Aker — Annual Report 2018

Apr 4, 2019

Proud ownership

Aker ASA annual report 2018

Aker's vision is to practice proud ownership.

Content

1.	This is Aker	5
	Highlights	6
	Key performance indicators	7
	Changes in net asset value	8
2.	Letter from the President and CEO	11
3.	Shareholder information	14
4.	Investment overview	16
	Industrial holdings	17
	Financial investments	24
	Alternative performance measures	25
5.	Board of Directors' report	27
6.	Annual accounts	38
	Aker Group	39
	Aker ASA	94
	Aker ASA and holding companies	114
7.	Board of Directors	124
8.	Management	127

Financial calendar 2019

Aker reserves the right to revise the dates.

Annual General Meeting 2019: 26 April Announcement of 1Q 2019: 10 May Announcement of 2Q 2019: 18 July Announcement of 3Q 2019: 1 November

	YAR	U	100	91,550	NAD THE MA 706,000 + 708
	ORK		鞫		91,600 × 1119 4400 4400
	GJF		13917		332,600 4 332,700 v 155 342 11 66,400 - 66,44
	WHY		700		128,800 v 128,900 v 1663 131100 132.00 133.00 14
	MHG	L	B 3579		26,530 4 26,550 4 687 27,000 27,00 22
	SCHB	B	瀡		111,800 A 112,000 Y 2359 112,800 11370 11378 1138
	SCHA	B	籣	258,900 v	254,000 v 254,900 + 1027 26000 2800 2800 2800 380 259,300 ▲ 219 261,200 2000 2300 2300 ·
	SALM		2629	165M *	167,000 ¥ 1317 197,000 1993 1998 1998 1
	LSG		1673	$311,000$ $*$	312,000 v 977 312,000 316 08 310 08 310 m + 130,000 v 130,500 v 5 135,000 135,000 135,000 139
	KOG		4516		44,300 + 1180 45040 4500 4600
Ξ	SUBC	B	柳	4210	17,900 = 5383 18,000 18.50
	FRO		$\eta$ ß		135,500 v 137,000 + 1500 137,000 137.8 29,740 v 388 NAV 215.42
	OLT		1925	29,720	97,750 v 1402 1909 1900 FSR FSR
	STB		$\mathcal{D}^{\text{th}}$		259,800 - 260,100 - 165 201,900 201,000 31 48 R25 R28 R38 R36
	γE		18		91,500 4 91,750 4 115 81,500 - 214
	BAKKA		$\mathcal{I}^{\text{m}}$		65,000 x 65,250 x 4.380 66.500
			1204		125,000 + 126,500 + 411 127.1
			1 2701 2877		110,400 - 110,700 - 559 111,000 138,500 v 138,500 v 1436 1456 51,000 v 51,250 v 51,510
	ENTRA		668
	AFG		2001
			$1^{121}$	254,500 - 255.300 -
			6467

This is Aker

Since its establishment in 1841, Aker has been a driving force for the development of internationally focused, knowledge-based industry in Norway.

Aker is the largest shareholder, directly or indirectly, in eight companies listed on Oslo Stock Exchange. Aker and companies in which Aker is the largest investor had a total turnover of more than NOK 70 billion in 2018.

Aker ASA (Aker) is an industrial investment company that exercises active ownership to create value. Aker combines industrial expertise with knowledge of the capital markets and financial strength. In its capacity as owner, Aker helps to develop and strengthen the companies in its portfolio of industrial holdings and financial investments. Aker works through the boards of the portfolio companies to drive forward strategy development, operational improvements, financing, restructuring and transactions.

Aker's ownership interests are concentrated in the oil and gas, maritime assets and marine biotechnology sectors. The investments are divided into Industrial holdings and Financial investments.

The Industrial holdings are strategic assets and are managed with a longterm perspective. They comprise Aker's ownership interests in Aker BP, Aker Solutions, Akastor, Kvaerner, Ocean Yield and Aker BioMarine.

The Financial investments comprise cash and other assets. The portfolio includes three relatively new companies: the oil company Aker Energy (a field operator in Ghana), the software company Cognite and the real estate development company FP Eiendom. These three companies are growing rapidly under Aker's ownership. Aker Energy and Cognite will be included in Aker's Industrial holdings portfolio from first quarter 2019.

Size

Aker is the largest shareholder, directly or indirectly, in eight companies listed on Oslo Stock Exchange. Aker and companies in which Aker is the largest investor had a total turnover of more than NOK 70 billion in 2018, and a workforce of approximately 28 000, including temporary hires. About 50 per cent of the workforce is located in Norway.

Net asset value (NAV) growth is a key performance indicator for Aker ASA and holding companies. As at 31 December 2018, NAV amounted to NOK 41.7 billion, compared to NOK 41.8 billion one year prior. In addition, a dividend of NOK 1.3 billion was paid in 2018.

Ownership

Since re-listing on the Oslo Stock Exchange on 8 September 2004, Aker has generated an average annual return of 27 per cent, including dividends. At the beginning of 2019, Aker had 13 388 shareholders. Aker's main shareholder is Kjell Inge Røkke, who owns 68.2 per cent of Aker through his company The Resource Group TRG AS. Through a private company, CEO Øyvind Eriksen owns 0.2 per cent of the B-shares in TRG Holding AS, as well as 219 072 shares in Aker.

Highlights 2018

Aker's share price rose from NOK 403 to NOK 462 during the course of the year. Including a dividend of NOK 18 per share, shareholders received an annual return of 19 per cent. Net asset value totalled NOK 562 at both the beginning and end of the year. Including the dividend paid in 2018, value growth amounted to 3 per cent. By comparison,

the Oslo Stock Exchange Benchmark Index – fell by 1.8 per cent in 2018.

Shareholder return: Upstream cash flow: New venture:

2.2 billion

Dividends and upstream cash flow from the portfolio companies to Aker totalled NOK 2 174 million in 2018 – up from NOK 1 588 million in 2017. Predictable cash flow increases the freedom of action for an investment company like Aker. Upstream cash flow has grown steadily year on year. Aker BP and Ocean Yield are the primary contributors. Aker BP has announced an increase in its annual dividend to USD 750 million in 2019. Aker owns 40 per cent of Aker BP.

Kjell Inge Røkke invited Aker to invest in a jointly-controlled oil company in February 2018, in connection with the purchase of 50 per cent of the ownership interests in the Deepwater Tano Cape Three Points oil field. The seller was Hess Corporation. Aker Energy has the potential to become a significant oil industry player in Ghana, West Africa, and in early 2019, the company announced a sucessful drilling operation and confirmed the volume base of 450-550 mmboe.

NOK billion Distribution of Aker's NOK 51.2 billion gross asset value as at 31 December 2018

n Aker BP 31.4 n Ocean Yield 5.8 n Aker Solutions 3.8 n Aker BioMarine 2.4 n Other financial investment 2.4 n Cash 1.9 n Akastor 1.3 n Kvaerner 0.9 n Listed financial investments 0.7 n Real Estate 0.6 Andre børsnoterte investeringer Kværner Akastor Kontanter og likvide fondsinvesteringer Andre nansiellle investeringer

Key performance indicators

Aker's key performance indicators are net asset value and shareholder returns (share price and dividends).

Aker ASA and holding companies are pure holding companies. The combined balance sheets of these companies are a more relevant tool for monitoring value creation than the balance sheet of the parent company alone or the Aker group accounts. Nevertheless, Aker's Annual Report presents all three sets of accounts.

Net asset value (NAV) expresses Aker's underlying financial value, and provides the basis for the company's dividend policy (two to four per cent of NAV per year). NAV is calculated based on the market value of listed shares and the book value of other assets.

NAV per share

NOK per share

Allocated dividend per share

NOK per share and per cent of NAV

n Per cent of NAV before dividend

Gross assets per business segment

NOK billion

Gross asset per sector

NOK billion

Changes in net asset value

Net asset value (NAV) totalled NOK 41 744 million before the dividend allocation at year-end 2018, compared to NOK 41 771 million last year. This equates to NAV-per-share of NOK 562. The following tables show Aker's investments and NAV per Aker share.

Net asset value development – Aker ASA and holding companies

NOK million

	2018	2017
Dividends received	2 174	1 588
Operating expenses 1)	(254)	(244)
Other financial expenses	(247)	(209)
Tax expense	-	-
Total	1 673	1 136
Dividend payments	(1 338)	(1 188)
Sale/(purchase) of treasury shares 2)	(25)	3
Value changes 3)	(337)	7 485
Change in net asset value	(27)	7 436
Net asset value before dividend allocation	41 744	41 771

1) Excluding depreciation

2) Bonus shares/own shares

3) Value changes include depreciation and write-downs of fixed assets, and sales gains

Change in net asset value

NOK billion

Net asset value

		As at 31.12.2018		As at 31.12.2017
	Ownership	NOK per share	NOK million	NOK per share	NOK million
INDUSTRIAL HOLDINGS
Aker BP	40.0%	423	31 403	391	29 083
Aker Solutions	34.8%	50	3 750	59	4 368
Akastor	36.7%	18	1 313	22	1 649
Kvaerner	28.7%	13	931	16	1 220
Aker BioMarine	100.0%	32	2 411	19	1 411
Ocean Yield	61.7%	78	5 816	92	6 828
Total Industrial Holdings		614	45 625	600	44 560
FINANCIAL INVESTMENTS
Cash		26	1 945	17	1 232
Liquid fund investments		-	-	6	442
Listed financial investments		9	701	16	1 220
Real estate		8	568	9	674
Other financial investments		32	2 374	30	2 261
Total Financial investments		75	5 588	78	5 829
Total value-adjusted assets		690	51 213	678	50 389
External interest-bearing liabilities		(123)	(9 160)	(112)	(8 343)
Interest-free liabilities before allocated dividend		(4)	(309)	(4)	(275)
Total liabilities before allocated dividend		(127)	(9 469)	(116)	(8 618)
NAV before allocated dividend		562	41 744	562	41 771
Net interest-bearing debt			(6 230)		(5 608)

Forward march!

Aker started and ended 2018 with its net asset value at NOK 562 per share. However, it would be wrong to conclude that Aker has been "at ease". Aker and its portfolio companies made great advances over the past year. After 10 years

as Aker's President and CEO, I can look back on an inspiring journey in the company together with skilled colleagues, and I look forward to what the future holds.

After 10 years as Aker's President and CEO, I can look back on an inspiring journey in a company together with skilled colleagues, and I look forward to what the future holds.

From 1 January 2009 to 1 January 2019, Aker's share price increased from NOK 137 to NOK 462, and net asset value from NOK 255 to NOK 562 per share. In addition, we have distributed NOK 113 per share in dividends during this period, excluding the additional NOK 22.50 per share to be paid in May this year.

Measured in terms of share price growth and dividends, the return to shareholders over the past 10 years totals NOK 32.7 billion – or an average of 18.1 per cent per year. For our reference, the Oslo Stock Exchange Benchmark Index (OSEBX), generated an average annual return of 13.5 per cent over the same period. In 2018, Aker's shareholders achieved a return of 19.1 per cent, in a year in which the OSEBX fell by 1.8 per cent.

Behind these facts and figures are the people and organisations we can thank for Aker's strong performance. That is what impresses me the most.

Industrial progress

2018 was one of the most sucessful years I have experienced during my time at Aker. In the first three quarters, oil and share prices rose, but in the fourth quarter the gains of the preceding nine months were wiped out by a 35 per

cent drop in oil prices. Industrially, Aker and the industrial portfolio companies have taken several important and significant steps:

• § Aker BP has laid the foundation for potentially tripling production from 155 700 barrels per day in 2018 to approximately 450 000 barrels per day in 2025, based on its existing portfolio only. In 2018, the company strengthened its position in key areas on the Norwegian Continental Shelf through the purchase of 11 licenses from Total and the acquisition of Equinor's King Lear discovery. Aker BP's strong operational performance and improvement programme for secure and effective operations, reduces the cost per produced barrel of oil over time. Aker BP's strong industrial and financial position has enabled the company to increase its annual dividend from USD 450 million in 2018 to USD 750 million in 2019, with the aim of further annual increases of USD 100 million per year until 2023. This gives Aker predictability, and is set to generate more than NOK 16 billion to Aker over the next five years at the current dollar exchange rate.
• § Aker Solutions continued its successful improvement and costcutting efforts in 2018, and is on track with its improvement programme aimed at cutting costs by 50 per cent by 2021, compared to 2015 cost

and activity levels. The company has become more competitive, winning several important contracts on the Norwegian Continental Shelf and internationally last year, in particular in Africa, Asia, Brazil and the UK. Aker Solutions has become even more attractive to customers, partners and industrial stakeholders. The oil service market – including the subsea, field design and MMO segments – is expected to grow in the years ahead.

• § Akastor completed several transactions in 2018. Mitsui acquired 50 per cent of Akastor's portfolio company AKOFS Offshore, making it an equal partner with Akastor in the company. The transaction released USD 142.5 million in cash to Akastor. Since the split from Aker Solutions in 2014, Akastor has released NOK 6.1 billion in capital through divestments. Akastor entered into an agreement to merge its portfolio company First Geo and AGR, thereby taking a controlling interest in a leading sub-surface and well operations company. The equity investment in Odfjell Drilling is an opportunistic venture in a market Akastor knows well. Moreover, a strategy has been developed and adopted for growing Akastor's most important portfolio company, MHWirth, through improvement initiatives and transactions. The aim is to list the company in a few years' time.
• § Kvaerner boosted its order backlog by 32 per cent, to NOK 10.6 billion by year-end 2018, with the yards at Stord and Verdal continuing to deliver projects on time and with the high level of quality. Kvaerner is making systematic efforts to improve productivity and cost levels at the two specialist yards, as well as in its project management, design and purchasing functions. In 2019, Kvaerner Stord will celebrate its 100th anniversary, marking a proud history of adaptability and cooperation between employee representatives, engineers, specialist workers, management and owners. Having started life as a herringoil factory that took on ship and

industrial equipment repairs in the off season, over time Kvaerner grew into an oil-industry pioneer and the builder of the world's largest tankers. Kvaerner continues to demonstrate impressive willingness and ability to adapt.

• § Ocean Yield invested approximately NOK 5 billion in 2018, increasing its portfolio from 40 to 57 vessels. Continued diversification is improving the company's robustness in the face of market fluctuations. A stable revenue-generator over the past 10 years – the FPSO Dhirubhai-1 – completed a contract in India in September 2018. A charter option agreement for the ship has been signed with Aker Energy. If the option is exercised in the second quarter of 2019, Aker Energy will charter Dhirubhai-1 for the next 15 years. Even without this agreement, Ocean Yield had an EBITDA order backlog of signed contracts totalling more than NOK 30 billion as at year-end 2018, and an average remaining contract tenor of 11 years. This provides a solid foundation for attractive dividend generation in the years to come.
• § Aker BioMarine is growing rapidly. In 2018, the company reported a 22 per cent increase in sales, to NOK 1.3 billion, and almost doubled EBITDA to NOK 269 million compared to 2017. The omega-3 market is improving after a few years of stagnation and falling demand. Asia in particular is developing into a growth market offering significant opportunities. The delivery of a new krill vessel in January 2019 improves harvesting efficiency and capacity. Moreover, the company secured an additional krill licence in December 2018, bringing the total number of licences to four. The company has invested in increased production capacity at its SUPERBA™ krill oil factory in Houston. Aker's whollyowned subsidiary is in a period of accelerating growth that may require additional investment going forward.

A strong position

Aker BioMarine has built a strong position in a growing market with SUPERBA™ Krill Oil – a niche product in the omega 3 nutritional supplements market. In the aquaculture market QRILL™-branded products have a strong market position. We continue to evaluate strategic opportunities for further growth, and are more than likely to take steps to crystallise the investment in Aker BioMarine in the longer term. It is too early to say when and how this may happen.

Aker BioMarine is one of three unlisted value drivers in Aker's portfolio. The two others are the oil company Aker Energy and the software company Cognite. Accordingly, these three companies are only available to investors through the Aker share. Listed companies, on the other hand, like Aker BP, Aker Solutions, Akastor, Kvaerner, Ocean Yield, American Shipping and Philly Shipyard – all companies in which Aker is the largest shareholder – are available for direct investments, allowing investors to increase or reduce their shareholdings relative to Aker's exposure in line with their own assessments.

The start of something big

Aker Energy was established one year ago in connection with the purchase of 50 per cent of the Deepwater Tano Cape Three Points block on the Ghanaian continental shelf. Aker and Kjell Inge Røkke's private company TRG each own 49 per cent of Aker Energy, while Aker Energy employees have acquired the remaining 2 per cent. Without Kjell Inge's presence in the neighbouring block, his intuition, drive and entrepreneurship, Aker Energy would not be an operator in Ghana. The work done in 2018 has laid the foundation for a venture with substantial promise.

Based on potential analysis of existing discoveries, the estimated resource potential is 450-550 million barrels of oil equivalents. The potential may also prove to be even larger.

Aker Energy aims to replicate Aker BP's success, including bringing the company's production in Ghana to at least 450 000 barrels per day by 2025. However, there are also significant

differences between the Norwegian Continental Shelf and Ghana. The Ghanaian oil field is located at depths of 2 500–3 000 metres, and the country's oil and gas industry is less mature than Norway's. Aker's task will therefore extend beyond oil and gas production to include developing local content in Ghana, inspired by the beginning of the Norwegian oil service industry and its development over the past 50 years.

Once the Ghanaian authorities have approved the plan of development, Aker Energy will start a process to raise capital either through an IPO or a transaction, or a combination of the two. The initial objective is to secure sufficient capital funding for the period until "first oil". In our view, it should be possible to start production in 2022. In order to achieve this goal, we are dependent on Ghanaian authorities and partners to follow our time schedule and support Aker Energy in reaching important milestones.

Cognite is growing quickly

In the software company Cognite, we control the pace of progress, and progress is rapid. In just two years, the company has expanded from zero to about 200 employees from 23 countries per March 2019. Cognite is attracting brilliant programmers and other talented individuals.

The company has built an industrial data platform that gathers, processes and analyses enormous volumes of data continuously. For example, Cognite and its digitalisation capacity are central to Aker BP's improvement programme, which seeks to reduce the cost per barrel of produced oil. Moreover, live access to data makes operations safer and more efficient.

Cognite began cooperating with many new industrial customers in various industries in 2018, and achieved operating revenues of NOK 164 million. At a minimum, sales revenues are expected to double in 2019. Cognite is currently establishing a local presence in the US and Japan. As of the first quarter of 2019, both Cognite and Aker Energy have been included in Aker's portfolio of industrial investments.

World Ocean Headquarters

The portfolio of unlisted companies also includes FP Eiendom (formerly Fornebuporten Holding). Under the radar, Aker's wholly-owned real estate development company has contributed NOK 870 million in net asset value since 2012.

FP Eiendom's land bank has a book value of approximately NOK 600 million. In cooperation with Aker, REV Ocean, which is owned by Kjell Inge and is currently constructing the world's most advanced research and expedition ship, announced a plan to build the World Ocean Headquarters on FP Eiendom's plot at Fornebu. The plan for a 250 metre-tall tower was "shot down" by local politicians even before the proposal had been submitted to the local authorities.

Aker has a firm intention to construct a landmark building designed to remind us of the importance of the oceans. Where and how this will be done remains to be clarified through dialogue with politicians and authorities who share our commitment to the world's oceans.

The target is to create a leading global knowledge centre that actively helps to develop knowledge of and overcome environmental challenges associated with the oceans. Since our own portfolio companies also have to face up to these challenges, the World Ocean Headquarters are central to Aker's longterm development.

An ocean of opportunities

The oceans and seabed resources have been the core of Aker's businesses ever since the company was established in 1841. We want to build a strong Aker for future generations. We will do this by developing knowledge industries based on current expertise and our networks. Aker and the portfolio companies must continue attracting skilled and talented individuals.

We see numerous marine and maritime opportunities. Aker BioMarine, Aker Solutions, Akastor, Kvaerner, Ocean Yield and Cognite are six examples of

companies with different approaches to opportunities and solutions. As responsible oil producers, Aker BP and Aker Energy are also a potential part of the solution.

Aker is in constant development. Since I took the role as CEO 10 years ago, the company's net asset value has almost tripled. 80 per cent of Aker's current asset portfolio amounted to less than 10 per cent of Aker's assets in 2009. The greatest change is that Aker has built a significant exploration and production company on the Norwegian Continental Shelf.

Oil and gas will remain a priority for Aker in many years to come. While we are aware of climate and environmental challenges, these will not be solved by stopping oil and gas production in Norway or Ghana. Aker Solutions, Kvaerner and Akastor have developed technologies that are part of the solution. As a shareholder in Aker BP and Aker Energy, Aker's target is to build a safe and profitable offshore petroleum activity that is as environmentally friendly as possible.

The most effective solutions to environmental and climate challenges are those that face realities. Global energy demand is increasing, and the reality is that oil and gas will remain an important energy source for many decades to come. An important solution from an environmental perspective is therefore to produce oil and gas in the most sustainable manner possible. The question is how we, and the rest of the oil and gas industry, will respond to new opportunities and challenges. This will be a key component of our strategies and decisions in future.

The current order for Aker and our portfolio companies is still "forward march", in the most sustainable manner possible.

Øyvind Eriksen President and CEO

Shareholder information

Aker is committed to maintaining an open dialogue with shareholders, investors, analysts and the financial markets in general.

Aker works to ensure that its share price reflects its underlying value by making all price-sensitive information available to the market.

Aker's goal is to create value for its shareholders in the form of dividends and share price growth over time. In February 2006, the company's board adopted the following dividend policy:

"Aker ASA's dividend policy supports the company's intention to maintain a solid balance sheet and liquidity reserves adequate to handle future obligations. The company's objective is to pay dividends annually that amount to 2-4 per cent of the company's net asset value. In determining net asset value, the share prices of Aker's exchange-listed investments are applied."

The board has proposed a dividend of NOK 22.50 per share for 2018:

Year	Allocated dividend (NOK)	Allocated dividend as % of NAV
2012	12.00	3.7
2013	13.00	3.9
2014	10.00	4.1
2015	10.00	3.6
2016	16.00	3.5
2017	18.00	3.2
2018	22.50	4.0

Shares and share capital

Aker ASA has 74 321 862 ordinary shares, each with a par value of NOK 28 (see Note 9 to the company's annual accounts). Aker ASA has a single share class, and each share carries one vote. The company held 53 070 treasury shares as at 31 December 2018.

As at 31 December 2018, the company had 13 388 shareholders. Kjell Inge Røkke is Aker ASA's main shareholder. Through The Resource Group TRG AS, he holds 68.18 per cent of Aker ASA shares. According to the shareholder register maintained by the Norwegian Central Securities Depository (VPS), non-Norwegian shareholders held 14.98 per cent of the company's shares as at 31 December 2018. VPS does not identify shareholders registered via nominee accounts.

Stock-exchange listing

Aker ASA is listed on the Oslo Stock Exchange with the ticker code AKER. Aker ASA's shares are registered with VPS with the registration number ISIN NO 0010234552. DNB ASA is the company's registrar.

Current board authorisations

At the annual general meeting on 20 April 2018, Aker's shareholders authorised the board to acquire up to 7 432 186 Aker ASA shares with a total par value of NOK 208 101 208. The authorisation also encompassed the acquisition of agreement liens in shares. The per-share purchase price may not be less than NOK 4 nor exceed NOK 1 200. The board is free to decide the method for acquiring or disposing of treasury shares. The authorisation is valid until the 2019 annual general meeting, though no longer than until 30 June 2019.

In the period 28 March 2018 to 26 March 2019, the company acquired 50 000 treasury shares, and distributed 12 663 treasury shares in connection with the employee incentive programme.

Share option plans

Aker ASA had no share option plans as at 31 December 2018.

Investor relations

Aker seeks to maintain an open and direct dialogue with shareholders, debt holders, financial analysts and the stock markets in general. In addition to capital markets days, the company arranges regular presentations for, and meetings with, shareholders, analysts and investors.

All Aker ASA press releases, stock exchange notices and investor relations (IR) publications are available on the company's website, www.akerasa.com.

This online resource also offers access to the company's quarterly and annual reports, prospectuses, corporate presentations, articles of association, financial calendar, investor relations and communications policy and corporate governance information.

Electronic quarterly and annual reports

Aker ASA's annual reports are published on the company's website at the same time as they are released via the Oslo Stock Exchange distribution service, www.newsweb.no (ticker: AKER).

Quarterly reports are distributed electronically and via the company's website.

Nomination committee

The company's nomination committee has the following members:

• § Kjell Inge Røkke (chairman)
• § Gerhard Heiberg
• § Leif-Arne Langøy

Shareholders who wish to contact the nomination committee may do so using the following email address: contact@akerasa.com

Audit committee

The company's audit committee has the following members:

• § Finn Berg Jacobsen (chairman)
• § Kristin Krohn Devold
• § Atle Tranøy

Annual general meeting

Aker ASA's annual general meeting is held in April. Written notification is sent to all shareholders and shareholder nominees.

Meeting notices and attendance registration forms are sent to shareholders by the deadlines laid down in the Norwegian Public Limited Liability Companies Act, and made available on the company's website and through the Oslo Stock Exchange distribution service. The annual report and other enclosures to the meeting notice are made available solely via the company's website and the Oslo Stock Exchange distribution service. Shareholders who wish to receive the enclosures by post must contact the company.

Shareholders who are unable to attend the general meeting may vote on individual agenda items electronically on Aker ASA's website during the pre-meeting registration period. Shareholders may change their votes or opt to attend the meeting in person throughout the registration period.

Shareholders may also vote by proxy. The company has designed its proxy forms to allow shareholders to vote on (issue voting instructions for) individual agenda items.

Procedures for electronic voting and the appointment of proxies with voting instructions are described in the meeting notice and on Aker ASA's website.

The company does not appoint an independent proxy to vote on behalf of shareholders. Aker considers that shareholders' interests are adequately safeguarded by permitting the participation of an appointed proxy or authorisation of the meeting chair/board chairman/other appointed representative to vote according to specific instructions.

2018 share data

As at 31 December 2018, the company's total market capitalisation was NOK 34.3 billion. During 2018, a total of 26 717 000 Aker ASA shares were traded, corresponding to 36 per cent of the company's total outstanding shares. The Aker ASA share was traded on all of Oslo Stock Exchange's trading days. The share is included in Oslo Stock Exchange's OSEBX index.

Geographical distribution of ownership as at 31 December 2018:

Nationality	No. of shares held	% of share capital
Non-Norwegain shareholders	11 128 006	14.98
Norwegian shareholders	63 193 856	85.02
Total	74 321 862	100.00

NAV and share price development (NOK per share) n Share price n NAV

Investment overview

Aker's portfolio comprises 86 per cent listed shares, 4 per cent cash and 10 per cent other assets. Aker's total investments amounted to NOK 51.2 billion as at 31 December 2018.

Industrial holdings

Aker's Industrial holdings represent 89 per cent of Aker's total investments, and comprise:

• § Aker BP
• § Aker Solutions
• § Akastor
• § Kvaerner
• § Ocean Yield
• § Aker BioMarine

Read more on page 17.

Financial investments

Aker's Financial investments represent 11 per cent of Aker's total

• investments, and comprise:
• § Cash
• § Real estate investments
• § Other listed investments: American Shipping Company, Philly Shipyard and Solstad Offshore
• § The digitalisation company Cognite
• § The oil company Aker Energy
• § Other financial investments

Read more on page 24.

Industrial and Financial investments sector exposures as at 31 December 2018:

Andre nansielle investeringer n E&P	62%
n Oil services Kontanter	12%
n Marine assets	12%
Sjømat og marin bioteknologi n Seafood & Marine Bio Tech	6%
n Cash	4%
Maritime eiendele n Other financial investments	2%
n Real estate investments	1%
Oljeservice

Industrial holdings

Aker's industrial holdings totalled NOK 45.6 billion at the end of 2018. This equates to 89 per cent of the total asset value of Aker ASA and holding companies.

The industrial holdings portfolio comprises the investments in Aker BP, Aker Solutions, Akastor, Kvaerner, Ocean Yield and Aker BioMarine. Aker has a long-term investment horizon for these companies.

Aker is actively involved in the development of its six industrial portfolio companies, cooperating closely with each company's board and management. Every investment is monitored by Aker's management with the support of a dedicated investment team. Aker also has representatives on the various company boards.

Ownership is exercised primarily in the board rooms of the individual companies. Aker also functions as a knowledge centre, as its staff possess valuable industrial and strategic knowhow and cutting-edge expertise in areas such as capital market operations, financing, restructuring, transactions, macroeconomics, communications/ investor relations and legal. These resources are available not only to Aker's management in its continuous follow-up of the operational companies, but also to each individual company.

Industrial strategy

Aker combines industrial knowledge with a strong tradition of cooperation with unions and employee board representatives. Aker has experience and expertise in implementing acquisitions, sales, mergers and demergers. Since listing on Oslo Stock Exchange in September 2004, Aker has completed dozens of transactions which have generated considerable value for Aker and the portfolio companies.

Aker invests in sectors and industrial companies operating in industries in which it has the knowledge and experience needed to generate value through growth and stable upstream cash flow to the parent company. Aker also invests opportunistically in companies which offer possibilities and scope for Aker to provide transactional expertise.

By exercising active ownership, Aker promotes the independence and robustness of each company in its industrial portfolio.

As an active owner of companies with excellent value and return potential, Aker's agenda is to contribute to robust returns for all shareholders. The company's focus is on skilful management, appropriate organisational structures, profitable operations, growth, optimal capital structures and industrial measures through acquisitions, sales, mergers and demergers.

Developments in 2018

The total market value of Aker's industrial holdings was NOK 45.6 billion at the end of 2018, compared to NOK 44.6 billion one year prior. In 2018, Aker converted a NOK 1 billion receivable from the krill and biotech company Aker BioMarine into equity.

In total, Aker received NOK 2.1 billion in dividends from the industrial portfolio companies in 2018, compared to NOK 1.4 billion in 2017. The table Key figures industrial holdings shows changes and developments in 2018.

For more information, see page 28.

Key figures industrial holdings

NOK million

		31.12.17		2018		31.12.18
	Ownership in % 1)	Value	Net investments	Received dividends	Value change	Value
Aker BP	40.0	29 083	-	1 465	3 784	31 403
Aker Solutions 2)	34.8	4 368	-	-	(618)	3 750
Akastor 2)	36.7	1 649	-	-	(336)	1 313
Kvaerner 3)	28.7	1 220	-	-	(289)	931
Ocean Yield	61.7	6 828	-	613	(399)	5 816
Aker BioMarine	100.0	1 411	1 000	-	-	2 411
Total Industrial Holdings		44 560	1 000	2 078	2 143	45 625

1) At end of 2018

2) Directly and through Aker Kværner Holding AS

3) Through Aker Kværner Holding AS

Aker BP ASA

Chairman: Øyvind Eriksen CEO: Karl Johnny Hersvik Aker's ownership interest: 40%

Aker BP is a fully-fledged exploration and production company. Measured in terms of production, Aker BP is one of Europe's leading independent listed oil companies.

Aker's engagement

Aker owns 40 per cent of the shares in Aker BP. In 2018, the company's share price rose from NOK 201.90 to NOK 218. In addition, a dividend of NOK 10 per share was paid.

Aker's shareholding was valued at NOK 31.4 billion at the end of 2018. The equity investment in Aker BP is equivalent to 61 per cent of Aker's total assets. Øyvind Eriksen and Kjell Inge Røkke represent Aker on Aker BP's board of directors.

Aker's ownership agenda

Aker's aim is to reinforce Aker BP as a key operator on the Norwegian Continental Shelf. The company operates almost 100 per cent of the fields in its production portfolio. This provides a robust foundation for further development and value creation. Moreover, Aker BP's ownership interest in the Johan Sverdrup field will further boost production from the end of 2019 onwards. In 2018, the company's growth basis was reinforced by the acquisition of attractive licences in the company's core areas on the Norwegian Continental Shelf, new licence awards and the Frosk oil discovery in the North Sea (in which Aker BP has a 65 per cent interest).

Aker supports Aker BP's ambitious targets for growth in its organic portfolio and through value-generating transactions. The company's strong operational performance and improvement programme for operational safety and efficiency are reducing the costs per produced barrel of oil. Aker BP's positive development in 2018 has enabled the company to raise its growth ambitions. Based on the potential in its exisiting portfolio, Aker BP aims to treble production to approximately 450,000 barrels per day by 2025 and to reduce its production costs from USD 12 to USD 7 per barrel. These measures will give Aker BP a solid foundation for the payment of stable dividends. Aker BP paid a dividend of USD 450 million in 2018. In January 2019, the company announced that its annual dividend would increase to USD 750 million in 2019. The ambition is to further increase the dividend by USD 100 million per year until 2023. Aker has a 40 per cent share in the oil company's dividends.

Aker BP aims to be a benchmark for safe, effective and profitable oil and gas activity that is as environmentally friendly as possible. Key tools in this regard include LEAN, digitalisation and models for alliances and cooperation with suppliers, as well as electrification using onshore power and technologies to reduce emissions from production. Aker BP is collaborating with the digitalisation company Cognite. Aker BP's data platform provides access to historical data and real-time information from the oil fields the company operates.

Johan Sverdrup phase 1 is scheduled to start production in November 2019. Photo: Equinor ASA.

% of Aker's total assets

Key figures	2018	2017
Revenues (USD million)	3 750	2 563
EBITDAX (USD million)	3 044	2 012
Profit after tax (USD million)	476	275
Exploration expenses (USD million)	296	226
Share price (NOK)	218.00	201.90
Earnings per share (USD)	1.32	0.81
Number of employees	1 648	1 354

Aker Solutions ASA

Chairman: Øyvind Eriksen CEO: Luis Araujo Aker's ownership interest: 34.8%

Aker Solutions is a global oil service company that delivers technologies, products and solutions in the Subsea and Field Design segments, as well as offshore maintenance, modification and operational (MMO) services.

Aker's engagement

Aker owns 70 per cent of the shares in Aker Kværner Holding AS, which in turn owns 40.6 per cent of the shares in Aker Solutions, giving Aker an equity interest equivalent to 28.4 per cent in Aker Solutions. Aker also owns 6.4 per cent of the shares in Aker Solutions directly, bringing its total stake to 34.8 per cent. Øyvind Eriksen and Kristian Røkke represent Aker on Aker Solutions' board of directors.

As at 31 December 2018, Aker Solutions' share price was NOK 39.66, compared to NOK 46.19 one year prior. Aker's shareholding was valued at NOK 3.75 billion at the end of 2018, equivalent to 7 per cent of Aker's total assets.

Aker's ownership agenda

Aker's top priorities for Aker Solutions are increased competitiveness through operational improvements, success in winning new contracts and openness to partnerships, alliances and transactions.

In 2018, the company continued to improve operational efficiency and to cut costs, making good progress on a programme designed to reduce costs by 50 per cent compared to 2015 levels, by 2021. Aker Solutions is well-positioned for the future, and the oil service market is expected to develop positively in the next few years.

In its ownership capacity, Aker is focused on ensuring that Aker Solutions wins new contracts and delivers on them with satisfactory margins. In 2018, the company won important contracts on the Norwegian Continental Shelf linked to the fields Johan Sverdrup, Johan Castberg, Nova, Troll and Askeladd. Internationally, Aker Solutions secured important contracts in Brazil, the UK, Africa and Asia. In addition, the company was awarded a cooperation agreement with Equinor relating to global subsea development, as well as a carbon capture and storage contract linked to the Northern Lights project. In 2018, Aker Solutions acquired 10 per cent of the shares in Principle Power Inc., a US offshore wind power company.

Aker Solutions' order backlog totalled NOK 35.1 billion at the end of 2018, compared to NOK 34.6 billion last year.

Work is continuing on operational improvements, optimisation of the capital base and development of first-class customer relationships. Aker Solutions is currently transforming its business by utilising new technology and is, among other things, partnering with Cognite to improve efficiency and cut costs in the oil and gas supply chain.

In 2018, Aker Solutions won important contracts on the NCS linked to the fields Johan Sverdrup, Johan Castberg, Nova, Troll and Askeladd.

% of Aker's total assets

Key figures	2018	2017
Revenues (NOK million)	25 232	22 461
EBITDA (NOK million)	1 810	1 519
EBITDA margin (Per cent)	7.2	6.8
Order backlog (NOK million)	35 148	34 581
Order intake (NOK million)	25 421	23 553
Share price (NOK)	39.66	46.19
Earnings per share (NOK)	1.88	0.81
Number of employees	14 705	13 796

Akastor ASA

Chairman: Kristian Røkke CEO: Karl Erik Kjelstad Aker's ownership interest: 36.7%

Akastor is an oil service investment company with a portfolio of companies. It has a flexible mandate to engage in active ownership and long-term value creation.

Aker's engagement

Aker owns 70 per cent of the shares in Aker Kværner Holding AS, which in turn owns 40.3 per cent of the shares in Akastor, giving Aker an equity interest equivalent to 28.2 per cent in Akastor. Aker also owns 8.5 per cent of the shares in Akastor directly. Kristian Røkke and Øyvind Eriksen represent Aker on Akastor's board of directors.

Akastor's share price was NOK 13.06 as at 31 December 2018, compared to NOK 16.40 one year prior. Aker's shareholding was valued at NOK 1.3 billion at the end of 2018, equivalent to 3 per cent of Aker's total assets.

Aker's ownership agenda

Aker's main ownership priorities are operational improvements and cost reductions in Akastor's portfolio companies, and winning new contracts and securing new transactions. Aker is supporting and encouraging Akastor to play an active role in the transactional market, both to release capital and to seize opportunities.

Akastor has released NOK 6.1 billion through operational divestments. In 2018, the transaction with Mitsui was completed for a 50-50 joint venture in AKOFS Offshore, and Akastor released USD 142.5 million in cash. AKOFS Offshore won an important long-term contract with Equinor in 2018, having previously secured long-term contracts with Petrobras. The drilling technology company MHWirth further improved its competitiveness during the year, and won a drilling package delivery contract with Keppel FELS that includes an option for three further drilling packages. MHWirth is concentrating on developing the drilling market technology of the future.

In 2018, Akastor made an equity investment of USD 75 million in the rig company Odfjell Drilling. Akastor's wholly-owned subsidiary First Geo signed a merger agreement with AGR in 2018 with the aim of creating a leading subsea and well operations company. Completion is scheduled for 2019, and after the completion date Akastor will own 100 per cent of the shares and 55 per cent of the financial interests. This transaction creates a foundation for future value creation.

Completed transactions show that Akastor's portfolio companies often have an added value which becomes visible when larger, more effective units are created in industrial constellations. Aker will maintain this strategy in its capacity as owner.

MHWirth won important contracts in 2018.

% of Aker's total assets

3%

Key figures	2018	2017 restated
Revenues (NOK million)	3 800	3 606
EBITDA (NOK million)	290	116
EBITDA margin (Per cent)	7.6	3.2
Order backlog (NOK million)	2 692	1 948
Order intake (NOK million)	4 481	3 818
Share price (NOK)	13.06	16.40
Earnings per share (NOK)	(1.19)	(0.21)
Number of employees	1 629	1 784

Kværner ASA

Chairman: Leif-Arne Langøy CEO: Karl-Petter Løken Aker's ownership interest: 28.7%

Kvaerner is a specialist provider of engineering, procurement and fabrication services for the offshore oil and gas industry.

Aker's engagement

Aker owns 70 per cent of the shares in Aker Kværner Holding AS, which in turn owns 41 per cent of the shares in Kvaerner. Aker thus indirectly owns 28.7 per cent of Kvaerner. Kjell Inge Røkke represents Aker on Kvaerner's board of directors.

As at 31 December 2018, Kvaerner's share price was NOK 12.06, compared to NOK 15.80 last year. Aker's shareholding was valued at NOK 0.9 billion at the end of the year, equivalent to 2 per cent of Aker's total assets.

Aker's ownership agenda

Aker's ownership priorities for Kvaerner are to increase competitiveness through operational improvements and a costs focus, win new contracts and maintain a strong balance sheet while building on Kvaerner's position as a leading supplier of engineering, procurement and construction (EPC) services on the Norwegian Continental Shelf.

Kvaerner is working continuously to improve productivity and costs at its specialised facilities at Stord and Verdal, as well as in its project management, design and purchasing functions at Fornebu. These efforts are bearing fruits. In 2018, Kvaerner won contracts valued at NOK 9.8 billion, boosting the order backlog by 32 per cent over the course of the year. The most important contracts included construction of the topside for the Johan Castberg FPSO, several Johan Sverdrup contracts and an agreement relating to additional scope on Njord A. All those contracts were with the operator Equinor.

In terms of quality, the company's project portfolio developed as planned in 2018, with important project milestones being reached. Kvaerner is in a robust financial position, with cash holdings of NOK 3.2 billion and no interest-bearing debt as at 31 December 2018. In its ownership capacity, Aker is focused on ensuring that Kvaerner delivers first-class project execution and maintains its systematic efforts to improve productivity and cost efficiency, with a continuous focus on HSE improvements. Aker supports Kvaerner's consideration of strategic opportunities.

For more information, see page 30 and www.kvaerner.com

In 2019, Kvaerner Stord, a leading and highly adaptable industrial player in Norway for generations, celebrates its 100th anniversary.

% of Aker's total assets

Key figures	2018	2017
Revenues (NOK million)	7 220	6 536
EBITDA (NOK million)	437	799
EBITDA margin (Per cent)	6.1	12.2
Order backlog (NOK million)	10 625	8 077
Order intake (NOK million)	9 827	9 215
Share price (NOK)	12.06	15.80
Earnings per share (NOK)	1.04	2.04
Number of employees	2 727	2 665

1) NOK million 2) Per cent 3) NOK

Ocean Yield ASA

Chairman: Frank O. Reite CEO: Lars Solbakken Aker's ownership interest: 61.7%

Ocean Yield charters vessels on long-term contracts, a strategy which offers predictability with respect to future earnings and dividend capacity.

Aker's engagement

Aker owns 61.7 per cent of the shares in Ocean Yield. As at 31 December 2018, Ocean Yield's share price was NOK 59.20, compared to NOK 69.50 at the end of 2017. The company paid a dividend of USD 0.76 per share in 2018, corresponding to NOK 6.24 per share. Aker's shareholding was valued at NOK 5.8 billion at the end of 2018, equivalent to 11 per cent of Aker's total assets. Frank O. Reite and Kjell Inge Røkke represent Aker on Ocean Yield's board of directors.

