FOURTH QUARTER AND FULL YEAR Q4 2013

4th QUARTER IN BRIEF

• 4th quarter EBITA in line with corresponding quarter 2012
• Strong improvement in Performance Chemicals
• Weaker results in Specialty Cellulose and Ingredients
• Positive effects of weaker NOK delayed by currency hedging strategy

The Group	3
The Business Areas	5
Performance Chemicals	5
Specialty Cellulose	6
Other Businesses	7
Cash flow and financial situation	8
Dividend	8
Share information	8
Other matters and subsequent events	9
Outlook	9
The Group's condensed income statement	10
Earnings per share	10
The Group's condensed comprehensive income statement 10
The Group's condensed balance sheet	11
Changes in equity	12
The Group's condensed cash flow statement	12
Notes 13 – 19

1 100 Operating revenues (NOK million)

900 1 000

CF op.act. (IFRS) Interest & tax paid EBITDA 0 50 100 150 200 250 300 Q4´12 Q1´13 Q2´13 Q3´13 Q4´13 176 ⁹¹ ¹²⁶ 190 133 210 108 150 209 256

THE GROUP1

		1.10 – 31.12		1.1 – 31.12
Amounts in NOK million	Note	2013	20121	2013	20121
Operating revenues	2	997	925	3 997	3 941
EBITDA2		150	148	730	764
EBITA3	2	90	91	501	546
Profit/loss before taxes		84	73	474	420
Earnings per share (NOK)	5	0.62	0.42	3.35	2.76
Cash flow from operating activities (IFRS)		133	176	540	551
Net interest-bearing debt	11	707	840	707	840
Equity ratio (%)				53.9	48,7
Leverage ratio4				0.97	1.01
Return on capital employed5 (%)				17.3	19.7

Fourth quarter

Borregaard's operating revenues totalled NOK 997 million (NOK 925 million⁶ ) in the 4th quarter of 2013. EBITA amounted to NOK 90 million, compared with NOK 91 million in the corresponding quarter of 2012. A lower EBITA level in Specialty Cellulose was compensated by progress for Performance Chemicals. Market conditions continued to be generally favourable. Reduced wood cost, high production output and weakening of NOK contributed positively. The annual maintenance stop at the Sarpsborg site in October was carried out according to plan.

EBITA in Performance Chemicals rose as improved product mix, higher prices and favourable currency impact more than off-set a reduced sales volume. The decline in Specialty Cellulose is primarily attributable to lower prices. Other Businesses suffered from lower vanillin prices, but this was partly compensated by lower corporate costs.

Other income and expenses was zero (NOK -9 million) in the 4th quarter. Net financial items amounted to NOK -5 million (NOK -9 million). The improvement relates to lower interest expense due to a decline in net interest-bearing debt and favourable FX difference compared with 2012. Group profit before tax amounted to NOK 84 million (NOK 73 million) in the 4th quarter of 2013. The 4th quarter tax charge was NOK 24 million.

Earnings per share was NOK 0.62 in the 4th quarter (NOK 0.42).

Borregaard had a strong cash flow from operations before interests and tax payments in the 4th quarter of 2013, primarily attributable to a significant decrease in working capital. A large scheduled tax payment in the 4th quarter of 2013 impacted negatively cash flow from operating activities (IFRS definition).

1. 2012 figures are restated due to implementation of revised IAS19, Pensions. See note 1 and 9.

2. Operating profit before depreciation, amortisation and other income and expenses

3. Operating profit before amortisation and other income and expenses
4. Net interest bearing debt/EBITDA (LTM)
5. EBITA/(Average net working capital+Average tangible assets+Average intangible assets at cost-Average net pension liabilities-Average deferred tax excess value)

6. Figures in parentheses are for the corresponding period in the previous year

Full year 2013

For the full year 2013, Borregaard's operating revenues totalled NOK 3,997 million (NOK 3,941 million). EBITA amounted to NOK 501 million, compared with NOK 546 million in 2012. A strong EBITA improvement in Performance Chemicals was more than off-set by weaker results in Specialty Cellulose and Other Businesses. Lower wood cost, favourable currency impact and all-time high production output at the Sarpsborg site contributed positively.

