 project contributed to a significant increase in energy consumption in The total amount of waste increased in 2011 due to the significant amount of activity. The waste sorting percentage increased by a further 2 % to 59%. Thanks to great efforts by employees and the public, beverage containers were collected at Oslo Airport in 2011 for the benefit of humanitarian causes. In all, approx. 2.5 million cans and bottles were collected from aircraft and public areas. OSL invests considerable resources in complying with requirements and improving the airport's environmental performance. For a more detailed review of the environmental conditions at and around the airport, the board of directors refers to OSL's 2011 Environmental Report.

10 Employees and working environment Health, environment and safety are high priorities, and OSL works systematically to prevent absence due to illness and injuries. The company enjoys a good working relationship with the employees' representatives, formalised through the Working Environment Committee and Cooperation Forum. At the end of the year, Oslo Lufthavn AS had 499 full-time employees, compared with 439 full-time employees at the end of The average age was 46 and personnel turnover was 2.1%. In 2011, 90% of the employees participated in individual professional development and goal setting talks with their supervisor. At the end of 2011, the gender mix was 22% women and 78% men. 32% of newly recruited employees are women. Women make up 17 % of all management positions. All jobs in the company are full-time jobs. At the end of 2011, 16 people had been granted reduced hours. Of these, 10 are women. Approximately half of the company's employees are shift workers. In terms of pay, female managers are at a pay level corresponding to 106% of the pay level for male managers. Overall, women have 103% of the pay level of men. One of the objectives of OSL is to achieve a better gender mix and diversity, particularly in management positions. The company has emphasised and is furthermore aiming to develop female managers through the company s leadership development program. The company endeavours to expand the diversity of the different job categories in the organisation. Absence due to illness Absence due to illness in OSL showed positive development, ending at 4.0%, compared with 5.1% in Long-term sick leave was reduced in particular. This was followed up in 2011 through measures directed at both groups and individuals. In 2011, 17 cases were registered as occupational injuries against 3 in Six of the instances resulted in absence. This yielded an LTI rate of 5.4, compared with 2.7 in The number of days absent due to injuries was 64, compared with 67 in All incidents are followed up 10

11 closely, both with respect to the employee, and with respect to preventive measures to prevent the same injury from occurring again. As an IA ( inclusive working life ) company, OSL organises work to enable employees to remain in their jobs. This includes people with disabilities. Due to special physical requirements of some jobs, people with disabilities will be excluded from these positions. Skills development The company works actively on skills development based on the skill requirements for each function and field and is developing skills improvement measures especially adapted to individual functions and groups within the company. Leadership training conducted in 2011 included financial training, contractual responsibilities, performance evaluation and HSE. In 2011, 4,965 people connected with the airport took OSL's HSE course with associated exam, compared with 3,509 in Discrimination The purpose of the Anti-Discrimination Act is to promote equality, ensure equal opportunities and rights and prevent discrimination based on ethnicity, national origin, descent, skin colour, language, religion or belief. The company works actively, purposefully and systematically to promote the objective of the Act in our operations. The activities include recruitment, pay and terms of employment, promotion, development opportunities and protection against harassment. Health, safety and environment (HSE) Oslo Lufthavn AS has established plans to safeguard systematic HSE work in the company and coordination responsibility for the airport area as a whole. HSE inspections of the airport's common areas are conducted regularly under the supervision of OSL. The management and main safety delegate of the relevant companies take part here. In addition, systematic safety inspections are conducted within the company, which is an important step in mapping the working environment and preventive HSE work. OSL has close contact with the Norwegian Labour Inspection Authority to ensure necessary approval of T2 project development works. The company focuses on good user participation and cooperation with the safety delegates. Thanks to good systematic work over several years, Oslo Lufthavn was awarded the Working Environment Prize for health examinations were carried out by Occupational Health Services (OHS) in OHS assisted with following up employees on sick leave through conversations, counselling and medical work fitness assessments. Oslo Airport is focused on health-promoting and preventive measures and the individual's responsibility and opportunities to improve personal health through healthy lifestyle habits. To this end, OHS has provided the assistance of dieticians, psychologists and physiotherapists to employees with health problems. Oslo Lufthavn AS has an established co-worker support scheme in a separate care programme. Employees who used the programme in 2011 were very pleased with the help it provided. The co-worker support scheme works in close cooperation with the AKAN (Workplace Advisory Centre for issues related to alcohol, drugs and addictive gambling in the workplace) Committee. The Working Environment Committee held seven meetings. 11