Aker's ownership agenda

Aker's main ownership priorities for Ocean Yield are portfolio growth and diversification, focus on counterparty risk, a new contract for the FPSO Dhirubhai-1, optimising capital structure, reducing capital costs and maintaining an attractive dividend.

Ocean Yield increased its investment capacity in the first quarter of 2018, completing a private placement that secured NOK 759 million in new equity. Aker pre-subscribed for 50 per cent, but was allocated zero shares due to strong demand and in order to increase the free-float of the Ocean Yield share. This reduced Aker's shareholding from 66.2 per cent to 61.7 per cent.

In 2018, the company invested USD 666 million, and approximately USD 579 million net after seller's credits. These investments contributed to increased diversification of the order backlog, both by counterpart and within segments. At year-end, the company owned 57 vessels with an EBITDA order backlog of USD 3.5 billion. The average remaining EBITDA-weighted contract tenor is 11 years. Dhirubhai-1 completed a 10-year contract in India in the autumn of 2018, and discussions are being held with interested parties to secure a new long-term contract for the FPSO.

Aker supports Ocean Yield's strategy of growing the company over time through value-generating transactions and further portfolio diversification in terms of both number of counterparties and segments. Future growth will primarily occur through the purchase of new ships in the industrial shipping sector. Aker's view of the market remains positive, and Ocean Yield is expected to be a substantial contributor to Aker's dividend receipts going forward.

For more information, see page 31 and www.oceanyield.no

Ocean Yield continues to grow.

% of Aker's total assets

11%

Key figures	2018	2017
Revenues (USD million)	343	339
EBITDA (USD million)	283	306
EBITDA margin (Per cent)	82.3	90.4
EBITDA backlog (USD million)	3 500	3 000
Share price (NOK)	59.20	69.50
Earnings per share (USD)	0.36	0.86
Number of employees	24	22

Aker BioMarine AS

Chairman: Ola Snøve CEO: Matts Johansen Aker's ownership interest: 100%

Aker BioMarine is an integrated biotechnology company that develops, markets and sells krill-based ingredients for the consumer, salmon-feed and animalfeed markets.

Aker's engagement

Aker BioMarine is a wholly-owned subsidiary. The shareholding is valued at NOK 2.4 billion (book value). This equates to 5 per cent of Aker's total assets at 31 December 2018. Kjell Inge Røkke, Øyvind Eriksen and Frank O. Reite represent Aker on the company's board of directors.

Aker's ownership agenda

Aker's key ownership priorities for Aker BioMarine are operational improvements, increased profitability, growth of sales of new products through new channels and in new geographical markets, achievement of synergies and continued investment in long-term growth. Aker's aim is to build a larger, more robust company with a focus on effective operation and efficient supply chains in target industries.

Aker BioMarine is in a growth phase. This entails investment driven by Aker's objective of building a vertically integrated company that controls the supply chain, from sustainable krill harvesting in the Antarctic to research, product development, production, logistics and marketing. In 2018, Aker converted a NOK 1 billion loan to Aker BioMarine into equity to strengthen the company's balance sheet. Aker BioMarine achieved profitable growth in 2018, and the delivery of a new krill vessel in January 2019 will help improve the efficiency and capacity of the harvesting operation. In December 2018, the company was awarded a new krill licence for the Antarctic Ocean, bringing the total number of licences to four.

The company has built a long-term partnership with branded consumer goods companies, environmental protection organisations and researchers. Superba™ Krill Oil, the company's brand ingredient in the omega-3 consumer market, has established a strong position in the global market. Demand for QRILL™ Aqua, a feed supplement for the aquaculture industry, is strong, and the product range has been expanded with feed ingredients for pets. The omega-3 market developed positively in 2018, with rising sales of both Superba™ Krill Oil and QRILL™ Aqua.

Aker is working to maximise Aker BioMarine's underlying value, and continuing to assess strategic opportunities for further growth, including making Aker's investment more liquid.

With the delivery of a new krill vessel in January 2019, Aker BioMarine will improve the efficiency and capacity of its harvesting operation.

% of Aker's total assets

Key figures	2018	2017
Revenues (USD million)	155	126
EBITDA (USD million)	33	17
Profit after tax (USD million)	(1)	(18)
Net interest-bearing debt (USD million)	203	273
Number of employees	364	341

Financial investments

The value of financial investments totalled NOK 5.6 billion at the end of 2018, including NOK 1.9 billion in cash. This equates to 11 per cent of the total asset value of Aker ASA and holding companies.

The Financial investments segment encompasses cash, equity investments in listed companies such as American Shipping Company, Philly Shipyard and Solstad Offshore, the real estate development company FP Eiendom, the 65 per cent shareholding in the digitalisation company Cognite, 49 per cent of the shares in Aker Energy, and other assets and receivables. From 2019, Aker Energy and Cognite are included in the portfolio of industrial investments.

At year-end 2018, Aker had cash holdings of NOK 1.95 billion. The company's liquidity reserve, including undrawn credit facillities, totalled NOK 5.2 billion as at 31 December 2018.

The listed financial investments American Shipping Company, Philly Shipyard and Solstad Offshore were valued at NOK 0.7 billion at the end of 2018. In total, these companies caused a decrease in net asset value of NOK 0.2 billion. Solstad Offshore faces a difficult situation in a challenging market, and has announced negotiations with creditors and other stakeholders to improve its financial position.

Other financial investments comprise equity investments, internal and external receivables and other assets. The largest investment in this category is Aker Energy, a company established jointly with The Resource Group TRG AS in February 2018 which subsequently acquired Hess Corporation's 50 per cent ownership interest in the Deepwater Tano Cape Three Points block in Ghana. So far, the company has focused on preparing a plan of development of the oil field and on drilling appraisal wells to investigate the field's characteristics. The first appraisal well was drilled at the end of the year, and confirmed expectations of the field. Based on existing seismological data, drilled wells and analysis of Pecan 4A results, the existing discoveries are estimated to contain contingent resources (2C) totalling between 450 million and 550 million barrels of oil equivalents. The potential is significantly higher. Aker sees value-creation opportunities for Aker Energy and the nation of Ghana.

Cognite achieved growth throughout 2018, in line with the digitalisation company's ambitious business plan. The company continues to attract

highly skilled programmers and other talented staff, bringing its workforce to 110 employees at year-end, compared to 37 at the end of 2017. Cognite is playing an active role in oil and gas industry digitalisation, and additionally demonstrated considerable commercial potential outside this sector in 2018. Cognite has been awarded a contract to develop a digitalisation strategy for Aker BP, and its digital data platform has been an important factor in the oil company's efforts to make operations more secure and efficient. During the course of 2018, Cognite also secured agreements with several other major clients, supporting the company's growth objectives.

FP Eiendom (formerly Fornebuporten Holding) had an exposure to real estate development projects of NOK 568 million as at 31 December 2018, down from NOK 674 million at yearend 2017. The reduction is mainly due to the joint establishment of FP Bolig with external investors, a transaction which released NOK 361 million in cash for Aker, including a sales gain of NOK 194 million.

For more information, see page 31

Key figures financial investments

NOK million

	31.12.18	31.12.17
Cash	1 945	1 232
Liquid fund investments	-	442
Listed financial investments	701	1 220
Real estate	568	674
Other financial investments	2 373	2 261
Total financial investments	5 588	5 829

Alternative performance measures

Aker ASA refers to alternative performance measures with regards to Aker ASA and holding companies' financial results and those of its portfolio companies, as a supplement to the financial statements prepared in accordance with IFRS. Such performance measures are frequently used by securities analysts, investors and other interested parties, and they are meant to provide an enhanced insight into operations, financing and future prospects of the group. The definitions of these measures are as follows:

• § EBITDA: operating profit before depreciation, amortisation, and impairment charges.
• § EBITDA margin: EBITDA divided by revenue.
• § EBITDAX: operating profit before depreciation, amortisation, impairment charges and exploration expenses.
• § Equity ratio: total equity divided by total assets.
• § Gross asset value: the sum of all assets determined by applying the market value of listed shares and the book value of other assets.
• § Kboed: thousand barrels of oil equivalents per day
• § Net asset value (NAV): gross asset value less liabilities.
• § NAV per share: NAV divided by the

total number of outstanding Aker ASA shares.

• § Net interest-bearing receivables/ debt: cash, cash equivalents and interest-bearing receivables (current and non-current), less interestbearing debt (current and non-current).
• § Order intake: new signed contracts in the period and expansion of existing contracts. The estimated value of potential options and change orders is not included.
• § Order backlog: estimated value of remaining work under signed contracts.
• § Value-adjusted equity ratio: NAV divided by gross asset value.

In industrial terms, important steps were taken in 2018, and the underlying performance of the portfolio companies is on a positive trend.

Board of Directors' report

2018 was a year of high volatility in oil prices, international financial markets and share prices. At year-end, Aker's** net asset value was on par with last year, at NOK 41.7 billion. In addition, a dividend of NOK 1.3 billion was paid in 2018. The shareholder return, defined as share price growth plus distributed dividends, totalled 19 per cent. By comparison, the Oslo Stock Exchange Benchmark Index (OSEBX) – fell by 2 per cent during the year.

Aker ASA* and its industrial holdings companies are well-positioned, characterised by robust balance sheets, financial flexibility and strong market positions. Upstream dividend to Aker increased to NOK 2.2 billion in 2018, up from NOK 1.6 billion in 2017. Aker's financial strength provides capacity for both future investments and predictable dividends to its shareholders. The board of directors is proposing a dividend of NOK 1.7 billion, or NOK 22.50 per share, payable in May 2019.

In industrial terms, important steps were taken in 2018, and the underlying performance of the portfolio companies is on a positive trend. However, the value development in 2018 was severely impacted by the drop in oil prices in the fourth quarter and the general decline in global stock markets, particularly in the oil and gas sector. Following three successive quarters of net asset value (NAV) growth, Aker's NAV ended the year at the same level as at the beginning of the year. NAV is a core performance

indicator at Aker and is determined by applying the market value of exchangelisted shares and book value for other assets. NAV is a key determinant of the company's dividend.

Also in 2018, Aker BP was the most important contributor among the portfolio companies, boosting Aker's NAV by NOK 2.3 billion and generating NOK 1.5 billion in dividends to Aker. While Ocean Yield paid NOK 0.6 billion in dividends to Aker, the value of the shareholding fell by NOK 1.0 billion during the year. The other portfolio companies listed on Oslo Stock Exchange paid no dividends and had a negative share price development.

The oil service companies in Aker's portfolio – Aker Solutions, Akastor and Kvaerner – continued to focus on their improvement programmes effectively and profitably in 2018. Aker's whollyowned krill and biotechnology company, Aker BioMarine, achieved increased harvests, sales and profits.

^* Aker ASA refers to the parent company.

^** Aker refers to Aker ASA and holding companies, as specified in Note 1 to the annual accounts of Aker ASA and holding companies, page 117.

Aker Group refers to Aker ASA and subsidiaries consolidated into the Group accounts, as specified in Note 9 to the annual accounts of the Aker Group, page 62.

1. Key developments in 2018

Volatility was the new normal in 2018. Oil prices started the year at USD 67 per barrel, peaked at USD 86 and ended the year at USD 54 per barrel. The financial markets were impacted by the trade conflict between the USA and China, protectionism, fear of a global economic downturn, uncertainty about the consequences of Brexit and other geopolitical factors. Cumulatively, these circumstances triggered major fluctuations in share prices and foreign exchange rates.

Through its concentration on equity investments in the oil and gas sector, Aker is exposed to developments in oil prices and activity levels in the oil service industry. In the first quarter, Aker's NAV increased from NOK 41.8 billion to NOK 42.4 billion, and its share price from NOK 403 to NOK 440.50. In the second quarter, NAV increased by 34.6 per cent, to NOK 57.1 billion. The share price reached NOK 623, and a dividend of NOK 18 per share was paid for the financial year 2017. In the third quarter, NAV increased by a further 10.8 per cent, to NOK 63.3 billion, while the share price rose to NOK 734.

At year-end 2018, NAV stood at NOK 41.7 billion, representing a drop of 34 per cent during the fourth quarter, and the share price ended the year at NOK 462. Including the NOK 1.3 billion dividend distribution made to shareholders, NAV rose by 3 per cent in 2018. The shareholder return, defined as share price growth plus distributed dividends, totalled 19 per cent. By comparison, the Oslo Stock Exchange Benchmark Index (OSEBX) – fell by 2 per cent during the year.

After dividend allocation for 2018, Aker's value-adjusted equity ratio was 78 per cent at year-end, and its book equity ratio 53 per cent. Cash holdings totalled NOK 1.9 billion, up from NOK 1.2 billion last year. Gross interest-bearing debt amounted to NOK 9.2 billion, while net interest-bearing debt stood at NOK 6.2 billion.

Aker's unlisted investments in Aker BioMarine, Aker Energy, Cognite and FP Eiendom are recognised in NAV at book value. In February 2018, Aker co-founded Aker Energy as a 50/50 owned company with Kjell Inge Røkke's privately owned company The Resource Group TRG AS (TRG), in connection with the purchase of Hess Corporation's 50 per cent stake in the Deepwater Tano Cape Three Points block in Ghana. The first appraisal well was drilled at the end of the year, and confirmed the expectations to the volume base. The digitalisation company Cognite, which was established in 2017, is developing positively, achieving growth and expanding its customer portfolio. In 2018, FP Eiendom (formerly Fornebuporten Holding) established the company FP Bolig in collaboration with external partners to undertake residential development at Fornebu. The transaction released NOK 361 million in cash for Aker.

Aker BP has announced an increase in its dividend distribution from USD 450 million in 2018 to USD 750 million in 2019, and aims to annually increase the dividend by an additional USD 100 million in the period to 2023. Through its 40 per cent stake in Aker BP, Aker is set to receive a substantial dividend stream in the years ahead.

On 20 April 2018, Aker ASA's annual general meeting approved the distribution of a NOK 18 per share ordinary dividend for 2017. The board of directors proposes a cash dividend of NOK 22.50 per share for 2018. The proposal corresponds to a 4.9 per cent yield on the share price at the close of 2018 and represents 4.0 per cent of NAV.

2. Business operations and location

Aker ASA is an industrial investment company with a history dating back to 1841. The company is domiciled in Norway, with headquarters at Fornebu.

As an active owner and equity investor, Aker employs its financial strength and industrial knowledge to further develop the operating companies in its portfolio. Through its participation on the boards of its portfolio companies, Aker drives strategic development, operational improvements, restructuring, and facilitates transactions. Aker's objectives are securing long-term profitable growth and returns, and building sound organisational cultures in

all its portfolio companies. The aim is to ensure sustainable value creation for all shareholders.

Aker's investments are divided into two portfolios: Industrial holdings and Financial investments. As at year-end 2018, Aker was directly or indirectly the largest shareholder in eight companies listed on the Oslo Stock Exchange.

a. Industrial holdings

Aker's industrial holdings are the company's long-term investments and comprise six companies, of which five are listed. These include the integrated exploration and production company Aker BP; the oil services company Aker Solutions; the oil services investment company Akastor; the engineering, procurement and construction company Kvaerner; the ship-owning company Ocean Yield; and the krill and biotechnology company Aker BioMarine.

The value of Aker's industrial holdings amounted to NOK 45.6 billion as at 31 December 2018, equivalent to 89 per cent of Aker's value-adjusted gross asset value, up from NOK 44.6 billion at yearend 2017. In 2018, Aker converted a NOK 1 billion receivable from Aker BioMarine into equity, bringing the book value of the unlisted investment to NOK 2.4 billion as at 31 December 2018.

Aker BP's value increase contributed NOK 2.3 billion to Aker's NAV in 2018. The value decreases of the other companies were NOK 1.0 billion for Ocean Yield, NOK 0.6 billion for Aker Solutions, NOK 0.3 billion for Akastor and NOK 0.3 billion for Kvaerner. Dividends received from Aker BP and Ocean Yield totalled NOK 2.1 billion.

Aker BP

Aker BP is a fully-fledged oil and gas exploration and production (E&P) company operating on the Norwegian Continental Shelf (NCS).

Aker's portfolio company in the E&P sector continued to grow in 2018. Aker BP strengthened its position in its key areas on the NCS through the purchase of 11 licenses from Total and the King Lear discovery from Equinor. These acquisitions boosted Aker BP's

contingent resources by 173 million barrels of oil equivalents, bringing its total contingent resources to 946 million barrels of oil equivalents as per year-end 2018, compared to 785 million barrels of oil equivalents last year.

During the course of the year, Aker BP's five field centres achieved satisfactory operational stability and good profitability. Collaboration models and alliances with oil service suppliers have helped to reduce costs and improved efficiency with regard to exploration, drilling, operations, maintenance, modifications and field development. Digitalisation contributes to more secure and efficient operations.

Aker BP's production averaged 155 700 barrels of oil equivalents per day in 2018. The company's operating revenues totalled USD 3.8 billion, compared to USD 2.6 billion in 2017. EBITDAX amounted to USD 3.0 billion, up from USD 2.0 billion in 2017.

Aker BP's positive development has enabled the company to adopt even more ambitious growth targets, namely to triple production by 2025 and to cut production costs from USD 12 to USD 7 per barrel. The company's profitable growth forecasts and strong balance sheet have enabled it to increase the dividend to its shareholders. Aker BP's board has proposed an increase in the dividend to USD 750 million in 2019, with the aim of further annual rises of USD 100 million per year in the period to 2023.

For 2019, Aker BP aims to produce between 155 000 and 160 000 barrels of oil equivalents per day. First-oil on the Johan Sverdrup field is expected in November 2019.

At present, Aker BP is the operator for almost 100 per cent of its portfolio of producing fields, providing a strong foundation for further development and value creation. The company has scheduled a large and promising exploration programme for 2019. Aker BP plans to participate in 15 exploration wells with an estimated resource potential – so-called net unrisked resources – totalling 500 million barrels of oil equivalents.

The company has adopted ambitious targets for growth in the existing portfolio and through value-generating transactions. In its capacity as an owner, Aker sees the Norwegian Continental Shelf as an attractive investment region due to both strong prospectivity and a stable tax system that stimulates profitable new investments. Aker supports Aker BP's plans for profitable growth, and will drive forward efforts to ensure smarter and more efficient operations through alliances and collaboration models. Digitalisation is a crucial aspect of Aker BP's improvement programme, and is playing a key role in change processes.

Aker BP has entered into a long-term cooperation agreement with Cognite, and is a proactive adopter of digital solutions aboard Aker BP-operated platforms. The company is the first in Norway to operate a manned platform (the Ivar Aasen platform) from an onshore control room. Crew aboard both the Ivar Aasen platform and the Skarv FPSO are using handheld units to access live data from the company's industrial data platform. The technology is currently being rolled-out to Aker BP's other FPSO and platforms.

Aker wants to contribute to make the Norwegian Continental Shelf an international benchmark for safe, profitable offshore petroleum production that is sustainable. Aker BP continues to be one of the oil and gas producers with the lowest carbon intensity. The company's emissions per produced barrel are lower than the average for the Norwegian Continental Shelf, and less than half the global average. Aker BP is making targeted efforts to reduce emissions, improve safety and boost efficiency throughout the supply chain. The Aker BP share was priced at NOK 218 on 31 December 2018, compared to NOK 201.90 at the end of 2017. This equates to a price increase of 8 per cent. Aker also received dividends from Aker BP totalling NOK 1 465 million.

Aker Solutions

Aker Solutions is a global oil services company that provides services, technologies, and product solutions within subsea and field design. The

company operates in global niches with high barriers to entry and is set up to generate an attractive return on capital through an asset-light business model.

In 2018, Aker Solutions continued its efforts to improve operational effectiveness and reduce its cost base, and is on track to achieve its target of cutting costs by 50 per cent by 2021 compared to 2015 levels. The company is well-positioned for the future, and the oil service market is expected to develop positively in the longer term.

The company's order backlog stood at NOK 35.1 billion at the end of 2018. The ratio between the order backlog and expected revenue for 2019 is at a healthy level. In 2018, Aker Solutions delivered satisfactorily on its order and project portfolios.

Aker Solutions' operating revenues totalled NOK 25.2 billion in 2018, up from NOK 22.5 billion the previous year. EBITDA totalled NOK 1.8 billion, compared to NOK 1.5 billion in 2017. The company's financial position is robust, and it had a liquidity reserve of NOK 7.5 billion at year-end 2018.

During the course of 2018, the company won important contracts linked to the Johan Sverdrup, Johan Castberg, Nova, Troll and Askeladd fields on the Norwegian Continental Shelf. Internationally, Aker Solutions secured several major contracts, inter alia in Brazil, the UK, Africa and Asia. This includes the Lingshui and Liuhua field developments in China, the first phase of the major Mero field development in Brazil, two sizable maintenance contracts – also in Brazil – and a strategically important contract with BP in Angola. Further, the company was awarded a collaboration agreement with Equinor relating to global subsea development projects, as well as a carbon capture contract under the Northern Lights project. In 2018, Aker Solutions purchased 10 per cent of the shares in the US wind energy company Principle Power Inc., and entered into a collaboration agreement with Cognite covering the development of digital services and solutions.

In its ownership capacity, Aker is focused on ensuring that Aker Solutions executes projects and wins new contracts with satisfactory margins. To succeed in this regard, the company must continue to develop first-class customer relationships and remain focused on further operational improvements and strengthening of its capital base. At the same time, the global oil service industry is consolidating, and Aker Solutions has entered into several cooperation agreements and alliances. Aker is taking an active approach in its capacity as owner in order to strengthen Aker Solutions' industrial operations in the international market.

Aker Solutions' share price closed the year at NOK 39.66, down from NOK 46.19 as at year-end 2017. The board of Aker Solutions has proposed that no dividend should be paid for the 2018 financial year.

Akastor

Akastor is an oil services investment company with a portfolio of industrial holdings and financial investments. MHWirth and AKOFS Offshore are the two most important companies in the portfolio. Akastor has a flexible mandate for active ownership and seeks to realize the value potential of its businesses.

Since its creation in 2014, Akastor has divested businesses and released approximately NOK 6 billion in capital. In 2018, an agreement was entered into under which Mitsui acquired a 50 per cent stake in AKOFS Offshore. The deal released USD 142.5 million in cash for Akastor. AKOFS Offshore won an important long-term contract with Equinor in 2018, supplementing existing long-term contracts with Petrobras.

In 2018, Akastor made an equity investment of USD 75 million in the rig company Odfjell Drilling. Further, Akastor's wholly-owned subsidiary First Geo signed a merger agreement with AGR with the aim of creating a leading subsea and well operations company. Completion is scheduled for 2019, and after the completion date Akastor will own 100 per cent of the shares and 55 per cent of the economic interest.

Akastor's largest investment, the drilling technology company MHWirth, continues its efforts to improve operations and cost efficiency, as well as developing technology solutions for the drilling industry . The company strengthened its competitiveness further, winning a drilling package contract with Keppel FELS with options for three further drilling packages.

Akastor is working closely with its portfolio companies to implement operational improvements, cost reductions and strategic initiatives to strengthen the company's competitiveness and position in challenging markets.

Akastor's operating revenues totalled NOK 3.8 billion in 2018, compared to NOK 3.6 billion in 2017. EBITDA totalled NOK 290 million, compared to NOK 116 million in 2017. Akastor had a liquidity reserve of NOK 2.2 billion at year-end 2018.

Aker's priority as owner is for Akastor to develop and realise the value of the portfolio companies. The transactions completed in 2018 show that Akastor's portfolio companies often have an added value which becomes visible through industrial constellations in larger and more efficient units. These efforts are continuing.

Akastor's share price closed the year at NOK 13.06, down from NOK 16.40 as at year-end 2017. No dividend has been proposed for the financial year 2018.

Kvaerner

Kvaerner is a specialised supplier of offshore installations and onshore process plants for projects in the upstream oil and gas sector, as well as other related segments. One of the company's competitive strengths is its ability to take on projects encompassing engineering, procurement and fabrication (EPC) services under a single contract. Although the EPC market remained challenging in 2018, with tough competition, Kvaerner succeeded in winning new important contracts. Existing projects are being executed as planned and in accordance with quality standards and budgets.

Kvaerner is constantly seeking to enhance productivity and improve cost levels at its specialised plants at Stord and in Verdal, as well as in its project management, design and procurement functions at Fornebu. Capacity has been adjusted to a lower activity level, and the delivery model has been refined to strengthen competitiveness. Digitalisation, robotisation and development of competencies are playing increasingly prominent roles in the company's continuous improvement strategy.

In 2018, Kvaerner was awarded a NOK 3.8 billion contract to construct the topside for the FPSO to be used in the Johan Castberg field development. New contracts were also won in connection with the Johan Sverdrup development, with Kvaerner and Aker Solutions jointly winning a NOK 3.4 billion contract for modification of the riser platform and field centre. Half of the contract value will accrue to Kvaerner. Kvaerner also signed a new contract with Equinor to deliver the jacket for the processing platform to be used in Phase 2 of Johan Sverdrup. This is Kvaerner's fourth jacket for the Johan Sverdrup field, and demonstrates Kvaerner's competitiveness. Moreover, in 2018 Equinor expanded the scope of its upgrade of the Njord A platform to include work in addition to the NOK 5 billion contract awarded in 2017.

Kvaerner had operating revenues of NOK 7.2 billion in 2018, compared to NOK 6.5 billion the previous year. EBITDA totalled NOK 437 million, down from NOK 799 million in 2017. At year-end 2018, Kvaerner held NOK 3.2 billion in cash and had no interest-bearing debt.

Kvaerner's order intake totalled NOK 9.8 billion in 2018, while the order backlog amounted to NOK 10.6 billion at the end of the year.

Kvaerner's most important shortterm focus areas are to deliver ongoing projects in line with customer expectations and to win new contracts. Since being spun off as a separate group in 2011, Kvaerner has delivered a predictable and satisfactory profit performance. In its ownership capacity, Aker is focused on ensuring that

Kvaerner continues to deliver firstclass project execution, focuses on HSE improvements and maintains its systematic efforts to improve productivity and cost efficiency.

Kvaerner's share price closed at NOK 12.06 on 31 December 2018, compared to NOK 15.80 at the end of 2017. The board of Kvaerner has proposed a dividend of NOK 1 per share.

Ocean Yield

Ocean Yield is a ship-owning company. Its mandate is to build a diversified portfolio of modern vessels on long-term charters to creditworthy counterparties.

Ocean Yield increased its investment capacity in 2018 through a share issue that secured NOK 759 million in new equity for the company. Aker presubscribed for half of the issue, but was allocated zero shares due to strong demand and in order to increase the free-float of the Ocean Yield share. This reduced Aker's shareholding from 66.2 per cent to 61.7 per cent.

In 2018, the company invested a total of USD 666 million (USD 579 million net of seller's credits). The number of vessels in the portfolio increased from 40 to 57. The growth occurred in the following segments: bulk carriers, crude-oil tankers (VLCC) and container ships (3,800 TEU). These investments helped diversify the order backlog in terms of both the number of counterparties and segments. The FPSO Dhirubhai-1 completed a 10 year contract with Reliance Industries in India in September 2018. Ocean Yield has entered into an option agreement giving Aker Energy the right to charter Dhirubhai-1 on bareboat terms. Aker Energy has paid USD 3 million for the option, which is exercisable in the second quarter of 2019. If the option is exercised, the agreement will have a duration of 15 years. Ocean Yield's operating revenue totalled USD 343 million in 2018, compared to USD 339 million in 2017.

EBITDA amounted to USD 283 million, compared to USD 307 million in 2017. The EBITDA order backlog linked to signed contracts totalled USD 3.5 billion at the end of 2018, while the average remaining contract tenor was 11 years.

This ensures predictability with respect to earnings and dividend capacity. The company is maintaining its ambition of paying attractive quarterly dividends to its shareholders.

Aker supports Ocean Yield's strategy of building a larger company over time through making value-accretive transactions and diversifying its portfolio further. Future growth will primarily occur through acquisition of new vessels on long-term charters in the industrial shipping sector.

Diversification helps improve the company's robustness in the face of fluctuations in individual segments.

Ocean Yield's share price stood at NOK 59.20 as at 31 December 2018, down from NOK 69.50 at the end of 2017. Aker received NOK 613 million in dividends from Ocean Yield in 2018 (NOK 6.25 per share).

Aker BioMarine

Aker BioMarine is an integrated biotechnology company that harvests krill in the Antarctic Ocean and develops, manufactures, markets and sells krillbased ingredients to the consumer health and animal nutrition and aquaculture markets.

The company is vertically integrated and controls the entire value chain, from sustainable krill harvesting in the Antarctic to research, product development, production, logistics and marketing. Aker BioMarine has developed long-term partnerships with leading branded consumer goods companies, environmental protection organisations and researchers. In 2018, Aker BioMarine was named Europe's most innovative company by the European Business Awards.

Aker BioMarine's core products are QRILL™ Aqua, a value-added ingredient for the aquaculture industry, and Superba™ Krill Oil, a phospholipid omega-3 dietary supplement for the consumer market. The market for QRILL™ products continued to develop favourably in 2018. Superba™ Krill Oil has a strong position in its market segment. The omega-3 market grew in 2018, particularly in Asia, which is becoming a

growth market with great potential. Sales of both Superba™ Krill Oil and QRILL™ Aqua increased from 2017 to 2018.

Aker BioMarine is in a growth phase requiring additional investments. In 2018, Aker converted a NOK 1 billion loan to Aker BioMarine into equity to strengthen the company's balance sheet. The company is well positioned to expand geographically and maintain product sales in higher price segments, through its strong supply chain, a solid innovation product pipeline and stable long-term partnerships with customers. The company holds US krill oil patents which cover its production process and product recipes. Aker BioMarine's krill-oil factory in Houston has expanded its capacity.

The company's improved performance in 2018 generated operating revenues of USD 155 million, compared to USD 126 million in 2017. EBITDA amounted to USD 33 million, almost a double from last year's total of USD 17 million.

At the end of 2018, Aker BioMarine was awarded a new krill licence, bringing the total number of licences to four. Delivery of a new krill vessel in January 2019 will help improve harvesting efficiency and capacity.

Aker's shares in Aker BioMarine had a book value of NOK 2.4 billion as at 31 December 2018. Aker is considering different options for long-term value generation by Aker BioMarine. The aim is to build a larger, more robust company that achieves profitable growth through a focus on robust operations and efficient supply chains in its industry segments. This growth strategy may require further investment by Aker.

b. Financial investments

Financial investments comprise all Aker assets not defined as industrial holdings, including cash, other listed investments, real estate and other investments. The value of Aker's financial investments amounted to NOK 5.6 billion as at 31 December 2018, representing 11 per cent of Aker's net asset value, compared to NOK 5.8 billion as at 31 December 2017.

Aker's cash holdings increased to NOK 1.9 billion in 2018, from NOK 1.2 billion the previous year. The increase is primarily

attributable to NOK 2.2 billion in dividends received from portfolio companies, net issue of new bond debt of NOK 0.7 billion and the divestment of fund investments totalling NOK 0.4 billion. This was partly offset by Aker's payment of NOK 1.3 billion in dividend to its shareholders in 2018, total operating and financial expenses of NOK 0.6 billion, the NOK 0.5 billion investment in Aker Energy and the issue of NOK 0.5 billion in financing to Aker BioMarine. Aker takes a conservative approach to the management of its cash holdings, spreading deposits between several banks with high credit ratings.

Aker sold its liquid fund investments in two funds managed by Norron in 2018, releasing a total of NOK 428 million, but continues as investor in the fund management company.

The value of other listed investments was NOK 0.7 billion as at year-end 2018, down from NOK 1.2 billion in 2017. The value of Aker's investments in Philly Shipyard and Solstad Offshore fell by NOK 290 million and NOK 253 million, respectively, to NOK 203 million and NOK 101 million as at year-end 2018. Philly Shipyard needs to secure new contracts in 2019 to ensure its future operations. Solstad Offshore is in a difficult position in a challenging market. The company has entered into a standstill agreement with creditors granting an interest and amortisation waiver until the summer of 2019.

The value of Aker's direct equity exposure to American Shipping Company (AMSC) increased to NOK 385 million, from NOK 276 million in 2017. Aker also received dividends totalling NOK 79 million from AMSC during the year, and realised a cash gain of NOK 291 million on its indirect total return swap (TRS) exposure to AMSC upon rollover of the TRSs in November 2018.

Aker's total exposure to real estate investments stood at NOK 568 million as at 31 December 2018, down from NOK 674 million at year-end 2017. The reduction is due to the establishment of FP Bolig together with external partners in the spring of 2018, which released NOK 361 million in cash for Aker, including a sale gain of NOK 194 million.

Other financial investments consist of equity investments, internal and external receivables, and other assets. The largest items are the investment in Aker Energy, receivables from Aker BioMarine AS and Ocean Harvest Invest AS, and airplane ownership. The value of other financial investments was NOK 2.4 billion as at 31 December 2018, compared to NOK 2.3 billion as at year-end 2017. The increase is mainly due to the investment in Aker Energy, a loan to Aker BioMarine and the purchase of an airplane, partly offset by the conversion into equity of part of the outstanding loan to Aker BioMarine.

Together with The Resource Group TRG AS (TRG), Aker formed the company Aker Energy at the start of 2018. Aker Energy then entered into an agreement to acquire Hess Corporation's 50 per cent stake in the Deepwater Tano Cape Three Points block in Ghana. During its first year, the company has grown to 120 employees, including temporary staffing. So far, the company's focus has been the preparation of a plan of development for the oil field and the drilling of appraisal wells to provide deeper insights into the field's geological characteristics. The first appraisal well was drilled at the end of the year, and verified the existing volume base.

The digitalisation company Cognite, which was established at the beginning of 2017, continued in 2018 to grow in line with its ambitious business plan. The company continues to attract highly qualified staff, bringing its workforce to 110 employees at year-end, compared to 37 at the end of 2017. Cognite is playing an active role in the digitalisation of the oil and gas industry, and demonstrated in 2018 considerable commercial potential also outside that sector. Cognite has been awarded a contract to develop a digitalisation strategy for Aker BP, and its digital data platform has been an important factor in the oil company's efforts to make operations more secure and efficient. While Aker BP remains the company's largest customer, Cognite also secured agreements with several other major clients in 2018, supporting the company's growth objectives. The investment in Cognite has a book value of NOK 42 million.

3. Presentation of annual accounts

Aker ASA's annual accounts consist of the consolidated financial statements, the separate financial statement of the parent, and the combined financial statements for Aker ASA and holding companies. It is the latter financial statements that are highlighted in Aker's internal and external reporting. The combined accounts show the aggregate financial position of the holding companies, including total available liquidity and net debt relative to the investments in the underlying operational companies. NAV for Aker ASA and holding companies forms the basis for Aker's dividend policy.

Pursuant to section 3-3a of the Norwegian Accounting Act, it is confirmed that the accounts have been prepared based on the assumption that Aker is a going concern and the board confirms that this assumption continues to apply.

a. Combined accounts for Aker ASA and holding companies Combined income statement

The combined profit and loss account for Aker ASA and holding companies (Aker) shows a pre-tax profit of NOK 1.5 billion for 2018. The corresponding 2017 figure was a profit of NOK 0.8 billion. The change is mainly due to an increase of NOK 645 million in dividends received from Aker BP and a NOK 194 million gain realised through the establishment of FP Bolig. Operating expenses amounted to NOK 254 million in 2018, compared to NOK 244 million in 2017.

Net financial items (including dividends received, but excluding value changes) amounted to NOK 1.9 billion in 2018, up from NOK 1.4 billion the previous year. Dividends received amounted to NOK 2.2 billion, while net interest expenses, write-downs on receivables and other provisions totalled NOK 247 million. The net value change on shares amounted to minus NOK 383 million in 2018. This drop was primarily due to the decline in the value of the investment in Solstad Offshore, and a decrease in the value of Aker's direct holdings in Akastor and Aker Solutions.

Combined balance sheet

The combined balance sheet of Aker ASA and holding companies shows a total book value for assets of NOK 23.7 billion as at 31 December 2018, including long-term equity investments of NOK 20.1 billion and cash holdings of NOK 1.9 billion. The asset value amounted to NOK 51.2 billion as at 31 December 2018. The corresponding 2017 figure was NOK 50.4 billion.

The value of Aker's industrial holdings was NOK 45.6 billion as at 31 December 2018, compared to NOK 44.6 billion at year-end 2017. The change is mainly attributable to value increases for the investment in Aker BP and an increased book value for Aker BioMarine due to the conversion of debt into equity in 2018. These increases were partly offset by value reductions of the investments in Aker Solutions, Akastor, Kvaerner and Ocean Yield.

The value of Aker's financial investments amounted to NOK 5.6 billion as at yearend 2018, compared to NOK 5.8 billion as at 31 December 2017. Cash holdings increased from NOK 1.2 billion in 2017 to NOK 1.9 billion in 2018. The changes are discussed in the Financial investments section above.

Gross interest-bearing liabilities amounted to NOK 9.2 billion as at 31 December 2018, up from NOK 8.3 billion one year prior. Net interest-bearing liabilities totalled NOK 6.2 billion as at year-end 2018, up from NOK 5.6 billion at the end of 2017.

In 2018, the AKER11 bond was repaid on maturity, and Aker issued the five-year, NOK 2.0 billion AKER14 bond. As at 31 December 2018, the total outstanding bond debt amounted to NOK 6.2 billion. Bank debt totalled NOK 3.0 billion, and comprised two bank loans denominated in USD. For one of these bank loans the borrowing limit was in 2018 increased from USD 350 to USD 450 million, of which USD 250 million was drawn by year-end 2018. In addition, the due date for the loan was extended by one year, to 2021. As at 31 December 2018, total undrawn credit facilities amounted to NOK 3.2 billion.

Aker's NAV as at 31 December 2018 was NOK 41.7 billion, compared to NOK 41.8 billion at year-end 2017.

b. Group accounts

The main companies included in Aker's consolidated accounts are Aker Solutions, Akastor, Kvaerner, Ocean Yield, Aker BioMarine, Aker Energy, FP Eiendom, Cognite and Philly Shipyard. Aker BP is accounted for as an associate.

Income statement

The Aker Group had operating revenues of NOK 42.2 billion in 2018, compared to NOK 40.9 billion the previous year. Total operating expenses came in at NOK 37.8 billion in 2018, compared to NOK 35.3 billion in 2017. The increase in operating revenues and operating expenses is explained by increased activity for Aker Solutions, Akastor and Kvaerner as the activity level within the oil service sector has improved compared with the recent years challenging market conditions.

In 2018, depreciation and amortisation amounted to NOK 2.1 billion, compared to NOK 2.2 billion the prior year.

Impairment charges in 2018 amounted to NOK 0.2 billion, mainly explained by impairments of goodwill and vessels in Ocean Yield. Net financial expenses were NOK 1.3 billion in 2018, compared NOK 1.0 billion in 2017. The increase in net financial expenses is primarily due to currency effects from hedging instruments, which were negative in 2018 but positive in 2017.

The pre-tax profit from continued operations came in at NOK 1.4 billion in 2018, compared to a pre-tax profit from continued operations of NOK 2.6 billion in 2017. Tax expenses in 2018 were NOK 0.5 billion, resulting in a net profit from continued operations of NOK 0.9 billion. In 2017, the tax expense was NOK 0.9 billion, resulting in a net loss from continued operations of NOK 1.8 billion.

Balance sheet

The Aker Group's total assets amounted to NOK 92.8 billion as at 31 December 2018, compared to NOK 84.6 billion as at year-end 2017. Total non-current assets were NOK 67.1 billion as at 31 December 2018, compared to NOK 61.7

billion at year-end 2017. The Group's total intangible assets were NOK 11.0 billion as at 31 December 2018, up from NOK 9.5 billion one year earlier. Of this, goodwill amounted to NOK 7.5 billion at year-end 2018, which is the same level as at 31 December 2017. Goodwill has been tested for impairment and this resulted in an impairment loss of NOK 80 million in 2018 related to Ocean Yield's FPSO Dhirubhai-1. Current assets were NOK 25.7 billion as at 31 December 2018, up from NOK 22.9 billion a year before.

Current liabilities amounted to NOK 23.3 billion, while non-current liabilities totalled NOK 27.5 billion at year-end 2018. The corresponding 2017 figures were NOK 18.3 billion and NOK 26.2 billion, respectively. The Group's interestbearing debt amounted to NOK 30.4 billion as at 31 December 2018, compared to NOK 28.1 billion at year-end 2017.

The Group's equity ratio was 45 per cent at year-end 2018, compared to 47 per cent at the end of 2017.

Cash flow statement

As at 31 December 2018, the Group had cash of NOK 9.8 billion, up from NOK 8.1 billion in 2017.

The Group's net cash flow from operations amounted to NOK 5.3 billion in 2018, compared to NOK 2.4 billion in 2017. The change is mainly explained by increased dividend received from Aker BP, and cash flow from discontinued operations and changes in other net operating assets and liabilities that was positive with NOK 0.8 billion in 2018 while it was negative with 2.1 billion in 2017. The NOK 0.9 billion difference between operating profit before depreciation and amortisation and net cash flow from operations in 2018 is primarily attributable to changes in working capital and dividends received from Aker BP, partly offset by interest and tax paid.

Net cash flow from investment activities totalled minus NOK 4.7 billion in 2018, compared to minus NOK 3.5 billion in 2017. Cash flow for 2018 primarily comprised investments in vessels, real estate, plant and equipment of NOK 5.6 billion, and investments in shares in other companies of NOK 1.0 billion. Divestment of shares in subsidiaries amounted to NOK 1.8 billion and divestments of other shares amounted to NOK 0.5 billion.

Net cash flow from financing activities amounted to plus NOK 1.0 billion in 2018, compared to minus NOK 3.4 billion in 2017. Cash flow for the year from financing activities is primarily attributable to a net increase in debt of NOK 1.8 billion, and increased equity in subsidiaries of NOK 0.9 billion, partly offset by dividend payments totalling NOK 1.7 billion. The dividends were split between shareholders in Aker ASA of NOK 1.3 billion and minority shareholders in the subsidiaries of NOK 0.4 billion.

c. Aker ASA accounts

The parent company Aker ASA achieved a profit for the year 2018 of NOK 1.8 billion, compared to a profit of NOK 1.6 billion in 2017. The 2018 profits are primarily attributable to dividend income from Aker Capital AS (which inter alia owns the shares in Aker BP and Ocean Yield), partly offset by write-downs of the investments in Aker Kvaerner Holding, Aker Solutions and Akastor.