Other income and expenses totalled NOK 14 million (NOK -71 million), representing a gain from property sale partly off-set by write-down of assets in Borregaard's lignin operations in Spain in 2013. The 2012 expense relates to write downs-of assets and restructuring charges in Borregaard's operation in Brazil as well as stay-on bonuses to management in connection with the IPO process.

Operating profit ended at NOK 513 million in 2013 (NOK 472 million). Net financial items amounted to NOK -39 million (NOK -52 million). A reduction in net interest expense of NOK 24 million due to lower net interest-bearing debt was partly off-set by an FX change of NOK -11 million.

Profit before tax amounted to NOK 474 million (NOK 420 million). The tax charge was NOK 143 million, giving a tax rate of 30%. Earnings per share ended at NOK 3.35 (NOK 2.76).

Borregaard's cash flow from operations before interests and tax payments was NOK 723 million for the full year of 2013. Compared with EBITDA of NOK 730 million, the conversion ratio was 0.99.

THE BUSINESS AREAS

Performance Chemicals

	1.10 – 31.12		1.1 – 31.12
Amounts in NOK million	2013	20121	2013	20121
Operating revenues	449	416	1 756	1 689
EBITA3	79	62	326	269
EBITA margin (%)	17.6	14.9	18.6	15.9

Performance Chemicals posted 4th quarter operating revenues of NOK 449 million (NOK 416 million). EBITA amounted to NOK 79 million, an increase from NOK 62 million in the same period last year. The market situation was generally positive, with strong demand in Asia. A 9% lower total sales volume compared with the corresponding quarter of 2012 was attributable to reduced raw material supply in Spain and the Czech Republic, partly off-set by spot purchases. Sales volume for high-value applications increased, whereas volumes for medium and low- value applications receded. In spite of the overall sales volume decline, total operating revenues and EBITA increased due to higher prices, a notable improvement in product mix and favourable currency impact. Both raw material costs and operating expenses were above the level in the 4th quarter of 2012.

For the full year 2013, Performance Chemicals posted operating revenues of NOK 1,756 million (NOK 1,689 million). EBITA amounted to NOK 326 million (NOK 269 million) as an improved product mix, beneficial currency impact and price increases more than compensated for an 8 % decline in total sales volume. High-value products' share of total volume increased from 15% in 2012 to 18% in 2013, while medium-value products accounted for 71% in 2013 versus 69% in 2012.

7. Average sales price and sales volume include 100% of sales and volume from the J/V in South Africa. Average sales price is calculated using actual FX rates, but excluding hedging impact.

8. Metric tonne dry solid

Specialty Cellulose

	1.10 – 31.12		1.1 – 31.12
Amounts in NOK million	2013	20121	2013	20121
Operating revenues	381	374	1 597	1 616
EBITA3	35	48	224	281
EBITA margin (%)	9.2	12.8	14.0	17.4

Specialty Cellulose had 4th quarter operating revenues of NOK 381 million (NOK 374 million). EBITA, at NOK 35 million, declined by NOK 13 million from the 4th quarter of 2012. The growth in operating revenues was attributable to higher sales volumes in both speciality cellulose and bioethanol. Product mix was similar to the corresponding quarter in 2012. The result was negatively impacted by lower prices in sales currencies for speciality grades competing with cotton linter pulp. High production volume and lower raw material costs contributed positively. Including a significant negative hedging effect, total currency impact was close to neutral versus the corresponding quarter of 2012.

For the full year 2013, operating revenues in Specialty Cellulose reached NOK 1,597 million (NOK 1,616 million) with EBITA at NOK 224 million (NOK 281 million). The decline was caused by a weaker product mix and reduced prices in some segments, the combined impact of which was partly off-set by lower raw material prices and strong production output. The share of highly specialised products was 67% of total volume in 2013, compared with 73% in 2012.

