Aker Solutions — Interim / Quarterly Report 2020

Jul 15, 2020

Half-Year Results for 2020

HALF-YEAR RESULTS 2020 | FIGURES AND NOTES

A leader in forging a sustainable future for the global energy industry and the world it serves.

Key Figures

Amounts in NOK million	1H 2020	1H 2019	2019
Revenue	11,871	14,781	29,263
EBITDA	381	1,257	2,244
EBITDA margin	3.2%	8.5%	7.7%
EBITDA ex. special items1	667	1,266	2,316
EBITDA margin ex. special items1	5.6%	8.6%	7.9%
Depreciation, amortization and impairment	-1,145	-834	-1,539
EBIT	-764	423	705
EBIT margin	-6.4%	2.9%	2.4%
EBIT ex. special items1	74	655	1,081
EBIT margin ex. special items1	0.6%	4.4%	3.7%
Net financial items	-273	-208	-535
FX on disqualified hedging instruments	1	-8	-0
Income (loss) before tax	-1,036	206	170
Income tax	135	-68	-87
Net income (loss)	-901	137	83
Net income (loss) ex. special items1	-219	327	353
Earnings per share (NOK)	-3.38	0.43	0.15
Earnings per share (NOK) ex. special items1	-0.87	1.13	1.54

1) Excludes special items, including impairments, restructuring charges, gain/loss on sale of PPE and impact of currency derivatives not qualifying for hedge accounting. For more information on special items see section on alternative performance measures on page 30.

Projects

Amounts in NOK million	1H 2020	1H 2019	2019
Revenue	9,177	11,967	23,253
EBITDA	406	947	1,736
EBITDA margin	4.4%	7.9%	7.5%
EBITDA ex. special items1	573	953	1,780
EBITDA margin ex. special items1	6.2%	8.0%	7.7%
Order intake	9,030	6,343	14,029
Order backlog	16,050	19,311	15,887

Services

Amounts in NOK million	1H 2020	1H 2019	2019
Revenue	2,667	2,802	5,995
EBITDA	148	391	721
EBITDA margin	5.5%	14.0%	12.0%
EBITDA ex. special items1	204	397	740
EBITDA margin ex. special items1	7.6%	14.2%	12.3%
Order intake	4,532	2,877	5,365
Order backlog	10,887	10,275	9,613

EBITDA NOK million

Key Developments

Key Financial Developments

Aker Solutions' revenue decreased to NOK 11.9 billion in the first half of 2020 from NOK 14.8 billion a year earlier. Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased to NOK 381 million in the period from NOK 1,257 million a year earlier. The EBITDA margin decreased to 3.2 percent in the first half from 8.5 percent a year earlier. Excluding special items, EBITDA was NOK 667 million in the first half compared with NOK 1,266 million a year earlier and the EBITDA margin was 5.6 percent versus 8.6 percent. Impairment cost of NOK 551 million was recognized in the first half of 2020, compared to impairment cost of NOK 223 million a year earlier. Earnings per share (EPS) was negative NOK 3.38 in the period compared with positive NOK 0.43 a year earlier. Excluding special items, the EPS was negative NOK 0.87 in the first half compared to positive NOK 1.13 in the same period in 2019.

The company has two reporting segments: Projects and Services. Revenue in Projects decreased to NOK 9.2 billion in the first half from NOK 12 billion a year earlier amid generally lower market activity. The EBITDA margin was 4.4 percent in the period compared with 7.9 percent a year earlier. Revenue in Services decreased to NOK 2.7 billion in the first half from NOK 2.8 billion a year earlier, primarily driven by lower activity. The EBITDA margin decreased to 5.5 percent in the period from 14.0 percent a year earlier, due to restructuring costs and a change of activity mix somewhat mitigated by strong operational performance.

The company's order intake was NOK 13,6 billion in the first half, compared with NOK 9.3 billion a year earlier. This brought the order backlog to NOK 26,9 billion at the end of June against NOK 29.5 billion a year earlier. The backlog is based on the value of signed contracts and the estimated value of firm periods in framework agreements and service contracts. The estimated value of options is not included.

Aker Solutions' order intake in the first half of the year was impacted by the COVID-19 outbreak and sharp decline in oil prices, which led operators to delay sanctioning and reduce spending plans. The volume of contract awards increased towards the end of the period, in part supported by temporary measures by the Norwegian parliament to boost activity on the Norwegian Continental Shelf.

Early in the year, the company signed a five-year contract extension to provide offshore maintenance and modification services to Brunei Shell Petroleum. In January, Aker Solutions also secured the FEED for the electrification of the Troll B and C platforms in the North Sea. This is an important contract that confirms Aker Solutions' strategic ambition towards the energy transition and reducing CO2 emissions.

In March, Aker Solutions signed a 20-year exclusive agreement to provide umbilicals for Chevron-operated oil and gas fields in the Gulf of Mexico. The award includes a first call-off to deliver 44 kilometers of umbilicals to Chevron' Anchor project. In June, another umbilical award was secured from Subsea 7 for Murphy Exploration and Production Company's King's Quay development in the Gulf of Mexico.

In June, Aker Solutions received letters of intent from Equinor to deliver subsea production systems for the Askeladd and Breidablikk developments on the Norwegian Continental Shelf. Aker Solutions also signed a two-year contract extension for maintenance and modifications for Aker BP's Ula, Skarv, Valhall and Tambar fields offshore Norway.

Aker Solutions continued to experience a strong demand for its front-end engineering capabilities, winning 89 study awards in the first half for projects in Norway, the UK, the US, Australia and Malaysia. This is an increase from 74 study awards during the same period in 2019.

The company's liquidity reserves at the end of June included cash and bank deposits of NOK 2.5 billion. Undrawn and committed long-term revolving bank credit facilities were NOK 3.0 billion and the total liquidity buffer was NOK 5.5 billion. Net current operating assets were NOK 920 million at the end of June versus NOK 731 million a year earlier. The company's working capital is likely to fluctuate with large project work and is expected to continue to trend around the NOK 1.0 billion level going forward.

Aker Solutions continued to experience a strong demand for its front-end engineering capabilities, winning 89 study awards in the first half.

Key Operational Developments

The impact from the COVID-19 pandemic and a steep decline in oil demand and commodity prices, led to a significant slowdown in activity levels in the first half of 2020.

The company introduced measures to protect the health and safety of people, which included temporarily closing some sites and introducing home office solutions for thousands of employees. The measures were sufficient to keep up productivity and the company managed to complete several important deliveries during the first half of the year. Key deliveries included 11 manifolds and associated subsea equipment to Equinor's Askeladd, Troll and Johan Castberg projects, and subsea equipment and umbilicals to CNOOC's Lingshui and Liuhua developments.