Assets totalled NOK 30.6 billion as at 31 December 2018, compared to NOK 28.4 billion as at year-end 2017. As at the end of 2017, equity amounted to NOK 20.1 billion at year-end 2018. This results in an equity ratio of 66 per cent at the end of 2018.

Information on salary and other remuneration to executive management and compensation guidelines is presented in Note 33 to the consolidated financial statements.

Research and development

The parent company had no research and development activities in 2018. The R&D activities of the group are presented in the annual reports of the respective operational portfolio companies.

Allocation of profit and dividend in Aker ASA

The board of directors has proposed, for approval at the annual general meeting, an ordinary cash dividend of NOK 22.50 per share for 2018. The proposal reflects anticipated cash flows, financing requirements and the need for financial flexibility. The proposed dividend corresponds to approximately 4.0 per cent of NAV, which is within the range of Aker's dividend policy of paying out 2–4 per cent of NAV.

Transfers to other equity amount to NOK 96 million, representing the net profit of the year of NOK 1.77 billion less the proposed dividend of NOK 1.67 billion.

4. Management model, corporate governance, control and compliance

Aker is a public limited liability company organised under Norwegian law with a governance structure based on Norwegian corporate law and other regulatory requirements. The company's corporate governance model has been designed to provide a foundation for long-term value creation and to ensure good control. Aker's Code of Conduct expresses Aker's expectations regarding its portfolio companies' codes of conduct.

Aker's principal owner, Kjell Inge Røkke, participates actively in Aker's development. Mr Røkke is Aker's Chairman of the Board.

Aker has nine directors, none of whom are executives and four of whom are employee representatives. The majority of the directors are independent of the company's management and significant business partners. The Chairman of the Board and Deputy Chairman are elected at the annual general meeting.

Aker follows the Norwegian Code of Practice for Corporate Governance. The company's practice largely complies with the Code's recommendations. Reference is made to the Corporate Governance Report. This report has been approved by the board and is available on the company's website: www.akerasa.com.

5. Board of directors' activities

The board of directors has an annual plan for its work, which includes recurring key topics such as strategy review, investment planning, risk and compliance oversight, financial reporting and budget review.

The board evaluates its own performance and collective expertise once a year.

Aker's board of directors held six meetings in 2018. The attendance of the board members averaged 89 per cent. In addition, five telephone conferences were held. Aker's audit committee met seven times in 2018.

Further information on the mandate and the work of Aker's board of directors and audit committee is available in Aker's Corporate Governance Report. The board members' shareholdings and remunerations are presented in Note 33 to the consolidated accounts.

6. Business and society

Aker's goal is to be an attractive employer, a preferred partner for business associates, and a valuable member of society. Aker's most important contribution to society is to create value and build forwardlooking companies that operate in an environmentally, ethically and socially responsible manner. Profitability is a prerequisite for achieving these objectives.

The operations of the parent company Aker ASA have negligible effect on the external environment.

As a significant shareholder in several companies, Aker works to promote businesses that are responsible and sustainable, including the financial, social and environmental consequences of the operations of Aker and the portfolio companies.

The Aker Group's operating portfolio companies report individually on their impact on the external environment. Section 3-3c of the Norwegian Accounting Act requires large companies to account for their efforts to integrate corporate social responsibility into their business strategies and day-to–day operations. Aker has complied with this requirement in a separate document approved by the board of directors and published on its website under "Corporate Responsibility in Aker".

7. Our employees

Aker ASA had a total of 39 employees as at 31 December 2018 – 22 men and 17 women. In its hiring processes, the company focuses on whether the candidates are qualified for the position, regardless of ethnic origin, religious beliefs, sexual orientation, nationality and other criteria considered irrelevant to their work.

The company endeavours to provide flexible working conditions so that employment at Aker ASA offers opportunities for a work-life balance. Varied and challenging work tasks and good career-development prospects, coupled with job security and competitive pay, are also important factors in making Aker ASA an attractive employer.

As at 31 December 2018, the number of regular employees working for companies of which Aker is the main shareholder, directly or indirectly, totalled 21 627, including approximately 11 405 employees in Norway.

About 17 per cent of the employees of the Aker Group are women. Many companies in which Aker has a major ownership interest are cornerstones of their local communities that recruit locally. Aker has entered into an international framework agreement with the Norwegian United Federation of Trade Unions (Fellesforbundet), IndustriALL Global Union, NITO and Tekna. The international framework agreement sets out fundamental labour rights and contains references to standards relating to health, safety and the environment (HSE) work, pay, working time and employment conditions. The agreement commits Aker to respecting and supporting fundamental human rights and union rights in the societies in which the companies operate. These principles are delineated in the United Nations' Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, and the ILO Declaration on Fundamental Principles and Rights at Work.

For generations, Aker has cooperated closely with employee organisations. Employee representatives participate in key decision-making processes, including through board representation. Aker has partnered with its employees and those of its relevant operating companies to establish an international works council. In addition, the company's Norwegian trade unions hold annual union representative conferences and maintain working committees at the portfolio companies Aker BP, Aker Solutions, Akastor, Kvaerner and Aker BioMarine.

Due to volatile activity levels within the E&P impacting the oil services sector, Aker's portfolio companies in this sector have made necessary capacity adjustments. The feedback received so far shows that while the downsizing processes are challenging, efforts are being made to implement them within the framework of existing positive working relations with employee organisations. Constructive cooperation with employee representatives and their organisations is a prerequisite for success in making market adjustments and restructuring. Aker has a long tradition of involving and including employee representatives in processes that may entail major changes for businesses and local communities. In the current challenging market situation, employees have contributed to profit improvements through their willingness and ability to adapt, cooperate, drive processes forward and make cost reductions.

The rate of sick leave among Aker ASA employees was at 1.4 per cent in 2018, compared to 2.2 per cent in 2017. The corresponding figure for the Aker Group as a whole was 2.9 per cent in 2018, compared to 3 per cent in 2017.

The portfolio companies did not report any work-related fatalities in 2018 nor 2017. There were 40 reported accidents that led to absence from work, compared to 34 in 2017. The accidents are discussed further in the reports of the operating entities.

8. Events after the balance-sheet date

On 12 March 2019, Aker Solutions announced a master contract to support the delivery of a subsea compression system for the Chevron-operated Jansz-Io field offshore Australia. The first service order under the master contract will be for front-end engineering and

design of a subsea compression station that will boost the recovery of gas from the field.

On 10 January 2019, Aker Energy announced a successful drilling operation of the Pecan-4A appraisal well in the Deepwater Tano/Cape Three Points (DWT/CTP) block offshore Ghana. On 4 March 2019, Aker Energy further announced that oil had been encountered in the drilling the Pecan South-1A well, the first of two additional appraisal wells. On 28 March 2019, Aker Energy, on behalf of its license partners, submitted an integrated Plan of Development (PoD) to Ghanaian authorities for the DWT/CTP block. The PoD presents an overall plan for a phased development and production of the petroleum resources in the block, with a firm Phase 1 plan for development and production of the Pecan field. The total oil reserves on the Pecan field is estimated at 334 million barrels, and the contingent resources (2C) is estimated to 110-210 mmboe for the remaining volume base of the existing discoveries. Based on the Pecan South results and pre-drill estimates of Pecan South East, the company estimates a potential volume upside of an additional 150-450 mmboe to the mentioned reserves and 2C resources.

The total investment in the Pecan development project is estimated to USD 4.4 billion. First oil from the Pecan field is estimated to be produced 35 months after a final investment decision following approval from the authorities. Further phases will be detailed in addendums to the integrated PoD.

9. Risks and risk management

Aker has a long-standing tradition of industrial and financial risk-taking. The company has evolved with the economic cycles and its strategy has adapted to market changes and company-specific issues in its portfolio. As presented in their respective notes to the financial statements, Aker ASA, the Aker Group, and Aker ASA and holding companies are exposed to financial risk, oil price, currency and interest rate risk, liquidity risk, market risk, credit risk, counterparty risk, and operational risk at the underlying company level.

Rather than diversifying risk by spreading investments across many different industries, Aker is focused on sectors in which the company possesses special expertise. The company has established a model for risk management, based upon identifying, assessing and monitoring major financial, strategic and operational risks in each business segment, drawing up contingency plans for those risks and attending to implementation and supervision.

The identified risks and how they are managed are reported to the Aker Board on a regular basis. Aker continuously works to improve its risk management process.

Risk management in Aker is based on the principle that risk evaluation is an integral part of all business activities. Consequently, management of operational risk lies primarily with the underlying operating companies, but Aker ASA actively supervises risk management through its participation in the boards of directors of the various companies.

Aker's main strategy for mitigating risk related to short-term value fluctuations is to maintain a solid financial position and strong creditworthiness. Aker has established clear financial guidelines that further regulate monitoring and follow-up of financial risk issues. Key governance parameters have been identified and are monitored closely. A finance committee has been appointed to focus particularly on issues and decisions related to financial investments, debt funding and foreign exchange issues.

Financial market exposures, including currency, interest, and liquidity risks, are discussed in greater detail in Note 6 to the consolidated financial statements.

The main risks that Aker ASA and holding companies are exposed to are related to changes in the value of the listed assets due to market price fluctuations. The development of the global economy, and energy prices in particular, as well as currency fluctuations, are important variables in assessing near-term market fluctuations. These variables may also influence the underlying value of Aker's unlisted assets. Aker ASA and its holding companies are also exposed to the risk of insufficient access to external financing. The company seeks to reduce this risk by maintaining a robust liquidity reserve and proactively planning refinancing activities.

Like Aker, the companies in Aker's portfolio are exposed to commercial risks, financial risks and market risks. In addition these companies, through their business activities within their respective sectors, are also exposed to legal/regulatory risks and political risks, i.e. political decisions on petroleum taxes, environmental regulations and operational risks, including major accidents which may have significant financial impact.

Oil prices were volatile in 2018, fluctuating between USD 86 and USD 54 per barrel, and remain lower than in the period 2011–2014. Combined with high expected price volatility, this is feeding ongoing uncertainty in the oil and gas sector. Aker BP's revenues are impacted by oil-price fluctuations. The activity level in the offshore oil service market is affecting Aker Solutions, Akastor and Kvaerner. The activity level affects the oil service companies' and Ocean Yield's counterparties, and the companies are therefore monitoring counterparty risk closely.

For further information on Aker's risk management, see the report on corporate governance available on the company's website.

10. Outlook

Investments in listed shares comprised 86 per cent of Aker's assets as per 31 December 2018. About 74 per cent of Aker's investments was associated with the oil and gas sector, 12 percent with the maritime industry, seafood and marine biotechnology 6 per cent, cash represented 4 per cent, and other assets 3 per cent. Aker's NAV will thus be influenced by a number of factors, including but not limited to fluctuations in market prices, commodity prices, exchange rates and operational performance.

Over the last years, the oil service industry has been under pressure due to cutbacks in E&P spending which has led to a decline in activity. Fewer projects have been sanctioned globally. At the same time, cost-cutting measures and increased operational efficiency across the industry have brought down break-even costs for offshore projects. Aker expects that this will lead to more projects being sanctioned, and that spending will increase. Oil price volatility is, however, significant, which creates uncertainty with level and timing. Aker expects the overall activity level to remain subdued as E&P companies continue to take a cautious approach to new investments, also taking into account the high oil price volatility. Aker's portfolio companies in the oil and gas sector will continue to increase competitiveness through increased productivity, efficiency and standardisation, improved technology offerings, and by exploring strategic partnerships and alliances. Aker remains positive about the longer term outlook for oil and gas and will therefore continue to evaluate strategic alternatives and opportunities in the sector.

The maritime leasing segment requires focus on capital structure diversification. Ocean Yield has identified interesting investment opportunities going forward, but main focus short term is on recontracting Dhirubhai-1.

Aker BioMarine is pursuing a longterm strategy to diversify its market exposure in terms of both industries and geographical coverage. Its main markets are the aquaculture industry – particularly the market for salmon farming supplements – and the dietary supplement market in Europe, North America and Australia. The salmon market has been developing positively for several years, and Qrill™ Aqua has gained increasing market share. The dietary supplement market, and the market for omega-3 ingredients in particular, has been challenging for the past three years, but did achieve growth in 2018.

Upstream dividends to Aker are expected to increase further in 2019, mainly due to the announced increase in Aker BP's dividend and dividends from Ocean Yield and Kvaerner. Although Aker Solutions and Akastor have the financial capacity to pay dividends and Kvaerner has the capacity to pay a higher dividend than proposed for 2018, Aker supports the view of the boards of directors that the companies should maintain robust cash holdings in the present market environment.

Aker considers the financial position of its portfolio companies to be robust. The companies have a moderate debt level and have capacity to increase their gearing to facilitate growth through investments.

Aker's strong balance sheet enables the company to face unforeseen operational challenges and short-term market

fluctuations, as well as to seize valueaccretive investment opportunities. As an industrial investment company, Aker will use its resources and competence to promote and support the development of the companies in its portfolio, and to consider new investments.

Fornebu, 29 March 2019 Aker ASA

Kjell Inge Røkke (sign) Chairman

Finn Berg Jacobsen (sign) Deputy Chairman

Anne Marie Cannon (sign) Director

Kristin Krohn Devold (sign) Director

Amram Hadida (sign) Director

Karen Simon (sign) Director

Atle Tranøy (sign) Director

Arnfinn Stensø (sign) Director

Tommy Angeltveit (sign) Director

Øyvind Eriksen (sign) President and CEO

Annual accounts

Aker Group

		Income statement and total comprehensive income	40
		Balance sheet at 31 December	42
		Consolidated statement of changes in equity	43
		Cash flow statement	44
		Notes to the financial statements	45
Note 1		Corporate information	45
Note 2		Basis for preparation and estimates and assumptions	45
Note 3		Changes in accounting policies	46
Note 4		New standards and interpretations not yet adopted	51
Note 5		Accounting principles	52
Note 6		Financial risk and exposure	56
Note 7		Acquisition of subsidiaries and transactions with minority interests	60
Note 8		Sale of subsidiaries and discontinued operations	61
Note 9		Operating segments and significant subsidiaries	62
Note 10		Operating revenue	66
Note 11		Wages, personnel expenses and other operating expenses	68
Note 12		Impairments	69
Note 13		Financial income and financial expenses	71
Note 14		Tax	72
Note 15		Property, Plant and Equipment	74
Note 16		Intangible assets	75
Note 17		Investments in associates and joint ventures	76
Note 18		Interest-bearing assets	79
Note 19		Other shares and non-current assets	80
Note 20		Inventories	80
Note 21		Trade and other short-term interest-free receivables	80
Note 22		Basis for earnings per share, dividend per share, and paid-in equity	81
Note 23		Minority interests	81
Note 24		Other comprehensive income	82
Note 25		Interest-bearing liabilities	82
Note 26		Pension expenses and pension liabilities	85
Note 27		Other interest-free long-term liabilities	86
Note 28		Provisions	87
Note 29		Trade and other payables	88
Note 30		Financial instruments	88
Note 31		Contingencies, guarantee liabilities and legal claims	89
Note 32		Transactions and agreements with related parties	90
Note 33		Vested salary and other remuneration to the board of directors, nomination committee, CEO and other senior executives at Aker ASA	91
Note 34		Events after the balance sheet date	93

Income statement and total comprehensive income

INCOME STATEMENT

			2017
Amounts in NOK million	Note	2018	Restated*
Continued operations
Operating revenue	9,10	42 163	40 868
Cost of goods and changes in inventory		(17 867)	(16 782)
Wages and other personnel expenses	11	(13 963)	(13 828)
Other operating expenses	11	(5 936)	(4 698)
Operating profit before depreciation and amortisation	9	4 397	5 559
Depreciation and amortisation	15,16	(2 097)	(2 209)
Impairment charges	12,15,16	(213)	(281)
Operating profit	9	2 087	3 069
Financial income	13	704	958
Financial expenses	13	(1 997)	(2 007)
Share of profit of equity accounted companies	17	626	623
Profit before tax	9	1 420	2 643
Income tax expense	14	(490)	(850)
Profit for the year continued operations	9	930	1 793
Discontinued operations
Profit for the period from discontinued operations net of tax	8	438	906
Result for the year		1 368	2 699
Attributable to:
Equity holders of the parent		906	1 517
Minority interests	23	462	1 182
Result for the year		1 368	2 699
Weighted average number of outstanding shares	22	74 282 137	74 292 690
Earnings per share 1)	22
Earnings per share continued operations		7.08	15.94
Earnings per share discontinued operations		5.11	4.49
Earnings per share		12.19	20.43

1) Profit attributable to equity holders of the parent/weighted average number of outstanding shares *) See Note 8

TOTAL COMPREHENSIVE INCOME

Amounts in NOK million	Note	2018	2017
Result for the year		1 368	2 699
Other comprehensive income, net of income tax
Items that will not be reclassified to income statement:
Defined benefit plan actuarial gains (losses)	26	(82)	(60)
Equity investments at FVOCI - net change in fair value		66	-
Items that will not be reclassified to income statement		(16)	(60)
Items that subsequently may be reclassified to income statement:
Debt investments at FVOCI - net change in fair value		6	-
Changes in fair value of available for sale financial assets		-	1
Changes in fair value of cash flow hedges		(95)	340
Reclassified to profit or loss: debt investments at FVOCI, translation, cash flow hedges and in 2017 available-for-sale financial assets		(478)	(50)
Currency translation differences		515	(240)
Changes in other comprehensive income associates and joint ventures	17	1 133	(974)
Items that subsequently may be reclassified to income statement		1 081	(923)
Change in other comprehensive income, net of tax	13,14,24	1 065	(983)
Total comprehensive income for the year		2 433	1 716
Attributable to:
Equity holders of the parent		2 219	534
Minority interests		214	1 182
Total comprehensive income for the year		2 433	1 716

Balance sheet at 31 December

Amounts in NOK million	Note	2018	2017
ASSETS
Property, plant and equipment	15	18 262	22 178
Intangible assets	16	10 976	9 482
Deferred tax assets	14	1 059	1 359
Investments in equity accounted companies	17	23 348	21 624
Interest-bearing non-current receivables	6,18	11 304	5 363
Other shares and non-current assets	19	2 121	1 672
Total non-current assets		67 070	61 679
Inventories	20	1 752	2 460
Trade receivables and other interest-free receivables	21	13 146	11 366
Calculated tax receivable	14	146	252
Derivatives	30	406	359
Interest-bearing current receivables	6,18	451	324
Cash and cash equivalents	6,9	9 786	8 148
Total current assets		25 688	22 909
Assets classified as held for sale	8	-	-
Total assets	9	92 758	84 588
EQUITY AND LIABILITIES
Paid-in capital	22	2 331	2 331
Translation and other reserves	24	3 618	2 545
Retained earnings		16 061	16 279
Total equity attributable to equity holders of the parent		22 009	21 155
Minority interests	23	19 908	18 905
Total equity		41 918	40 059
Interest-bearing non-current liabilities	6,25	24 745	23 508
Deferred tax liabilities	14	515	377
Pension liabilities	26	1 181	1 189
Other interest-free non-current liabilities	27	837	627
Non-current provisions	28	221	503
Total non-current liabilities		27 499	26 205
Interest-bearing current liabilities	6,25	5 682	4 616
Trade and other payables	29	14 529	11 636
Income tax payable	14	168	134
Derivatives	30	585	507
Current provisions	28	2 343	1 393
Total current liabilities		23 306	18 286
Total liabilities		50 806	44 491
Liabilities classified as held for sale	8	34	37
Total equity and liabilities	9	92 758	84 588

Fornebu, 29 March 2019

Aker ASA

Kjell Inge Røkke (sign) Chairman

Finn Berg Jacobsen (sign) Deputy Chairman

Anne Marie Cannon (sign) Director

Karen Simon (sign) Director

Atle Tranøy (sign) Director

Tommy Angeltveit (sign) Director

Øyvind Eriksen (sign) President and CEO

Kristin Krohn Devold (sign) Director

Amram Hadida (sign) Director

Arnfinn Stensø (sign) Director

Consolidated statement of changes in equity

		Total	Trans	Fair		Total translation		Total equity of equity holders
Amounts in NOK million	Note	paid-in capital	lation reserve	value reserves	Hedging reserves	and other reserves	Retained earnings	of the parent	Minority interests	Total equity
Balance at 31 December 2016		2 330	3 541	103	(125)	3 518	15 994	21 842	18 177	40 019
Profit for the year 2017		-				-	1 517	1 517	1 182	2 699
Other comprehensive income	24	-	(1 171)	10	188	(973)	(10)	(983)	-	(983)
Total comprehensive income		-	(1 171)	10	188	(973)	1 508	534	1 182	1 716
Dividends		-				-	(1 188)	(1 188)	(387)	(1 575)
Share-based payment transactions		-				-	2	3	-	3
Total contributions and distributions		-	-	-	-	-	(1 186)	(1 185)	(387)	(1 573)
Acquisition and sale of minority	7,23	-				-	(22)	(22)	(74)	(96)
Issuance of shares in subsidiaries	23	-				-	-	-	7	7
Total changes in ownership without change of control		-	-	-	-	-	(22)	(22)	(67)	(89)
Transaction cost share issue in associated company		-				-	(15)	(15)	-	(15)
Balance at 31 December 2017	22-24	2 331	2 370	113	62	2 545	16 279	21 155	18 905	40 059
Impact of changes in accounting policies	3	-	4	(313)	42	(267)	290	23	22	45
Balance at 1 January 2018		2 331	2 374	(200)	105	2 278	16 569	21 178	18 927	40 105
Profit for the period year 2018		-				-	906	906	462	1 368
Other comprehensive income	24	-	1 348	86	(94)	1 340	(27)	1 313	(248)	1 065
Total comprehensive income		-	1 348	86	(94)	1 340	879	2 219	214	2 433
Dividends		-				-	(1 338)	(1 338)	(499)	(1 836)
Own shares and share-based payment transactions		-				-	(26)	(26)	-	(26)
Total contributions and distributions		-	-	-	-	-	(1 364)	(1 364)	(499)	(1 862)
Acquisition and sale of minority	7,23	-				-	(17)	(17)	37	20
Issuance of shares in subsidiaries	23	-				-	(9)	(9)	1 229	1 220
Total changes in ownership without change of control		-	-	-	-	-	(26)	(26)	1 266	1 240
Transaction with minority interests in joint ventures		-				-	2	2	-	2
Balance at 31 December 2018	22-24	2 331	3 722	(114)	10	3 618	16 061	22 009	19 908	41 918

Cash flow statement

			2017
Amounts in NOK million	Note	2018	Restated*
Profit before tax		1 420	2 643
Net interest expenses	13	1 274	1 152
Sales losses/gains (-) and write-downs		240	276
Unrealised foreign exchange gain/loss and other non-cash items		135	78
Depreciation and amortisation	15,16	2 097	2 209
Share of earnings in associates and joint ventures	17	(1 019)	(1 225)
Dividend received from associates and joint ventures	17	1 787	1 175
Changes due to discontinued operations and other net operating assets and liabilities		809	(2 081)
Cash flow from operating activities before interest and tax		6 743	4 227
Interest paid		(1 566)	(1 489)
Interest received		270	274
Taxes paid		(185)	(597)
Net cash flow from operating activities		5 262	2 414
Proceeds from sales of property, plant, equipment and intangible assets	15,16	204	32
Proceeds from sales of shares and other equity investments		520	438
Disposals of subsidiaries, net of cash disposed	8	1 786	868
Acquisitions of subsidiaries, net of cash acquired	7	(205)	(511)
Acquisitions of property, plant, equipment and intangible assets	15,16	(2 215)	(3 456)
Acquisitions of shares and equity investments in other companies		(1 018)	(2 473)
Acquisition of vessels accounted for as finance lease	18	(3 343)	(398)
Net cash flow from other investments	18	(396)	2 029
Net cash flow from investing activities		(4 667)	(3 472)
Proceeds from issue of interest-bearing debt	25	9 129	6 854
Repayment of interest-bearing debt	25	(7 315)	(8 701)
Net repayment and issue of interest-bearing debt		1 814	(1 847)
New equity	23	917	7
Own shares		(37)	(10)
Dividends paid	22,23	(1 737)	(1 575)
Net cash flow from transactions with owners		(857)	(1 578)
Net cash flow from financing activities		957	(3 425)
Net change in cash and cash equivalents		1 552	(4 482)
Effects of changes in exchange rates on cash		86	(88)
Cash and cash equivalents at 1 January		8 148	12 718
Cash and cash equivalents at 31 December	9	9 786	8 148

* See note 8

Notes to the financial statements

Note 1 | Corporate information

Aker ASA is a company domiciled in Norway, with headquarters at Fornebu outside Oslo, and listed on the Oslo Stock Exchange with the ticker "AKER". Aker's 2018 consolidated financial statements include the financial statements of the parent company, Aker ASA, its subsidiaries, and interests in associated companies and jointly controlled entities.

Note 2 | Basis for preparation and estimates and assumptions

2.1. STATEMENT OF COMPLIANCE

Aker has prepared its consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs) and associated interpretations as determined by the EU as at 31 December 2018 and Norwegian disclosure requirements pursuant to the Norwegian accounting act as at 31 December 2018. The consolidated financial statements have been prepared on a historical cost basis, with a few exceptions described in section 2.5.

The consolidated financial statements for the 2018 accounting year were approved by the Board of directors on 29 March 2019. The annual accounts will be submitted to Aker's annual general meeting on 26 April 2019 for final approval.

2.2. FUNCTIONAL CURRENCY AND PRESENTATION CURRENCY

The consolidated financial statements are presented in million Norwegian kroner. The Norwegian krone (NOK) is the functional currency of the parent company. As a result of rounding differences, amounts and percentages may not add up to the total.

2.3. USE OF ESTIMATES AND ASSUMPTIONS

The preparation of annual financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses. Actual results may differ from amounts arrived at based on these assumptions. Estimates and underlying assumptions are reviewed and assessed on an on-going basis, and are based on historical experience, consultations with experts, trends and other methods which management considers reasonable under the circumstances. Changes to accounting estimates are recognised in the period in which the estimates are revised and in future periods if affected.

Areas in which, in applying the group's accounting principles, there tends to be uncertainties as to material estimations and critical assumptions and assessments, are described in the following paragraphs and in relevant notes to the accounts. The group's operational companies operate in different markets, and are thus affected differently by the uncertainties that characterise the different markets.

(a) Consolidation

IFRS 10 contains a definition of control, which must be applied when an investor is to assess whether an investment must be consolidated in the consolidated financial statements. The assessment of control involves high degree of judgements. See Note 9.

(b) Revenue recognition

Revenue from construction contracts and other contracts with customers where the performance obligations are satisfied over time, are recognised according to progress. This method requires estimates of the final revenue and costs of the contract, as well as costs incurred to date.

For contract revenue, there are uncertainties related to recoverable amounts from variation orders and incentive payments. These are recognised when it is deemed to be highly probable that a significant revenue reversal will not occur. Contract revenue is adjusted by management's evaluation of liquidated damages to be imposed by customers typically relating to contractual delivery terms.

The project costs depend on productivity factors and the cost of inputs. Weather conditions, the performance of subcontractors and others with an impact on schedules, commodity prices and currency rates can all affect cost estimates. Although experience, use of the established project execution model and high competence reduce the risk, there will always be uncertainty related to such assessments.

The estimation uncertainty during the early stages of a contract is often large. No profit is recognized unless the outcome of a performance obligation can be measured reliably, usually at approximately 20 percent progress. However, management can on a project-by-project basis give approval of earlier recognition if the uncertainties of cost estimates are low. This is typically in situations of repeat projects, proven technology or proven execution model. See Note 9 and 10.

(c) Warranty provisions

At the completion of a project, a provision is made for expected warranty expenditures. Based on experience, the provision is often set at one per cent of the contract value, but can also be a higher or lower amount following a specific evaluation of the actual circumstances for each contract. Both the general one per cent provision and the evaluation of project specific circumstances are based on experience from earlier projects. Factors that could affect the estimated warranty cost include the group's quality initiatives. Provisions are presented in Note 28.

(d) Impairment testing of goodwill and intangible assets with indefinite useful lives.

In accordance with applicable accounting principles, the group performs annual impairment tests to determine whether goodwill and intangible assets recorded in the balance sheet have suffered any impairment. The estimated recoverable amount for cash-generating units are determined based on the present value of budgeted cash flows or estimated sales value less cost to sell if higher. See Note 12.

(e) Tax

The group is subject to income taxes in numerous jurisdictions. Significant judgment is required to determine provisions for income taxes worldwide. Aker incurs an income-tax payable and/or earns a considerable tax receivable. The group also recognises changes in deferred tax or deferred tax benefits. These figures are based on management's interpretation of applicable laws and regulations, and relevant court decisions. The quality of these estimates is largely dependent on management's ability to apply complex set of rules, its ability to identify changes to existing rules and, in the case of deferred tax benefits, its ability to project future earnings from which a loss carryforward may be deducted for tax purposes. See Note 14.

(f) Financial instruments

The group is exposed to various risks resulting from its use of financial instruments. This includes credit risk, liquidity risk and market risk (including currency- and interest rate risk). Note 6 and Note 30 present information about the group's exposure to each of these risks, the group's objectives, the principles and processes for measuring and managing risk, and the group's capital management.

(g) Contingent assets and liabilities

As a result of their extensive worldwide operations, group companies sometimes become involved in legal disputes. Provisions have been made to cover the expected outcomes of the disputes where negative outcomes are likely and reliable estimates can be prepared. However, the final outcome of these cases will always be subject to uncertainties and resulting liabilities may deviate from booked provisions. See Note 31.

h) Acquisition costs – exploration

The accounting policy of Aker's subsidiary Aker Energy is to temporarily recognize expenses relating to the drilling of exploration wells in the balance sheet as capitalized exploration expenditures, pending an evaluation of potential oil and gas discoveries. If resources are not discovered, or if recovery of the resources is considered technically or commercially unviable, the costs of exploration wells are expensed. Decisions as to whether this expenditure should remain capitalized or be expensed during the period, may materially affect the operating result for the period.

2.4. FAIR VALUE MEASUREMENT

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair values are measured or disclosed in the financial statements are categorised within the fair value hierarchy, described below, based on the lowest level of input that is significant to the fair value measurement as a whole:

• § Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
• § Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
• § Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

The Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation at the end of each reporting period.

For the purpose of fair value disclosures, the group has determined asset and liability classes based on their nature, characteristics and associated risks, and the applicable level within the fair value hierarchy. See Note 30.

2.5. BASIS OF MEASUREMENT

The consolidated financial statements have been prepared on a historical cost basis, with except for the following items:

• § Derivative financial instruments are measured at fair value
• § Non-derivative financial instruments at fair value through profit and loss are measured at fair value
• § Debt instruments at fair value through profit and loss are measured at fair value
• § Contingent consideration assumed in business combinations are measured at fair value
• § Net defined benefit asset or liability is recognised at fair value of plan assets less the present value of the defined benefit obligation

Note 3 | Changes in accounting policies

With effect from 1 January 2018, Aker has implemented IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments. Other new interpretations and changes to standards are also effective from 1. January 2018, but they do not have a material effect on the group's financial statements.

3.1 IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS

IFRS 15 Revenue from Contracts with Customers was adopted on 1 January 2018 and replaced IAS 11 Construction Contracts and IAS 18 Revenue. The new standard has been implemented retrospectively with the cumulative effect recognised in equity at the date of initial application. In accordance with the transitional provisions in IFRS 15, comparative figures have not been restated. The accounting principles that is the basis for the comparative 2017 figures are described in the 2017 annual report available on www.akerasa.com.

3.1.1 Accounting policy under IFRS 15

IFRS 15 establishes a five-step method that applies to all customer contracts. Under the new standard, only approved customer contracts with a firm commitment are basis for revenue recognition. Variation orders are included when they have been approved, either verbally, in writing, or implied by customary business practice. The deliveries in the contracts are reviewed to identify distinct performance obligations, and revenue is recognised in line with how the entity satisfies these performance obligations – either over time or at a point in time. This assessment may involve significant judgement. For contracts with customers for which the performance obligations are satisfied over time, revenue is recognised over time using a cost progress method. For contracts with customers for which the performance obligations are satisfied at a point in time, revenue is recognised at the point in time when the customer obtains control of the product or the service. Details of the accounting policies and the nature of performance obligations for each of the major types of customer contracts are set out below.

Construction contracts

Under construction contracts, specialised products are built according to a customer's specifications and the assets have no alternative use to the group. If a construction contract is terminated by the customer, the group has an enforceable right to payment for the work completed to date. The contracts usually establish a milestone payment schedule.

The group has assessed that performance obligations are satisfied over time and revenue from construction performance obligations is recognised according to progress. The progress is measured using an input method that best depicts the group's performance. The input method used to measure progress is determined by reference to the costs incurred to date relative to the total estimated contract costs. Project costs include costs directly related to the specific contract and indirect costs attributable to the contract.

Variable considerations, such as incentive payments, are included in construction revenue when it is highly probable that a significant revenue reversal will not occur. Disputed amounts are only recognised when negotiations have reached an advanced stage, customer acceptance is highly likely, and the amounts can be measured reliably. Contract modifications, usually in form of variation orders, are only accounted for when they are approved by the customers. Contract costs are mainly expensed as incurred. Expected liquidated damages (LD) are recognised as a reduction of the transaction price unless it is highly probable that LDs will not be incurred. The transaction price of performance obligations is adjusted for significant financing components to reflect the time value of money. Financing components may exist when the expected time period between the transfer of the promised goods and services and the payment is more than twelve months.

When the final outcome of a performance obligation cannot be reliably estimated, contract revenue is recognised only to the extent of costs incurred that are expected to be recoverable. The full loss is recognised immediately when identified on loss-making contracts.

Services revenue

Service revenue is recognised over time as the services are provided. The revenue is recognised according to progress or using the invoiced amounts for the period when these directly correspond with the value of the services that are transferred to the customers in the period. Progress is normally measured using an input method, by reference of costs incurred to date relative to the total estimated costs.

Sale of standard products

This revenue type involves sale of products or equipment that are of a standard nature, not made according to the customer's specifications. Customers usually obtain control of these products when the goods are delivered to the customers in accordance with the contract terms. The group has assessed that the performance obligations for such products are satisfied at a point in time.

Revenue from these performance obligations is recognised when the customers obtain control of the goods, which is essentially similar to the timing when the goods are delivered to the customers.

3.1.2. Impact of transition to IFRS 15

The following table summarises the impact of transition to IFRS 15 on the group's financial statements as of 1 January 2018:

1 January 2018
(140)
(48)
94
(93)

Changes in progress measurement from IAS 11 to a cost progress method were identified for some construction contracts due to the implementation of IFRS 15. The net impact resulted in a decrease of equity of NOK 140 million before tax as at 1 January 2018. Tender costs previously capitalized when award was probable are fully expensed under IFRS 15. The effect of removing capitalized tender cost in the balance sheet upon transition as at 1 January 2018 was a reduction of equity of NOK 48 million before tax.

Revenue and cost accruals are presented separately as contract assets or liabilities under IFRS 15. Under previous revenue recognition guidance, the amount was netted as cost accruals and presented as work in progress (WIP). Warranty provisions related to on-going projects and onerous customer contracts provision are now presented within the balance sheet line Provisions. See Note 28.

The following tables summarise the impact of adopting IFRS 15 in the group's financial statements for 2018:

Amounts in NOK million	As reported	Adjust ments	Amounts without adoption of IFRS 15
Operating revenue	42 163	(273)	41 890
Operating expenses	(37 766)	380	(37 386)
Operating profit before depreciation and amortisation	4 397	106	4 503
Operating profit	2 087	106	2 193
Profit before tax	1 420	106	1 526
Income tax expense	(490)	(32)	(522)
Net profit/loss from continuing
operations	930	74	1 004
Result for the year	1 368	74	1 442
Total comprehensive income
for the year	2 433	62	2 495

Amounts in NOK million	As reported	Adjust ments	Amounts without adoption of IFRS 15
Deferred tax assets	1 059	(8)	1 051
Current assets	25 688	(3 083)	22 605
Total assets	92 758	(3 091)	89 667
Total equity	41 918	156	42 074
Current liabilities	23 306	(3 248)	20 058
Total equity and liabilities	92 758	(3 091)	89 667

3.2 IFRS 9 FINANCIAL INSTRUMENTS

IFRS 9 Financial Instruments was adopted on 1 January 2018 and replaced IAS 39 Financial Instruments Recognition and Measurement. The new standard has been implemented retrospectively with the cumulative effect recognised in equity at the date of initial application. In accordance with the transitional provisions in IFRS 9, comparative figures have not been restated. The accounting principles that is the basis for the comparative 2017 figures are described in the 2017 annual report available on www.akerasa.com.

3.2.1 Accounting policy under IFRS 9

Classification of financial assets

The group classifies its financial assets in the following measurement categories:

• § Those to be measured subsequently at fair value (either through OCI or through profit or loss), and
• § Those to be measured at amortised cost.

The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI). Financial assets are not reclassified subsequent to their initial recognition unless the group changes its business model for managing financial assets.

Recognition and derecognition of financial assets

Regular way purchases and sales of financial assets are recognised on tradedate, the date on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.

Measurement of financial assets

At initial recognition, the group measures a financial asset (unless it is a trade receivable without a significant financing component) at its fair value plus, in the case of a financial asset not at FVPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss. Trade receivables without a significant financing component are initially measured at the transaction price.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Debt instruments

Subsequent measurement of debt instruments depends on the group's business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments:

§ Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of

principal and interest are measured at amortised cost using the effective interest rate method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, impairments, and any gain or loss arising on derecognition are recognised in profit and loss.

• § FVOCI: Assets that are held both for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss.
• § FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. Net gains and losses, including any interest, are recognised in profit or loss. However, see section below regarding derivatives designated as hedging instruments.

Equity instruments

The group subsequently measures all equity investments at fair value. Where the group has irrevocably elected (an election that is made on an investment -by-investment basis) to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss when the group's right to receive payments is established.

Impairment of financial assets

The group assesses on a forward-looking basis the expected credit loss associated with its debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

There are mainly financial receivables (including trade receivables), contract assets and financial lease receivables that are subject to the expected credit loss model (ECL) in IFRS 9. For trade receivables, the group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Financial liabilities – initial recognition, classification, subsequent measurement, gains and losses and derecognition.

A financial liability is initially measured at fair value and, for a financial liability not at FVPL, net of transaction costs that are directly attributable to its issue. Financial liabilities are classified as measured at amortised cost or FVPL. A financial liability is classified at FVPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss. See section below regarding derivatives designated as hedging instruments.

The group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. The group also derecognises a financial liability when its terms are modified, and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset, and the net amount presented in the balance sheet when, and only when, the group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Derivative financial instruments and hedge accounting

The group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Derivatives are initially recognised at fair value, and attributable transaction costs are recognised in profit or loss as incurred.

Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and the following criteria are met: i) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host, ii) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and iii) the hybrid contract is not measured at fair value with changes in fair value recognised in profit or loss.

Derivatives not being part of hedge accounting are measured at fair value and all changes in value are recognised in profit and loss. The group may designate certain derivatives as hedging instruments to hedge the fair value of recognised assets or liabilities (fair value hedges), the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates and interest rates (cash flow hedges), and certain derivatives and non-derivative financial liabilities as hedges of foreign exchange risk on a net investment in a foreign operation (net investment hedges). At inception of designated hedging relationships, the group documents the risk management objective and strategy for undertaking the hedge. The group also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.

Cash flow hedges

When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a particular risk associated with a recognised asset or liability, or a highly probable forecast transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and presented in the hedging reserve within equity. The amount recognised in other comprehensive income is removed and included in profit or loss in the same period as the hedged cash flows affect profit or loss under the same line item in the income statement as the hedged item. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in other comprehensive income and presented in the hedging reserve in equity remains there until the forecast transaction affects profit or loss. If the forecast transaction is no longer expected to occur, then the balance in other comprehensive income is recognised immediately in profit or loss. In other cases, the amount recognised in other comprehensive income is transferred to profit or loss in the same period that the hedged item affects profit or loss.

Fair value hedges

Changes in the fair value of derivatives designated as fair value hedges are recognised in profit or loss. The hedged object is valued at fair value with respect to the risk that is hedged. Gains or losses attributable to the hedged risk are recognised in profit or loss and the hedged object's carried amount is adjusted.

Net investment hedges

Foreign currency differences arising from the translation of a financial liability designated as a hedge of a net investment in a foreign operation are recognised in other comprehensive income to the extent that the hedge is effective and are presented within equity in the translation reserve. To the extent that the hedge is ineffective, such differences are recognised in profit or loss. When the hedged part of a net investment is disposed of, the relevant amount in the translation reserve is transferred to profit or loss as part of the profit or loss on disposal.

3.2.2 Impact of transition to IFRS 9

The following table summarises the impact of transition to IFRS 9 on the group's financial statements as of 1 January 2018:

Amounts in NOK million	1 January 2018
Reclassification of hedge reserve	174
Other effects	4
Tax effects	(40)
Total impact on equity:	138

The group has elected to adopt the new general hedge accounting model in IFRS 9. The new hedge accounting rules will align the accounting for hedging instruments more closely with the group's risk management practices. The group has concluded that all hedge relationships designated under IAS 39 as of 31 December 2017 met the criteria for hedge accounting under IFRS 9 as of 1 January 2018 and therefore regarded as continuing hedging relationships.

The group uses forward foreign exchange contracts to hedge the variability in cash flows arising from changes in foreign exchange rates relating to foreign currency borrowings, receivables, sales and inventory purchases. For all cash flow hedges under IAS 39, the amounts accumulated in the cash flow hedge reserve are reclassified to profit or loss as a reclassification adjustment in the same period as the hedged transaction occurs and affects profit or loss. Under IFRS 9, for cash flow hedges associated with forecast transactions that subsequently result in recognition of a nonfinancial asset or a non-financial liability, the amounts accumulated in the cash flow hedge reserve and the cost of hedging reserve are instead included directly in the initial cost of the non-financial asset or non-financial liability when recognised. This change has resulted in an increase of NOK 174 million excluding tax of the carrying amount of the hedge reserve.