9. Average sales price is calculated using actual FX rates, but excluding hedging impact

Other Businesses

	1.10 – 31.12		1.1 – 31.12
Amounts in NOK million	2013	20121	2013	20121
Operating revenues	186	157	703	715
EBITA3	-24	-19	-49	-4
EBITA margin (%)	-12.9	-12.1	-7.0	-0.6

Other Businesses had total operating revenues of NOK 186 million (NOK 157 million) and an EBITA of NOK -24 million (NOK -19 million). The Ingredients business still suffered from a challenging market situation for vanillin products due to increased capacity of petrochemical-based vanillin. Despite lower prices there was growth in sales volume and operating revenues compared with the 4th quarter of 2012. The Fine Chemicals business saw a moderate increase in operating revenues and EBITA due to higher sales of X-ray contrast media intermediates. Net costs and depreciation associated with corporate functions and unallocated group costs declined from the 4th quarter of 2012, mainly due to increased grants for business development projects.

In 2013, operating revenues in Other Businesses fell from NOK 715 million in 2012 to NOK 703 million. EBITA deteriorated from NOK -4 million in 2012 to NOK -49 million. The notable decline is related to a weaker profitability in the Ingredients and Fine Chemicals businesses, full year depreciation of the BALI pilot plant and higher costs associated with being a stand-alone company.

CASH FLOW AND FINANCIAL SITUATION

Cash flow from operating activities in the 4th quarter of 2013 amounted to NOK 133 million (NOK 176 million). The decrease was primarily due to a large scheduled tax payment in the 4th quarter of 2013. This was partly off-set by a larger decrease in net working capital than in the corresponding quarter in 2012. Investments in the 4th quarter decreased modestly compared with the previous year. During the 4th quarter of 2013, the Group has repurchased treasury shares at a cost of NOK 11 million.

For the full year 2013, cash flow from operating activities amounted to NOK 540 million (NOK 551 million). The slight decrease in cash flow from operating activities is mainly related to higher tax payments in 2013 largely off-set by improved profit before tax adjusted for non-cash elements. Replacement investments declined in 2013 compared with 2012, while expansion investments were at the same level as the previous year. During 2013, the Group has repurchased treasury shares at a cost of NOK 33 million.

As of 31 December, the Group had net interest-bearing debt totalling NOK 707 million (NOK 840 million). At the end of 2013, NOK 750 million had been drawn on the long-term revolving credit facilities.

The Group is well capitalised with an equity ratio of 53.9% at the end of December 2013.

DIVIDEND

The Board of Directors of Borregaard ASA will propose a dividend for 2013 of NOK 1.10 (NOK 1.00) per share to the General Meeting on 23 April 2014. This corresponds to 33% of net profit. Dividend payment is estimated to NOK 109 million. The exact amount will depend on the number of treasury shares held at the date of the Annual General Meeting.

Borregaard's dividend policy is to pay regular and progressive dividends reflecting the expected long-term earnings and cash flows of the Group. A pay-out ratio in the 30-50% range of the Company's net profit for the preceding year is targeted.

SHARE INFORMATION

Total number of shares outstanding at the end of 2013 was 100 million including 1,270,000 treasury shares held by Borregaard ASA. Total number of shareholders was 6,381 at the end of December 2013. Approximately 40% of the shares were held by Norwegian residents. Borregaard ASA's share price ended at NOK 30.20 at the end of December 2013 compared with 20.80 at the end of 2012.

OTHER MATTERS AND SUBSEQUENT EVENTS

Share options

In January 2014 50,000 share options were exercised at a strike price of 19.03. Borregaard holds 1,220,000 treasury shares after the transaction.

OUTLOOK

Performance Chemicals continues to enjoy strong demand in major applications. Total sales volume in 2014 is expected to be on or moderately (0-5%) below its 2013 level. Increased supply from existing sources and new contracted suppliers is expected largely to compensate for sales from inventories in 2013 and the assumed lack of supply in Spain. Sales volume in the 1st quarter will be negatively affected by normal seasonality.

In 2014, cellulose prices in sales currency are expected to be on average 7-8% lower than in 2013. In addition, product mix in 2014 is expected to be marginally weaker than in 2013. However, actual mix will be determined by demand development, especially within the construction end-market. Compared with the preceding quarter, Specialty Cellulose expects a certain improvement in product mix in the 1st quarter of 2014, although it will be weaker than in the 1st quarter of 2013.