12 OSL's new VIP terminal was opened in autumn Developments - Upgrading of facilities for use in low-visibility procedures was completed. - Several renovation projects for commercial operators were initiated in In the International Pier, the new cosmetics shop project was completed. - In the summer of 2011, the Norwegian National Rail Administration shut down train traffic at Oslo Central Train Station. A great many travellers consequently chose to drive to Oslo Airport. To deal with the increased need for parking, 2,500 temporary parking spaces were added in the spring. - Construction of the new VIP facility was completed. The building opened in early autumn Construction of a treatment plant was commenced on the fire drill area. Through the European cooperation for improving the efficiency of airspace capacity (Single European Sky) the Avinor Group is obligated to adopt Collaborative Decision Making (CDM), a concept for sharing information between airports. The goal of CDM is to increase the capacity associated with aircraft movements on the ground and in the air. The company has initiated a project to introduce CDM at the airport, with the goal of certification by Eurocontrol in

13 Expansion of Oslo Lufthavn started in Future developments and challenges Traffic developments Economic problems in the Eurozone are making the future more uncertain than has been the case for quite some time, and there are divergent views on the demand in the coming year. The airlines, however, are confident of further growth and are increasing capacity in their 2012 summer programmes. A 5-10% increase in demand is expected. The trend towards progressively larger aircraft continues in line with fleet replacement programmes by Norwegian and other carriers, and because the market for more long-distance routes is present. Competition in the Oslo region sharpened after Ryanair began offering flights from Rygge. So far, OSL has held its own in the competition. Because the decline in traffic at Torp outstripped growth at Rygge, OSL's market position was bolstered in Eastern Norway in In 2012 Norwegian started ten new routes from Sandefjord Torp, further increasing competition in the region. However, a large variety of routes and good public transport system at OSL are expected to continue to provide a competitive edge vis-à-vis Rygge and Torp. SAS New York route has increased the total market for this destination. United Airlines plans two departures daily to New York during the 2012 summer season. Qatar Airways is very satisfied with the start-up of its route to Doha, and plans to increase its flight schedule from 5 to 7 departures per week starting with the 2012 summer season. Thai Airways also plans to increase its flight schedule from 5 to 7 departures during the summer season. Norwegian's plans for long-haul routes were strengthened, and it has signalled that it will open routes to the United States and Asia in There are still great expectations that the B787 Dreamliner and the A350 will open up markets that were previously too small to create profitable routes. The main challenge at OSL in coming years is to create sufficient capacity until the 13