No significant changes in loss allowances have been necessary in order to satisfy the impairment requirement under IFRS 9. There is no significant impact on the consolidated financial statements from adopting the new impairment model.

IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities. However, it eliminates the previous IAS 39 categories for held to maturity investments, loans and receivables and available for sale financial assets. Under IFRS 9, a financial asset is classified on initial recognition as measured at amortised cost, fair value to other comprehensive income (FVOCI) debt investments, FVOCI equity investment or fair value through profit or loss (FVPL).

On the date of initial application of IFRS 9, Aker's financial instrument assets were classified into measurement categories as follows. The table shows the assets by category according to previous requirements and according to IFRS 9.

Financial assets at 1 January 2018

	Measurement category	Carrying amount
Amounts in NOK million	Previous standard (IAS 39)	New standard (IFRS 9)	Previous standard (IAS 39)	New standard (IFRS 9)
Other investments	Available for sale	Equity instrument at FVOCI	412	416
	Available for sale	Debt investment at FVOCI	392	392
	Available for sale	Fair value through profit or loss	617	617
Financial interest-bearing non	Available for sale	Equity investment at FVOCI	402	402
current assets	Amortised cost	Amortised cost	4 961	4 961
Other non-current assets including long-term derivatives	Held for trading	Fair value through profit or loss	50	50
	Fair value through profit or loss	Fair value through profit or loss	99	99
	Amortised cost	Amortised cost	104	104
Trade receivables, other interest	Available for sale	Fair value through profit or loss	19	19
free short-term receivables	Amortised cost	Amortised cost	6 078	6 075
Current derivatives	Held for trading	Fair value - hedging instrument	161	103
	Fair value - hedging instrument	Fair value - hedging instrument	198	430
Interest-bearing short-term	Fair value through profit or loss	Fair value through profit or loss	69	69
receivables	Available for sale	Amortised cost	10	10
	Amortised cost	Amortised cost	245	245
Cash and cash equivalents	Amortised cost	Amortised cost	8 148	8 148
Total financial assets			21 963	22 140

There are no changes related to the classification of Aker's financial liabilities following the implementation of IFRS 9.

Note 4 | New standards and interpretations not yet adopted

A number of new standards are effective for annual periods beginning after 1 January 2018 and earlier application is permitted. The group has however not early adopted the new or amended standards in preparing these consolidated financial statements.

Of those standards that are not yet effective, IFRS 16 Leases is expected to have material impact on the group's financial statements in the period of initial application.

IFRS 16 LEASES

The group is required to adopt IFRS 16 Leases from 1 January 2019. The standard replaces IAS 17 Leases and related interpretations. The group has assessed the estimated impact that initial application of IFRS 16 will have on its consolidated financial statements, as described below. The actual impacts of adopting the standard on 1 January 2019 may differ from the estimate.

IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees, with optional exemptions for short-term leases and leases of low value items. A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. Lessor accounting remains similar to current standard – i.e. lessors continue to classify leases as finance or operating leases.

Leases in which the group is a lessee

The group will recognise new assets and liabilities for its operating leases of warehouses, rental of offices and factory facilities and machines and vehicles. The nature of expenses related to those leases will now change because the group will recognise a depreciation charge for right-of-use assets and interest expenses on lease liabilities.

Previously, the group recognised operating lease expense on a straightline basis over the term of the lease, and recognised assets and liabilities only to the extent that there was a timing difference between actual lease payments and the expense recognised.

In addition, the group will no longer recognise provisions for operating leases that it assesses to be onerous. Instead, the group will include the payments due under the lease in its lease liability. No significant impact is expected for the group's finance leases.

Based on the information current available, the group estimates that it will recognise additional lease liabilities of approximately NOK 6.5 billion as of 1 January 2019.

Leases in which the group is a lessor

The group has reassessed the classification of sub-leases in which the group is a lessor. Based on the information currently available, the group expects that it will reclassify some of its sub-leases as a finance lease, resulting in recognition of a finance lease receivable of approximately NOK 0.7 billion as of 1 January 2019.

No significant impact is expected for other leases in which the group is a lessor.

Transition

The group plans to apply IFRS 16 initially from 1 January 2019, using the modified retrospective approach. Therefore, the cumulative effect of adopting IFRS 16 will be recognised as an adjustment to the opening balance of equity at 1 January 2019, with no restatement of comparative information. Based on the information current available, the group estimates that the impact of transition to IFRS 16 on the group's equity as of 1 January 2019 is a reduction of approximately NOK 0.4 billion.

The group plans to apply the following practical expedients on transition to IFRS 16:

• § Non-lease components for housing contracts, machines and vehicles will not be separated.
• § Rely on assessment of whether leases are onerous applying IAS 37 on 31 December 2018 as an alternative to performing an impairment review of right-of-use assets for all leases on 1 January 2019. The group expects to reduce the right-of-use assets at 1 January 2019 by approximately NOK 0.2 billion of the onerous lease provision recognised as of 31 December 2018.
• § Apply the short-term lease practical expedient to leases ending within 2019 and assets of low value on a lease-by-lease basis.
• § Exclude initial direct costs from measurement of right-of-use assets at the date of initial application.

Based on the information current available, the group estimates that it will recognise right-of-use assets of approximately NOK 5.0 billion as of 1 January 2019 after reclassification of finance lease and onerous lease provisions as mentioned above.

Other standards

The following amended standards and interpretations are not expected to have a significant impact on the group's consolidated financial statements:

• § IFRIC 23 Uncertainty over Tax Treatments
• § Prepayment Features with Negative Compensation (Amendments to IFRS 9)
• § Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)
• § Plan Amendment, Curtailment or Settlement (Amendments to IAS 19)
• § Annual Improvements to IFRS Standards 2015-2017 Cycle various standards
• § Amendments to References to Conceptual Framework in IFRS Standards
• § IFRS 17 Insurance Contracts

Note 5 | Accounting principles

The accounting principles presented below have been applied consistently for all periods and companies that are presented in the consolidated financial statements. Comparative figures have been restated in accordance with this year's presentation, see however information provided in Note 3 regarding IFRS 15 Revenue from Contracts with customers and IFRS 9 Financial Instruments.

5.1. GROUP ACCOUNTING AND CONSOLIDATION PRINCIPLES 5.1.1. Subsidiaries

Subsidiaries are companies controlled by Aker. Control requires three elements:

• a. a) ownership interests that give the investor power to direct the relevant activities of the investee,
• b. b) that the investor is exposed to variable returns from the investee, and that
• c. c) decision-making power allows the investor to affect its variable returns from the investee.

Subsidiaries are included in the consolidated accounts from the day control is achieved and until control ceases.

Acquisitions of companies that meet the definition of a business combination are recognised using the acquisition method. See further description in section 5.8 Intangible assets. Acquisitions of companies, which are not defined as business combinations, are recorded as asset acquisitions. The cost of such purchases is allocated between the individual identifiable assets and liabilities acquired based on their fair values on the acquisition date. Goodwill is not recognised in connection with such acquisitions, nor is deferred tax recognised in connection with differences arising in the recognition of such assets.

Minority interests have been disclosed separately from the parent company owners' equity and liabilities in the balance sheet, and are recorded as a separate item in the consolidated profit and loss account.

5.1.2. Investments in associates

An associate is defined as a company over which the group has significant influence, but which is not a subsidiary nor a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee, without having control or joint control of those policies. The group's investments in associates are accounted for using the equity method and are initially recognised at cost. Received dividends are recognised as a reduction of the book value of the investment, and are presented as part of net cash flow from operating activities in the cash flow statement.

Investments include goodwill upon acquisition less any accumulated impairment losses. The consolidated financial statements reflect the group's share of the associate's profits or losses and equity changes, after restatement to comply with the group's accounting principles, from the time significant influence is established until such influence ceases. If the group's share of accumulated losses exceeds its interest in the entity, the group does not recognise further losses unless it has incurred or guaranteed obligations with respect to the associate. If control is achieved in stages, goodwill is measured on the date control is obtained, and any changes in the value of previously held equity interests are recognised as profits or losses.

5.1.3. Interests in joint arrangements

A joint arrangement is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. A joint arrangement is either a joint venture or a joint operation. The classification of a joint arrangement as a joint venture or a joint operation depends upon the rights and obligations of the parties to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.

Joint ventures are accounted for using the equity method and are initially recognised at cost. Received dividends are recognised as a reduction of the book value of the investment, and are presented as part of net cash flow from operating activities in the cash flow statement.

The subsidiary Aker Energy has a 50 per cent ownership interest in a license offshore Ghana, which is classified as joint operations under IFRS 11. The group recognises the investment by reporting its share of related revenues, expenses, assets, liabilities and cash flows under the respective items in the financial statements.

5.1.4. Elimination of transactions upon consolidation

Intragroup balances and transactions, and any unrealised gains and losses or revenues and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the group's interest in the investee.

5.1.5. Foreign currency translations and transactions

Items are initially recorded in the financial statements of each subsidiary in the subsidiary's functional currency, i.e. the currency that best reflects the economic substance of the underlying events and circumstances relevant to that subsidiary. Foreign currency transactions are translated into the functional currency of the respective subsidiary using the exchange rates prevailing on the date of each transaction. Receivables and liabilities in foreign currencies are translated into the functional currency using the exchange rates on the balance sheet date. Foreign currency exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.

The consolidated financial statements are presented in Norwegian kroner. Financial statements of subsidiaries whose functional currencies are different from the presentation currency (NOK) are translated into NOK in the following way:

• § Balance sheet items are translated using the exchange rates on the balance sheet date
• § Profit or loss items are translated using the average exchange rates for the period (if the average exchange rates for the period do not provide a fair estimate of the transaction rate, the actual transaction rate is used).

Translation differences arising from the translation of net investments in foreign operations and from related hedging objects are specified as translation differences in other comprehensive income, and are specified under shareholders' equity. When a foreign entity is sold, translation differences are recognised in the profit and loss account as part of the gain or loss on the sale. Foreign exchange gains or losses on receivables from and liabilities payable to a foreign entity are recognised in the profit and loss, except when settlement is neither planned nor likely to occur in the foreseeable future. Such foreign exchange gains and losses are considered to form part of the net investment in the foreign activity and are recognised in other comprehensive income as translation differences.

5.2. DISCONTINUED OPERATIONS

A discontinued operation is a component of the group's business operations that represents a separate, major line of business or a geographical area of operations that has been disposed of or is held for sale. Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held for sale.

Profits or losses from discontinued operations (after tax), are reclassified and presented as a separate line item in the financial statements. The comparatives are restated accordingly.

5.3. REVENUE FROM CONTRACTS WITH CUSTOMERS AND OTHER INCOME

5.3.1. Revenue from contracts with customers

The group has initially applied IFRS 15 Revenue from Contracts with customers from 1 January 2018. Information about the effect of initially applying IFRS 15 and the group's accounting policies relating to contracts with customers are provided in Note 3.

5.3.2. Revenue from charter agreements

Revenues related to vessel bareboat charter agreements are recognised over the charter period. Time-charter agreements may include a revenuesharing agreement with the charterer. Revenue related to profit sharing agreements is recognised when the amount can be reliably estimated.

5.3.3. Other income

Gains and losses resulting from acquisition and disposal of businesses which do not represent discontinued operations are included in Other income within operating profit. In case of acquisitions in stages, such gains may come from the remeasurement of previously held interests in the acquired entity. Changes in the fair value of the contingent consideration from acquisition of a subsidiary or non-controlling interest are recognised in Other income as gains or losses.

5.4. PENSION BENEFITS AND SHARE-BASED PAYMENTS 5.4.1. Pension benefits

For defined benefit plans, the liability recognised is the defined benefit obligation as at the balance sheet date, minus the fair value of plan assets. The defined benefit obligation is calculated by independent actuaries and is measured as the present value of estimated future cash outflows. The pension cost is allocated to profit and loss over the employees' estimated time of service. Actuarial gains and losses arising from experience adjustments, changes in actuarial assumptions, and amendments to pension plans are recognised in other comprehensive income ("OCI"). The net interest expense for the period is calculated by applying the discount rate to the net defined benefit liability, thus

comprises both interest on the liability and the return on the pension plan assets. The difference between the actual return on the pension plan assets and the recognised return is recognised against the OCI on an ongoing basis.

For defined contribution plans, contributions are paid into pension insurance plans. Contributions to defined contribution plans are charged to the profit and loss account in the period to which the contributions relate.

5.4.2. Share-based payments

Share-based payment expense is measured at fair value over the service period. All changes in fair value are recognised in the income statement.

5.5. EXPENSES

5.5.1. Lease agreements (as lessee)

Leases under which a significant proportion of the risks and rewards of ownership is retained by the lessor are classified as operating leases.

Lease payments under operating leases are recognised in the profit and loss account on a straight-line basis over the lease period. Any lease incentives received are recognised as an integral part of the total lease expense over the term of the lease.

Leases under which the group has substantially all the risks and rewards of ownership, are classified as financial leases and are capitalised at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Following initial capitalisation, the same accounting principle that applies to the corresponding asset is used. Lease payments are apportioned between financial expenses and the reduction in the lease liability. Finance expenses are recognised as finance costs in profit or loss.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease, when the contingencies of the variable lease have been met and the adjustment amount is known.

5.5.2. Finance expenses

Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets, and losses on hedging instruments that are recognised in profit or loss. Borrowing costs not directly attributable to the acquisition or production of a qualifying asset are recognised in profit or loss using the effective-interest method. Foreign currency gains and losses are reported on a net basis.

5.5.3. Income tax

Income tax comprises current and deferred tax. An income tax expense is recognised in the profit and loss account unless it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted as at the balance sheet date, and any adjustments to tax payable in respect of previous years.

Deferred tax is calculated based on the temporary differences between the carrying amounts of assets and liabilities and the amounts used for

taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse. Deferred tax is not recognised for the following temporary differences:

• § initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit.
• § differences relating to investments in joint ventures, if it is probable that they will not reverse in the foreseeable future.
• § tax-increasing temporary differences upon initial recognition of goodwill.

Deferred tax assets and liabilities are offset if:

• § there is a legally enforceable right to offset current tax liabilities and assets
• § they relate to income taxes levied by the same tax authority on the same taxable entity, or on different taxable entities that intend to settle current tax liabilities and assets on a net basis, or to realise their tax assets and liabilities simultaneously.

A deferred tax asset will be recognised if it is probable that future taxable profits will be available against which the temporary difference can be utilised.

5.6. INVENTORY

Inventory is stated at the lower of cost or net realisable value. Cost is determined by the first-in first-out (FIFO) method, or the weighted average cost formula depending on the nature of the inventory. The cost of finished goods and work in progress comprises raw materials, direct labour and other direct costs, and related production overhead (based on normal operating capacity). Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses.

5.7. PROPERTY, PLANT, AND EQUIPMENT 5.7.1. Recognition and measurement

An item of property, plant and equipment is recognised as an asset if it is probable that the future economic benefits associated with the assets will flow to the group, and its cost can be reliably measured. Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses.

Cost includes expenditures directly attributable to the asset's acquisition and if material the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use. Borrowing costs associated with loans to finance the construction of property, plant and equipment are capitalised over the period necessary to complete an asset and make it ready for its intended use. Other borrowing costs are expensed. When significant parts of an item of property, plant, and equipment have different useful lives, major components are accounted for as separate items of property, plant, and equipment.

A gain or loss on the disposal of an item of property, plant and equipment is determined by comparing the disposal proceeds with the carrying amount of that item; any loss is included in impairment charges.

5.7.2. Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that future economic benefits associated with the asset will flow to the group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of day-to-day maintenance of property, plant and equipment are recognised in profit and loss as incurred.

5.7.3. Depreciation

Depreciation is recognised in profit and loss on a straight-line basis over the estimated useful life of each major component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term or the asset's useful life, unless it is highly probable that the group will acquire ownership at the end of the lease term. Land is not depreciated. Depreciation methods, useful lives, and residual values are reviewed at each balance sheet date.

5.8. INTANGIBLE ASSETS

5.8.1. Goodwill

All business combinations in the group are recognised using the acquisition method. Goodwill represents values arising from the acquisitions of subsidiaries, associates, and joint ventures. Goodwill is allocated to cash-generating units and is tested annually for impairment. For associates and joint ventures, the carrying amount of goodwill is included in the carrying amount of the investment in the associates. Negative goodwill arising on an acquisition is recognised directly in the profit and loss account. Minority interests are measured at the net value of identifiable assets and liabilities in the acquired company or at fair-value including a goodwill element. The method of measurement is decided individually for each acquisition.

Goodwill is measured as a residual at the acquisition date and constitutes the sum of total consideration transferred in connection with the business combination, the carrying amount of the minority interests and the fair value of the previous ownership interest in the acquired company at the time of acquisition, less the net recognised amount (normally fair value) of the identifiable assets acquired and liabilities assumed.

Acquisitions of minority interests are accounted for as transactions with equity holders in their capacity as equity holders, and therefore no goodwill is recognised as a result of such transactions. In subsequent measurements, goodwill is valued at acquisition cost, less accumulated impairment losses.

5.8.2. Research and development

Expenditures on research activities undertaken to gain new scientific or technical knowledge and understanding are recognised in profit and loss in the period incurred.

Development expenditure that applies research findings to a plan or design for the production of a new or substantially improved product or process is capitalised if the product or process is technically and commercially feasible and the group has sufficient resources to complete development. The capitalised amount includes the cost of materials, direct labour expenses and an appropriate proportion of overhead expenses. Other development expenditure is recognised in the profit and loss account as an expense in the period in which it occurs. Capitalised development expenditures are recognised at cost less accumulated amortisation and impairment losses.

5.8.3. Other intangible assets

Expenditures on internally generated goodwill and brand names are recognised in profit and loss in the period in which they are incurred. Other acquired intangible assets (patents, trademarks and other rights), are recognised in the balance sheet at cost less accumulated amortisation and impairment losses. Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets are amortised from the date they are available for use.

5.9. IMPAIRMENT OF NON-FINANCIAL ASSETS

The carrying amounts of the group's non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is also estimated annually at the balance sheet date irrespective of any impairment indicators. The recoverable amount of an asset or cashgenerating unit is the greater of its value in use and its fair value less costs to sell.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit", or "CGU"). Goodwill acquired in a business combination is allocated to the groups of CGUs that are expected to benefit from the synergies of the combination.

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (or group of units), on a pro rata basis.

An impairment loss in respect of goodwill and intangible assets that have indefinite useful lives is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed as at each reporting date as to any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation and amortisation, if no impairment loss had been recognised.

5.10. ASSETS HELD FOR SALE OR DISTRIBUTION

Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale or distribution rather than through continuing use, are classified as held for sale or distribution. This condition is regarded as met only when the sale is highly probable, and the asset or disposal group is available for immediate sale or distribution in its present condition.

Non-current assets and disposal groups classified as held for sale or distribution are measured at the lower of their carrying amount and fair value less costs to sell. Property, plant and equipment and intangible assets once classified as held for sale or distribution are not depreciated or amortised, but are considered in the overall impairment testing of the disposal group.

Non-current asset classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from other assets in the statement of financial position. Liabilities of a disposal group classified as held for sale shall be presented separately from other liabilities in the statement of financial position. The balance sheet for prior periods is not reclassified to reflect the classification in the balance sheet for the latest period presented.

5.11. FINANCIAL ASSETS AND LIABILITIES

The group has initially applied IFRS 9 Financial instruments from 1 January 2018. Information about the effect of initially applying IFRS 9 and the group's accounting policies relating to financial assets and liabilities are provided in Note 3.

5.12. SHARE CAPITAL, TREASURY SHARES AND EQUITY RESERVES

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects. When share capital is repurchased, the amount of the consideration paid including directly attributable costs and net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or reissued, the amount received is recognised as an increase in equity, and the surplus or deficit resulting from the transaction is transferred to/from retained earnings.

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as from the translation of liabilities that hedge the group's net investment in a foreign operation.

The fair value reserve comprises the cumulative net change in the fair value of financial assets at FVOCI.

The hedging reserve applies to cash flow hedges entered into in order to hedge against changes in income and expenses that may arise from exchange rate fluctuations. The profit or loss effect of such transactions is included in the profit and loss account upon recognition of the hedged cash flow. The hedging reserve represents the value of such hedging instruments that is not yet recognised in the income statement.

5.13. PROVISIONS

A provision is recognised when the group has a present legal or constructive obligation as a result of a past event, it is probable that payments or other outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are determined as the present value of expected future cash flows, discounted by a market based pre-tax discount rate.

Warranty provisions are made for expected future expenses related to delivered products and services. The provisions are based on historic data and a weighting of all possible outcomes against their associated probabilities.

A provision for restructuring is recognised when an approved, detailed and formal restructuring plan exists, and the restructuring either has begun or has been announced to the affected parties.

Provisions for contract losses are recognised when the expected revenues from a contract are lower than the cost of meeting the contractual obligations. Before provisions are made, all impairment losses on assets associated with the contract are recognised.

5.14. EARNINGS PER SHARE

The calculation of ordinary earnings per share is based on the profit attributable to ordinary shares using the weighted average number of shares outstanding during the reporting period, after deduction of the average number of treasury shares held over the period. The calculation of diluted earnings per share is consistent with the calculation of ordinary earnings per share, and gives effect to all ordinary shares with dilutive potential that were outstanding during the period.

5.15. SEGMENT REPORTING

Aker defines operating segments based on the group's internal management and reporting structure. The group's chief operating decision maker, responsible for the allocation of resources and assessment of the performance in the different operating segments, is defined as the board of directors, the group president and CEO and the CFO. Aker's investment portfolio comprises two segments: Industrial holdings and Financial investments. The recognition and measurement applied in segment reporting is consistent with the accounting principles applied when preparing the financial statements. Transactions between segments are conducted on market terms and conditions. Comparative segment information is usually re-presented for changes in reporting segments. See Note 9 Operating segments and significant subsidiaries.

Note 6 | Financial risk and exposure

FINANCIAL RISK

The Aker Group consists of various operations and companies that are exposed to different types of financial risks, including credit-, liquidityand market risk (e.g. oil price-, interest- and currency risk). The purpose of risk management is to measure and manage financial risk in a reliable manner, thereby increasing predictability and reducing negative effects on Aker's financial results. The Group uses different financial instruments to manage its financial exposure actively.

CAPITAL MANAGEMENT

The overall objectives of Aker's capital management policy are to maintain a strong capital base to retain investor, creditor and market confidence, to ensure financial flexibility for the seizure of opportunities as they arise, and to maintain a capital structure that minimises the company's cost of capital. For its surplus liquidity, Aker pursues a conservative placement strategy with minimal risk. The placements need to be flexible in terms of liquidity.

The target rate of return for the Industrial holdings is 12 per cent. The target return for the Financial investments portfolio depends on the composition of the portfolio, including the size of cash deposits and the risk profile of the receivables. In addition, Aker has defined financial target indicators (FTIs) that regulate the relationship between cash and interest-bearing debt, as well as the capital structure. The ratios work as guidelines for investment activities and capital allocation.

The governing principle of Aker's dividend policy is that the company at all times should have a solid balance sheet and liquidity reserves sufficient to deal with future liabilities. The policy of the company is to pay annual dividends corresponding to 2-4 per cent of net asset value (value-adjusted). The market prices of listed companies are used in calculating net asset value, while book values are used for other assets.

CREDIT RISK

The Group's financial assets are bank deposits, trade and other receivables, derivatives, and investments in shares. The Group's exposure to credit risk is mainly related to external receivables. For large projects and long-term lease contracts, assessment of credit risk related to customers and subcontractors are performed in the tender phase and throughout the contract period. Large and long-term projects are closely monitored in accordance with agreed milestones.

Trade receivables presented in the balance sheet are net of provisions for bad debts, which are estimated based on prior experience as well as specific assessments for some of the receivables.

Transactions involving derivative financial instruments are with counterparties with sound credit ratings and with whom the Group has signed a netting agreement.

The company within the group with the largest exposure to credit risk, is Ocean Yield. Ocean Yield faces credit risk through counterparties that may not be able to meet its obligations under a long-term charter contract. In order to mitigate this, the company charters out the vessels to internationally well-recognised companies within the shipping and offshore industry. However, as shipping and oil service markets are volatile, there is no complete protection against potential counterparty default. In December 2018, Solstad Offshore entered into a 6-month standstill period with respect to payment of interest, instalments and charter hire with the secured lenders and other creditors. Following the standstill agreement there is a risk related to Solstad Offshore's obligations under the charter contract with Ocean Yield for the two AHTS vessels Far Senator and Far Statesman. This resulted in an impairment of the two vessels at the end of 2018, see Note 12.

The exposure to credit risk is represented by the carrying amount of each financial asset, including derivative financial instruments, in the balance sheet. The exposure to credit risk at the balance sheet date was:

		2018 Carrying amount - exposure to credit risk (IFRS 9 categories)
		Fair value through profit	Fair value through other comprehensive	Receivables at amortised	Derivatives qualified for hedge
Amounts in NOK million	Note	and loss	income (FVOCI)	cost	accounting at FVOCI	Total
Financial interest-bearing non-current assets	18	-	-	11 304	-	11 304
Other non-current assets including long-term derivatives	19	61	512	71	-	644
Trade receivables, other interest-free short-term receivables	21	12	-	5 875	-	5 888
Current derivatives	30	64	-	-	342	406
Interest-bearing short-term receivables	18	25	-	426	-	451
Cash and cash equivalents	9	-	-	9 786	-	9 786
Total		163	512	27 462	342	28 479

Interest-bearing receivables were impaired with NOK 29 million in 2018. In addition, a shareholder loan of NOK 35 million from Akastor to the joint venture DOF Deepwater AS is recognised against the share of losses from the joint venture (See Note 32).

			2017 Carrying amount - exposure to credit risk (IAS 39 categories)
		Classified as held for	Designated at fair value through	Available for sale financial	Receivables at amortised	Derivatives qualified for hedge accounting at
Amounts in NOK million	Note	trading	profit and loss	assets	cost	FVOCI	Total
Financial interest-bearing non-current assets	18	-	-	402	4 961	-	5 363
Other non-current assets including long-term derivatives	19	50	99	-	104	-	252
Trade receivables, other interest-free short-term receivables	21	-	-	19	6 078	-	6 097
Current derivatives	30	161	-	-	-	198	359
Interest-bearing short-term receivables	18	-	69	10	245	-	324
Cash and cash equivalents	9	-	-	-	8 148	-	8 148
Total		210	168	431	19 535	198	20 543

Aging trade receivables and contract assets:

	Gross trade receivables and	Gross trade
Amounts in NOK million	contract assets 2018	receivables 2017
Not past due	8 459	3 297
Past due 0-30 days	673	642
Past due 31-120 days	332	211
Past due 121-365 days	261	392
Past due more than one year	648	698
Total	10 372	5 240

Movements in allocation to loss on trade receivable and contract assets:

Amounts in NOK million
Balance at 31 December 2017	(324)
Adjustment on initial application of IFRS 9	(3)
Balance at 1 January 2018	(327)
Impairment loss (write-off) included in operating profit	(155)
Reversal of impairments included in operating profit	10
Impairment included in net financial items	(24)
Provisions utilised during the year	197
Other changes	43
Effects of changes in foreign exchange rates	(12)
Allocation to loss on trade receivable and contract assets at 31 December 2018	(268)

LIQUIDITY RISK

Liquidity risk is the risk that the Group will be unable to fulfil its financial obligations as they fall due. The Group's approach to managing liquidity risk is to ensure that it always has sufficient liquidity to pay its liabilities as they fall due.

Overview of contractual maturities of financial liabilities, including estimated interest payments specified by category of liabilities:

		2018 Contractual cash flows including estimated interest payments
	Carrying	Contractual	6 months	6-12	1-2	2-5	Over 5
Amounts in NOK million	amount	cash flow	or less	months	years	years	years
Secured loans	18 115	(21 968)	(1 760)	(1 661)	(5 099)	(10 274)	(3 174)
Unsecured bank loans	988	(1 155)	(68)	(77)	(195)	(815)	-
Unsecured bond issues	11 021	(12 412)	(288)	(2 694)	(2 940)	(6 490)	-
Other liabilities	171	(174)	(94)	-	(68)	-	(12)
Credit facilities	132	(132)	(132)	-	-	-	-
Total contractual cash flows for interest-bearing liabilities	30 427	(35 841)	(2 342)	(4 432)	(8 302)	(17 579)	(3 186)
Short-term derivative financial liabilities	585	(586)	(373)	(152)	(54)	(7)	-
Long term derivative financial liabilities	232	(338)	-	-	(189)	(149)	-
Total contractual cash flows for interest-bearing liabilities and derivatives	31 244	(36 765)	(2 715)	(4 584)	(8 545)	(17 735)	(3 186)
Trade and other payables	16 816
Long-term interest-free liabilities	2 746
Total liabilities	50 806

Overview of contractual maturities:

		2018 Contractual cash flows including estimated interest payments
	Carrying	Contractual	6 months	6-12	1-2	2-5	Over 5
Amounts in NOK million	amount	cash flow	or less	months	years	years	years
Industrial holdings	21 090	(25 853)	(1 611)	(2 809)	(3 775)	(14 472)	(3 186)
Financial investments	975	(1 005)	(264)	(93)	(647)	(1)	-
Aker ASA and holding companies	9 179	(9 907)	(840)	(1 682)	(4 123)	(3 262)	-
Total contractual cash flows for interest-bearing liabilities and derivatives	31 244	(36 765)	(2 715)	(4 584)	(8 545)	(17 735)	(3 186)

Long-term interest-free liabilities include NOK 515 million in deferred tax liabilities and NOK 381 million in deferred revenue and prepaid charter hire.

The Group's liquidity requirements are expected to be met through the balances of liquid assets and cash flow from operating activities. As at 31 December 2018, the group had cash and cash equivalents of NOK 9 786 million. In addition, the group has interest-bearing assets of NOK 11 755 million (see Note 18), and other investments of NOK 1 989 million (see Note 19).

OIL PRICE RISK

The equity accounted investment in Aker BP represents a substantial part of the group's assets. Since Aker BP's revenues are derived from the sale of petroleum products, the value of the investment and the group's share of profit or loss are therefore exposed to oil and gas price fluctuations. With the current unstable macro environment, Aker BP is continuously evaluating and assessing opportunities for hedging as part of a prudent financial risk management process. At year-end 2018, the company had entered into commodity hedges for 2019 consisting of put options with average strike price of 55 USD/bbl for approximately 12 per cent of estimated 2019 oil production. This corresponds to approximately 40 per cent of the after-tax value of estimated oil production.

Although Aker's subsidiary Aker Energy does not currently have any production of hydrocarbons, the company is exposed to the oil markets in several aspects. Market conditions will influence banks and investors' appetite to lend to, or invest in, Aker Energy. Furthermore, Aker Energy is exposed to the cost levels in the supplier industry that is a function of the capacity and activity levels in the sector.

CURRENCY RISK

Aker's operation in the international market results in various types of currency exposure for the group. Currency risks arise through ordinary, future business transactions, capitalised assets and liabilities, and when such transactions involve payment in a currency other than the functional currency of the respective company. In addition, currency risk arises from investments in foreign subsidiaries. The group's main exposures are against USD, GBP, EUR and BRL, but it is also exposed to several other currencies.

In Aker's consolidated accounts, the following exchange rates have been applied in translating the accounts of foreign subsidiaries and associated companies:

Country	Currency	Average rate 2018	Rate at 31 Dec. 2018	Average rate 2017	Rate at 31 Dec. 2017
USA	USD 1	8.13	8.69	8.27	8.21
Great Britain	GBP 1	10.85	11.12	10.65	11.09
The European Union	EUR 1	9.60	9.95	9.33	9.84
Brazil	BRL 1	2.25	2.24	2.59	2.48

The average rate and rate as at 31 December have been applied when translating the income statement and balance sheet items, respectively. If the average exchange rate for the period does not provide a fair estimate of the transaction rate, the actual transaction rate is used.

The table below illustrates the Group's sensitivity to foreign currency rate fluctuations. If the Norwegian krone had been 10% stronger against USD in 2018, the effects on the consolidated financial statements would have been as shown below. The sensitivity analysis does not take into account other effects of a stronger currency, such as competitiveness, change in the value of derivatives etc.

Amounts in NOK million	Operating revenue	Profit before tax	Equity
USD	8 976	2 364	22 805
Other currencies	10 785	402	9 771
NOK	22 402	(1 347)	9 342
Total	42 163	1 420	41 918
Change if NOK 10% stronger against USD	(1 976)	(277)	(3 258)
When NOK 10% stronger against USD	40 187	1 143	38 660

Aker ASA and the operational companies in the group have prepared guidelines on the management of currency risks, including hedging of expected future cash flows and value of assets and liabilities in foreign currencies. The group uses currency forward contracts and currency option contracts to reduce currency exposure. The net value of the group's currency contracts was NOK -392 million as at 31 December 2018.

INTEREST RATE RISK

The group's interest rate risk arises from long-term borrowings and receivables. Borrowings and receivables issued at variable rates expose the group to cash flow interest rate risk. Securities issued at fixed rates expose the group to fair value interest rate risk.

As at 31 December 2018, the interest rate profile of the group's interest-bearing financial instruments was as follows:

Amounts in NOK million	2018	2017
Fixed rate instruments:
Financial assets	1 708	471
Financial liabilities	(5 100)	(3 824)
Net fixed rate instruments	(3 392)	(3 353)
Variable rate instruments:
Financial assets	19 833	13 363
Financial liabilities	(25 327)	(24 301)
Net variable rate instruments	(5 494)	(10 937)
Net interest-bearing debt (-) / assets (+)	(8 886)	(14 290)

Fair value sensitivity analysis for fixed-rate instruments

The Group does not recognise any fixed rate financial assets and liabilities at fair value through profit or loss. At 31 December 2018, the fair value of interest rate swaps designated as hedges for parts of debt was NOK -9 million. A change in interest rates as at the reporting date would not affect profit or loss, but would appear as a change in the fair value of the cash flow hedge in the Group's comprehensive income. Other interest rate derivatives are not designated as hedges, and hence a change in the interest rate would affect profit or loss with respect to these instruments. In 2018, the Aker Group has an income of NOK 57 million related to interest rate derivatives.

Note 7 | Acquisition of subsidiaries and transactions with minority interests

ACQUISITION OF SUBSIDIARIES IN 2018 Aker Energy

Aker Energy AS ("Aker Energy") was founded in February 2018 and is owned 49 per cent by Aker ASA and 49 per cent by The Resource Group TRG AS. Based on an assessment under IFRS 10, Aker Energy is fully consolidated in the Aker Group. On 1 June 2018, Aker Energy Ghana AS, a subsidiary of Aker Energy, completed the acquisition of Hess Ghana, the operator of the Deepwater Tano Cape Three Points block ("DWT/CTP") with a 50 percent participating interest in the license. The acquisition is regarded as an acquisition of an asset. The transaction has a total cash consideration of USD 102 million, where USD 27 million was paid upon closing of the transaction and a further USD 75 million will be payable upon approval of the PoD for the DWT/CTP block.

The recognised amounts of assets and liabilities assumed at time of acquisition were as follows:

Amounts in NOK million

Intangible assets - value of licenses	880
Other current operating assets	2
Cash and cash equivalents	12
Total assets	894
Trade creditors	1
Other non-current liabilities	64
Total liabilities	65
Total identifiable net assets at fair value	829
Contingent consideration	(611)
Total consideration paid on acquisition	218
Less cash and cash equivalents acquired	(12)
Acquisition, net of cash acquired	205

Aker BioMarine

On 17 January 2018, Aker BioMarine Antarctic AS (AKBMA) entered into an Asset Purchase Agreement pursuant to which AKBMA acquired from Enzymotec Ltd assets and certain liabilities related to the global krill operations of Enzymotec. Total payable was equivalent to NOK 214 million. The purchase price reflects, among other things, payment of transferred inventory and consideration for customer relationships and trademark.

The recognised amounts of assets assumed at time of acquisition were as follows:

Amounts in NOK million

Total consideration paid on acquisition	214
Goodwill arising on acquisition	10
Inventory	37
Intangible assets	168

In addition, on 3 July 2018 Aker BioMarine Antarctic AS (AKBMA) entered into a Settlement and Termination Agreement with Orochem Technologies, Inc (Orochem), whereupon the existing Equipment and License Agreement were terminated and Orochem assigned to AKBMA its entire right, title, and interest in the patents, inventions for removal of arsenic from krill oil and ownership to purification technology. Total settlement was equivalent to NOK 23 million, hereof NOK 3 million related to royalty payable until the settlement date and NOK 20 million related to the intangible asset acquired.

The above valuations are based on current available information about fair values as of the acquisition date. If new information becomes available within 12 months from the acquisition date, the fair value assessment in the PPA may change, in accordance with guidance in IFRS 3.

TRANSACTIONS WITH MINORITY INTERESTS IN 2018

In 2018, acquisition and sale of minority interests and subsidiaries' purchase and sale of own shares lead to an increase in minority interests of NOK 37 million and a decrease in majority interests of NOK 17 million, recognised directly in equity and attributed to the equity holders in the parent company. See also Note 23.

ACQUISITION OF SUBSIDIARIES IN 2017 Aker Solutions

On April 7, 2017, Aker Solutions entered into an agreement to acquire Reinertsen's Norwegian oil and gas services business to strengthen the position as a leading maintenance and modifications supplier offshore Norway. About 700 employees and a backlog containing key maintenance and modifications contracts with Equinor, including a framework agreement of 10 years awarded in December 2015, was part of the deal. The transaction was structured as an asset deal with a purchase price of NOK 213 million. Transaction costs of NOK 3.4 million has been recognised as other operating expenses in the income statement. Goodwill resulting from the transaction is mainly attributable to the expected synergies by moving Reinertsen employees in Trondheim and Bergen to Aker Solutions offices in addition to synergies from assembled workforce.

The recognised amounts of assets and liabilities assumed at time of acquisition were as follows:

Amounts in NOK million

Property, plant, and equipment	5
Intangible assets	45
Total assets	50
Current operating liabilities	68
Total liabilities	68
Total identifiable net assets at fair value	(18)
Goodwill arising on acquisition	231
Total consideration paid on acquisition	213

Aker BioMarine

On 7 August 2017, Aker BioMarine Antarctic AS acquired Neptune's krill business. The transaction increased the Group's market share, as Neptune ceased to produce and sell krill oil. The total purchase price was USD 35.0 million (NOK 289 million) including transaction fees of USD 1.0 million incurred up to the date of signing. The assets and liabilities recognised

at the acquisition date comprised inventory, customer relationships and trademarks as follows:

Amounts in NOK million

Total consideration paid on acquisition	289
Inventory	40
Intangible assets	250

In addition, Aker paid NOK 179 million for other acquisitions of subsidiaries in 2017. The amount includes deferred payment related to acquisitions for earlier years.

The above valuations are based on current available information about fair values as of the acquisition date. If new information becomes available within 12 months from the acquisition date, the fair value assessment in the PPA may change, in accordance with guidance in IFRS 3.

TRANSACTIONS WITH MINORITY INTERESTS IN 2017

In 2017, the Aker group net purchase of minority interests (shares in subsidiaries) was NOK 103 million. This led to a decrease in minority interests of NOK 90 million and a decrease in majority interests of NOK 14 million, recognised directly in equity and attributed to the equity holders in the parent company. In addition, subsidiaries net sold own shares for NOK 7 million, it led to an increase in minority interests of NOK 16 million and a decrease of majority interests of NOK 8 million. See also Note 23.

Note 8 | Sale of subsidiaries and discontinued operations

SALE OF SUBSIDIARIES

In April 2018, Aker sold real estate land areas at Fornebu. The sale resulted in a gain in Aker Group accounts of NOK 232 million. The disposal did not represent a separate major line of business and is not presented as discontinued operations. There have been no major sales of subsidiaries in 2018 except for the sales described below for discontinued operations.

DISCONTINUED OPERATIONS IN 2018

On September 26, 2018, Akastor completed the transaction to divest 50 percent of its shares in AKOFS Offshore to MITSUI & CO., Ltd. ("Mitsui") and Mitsui O.S.K. Lines, Ltd. ("MOL") for a total consideration of USD 142.5 million with interest of 4 per cent from the locked box date on December 31, 2017. In addition, there are certain preferential rights in respect of the operations of AKOFS Seafarer, including guaranteed return to Mitsui and MOL and earn-out payments to Akastor in the first six years of operations. The transaction does not include the existing joint venture, Avium Subsea AS, between Akastor, Mitsui and MOL. Following the transaction, AKOFS Offshore was restructured to consolidate 100 per cent ownership interest in Avium Subsea AS. Akastor, Mitsui and

RESULTS FROM DISCONTINUED OPERATIONS

MOL holds 50 per cent, 25 per cent and 25 per cent of the shares in AKOFS Offshore, respectively. AKOFS Offshore is classified as a joint venture to the group and consolidated using the equity method. The AKOFS Offshore operations, exclusive Avium Subsea AS, are classified as discontinued operations and the comparative statement of profit and loss has been restated to show the discontinued operations separately from continuing operations.

DISCONTINUED OPERATIONS IN 2017

On January 6, 2017, Akastor completed the transaction to sell Frontica's staffing business (Frontica Advantage) to NES Global Talent (NES) in exchange for a minority shareholding of 15.2 per cent economic ownership interest in the combined entity. Frontica Advantage was classified as discontinued operations and as held-for-sale as of December 31, 2016. On July 27, 2017, Akastor completed the transaction to sell KOP Surface Products to the Weir Group PLC for a consideration of USD 114 million on a debt- and cash-free basis. The disposals resulted in an accounting gain before tax of NOK 383 million for Frontica Advantage and NOK 728 million for KOP Surface Products, presented as Net profit from discontinued operations.

Amounts in NOK million	2018	2017
Operating revenues	821	742
Operating expenses	(850)	(940)
Financial items	(176)	(103)
Profit before tax	(204)	(301)
Tax expense	(33)	128
Profit for the period	(237)	(174)
Gain after tax from discontinued operations	675	-
Net profit from discontinued operations classified in 2018	438	(174)
Classified as discontinued operations previous years:
Operations within Akastor	-	1 049
Operations within Kvaerner	-	31
Total profit from discontinued operations	438	906

CASH FLOW FROM DISCONTINUED OPERATIONS

Net cash flow from operating activities 8 (322) Net cash flow from investing activities 1 043 (42) 1 051 (364) Net cash flow discontinued operations Classified as discontinued operations previous years: Operations within Akastor - 876 Operations within Kvaerner (3) (3)	Amounts in NOK million	2018	2017
	Total from discontinued operations	1 048	509

ASSETS AND LIABILITIES HELD FOR SALE

Liabilities of NOK 34 million classified as held for sale at 31 December 2018 are remaining legacies related to Kvaerner's sale of its the onshore construction business in North America in 2013.