The oil price decreased more than 65 percent in the first quarter of 2020 and the pandemic had significant adverse effects on the global economy. Oil companies responded by cutting investment plans by 20 to 30 percent, on average. The sanctioning of several expected projects was delayed and some cancelled.

In response to new market conditions, Aker Solutions announced in April further measures to reduce cost and protect the company's balance sheet. The measures include temporary and permanent lay-offs, removing contractors, site closures and freezing pay levels. The cost-cutting initiatives aim to reduce the fixed cost-level by about NOK 1 billion on an annualized basis. At the end of June the company had achieved about 90 percent progress on this initiative. The company also cut capex investments by 40 percent from the 2019 level, to NOK 500 million in 2020.

The focus on low carbon and renewable solutions was reinforced by a clear increase in the number of studies where CO2 reduction is either part of the scope or the main purpose of the study. A total of 20 out of the 89 studies were related to renewables and low carbon. In addition, Aker Solutions received funding from the Norwegian Research Council for development of its blue hydrogen solutions. Blue hydrogen is also the main focus of the hydrogen production unit (HPU) testing by Preem in their facility in Lysekil, Sweden where Aker Solutions participates with the mobile test unit (MTU) to capture the CO2 from the flue gas resulting from the gas reforming process of the HPU.

Aker Solutions also experienced strong interest in its carbon capture, utilization and storage (CCUS) solutions. In June, the company signed an agreement with Norcem, a subsidiary of German cement producer, HeidelbergCement, as a firm step towards the engineering, procurement and construction (EPC) delivery of a carbon capture plant at Norcem's cement plant in Brevik, Norway. The plant is part of the Norwegian carbon capture demonstration project to be funded by the Norwegian government. Parliament is expected to take the final decision to realize the full-scale project in the national budget for 2021.

Aker Solutions is a signatory member of the UN Global Compact and is committed to its 10 principles. Aker Solutions supports the UN Sustainable Development Goals and has prioritized nine goals. Additional information on Aker Solutions' sustainability and human rights initiatives is available on the company's website www.akersolutions.com/sustainability

In the first half of 2020, Aker Solutions made changes to the executive management team. Egil Bøyum was appointed Special Advisor to Chief Executive Officer, Luis Araujo. Geir Glømmi replaced Egil as Head of Greenfield Projects on an acting interim basis. On June 2, Aker Solutions announced that Chief Financial Officer, Ole Martin Grimsrud, had given notice that he would leave the company on September 1, 2020 to pursue other opportunities. Aker Solutions has initiated the process to find his successor.

Aker Solutions decreased its permanent workforce from about 16,000 at the end of June last year to about 13,000 in June 2020. At the same time the number of contractors was reduced from 5,500 to about 2,300. Maintaining a flexible workforce protects permanent employees as project requirements fluctuate.

The governments in some countries introduced measures for temporary layoffs and furlough to help companies during the COVID-10 pandemic. In Norway, the US and the UK, Aker Solutions has about 600 employees on temporary leave as of the end of June.

Health, Safety, Security and Environment

In the first half of 2020, the HSSE function focused on managing the global COVID-19 pandemic. The pandemic has impacted all of Aker Solutions' global operations. This required the mobilization of the crisis management team under the HSSE function leadership in close liaison with the individual country management teams. The crisis management team demobilized in mid-April 2020. The HSSE function is still working closely with the individual country management teams and ensuring that Aker Solutions is demonstrating the correct level of care to all employees. At the end of the first half, 127 Aker Solutions employees had at one point been infected by COVID-19, with the majority of these cases (100+) coming from Brazil.

Aker Solutions is committed to a goal of zero harm to people, assets and the environment. The cornerstone of this objective is a strong, structured and companywide HSSE system, setting clear standards for HSSE management and leadership. Regular audits aim to identify, isolate and help address potential shortcomings. Aker Solutions is focused on continuous improvement and learning throughout the organization and the HSSE system is a key enabler in the quest for ever more stringent standards. At Aker Solutions, the HSSE culture is founded on the principle that HSSE is the personal responsibility of every employee.

The company investigates all incidents at a level appropriate to the actual or potential outcome in order to learn and improve. The company had 10 recordable injuries in the first half of 2020. This is down from 33 in the same period last year. Most of the cases were related to movement, construction and manual handling aspects resulting in cuts, pinches, strains or foreign objects in the eye. The total recordable injury frequency (TRIF) reduced to 0.90 in the first half of 2020 compared to 1.95 in the same period a year earlier. During the first six months of 2020, four serious incidents occurred in operations, resulting in a serious incident frequency (SIF) of 0.23 compared to 0.57 in June last year. Dropped objects continues to be the main contributing event. Both frequencies are 12-month rolling and per million worked hours, which means the number of incidents in the second half of 2019 affects the frequency number of the first half of 2020. The numbers include subcontractors under our direct management. Sick leave increased slightly to 2.83 from 2.6 percent. Sick leave is calculated 12 months rolling.

To strengthen the culture further and improve the company's HSSE performance, Aker Solutions continues to follow the International Association of Oil and Gas Producers (IOGP) Lifesaving Rules which were introduced in March 2019.

In January 2020, Aker Solutions entered into a collaboration agreement with Equinor, Kvaerner, Aibel and Rosenberg Worley with the goal of learning, collaboration and establishing a 2025 goal that will improve the industry's HSSE performance. As part of this agreement, the quarterly HSSE mindset program has been standardized with the collaboration partners in order to share a common message with all front-line staff. In the second half of the year, the focus will be on Line of Fire and Working Environment.

The company communicates on a regular basis to its global workforce HSSE information on personal zero targets and risk awareness. The company continuously works to identify, analyze and mitigate intentional security threats to personnel and assets. The company did not experience any serious security incidents in the first half of 2020.

Aker Solutions also measures the company's CO2 emission intensity. As of end June, the key performance indicator was at 644 tonnes CO2 per million-man hours (12 months rolling average). This is a significant reduction on the same period last year, 815 tonnes, due to vastly reduced numbers of people travelling during the COVID-19 situation.

Aker Solutions is committed to a goal of zero harm to people, assets and the environment.

• Total recordable incidents per million worked hours
• Serious Incident Frequency

* Starting from 2018, Aker Solutions has begun to use the serious incident frequency (SIF) to focus on the occurrence of high-risk incidents. These are incidents where the actual or potential consequence is high or extreme.

2.83

Sick leave Percent

Total Recordable Injury Frequency (TRIF) 0.9

Serious Incident Frequency (SIF) 0.23

Outlook

In 2020, oil companies responded to the unprecedented market situation and COVID-19 pandemic by cutting investment plans by 20 to 30 percent, on average. The sanctioning of several expected projects was delayed, and some cancelled. During the second quarter, several countries lifted the lock-down of societies, after containing or beating the spread of the virus. At the same time, oil markets started to rebalance following OPEC+ production cuts and some increase in demand following easing of the lock-downs. At the end of the second quarter, the outlook and discussions with customers are more constructive again, supported by oil prices that are back at USD 40 dollar levels.

