1 131 Introduction p.132 Dividend policy p.132 Buyback of shares p.132 Funding and credit quality p.132 Major shareholders and voting rights p.133 Key figures for the Hydro share p.135 Information from Hydro p.136 Annual General Meeting p.136 Change of address p.136 Financial calendar 2013 p : Shareholder information QUICK OVERVIEW Hydro s share price closed at NOK at the end of The return for 2012 was positive, amounting to NOK 0.14, or 0.5 percent. Hydro s Board of Directors proposes to pay a dividend of NOK 0.75 per share for 2012, for approval by the Annual General Meeting on May 8, 2013, reflecting the company s strong commitment to provide a cash return to its shareholders. The dividend reflects the operational performance for 2012 and a strong financial position, also taking into consideration the uncertain market outlook. There were 2,037,568,162 outstanding shares at the end of Hydro had 51,766 registered shareholders as per the Norwegian Central Securities Depository. The Ministry of Trade and Industry of Norway was the largest of these with a shareholding of percent of the total number of ordinary shares authorized and issued. Hydro s shares are, in addition to the Oslo Stock Exchange, also listed in London while our American Depositary Shares (ADSs) trade on OTCQX International in the U.S., the premium over-thecounter market tier. Share price development in 2012 NOK Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Hydro Oslo Børs Benchmark Index LME 3-month USD/mt
2 132 SHAREHOLDER INFORMATION Shareholder information Introduction Hydro's share price closed at NOK at the end of The return for 2012 was positive with NOK 0.14, or 0.5 percent. Hydro's Board of Directors proposes to pay a dividend of NOK 0.75 per share for 2012, for approval by the Annual General Meeting on May 8, 2013, reflecting the company's strong commitment to provide a cash return to its shareholders and strong financial position. There were 2,037,568,162 outstanding shares at the end of A total of 1.3 billion Hydro shares were traded on the Oslo Stock Exchange during 2012, representing 3.7 percent of the total turnover on the exchange in terms of share value. At the closing of the acquisition of Vale's aluminium assets on February 28, 2011, Hydro issued 447,834,465 new shares to Vale as part of the consideration in the transaction. Hydro's shares are, in addition to the Oslo Stock Exchange, also listed in London while our American Depositary Shares (ADSs) trade on OTCQX International in the US, the premium over-the-counter market tier. Dividend policy Long-term returns to shareholders should reflect the value created by Hydro. Shareholders' returns consist of dividends and share price development. Over time, value creation should be reflected to a greater extent by share price development than through dividends. Our policy is to pay out, on average, 30 percent of net income as ordinary dividend over time to our shareholders. In setting the dividend for a specific year, we will take into consideration future earnings, future investment opportunities, the outlook for world commodity markets and our financial position. Share buybacks or extraordinary dividends will supplement ordinary dividends during periods of strong financials, due consideration being given to the commodity cycle and capital requirements for future growth. The total payout should reflect Hydro's aim to give its shareholders competitive returns benchmarked against alternative investments in comparable companies. Hydro's board of directors normally propose a dividend per share in connection with the publication of our fourth quarter results. The Annual General Meeting then considers this proposal in May each year, and the approved dividend is subsequently paid to shareholders in May or June. We pay dividends once each year. For non-norwegian shareholders, Norwegian tax will be deducted at source in accordance with the current regulations. Buyback of shares In periods when earnings are high, Hydro may consider buying back shares in addition to ordinary or extraordinary dividend payments. This consideration will be made in the light of alternative investment opportunities and our financial situation. In circumstances when buying back shares are relevant, our board of directors proposes buyback authorizations to be considered and approved by the Annual General Meeting. Authorizations are granted for a specific time period and for a specific share price interval during which share buybacks can be made. Funding and credit quality Maintaining a strong financial position and an investment grade credit rating are viewed as important risk mitigating factors, supporting Hydro's possibilities for strategic development of its businesses. Access to external financial resources is required in order to maximize value creation over time, balanced with acceptable risk exposure. To secure access to debt capital on attractive terms, we aim at maintaining an investment grade credit rating from the leading rating agencies. Contributing toward this ambition to retain our credit rating, we intend to keep our funds from operations at a level no less than 40 percent of net adjusted interest-bearing debt, in addition to net adjusted interest-bearing debt at a ratio not higher than 0.55 to equity capital over time. In calculating this ratio, we include off-balance sheet pension obligations, operating lease commitments, share of net interest-bearing debt in joint ventures and certain other debt-like items. For a discussion of these adjustments see Note 35 - Capital Management in the Financial Statements section of this report.