Note 9 | Operating segments and significant subsidiaries

Operating segments are identified based on the Group's internal management- and reporting structure. The Group's chief operating decision makers, who are responsible for the allocation of resources and assessment of performance in the different operating segments, are defined as the board of directors, the CEO and the CFO.

Aker's investment portfolio comprises two segments: Industrial holdings and Financial investments. The primary focus for businesses within Industrial holdings is long-term value creation. Businesses within Financial investments are managed as a portfolio with focus on financial and strategic opportunities.

Recognition and measurement applied to segment reporting is consistent with the accounting principles applied when preparing the financial statements. Transactions between segments are conducted on market terms and conditions. Operational revenues and segment assets are based on the geographical location of companies.

Industrial holdings
Aker Solutions	Leading global supplier of products, systems and services for the oil and gas industry. The Aker Group's ownership interest is 46.93%. Aker ASA indirectly owns 34.76%. Aker Kværner Holding AS owns 40.56% of Aker Solutions ASA. Aker ASA owns 70% of Aker Kværner Holding AS. In addition, Aker ASA owns directly 6.37% of Aker Solutions ASA.
Akastor	Akastor is an oil-services investment company with a portfolio of industrial holdings and other investments. The Aker Group's ownership interest is 48.78%. Aker ASA indirectly owns 36.71%. Aker Kværner Holding AS owns 40.27% of Akastor ASA. Aker ASA owns 70% of Aker Kværner Holding AS. In addition, Aker ASA owns directly 8.52% of Akastor ASA.
Aker BP	Exploration and production (E&P) company on the Norwegian Continental Shelf. Ownership interest 40.00%. The company is defined as an associated company in the Aker Group, and is accounted for using the equity method.
Kværner	Leading global provider of engineering and construction services to the energy and process industry. The Aker Group's ownership interest is 41.02%. Aker ASA indirectly owns 28.71%. Aker Kværner Holding AS owns 41.02% of Kværner ASA. Aker ASA owns 70% of Aker Kværner Holding AS.
Ocean Yield	Owns, operates and charters vessels. Ownership interest 61.65% as at 31 December 2018.
Aker BioMarine	Biotechnology company. Harvesting of krill, production and sale. Ownership interest 100%.
Financial investments
Philly Shipyard	Design and construction of vessels. Ownership interest 57.56%.
Solstad Offshore	Owns and operates platform supply-vessels, anchor handling vessels and construction service-vessels. Ownership interest 23.10%. The company is defined as an associated company in the Aker Group, and is accounted for using the equity method.
Aker Energy	E&P company. Owns a 50% ownership interest in the Deepwater Tano Cape Three Points block that is under devel opment in Ghana. The group's ownership in the company is 49.03%. With effect from 2019, Aker Energy will be part of industrial holdings.
Cognite	Software and digitalisation company. Ownership interest 65.24%. With effect from 2019, Cognite will be part of industrial holdings.
Other and eliminations
Aker ASA and holding companies	Cash, other financial investments and other assets. Companies included are listed in Note 1 in the annual accounts of Aker ASA and holding companies.
Other	Other companies and eliminations. See next section for overview of group entities.

AN OVERVIEW OF OPERATING SEGMENTS

SUBSIDIARIES

Aker Solutions, Akastor and Kvaerner

The board and management of Aker have considered whether the company's indirect and direct ownership interests in Aker Solutions and Akastor, as well as the indirect ownership in Kvaerner, are sufficient to give it control under IFRS 10. The primary consideration has been whether Aker is able to control the outcome of voting at the companies' general meetings. After careful consideration of this question based on both the absolute and relative ownership interests and attendance at previous general meetings of the companies and comparable companies, Aker has concluded that such control exists. Consideration

has also been given to all other relevant factors mentioned in IFRS 10 that may help to illuminate the question of control further. Factors indicating that Aker has control include Aker's representation on the nomination committees, the fact that leading employees have previously worked for Aker, the fact that the companies themselves consider Aker an active owner, etc. On the other hand, in isolation, the shareholder's agreement with the Norwegian State relating to the holding company Aker Kværner Holding AS is a factor in favour of Aker not having control. Based on an overall assessment, the conclusion is that Aker does have control over Aker Solutions, Akastor and Kvaerner.

SIGNIFICANT SUBSIDIARIES IN THE AKER GROUP ACCOUNTS ARE PRESENTED IN THE TABLE BELOW.

Companies owned directly by Aker ASA are highlighted. Group's ownership in per cent and Group's share of votes in per cent are equal if nothing else is indicated.

For further information regarding significant subsidiaries in the listed companies Aker Solutions ASA, Akastor ASA, Kværner ASA, Philly Shipyard ASA and Ocean Yield ASA, please refer to the companies' own annual reports.

		Business address
	Group's ownership in % *)	City location	Country
Aker BioMarine AS	100.00	Fornebu	Norway
Aker BioMarine Antarctic AS	100.00	Fornebu	Norway
Aker Capital AS	100.00	Fornebu	Norway
Ocean Yield ASA (OCY)	61.65	Fornebu	Norway
Aker Energy AS	49.03	Fornebu	Norway
Philly Shipyard ASA (PHLY)	57.56	Oslo	Norway
Cognite AS	65.24	Fornebu	Norway
FP Eiendom AS 1)	100.00	Fornebu	Norway
Aker Kværner Holding AS	70.00	Fornebu	Norway
Aker Solutions ASA (AKSO)	40.56 2)	Fornebu	Norway
Akastor ASA (AKA)	40.27 3)	Fornebu	Norway
Kværner ASA (KVAER)	41.02	Fornebu	Norway

1) In accordance with UK Companies Act 2006, FP Eiendom AS' indirectly owned subsidiaries Abstract (Aberdeen 2) Limited (reg. no. 8271923), Abstract (Aberdeen 3) Limited (reg. no. 9137931), Abstract (Aberdeen 4) Limited (reg. no. 9137913), Abstract (Aberdeen 5) Limited (reg. no. 9137895), Abstract (Aberdeen 6) Limited (reg. no. 9137897), Abstract (Aberdeen 7) Limited (reg. no. 9137984), Abstract (Aberdeen 8) Limited (reg. no. 9138091), Abstract (Aberdeen 9) Limited (reg. no. 9137993), Abstract (Aberdeen 10) Limited (reg. no. 9251169), Aberdeen Residual Land Holdings Limited (reg. no. 9138539), and Aberdeen International Business Park Limited (reg. no. 8361458) are exempt from audit of accounts under section 479A.

2) In addition, Aker ASA owns 6.37 % directly.

3) In addition, Aker ASA owns 8.52 % directly.

*) Ownership percentage shown is percentage ownership of the relevant entity's parent.

2018 - OPERATING SEGMENTS

	Aker				Ocean	Aker Bio	Elimina tions and	Total industrial	Financial investments and
Amounts in NOK million	Solutions Akastor		Aker BP	Kværner	Yield	Marine	other	holdings	eliminations	Total
External operating revenues	24 422	3 709	-	7 144	2 614	1 263	173	39 326	2 838	42 163
Inter-segment revenues	810	90	-	76	179	-	(1 117)	38	(38)	-
Operating revenues	25 232	3 800	-	7 220	2 793	1 263	(945)	39 363	2 800	42 163
EBITDA	1 810	290	-	437	2 299	269	(238)	4 868	(471)	4 397
Depreciation and amortisation	(739)	(181)	-	(110)	(803)	(179)	-	(2 011)	(86)	(2 097)
Impairments	(22)	-	-	-	(262)	(7)	-	(291)	78	(213)
Operating profit	1 049	109	-	327	1 235	83	(238)	2 565	(479)	2 087
Share of earnings in associates and joint ventures	-	(157)	1 547	-	-	-	-	1 390	(763)	626
Interest income	39	67	-	27	26	1	-	160	92	252
Interest expense	(236)	(90)	-	(20)	(676)	(100)	-	(1 122)	(404)	(1 526)
Other financial items	(60)	(20)	-	4	(84)	5	27	(128)	109	(19)
Profit before tax	792	(91)	1 547	338	501	(10)	(211)	2 865	(1 445)	1 420
Tax expense	(238)	(103)	-	(60)	(26)	2	(6)	(430)	(60)	(490)
Profit for the year from continuing operations	554	(194)	1 547	278	475	(8)	(217)	2 434	(1 504)	930
Result from discontinued operations (net of tax)	-	(128)	-	-	-	-	364	236	202	438
Profit for the year	554	(322)	1 547	278	475	(8)	147	2 670	(1 302)	1 368
Profit for the year to equity holders of the parent	488	(278)	1 547	278	475	(8)	147	2 648	(1 742)	906
Property, plant, and equipment	3 044	825	-	967	10 388	2 019	-	17 243	1 018	18 262
Intangibles assets	5 686	1 260	-	710	-	992	-	8 647	2 329	10 976
Investment in equity accounted companies	1	1 088	19 878	69	1 668	-	-	22 704	644	23 348
External interest-bearing fixed assets	93	257	-	-	10 324	-	-	10 674	1 081	11 755
Cash and cash equivalent 1)	2 473	198	-	3 165	956	22	96	6 910	2 876	9 786
Internal interest-bearing liabilities	-	-	-	-	-	(324)	-	(324)	324	-
External interest-bearing liabilities	(2 913)	(602)	-	-	(15 317)	(1 460)	-	(20 292)	(10 135)	(30 427)
Net tax liabilities(-)/assets(+)	439	361	-	(265)	(7)	-	29	556	(34)	523
Other assets and liabilities	(1 214)	930	-	(1 206)	(663)	305	(182)	(2 030)	(274)	(2 304)
Equity	7 608	4 317	19 878	3 439	7 348	1 554	(57)	44 087	(2 170)	41 918
Minority interest	(106)	-	-	-	-	-	55	(52)	(19 856)	(19 908)
Total equity attributable to equity holders
of the parent	7 502	4 317	19 878	3 439	7 348	1 554	(3)	44 035	(22 026)	22 009
Value 100 per cent 2)	10 769	3 542	31 403	3 231	9 433	2 411	-	60 789		34 312
Investments 3)	505	131	-	334	21	545	-	1 537	1 569	3 106
Aker ASA and holding companies key figures:
Dividends received	-	-	1 465	-	613	-	-	2 078	96	2 174
Gross asset value (GAV) 4)	3 750	1 313	31 403	931	5 816	2 411	-	45 625	5 588	51 213

1) There are restrictions on the cash transfers between Aker ASA and holding companies and subsidiaries. Restricted cash at end of 2018 was NOK 45 million.

2) Listed companies at 100 per cent of market value, with exception of Aker BP, which is 40 per cent of market value, other companies at book value in Aker ASA and holding companies. Total is market value of Aker ASA.

3) Investment include acquisitions of property, plant and equipment and intangibles (including increases due to business combinations).

4) Listed companies at market value and other companies at book value.

2017 - OPERATING SEGMENTS

	Aker				Ocean	Aker Bio	Elimi	Total industrial	Financial investments and
Amounts in NOK million	Solutions Akastor		Aker BP	Kværner	Yield	Marine	nations	holdings	eliminations	Total
External operating revenues	21 891	3 519	-	6 501	2 571	1 038	(28)	35 492	5 376	40 868
Inter-segment revenues	570	87	-	35	233	-	(921)	3	(3)	-
Operating revenues	22 461	3 606	-	6 536	2 804	1 038	(950)	35 495	5 373	40 868
EBITDA	1 519	116	-	799	2 535	142	(195)	4 916	644	5 559
Depreciation and amortisation	(792)	(278)	-	(90)	(849)	(142)	-	(2 151)	(58)	(2 209)
Impairments	(156)	(118)	-	(15)	-	(15)	-	(304)	23	(281)
Operating profit	571	(280)	-	693	1 686	(14)	(195)	2 461	608	3 069
Share of earnings in associates and joint ventures	-	(212)	909	-	-	-	-	697	(73)	623
Interest income	55	63	-	22	64	7	-	211	113	325
Interest expense	(293)	(144)	-	(20)	(573)	(95)	-	(1 126)	(351)	(1 477)
Other financial items	66	(113)	-	2	61	(36)	-	(20)	123	103
Profit before tax	399	(686)	909	697	1 238	(139)	(195)	2 223	420	2 643
Tax expense	(160)	(20)	-	(186)	(166)	(8)	(16)	(556)	(293)	(850)
Profit for the year from continuing operations	239	(706)	909	511	1 072	(147)	(212)	1 667	127	1 793
Result from discontinued operations (net of tax)	-	648	-	31	-	-	227	906	-	906
Profit for the year	239	(58)	909	542	1 072	(147)	15	2 572	127	2 699
Profit for the year to equity holders of the parent	77	(35)	909	157	702	(147)	(18)	1 646	(128)	1 517
Property, plant, and equipment	3 317	4 419	-	800	10 755	1 697	(180)	20 807	1 371	22 178
Intangibles assets	5 814	1 435	-	649	80	783	-	8 762	721	9 482
Investment in equity accounted companies	1	10	18 815	17	1 548	-	-	20 391	1 233	21 624
External interest-bearing fixed assets	167	1	-	-	4 732	-	-	4 900	787	5 687
Internal interest-bearing fixed assets	-	-	-	-	1 592	-	(1 592)	-	-	-
Cash and cash equivalent 1)	1 978	168	-	2 812	810	22	-	5 790	2 357	8 148
Internal interest-bearing liabilities	-	(1 494)	-	-	-	(823)	1 494	(823)	823	-
External interest-bearing liabilities	(3 114)	(1 038)	-	-	(12 394)	(1 434)	-	(17 980)	(10 144)	(28 124)
Net tax liabilities(-)/assets(+)	526	649	-	(219)	6	(1)	109	1 070	30	1 100
Other assets and liabilities	(1 640)	1 127	-	(884)	(306)	243	(95)	(1 556)	1 520	(35)
Equity	7 047	5 277	18 815	3 176	6 823	487	(264)	41 361	(1 301)	40 059
Minority interest	(67)	-	-	-	(85)	-	50	(102)	(18 803)	(18 905)
Total equity attributable to equity holders
of the parent	6 981	5 277	18 815	3 176	6 737	487	(214)	41 259	(20 104)	21 155
Value 100 per cent 2)	12 542	4 448	29 083	4 216	10 308	1 411	-	62 009		29 941
Investments 3)	650	97	-	91	1 346	925	-	3 107	652	3 759
Aker ASA and holding companies key figures:
Dividends received	-	-	820	-	603	-	-	1 424	165	1 588
Gross asset value (GAV) 4)	4 368	1 649	29 083	1 220	6 828	1 411	-	44 560	5 829	50 389

1) There are restrictions on the cash transfers between Aker ASA and holding companies and subsidiaries. Restricted cash at end of 2017 was NOK 45 million. 2) Listed companies at 100 per cent of market value, with exception of Aker BP, which is 40 per cent of market value, other companies at book value in Aker ASA and

holding companies. Total is market value of Aker ASA.

3) Investment include acquisitions of property, plant and equipment and intangibles (including increases due to business combinations).

4) Listed companies at market value and other companies at book value.

GEOGRAPHICAL SEGMENTS BASED ON COMPANY LOCATION

	Operating revenue		Total properties, plants, equipment and intangibles
Amounts in NOK million	2018	2017	2018	2017
Norway	27 973	24 331	14 760	24 802
EU	4 994	3 024	9 828	2 576
North America	2 924	7 619	1 629	811
South America	1 863	2 396	1 446	2 494
Asia	2 615	2 290	776	861
Other areas	1 794	1 950	799	116
Discontinued operations	-	(742)	-	-
Total	42 163	40 868	29 237	31 660

Note 10 | Operating revenue

ANALYSIS OF OPERATING REVENUES BY CATEGORY

Amounts in NOK million	2018	2017
Revenue from contracts with customers recognised over time	35 110	34 553
Revenue from contracts with customers recognised at a point in time	3 470	1 845
Leasing income	2 402	2 792
Other income	1 182	2 420
Discontinued operations	-	(742)
Total	42 163	40 868

Revenue from contracts with customers consist of construction contracts, service revenue and sale of standard products recognised over time or at a point in time in accordance with IFRS 15. Different types of customer contracts are described below. Warranty provisions related to on-going projects and onerous customer contracts provision are described in Note 28.

REVENUE FROM CONTRACTS WITH CUSTOMERS RECOGNISED OVER TIME

Revenue from contracts with customers in Aker Solutions totalled NOK 24.4 billion in 2018 and include contracts with customers to deliver services, technologies, products and solutions within Subsea and Field Design. Each contract within Subsea is usually assessed as one performance obligation as the deliveries are combined in one output. Each engineering, hook-up, modification and maintenance job within Field Design is usually assessed as a separate performance obligation and revenue is recognised over time using a cost progress method or according to delivered time and materials. Each service job under a frame agreement is usually assessed as a separate performance obligation and revenue is recognised according to delivered time and materials within Services. Payment terms are normally 30-90 days according to predefined milestones within Subsea and 30 days after time and materials are delivered within Field Design and Services.

Revenue from contracts with customers in Kvaerner totalled NOK 6.9 billion in 2018 and include contracts with customers to provide engineering, procurement and construction services (EPC-contracts) for offshore installations or onshore plants and decommissioning that have no alternative use for the group. These contracts will usually be one performance obligation and revenue is recognised over time using a cost progress method. Service revenue is recognised over time using a cost progress method or is recognised according to delivered time and materials. Payment terms are normally 30 days for construction contracts and on average around 45 days after time and materials are delivered for service revenue.

Revenue from contracts with customers in Akastor totalled NOK 2.5 billion in 2018 and include construction contracts with customers to provide drilling systems, products and services. Each of the construction contracts normally includes a single combined output for the customer, such as an integrated drilling equipment package. One single performance obligation is usually identified in each contract and revenue is recognised over time using a cost progress method. Service revenue is recognised over time using a cost progress method.

Revenue from contracts with customers in Philly Shipyard totalled NOK 1.1 billion in 2018 and include contracts with customers regarding construction of merchant vessels for the Jones Act market. Revenue from shipbuilding is recognised over time using a cost progress method.

REVENUE FROM CONTRACTS WITH CUSTOMERS AT POINT IN TIME

Revenue from contracts with customers in Aker BioMarine totalled NOK 1.2 billion in 2018 and include sale of krill products recognised at a point in time, when the customers obtains control over the goods, which is based on the contractual terms of the agreements. Upon sale of product, each sale would normally constitute two performance obligations.

Revenue from contracts with customers in Akastor totalled NOK 1.0 billion in 2018 and include revenue from sale of standard oilfield products recognised at a point in time, usually when the goods are delivered to the customers.

Revenue from contracts with customers in FP Eiendom totalled NOK 1.2 billion in 2018 and include revenue from sales of apartments recognised at a point in time at delivery to the customers.

IMPORTANT CUSTOMERS

Aker has one customer that has been invoiced for more than 10 per cent of the group's revenues in 2018.

ORDER INTAKE AND ORDER BACKLOG AT YEAR-END 2018

(Figures are unaudited. Internal order backlog and order intake are not eliminated)

The order backlog represents an obligation to deliver goods and services not yet produced, as well as Aker's contractual entitlement to make future deliveries. The performance obligations in customer contracts vary from a few months to as long as five years. The order backlog as at 31 December 2018 was NOK 48.6 billion. The table below shows the expected timing of future revenue for ongoing and not yet started performance obligations at year-end.

Amounts in NOK million	Order intake 2018	Order backlog 2018	2019	2020	2021	2022 and later
Aker Solutions	25 421	35 148	20 671	7 396	3 684	3 397
Kværner	9 828	10 625	6 663	2 827	979	157
Philly Shipyard	-	151	151	-	-	-
Akastor	4 481	2 692	1 271	1 421	-	-
Total	39 730	48 616	28 756	11 644	4 663	3 554

CONTRACT BALANCES

The following table provides information about contract assets and contract liabilities from contracts with customers.

Amounts in NOK million	31 December 2018	1 January 2018
Trade receivables	5 408	4 916
Contract assets	4 696	4 899
Contract liabilities	1 764	1 607

Contract assets relate to consideration for work completed, but not yet invoiced at the reporting date. The contract assets are transferred to

receivables when the rights to payment become unconditional, which usually occurs when invoices are issued to the customers. Movements in allocation to loss on trade receivables and contract assets are described in Note 6. Contract liabilities relate to advances from customer for work not yet performed at the reporting date. Revenue recognised in 2018 that was included in contract liabilities in the beginning of the year is NOK 1 223 million. The change in contract assets and liabilities relates to the natural progression of the project portfolio, as well as the current project mix.

LEASING INCOME

Leasing income of NOK 2 402 million in 2018 consists mainly of NOK 1 707 million in financial lease income and NOK 513 million in operational lease income from bareboat hire in Ocean Yield.

FUTURE LEASE INCOME

Operating lease

Amounts in NOK million	Less than one year	Between one and five years	More than five years	Total
Ocean Yield	739	2 924	2 548	6 211
Akastor	116	47	15	178
Total operating lease	855	2 971	2 563	6 389

Finance lease

Amounts in NOK million	Less than one year	Between one and five years	More than five years	Total
Ocean Yield	1 218	4 489	8 410	14 118
Total finance lease	1 218	4 489	8 410	14 118

The table show gross future revenues from finance lease contracts. Present value of the future financial lease contracts is NOK 9 383 million.

OTHER INCOME

Other income of NOK 1 182 million in 2018 consist among others of gain from sale of subsidiaries and other assets and in addition NOK 393 million in share of earnings in joint ventures and associates.

Note 11 | Wages, personnel expenses and other operating expenses

Amounts in NOK million	2018	2017
Wages	11 263	11 223
Social security contributions	1 611	1 479
Pension costs	749	721
Other expenses	698	780
Personnel expenses included in other items1)	(358)	(279)
Discontinued operations	-	(96)
Total wages and other personnel expenses	13 963	13 828

1) Related to capitalised construction expenses in Philly Shipyard.

GEOGRAPHICAL SPLIT OF NUMBER OF EMPLOYEES:	2018	2017
Norway	9 757	9 423
EU	2 426	2 440
North America	884	1 262
South America	4 001	3 565
Asia	2 549	2 387
Other regions	362	367
Total number of employees at year-end	19 979	19 444
Average number of employees	19 712	20 099

OTHER OPERATING EXPENSES CONSIST OF THE FOLLOWING:

Amounts in NOK million	2018	2017
Rent and leasing expenses	1 163	1 206
Office equipment, sales- and administration expenses	1 060	834
External consultants and hired-ins, exclusive audit expenses (see below)	1 005	737
Travel expenses	517	481
Insurance	169	171
Loss on customer receivables	155	5
Miscellaneous operating expenses 1)	1 866	1 330
Discontinued operations	-	(66)
Total	5 936	4 698

1) Other operating expenses include, among others, operation and maintenance of properties.

FEES TO AUDITORS OF THE AKER GROUP ARE INCLUDED IN MISCELLANEOUS OPERATING EXPENSES, AND DISTRIBUTED AS FOLLOWS:

Amounts in NOK million	Ordinary auditing	Consulting services	Total 2018	2017
Aker ASA	2	-	2	2
Subsidiaries	34	6	40	47
Total	36	6	42	50

Ordinary audit fees totalled NOK 36 million in 2018 (NOK 38 million in 2017).

Consulting services of NOK 6 million consist of NOK 3.5 million in other assurance services, NOK 1 million in tax advisory services and NOK 1.5 million in other non-audit services.

OPERATING LEASES

Lease and sublease payments recognised in the income statement:

Amounts in NOK million	Minimum lease payments	Sublease income	2018	2017
Buildings and vessels	999	-	999	1 158
Machinery and equipment	163	-	163	36
Other agreements	1	-	1	12
Leasing agreements as part of other operating expenses	1 163	-	1 163	1 206
Part of operating revenue	-	(244)	(244)	(160)
Part of cost of goods and changes in inventory	263	-	263	302
Total leasing agreements	1 426	(244)	1 182	1 348

Irrevocable operating leases where the Group is the lessee, are payable as follows:

Amounts in NOK million	2018	2017
Less than one year	1 122	1 394
Between one and five years	3 474	3 872
More than five years	3 631	4 211
Total	8 228	9 477

Aker's operational lease costs and future commitments relate mainly to rent of production sites, office facilities, IT services and ships, the majority of these relates to agreements in Aker Solutions with NOK 6 675 million excluding internal contracts, Akastor with NOK 937 million, Kvaerner with NOK 424 million and Aker BioMarine with NOK 56 million. The contracts relate to leasing of buildings and locations around the world, typical lease periods are 10-15 years with options for renewal at market value. The lease contracts regarding IT services, vehicles and equipment have an average lease term of 3-5 years.

Note 12 | Impairments

Amounts in NOK million	2018	2017
Impairment losses on intangible assets (Note 16)	(97)	(167)
Impairment losses on property, plant and equipment (Note 15)	(117)	(132)
Reversal of impairment losses on property, plant and equipment (Note 15)	-	17
Total	(213)	(281)

Impairment losses on intangible assets in 2018 of NOK 97 million are mainly attributable to Ocean Yield with NOK 80 million, and Aker Solutions with NOK 15 million. Ocean Yield has made an impairment of goodwill related to the FPSO Dhirubhai-1. The reason for the impairment charges in Aker Solutions relates to capitalised development costs.

Impairment losses on property, plant and equipment of NOK 117 million in 2018 are mainly attributable to Ocean Yield with NOK 109 million and Aker Solutions with NOK 7 million. Ocean Yield has made an impairment charge related to the AHTS vessels Far Senator and Far Statesman.

Impairment losses on intangible assets in 2017 of NOK 167 million are mainly attributable to impairment charges in Aker Solutions and Kvaerner of capitalised development costs. The impairment in Akastor relates to intangible assets in MHWirth.

Impairment loss on property, plant and equipment of NOK 132 million in 2017 are mainly attributable to Aker Solutions related to assets in Norway and UK and to Akastor related to MHWirth.

Below is more detailed information about impairment assessments performed for the material assets within the Group. See also Note 15 Property, plant and equipment and Note 16 Intangible assets.

IMPAIRMENT ASSESSMENTS Determination of the recoverable amount

When performing impairment assessments, cash generating units are determined at the lowest level possible to identify independent cash flows.

For capitalised development expenses and other intangible assets, all development projects are tested quarterly for impairment in which it is taken into account market and technology development, changes in order backlog, costs incurred compared to the budget, and other factors that potentially may deteriorate the value in use. For uncompleted projects, full impairment tests are performed annually by reviewing and updating the original business case for each project so future cash flows are revised and new present value calculated. An impairment loss is recognised for projects where the net present value of future cash flows is lower than expected recognised capitalised amount at project completion.

For the years 2018 and 2017, the recoverable amounts of the cash generating units are found by calculating the value in use. The calculations are based on future cash flows as assumed in current budgets and strategic plans. Cash flow after tax is used in the calculations and correspondingly discount rate after tax.

Discount rates:

Discount rates are derived from a weighted average cost of capital (WACC) model. The rate is estimated as a weighted average of the required return on equity and expected borrowing costs. The capital asset pricing model for a peer group of companies within the same sector has been applied when calculating the WACC. The risk-free interest rate is based on the interest rate for 10-year government bonds at the time of the impairment assessment. Borrowing costs are based on a risk-free rate, with an adjustment reflecting long-term interest margin. The discount rate is set for each CGU and may therefore vary between and within the subsidiaries.

	Discount rate, post tax		Discount rate, pre tax		Growth rate terminal value
Selskap	2018	2017	2018	2017	2018	2017
Aker Solutions	9.3-9.5	8.4-8.7	12.2-14.3	11.0-11.6	1.5	1.5
Akastor	10.0	9.3-10.1	12.2	10.1-11.2	≤ 2.0	≤ 2.0
Kvaerner	8.6	8.7	10.9-10.4	11.3-11.6	1.0	1.0
Ocean Yield	6.1-8.2	6.1-8.3	7.2-8.2	6.8-8.8	NA	NA
Aker BioMarine	11.0	10.0	12.7	11.5	2.0	2.0

Cash flow assumptions:

Cash flow assumptions varies between the different CGUs, and the assumptions used in the most material assessments are described below.

For Aker Solutions, expectations about long-term oil prices are important when assessing the future market development for the products and services of the company. After several years with a challenging oil services market, the market recovery has continued in 2018. The long-term oil price per barrel has been assumed to gradually increase to USD 70 in the terminal year. This assumption is particularly sensitive in the current market conditions. Four years cash flows in the period 2019 to 2022 projected from the forecast and strategy process, approved by management and the Board of Directors in 2018, have been used as basis for the estimates of future cash flows. The forecasts are based on firm orders in the backlog and identified prospects in addition to expected service revenue. Changes in the assumptions related to the expected prospects can have a significant impact on the forecasted cash flows. The forecasted cash flows used in the impairment tests reflect organic growth only. Other parameters in the assessment are the mix of products and services, level of operating expenses and capital expenditure for maintenance of the asset portfolio.

For Akastor, the value-in-use calculations represent the operating earnings before depreciation and amortisation and are estimated based on the expected future performance of the existing businesses in their main markets. Assumptions are made regarding revenue growth, gross margins and other cost components based on historical experience as well as assessment of future market development and conditions. These assumptions require a high degree of judgement, given the significant degree of uncertainty regarding oilfield service activities in the forecast period. Akastor uses a constant growth rate not exceeding 2 per cent (including inflation) for periods beyond the management's forecast period of five years.

For Kvaerner, assumed project awards is an essential element in the impairment testing. The group's business development organisation reviews and considers market prospects and selects target projects. Target projects are included based on a probability that Kvaerner will be selected as supplier and estimated revenues and margins based on the scope of work and Kvaerner's experience and judgment from other projects. Cash flow projections for on-going projects are based on budget and forecast. Explicit period for estimated cash flows is 2019-2022. Terminal values reflecting long-term, steady state revenue and margin levels are estimated

based on a combination of historic levels and judgment. An annual growth rate of one per cent is used in calculating the terminal value for Process Solutions and Structural Solutions.

For Ocean Yield the value in use has been estimated for the FPSO Dhirubhai-1. The 10-year contract for the vessel in India expired on 19 September 2018, and alternative lease alternatives have been explored. The most likely utilisation of the FPSO is a bareboat charter to Aker Energy for a period of 15 years for use offshore Ghana. In February 2019, Ocean Yield entered into an option agreement with Aker Energy providing Aker Energy with a right until May 2019 to enter into such a contract on negotiated terms. The net present value of the future cash flows under the negotiated terms, discounted with Ocean Yield's WACC for the project of 7.7 per cent, is higher than the book value of the vessel as at 31 December 2018. See below for sensitivities for the Dhirubhai-1 assessment.

The anchor handling tug supply vessels Far Senator and Far Statesman are on long-term bareboat charter contracts to a subsidiary of Solstad Offshore ASA ("Solstad"). In December 2018, Solstad entered into a 6-month standstill period with respect to payment of interest, instalments and charter hire with the secured lenders and other creditors. Following the standstill agreement there is a risk related to Solstad's obligations under the charter contracts. As a consequence, the vessel values have been assessed without the charter contracts at year-end. The value in use has been estimated for the vessels and has been calculated based on the present value of estimated future cash flows.

For Aker BioMarine, projected cash flows are based on management's best estimates of budget and the business plan for the krill business for the subsequent five-year period. The budget is based on detailed budgets prepared by the various departments in the krill business. For subsequent periods, the model is based on estimated terminal growth of 2.0 per cent, which is in line with long-term forecasts for growth in GDP. In the forecast and budget for the period 2019-2023, revenue projections are based on agreements entered into, actual historical prices along with management's evaluation of potential new agreements. The budgeted operating margin is in accordance with management`s forecast which is based on the scalability in the business model. A large proportion of the company's operating expenses are independent of production volumes, which means that increased sales levels will contribute to higher operating margins. Capital expenditure is based on long-term technical and operations program and firm commitments.

Sensitivity analysis and recoverable amount

In relation to the impairment testing, the companies have performed various sensitivity analysis. Below is a summary of the sensitivity analysis performed in the largest companies.

Aker Solutions

The impairment testing is affected by changes in the long-term oil price, as it will impact the expected order intake. The testing is also affected by changes in the discount rate, growth rates, and the ability to secure projects as estimated in the cash flow, product mix and cost levels. Multiple sensitivity tests have been run to address the current uncertainty in the oil services market. Sensitivity testing of goodwill includes changing various assumptions to consider other potential alternative market conditions. This includes changing the discount rate and growth rate in addition to reducing the expected cash flows in the future. The headroom was comfortable in all scenarios in the goodwill impairment testing.

Akastor

For the portfolio companies containing goodwill, the recoverable amounts are higher than the carrying amounts based on the value in use analysis and consequently no impairment loss of goodwill was recognised in 2018. The group has performed sensitivity calculations to identify any reasonably possible change in key assumptions that could cause the carrying amount to exceed the recoverable amount. Akastor believes that no reasonably possible change in any of the key assumptions used for impairment testing would cause the carrying amount of the portfolio company to exceed its recoverable amount.

Kvaerner

For the Process Solutions and Structural Solutions operational areas, recoverable amount for recognised goodwill exceeds the related carrying values, and consequently the analysis indicates that no impairment is required. The following adverse changes could occur simultaneously before any impairment is required; for Process Solutions revenue reduction of 25 per cent, EBITDA margin reduction of 1.5 percentage points and increase in pretax discount rate of 2.5 percentage points. For Structural Solutions, revenue reduction of 8 per cent, EBITDA margin reduction of 0.5 percentage point and increase in pre-tax discount rate of 2.2 percentage points.

Ocean Yield

Should the option agreement with Aker Energy to bareboat charter the FPSO Dhirubhai-1 not be exercised, and Ocean Yield not be able to secure alternative employment, there is a risk of impairment related to the book value of the FPSO. The book value as of 31 December 2018 is USD 238.8 million. Ocean Yield has made an impairment of goodwill related to the FPSO of USD 9.1 million and the book value of goodwill is zero as of 31 December 2018.

The estimated value in use is lower than the book value for the AHTS vessels Far Senator and Far Statesman, and impairment losses of USD 13.4 million have been recognised. The projected cash flows used in the calculation of value in use represent management's best estimate for future charter hire for the vessels. The cash flows cover a period of five year, with an estimated residual value at the end. The calculation of value in use is highly sensitive to the estimated future charter hire.

Aker BioMarine

Sensitivity analysis of goodwill have been performed by using simulations of various combinations of discount rates and changes in vessel production volumes, krill production and krill sales in addition to fuel costs. No reasonably combination of these factors results in a value in use being lower than the value recognised in the balance sheet as of 31 December 2018.

Note 13 | Financial income and financial expenses

Amounts in NOK million	2018	2017
Interest income	-	325
Interest income on cash and cash equivalents and investments at amortised cost	176	-
Interest income on debt instruments at FVOCI	76	-
Dividends on financial assets	170	94
Net change in fair value of financial equity investments at fair value through profit and loss	64	-
Net foreign exchange gain	59	-
Foreign exchange gain from hedge instruments	-	366
Net gain from interest rate swaps	57	37
Other financial income	101	114
Discontinued operations included above (see Note 8)	-	22
Total financial income	704	958
Interest expense on financial liabilities measured at amortised cost	(1 497)	(1 422)
Interest expense on financial liabilities measured at fair value	(30)	(55)
Net foreign exchange loss	-	(383)
Foreign exchange loss from hedge instruments	(297)	-
Net loss and impairment on available for sale financial assets	-	(53)
Net change in fair value of financial assets at fair value through profit and loss	-	(19)
Net other financial expenses	(174)	(157)
Discontinued operations included above (see Note 8)	-	81
Total financial expenses	(1 997)	(2 007)
Net financial items	(1 293)	(1 049)

Note 14 | Tax

TAX EXPENSE(-)/TAX INCOME(+)

	2018	2017
Amounts in NOK million		Restated*
Recognised in income statement:
This year's net tax receivable (+) and payable (-)	(261)	(553)
Adjustment prior years	-	22
Total current tax expense	(261)	(531)
Deferred tax expense:
Origination and reversal of temporary differences	(253)	(391)
Utilisation of previously unrecognised tax losses	24	73
Total deferred tax expense	(229)	(319)
Income tax - continued operations	(490)	(850)

RECONCILIATION OF EFFECTIVE TAX RATE

	2018	2017
Amounts in NOK million		Restated*
Profit before tax	1 420	2 643
Nominal tax rate in Norway 23% (2017: 24%)	(327)	(634)
Tax rate differences in Norway and abroad	44	(63)
Permanent differences	81	(72)
Utilisation of previously unrecognised tax losses	24	73
Tax losses for which no deferred income tax asset was recognised	(422)	(281)
Tax effect of associated companies	234	294
Other differences	(124)	(166)
Total income tax expenses in income statement	(490)	(850)

*) See note 8

TAX RECOGNISED IN OTHER COMPREHENSIVE INCOME:

Amounts in NOK million	2018	2017
Remeasurement of defined benefit liabilities	15	6
Changes in fair value of financial assets	(2)	2
Changes in fair value of cash flow hedges	20	(169)
Currency translation differences	7	(13)
Total tax expenses other comprehensive income	40	(175)

DEFERRED TAX ASSETS ARE ALLOCATED AS FOLLOWS:

Amounts in NOK million	2018	2017
Aker Solutions	663	633
Akastor	374	661
Ocean Yield	-	23
Other companies	22	42
Total	1 059	1 359

Deferred tax assets refer to NOK 1 602 million in losses carried forward and NOK -543 million in temporary differences. The deferred tax asset related to the tax losses carried forward was reduced by NOK 308 million in 2018.

The total unrecognized tax loss carry-forward at year-end 2018 are NOK 12.0 billion. This mainly relates to Aker ASA with NOK 3.6 billion, Aker Capital AS with NOK 1.4 billion, Aker BioMarine with NOK 2.5 billion, Akastor with NOK 2.4 billion, Ocean Yield with NOK 0.7 billion and Aker Solutions with NOK 0.5 billion.

CHANGES IN NET DEFERRED TAX ARE AS FOLLOWS:

	Property,		Projects	Tax losses
Amounts in NOK million	plant and equipment	Intangible assets	under construction	carry forward	Other	Total
At 31 December 2017	(221)	(260)	(2 245)	1 910	1 799	982
Impact of changes in accounting policies	-	-	94	-	(40)	54
At 1 January 2018	(221)	(260)	(2 151)	1 910	1 759	1 036
Acquisitions and sales of subsidiaries	101	5	4	(313)	(19)	(222)
Deferred tax income statement - continued operations	-	18	(259)	47	(36)	(229)
Deferred tax income statement - discontinued operations	(77)	-	-	(33)	-	(109)
Deferred tax total comprehensive income - other comprehensive income	-	-	-	-	40	40
Prepaid withholding tax	-	-	-	-	46	46
Exchange rate differences and other changes	(1)	-	5	(10)	(11)	(18)
At 31 December 2018	(198)	(238)	(2 401)	1 602	1 779	544
Allocated between deferred tax assets and liabilities as follows:
Deferred tax assets	(153)	(228)	(1 493)	1 634	1 299	1 059
Deferred tax liabilities	(44)	(10)	(908)	(32)	479	(515)
CHANGES IN NET DEFERRED TAX ARE AS FOLLOWS:
	Property,	Intan	Projects	Tax losses
Amounts in NOK million	plant and equipment	gible assets	under construction	carry forward	Other	Total
At 1 January 2017	(227)	(292)	(3 444)	3 426	1 871	1 334
Acquisitions and sales of subsidiaries	9	-	(16)	(14)	14	(8)
Deferred tax income statement - continued operations	(20)	35	1 222	(1 446)	(111)	(319)
Deferred tax income statement - discontinued operations	-	-	-	-	110	110
Deferred tax total comprehensive income - other comprehensive income	-	-	-	-	(175)	(175)
Prepaid withholding tax	-	-	-	-	94	94
Exchange rate differences and other changes	16	(4)	(7)	(56)	(3)	(54)
At 31 December 2017	(221)	(260)	(2 245)	1 910	1 799	982

Allocated between deferred assets and liabilities as follows: Deferred tax assets (151) (242) (1 643) 2 187 1 209 1 359 Deferred tax liabilities (70) (18) (602) (278) 591 (377)

TAX PAYABLE AND INCOME TAX RECEIVABLE

Tax payable amounts to NOK 168 million and tax receivable amount to NOK 146 million. Tax receivable mainly relates Aker Solutions with NOK 109 million, Akastor with NOK 4 million and Philly Shipyard with NOK 28 million. The 2018 figures are based on preliminary estimates of non-taxable income, non tax-deductible items and temporary differences between the financial accounts and the tax accounts. The final result will be calculated based on the tax return, and may differ from the estimates above.

Note 15 | Property, Plant and Equipment

Amounts in NOK million	Vessels	Machinery and vehicles	Land and buildings	Assets under construction	Total
Cost at 1 January 2018	25 628	10 034	5 393	951	42 005
Other acquisitions 1)	243	168	41	868	1 320
Sales of operations	(7 063)	(106)	(507)	(73)	(7 749)
Other disposals and scrapping	(39)	(587)	(260)	(5)	(892)
Transferred from assets under construction and other reclassifications	(294)	277	(32)	(312)	(360)
Effects of changes in foreign exchange rates	901	160	(88)	55	1 028
Cost at 31 December 2018	19 375	9 945	4 547	1 484	35 351
Accumulated depreciation and impairment at 1 January 2018	(11 187)	(6 728)	(1 859)	(54)	(19 828)
Depreciation charge for the year	(1 007)	(699)	(151)	-	(1 858)
Impairments (see Note 12)	(164)	(3)	(5)	-	(172)
Sales / disposals of operations	4 164	81	4	-	4 249
Reclassifications	244	4	(15)	5	238
Other disposals and scrapping	35	567	204	-	806
Effects of changes in foreign exchange rates	(397)	(122)	(6)	(2)	(527)
Accumulated depreciation and impairment at 31 December 2018	(8 312)	(6 900)	(1 828)	(51)	(17 091)
Carrying amount at 31 December 2018	11 063	3 045	2 719	1 433	18 262
Book value of leasing agreements recorded in the balance sheet	-	4	123	-	127

1) Capitalised interest in 2018 amounted to NOK 11 million.