14 expansion is completed in Commercial developments Overall rental income for OSL increased by approx. NOK 175 million from 2010 to 2011 despite the fact that the increased volume of traffic put even greater pressure on existing commercial spaces. Commercial spaces were not expanded in With most leases for shops and eateries expiring on 31 December 2011, the year was filled with competitive bidding rounds and negotiating of new contracts. As a result of these negotiations, 2012 will see the addition of several new concepts (Starbucks, Yo Sushi, 7-Eleven, Narvesen, Travel Value International and others). The area use plan for 2011 was the basis for the competitive bidding rounds and negotiations. The plan provides for an increase of approx. 500 m2 in the commercial areas. The area use plan and new contracts will mostly be implemented in the first quarter of 2012, further boosting commercial rental income. New area zoning plan Work on a new municipal zoning plan has been ongoing since Updating and coordinating the plans and actions necessary for the T2 development is a requirement by the host municipalities Ullensaker and Nannestad. Plan maintenance will supersede the nearly 20-yearold state development plan, and the Ministry of Transport and Communications has accepted this. A prerequisite of this process is that OSL's framework conditions must not be reduced. After the planning programme was approved in December 2010, work has continued at full tilt in close cooperation with the two municipalities and other affected parties. A revised planning proposal was submitted for further consideration in June The municipalities submitted the planning documents for public comment. Sixteen comments and objections were received by the expiration of the deadline. Three of the objections were from public authorities: the Norwegian Public Roads Administration, Norwegian National Rail Administration and the Environmental Department of the County's Chief Administrative Officer. These objections must either be resolved by amendments of planning documents, or that the County Governor, acting as a mediator, finds solutions that the parties can accept. While OSL has come to terms with the road authorities, the other two objections were forwarded to mediation in early The original schedule has had to be modified as a result of this process. Approval during the first quarter of 2012 is now planned. The amended schedule will not have consequences for the development project. Master plan Report to the Storting No. 15 ( ) National Transport Plan states that the Government has made a decision in principle that land shall be set aside for a potential third runway at Gardermoen. A decision will be made concerning the land to be set aside and the form and content of the decision. The Ministry of Transport and Communications will lead the work on determining where a possible third runway should be located. The work will be done in consultation with the Ministry of the Environment, which is responsible for the Planning and Building Act. Earlier studies have concluded that there will be a need for such a runway around On this basis, the company started its external work on a new long-term plan, the OSL master plan , in the autumn of The plan will address OSL's need for incremental development in line with traffic growth over the long term. Avinor will submit the plan to the Ministry of Transport and Communications in the second quarter of 2012, as a basis for the Ministry's planned land reservation process for a potential third runway in accordance with the National Transport Plan. In recent years, international aviation organisations have focused on a number of measures to streamline aviation on the ground and in the air. For example, GPS-based take-off and landing has been a key element. This technology is expected to be adopted before 2020 and will permit curved approaches. This will also make it easier to avoid flying over densely populated areas during landing. Because of the new technology, during the planning process OSL will examine a western, eastern and northern option for a possible third runway. In 2008, the Akershus county administration passed the county plan, Gardermoen 2040, strategic development plan for Gardermoen. It unequivocally recommends that land use planning at Gardermoen include a future third runway. The municipality of Ullensaker has prepared a municipal master plan with a land use part that also emphasises land use and growth patterns for the areas around the airport. The municipal council passed the plan on 2 March Terminal expansion The T2 project represents stage two in the development of Oslo Airport Gardermoen. The development will continue until 2017 and provide capacity for 28 million passengers. The project was approved by the board of directors of Avinor on 19 January The management model for its implementation was approved with the establishment of a separate development organisation that reports to a project board chaired by the managing director. At the same time an operations coordination organisation was created in OSL with responsibility for coordinating development and operations. Main elements of the project are: Expansion and rebuilding of the current passenger terminal A new pier northwards with gates and aircraft parking spaces Extension of the current traffic apron Extension of the aircraft area north of the current terminal, including a new taxiway New remote parking spaces Associated infrastructure for environmental protection Temporary structures to facilitate traffic handling during the construction period Further expansion is also anticipated. Fully developed, the terminal will have a capacity of 35 million passengers. The timing of further expansion beyond 28 million passengers will depend on traffic growth. The total area increase with the first development stage is 117,000 m2, plus rebuilding of approximately 23,000 m2 of the existing terminal. 14

15 The development project saw intense activity in Four new remote aprons were completed along with an expanded Commuterlounge (Terminal expansion and aircraft parking areas), both of which will ensure capacity during further development. The first significant projects started up in April with the construction of new cross-field taxiways between the eastern and western runways, as well as extensive infrastructure for surface water handling. One challenge with this part of the project has been handling contaminated soil from earlier military activity. During the year, the first constructionrelated work started with the building of the South Pier (temporary domestic terminal), preparatory activities for the North Pier, as well as rebuilding and adaptation of technical systems and baggage handling. On the whole, progress at the end of the year was ahead of the current plan. The size, geographical extent, interdisciplinary nature and simultaneity of the project with an airport in full operation are the project's main challenges. The traffic increase in 2011, forecasts for continued growth and demand for more capacity while construction is in progress will exacerbate the challenge of simultaneous building and operation. In addition to the operational and safety aspects, the project places great demands on good collaboration and coordination and is also challenging for tight budgetary control and upholding the "cost-freeze" strategy. Based on experience throughout the year, good common management systems were established and developed along with systems for coordinating planning and implementation in the best possible way. Co-location of the joint Project Office at Gardermoen was completed, providing optimal conditions for a good working environment and efficient collaboration. In addition to the development and operations organisation, this also includes engineering staff. Collaboration in the project is very good. Communication and information are priorities for ensuring that development activities will be coordinated and experienced as predictable vis-à-vis operations. 15