Projects going ahead in international markets in the near to medium term are typically tie-back and infill projects or the most mature/ advanced projects. Government relief measures are also having a positive effect on accelerating project sanctioning. This is particularly true for the home market of the Norwegian Continental Shelf (NCS), where Aker Solutions has a strong position. The measures for the oil and gas industry has already led to accelerated project sanctioning on the NCS during a critical period for the supplier industry and there is likely more to come.

The market outlook for suppliers to transition-related projects, such as carbon capture, offshore wind and projects for the decarbonization of the oil and gas industry remains encouraging and activity is increasing. These markets are less impacted by the capex cuts in the oil industry and many customers are outside oil and gas.

Aker Solutions is well positioned to enable oil and gas operators to meet their decarbonization and net zero emission targets. The majors have not included capex cuts for items in their transformation agenda, and Aker Solutions expects the transition to low-carbon and renewables to accelerate. Industry downturns are often followed by structural transformations across market segments and players, and increased industry consolidation.

As markets slowed down, so did tendering activity in the second quarter. Aker Solutions is currently bidding for contracts totaling about NOK 42 billion, compared with about NOK 55 billion a year ago. The largest portion of the tender volume remains within the subsea area. Further key projects could be awarded this year within all segments, including renewals of frame agreements for brownfield.

Aker Solutions is well positioned to enable oil and gas operators to meet their decarbonization and net zero emission targets.

Risk Factors

Aker Solutions' global footprint, operations and exposure to energy markets provide both opportunities and risks that may affect the company's operations, performance, finances, reputation and share price. Through its business, Aker Solutions is exposed to legal, regulatory and political risks, decisions on environmental regulation and international sanctions that impact supply and demand, as well as risks associated with unethical and criminal behavior such as cyber-security attacks. The annual report for 2019 provides more detailed information on inherent risks and uncertainties.

The COVID-19 pandemic and associated market turmoil during 2020 have made the following risks more predominant:

• n Operational risks: The pandemic caused disruptions to the operations of Aker Solutions and threatened the health of its personnel. The manufacturing and service sites were impacted by reduced personnel or closure, and many employees were working from home. Despite challenges in own operations and in the supply chain, Aker Solutions was able to deliver on key milestones during the period. Pandemic outbreaks and other natural disasters could also occur in the future and may impact Aker Solutions.
• n Market outlook: The sharp decline in oil prices, which led operators to delay sanctioning and reduce spending plans, has consequences for Aker Solutions and for the oil and gas industry at large. It may cause consolidations, bankruptcies and other changes to the supplier industry. Market developments may lead to capacity adjustments and changes in the valuation of

company assets and liabilities. The main uncertainties include delivering on the company's international growth ambitions, entry and establishment in new growth markets, and delivering a competitive cost base.

• n Climate change: The company is exposed to risks and opportunities stemming from climate change and the energy transition to renewables and a lower carbon economy. This includes changes in global demand, energy prices and environmental requirements that could increase costs, reduce demand for the company's offerings, reduce revenue and limit certain growth opportunities. Risks are mitigated or turned into opportunities by investing in or transforming existing technology and services into sustainable energy such as floating offshore wind and technology to reduce emissions such as carbon capture and storage.
• n Credit risk: As a result of the COVID-19 situation and general market uncertainties, credit risk has increased in most industries. The additional factors of volatile commodity prices and an increasing transition towards greener energy, credit risk has increased more in the oil and gas industry than in other industries. Due to a predominance of large international oil companies with a relatively low credit risk in its customer base, the exposure of Aker Solutions to this increased credit risk is limited.
• n Liquidity risk: The current market uncertainty as a result of the COVID-19 pandemic has increased the liquidity risk, as the future operating cashflows may develop negatively. The development of the debt covenants is closely monitored, and management is in close dialog with the lending banks and financial institutions

to ensure continued access to liquidity. The revolving credit facility and the group's cash reserve is currently assessed as sufficient, provided that there will be no draw-stop imposed on the revolving credit facility.

Aker Solutions is committed to an active policy of risk management and will take mitigating actions to increase flexibility in its operations by driving down costs, building a sustainable global workforce, and investing to develop as a supplier to sustainable energy solutions such as floating offshore wind and low carbon technologies. A focus on standardization, simplification and continuous improvement in productivity is central to these efforts.

Fornebu, July 14, 2020 The Board of Directors and CEO of Aker Solutions ASA Integrity is at the core of our values. Wherever we operate. It guides how we connect with our customers and our health, safety, security and environment mindset.

Declaration by the Board of Directors and CEO

The board and CEO have today reviewed and approved the condensed, consolidated financial statements for the six months ending June 30, 2020 for Aker Solutions.

This declaration is based on information received by the Board through reports and statements from the CEO and CFO as well as other information essential to assess the company's results and financial position.

To the best of our knowledge:

• n The half-year 2020 financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting.
• n The half-year 2020 financial statements give a true and fair view of the company's assets, liabilities and financial position in addition to the development and results of the company taken as a whole.
• n The half-year 2020 financial statements give a true and fair overview of important events that have occurred during the period and their impact on the financial statements, the most significant risks and uncertainties facing the company and significant related party transactions.

Fornebu, July 14, 2020 Board of Directors and CEO of Aker Solutions ASA

Øyvind Eriksen Chairman

Koosum Kalyan Director

Kristian Røkke Director

Birgit Aagaard-Svendsen Director

Henrik O. Madsen Director Director

Atle Teigland

Hilde Karlsen Director

Audun Bråthen Director

Luis Araujo Chief Executive Officer

AKER SOLUTIONS 11

Figures and Notes

Aker Solutions Group

The subtotals and totals in some of the tables may not equal the sum of the amounts shown due to rounding. The periodic figures are not audited, except the annual 2019 figures that have been derived from the audited financial statements.