Amounts in NOK million	Vessels	Machinery and vehicles	Land and buildings	Assets under construction	Total
Cost at 1 January 2017	25 429	9 733	5 582	594	41 339
Acquisitions through business combination	-	5	-	-	5
Other acquisitions 1)	1 409	221	598	794	3 023
Sales of operations	-	(350)	(77)	-	(427)
Other disposals and scrapping	(48)	(106)	(4)	-	(159)
Transferred from assets under construction and other reclassifications	(40)	655	(570)	(429)	(384)
Effects of changes in foreign exchange rates	(1 122)	(125)	(136)	(8)	(1 392)
Cost at 31 December 2017	25 628	10 034	5 393	951	42 005
Accumulated depreciation and impairment at 1 January 2017	(10 513)	(5 965)	(2 006)	(161)	(18 646)
Depreciation charge for the year	(1 211)	(795)	(153)	-	(2 159)
Impairments (see Note 12)	-	(74)	(58)	-	(132)
Reversals of impairments	-	-	-	17	17
Sales / disposals of operations	-	298	40	-	338
Reclassifications	43	(308)	263	89	88
Other disposals and scrapping	35	97	2	-	134
Effects of changes in foreign exchange rates	459	19	53	1	532
Accumulated depreciation and impairment at 31 December 2017	(11 187)	(6 728)	(1 859)	(54)	(19 828)
Carrying amount at 31 December 2017	14 441	3 306	3 535	897	22 178
Book value of leasing agreements recorded in the balance sheet	-	7	128	-	135

1) Capitalised interest in 2017 amounted to NOK 5 million

Carrying amount at the end of 2018 amounts to NOK 18 261 million, a decrease of NOK 3 917 million during the year. The decrease mainly relates to the divestment of 50 per cent in the shares in AKOFS Offshore in Akastor, divestments of a real estate company, in addition to reclassification of real estate projects from property, plant and equipment to work in progress within inventory. See also comments below.

This year's depreciation of NOK 1 858 million (NOK 2 159 million in 2017) is divided between NOK 1 715 million (NOK 1 799 million in 2017) in continuing operations and NOK 144 million (NOK 360 million in 2017) in discontinued operations. The impairment of the year is NOK 172 million (NOK 132 million in 2017) divided between NOK 117 million (NOK 132 million in 2017) in continuing operations and NOK 55 million in discontinuing operations in 2018.

See Note 12 Impairments for more information regarding impairment assessments and Note 25 regarding collateral.

Vessels

Vessels totalled NOK 11 063 million at the end of 2018, with a decrease of NOK 3 378 million during the year. The decrease is mainly attributed to the divestment of 50 per cent of the shares in AKOFS Offshore of NOK 2.9 billion, in addition to depreciation and impairments of NOK 1.2 billion. The decrease is offset by investments and foreign exchange fluctuations of NOK 0.7 billion.

The depreciation periods for the hulls are between 10 and 30 years, while the machinery and equipment on board are depreciated over a period between 3 and 15 years.

Machinery and vehicles

Machinery and vehicles totalled NOK 3 045 million, a reduction from previous year of NOK 260 million. The reduction is due to depreciation of NOK 699 million, divestments of operations mainly in Akastor and other disposals and scrapping totalling NOK 45 million. The reduction is partly offset by investments of NOK 168 million in addition to transfer from assets under constructions and foreign exchange fluctuations of NOK 319 million.

Machinery and vehicles are depreciated over a period between 3 to 15 years.

Buildings and land

Buildings and land totalled NOK 2 719 million, with a decrease of NOK 815 million in 2018. The decrease is mainly related to divestments in a real estate company and transfer of real estate projects to work in progress within inventory and to machinery and vehicles of totally NOK 550 million. In addition, the decrease is due to other disposals and scrapping,

depreciation, impairment and foreign exchange fluctuations of NOK 306 million. The reduction is partly offset by investments with NOK 41 million.

Land is not depreciated. The depreciation periods for buildings are between 8 to 30 years.

Assets under construction

Assets under construction are increased by NOK 536 million during 2018 to NOK 1 433 million. The increase is partly due to investments made by Aker BioMarine of NOK 253 million in the Antarctic Endurance vessel, as well as investments by Aker Solutions, Akastor, Kvaerner and FP Eiendom totalling NOK 591 million. The increase is partly offset by transfer and reclassifications totalling NOK 307 million.

Contractual commitments

Aker BioMarine has at the end of 2018 entered into contracts on investments in property, plant and equipment for NOK 1.2 billion. Contractual commitments in Aker Solutions is NOK 233 million and in Kvaerner NOK 166 million.

Ocean Yield has entered contractual obligations for the purchase of vessels, currently under construction, of NOK 1.8 billion in total during 2019.

Effect of exchange rate changes on property, plant and equipment

Effects from exchange rate fluctuations represent NOK 501 million and are mainly attributable to changes in the USD/NOK in Ocean Yield, Akastor, Aker Solutions, Aker BioMarine and Philly Shipyard. Based on book values as at 31 December 2018, a decrease of the USD rate of 10 per cent will reduce assets by about NOK 1.4 billion.

Note 16 | Intangible assets

Amounts in NOK million	Oil- and gas licenses	Capitalised oil and gas exploration expenses	Goodwill	Other	Total
Cost at 1 January 2018	-	-	9 098	4 279	13 377
Acquisitions through business combinations	880	-	-	-	880
Other acquisitions	-	390	10	506	906
Sales / disposals of subsidiaries and operations	-	-	-	(206)	(206)
Effects of changes in foreign exchange rates	58	27	90	55	230
Cost at 31 December 2018	937	416	9 199	4 635	15 188
Accumulated amortisation and impairment at 1 January 2018	-	-	(1 627)	(2 269)	(3 895)
Amortisation for the year	-	-	-	(391)	(391)
Impairment losses (see Note 12)	-	-	(80)	(18)	(97)
Sales / disposals of subsidiaries and operations	-	-	-	187	187
Effects of changes in foreign exchange rates	-	-	15	(30)	(15)
Accumulated amortisation and impairment at 31 December 2018	-	-	(1 692)	(2 520)	(4 212)
Carrying amount at 31 December 2018	937	416	7 506	2 116	10 976

Amounts in NOK million	Goodwill	Other	Total
Carrying amount at 1 January 2017	7 282	2 147	9 429
Acquisitions through business combinations	239	55	294
Other acquisitions	-	437	437
Sales / disposals of subsidiaries and operations	(100)	(44)	(145)
Amortisation for the year	-	(414)	(414)
Impairment losses (see Note 12)	-	(167)	(167)
Effects of changes in foreign exchange rates	51	(3)	48
Carrying amount at 31 December 2017	7 471	2 011	9 482

Oil- and gas licenses

Oil- and gas licenses of NOK 937 million at the end of 2018 is attributable to Aker Energy and is related to NOK 880 million from acquisition of Hess Ghana and NOK 58 million in foreign exchange fluctuations. License rights are recognised as intangible assets at the time of acquisition, see Note 7 for further information.

Oil- and gas licenses are assessed for impairment yearly.

Capitalised oil- and gas exploration expenses

Capitalised oil- and gas exploration expenses of NOK 416 million at the end of 2018 is attributable to Aker Energy and is related to NOK 390 million in capitalised exploration expenses and NOK 27 million in foreign exchange fluctuations.

Goodwill

Goodwill totalled NOK 7 506 million at the end of 2018. The change in 2018 of NOK 35 million is attributable to positive foreign exchange fluctuations and increase due to the acquisition of Enzymotec's krill business of NOK 10 million, partly offset by impairment of goodwill related to the FPSO Dhirubhai-1 in Ocean Yield of NOK 80 million.

See table below for the allocation of goodwill per company. Goodwill related to Aker Solutions, Akastor and Kvaerner originates from various acquisitions and other transactions through the years. The goodwill in Aker BioMarine stems from Aker's acquisition of Natural and the establishment of Aker BioMarine in December 2006, and is fully allocated to the krill business.

Other intangible assets

The carrying amount of other intangible assets of NOK 2 116 million at the end of 2018 mainly consists of NOK 1 538 million in capitalised development expenses and customer relationships and trademark in Aker BioMarine of NOK 396 million. The increase of NOK 168 million in customer relationships and trademark in 2018 is due to the acquisition of Enzymotec's krill-oil business.

Capitalised development expenses consisted of NOK 1 323 million representing capitalised expenses for internal R&D projects in Aker Solutions, capitalised development projects in Akastor totalling NOK 112 million and in Kvaerner totalling NOK 102 million. The net change of NOK -7 million in 2018 is largely attributable to depreciation and impairment of NOK 302 million. The decrease is offset by capitalised expenses of NOK 209 million in Aker Solutions and Akastor, and NOK 74 million in Kvaerner related to a strategic digitalisation project and IT systems.

Other intangible assets are amortised over a period between 5 to 12 years.

Amortisation and impairments

This year's amortisation of NOK 391 million (NOK 414 million in 2017) is divided between NOK 382 million (NOK 409 million in 2017) in continued operations and NOK 9 million (NOK 5 million in 2017) in discontinued operations. Impairment of intangible assets of NOK 97 million (NOK 167 million in 2017) is mainly attributable to impairment of goodwill in Ocean Yield and is allocated to continued operations in 2018.

See Note 12 Impairments for more information regarding impairment assessments.

	Goodwill		Other intangible assets
Amounts in NOK million	2018	2017	2018	2017
Aker Solutions	4 642	4 665	1 428	1 533
Akastor	1 359	1 263	134	183
Kværner	929	929	102	42
Aker BioMarine	576	535	416	248
Other	-	80	36	4
Total	7 506	7 471	2 116	2 011

Note 17 | Investments in associates and joint ventures

The Aker Group has interests in several associates and joint ventures ("JV"), of which the most important ones are: Aker BP ASA (40 per cent, associate), BOX Holding Inc. (49.9 per cent, associate), Solstad Offshore ASA (23.1 per cent, associate), FP Bolig Holding AS (37.6 per cent, associate), DOF Deepwater AS (50 per cent, JV), Kiewit-Kvaerner Contractors (50 per cent, JV), K2JV ANS (51 per cent, JV), Philly Tankers AS (53.7 per cent, JV), Align AS (38.8 per cent, associate), Trygg IDT Holdings I Corp (50 per cent, JV), and AKOFS Offshore AS (50 per cent, JV).

Aker BP ASA is an E&P company operating on the Norwegian Continental Shelf.

BOX Holding Inc. owns six container vessels chartered out on long-term bareboat contracts.

Solstad Offshore ASA owns and operates platform supply vessels, anchor handling vessels and construction service vessels.

AKOFS Offshore AS is a provider of vessel-based subsea well construction and intervention services to the oil and gas industry.

K2JV ANS is a partnership between Kellogg Brown & Root (Norway) AS and Kvaerner. The partnership is constructing the Johan Sverdrup utility and living quarter (ULQ) topside for Equinor.

DOF Deepwater AS operates in the marine sector. The company owns a series of five anchor-handling (AHTS) vessels.

Kiewit-Kvaerner Contractors is a partnership between Peter Kiewit Infrastructure Co and Kvaerner. The partnership was established with the purpose of delivery of the contract awarded by ExxonMobil for the Hebron Project gravity based structure (GBS) offshore Newfoundland, Canada.

Philly Tankers AS was established in 2014 with newbuild-contracts for ecodesign product tankers. The vessels have been built by Philly Shipyard.

Align AS is a supplier of technical safety and total fire-fighting solutions for the global oil and gas market.

Trygg IDT Holdings I Corp is a pharmaceutical development company with FDA approved products for abuse-deterrent opioids that has been licensed to others and launched in the U.S. market.

FP Bolig Holding AS develops residential real estate projects at Fornebu outside Oslo.

The associates and joint ventures are accounted for by using the equity method.

Amounts in NOK million		Book value at 1 January 2018	Effects of acquisitions or disposals of subsidiaries in stages	Acquisitions and disposals	Share of profits / losses	Changes due to exchange differences and hedges	Dividends received	Other changes in equity	Book value at 31 December 2018
Aker BP ASA	1)	18 815		-	1 547	1 030	(1 465)	(48)	19 878
BOX Holdings Inc.	1)	1 548	13	-	197	93	(184)	-	1 668
Solstad Offshore ASA	1)	630		-	(662)	32	-	-	-
AKOFS Offshore AS	2)	-	1 097	-	(20)	(44)	-	53	1 086
K2 JV ANS	2)	-	-	-	130	-	(107)	-	24
DOF Deepwater AS	2)	-	-	-	(102)	-	-	102	-
Kiewit-Kværner Contractors	2)	-	-	-	47	-	(30)	-	17
Philly Tankers AS	2)	398	-	(17)	(14)	21	-	-	388
Align AS	1)	61		-	(6)	-	-	-	56
Trygg IDT Holdings I Corp	2)	78		-	(58)	1	-	-	20
FP Bolig Holding AS	1)	-	180	-	(1)	-	-	(81)	98
Other entities		93	-	323	(40)	-	(1)	(263)	113
Total		21 624	1 290	306	1 019	1 133	(1 787)	(238)	23 348
1) Associates		21 082	193	16	1 071	1 152	(1 650)	64	21 927
2) Joint ventures		542	1 097	290	(51)	(18)	(137)	(301)	1 421
Total		21 624	1 290	306	1 019	1 133	(1 787)	(238)	23 348

Shares of profits/losses from associates and joint ventures are based on the companies' net profit including profit/loss from discontinued operations. The purpose of the investment determines where its results are presented in the income statement. When entities are formed to share risk in executing projects or are closely related to the operating activities, the shares of the profits and losses are reported as part of other income in the operating profit. Shares of profits or losses from financial investments are reported as part of financial items.

Share of profits/losses for 2018 is allocated with NOK 393 million as other income and NOK 626 million as share of profit/loss from associates and joint ventures as part of financial items.

The NOK 1 290 million effect of acquisitions or disposals of subsidiaries in stages is mainly attributed to Akastor's loss of control in AKOFS Offshore AS upon establishment of the company as a joint venture in 2018 (see Note 8).

	Aker BP ASA		BOX Holdings Inc.		Solstad Offshore ASA		AKOFS Offshore AS 1)	K2JV ANS
Amounts in NOK million	2018	2017	2018	2017	2018	2017	2018	2018	2017
Country	Norway			Marshall Islands		Norway	Norway	Norway
Ownership and voting rights	40.0%	40.0%	49.9%	49.5%	23.1%	23.1%	50.0%	51.0%	51.0%
Operating revenues	30 499	21 199	668	656	4 830	3 784	448	1 527	2 705
Operating expenses	(14 433)	(12 868)	(8)	(8)	(8 627)	(3 059)	(269)	(1 271)	(2 520)
Financial items	(1 387)	(1 622)	(188)	(295)	(1 892)	(1 055)	(145)	-	-
Net profit (100%)	3 875	2 273	473	352	(5 732)	(344)	(62)	256	185
Share of net profit result	1 550	909	234	174	(1 324)	(77)	(31)	130	94
Elimination of unrealised sales gain and other adjustments	(3)	-	(37)	25	-	(80)	11	-	-
Impairment/reversal of impairment	-	-	-	-	662	115	-	-	-
Share of earnings	1 547	909	197	199	(662)	(41)	(20)	130	94
Non-current assets	87 647	77 837	7 094	6 934	28 608	32 333	4 741	-	-
Current assets	5 990	20 776	463	475	3 041	3 806	447	332	825
Total assets	93 637	98 612	7 557	7 409	31 649	36 138	5 188	332	825
Non-current liabilities	(55 606)	(50 391)	(4 721)	(4 793)	(10 013)	(29 173)	(2 098)	-	-
Current liabilities	(12 053)	(23 700)	(333)	(363)	(22 267)	(2 002)	(861)	(106)	(824)
Minority interests	-	-	-	-	(28)	(32)	-	-	-
Net assets (100%)	25 978	24 521	2 503	2 252	(658)	4 931	2 229	226	1
Share of net assets	10 391	9 809	1 249	1 115	(152)	1 139	1 115	115	-
Elimination of unrealised gains and losses, deferred payment and adjustments	(80)	(28)	419	433	276	276	(154)	(91)	-
Excess value	9 567	9 035	-	-	(124)	(785)	125	-	-
Balance end of period	19 878	18 815	1 668	1 548	-	630	1 086	24	-
Dividends received	1 465	820	184	170	-	-	-	107	111

SUMMARY OF FINANCIAL INFORMATION AND THE GROUP'S OWNERSHIP IN MAJOR ASSOCIATES AND JOINT VENTURES:

1) From 27 September 2018 to 31 December 2018, see note 8.

Aker BP ASA

The excess value of NOK 9.6 billion is allocated to the Johan Sverdrup field with NOK 7.1 billion and NOAKA-field (North of Alvheim, Krafla/Askja) with NOK 2.4 billion. The reduction of NOK 0.5 billion in 2018 is attributable to the effects from exchange rate fluctuations. Together with the company,

Aker is performing impairment assessments. Sensitivity analysis of excess value have been performed by using simulations of various combinations of discount rates, oil price and value growth. No reasonably possible combination of these factors results in a value in use being lower than the value recognised in the balance sheet as of 31 December 2018.

Aker BP ASA and Solstad Offshore ASA are listed companies. Shown below are the share prices and market values of the Group's share in the companies:

At 31 December 2018	Number of shares in millions	Quoted price in NOK	Book value in NOK million	Market value in NOK million
Aker BP ASA	144.0	218.00	19 878	31 403
Solstad Offshore ASA	67.3	1.72	-	116

Note 18 | Interest-bearing assets

Amounts in NOK million	2018	2017
Restricted deposits	528	120
Loans to employees	22	4
Loans to related parties	450	141
Non-current bonds	37	425
Finance lease receivables	10 181	4 315
Other interest-bearing receivables	536	682
Total	11 755	5 687
Recorded as follows:
Interest-bearing non-current receivables	11 304	5 363
Interest-bearing current receivables	451	324
Total	11 755	5 687

Restricted deposits in 2018 mainly relates to a deposit related to loan agreements with Philly Shipyard of NOK 388 million and with Ocean Yield of NOK 140 million.

Loans to related parties consists of loans to the associates and joint ventures AKOFS Offshore AS of NOK 257 million, Haut Nordic AS of NOK 60 million, FP Bolig Holding AS of NOK 42 million and G&A Air AS of NOK 76 million.

The finance lease receivable of NOK 10.2 billion represents Ocean Yield's ownership in 32 vessels and four vessels under construction. This includes NOK 1.6 billion against the joint venture AKOFS Offshore AS, for the lease of Aker Wayfarer. See details for the financial lease receivables in the table below.

Amounts in NOK million	Aker Wayfarer	Container vessels	Tankers	Other shipping	Total
Number of vessels	1	4	24	7	36
Gross finance lease receivables
Less than one year	346	105	658	109	1 218
Between one and five years	1 089	420	2 564	417	4 489
More than five years	947	684	4 078	808	6 517
Unguaranteed residual values	501	193	1 200	-	1 894
Gross finance lease receivables	2 882	1 402	8 500	1 334	14 118
Less: unearned finance income	(1 312)	(394)	(2 614)	(415)	(4 735)
Total finance lease receivables	1 571	1 007	5 886	919	9 383
Present value of minimum lease payments
Less than one year	321	102	637	105	1 165
Between one and five years	735	358	2 139	343	3 574
More than five years	366	442	2 481	471	3 760
Unguaranteed residual values	149	105	630	-	883
Total finance lease receivables	1 571	1 007	5 886	919	9 383
Pre-delivery instalments	-	-	798	-	798
Total finance lease receivables and related assets	1 571	1 007	6 685	919	10 181

Note 19 | Other shares and non-current assets

Amounts in NOK million	2018	2017
Norron funds	26	471
American Shipping Company ASA	385	276
NES Global Talent Ltd.	530	405
Awilco Drilling Plc	76	-
Odfjell Drilling Ltd.	705	-
Shares in other companies	267	267
Total other shares and investments	1 989	1 420
Pension assets (Note 26)	1	-
Derivatives (Note 6 and Note 30)	-	50
Other interest-free non-current receivables	132	203
Total other non-current assets	132	253
Total other shares and other non-current assets	2 121	1 672

Note 20 | Inventories

Amounts in NOK million	2018	2017
Raw materials	103	534
Work in progress	870	1 334
Finished goods	779	593
Total	1 752	2 460
Impairment of inventory recognised as expense during the period Reversal of impairment recognised as an expense reduction during the period	(101) 69	(516) 87

Carrying amount of inventory pledged as security for liabilities was NOK 554 million as at 31 December 2018.

Note 21 | Trade and other short-term interest-free receivables

Amounts in NOK million	2018	2017
Trade receivables	5 408	4 916
Contract assets	4 696	-
Construction work	-	1 170
Other short-term interest-free receivables	3 042	5 280
Total	13 146	11 366

Other short-term receivables in 2018 includes prepaid expenses with NOK 1 890 million.

See also Note 6 Financial risk and exposure.

Note 22 | Basis for earnings per share, dividend per share, and paid-in equity

EARNINGS PER SHARE
Amounts in NOK million	2018	2017
Continued operations:
Net profit (loss) from continued operations	930	1 793
Minority interests	404	609
Profit from continued operations attributable to equity holders of the parent	526	1 184
Discontinued operations:
Net profit (loss) from discontinued operations	438	906
Minority interests	58	572
Profit from discontinued operations attributable to equity holders of the parent	379	333
Total profit attributable to equity holders of the parent	906	1 517
Shares outstanding at 1 January	74 295 513	74 281 961
Changes in own shares held	(26 721)	13 552
Total shares outstanding at 31 December	74 268 792	74 295 513
Allocation:
Issued shares at 31 December	74 321 862	74 321 862
Own shares held	(53 070)	(26 349)
Total shares outstanding at 31 December	74 268 792	74 295 513
Weighted average number of shares at 31 December	74 282 137	74 292 690

DILUTED EARNINGS PER SHARE

No instruments with a potential dilution effect were outstanding at 31 December 2018 or 31 December 2017.

A dividend of NOK 22.50 per share, totally NOK 1 671 million, will be proposed at the Annual General Meeting on 26 April 2019.

DIVIDEND

Dividends paid in 2018 was NOK 18.00 per share, NOK 1 337 million in total. Dividends paid in 2017 was NOK 16.00 per share, NOK 1 188 million in total.

PAID-IN CAPITAL

See Note 9 to the Aker ASA separate financial statement for a specification of share capital as at 31 December 2018.

Note 23 | Minority interests

The Aker Group includes several subsidiaries owned less than 100 per cent. See Note 9 Operating segments and significant subsidiaries for key figures for some of these companies.

Amounts in NOK million	Per cent minority interests as at 31 December 2018	Balance at 31 December 2017	Impact of changes in accounting policies	Balance at 1 January 2018	Profit for the year	Other compre hensive income	Dividend	New minority, release of minority	Share issue by subsidiary	Balance at 31 December 2018
Aker Solutions	65.24	10 142	66	10 207	378	(69)	-	6	-	10 523
Akastor	63.30	2 388	(44)	2 344	(41)	(358)	-	-	-	1 944
Aker Energy	50.97	-	-	-	(144)	21	-	19	471	367
Kværner	71.29	3 271	-	3 271	198	(11)	-	1	-	3 459
Ocean Yield	38.34	2 425	-	2 425	189	150	(477)	10	755	3 051
Philly Shipyard	42.44	649	-	649	(147)	20	-	-	-	522
Other companies	-	31	-	31	29	(1)	(22)	1	2	41
Total		18 905	22	18 927	462	(248)	(499)	37	1 229	19 908

Minority interest in Aker Kværner Holding

The minority interest in Aker Kværner Holding of NOK 5 960 million at 31 December 2018 is broken down in the table above on the companies where Aker Kværner Holding has ownership interests, with NOK 3 615 million for Aker Solutions, NOK 1 224 million for Akastor and NOK 1 122 million for Kvaerner.

Share issue by subsidiary

Ocean Yield received NOK 759 million through a share issue in February 2018. The increase in minority interests after the deduction of the minority share of transactions costs was NOK 755 million. Share increase in Aker Energy AS in March and December from The Resource Group TRG AS increased minority interests by NOK 471 million.

Note 24 | Other comprehensive income

		Fair		Total
Amounts in NOK million	Translation reserve	value reserves	Hedging reserves	translation and other reserves	Retained earnings	Total	Minority interests	Total equity
2018
Defined benefit plan actuarial gains (losses)	-	-	-	-	(30)	(30)	(53)	(82)
Equity investments at FVOCI - net change in fair value	-	82	-	82	-	82	(16)	66
Items that will not be reclassified to income statement	-	82	-	82	(30)	52	(68)	(16)
Debt investments at FVOCI - net change in fair value	-	4	-	4	-	4	2	6
Changes in fair value of cash flow hedges	-	-	(59)	(59)	-	(59)	(36)	(95)
Reclassified to profit or loss: debt investments at FVOCI, translation and cash flow hedges	(165)	-	(12)	(177)	-	(177)	(301)	(478)
Currency translation differences	362	-	-	362	-	362	153	515
Changes in other comprehensive income from associated and joint venture companies	1 151	-	(23)	1 128	3	1 131	2	1 133
Items that may be reclassified to income statement subsequently	1 348	4	(94)	1 258	3	1 261	(180)	1 081
Other comprehensive income 2018	1 348	86	(94)	1 340	(27)	1 313	(248)	1 065
Amounts in NOK million	Translation reserve	Fair value reserves	Hedging reserves	Total translation and other reserves	Retained earnings	Total	Minority interests	Total equity
2017 Defined benefit plan actuarial gains (losses)	-	-	-	-	(2)	(2)	(58)	(60)
Items that will not be reclassified to income statement	-	-	-	-	(2)	(2)	(58)	(60)
Changes in fair value of available-for-sale financial assets	-	9	-	9	-	9	(8)	1
Changes in fair value of cash flow hedges	-	-	137	137	-	137	203	340
Reclassified to profit or loss: changes in fair value of available-for-sale financial assets, translation differences and cash flow hedges	(86)	-	64	(22)	-	(22)	(28)	(50)
Currency translation differences	(175)	-	-	(175)	-	(175)	(65)	(240)
Changes in other comprehensive income from associated and joint venture companies	(910)	-	(13)	(923)	(8)	(930)	(44)	(974)
Items that may be reclassified to income statement subsequently	(1 171)	10	188	(973)	(8)	(981)	58	(923)

Note 25 | Interest-bearing liabilities

Amounts in NOK million	2018	2017
Secured bank loans	17 851	16 543
Unsecured bank loans	988	2 278
Unsecured bond issues	11 021	8 880
Loan from associates and other related parties	12	11
Overdraft facilities	132	149
Other interest-bearing liabilities	423	263
Total interest-bearing liabilities	30 427	28 124
Recorded as follows:
Current liabilities	5 682	4 616
Non-current liabilities	24 745	23 508
Total interest-bearing liabilities	30 427	28 124

CONTRACTUAL TERMS OF INTEREST-BEARING LIABILITIES AS AT 31 DECEMBER 2018:

Amounts in million	Currency	Nominal interest rate	Maturity	Nominal value in currency	Carrying amount (NOK)
Aker Solutions
Unsecured bond 2019	NOK	3 mnd Nibor + 4.20%	October 2019	1 000	1 011
Unsecured bond 2022	NOK	3 mnd Nibor + 3.15%	July 2022	1 500	1 497
Unsecured bank loan - Brazilian Development Bank	BRL	9.41%	2019 to 2024	188	425
Other loans and loan fees					(20)
Total Aker Solutions					2 913
Akastor
Unsecured bank loan - Term loan	NOK	Nibor + 2.25%	December 2021	600	588
Overdraft facility					14
Total Akastor					602
Ocean Yield
Secured loans in USD	USD	Libor + 0.66% - 2.65%	2019 to 2027	1 442	12 378
Secured loans in NOK	NOK	3.69%	2025	565	565
Unsecured bond	NOK	Nibor + 3.65% - 4.5%	2019 to 2023	2 398	2 374
Total Ocean Yield					15 317
Aker BioMarine
Secured bank loan	USD	Libor + 3.4% - 3.95%	2022 to 2023	123	1 070
Other mortgage loans	NOK		2023 to 2026	111	111
Other loans and overdraft facilities					279
Total Aker BioMarine					1 460
Aker ASA and holding companies
Unsecured bond issue	SEK	Stibor + 3.25%	July 2019	1 500	1 455
Unsecured bond issue	NOK	Nibor + 2.65% - 5.00%	2019 to 2023	4 700	4 678
Term loan facilities	USD	Libor + margin	2019 to 2021	350	3 027
Total Aker ASA and holding companies					9 160
Other companies
FP Eiendom	NOK	Nibor + 1.3% - 2.75%	2019 to 2020	457	457
Philly Shipyard	USD	2.63%	March 2020	60	518
Total other companies					975
Total interest-bearing liabilities					30 427

Aker Solutions

Unsecured bonds: The bonds are unsecured on a negative pledge basis and include no dividend restrictions. The bonds issued are listed on the Oslo Stock Exchange.

Bank loans: The terms and conditions of the Brazilian Development Bank loan include restrictions which are customary for this kind of facility.

Credit facility: Aker Solutions has a credit facility of NOK 5 billion with expiry in March 2023. The credit facility was undrawn per 31 December 2018.

Akastor

Mortgage loans: The terms and conditions include restrictions which are customary for this kind of facility, including inter alia negative pledge provisions and restrictions on acquisitions, disposals and mergers. There are also certain change of control provisions included.

Kvaerner

Revolving credit facility of NOK 2 billion is maturing in July 2020. The revolving credit facility was undrawn per 31 December 2018.

Ocean Yield

Mortgage loan: The mortgage loans in USD are with a different bank syndicates and are secured in 46 vessels with a book value of NOK 18.4 billion. The mortgage loan has an average debt maturity of 4 year with maturity from March 2019 to July 2027. Interests are mainly paid quarterly.

Unsecured bonds: The senior unsecured bond issues have a floating interest, which is paid quarterly. The Company has entered into cross currency interest rate swaps from NOK interest to USD interest.

The facilities include financial covenants as to equity ratio, interest coverage ratio and minimum liquidity. Ocean Yield was in compliance with all covenants at year-end 2018.

Aker BioMarine

Secured loans: Instalments and interest are paid semi-annually.

The mortgages and overdraft facility, totalling NOK 1 449 million, are secured in ships and other assets with book values of NOK 2 477 million.

The loan and overdraft facilities include several financial covenants. Aker BioMarine was in compliance with all covenants at year-end 2018.

Aker ASA and holding companies

Senior unsecured bonds: The maturity dates and interest rates are shown more in detail in note 14 to Aker ASA's separate financial statements. The principal falls due on the maturity date and interest is payable quarterly until maturity.

Mortgage loan: The mortgage loans and the interest are paid quarterly, until maturity. The loans are secured with 42.8 million Aker BP ASA shares.

The bonds and loans have an average debt maturity of 2.5 year with maturity from July 2019 to January 2023.

CHANGES IN THE GROUP'S INTEREST-BEARING LIABILITIES IN 2018:

There are several covenants associated with Aker ASA and holding companies' loans, including debt ratio and total internal loans and guarantees in relation to Aker ASA and holding companies net asset value. Aker ASA has fulfilled all the covenants of the loan agreements by the end of 2018.

FP Eiendom

Loans with a group of Norwegian banks with floating interest. Interest and instalments are payable quarterly until maturity. The loans mature with NOK 337 million in 2019 and NOK 120 million after 2019.

Philly Shipyard

The company's loans are secured in shares.

Collateral

Collateral for interest-bearing debt of NOK 18.4 billion has been issued related to secured loans, construction loans and overdraft facilities. The book value of the assets used as collateral is NOK 26 billion.

Amounts in NOK million	Non-current	Current	Total
Interest-bearing liabilities as at 1 January 2018	23 508	4 616	28 124
Bond in Aker Solutions	1 500	-	1 500
Drawn bank facility in Ocean Yield	3 567	-	3 567
Drawn bank facility in Akastor	924	-	924
Bond in Aker ASA and holding companies	2 000	-	2 000
Bond in Ocean Yield	750		750
Other new loans	435	-	435
Change in credit facilities	-	(17)	(17)
Loan fees and establishment costs	(30)	-	(30)
Total payment of interest-bearing loans	9 146	(17)	9 129
Repayment of bank facilities in Aker Solutions	-	(1 716)	(1 716)
Repayment of bonds in Aker ASA and holding companies	-	(1 300)	(1 300)
Repayment of bonds in Ocean Yield	(755)	-	(755)
Repayment of bank facilities in Ocean Yield	-	(1 388)	(1 388)
Repayment of bank facilities in Akastor	(1 319)	-	(1 319)
Other repayments	(109)	(729)	(838)
Total repayment of interest-bearing loans	(2 183)	(5 133)	(7 315)
Acquisition and sale of subsidiaries	(726)	352	(374)
Reclassification / first year instalments	(5 396)	5 396	-
Currency translation and other changes	395	467	863
Interest-bearing liabilities as at 31 December 2018	24 745	5 682	30 427

Currency adjustments total NOK 0.9 billion and are mainly attributable to the USD loans described above. Loans denominated in USD at the end of the year totalled USD 1.9 billion. A 10 per cent decrease in the USD exchange rate compared to the rate of 8.69 on the balance sheet date would have caused a reduction in debt expressed in NOK of NOK 1.6 billion.

Note 26 | Pension expenses and pension liabilities

The Aker Group's Norwegian companies mainly cover their pension liabilities through group pension plans managed by life insurance companies. The Norwegian companies in the Group are subject to the Norwegian Act relating to mandatory occupational pensions, and the Group meets the requirements of this legislation.

In addition, some of the Norwegian companies are members of an agreement-based early retirement plan (AFP). The schemes provide a large proportion of the Norwegian employees the opportunity to retire before the normal retirement age in Norway of 67 years. Employees who choose retirement will retain a lifelong benefit from the age of 62 years.

The Group's companies outside Norway have pension plans based on local practice and regulations.

The Group also has uninsured pension liabilities for which provisions have been made.

The discount rates used in 2018 and 2017 are based on the Norwegian high-quality corporate bond rate.

The following assumptions have been made when calculating liabilities and expenses in Norway:

	Balance 2018	Profit/loss 2018 and balance 2017
Expected return	2.8 %	2.4 %
Discount rate	2.8 %	2.4 %
Wage growth	2.8 %	2.5 %
Pension adjustment	0.0 %-4.0 %	0.0 %-2.3 %
Mortality table	K2013	K2013

PENSION EXPENSE RECOGNISED IN PROFIT AND LOSS:

Amounts in NOK million	2018	2017
Expense related to benefits earned during the period	90	93
Interest expense accrued on pension liabilities	35	39
Expected return on pension funds	(11)	(14)
Service costs	1	1
Pension expense recognised from defined benefit plans	114	120
Contribution plans (employer's contribution)	658	628
Total pension expense recognised in profit and loss	772	748
Allocation in income statement:
Pension cost recognised as part of wages and other personal expenses	749	721
Interest expenses and expected return recognised as part of net financial items	23	27
Total pension expense recognised in profit and loss	772	748

REMEASUREMENT LOSS (GAIN) INCLUDED IN OTHER COMPREHENSIVE INCOME:

Amounts in NOK million	2018	2017
Change in discount rate and other financial assumptions	(4)	2
Change in life expectancy	6	(39)
Change in other assumptions	95	103
Other comprehensive income - loss/(gain) before tax	97	66
Tax	(15)	(6)
Other comprehensive income - loss/(gain) after tax	82	60

CHANGES IN NET PRESENT VALUE OF BENEFIT-BASED PENSION LIABILITIES:

Amounts in NOK million	2018	2017
Net pension liabilities at 1 January	1 189	1 238
Pension expense recognised from defined benefit plans	114	120
Acquisitions and disposals	(7)	(18)
Pension payments	(68)	(62)
Payments received	(130)	(154)
Remeasurements included in other comprehensive income	97	66
Effects of changes in exchange rates and other changes	(16)	(1)
Net pension liabilities at 31 December	1 180	1 189

NET DEFINED-BENEFIT OBLIGATIONS RECOGNISED IN THE BALANCE SHEET:

Amounts in NOK million	2018	2017
Pension liabilities at 31 December	(2 872)	(2 983)
Fair value of pension funds at 31 December	1 692	1 794
Net liabilities for benefit-based pension liabilities at 31 December	(1 180)	(1 189)
Pension funds	1	-
Pension liabilities	(1 181)	(1 189)
Net liabilities for benefit based pension liabilities at 31 December	(1 180)	(1 189)

Plan assets per category:

Amounts in NOK million	2018	2017
Equity securities	-	45
Bonds	1 139	1 406
Other	434	219
Total funds Norwegian plans	1 573	1 669
Total funds for plans outside Norway	119	125
Total funds	1 692	1 794

The equity securities are invested globally, and the value is based on quoted price at the reporting date without any deduction for estimated future selling cost. The bond investments are mainly in Norwegian municipalities. Norwegian municipalities are assumed to have a rating equal to AA, but there are no official ratings for the majority of these investments. The remaining bond investments are primarily in the Norwegian market within bonds classified as being "Investment Grade".

SENSITIVITY (NORWEGIAN PLANS):

In the table below, the effect on pension expenses and pension liabilities is depicted given a one percentage point increase or decrease in the discount rate. The effect of a one percentage point increase or reduction in pension adjustment is shown as well.

Amounts in NOK million	1%-point increase	1%-point reduction
Discount rate	(165)	198
Future pension growth	160	(134)

Note 27 | Other interest-free long-term liabilities

Amounts in NOK million	2018	2017
US pension guarantee provision (see Note 12 to the Aker ASA financial statement)	89	93
Derivatives (see also Note 30)	232	97
Deferred revenue and deferred considerations	381	348
Other interest-free long-term debt	135	89
Total other interest-free long-term liabilities	837	627

The derivatives consist mainly of interest rate swaps and currency contracts in Ocean Yield. Deferred revenue consists mainly of NOK 106 million (NOK 251 million in 2017) in Ocean Yield related to prepaid charter hire related to four car carriers and two anchor handling vessels.

Note 28 | Provisions

Amounts in NOK million	Warranties	Abandonment provision	Other	Total
Balance at 31 December 2017	706	247	944	1 897
Effect of implementing IFRS 15	155	-	123	277
Adjusted balance at 1 January 2018	861	247	1 066	2 174
Acquisition and disposals of subsidiaries	-	-	75	75
Provisions made during the year	217	88	837	1 142
Provisions used during the year	(129)	(116)	(442)	(687)
Provisions reversed during the year	(109)	-	(161)	(270)
Reclassifications	(11)	(8)	94	75
Currency exchange adjustment	-	12	43	55
Balance at 31 December 2018	828	223	1 513	2 564
Non-current liabilities	1	-	220	221
Current liabilities	827	223	1 292	2 343
Balance at 31 December 2018	828	223	1 513	2 564
Amounts in NOK million	Warranties	Abandonment provision	Other	Total
Balance at 1 January 2017	801	246	1 154	2 201
Acquisition and disposals of subsidiaries	-	-	(8)	(8)
Provisions made during the year	171	-	518	689
Provisions used during the year	(127)	-	(570)	(697)
Provisions reversed during the year	(139)	-	(179)	(317)
Reclassifications	-	13	26	40
Currency exchange adjustment	-	(12)	2	(11)
Balance at 31 December 2017	706	247	944	1 897
Non-current liabilities	13	247	243	503
Current liabilities	693	-	700	1 393
Balance at 31 December 2017	706	247	944	1 897

Warranties

The provision for warranties mainly relates to the possibility that the group, based on contractual agreements, may have to perform guarantee work related to products and services delivered to customers. The provision is based on Aker's contractual obligations and empirical estimates of the frequency and cost of work that may need to be done. The warranty period is normally two to five years and any cash effects will arise during this period. The warranty provision for ongoing projects previously reported as part of amounts due to or from customers, has been reclassified to provisions after the implementation of IFRS 15 on 1 January 2018.

NOK 551 million has been provided for warranties in Aker Solutions, NOK 82 million in Akastor, NOK 187 million in Kvaerner and NOK 8 million in Philly Shipyard.

Removal and decommissioning liabilities

The current liability of NOK 223 million relates to FPSO Dhirubhai-1 in Aker Floating Production. The unit completed its 10-year contract with Reliance Industries Ltd. in September 2018. The FPSO has now seized production and the decommissioning of the subsea infrastructure will be completed during 2019-2020. Due to some delays, the cost of the decommissioning process has increased, and an additional provision of USD 9.1 million has been recognised in 2018.

Other provision

Other provisions mainly comprise Aker Energy with NOK 717 million, Akastor with NOK 320 million, Aker Solutions with NOK 355 million and Kvaerner with NOK 46 million. The provision in Aker Energy is mainly related to contingent liability from the acquisition of Hess Ghana. The provision will be settled when the Plan of Development is approved by the Ghanaian authorities, see Note 7. Other provision relates to workforce reductions and restructuring in addition to lease obligations for vacant premises. The onerous customer contracts provision previously reported as part of amounts due to or from customers, has been reclassified to provisions after the implementation of IFRS 15 on 1 January 2018.

Note 29 | Trade and other payables

Amounts in NOK million	2018	2017
Trade accounts payable	2 732	2 600
Contract liabilities	1 764	-
Liabilities from construction contracts and advances	-	1 602
Accruals of operating- and financial expenses	7 931	6 086
Other current interest-free liabilities	2 102	1 347
Total	14 529	11 636

Other current liabilities include VAT, payroll tax and tax withholding and reserves for unpaid wages and holiday payments.

Note 30 | Financial instruments

See also Note 3 New standards and interpretations not yet adopted and Note 6 Financial risk and exposure for description of financial instruments.