16 Accounts 2012 Going concern The financial statements have been prepared on the basis of the going concern assumption. The reason for this assumption is the earnings estimates for 2012 and long-term estimates for the years ahead. While the company s equity ratio is low, the company is nevertheless in a healthy financial position because it has subordinated loans of NOK 1,371 million which are secondary to other debt. Turnover In 2011, OSL had a turnover of NOK 4,038 million, an increase of NOK 345 million compared with % of revenues are directly related to air traffic, and revenue is invoiced on the basis of departed passengers and flights from the airport. These revenues increased by NOK 139 million from 2010 to The remaining revenues came from derived activities such as leasing of space for retail operations, service, parking and other use of building and ground infrastructure. These revenues are strongly dependent on traffic development, especially international traffic. Profits, investments, financing and liquidity Oslo Lufthavn AS presents its financial statements pursuant to the Regulations relating to simplified IFRS, issued by the Ministry of Finance on 21 January The 2011 income statement shows a profit before tax of NOK 1,092 million, and NOK 787 million after tax. The corresponding numbers for 2010 were NOK 1,124 million and NOK 810 million, respectively. The decline is due to the cost of NOK 224 million in the T2 project. The difference between the pre-tax result and cash flow from operations has its background in depreciation and accrual items. At 31 December 2011, the company had total assets of NOK 10,653 million. The assets mainly consist of airport investments in the form of runway systems and buildings, and, as a consequence of the T2 project, assets under construction increased substantially in Liabilities mainly consist of equity of NOK 1,869 million, subordinated loans from Avinor AS of NOK 1,371 million and a long-term government loan from the Ministry of Transport and Communications of NOK 5,194 million. In 2011, the company s total investments in property, plant and equipment amounted to NOK 1,197 million. 16

17 At 31 December 2011, the company had unrestricted equity of NOK 803 million, after allocation of profits. The company s financial position is good, and OSL is able to repay its short-term debt and instalments on its long-term debt out of liquid assets. The subordinated loan from Avinor AS has a lower priority than all other liabilities. Included in the result are payments by OSL of NOK 383 million in ground rent and NOK 62 million in interest on the subordinated loan from the parent company Avinor AS. Financial risk Market risk The company is exposed to changes in long-term interest rate levels, as a significant part of the company s financing (government loan) is tied to the interest on long-term government bonds. The company is marginally exposed to changes in foreign currency exchange rates. Credit risk Thus far, OSL and its parent, Avinor AS, have experienced low losses on receivables from our most important customers, the airlines. Other income is to a great extent related to turnover-based compensation, with short credit periods. The economic downturn had an adverse effect on the finances of our customers, but the company is still of the opinion that there is low to moderate risk of customers not being able to fulfil their obligations. Liquidity risk The company is affiliated with the group s group account scheme, and considers its liquidity to be good. Allocation of annual profits The Board of Directors proposes that the year's profit of NOK 786,491,133 after tax be transferred to other equity. Gardermoen, 22 March

18 Revenue statement 1 January 31 December Amounts in NOK million Note OPERATING REVENUE: Traffic revenue , ,0 Sales and rental revenue , ,3 Other operating revenue 33,8 1,6 Total operating revenue 4 037, ,9 OPERATING EXPENSES: Raw materials and consumables used 46,0 43,6 Wage and salary 5 448,7 366,5 Depreciation, amortisation and impairment charges 8,11 570,0 468,0 Changes in value and other losses/gains - net 6 12,3-17,2 Other operating expenses 7, , ,2 Total operating expenses 2 690, ,1 Operating profit 1 347, ,8 FINANCE INCOME AND COSTS: Interest income 9 18,3 13,6 Other financial income 9 0,8 1,0 Interest expense 9 299,0 291,1 Other interest paid 9-25,2 12,1 Net finance costs -254,8-288,6 Profit before income tax 1 092, ,3 Tax on profit ,7 314,7 PROFIT FOR THE YEAR 786,5 809,6 OTHER COMPREHENSIVE INCOME FOR THE YEAR Actuarial gains/losses on post employment benefit obligations ,7 45,6 Tax effect 47,8-12,8 Cash flow hedges 14 0,0 0,0 Tax effect 0,0 0,0 Other comprehensive income for the year, net of tax -122,9 32,8 Total comprehensive income for the year 663,6 842,4 Attributable to: Equity holders of the company 663,6 842,4 18