Income Statement

Condensed consolidated income statement

NOK million.	Note	1H 2020	1H 2019	2019
Revenue	3, 4	11,871	14,781	29,263
Operating expenses		-11,490	-13,524	-27,019
Operating income before depreciation, amortization and impairment	4	381	1,257	2,244
Depreciation and amortization	6,7	-594	-611	-1,234
Impairments	8	-551	-223	-304
Operating income	4	-764	423	705
Interest income	5	51	28	57
Interest expenses	5	-251	-244	-508
Net other financial items	5	-72	0	-84
Income before tax		-1,036	206	170
Income tax		135	-68	-87
Net income		-901	137	83
Net income attributable to:
Equity holders of the parent company		-919	118	41
Non-controlling interests		18	19	41
Net income		-901	137	83
Earnings per share in NOK (basic and diluted)	9	-3.38	0.43	0.15

Other Comprehensive Income (OCI)

Condensed consolidated statement of other comprehensive income

NOK million.	1H 2020	1H 2019	2019
Net income	-901	137	83
Other comprehensive income:
Items that are or may be reclassified subsequently to profit or loss:
Cashflow hedges, effective portion of changes in fair value	-69	58	124
Cashflow hedges, reclassification to income statement	21	-77	-98
Cashflow hedges, deferred tax	11	4	-7
Translation differences - foreign operations	281	-177	80
Total	244	-192	98
Items that will not be reclassified to profit or loss:
Remeasurements of defined pension obligations	0	0	-109
Remeasurements of defined pension obligations, deferred tax asset	0	0	24
Total	0	0	-85
Total comprehensive income (loss)	-657	-55	96
Total comprehensive income attributable to:
Equity holders of the parent company	-683	-72	55
Non-controlling interests	26	17	41
Total comprehensive income (loss)	-657	-55	96

Balance Sheet

Condensed consolidated balance sheet

NOK million.	Note	June 30, 2020	June 30, 2019	December 31, 2019
Property, plant and equipment	6	2,905	2,916	3,065
Intangible assets	7	5,423	5,578	5,710
Right-of-use assets	11	3,494	3,848	3,628
Deferred tax asset		1,121	751	871
Lease receivables	11	755	665	663
Other investments	15	92	157	93
Other non-current assets	14	370	168	268
Total non-current assets		14,161	14,084	14,298
Current tax assets		93	92	120
Inventories		270	353	369
Trade receivables		3,617	4,063	3,182
Customer contract assets and other receivables		4,868	4,147	4,846
Prepayments		1,536	1,918	1,564
Derivative financial instruments		204	86	156
Interest-bearing receivables		140	122	130
Cash and cash equivalents		2,460	2,228	1,898
Total current assets		13,188	13,009	12,265
Total assets		27,349	27,092	26,563

NOK million.	Note	June 30, 2020	June 30, 2019	December 31, 2019
Total equity attributable to the parent	9	6,532	7,044	7,134
Non-controlling interests	9	78	123	97
Total equity		6,610	7,167	7,231
Non-current borrowings	10	4,580	2,714	3,280
Non-current lease liabilities	11	4,799	5,029	4,889
Pension obligations		656	562	663
Deferred tax liabilities		242	211	269
Other non-current liabilities		3	14	22
Total non-current liabilities		10,280	8,530	9,123
Current tax liabilities		221	79	81
Current borrowings	10	242	865	217
Current lease liabilities	11	608	556	571
Provisions		555	582	521
Trade payables		3,087	2,087	2,000
Other payables		5,084	6,364	6,021
Customer contract liabilities		516	730	677
Derivative financial instruments		144	132	121
Total current liabilities		10,458	11,396	10,209
Total liabilities and equity		27,349	27,092	26,563

Cashflow

Condensed consolidated statement of cashflow

NOK million.	Note	1H 2020	1H 2019	2019
Cashflow from operating activities
Net income		-901	137	83
Adjustments for:
Income tax		-135	68	87
Net financial cost		273	208	535
(Profit) loss on foreign currency forward contracts		-1	8	0
Depreciation, amortization and impairment	6, 7, 8	1,145	834	1,539
Other (profit) loss on disposals and non-cash effects		-31	-12	-99
Net income after adjustments		350	1,245	2,145
Changes in operating assets and liabilities		-364	-1,178	-1,202
Cash generated from operating activities		-14	67	943
Interest paid		-257	-274	-572
Interest received		71	54	132
Income taxes paid		-51	-95	-184
Net cash from operating activities		-251	-248	319

NOK million.	Note	1H 2020	1H 2019	2019
Cashflow from investing activities
Acquisition of property, plant and equipment	6	-269	-184	-599
Payments for capitalized development	7	-119	-79	-228
Acquisition of subsidiaries, net of cash acquired		0	-35	-35
Proceeds from sale of property, plant and equipment		0	2	33
Change in interest-bearing receivables		-88	-57	-64
Acquisition of shares and funds		-4	-76	-151
Sale of shares and funds		0	16	16
Cash collection from lease receivables	11	63	62	113
Net cash from investing activities		-417	-351	-916
Cashflow from financing activities
Proceeds from borrowings	10	1,505	1,001	1,784
Repayment of borrowings	10	-156	-326	-1,190
Payment of lease liabilities	11	-306	-270	-559
Acquisition of non-controlling interests		-50	0	0
Net purchase of treasury shares and share purchase program		19	0	-48
Other financing activities		0	0	-1
Net cash from financing activities		1,012	405	-14
Effect of exchange rate changes on cash and bank deposits		218	-51	37
Net increase (decrease) in cash and bank deposits		562	-245	-575
Cash and cash equivalents at the beginning of the period		1,898	2,473	2,473
Cash and cash equivalents at the end of the period		2,460	2,228	1,898

Equity

Condensed consolidated statement of changes in equity

NOK million.	Share capital	Treasury share reserve	Retained earnings	Hedging reserve	Translation reserve	Pension reserve	Equity attributable to parent	Non controlling interests	Total equity
Equity as of January 1, 2019	294	-1	5,692	-8	1,240	-71	7,147	106	7,252
Net income	0	0	118	0	0	0	118	19	137
Other comprehensive income	0	0	0	-16	-175	0	-190	-2	-193
Total comprehensive income	0	0	118	-16	-175	0	-72	17	-55
Other changes to equity	0	0	-31	0	0	0	-31	0	-31
Equity as of June 30, 2019	294	-1	5,780	-23	1,065	-71	7,044	123	7,167
Equity as of December 31, 2019	294	0	5,666	11	1,320	-156	7,134	97	7,231
Net income	0	0	-919	0	0	0	-919	18	-901
Other comprehensive income	0	0	0	-37	273	0	236	8	244
Total comprehensive income	0	0	-919	-37	273	0	-683	26	-657
Acquisition of non-controlling interests	0	0	-5	0	0	0	-5	-45	-50
Correction of opening balance related to IFRS 16 leases	0	0	102	0	0	0	102	0	102
Taxes on equity transactions	0	0	-16	0	0	0	-16	0	-16
Equity as of June 30, 2020	294	0	4,828	-27	1,593	-156	6,532	78	6,610

Notes

Note 1 General

Aker Solutions is global provider of products, systems and services to the oil and gas industry. The company has about 13,000 own employees and is present in 25 countries. The main office is at Fornebu, Norway. Aker Solutions ASA is a Norwegian limited liability company listed on the Oslo Stock Exchange under the ticker AKSO.