FAIR VALUE AND CARRYING AMOUNTS

The estimates of fair value and the carrying amounts shown in the balance sheet are as follows:

	2018		2017
	Carrying	Fair	Carrying	Fair
Amounts in NOK million	amount	value	amount	value
Financial assets carried at fair value
Available for sale financial assets	-	-	1 851	1 851
Financial assets at fair value through other comprehensive income (FVOCI)1)	1 030	1 030	-	-
Financial assets at fair value through profit and loss (including derivatives)2)	1 108	1 108	210	210
Financial assets designated at fair value through profit and loss	-	-	168	168
Foreign exchange contracts - hedge accounting at FVOCI	342	342	198	198
Total financial assets carried at fair value	2 480	2 480	2 428	2 428
Financial assets carried at amortised cost
Loans and receivables	17 162	17 746	11 267	11 737
Cash and cash equivalents (including long-term restricted deposits, see Note 18)	10 314	10 314	8 268	8 268
Total financial assets carried at amortised cost	27 476	28 061	19 535	20 005
Financial liabilities carried at fair value
Interest rate swaps - hedge accounting at FVOCI	9	9	18	18
Foreign exchange contracts - hedge accounting at FVOCI	190	190	380	380
Derivative contracts - not hedge accounting at fair value through profit and loss	618	618	206	206
Other liabilities at fair value through profit and loss3)	74	74	-	-
Total financial assets carried at fair value	891	891	604	604
Financial liabilities carried at amortised cost
Bonds	11 021	11 282	8 880	9 132
Other interest-bearing debt	19 406	19 469	19 244	19 362
Interest-free non-current financial liabilities	518	518	266	266
Interest-free current financial liabilities	10 724	10 724	6 722	6 722
Total financial liabilities carried at amortised cost	41 669	41 993	35 113	35 482

1) Consist of investments in debt instruments with NOK 512 million and investments in equity instruments with NOK 518 million. These investments are designated to FVOCI. The equity instruments are not held for trading and are classified as medium to long-term strategic investments. The largest investment is shares in American Shipping Company ASA with NOK 385 million.

2) Consists of equity instruments with NOK 959 million, derivatives with NOK 64 million and NOK 85 million in debt instruments / contingent consideration. These items are mandatory measured at fair value through profit and loss in accordance with IFRS 9.

3) Consists of total return swap agreement with underlying American Shipping Company ASA shares with NOK 39 million and deferred consideration of NOK 35 million. These items are mandatory measured at fair value through profit and loss in accordance with IFRS 9.

NOK 4.1 billion of financial liabilities classified as fixed rate in the interest profile table (Note 6) are liabilities that pursuant to contract have floating interest rates but have been swapped to fixed rates using interest rate swaps. In the table above, the changes in the fair value of these derivatives due to interest rate changes are shown on the line "Interest rate swaps-hedge accounting at FVOCI" and the line "Derivative contracts - not hedge accounting at fair value through profit and loss".

FAIR VALUE HIERARCHY

The table below analyses financial instruments by valuation method. See Note 5 Accounting principles for definitions of the different levels in the fair value hierarchy. 2018

Amounts in NOK million	Level 1	Level 2	Level 3
Financial assets carried at fair value
Financial assets at fair value through other comprehensive income	424	12	594
Financial assets at fair value through profit and loss (including derivatives)	101	67	940
Foreign exchange contracts - hedge accounting at FVOCI	-	342	-
Total	525	420	1 534
Financial liabilities carried at fair value
Interest rate swaps - hedge accounting at FVOCI	-	9	-
Foreign exchange contracts - hedge accounting at FVOCI	-	190	-
Derivative contracts - not hedge accounting at fair value through profit and loss	-	618	-
Other liabilities at fair value through profit and loss	-	39	35
Total	-	856	35
Fair value interest-bearing financial liabilities carried at amortised cost
Bonds	8 861	-	2 421
Other interest-bearing debt	-	19 064	405
Total	8 861	19 064	2 826

THE FOLLOWING TABLE PRESENTS THE CHANGES FOR RECURRING FAIR VALUE MEASUREMENTS CLASSIFIED AS LEVEL 3 AS AT 31 DECEMBER:

Amounts in NOK million	2018 Financial assets	2017 Financial assets
Carrying amount as at 1 January	1 095	243
Transfer to level 3	9	389
Total gains or losses for the period recognised in the income statement	41	21
Total gains or losses recognised in other comprehensive income	(14)	1
Purchases	765	445
Divestment and other	(363)	(3)
Carrying amount as at 31 December	1 534	1 095
The amount of gains or losses for the period included in profit and loss and other comprehensive income that is attributable to gains or losses related to assets and liabilities at level 3 still held at the end of the reporting period	11	(3)

Note 31 | Contingencies, guarantee liabilities and legal claims

GUARANTEES

In the course of ordinary operations, completion guarantees are issued and advance payments are received from customers. Guarantees are typically issued to the customer by a financial institution.

Akastor ASA has issued financial guarantees in favour of financial institutions related to financing of the five vessels in DOF Deepwater AS. The guarantee was NOK 507 million per 31 December 2018 (NOK 502 million per 31 December 2017), of which NOK 117 million has been provided for under other non-current liabilities as part of the recognition of Akastor's share of losses in 2018.

Akastor AS has issued a financial parent company indemnity guarantee of NOK 296 million and a financial guarantee of NOK 134 million in favour of finance institutions for fulfilment of lease obligations related to Avium Subsea AS, a wholly-owned subsidiary of AKOFS Offshore.

LEGAL DISPUTES

Through their activities, the group companies are involved in various disputes all over the world. Provisions are made to cover expected losses resulting from such disputes if a negative outcome is likely and a reliable estimate can be prepared. However, the final decision in such cases will always be associated with uncertainty, and a liability may thus exceed the provision made in the accounts.

Kvaerner – Nordsee Ost Project

In 2012, arbitration related to the Nordsee Ost project was filed. The last wind jackets for the project were delivered in October 2013. The arbitration process for the project will take time due to high complexity, and it is currently not possible to estimate when the arbitration will be finalised. There is substantial uncertainty with respect to the final financial outcome of the Nordsee Ost project.

TAX CLAIMS

Group companies are regularly involved in matters under consideration by local tax authorities in various countries. The group treats matters, which have not been finally resolved, in accordance with the information available at the time the annual accounts are issued.

Aker Solutions – Tax claim Brazil

The tax authorities in the state of Parana in Brazil has claimed the Aker Solutions company in Brazil for approximately BRL 311 million (NOK 705 million) including penalties and interests, stating that the conditions for the export exemption from ICMS are not fulfilled. ICMS is a value added tax on sales and services related to the movement of goods. Management has the opinion that a successful outcome in the administrative appeal system or in a judicial process is likely based on current law and practice. The claim is regarded as a contingent liability since the possible outcome will be confirmed by the occurrence of an uncertain future event (a potential court decision). No provision has been made for this contingent liability since a cash outflow is not considered probable, nor is it possible to establish a reliable estimate.

Note 32 | Transactions and agreements with related parties

Aker ASA's main shareholder is TRG Holding AS, controlled by Kjell Inge Røkke through The Resource Group TRG AS (TRG AS). The Aker Group treats all companies controlled by Kjell Inge Røkke as related parties.

TRANSACTIONS WITH KJELL INGE RØKKE AND FAMILY

Through TRG AS, Kjell Inge Røkke owns various companies with investments in industrial properties, as well as 40 per cent of the shares of the commercial real estate company Fornebu Gateway AS. Companies within the group are tenants at several of these properties. In 2018, companies within the group paid NOK 89 million in rent to the real estate companies owned by TRG and NOK 170 million in rent to Fornebu Gateway AS (NOK 86 million to the real estate companies owned by TRG and NOK 171 million in rent to Fornebu Gateway AS in 2017).

Since 2015, Aker ASA has guaranteed for certain pension liabilities in TRG AS (previously Aker Maritime Finance AS) that the company took over from Aker ASA in 2015 (see Note 12 to Aker ASA's separate financial statement).

TRG AS has in 2018 contributed NOK 471 million in equity to Aker Energy AS. Part of this amount was initially provided as a loan that later was converted to equity, including accrued interest on the loan with NOK 3 million. Petrica Holding AS and AGM Petroleum Ghana Ltd., companies controlled by TRG AS that explore an adjacent oil field in Ghana, were in 2018 invoiced NOK 14 million from Aker Energy AS for manhours related to Petrica/AGM's oil field.

When Aker employees perform services for Kjell Inge Røkke or other related parties, Aker's expenses are billed in full. In 2018, TRG AS and Kjell Inge Røkke paid NOK 2.2 million plus value added tax for services and rental of premises (NOK 2.0 million in 2017). TRG AS and Kjell Inge Røkke have provided services to Aker for NOK 1.6 million in 2018 (NOK 1.6 million in 2017).

Except for the above-mentioned transactions, and remuneration for his work as chairman of the board of Aker ASA and board representative in other companies within the group (see Note 33), Aker has no material outstanding accounts or other transactions with Kjell Inge Røkke.

Kristian Røkke, son of Kjell Inge Røkke, was hired as Chief Investment Officer in Aker ASA from 1 January 2018. See Note 33 for information about his remuneration in 2018. In 2017, he earned NOK 6 394 790 in salary and other remuneration as CEO of Akastor. In 2017, he also earned remuneration for his role as member of the board of Aker ASA (see Note 33).

TRANSACTIONS WITH EMPLOYEES

In parallel with an issue of shares in Cognite to newly recruited employees in the company during 2018, Øyvind Eriksen was as Cognite's chairman of the board given the opportunity to purchase two percent of the shares in the company. Eriksen purchased the shares from Aker on the same market terms and conditions as the Cognite employees, including sales restrictions and a five-year lockup-period. The purchase price for the shares was NOK 2 million.

As part of a co-investment program for leading employees in Aker Energy, Aker sold in 1 250 001 shares (1.9 per cent) in Aker Energy to employees of the company in 2018. The shares were sold at market terms for a total amount of NOK 19 million.

TRANSACTIONS WITH ASSOCIATES AND JOINT VENTURES OUTSIDE ORDINARY COURSE OF BUSINESS

Several of the companies within the group have transactions with related parties to the group as part of their ordinary course of business. This particularly applies to Aker BP, who received products and services from several companies within the group, including Aker Solutions, Akastor, Kvaerner, Ocean Yield and Cognite. Below are descriptions of other transactions with associates and joint ventures outside ordinary course of business.

DOF Deepwater AS

Aker's subsidiary Akastor have issued a shareholder's loan to the joint venture DOF Deepwater AS (a company owned 50 per cent by Akastor and 50 per cent by DOF ASA). During 2018, the shareholder's loan was increased by NOK 24 million. As of 31 December 2018, the balance of the shareholder's loan was NOK 35 million, while the carrying amount has been reduced to zero due to recognition of Akastor's share of losses in 2018. Akastor ASA has issued financial guarantees in favour of financial institutions related to financing of the five vessels in DOF Deepwater AS (see Note 31).

AKOFS Offshore AS

As of 31 December 2018, Akastor ASA had interest-bearing receivables against AKOFS Offshore amounting to NOK 257 million with maturity in September 2019. Akastor AS has issued a financial parent company indemnity guarantee of NOK 296 million and a financial guarantee of NOK 134 million in favour of finance institutions for fulfilment of lease obligations related to Avium Subsea AS, a wholly-owned subsidiary of AKOFS Offshore. In addition, Akastor ASA has issued a guarantee

for payment of preferred dividend from AKOFS Offshore to its other investees over five years for a total amount of NOK 333 million.

G&A Air AS

G&A Air AS, a company owned 50 per cent by Aker ASA and 50 per cent by Bjørn Rune Gjelsten, owns an airplane. The airplane is leased and operated by Sundt Air Management who based on market terms (for the use) directly invoices the users of the airplane. G&A Air AS had a loan from Aker ASA of USD 9 million as at 31 December 2018. Bjørn Rune Gjelsten has also provided a loan on equal terms.

Aker BP ASA

Aker BP has in 2018 invoiced NOK 99 million to Aker Energy AS for services related to the development of Aker Energy's oil field in Ghana.

Haut Nordic AS

FP Eiendom acquired in 2018 a 20 per cent direct ownership interest in the company Miklagard Properties Holding AS from the joint venture Haut Nordic AS for NOK 16 million.

TRANSACTIONS AND OUTSTANDING BALANCES INVOLVING RELATED PARTIES IN 2018 AND 2017

Amounts in NOK million	2018	2017
Income statement:
Operating revenues	4 067	4 984
Operating expenses	(363)	(364)
Net financial items	4	8
Balance sheet:
Finance lease receivable	1 571	-
Interest-bearing receivable	450	141
Trade receivable and other interest-free current assets	669	406
Total assets	2 690	547
Trade liabilities and other interest-free current liabilities	(18)	(10)
Interest-bearing debt	(12)	(11)
Net exposure	2 660	526

The operating revenues above for 2018 mainly relate to the delivery of equipment and services from Aker Solutions to Aker BP and sale of man-hours from Kvaerner to joint venture projects.

Note 33 | Vested salary and other remuneration to the board of directors, nomination committee, CEO and other senior executives at Aker ASA

REMUNERATION TO AND SHARES OWNED BY THE BOARD OF DIRECTORS

	Shares owned as of
Amounts in NOK	31 December 2018	2018	2017
Kjell Inge Røkke (Chairman of the Board) 1)	50 673 577	600 000	575 000
Finn Berg Jacobsen (Deputy Chairman)	5 159	415 000	400 000
Kristin Krohn Devold (Director)	-	365 000	350 000
Karen Simon (Director)	-	365 000	350 000
Anne Marie Cannon (Director)	-	365 000	350 000
Atle Tranøy (Employee representative) 2)	-	182 500	175 000
Arnfinn Stensø (Employee representative) 2)	-	182 500	175 000
Amram Hadida (Employee representative) 2)	-	182 500	175 000
Tommy Angeltveit (Employee representative since 21 April 2017) 2)	-	182 500	116 667
Kristian Røkke (Director until 31 December 2017)	-	-	350 000
Anne Tysdal Egaas (Employee representative until 21 April 2017) 2)	-	-	58 333
Total		2 840 000	3 075 000

1) Owns 100 per cent of The Resource Group TRG AS (TRG AS). TRG AS owns 99.71 per cent of TRG Holding AS, which owns 66.99 per cent of Aker ASA. In addition, TRG AS owns 1.19 per cent of Aker ASA directly. TRG AS also owns 31 427 000 shares in Aker Energy AS. Kjell Inge Røkke also owns 280 800 shares in Ocean Yield ASA directly.

2) The employee representatives have the same responsibilities as the other board directors, and should therefore generally have the same compensation.

However, based on an initiative from the employees, an agreement has been made between Aker ASA and employee representatives from LO and other labour organisations, consequently the employee representatives receive a lower compensation.

REMUNERATION TO THE AUDIT COMMITTEE

Amounts in NOK	2018	2017
Finn Berg Jacobsen (Chairman of the audit committee)	185 000	175 000
Atle Tranøy	130 000	125 000
Kristin Krohn Devold	130 000	125 000
Total	445 000	425 000
REMUNERATION TO THE NOMINATION COMMITTEE Amounts in NOK	2018	2017
Kjell Inge Røkke (Chairman of the nomination committee)	45 000	50 000
Gerhard Heiberg	45 000	50 000
Leif-Arne Langøy	45 000	50 000
Total	135 000	150 000

All remunerations are vested during the year. Where amounts have not been paid by the end of the year, provisions have been made in accordance with best estimates.

In 2018, The Resource Group TRG AS (TRG) earned NOK 645 000 in board remuneration (remuneration to the nomination committee included) from Aker ASA (NOK 625 000 in 2017), through Chairman of the Board Kjell Inge Røkke. TRG also earned board remuneration from other Aker-owned companies totalling NOK 1 756 000 through Kjell Inge Røkke in 2018 (NOK 1 496 000 in 2017). See also Note 32 Transactions and agreements with related parties.

The board members earned no payments from Aker ASA in 2018 or 2017 except as described above. Some board members also hold directorships in other companies within the Aker Group.

AKER'S ORGANISATIONAL STRUCTURE

Aker ASA's numerous operational companies are organised into two portfolios; one industrial and one financial. At the end of 2018, Aker's executive team consisted of President and CEO Øyvind Eriksen, CFO Frank O. Reite and Chief Investment Officer Kristian Røkke.

GUIDELINES FOR REMUNERATION OF THE CEO AND SENIOR COMPANY EXECUTIVES

Advisory guidelines

The total remuneration package for executives consists of a fixed salary, standard employee pension and insurance coverage and a variable salary element. The main purpose of the system is to stimulate a strong and enduring profit-oriented culture that ensures share price growth.

The intention of the variable salary element is to promote the achievement of good financial results and leadership in accordance with the company's values and business ethics. The variable salary element has three main components. The first component is a payment based on the dividend on the company's shares, and the second component is a payment based on personal goal achievement. Work on special projects may entitle an employee to an additional bonus. The third component of the variable salary is described under "Binding guidelines" below.

Senior executives participate in a collective pension and insurance scheme open to all employees. The collective pension and insurance scheme applies for salaries up to 12G. For further information regarding the pension scheme, see Note 11 to Aker ASA's separate financial

statements. The members of the executive team are offered standard employment contracts and standard employment conditions with respect to notice periods and severance pay. Their employment contracts can be terminated on three months' notice. If the company terminates a contract, the executive is entitled to three months' pay after the end of the notice period.

Binding guidelines

One of the three components of the variable salary is a granting of bonus shares calculated on the basis of the increase in value-adjusted equity. The other components of the variable salary are described under "Advisory guidelines" above. In addition, the employees have an option to buy Aker ASA shares at a discount (see Note 2 to the separate financial statement for Aker ASA). The company does not offer stock option programmes for its employees.

REMUNERATION OF SENIOR EXECUTIVES

Øyvind Eriksen's appointment as President and CEO can be terminated by either party on three months' notice. If his contract is terminated by the company, Mr. Eriksen is entitled to three months' notice and three months' salary from the date of termination. This amount will not be paid if he continues to be employed by another company in the Aker Group. The remuneration plan for Mr. Eriksen includes a fixed salary, standard employee pension and insurance coverage and a variable salary element. The variable salary element may total up to two-thirds of the fixed salary. In 2018, Mr. Eriksen earned a salary of NOK 17 260 590 (NOK 15 726 319 in 2017), and variable pay of NOK 11 316 948 (NOK 10 232 617 in 2017). The value of additional remuneration was NOK 31 722 in 2018 (NOK 30 036 in 2017), while the net pension expense for Mr. Eriksen was NOK 176 220 (NOK 293 755 in 2017). As at 31 December 2018, Mr. Eriksen owns 219 072 shares in Aker ASA through his wholly-owned company Erøy AS. Erøy AS also owns 200 000 shares in Ocean Yield ASA, 208 220 shares in Cognite AS and 100 000 Class-B shares (0.2 per cent) in TRG Holding AS as at 31 December 2018.

Frank O. Reite's appointment as CFO can be terminated by either party on three months' notice. If his contract is terminated by the company, Mr. Reite is entitled to three months' salary from the date of termination. This amount will not be paid if he continues to be employed by another company in the Aker Group. The remuneration plan for Mr. Reite includes a fixed salary, standard employee pension and insurance coverage and a variable salary element. Mr. Reite's variable salary also includes a bonus-share award scheme including an option to buy Aker ASA shares

at a discount (see Aker ASA Note 2 for a description of the scheme). Mr. Reite's contractual variable salary may total up to 140 per cent of his fixed salary. Mr. Reite earned a fixed salary of NOK 4 583 902 in 2018 (NOK 3 799 814 in 2017), as well as variable pay of NOK 4 374 198 (NOK 5 951 260 in 2017). For 2017, this includes the value of allocated bonus shares in Aker ASA. For 2018, no bonus shares will be allocated. The value of additional remuneration was NOK 21 352 in 2018 (NOK 324 726 in 2017), while the net pension expense for Mr. Reite was NOK 172 754 in 2018 (NOK 263 532 in 2017). In 2018, through his wholly-owned company Fausken Invest AS, Mr. Reite was allocated 2 015 bonus-shares for 2017 (2017: 2 402 bonus-shares for 2016). In 2018, Reite purchased through Fausken Invest AS 4 444 shares at a discount as part of the employee share purchase program. The share purchase program was not carried out during 2017. As at 31 December 2018, Mr. Reite owns 71 240 shares in Aker ASA through Fausken Invest AS. In addition, Fausken Invest AS owns 200 000 shares in Akastor ASA and 11 111 shares in Ocean Yield ASA as at 31 December 2018.

Kristian Røkke acceded the position of Chief Investment Officer in Aker on 1 January 2018. The appointment can be terminated by either party on three months' notice. If his contract is terminated by the company, Mr. Røkke is entitled to three months' salary from the date of termination. This amount will not be paid if he continues to be employed by another

company in the Aker Group. The remuneration plan for Mr. Røkke includes a fixed salary, standard employee pension and insurance coverage and a variable salary element. Mr. Røkke's variable salary also includes a bonus-share award scheme including an option to buy Aker ASA shares at a discount (see Aker ASA Note 2 for a description of the scheme). Mr. Røkke's contractual variable salary may total up to 140 per cent of his fixed salary. Mr. Røkke earned a fixed salary of NOK 3 275 835 in 2018, as well as variable pay of NOK 3 750 011. The value of additional remuneration was NOK 16 935 in 2018, while the net pension expense for Mr. Røkke was NOK 170 953 in 2018. As at 31 December 2018, Mr. Røkke owns 200 000 shares in Akastor ASA through his wholly-owned company Riverrun Capital Management AS. Mr. Røkke owns no shares in Aker ASA.

Senior executives receive no remuneration for directorships or membership of nomination committees of other Aker companies. In 2018, Aker ASA recognised a total of NOK 2 460 567 in respect of Øyvind Eriksen's directorships of other Aker companies. Aker ASA recognised NOK 1 434 922 in respect of Frank O. Reite's directorships of other Aker companies in 2018.

The President and CEO and other senior executives receive no other remuneration than described above. Accordingly, their employment conditions include no loans, guarantees or stock option rights.

Note 34 | Events after the balance sheet date

AKER ENERGY – DRILLING OPERATIONS AND POD SUBMISSION

On 10 January 2019, Aker Energy announced a successful drilling operation of the Pecan-4A appraisal well in the Deepwater Tano/Cape Three Points (DWT/CTP) block offshore Ghana. On 4 March 2019, Aker Energy further announced that oil had been encountered in the drilling the Pecan South-1A well, the first of two additional appraisal wells.

On 28 March 2019, Aker Energy, on behalf of its license partners, submitted an integrated Plan of Development (PoD) to Ghanaian authorities for the DWT/CTP block. The PoD presents an overall plan for a phased development and production of the petroleum resources in the block, with a firm Phase 1 plan for development and production of

the Pecan field. The total oil reserves on the Pecan field is estimated at 334 million barrels, and the contingent resources (2C) is estimated to 110-210 mmboe. Based on the Pecan South results and pre-drill estimates of Pecan South East, the company estimates a potential volume upside of an additional 150-450 mmboe to the mentioned reserves and 2C resources.

The total investment in the Pecan development project is estimated to USD 4.4 billion, of which USD 2.4 billion prior to first oil. First oil from the Pecan field is estimated to be produced 35 months after a final investment decision following approval from the authorities. Further phases will be detailed in addendums to the integrated PoD.

Aker ASA

Income statement Cash flow statement	Balance sheet as at 31 December Notes to the financial statements	95 96 97 98
Note 1	Accounting principles	98
Note 2	Salaries and other personnel expenses	99
Note 3	Property, plant and equipment	100
Note 4	Shares in subsidiaries	100
Note 5	Investments in associates and joint venture companies	101
Note 6	Other non-current financial assets and receivables from subsidiaries	101
Note 7	Impairments and reversals of impairment of shares	102
Note 8	Cash and cash equivalents	102
Note 9	Shareholders' equity	102
Note 10	Tax expense and deferred tax	103
Note 11	Pension expenses and pension liabilities	104
Note 12	Other non-current provisions	105
Note 13	Non-current liabilities to subsidiaries	105
Note 14	External interest-bearing debt	106
Note 15	Other current liabilities	106
Note 16	Guarantee obligations	106
Note 17	Financial market risk	106
Note 18	Shares owned by board members and key executives	107
Note 19	Salary and other remuneration to the Board of directors, nomination committee, CEO and other senior executives	107
Note 20	Disputes and contingent liabilities	107
Note 21	Events after the balance sheet date	107
	Directors' responsibility statement	108
	Independent auditor's report	109

Income statement

Amounts in NOK million	Note	2018	2017
Salaries and other personnel related expenses	2,11,19	(169)	(166)
Depreciation of fixed assets	3	(14)	(14)
Other operating expenses	2	(77)	(77)
Operating profit (loss)		(260)	(257)
Interest income from subsidiaries		40	30
Other interest income		20	33
Reversed impairments of shares	7	-	760
Dividends from subsidiaries	4	3 517	1 272
Foreign exchange gains		85	11
Other financial income		26	154
Total financial income		3 688	2 260
Interest expenses to subsidiaries		(22)	(19)
Other interest expenses		(283)	(271)
Impairments of shares and receivables	7	(1 254)	-
Foreign exchange losses		(15)	(88)
Other financial expenses		(88)	(67)
Total financial expenses		(1 662)	(444)
Net financial items		2 026	1 816
Profit before tax		1 767	1 559
Tax expense	10	-	-
Profit after tax		1 767	1 559
Allocation of profit/loss for the year:
Profit (+) / loss (-)		1 767	1 559
Allocation of dividend		(1 671)	(1 337)
Allocated to other equity		(96)	(222)
Total	9	-	-

Balance sheet as at 31 December

Amounts in NOK million	Note	2018	2017
ASSETS
Deferred tax assets	10	-	-
Property, plant and equipment	3	98	107
Shares in subsidiaries	4	24 657	24 859
Investments in associates and joint ventures	5	56	66
Non-current receivables from group companies	6	671	951
Other non-current financial assets	6	11	106
Total non-current assets		25 493	26 088
Current receivables from group companies	6	3 505	1 260
Other current receivables	5	292	221
Cash and cash equivalents	8	1 310	873
Total current assets		5 107	2 353
Total assets		30 600	28 442
EQUITY AND LIABILITIES
Share capital		2 081	2 081
Own shares		(1)	(1)
Share premium		250	250
Other paid-in equity		1	-
Total paid-in equity		2 331	2 331
Other equity		17 816	17 751
Total equity	9	20 148	20 081
Pension liabilities	11	58	81
Other non-current provisions	12	89	93
Non-current liabilities to group companies	13	2 380	1 272
Non-current external interest-bearing debt	14	4 679	4 184
Total non-current liabilities		7 206	5 629
Allocated dividend	9	1 671	1 337
Current external interest-bearing debt	14	1 454	1 299
Other current liabilities	15	121	95
Total current liabilities		3 246	2 732
Total equity and liabilities		30 600	28 442

Fornebu, 29 March 2019 Aker ASA

Kjell Inge Røkke (sign) Chairman

Finn Berg Jacobsen (sign) Deputy Chairman

Anne Marie Cannon (sign) Director

Kristin Krohn Devold (sign) Director

Karen Simon (sign) Director

Atle Tranøy (sign) Director

Tommy Angeltveit (sign) Director

Amram Hadida (sign) Director

Arnfinn Stensø (sign) Director

Øyvind Eriksen (sign) President and CEO

Cash flow statement

Amounts in NOK million	Note	2018	2017
Profit before tax		1 767	1 559
Sales losses/gains(-) and write-downs/reversals(-) of financial assets	7	1 254	(760)
Unrealised foreign exchange losses/gains(-)		(59)	75
Depreciation and write-downs of fixed assets	3	14	14
Changes in other current items, etc.		(3 603)	(1 446)
Cash flow from operating activities		(628)	(559)
Sales proceeds/acquisitions(-) of fixed assets	3	(5)	(3)
Acquisitions of shares and other equity investments		-	(7)
Repayments of interest-bearing receivables		106	119
Payments on interest-bearing receivables		(706)	(976)
Cash flow from investment activities		(604)	(867)
Issue of non-current debt		1 985	-
Repayments of external interest-bearing debt		(1 300)	(1 000)
Net repayments/payments (-) on debt to group companies		2 345	1 239
Dividend paid and payments from other equity transactions		(1 361)	(1 188)
Cash flow from financing activities		1 668	(949)
Cash flow for the year		436	(2 375)
Cash and cash equivalents as at 1 January	8	873	3 248
Cash and cash equivalents as at 31 December	8	1 310	873

Notes to the financial statements

Note 1 Accounting principles

The financial statements are prepared and presented in Norwegian kroner (NOK). The financial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in Norway as at 31 December 2018.

SUBSIDIARIES, ASSCIATES AND JOINT VENTURES

Subsidiaries are companies in which Aker ASA has control. This normally means an ownership interest of more than 50 per cent, and that the investment is long-term and of a strategic nature. Associates are companies in which Aker ASA has significant influence, but not control, which normally is the case when Aker ASA holds between 20 per cent and 50 per cent of the voting shares. Joint ventures are contractual arrangements whereby two or more parties undertake an economic activity that is subject to joint control, and whereby the parties have rights to the net assets of the arrangement.

Subsidiaries, associates and joint ventures are accounted for using the cost method in Aker ASA's separate financial statements. A writedown to fair value is made whenever impairment is due to causes that are assumed to be non-transient. A reversal is made whenever the impairment is no longer present.

Dividends exceeding the share of retained profits since acquisition are deemed as refunds of invested capital. Such dividends reduce the book value of the investments. Received dividends from companies owned less than 90 per cent are accounted for when the dividends are approved.

A group contribution received that exceeds Aker ASA's share of retained profits since acquisition, is booked as a deduction from the book value of the investment, with a corresponding deduction of the deferred tax asset (or an increase in deferred tax). In cases where no deferred tax asset is booked and an amount equal to the group contribution is transferred back to the subsidiary as a group contribution without tax effect, the entire received group contribution will be recorded as a deduction from the book value of the investment (without any corresponding entry with respect to deferred tax assets/deferred tax). The group contribution without tax effect is then correspondingly recorded as an increase in the book value of the investment, with the result that the net effect on the investment is zero. This reflects the fact that, overall, the "circular group contribution" has not constituted a transfer of value between Aker ASA and the subsidiary.

CLASSIFICATION AND ASSESMENT OF BALANCE SHEET ITEMS

Current assets and current liabilities comprise items that fall due within one year after the balance sheet date. Other items are classified as noncurrent assets/non-current liabilities.

Current assets are valued at the lower of acquisition cost or fair value. Current debt is recognised at its nominal value at the time it was recorded.

Non-current assets are valued at acquisition cost but written down to fair value whenever impairment is deemed non-transient. Non-current debt is recognised at its nominal value at the time it was established. Fixed interest rate bonds are accounted for at amortised cost.

RECEIVABLES

Trade receivables and other receivables are recorded at par value after

the subtraction of a provision for expected losses. Provisions are made for losses based on individual assessments of each receivable.

FOREIGN CURRENCY

Transactions in foreign currencies are translated into NOK using the exchange rates applicable at the time of each transaction. Monetary items in foreign currencies are translated into NOK using the exchange rates applicable on the balance sheet date. Non-monetary items that are measured at fair value in a foreign currency are translated into NOK using the exchange rates applicable on the date of measurement. Valuation changes due to exchange rate fluctuations are recorded on a continuous basis under other financial items.

NON-CURRENT ASSETS

Non-current assets are recognised and depreciated over their estimated useful lifes. Direct maintenance of operating assets is expensed on an ongoing basis as operating expenses, while improvements and enhancements are added to the acquisition cost and depreciated in line with the asset. If the recoverable amount of the operating asset is less than its carrying value, the recoverable amount is impaired. The recoverable amount is the higher of net sales value and value-in-use. Value-in-use is the present value of the future cash flows that the asset is expected to generate.

PENSIONS

Pension expenses and pension liabilities are calculated according to linear vesting based on expected final salary. The calculation is based on a number of assumptions such as the discount rate, future salary increases, pensions and other social benefits from the Norwegian national insurance system (Folketrygden), future returns on pension funds and actuarial assumptions regarding mortality and voluntary retirement. Pension funds are recognised at fair value.

TAX

The tax expense in the income statement includes both the tax payable for the period and changes in deferred tax. Deferred tax is calculated at a nominal value rate based on the temporary differences that exist between accounting and tax values, and tax losses carried forward at the end of the accounting year. Tax increasing and tax decreasing temporary differences that reverse or can be reversed in the same period are offset. Net deferred tax assets are recognised to the extent that it is probable that they can be utilised.

CASH FLOW STATEMENT

The cash flow statement is prepared according to the indirect method. Cash and cash equivalents consist of cash, bank deposits and other current, liquid investments.

THE USE OF ESTIMATES

Preparation of the annual accounts in accordance with generally accepted accounting principles requires management to make judgments, estimates and assumptions that affect the application of accounting principles, as well as the reported amounts of assets and liabilities, income and expenses. The estimates and underlying assumptions are reviewed and assessed on an ongoing basis, and are based on historical experience and various other factors considered to be reasonable. Changes to the accounting estimates are recognised in the profit and loss account in the same period as the one in which the estimates are revised, unless deferred allocations are prescribed by generally accepted accounting principles.

Note 2 | Salaries and other personnel expenses

Amounts in NOK million	2018	2017
Salaries	126	121
Social security contributions	23	21
Pension expenses exclusive financial items (see Note 11)	14	7
Other benefits	7	17
Total salaries and other personnel expenses	169	166
Number of employees at year-end	39	37
Number of full time equivalents at year-end	38	37

AUDIT FEE IS INCLUDED IN OTHER OPERATING EXPENSES AND CONSISTS OF THE FOLLOWING:

Amounts in NOK million, inclusive VAT	2018	2017
Statutory audit	1.9	2.1
Attestasion services	-	-
Tax services	-	-
Other services	0.1	0.2
Total	2.0	2.4

REMUNERATION TO/FROM GROUP COMPANIES AND RELATED PARTIES CONSIST OF THE FOLLOWING:

Amounts in NOK million	2018	2017
Invoiced for services and office rent within the Group	15.7	10.8
Invoiced for services to The Resource Group TRG AS	2.1	2.0
Procured services from the The Resource Group TRG AS and Kjell Inge Røkke	(1.6)	(1.6)
Board fee to The Resource Group TRG AS, excluding payroll tax	(0.6)	(0.6)
Total	15.6	10.6

See Note 32 to the group accounts for other transactions with related parties.

INCENTIVE PROGRAMME FOR EMPLOYEES (EXCLUDING THE PRESIDENT AND CEO)

Aker ASA has adopted an incentive programme to promote the company's goals and give employees the same motivation as shareholders. In 2018, the incentive programme had the following elements:

• § a dividend bonus, based on the Aker ASA dividend
• § a personal bonus, based on personal achievement
• § bonus shares, allocated on the basis of on an agreed increase in net asset value
• § an option to purchase Aker ASA shares subject to a lock-up period.

See Note 33 to the group accounts regarding the incentive programme for the President and CEO.

BONUS CEILING

Dividends and personal bonuses are paid in cash in the year after the vesting year. Participants can achieve a total bonus equal to a defined percentage of fixed salary (bonus ceiling), split into a dividend bonus and a personal bonus.

DIVIDEND BONUS

The dividend bonus is linked to dividends paid for the vesting year. A defined number of shadow shares are used as the basis for calculating the dividend bonus. The calculation of the shadow shares is based on the target yield for net asset value and the target dividend for the vesting year. Participants receive a dividend bonus (cash) equal to the dividend per share proposed by the board of directors multiplied by the number of shadow shares.

PERSONAL BONUS

The personal bonus is linked to the achievement of personal results and goals, and is set based on an overall evaluation covering each participant's personal achievements and development, the results and development of the company and the unit to which the participant belongs, and the participant's contribution to the Aker-community.

BONUS SHARES

Participants may be awarded shares in the company if the company achieves an increase in net asset value of more than 10 per cent in the relevant year. The number of potential bonus shares cannot be determined before allocation takes place, as the final number is based on the share price on the determination date and the participant's salary as at 31 December of the vesting year. An allocation range is calculated for the award of bonus shares at the beginning of the vesting year, equal to 50 per cent of the range for the dividend bonus. The fixed allocation range is a gross range. The participant's estimated tax on the free bonus shares is deducted from this gross range, as the company pays this amount in by way of advance tax deduction. Deduction of tax leaves a net range as a basis for calculating the number of bonus shares. The value of the bonus shares equals the share price on the vesting date

minus a deduction to take into the account the lock-up period (20 per cent). The lock-up period is three years from the date the bonus shares are received. The limitations on the right of participants to dispose of the discounted shares freely are registered in VPS as a restriction in favour of the company. If a participant leaves the company during the lock-up period, 50 per cent of the distributed bonus shares are returned to the company without compensation to the participant.

OPTION TO PURCHASE SHARES SUBJECT TO A LOCK-UP PERIOD

Participants may purchase shares in the company at a price equal to 80 per cent of the share price at the time the shares are purchased. The number of shares that can be purchased during the vesting year is calculated based on the estimated number of bonus shares the participant may theoretically receive at the end of the earning year if he/ she achieves the maximum bonus. Participants choose how many shares they want to buy within their allocation range. A lock-up period of three years applies from the date the shares are received. The limitations on the right of participants to dispose of the shares freely are registered in VPS as a restriction in favour of the company. The lock-up period continues to apply if the participant leaves the company during the lock-up period, unless the company and the participant agree otherwise.

Dividend bonuses and personal bonuses are recorded as salary expenses. An allocation of NOK 35 million has been made under other current liabilities as at 31 December 2018 in respect of dividend bonuses and personal bonuses including holiday pay and payroll tax. The accrual of bonus shares is recorded as a salary expense in the income statement distributed over the lock-up period. The contra entry is other equity. It is recorded an accrual related to 2018 bonus shares of NOK 3 million.

Note 3 | Property, plant and equipment

Office and
Amounts in NOK million	Art	fixtures	Property	Total
Acquisition cost as at 1 January 2018	43	104	8	155
Additions	-	5	-	5
Acquisition cost as at 31 December 2018	43	109	8	160
Accumulated depreciation and write-downs	(17)	(43)	(1)	(61)
Book value as at 31 December 2018	26	66	6	98
Depreciation for the year	-	(14)	-	(14)
Useful life		3-8 years	50 years
Depreciation plan	No depreciations	Linear	Linear

Note 4 | Shares in subsidiaries

			Equity as at 31	Profit before tax	Dividend
Amounts in NOK million	Ownership in % 1)	Location, city	Dec. 2018 2)	2018 2)	received	Book value
Aker Capital AS	100.0	Fornebu	16 703	1 139	3 500	16 814
Aker Kværner Holding AS	70.0	Fornebu	7 144	(1 504)	-	5 001
Aker BioMarine AS	100.0	Fornebu	1554	(10)	-	1 746
Aker Solutions ASA 4)	6.4	Fornebu	7 608	792	-	687
Akastor ASA 3)	8.5	Fornebu	4 317	(91)	-	305
Resource Group International AS	100.0	Fornebu	53	(3)	-	52
Norron Holding AB	54,3	Stockholm	71	66	17	44
Intellectual Property Holdings AS	100.0	Fornebu	3	-	-	8
Aker Achievements AS	100.0	Fornebu	6	-	-	-
AGE Air AS	100.0	Fornebu	-	-	-	-
Total					3 517	24 657

1) Ownership and voting interest.

2) 100 per cent of the company's equity before dividends and group contributions as at 31 December and profit before tax in 2018. Akastor ASA, Aker Solutions ASA, Norron Holding AB and Aker BioMarine AS figures are group figures.

3) In addition, Aker ASA owns 40.3 per cent through Aker Kværner Holding AS.

4) In addition, Aker ASA owns 40.6 per cent through Aker Kværner Holding AS.

The investments are recorded at the lowest of fair value and cost price.

Note 5 | Investments in associates and joint venture companies

Amounts in NOK million	Equity as at 31.12.2018 2)	Profit before tax 2)	Cost	Accumulated write-down	Book value 2018	Book value 2017
G&A Air AS 1)	111	(7)	66	(10)	56	66
Others	-	-	1	(1)	-	-
Total investments in associates and joint ventures			67	(11)	56	66

1) Location at Fornebu. Ownership and voting interest 50%. In addition, the company has a NOK 160 million receivable on G&A Air AS at 31.12.2018. 2) 100 per cent of the comapny's equity as at 31 December and profit before tax in 2018.

The investments are recorded at the lowest of fair value and cost.

Note 6 | Other non-current financial assets and receivables from subsidiaries

Amounts in NOK million	2018	2017
Non-current derivatives	-	50
Other non-current receivables	7	52
Aker Pensjonskasse	4	4
Total other non-current financial assets	11	106
Amounts in NOK million	2018	2017
Aker BioMarine AS	477	919
AGE Air AS	190	-
Aker Kværner Holding AS	4	2
Resource Group International AS	-	30
Total non-current receivables from group companies	671	951

The receivables have maturities of more than one year. Interest terms on the receivables reflect market terms.

Amounts in NOK million	2018	2017
Aker Capital AS	3 500	1 259
Other	5	1
Total current receivables from group companies	3 505	1 260

Note 7 | Impairments and reversals of impairment of shares

Amounts in NOK million	2018	2017
Aker Kværner Holding AS	(1 053)	672
Aker Solutions ASA	(113)	84
Akastor ASA	(78)	5
G&A Air AS	(10)	-
Total impairment and reversals of impairments on shares	(1 254)	760

Note 8 | Cash and cash equivalents

Amounts in NOK million	2018	2017
Unrestricted cash	1 289	851
Restricted cash	20	22
Total cash and cash equivalents	1 310	873

Note 9 | Shareholders' equity

The share capital at 31 December 2018 consisted of 74 321 862 shares with a nominal value of NOK 28 per share. All shares have equal voting rights and are entitled to dividends. Aker ASA has no voting rights for its own shares. At 31 December 2018, Aker ASA had 53 070 own shares, and the number of shares outstanding was 74 268 792. At the General Meeting on 26 April 2019, it will be proposed a dividend of NOK 22,50 per share, totalling NOK 1 671 million.

CHANGES IN SHAREHOLDER'S EQUITY IN 2018 ARE SHOWN BELOW:

Amounts in NOK million	Share capital	Premium on shares	Share premium	Other paid-in capital	Total paid-in capital	Other equity	Total equity
Equity as at 1 January	2 081	(1)	250	-	2 331	17 751	20 081
Purchased/sold/bonus treasury shares	-	(1)	-	1	-	(26)	(26)
Changes in estimate pension booked directly against equity	-	-	-	-	-	(4)	(4)
Allocation of dividend	-	-	-	-	-	(1 671)	(1 671)
Profit for the year	-	-	-	-	-	1 767	1 767
Equity as at 31 December	2 081	(1)	250	1	2 331	17 816	20 148

In 2018, the company has acquired 50 000 treasury shares and sold/distributed 23 279 treasury shares in connection with the employees incentive program. Net effect recorded against equity was NOK 24 million.