The challenging market situation for vanillin products is expected to continue. The Fine Chemicals business is likely to remain relatively stable.

If maintained, the recent weakening of the NOK will contribute positively in all business areas. The impact will gradually take effect towards mid-year 2014.

Sarpsborg, 4 February 2014 The Board of Directors of Borregaard ASA

THE GROUP'S CONDENSED INCOME STATEMENT

Interim condensed income statement

			1.10 – 31.12	1.1 – 31.12
Amounts in NOK million	Note	2013	20121	2013	20121
Operating revenues	2	997	925	3 997	3 941
Operating expenses		-847	-777	-3 267	-3 177
Depreciation property, plant and equipment		-60	-57	-229	-218
Amortisation intangible assets		-1	0	-2	-3
Other income and expenses	3	0	-9	14	-71
Operating profit		89	82	513	472
Financial items, net		-5	-9	-39	-52
Profit before taxes		84	73	474	420
Taxes	4	-24	-29	-143	-142
Profit for the period		60	44	331	278
Profit attributable to non-controlling interests		-2	2	-4	2
Profit attributable to owners of the parent		62	42	335	276
EBITA adjusted*	2	90	91	501	546
EBITDA adjusted**		150	148	730	764

* Operating profit before amortisation and other income and expenses

** Operating profit before depreciation, amortisation and other income and expenses

EARNINGS PER SHARE

Interim earnings per share

			1.10 – 31.12	1.1 – 31.12
Amounts in NOK million	Note	2013	20121	2013	20121
Earnings per share (100 million shares)	5	0.62	0.42	3.35	2.76
Diluted earnings per share	5	0.62	0.42	3.36	2.76

THE GROUP'S CONDENSED COMPREHENSIVE INCOME STATEMENT

Interim condensed comprehensive income statement

			1.10 – 31.12	1.1 – 31.12
Amounts in NOK million	Note	2013	20121	2013	20121
Profit for the period		60	44	331	278
Items not to be reclassified to P&L Actuarial gains and losses (after tax)	9	4	-3	4	-3
Total		4	-3	4	-3
Items to be reclassified to P&L Change in hedging reserve after tax Translation effects	7	-15 5	-3 -12	-84 30	29 -45
Total		-10	-15	-54	-16
The Group´s comprehensive income		54	26	281	259
Comprehensive income non-controlling interests Comprehensive income owners of the parent		-1 55	2 24	-2 283	2 257

THE GROUP´S CONDENSED BALANCE SHEET

Interim condensed statement of financial position

Amounts in NOK million	Note	2013 31.12	20121 31.12
Intangible assets Property, plant and equipment Other assets		57 1 991 53	39 1 954 30
Non-current assets		2 101	2 023
Inventories Receivables Cash and cash equivalents	11	554 731 58	589 727 155
Current assets		1 343	1 471
Total assets		3 444	3 494

Group equity Non-controlling interests	10	1 847 9	1 691 11
Equity		1 856	1 702
Provisions and other liabilities Interest-bearing liabilities	11	172 774	179 990
Non-current liabilities		946	1 169
Interest-bearing liabilities Other current liabilities	11	6 636	16 607
Current liabilities		642	623
Equity and liabilities		3 444	3 494
Equity ratio		53.9%	48.7%

CHANGES IN EQUITY

Interim condensed change in equity

			1.1 – 31.12.2013			1.1 – 31.12.20121
Amounts in NOK million	Note	Majority	Minority	Total Group	Majority	Minority	Total Group
Equity 1.1. before restatement		-	-	-	1 109	14	1 123
Restatement pension IAS19R	9	-	-	-	-35	0	-35
Equity 1.1. after restatement pension		1 691	11	1 702	1 074	14	1 088
Profit/loss for the period		335	-4	331	276	2	278
The Group´s comprehensive income	7	-52	2	-50	-19	0	-19
Total comprehensive income	7	283	-2	281	257	2	259
Option costs (share based payment)		6	0	6	2	0	2
Group contribution/pooling of interests		0	0	0	358	-5	353
Dividend	10	-100	0	-100	0	0	0
Treasury shares	10	-33	0	-33	0	0	0
Equity at the close of the period	10	1 847	9	1 856	1 691	11	1 702