The consolidated financial statements of Aker Solutions ASA incorporate the financial statements of the company and its subsidiaries collectively referred to as "the group" or "the company" and separately as group companies. The parent company Aker ASA publishes consolidated financial statements. The Resource Group TRG AS is the ultimate parent company of Aker Solutions ASA. The half-year financial statements are unaudited.

Note 2 Basis for Preparation

Statement of Compliance

Aker Solutions' half-year financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and are unaudited. The accounting principles used in the half-year financial statements are consistent with those used in the 2019 Annual Report. As the half-year financial statements do not include all the information and disclosures required in the annual report, they should be read in conjunction with the 2019 Annual Report available at www.akersolutions.com.

Judgments and Estimates

The preparation of the half-year financial statements in conformity with IAS 34 Interim Financial Reporting requires management to make judgments, estimates and assumptions each reporting period that affect the income statement and balance sheet. The accounting estimates will by definition seldom precisely match actual results. The judgments and estimates are based on historical experience or other factors, including expectations of future events that are believed to be reasonable under the circumstances. Changes to accounting estimates are recognized in the period in which the estimate is revised and any subsequent periods the change relates to.

In preparing these half-year financial statements, significant judgments made by management in applying the group's accounting policies and the key sources of uncertainty in the estimates were consistent with those described in the 2019 Annual Report available on www.akersolutions.com.

Note 3 Revenue

The following tables show the revenue from customer contracts by type and per country. Revenue figures include only external revenues. Revenue per country is based on location of the selling company.

Amounts in NOK million	1H 2020	1H 2019	2019
Projects - Subsea	4,204	4,730	9,151
Projects - Field Design	4,916	7,174	13,948
IFRS 15 revenue included in Projects operating segment	9,120	11,903	23,099
IFRS 15 revenue included in Services operating segment	2,663	2,800	5,986
IFRS 15 revenue included in Other segment	24	18	35
Total revenue from customer contracts (IFRS 15)	11,807	14,721	29,120
Operating lease revenue and other	64	60	143
Total revenue	11,871	14,781	29,263

Amounts in NOK million	1H 2020	1H 2019	2019
Norway	7,020	8,837	17,354
Malaysia	872	1,200	2,370
UK	867	1,931	3,606
Brazil	670	942	2,070
USA	517	615	972
Angola	505	457	1,030
Brunei	401	394	806
Other countries	1,017	404	1,056
Total revenue	11,871	14,781	29,263

Note 4 Operating Segments

Aker Solutions' operations are managed through value-chain based delivery centers. Early customer engagement and project execution are reported in the Projects segment whereas life-of-field offerings are reported in Services.

Projects

The Projects segment provides subsea equipment and systems, engineering and procurement in addition to frame agreements for brownfield maintenance, modifications and hook-up. The objective of the segment is to deliver world-class project execution by building excellence in project management, engineering, fabrication and offshore construction.

Services

The Services segment provides subsea lifecycle services (SLS) and production asset services (PAS). The objective of the segment is to grow a focused service business and position Aker Solutions as a key partner of choice for customers.

Other

The Other segment includes unallocated corporate costs, leasing of property shared across segments and the effect of hedges not qualifying for hedge accounting.

Accounting principles

The accounting principles of the operating segments are generally the same as described in the annual report. As noted in the annual report, the operating segments apply hedge accounting independently of whether the hedge qualifies for hedge accounting or not in accordance with IFRS. When contract revenues and contract costs are denominated in a foreign currency, the subsidiary hedges the exposure against corporate treasury. A correction for the non-qualifying hedges and elimination of internal transactions are made in the consolidated financial statements. This means that the group's segment report reflects both internal and external hedges before any adjustment for non-qualifying hedges and before internal transactions are eliminated in the Other segment.

Segment performance

Amounts in NOK million	1H 2020	1H 2019	2019
Income statement
Revenue
Projects	9,177	11,967	23,253
Services	2,667	2,802	5,995
Total operating segments	11,844	14,769	29,248
Other	81	77	176
Eliminations	-54	-65	-160
Total	11,871	14,781	29,263
Operating income before depreciation, amortization and impairment (EBITDA)
Projects	406	947	1,736
Services	148	391	721
Total operating segments	554	1,338	2,457
Other	-173	-82	-213
Total	381	1,257	2,244
Operating income (EBIT)
Projects	-357	469	837
Services	-111	242	399
Total operating segments	-467	711	1,236
Other	-297	-288	-531
Total	-764	423	705

Amounts in NOK million	1H 2020	1H 2019	2019
Balance Sheet
Net current operating assets (NCOA)
Projects	91	-66	-239
Services	479	936	844
Total operating segments	569	870	606
Other	351	-139	176
Total	920	731	781

Refer to alternative performance measure for further information on NCOA.

Note 5 Finance Income and Expenses

Amounts in NOK million	1H 2020	1H 2019	2019
Interest income on lease receivables	19	17	33
Other interest income	32	10	24
Interest income	51	28	57
Interest expense on lease liabilities	-117	-120	-237
Interest expense on financial liabilities measured at amortized cost	-128	-116	-255
Interest expense on financial liabilities measured at fair value	-6	-8	-16
Sum interest expense	-251	-244	-508
Net foreign exchange gain (loss)	-47	-4	-107
Profit (loss) on foreign currency forward contracts	1	-8	0
Other finance income	5	18	42
Other financial expenses	-31	-6	-19
Net other finance items	-72	0	-84
Net finance cost	-272	-217	-535

Amounts in NOK million Buildings and sites Machinery and equipment Under construction Total Balance as of December 31, 2019 1,123 1,447 495 3,065 Additions 1 15 253 269 Reclassifications from assets under construction 7 199 -206 0 Depreciation -27 -209 0 -236 Impairment -6 -75 0 -81 Currency translation differences -87 -4 -21 -112 Balance as of June 30, 2020 1,010 1,373 522 2,905

Note 6 Property, Plant and Equipment

Note 7 Intangible Assets

Amounts in NOK million	Goodwill	Development	Other intangible assets	Total
Balance as of December 31, 2019	4,324	1,324	61	5,710
Capitalized development	0	119	0	119
Amortization	0	-116	-15	-131
Impairment	-104	-272	0	-376
Currency translation differences	48	53	1	102
Balance as of June 30, 2020	4,269	1,107	47	5,423

Note 8 Impairment of Assets

The COVID-19 pandemic and the challenging commodity price environment in 2020 has created unprecedented uncertainty with negative impact on both activity and financial performance at Aker Solutions. These events have also impacted the long-term market outlook. The company has completed an assessment of impairment indicators and performed an impairment test for those assets and cash generating units (CGUs) where impairment indicators have been identified. Impairment of assets of NOK 551 million was recognized in the first-half of 2020.