In addition, accrued share bonus in 2018 with NOK 3 million has been recorded as an expense and increased other equity. Other equity has been reduced through distribution of profit and loss with the same amount and accrued share bonus totally has net zero effect on other equity.

THE 20 LARGEST SHAREHOLDERS AS AT 31 DECEMBER 2018:

	Number of shares	Per cent
TRG Holding AS 1)	49 785 635	67.0%
Folketrygdfondet	3 300 408	4.4%
The Resource Group TRG AS 1)	887 942	1.2%
J.P. Morgan Bank Luxenburg S.A.	847 475	1.1%
Tvenge, Torstein Ingvald	750 000	1.0%
KLP Aksjenorge	498 767	0.7%
State Street Bank & Trust Company	460 740	0.6%
UBS AG	424 547	0.6%
Handelsbank Nordiska Småbolagsfond	400 000	0.5%
J.P. Morgan Chase BANK N.A. London	366 795	0.5%
J.P. Morgan Chase BANK N.A. London	319 069	0.4%
Kommunal Landspensjonskasse	313 110	0.4%
Société Générale	308 949	0.4%
Norron Sicav - Active	293 814	0.4%
State Street Bank and Trust Comp	288 960	0.4%
VPF Nordea Norge Verdi	266 741	0.4%
State Street Bank and Trust Comp	247 129	0.3%
Morgan Stanley & Co LLC	231 607	0.3%
KLP Aksjenorge indeks	229 930	0.3%
Pagano AS	225 477	0.3%
Others	13 874 767	18.7%
Total	74 321 862	100%

1) Kjell Inge Røkke controls 68.2 per cent of the shares in Aker ASA through TRG Holding AS and The Resource Group TRG AS.

Note 10 | Tax expense and deferred tax

The table below shows the difference between accounting and tax values at the end of 2018 and 2017 respectively, changes in these differences, deferred tax assets at the end of each year and the change in deferred tax assets.

Amounts in NOK million	2018	2017
Provisions and accruals	-	50
Fixed asset differences	1	2
Net pension liability/guarantee pension	(147)	(174)
Capital gains and loss reserve	33	41
Total differences	(113)	(81)
Tax losses carried forward	(3 565)	(3 957)
Other differences	(11)	(3)
Total deferred tax basis	(3 689)	(4 041)
Net deferred tax 22% (2017: 23%)	(812)	(929)
Write-down deferred tax assets	812	929
Recognised deferred tax assets	-	-

Deferred tax asset is recognised in the balance sheet if future utilisation of the asset is expected.

The deferred tax assets have been written down to zero as of 31 December 2018. NOK 834 million of the tax losses carried forward are disputed and included in the 2017 figures. The amount is removed in the 2018 figures.

ESTIMATED TAXABLE INCOME

Amounts in NOK million	2018	2017
Profit before tax	1 767	1 559
Permanent differences	(2 208)	(2 010)
Change in temporary differences	(17)	(189)
Estimated taxable income	(458)	(640)
Tax payable 23% in the profit and loss account (2017: 24%)	-	-
Tax payable 23% in the balance sheet (2017: 24%)	-	-

INCOME TAX EXPENSE

Amounts in NOK million	2018	2017
Tax payable in the profit and loss account	-	-
Change in deferred tax	-	-
Total tax expense	-	-

RECONCILIATION OF EFFEKCTIVE TAX RATE IN THE PROFIT AND LOSS ACCOUNT

Amounts in NOK million 2018	2017
23% tax on profit before tax (2017: 24%) (406)	(374)
23 % tax on permanent differences (2017: 24%) 508	482
Change earlier years 13	-
Change in tax rate (37)	(40)
Change in unrecognised deferred tax asset (78)	(68)
Estimated tax expense -	-
Effective tax rate (tax expense compared with profit / loss before tax) 0%	0%

Note 11 | Pension expenses and pension liabilities

According to the Norwegian Occupational Pensions Act (Lov om tjenestepensjon), the company is required to provide a pension plan for all its employees. The company's pension plans meets the statutory requirements. Aker ASA primarily covers its pension liabilities through a group pension plan provided by a life insurance company. From 1 January 2018, the company changed the pension scheme to a defined contribution plan. The change had effect for persons up to 58 years old as at 1 January 2018. The employees included in the defined benefit plan received paid-up policies according to earned rights from the defined benefit plan. For accounting purposes, the change in scheme was treated as a change in plan and included 33 persons. The pension scheme for persons above 58 years is treated as a defined benefit plan and includes 4 active persons as of 31 December 2018. In addition, Aker ASA has uninsured pension liabilities, which gives rights to defined future benefits.

AKTUARIAL CALCULTATIONS HAVE BEEN UNDERTAKEN BASED ON THE FOLLOWING ASSUMPTIONS	2018	2017
Discount rate	2.8%	2.4%
Wage increases	2.8%	2.5%
Social security base adjustment / inflation	2.5%	2.3%
Pension adjustment	0.0%	0.0%

The actuarial assumptions are based on assumptions commonly used in the life insurance industry with respect to demographic factors. The discount rate is based on the Norwegian high-quality corporate bond rate.

PERCENTAGE COMPOSITION OF PENSION ASSETS	2018	2017
Bonds	84.2%	86.7%
Shares	8.2%	7.5%
Property/other	7.6%	5.8%

PENSION EXPENSES

Amounts in NOK million	2018	2017
Present value of this year's pension accruals	(8)	(6)
Change in plan in profit and loss accounts	-	(1)
Interest expense on accrued pension liabilities	(2)	(5)
Expected return on pension funds	1	2
Net pension expenses defined benefit plan	(10)	(10)
Pension expenses defined contributions plan	(5)	-
Total pension expenses (-)	(15)	-

NET PENSION LIABILITIES AS AT 31 DECEMBER

Amounts in NOK million	2018 1)	2017 1)
Present value of accrued pension liabilities	(101)	(124)
Value of pension funds	43	43
Net pension liabilities 2)	(58)	(81)
Number of individuals covered	63	65

1) Aker ASA had only underfunded plans in 2018 and 2017 i.e. plans where the value of the pension liabilities exceeds the value of the pension funds. 2) Provision has been made for social security contributions on plans with net pension liabilities.

The plans include 3 active and 60 retired persons.

Pension funds are invested in accordance with the general guidelines for life insurance companies. Recorded pension liabilities are calculated on the basis of estimated future pension liabilities and accrued in accordance with generally accepted accounting principles. The pension liability recorded in the accounts is not the same as the vested pension rights as at 31 December.

Note 12 | Other non-current provisions

Amounts in NOK million	2018	2017
US pension guarantee provision	89	93
Total other non-current provisions	89	93

Aker ASA had earlier signed a guarantee commitment regarding the US pension fund Kvaerner Consolidated Retirement Plan with Kvaerner US Inc (KUSI). As of December 2015, Aker Maritime Finance AS ("AMF") took over the pension liability from KUSI in order to avoid accelerated payments under the Aker ASA guarantee because of a potential bankruptcy of KUSI. Aker ASA continued to guarantee for the liability and shall cover for all AMF's expenses related to the pension plan. In 2017, Aker Maritime Finance AS merged with The Resource Group TRG AS ("TRG"), and the commitment of Aker ASA to cover the expenses is now against TRG. As at 31 December 2018, Aker ASA has made a provision of NOK 89 million in the balance sheet.

Note 13 | Non-current liabilities to subsidiaries

Amounts in NOK million	2018	2017
Aker Capital AS	2 367	1 259
Aker Holding Start 2 AS	13	13
Total non-current liabilities to group companies	2 380	1 272

Note 14 | External interest-bearing debt

Amounts in NOK million	Interest	Maturity	2018	2017
Bond AKER12	Stibor + 3.25%	July 2019	-	1 499
Bond AKER10	Nibor + 4%	June 2020	700	700
Bond AKER13	Nibor + 3.5%	May 2020	1 000	1 000
Bond AKER09	Nibor + 5%	September 2022	1 000	1 000
Bond AKER14	Nibor + 2.65%	January 2023	2 000	-
Loan expenses			(21)	(16)
Total non-current external interest-bearing liabilities			4 679	4 184
Bond AKER11	Nibor + 3.5%	June 2018	-	1 300
Bond AKER12	Stibor + 3.25%	July 2019	1 455	-
Loan expenses			(1)	(1)
Total current external interest-bearing liabilities			1 454	1 299

The loans are all denominated in NOK, except for the AKER12 bond that is denominated in SEK. The company is in no breaches to its covenants as of 31 December 2018.

Note 15 | Other current liabilities

Amounts in NOK million	2018	2017
Accrued interest external	34	33
Other accrued expenses	33	23
Foreign exchange derivatives	19	-
Other	35	38
Total other current liabilities	121	95

Note 16 | Guarantee obligations

Amounts in NOK million	2018	2017
Loan guarantees	308	308
Other guarantees	32	-
Total guarantee obligations	340	308

Loan guarantees as at 31 December 2018 consisted mainly of guarantees related to Aker BioMarine AS with NOK 305 million.

Note 17 | Financial market risk

The company are exposed to several types of financial risk, the most significant of which are credit, liquidity, foreign exchange and interest rate risk. The purpose of risk management is to measure and manage financial risks in a reliable manner, in order to increase predictability and simultaneously minimise any negative impacts on Aker's financial results. Aker ASA has loan and guarantee commitments that contain equity covenants. At 31 December 2018, Aker ASA was in compliance with all such covenants. See also Note 6 to the group accounts. Aker ASA secures a part of net exposure in cash flow in foreign exchange and normally not

balance items. Cash flow, including detectable structural transactions and possible loans in foreign exchange are secured within fixed intervals. In total, Aker ASA has hedged USD 35 million net by means of forward contracts and options. In addition, Aker ASA has an interest- and foreign currency agreement of SEK 1 150 million. As at 31 December 2018, the income statement shows an net loss of NOK 65 million on all foreign exchange agreement. Unrealised gain is included in other current receivables of NOK 11 million, and unrealised loss of 19 million is included in other current liabilities.

Note 18 | Shares owned by board members and key executives

See Note 33 to the financial statements of the Group.

Note 19 | Salary and other remuneration to the Board of directors, nomination committee, CEO and other senior executives

See Note 33 to the financial statements of the Group.

Note 20 | Disputes and contingent liabilities

There are no known major disputes or contingent liabilities as at 31.12.18.

Note 21 | Events after the balance sheet date

There have not been any other major events after the balance sheet date. See also Note 34 in the financial statement of the Group.

Directors' responsibility statement

Today, the board of directors and the president and chief executive officer reviewed and approved the board of directors' report and the consolidated and separate annual financial statements of Aker ASA, consolidated and parent company for the year ending and as of 31 December 2018.

Aker ASA's consolidated financial statements have been prepared in accordance with IFRSs and IFRICs adopted by the EU as well as additional disclosure requirements in the Norwegian Accounting Act and as such are to be applied per 31 December 2018. The separate financial statements of Aker ASA and the parent company have been prepared in accordance with the Norwegian Accounting Act and Norwegian accounting standards as at 31 December 2018. The board of directors' report for the group and the parent company satisfy with the requirements of the Norwegian Accounting Act and Norwegian accounting standard no. 16, as at 31 December 2018.

To the best of our knowledge:

• § The consolidated and separate annual financial statements for 2018 have been prepared in accordance with applicable accounting standards.
• § The consolidated and separate annual financial statements give a true and fair overall view of the assets, liabilities, financial position and profit/loss of the group and for the parent company as of 31 December.
• § The board of directors' report provides a true and fair review of the
• – development and performance of the business and the position of the group and the parent company,
• – the principal risks and uncertainties the group and the parent company may face.

Fornebu, 29 March 2019 Aker ASA

Amram Hadida (sign) Director Arnfinn Stensø (sign) Atle Tranøy (sign) Director Øyvind Eriksen (sign) Karen Simon (sign) Director Tommy Angeltveit (sign) Director Anne Marie Cannon (sign) Director Finn Berg Jacobsen (sign) Deputy Chairman Kristin Krohn Devold (sign) Director Kjell Inge Røkke (sign) Chairman

Director

President and CEO

Independent auditor's report

KPMG AS Sørkedalsveien 6 Postboks 7000 Majorstuen 0306 Oslo

Telephone +47 04063 Fax +47 22 60 96 01 Internet www.kpmg.no Enterprise 935 174 627 MVA

To the Annual Shareholder's Meeting of Aker ASA

Independent auditor's report

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Aker ASA. The financial statements comprise:

• The financial statements of the parent company Aker ASA (the Company), which comprise the balance sheet as at 31 December 2018, and income statement and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and
• The consolidated financial statements of Aker ASA and its subsidiaries (the Group), which comprise the balance sheet as at 31 December 2018, and income statement, statement of total comprehensive income, statement of changes in equity, cash flow for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion:

• The financial statements are prepared in accordance with the law and regulations.
• The accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2018, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway.
• The accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2018, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU.

Basis for Opinion

We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by laws and regulations, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

	Offices in:
KPMG AS, a Norwegian limited liability company and member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Statsautoriserte revisorer - medlemmer av Den norske Revisorforening	Oslo Alta Arendal Bergen Bodø Drammen	Elverum Finnsnes Hamar Haugesund Knarvik Kristiansand	Mo i Rana Molde Skien Sandefjord Sandnessjøen Stavanger	Stord Straume Tromsø Trondheim Tynset Ålesund

	Auditor's Report - 2018 Aker ASA
1. Assessment of the carrying value of property, plant and equipment and goodwill principles, Note 12 Impairments, Note 15 Property, plant and equipment, Note 16 Intangible assets,	Reference is made to Note 2 Basis for preparation and estimates and assumptions, Note 5 Accounting
and the Board of Directors' report.
The key audit matter	How the matter was addressed in our audit
The impairment assessment of property, plant and equipment and goodwill is considered to be a risk area mainly due to the size of the balances and the economic environment in the Group's operating segments, particularly oil & gas business segments. The identification of indicators of impairment and the preparation of the estimate of the recoverable amount of an asset involves significant uncertainties and subjective judgments, which requires special audit consideration. As of 31 December 2018, the Group has property, plant and equipment with carrying values of NOK 18 262 million and goodwill of NOK 7 506 million. The Group has recognised impairment charges of property, plant and equipment and goodwill during the year of NOK 172 million and NOK 80 million respectively.	Audit procedures in this area, performed by the group team and component auditors in other listed subsidiaries, included: • assessing management's process and results for identification and classification of cash generating units; • evaluating management's assessment of impairment indicators; • where impairment indicators were identified or where impairment testing was required, assessing the mathematical and methodological integrity of management's impairment models and the reasonableness of discount rates applied with reference to market data; • using KPMG valuation specialists on the audit of certain valuations; • evaluating the historical accuracy of management's budgets and forecasts in order to challenge management on the current year cash flow forecasts; • evaluating and challenging management on the appropriateness of the key assumptions, such as for example growth assumptions and residual values, in the cash flow forecasts; and • evaluating the adequacy and appropriateness of the disclosures in the financial statements related to the carrying value of property, plant and equipment and goodwill. From the audit evidence obtained, we consider management's assessment of the carrying value of property, plant and equipment and goodwill to be in accordance with the requirements under the relevant accounting standards.

2. Construction contract estimates and revenue recognition

Reference is made to Note 2 Basis for preparation and estimates and assumptions, Note 5 Accounting principles, and Note 10 Operating revenue.

The key audit matter	How the matter was addressed in our audit
IFRS 15 Revenue from contracts with customers ('IFRS 15') was implemented by the Group on 1 January 2018. This new accounting standard introduces a 'five step model' for revenue recognition and new requirements and guidance	Our audit procedures, performed by the group team and component auditors in other listed subsidiaries, included: • assessing the implementation of IFRS 15, including the Group's updated accounting

	Auditor's Report - 2018 Aker ASA
relevant to project accounting estimates and judgements.	policies, transition impact assessment, application to construction and service
	contract accounting and disclosures;
IFRS 15 has introduced a higher degree of	• for financially significant contracts and any
judgment in determining the number of	contracts with a reasonable possibility of
performance obligations which can impact the	being in a significant loss-making position,
timing and amount of revenue recognition for certain contracts.	we applied professional skepticism and critically assessed the accounting estimates
	and judgments against the requirements of
Accounting for long term construction contracts	IFRS 15;
involves management estimates and judgments	• challenging management's assumptions in
which are often complex and involve	determining if certain contracts contain
assumptions regarding future events for which	single or multiple performance obligations
there may be little or no external corroborative evidence available.	by obtaining, reading, and critically
	assessing the terms and conditions of relevant contractual documents;
The key judgements and estimates applied by	• assessing contractual revenue forecasts
management include their assessment of the	including corroborating those forecasts with
stage of project completion as well as assessing	reference to signed contracts and variation
the estimated future contract revenue and cost	orders;
outcomes. Revenue and cost outcomes factored in management's forecasts include:	• assessing variable considerations estimates
• incentive payments;	included in forecasted revenue against the requirements of IFRS 15;
• key performance indicators;	• obtained and read the terms and conditions
• liquidated damages; and	of significant contracts and comparing these
• expected fulfilment cost.	to management's assessment of the contract forecasts;
As such, these contract accounting estimates	• evaluating management's process for
also require significant attention during the audit and are subject to a high degree of auditor	assessing measurement of progress and the method applied;
judgment.	• challenging management on estimated
	recovery of incentive payments, incentives
	linked to key performance indicators and
	recognition of liquidated damages;
	• reading and discussing project reports with
	management and comparing current forecasts to historical outcomes where
	relevant;
	• challenging management on the estimate of
	cost to complete and the risk assessment
	related to forecast cost; and
	• evaluating the adequacy and
	appropriateness of the disclosures in the financial statements related to IFRS 15
	transition effects, revenue from construction
	contracts and service contracts.
	From the audit evidence obtained, we consider
	construction contract estimates and revenue
	recognition to be consistent with the
	requirements under the relevant accounting

Other information

Management is responsible for the other information. The other information comprises the information included in the Annual Report, with the exception of the financial statements and the Independent auditor's report.

Aker ASA and holding companies

		Combined income statement Combined balance sheet as at 31 December Notes to the financial statements	115 116 117
Note 1		Accounting principles and basis for preparation	117
Note 2		Operating revenues	117
Note 3		Dividends received	117
Note 4		Other financial items	118
Note 5		Value change of shares and fund gains	118
Note 6		Tax	118
Note 7		Equity investments	119
Note 8		Property, plant and equipment and financial interest-free non-current assets	119
Note 9		Interest-bearing receivables and interest-free non-current receivables	120
Note 10		Cash and cash equivalents	120
Note 11		Shareholders' equity	120
Note 12		Interest-free current and non-current liabilities	120
Note 13		Interest-bearing current and non-current liabilities	121
Note 14		Risk	121
		Independent auditor's report	122

Combined income statement

Amounts in NOK million	Note	2018	2017
Operating revenues	2	194	-
Operating expenses		(254)	(244)
Depreciation and write-down	8	(18)	(14)
Operating profit		(78)	(258)
Dividends received	3	2 174	1 588
Other financial items	4	(247)	(209)
Value change of shares and fund gains	5	(383)	(289)
Profit before tax		1 467	833
Income tax expense	6	-	-
Profit for the year		1 467	833

Combined balance sheet as at 31 December

Amounts in NOK million	Note	2018	2017
ASSETS
Property, plant and equipment	8	328	149
Interest-bearing non-current receivables	9	759	1 306
Financial interest-free non-current assets	8,9	154	146
Equity investments	7	20 082	19 578
Total financial non-current assets		20 996	21 030
Total non-current assets		21 324	21 179
Interest-free current receivables		192	127
Interest-bearing current receivables	9	225	196
Cash and cash equivalents	10	1 945	1 232
Total current assets		2 363	1 555
Total assets		23 686	22 735
SHAREHOLDERS' EQUITY AND LIABILITIES
Paid-in capital	11	2 331	2 331
Retained earnings		10 215	10 448
Total equity		12 546	12 779
Non-current provisions	12	147	174
Interest-bearing non-current liabilities	13	6 837	6 224
Total non-current liabilities		6 984	6 398
Interest-free current liabilities	12	1 833	1 439
Interest-bearing current liabilities	13	2 323	2 119
Total current liabilities		4 156	3 558
Total equity and liabilities		23 686	22 735

Fornebu, 29 March 2019 Aker ASA

Kjell Inge Røkke (sign)
Chairman

Finn Berg Jacobsen (sign) Deputy Chairman

Anne Marie Cannon (sign) Director

Kristin Krohn Devold (sign) Director

Karen Simon (sign) Director

Atle Tranøy (sign) Director

Tommy Angeltveit (sign) Director

Amram Hadida (sign) Director

Arnfinn Stensø (sign) Director

Øyvind Eriksen (sign) President and CEO

Notes to the financial statements

Note 1 | Accounting principles and basis for preparation

The combined financial statements of Aker ASA and holding companies have been prepared to present Aker's financial position as a parent holding company. The traditional financial statement of the parent company has been extended to include all subordinate administrative service and holding companies that are wholly-owned by Aker ASA and have balance sheets containing only investments, bank deposits and debt.

THE COMPANIES THAT HAVE BEEN COMBINED ARE AS FOLLOWS:

• § Aker ASA
• § Aker Capital AS
• § Aker Holding Start 2 AS
• § Aker US Services LLC
• § Resource Group International AS
• § AGE Air AS

To the extent applicable, the accounting principles of Aker ASA and holding companies are based on the same accounting principles as Aker ASA. See accounting principles of Aker ASA on page 98. One exception from Aker ASA's accounting principles is that the acquisition and disposal of companies is part of the ordinary business of Aker ASA and holding companies. Consequently, gains on sales of shares are classified as operating revenues in the combined income statement. Gains and losses are only recognised when assets are sold to third parties. This is one reason why the accounts of Aker ASA and holding companies may show different historical cost for share investments than the company accounts of the underlying companies included in the combined financial statements. Group contributions approved after the balance sheet date are accounted for in the year of approval.

Note 2 | Operating revenues

Amounts in NOK million	2018	2017
Gain on sale of shares in Fornebuporten Holding AS	194	-
Total operating revenues	194	-

Note 3 | Dividends received

Amounts in NOK million	2018	2017
Aker BP ASA	1 465	820
Ocean Yield ASA	613	603
American Shipping Company ASA	79	91
Fornebuporten Holding AS	-	45
Philly Shipyard ASA	-	15
Other	17	14
Total dividends received	2 174	1 588

Note 4 | Other financial items

Amounts in NOK million	2018	2017
Interest income from subsidiaries	43	31
Other interest	(333)	(253)
Other financial items	42	13
Total other financial items	(247)	(209)

Other financial items in 2018 included a gain on total return swap (TRS) agreements of NOK 166 million and loss on foreign exchange including hedge instruments totaling NOK 102 million.

Other financial items in 2017 included a gain on foreign exchange including hedge instruments totaling NOK 69 million, impairment on Solstad Offshore ASA convertible loan NOK 31 million and a loss on TRS agreements of NOK 18 million.

Note 5 | Value change of shares and fund gains

Amounts in NOK million	2018	2017
Aker Solutions ASA (direct investment)	(113)	84
Akastor ASA (direct investment)	(78)	5
Solstad Farstad ASA / Farstad Shipping ASA	(253)	(325)
Cxense ASA	(17)	(27)
The Future Group ASA	-	(20)
American Shipping Company ASA	41	(5)
Trygg IDT Holdings Corp	(89)	-
Other changes in value of shares	(22)	-
Fund gains - Norron Target/Select	148	-
Total	(383)	(289)

Note 6 | Tax

Deferred tax asset is incorporated in the balance sheet if budgets and plans indicate that the asset will be utilised in the future. The deferred tax assets have been written down to zero as of 31 December 2018 and 31 December 2017.

Note 7 | Equity investments

					Investment
	Ownership in	Number of	Book value	Per share market	market value 4)
At 31 December 2018	per cent	shares	(NOK million)	value (NOK)	(NOK million)
Industrial Holdings
Aker Solutions ASA 1)	28.39	77 233 531		39.66	3 063
Akastor ASA 2)	28.19	77 233 531		13.06	1 009
Kværner ASA 3)	28.71	77 233 531		12.06	931
Aker Kværner Holding AS	70.00		3 460		5 003
Aker Solutions ASA 1)	6.37	17 331 762	687	39.66	687
Akastor ASA 2)	8.52	23 331 762	305	13.06	305
Aker BP ASA	40.00	144 049 005	8 967	218.00	31 403
Aker BioMarine AS	100.00	69 053 544	2 411	-	2 411
Ocean Yield ASA	61.65	98 242 575	2 487	59.20	5 816
Total industrial investments			18 318		45 625
Financial Investments
FP Eiendom AS			508

Total shares and long-term equity investments	20 082
Other equity investments	24
Cxense ASA	13
Trygg IDT Holdings I Corp	20
Cognite AS	42
Norron Holding AB	44
Philly Shipyard ASA	51
G&A Air AS	56
Solstad Offshore ASA	101
Align AS	117
American Shipping Company ASA	317
Aker Energy AS	471

1) Aker Kværner Holding AS owns 40.56 per cent of Aker Solutions ASA. Aker ASA owns 70 per cent of Aker Kværner Holding AS. In addition, Aker ASA owns 6.37 per cent of Aker Solutions ASA. Total indirect and direct shareholding in Aker Solutions ASA for Aker ASA is 34.76 per cent.

2) Aker Kværner Holding AS owns 40.27 per cent of Akastor ASA. Aker ASA owns 70 per cent of Aker Kværner Holding AS. In addition, Aker ASA owns 8.52 per cent of Akastor ASA. Total indirect and direct shareholding in Akastor ASA for Aker ASA is 36.71 per cent.

3) Aker Kværner Holding AS owns 41.02 per cent of Kværner ASA. Aker ASA owns 70 per cent of Aker Kværner Holding AS. Aker ASA thus indirectly owns 28.71 per cent of Kværner ASA.

4) See Note 14.

Note 8 | Property, plant and equipment and financial interest-free non-current assets

Amounts in NOK million	Financial interest free fixed assets	Property, plant and equipment	Total 2018	Total 2017
Pension funds	1	-	1	-
Interest-free non-current receivables from subsidiaries	153	-	153	95
Other	-	328	328	200
Total	154	328	482	295

In 2018, property, plant and equipment includes an airplane of NOK 183 million. The item also includes inventory, software, office machines and real estate of NOK 115 million (NOK 118 million in 2017).

The depreciation in 2018 was NOK 18 million (NOK 14 million in 2017).

Note 9 | Interest-bearing receivables and interest-free non-current receivables

Amounts in NOK million	Interest-bearing current receivables	Interest-bearing non-current receivables	Total 2018	Total 2017
Receivables from subsidiaries	60	328	388	825
Receivable American Shipping Company ASA	58	-	58	55
Receivable Ocean Harvest Invest AS	-	367	367	404
Other receivables	107	64	171	218
Total	225	759	985	1 503

INTEREST-BEARING RECEIVABLES AND INTEREST-FREE NON-CURRENT RECEIVABLES FROM SUBSIDIARIES AT 31 DECEMBER 2018:

Amounts in NOK million	Interest-bearing current receivables	Interest-bearing non-current receivables	Total interest-bearing	Interest-free non-current receivables	Total receivables from subsidiaries
FP Eiendom AS	60	-	60	-	60
Aker BioMarine AS	-	324	324	153	477
Other companies	-	4	4	-	4
Total	60	328	388	153	541

Note 10 | Cash and cash equivalents

Cash and cash equivalents amounted to NOK 1 945 million as at the end of 2018. Of this total, NOK 20 million were restricted deposits.

Note 11 | Shareholders' equity

	Number of shares	Par value (NOK)	Total par value (NOK million)
Share capital	74 321 862	28	2 081
Own shares	(53 070)	28	(1)
Other paid-in capital			252
Total paid-in capital / shares outstanding	74 268 792		2 331

All shares have equal voting rights and are entitled to dividends. Aker ASA has no voting rights for its own shares.

A dividend of NOK 22.50 per share, NOK 1 671 million in total, will be proposed at the Annual General Meeting on 26 April 2019.

Note 12 | Interest-free current and non-current liabilities

Amounts in NOK million	Current	Non-current	Total 2018	Total 2017
Pension liabilities	-	58	58	81
Guarantee liability The Resource Group TRG AS 1)	-	89	89	93
Dividend	1 671	-	1 671	1 337
Other liabilities	162	-	162	102
Total	1 833	147	1 980	1 613

1) See Note 12 to the Aker ASA separate financial statements

Note 13 | Interest-bearing current and non-current liabilities

INTEREST-BEARING LIABILITIES TO EXTERNAL CREDITORS IS SHOWN BELOW:

Amounts in NOK million	2018	2017
Non-current bonds	4 700	4 199
Secured bank loans	2 172	2 051
Capitalised fees	(35)	(27)
Total non-current interest-bearing liabilities	6 837	6 224
Current bonds	1 455	1 300
Secured bank loans (3-year loan with annual rollover)	869	821
Capitalised fees	(1)	(2)
Total current interest-bearing liabilities	2 323	2 119
Total interest-bearing liabilities	9 160	8 343

INSTALMENT SCHEDULE FOR EXTERNAL INTEREST-BEARING LIABILITIES, BY TYPE:

Amounts in NOK million	Bonds	Secured bank loans	Accrued fees	Total
2019	1 455	869	(1)	2 323
2020	1 700	-	(3)	1 697
2021	-	2 172	(14)	2 158
2022	1 000	-	(5)	995
2023	2 000	-	(12)	1 988
Total	6 155	3 041	(36)	9 160

Note 14 | Risk

THE BALANCE SHEET OF AKER ASA AND HOLDING COMPANIES IS SPLIT INTO TWO SEGMENTS:

Per cent	2018	2017
Industrial investments	77%	77%
Financial investments	23%	23%
Specification financial investments:
Funds- and equity investments	7%	9%
Cash	8%	5%
Interest-bearing receivables	4%	7%
Fixed assets, deferred tax assets and interest-free receivables	3%	2%

The businesses within each category are exposed to macro-development in their respective market segments.

The total book value of the assets of Aker ASA and holding companies are NOK 23 686 million including the book value for Industrial investments of NOK 18 318 million. The book value and market value of each investment included in Industrial investments are specified in Note 7. The total market value of the Industrial investments, NOK 45 625 million, is significantly higher than the book value. The book value of the unlisted company Aker BioMarine AS is included in the total market

value. In the case of Aker ASA's direct investment in the listed company Aker Solutions ASA (6.37 per cent ownership interest) and Akastor ASA (8.52 per cent ownership interest), the book value is equal to the market value.

The book value of Financial investments is NOK 5 369 million. Cash represents 8 per cent of the book value of total assets and 36 per cent of Financial investments.

See also Note 6 to the consolidated financial statements for Aker ASA.

Independent auditor's report

KPMG AS Sørkedalsveien 6 Postboks 7000 Majorstuen 0306 Oslo

Telephone +47 04063 Fax +47 22 60 96 01 Internet www.kpmg.no Enterprise 935 174 627 MVA

To the board of Aker ASA

Independent Auditor's Report

Report on the Audit of the combined financial statements of Aker ASA and holding companies

Opinion

We have audited the combined financial statements of Aker ASA and holding companies, which comprise the balance sheet as at 31 December 2018, the income statement for the year then ended, a summary of key assumptions used as basis for preparation and other notes.

In our opinion, the accompanying combined financial statements are prepared in accordance with the basis for preparation of the financial reporting defined in the introduction to the combined financial statements and give a true and fair view of the financial position of the Aker ASA and holding companies as at 31 December 2018, and the financial performance for the year then ended.

Without modifying our opinion, we draw attention to the basis for preparation of the financial reporting, defined in the introduction to the combined financial statements, which describes the basis of accounting. As a result, the combined financial statements may not be suitable for any other purpose.

Basis for Opinion

We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, included International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Combined Financial Statements section of our report. We are independent of Aker ASA and holding companies as required by laws and regulations, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other information

Aker ASA has prepared financial statements for the year ended 31 December 2018, comprising parent financial statements prepared in accordance with Norwegian Accounting Act and accounting standards and practices generally accepted in Norway and consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the EU. We have issued a separate auditor's report on the statutory financial statements to the shareholders of Aker ASA dated 29 March 2019.

Responsibilities of The Board of Directors for the Combined Financial Statements

The Board of Directors (management) are responsible for the preparation and fair presentation of the combined financial statements in accordance with the basis for preparation of the financial reporting defined in the introduction of the combined financial statements, and for such internal control as management determines is necessary to enable the preparation of the combined financial statements that are free from material misstatement, whether due to fraud or error.

	Offices in:
KPMG AS, a Norwegian limited liability company and member firm of the KPMG network of independent member firms affiliated	Oslo	Elverum	Mo i Rana	Stord
with KPMG International Cooperative ("KPMG International"), a Swiss entity.	Alta	Finnsnes	Molde	Straume
	Arendal	Hamar	Skien	Tromsø
Statsautoriserte revisorer - medlemmer av Den norske Revisorforening	Bergen	Haugesund	Sandefjord	Trondheim
	Bodø	Knarvik	Sandnessjøen	Tynset
	Drammen	Kristiansand	Stavanger	Ålesund

Board of Directors

Kjell Inge Røkke Chairman

—

Kjell Inge Røkke (born 1958), Aker ASA's main owner, has been a driving force in the development of Aker since the 1990s. Mr. Røkke launched his business career with the purchase of a 69-foot trawler in the United States in 1982, and gradually built a leading worldwide fisheries business. In 1996, the Røkke controlled company, RGI, purchased enough Aker shares to become Aker's largest shareholder, and later merged RGI with Aker. Mr. Røkke is currently director of Aker BP, Kvaerner, Ocean Yield, Aker BioMarine and Aker Energy.

As at 31 December 2018, Mr. Røkke holds 50 673 577 (68.2 per cent) in Aker ASA through his investment company TRG AS and its subsidiaries, and has no stock options. Mr. Røkke is a Norwegian citizen. He has been elected for the period 2018–2020.

Finn Berg Jacobsen Deputy Chairman

—

Finn Berg Jacobsen (born 1940) holds an MBA degree from Harvard Business School and is a state authorised auditor. He has held various positions with Arthur Andersen & Co, and worked as Regional Managing Partner for the Nordic countries from 1983– 1999. From 2001–2005, Mr. Berg Jacobsen worked as CFO and Chief of Staff at Aker Kvaerner. He is currently working as a consultant within corporate governance, compliance and corporate finance. Mr. Berg Jacobsen has served on several corporate boards and has also been member and chairman of supervisory committees and task forces in several associations and organizations. He has been awarded the Royal Order of St. Olav for his contributions to the advancement of auditing and accounting in Norway.

As at 31 December 2018, Mr. Berg Jacobsen holds 5 159 shares in Aker ASA, through FBJ-Consulting AS, and has no stock options. Mr. Berg Jacobsen is a Norwegian citizen. He has been elected for the period 2018–2020.

Anne Marie Cannon Director

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Anne Marie Cannon (born 1957) has over 35 years' experience in the oil and gas sector. From 2000 to 2014, she was senior advisor

to the Natural Resources Group with Morgan Stanley, focusing on upstream M&A. She has previously held positions with J Henry Schroder Wagg, Shell UK E&P and with Thomson North Sea. She was an executive director on the boards of Hardy Oil and Gas and British-Borneo Petroleum. Ms. Cannon is the Deputy Chairman of Aker BP ASA. She is a non-executive director of Premier Oil, STV Group plc and Aker Energy. She holds a BSc Honours Degree from Glasgow University.

As at 31 December 2018, Ms. Cannon holds no shares in Aker ASA, and has no stock options. Ms Cannon is a British citizen. She has been elected for the period 2017-2019.

Kristin Krohn Devold Director

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Kristin Krohn Devold (born 1961) was a Member of the Norwegian Parliament for the Conservative Party from 1993 to 2005. She was Minister of Defense from 2001 to 2005. Ms. Krohn Devold is currently the management director of the Norwegian Hospitality Association (NHO Reiseliv) and director of several companies, including Aker ASA, Aker Kværner Holding AS, Evry and Chamber of Commerce of Sweden and Norway. She has an MSc degree from the Norwegian School of economics (NHH) and has a bachelor degree in sociology from the University of Bergen.

As at 31 December 2018, Ms. Krohn Devold holds no shares in Aker ASA, and has no stock options. Ms. Krohn Devold is a Norwegian citizen. She has been elected for the period 2017-2019.

Karen Simon Director

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Karen Simon (born 1959) is a Vice Chairman in the Investment Bank of J.P. Morgan. She currently heads a global initiative entitled Director Advisory Services, serving as a central contact to facilitate ongoing interactions between Directors of public company boards and J.P. Morgan. Prior to this, she headed J.P. Morgan's Financial Sponsor Coverage group, advising private equity clients on leveraged buy-outs, mergers and acquisitions, and initial public offerings. Ms. Simon has spent over 30 years at J.P. Morgan including time in London, focusing on oil & gas clients and heading up Debt Capital Markets in addition to working with private equity clients. She has extensive corporate finance experience.

As at 31 December 2018, Ms. Simon holds no shares in Aker ASA, and has no stock options. She is a dual UK and US citizen. She has been elected for the period 2017-2019.

Atle Tranøy Director, elected by the employees

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Atle Tranøy (born 1957) is trained as a pipe fitter and has been an employee of Kværner Stord AS since 1976. Mr. Tranøy has been a fulltime employee representative since 1983. Mr. Tranøy is also the chairperson of the Global Works Council in Aker, and a director of the board of the Norwegian united federation of trade unions, Fellesforbundet.

As at 31 December 2018, Mr. Tranøy holds no shares in Aker ASA, and has no stock options. Mr. Tranøy is a Norwegian citizen. He has been elected for the period 2017–2019.

Board of Directors

Tommy Angelveit Director, elected by the employees

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Tommy Angeltveit (born 1965) has worked as a mechanic at the Controls division in Aker Solutions SLS Norway since 2003. Mr. Angeltveit has occupational education as a service electronics engineer. He previously served as an employee representative at the board of Aker Subsea. Mr. Angeltveit is full time employee representative and manager for Industry Energy section 47.

As of 31 December 2018, Mr. Angeltveit holds no shares in Aker ASA, and has no stock options. Tommy Angeltveit is a Norwegian citizen. He has been elected for the period 2017-2019.

Amram Hadida Director, elected by the employees

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Amram Hadida (born 1960) has been employed by Kvaerner since 1990 and has been a local union representative for Aker Stord AS and Kværner Stord AS on a full-time basis since 2004, a group union leader since 2012 and served several periods on the boards of Aker Stord AS and Kværner Stord AS during the period between 2005 and 2015. Mr. Hadida is a welder and holds a certificate of apprenticeship in the welding discipline.

As at 31 December 2018, Mr. Hadida holds no shares in Aker ASA and has no stock options. Mr. Hadida is an Israeli citizen. He has been elected for the period 2017-2019.

Arnfinn Stensø Director, elected by the employees

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Arnfinn Stensø (born 1957) has been employed by Aker Solutions (former Aker Offshore Partner) n Stavanger since 1998. He is educated electrical engineer. Mr. Stensø is member of the negotiating committee in NITO (Norwegian Engineers and technologist organization) and of the liaison committee NITO – NHO.

As at 31 December 2018, Mr. Stensø holds no shares in Aker ASA and has no stock options. Arnfinn Stensø is Norwegian citizen. He has been elected for the period 2017-2019

Management

Øyvind Eriksen President & CEO

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Øyvind Eriksen (born 1964) joined Aker ASA in January 2009. Mr. Eriksen holds a law degree from the University of Oslo. He joined Norwegian law firm BA-HR in 1990, where he became a partner in 1996 and a director/ chairman in 2003. As a corporate attorney he among other things worked with strategic and operational development, M&A and negotiations. Among other, Mr. Eriksen worked closely with Aker. Mr. Eriksen has held several board positions in different industries, including shipping, finance, asset management, offshore drilling, fisheries, media, trade and industry. As CEO Mr. Eriksen is currently chairman of the board in Aker BP ASA, Aker Solutions ASA, Cognite AS, Aker Capital AS and Aker Kværner Holding AS, and a director of several companies, including Aker Energy AS, Akastor ASA, The Resource Group TRG AS, TRG Holding AS and Reitangruppen AS.

As at 31 December 2018, Mr. Eriksen holds 219 072 shares in Aker ASA through the company Erøy AS. He has no stock options. Through Erøy AS, Mr. Eriksen also holds 0.20 percent of the B-shares in TRG Holding AS. Mr. Eriksen is a Norwegian citizen.

Frank O. Reite CFO

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Frank O. Reite (born 1970) joined Aker in 1995, and became CFO in Aker ASA in August 2015. He holds a B.A. in business administration from Handelshøyskolen BI in Oslo. Mr. Reite came from the position of President & CEO of Akastor, and has previously held a variety of executive positions in the Aker group, including overseeing and developing Aker's investments in Converto Capital Fund AS, Havfisk ASA, Norway Seafoods AS and Aker Yards ASA. Mr. Reite also has experience from banking and served as Operating Director at Paine & Partners, a New Yorkbased private equity firm. Mr. Reite is Chair of the board in Ocean Yield ASA.

As of 31 December 2018, Mr. Reite holds 71 240 shares in Aker ASA through the company Fausken Invest AS. He has no stock options. Mr. Reite is a Norwegian citizen.

Kristian Røkke Chief investment officer

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Kristian Røkke (born 1983) has been the Chief Investment Officer of Aker ASA since January 2018. He has extensive experience from offshore oil services, shipbuilding industry and mergers and transactions. Røkke joined Aker ASA from Akastor, an investment company listed on the stock exchange, where he was the CEO from 2015. Røkke is Chair of the board of Akastor ASA, Director of TRG Holding AS, Aker Capital AS, Aker Solutions ASA and previously a Director of Aker ASA. He holds an MBA from The Wharton School, University of Pennsylvania.

As of 31 December 2018, Kristian Røkke owns no shares in Aker ASA and has no options. Røkke holds both Norwegian and American citizenships.

AKER ASA

Oksenøyveien 10, NO-1366 Lysaker, Norway Post: P.O Box 243, NO-1326 Lysaker, Norway Telefon: +47 24 13 00 00 E-post: contact@akerasa.com www.akerasa.com