THE GROUP'S CONDENSED CASH FLOW STATEMENT

Interim condensed cash flow statement

			1.10 – 31.12	1.1 – 31.12
Amounts in NOK million	Note	2013	20121	2013	20121
Profit before taxes Amortisation, depreciation and impairment charges Changes in net working capital, etc. Taxes paid		84 60 107 -118	73 57 71 -25	474 239 -29 -144	420 265 -38 -96
Cash flow from operating activities		133	176	540	551
Investments property, plant and equipment and intangible assets* Other capital transactions		-107 -5	-117 4	-292 2	-388 2
Cash flow from investing activities		-112	-113	-290	-386
Dividends/Group contributions Paid-in equity Repurchase of treasury shares		0 0 -11	24 0 0	-100 0 -33	-690 1 000 0
Net paid to/from shareholders		-11	24	-133	310
Change in interest-bearing liabilities	11	-111	-1 348	-226	-806
Change in interest-bearing receivables	11	1	5	-3	5
Change in net interest-bearing liabilities		-110	-1 343	-229	-801
Cash flow from financing activities		-121	-1 319	-362	-491
Change in cash and cash equivalents		-100	-1 256	-112	-326

Cash and cash equivalents at beginning of period Change in cash and cash equivalents Currency effects cash and cash equivalents		155 -100 3	1 411 -1 256 0	155 -112 15	496 -326 -15
Cash and cash equivalents at the close of the period	11	58	155	58	155
*Investments by category
Replacement investments Expansion investments Stamp duty		84 23 0	89 5 23	230 62 0	302 63 23

NOTE 1 NOTES

Organisation and basis for preparation

General information

Borregaard ASA is incorporated and domiciled in Norway. The address of its registered office is Hjalmar Wessels vei 10, Sarpsborg.

Borregaard ASA ("The Company") was listed on the Oslo Stock Exchange on 18 October 2012 and was incorporated as a public limited liability company on 22 August 2012.

Basis for preparation

These unaudited Interim Condensed Consolidated Financial Statements are prepared in accordance with IAS 34 Interim Financial Reporting. Borregaard ASA is the parent company of the Borregaard Group presented in these Interim Condensed Consolidated Financial Statements.

The same accounting principles and methods of calculation have been applied as in the Consolidated Financial Statements for 2012 for the Borregaard Group.

New accounting principles

Future effects of new accounting standards were described in the Consolidated Financial Statements for 2012. IFRS 11 Joint Arrangement will be implemented from 1 January 2014. The impact the application will have on the 2013 figures after implementation are described in Note 14.

The changes in IAS 19, effective from 1 January 2013, have been implemented as of the effective date. It has resulted in a restatement of the figures as of 31 December 2012 and 1 January 2012. The main change in the pension standard is that the so-called "corridor approach" is no longer permitted as an alternative. According to the new standard, net pension liabilities shall be fully reported in the balance sheet and all actuarial gains and losses shall be charged to the Group's equity and recognized in the statement of comprehensive income. Due to this actuarial gains and losses will no longer be charged to the Group's operating profit.

Additionally, the financial part of net pension costs is reported as financial items rather than as part of net pension expenses in Operating profit.

Implementation of the new principle implies that equity is reduced by NOK 35 million as of 31 December 2012 (NOK 35 million in 2011) following the recognition of accumulated estimate variances after tax and the restatement of profit for the year. Operating profit for 2012 is increased by NOK 4 million (NOK 1 million in 2011) due to the fact that the accounting of actuarial gains and losses no longer can be recognized in the ordinary result. In addition, finance cost is reduced by NOK 1 million (NOK 0 million in 2011) as the financial part of the pension cost now is reported as financial items. Profit for the year is increased by NOK 3 million (NOK 1 million for 2011). See Note 9.

Use of estimates

The same use of estimates has been applied as in the Consolidated Financial Statements for 2012.