Individual assets

Each property, plant, equipment and right-of-use asset has been assessed for impairment triggers to identify assets that are damaged or will no longer be fully used. Capitalized development is assessed for impairment triggers to identify development programs where the technological development or market outlook for that specific technology no longer justify the book value.

The testing resulted in impairment of certain assets. The market outlook for some capitalized development projects had a negative development in the period, which resulted in an impairment. Further, the company decided to close the Sandnessjøen plant and updated the assessment of potential sub-leases for emptied parts of leased buildings in the period, which resulted in impairment of right-of-use lease assets. Some fixed assets were also impaired. In total, the individual asset testing resulted in impairment of NOK 436 million.

Assets in Cash Generating Units (CGU)

Impairment indicators has been reviewed for the company's CGUs with assessment of market conditions, cost development, technological development, change in order backlog, change in discount rate and other elements that may impact the value of the assets in the CGU. The company completed impairment tests using the value-in-use approach for those CGUs where impairment triggers were identified. The testing resulted in impairment of NOK 115 million related to one CGU. The remaining book value of fixed and intangible assets of the impaired CGU was NOK 49 million.

Goodwill

Due to the global market disruption as a result of the commodity price development and the COVID-19 pandemic, the company has performed an impairment test of its goodwill. The following assumptions were used:

• n Updated forecast of five-year cashflows in the period 2020-2024 based on firm orders in the backlog, identified prospects, expected service revenue and expected cost levels
• n Updated post-tax WACC of 9.6 percent (8.6 percent at year-end 2019) for Projects, and 9.8 percent (8.8 percent at year-end 2019) for Services.
• n A growth rate of 1.5 percent was used for both segments (same as year-end 2019)

No impairment was identified in the goodwill testing.

Note 8 continues on next page

The table below summarizes the impairments identified in the individual asset and CGU testing:

		Projects		Services			Other			Total
Amounts in NOK million	1H 2020	1H 2019	2019	1H 2020	1H 2019	2019	1H 2020	1H 2019	2019	1H 2020	1H 2019	2019
Impairment of intangible assets	254	2	2	119	0	0	2	0	0	376	2	2
Impairment of property, plant and equipment	50	0	25	11	0	14	20	5	7	81	5	46
Impairment of right-of-use assets	59	74	53	2	19	54	34	123	150	94	216	257
Total impairments	363	76	80	132	19	68	56	128	157	551	223	304

Multiple sensitivity tests have been run on the key assumptions in the value-in-use calculations to address the current uncertainty in the oil service market. Applying the following changes in key assumptions did not result in any impairment:

• n decrease the long-term growth rate to zero
• n Increase post-tax WACC by 2 percentage points
• n Decrease forecasted cash-flows in all years (including terminal value) by 20 percent

Future cash flows are uncertain as they are impacted by market developments beyond Aker Solutions' control. The development of the long-term oil price impacts the investment levels in capex and maintenance projects by the oil companies, which in turn impacts the order intake in Aker Solutions. Due to the high level of uncertainties at the time this report was finalized, there is significant uncertainty related to the long-term impact on the market and future cashflows of the company.

Note 9 Share Capital and Equity

Aker Solutions ASA was founded May 23, 2014 with a nominal share capital of NOK 293,807,940. The total outstanding shares are 272,044,389 shares at par value NOK 1.08 per share at June 30, 2020. All issued shares are fully paid.

Aker Solutions ASA holds 101,636 treasury shares as of June 30, 2020. Treasury shares are not included in the weighted average number of ordinary shares. Earnings per share have been calculated based on an average of 271,942,753 shares outstanding June 30, 2020.

The General Meeting on April 21, 2020 decided that no dividend payment is made for 2019 as it was deemed prudent to exercise caution and conserve cash amid continued uncertainty about the market outlook.

Note 10 Borrowings

Interest bearing borrowings are recognized initially at fair value less transaction costs and subsequent at amortized cost.

Amounts in NOK million	Maturity	June 30, 2020	June 30, 2019	Dec 31, 2019
Bond - ISIN NO 0010661051	October 2019	0	732	0
Bond - ISIN NO 0010814213	July 2022	1,501	1,500	1,503
Bond - ISIN NO 0010853286	June 2024	992	992	993
Brazilian Development Bank EXIM and capex loans	Within one year	209	114	194
Brazilian Development Bank EXIM and capex loans	More than one year	116	262	221
Revolving Credit Facility1	March 2023	1,994	-22	582
Other loans and amortization effects		10	2	4
Total borrowings		4,823	3,579	3,497
Current borrowings		242	865	217
Non-current borrowings		4,580	2,714	3,280
Total borrowings		4,823	3,579	3,497

1) The carrying amount includes fees for establishing the credit facility which is deferred according to the amortized cost method

Borrowings are measured at amortized cost and interest rate variations will not affect the valuation as they are held to maturity. The bonds were issued in the Norwegian bond market. The fair value of the bonds were NOK 2,164 million per June 30, 2020, compared to carrying amount of NOK 2,494 million. The fair value of the bonds per December 31, 2019 was NOK 2,551 million compared to carrying amount of NOK 2,496 million.

As of June 30, 2020 Aker Solutions is in compliance with financial covenants in all loan agreements. As a preemptive measure Aker Solutions has close dialogue with core lenders to protect the liquidity reserve and ensure continued availability of credit facilities in case the market further deteriorates.

Note 11 Leasing

The company leases a number of office buildings in addition to manufacturing and service sites. The company also leases machines and vehicles. All contracts that contain a lease are recognized on the balance sheet as a right-of-use asset and lease liability, except short-term and low-value leases. The right-of-use asset is depreciated over the lease term and is subject to impairment testing. Sub-leases covering the major part of the lease term in the head-lease are classified as finance sub-leases.

The movement in the right-of-use assets and lease liabilities during the period is summarized below.

		Right-of-use assets
Amounts in NOK million	Land and building	Machinery and vehicles	Others	Total	Lease liabilities	Lease receivable (sub-lease)
Balance as of December 31, 2019	3,608	16	4	3,628	5,460	784
Additions	126	1	0	127	149	148
Depreciation expense	-219	-6	-3	-227	n/a	n/a
Impairments	-94	0	0	-94	n/a	n/a
Interest expense/sub-lease interest income	n/a	n/a	n/a	n/a	117	19
Lease payments/sub-lease payments	n/a	n/a	n/a	n/a	-423	-82
Currency translation differences	61	-1	0	60	105	17
Balance as of June 30, 2020	3,482	10	2	3,494	5,407	886

Note 12 Provisions

Amounts in NOK million	Warranties	Onerous contracts	Restructuring	Other	Total
Balance as of December 31, 2019	182	196	8	135	521
Change in the period	-26	-80	130	6	30
Currency translation	2	1	0	1	5
Balance as of June 30, 2020	158	117	138	142	555

The provision for warranties relates to expected re-work and improvements for products and services delivered to customers. The warranty period is normally two to five years. The provision is based on the historical average warranty expenses for each type of equipment and an assessment of the value of delivered products and services currently in the warranty period.