19 Balance sheet on 31 December 2011 Amounts in NOK million Note ASSETS NON-CURRENT ASSETS Intangible assets: Deferred tax assets ,5 342,1 Other intangible assets 0,0 0,0 Total intangible assets 410,5 342,1 Tangible fixed assets: Property, plant and equipment , ,0 Assets under construction ,3 542,9 Total property, plant and equipment 9 121, ,9 Fixed asset investment: Investments in subsidiaries 12 89,8 89,8 Loans to group companies 13 0,0 0,0 Investment in associated company 12 1,6 1,6 Derivative financial instruments 14 0,0 0,0 Other non-current receivables 15 48,7 20,8 Total financial assets 140,1 112,2 Total non-current assets 9 672, ,2 CURRENT ASSETS Inventories Trade and other receivables 0,0 0,0 Derivative financial instruments 13,15 937, ,8 Derivater 14 0,2 8,9 Bank deposits, cash, etc ,1 41,4 Total current assets 980, ,1 TOTAL ASSETS , ,3 19

20 Balance sheet on 31 December 2011 Amounts in NOK million Note Restricted equity: EQUITY Innskutt egenkapital Share capitall 17,18 250,0 250,0 Share premium reserve 18 46,9 46,9 Other restricted equity ,3 160,3 Total restricted equity 457,2 457,2 Retained earnings: Other reserves 18-60,8 62,1 Other equity ,1 685,6 Total retained earnings 1 411,3 747,7 TOTAL EQUITY 1 868, ,9 PROVISIONS AND LIABILITIES Provisions: Pension commitments ,2 271,8 Deferred tax liabilities 10 0,0 7,7 Other provisions 21 31,0 0,9 Total provisions 464,2 280,4 Non-current liabilities: State loan , ,5 Derivative financial instruments 14 0,2 0,0 Other non-current liabilities 13, , ,3 Total non-current liabilities 6 520, ,8 Current liabilities: Accounts payable 233,0 140,3 Tax payable ,1 0,4 Public duties payable 41,3 61,3 Derivative financial instruments 10 3,3 0,0 First annual instalment on long-term liabilities ,4 444,4 Other current liabilities 13,21,22 743, ,8 Total current liabilities 1 799, ,2 TOTAL LIABILITIES 8 784, ,4 TOTAL EQUITY AND LIABILITIES , ,3 20

21 Statement of cash flows 1 January 31 December Amounts in NOK million Note CASH FLOW FROM OPERATING ACTIVITIES Cash generated from operations* 2 431, ,7 Income tax paid -0,4-0,1 Net cash generated from operating activities 2 430, ,6 CASH FLOW FROM INVESTING ACTIVITIES Investments in property, plant and equipment (PPE) ,5-493,4 Proceeds from sale of PPE, including assets under construction 4,5 1,2 Changes in other investments 0,1 0,1 Net cash used in investing activities ,9-492,1 CASH FLOW FROM FINANCING ACTIVITIES Proceeds from borrowings 400,0 0,0 Repayment of borrowings -444,4 0,0 Interest paid -298,8-291,1 Net group contribution/dividend ,0-935,0 Net cash used in financing activities , ,1 Net (decrease)/increase in cash, bank deposits, etc. 1,7 11,4 Cash, bank deposits, etc. at beginning of year 41,4 30,0 Cash, bank deposits, etc. at end of year 43,1 41,4 Amounts in NOK million Profit before income tax 1 092, ,0 Depreciation ,0 468,0 (Profit)/loss on disposal of non-current assets 4,7 2,3 Changes in value and other losses/gains - net (unrealised) 6 12,1 7,3 Change in inventories, trade receivables and trade payables 0,2-11,8 Difference between post employment benefit expense and amount paid/received -9,3-29,5 Change in other working capital items 307,8 274,9 Change in group receivables and payables 453,5-106,5 Cash generated from operations 2 431, ,7 In the statement of cash flows, proceeds from the sale of PPE comprise: Net book amount 0,7 3,5 Profit/(loss) on disposal of property, plant and equipment 3,8-2,3 Proceeds from disposal of property, plant and equipment 4,5 1,2 21