3 SHAREHOLDER INFORMATION Major shareholders and voting rights 133 Major shareholders and voting rights As of December 31, 2012, Hydro had 51,766 registered shareholders as per the Norwegian Central Securities Depository (VPS). The Ministry of Trade and Industry of Norway was the largest of these with a shareholding of percent of the total number of ordinary shares authorized and issued, and percent of the total shares outstanding. As of the same date, The Government Pension Fund - Norway (Folketrygdfondet) owned 3.89 percent of the total number of ordinary shares issued and 3.95 percent of the total shares outstanding. There are no different voting rights associated with the ordinary shares held by the state. The Norwegian Ministry of Trade and Industry represents the Norwegian government in exercising the state's voting rights. The state has never taken an active role in the day-to-day management of Hydro and has for several decades not disposed of any of the ordinary shares owned by it, except when participating in the share buyback programs. At the closing of the acquisition of Vale's aluminium assets on February 28, 2011 Hydro issued 447,834,465 new shares to Vale as part of the consideration in the transaction. Vale therefore owns percent of the total number of ordinary shares issued and percent of the total shares outstanding. According to the agreement, Vale cannot increase its ownership beyond the 22 percent, is required to retain its shares for at least two years after the transaction closes and following the twoyear period not sell shares constituting more than 10 percent of Hydro's issued shares to any single buyer or group. The state, represented by the Ministry of Trade and Industry has stated its intention to potentially increase its shareholding up to 39.9 percent through acquiring shares in the market. JPMorgan Chase & Co, as depositary of the ADSs, through its nominee company, Morgan Guaranty Trust Company, held interests in 9,351,756 ordinary shares, or 0.45 percent of the issued and outstanding ordinary shares as of December 31, The interests are on behalf of approximately 410 registered holders of ADSs. Geographical ownership distribution of shares Norwegian State 7.4% Hydro 5.6% 7.1% 34.3% Norway other Vale USA Great Britain Others 21.6% 1.5% All shares basically carry one vote. It is, however, a requirement of Norwegian legislation that a shareholder can only vote for shares registered in their name. Shares registered with a nominee account must be re-registered in the Norwegian Central Securities Depositary before the Annual General Meeting in order to obtain voting rights. This requirement also applies to our US-traded ADSs. 22.5% Source: Norwegian Central Securities Depository (VPS)
4 134 SHAREHOLDER INFORMATION Major shareholders and voting rights Hydro's 20 largest shareholders, December 31, 2012 Shareholder Number of shares Ownership interest Ministry of Trade and Industry 708,865, % Vale Austria Holdings Gmbh 447,834, % Folketrygdfondet 80,454, % Silchester International Investors LLP 49,480, % Dodge & Cox 34,041, % Rasmussengruppen AS 32,377, % SAFE Investment Company Limited 29,710, % Skagen AS 20,784, % DNB Asset Management AS 20,357, % Pareto Forvaltning AS 17,877, % EARNEST Partners, LLC 16,885, % KLP Forsikring 16,069, % BlackRock Institutional Trust Company, N.A. 15,781, % Manning & Napier Advisors, LLC 15,761, % Baillie Gifford & Co. 14,410, % Storebrand Kapitalforvaltning AS 13,217, % ODIN Forvaltning AS 11,604, % Statoil Kapitalforvaltning ASA 10,710, % State Street Global Advisors (US) 10,658, % Vanguard Group, Inc. 9,512, % Source: The data is provided by Thompson Reuters through the Share Register Analyses service. The data is obtained through the analysis of beneficial ownership and fund manager information provided in replies to disclosure of ownership notices issued to all custodians on the Hydro share register. Whilst every reasonable effort is made to verify all data, Thompson Reuters can not guarantee the accuracy of the analysis. For a list of the largest shareholders as of December 31, 2012, from the Norwegian Central Securities Depositary (VPS), see Note 13 in Notes to the financial statements Norsk Hydro ASA.