The onerous contracts provision includes customer contracts with expected losses upon completion. The provision is sensitive to changes in assumptions related to expected future revenue and expense on the customer contract.

The restructuring provision relates to expected employee costs for permanent and temporary redundancies as a result of the COVID-19 pandemic and the general market uncertainties. Other provisions relate to other liabilities with uncertain timing or amount, including provisions for claims, leasehold dilapidations and certain employee benefits.

Note 13 Related Parties

Related parties' relationships are defined to be entities outside the Aker Solutions group that are under control (either directly or indirectly), joint control or significant influence by the owners of Aker Solutions. Related parties are in a position to enter into transactions with the company that would potentially not be undertaken between unrelated parties. All transactions in the Aker Solutions group with related parties have been based on arm's length terms.

The largest shareholder of Aker Solutions is Aker Kværner Holding AS which is controlled by Aker ASA (70 percent). Aker ASA is controlled by The Resource Group TRG AS, a company controlled by Kjell Inge Røkke. The Resource Group TRG AS is the ultimate parent company of Aker Solutions ASA. In this respect, all entities owned by Aker ASA and entities which Kjell Inge Røkke and his close family controls through The Resource Group TRG AS are considered related parties to Aker Solutions. These entities include companies like Akastor, Kvaerner and Aker BP and are referred to as Aker entities in this note. Non-controlling interests with significant influence are also considered as related parties.

Below is a summary of transactions and balances between Aker Solutions group and its related parties.

Related Party Transactions Included in Income statement

Amounts in NOK million	1H 2020	1H 2019	2019
Operating revenues	2,094	2,202	3,983
Operating expenses	-154	-63	-386
Depreciation and impairment of ROU assets	-136	-140	-217
Net financial items	-20	-27	-53

Related Party Transactions Included in Balance Sheet

Amounts in NOK million	June 30, 2020	June 30, 2019	December 31, 2019
Right-of-use (ROU) assets	1,075	1,292	1,187
Lease receivable, long term	188	220	189
Trade receivables	674	584	286
Non-current interest-bearing receivables	194	121	98
Lease receivable, short term	67	60	61
Non-current leasing liabilities	-1,280	-1,366	-1,313
Trade payables	-16	-57	-34
Current interest-bearing loans	-8	-1	-1
Current leasing liabilities	-109	-121	-108

Aker Solutions has several transactions with related parties on a recurring basis as part of normal business such as commercial customer contracts, sub-supplier contracts and hire of technical and project personnel between Aker Solutions, Aker BP and Kvaerner. Aker Solutions is also leasing property from and to related parties.

Note 14 Equity-Accounted Investments

Joint ventures are those entities where the company has joint control and rights to net assets. Associates are those entities where the company has significant influence, but not control or joint control (usually between twenty and fifty percent of voting power). Interests in associates and joint ventures are accounted for using the equity method. The book value of equity-accounted investments was:

Amounts in NOK million	June 30, 2020	June 30, 2019	December 31, 2019
Joint ventures	24	3	15
Associates	125	1	130
Total	149	4	146

Note 15 Other Investments

Other investments include investments in entities which the company does not have significant influence, usually where the company holds less than twenty percent of the voting power. Such investments are designated as equity securities at fair value through other comprehensive income as they represent long-term strategic investments. The company had invested NOK 92 million in unlisted shares at June 30, 2020 compared to NOK 157 million at June 30, 2019 and NOK 93 million at December 31, 2019. These shares are measured at cost less impairment, as this is the best estimate of fair value. There is no quoted market prices or other information available to measure fair value.

Alternative Performance Measures

Aker Solutions discloses alternative performance measures in addition to those normally required by IFRS as such performance measures are frequently used by securities analysts, investors and other interested parties. Alternative performance measures are meant to provide an enhanced insight into the operations, financing and future prospects of the company.

Profit Measures

EBITDA and EBIT terms are presented as they are used by financial analysts and investors. Special items are excluded from EBITDA and EBIT as alternative measures to provide enhanced insight into the financial development of the business operations and to improve comparability between different periods.

EBITDA	is short for earnings before interest, taxes, depreciation and amortization. EBITDA corresponds to the "operating income before depreciation, amortization and impairment" in the consolidated income statement in the annual report.
EBIT	is short for earnings before interest and taxes. EBIT corresponds to "operating income" in the consolidated income statement in the annual report.
Margins	such as EBITDA margin and EBIT margin are used to compare relative profit between periods. EBITDA margin and EBIT margin are calculated as EBITDA or EBIT divided by revenue.
Special items	may not be indicative of the recurring operating results or cash flows of the company. Profit measures excluding special items are presented as alternative measures to improve comparability of the underlying business performance between the periods.

Amounts in NOK million		Projects			Services			Other / eliminations					Aker Solutions
	2Q 2020	2Q 2019	1H 2020	1H 2019	2Q 2020	2Q 2019	1H 2020	1H 2019	2Q 2020	2Q 2019	1H 2020	1H 2019	2Q 2020	2Q 2019	1H 2020	1H 2019
Revenue	4,058	6,015	9,177	11,967	1,281	1,503	2,667	2,802	22	8	28	12	5,361	7,525	11,871	14,781
Non-qualifying hedges	0	0	0	0	0	0	0	0	2	0	-7	1	2	0	-7	1
Sum of special items excluded from revenue	0	0	0	0	0	0	0	0	2	0	-7	1	2	0	-7	1
Revenue ex. special items	4,058	6,015	9,177	11,967	1,281	1,503	2,667	2,802	24	8	21	13	5,363	7,525	11,864	14,782
EBITDA	233	470	406	947	85	205	148	391	-87	-52	-173	-82	232	623	381	1,257
Restructuring cost	35	5	167	6	41	6	56	6	41	0	50	1	117	10	272	13
Non-qualifying hedges	0	0	0	0	0	0	0	0	-8	-4	1	-6	-8	-4	1	-6
Other special items	0	0	0	-0	0	0	0	0	13	-0	13	2	13	-0	13	2
Sum of special items excluded from EBITDA	35	5	167	6	41	6	56	6	45	-4	64	-3	121	6	286	9
EBITDA ex. special items	268	475	573	953	126	210	204	397	-41	-56	-109	-85	353	629	667	1,266
EBITDA margin	5.7%	7.8%	4.4%	7.9%	6.6%	13.6%	5.5%	14.0%					4.3%	8.3%	3.2%	8.5%
EBITDA margin ex. special items	6.6%	7.9%	6.2%	8.0%	9.8%	14.0%	7.6%	14.2%					6.6%	8.4%	5.6%	8.6%
EBIT	47	189	-357	469	12	122	-111	242	-122	-213	-297	-288	-63	98	-764	423
Sum of special items excluded from EBITDA	35	5	167	6	41	6	56	6	45	-4	64	-3	121	6	286	9
Impairments	-10	76	363	76	9	19	132	19	3	126	56	128	3	221	551	223
Sum of special items excluded from EBIT	25	80	529	82	50	25	188	25	49	122	120	125	124	228	838	232
EBIT ex. special items	72	270	173	550	63	147	77	267	-73	-91	-177	-163	62	325	74	655
EBIT margin	1.1%	3.1%	-3.9%	3.9%	1.0%	8.1%	-4.2%	8.6%					-1.2%	1.3%	-6.4%	2.9%
EBIT margin ex. special items	1.8%	4.5%	1.9%	4.6%	4.9%	9.8%	2.9%	9.5%					1.1%	4.3%	0.6%	4.4%