22 Notes to financial statements Note 1 General information Oslo Lufthavn AS is a public limited company incorporated in Norway. The company s main office is at Gardermoen, Edvard Munchs veg, 2060 Gardermoen, Norway. 2. Accounting policies The financial statements have been prepared in accordance with section 3-9 of the Regulations relating to simplified IFRS adopted by the Ministry of Finance on 21 January This mainly implies that recognition and measurement comply with international accounting standards (IFRS) and that the presentation and the notes to the accounts comply with the Norwegian Accounting Act and generally accepted accounting principles. The financial statements were adopted by the company s Board of Directors on 22 March Simplified IFRS The company has applied the following simplifications relative to the recognition and valuation provisions of IFRS: IFRS 1 no. 7 regarding continuation of acquisition cost of investments in subsidiaries, associates and joint ventures IAS 10 nos. 12 and 13 are departed from in order to recognise dividends and group contributions in accordance with the provisions of the Norwegian Accounting Act IAS 28 and IAS 31 are departed from in order to use the cost method for investments in associates and joint ventures Basis for preparation of the financial statements The company accounts are based on the principles of historical cost accounting, with the exception of financial instruments, which are measured at fair value Segment reporting The company is organised as one reporting segment Foreign currency "Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate at the balance sheet date. Non-monetary assets and liabilities measured at historical cost denominated in foreign currencies are translated using the exchange rate at the date of transaction. Non-monetary assets and liabilities measured at fair value denominated in foreign currencies are translated using the exchange rate at the balance sheet date. Foreign exchange gains and losses are recognised in the income statement." 2.5. Use of estimates In preparing the financial statements the management has used estimates based on judgements and assumptions believed to be reasonable under the circumstances. There may be situations or changes in the market conditions that may result in changes in estimates, and thereby have consequences for the company s assets, liabilities, equity and results. The company s most significant accounting estimates and judgements are related to the following items: Depreciation of property, plant and equipment Net pension obligation 2.6. Principles for income recognition Income is recognised when it is probable that transactions will generate future economic benefits that will accrue to the company and the amount can be reliably estimated. Dividends from subsidiaries are recognised in the same year as the dividends are declared by the subsidiary. Dividends from other companies are recognised when the shareholders right to receive dividends has been determined by the annual general meeting. Group contributions received from subsidiaries are recognised if they are within the accumulated retained earnings of the subsidiary subsequent to the time of investment. Upon recognition, the group contribution is recognised as a gross amount (before tax) on a separate line item in the income statement. Repayment of the cost price will reduce the value of the investment in the balance sheet. In that case, the group contribution is recognised as a net amount (after tax). Group contributions made to subsidiaries increase the carrying amount of the investment. Group contributions paid are recognised as a net amount (after tax). Group contributions paid to the parent company are recognised directly in other equity. Group contributions paid are recognised as a net amount (after tax). Group contributions received from the parent company are recognised as other restricted equity Income tax The tax expense comprises tax payable and change in deferred tax. Deferred tax/tax assets are calculated on all differences between accounting and tax-related values for assets and liabilities. Deferred tax assets are recognised when it is probable that the company will have sufficient tax-related profit in later periods to utilise the tax asset. The company recognises previously unrecognised deferred tax assets to the extent it has become probable that the company will be able to utilise the deferred tax asset. Similarly, the company will reduce its deferred tax asset to the extent that the company no longer considers it probable that it can utilise the deferred tax asset. Deferred tax and deferred tax assets are measured on the basis of expected future tax rates for the items on which the temporary difference has accrued. Deferred tax and deferred tax assets are reported at nominal value and are classified as financial assets (non-current liability) in the balance sheet. 22