5 SHAREHOLDER INFORMATION Key figures for the Hydro share 135 Key figures for the Hydro share Key figures for the Hydro share Share price high, Oslo (NOK) Share price low, Oslo (NOK) Share price average, Oslo (NOK) Share price year-end, Oslo (NOK) Earnings per share (EPS) (NOK) (0.61) (3.25) EPS from continuing operations (NOK) 1) (0.35) (3.04) Dividend per share (NOK) 2) Pay-out ratio 3) - 22% 56% 200% - Dividend growth 0% 0% 50% % Pay-out ratio five year average 4) 172% 77% 57% 39% 38% Adjusted debt/equity ratio 5) Credit rating, Standard & Poor's BBB BBB BBB BBB- BBB Credit rating, Moody's Baa2 Baa2 Baa2 Baa2 Baa1 Non-Norwegian ownership, year-end 42% 44% 23% 27% 33% Outstanding shares, average 2,037,199,618 1,965,039,601 1,419,052,116 1,205,376,724 1,209,143,809 Outstanding shares, year-end 2,037,568,162 2,036,459,019 1,587,776,741 1,204,785,945 1,206,325,863 1) Extruded Products is only included as discontinued operations for ) 2012 dividend per share proposed by Board of Directors, dependant on approval from the Annual General Meeting May 8, ) Dividend per share divided by earnings per share from continuing operations. 4) Dividend per share divided by earnings per share from continuing operations for last five years. 5) See note 35 to the Consolidated Financial Statements.
6 136 SHAREHOLDER INFORMATION Information from Hydro Information from Hydro Hydro gives a high priority to communicating with the stock market, and aims to maintain an open dialogue with market participants. Our objective is to provide sufficient information on a timely basis to all market participants to ensure a fair valuation of our shares. Information that is considered price sensitive is communicated by news releases and stock exchange announcements. We host regular meetings for investors in Europe and the US. The major brokers in Oslo and London publish equity research reports on Hydro. All information about Hydro is published on our website: Our annual and quarterly reports are available on and our latest annual reports can also be ordered in printed versions from the website. Two weeks before the announcement of quarterly results, Hydro practices a "closed period" meaning that contact with external analysts, investors and journalists is minimized. This is done to minimize the risk of information leaks and potentially unequal information in the marketplace. Annual General Meeting The Annual General Meeting will be held at the company's headquarters at Drammensveien 260, Oslo, Norway, on Wednesday, May 8, 2013, at 13:00 CET. Shareholders who wish to attend are asked to inform the registrar by 16:00 CET on Monday, May 6: DNB Bank ASA Verdipapirservice Postboks 1600 Sentrum 0021 Oslo, Norway Fax: You may also register electronically on our website or via VPS Investor Services. Any shareholder may appoint a proxy with written authority to attend the meeting and vote on his or her behalf. Voting rights are discussed under "Major shareholders and voting rights." Change of address Shareholders registered in the Norwegian Central Securities Depository should send information on changes of address to their registrar and not directly to Hydro. Financial calendar 2013 April 24 First quarter results May 8 Annual General Meeting May 10 Shares traded ex-dividend May 14 Record date for dividend July 18 Second quarter results October 23 Third quarter results December 5 Capital Markets Day