Segments

Operating revenues

	1.10 – 31.12		1.1 – 31.12
Amounts in NOK million	2013	2012	2013	2012
Borregaard	997	925	3 997	3 941
Performance Chemicals	449	416	1 756	1 689
Specialty Cellulose	381	374	1 597	1 616
Other Businesses	186	157	703	715
Eliminations	-19	-22	-59	-79

EBITA3
	1.10 – 31.12		1.1 – 31.12
Amounts in NOK million	2013	20121	2013	20121
Borregaaard	90	91	501	546
Performance Chemicals	79	62	326	269
Specialty Cellulose	35	48	224	281
Other Businesses	-24	-19	-49	-4
Reconciliation against operating profit and profit before taxes
EBITA adjusted2	90	91	501	546
Amortisation intangible assets	-1	0	-2	-3
Other income and expenses	0	-9	14	-71
Operating profit	89	82	513	472
Financial items, net	-5	-9	-39	-52
Profit before taxes	84	73	474	420

There are limited intercompany sales between the different segments and eliminations consist essentially of allocations from the corporate headquarter.

NOTE 3

Other income and expenses

There are no Other income and expenses in the 4th quarter. NOK 14 million is recorded as other income and expenses during 2013, where NOK 23 million relates to gain from sale of property and NOK 9 million relates to write down of assets in LignoTech Ibérica.

Income tax expense

The tax rate of 30.2% for the twelve months of 2013 is a compilation of the tax rates in the various countries in which Borregaard operates and has taxable income. The normal tax rate is in the range 29 - 32%. The tax rate in Norway is reduced from 28% to 27% from 1 January 2014. This is considered in the calculation of deferred taxes as of 31 December 2013.

NOTE 5

Earnings per share (EPS)

The share capital consists of 100 million shares as of 31 December 2013. The company holds 1,270,000 treasury shares. As of 31 December 2013, there are 99,591,765 diluted shares. Earnings per diluted share ended at NOK 3.36 in 2013. As of 31 December 2012, there were 100,058,861 diluted shares.

NOTE 6

Stock options

The Group Executive Management and other key employees hold a total of 2,540,000 stock options in two different share option programmes in Borregaard. The first programme has a total of 1,590,000 stock options at a strike price of NOK 19.03. The second programme has a total of 950,000 options for shares at a strike price of NOK 21.50. The strike prices have been adjusted for dividend of NOK 1.00 in 2013. The share options are vested on 18 October 2013 and can be exercised until the end of October 2016.

NOTE 7

Statement of comprehensive income

The statement of comprehensive income shows changes in the value of hedging instruments (hedging reserve). These figures are presented after tax. The tax effect for the twelve months of 2013 relating to the hedging reserve amounts to NOK -12 million (NOK 19 million as of 31 December 2012). Total hedging reserve included in equity at 31 December 2013 (after tax) amounts to NOK -34 million (NOK 50 million as of 31 December 2012).

Fair value hierarchy

For financial instruments that are recognised at fair value on a recurring basis, the Group determines whether transfers have occured between levels in the hierarchy by re-assessing categorisation at the end of each reporting period.

The following measurement levels are used for determining the fair value of financial instruments:

Level 1 Quoted market prices in an active market (that are unadjusted) 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)

There were no transfers from one level to another in the measurement hierarchy from 2012 to 4th quarter 2013. Borregaard has no items defined as level 1 and level 3, respectively.

Set out below is a comparison of the carrying amount and the fair value of financial instruments as at 31 December 2013:

Financial assets Amounts in NOK million	Carrying amount	Fair value
Non-current derivatives	0	0
Current derivatives	4	4

Financial liabilities
Non-current financial liabilites	38	38

Financial assets measured at fair value Amounts in NOK million	2013 31.12	Level 1	Level 2	Level 3
Foreign currency forward contracts	-42	0	-42	0

The foreign currency forward contracts are measured based on observable spot exchange rates, the yield curves of the respective currencies as well as the currency basis spreads between the respective currencies

Implementation of revised IAS 19

Revised IAS 19 has been applied retrospectively from 1 January 2012. As a result, expected returns on plan assets of defined benefit plans are not recognised in profit or loss. Instead, interest on net defined benefit obligation is recognised in profit or loss, calculated using the discount rate used to measure the net pension obligaton or asset. Also, unvested past service cost can no longer be deferred and recognised over the future vesting period. Instead, all past service costs are recognised at the earlier of when the amendment occurs and when the Group recognises related restructuring of termination costs. The financial part of the pension cost is now recognised as part of financial items.