23 The tax expense comprises tax payable and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively Property, plant and equipment Property, plant and equipment are initially recognised in the balance sheet at historical cost. Historical cost includes expenditure that is directly attributable to the acquisition of the asset. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use. Land and housing are not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows: Buildings Infrastructure Runways and other related assets Vehicles Other non-current assets years 5-50 years years 3-20 years 5-15 years The assets useful lives are reviewed, and adjusted if appropriate, at the end of each balance sheet date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the income statement Leases The company as lessee Finance leases: Leases where the company has substantially all the risks and rewards of ownership are classified as finance leases. Operating leases: "Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease." The company as lessor Operating leases: "The company presents rental assets as non-current assets in the balance sheet. Rental income is recognised in income on a straight-line basis over the period of the lease." Financial assets The company classifies its financial assets in the following categories: 1. At fair value through profit or loss 2. Loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. Financial assets at fair value through profit or loss "Financial assets at fair value through profit or loss are derivatives with a positive market value. Assets in this category are classified as current if expected realisation is within 12 months after the end of the reporting period." Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. Loans and receivables are classified as trade and other receivables in the balance sheet. objective evidence that a financial asset or a group of financial assets is impaired. An impairment loss is recognised when the loss is material and assumed to last for a longer period of time. Regular purchases and sales of financial assets are recognised on the trade-date the date on which the group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership Derivative financial instruments and hedging activities Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The company classifies derivatives that are part of a hedging transaction as hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow hedge). The company documents at the inception of the transaction the relationship between hedging instruments and hedged items, its risk management objectives and strategy for undertaking various hedging transactions. The company also documents its assessment, both at hedge inception and on an 23

24 ongoing basis, of whether the derivatives that are used in hedging transactions are effective in offsetting changes in fair values or cash flows of hedged items. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability. The company normally defines derivatives related to borrowings as hedging derivatives and as designated and qualified for hedge accounting. This means that changes in values of derivatives are recognised directly in equity, and are classified as assets or liabilities in the balance sheet. The company uses derivative financial instruments related to the purchase of energy and foreign currency. For energy, forward energy contracts are purchased at NordPool. None of these derivatives qualify for hedge accounting. Changes in the fair value of derivatives that do not qualify for hedge accounting are recognised in the income statement within Changes in value and other losses/gains net or as "Net finance costs". The derivatives are recognised at fair value through profit or loss. Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedging is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the income statement within Net finance costs". "Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for example, when the forecast sale that is hedged takes place). The gain or loss related to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in the income statement within Finance costs. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement." Financial liabilities The company classifies its financial liabilities in the following categories: 1. At fair value through profit or loss 2. Other financial liabilities The classification depends on the purpose for which the financial liabilities were incurred. Management determines the classification of its financial liabilities at initial recognition. Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss are derivatives with a negative market value. Derivatives are initially recognised at fair value. Subsequent changes in fair value are recorded in the income statement. Liabilities in this category are classified as current if they are due to be settled more than 12 months after the reporting period. Other financial liabilities Other financial liabilities are non-derivative financial liabilities with fixed or determinable payments that are not quoted in an active market. Other financial liabilities are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. They are included in current liabilities, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current liabilities Derivatives that are not hedging instruments Financial derivatives that are not recognised as hedging instruments are measured at fair value. Changes in fair value are recognised currently in the income statement Subsidiaries and associates Subsidiaries, associates and joint ventures are valued according to the cost method in the company accounts. The investments are valued at cost, unless a write-down has been necessary. Dividends and other distributions are recognised as other finance income Trade receivables Trade and other receivables are recognised in the balance sheet at face value after deduction of provisions for expected losses. Provisions for losses are made on the basis of an individual assessment of each receivable item Short-term investments Short-term investments (shares and interests valued as current assets) are valued at average acquisition cost or fair value on the balance sheet date, whichever is lower Bank deposits, cash, etc. Bank deposits and cash include cash in hand and bank balances. "Etc." are short-term liquid investments that may be immediately converted to a known cash amount, and with a maximum maturity of 3 months Classification and valuation of balance sheet items Current assets and current liabilities include items with a due date of less than one year from the date of the balance sheet, as well as items related to the normal operating cycle. The first-year instalment on long-term debt is classified as a current liability. Other items are classified as non-current assets/ liabilities. 24