Table continues on next page

Amounts in NOK million	Aker Solutions
	2Q 2020	2Q 2019	1H 2020	1H 2019
Net income	-171	-11	-901	137
Sum of special items excluded from EBIT	124	228	838	232
Non-qualifying hedges	11	5	-1	8
Tax effects on special items	-21	-52	-154	-50
Net income ex. special items	-56	169	-219	327
Net income to non-controlling interests	-6	-18	-18	-19
Net income ex. non-controlling interests	-63	151	-237	308
Average number of shares (in 1,000)	271,943	271,533	271,943	271,533
Earnings per share1	-0.65	-0.11	-3.38	0.43
Earnings per share ex. special items2	-0.23	0.56	-0.87	1.13

1) Earnings per share is calculated using net income, adjusted for non-controlling interests, divided by average number of shares 2) Earnings per share ex. special items is calculated using net income ex. special items, adjusted for non-controlling interests, divided by average number of shares

Order Intake Measures

Order intake, order backlog and book-to-bill ratios are presented as alternative performance measures, as they are indicators of the company's revenues and operations in the future.

• Order intake includes new signed customer contracts in the period in addition to expansion of existing contracts. For construction contracts, the order intake includes the value of signed contracts and options, and value of agreed change orders. It does not include potential options and change orders. For service contracts, the order intake is based on estimated customer revenue in periods that are firm in the contracts.
• Order backlog represents the estimated value of remaining work on signed customer contracts. The order backlog does not include parts of the Services segment, which is short-cycled or book-and-turn in nature. The order backlog does also not include potential growth or value of options in existing contracts.
• Book-to-bill ratio is calculated as order intake divided by revenue in the period. A book-to-bill ratio higher than 1 means that the company has secured more contracts in the period than what has been executed in the same period.

		2Q 2020		2Q 2019
Amounts in NOK million	Order intake	Revenue	Book-to-bill	Order intake	Revenue	Book-to-bill
Projects - Subsea	2,967	1,895	1.6	1,846	2,343	0.8
Projects - Field Design	3,365	2,164	1.6	999	3,680	0.3
Other/eliminations	-1	-1		15	-8
Projects	6,331	4,058	1.6	2,860	6,015	0.5
Services	614	1,281	0.5	902	1,503	0.6
Other/eliminations	26	22		60	8
Aker Solutions	6,971	5,361	1.3	3,822	7,525	0.5

Financing Measures

Alternative financing and equity measures are presented as they are indicators of the company's ability to obtain financing and service its debts.

Liquidity buffer (available liquidity) is a measure of available cash and is calculated by adding together the cash and cash equivalents and the unused credit facility.

Net current operating assets (NCOA) or working capital

is a measure of the current capital necessary to maintain operations. Working capital includes trade receivables, trade payables, accruals, provisions and current tax assets and liabilities.

Amounts in NOK million	June 30, 2020	June 30, 2019
Cash and cash equivalents	2,460	2,228
Credit facility (unused)	3,000	5,000
Liquidity buffer	5,460	7,228

	Projects		Services		Aker Solutions
Amounts in NOK million	June 30, 2020	June 30, 2019	June 30, 2020	June 30, 2019	June 30, 2020	June 30, 2019
Current tax assets	52	43	0	1	93	92
Inventory	108	175	160	177	270	353
Customer contract assets and other receivables	2,596	1,952	1,024	1,108	4,868	4,147
Trade and other receivables	2,767	3,870	2,763	2,484	3,617	4,063
Prepayments	416	915	500	403	1,536	1,918
Current tax liabilities	0	0	-64	-66	-221	-79
Provisions	-374	-471	-21	1	-555	-582
Trade payables	-1,658	-1,910	-2,420	-2,015	-3,087	-2,087
Other payables	-3,407	-4,045	-1,409	-1,124	-5,084	-6,365
Customer contract liabilities	-408	-595	-53	-31	-516	-730
Net current operating assets (NCOA)	91	-66	479	936	920	731

Net interest-bearing debt to EBITDA (leverage ratio)

is a key financial measure that is used to assess the borrowing capacity of a company. The ratio shows how many years it would take for a company to pay back its debt if net debt and EBITDA are held constant. The ratio is one of the debt covenants of the company.

The ratio is calculated as net interest-bearing debt (total principal debt outstanding less unrestricted cash) divided by EBITDA. If a company has more cash than debt, the ratio can be negative. The leverage ratio for Aker Solutions does not include the effects of IFRS 16 Leasing, as the debt covenants are based on frozen GAAP.

Further, the EBITDA is calculated based on the last four quarter period and it excludes certain special items as defined in the loan agreements, such as restructuring of offices (onerous leases) and other restructuring costs.

Amounts in NOK million	June 30, 2020	June 30, 2019
Non-current borrowings	4,580	2,714
Current borrowings	242	865
Cash and cash equivalents	-2,460	-2,228
Net interest-bearing debt	2,362	1,351
Trailing four quarters:
EBITDA	1,368	2,203
IFRS 16 effects excl. onerous lease cost	567	285
EBITDA excl. IFRS 16 effects and onerous lease cost	801	1,918
Onerous lease cost (IAS 17)	0	15
Restructuring cost	330	41
Non-qualifying hedges	7	-10
Adjusted EBITDA	1,138	1,963
Net interest-bearing debt to EBITDA (leverage ratio)	2.1	0.7

Contact

Aker Solutions ASA Oksenøyveien 8, 1366 Lysaker Postal address: P.O. Box 169 NO-1325 Lysaker Telephone:

+47 67 51 30 00

Web: www.akersolutions.com

COPYRIGHT AND LEGAL NOTICE