Equity as of 31 December 2011 and 2012, respectively, and the income statement for 2012 are restated due to implementation of the revised IAS 19. The impact is as follows:

Amounts in NOK million	2012
Reduced equity (unrecognised acturarial gains/losses) 1 January	35*

Increased operating profit	4
Reduced net finance cost Net increased profit before tax Increased tax expense	1 5 2
Net increased profit	3
Actuarial gains/losses in Comprehensive income	-3

Restated equity as of 31 December 2012	35

*) NOK 58 million before tax. The majority of the unrecognised actuarial losses are related to the US subsidiaries where the tax rate is approximately 36%.

An updated actuary calculation is obtained related to the 4th quarter reporting. Updated assumptions such as the new mortality table (K2013) for Norway are used in the calculations.

Compilation of Equity

	2013	20121
Amounts in NOK million	31.12	31.12
Share Capital	100	100
Treasury shares	-1	0
Share premium fund	1 346	1 346
Other paid-in equity	308	302
Translation effects	-86	-114
Hedging reserve	-34	50
Actuarial gains/losses	4	-3
Retained earnings	210	10

Total equity (majority)	1 847	1 691

Dividend of NOK 100 million (NOK 1.00 per outstanding share) was paid out on 25 April 2013. As at 31 December 2013, the company held 1,270,000 treasury shares. The majority of the treasury shares were acquired during the 3rd and 4th quarter of 2013 at an average price of NOK 26.09 per share. Retained earnings is reduced by NOK 32 million.

NOTE 11

Net interest-bearing debt

The various elements of net interest-bearing debt are shown in the following table:

	2013	2012
Amounts in NOK million	31.12	31.12
Non-current interest-bearing liabilities	774	990
Current interest-bearing liabilities	6	16
Non-current interest-bearing receivables (included in "Other Assets")	-15	-11
Cash and cash equivalents	-58	-155
Net interest-bearing debt	707	840

NOTE 12

Related parties

The members of the Group Executive Management of Borregaard hold a total of 1,845,000 stock options in the Company.

Assessments relating to impairment

No impairment indicators have been identified in the Borregaard Group's property, plant and equipment or intangible assets in the 4th quarter.

NOTE 14

Effects of implementing IFRS 11 Joint Arrangements from 1 January 2014

IFRS 11 Joint Arrangements replaces IAS 31 Interests in Joint Ventures. IFRS 11 removes the option to account jointly controlled entities using proportionate consolidation. Instead joint ventures must be accounted for using the equity method. The result of the joint venture will be accounted for as part of operating profit as it is part of Performance Chemicals. The impact of the application will be the following for the 2013 figures:

	2013	Effect of IFRS 11	Restated 2013
Operating revenues	3 997	-118	3 879
Operating profit	513	-12	501
Profit for the period	331	0	331
Earnings per share	3.35	0	3.35

Non-current assets	2 101	51	2 152
Current assets	1 285	-49	1 236
Cash and cash equivalents	58	-19	39
Total assets	3 444	-17	3 427

Equity	1 856	0	1 856
Non-current liabilities	946	-8	938
Current liabilities	642	-9	633
Equity and liabilities	3 444	-17	3 427

The opening balance 1.1.2013 of the investment is measured as the aggregate of the carrying amounts of the assets and liabilities that the entity had previously proportionately consolidated. This is regarded as deemed cost for the Joint Venture at initial recognition.

NOTE 15

Other matters and subsequent events

In January 2014, 50,000 share options were exercised at a strike price of NOK 19.03. Borregaard holds 1,220,000 treasury shares after this transaction.

There have been no other events after the balance sheet date that would have had an impact in the financial statements or the assessments carried out.

Borregaard ASA

P.O. Box 162 NO-1701 Sarpsborg, Norway Telephone (+47) 69 11 80 00 Fax (+47) 69 11 87 70 email: [email protected] www.borregaard.com